BRIEF STATEMENT OF CONSOLIDATED FINANCIAL RESULTS
FOR THE FULL FISCAL YEAR ENDED MARCH 2023
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 12, 2023
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 23, 2023
Date of Submission of Annual Security Report: June 26, 2023
Starting Date of the Dividend Payment: June 26, 2023
Preparation of Supplementary Materials for Financial Results: Applicable/May 31, 2023
Information Meeting for Financial Results to be Held: Applicable/May 31, 2023 (for Institutional
Investors and Analysts)
Amounts are rounded down to the nearest JPY 1 million.

1. Results for the Fiscal Year Ending March 2023 (From April 1, 2022 to March 31, 2023)(1) Consolidated Operating Results(Percentages indicate changes compared with the previous fiscal year.)

Net SalesYear ending
March 2023
March 2022

Millions of yen

Operating Income

Millions of yen

%
△0.9
△23.4

15,177
15,311

%
—
—

△183
△92

Ordinary Income

Millions of yen

△148
136

Net Income Attributable
to the Shareholders of
the Parent

%
—
△83.3

Millions of yen

%
—
—

△421
△333

(Note) Comprehensive income: fiscal year ending March 2023: △311 million (—%); fiscal year ending March 2022: △537 million (—%)

Net Income per
Share

Year ending
March 2023
March 2022

Diluted Net
Income per Share

Return on Equity
CapitalOrdinary Incomeon Total Assets

Operating Income
on Net Sales

Yen
—
—

%
△2.6
△1.9

%
△0.6
0.5

%
△1.2
△0.6

Yen
△38.40△26.41(Reference) Equity in earnings of affiliates: fiscal year ending March 2023: ¥△35 million; fiscal year ending March 2022: ¥33 million(2) Consolidated Financial Position
Total Assets

Year ending
March 2023
March 2022

Net Assets

Millions of yen

Millions of yen

24,22625,291

15,385
17,117

Ratio of Equity Capital

Net Assets per Share

%
63.5
67.7

Yen
1,420.51
1,355.09(Reference) Equity capital: fiscal year ending March 2023: ¥15,385 million; fiscal year ending March 2022: ¥17,117 million(3) Consolidated Cash Flow Results
Cash Flow fromOperating Activities

Year ending
March 2023
March 2022

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

158
△104

△339
△970

△329
△387

10,973
11,4841

2. Dividends
Dividends per ShareYear ending
March 2022
March 2023
March 2024
(Forecast)

1st
Quarter
Yen

InterimYear-end

Yen

3rd
Quarter
Yen

Yen

Total
(Annual)
Yen

—
—
—

5.00
5.00
5.00

—
—
—

5.00
5.00
5.00

10,00
10.00
10.00

Total Dividend
Payment

Payout Ratio(Consolidated)

Dividend on Net
Assets(Annual)(Consolidated)

Millions of yen

%

%

128
119

—
—

0.7
0.7

108.3

3. Forecast for the Consolidated Results for the Year Ending March 2024
（from April 1, 2023 to March 31, 2024）(Percentages show changes from the previous year for full-year figures and from the same quarter of the previous year for quarterly figures.)

Net Sales

Full
year

Operating Income

Net Income Attributable
to the Shareholders of
the Parent

Ordinary Income

Net Income
per Share

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Yen

16,100

6.1

305

—

300

—

100

－

9.23

※ 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
(3) Outstanding shares (common shares)(3)-1. Outstanding shares at the end of the fiscal years (including treasury stock):
The fiscal year ending March 2023: 13,831,091 shares
The fiscal year ending March 2022: 13,831,091 shares(3)-2. Treasury stock at the end of the fiscal year:
The fiscal year ending March 2023: 2,999,883 shares
The fiscal year ending March 2022: 1,198,938 shares(3)-3. Average number of shares during the accounting period
The fiscal year ending March 2023: 10,981,526 shares
The fiscal year ending March 2022: 12,632,559 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 2023, 257,200 shares for the fiscal year ending March 2022) contributed as trust assets of the performance-linked stockcompensation plan. In addition, these shares are included in the shares of treasury stock deducted in calculating the average number ofshares during the accounting period (257,200 shares for the fiscal year ending March 2023, 257,200 shares for the fiscal year ending
March 2022).

2

(Reference) Overview of Non-Consolidated Results
Results for the Fiscal Year Ending March 2023 (From April 1, 2022 to March 31, 2023)(1) Non-Consolidated Operating Results(Percentages indicate changes compared with the previous fiscal year.)

Net SalesYear ending
March 2023
March 2022

Millions of yen

1,835
1,969

Operating Income%

Ordinary Income

Millions of yen

%

△761
△513

—

△6.8
△11.5

—

%

△694
△421

—

Net Income per ShareYear ending
March 2023
March 2022

Net Income

Millions of yen

Millions of yen

%

△603
△436

—

—

—

Diluted Net Income per ShareYen△54.98△34.55Yen——(2) Non-Consolidated Financial Position
Total Assets

Year ending
March 2023
March 2022

Net Assets

Ratio of Equity CapitalMillions of yen

Millions of yen%

19,413
18,946

14,087
15,992

72.6
84.4

Net Assets per ShareYen

1,300.67
1,266.02(Reference) Equity capital: fiscal year ending March 2023: 14,087 million; fiscal year ending March 2022: ¥15,992 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 31, 2023.

3

Accompanying Material Contents
1. Overview of Operating Results, etc.……………………………………………………………………2(1) Overview of Operating Results for the Current Term…………………………………………… 2(2) Overview of Financial Position for the Current Term …………………………………………… 4(3) Overview of Cash Flow for the Current Term …………………………………………………… 4(4) Future Outlook…………………………………………………………………………………… 5(5) Basic Policy on Profit Allocation and Current Term/Next Term Dividend Distribution………… 5(6) Business Risks …………………………………………………………………………………… 5
2. Basic Philosophy on Selection of Accounting Standards………………………………………………7
3. Consolidated Financial Statements and Main Explanatory Notes.……………………………………. 8(1) Consolidated Balance Sheet…………………………………………………………………....…. 8(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income … 10
(Consolidated Statement of Income) …………………………………………………………… 10(Consolidated Statement of Comprehensive Income) ………………………………………… 11(3) Consolidated Statement of Changes in Shareholders’ Equity…………………………………… 12(4) Consolidated Statement of Cash Flows………………………………………………………… 14(5) Notes Concerning the Consolidated Financial Statements……………………………………… 16(Notes Concerning the Premise of a Going Concern) ……………………………………………16(Notes in the Event of Significant Changes in the Amount of Shareholders’ Equity) ………… 16(Changes in Accounting Policy) ………………………………………………………………... 16(Segment Information, etc.) …………………………………………………………………… 16(Per Share Information) ………………………………………………………………………… 19(Significant Subsequent Events) …………………………………………………………………19

1

1. Overview of Operating Results, etc.
(1) Overview of Operating Results for the Current Term
In the Japanese information and communications field in 2021, the Internet penetration rate remained high at
82.9%, while the percentage of households owning one or more smartphones increased to 88.6%, greatly
exceeding the 69.8% of households owning one or more personal computers (*1). In addition, while the movementaway from television has continued since the year 2000, mainly centered on the young, advertising expenses for
the Internet in Japan increased by 14.3% in 2022 from the previous year to ¥3,091.2 billion, exceeding the
combined advertising expenses for the four largest mass media sectors (newspapers, magazines, radio, andtelevision) of ¥2,398.5 billion, and reaching 43.5% of Japan’s total advertising expenditures (*2). This trend is also
evident worldwide, where in 2023 global spending on digital advertising is expected to reach approximately ¥56
trillion (US$422.8 billion), an increase of 7.2% from the previous year, with spending on digital advertisingexceeding 57.1% of total spending on advertising (*3).
*1. Source: Ministry of Internal Affairs and Communications, 2021 Telecommunications Usage Trend Survey Results*2. Source: Dentsu Inc., 2022 Advertising Expenditures in Japan*3. Source: Dentsu Group Inc., Global Ad Spend Forecasts (2022-2025)

In the entertainment market in 2022, sales in the global music market centered on streaming services grew by
9.0% year over year to approximately ¥3,523.4 billion (US$26.2 billion), marking its eighth consecutive year of
growth and reaching its highest sales total since the beginning of this century. In particular, paid subscription
streaming accounted for 67% of the total, increasing to ¥2,345 billion ($17.5 billion) (*4). In Japan, the production
value of music software including music videos increased by 4% year over year to ¥202.3 billion, to exceed ¥200
billion for the first time in three years since 2019. Moreover, paid music distribution sales increased by 17% to¥105.0 billion and audio streaming sales increased by 25% year over year to ¥92.8 billion, reaching almost 90%
of total paid music distribution sales (*5).
As music events in real venues began to resume in line with the Japanese Government’s basic infection prevention
guidelines, the live entertainment market showed signs of recovery, reaching ¥307.2 billion in 2021, a decreaseof 52.1% compared with 2019, before the start of the novel coronavirus pandemic (*6). Meanwhile, new ways ofenjoying live entertainment have taken root, with many artists streaming live performances via the Internet, thescale of the pay-per-view online live performance market was estimated at ¥44.8 billion in 2020, rising to an
estimated ¥51.2 billion in 2021 (*7).
*4. Source: IFPI, Global Music Report 2023
*5. Source: Recording Industry Association of Japan (RIAJ), The Recording Industry in Japan 2023
*6. Source: PIA Research Institute, Japanese Live Entertainment Market Size Confirmed Report (published June 15, 2022)*7. Source: PIA Research Institute, Japanese Online Live Entertainment Market Survey (published June 15, 2022)

Founded in 1992, Faith 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, in thecurrent music market, with the spread of smartphones, the music industry is facing a situation in which all mannerof activities, including content distribution methods, consumption styles, and content production methods, arechanging as media such as streaming, user-generated content (UGC) (*8), which allows general users to easilytransmit information to society, and social media become more diverse.
*8. User-generated content: images and videos generated and posted by users themselves on the Internet.

In this environment, the Faith Group is forging ahead with its Multi-Content and Multi-Device Strategy ofcreating environments in which people can enjoy a variety of content when and where they need it, by utilizing
the efforts it has focused on digital content distribution ever since its establishment, and developing new services
in response to the changing market environment, such as platforms that collect and organize the information
flooding the Internet and providing it to users after increasing its added value.
Thumva, a new kind of live-streaming platform that offers music lovers a novel live experience, includes features
for group viewing, comment posting, and gifting, allowing users to share a sense of excitement and togetherness
as if they were attending a live concert. In the future, we will continue to expand Thumva’s diverse lineup ofcontents. In addition, we have launched Thumva BIZ as a new online store service utilizing Thumva’s resourcesthat allows customers who wish to make inquiries or consult online to initiate business discussions with a single
click. Our proposal is for an online retail store service that meets the needs of the age of digital transformation.
The Faith Group has reorganized its Content Business with effect from April 1, 2023, with the goal of establishingan organization that is better adapted to the needs of the present era. By breaking down the functions that eachgroup company has developed to date and clarifying their core competencies, we are aiming to create anorganizational structure that facilitates business development, differentiates the profit structure, and further2

improves efficiency. By building a system capable of quickly responding to the rapidly changing tastes and trendsof the music market, we will enhance our ability to create appealing content and improve our competitiveness.
We are aiming to further develop synergies within the Group by consolidating the major labels, reinforcing andstreamlining the administrative and sales functions, and integrating the assets belonging to each label using theGroup’s own technology.
In addition, Faith, Inc. has consolidated its office functions into the Minami-Aoyama Office, and has establisheda permanent telework work system in anticipation of changes in behavioral patterns and the establishment of newvalues. We are actively engaged in a company-wide effort to reestablish and activate cross-sectional
communication between departments, and we will continue to pursue more flexible workstyles and realize diverse
and efficient ways of working.
Regarding the Faith Group’s business performance for the full fiscal year ended March 2023, net sales decreased
by 0.9% from the previous fiscal year to ¥15,177 million, the operating loss amounted to ¥183 million (comparedwith an operating loss of ¥92 million for the previous fiscal year), and the ordinary loss was ¥148 million(compared with an ordinary income of ¥136 million for the previous fiscal year). As a result, the Group posted a
net loss attributable to owners of the parent of ¥421 million (compared with a net loss attributable to owners of
the parent of ¥333 million for the previous year).

Information on each business segment is as follows.
The Faith Group previously had three reportable segments; the Content Business, the Point Service Business andthe Label Business, but as a result of a review of business management decisions and performance classifications,from the start of the current fiscal year, the Group has changed to two reportable segments: the Platform Businessand the Content Business. The comparative analysis with the previous fiscal year given below is based on thesegment classification after the change.
Platform BusinessIn the Platform Business, as sales in existing distribution businesses continue to decline, we will continue to invest
in new growth areas by linking and platforming each of our services with the aim of developing new andinnovative products and grasping diversified profit opportunities.
Through FaRao PRO, we are focusing not only on providing BGM for commercial use, but also on actively
developing sales activities centered on the expansion of functions necessary for store operations, such as solutions
that propose store branding, as well as announcement functions. In the future, we will continue to aim at thecreation and activation of a new BGM market.
In Fans’, our platform of services for artists based on the D2C (*9) business model, which is expected to expand
further in future, we are enhancing the functions essential to artists’ musical activities such as constructing official
websites, distributing music and videos, selling artists’ goods, and operating fan clubs. By strengthening links
with SNS, we have introduced a system that allows fans to contribute to building a community by sharing theinformation that creators send out. Moreover, as the provider of a service that allows more artists to freely
disseminate their work and information, we are attempting to acquire and expand the number of users and improve
the quality of the service by pursuing greater convenience.
*9. Abbreviation of “Direct to Consumer”—a business model for delivering services and products planned and manufactured by Faith directly to users

In addition, the Point Service provides a platform that allows retailers to operate point issuing systems and otherservices, and also offers total support from planning to operation as a series of cycles of point issuance dataacquisition, analysis, and sales promotion utilization, as well as providing outsourcing services to maximize theefficiency of sales promotion in the retail industry.
Regarding the performance of this segment for the full fiscal year ended March 2023, due to decreases in sales ofcarrier official website services and in the number of performances available for live distribution services in themobile phone content distribution field and a decrease in point issuance to existing member stores in the Retail
Point System Operation Platform, net sales decreased by 19.1% year over year to ¥2,150 million, and the segment
recorded a loss of ¥236 million (compared with a segment loss of ¥7 million for the previous fiscal year).

3

Content BusinessIn the Content Business, we are strengthening new businesses with an eye to the future in order to overcome ourdependence on sales of packaged products in the severe environment faced by the music and video-relatedindustries due to the changing music market. In an effort to create new hits, the three label companies, Nippon
Columbia, DREAMUSIC, and KSR, are developing and nurturing content suitable for the next-generation musicbusiness. In addition, they are actively utilizing their extensive catalog assets in new projects, with the goal of
expanding their IP domains both domestically and globally.
In addition, we accept commissions to manage various facilities and events utilizing the Faith Group’s
accumulated location business management knowhow. We have been entrusted with the operation of
ZEROTOKYO (a new facility utilizing the nighttime hours of Zepp Shinjuku (TOKYO), one of the largest live
halls in the area), which opened inside the Tokyu Kabukicho Tower in April 2023. This business is expected togenerate stable revenue due to its asset-light business structure, and we will work toward further expanding it byharnessing synergies with our existing businesses.
Regarding the performance of this segment, in response to an increase in activities by affiliated artists, a recovery
of sales related to the use of sound sources, and an increase in sales of exclusive mail-order products amid signsof recovery in the entertainment market, net sales increased by 3.0% year over year to ¥13,027 million andsegment income increased by 81.8% year over year to ¥433 million.
*Product and service names appearing in this document are trademarks or registered trademarks of Faith, Inc. either in Japan or in other countries.

(2) Overview of Financial Position for the Current Term
Total assets as of the end of the consolidated fiscal year ended March 31, 2023 decreased by ¥1,065 million fromthe end of the previous fiscal year to ¥24,226 million, a year-over-year decrease of 4.2%. This result was mainly
attributable to decreases in cash and deposits and investment and other assets.
Total liabilities increased by ¥666 million compared with the end of the previous fiscal year to ¥8,840 million, a
year-over-year increase of 8.2%. This result was mainly attributable to an increase in long-term loans payable.
Net assets decreased by ¥1,731 million compared with the end of the previous fiscal year to ¥15,385 million, a
year-over-year decrease of 10.1%. This result was mainly attributable to the acquisition of treasury stock and toa net loss attributable to shareholders of the parent. The equity ratio became 63.5%.

(3) Overview of Cash Flow for the Current Term
Cash and cash equivalents at the end of the consolidated fiscal year ended March 31, 2023 decreased by ¥510
million to ¥10,973 million, a decrease of 4.4% compared with the end of the previous 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)
Net cash flow from operating activities amounted to an inflow of ¥158 million (compared with an outflow of¥104 million for the previous fiscal year), attributable mainly to a loss before income taxes and minority interestsof ¥175 million, and to expenditures of ¥186 million in respect of depreciation expenses, ¥121 million in respectof amortization of goodwill, ¥212 million in respect of a decrease in inventories, ¥635 million in respect of adecrease in trade payables, ¥371 million in respect of others, as well as to income tax refunds of ¥138 million andincome tax payments of ¥363 million, etc.
(Cash flow from investing activities)
Net cash flow from investing activities amounted to an outflow of ¥339 million (compared with an outflow of¥970 million for the previous fiscal year), attributable mainly to expenditures of ¥304 million in respect of theacquisition of tangible fixed assets and ¥76 million in respect of the acquisition of software.
(Cash flow from financing activities)
Cash flow from financing activities amounted to an outflow of ¥329 million (compared with an outflow of ¥387
million for the previous fiscal year), mainly due to income of ¥1,450 million from long-term borrowing, andexpenditures of ¥409 million in respect of repayments of long-term borrowing, ¥1,300 million in respect ofacquisition of treasury stock, and ¥119 million in respect of dividend payments.

4(4) Future Outlook
The Faith Group’s business performance forecasts for next consolidated fiscal year (FY 2023; ending March 31,2024) are for net sales of ¥16,100 million, operating income of ¥305 million, ordinary income of ¥300 million,
and net income attributable to the shareholders of the parent of ¥100 million.
With the aim of creating “future entertainment”, the Faith Group respond quickly and flexibly to changes in thebusiness environment.

(5) Basic Policy on Profit Allocation and Current Term/Next Term Dividend Distribution
Faith Inc. will continue its policy of placing priority on strengthening its corporate structure and securing thefunds necessary for making aggressive business investments. At the same time, the Company also recognizes thatthe return of profits to shareholders is an important management task. For this reason, the Company will consider
the payment of dividends while taking into account its operating results and financial position.
As initially announced, the Company is planning to pay a dividend of ¥10 per share for the current fiscal year(including an interim dividend of ¥5 that has already been paid), based on the decision of the Board of Directors
to continue to make flexible payments to shareholders regardless of the timing of the Annual General Meeting of
Shareholders. For the next fiscal year, based on its fundamental policy of paying continuous stable dividends, theCompany is also planning to pay a dividend of ¥10 per share (including an interim dividend of ¥5).

(6) Business Risks
1) Risks related to business content
Platform Business(a) Business environment
The Faith Group develops new markets by creating services that users want to use based on original businesssolution 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 Platform
Business that the Group and its collaborating content providers are striving to develop, and it is possible that the
number of new entrants in this business will continue to increase in future. If unit prices of content decrease due
to price competition, etc., if the content services of the Group and its collaborating content providers fail to meetthe 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 ofcontent 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 inplace that allows us to restore operation quickly by remote control. However, in the case that unavoidable failuresoccur due to natural disasters, etc., that would make it difficult to provide services for an extended period, thismay 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 bytechnological development. However, even after the customer company's acceptance inspection, if deficiencies,
discrepancies or defects are found in the Group's technology, in the case that a user suffers a loss as a consequenceof using a product or service that employs the Group’s technology, this may adversely affect the Group’s current
or future business performance.
(c) Legal regulations
Increasing damage caused by illegal acquisition and modification of data on the Internet or by leakage of personal
information has led to the development of legal regulations in Japan and 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.
(d) Point service
The Faith Group sells points to participating point member stores, and in order to prepare for the cost burden ofusing points, with regard to the balance of unexchanged points among issued points, the required amount that is5

expected to be used in future is estimated and recorded as a provision based on the past point collection rate.
However, if points are exchanged in excess of the estimated amount, this may adversely affect the Group’sbusiness performance.
Contents 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 andDVDs, and the Sales/Digital Distribution 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 the music and video-related industry in generaldeclines due to a recession or reduced consumer spending, the Group's business performance and financial
condition may be adversely affected. An increase in illegal copying and downloading is considered to be one of
the factors causing the current decline in sales of music and video-related titles and the contraction in the overall
scale of the music and video-related industry. Competition in the music 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 efforts on this field as well. However,
the expansion of this market may have a negative impact on sales of the Group’s conventional products such asmusic CDs. Due to the recent revision of the Japanese Copyright Act, downloading of illegal 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 the stability and growth of the Group’s management derives from the creation of artists and music works thatare expected to become hits. The Group will continue to discover and develop new artists who will be acceptedby consumers, but since the creation of hit titles involves complex and uncertain factors such as consumer
preferences and trends, lack of success at producing hits may adversely affect the Group’s business performanceand 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 offactors such as the trends of the times and consumer preferences, sales may fall below the forecast levels predictedfrom past results so that the targets specified in the initial performance plan may not be achieved. In addition, theproduction of music CDs and other products may be postponed or canceled due to factors involving artists,
production, and manufacturing and sales outsourcing, which may cause the Group’s performance to fall below
the level specified in the initial performance plan. For this reason, it is difficult to predict business performanceelements such as sales forecasts, and a decline in profit for a specific quarter may change the business performanceplan and affect the business performance. In the manufacturing and sales contract business, depending on thecircumstances of individual business partners, the subcontractor may be changed from the Group to anothersubcontractor, 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 return prevention measures
Under the Antimonopoly Act, copyrighted works such as music CDs, newspapers, books, etc. may be legallyresold 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 its view that it is reasonable to leave the system
in place for the foreseeable future. Moreover, in recent years, the copyright law has been revised to protect theinterests of copyright holders of music CDs produced locally under license agreements for the purpose of sellingthem in Asia at low cost. A so-called return prevention measure has been introduced to prohibit the import ofcommercial 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 a business practice under which retailers can return products within a certain range. For this reason, some6

products that do not sell well may be returned in the future. The Faith group properly prepares for this eventuality
by recording contract liabilities based on past returns and other provisions. However, if more returns occur due
to unexpectedly poor sales, etc., there is a possibility that the Group’s business performance may be adversely
affected through decreases in sales and profit.
2) Intellectual property rights
The Faith Group has filed patent applications and trademark applications related to its technology, and the Groupintends to continue making similar promotion efforts in future. With respect to intellectual property rights suchas patent rights, trademark rights, and copyrights, the Group is strengthening its efforts to protect these rights andto prevent infringements. However, it is difficult to predict how the intellectual property rights of third parties
will be applied to the Group’s business. For example, in the future, if a patent right related to the Group’s businessmodel or to a related technology is established by a third party, or if a patent right not recognized by the Group isestablished, there is a possibility that the Group may be required to compensate the patent holder for damages
related to an infringement of the said patent right, or it may become impossible for the Group to continue to
conduct all or part of the business related to the patent. In addition, even if the patent holder allows the use tocontinue, 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 Groupmay unintentionally infringe the rights of third parties. Such copyright infringements may adversely affect theGroup’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 complianceamong 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 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 a possibility that such business tie-ups may adversely affect the Group’s business performance and financial
condition.
5) Pension system
The Group has established a defined-benefit corporate pension plan for beneficiaries and a pension plan for
employees that combines a lump-sum retirement allowance plan with a defined contribution pension plan.
However, if in the future pension asset management yields decline, or if the actuarial assumptions or theassumptions used to calculate retirement benefit obligations are changed, retirement benefit obligations andretirement benefit expenses may increase, which could adversely affect the Group’s business performance andfinancial condition.
6) Large-scale natural disasters and pandemics
In the event of a natural disaster such as a large-scale earthquake, severe storm or flood, or a pandemic such as
the novel coronavirus infection, the Group's business performance could be affected by such factors as voluntary
restraints on business activities and the prolonged closure of store facilities. In addition, if the Group's head office,business offices, store facilities, artists, production companies, contract manufacturers, or sales consignees
experience a disruption of their business activities due to the aforementioned natural disasters or pandemics, there
is a possibility that this could hinder the Group’s business activities and adversely affect its business performanceand 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 underJapanese standards 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 to respond appropriately based on the movements of other companies, etc.

7

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

FY 2021(As of March 31, 2022)
AssetsCurrent assets
Cash and deposits
Notes receivable - trade
Accounts receivable
Contract assets
Marketable securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Income taxes refundable
Other
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)
Boats and ships
Accumulated depreciation
Boats and ships (net base)Land
Construction in progress
Total tangible fixed assets
Intangible fixed assets
Software
Goodwill
Other
Total intangible fixed assets
Investment and other assets
Investment securities
Deferred tax assets
Other
Allowance for doubtful accounts
Total investment and other assets
Total fixed assets
Total assets

8

FY 2022(As of March 31, 2023)

11,536,650
8,296
2,038,607
370
224,003
336,103499,421104,241
141,976
639,337△18,325
15,510,681

11,024,018
6,873
1,992,323
920
218,509290,769
373,434
62,796
175,393
796,954△23,801
14,918,191

2,160,563△823,266
1,337,297
613,451△573,884
39,567
1,003,309△922,471
80,837－－－
1,558,120
438,3133,454,136

2,349,898△753,527
1,596,370
618,462△583,498
34,964815,982△701,522
114,460
2,894
△482
2,412
1,558,120
275,2123,581,540

118,913
1,270,938
267,486
1,657,338

100,278
1,149,180
258,789
1,508,248

3,528,354
705,202
1,071,430△635,348
4,669,638
9,781,112
25,291,794

3,621,214
210,402
1,064,557△677,703
4,218,470
9,308,259
24,226,451

(Consolidated Balance Sheet)(Thousands of yen)

FY 2021(As of March 31, 2022)
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
Contract liabilities
Other
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
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 other marketablesecurities
Foreign currency translation adjustments
Accumulated adjustment for retirement benefits
Total other accumulated comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

9

FY 2022(As of March 31, 2023)

1,401,065
340,000
217,700
678,160
2,888,759
119,451
238,261
49,569689,1096,622,077

765,755
390,000
495,350
906,621
3,141,533
27,201
295,468
48,216
742,554
6,812,700

162,150
542,544
39,691
39,283765,118
3,191
1,551,979
8,174,057

924,800
504,82247,15839,333
482,410
29,3352,027,860
8,840,561

3,218,000
2,840,498
10,393,392△1,122,330
15,329,560

3,218,000
2,840,496
9,851,724△2,422,510
13,487,710

1,740,714

1,848,510△8,881
56,343
1,788,177－
17,117,737
25,291,794△8,87958,547
1,898,179－
15,385,889
24,226,451

(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income(Consolidated Statement of Income)(Thousands of yen)

FY 2021(April 1, 2021 ~March 31, 2022)
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income (loss =△)Non-operating income
Interest income
Dividend income
Interest on securities
Foreign exchange gains
Share of profit of entities accounted for using equity method
Gain on investments in investment partnerships
Subsidy income
Miscellaneous receipts
Total non-operating Income
Non-operating expenses
Interest paid
Foreign exchange loss
Share of loss of entities accounted for using equity method
Loss on valuation of securities
Loss on investments in investment partnerships
Miscellaneous expenses
Total non-operating expenses
Ordinary income (loss =△)Extraordinary income
Gain on sale of fixed assets
Gain on sale of investment securities
Total extraordinary income
Extraordinary losses
Loss on disposal of fixed assets
Loss on liquidation of subsidiaries
Loss on valuation of investment securities
Impairment loss
Total extraordinary losses
Net income (loss =△) before income taxes
Corporate, inhabitant, and enterprise taxes
Corporate tax adjustment
Total income taxes
Net income (loss = △)Net income (loss = △) attributable to noncontrolling interests
Net income (loss = △) attributable to owners of parent- 10 -FY 2022(April 1, 2022 ~March 31, 2023)

15,311,830
9,495,071
5,816,758
5,908,760△92,001

15,177,877
9,382,883
5,794,994
5,978,124△183,130

125
4,259
11
568
33,407
153,510
234,878
16,987443,749

104
4,440
232
－
－
2,481
55,43839,675102,372

4,419
－
－
6,586
201,816
1,997
214,820
136,9278,470
622
35,416
6,439
9,922
6,546
67,417△148,174

141
34,11434,255

4,832
－
4,832

42
29,756104,940
28,336
163,075
8,106
235,436
106,323
341,759△333,652－△333,652

18,807－－
13,17031,977△175,319
81,746
164,711
246,457△421,777－△421,777

(Consolidated Statement of Comprehensive Income)(Thousands of yen)

FY 2021(April 1, 2021 ~March 31, 2022)
Profit (loss = △)Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Retirement benefit adjustment (before any applicable tax
effect)Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

11

FY 2022(April 1, 2022 ~March 31, 2023)△333,652△421,777△247,145
21,925

107,795
2

21,6242,204△203,595△537,248

110,001△311,775△537,248△311,775－－

(3) Consolidated Statement of Changes in Shareholders’ Equity
FY 2021 (April 1, 2021 ~ March 31, 2022)(Thousands of yen)
Shareholders’ equity
Capital stock Capital surplus
Balance at beginning of period
Cumulative effects of changes inaccounting policies
Balance at beginning of period
reflecting change in accounting policy

3,218,000

2,840,667

Retainedearnings

Treasury stock

Total shareholders’equity10,698,825△1,121,619

15,635,873

157,121
3,218,000

2,840,667

10,855,946

157,121△1,121,619

15,792,994

Changes of items during period
Dividend of surplus△128,900△128,900

Net gain or net loss (△) attributable
to shareholders of parent△333,652△333,652

Acquisition of treasury stock

Increase/decrease in equity resulting
from acquisition of shares of
consolidated subsidiaries
Changes in non-equity items during
period (net amount)

Balance at end of period

△838

126

36

△90

Disposal of treasury stock

Total changes during period

△838

△78

△78

－

△168

△462,553△711△463,433

3,218,000

2,840,498

10,393,392△1,122,330

15,329,560

Accumulated other comprehensive income

Balance at beginning of period
Cumulative effects of changes inaccounting policies
Balance at beginning of period
reflecting change in accounting policy

Valuation
Foreigndifference
currency
on othertranslation
marketableadjustments
securities

Retirement
benefitrelated
adjustments

Total otheraccumulatedcomprehensive income

Minority
Interests

Total net
assets△30,807

34,7191,991,773－

17,627,646

1,987,860

157,121
1,987,860△30,807

34,7191,991,773－

17,784,767

Changes of items during period
Dividend of surplus△128,900

Net gain or net loss (△) attributable
to shareholders of parent△333,652△838

Acquisition of treasury stock

36

Disposal of treasury stock
Increase/decrease in equity resulting
from acquisition of shares of
consolidated subsidiaries
Changes in non-equity items during
period (net amount)△78△247,145

21,925

21,624△203,595

Total changes during period△247,145

21,925

21,624△203,595－△667,029

Balance at end of period

1,740,714△8,881

56,343

1,788,177－

17,117,737

12△203,595

FY 2022 (April 1, 2022 ~ March 31, 2023)(Thousands of yen)
Shareholders' equity
Capital stock Capital surplus
Balance at beginning of period
Cumulative effects of changes inaccounting policies
Balance at beginning of period
reflecting change in accounting policy

3,218,000

2,840,498

Retainedearnings

Treasury stock

Total shareholders’equity10,393,392△1,122,330

15,329,560－

3,218,000

2,840,498

10,393,392△1,122,330

15,329,560

Changes of items during period
Dividend of surplus△119,890△119,890

Net gain or net loss (△) attributable
to shareholders of parent△421,777△421,777

Acquisition of treasury stock

Increase/decrease in equity resulting
from acquisition of shares of
consolidated subsidiaries
Changes in non-equity items during
period (net amount)

Balance at end of period△1,300,188

9

6

△2

Disposal of treasury stock

Total changes during period△1,300,188

－

－
ー

－

△2

△541,667△1,300,179△1,841,849

3,218,000

2,840,496

9,851,724△2,422,510

13,487,710

Accumulated other comprehensive income

Balance at beginning of period
Cumulative effects of changes inaccounting policies
Balance at beginning of period
reflecting change in accounting policy

Valuation
Foreigndifference
currency
on othertranslation
marketableadjustments
securities

Retirement
benefitrelated
adjustments

Total otheraccumulatedcomprehensive income

Minority
Interests

Total net
assets△8,881

56,343

1,788,177－

17,117,737

1,740,714－
1,740,714△8,881

56,343

1,788,177－

17,117,737

Changes of items during period
Dividend of surplus△119,890

Net gain or net loss (△) attributable
to shareholders of parent△421,777△1,300,188

Acquisition of treasury stock

6

Disposal of treasury stock
Increase/decrease in equity resulting
from acquisition of shares of
consolidated subsidiaries
Changes in non-equity items during
period (net amount)－
107,795

2

2,204

110,001

110,001

Total changes during period

107,795

2

2,204

110,001－ △1,731,847

Balance at end of period

1,848,510△8,87958,547

1,898,179

13－

15,385,889

(4) Consolidated Statement of Cash Flows(Thousands of yen)

FY 2021(April 1, 2021 ~March 31, 2022)
Cash flow from operating activities
Income or loss (△) before income taxes, etc.
Depreciation expenses
Impairment losses
Gain or loss on liquidation of subsidiaries (△ = gain)
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)
Interest paid
Subsidy income
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 valuation 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)
Other
Sub-total
Subsidy income received
Interest and dividends received
Interest paid
Income tax refunded
Income tax paid
Net cash flow from operating activities

14

FY 2022(April 1, 2022 ~March 31, 2023)

8,106
198,744
28,33629,756
124,757△175,319
186,636
13,170－121,757

49,66147,832△114,162

57,206△251－△34,377△37,722

6,561△4,385
△11
6,586
4,419
△234,878△33,40748,306△34,114104,940
42△164,168△23,896
437,039△87,162△140,395
34,730210,778
234,878
4,386△4,67771,062△620,494△104,067

7,466△4,544
△232
6,439
8,470
△55,438
35,416
7,441－－
18,80752,582
212,214△635,309
69,431
22,867
371,456
330,630
55,438
4,776△7,525
138,186△363,105
158,400(Thousands of yen)

FY 2021(April 1, 2021 ~March 31, 2022)
Cash flow from investing activities
Expenditure for payments into term deposits
Expenditure for acquisition of tangible fixed assets
Income from sale of tangible fixed assets
Expenditure for acquisition of software
Expenditure for acquisition of shares of affiliates
Expenditure for acquisition of investment securities
Income from sale of investment securities
Income from share of profits from investment partnerships
Income from collection of loans receivable
Expenditure for security deposits
Income from collection of security deposits
Expenditure for fulfillment of asset retirement obligations
Other
Net cash flow from investing activities
Cash flow from financing activities
Net increase (△ = decrease) in short-term borrowing
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
Other
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

15

FY 2022(April 1, 2022 ~March 31, 2023)△2,000△637,747
141△154,466△157,405△40,000
40,30768,362－△9,000190,469△146,724△122,457△970,521－△304,144
4,832△76,824－△5,000
1,218
－
180
△162
131,59750△91,648△339,902－△258,700－△838
36△128,195△78△387,775－△1,462,364
12,946,994
11,484,630

50,000△409,700
1,450,000△1,300,188
6△119,249－△329,131－△510,633
11,484,630
10,973,997

(5) Notes Concerning the Consolidated Financial Statements(Notes Concerning the Premise of a Going Concern)
Not applicable(Note in the Case of Significant Changes in the Amount of Shareholders’ Equity)
Faith repurchased 1,800,000 shares of treasury stock based on a resolution of the Board of Directors
meeting held on May 17, 2022. Accordingly, the Company’s holdings of treasury stock increased by¥1,299,600 thousand during the current fiscal year. As a result of this acquisition, the total amount oftreasury stock was ¥2,422,510 at the end of the current fiscal year.
(Changes in Accounting Policies)(Application of Implementation Guidance on Accounting Standard for Fair Value Measurement)
With effect from the start of the current fiscal year, Faith has begun to apply the Implementation
Guidance on Accounting Standard for Fair Value Measurement (ASBJ Guidance No. 31, June 17,
2021, hereinafter the “Implementation Guidance”). The Company has decided to apply the new
accounting policies set forth in the Implementation Guidance prospectively in accordance with thetransitional treatment stipulated in Section 27-2 of the Implementation Guidance. Application of the
Implementation Guidance has no impact on the Company’s consolidated financial results.
(Additional Information)(Application of Accounting Treatment and Disclosure When Adopting the Group Tax Sharing
System)From the current fiscal year, Faith and some of its domestic consolidated subsidiaries have adopted
the group tax sharing system. In accordance with this change, the Company is applying the Practical
Solution on the Accounting and Disclosure under the Group Tax Sharing System (Practical Issues
Task Force Report No. 42, August 12, 2021, hereinafter “PITF No. 42”). In addition, in accordancewith Paragraph 32 (1) of PITF No. 42, the Company considers that the change in accounting policy
due to the application of PITF No. 42 has no impact on the Company's financial statements.
(Segment Information)
1. Outline of reportable segments
The Company’s reportable segments provide financial information separated according to its
various structural units and are also subject to periodic review when the Board of Directors decides
on the allocation of management resources and makes performance appraisals. The Faith Group’s
main businesses are the Platform Business the Content Business.
Platform BusinessIn order to promote its Multi-Content and Multi-Platform Strategy, the Faith Group’s Platform
Business provides one-stop solutions ranging from content creation and production, todevelopment and provision of distribution platform technology, construction and operation of
network systems for content distribution, and content distribution services for users. Thisbusiness also provides point services to retailers and other services. Main companies involved inthis business: Faith, Inc., Faith Wonderworks, Inc., and GoodyPoint Co., Ltd.
Content Business
The Content Business encompasses the planning, production and sales of sound sources and videos,
as well as the music copyright acquisition and management business, the manufacturing and salesconsignment business, and the facility and event consignment business. Main companies involvedin this business: Nippon Columbia Co., Ltd., DREAMUSIC Inc., and KSR Corp.
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. Intersegment sales and transfer amounts are decided in consideration of the market price and otherfactors.

16

3.

Information on sales, profit or loss, assets, liabilities and other items by reportable segment
Previous consolidated fiscal year/FY 2021 (April 1, 2021 ~ March 31, 2022)(Thousands of yen)

Net sales
Goods transferred at a single point in time
Goods transferred over a period of time
Revenue from contracts with customers
Sales to external customers
Intersegment sales or transfer amount
Total
Segment income or segment loss (△)
Segment assets
Other items
Depreciation expenses
Amortization of goodwill

Adjustment
Amount recorded inamount (Notes Consolidated Financial
1 & 2)
Statements (Note 3)

PlatformContent

Total

2,658,206－
2,658,206

12,599,192
54,431
12,653,623

15,257,399
54,431
15,311,830

2,658,206

12,653,623

15,311,830

－
－
－
－

15,257,399
54,431
15,311,830
15,311,830

317,066

29,503

346,570△346,570－

2,975,273

12,683,127

15,658,401△346,570

15,311,830△7,032

238,293

231,260△323,262△92,001

13,821,381

14,009,355

27,830,737△2,538,942

25,291,794

112,92085,824

198,744－

198,744

4,000

120,757

124,757－

124,757

Investment in equity-method affiliates

243,289
90,693
333,982－
333,982
Increase in tangible and intangible fixed
688,373
107,969
796,342－796,342
assets(Notes)1. The segment income or segment loss adjustment amount of △¥323,262 thousand for the current fiscal year is dueto the elimination of intersegment transactions of △¥15,595 thousand and corporate expenses of ¥324,857
thousand that are not allocated to reportable segments.
2. The segment assets adjustment amount eliminates intersegment transactions, etc.
3. The segment income or segment loss is adjusted with the operating loss in the consolidated financial statements.

Current consolidated fiscal year/FY 2022 (April 1 2022 ~ March 31, 2023)(Thousands of yen)

PlatformContent

Total

2,150,231－
2,150,231

12,840,225
187,420
13,027,646

14,990,457
187,420
15,177,877

2,150,231

13,027,646

385,156

64,857

Total

2,535,388

Segment income or segment loss (△)
Segment assets

Net sales
Goods transferred at a single point in time
Goods transferred over a period of time
Revenue from contracts with customers
Sales to external customers
Intersegment sales or transfer amount

Other items
Depreciation expenses
Amortization of goodwill
Investment in equity-method affiliates

Adjustment
Amount recorded inamount (Notes Consolidated Financial
1 & 2)
Statements (Note 3)

14,990,457
187,420
15,177,877

15,177,877

－
ー
ー
－

450,014△450,014－

13,092,503

15,627,892△450,014

15,177,877△236,860

433,171

196,311△379,441△183,130

14,165,422

14,204,306

28,369,729△4,143,277

24,226,451

116,082

70,553

186,636－

186,636

1,000

120,757

121,757－

121,757

224,627

116,374

341,001△35,225

15,177,877

305,775
Increase in tangible and intangible fixed
328,170
52,798
380,968
380,968－
assets(Notes)1. The segment income or segment loss adjustment amount of △¥379,441 thousand for the current fiscal year is dueto the elimination of intersegment transactions of △¥11,429 thousand and corporate expenses of ¥390,870
thousand that are not allocated to reportable segments.
2. The segment assets adjustment amount eliminates intersegment transactions, etc.
3. The segment income or segment loss is adjusted with the operating loss in the consolidated financial statements.
4. The adjustment for investment in equity-method affiliates represents the elimination of intersegment transactions.

17

4. Matters related to changes in reportable segments, etc.
Historically, the Faith Group has had three reportable segments: the Content Business, the Point
Service Business, and the Label Business. However, after reassessing its business management
decision-making and performance classifications, with effect from the start of the current fiscal
year, the Group has begun operate under two reportable segments: the Platform Business and theContent Business. Moreover, since Faith Inc. now manages the entire Faith Group following the
integration of the Group’s offices, the personnel and other expenses of the Company's
Administration Department, which were previously included under the Content Business, are now
included in the adjustment amount as companywide expenses effective from the current fiscal year.
In addition, segment information for the previous fiscal year is disclosed based on the reporting
segment classifications resulting from this change.
[Related Information]
Previous consolidated fiscal year/FY 2021 (April 1, 2021 ~ March 31, 2022) and current
consolidated fiscal year/FY 2022 (April 1 2022 ~ March 31, 2023)
1. Information by product and service
This information is omitted because similar information appears under (Segment Information).
2. Information by region(1) Sales: Information on sales by region is omitted because sales to external customers in Japanaccount for over 90% of the net sales amount reported on the consolidated statement ofincome.
(2) Tangible fixed assets: Information on tangible fixed assets by region is omitted because theamount of tangible fixed assets in Japan accounts for over 90% of the amount of tangible
fixed assets reported on the consolidated balance sheet.
3. Information on major customers
Information on major customers is omitted because there were no sales to a single externalcustomer accounting for 10% or more of net sales on the consolidated statement of income.
[Information on Impairment Losses on Fixed Assets for Each Reportable Segment]
Previous consolidated fiscal year/FY 2021 (April 1, 2021 ~ March 31, 2022)(Thousands of yen)

Impairment losses

PlatformContent

28,336－

Total
28,336Company-wide/
elimination－

Total
28,336

Current consolidated fiscal year/FY 2022 (April 1 2022 ~ March 31, 2023)(Thousands of yen)

Impairment losses

PlatformContent

13,170－

Total
13,170Company-wide/
elimination－

Total
13,170[Information on Amortization of Goodwill and Unamortized Balance for Each Reportable Segment]
Previous consolidated fiscal year /FY 2021 (April 1, 2021 ~ March 31, 2022)(Thousands of yen)

PlatformContent

Total

Company-wide/
Total
elimination
Impairment losses
1,000
1,269,938
1,270,938
1,270,938－(Note) Information on amortization of goodwill is omitted as this information appears in [Segment Information].

Current consolidated fiscal year/FY 2022 (April 1 2022 ~ March 31, 2023)(Thousands of yen)

PlatformContent

Company-wide/
Total
elimination
Impairment losses
1,149,180
1,149,180
1,149,180－－(Note) The amount of amortization of goodwill is omitted as this information appears in [Segment Information].

18

Total

[Information on Gains on Negative Goodwill by Reportable Segment]
Previous consolidated fiscal year/FY 2021 (April 1, 2021 ~ March 31, 2022) and current
consolidated fiscal year/FY 2022 (April 1 2022 ~ March 31, 2023)
Not applicable(Per Share Information)(Yen)

FY 2021 (April 1, 2021 ~ March 31, 2022)
FY 2022 (April 1 2022 ~ March 31, 2023)
Net assets per share
1,355.09 Net assets per share
1,420.51
Net loss (△) per share△26.41 Net loss (△) per share△38.40(Notes)1. The amount of net income per share fully diluted during the current fiscal year and diluted net income per share forthe previous fiscal year are not recorded because there are no residual shares subject to a dilution effect.
2. The basis of the calculation of net loss per share is as follows.
FY 2021
FY 2022(April 1, 2021 ~ March 31,(April 1 2022 ~ March 31,
2022)
2023)
Net loss (△) per share
Net loss (△) attributable to the shareholders of the△333,652△421,777
parent (thousands of yen)Amount not attributable to ordinary shareholders－－(thousands of yen)
Net loss (△) pertaining to common stock△333,652△421,777
attributable to the shareholders of the parent(thousands of yen)
Average number of shares outstanding during the
12,632,559
10,981,526
period (shares)(Note) The Company's shares contributed as trust assets for the performance-linked stock compensation plan are included in theamount 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 (257,200 shares for the previous fiscal year ending March 2022, and 257,200 shares forthe current fiscal year ending March 2023).

3. The basis of the calculation of net assets per share is as follows.
End of FY 2021
(As of March 31, 2022)
Total amount of net assets (thousands of yen)
17,117,737
Amount deducted from total amount of net assets－(thousands of yen)
(Of which, non-controlling interests (thousands of
(－)
yen))
Year-end net assets pertaining to common stock
17,117,737(thousands of yen)
Year-end number of shares of common stock used
12,632,153
in calculating net assets per share (shares)(Significant Subsequent Events)
Not applicable19

End of FY 2022
(As of March 31, 2023)
15,385,889－(－)
15,385,889
10,831,208