BRIEF STATEMENT OF CONSOLIDATED FINANCIAL RESULTS
FOR THE 2nd QUARTER OF THE FISCAL YEAR ENDING MARCH 2016
This is an English translation of summarized consolidated financial results prepared
for the convenience of non-resident shareholders. Should there be any inconsistency
between the translation and the official Japanese text, the latter shall prevail.

November 12, 2015
Faith, Inc. (Stock code 4295, Listed on TSE 1st section)(URL http://www.faith.co.jp/)
Representative: Hajime Hirasawa, CEO/President
Contact: Jiro Saeki, CFO/Director
Tel: +81-3-5464-7633
Date of Submission of Securities Report: November 13, 2015
Starting Date of the Dividend Payment: December 10, 2015
Preparation of Supplementary Materials for Quarterly Financial Results: Applicable
Information Meeting for Quarterly Financial Results to be Held: Applicable (for Institutional
Investors and Analysts)
Amounts are rounded down to the nearest JPY 1 million.

1. Results for the 2nd Quarter of the Fiscal Year Ending March 2016
(From April 1, 2015 to September 30, 2015)(1) Consolidated Operating Results(Percentages indicate changes compared with the same quarter of the previous fiscal year.)

Net Sales

Q2 of the year ending
March 2016
March 2015

Millionsof yenOperating Income

%

9,709
9,082

6.9
186.3

Millionsof yenOrdinary Income
Millionsof yen

%
—
—

575
△830

%

Net Income
Millionsof yen

—
—

580
△791

313
△697

%
—
—

(Note) Comprehensive income: 2nd quarter of the fiscal year ending March 2016: ¥379 million (—%); 2nd quarter of fiscal year ending
March 2015: △¥1,135 million (—%)

Q2 of the year ending
March 2016
March 2015

Net Income per
Share

Diluted Net
Income per Share

Yen
30.23
△61.20Yen——(2) Consolidated Financial Position
Total Assets

Ratio of Equity Capital

Net Assets Per Share

Millions of yen

Millions of yen%

Yen

23,023

16,24966.4

1,549.01

25,835

17,72365.5

1,540.23

Q2 of the year ending
March 2016
Year ending March 2015

Net Assets(Reference) Equity capital: 2nd quarter of fiscal year ending March 2016: ¥15,288 million; fiscal year ending March 2015: ¥16,918 million

2. Dividends
Dividends per Share
(Record dates)

Year ending March 2015
Year ending March 2016

1st Quarter

yen
—
—

3rd Quarter

Interim

yen
5.00
5.00

Year ending March 2016
(Forecast)Year-end

yen
5.00

yen
10.00

—

5.00

10.00

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

1

Total

yen
—

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

Net Sales

Full year

Operating Income

Ordinary Income

Net Income
Attributable to the
Shareholders of the
Parent Company

Millionsof yen%Millionsof yen%Millionsof yen%Millions ofyen%

19,100

△2.5

730

—

720

—

360

—

Net Income
per Share
Yen
36.47

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

※ Notes(1) Changes in significant subsidiaries (accompanying changes in scope of consolidation): None
Newly added subsidiaries: 0 companies (subsidiary’s name:)Removed subsidiaries: 0 companies (subsidiary’s name:)(2) Adoption of simplified accounting practices or specific procedures in preparation of the quarterly
consolidated financial reports: Applicable* For details, please refer to “2. Summary Information, (2) Adoption of Simplified Accounting Methods in the

Preparation of Quarterly Financial Statements” on page 5 of the accompanying material.

(3) Changes in accounting policy, changes in accounting estimates, and restatements(i) Changes accompanying revisions of accounting standards, etc.: Applicable(ii) Changes other than the above: None(iii) Changes in accounting estimates: None(iv) Restatements: None
* For details, please refer to “2. Summary Information, (3) Changes in Accounting Principles, Procedures, andDisclosure Methods” on page 5 of the accompanying material.

(4) Outstanding shares (common shares)(i) Outstanding shares at the end of the fiscal years (including treasury shares):
The 2nd quarter of the fiscal year ending March 2016: 11,960,000 shares
The fiscal year ending March 2015: 11,960,000 shares(ii) Treasury shares at the end of the fiscal years:
The 2nd quarter of the fiscal year ending March 2016: 2,089,920 shares
The fiscal year ending March 2015: 975,480 shares(iii) Average number of shares at the interim accounting period
The 2nd quarter of the fiscal year ending March 2016: 10,363,240 shares
The 2nd quarter of the fiscal year ending March 2015: 11,390,115 shares* Indication of auditing procedures implementation status
This financial results report is exempt from quarterly review procedures under Japan’s Financial Instruments and Exchange
Law. As of the time of disclosure of this report, the auditing procedure based on the Financial Instruments and Exchange Law
has not been completed.
* Statement regarding the proper use of financial forecasts and other special remarks(Notice regarding statements concerning the future)
Statements concerning the future, such as performance forecasts, etc., described in the present material are based on
information currently available to the Company and on certain assumptions judged as reasonable by the Company. The
Company’s actual performance may differ substantially from these forecasts as a result of various factors beyond theCompany’s control. For details of cautions, etc., employed in making performance forecasts and the assumptions underlying
performance forecasts, please refer to 1. (3) Explanation Concerning Future Forecast Information on the Consolidated
Financial Results, etc.” on page 4 of the accompanying material.
(To obtain supplemental documents relating to financial results)
Supplemental materials related to the Company’s quarterly and other financial results are posted on the company website.

2

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

2
2
4
4

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

5
5
5
5

3. Consolidated Financial Statements ··············································································· 6(1) Consolidated Balance Sheet ··················································································· 6(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income ········ 8(Consolidated Statement of Income) ·········································································· 8(Consolidated Statement of Comprehensive Income) ······················································· 9(3) Consolidated Statement of Cash Flows ······································································· 10(4) Notes Concerning the Consolidated Financial Statements ················································· 12(Note Concerning the Premise of a Going Concern) ························································ 12(Note in the Case of Significant Changes in the Amount of Shareholders’ Equity) ··················· 12(Segment Information) ························································································· 13

1. Qualitative Information Concerning the Settlement of Accounts for the 2nd Quarter(1) Explanation Concerning the Operating Results
As high-performance mobile devices such as smartphones and tablets become increasingly widespreadthroughout the world in keeping with the continuing development of the Internet infrastructure, in theJapanese domestic information communication field, the ratio of smartphone contracts currently
exceeds 60% of all contracts for mobile phone devices and the ongoing shift from feature phones tosmartphones is continuing apace. Meanwhile, information and communications technology (ICT)utilization is expanding among people of all age groups. A comparison of Internet utilization rates
between 2002 and 2014 classified according to user age shows increases in all age groups, with the riseamong senior citizens aged over 60 being particularly pronounced (*1).
(*1) "Communications Usage Trend Survey" compiled by the Ministry of Internal Affairs and Communications

In the music contents market as well, in addition to the launch of a succession of subscription-type
music distribution services that allow subscribers to listen to as much music as they like for a fixedmonthly charge, both business models and styles of listening to music are changing, as exemplified by
the continuing expansion of the market that utilizes high-resolution sound sources (audio data featuring
a sound quality higher than that of a music CD), etc.
In future, a further switch to services that are in keeping with the digital era is expected against thebackground of an increasing Internet connection ratio and higher smartphone functionality. Accordingly,
it is becoming even more important to promptly deploy services that match the changing environment
and marketplace.
In the current environment, the Faith Group is continuing to utilize the results of the efforts it has beenpouring into content digital distribution ever since its establishment, and is forging ahead with its
Multi-Content and Multi-Platform Strategy of creating an environment that allows people to enjoy awide diversity of contents whenever and wherever they choose. The Group is also strengthening thedevelopment of new services in response to the changing market environment such as platforms thatcollect and organize the information flooding the Internet and then provide this to users after increasing
its added value. Moreover, we are proceeding with streamlining by deploying our human resources
flexibly irrespective of organization, including through office and management departmental integration
at the Group level, in response to the needs of the work progress situation, busy periods, etc. Recently,
with effect from July 1, 2015, the Business Development Department of Faith Wonderworks, Inc., a100% subsidiary of the Company, was integrated with the Company and centralized by means of asimplified absorption-type corporate split. This restructuring measure was conducted in the interests ofsystem improvement aimed at more efficient operation and enhanced competitiveness through the
integration and centralization of our production and development resources.
Regarding the Faith Group business performance for the second quarter of the fiscal year ending March
2016, although sales of distribution services for feature phone use—the Group’s largest sales
category—continued to decrease, as a consequence of launching new services in response to theenvironment and of the return to profitability of the Company’s 100% consolidated subsidiary Nippon
Columbia Co., Ltd., net sales increased by 6.9% compared with the same quarter of the previous fiscal
year to ¥9,709 million while the Group recorded an operating income of ¥575 million (compared with
an operating loss of ¥830 million for the same quarter of the previous fiscal year), an ordinary incomeof ¥580 million (compared with an ordinary loss of ¥791 million for the same quarter of the previous
fiscal year), and net income attributable to the shareholders of the parent company for the quarter underreview of ¥313 million (compared with a net loss attributable to the shareholders of the parent companyof ¥697 million for the same period of previous fiscal year).
Information on each business segment is as follows.
Content BusinessIn the Content Business, the Faith Group is actively pursuing the development of new services in
response to the market environment including the ongoing popularization of smartphones, changing
lifestyles, etc. We have continuously worked to build up our music service platforms by utilizing

2

business synergies between the Group’s member companies such as linking the various
profit-generating functions, which are diversified in the artist business, and also through a program ofscrap and build for those services for which expanding demand cannot be foreseen.
By equipping functions that make it possible to provide services essential for artistic activities centeredon music artists, such as official site construction, fan club operation, music distribution, etc., theplatform business Fans’, which integrates a variety of the Company’s services, began operating on a fullscale from the end of April 2015. In future too, we will promote the activities of various artists both inJapan and oversees and we will work to expand the number of users by making efforts to offer a wider
range of functions and services.
FaRao Pro is a store-use solution service for restaurants and retailers equipped with BGM functions inaddition to essential functions for in-store operations such as sales promotion. In FaRao Pro, apart fromstrengthening the system of operations, acoustic construction, and maintenance in partnership with sales
stores, we will attempt to expand the service’s users by targeting offices that are expecting to use it formental health purposes in addition to for switchover demand from existing stores employing
professional BGM services. Also, we are moving forward with preparations for overseas development
based on current services in Japan and are targeting the creation and activation of new BGM markets
both in Japan and overseas.
In keeping with above developments, despite the decline in sales of existing distribution services, as aresult of the ongoing positive deployment of new services in line with the changing market environment,
the Content Business recorded net sales of ¥2,341 million (an increase of 3.3% year on year). Moreover,factoring in reductions in costs beginning with subcontracting costs and advertising and promotional
expenses, operating income increased by 156.6% year on year to ¥117 million.
Point Service BusinessIn the Point Service Business, as a result of the end of the government-administered reconstruction
support home appliance eco-point system, despite an increase in the number of new points issued byexisting participating stores, this business recorded net sales of ¥1,112 million, a decrease of 4.8%
compared with the same period of the previous fiscal year. On the other hand, due to a temporary
decrease in the expense burden of recovering old points in accordance with the transfer to server
management-based operation during the previous fiscal year and other factors, operating income for thisbusiness totaled ¥96 million (compared with ¥2 million for the same period of the previous fiscal year).
Columbia Business
Amid the severe environment facing the music and video-related industry in line with the continuing
shrinking of the music market, the Columbia Business proceeded with its strategy of strengthening new
future-oriented businesses in order to overcome the present situation in which it remains dependent onsales of package products for which the market remains sluggish.
Due mainly to improved sales of animation-related titles in the Sales/Digital Distribution Business andto a general increase in sales of products in the Direct Sales Business, overall sales by the Columbia
Business totaled ¥6,254 million, an increase of 10.8% compared with the same quarter of the previous
fiscal year. Regarding the profit and loss situation, the Sales/Digital Distribution Business achieved ageneral increase in product sales and the Direct Sales Business was buoyed particularly by favorable
sales of products utilizing high-margin sound sources. In addition, due to a steep decline in overall fixed
costs stemming from the implementation of career change support measures for the purpose oforganizational reform during the previous fiscal year, this business segment recorded an operating
income for the second quarter under review of ¥356 million (compared with an operating loss for thesame period of the previous fiscal year: ¥883 million).
*The product and service names appearing in this document are trademarks or registered trademarks of Faith Inc. either
in Japan or in other countries.

3(2) Explanation Concerning the Financial Position(Analysis of Financial Position)
Total assets as of September 30, 2015 decreased by ¥2,811 million compared to March 31, 2015 to¥23,023 million. This result was mainly due to decreases in cash and deposits, accounts and notes
receivable, and merchandise and finished goods.
Total liabilities decreased by ¥1,337 million compared to the end of the previous consolidated fiscal
year to ¥6,744 million. This result was mainly due to decreases in accounts and notes payable.
Total net assets decreased by ¥1,473 million compared to the end of the previous consolidated fiscal
year to ¥16,249 million. This was mainly due to the recording of a quarterly net income attributable tothe shareholders of the parent company, the payment of dividends, and an increase in the amount oftreasury stock, etc.
As a result of the above, the equity ratio increased by 0.9 percentage points to 66.4%.
(Cash Flow Situation)
Cash and cash equivalents for the consolidated cumulative 2nd quarter of the current fiscal year
increased by ¥543 million from the end of the previous consolidated fiscal year to ¥9,889 million.
Details of cash flow for the consolidated cumulative 2nd quarter and its contributory factors are as
follows:(Cash flow from operating activities)
Cash flow from operating activities amounted to an inflow of ¥669 million (compared with an outflow
of ¥123 million for the same period of the previous fiscal year), due mainly to the recording of net
income before income taxes and other adjustments of ¥619 million for the previous quarter.
(Cash flow from investing activities)
Cash flow from investing activities amounted to an inflow of ¥1,659 million (compared with an outflow
of ¥1,381 million for the same period of the previous fiscal year), due mainly to revenues of ¥4,032
million in respect of reimbursement of fixed-term deposits, despite outgoings of ¥2,008 million in
respect of making fixed-term deposits.
(Cash flow from financing activities)
Cash flow from financing activities amounted to an outflow of ¥1,786 million (compared with an
outflow of ¥161 million for the same period of the previous fiscal year), due mainly to outgoings of¥1,581 million in respect of treasury stock acquisition, ¥170 million in respect of repayment oflong-term loans, and ¥55 million in respect of dividend payments.

(3) Explanation Concerning Future Forecast Information on the Consolidated Financial
Results, etc.
Performance forecasts are made based on information currently available to the Company, but there is apossibility that the actual performance figures will differ significantly from the forecast figures due to avariety of factors. In addition, the current performance forecast for the full financial year is unchanged
from the forecast issued on November 2, 2015.

4

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

(3) Changes in Accounting Principles, Procedures, and Disclosure Methods(Changes in Accounting Principles)(Adoption of the Accounting Standard for Business Combinations)
From the first quarter of the current consolidated accounting year, we have applied the AccountingStandard for Business Combinations (Accounting Standards Board of Japan (ABSJ) Statement No. 21,
issued on September 13, 2013, hereinafter referred to as the Business Combinations AccountingStandard), the Accounting Standard for Consolidated Financial Statements (ABSJ Statement No. 22,
issued on September 13, 2013, hereinafter referred to as the Consolidated Accounting Standard), and the
Accounting Standard for Business Divestitures (ABSJ Statement No.7, September 13, 2013, hereinafterreferred to as the Business Divestitures Accounting Standard). Also, the balance due to changes in the
Company’s equity with respect to the subsidiaries continuing under the Company’s control is recorded
as a capital surplus, and the accounting method has been changed to recording this as expenses during
the consolidated accounting year in which acquisition-related costs arise. Moreover, for businesscombinations that take place after the beginning of the first quarter of the current consolidated
accounting year, the method has been changed to reflect the revision of the proportional amount of theacquisition cost according to the settlement of the provisional accounting treatment in the quarterly
consolidated financial statements for the consolidated quarterly accounting period to which the businesscombination date belongs. In addition, changes have been made in the method of presenting thequarterly net income, etc., and the method of presentation has been changed from “minority interests” to“non-controlling shareholders”. In order to reflect the said presentation changes, we have also revised
the Quarterly Consolidated Financial Statements and Consolidated Financial Statements accordingly.
Concerning the application of the Business Combinations Accounting Standard, etc. the Company isfollowing the transitional measures decided in the Business Combinations Accounting Standard Section
58-2 (4), the Consolidated Accounting Standard Section 44-5 (4), and the Business Divestitures
Accounting Standard Section 57-4 (4), and is applying them from the beginning of the 2nd quarter ofthe current consolidated fiscal year and for the foreseeable future.
These changes have no material impact on the Group’s retained earnings or profitability in the first halfof the current consolidated accounting year.

53. Consolidated Financial Statements(1) Consolidated Balance Sheet
FY 2014(As of March 31, 2015)(Assets)
Current assets
Cash and deposits
Accounts and notes receivable
Marketable securities
Commercial products
Products in progress
Primary materials and inventory goods
Corporation tax refund receivable, etc.
Deferred tax assets
OthersAllowance for doubtful accounts
Total current assets
Fixed assets
Tangible fixed assets
Intangible fixed assets
Goodwill
OthersTotal intangible fixed assets
Investment and other assets
Investment securities
OthersAllowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets(Liabilities)
Current liabilities
Accounts and notes payable
Short-term loans payable
Lease obligations
Accrued expenses payable
Income taxes payable
Reserve for bonuses
Reserve for point card certificates
Reserve for sales returns
OthersTotal current liabilities
Fixed liabilities
Long-term loans payable
Net defined retirement benefits
Lease obligations
Deferred tax liabilities
OthersTotal fixed liabilities
Total liabilities

6(Unit: thousands of yen)
2nd Quarter of FY 2015

(As of Sept. 30, 2015)

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

11,655,665
2,204,076
243,011344,748289,216
39,104150
14,540708,313△55,838
15,442,988

2,983,139

2,951,916

1,940,390
793,9112,734,302

1,889,256
851,491
2,740,748

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

1,590,066
602,433△304,242
1,888,257
7,580,922
23,023,910

1,133,715
546,120
17,7302,431,769
124,473
64,30939,828160,593
1,967,451
6,485,992

864,584
551,120
17,792
2,368,279
145,362
85,244
41,74773,046
1,264,103
5,411,281

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

593,460
597,707
14,852
133,231
23,6201,362,871
6,774,152

(Net assets)
Shareholder's equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholder's equity
Other accumulated comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustments
Cumulative adjustment for retirement benefit
obligations
Total other accumulated comprehensive income
Stock acquisition rights
Holdings of non-controlling shareholders
Total net assets
Total liabilities and net assets

7(Unit: thousands of yen)
2nd Quarter of FY 2015

FY 2014(As of March 31, 2015)(As of Sept. 30, 2015)

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

3,218,000
3,708,355
11,197,329△3,037,834
15,085,849

215,116
5,399
87,627

131,338△8,57980,198308,143
58,591
745,938
17,723,169
25,835,139

202,957
43,686917,265
16,249,757
23,023,910

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

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income or loss (△)
Non-operating income
Interest income
Dividend income
Interest on securities
Investment gain on equity method
Investment partnership operation gain
Foreign exchange gain
Gain on disposal of unpaid royalties
Miscellaneous receipts
Total non-operating income
Non-operating expenses
Interest paid
Investment loss on equity method
Investment partnership operation loss
Foreign exchange loss
Miscellaneous expenses
Total non-operating expenses
Ordinary income or loss (△)
Extraordinary income
Gain on disposal of fixed assets
Gain on change in equity
Gain on step acquisitions
Gain on reversal of subscription rights to shares
Other extraordinary income
Total extraordinary income
Extraordinary losses
Loss on disposal of fixed assets
Impairment losses
Loss on valuation of investment securities
Provision of reserve for copyright-related losses
Organizational reform-related losses
Other extraordinary losses
Total extraordinary losses
Net income or net loss before income taxes (△)
Corporate, local, and business taxes
Corporate tax adjustment amount
Net income or net loss before minority interests (△)
Minority interests in loss (△)
Net income or loss for the current quarter (△)

8

2nd Quarter of FY 2014

2nd Quarter of FY 2015

(April 1-Sept. 30, 2014)
9,082,895
5,998,116
3,084,779
3,915,230△830,451(April 1-Sept. 30, 2015)
9,709,264
5,881,165
3,828,098
3,252,492
575,606

5,311
4,058
72
4,765
11,412
1,574
10,301
13,72551,222

2,505
1,977
72
－
10,840－－12,443
27,840

5,713
－
6,244
—
523
12,480△791,709

7,337
10,461
3,162
910
1,058
22,929580,516

－
－
－
2,406
—
2,406

990
36,22813,186
14,906
1,511
66,8234,308－－－
150,000－
154,308△943,611
162,149
106,040△1,211,801△514,720△697,080

3,949
9,966
3,176
10,000－500
27,591
619,748
128,274360
491,114
177,787
313,326

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

Net income or loss for the current quarter (△)
Other comprehensive income
Valuation difference on other available-for-salesecurities
Foreign currency translation adjustments
Retirement benefit adjustments
Total other comprehensive income
Comprehensive income(Details)
Comprehensive income attributable to shareholders of
the parent company
Comprehensive income attributable to non-controllingshareholders

9

2nd Quarter of FY 2014

2nd Quarter of FY 2015

(April 1-Sept. 30, 2014)△1,211,801(April 1-Sept. 30, 2015)
491,114

7,539△83,279

7,896
61,14076,575△1,135,225△13,997△14,576△111,853
379,260△655,044

208,139△480,181

171,121

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

(April 1-Sept. 30, 2014)
Cash flow from operating activities
Gain or loss before income taxes and minority interests (△)
Depreciation and amortization
Impairment losses
Amortization of goodwill
Increase/decrease in allowance for doubtful accounts (△ =decrease)
Increase/decrease in reserve for bonus (△ = decrease)
Increase/decrease in allowance for unexercised sales
promotion points (△ = decrease)
Increase/decrease in liabilities for retirement benefits (△ =decrease)
Increase/decrease in allowance for organizational reform (△= decrease)
Interest and dividends income
Interest on securities
Interest paid
Gain or loss on foreign exchange (△ = gain)
Gain or loss on sale of investment securities (△ = gain)
Investment gain or loss on equity method (△ = gain)
Gain or loss on change in equity (△ = gain)
Gain or loss on sale of fixed assets (△ = gain)
Gain or loss on disposal of fixed assets (△ = gain)
Gain or loss on step acquisitions (△ = gain)
Increase/decrease in trade receivables (△ = increase)
Increase/decrease in inventory assets (△ = increase)
Increase/decrease in trade payables (△ = decrease)
OthersSub-totalInterest and dividends received
Interest paid
Income tax refunded
Income tax paid
Cash flow from operating activities

10

2nd Quarter of FY 2014
(April 1-Sept. 30, 2015)

2nd Quarter of FY 2015
(April 1-Sept. 30, 2014)△943,611
176,622—
129,278△7,318

619,748
168,802
9,966
78,29537,916

12,147△169,733

20,072
1,919

19,298△52,643

150,000－△9,370△72
5,713△6,119－△4,765△4,483
△72
7,337
△943
3,176
10,461△36,228△990
3,949△13,186
619,479
252,862△320,580△682,010
722,845
10,225△7,40055,228△111,228
669,671－4,308－
765,388△84,023△252,429
76,691△137,995
13,551△5,897
67,776△61,011△123,577

(Unit: thousands of yen)

Cash flow from investing activities
Expenditure for opening of term deposits
Proceeds from withdrawal of term deposits
Expenditure for acquisition of tangible fixed assets
Expenditure for acquisition of software
Proceeds from sale of software
Expenditure for acquisition of investment securities
Proceeds from sale of investment securities
Expenditure for acquisition of shares of affiliates
Expenditure for acquisition of goodwill
Proceeds from acquisition of subsidiary shares accompanying
changes in the scope of consolidation
Expenditure for loans receivable
Proceeds from collection of loans receivable
Expenditure for guaranteeing security deposits
Proceeds from collection of security deposits
OthersNet cash flow from investing activities
Cash flow from financing activities
Net increase/decrease in short-term loans payable (△ =decrease)
Expenditure for repayment of financing and lease obligations
Proceeds from long-term loans payable
Expenditure for repayment of long-term borrowing
Expenditure for acquisition of treasury stock
Proceeds from sale of treasury stock
Payment of dividends
Payment of dividends to non-controlling shareholders
OthersNet 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 beginning of year
Cash and cash equivalents at end of the quarter11

2nd Quarter of FY 2014
(April 1-Sept. 30, 2014)

2nd Quarter of FY 2015
(April 1-Sept. 30, 2015)△4,144,075
3,023,242△49,134△198,338—－－△0△15,600—△2,008,740
4,032,306△55,763△191,367
3,780△61,360
14,032△100,000△462
42,404△15,000
6,186
△462
849
11,071△1,381,261－
60－
21,213△36,809
1,659,291△300,000

30,000△31,055
500,000△236,292△1,462
32△57,349△25,521△10,826△161,044
6,119△1,659,764△8,878－△170,560△1,581,408
69△55,484△56－△1,786,318
943
543,588

11,415,340
9,755,576

9,346,285
9,889,873

(4) Notes Concerning the Consolidated Financial Statements(Notes Concerning the Premise of a Going Concern)
Not applicable(Notes in the Case of Significant Changes in the Amount of Shareholders’ Equity)
1. Concerning the acquisition of treasury stock based on a resolution at the Board of Directors meeting:Based on a resolution at the Board of Directors meeting held on December 5, 2014, the Company
proceeded to acquire shares of its own stock.
(1) Type of treasury stock acquired
The Company’s common stock(2) Total number of shares of acquired stock
127,900 shares(3) Total stock acquisition price¥201,673,000(4) Acquisition period
April 1, 2015 ~ April 30, 2015
(5) Acquisition method
Market purchasing by means of the trust method
2. Concerning the acquisition of treasury stock from shareholders opposed to the absorption-type
corporate split involving a subsidiary
Effective from July 1, 2015, the Company inherited the contents distribution platform development
and production business of its100% subsidiary Faith Wonderworks Ltd. by means of the corporate
split (absorption-type demerger) method. Regarding this absorption-type split, in response to a sharepurchase request from a shareholder opposed to the split based on Article 797, Paragraph 1 of theCompanies Act, the Company carried out the treasury stock acquisition procedure outlined below.
(1) Number of shareholders to which share purchase requests were made1(2) Date of receipt of share purchase request
June 16, 2015
(3) Number of shares for which purchase was requested
985,650 shares (equal to 8.24% of the Company’s total number of issued shares as March 31,
2015)(4) Purchase price¥1,579,996,000 (price per share: ¥1,603)(5) Purchase dateJuly 10, 2015
(6) Acquisition method
Off-market trading

12

(Segment Information)
Ⅰ 2nd quarter of the previous consolidated fiscal year/FY 2014 (April 1, 2014 through Sept. 30, 2014)

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

Point Service Columbia

Total

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

Net sales
Sales to externalcustomers
Intersegment sales
or transfer amount
Total
Segment income/loss(△)

2,266,130

1,169,082

5,647,682

9,082,895－

9,082,895

73,980312

11,32585,618△85,618－

2,340,111

1,169,394

5,659,008

9,168,514△85,618

9,082,895

45,7302,235△883,810△835,845

5,394△830,451

Notes: 1. The segment income or loss (△) adjustment amount of ¥5,394 thousand is calculated by eliminating intersegment
transactions.
2. Segment income or loss (△) is adjusted with operating income in the quarterly consolidated profit and loss statement.

2. Information regarding impairment loss on fixed assets or goodwill by segment reported
This information is omitted since there is no critical impairment loss on fixed assets or significant
change in amount of goodwill.
Ⅱ 2nd quarter of the current consolidated fiscal year/FY 2015 (April 1, 2015 through Sept. 30, 2015)

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

Point Service Columbia

Total

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

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

2,341,871

1,112,539

6,254,853

9,709,264－

9,709,264

74,865778

26,496102,140△102,140－

2,416,736

1,113,317

6,281,350

9,811,404△102,140

9,709,264

117,344

96,207356,073

569,625

5,980

575,606

Notes: 1. The segment income or loss (△) adjustment amount of ¥5,980 thousand is calculated by eliminating intersegment
transactions.
2. Segment income or loss (△) is adjusted with operating income in the quarterly consolidated profit and loss statement.

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

13