BRIEF STATEMENT OF CONSOLIDATED FINANCIAL RESULTS
FOR THE FULL FISCAL YEAR ENDED MARCH 2020
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 14, 2020
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: +81-03-6855-7811
Date of General Meeting of Shareholders: June 26, 2020
Date of Submission of Annual Security Report: June 29, 2020
Starting Date of the Dividend Payment: June 29, 2020
Preparation of Supplementary Materials for Financial Results: Applicable/May 29, 2020
Information Meeting for Financial Results to be Held: None
Amounts are rounded down to the nearest JPY 1 million.

1. Results for the Fiscal Year Ending March 2020
(1) Consolidated Operating Results(Percentages indicate changes compared with the previous fiscal year.)

Net SalesYear ending
March 2020
March 2019

Millions of yen

20,093
20,965(From April 1, 2019 to March 31, 2020)

Operating Income
Millions of yen

%
△4.2
△1.2

385
144

Ordinary Income

%
166.9

Millions of yen

△87.2

△586

Net Income

%
－
－

471

Millions of yen

%
－
－

△884
△309

(Note) Comprehensive income: fiscal year ending March 2020: △446 million (—%); fiscal year ending March 2019: △314 million (—%)

Net Income per
Share

Year ending
March 2020
March 2019

Diluted Net
Income per Share

Return on Equity
CapitalOrdinary Incomeon Total Assets

Operating Income
on Net Sales

Yen
—
—

%
△5.2
△1.7

%
1.9
△2.3

%
1.9
0.7

Yen
△67.93△23.15(Reference) Equity in earnings of associated companies: FY ending March 2020: ¥28 million; FY ending March 2019: △¥704 million(2) Consolidated Financial Position
Total Assets

Year ending
March 2020
March 2019

Net Assets

Millions of yen

Millions of yen

24,74624,343

16,43917,520

Ratio of Equity Capital

Net Assets per Share

%
66.4
72.0

Yen
1,301.66
1,321.37(Reference) Equity capital: FY ending March 2020: ¥16,439 million; FY ending March 2019: ¥17,520 million(3) Consolidated Cash Flow Results
Cash Flow fromOperating Activities

Year ending
March 2020
March 2019

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

1,175
454

△512
△187

△165
△1,077

12,585
12,1002. Dividends
Dividends per Share
(Record dates)

Year ending
March 2019
March 2020
March 2021
(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)(Annual)Millions of yen

132
133

Dividend on Net
Assets(Consolidated)

%
—
—
—

%
0.7
0.8

3. Forecast for the Consolidated Results for the Year Ending March 2021 （from April 1, 2020 to March 31, 2021）
Regarding the outlook for the fiscal year ending March 2021, we anticipate that the outlook will remain uncertain
due to the global spread and prolongation of the COVID-19 pandemic, and it is difficult to predict the impact on
the Group’s business results at this stage. Therefore, we have not yet decided the financial forecast for the fiscal
year ending March 2021. We will make an announcement as soon as a reasonable forecast becomes possible.
1※ Notes(1) Changes in significant subsidiaries (accompanying changes in scope of consolidation): None
Newly added subsidiaries: 0 companies (subsidiary’s name:)Removed subsidiaries: 0 companies (subsidiary’s name:)(2) Changes in accounting policy, changes in accounting estimates, and restatements(2)-1. Changes accompanying revisions of accounting standards, etc.: None(2)-2. Changes other than the above: None(2)-3. Changes in accounting estimates: None(2)-4. Restatements: None

(3) Outstanding shares (common shares)(3)-1. Outstanding shares at the end of the fiscal years (including treasury stock):
The fiscal year ending March 2020: 13,831,091 shares
The fiscal year ending March 2019: 13,831,091 shares(3)-2. Treasury stock at the end of the fiscal year:
The fiscal year ending March 2020: 1,201,840 shares
The fiscal year ending March 2019: 572,000 shares(3)-3. Average number of shares during the accounting period
The fiscal year ending March 2020: 13,016,759 shares
The fiscal year ending March 2019: 13,353,334 shares(Note)The number of shares of treasury stock at the end of the fiscal year includes those shares (262,500 shares for the fiscal year ending
March 2020, 0 shares for the fiscal year ending March 2019) 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 numberof shares during the accounting period (153,125 shares for the fiscal year ending March 2020, 0 shares for the fiscal year ending
March 2019).

(Reference) Overview of Non-Consolidated Results
Results for the Fiscal Year Ending March 2020 (From April 1, 2019 to March 31, 2020)(1) Non-Consolidated Operating Results(Percentages indicate changes compared with the previous fiscal year.)

Net Sales

Operating Income

Ordinary Income

Net Income

Year ending
March 2020

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen

%

2,153

△1.8

△380

－

△6.2

△239

－

△1,468
328

－

2,192

△927
504

－

March 2019

Net Income per ShareYear ending
March 2020
March 2019－－

Diluted Net Income per
Share

Yen
△112.85
24.57

Yen
—
—

(2) Non-Consolidated Financial Position
Total Assets

Year ending
March 2020
March 2019
(Reference)

Net Assets

Ratio of Equity
CapitalNet Assets per Share

Millions of yen

Millions of yen%

Yen

17,551
18,596

16,192
17,87092.3
96.1

1,282.14
1,347.80

Equity capital: fiscal year ending March 2020: ¥16,192 million; fiscal year ending March 2019: ¥17,870 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)
The Company has not yet issued a consolidated business forecast for the fiscal year ending March 2021 because it is difficult to
calculate a reasonable business forecast at this time. We will promptly issue a consolidated performance forecast as soon it becomes
possible to disclose it. For details, please refer to “1. Overview of Operating Results, etc., (4) Future Outlook” on page 5 of theaccompanying material.
(To obtain supplemental documents relating to financial results)
Supplemental Materials for Financial Results are posted on the company website on May 29, 2020.

2

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 …………………………………………………………………………………… 6
2. Basic Philosophy on Selection of Accounting Standards………………………………………………8
3. Consolidated Financial Statements and Main Explanatory Notes…………………………………… 9(1) Consolidated Balance Sheet…………………………………………………………………....… 9(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income … 11
(Consolidated Statement of Income) …………………………………………………………… 11(Consolidated Statement of Comprehensive Income) ………………………………………… 12(3) Consolidated Statement of Changes in Shareholders’ Equity……………………………………13(4) Consolidated Statement of Cash Flows………………………………………………………… 14(5) Notes Concerning the Consolidated Financial Statements……………………………………… 17(Notes Concerning the Premise of a Going Concern)…………………………………………… 17(Segment Information, etc.) …………………………………………………………………… 17(Per Share Information)………………………………………………………………………… 20(Significant Subsequent Events)………………………………………………………………… 20

1

1. Overview of Operating Results(1) Overview of Operating Results for the Current Term
In the Japanese information and communications field in 2018, the Internet penetration rate remained
high at 79.8%, and the percentage of households owning one or more smartphones reached 79.2%,
exceeding the percentage of households that own personal computers. (*1)
Meanwhile, since 2000, the movement away from television has been progressing centered mainly on
the younger generation, and in 2018, the Internet usage rate exceeded the TV viewing rate on weekdays
and holidays for the first time. (*2) Furthermore, in 2019 in Japan, advertising expenses for the Internet
increased by 19.7% from the previous year to ¥2,104.8 billion, exceeding the advertising expenses for
television of ¥1,861.2 billion for the first time. (*3) In addition, as a measure aimed at preventing the
spread of novel coronavirus (COVID-19) infections, the popularization of teleworking and of services
that allow people to communicate online with remote parties while remaining at home has increased. It
is expected that the shift to services in line with the era of digitalization will accelerate as the Internet
usage rate rises and smartphones become even more widespread.
*1. Source: Ministry of Internal Affairs and Communications,2018 Telecommunications Usage Trend Survey Results*2. Source: Ministry of Internal Affairs and Communications,
FY2018 Survey Report on Survey on Time Spent for Information and Communication Media and Information Behaviors*3. Source: Dentsu Inc., 2019 Advertising Expenditures in Japan

In the entertainment market, sales in the global music market centered on streaming services grew by
8.2% year-on-year to approximately ¥2,198.4 billion (US$20.2 billion), marking its fifth consecutive
year of sales growth. (*4) Meanwhile in Japan, the production value of music software including music
videos decreased by 5% year-on-year to ¥229.1 billion, and sales of packaged products continued to
decline, but sales of fee-based music distribution increased by 10% to ¥70.6 billion. Sales of streaming
services in particular increased by 33% year-on-year, and the share of music distribution sales accounted
for by streaming greatly exceeded that accounted for by download sales (*5). On the other hand, as
lifestyles shift from “product consumption” to “experience consumption”, the size of the live
entertainment market had been expected to continue growing, but due to the spread of COVID-19,
large-scale events including live concerts have been postponed and canceled, and the future outlook
remains uncertain.
*4. Source: IFPI, Global Music Report 2020 - THE INDUSTRY IN 2019
*5. Source: Recording Industry Association of Japan (RIAJ),
The Recording Industry in Japan 2020

Founded in 1992, Faith was the first company in the world to commercialize ringtones, and has steadilygrown centered on the music distribution business and in step with the spread of mobile phones.
However, in recent years, amid the growing popularity of smartphones in the music market, streaming
media, user upload content (UUC) that allows general users to easily transmit information to society,and media diversification such as social media, etc., all kinds of activities in the music industry havebeen changing, including musical styles and content production methods.
In the current environment, the Faith Group is continuing to utilize the results of the efforts it has beenpouring into digital content distribution ever since its establishment, and is forging ahead with its
Multi-Content and Multi-Device Strategy of creating environments in which people can enjoy a wide
diversity of contents whenever and wherever they choose. We are also strengthening the developmentof new services in response to the changing market environment, which includes platforms that collectand organize the information flooding the Internet and then providing this to users after increasing its
added value.
In addition, in 2018, the number of tourists visiting Japan increased by 8.7% year-on-year to 31.19
million (*6), which was expected to further expand the nighttime economy market in Japan. However,
due to the spread of COVID-19 on a global scale, restrictions on entering the country from abroad havebeen issued, and the market has also been forced to shrink in response to official requests to many storesto suspend or curtail their operations to help prevent infections. Faith operates PLUSTOKYO, thelargest music lounge in Tokyo, and an entertainment facility named CROKET MIMIC TOKYO, which
specializes in world-class performances centered on impersonation, and we are currently suspending theoperation of both facilities. We are making preventing the spread of COVID-19 infections and ensuring2

safety our top priorities, and we will continue to respond swiftly in the future based on administrative
policies and action plans.
*6. Source: Visitor Arrivals to Japan and Japanese Overseas Travelers, 2018,
compiled by Japan National Tourism Organization (JNTO)

On October 8, 2019, Faith acquired all the shares of KSR Corporation and welcomed that company into
the Faith Group. KSR was founded in 2000 and is a domestic music label. Musician Shinji Nira, amember of the Japanese reggae group Shonan no Kaze, serves on the board of directors. In addition to
producing wide-ranging artists with a strong focus on dance music, KSR is developing a variety ofbusinesses in the entertainment field including music production, promotion, and events. From now on,
KSR will work to achieve synergies with the Faith Group's artist platform business as well as in theartist nurturing and development, music production, advertising, and sales businesses.
Regarding the Faith Group’s performance during the consolidated fiscal year ending March 2020, net
sales decreased by 4.2% compared with the previous fiscal year to ¥20,093 million in accordance withthe decline in sales of existing distribution services, which account for a major share of overall sales,
and with the suspension of store operations to prevent COVID-19 infections, Operating income
increased by 166.9% year on year to ¥385 million due mainly to increases in sales of high-margin
in-house produced titles and sound source use in the Label Business. In addition, the Company recorded
ordinary income of ¥471 million (compared with an ordinary loss of ¥586 million for the previous fiscal
year), due mainly to operating income from investment partnerships, and a net loss attributable to theparent company's shareholders of ¥884 million (compared with a net income attributable to parent
company shareholders of ¥309 million for the previous fiscal year) due mainly to extraordinary losses
associated with the impairment of fixed assets and unlisted stock.
Information on each business segment is as follows.
Content BusinessIn the Content Business, while sales in the existing distribution business continue to decline, the FaithGroup is actively promoting business development in Asian countries and other countries where highgrowth rates are expected. In addition, we are interlinking and platforming various services in an effort
to develop new products and services and grasp diversified revenue opportunities, and we will continue
to invest in growth areas in future.
We are actively developing FaRao PRO not only as a service providing business BGM but also for sales
activities focused on expanding the functions necessary for store management, such as solutions andannouncement functions that make store-branding proposals. In addition to conventional products using
tablet devices, we have also released an app-version service that offers users reduced initial costs and
we are working to strengthen retail store sales through collaboration with the Point Service Business.
Moreover, based on our Japanese service, we have started FaRao PRO services in Indonesia, and for the
future we are aiming to create and activate new BGM markets both in Japan and overseas.
In Fans’, our platform of services for artists based on the D2C (*7) business model, which is expected to
expand in future, we are enhancing the functions essential to artists’ musical activities such as official
website construction, music and video distribution, sales of artist goods, and fan club operation. In June
2019, we began working to further expand the functions of Fans’ such as introducing a system that
contributes to the creation of communities by spreading information transmitted by creators throughstrengthened cooperation with SNS. We are also aiming to acquire new users and expand themembership base of Fans’ as a service that allows more artists to disseminate their works andinformation freely, and we will endeavor to improve the quality of the service by pursuing enhanced
convenience. In addition, in response to the request for people to refrain from going out in order toprevent the spread of COVID-19 infections, until the end of April we offered free of charge the usually
paid music under our Musical Life ReviewTM product used by people to maintain their cognitive
function.
*7. Abbreviation of “Direct to Consumer”—a business model for delivering
services and products planned and manufactured by Faith directly to users

Regarding the performance of this segment, buoyed by the contribution of sales in new businesses, theContent Business recorded net sales of ¥3,574 million (an increase of 1.8% year on year). However,3

factoring in declining sales in the carrier official website service, delays in the progress of new
businesses, and the suspension of store operations due to the spread of COVID-19 infections thisbusiness posted an operating loss of ¥643 million (compared with an operating loss of ¥605 million yen
for the previous year).
Point Service BusinessIn the Point Service Business, in addition to providing point issue services to retail stores, we offer total
support for point issue data acquisition, analysis and sales promotion utilization as a series of cycles
from planning to operation, and we provide outsourcing services that maximize retail sales promotion
efficiency.
Regarding the performance of this segment, with the issue of points at existing member storesremaining steady due to the development of sales promotion measures, net sales increased by 3.8%
compared with the previous fiscal year to ¥2,783 million. Moreover, due to an increase in inventory
write-downs, operating income decreased by 9.0% year on year to ¥104 million.
Label Business
Amid the severe environment facing the music and video-related industry in line with the continuing
shrinkage of the music market, the Label Business is proceeding 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. In order to continue to play a majorrole in the music industry and expand its revenue, in addition to pursuing the creation of hit products,
artist management, and investment in the live performance business, we consider it necessary to
introduce new services that anticipate the ever-changing market environment.
In this segment, sales of animation-related titles released by DREAMUSIC Inc. and sales of animation
titles and game titles released by Nippon Columbia, Co., Ltd. decreased compared with the previous
fiscal year, resulting in a decline in sales of 7.0% year-on-year to ¥13,734 million. Regarding operating
income, although sales of live performances declined during the fourth quarter, the Group’s newconsolidated subsidiary KSR Co., Ltd. performed well, sales of live performances by Columbia artists
were favorable overall, and sales of sound sources remained solid, with the result that net sales in thissegment increased by 46.3% year on year to ¥923 million.
*Product and service names appearing in this document are trademarks or registered trademarks of Faith, Inc. either in Japan or in othercountries.

(2) Overview of Financial Position for the Current Term
Total assets as of the end of the consolidated fiscal year ended March 31, 2020 decreased by ¥403
million from the end of the previous consolidated fiscal year to ¥24,746 million, a year-on-year increaseof 1.7%. This result was mainly attributable to an increase of ¥485 million in cash and deposits, adecrease of ¥510 million in buildings and structures, an increase of ¥187 million in investment
securities, and an increase of ¥311 million in deferred tax assets.
Total liabilities increased by ¥1,485 million compared with the end of the previous consolidated fiscal
year to ¥8,307 million, a year-on-year increase of 21.8%. This result was mainly attributable to anincrease of ¥377 million in long-term debt, an increase of ¥225 million in income taxes payable, and anincrease of ¥193 million in deferred tax liabilities.
Net assets decreased by ¥1,081 million compared with the end of the previous consolidated fiscal yearto ¥16,439 million, a year-on-year decrease of 6.2%. This result was mainly attributable to outgoings of¥690 million for acquisition of treasury stock, income of ¥368 million from the disposal of treasury
stock, outgoings of ¥133 million for payment of dividends, and to a net loss of ¥884 million attributable
to shareholders of the parent company. The equity ratio became 66.4%.

(3) Overview of Cash Flow for the Current Term
Cash and cash equivalents at the end of the consolidated fiscal year ended March 31, 2020 increased by¥485 million to ¥12,585 million, an increase of 4.0% compared with the end of the previous
consolidated fiscal year.
Details of cash flow during the fiscal year under review and its main contributory factors were as
4

follows:(Cash flow from operating activities)
Cash flow from operating activities amounted to an inflow of ¥1,175 million (an increase of 158.9%
compared with the previous consolidated fiscal year), attributable mainly to a loss before income taxes
and minority interests of ¥769 million, depreciation and amortization expenses of ¥310 million,
impairment losses of ¥544 million, amortization of goodwill of ¥115 million, an increase in the reserve
for bonuses of ¥267 million, a loss on the valuation of investment securities of ¥754 million, and adecrease in trade receivables of ¥210 million.
(Cash flow from investing activities)
Cash flow from investing activities amounted to an outflow of ¥512 million (compared with an outflow
of ¥187 million for the previous consolidated fiscal year), attributable mainly to expenditure of ¥72
million in respect of the acquisition of tangible fixed assets, expenditure of ¥87 million in respect of theacquisition of software, expenditure of ¥322 million for the acquisition of investment securities, incomeof ¥110 million in respect of income from the sale of investment securities, and expenditure of ¥69
million in respect of the acquisition of subsidiary shares accompanying changes in the scope of
consolidation.

(Cash flow from financing activities)
Cash flow from financing activities amounted to an outflow of ¥165 million (compared with an outflow
of ¥1,077 million for the previous consolidated fiscal year), due mainly to expenditure of ¥291 million
in respect of repayment of long-term loans, income of ¥760 million in respect of proceeds fromlong-term loans, income of ¥189 million in respect of disposal of treasury stock, expenditure of ¥690
million in respect of the purchase of treasury stock, and expenditure of ¥132 million in respect ofdividend payments, etc.

(4) Future Outlook
The Faith Group has been forced to take action in response to the worldwide spread of COVID-19
infections. In the Label Business, titles planned for release have been postponed or cancelled, and many
events starring major artists have had to be postponed or cancelled as in the current situation there is noprospect of holding events. In addition, in the Content Business, in consideration of the Japanese
Government’s response policy, our highest priority is to prevent the spread of COVID-19 infections andto ensure people’s safety, so we have suspended the operation of two eating and drinking establishments
including a music lounge operated by the Company, and it is difficult to envisage when these businesses
will resume.
Against this backdrop, the outlook for next consolidated fiscal year (FY 2020; ending March 31, 2021)
is expected to remain uncertain due to the global spread and prolonging of the COVID-19 pandemic.
We have determined that it will be difficult to predict the impact, and so for the present we have decided
to leave the business performance forecast for the next fiscal year undecided. We will make anannouncement as soon as a reasonable forecast becomes possible.
The Faith Group is aiming to achieve changes in behavioral patterns fostered by the prolongation of the
COVID-19 pandemic and the establishment of new values after the pandemic ends. In addition, we will
endeavor to secure funds with a view to expediting strategic and agile investments in the entertainment
industry, and we will respond quickly and flexibly to changes in the business environment.

(5) Basic Policy on Profit Allocation and Current Term/Next Term Dividend Distribution
Faith Inc. will continue its policy of giving priority to securing the funds necessary for strengthening its
business structure and making aggressive business investments. At the same time, it also recognizes thereturn of profits to shareholders to be an important management task. For this reason, the Company willconsider the payment of dividends, taking into account its operating results and financial position while
keeping in mind the above-described situation.
The Company’s dividend will be decided by a resolution of the Board of Directors with the aim ofmaking flexible payments to shareholders regardless of the timing of the annual general meeting ofshareholders. As originally announced, the Company is planning to pay a dividend of ¥10 per share5

(including an interim dividend of ¥5 that has already been paid).
Regarding the dividend for the next fiscal year, based on its fundamental policy of paying continued
stable dividends, it is unclear at this point how the worldwide spread of COVID-19 infections will affecteach business segment, but the Company plans to pay a dividend of ¥10 per share (including an interim
dividend of ¥5) in the next fiscal year.

(6) Business Risks
1) Risks related to the Company’s business
Content Business(a) Business environment
The Faith Group develops new markets by creating services that users want to use based on original
business solution proposals and develops content services and wide-ranging enterprise support services
through tie-ups with leading companies in various fields such as content providers. Competition isintense in the content business that the Group and its collaborating content providers are striving todevelop, 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 theGroup and its collaborating content providers fail to meet the needs of users, or if the number of users
decreases, then there is a possibility that sales will not expand.
In some cases, the Group may provide server construction and operation services in order to meet theneeds of content provider customers. In so doing, the Group makes every effort to prevent operational
management failures, and even in the unlikely event of such a failure occurring, we take emergency
measures and have a system in place that allows us to restore operation quickly by remote control.
However, in the case that unavoidable failures occur due to natural disasters, etc., which make it
difficult to provide services for an extended period, this may adversely affect the Group’s performance.
(b) Quality control
The Faith Group makes every effort to ensure quality control by operating a thorough system supported
by technological 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 suffersa loss as a consequence of 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 and by leakageof personal information has led to the development of legal regulations in Japan as elsewhere. The FaithGroup’s operations are related to the business of distributing content via the Internet, so in the case thatlaws and regulations or voluntary restraints between businesses are established in this field, or if theapplication of laws and regulations becomes clear, there is a possibility that the Group’s businessdevelopment will be restricted and that costs may be incurred with regard to the implementation ofcountermeasures.
Point Service Business
The Faith Group sells points to participating point member stores, and in order to prepare for the costburden of using points, with regard to the balance of unexchanged points among issued points, therequired amount that is expected to be used in future is estimated and recorded as a provision based on
the past point collection rate. However, if points are exchanged in excess of the estimated amount, thismay adversely affect the Group’s business performance.
Label Business(a) Economic situation and market environment
The Faith Group's main businesses, including the sale and distribution of music and video titles such as
CDs and DVDs, BtoB business, and Direct Sales Business, are affected by the economic conditions in
the regions and countries where these products are sold. Many of the Group's products are notnecessarily indispensable for consumers, and their sales are strongly influenced by market trends,
6

consumer preferences and consumption behavior. For this reason, if the demand for the products ofmusic and video-related industry in general declines due to a recession or reduced consumer spending,the Group's business performance and financial condition may be adversely affected. An increase inillegal copying and downloading is considered to be one of the factors causing the current decline insales of music and video-related titles and the contraction in the overall scale of the music andvideo-related industry. Competition in the music and video-related industry is intensifying in thisshrinking 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 aswell. However, the expansion of this market may have a negative impact on sales of the Group’s
conventional products such as music CDs. Due to the recent revision of the Japanese Copyright Act,
downloading of illegal copies is now prohibited, and consequently it is expected that the number ofillegal downloads will decrease, but illegal downloads from illegal distribution sites still appear to be ata high level, which is likely to adversely affect the Group’s sales. Moreover, in the music market, pricecompetition 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 popularartists, and the stability and growth of the Group’s management derives from the creation of artists andmusic works that are expected to become hits. The Group will continue to discover and develop new
artists who will be accepted by consumers, but since the creation of hit titles involves complex and
uncertain factors such as consumer preferences and trends, lack of success at producing hits may
adversely affect the Group’s business performance and financial condition.
(c) Performance plan
The Faith Group's sales and profitability rest on a low proportion of fixed and continuous income, andare strongly influenced by the sales situation of individual music titles. Since the sales situation changes
due to a number of factors such as the trends of the times and consumer preferences, sales may fall
below the forecast levels predicted from past results so that the targets specified in the initial
performance plan may not be achieved. In addition, the production 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 performance elements such as sales
forecasts, and a decline in profit for a specific quarter may change the business performance plan andaffect 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 toanother subcontractor, which may be a factor in driving the Group’s actual business performance below
level specified in the initial performance plan.
(d) Retail price maintenance system and reflux prevention measures
Under the Antimonopoly Act, copyrighted works such as music CDs, newspapers, books may be legally
old under a price maintenance system (resale system). Although there is no guarantee that the system
will last forever, the Japan Fair Trade Commission has announced it’s view that it is reasonable to leave
the system in place for the foreseeable future. Moreover, in recent years, the copyright law has beenrevised to protect the interests of copyright holders of music CDs produced locally under license
agreements for the purpose of selling them in Asia at low cost. A so-called reflux prevention measurehas been introduced to prohibit the import of commercial records produced for the purpose of
distribution overseas under certain conditions. If in the future, the Antitrust Law or Copyright Act isreviewed, 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, some products that do not sell well may be returned in the future. The Faith group properly
prepares a reserve for return adjustments based on past returns and other provisions, and is preparing forthis eventuality, but if more returns occur due to unexpectedly poor sales, etc., there is a possibility that
the Group’s business performance may be adversely affected by a decrease in sales and profit.
2) Intellectual property rights
7

The Faith Group has filed patent applications and trademark applications related to its technology, and
the Group intends to continue making similar promotion efforts in future. With respect to intellectual
property rights such as patent rights, trademark rights, copyright (“intellectual property rights”), theGroup is strengthening its efforts to protect these rights and to prevent infringements. However, it isdifficult to predict how the intellectual property rights of third parties will be applied to the Group’sbusiness. For example, in the future, if a patent right related to the Group’s business model or to related
technology is established by a third party, or if a patent right not recognized by the Group is established,
there is a possibility that the Group may be required to compensate the patent holder for damages
related to the infringement of the said patent right, or it may become impossible for the Group tocontinue to conduct all or part of the business related to the patent. In addition, even if the patent holder
allows the use to continue, payment of a license fee may be obligated, and in such a case, this may
adversely affect the Group’s performance.
Among the intellectual property rights owned by the Group, rights such as copyrights and neighboringrights represent one of the strengths of the Group’s business. However, there is a possibility that third
parties may infringe on the rights regarding songs sold by the Group or for which the Group holds rights
or that the Group may unintentionally infringe the rights of third parties. Such copyright infringements
may adversely affect the Group’s business performance and financial condition.
3) Leakage of personal information
Regarding the protection of personal information, the Faith Group has established a personal
information protection policy for the purpose of completing the internal system and instilling anawareness of compliance among its employees, as well as exercising the utmost caution in conducting
internal education and implementing security measures for information systems. However, if personal
information is leaked for some reason, it may damage the Group’s social credibility and adversely affectits 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 othercompanies, and there is a possibility that such business tie-ups may adversely affect the Group’sbusiness performance and financial condition.
5) Pension system
The Group has established a defined benefit corporate pension plan for beneficiaries and a pension planfor employees that combine a lump-sum retirement allowance plan with a defined contribution pension
plan. In future, if pension asset management yields decline or if the actuarial assumptions or theassumptions used to calculate retirement benefit obligations are changed, retirement benefit obligations
and retirement benefit expenses may increase, which could adversely affect the Group’s businessperformance and financial condition.
6) Influence of COVID-19 infection
In keeping with the Japanese Government’s request for stores to practice self-restraint in retail
operations and for individuals to refrain going out unnecessarily in order to limit the spread of the novel
coronavirus (COVID-19) infection, it is expected that personal consumption will remain sluggish andstore visits will decline, and that depending on the progress of the situation, the call to refrain from retail
activities and the closing of store facilities may be prolonged. This may affect the Group’s businessperformance. In addition, if COVID-19 infections occur affecting the Group’s head office, businessoffices, store facilities, artists, production, manufacturing and sales consignees, etc., there is apossibility that this may hinder the Group’s business activities and affect its business performance andfinancial condition.

2. Basic Philosophy on Selection of Accounting Standards
For the present, the Faith Group is following a policy of producing its consolidated financial statements
under Japanese standards in the interest of maintaining comparability between the financial statementsof its constituent companies. Furthermore, concerning the future application of the International
Financial Reporting Standards (IFRS), we intend to respond appropriately based on the movements ofother companies, etc.
8

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

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

9

FY 2018(As of March 31, 2019)

FY 2019(As of March 31, 2020)

12,150,463
2,063,965
232,066
484,367
394,308
61,544
212,102534,205△19,401
16,113,621

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

2,525,299△996,463
1,528,836
615,252△595,720
19,531
1,212,819△1,006,064
206,754
1,501,684
38,823△37,828995
3,257,801

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

350,763
1,541,584
205,871
2,098,219

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

1,957,225
454,354942,793△480,799
2,873,573
8,229,594
24,343,216

2,145,096
765,419
1,037,457△523,083
3,424,888
8,047,321
24,746,972

(Unit: thousands of yen)

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

10

FY 2018(As of March 31, 2019)

FY 2019(As of March 31, 2020)

905,762
509,950662
775,600
2,749,170
116,814
79,633374
62,356
740,830
5,941,156

1,039,823
609,900－
706,8172,725,341
341,858
347,424
364
90,279824,594
6,686,405

63,000632,538－60
139,595
46,577881,771
6,822,927

440,350
652,153
16,401－
333,275
179,374
1,621,554
8,307,960

3,218,000
3,019,175
11,872,088△802,315
17,306,948

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

307,035△10,936△82,758

737,236△21,026△65,114

213,340－
17,520,288
24,343,216

651,096－
16,439,012
24,746,972

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

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Interest on marketable securities
Gain on valuation of marketable securities
Gain on equity method investment
Gain on investment partnership management
Miscellaneous receipts
Total non-operating Income
Non-operating expenses
Interest paid
Foreign exchange loss
Loss on valuation of investment securities
Loss on sale of investment securities
Loss on equity method investment
Loss on investment partnership management
Miscellaneous expenses
Total non-operating expenses
Ordinary income or ordinary loss (△ = loss)
Extraordinary income
Gain on sale of shares of affiliates
Gain on sale of investment securities
Other extraordinary income
Total extraordinary income
Extraordinary losses
Loss on disposal of fixed assets
Loss on valuation of investment securities
Loss on sale of investment securities
Impairment loss
Other extraordinary losses
Total extraordinary losses
Current term net income or net loss before taxes (△ =net loss)
Corporate, local, and business taxes
Income taxes - deferred
Total corporate, local, and business taxes
Current term net income net income or net loss (△ = net
loss)
Current term net income or net loss attributable tonon-controlling interests (△ = net loss)
Current term net income or net loss attributable toshareholders of the parent company (△ = net loss)

11

FY 2018(April 1, 2018 ~March 31, 2019)
20,965,356
13,736,658
7,228,697
7,084,406
144,290

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

1,183
4,497
133
2,135
－
22,771
28,13658,859

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

6,201
209
－
－
704,51074,495
4,724
790,140△586,991

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

164,963
69,052
4,768
238,784－
70,500809
71,30929,29915,000－－912
45,212△393,418

6,779
754,346
7,088
544,490－
1,312,704△769,536

258,667△318,802△60,134△333,284

437,888△323,124
114,764△884,300△24,026－△309,257△884,300

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

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

12

FY 2018(April 1, 2018 ~March 31, 2019)△333,284

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

43,7801,569△26,197
19,153△314,131

430,201△10,089
17,644
437,755△446,544△290,104△446,544△24,026－

(3) Consolidated Statement of Changes in Shareholders’ Equity
FY 2018 (April 1, 2018 ~ March 31, 2019)(Unit: thousands of yen)
Shareholders' equity
Capital stock Capital surplus
Balance at beginning of period

3,218,000

3,019,205

Retained
Total shareholders’
Treasury stockearnings
equity12,316,449
18,453,496△100,158

Changes of items during theaccounting period
Dividends paid

△135,103△135,103

Net gain or net loss (△) attributable
to shareholders of parent company△309,257△309,257

Acquisition of treasury stock△702,351

195

164

△30

Disposal of treasury stock
Changes in non-equity items during
the accounting period (net amount)
Total changes during the accounting
periodBalance at end of period△702,351-△30△444,360△702,156△1,146,548

3,218,000

3,019,175

11,872,088△802,315

17,306,948

Accumulated other comprehensive income

Balance at beginning of period

Valuation
Foreigndifference
currency
on othertranslation
marketableadjustments
securities

Retirement
benefitrelated
adjustments△12,505△56,561

263,254

Total otheraccumulated comprehensive
income194,187

Minority
Interests

Total net
assets24,026 18,671,710

Changes of items during theaccounting period
Dividends paid

△135,103

Net gain or net loss (△) attributable
to shareholders of parent company△309,257

Acquisition of treasury stock△702,351
164

Disposal of treasury stock
Changes in non-equity items during
the accounting period (net amount)

43,7801,569△26,197

19,153△24,026

Total changes during the accounting
period43,7801,569△26,197

19,153△24,026 △1,151,421

Balance at end of period

307,035△10,936△82,758

213,340

13－△4,873

17,520,288

FY 2019 (April 1, 2019 ~ March 31, 2020)(Unit: thousands of yen)
Shareholders' equity
Capital stock Capital surplus
Balance at beginning of period

3,218,000

3,019,175

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

Changes of items during theaccounting period
Dividends paid

△133,622△133,622

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

Acquisition of treasury stock△690,108△690,108

368,079

189,000△179,079

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

3,218,000

2,840,095

10,854,165△1,124,344

15,787,916

Accumulated other comprehensive income

Balance at beginning of period

Valuation
Foreigndifference
currency
on othertranslation
marketableadjustments
securities

Retirement
benefitrelated
adjustments△10,936△82,758

307,035

Total otheraccumulated comprehensive
income213,340

Minority
Interests－

Total net
assets17,520,288

Changes of items during theaccounting period
Dividends paid

△133,622

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

Acquisition of treasury stock△690,108

Disposal of treasury stock

189,000

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

17,644

437,755

437,755

430,201△10,089

17,644

437,755－ △1,081,275

Balance at end of period

737,236△21,026△65,114651,096－

14

16,439,012

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

FY 2018(April 1, 2018 ~March 31, 2019)
Cash flow from operating activities
Income or loss (△) before income taxes, etc.
Depreciation expenses
Impairment loss
Amortization of goodwill
Increase/decrease in allowance for doubtful accounts (△ =decrease)
Increase/decrease in reserve for bonus (△ = decrease)
Increase/decrease in allowance for unexercised sales
promotion points (△ = decrease)
Increase/decrease in net defined retirement liabilities (△ =decrease)
Increase/decrease in for stock benefits for directors (△ =decrease)
Interest and dividend income
Interest on marketable securities
Gain or loss on valuation of marketable securities (△ = gain)
Gain or loss on sale of marketable securities (△ = gain)
Interest paid
Gain or loss on foreign exchange (△ = gain)
Gain or loss on equity method investment (△ = gain)
Gain or loss on investment partnership management (△ =gain)Gain or loss on sale of shares in affiliates (△ = gain)
Gain or loss on sale of investment securities (△ = gain)
Gain or loss on evaluation of investment securities (△ = gain)
Gain or loss on disposal of fixed assets (△ = gain)
Increase/decrease in trade receivables (△ = increase)
Increase/decrease in inventory assets (△ = increase)
Increase/decrease in trade payables (△ = decrease)
Increase/decrease in consumption tax receivable (△ =increase)
Increase/decrease in consumption tax payable (△ = decrease)
OthersSub-totalInterest and dividends received
Interest paid
Income tax refunded
Income tax paid
Cash flow from operating activities

15

FY 2019(April 1, 2019 ~March 31, 2020)△393,418
304,685－
106,105
83,110△769,536
310,629544,490
115,421
41,414

3,316△8,336

267,791△10△15,048

7,783－

16,401△5,681△133△2,135－6,201△13704,51051,724△4,988
△121
1,016
2,076
5,744
933
△28,284△37,246△164,963△69,052
15,00029,299△59,812122,384
28,354△53,839－△63,412754,346
6,689
210,307△160,361
97,22055,294△39,571
101,480
744,1625,834△6,19524,753△314,402
454,151

6,224△109,490
1,270,332
4,984△5,717
210,963△304,937
1,175,626

(Unit: thousands of yen)

FY 2018(April 1, 2018 ~March 31, 2019)
Cash flow from investing activities
Expenditure for opening of term deposits
Income from withdrawal of term deposits
Expenditure for acquisition of tangible fixed assets
Expenditure for acquisition of software
Expenditure for acquisition of investment securities
Income from sale of investment securities
Income from share of profits from investment partnerships
Income from sale of shares of affiliates
Income from sale of subsidiary shares accompanying changes
in the scope of consolidation
Expenditure for acquisition of subsidiary shares accompanying
changes in the scope of consolidation
Income from collection of loans receivable
Expenditure for security deposits
Income from collection of security deposits
OthersNet cash flow from investing activities
Cash flow from financing activities
Expenditure for repayment of lease obligations
Expenditure for repayment of long-term borrowing
Income from long-term borrowing
Expenditure for acquisition of treasury stock
Income from disposal of treasury stock
Payment of dividends
Net cash flow from financing activities
Effect of exchange rate on cash and cash equivalents
Net increase/decrease in cash and cash equivalents (△ =decrease)
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year

16

FY 2019(April 1, 2019 ~March 31, 2020)△50,004
550,000△633,400△96,611△165,000
88,31983,2197,790
179,613－－△72,074△87,627△322,981
110,377
14,169－－－△69,988－△120,150
1,876△33,274△187,622

730
△99
1,884
△87,204△512,815△723△240,304－△702,351
164△134,278△1,077,494
1,114△809,850△723△291,200
760,000△690,108
189,000△132,879△165,911△11,517
485,382

12,910,303
12,100,452

12,100,452
12,585,834

(5) Notes Concerning the Consolidated Financial Statements(Notes Concerning the Premise of a Going Concern)
Not applicable(Segment Information, etc.)[Segment Information]
1. Outline of reportable segments
The Company’s reportable segments provide financial information separated according to its
various structural units and are also subject to periodic review when the Board of Directors
decides on the allocation of business resources and makes performance appraisals. The FaithGroup’s main businesses are the Content Business, the Point Service Business, and the LabelBusiness.
Content BusinessIn order to promote its Multi-Content and Multi-Platform Strategy, the Faith Group’s Content
Business is providing one-stop solutions ranging from the construction of distribution systems
and the operation of services for end-users to the planning and production of digital contents.
Main companies involved in this business: Faith, Inc. and Faith Wonderworks, Inc.
Point Service Business
The Faith Group is engaged in the Point Service Business, which is aimed at the retail industry.
Main company involved in this business: GoodyPoint Co., Ltd.
Label Business
The Label Business encompasses planning, production and sales of sound sources and videos,music rights acquisition and management, and contracted production and sales of sound source
and video products for other companies, etc.
Main companies involved in this business: Nippon Columbia Co., Ltd. and DREAMUSIC Inc.
2. Calculation method for sales, profit or loss, assets, liabilities and other items by reportablesegment
The accounting method for the reportable business segments is in accordance with the accounting
policies adopted for preparing the consolidated financial statements.
For the profit figures of the reportable segments, the operating income base figures are used.
Inter-segment sales and transfer amounts are decided in consideration of the market price andother factors.

17

3. Information on sales, profit or loss, assets, liabilities and other items by reportable segment
Previous consolidated fiscal year/FY 2018 (April 1, 2018 ~ March 31, 2019)(Unit: thousands of yen)Content

Reportable segment
Point
Label
Service

Total

Adjustment
amount(Notes
1 & 2)

Amountrecorded in
Consolidated
Financial
Statements(Note 3)

Sales
Sales to external
3,512,723
2,683,271
14,769,361
20,965,356
20,965,356－
customers
Inter-segment sales or
75,668540
2,503
78,712△78,712－transfer amountTotal
3,588,391
2,683,812
14,771,865
21,044,068
20,965,356△78,712Segment profit or loss
114,703631,130
140,6633,626
144,290△605,170(△)
Segment assets
11,648,799
1,240,498
11,458,691
24,347,989
24,343,216△4,773
Other items
Depreciation expenses
176,578
20,621
107,485304,685304,685－
Amortization of
4,205
101,899
106,105
106,105－－
goodwill
Investment in
57,71052,255
109,965
109,965－－
equity-method affiliates
Increase in tangible
and intangible fixed
657,193
25,974
46,843730,011730,011－
assets(Notes)1. The segment profit or loss adjustment amount of ¥3,626 thousand is calculated by eliminating intersegment
transactions.
2. The segment assets adjustment amount eliminates intersegment transactions, etc.
3. Segment profit is adjusted with operating income in the consolidated financial statements.

Current consolidated fiscal year/FY 2019 (April 1 2019 ~ March 31, 2020)(Unit: thousands of yen)Content

Reportable segment
Point
Label
Service

Total

Adjustment
amount(Notes
1 & 2)

Amountrecorded in
Consolidated
Financial
Statements(Note 3)

Sales
Sales to external
3,574,322
2,783,983
13,734,734
20,093,040
20,093,040－
customers
Inter-segment sales or
142,031309
641
142,981△142,981－
transfer amountTotal
3,716,353
2,784,292
13,735,375
20,236,022
20,093,040△142,981
Segment profit or loss
104,365
923,111
383,724
1,364
385,088△643,752
Segment assets
10,236,962
1,204,729
13,428,420
24,870,112
24,746,972△123,139
Other items
Depreciation expenses
194,204
14,047103,117311,369
310,629△740
Amortization of
4,092
111,328
115,421
115,421－－
goodwill
Investment in
50,041
88,670138,711
138,711－－equity-method affiliates
Increase in tangible
and intangible fixed
83,756
26,166
49,779159,701
159,701－
assets(Notes)1. The segment profit or loss adjustment amount of ¥1,364 thousand is calculated by eliminating intersegment
transactions.
2. The segment assets adjustment amount eliminates intersegment transactions, etc.
3. Segment profit is adjusted with operating income in the consolidated financial statements.

18

[Related Information]
Previous consolidated fiscal year/FY 2018 (April 1, 2018 ~ March 31, 2019) and current
consolidated fiscal year/FY 2019 (April 1 2019 ~ March 31, 2020)
1. Information by product and service
This information is omitted because similar information is disclosed in the segment
information.
2. Information by region(1) Sales: Information on sales by region is omitted because the amount of sales to externalcustomers in Japan accounts for over 90% of the amount of sales reported on the
consolidated balance sheet.
(2) Tangible fixed assets: Information on tangible fixed assets by region is omitted because
the amount of fixed assets in Japan accounts for over 90% of the amount of fixed assets
reported on the 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 2018 (April 1, 2018 ~ March 31, 2019)(Unit: thousands of yen)Content
Loss onimpairment

Point
Service542,629

Label

Total

－

1,860

Company-wide/
elimination

Total

－

544,490

544,490

Current consolidated fiscal year/FY 2019 (April 1 2019 ~ March 31, 2020)
Not applicable[Information on Amortization of Goodwill and Unamortized Balance for Each Reportable Segment]
Previous consolidated fiscal year /FY 2018 (April 1, 2018 ~ March 31, 2019)(Unit: thousands of yen)

Year-endbalance

Content

Point
Service

13,092

－

Label

Total

1,528,491

1,541,584

Company-wide/
elimination－

Total
1,541,584(Note)
The amount of amortization of goodwill is omitted because the same information is shown in [Segment
Information].

Current consolidated fiscal year/FY 2019 (April 1 2019 ~ March 31, 2020)(Unit: thousands of yen)

Year-endbalance

Content

Point
Service

9,000

－

Label

Total

1,511,453

1,520,453

Company-wide/
elimination－

Total
1,520,453(Note)
The amount of amortization of goodwill is omitted because the same information is shown in [Segment
Information].

[Information on Gains on Negative Goodwill by Reportable Segment]
Previous consolidated fiscal year/FY 2018 (April 1, 2018 ~ March 31, 2019) and current
consolidated fiscal year/FY 2019 (April 1 2019 ~ March 31, 2020)
Not applicable19(Per Share Information)(Unit: yen)

FY 2018 (April 1, 2018 ~ March 31, 2019)
Net assets per share
1,321.37
Net income per share
23.15

FY 2019 (April 1 2019 ~ March 31, 2020)
Net assets per share
1,301.66
Net income per share
67.93(Notes)1. The amount of net income per share fully diluted during the current consolidated fiscal year and diluted net
income per share for the previous consolidated fiscal year are not recorded because there are no residual sharessubject to a dilution effect.
2. The basis of the calculation of net income per share is as follows.
FY 2018
FY 2019(April 1, 2018 ~ March 31,(April 1 2019 ~ March 31,
2019)
2020)
Net income per share
Net loss (△) attributable to the shareholders△309,257△884,300of the parent company (thousands of yen)Amount not attributable to ordinary－－
shareholders (thousands of yen)
Net loss (△) pertaining to common stock
attributable to the shareholders of the parent△309,257△884,300
company (thousands of yen)
Average number of shares outstanding during
13,353,334
13,016,759
the period (shares)
3. The basis of the calculation of net assets per share is as follows.
End of FY 2018(as of March 31, 2019)
Total amount of net assets (thousands of yen)
17,520,288
Amount deducted from total amount of net－
assets (thousands of yen)(Non-controlling interests)(－)
Year-end net assets pertaining to common stock
17,520,288(thousands of yen)
Year-end number of shares of common stock
13,259,091
used in calculating net assets per share (shares)(Significant Subsequent Events)
Not applicable20

End of FY 2019(as of March 31, 2020)

16,439,012－(－)
16,439,012
12,629,251