BRIEF STATEMENT OF ANNUAL FINANCIAL RESULTS FOR THE YEAR ENDED
MARCH 2008 AND FORECASTS FOR THE YEAR ENDING MARCH 2009
May 14, 2008
Faith, Inc. (Stock code 4295, Listed on TSE 1st section)(URL http://www.faith.co.jp/)
Place of headquarters; Kyoto Pref.
Representative; Hajime Hirasawa, CEO/President
Contacts; Shigeyoshi Fujiwara, Director/General Manager, Investor & Public Relations,Tel: +81-3-5776-6255
Date of General Meeting of Shareholders: June 27, 2008
Date of Submission of Securities Report: June 27, 2008
Starting date of the dividend payment: June 30, 2008
Amounts are rounded down to the nearest JPY 1 million.

1. Results for the fiscal year (From April 1, 2007 to March 31, 2008)(1)

Consolidated financial results
Those figures in “%” show increased/decreased ratio compared with the previous fiscal term

Net SalesYear ended
March 2008

Millions of yen

Operating Profit
Millions of yen

50,192%
13.7

March 2007

44,15247.0

Years ended
March 2008
March 2007

Net Assets per
Share
Yen
451
38
81
△1,581

Recurring Profit
Millions of yen

2,266

%
113.7

1,060

Net Profit
Millions of yen

1,909

%
123.7

537

%
―

△68.7

853

△75.3

△1,883―Returnon
Equity Capital
%
3.6
△10.8

Recurring Profit
on Total Assets
%
5.1
2.4

DilutedNet
Income per Share
Yen
430
05
－
－

Operating Income
on Net Sales
%
4.5
2,4

Reference: Equity in earings of associated companies: the fiscal year ended March 2008: 511million yen/ the fiscal year
ended March 2007: 136 million yen(2) Consolidated financial position
Total Assets
Year ended
March 2008
March 2007

Net Assets

Millions of yen

Millions of yen

36,17439442

16,545
15,914

Ratio of Equity Capital
%
41.5
38.6

Net Assets per ShareYen
12,61200
12,79762

Reference: Equity Capital: the fiscal year ended March 2008: 15,013million yen/ the fiscal year ended March 2007:
15,234million yen.

(3) Cash flow results
Cash Flow fromOperating Activities
Year ended
March 2008
March 2007

Cash Flow from
Investing Activities

Cash
Flow
from
Financing Activities

Cash and Cash
Equivalents, End of
the year

Millions of yen

Millions of yen

Millions of yen

Millions of yen

6,112
1,371

344
△13,978△3,944
12,73910,6148,065

1

2. Dividends(Record dates)

InterimYear ended
March 2007
March 2008

yen

Year ending March2009 (Forecast)

50
50
50

Year-end

00
00
00

50
50
50

Total(Annual)

yen
00
00
00

100
100
100

yen
00
00
00

Total Dividend
Payment

Payout Ratio

Dividend on
Net Assets(Annual)Millions of yen(Consolidated)(Consolidated)

119
119

22.2
119.0

%

-

%
0.7
0.8
-

3. Forecasts for the business results for the year ending March 2009 (from April 1, 2008 to
March 31, 2009)
The figures in “%” show increased/decreased ratio compared with the previous fiscal year and the previous interim result.

Net SalesInterimresults 2009
Year ending
March 2009

Operating Income

Recurring Profit

Net Income

Net Income per
Share
Yen

Millions ofyen%Millionsof yen%Millions of yen%

Millionsof yen%25,700

9.6

400

△62.5

300

△66.1

40

△95.8

33

60

57,000

13.6

1,200

△47.1

1,000

△47.6

100

△81.4

84

00

4. Others(1) Changes in the significant subsidiaries (Accompanying changes in scope of theconsolidation): None
(2) Changes in accounting policy, procedure, and presentation in preparation of theconsolidated financial reports: (Described in the “Basis of consolidated financial
statements and summary of significant accounting polices”)(2)-1. Changes accompanying revisions of accounting standards, etc.:Applicable(2)-2. Changes other than the above: None
(3)Outstanding shares (common shares)(3)-1. Outstanding shares at the end of the fiscal years (including treasury shares):
The fiscal year ended March 2008: 1,196,000 shares, the fiscal year ended March 2007: 1,196,000shares(3)-2. Treasury shares at the end of the fiscal years:
The fiscal year ended March 2008: 5,580 shares, the fiscal year ended March 2007: 5,580 shares21. Operating Results(1) Analysis on Operating Results
During the consolidated fiscal year under review, the digital content distribution market expanded
continuously. Behind this growth, accessibility of broadband Internet diversified more opportunities toutilize various services, and a shift toward third-generation (3G) mobile communication system madeprogress in the mobile phone market. At the same time, the volume of content distribution on
lifestyle-related information such as medical services, beauty, and health increased, in addition tohigh-quality and highly entertaining services which provide with music, video, and online game. The
highly convenient information services accessible via mobile phones also increased.
In anticipation of these trends in the growing Japanese digital content distribution market, Faith Group has
actively taken part in creating a new content distribution structure through acquisitions and building
partnership with other leading companies.
The Group started new commercial content distribution services using NFRM, Near Filed Rights
Management TM, an authentication technology developed in-house to achieve the creation of new
platform-agnostic, multi-content market. That is, the group aims to realize the distribution of wide rangeof content in any forms, through any networks to any terminals. At the same time, the Group took
initiative to build and develop new platforms required to stimulate new content needs, and other activities
such as authentication, medical information distribution, electronic payment, and electronic commerce inthe growing content market.
Furthermore, in the electronic money field, which is seeing increasing demand, the amount of payments
settled using WebMoney continued to grow substantially, with its strength including high market shares inonline game and other areas.
As a result, consolidated net sales for the fiscal year under review increased 13.7% year on year to ¥50,192
million. This increase was aided by continued strong growth in the electronic money business and steady
expansion of the content distribution business in Japan through aggressive efforts including acquisitions
and partnership. Operating profit was ¥2,266 million, up 113.7% year on year, due to factors such as
realignment of overseas business. Recurring profit was ¥1,909 million, up 123.7% year on year. Net
profit sharply increased to ¥537 million due mainly to the increase in recurring profit. In fiscal 2006, net
loss of ¥1,883 million was recorded due to the posting of huge extraordinary loss caused by realignment ofoverseas business.
<Contents Business>
Faith Group strived to expand and reinforce its operating base through activities including acquisitions andbuilding partnership with other leading companies, and concentration of management resources by businessrealignment during the period under review.
1) Following the launch of the commercial services of NFRM in June 2007, the Group strived to promoteprevalence of NFRM services by introducing the technologies in wider range of terminals and content.
The use of NFRM had been limited to short distance authentication utilizing FeliCa technology. In
October 2007, this condition was improved and NFRM was applied to infrared ray communication anddemonstration of authentication were held using Internet AQUOS, a PC-TV of Sharp Corporation. In
November, the operation of KAZAS Channel, a total portal site for mobile phones launched as one of theofficial i-mode sites to distribute NFRM corresponding video content. Furthermore, GIGA Networks Inc.,
the first company who introduced the commercial service of NFRM, started to take initiative of the video
distribution service business cooperating with other content providers both in and out of the Group.
2) Medical Communication, Inc., a consolidated subsidiary, expanded its medical and health information
business mainly by providing new services for mobile phones. In July 2007, it launched "PocketQQ," acorporate-use medical information service, and in December 2007, "Makasete Romu," a new personnel
management information service.

33) Brave, Inc., a consolidated subsidiary, launched "viBirth.com" business in November 2007. It
provides with marketing network structure through which creators of music and video are able to deliver
their works directly to the consumers.
4) In November 2007, Faith.biz, Inc...., a consolidated subsidiary, developed a high-definition video
player for mobile phones which enables full-screen viewing, and started provision of the products. The
company was established in May 2007 aiming to streamline the Group business by integrating the Group's
IT resources and expand the Group business by developing new solutions.
5) In cooperation with Credit Saison Co., Ltd. in the field of content distribution services, provision of"Eikyufumetsu Contents (Everlasting Conttents)," a mobile content distribution site commenced in
February 2008, which allows eternal reward points to users.
6) The Group developed a new user authentication platform utilizing NFRM function, and launched atrial service of "GPass," a password manager for online games in February 2008.
7) Brave, Inc. and Faith.biz, Inc... expanded their operations of EC platform development andmanagement mainly in cooperation with leading companies in the credit card industry and the distributive
industry.
8) The Group completed the realignment of the overseas content distribution business to realize
convergence and reallocation of management resources by selling Any Music Limited, a content
distribution service subsidiary in China, in November 2007, and Curupira S.A., a content distribution
service subsidiary and commonly known as TakeNET, in South America in February 2008.
As a result, sales in the content business totaled ¥16,264 million, down 12.4% year on year. This figure
resulted from a decline in revenues from overseas content distribution businesses, despite steady growth in
the content distribution business in Japan due to aggressive business cooperation and acquisitions, andother developments. Operating profit fell by 32.6% year on year, to ¥1,674 million, due to increases inroyalties on distribution of audio and video content and continued upfront investment on new businesses.
<Electronic Money Business>
According to the Information and Communications Statistics Database issued by Japan's Ministry ofInternal Affairs and Communications, subscriptions to broadband services in Japan exceeded 28 million at
the end of December 2007. Demand for electronic money continued to increase for the purchase of online
game, the mainstay of the electronic money business, as well as mobile content and other digital content
such as music and video. Against the backdrop, the volume of online payment settled in the Faith Group's
WebMoney sharply increased, since it provided secure and convenient solutions.
To improve convenience for the users, the Group thoroughly renewed "WebMoney Wallet," an online
wallet function for WebMoney. Not only enhancing security and other functional aspects, further
improvement was made to provide safer and more convenient services. In addition, the improvement of
online purchase function allows users to charge WebMoney in their WebMoney Wallet and settle online
using credit card, or online banking. Also, Users can deposit and withdraw cash for WebMoney
settlement at banking facilities across Japan.
As a result, sales in the electronic money business totaled ¥32,389 million, up 43.0% year on year, andoperating profit was ¥527 million, an increase of 11.5% year on year.
<Other Businesses>
Factors such as revenues from the point-card system business led sales in other businesses to decrease by
47.1% year on year, to ¥1,538 million. Operating profit was ¥81 million compared with an operating lossof ¥53 million in fiscal 2006.

4

Projections for full-year business performance are summarized below.

Net sales
Operating profit
Recurring profit
Net profit(△Net loss)

FY2007 (Result)(a)
50,192
2,266
1,909
537

FY2008 (Forecast)(b)
57,000
1,200
1,000
100

(millions of yen)
Change(a)-(b)6,808△1,066△909△437

Currently, in the content distribution market in Japan, demand for music and videos are showing steady
growth. At the same time, demands for other content such as games, novels, graphics, and texts(education, home life, hobbies.) are showing remarkably strong growth, and these newly developing
categories make up almost half of the volume distributed in Japan. Along with the diversifying content
distributed in the market, terminals connected to the distribution networks has been diversifying frommobile phone, PC, digital TV, to set-top box. Payment settlement methods are diversified as well. Dueto the aforementioned factors and other factors, the user environment has been increasingly complex.
To provide with solutions for this complicated user environment and diversifying content, Faith Grouptakes initiative to design and develop platforms which allow users to download content on various
terminals, and introduce these technologies to the companies both in and out of the Group. At the sametime, the Group takes part in the production of video, music and other content. Furthermore, the Group
organizes comprehensive content distribution business, from building distribution structure, operating
services, to producing content creation. The new models of content distribution business will be
immediately adopted in the Group, and then will be introduced to other partner companies.
NFRM authentication technology was developed by Faith, commercialized in fiscal 2007 as NFRM service
utilizing mobile phone. In future, the Group aims to increase the content which corresponds to NFRM
service, and promote further prevalence of compatible devices such as PC and digital TV. At the sametime, the Group takes active initiative to develop the technology applicable to a user authentication method.
Further expansion of EC platform is planned in cooperation with leading companies. In addition,
development of a platform for provision of medical and health information service will actively continue,
as well as the issuance of the electronic money which occupies high share of the online payment settlement
market.
In the overseas business, a series of realignment has been completed. The Group will continue expanding
the sales of its distribution platform technologies together with partner companies, mobile phone carriers,
handset manufacturers, and content providers.
As a result, Faith Group sales for the full fiscal year are projected to rise 13.6% year on year, to ¥57,000
million. Two factors are projected to lead to year on year decrease of 47.1% in operating profit to ¥1,200
million. The first factor is the continued upfront investment to design, develop, and built multi-content
distribution services on multi-platform. The other factor is the expenses to produce creation of richcontent targeting various terminal devices, as well as purchasing such content. Recurring profit isprojected to decrease by 47.6% year on year to ¥1,000 million. Net profit is projected to decrease by
81.4% year on year to ¥100 million.

(2) Basic Policy on Appropriation of Profit and Dividend Payment
The Company continues its policy of giving priority to securing the funds necessary for strengthening its
business structure and making aggressive business investments, but it also recognizes return of profit toshareholders to be an important management issue. For this reason, the Company will consider payment
of dividends, taking into account its operating results and financial positions.
Based on its fundamental policy of paying continued stable dividends, the Company plans to pay dividendsof ¥100 per share, including interim dividends of ¥50, in the next fiscal year.

52. Overview of Faith Group
Faith Group consists of Faith, Inc (the Company), 18 subsidiaries and 11 affiliates and mainly conducts
content distribution business (content distribution services and licensing of distribution platform
technologies) and electronic payment business.
The Faith Group’s businesses and relationship between the Company and other group companies inbusiness operations are as follows:(1)

Businesses of affiliate companies

Businesses
Contents businessElectronic Money business
Other businesses

Main operations
Content distribution services, using computer
networks Development and licensing of
distribution platform technologies
Production of contents
Issuance of electronic money and providing
electronic payment platforms
Point service and other businessCompanies concerned
Faith, Inc., GIGA Networks Co., Ltd,
Desperado, Inc., BRAVE Inc., Rightsscale,Inc., Faith West Inc. and 14 other companies
WebMoney Corporation

Faith, GoodyPoint Corp. and 8 othercompanies
Note: Prior "Contents distribution business" is changed its name to "Contents business" and the film production
business previously sectioned to "Other businesses" is changed to "Contents business" from this fiscal year.

63. Management Policies(1) Faith Group's basic management policy
This information is omitted as no substantial changes have been made since it was disclosed in the Brief
Statement of Consolidated Financial Results for the First Half of the Fiscal Year Ending March 2008 issued
on November 14, 2007.
The document mentioned above is available online.
Faith Homepage
http://www.faith-inc.com/ir/library/FY2007_Interim_E_0121final.pdf
Tokyo Stock Exchange Homepage (Listed Company Information)
http://www.tse.or.jp/english/index.html

7

4. Consolidated Financial Statements(1) Consolidated Balance Sheet

Note(Assets)
I. Current assets
1. Cash and deposits
2.Accounts and notes
receivable
3. Marketable securities
4. Inventories
5. Accrued refund incometax
6. Deferred tax assets
7. Others
Allowance for doubtful
accounts
Total current assets
II. Fixed assets
1. Tangible fixed assets(1)
Buildings
andstructures
Accumulated depreciation(2) Machinery, equipment
and vehicles
Accumulated depreciation(3) Tools
Accumulated depreciation(4) Land
Total tangible fixed assets
2. Intangible fixed assets(1)
Consolidated
adjustment account(2) Goodwill(3) Soft ware(4) Others
Total intangible fixed
assets
3. Investment and otherassets(1) Investment securities(2)Long-term loans(3)Deposits with landlords(4)Others
Allowance for doubtfulreceivable
Total investments and otherassetsTotal fixed assets
III Deferred charges
1. Expenditure for stock
delivering prescription
Total deferred charges
Total assets(Unit: thousands of yen)

FY2006(As of March 31, 2007)
Amount*2Component
percentage

FY 2007(As of March 31, 2008)
Amount8,217,827
6,929,263

13,424,006
6,861,259

347,644636,880865,236

250,227
488,727
516,982

1,350,004
1,889,891△206,234

763,972
588,379△209,568

20,030,513

50.8

243,861

22,683,987

Component
percentage

62.7

276,308

24,30726,305219,553

55,55626,305

220,751

7,848
1,747,897
1,171,123

18,457

13,6481,737,612
1,310,708

12,656

576,773
216,602
1,031,386

2.6

426,903－
660,3121.8

28.4

7,607,662
866,564
56,1518,530,378

23.6－
10,293,255
781,620
105,399
11,180,274*1

5,273,058
180,045
1,440,442
1,037,395△739,117

3,490,977－－
920,572△134,516

7,191,823

18.2

4,277,033

11.8

19,403,485

49.2

13,467,724

37.2

8,161

－

22,567

8,161
39,442,160

0.0
100.0

22,56736,174,279

8

0.1
100.0

FY2006 (As of March 31, 2007)
Account name(Liabilities)
I. Current liabilities
1. Trade notes and Accounts
payablenote

2. Short-term loans
3. Income taxes payable
4. Allowance for costs ofcard use*2

5. Allowance for points
6. Allowance for bonus
payments
7. Others
Total current liabilities
II. Fixed liabilities
1. Long-term liabilities
2. Deferred tax liabilities
3. Allowance for retirement
benefits*2

Component
percentage

Amount

FY2007 (As of March 31, 2008)
Component
percentage

Amount4,648,274
5,215,768
580,242

5,922,813
2,529,928
136,221

2,511,846
553,247

2,873,200
468,391

129,177
1,844,707
15,483,265

87,445
1,973,507
13,991,508

39.3

6,119,854
535,501

4,083,472
522,858

35,53549,229

4. Reserve for guarantee
losses1,298,550-

5. Reserve for subsidiaries
losses
6. Others
Total fixed liabilities
Total liabilities

54,611
8,044,052
23,527,318

300,561
681,599
5,637,720
19,629,228

20.4
59.7

9

38.7

15.6
54.3

FY2006 (As of March 31, 2007)
Account name
(Net assets)
I. Shareholder's equity
1. Common stock
2. Capital surplus
3. Retained earning
4. Treasury stock
Total shareholder's equity
II Valuation and translation
adjustments
1.Net unrealized gains on
investment securities
2.
Foreigncurrencytranslation adjustments
III Share warrant
1. subscription right
Total share warrant
IV. Minority interests
Total net assets
Total liability and net assets

note

Component
percentage

Amount

FY2007 (As of March 31, 2008)
AmountComponent
percentage

3,218,000
3,708,355
7,276,602△354,269
13,848,687

8.2
9.4
18.4
△0.9
35.1

3,218,000
3,708,355
7,694,895△354,269
14,266,980

8.9
10.2
21.3
△1.0
39.4

1,195,867

3.0

799,398

2.2

189,991
1,385,858

0.5
3.5△52,807746,591

△0.1
2.1

487
487
679,808
15,914,842
39,442,160

0.0
0.0
1.7
40.3
100.0

1,531,478
16,545,050
36,174,279

4.2
45.7
100.0

10

(2) Consolidated Profit and Loss Statement(Thousands of yen)
FY2006 (As of March 31, 2007)
Account nameI Net sales
II Cost of Sales
Gross profit
III. Selling, generaladministrative expenses

note
*2

FY2007 (As of March 31, 2008)

Amount44,152,751
31,215,018
12,937,733

Component
percentage
100.0
70.7
29.3

Amount50,192,701
37,087,481
13,105,220

Component
percentage
100.0
73.9
26.1

11,877,157
1,060,576

26.9
2.4

10,838,540
2,266,680

21.6
4.5

383,4290.8

740,591
19,090,519

1.5
3.8

1,748,481

3.5

1,539,526

3.1

2,118,474

4.2

and
*1,2

Operating profit
IV. Non-operating income
1. Dividend income
2. Interest income
3.Interest securities.
4. Foreign exchange gain
5. Non-operating expense
V. Operating expenses
1. Interest expense
2.Investment profit on equity
method3. Miscellaneous expense
Ordinary profit
VI. Extraordinary profit
1.Gain on disposal of fixed
assets2.Gainontransferofoperation
3.Gain on disposal ofinvestment securities

41,07042,575
7,886
40,851

0.3

191,407
136,624
11,260*3

4.Gain on liquidation ofallowance for cost of card use
5. Accrued retirement
benefits directors
and statutory auditors
6.Change of scope of equity
method
7. OthersVII. Extraordinary loss
1. Loss on disposal of fixed
assets132,383

183,041

339,293853,6670.8
1.9

511,161
46,388-228,505-

826,627

31,854-

3,380,630

271,550

151,150-

139,137
10,351*4

127,299
44,18026,634
121,000
64,314

3,713,124

8.4

416,091
5,707

363.862

171,427

72,435

270,506

449,273

135,701

622,0632,989,387

160,000
128,706
298,385

1,298,550-

2. Loss due to impairment
3.Lossfrominvestment
securities valuation
4.Lossfromdevelopment

entrusted

5. Provision for loan losses
6. Amortization of goodwill
7. Guaranty of liabilities loss
provision
8.Reserve for subsidiaries
losses provision
9. Others
Income before income taxes
and minority interests*5481,960

6,277,532

14.2△1,710,741

△3.9

11

300,561
74,237

FY2006 (As of March 31, 2007)
Account name
Corporate, local, and businesstaxes
Prior corporate, local, andbusiness taxes
Adjustment for income taxes,
etc.
Income or Loss on minority
shareholders
Net profit or loss

note

FY2007 (As of March 31, 2008)

Component
percentage

Amount723,478

533,584

29,251-△733,791

18,9380.0

153,333△1,883,013

0.4
△4.3

12

Component
percentage

Amount754,971

1,308,555

2.6

272,584
537,3340.5
1.1

(3) Consolidated statement of capital surplus andchanges in net assets
FY2006 (As of March 31, 2007)
For the year ended March 31, 2007
(Thousands of yen)

Shareholders' equity

Balance as of March 31, 2006
Changes of items during theaccounting period
Cash dividend paid *Cash dividend paid
Bonuses to directors and corporate
auditors*
Net loss
Decrease for change in accounting
procedure of controlled foreigncompany
Net changes of items other thanshareholders' equity
Total changes of items during theaccounting period
Balance as of March 31, 2007

Common stock

Capital surplus

3,218,000

3,708,355

3,218,000

3,708,355

Valuation and translation adjustments

Balance as of March 31, 2006
Changes of items during theaccounting period
Cash divided paid*
Cash divided paid
Bonuses to directors andcorporate auditors*
Net loss
Decrease for change inaccounting procedure of controlledforeign company
Net changes of items other thanshareholders' equity
Total changes of items during theaccounting period
Balance as of March 31, 2007

Retainedearnings
9,408,748

Treasury
stock

Total
shareholders'equity△354,269

15,980,834△59,521△59,521△59,521△59,521△39,000△1,883,013△39,000△1,883,013△91,091△91,091△2,132,146
7,276,602△354,269△2,132,146
13,848,687

Sharewarrant

Net unrealized
gains oninvestment
securities

Foreigncurrencytranslation
adjustments

Totalvaluation andtranslation
adjustments

subscription
rightMinority
interests

Total net
assets3,401,193

243,952

3,645,145

487

342,525

19,968,993△59,521△59,521△39,000△1,883,013△91,091△2,205,326△53,960△2,259,287-

337,282△1,922,004△2,205,326△53,960△2,259,287

189,991

1,385,858

337,282
679,808△4,054,151

1,195,867

487*Appropriations of income for annual meeting of shareholders in June 2006.

13

15,914,842

FY2007 (As of March 31, 2008)
For the year ended March 31, 2008
(Thousands of yen)

Shareholders' equity

Balance as of March 31, 2007
Changes of items during theaccounting period
Cash dividend paid
Net profit
Net changes of items other thanshareholders' equity
Total changes of items during theaccounting period
Balance as of March 31, 2008

Common stock

Capital surplus

3,218,000

3,708,355

7,276,602

Treasury
stock

Total
shareholders'equity△354,269

13,848,687△119,042
537,334

3,218,000

3,708,355

Valuation and translation adjustments

Balance as of March 31, 2007
Changes of items during theaccounting period
Cash divided paid
Net profit
Net changes of items other thanshareholders' equity
Total changes of items during theaccounting period
Balance as of March 31, 2008

Retainedearnings△119,042
537,334

418,292
7,694,895△354,269

418,292
14,266,980

Sharewarrant

Net unrealized
gains oninvestment
securities

Foreigncurrencytranslation
adjustments

Totalvaluation andtranslation
adjustments

subscription
rightMinority
interests

Total net
assets

1,195,867

189,991

1,385,858

487

679,808

15,914,842△119,042
537,334△396,468△242,798△639,267△487

851,670

211,915△396,468△242,798△52,807△639,267△487

746,591-

851,670
1,531,478

630,208
16,545,050

799,39814

(4) Consolidated Statements of Cash FlowsFY2006 (FromApril 1, 2006 to
March 31, 2007)
Amount, thousandof yen

FY2007 (From April
1, 2007 to March 31,
2008)
Amount, thousand ofyen△1,710,741
625,384
72,4355,604,258

2,118,474
574,121
270,506
2,742,576

136,624

511,161△139,137△416,091

Increase in allowance for doubtful accounts

735,361△503,533

Increase (decrease) in reserve for bonus

51,861△34,621

188,706

361,353△144,334△84,856

8,282

13,694△121,134-

1,298,550-

Gain from anonymous association
Interest and dividends income
Interest on securities
Interest expenses
Foreign exchange gains△615△43,510△42,575
191,407△9,976

300,561△171,480△26,634
183,041△70,523

Gains on sale of investment securities△31,854-△3,380,630△271,550

449,273

135,701-△228,505

363,862

171,427-△826,627△1,057,870△689,984△976,843
148,564

1,491,274

1,731,016

Item
I. Cash flow from operating activities

Note

Income before income taxes and minority interests
Depreciation and amortization
Impairment loss
Amortization of goodwill
Loss from investment in equity method
Proceeds from equity movement

Increase (decrease) in allowance for cost of card use
Decrease in allowance for unexercised sales promotion points

Increase in allowance for retirement benefits
Increase (decrease) in allowance for directors and statutory auditors’
retirement bonus
Gain from guaranty of liabilities loss provision
Reserve for subsidiaries losses

Gain on sale of corporate share on affiliated company
Valuation loss on investment securities

Losses from disposal of fixed assets
Gain on transfer of operation

Decrease (increase) in accounts and notes receivable-trade
Decrease (increase) in inventories
Increase in accounts and notes payable-trade15

FY2006 (FromApril 1, 2006 to
March 31, 2007)
Amount, thousandof yen

FY2007 (From April
1, 2007 to March 31,
2008)
Amount, thousand ofyen

Decrease (increase) in consumption taxes receivable△266,735

644,931

Payment of directors and statutory auditors’ bonus△39,000△41,5623,497,621
41,996△173,947△1,993,905

515,692
6,768,658
1,368,840△174,210△1,255,650△595,411

1,371,764

6,112,226

Item

Note

OthersSub-totalInterest and dividends received
Interest expenses paid
Expenditures for execution of debt guarantee
Income taxes paid
Net cash provided by operating activities

16

FY2006 (FromApril 1, 2006 to
March 31, 2007)
Amount,thousand of yen

FY2007 (FromApril 1, 2007 to
March 31, 2008)
Amount,thousand of yen

Expenditure for deposit of time deposits△1,850,052△3,981,260

Proceeds from withdrawal of time deposits

1,550,052

1,454,900

Expenditures for acquisition of tangible fixed assets△579,359△368,592

8,755

587,247

Expenditure for acquisition of software△605,288△362,013

Expenditure for acquisition of other intangible fixed assets△11,109△55,032△1,608,239△40,800△600,857-

109,280

700,000-△39,980

41,341-*2

1,871,039

467,294*2△52,284-*3-

1,144,319*4△12,036,313-△1,678△430,011△3,997△424,290

39,883△383,855

652,638
1,173,880△13,978,639

344,254

Item
II. Cash flow from investing activities

Note

Proceeds from sale of tangible fixed assets

Expenditure for acquisition of investment securities
Expenditure for acquisition of investment securities from minority
Proceeds from sale of investment securities
Expenditures for acquisition of subsidiary’s shares causing a change inscope of consolidation
Proceeds for acquisition of subsidiary’s shares causing a change inscope of consolidation
Proceeds for sale of subsidiary’s shares causing a change in scope of
consolidation
Expenditure for sale of subsidiary’s shares causing a change in scope of
consolidation
Proceeds for transfer of operation
Expenditure for assigning management of business
Expenditure for depositing long-term guaranty deposit
Expenditure for loans receivable
Proceeds from collection of loans receivable
OthersNet cash used in investing activities

17

FY2006 (FromApril 1, 2006 to
March 31, 2007)

FY2007 (FromApril 1, 2007 to
March 31, 2008)

Amount,thousand of yen

Amount,thousand of yen

Net increase in short-term loans

4,397,167△2,718,102

Proceeds from long-term borrowing

10,131,509

6,292,286

Expenditure for repayment of long-term borrowing△2,008,315△8,071,605-

100,000-△16,000

Expenditure for refund to minorities
Payment of dividends
Others351,000△1,145△117,659△12,591

598,503△118,055△11,228

Net cash flow used in financing activities

12,739,964△3,944,200

IV. Effect of exchange rate on cash and cash equivalents

59,79936,482

V. Net increase in cash and cash equivalents

192,8892,548,762

7,679,435

8,065,471

193,146-

8,065,471

10,614,234

Item
III. Cash flow from financing activities

Note

Proceeds from issue of bonds
Expenditure for issue of bonds

Proceeds from payment from minorities

VI. Cash and cash equivalents at beginning of year
VII. Cash and cash equivalents of newly consolidated subsidiaries at
beginning of year
VII. Cash and cash equivalents at end of year

*118