BRIEF STATEMENT OF ANNUAL FINANCIAL RESULTS FOR THE YEAR ENDED
MARCH2007 AND FORECASTS FOR THE YEAR ENDING MARCH 2008
May 11, 2007
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 28, 2007
Date of Submission of Securities Report: June 29, 2007
Starting date of the dividend payment: June 29, 2007
Amounts are rounded down to the nearest JPY 1 million.

1. Results for the fiscal year (From April 1, 2006 to March 31, 2007)(1)

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

Net SalesYear ended
March 2007

Millions of yen

Operating Income
Millions of yen

44,152%47.0

March 2006

30,04027.1

Years ended
March 2007
March 2006

Net Income perShareYen
81△1,581
1,174
67

Recurring Profit
Millions of yen

1,060%
△68.7

3,391

△15.6

DilutedNet
Income per ShareYen－－
1,17453Net Income
Millions of yen

853%
△75.3

△1,883%―3,455

△14.6

1,438

355.1

ReturnonEquity Capital%
△10.8
8.3

Recurring Profit
on Total Assets
%
2.4
12.8

Operating Income
on Net Sales%
2.4
11.3

Reference: Equity in earings of associated companies: the fiscal year ended March 2007: 136million yen/ the fiscal year
ended March 2006: 140 million yen(2) Consolidated financial position
Total Assets
Year ended
March 2007
March 2006

Net Assets

Millions of yen

Millions of yen

39,442
31,595

15,914
19,625

Ratio of Equity Capital%
38.6
62.1Net Assets per ShareYen
12,79762
16,45384

Reference: Equity Capital: the fiscal year ended March 2007: 15,234million yen/ the fiscal year ended March 2006:
19,625million yen.

(3) Cash flow results
Cash Flow fromOperating Activities
Year ended
March 2007
March 2006

Cash Flow from
Investing Activities

CashFlowfrom
Financing Activities

Cash and Cash
Equivalents, End ofthe year

Millions of yen

Millions of yen

Millions of yen

Millions of yen

1,371
2,970

△13,978△2,041

12,739
△236

8,065
7,679

1

2. Dividends(Record dates)

InterimYear ended
March 2006
March 2007yen

Year ending March2008 (Forecast)

5050
50

Year-end000000

50
50
50

yen
00
0000

Total(Annual)

100
100
100

yen000000

Total Dividend
PaymentPayout Ratio

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

119
119

8.5
9.2%

-%
0.7
0.7-

3. Forecasts for the business results for the year ending March 2008 (from April 1, 2007 toMarch 31, 2008)
The figures in “%” show increased/decreased ratio compared with the previous fiscal year and the previous interim result.

Net SalesInterimresults 2008
Year endingMarch 2008

Operating Income

Recurring Profit

Net Income

Net Income perShareYen

Millions ofyen%Millions ofyen%Millions ofyen%Millions ofyen%

23,500

16.4

850

31.9

700

24.2

800－

67203

50,000

13.2

2,100

98.0

1,700

99.1

1,300－

1,092

05

4. Others(1) Changes in the significant subsidiaries (Accompanying changes in scope of theconsolidation): Applicable(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 2007: 1,196,000 shares, the fiscal year ended March 2006: 1,196,000shares(3)-2. Treasury shares at the end of the fiscal years:
The fiscal year ended March 2007: 5,580 shares, the fiscal year ended March 2006: 5,580 shares

2Consolidated Financial Statements(1) Consolidated Balance SheetNote(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 doubtfulaccounts
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)
Consolidatedadjustment account(2) Goodwill(3) Soft ware(4) Others
Total intangible fixedassets
3. Investment and otherassets(1) Investment securities(2)Long-term loans(3)Deposits with landlords(4)Others
Allowance for doubtfulreceivable
Total investments and otherassets
Total fixed assets
III Deferred charges
1. Expenditure for stock
delivering prescription
Total deferred charges
Total assets(Unit: thousands of yen)

FY2005(As of March 31, 2006)
AmountComponent
percentage

FY 2006(As of March 31, 2007)
Amount

7,534,815
4,768,010

8,217,827
6,929,263

364,619
39,905－

347,644636,880865,236808,951
571,683△82,229

1,350,004
1,889,891△206,234

14,005,756

44.3

256,659

20,030,513

50.8

243,861

44,61833,403

212,041

24,30726,30520,083
1,917,608
1,131,299

13,3197,848
1,747,897
1,171,123*1

Component
percentage

786,209
216,5101,228,080

3.9

219,553
18,457576,773
216,602
1,031,386

3,656,824－－
457,318
483,401
4,597,545

10,293,255
781,620
105,399
11,180,274

14.6

9,560,144
1,560
1,144,546
1,178,102△119,956

2.6

28.4

5,273,058
180,045
1,440,442
1,037,395△719,823

11,764,397

37.2

7,047,700

18.2

17,590,023

55.7

19,403,485

49.2

－－

8,161

－
31,595,780

100.0

8,161
39,442,160

30.0
100.0

FY2005 (As of March 31, 2006)
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
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
4. Allowance for directors
andstatutory
auditors
retirement bonus
5. Reserve for guarantee
losses
6. Others
Total fixed liabilities
Total liabilities(Minority interests)
Minority interests(Shareholders’ equity)
I. Capital stock
II. Additional paid-in capital
III. Retained earnings*2

IV. Unrealized gain on
available-for-sale securities
V.
Foreigncurrencytranslation adjustments
VI. Treasury stock
Total shareholders’ equity

Total liabilities, minority
interests and shareholders’equity*3

Component
percentage

Amount

FY2006 (As of March 31, 2007)
Component
percentage

Amount3,349,235
86,969826,587

4,648,274
5,215,768
580,2422,323,140
697,582

2,511,846
553,247

77,316
1,844,745
9,205,576

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

29.1

39.3

2,235,777

6,119,854
535,501

27,25235,535

121,134-

37,532
2,421,697
11,627,274

7.7
36.8

1,298,550
54,611
8,044,052
23,527,318

20.4
59.7

342,525

1.1--

3,218,000
3,708,355

10.2
11.7

-

-

9,408,748

29.8--3,401,193

10.7-

-

243,952△354,269

0.8
△1.1-

-

19,625,979

62.1

-

-

31,595,780

100.0--

4

FY2005 (As of March 31, 2006)
Account name(Net assets)
I. Shareholder's equity
1. Common stock
2. Capital surplus
3. Retained earning
4. Treasury stock
Total shareholder's equity
Valuation and translation
adjustments
1.Net unrealized gains on
investment securities
2.
Foreigncurrencytranslation adjustments
Share warrant
1. subscription right
Total share warrant
Minority interests
Total net assets
Total liability and net assets

note*2*3

FY2006 (As of March 31, 2007)

Component
percentage

Amount---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

-

1,195,867

3.0--

189,991
1,385,858

0.5
3.5-

-

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

0.0
0.0
1.7
40.3
100.0

5

(2) Consolidated Income statement(Thousands of yen)
FY2005 (As of March 31, 2006)
Account nameI Net sales
II Cost of Sales
Gross profit
III. Selling, generaladministrative expenses

note*2FY2006 (As of March 31, 2007)

Amount30,040,166
20,308,957
9,731,209

Component
percentage
100.0
67.6
32.4

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

Component
percentage
100.0
70.7
29.3

6,339,781
3,391,428

21.1
11.3

11,877,157
1,060,576

26.9
2.4

132,383

0.3

339,293853,6670.8
1.9

3,713,124

8.4

6,277,532

14.2△1,710,741△3.9

18,938
153,333△1,883,013

0.0
0.4
△4.3

and
*1,2

Operating income
IV. Other income
1. Dividend income
2. Interest income
3. Foreign exchange gain
4. Miscellaneous income
V. Operating expenses
1. Interest expense
2.Investment profit on equity
method3. Miscellaneous expense
Ordinary profit
VI. Extraordinary profit
1. Gain on disposal
investment securities

38,292
43,736116,908
22,498221,4360.7

9,146
140,794
7,865

41,07042,575
7,886
40,851
191,407

157,805
3,455,058

0.5
11.5

136,624
11,260of
220,271

2. Gain on liquidation ofallowance for cost of card use
3. Accrued retirement
benefits directors
and statutory auditors
4. Others
Total extraordinary profit
VII. Extraordinary loss
1. Loss on disposal of fixed
assets-

14,332*3

Income taxes and other taxes
Minority interests
Net income or loss

234,603

0.8

108,555449,273622,063
63,268-*4

151,150
149,488363.862-

3. Provision for loan losses
4. Loans charged off

Income taxes and business
taxes

3,380,630-

2. Loss from investment
securities valuation

5. Amortization of goodwill
6. Guaranty of liabilities loss
provision
7. Others
Income before income taxes
and minority interests

31,854

2,989,387

8,095

2,132,141
33,938

179,9190.6

3,509,74211.7

2,166,080△94,631
1,438,293

7.2
△0.3
4.8

6

1,298,550
554,395

752,730△733,791

(3) Consolidated statement of capital surplus andchanges in net assets
Consolidated statement of capital surplus(Thousands of yen)Account name
(Additional paid-in capital)
I. Beginning balance
II. Ending balance

Note

FY2006 (From April 1, 2006 toMarch 31, 2007)
Amount3,708,355
3,708,355(Accumulated income)I Beginning balance
II. Increase of accumulated income
1. Net income

8,128,670

1,438,293

1,438,293

III. Decrease of accumulated income
1. Dividends
2. Bonuses tostatutory auditors

119,215
directors

and39,000

IV Ending balance

7158,215
9,408,748

CONSOLIDATED STATEMENTS OF CHANGES IN NETASSETSFor 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 Mrch 31, 2006
Changes of items during theaccounting period
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

Treasurystock

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

19,968,992△2,205,326△53,960△2,259,287△2,205,326△53,960△2,259,287

1,195,867

189,991

1,385,858*8337,282
487

337,282
679,808△
1,922,004△
4,054,151
15,914,842

(4) Consolidated Statements of Cash FlowsFY2005 (FromApril 1, 2005 toMarch 31, 2006)
Amount, thousandof yen

FY2006 (From April
1, 2006 to March 31,2007)
Amount, thousand ofyen

3,509,742
520,755-△1,710,741
625,384
72,435

Amortization of goodwill

715,371-5,604,258

Loss from investment in equity method

140,794

136,624

Increase in allowance for doubtful accounts

71,641

735,361△20,82151,861△80,861

188,706△114,426△144,334

7,470

8,282

3,568

△121,134-

1,298,550△220,271△31,854-△3,380,630

Gain from anonymous association
Proceeds from equity movement
Interest and dividends income
Interest on securities
Interest expenses
Foreign exchange gains△771△40,478△43,736
9,146△132,560

449,273△615△139,137△43,510△42,575
191,407△9,976

Losses from disposal of fixed assets

108,555

363,862

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

4,922△12,555△1,057,870△689,984

Increase in accounts and notes payable-trade717,771

1,491,274

Decrease (increase) in consumption taxes receivable

27,702△266,735

Payment of directors and statutory auditors’ bonus△39,000△39,000

Item
I. Cash flow from operating activities

Note

Income before income taxes and minority interests
Depreciation and amortization
Impairment loss
Amortization of consolidation difference

Increase (decrease) in reserve for bonus
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
Gains on sale of investment securities
Gain on sale of corporate share on affiliated company
Valuation loss on investment securities

9ItemNoteOthers
Sub-totalInterest and dividends received
Interest expenses paid
Income taxes paid
Net cash provided by operating activities

10

FY2005 (FromApril 1, 2005 toMarch 31, 2006)
Amount, thousandof yen
73,9685,206,927
56,541△8,591△2,283,218

FY2006 (From April1, 2006 to March 31,2007)
Amount, thousand ofyen△41,562
3,497,621
41,996△173,947△1,993,905

2,970,659

1,371,764

FY2005 (FromApril 1, 2005 to
March 31, 2006)
Amount,thousand of yen

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

Expenditure for deposit of time deposits△200,000△1,850,052

Proceeds from withdrawal of time deposits

400,000

1,550,052△427,664△579,359

12,206

8,755

Expenditure for acquisition of software△322,909△605,288

Expenditure for acquisition of other intangible fixed assets△44,037△11,109△2,344,873-△1,608,239△40,800

Proceeds from sale of investment securities

758,255

109,280

Proceeds from redemption of securities

256,140-△58,896--

41,341-

1,871,039

Item
II. Cash flow from investing activities

Note

Expenditures for acquisition of tangible fixed assets
Proceeds from sale of tangible fixed assets

Expenditure for acquisition of investment securities
Expenditure for acquisition of investment securities from minority

Expenditures for acquisition of subsidiary’s shares causing a change inscope of consolidation*2

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 ofconsolidation
Expenditure for sale of subsidiary’s shares causing a change in scope ofconsolidation*3△52,284*3

Expenditure for depositing long-term guaranty deposit△3,563-△1,678△430,011

9,944

39,883△76,349△12,036,313△383,855△2,041,748△13,978,639

86,9694,397,167

Proceeds from long-term borrowing-

10,131,509

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

Proceeds from repayment of bonds-351,000△1,145

Expenditure for loans receivable
Proceeds from collection of loans receivable
Expenditure for assigning management of business
OthersNet cash used in investing activities
III. Cash flow from financing activities
Net increase in short-term loans

Expenditure for refund of bond11

Expenditure for acquisition of treasury stocks△20,4056△119,105
FY2005 (FromApril 1, 2005 to
March 31, 2006)
Amount,thousand of yen-△117,659
FY2006 (FromApril 1, 2006 to
March 31, 2007)
Amount,thousand of yen△12,591△236,192

12,739,964

IV. Effect of exchange rate on cash and cash equivalents

216,450

59,799V. Net increase in cash and cash equivalents

909,168

192,8896,770,266

7,679,435-

193,146

7,679,435

8,065,471

Payment of dividends

ItemNoteOthers
Net cash flow used in financing activities

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

*112