BRIEF STATEMENT OF CONSOLIDATED FINANCIAL RESULTS
FOR THE FIRST HALF OF THE FISCAL YEAR ENDING MARCH 2009
November 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, Executive Officer/General Manager, Investor & Public
Relations, Tel: +81-3-5776-6255
Date of Submission of Securities Report: November 14, 2008
Starting Date of the Dividend Payment: December 10, 2008
Amounts are rounded down to the nearest JPY 1 million.

1. Results for the first half of the year ending March 2009
(April 1, 2008 through September 30, 2008)(1)

Consolidated financial results

Those figures in “%” show increased/decreased ratio compared with the previous 1st half of fiscal term

Net SalesInterim of the year
ending March
2009
Interim of the year
ended March2008

Operating Profit

Millions of yen%

25,291
23,452

Recurring Profit

of

%

―

907

16.1

1,066

Millions
yen

%

―

741

65.6

884

Net Profit per ShareYen
241.51807.23

Interim of the year ending March 2009
Interim of the year ended March 2008

Net ProfitofMillions
yen

of

%

―

287

―

57.0

960

―

Millionsyen

Diluted Net Profit per
share
Yen
―
―

(2) Consolidated financial position
Total Assets
Interim of the year
ending March 2009
the year ended
March 2008

Net Assets

Ratio of Equity
CapitalNet Assets per Share

Millions of yen

Millions of yen

32,361

16,148%45.4

12,350Yen
54

36,174

16,54541.5

12,61200

Reference: Equity Capital: the 1st half of the fiscal year ending March 2009: 14,702 million yen/ the fiscal year ended March
2008: 15,013 million yen.

1

2. Dividends
Dividends per share(Record dates)

1st QuarteryenYear Ended
March 2008
Year Ending
March 2009

3rd Quarter

Interim

-

50

yen
00

-

50

00

Year-end

yen
-

50

―

―

Total(Annual)

yen
00

100

yen
00

―

Year ending March
―
―
50
00
100
00
2009 (Forecast)
Note: Forecasts for dividends have not modified at the announcement of the financial statements for FY08 1H.

3. Forecasts for the consolidated 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 SalesYear ending
March 2009

Operating Profit

Recurring Profit

Net Income

Millions ofyen%Millionsof yen%Millions of yen%

Millionsof yen%54,,600

8.8

1,000

△55.9

800

△58.1

100

△81.4

Net Income per
Share
Yen
84

00

Note: Forecasts for the consolidated business results have not modified at the announcement of the financial statements for
FY08 1H.

4. Others(1) Changes in the significant subsidiaries (Accompanying changes in scope of the consolidation): None(2)

Adoption of simplified accounting practices or specific procedures in preparation of the quarterly
consolidated financial reports: Applicable* Note: For details, please see page.5 “Qualitative information and financial statements” 4. Others(2).

(3)

Changes in accounting policy, procedure, and presentation in preparation of the quarterly
consolidated financial reports (Described in the “Changes in preparing for consolidated financial
statements and summary of significant accounting polices”)(3)-1. Changes accompanying revisions of accounting standards, etc.:Applicable(3)-2. Changes other than the above: Applicable* Note: For details, please see page.5 “Qualitative information and financial statements” 4. Others(3).

(4)Outstanding shares (common shares)(4)-1. Outstanding shares at the end of the fiscal years (including treasury shares):

The 1st half of the fiscal year ending March 2009: 1,196,000 shares, the fiscal year ended March 2008:
1,196,000shares(4)-2. Treasury shares at the end of the fiscal years:

The 1st half of the fiscal year ending March 2009: 5,580 shares, the fiscal year ended March 2008: 5,580 shares(4)-3. Average number of shares at the interim accounting period
The 1st half of the fiscal year ending March 2009: 1,190,420 shares, the fiscal year ended March 2008: 1,190,420
shares*Note for utilizing business forecasts, and other special instruction(1) This document contains projections of our company’s future performance. These are estimates by the management ofFaith based on currently available information. There are potential risks and uncertainties that may affect the results. Pleasebe advised that actual performance may differ significantly from the forecast. Please refer to page. 5 “3. Qualitative
information regarding forecast of consolidated financial results” when utilize business forecasts.
(2) Effective from the fiscal year under review, new accounting standards (12th edition) and its implementation guidance (14thedition) have applied. The quarterly consolidated financial statement is based on the quarterly consolidated financial
standards.

2

[Qualitative information and financial statements]
1. Qualitative information regarding consolidated operating results
During the first half of consolidated fiscal 2008, the six months ended September 30, 2008, a wide range ofimprovements were observed toward the establishment of network environment which allows users toaccess content in high-capacity and with high-definition freely. For example, broadband accessible
mobile phones have spread and flat-rate packet plans for mobile phone charges have widely accepted. At
the same time, Next Generation Network (NGN) services have commercialized and digital broadcastinghas become widespread.
In terms of content development, content digitalization has increased in most of the fields to meet the ever
diversifying market needs. The content categories diversified into various kinds such as video, music,
online game, photo, and lifestyle-related information such as medical, beauty, and health. According to areport on the content distribution channels by Digital Content Association of Japan, mobile phone andInternet accounted for 19.5% and 11.2% of the total content distribution in 2007.
Against this backdrop, the digital content distribution market showed continuous expansion driven by theincrease of information services to accommodate diversifying mobile phone users’ needs and other factors.
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 promotes development of new multi-platform, multi-content markets, in which a wide range ofcontent is distributed without any restriction of networks or terminal devices. At the same time, the Grouppursued improvement of the user environment for digital content distribution services utilizing Near Field
Rights Management® (NFRM™) service, a proprietary viewing rights authentication technology. The
commercial use of NFRM™ has been launched in the previous fiscal year.
In the medical and health information distribution business, the Group launched a medical service using
electronic recording system which is able to satisfy the data storing guideline under the health care system
implemented by the Japanese government.
In the electronic money field, with rising demand in the market, the volume of payment settled in theGroup's “WebMoney” showed a sharp increase. One factor behind this increase was that “WebMoney”
has strength in online game settlement, a main category of contents distributed to PC, and it maintained
high market share during the period under review. Also, expanded demand for fastest-growing mobile
content, the launch of advertisement solution business and other factors contributed to the increase.
As a result, consolidated net sales for the first half of fiscal 2008 increased 7.8% year on year to ¥25,191
million led by the continuous high growth in the Electronic Money Business. Operating profit was ¥907
million, down 14.9% year on year, and recurring profit was ¥741 million, down 16.2% year on year, mainly
due to the upfront investments on the creation of new multi-content distribution markets on themulti-platforms. Net profit decreased 70.1% year on year to ¥287 million because substantial amount of
extraordinary profit gained from the realignment of overseas businesses was recorded in the same period of
the previous fiscal year.
Information on each business segment is as follows:<Contents Business>
During the consolidated six-month period under review, the Group has expanded and enhanced its
operating base through activities such as building partnership with other leading companies.
1) Following the launch of the commercial use of NFRM™ in June 2007, the Group has promoted
prevalence of the business by improving NFRM™ corresponding terminal device and increasing the lineupof content available on NFRM™ services. In April 2008, GIGA Networks, a consolidated subsidiary,
launched a NFRM™ corresponding content distribution site called “GIGA Miranca.” The lineup ofvideos available with this service dramatically increased since the launch, and its number reached over3

1,500 titles at the end of the first half of fiscal 2008, meanwhile the initial title was 1,000.
2) In June 2008, Medical Communication, Inc., a consolidated subsidiary, started a test service of “Pocket
Karte” in cooperation with Willcom and other companies. In response to the health care system reform
implemented by Health, Labour and Welfare Ministry of Japan in April 2008, Medical Commnunication,
Inc. has launched a trial service of Pocket Karte, which provides an individual's medical check results inaccessible form via mobile phone.
3) In June 2008, “Eikyufumetsu Contents (Eternal Contents)” has expanded its service to PC alongside theexisting distribution to mobile phone. The Group has been providing this content distribution service incooperation with Credit Saison Co., Ltd. and users are able to earn non-expiring reward points bypurchasing the service.
4) In June 2008, the Group started an award scheme through a joint effort with Adways Co., Ltd., an
Internet advertisement agency. Under this scheme, consumers are able to obtain free privileges in returnfor registering advertisement promotions online. “WebMoney Point Park” started in June 2008 is the firstprogram under this scheme. It is operated by WebMoney Corporation, a consolidated subsidiary of Faith.
In the following August, “ROSE POINT ISLAND” was launched on “ROSE ONLINE LEGEND,” theGroup's online game site.
5) In August 2008, in cooperation with MySpace Japan, Brave, Inc., a consolidated subsidiary, launched“viBirth” as an official online store on MySpace, one of the largest Social Networking Service (SNS) in theworld. At viBirth, the Group provides support to many content artists developing their businesses.
6) In August 2008, KAZAS Channel™, a portal site corresponding NFRM™ service, has been
pre-installed on the digital terrestrial tuner for PC. On the tuners applicable, “ROBRO”, an integral
application system, is also mounted, to enable both the terrestrial digital channels and web-sites accessible
via one browser. Also, infrared data communication, the most common communication method among
home appliances, was equipped on “ROBRO” to transmit various contents.
7) In September 2008, Brave launched “KASIMO” an automatic lyric display service for iTunes users.
As a result, net sales in the Contents Business totaled ¥6,592 million, down 21.0% year on year. This
figure resulted from a decline in revenues mainly due to disposal of overseas content distribution
subsidiaries despite strong sales in Japan helped by the aggressive business expansion through partnerships
with other companies and other measures. Operating profit fell by 6.7% year on year to ¥732 million due
to continued upfront investments on the planning and development of new multi-content distribution
services on the multi-platforms and the increase of production and procurement costs of rich content
suitable for a wide range of information devices.

<Electronic Money Business>
At the end of June 2008, the number of broadband subscribers in Japan reached more than 29.3 million
according to the Information and Communications Statistics Database issued by Japanese Ministry ofInternal Affairs and Communications. Demand for electronic money continued to increase in the digitalcontent market for the purchase of online game, the mainstay of the electronic money business, as well as
mobile content and other content such as video. Against this backdrop, the volume of online payment
settled in “WebMoney” sharply increased, since it provided easy, secure and convenient solutions.
In April 2008, as one of the measures to enhance users' convenience, the Group started the sale of“WebMoney” through multi-functional copiers introduced to Seven-Eleven stores across Japan operated bya convenience store chain giant, Seven-Eleven Japan Co., Ltd. At the same time, the Group has made a
different approach to develop new services. For example, “WebMoney Point Park” was launched in June2008 jointly with Adways Co., Ltd., an Internet advertisement agency. On this site, members are able toearn “WebMoney” free of charge.
As a result, net sales in the Electronic Money Business rose 25.9% year on year to ¥17,998 million.
Operating profit was ¥150 million, down 36.5% year on year due to the increase in costs fordevelopment and operation of new services and enforcement of management structure.
<Other Businesses>
Factors such as revenues from the point-card system business led sales in other businesses to ¥700 million
decrease by 13.1% year on year. Operating profit was ¥33 million, down 36.4% year on year.

4Figures for the first half of consolidated fiscal 2007 and the year on year change between the first half ofconsolidated fiscal 2007 are provided in Qualitative information regarding consolidated operating results
for reference purposes.

2. Qualitative information regarding consolidated financial positions(1) Positions of assets, liabilities and net assets
Total assets as of the end of the 1st half of FY2008 decreased by ¥3,813 million from the end of theprevious consolidated fiscal year to ¥32,361 million, due to the decrease in amortization of goodwill causedby write-off, and in trade notes and account receivable.
Liabilities decreased by ¥3,416 million from the end of the previous consolidated fiscal year to ¥16,212, by
repayment of dept and reduction of reserve for subsidiaries losses.
Net assets decreased by ¥396 million against the end of the preceding consolidated fiscal year to ¥16,148
million. Shareholders’ equity ratio advanced by 3.9 percent point from the end of March 2008 to 45.4%.
(2) Positions of cash flows
Cash and cash equivalents of the 1st half of FY2008 decreased by ¥114 million from the end of theprevious consolidated fiscal year to ¥10,499 million.
Cash flow from operating activities was ¥1,930 million of excess over income despite accounts payable
declined ¥488 million, due to ¥273 million of profit before income taxes, ¥1,463 million of goodwill
amortization and ¥552 million of decrease of trade receivable.
Cash flow from investing activities was ¥343 million of excess over expenditure despite ¥420 million camein as repayment of fixed deposit. This was caused by ¥584 million of expenditure for acquisition of
tangible fixed assets and software, ¥261 million of loan receivable.
Cash flow from financing activities was ¥1,559 million of excess over expenditure due to ¥1,539 million of
expenditure repayment of borrowed money.

3. Qualitative information regarding forecast of consolidated financial results
The following is the revised forecasts for consolidated operating results for fiscal 2008 on the date ofNovember 11, 2008.
The volume of online payment settled in “WebMoney” has been continuously increasing and further
growth was expected in the second half. However, net sales, operating profit and recurring profit areprospected to drop as revised the net sales of Electronic Money business in the second half considering thesevere market situation.
（Unit: million yen）
Net Sales

Previous Forecast(A)Revised Forecast(B)Change(B-A)
Decrease Rate(%)△△

57,00054,6002,400
4.2
50,192

Operating Profit

1,200
1,000
200
16.7
2,266

△
△

Recurring Profit

△
△

1,000
800
200
20.0
1,909

Net Profit

100
100
537

4. Others(1) Changes in major subsidiaries during the 1st half of FY2008 (Changes in specific subsidiaries causingchange in the scope of consolidation): None
(2) Adoption of simplified methods in accounting methods(Simplified methods in accounting methods):None(Specific procedures in preparation of the quarterly consolidated financial reports)
Tax expenses are calculated by multiplying the amount of quarterly net profit before tax deduction and theestimated effective tax rates, which is estimated as an effective tax rates applied to the tax effect accounting,by the amount of consolidated net profit including the 1st quarter of the financial period and before tax
deduction.
(3) Changes in accounting policy, procedure, and presentation in preparation of the quarterly consolidated
financial reports5

(Described in the “Changes in preparing for consolidated financial statements and summary ofsignificant accounting polices”) : Applicable(3)-1. Effective from the fiscal year under review, new accounting standards (12th edition) and its
implementation guidance (16th edition) have applied. The quarterly consolidated financial statement isbased on the quarterly consolidated financial standards.

6

5. Consolidated Financial Statement(1) Consolidated Balance Sheet for the 1st Half
(Unit: thousands of yen)the 1st Half of FY2008(As of September 30, 2008)
Amount(Assets)
Current assets
Cash and deposits
Accounts and notes receivable
Marketable securities
Commercial products
Products in progress
Primary materials and inventory goods
Accrued refund income tax
Deferred tax assets
OthersAllowance for doubtful accounts
Total current assets
Fixed assets
Tangible fixed assets
Intangible fixed assets
Goodwill
OthersTotal intangible fixed assets
Investment and other assets
Investment securities
OthersAllowance for doubtful receivable
Total investments and other assets
Total fixed assets
Expenditure for stock delivering prescription
Total assets(Liabilities)
Current liabilities
Trade notes and Accounts payable
Short-term loans
Income taxes payable
Allowance for costs of card use
Allowance for points
Allowance for bonus payments
OthersTotal current liabilities
Fixed liabilities
Long-term liabilities
Deferred tax liabilities
Allowance for retirement benefits
Reserve for subsidiaries losses
OthersTotal fixed liabilities
Total liabilities

7

FY 2007(As of March 31, 2008)
Amount11,899,796
6,244,657
1,240,189
432,934
54,247
16,343
546,421484,114518,815△200,000
21,237,519

13,424,006
6,861,259
250,227
202,489
269,123
17,113516,982
763,972
588,379△209,568
22,683,987

573,092

660,3126,133,786
751,4136,885,199

7,607,662
922,715
8,530,378

2,797,114
988,084△137,012
3,648,186
11,106,477
17,21232,361,210

3,490,977
920,572△134,516
4,277,033
13,467,724
22,56736,174,279

5,431,780
2,029,928
101,772
2,817,643
427,973
98,068
1,192,984
12,100,151

5,922,813
2,529,928
136,2212,873,200
468,391
87,445
1,973,507
13,991,508

3,068,512
356,906
54,684
632,613
4,112,716
16,212,867

4,083,472
522,858
49,229300,561
681,599
5,637,720
19,629,228

the 1st Halfr of FY2008(As of September 30, 2008)
Amount(Net assets)
Shareholder's equity
Common stock
Capital surplus
Retained earning
Treasury stock
Total shareholder's equity
Valuation and translation adjustments
Net unrealized gains on investment securities
Foreign currency translation adjustments
Total valuation and translation adjustments
Minority interests
Total net assets
Total liability and net assets

8

FY2007 (As of March 31, 2008)
Amount3,218,000
3,708,355
7,842,133△354,269
14,414,218

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

557,696△269,586
288,109
1,446,013
16,148,342
32,361,210

799,398△52,807746,591
1,531,478
16,545,050
36,174,279

(2) Consolidated Profit and Loss Statement for the 1st Half
1st half of this fiscal year (April 1, 2008 through September 30, 2008)(Thousands of yen)the 1st Half of FY2008(As of September 30, 2008)
25,291,152
19,359,410
5,751,742
4,843,855

Net sales
Cost of Sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating profit
Interest income
Dividend income
Interest securities
Miscellaneous receipts
Total non-operating profit
Non-operating expenses
Interest expense
Investment profit on equity method
Foreign exchange loss138,549
Miscellaneous expense
Total non-operating expenses
Recurring profit
Extraordinary profit
Gain on disposal of investment securities
Reversal of allowance for subsidiaries liquidation loss
OthersTotal extraordinary profit
Extraordinary loss
Loss from investment securities valuation
Loss from disposal of business
Amortization of goodwill
OthersTotal extraordinary loss
Quarterly net profit before income taxes
Corporate, local, and business taxes
Income or Loss on minority shareholders
Net profit during the accountijng period

907,887
30,92815,9305,249
17,866
69,97443,746
138,549
23,62730,420236,343
741,519
141,606
95,96853,987
291,563
160,973
286,989
294,976
17,109760,048
273,034
104,879△119,345
287,5009

(3) Consolidated Statements of Cash Flowsthe 1st Half of FY2008(April 1, 2008 through September 30, 2008)
Item
Cash flow from operating activities
Quarterly profit before income taxes and minority interests
Depreciation and amortization
Amortization of goodwill
Increase in allowance for doubtful accounts
Decrease in reserve for bonus
Decrease in allowance for cost of card use
Decrease in allowance for unexercised sales promotion points
Increase in allowance for retirement benefits
Allowance for subsidiaries liquidation loss
Interest and dividends income
Interest on securities
Interest expenses
Foreign exchange gains
Gains on sale of investment securities
Valuation loss on investment securities
Loss from investment in equity method
Loss from disposal of business
Decrease (increase) in accounts and notes receivable-trade
Decrease (increase) in inventories
Increase in accounts and notes payable-trade
Decrease (increase) in consumption taxes receivable
OthersSub-totalInterest and dividends received
Interest expenses paid
Income tax refund
Income taxes paid
Cash flow from operating activities
Cash flow from investing activities
Expenditure for deposit of time deposits
Proceeds from withdrawal of time deposits
Expenditures for acquisition of tangible fixed assets
Expenditure for acquisition of software
Expenditure for acquisition of investment securities
Proceeds from disposal of investment securities
Expenditure for loans receivable
Proceeds from collection of loans
OthersNet cash flow used in investing activities
Cash flow from financing activities
Net increase in short-term loans
Proceeds from long-term borrowing
Expenditure for repayment of long-term borrowing
Proceeds from payment from minorities
Payment of dividends
Expenditure for dividends to minorities
OthersNet cash flow used in financing activities
Effect of exchange rate on cash and cash equivalents
Net increase in cash and cash equivalents
Decrease in cash and cash equivalents result from excluded subsidiaries fromconsolidation
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

10

Amount, thousand of yen
273,034
254,670
1,463,295△84,390
10,622△55,557△40,4175,454△300,561△46,859△5,24943,7463,475△141,606
160,973
138,549
286,989552,843△14,798△488,420△115,083△36,511
1,864,198
113,733△43,763
118,751△122,281
1,930,637△3,280,000
3,700,000△148,288△435,949△105,000
157,159△269,649
34,983△5,179△343,924△500,000
25,000△1,039,960
69,452△59,368△30,238△24,700△1,559,814△73,511△46,612△67,634
10,614,234
10,499,986

Effective from the fiscal year under review, new accounting standards (12th edition) and
its implementation guidance (14th edition) have applied. The quarterly consolidated
financial statement is based on the quarterly consolidated financial standards.
(4) Explanatory note regarding premise of a going concern
Not applicable(5) Segment Information
a. Business segment information
1st half of the fiscal year 2008 (April 1, 2008 through September 30, 2008)(Unit: thousands of yen)Content
Eliminations Consolidate
Electronic
Other
Total
distribution/CorporatedMoneybusinesses
services
Net sales–
Sales to outside
6,592,950
17,998,139
700,063
25,291,152
25,291,152
customers––
Inter-group sales
100,251
2,942,300
103,193△103,193
and transfers
Total
6,693,201
18,001,081
700,063
25,394,346
25,291,152△103,193
Operating profit732,297
150,10933,723
916,131
907,887△8,243
Notes: 1.
Method of businesses segmentation: The Company and its group companies’ businesses are classified into
four segments based on the similarities of services and nature of businesses.
2.
Details of business segments

Business segment

Major business operations
Content distribution service using networks, anddevelopment and licensing of distribution platform
technologies, producing content creation
Issuance of electronic money and providing
electronic settlement platforms
Point service and other business

Contents businessElectronic Money business
Other businessesb. Geographical segment information
The 1st half of this fiscal year ending March 2009 (April 1, 2008 through September 30, 2008)
Geographical segment information is omitted since net sales in Japan dominated more than 90% of total
sales.

c. Overseas sales
The 1st half of this fiscal year (April 1, 2008 through September 30, 2008)
Sales result of overseas is omitted from segmental information since consolidated net sales of overseas
are less than 10% of total sales.

(6) Note for significant changes in amount of shareholders’ equity
Not applicable11[Reference]

Consolidated financial Results for the 1st half of the previous fiscal year
(1) Consolidated profit and loss for the 1st half of previous fiscal year
the 1st Half of FY2007(April 1, 2007 through September 30, 2007)
Amount (Thousands of yen)(%)
I. Net sales
II. Cost of Sales
Gross profit
III.Selling, general and administrative expenses
Operating profit
IV. Non-operating profit
1. Interest received
2. Interest on securities
3. Exchange profit
4. Others
V. Non-operating expenses
1. Interest paid
2. Investment loss on equity method
3. Others
Recurring profit
VI. Extraordinary profit
1.Gain on disposal of fixed assets
2.Gain on transfer of operation
3.Change of scope of equity methodVII. Extraordinary loss
1.Loss from disposal of fixed assets
2.Loss from investment securities valuation
3.Loss from entrusted development
4.Prior period adjustment
5.Others
Quarterly net profit before income taxes
Corporate, local, and business taxes
Income or Loss on minority shareholders
Quarterly net profit or loss

53,956
14,557
104,452
49,600100,168
285,489
18,894

228,505
892,597
308,936
20,108106,022160,000
39,238
11,832

23,452,221
16,896,555
6,555,665
5,488,808
1,066,856

100.0
72.0
28.0
23.5
4.5

222,566

1.0

404,552
884,8711.7
3.8

1,430,039

6.1

337,202
1,977,708
918,728
98,042960,937

1.5
8.4
3.9
0.4
4.1

(2) Consolidated Statements of Cash Flows for the 1st half of previous fiscal year

Item
I. Cash flow from operating activities
Net income or net loss before taxes and other adjustment
Depreciation and amortization
Amortization of goodwill
Loss from investment in equity method
Income from changes in net assets
Increase(decrease) in allowance for doubtful accounts
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
Interest and dividends income
Interest on securities
Interest expenses
Foreign exchange loss (gain)
Valuation loss on investment securities
Gian on disposal of fixed assets
Loss from disposal fixed assets

12

the 1st Half of FY2007(April 1, 2007 through September
30, 2007)
Amount, thousand of yen

1,977,708
280,265
1,222,032
285,489△ 308,936△ 1,389△ 26,900
31,416△ 51,822
8,383△ 55,028△ 14,557
100,168△ 127,689
106,022△ 228,505
20,108

Gain on sale of corporate share on affiliated company
Decrease (increase) in accounts and notes receivable-trade
Decrease (increase) in inventories
Increase in accounts and notes payable-trade
Decrease (increase) in consumption taxes receivable
OthersSub-totalInterest and dividends received
Interest expenses paid
Income taxes paid
Income taxes refund
Net cash provided by operating activities△ 892,597△ 654,959
294,646
603,994553,255
134,2143,255,319
1,262,137△ 87,387△ 551,661
899,838
4,778,246
the 1st Half of FY2007(April 1, 2007 through September
30, 2007)

Item
II. Cash flow from investing activities
Expenditure for deposit of time deposits
Proceeds from withdrawal of time deposits
Expenditures for acquisition of tangible fixed assets
Proceeds from sale of tangible fixed assets
Expenditure for acquisition of software
Expenditure for acquisition of other intangible fixed assets
Expenditure for acquisition of investment securities
Proceeds for sale of subsidiary’s shares causing a change inscope of consolidation
Expenditure for acquisition of subsidiary’s shares causing achange in scope of consolidation
Gain on sale of corporate share on affiliated company
Expenditure for loans receivable
Proceeds from collection of loans receivable
OthersNet cash used in investing activities
III. Cash flow from financing activities
Net increase (decrease) in short-term loans
Proceeds from long-term borrowing
Expenditure from repayment of long-term borrowing
Payment of dividends
OthersNet cash flow used in financing activities
IV. Effect of exchange rate on cash and cash equivalents
V. Net increase (decrease) in cash and cash equivalents
VI. Cash and cash equivalents at beginning of year
VII. Cash and cash equivalents at interim (end) of year

13

Amount, thousand of yen△ 1,521,260
570,000△ 324,356
586,815△ 219,056△ 53,786△ 527,032
147,040△ 39,980
1,235,644△ 57,500
345,310945,545
1,096,382△ 2,220,028
244,318△ 1,012,469△ 59,217△ 8,600△ 3,055,997
74,972
2,893,604
8,065,471
10,959,075

(3) Segment Information
Business segment information
1st half of the previous fiscal year (April 1, 2007 through September 30, 2007)(Unit: thousands of yen)Content
Electronic
Other
Eliminations Consolidate
Total
distribution
Moneybusinesses/Corporatedservices
Net sales–
23,452,221
Sales to outside
8,345,636
14,300,708
805,876
23,452,221
customers––
Inter-group sales
86,787
1,100
87,887△87,887
and transfers
Total
8,432,424
14,301,808
805,876
23,540,108
23,452,221△87,887
Operating profit
785,238
236,541
53,043
1,074,823
1,066,856△7,966
Notes: 1.
Method of businesses segmentation: The Company and its group companies’ businesses are classified into
four segments based on the similarities of services and nature of businesses.
2.
Details of business segments

Business segment

Major business operations
Content distribution service using networks, anddevelopment and licensing of distribution platform
technologies, producing content creation
Issuance of electronic money and providing
electronic settlement platforms
Point service and other business

Contents businessElectronic Money business
Other businesses

6. Other information(important post-balance sheet events)

the 2nd quater of FY2008(July 1, 2008 through September 30, 2008)

Faith, Inc. (hereinafter referred to as "Faith") announced that the Board of Directors resolved during theboard of directors meeting held on November 14, 2008 an acquisition of own shares pursuant to Article 156of the Corporate Law whose wording of the phrase was changed pursuant to item 3 of Article 165 of thesame law.
(1) Reason for acquiring Faith's own shares
For the purpose of implementing a flexible capital policy to cope with the changes in businessenvironment.
(2)Means of acquisition:
Purchase from market by trust means(3) Type of shares to be repurchased:
Common stock of Faith(4) Total number of shares to be acquired:
Up to 50,000 shares(5) Total amount to be repurchased:
Up to JPY 300,000,000(6) Repurchasing period:
From November 17, 2008 to December 19, 200814