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18F, Shinjuku NS Bldg. 2-4-1 Nishishinjuku, Shinjuku-ku,
Tokyo 163-0818 Tel. +81 3 5321 7020 Fax. +81 3 5321 7271

Message from the President
Here is the interim report of our business results for the fiscal year ending December 2007 (our 17th financial term).
Since incorporation, we have continued to maintain a position for ourselves as one of the leading comprehensive
asset consulting firms in Japan. We are a Japanese-style private banking enterprise and operate under the slogan:
We will remain your best partner over 100 years.
The portfolios of Japanese investors tend to be biased towards high levels of real estate assets. We have earned an
excellent reputation and sound confidence from many high net-worth clients by addressing this issue and offeringsolutions that focus on the diversification of risk and higher income through a well-balanced asset mix.
We have provided asset consulting services to several hundreds of clients since the business was founded.
Each individual solution provided has been recorded, and this knowledge base has now become an absolutely
invaluable asset for us.
We believe that our fundamental mission lies in contributing to society by returning the benefits of our advanced
consulting know-how to as many clients as possible. For example, we hold regular seminars tailored to the uniqueneeds of specific business types, such as operators of tennis court facilities or golf driving ranges, for instance, andFunai Zaisan Consultants Co., Ltd. Hokkaido
Funai Zaisan Consultants Tsuchida Management
Funai Zaisan Consultants Co., Ltd. Fukushima
Funai Zaisan Consultants Sanbe Accounting
Funai Zaisan Consultants Niigata Support
Funai Zaisan Consultants Eguchi Support
Funai Zaisan Consultants Co., Ltd. Gunma
Funai Zaisan Consultants Co., Ltd. Nagano
Funai Zaisan Consultants Co., Ltd. Kanazawa
Funai Zaisan Consultants Kimura Keiei Brain
Funai Zaisan Consultants Co., Ltd. Nagoya
Funai Zaisan Consultants Uesaka CPA
Funai Zaisan Consultants Shiga Support
Funai Zaisan Consultants Co., Ltd. Kyoto
Funai Zaisan Consultants Hirose
Funai Zaisan Consultants Co., Ltd. Osaka
Funai Zaisan Consultants Co., Ltd. Hyogo
Funai Zaisan Consultants Tottori Support
Funai Zaisan Consultants Co., Ltd. Takamatsu
Funai Zaisan Consultants Co., Ltd. Tokushima
Funai Zaisan Consultants Shimane Support
Funai Zaisan Consultants Co., Ltd. Hiroshima
Funai Zaisan Consultants Kochi Support
Funai Zaisan Consultants Co., Ltd.
Matsuyama
Funai Zaisan Consultants
Sasebo Support

conduct presentations on asset management techniques for individual, high net-worth investors. These activities
continue to be extremely well received.
Nippon Investors Securities Co., Ltd., which became an equity method affiliate of ours in 2005, works together withaccounting firms nationwide, giving the company a reach similar to our nationwide network that has now grown to
52 offices. The company's operations, which specialize in the sale of installment-type investment trusts, are now
producing stable results. Ukai Co., Ltd., an equity method affiliate of ours that we introduced to shareholders lastyear as part of our shareholder benefit plan, has also produced strong results and plans to open new branches in
Omotesando in Tokyo this coming November.

Funai Zaisan Consultants Co., Ltd.
Okinawa

Funai Zaisan Consultants Aomori Support
Funai Zaisan Consultants Co., Ltd. Sendai
Funai Zaisan Consultants Co., Ltd. Tochigi
Funai Zaisan Consultants MMG
Funai Zaisan Consultants Co., Ltd. Saitama
Funai Zaisan Consultants Kujirai Accounting Office
Funai Zaisan Consultants Co., Ltd. Johoku
Funai Zaisan Consultants Masuyama Soken
Funai Zaisan Consultants Co., Ltd. Keiyo
Funai Zaisan Consultants Co., Ltd. Tokyo Ginza
Funai Zaisan Consultants Jonan Support
Funai Zaisan Consultants Co., Ltd.
Funai Zaisan Consultants Kawasaki Support
Funai Zaisan Consultants Co., Ltd. Yokohama
Funai Zaisan Consultants Shonan Support
Funai Zaisan Consultants Co., Ltd. Shizuoka
Funai Zaisan Consultants Tokai Support
Funai Zaisan Consultants Mie Support

Funai Zaisan Consultants Co., Ltd. Nara
Funai Zaisan Consultants Nishioka
Funai Zaisan Consultants Kitakyushu Support
Funai Zaisan Consultants Co., Ltd. Fukuoka
Funai Zaisan Consultants Miyazaki Support
Funai Zaisan Consultants Co., Ltd. Kumamoto
Funai Zaisan Consultants Co., Ltd. Nagasaki
Funai Zaisan Consultants Kagoshima Support

Building 100 Offices
Nationwide by 2010
52 offices established as of June 2007

We intend to become a company respected by society and tocontinue to grow steadily in the pursuit of the happiness of ourclients, shareholders and employees. We look forward to yourcontinued support.

President & CEO
Funai Zaisan Consultants Co., Ltd.

Yoshihito Hirabayashi
1

Message from the PresidentInterim Business Results for the Fiscal Year Ending December 2007
Business Lineup

1
3
5

Consolidated Financial Data (Summary)
Stock/Stockholder Information/ Notes for Shareholders
Company Information/ Executives

7
9
10

2

Interim Business Results for the Fiscal Year Ending December 2007
Highlights of Consolidated Business Results

Overview of Results

The following provides an overview of the business results

has now grown to 52 offices, with the number steadily

produced by our group (comprised of Funai Zaisan Consulting,increasing ( 8 new offices were established during the

9 consolidated subsidiaries and 4 equity method affiliates) for

consolidated interim period under review).

the consolidated interim period under review.

We are committed to further accelerating the growth of thisOur group takes a proactive approach to the recruitment of new

network and expanding our asset consulting business to coverpersonnel while striving to develop and raise the quality of its

the entire country. In other areas, we also engaged in the sale ofexisting consultants through comprehensive in-house education

joint real-estate ownership schemes and the sale of inner-city

programs. The group is also making concerted efforts to acquire

properties. Income from real estate deals performed favorably,

new clients by, for instance, actively holding seminars andand this led to the realization of gross operating profit thatpublishing materials relevant to asset consulting. With respect

exceeds initial expectations by a substantial margin, propellingto institutional asset consulting, income generated by some ofstrong growth in business results.

our large accounts will be carried over to the second half of the

As a result of the factors described above, operating income foryear. The individual asset consulting business segment, on thethe consolidated interim period under review was up 23.8%

other hand, continued to post strong performance for the

year-on-year to 8,162 million yen, operating profit rose 89.8% tointerim period under review. Turning to the group's business

2,409 million yen, ordinary profit surged 81.7% to 2,138 million

network, one of our goals is to expand to 100 offices nationwide

yen, and interim net profit jumped 87.6% to 1,302 million yen.

Operating income (unit : million yen)

Ordinary profit (unit : million yen)

20,0002,500
15,25016,00012,000
8,000

1,176
1,000

6,593

500
Interim
2006

Interim
2007

Full year 2007
(projected)

Interim net profit of the current period (unit : million yen)
1,450

1,500

0

Interim
2006

Interim
2007

Full year 2007
(projected)

Net profit per share for the current interim period (unit: yen)*
30,0001,302

26,486

1,200

27,66524,84320,000

900
694
600

by 2010. This network, which includes Funai Zaisan Consulting,

2,300

1,500
8,162

4,000
0

2,138
2,000

10,000300
0■ Operating Income by Category

Interim
2006

Interim
2007

Full year 2007
(projected)

0Interim
2006

Interim
2007

Full year 2007
(projected)*The company implemented a two-for-one stock split in fiscal year 2006 (the 16th financial term).
The above figure for net income per share is based on the number of shares on issue as of June 30, 2007.

Previous interim period(Jan. – Jun. 2006)

Current interim period(Jan. – Jun. 2007)

Amount(Million yen)

Ratio (%)

Amount(Million yen)

Ratio (%)
Projected full-year results have been revised in accordance withmillion yen, representing year-on-year growth of 10.9%, operating

Income from asst consulting

1,722

26.1

1,395

17.1

△ 19.0conditions prevailing for the consolidated interim period under

profit of 2,750 million yen, a rise of 42.1%, ordinary profit of 2,300

Income from real estate deals

4,190

63.6

6,079

74.5

45.1

review. We are expecting income from asset consulting of 2,774

million yen, a rise of 41.2%, net profit of 1,450 million yen, a rise of

million yen, income from real estate deals of 11,150 million yen,

60.6%, and net profit per share of 27,665 yen.

Projection of Full-Year Results

Income from sublease

569

8.6

5 51

6.7

△ 3.2

income from subleasing of 1,100 million yen, and other income

Other income

110

1.7

13 5

1.7

23.4

of 226 million yen.

6,593

100.0

8 ,16 2

100.0

23.8

Total
3

Increase(%)

Projected full-year consolidated results for the year ending
December 2007 are as follows : operating income of 15,250*The projected results announced when full-year accounts were released on February
14, 2007 were revised on August 6, 2007. The projected figures appearing abovereflect analysis based on information available at the time of preparation, and are
subject to various uncertainties. Actual realized results may vary significantly from theabove projections due to changes in business conditions and /or other factors.

4

Business Lineup
Individual Asset Consulting

Institutional Asset Consulting

Japanese-style customerfirst consulting tailored
towards individual high networth Japanese investors

Asset Consulting

Asset Management Consulting

Corporate revitalization
experience and know-how
assisting more than 100
firms every year

Corporate Revitalization Consulting•100-Year Asset Consulting•Corporate Revitalization Network

Looking two to three generations ahead, the 100-Year Asset
Consulting service primarily addresses one of the most important
issues for high net-worth individuals: inheritance. We provide thebest possible advice, given each individual client's circumstances,
covering the areas of real estate, insurance and asset management.

Our consultants can oversee and coordinate corporate
revitalization projects that utilize our impressive network oflicensed tax accountants, real estate appraisers, debt
servicers, certified accountants, attorneys, management
consultants and other professionals.

•10 (Ichimaru) Consulting•Establishment of Revitalization Funds

10 (Ichimaru) Consulting targets a 10% return on the client's
taxable assets. This service advises clients regarding theeffective utilization of real estate, with respect to thereadjustment of real-estate portfolios to include properties infavorable locations or the outright purchase of such properties,
and on the use of Funai's joint real-estate ownership schemes.

We are engaged in launching corporate revitalization funds
in an effort to revitalize Japan and its corporations.

Addressing polarization in prices of real estate, a category that accounts for 60% of the averagehigh-net worth portfolio
From savings to management: effective asset management reduces risk. We provide asset
management consulting targeted towards an ideal US and European style portfolio composition.

Joint Real-Estate Ownership Schemes
We are now in what is sometimes called the age of real estate
securitization, but to meet the needs of clients who want toenjoy the benefits of owning actual real estate, Funai Zaisan
has created joint real-estate ownership schemes. These
schemes involve the formation of voluntary partnershipagreements (through monetary investment) for the coownership of income-bearing real estate and the apportionmentof that income. This system is operated in accordance with theReal Estate Specified Joint Enterprise Law.

Land owners frequently require consulting tailored towards
the needs of specific business endeavors, such as theoperation of a tennis court facility or the management of agolf driving range. Our consultants put forward various
ideas for preserving wealth and developing clients'
businesses, and these services currently enjoy an
excellent reputation.

5

This services takes advantage of
the Internet to bring together people wishing to sell real estate withthose wishing to buy, and facilitates real estate transactions in a
way that promotes confidence andsatisfaction from clients.
October 2004: Funai Real Estate Net Auction launched
April 2005:

Business alliance formed with DeNA Co., Ltd. (TSE Mothers, Mothers: 2432)

November 2005: Business alliance formed with Tokyu Resort Co., Ltd.
(as of end June 2007)

Total Assets
Under Custody:

15.68 billion yen

July 2006:

Business alliance formed with Benefit One Inc. (TSE, 2nd section: 2412)

Nippon Real Estate Rating Services Co., Ltd.
Providing a safe and accessible real estate market, boosting
market activity and specializing in building diagnosis

Funai's real estate joint ownership scheme

Individual Business Consulting

Funai Real Estate Net Auction

M&A Consulting
M&As have become a crucial part of corporate
revitalization efforts, and our services in this area areamong the best in Japan. We enjoy an establishedreputation for speedily closing deals and placing
maximum priority on confidentiality. Our efforts contributeto economic growth through the promotion of friendly
M&As that fulfill part of corporate restructurings or assist
other entities such as owner-controlled enterprises thatface issues with respect to corporate succession.

Real estate target(urban buildings)

Voluntary partnership
Acquisition,
price
Proprietors in specified
real estate joint enterprise
RentalSublease company
Lease
Lease

RentalTenantChair

Earnings distribution

Funai Zaisan
Consultants Co., Ltd.

Participants(partners)

On January 23, 2006, we established Nippon Real Estate
Rating Service Co., Ltd. as a joint venture with the
NIS Group ( TSE, 1st section). Collaborating through thisentity, we launched real estate rating, building diagnosis,
real estate appraisal and due diligence services.

Cash investment
Managerial business decisions

Business
activities•Real estate appraisal and due diligence related activities•Building diagnosis, earthquake resistance, asbestos andProbable Maximum Loss (PML) evaluations•Operation of a ratings website

6

Consolidated Financial Data (Summary)(Million of yen, rounded down to the nearest million)

Interim Consolidated Balance Sheet
Term
Item

Interim Consolidated Income Statements
Term

Previous interim period ended Current interim period ended
June 2006

Item

June 2007

Current liabilities
Current assets

June 2006

June 2007

Item

Liabilities

Assets14,311

20,909Accounts payable

Term

Previous interim period ended Current interim period ended

7,085

5,580

93

93

5,569

5,338

Accounts receivable

563

542

Real estate held for sale

7,656

10,824
3,815

Others521

394

Allowance for doubtful accounts

△0

△4

6,593

8,162

Operating cost

4,485

4,684

2,107

3,477

837

1,067

Operating profit

1,269

2,409

Gross operating profit

Long-term debt repayable within one year

1,168

168

Non-operating income

158

Bonds redeemable within one year

1,040

1,140

Non-operating expenses

108

279

530

1,024

1,176

2,138

Accrued corporate taxes

Bonds
Long-term debt
Anonymous association investment deposits payable

796

2,408

747

−

Extraordinary loss

16

19

1,197

2,237

3,615

3,475

Income taxes

518

1,012

178

3,510

Deferred income taxes

△19

△79

6,294

Minority interests

3,028
27

28

213

227

Addition to reserve for compensation of retired directors

128

152

Deposits payable

819

784

Property, plant and equipment

103

114

1

48

Others110

112

14,88519,874

Total liabilities

4

14,293

Allowance for employee retirement benefits

OthersOrdinary profit
Extraordinary profit

7,799

5,061

Tangible fixed assets

4,956Interim net income before taxes

Net profit

Investments and other assets

41
4,700

4,796

2

694

1,302

Previous interim
periodCurrent interim
periodJan. 1 – Jun. 30 2006

Jan. 1 – Jun. 30 2007

Cash flow from operating activities

1,284△2,954

Cash flow from investing activities△3,739△113

Cash flow from financing activities

3,743

3,140

Change in cash and equivalents

1,288

72

Cash and equivalents at start of period

3,957

4,463

Cash and equivalents at end of interim period

5,246

4,536

Minority
interests

Total
net assets

Evaluation andconversion difference

Shareholders' equity
Jan. 1 – Jun. 30 2007

37

4

Term
Item

Interim Consolidated Statement of Shareholders' Equity

Net assets
Intangible fixed assets

Jan. 1 – Jun. 30 2007

3,458

Fixed liabilities

Fixed assets

Current interim
periodJan. 1 – Jun. 30 2006

Short-term debt

Others−Purchased receivables

Previous interim
periodOperating income

SG&A
Cash and deposits

Interim Consolidated Cash Flows

Shareholders' equity

4,384

5,773

Common stock

805

805

Capital surplus

875

875

2,703

4,092

△54

265

Minority interests

52

57

Total net assets

4,382

6,096

Total

Total liabilities and net assets

19,26825,971

Balance on Jun. 30, 2007

Balance on Dec. 31, 2006

Commonstock

CapitalsurplusRetainedearnings

Total shareholders'equityOther marketablesecurities evaluationdifference

Total evaluationand conversion
difference

805

875

2,869

4,550

224

224

55

4,829

Distribution of reserves

−

−

△78

△78

−

−

−

△78

Interim net profit

−

−

1,302

1,302

−

−

−

1,302

Changes in other items (net)

−

−

−

−

41

41

2

43

−

−

1,223

1,223

41

41

2

1,267

805

875

4,092

5,773

265

265

57

6,096

Consolidated interim period changes
Investment securities

505

1,013
Retained earnings

Shares in affiliates
OthersTotal assets

7

3,857

3,624

338

158

19,26825,971

Evaluation and conversion difference8Stock/Stockholder Information/ Notes for Shareholders

Company information/ Executives

Overview

Notes for Shareholders

Company information

Fiscal year

January 1 to December 31

Name of company

General meeting ofshareholders

Each MarchHead office

Administrator ofshareholders' register

The Chuo Mitsui trust and Banking Company, Limited
3-33-1 Shiba, Minato-ku, Tokyo

OfficeThe Chuo Mitsui Trust and Banking Company, Limited
2-8-4 Izumi, Suginami-ku, Tokyo 168-0063
Stock Transfer agency department
Phone (toll-free:0120-78-2031)(as of June 30, 2007)

Total number of authorized shares
Number of shares in issue
Number of shareholders

144,000
52,412
1,757*The company implemented a two-for-one stock split of its common stock on November 1, 2006.

Major Shareholders (Top 10)
Name

No. shares held Ratio of shareholding (%)

Japan Trustee Services Bank Ltd.

5,359

10.22

Funai Consulting Co., Ltd.

5,316

10.14

Taihei Shoji Co., Ltd.

5,280

10.07

JP Morgan Chase Oppenheimer
Funds JASDEC Account
The Master Trust Bank of Japan Ltd.
The Bank of New York,

Public announcements
4,000
3,168

6.04
3.84

Yoshihito Hirabayashi

1,412

2.69

Trust & Custody Services Bank Ltd.

1,071

2.04

1,007

1.92

Bank of New York GCM
Client Accounts EISG
The Chase Manhattan Bank, N.A. London

916

The Chuo Mitsui Trust and Banking Company, Limited
Branches throughout Japan
Japan Securities Agents, Ltd. Head office and branches

Funai Zaisan Consultant Co., Ltd.

President & CEO

Yoshihito Hirabayashi

18F, Shinjuku NS Bldg. 2-4-1 Nishishinjuku, Shinjuku-ku, Tokyo
163-0818

Deputy President

Hideo Murakami

Managing Director

Hisao Nakatsuka

Director, 4th Division Manager

Seiki Noda

Director, 2nd Division Manager

Takahiko Makino

Director, 1st Division Manager

Masayuki Yagi

September 17, 1991

Capital stock805.81 million yen

Business line

Individual asset consulting, institutional asset consulting, andasset management

Number of employees

126

Director, 5th Division Manager

Yasuhiko SatoBusiness network
52 locations
Throughout Japan

Sapporo, Aomori, Sendai, Yonezawa, Koriyama, Mito, Tsukuba,
Tochigi, Gunma, Saitama, Kumagaya, Chiba, Johoku, Ginza,
Jonan, Kawasaki, Yokohama, Odawara, Niigata, Kanazawa, Fukui,Matsumoto, Takayama, Shizuoka, Nagoya, Mie, Shiga, Kyoto,
Osaka, Hyogo, Nara, Wakayama, Tottori, Shimane, Hiroshima,
Tokushima, Takamatsu, Matsuyama, Kochi, Fukuoka, Kitakyushu,
Nagasaki, Sasebo, Kumamoto, Miyazaki, Kagoshima, Okinawa

Director, 6th Division Manager

Takeshi Matsuura

Director in charge, 3rd Division Manager

Tetsuo Akiyama

Outside Director

Haruo Shimada

Outside Director

Kiyoshi Ohno

Outside Auditor (full-time)

Takao Kitamura

9 companies including Funai Estate,
Nippon Real Estate Rating Services Co., Ltd.,and the Centennial Fund Investment Limited Partnership

Auditor

Takehiko Yamamura

Outside Auditor

Hiroshi Yamagishi

4 companies including Nippon Investors Securities Co., Ltd.,
Ukai Co., Ltd.

Outside Auditor

Toshio Honda

Please refer to the Funai Zaisan website

For information on balance sheet and income statements,
please see http://www.funai-zc.co.jp/ir/houtei.html(as of June 30, 2007)

Incorporated

7.63

2,017

Treaty JASDEC AccountAgencyExecutives(as of June 30, 2007)

Consolidated
subsidiaries
Affiliates underequity method

Announcement

Notice of Stock Split

Funai Zaisan will implement a two-for-one stock split of its common stock that will affect shareholders recorded in the shareholder registry or theregistry of substantial shareholders as of the end of September 30, 2007. The aims of the split are to create a more accessible investment
environment for all investors by lowering the minimum investment unit, enhance the liquidity of the company's shares, and expand the range ofindividual investors that hold the company's shares.

1.74*Since the date of the split falls on a non-business day for the administrator of the shareholder registry, the effective date of the split will be September 28, 2007.

Number of Shareholders by Category

Number of Shareholders by Category

Other Japanese companies: 46 (2.61%)

Securities firms: 17 (0.96%)

Securities firms: 583 (1.11%)

Foreign nationals: 68 (3.86%)

Financial institutions: 13 (0.71%)[Schedule]
Foreign nationals:
15,089 ( 28.78%)

Financial institutions:
11,646 (22.19%)

Individuals / others:
1,613 (91.86%)

9

Other Japanese companies:
12,372 (23.60%)

Individuals / others:
12,722 (24.32%)

Key date for stock split

September 30, 2007 (Sunday)

Date of effectOctober 1, 2007 (Monday)

Distribution date of new stock certificatesNovember 20, 2007 (Tuesday)

Important matters relating to this stock split will be discussed at the next board meeting.
For details, please refer to News Releases in the IR in English section of Funai Zaisan Consultant's website:
http://www.funai-zc.co.jp/ir/eng/index.html

10