FCE Faces Cosmetics

    FACES COSMETICS PLC ("FACES" OR THE "COMPANY")                 

   Proposed Subscription of 125,000,000 new Ordinary Shares at 4p per share    

                     to raise �5 million (before expenses)                     

           and grant of warrants over 88,959,478 new Ordinary Shares           

Highlights:

  * Faces secures funding of �5 million, before expenses
   
  * New Investor provides access to the important Indian subcontinent market
   
  * Growth expected in core markets and internationally
   
Introduction

The Company is pleased to announce that, on 18 October 2007, it entered into an
agreement with Indivision, pursuant to which Indivision has agreed, subject to
shareholder approval, to subscribe for 125,000,000 new ordinary shares at a
price of 4p per share to raise �5 million, before expenses. Indivision, a newly
created entity for the purposes of the subscription, is wholly owned by India
Indivision Partners, a US$425 million private equity fund.

The Company has agreed, upon Admission, to grant warrants over 48,750,000 new
ordinary shares to Indivision (with exercise prices between 5p and 7p per new
Ordinary Share), and warrants over 20,000,000 new ordinary shares to Ramesh
Jolly (with exercise prices between 6p and 10p per new ordinary share).
Further, the Company has agreed, upon Admission, to grant warrants to
Charterhouse over 20,209,478 new ordinary Shares (with exercise prices between
4p and 8p per new ordinary share) in consideration for strategic advice
provided to the Company.

Following the subscription, Indivision will be beneficially interested in 70.60
per cent. of the enlarged issued share capital. Indivision's maximum
shareholding, upon exercise of its warrants in full, will be 76.95 per cent. of
the issued share capital so enlarged.

The Company has also agreed with GEM Global Yield Fund Limited and GEM
Management Investment Advisers Inc. to cancel arrangements announced on 13
November 2006, whereby the Company could make drawdowns by the issue new
ordinary shares for cash dependent on the average trading volumes in the
Company's ordinary shares.

Commenting on the Subscription, Ramesh Jolly, President and Chief Executive,
stated:

"Faces has reached a significant milestone by securing substantial new funding
to build its infrastructure, accelerate growth in its established markets and
benefit from strategic alliances."

Background to and reasons for the Proposals

Since the Company's admission to AIM in September 2006, the Company has laid
the foundations for expansion. However, progress has been slower than
anticipated and the Directors recognise that the Group is constrained by the
limited financial resources available to it.

In order to implement the Company's strategy and grow the business, the
Directors believe that a significant financial investment is required in
operations, product development and packaging, brand development and marketing.
Further, the Directors recognise that to expand into new territories such as
India, the Company will need to partner with a third party with proven
experience of operating in these new markets.

The subscription price represents a 2p discount to the middle market price of
6p per ordinary share on 17 October 2007. The Directors' believe that the
subscription price is justified due to the size of the subscription, compared
to the Company's market capitalisation of �3.12 million, and that the net
proceeds from the subscription will, in the opinion of the Directors, provide
the necessary financial resource and, through the Company's new relationship
with Indivision, access to the Indian subcontinent market.

Information on Indivision

Indivision, wholly-owned by Indivision India Partners, was established for the
purpose of the subscription. Indivision India Partners is a US$425 million
private equity fund with an investment focus on businesses in the consumer
brands sectors which caters to consumers from the Indian subcontinent.

Indivision India Partners has a relationship with Pantaloon Retail (India)
Limited, one of India's largest retailers with a quotation on the Mumbai Stock
Exchange. Indivision India Partners' investment philosophy is (i) to partner
with and invest in businesses seeking growth capital, and who share similar
growth aspirations and (ii) to invest in businesses where there are
opportunities to exploit synergies with Pantaloon.

Subscription Agreement

Under the subscription agreement, Indivision has agreed, conditional, inter
alia, upon Admission, to subscribe for 125,000,000 new Ordinary Shares at 4p
per share. Additionally, conditional upon Admission, Indivision will be granted
warrants over 48,750,000 new ordinary shares of which 5,000,000 will be
exercisable at 5p per ordinary share, 31,250,000 will be exercisable at 6p per
ordinary share and 12,500,000 will be exercisable at 7p per ordinary share, at
any time until 31 July 2012.

Upon completion of the subscription, Ms Dimple Sanghi (a representative of
Indivision) will join the Board as a non-executive director of the Company. Ms
Sanghi will not enter into an appointment letter with the Company and will not
be entitled to any payment from the Company, other than her reasonable expenses
pursuant to the articles of association of the Company.

Relationship Agreement

The Company and Indivision have entered into a relationship agreement with a
view to ensuring that the Company is capable of carrying on its business
independently of Indivision (as a controlling shareholder) and to ensure that
all transactions between the Company and Indivision are at arm's length and on
normal commercial terms.

Related Party Transaction - issue of warrants to Ramesh Jolly

To ensure that Ramesh Jolly is suitably incentivised to implement the Company's
strategy, the Board has agreed to grant warrants to Ramesh Jolly, conditional
on Admission, over 20,000,000 new ordinary shares exercisable at any time until
31 July 2012 at the following prices; 6,666,666 at 6p share per ordinary share;
6,666,666 at 8p per Ordinary Share and 6,666,668 at 10p per ordinary share.

The issue of warrants to Mr Jolly is a related party transaction under Rule 13
of the AIM Rules. Where a company whose shares are listed on AIM enters into
such a transaction there is a requirement for the directors of the company, who
are independent of the transaction, to consider, after consultation with the
nominated adviser, whether the terms of the transaction are fair and reasonable
insofar as the shareholders are concerned.

The Directors (excluding Mr Jolly) consider, having consulted with CFA, the
Company's nominated adviser, that the issue of the warrants to Mr Jolly is fair
and reasonable insofar as the shareholders are concerned.

Use of net proceeds of the Subscription

The availability of new funding will provide the Directors not only with an
opportunity to build upon Faces' existing operations though the continued
rollout of its franchise model but also to establish, over the next 12 to 18
months, a limited number of Company-owned flagship stores which can also be
used as training centres for franchisees.

In Asia, the opportunity to develop a Faces network in India with Indivision is
an exciting prospect for the Company. The Directors believe that the Indian
market, with a middle class population of 250 million people and where women
(aged between 15 years and 39 years) make up 20 per cent. of the population,
with an established demand for cosmetic, skin care and anti-aging products
provides outstanding growth potential.

If the resolutions to be proposed at the General Meeting with respect to the
above are not approved by Shareholders and the net proceeds of the Subscription
are not received, the Company's ability to implement its strategy will be
significantly curtailed and growth will be impeded.

Current Trading

The Directors anticipate, in view of the process leading to the subscription,
the audited results for the year ended 31 July 2007 will now be announced in
December 2007.

The Directors believe that the investment by Indivision will provide the
Company's strategy and assist with entry into India, a potentially substantial
market for the Company's product range. It is on this basis that, following
receipt of the new proceeds of the subscription, the Directors view the future
with confidence.

Extraordinary General Meeting

A General Meeting has been convened for 12 November 2007 at which resolutions
will be proposed to approve the subscription and related matters:

Copies of the circular convening the General Meeting are available on the
Company's website www.faces-cosmetics.com and will be available free of charge,
during normal business hours on any weekday (Saturdays, Sundays and public
holidays excepted) at the Company's registered office and at the office of
Gates and Partners, 20 St. Mary At Hill, London EC3R 8EE from the date of this
announcement until Admission.

For further information please contact:

Faces                                                                        
                                                                             
President and CEO                                                            
                                                                             
Ramesh Jolly                                                                 
                                                                             
Tel: +1 (905) 760 0110 Ext. 112                                              
                                                                             
City Financial Associates                                                    
Limited                                                                      
                                                                             
Nominated Adviser                                                            
                                                                             
Ross Andrews                                                                 
                                                                             
Tel: +44 (0) 20 7492 4777                                                    
                                                                             



END

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