Financial Highlights
1. INFORMATION OF EPS Co,Ltd & CONSOLIDATED SUBSIDIARIES 2008.3 ( Interim )(2007.10.1-2008.3.31)(UNAUDITED)(1) CONSOLIDATED OPERATING RESULTS( UNIT:JPY MILLION )Net sales

Operating Income

Mar-08Mar-07
Sep-07

10,472 (8,472 (
17,980Mar-08Mar-07
Sep-07Net Income per Share(yen)
10,019.36
7,052.63
15,485.66

Note :

23.6% )
19.2% )−

Ordinary Income

1,741 ( 31.0% )1,329 ( 102.8% )
2,980−

1,777 ( 31.4% )1,352 ( 105.8% )3,042−

Net Income
895 (
630 (
1,384

42.1% )
89.0% )−Net Income per
Share,diluted (yen)10,003.30
7,048.95
15,474.39

Percentages for net sales, operating income, ordinary income, and net income indicate growth ratio
to previous year.

(2) CONSOLIDATED FINANCIAL INFORMATION
Total Assets

Net assets
10,334
9,065
9,710

14,984
12,808
14,537Mar-08Mar-07
Sep-07

Shareholders'Equity ratio (%)
61.8%
63.4%
60.0%

( UNIT:JPY MILLION )Shareholders' Equity
per share (yen)103,668.79
90,775.09
97,517.76(3) CONSOLIDATED CASH FLOW INFORMATION( UNIT:JPY MILLION )Mar-08Mar-07
Sep-07

Net cash provided by(used in) operating
activities
690
1,177
2,697

Net cash provided by(used in) investing
activities
△ 300
△ 132
△ 605

Net cash provided by(used in) financing
activities
△ 320
△ 328
△ 637

Ending balance of cash
and cash equivalents
5,292
4,520
5,260

(4) CONSOLIDATED SUBSIDIARIES
Consolidated subsidiaries :Affiliated companies by equity accounting method :143companies
companies

2.OVERALL SITUATION OF DIVIDEND DISTRIBUTION( UNIT:JPY )Sep-07
Sep-08(Result)(Projection)

Interim Dividend
1,700.00
2,400.00

Cash Dividends per share
Year end Dividend
2,600.00
2,600.00

Annual4,300.00
5,000.00

3. INFORMATION OF CONSOLIDATED BUDGET 2008.09 (2007.10.1-2008.9.30)( UNIT:JPY MILLION )Net sales
Sep-0821,594 (Operating Income
20.1% )

Budgeted net income per share :3,488 (
Sep-0817.0% )

Ordinary Income
3,527 (

15.9% )Net Income
1,705 (

19,079.46 yen

Notes :1 Above figures may differ from actual results as uncertain various factors may affect future earnings.
2 Percentages for net sales, operating income, ordinary income, and net income indicate growth ratio
to previous year.

23.2% )

4. INFORMATION OF NON-CONSOLIDATED 2008.3 (2007.10.1-2008.3.31)(UNAUDITED)(1) OPERATING RESULTS( UNIT:JPY MILLION )Net sales
Mar-08Mar-07
Sep-07Note :

Mar-08Mar-07
Sep-07

6,280 (
5,138 (
10,891

Operating Income
22.2% )
18.0% )−

1,126 (
889 (
1,983

26.7% )
50.3% )−

Ordinary Income
1,251 (
964 (
2,105

29.8% )
51.1% )−Net Income
724 (
488 (
1,079

48.4% )
32.9% )−

Percentages for net sales, operating income, ordinary income, and net income indicate growth ratio
to previous year.
Net Income per Share(yen)
8,103.30
5,459.20
12,074.43(2) FINANCIAL INFORMATION
Total Assets

Net assets
8,004
7,153
7,588

11,175
9,786
10,663Mar-08Mar-07
Sep-07

Shareholders'Equity ratio (%)
71.6%
73.1%
71.2%

( UNIT:JPY MILLION )Shareholders' Equity
per share (yen)89,541.61
80,022.49
84,883.88

5. INFORMATION OF NON-CONSOLIDATED BUDGET 2008.09 (2007.10.1-2008.9.30)( UNIT:JPY MILLION )Net sales
Sep-0812,920 (Operating Income
18.6% )

Budgeted net income per share :2,244 (
Sep-08

13.2% )

Ordinary Income
2,392 (

13.6% )Net Income
1,289 (

14,419.67 yen

Notes :1 Above figures may differ from actual results as uncertain various factors may affect future earnings.
2 Percentages for net sales, operating income, ordinary income, and net income indicate growth ratio
to previous year.

19.4% )

Summary of Interim Financial Results
For the Six Months Ending September 2008
1.

Management Results(1) Analysis of management results(Management results of the current period)
The Japanese economy in the current period was affected by a downside risk in the U.S. economy
against the backdrop of the subprime lending issue, soaring crude oil prices, and trends ininterest rates, and the outlook about its recovery trends has been adding to uncertainty.

Undersuch circumstances, our CRO (Contract Research Organization) industry and the SMO (SiteManagement Organizations) industry, in which one of our consolidated subsidiaries EP-Mint Co.,
Ltd., operates, are continuing to grow in the process of reorganization, and the pre-clinical study
industry, in which our LSG. Co., Ltd. Group operates, is also performing steadily.

Additionally,in the software development industry, in which our All Right Software Inc. group operates,
business is brisk in spite of a shortage of IT engineers.
The CRO business is operated mainly by the Company.
As regards the monitoring service of the Company, the Clinical Development Division has beenfavorably performing clinical trials in both development and post-marketing stages, centering on
implementation of existing projects, acquisition of new projects and testing for anti-cancer,
diabetes, and CNS(Central Nerves System) drugs.

The sales for the current first-half, with theenormous progress of contract projects, increased substantially compared with the same period
last year.

The medical device development service also showed a strong performance andachieved a considerable growth in sales compared with the same period last year.
As for the registration & project management, data management and statistical analysis
services, the Biometrics Division is showing a favorable performance in both implementation ofexisting projects and acquisition of new projects.

In the medical writing and pharmacovigilanceservices, it is continuously making efforts to acquire more contracts, making an increase inturnover over the same period last year.
The Clinical coordination Center, which provides new business planning and associated services,
reported slightly increase sales figures compared with the same period last year as its
post-marketing clinical trials for an anti-cancer drug having been tested over a long period oftime are drawing to an end.

On the non-consolidated basis, the valuation loss on investment securities is reported as
extraordinary loss.

However, the Company achieved a significant increase in both sales andprofits compared with the same period last year with a marked increase in sales owing tosmooth progress in contract projects as well as its efforts to reduce expenses.
As regards our consolidated subsidiaries in Japan, e-trial Co., Ltd., which was established forthe purpose of acquiring clinical trial contracts using the EDC system, is continuously striving
to acquire new contract orders and smoothly improving its performance.

EP-Mate Co., Ltd.,

engaged in the staff dispatching service (dispatched CRO business) for pharmaceuticalcompanies, also increased its turnover.
Moreover, EP-Medical Co., Ltd., providing a MR dispatching service (CSO business), has been
improving its performance continuously adding dispatched MRs to implement a big projectcontracted during the previous period and deal with new contracts.
On the other hand, as for our overseas CRO business, EPS International Co., Ltd., together with
its group companies, is continuing to improve a system to deal with the increase demand for
CRO services relating to clinical trials across borders (especially those in Asia).
Individually, EPS International Co., Ltd., is facing an uphill battle due to delayed execution of aschedule contract, and EPS China Co., Ltd., is making efforts to acquire new orders while
conducting operations in the finishing stage of a big project carried on since the previous period.
EPS Singapore has been smoothly performing contracts acquired in the previous period while
promoting new customer acquisition activities on its own. ADM Korea Inc., providing a clinical
trials contract service in Korea, is improving a structure for joint contracts in Korea and thus
expanding its scale and activities.

Furthermore, the Taiwan Branch of EPS International Co.,

Ltd. is also working on improving structure for joint contracts.
Consequently, our consolidated net sales for the CRO business amounted to ¥7,282 million, up
26.9% compared with the same period in previous year, and consolidated operating income¥1,225 million, up 22.6% on the same basis, posting a significant increase in both sales andprofits.
The SMO business is operated by EP-Mint Co., Ltd.
EP-Mint Co., Ltd. has been continuously improving its performance underpinned by strong
orders with improved sales and expenses management effectiveness by enhancing thebranch-based management system, centering on the site-supporting business by the clinicaladministration in cooperation with local trial sites, in addition to its CRC service.

Consequently, in our SMO business, we achieved significant growth in both sales and profits
with consolidated net sales of ¥1,801 million (up 14.5% compared with the same period in
previous year) and the consolidated operating income of ¥386 million (up 46.3% on the same
basis).
The pre-clinical study business is operated by LSG Corporation Group.
LSG Co., Ltd. is facing an uphill battle in performance due to the delay in the scheduled
shipment of laboratory animals for the client’s reason.
Consequently, in our pre-clinical study business, both sales and profits decreased, posting theconsolidated net sales of ¥614 million (down 5.1% compared with the same period in previousyear) and consolidated operating income of ¥5million (down 64.5% on the same basis).
The software development business is operated by All Right Software Inc Group.
All Right Software Inc. is continuing to promote a business making use of Chinese IT engineers
and remarkably growing in its contract SE service relating to backbone systems for financial
institutions and major companies.
Consequently, in our software development business, the consolidated net sales amounted to¥845 million (up 40.3% compared with the same period in previous year) and the consolidated
operating income ¥117 million (up 165.3% on the same basis), posting a significant increase inboth sales and profits
After deducting inter-segmental transactions from the segmental figures shown above, theconsolidated net sales amounted to ¥10,472 million (up 23.6% compared with the same period in
previous year),the consolidated operating income ¥1,741 million (up 31.0% on the same basis),the consolidated ordinary income ¥1,777 million (up 31.4% on the same basis), and the interim
net income ¥895 million (up 42.1% on the same basis), resulting in a significant increase in bothsales and profits.
(Outlook for the current year)
The future Japanese economy is expected to be directly and indirectly affected by the impact ofdownside factors such as the U.S. subprime lending issue and the soaring crude oil prices with
continuing uncertainties about overseas economies and trends of interest rates.
Our CRO business is operated mainly by the Clinical Development Division, responsible formonitoring and clinical development concerning medical devices, etc., and the Biometrics
Division, responsible for services such as data management, statistical analysis, registration &project management, medical writing, pharmacovigilance, together with the Clinical
Coordination Center, in charge of new business planning and associated services, and theBusiness Development Division, which engages in information collection and order receiving
activities. In addition to acquisition of new contracts, we will further focus on monitoring anddata management services to achieve our full-year profit plan by enhancing the operating rate
and reducing expenses.
As regards our domestic consolidated subsidiaries, e-Trial Co., Ltd., will continuously strive toacquire new orders centering on EDC based contracts from pharmaceutical companies andmedical research facilities.
EP-Mate Co., Ltd., a dispatched CRO service provider, will continue to expand its business withfocus on the Company and pharmaceutical companies.

EP-Medical Con., Ltd., providing CSO

services including MR dispatching, is concentrating on performing existing contracts of a
relatively substantial scale acquired during the previous fiscal year and securing employees todeal with newly acquired contracts.
As for our overseas businesses, EPS International Co., Ltd., together with its group companies,
will continue to improve the system for clinical trial contracts across borders.

Individually,

EPS International Co., Ltd, will strive to recover delayed orders and acquire new orders.

On agroup basis, it will endeavor to acquire new clinical trial contracts mainly in Asia for the
improvement of its overseas contract clinical trial services, continuously pursuing the synergy
effect of its collaboration with EPS China Co., Ltd., EPS Singapore and ADM Korea Inc., as wellas its Taiwan Branch.
EP-Mint Co, Ltd., which engages in an SMO business, will continue to work on maintaining its
high operating rate and acquiring new orders by strengthening its structure to acquire contracts
and enhancing branch-based management system.
LSG Co., Ltd., a pre-clinical study agent, will expedite the delayed shipment of laboratory
animals according to its plan and endeavor to acquire new orders.
All Right Software Inc., a software developer, will continue to promote contract SE services andoffshore software development and to acquire more contracts for communication-, finance-, andnetwork-related software development, making use of Chinese IT engineers.

Accordingly, the Company does not revise its full consolidated forecast for the fiscal year ending
September 2008 announced on April 25, 2008.

(2) Analysis on consolidated financial status(i) Analysis on status of assets, liabilities, net assets, and cash flow status
The changes in the financial position for the current interim accounting period from the end of
the previous consolidated fiscal year are as follows:
Current assets for the current interim accounting period increased by ¥571 million to ¥11,525
million due to an increase of ¥211 million in notes and accounts receivable, of ¥300 million in
investment securities, and of ¥97 million in inventories.

Fixed assets decreased by ¥123

million due to an increase of ¥41 million in tangible fixed assets through purchase, of ¥53
million in others in intangible fixed assets, and of ¥149 million in others in investments andother assets, respectively, in contrast to a decrease of ¥357 million in investment securities
through sales and valuation loss on investment securities, etc.

Consequently, the total assets

at the end of the current consolidated interim period increased by ¥447 million to ¥14,984
million compared with the previous consolidated fiscal year.
As regards liabilities, accounts payable increased by ¥85 million, short-term debt increasedby ¥50 million due to new borrowing, provision for bonuses increased by ¥184 million, andprovison for directors retirement benefits increased by ¥39 million, respectively, in contrast to adecrease of ¥226 million in income taxes payable, of ¥204 million in other current assets, and of¥105 million in long-term debt as the result of payment thereof, respectively.

Consequently,

total liabilities at the end of the current consolidated interim period decreased by ¥176 million
to ¥4,650 million compared with the previous consolidated fiscal year.
The net assets at the end of the current consolidated interim period increased by ¥624 million to¥10,334 due to an increase of ¥659 million in retained earnings and of ¥74 million in minority
interests, respectively, in contrast to a decrease of ¥75 million in unrealized gain on
available-for-sale securities and of ¥33 million in foreign currency translation adjustments.
(ii) Analysis on consolidated cash flow status
The cash and cash equivalents at the end of the current consolidated interim period increasedby ¥32 million to ¥5,292 million, with the effect of exchange rates changes added, due to anincrease in the net cash flow provided by operating activities by ¥690 million, a decrease in the
net cash flow used in investing activities by ¥300 million, and a decrease in the net cash flowused in financing activities by ¥ 320 million.

(Cash Flow in Operating Activities)
The capital inflow acquired as a result of operating activities decreased by ¥486 million to ¥690
million compared with the same period in previous year.
due to an increase of ¥99million

The decrease in the income is mainly

in inventories (an increase of ¥120 million compared with thesame period in previous year), a decrease by ¥244 million in other current liabilities (increase of¥391 million on the same basis), and the payments of ¥1, 058 million for income taxes (anincrease of ¥701 million on the same basis), despite income before taxes of ¥1,699 million (anincrease of ¥554 million on the same basis) and an increase in provision for bonuses by ¥186
million (an increase of ¥ 171 million on the same basis).
(Cash Flow in Investing Activities)
The capital outflow resulting from investing activities increased by ¥168 million to ¥300 million
compared with the same period in previous year.

The increase in the payments is mainly due

to the payments of ¥134 million for the purchase of tangible and intangible assets (an increaseof ¥52 million on the same basis), of ¥300 million for the purchase of investment securities (anincrease of ¥60 million on the same basis), and of ¥24 million for collection of deposits (adecrease of ¥120 million on the same basis), despite the income of ¥100 million from redemption
at maturity of investment securities.
(Cash Flow in Financing Activities)
The capital outflow resulting from financing activities decreased by ¥7 million to ¥320 million
compared with the same period in previous year.

The decrease in the payments is mainly due

to the payment of ¥261 million for dividends including those for minority stock holders (anincrease of ¥40 million on the same basis), despite an income of ¥50 million by a short-term
debt.
The Company’s cash flow index is as follows:
Fiscal year

Fiscal year ended 9/

Fiscal year ended

Fiscal year ended

Interim period

ended 9/ 20042005

9/2006

9/ 2007

ended 3/ 2008

Shareholders’ equity Ratio
63.6

62.9

64.2

60.0

61.8

380.7

292.8

189.6

230.0

288.8

(%)
Shareholders’ equity Ratio
at Market Price (%)
Cash flow -Interest bearing
0.1

-

0.7

0.2

0.8

205.4

-

65.6

171.3

119.1

debt ratio
Interest Coverage ratio(times)Shareholders’ equity ratio:

Shareholders’ equity / Total assets

Shareholder’s equity ratio at market price : Total market value of shares / Total assets
Cash flow - Interest bearing debt ratio: Interest bearing debt / Operating cash flow
Interest coverage ratio: Operating cash flow / Interest payment

Note:
1. Each index is calculated using the consolidated financial values.
2. The total market value of shares is calculated based on the number of shares issued at theend of each period excluding common stock for treasury.
3. The cash flow uses net cash flow in operating activities in the consolidated cash flow
statement of each period.
4. The interest-bearing debt includes all debts of which interest is being paid among debts
that are posted on the consolidated balance sheet.

In addition, interest paid posted in the

consolidated cash flow statement is used for interest payment.
5. The shareholders’ equity ratio is calculated as (total of net assets – minority interests) /total assets from the fiscal year ended September 2006.

(3) Basic profit distribution policy and dividend for the current year
The Company considers it an important management agenda to improve the profit return to theshareholders while reinforcing the business structure for the enhancement of profitability.

Asfor profit distribution, we basically intend to distribute the profit steadily considering theimprovement of our financial infrastructure to respond to rapid market change, with yearlytarget dividend payout ratio set to 30%.
The Company intends to continue to pay out dividends twice a year as interim and year-end
dividends even after the implementation of the Corporate law.
(4) Risks in businesses and others
The following describes items among those related to the status of business, finances, and othersof our Group that may have any possibilities toaffect the investor’s judgment significantly.

The

items in the description concerning the future are based on the present evaluation by our Group.
It is also our policy to avoid risks from arising and respond to the realization of risk after
confirming whether there may be a possibility of a risk.
1) High dependence on a particular industry

As our Group is mainly engaged in CRO business, SMO business, and pre-clinical business that
acquire contracts from drug development organizations for services related to management andadministration of clinical trials (investigation and search), the amount of sales is highly
dependent on the pharmaceutical industry.
Under such circumstances, if there is an industrial reorganization such as M&A ofpharmaceutical companies, a decrease in the absolute number of pharmaceutical companies who
are our main clients, in addition to an increase in joint developments in view of
cost-effectiveness, may have any possibilities to affect the business performance of our Group.
2) Securing of human resources
Our Group implements the CRO business and the SMO business that are our present corebusinesses by collaboration between personnel having knowledge and experience in each of areaof expertise such as medicinal science, pharmaceutical science, statistics, and IT technology,etc.
Consequently, we consider securing and training of human resources and the retention of suchhuman resources to the Company is a primary importance.
As the CRO business and the SMO business involve direct interviews with the doctor in charge ofthe clinical trials and the clinical trial volunteer, the businesses are based on human capital.

In

order to maintain and improve our services in accordance with an increase in the number ofcontracts, it is necessary for our Group to secure human resources that meet the required
performance of the Group.
The Group has secured excellent human resources that possess adaptable potential from insideand outside the industry, so that there has been no difficulties up to the present.

However, there

is a possibility that the securing of human resources required by the Group will not be
implemented as planned in the future.
If the market to which our Group belongs is to expand and competition is to intensify, thecompetition to secure human resources between competitors will also increase, and then there
would be any possibilities that Company’s human resources to emigrate to other companies.
Therefore, if securing of human resources does not proceed as planned, it may have any
possibilities to affect the business performance of the Group.
3) The effect of decline in stock prices
The Group owns stocks that are marketable and that are non-marketable.

If there is a great

decline in stock prices, there will be impairment or loss on revaluation of marketable stocks, andif the real value of the issuing company significantly drops, there will be impairment in
non-marketable stocks.

Consequently, it may have any possibilities to affect the businessperformance of the Group.
2.

Status of the Corporate GroupAs there has not been major changes from “Business of Our Group” and “Status of our Group
Companies” in our recent business report (issued Februay 15, 2008), refer to such report.
3.

Management Policy(1) Basic Management Policy of Our Group
Our Group has managed our businesses, setting it our basic management philosophy to provide
services that will satisfy our customers by pursuing, implementing, and establishing a business style
to fulfill contracting missions of high efficiency and high quality, while maintaining corporate
compliance.
We are committed to managing our businesses to be “Ever Progressing System” as the Company
name suggests, for the purpose of further expanding our business and playing a role as the industry
leader under the above management philosophy.
(2) Target Management Index
Our Group set the management targets as below:-

Sales growth rate

approximately 15%-

Ordinary profit rate

approximately 13 to 15%

Our Group is promoting the following management strategies to achieve the above targets.
(3) Mid and Long-Term Management Strategies
Our Group has managed our businesses, setting it our basic management philosophy to provide
services that will satisfy our customers by pursuing, implementing, and establishing a business style
to fulfill contracting missions of high efficiency and high quality, while maintaining corporate
compliance.
We are committed to managing our businesses to be “Ever Progressing System” as the Company
name suggests, for the purpose of further expanding our business and playing a role as the industry
leader under the above management philosophy.

Our Group has adopted the following specificmanagement strategies.
1) Establishment of CRO businessIn order to respond to full-scale outsourcing of the development of pharmaceutical products, wewill not only manage clinical trials but also promote the building of a full-service system ranging
from planning to pharmaceutical applications.
Furthermore, we aim at establishing our leading position in this industry as the CRO which canprovide total support for the development of pharmaceutical products including development of
medical devices and specified health foods as well as active response to bio-ventures anddoctor-led clinical trials.

2) Promotion of SMO business
As the clinical trial support service for medical institutions expands, EP-Mint Co., Ltd., ourconsolidated subsidiary, promotes reinforcement of branch-based management

system, toachieve more effective management of sales and expenses, and expanding its scope of the SMO
business, with the aim of being raked as top 3 in the industry.
3) Promotion of overseas business
EPS International Co., Ltd. will continue to take a leading role in responding to the shift tointernational simultaneous clinical development and decisions of the ICH1 and pursue a synergy
effect through collaboration between its Group companies and branches, continue to develop thesystem for contracts of multi-national clinical trials, and improve clinical contract services inoverseas (especially East Asia).
4) Entry into drug discovery business
In Japan, we intend to engage in the drug discovery business through capital investment,
consulting, and contracting of development services under a partnership with bio-ventures,
rather than being directly involved in the business alone.
In China, we plan to develop our own drug discovery business through collaboration with
bio-ventures utilizing our local subsidiaries.
5) Reinforcement of group management
Currently, the EPS group is composed of the Company and 14 consolidated subsidiaries,
belonging to the industry related to the development of pharmaceutical products.
We consider it essential to recruit, develop, and effectively allocate human resources in
expanding our scope of business.

We also intend to reinforce the group management by pursing

the synergy effect of launching new business promotion and M&A.
Note: 1. ICH (International Conference on Harmonization of Technical Requirements for
Registration of Pharmaceuticals for Human Use) is a conference held by administrative
authorities of Japan, US, and EU to promote harmonization of standard of approval for
pharmaceutical products.
(4) Agendas to be addressed by the Company
As the outsourcing from customers and their international diversification is expected to increase in
the future, the entire Group will work together and improve the quality through reinforcement of
QC/QA divisions, compliance with standardized operating procedures, and enhanced skills througheducation and training.
As a part of such efforts, our divisions and departments that handle clinical trial information (CRO

services including pharmaceutical products, medical devices, and specified health foods, etc.) haveobtained ISO 27001 certification (valid until December 8, 2009) from the international certification
institution.

We will continue to develop our system to enhance the security of information

management and to win more trust from our customers.
Furthermore, in order to respond to increasingly intensive cost competition, we will establish theprocess management system ranging from receipt of orders to delivery, improving the efficiency ofour business.

STATEMENT OF ORDER ENTRY AND SALES BY ITEMS(UNAUDITED)(1) RESULT OF ORDER ENTRY
2008.3<2007.10.1-2008.3.31>(IN THOUSANDS, JPY )DIVISION

year-to-yearcomparison (%)

AMOUNT OF
ORDER ENTRY

ORDER
BACKLOG

CRO
Monitoring
Data Management

2,179,513
51.6
8,256,749
2,586,422
100.9
5,185,361
CRO others
1,187,086
179.1
626,204
TOTAL OF CRO
5,953,022
79.9
14,068,315
SMO
3,492,427
212.0
3,599,276
Preclinical Service
671,687102.8
174,926
System Development
688,77086.0
373,172
TOTAL
10,805,906
102.4
18,215,690* These figures are expressed by sales price.
* These above figures do not include the consumption tax.

year-to-yearcomparison (%)

112.3
109.8
272.6
114.3
195.8
109.3
87.7
123.7

(2) RESULT OF SALESDIVISION

2008.3<2007.10.1-2008.3.31>(IN THOUSANDS, JPY )CRO
Monitoring
Data Management

3,562,904
2,762,335
947,797
7,273,037
1,793,782
612,510
793,373
10,472,704

CRO others

TOTAL OF CRO
SMO
Preclinical Service
System Development
TOTAL

year-to-yearcomparison (%)

130.0
118.7
143.7
127.0
116.3
95.5
141.4
123.6

INDUSTRY SEGMENT(UNAUDITED)2008 (2007.10.1-2008.3.31)

SALES
Sales to customers
Intersegment sales
Total
Operating expenses
Operating income

CRO

SMO

7,273,037
9,885
7,282,923
6,057,359
1,225,564

1,793,782
7,637
1,801,420
1,414,450
386,970

Preclinical
Service

SystemDevelopment

612,5102,070
614,580
609,194
5,386

793,373
52,306845,679
727,909117,769

Preclinical
Service

SystemDevelopment

641,605
5,823
647,428
632,252
15,176561,163
41,495602,659558,269
44,389SystemDevelopment

Total

1,181,770
69,1181,250,889
1,161,162
89,726

17,980,875
159,488
18,140,364
15,172,962
2,967,402

Total
10,472,704
71,89910,544,603
8,808,912
1,735,691

2007 (2006.10.1-2007.3.31)

SALES
Sales to customers
Intersegment sales
Total
Operating expenses
Operating income

CRO

SMO

5,727,454
10,674
5,738,129
4,738,707
999,422

1,541,827
31,538
1,573,366
1,308,814
264,552

Total
8,472,051
89,5318,561,583
7,238,043
1,323,540

2007 (2006.10.1-2007.9.30)

SALES
Sales to customers
Intersegment sales
Total
Operating expenses
Operating income

CRO

SMO

Preclinical
Service

12,232,620
21,501
12,254,122
10,096,860
2,157,261

3,315,293
60,617
3,375,910
2,732,511
643,399

1,251,190
8,251
1,259,441
1,182,427
77,014(IN THOUSANDS, JPY)
Eliminations/
Consolidation
Corporate− 10,472,704(71,899)−(71,899) 10,472,704(77,401)
8,731,511
5,502
1,741,193(IN THOUSANDS, JPY)
Eliminations/
Consolidation
Corporate−(89,531)(89,531)(95,238)
5,706

8,472,051−
8,472,051
7,142,804
1,329,246(IN THOUSANDS, JPY)
Eliminations/
Consolidation
Corporate− 17,980,875(159,488)−(159,488) 17,980,875(172,817) 15,000,144
13,3282,980,730

CONSOLIDATED STATEMENTS OF CASH FLOWSFor Six months ended March 31 2008, 2007 and the year ended September 30, 2007
(UNAUDITED)(IN THOUSANDS,JPY)
Six months ended
March 31.2008

OPERATING ACTIVITIES:
Income before income taxes and minority interests
Adjustments to reconcile income before income taxes and minority
interests to net cash provided by operating activities:
Depreciation and amortization
Increase in provision for bonuses
Increase in allowance for retirement benefits for employees
Increase in allowance for retirement benefits for directors
Interest and dividends income
Interest expense
Gain on sale of investments in securities and subsidiaries
Loss on devaluation of investments in securities
Changes in operating assets and liabilities:
Increase in accounts receivable-trade
Decrease in inventories(△Increase)
Increase in accounts payable -trade
Increase in other current liabilities(△Decrease)
Others , Net
SubtotalInterest and dividends received
Interest paid
Compensation for office removal
Income taxes paid
Net cash provided by (used in) operating activities

Six months ended
March 31.2007

Year ended
September 30.2007

1,699,417

1,144,808

2,722,197

105,609
186,1446,536
39,285△ 21,472
5,733△ 35,913
113,145

83,232
15,127
8,966
11,061△ 18,593
8,152△ 41,161
210,630

171,336
226,430
30,844
24,524△ 39,569
15,771△ 51,186
345,918△ 219,809△ 99,996
87,562△ 244,963
26,404
1,647,683
22,476△ 5,800
85,000△ 1,058,633
690,726△ 190,296
20,77826,713
202,427
43,1481,524,996
18,349△ 8,157△ 511,143△ 71,298
16,734
667,652△ 141,456
3,406,754
37,797△ 15,749−△ 357,553
1,177,635−△ 731,149
2,697,652

INVESTING ACTIVITIES:
Disbursements for purchase of tangible fixed assets
Disbursements for purchase of intangible fixed assets
Payment for purchase of investments securities
Proceeds from sales of investments in securities and subsidiaries
Proceeds from maturity of investment securities
Payment for deposit for rent office and others
Collection for deposit for rent office and others
Others , Net
Net cash provided by (used in) investing activities△ 113,511△ 21,181△ 300,614
71,669100,000△ 49,407
24,374△ 12,060△ 300,731△ 72,756△ 9,869△ 239,872
75,161△ 178,665△ 37,714△ 439,793
95,186−△ 50,730
145,130
20,501△ 132,434−△ 197,211
173,885△ 20,696△ 605,009

FINANCING ACTIVITIES:
Proceeds from borrowing short-term debt
Disbursements for repayment of long-term debt
Dividends paid
Dividends paid for minority stock holders
Others , Net
Net cash provided by (used in) financing activities
EFFECT OF EXCHANGE DIFFERENCE ON CASH & CASH EQUIVALENTS
NET INCREASE IN CASH AND CASH EQUIVALENTS
BEGINNING OF BALANCE,CASH AND CASH EQUIVALENTS
ENDING OF BALANCE,CASH AND CASH EQUIVALENTS

50,000△ 107,700△ 231,480△ 30,508△ 776△ 320,465△ 37,504
32,0255,260,080
5,292,105−△ 106,600△ 205,217△ 15,813△ 776△ 328,406
11,452
728,245
3,792,223
4,520,469−△ 263,200△ 357,397△ 15,813△ 1,553△ 637,964
13,1781,467,856
3,792,223
5,260,080

CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETSFor Six months ended March 31, 2008 and 2007

(UNAUDITED)2008(IN THOUSANDS,JPY)
Attributable to equity holders of the Company
Common stock

Balance at 30
September 2007

1,875,251

Additional paid-in
capitalRetained earnings

Common stock fortreasury

1,825,298

5,205,599△ 322,080

Changes during the period
Cash dividends
Net income
Others△ 232,434
895,710△ 3,873

Sub total

8,584,068△ 232,434
895,710△ 3,873

Net increase/decrease in evaluation,translation adjustment and minority
Total changes during the period

Balance at 31
March 2008−−

1,875,251

1,825,298−

659,402△ 322,080

5,865,001

659,4029,243,470

Evaluation and translation adjustment
Unrealized gain on
available-for-salesecurities

Balance at 30
September 2007

66,076

Deferred gain on
Hedges485

Foreign currencytranslation
adjustments

67,262

Total evaluation and Total Shareholders'equitytranslation
adjustments

133,823

Changes during the period
Cash dividends
Net income
Others
Net increase/decrease in evaluation,translation adjustment and minority
Total changes during the period

Balance at 31
March 2008

8,717,892

Minority interests

992,401△ 232,434
895,710△ 3,873△ 75,592△ 75,592

△ 485
△ 485

△ 33,434△ 33,434△ 109,512△ 109,512△ 109,512
549,889

74,382
74,382△ 35,130624,271△ 9,516−

33,82724,311

9,267,782

1,066,783

10,334,565

Attributable to equity holders of the Company
Common stock

1,875,251

Additional paid-in
capitalRetained earnings

Common stock fortreasury

1,825,298

4,180,774△ 322,080

Changes during the period
Cash dividends
Net income
Others△ 205,615
630,491△ 1,970

Sub total

7,559,243△ 205,615
630,491△ 1,970

Net increase/decrease in evaluation,translation adjustment and minority
Total changes during the period

Balance at 31
March 2007−
1,875,251−
1,825,298

422,905
4,603,680−△ 322,080

422,905
7,982,149

Evaluation and translation adjustment
Unrealized gain on
available-for-salesecurities

Balance at 30
September 2006

89,590Foreign currencytranslation
adjustments

40,552

Total evaluation and Total Shareholders'equitytranslation
adjustments

130,142

Changes during the period
Cash dividends
Net income
Others
Net increase/decrease in evaluation,translation adjustment and minority
Total changes during the period

Balance at 31
March 2007

9,710,293△ 232,434
895,710△ 3,873

2007(IN THOUSANDS,JPY)

Balance at 30
September 2006

Total net assets

7,689,386

Minority interests

880,745△ 205,615
630,491△ 1,970

Total net assets

8,570,131△ 205,615
630,491△ 1,970△ 18,702△ 18,702

21,521
21,521

2,818
2,818

2,818
425,724

69,261
69,261

72,080494,986

70,88862,073

132,961

8,115,111

950,006

9,065,118

CONSOLIDATED STATEMENTS OF INCOME
For Six months ended March 31 2008, 2007 and the year ended September 30, 2007
(UNAUDITED)Year ended
September
30.2007

Six months ended
March 31.2008

Six months ended
March 31.2007

NET SALES

10,472,704

8,472,051

17,980,875

COST OF SALES

7,099,353

5,747,242

12,046,656

Gross profit

3,373,351

2,724,809

5,934,218

1,632,157

1,395,562

2,953,488

1,741,193

1,329,246

2,980,730(IN THOUSANDS,JPY)SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Operating income
OTHER INCOME (EXPENSES)Interest income

20,122

17,99338,069Interest expenses△ 5,733△ 8,152△ 15,771

Gain on cancellation of life insurance

5,900

9,604

16,746

Service fee income

2,076

3,694

6,056

Gain on consumption tax

−

6,617

14,618

Payment to the Association for employment of persons with disabilities−△ 2,800△ 5,350

Foreign exchange gain or loss (△ loss)

5,069△ 3,299739

Equity in gain or loss of associated companies (△ loss)

5,974△ 6,931△ 5,708

Gain on sale of investments in securities and subsidiaries

35,913

41,161

51,186Compensation for office removal

8,650

−

61,080Compensation for termination of agency agreement

15,000−−Loss on sale and disposal of property and equipment△ 20,288△ 28,561△ 61,266

Loss on devaluation of investments in securities△ 113,145△ 210,630△ 345,918−△ 10,000△ 10,000△ 1,316

6,864△ 3,016

Other income (expenses)-net△ 41,776△ 184,438△ 258,533

Income before income taxes and minority interests

1,699,417

1,144,808

2,722,197

834,138

512,370

1,409,739△ 125,836△ 67,065△ 255,795

708,302445,305

1,153,944

MINORITY INTERESTS

95,40469,012

183,865

NET INCOME

895,710

630,491

1,384,387

Allowance for doubtful accounts
Others- net

INCOME TAXES
Current
Deferred
Total

CONSOLIDATED BALANCE SHEETSMarch 31 2008, 2007 and September 30, 2007
(UNAUDITED)(IN THOUSANDS,JPY)ASSETS
CURRENT ASSETS
Cash and cash equivalents
Notes and accounts receivable
Investment securities
Inventories
OthersAllowance for doubtful accounts
Total current assets

March 31.2008

March 31.2007

September 30.2007

5,292,105
4,338,202
500,918
535,560
862,990△ 3,979
11,525,798

4,520,469
3,803,567−
334,238
714,856△ 1,813
9,371,318

5,260,080
4,126,574
200,012437,696
931,877△ 1,523
10,954,717

417,716
364,085

331,980
357,374

376,393
345,077

717,569
705,233

1,132,080
572,495

1,074,612
681,724500,000

500,000

500,000

764,393△ 10,000
2,677,196

552,889△ 10,000
2,747,465

614,722△ 10,000
2,861,059

Total fixed assets

3,458,998

3,436,821

3,582,530

TOTAL ASSETS

14,984,797

12,808,139

14,537,247

LIABILITIESCURRENT LIABILITIES
Accounts payable
Short-term debt
Current portion of long-term debt
Income taxes payable
Provision for bonuses
OthersTotal current liabilities

287,764
50,000212,300
837,172
834,389
1,657,540
3,879,166

210,726−
213,200
532,174
438,221
1,395,953
2,790,275

201,903−214,300
1,063,181
649,722
1,861,952
3,991,058

300,000
264,984
194,309
11,770771,064
4,650,231

563,400
236,570
141,561
11,213
952,745
3,743,021

405,700
258,448
155,023
16,722
835,895
4,826,953

1,875,251
1,825,298
5,865,001△ 322,080

1,875,251
1,825,298
4,603,680△ 322,080

1,875,251
1,825,298
5,205,599△ 322,080△ 9,51670,88866,076−33,827
9,267,782
1,066,783
10,334,565
14,984,797−
62,073
8,115,111
950,006
9,065,118
12,808,139

485
67,262
8,717,892
992,401
9,710,293
14,537,247

FIXED ASSETS
Tangible Assets
Intangible Assets
Investments and other assets ;Investment securities
Deposits
Time deposits and banking arrangements
other than cash equivalents
OthersAllowance for doubtful accounts
Total investments and other assets

LONG-TERM LIABILITIESLong-term debt
Provision for employee's retirement benefits
Provision for director's retirement benefits

OthersTotal long-term liabilities
TOTAL LIABILITIESNET ASSETS
Common stock
Additional paid-in capital
Retained earnings
Common stock for treasury
Unrealized gain on
available-for-sale securities
Deferred gain on hedges
Foreign currency translation adjustments

TOTAL SHAREHOLDERS' EQUITYMinority interests
TOTAL NET ASSETSTOTAL LIABILITIES AND NET ASSETS