Financial Highlights
1. INFORMATION OF EPS Co,Ltd & CONSOLIDATED SUBSIDIARIES 2007.09(2006.10.1-2007.9.30)(UNAUDITED)(1) CONSOLIDATED OPERATING RESULTS( UNIT:JPY MILLION )Net sales
Sep-07
Sep-06

17,98015,257(17.8%)(17.3%)Net Income per Share (yen)Sep-07
Sep-06

Operating Income
2,980
1,958

Ordinary Income(52.2%)( 9.2%)

3,042
1,979

Net Income per Share,
diluted (yen)Return on
Shareholders'equity(%)

15,485.66
12,300.92

16.9%
15.8%

15,474.39
12,299.67

Net Income(53.7%)( 9.3%)

Ordinary
income tototal
assets(%)
22.9%
18.4%

1,384
1,079

( 28.3%)(△4.2%)

Operatingincome tonet sales(%)
16.6%
12.8%

Notes: 1 Percentages for net sales, operating income, ordinary income, and net income indicate growth ratio to previous year.
2 Average number of shares issued and outstanding during the period :Sep-0789,398sharesSep-0687,724
shares(2) CONSOLIDATED FINANCIAL INFORMATION

Sep-07
Sep-06Note :

Total Assets

Net assets

14,537
11,973

9,710
8,570

Total shareholders' Equity as of :Sep-07
8,717
Million yen( UNIT:JPY MILLION )Shareholders' Equity
per share (yen)97,517.76
86,012.96

Shareholders'Equity ratio(%)
60.0%
64.2%

Sep-06

7,689

Million yen(3) CONSOLIDATED CASH FLOW INFORMATION( UNIT:JPY MILLION )Net cash provided by
Net cash provided by
Net cash provided byEnding balance of cash and(used in) operating activities (used in) investing activities (used in) financing activities
cash equivalents△ 605△ 1,139

2,697
1,357

Sep-07
Sep-06

△ 637
1,609

5,260
3,792

(4) CONSOLIDATED SUBSIDIARIES
Consolidated subsidiaries :Associated companies by equity accounting method :14 companies
3 companies

2.OVERALL SITUATION OF DIVIDEND DISTRIBUTION
Cash Dividends per share

Sep-06
Sep-07
Sep-08(Result)(Result)(Projection)

Interim
Dividend

Year end
Dividend

Annual1,000.00
1,700.00
2,400.00

2,300.00
2,600.00
2,600.00

3,300.00
4,300.00
5,000.00( UNIT:JPY )Dividend ratio Dividend ratio
Total dividendtotoamountnet
shareholders'(Million Yen)
income(%)
equity(%)
291
384
−

26.8%
27.8%
27.9%

4.2%
4.7%
−

3. INFORMATION OF CONSOLIDATED BUDGET 2008.09 (2007.10.1-2008.9.30)( UNIT:JPY MILLION )Net sales
Mar-08
Sep-0810,03020,930(18.4%)(16.4%)

Budgeted net income per share :Operating Income
1,284
3,205
Mar-08
Sep-08(△3.4%)( 7.6%)

Ordinary Income
1,308
3,235

(△3.3%)( 6.3%)Net Income
621
1,602

(△1.4%)( 15.8%)

6,955.84 yen
17,924.53 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.

4. OTHER INFORMATION(1) Total shares issued and outstanding as of :Sep-0790,400sharesSep-0690,400sharesSep-06

1,002

shares(2) Common stock for treasury as of :Sep-07

1,002

shares

5. INFORMATION OF NON-CONSOLIDATED 2007.09(1) OPERATING RESULTS( UNIT:JPY MILLION )Net sales
Sep-07
Sep-06

10,8919,479(14.9%)(20.0%)

Operating Income
1,983
1,587

Ordinary Income(25.0%)(38.8%)

2,105
1,664

(26.5%)(36.3%)Net Income
1,079
980

(10.1%)(20.5%)Net Income per Share (yen)Sep-07
Sep-06Note :

12,074.43
11,171.96
Percentages for net sales, operating income, ordinary income, and net income indicate growth ratio to previous year.

(2) FINANCIAL INFORMATION

Sep-07
Sep-06Note :

Total Assets

Net assets

10,663
9,365

7,588
6,890

Total shareholders' Equity as of :Sep-07
7,588
Million yen

Shareholders'Equity ratio(%)
71.2%
73.6%

Sep-06

6,890( UNIT:JPY MILLION )Shareholders' Equity
per share (yen)84,883.88
77,072.49

Million yen

6. INFORMATION OF NON-CONSOLIDATED BUDGET 2008.09 (2007.10.1-2008.9.30)( UNIT:JPY MILLION )Net sales
Mar-08
Sep-08

5,863
12,430(14.1%)(14.1%)

Budgeted net income per share :Operating Income
815
2,052
Mar-08
Sep-08(△8.3%)( 3.5%)

Ordinary Income
912
2,178

(△5.4%)( 3.5%)Net Income
492
1,170

( 0.9%)( 8.4%)

5,509.22 yen
13,091.94 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.

September 2007 Edition of Accounting Briefing

1. Management Results(1) Analysis on Management Results(Management results for the current term)
Though the Japanese economy in this consolidated fiscal year has causes for concern such as
the trends in US economy and crude oil prices, and raised interest, the corporate earnings still
maintain strength on upward trends in capital investment and personal consumption, leading toa mild increase in business. In such circumstances, the CRO (Contract Research Organization)business to which EPS Co.,Ltd belongs to and the SMO (Site Management Organization)business in which EP-Mint Co., Ltd., our consolidated subsidiary, is operating are growing
through restructuring, with the pre-clinical study business in which LSG Corporation isdeveloping its business maintaining a steady performance. Also, the software development
business in which All Right Software Inc. is operating is booming in spite of the shortage ofIT engineers.
The CRO business is mainly operated by EPS Co.,Ltd.
Our monitoring business is developing favorably in both development stage trials and postmarketing clinical trials, with focus on performance of existing projects, acquisition of new
projects, and trials of drugs for cancers, diabetes and central nerves, under the control of theClinical Development Division. In the medical device development business, the businessassignment in the previous consolidated fiscal year contributed to the significant growth insales compared to the previous consolidated fiscal year.
In the services of registration, progress management, data management and statistics analysis
businesses, the Biometrics Division is also doing well in both performance of the existing
projects and acquisition of new projects. In this consolidated fiscal year, the operating rate has
increased due to the development of the system to respond to contract projects flexibly,
increase in cases of existing projects and acquisition of new projects. We are pushing hard to
win orders for medical writing and pharmacovigilance businesses, whose sales has growncompared to the previous consolidated fiscal year.
The Clinical Coordination Center which plans and offers services for new projects engages in
performance of existing projects and acquisition of new projects, recording a significant
increase in its sales compared to the previous consolidated fiscal year.
On the non-consolidated basis, the valuation loss on investment securities is reported as
extraordinary loss. However, the sales of each division rose steadily, posting increases in bothprofit and revenue compared to the previous consolidated fiscal year due to increased sales,enhanced operating rate associated with more efficient services, and cost saving efforts.
As for our consolidated subsidiaries, e-Trial Co., Ltd, which was established in the previous
consolidated fiscal year to contract EDC-based clinical trials in Japan, concentrates on
winning new contracts, improving its performance steadily. EP-Mate Co., Ltd, which
dispatches staff to pharmaceutical companies (dispatched CRO services), is also improving its
results favorably.
EPMedical Co., Ltd, which dispatches MRs (CSO services), has increased the number of MRs
to be dispatched through acquisition of new projects, though it has incurred prior investment
expenses.
The overseas CRO business was succeeded by EPS International Co., Ltd. (Voting right ratio100%) which was established in April 2007 through the company split to provide rapid,
professional and appropriate services to customers in response to the increasing demand forclinical trials in overseas (especially Asia) with each passing year. The subsidiary is promoting-1-

EPS Co., Ltd.

(4282) September 2007 Edition of Accounting Briefing

with overseas subsidiaries the development of the system to correspond to the increase indemand for CRO businesses associated with clinical trials across the countries.
In this overseas subsidiary group, EPS China Co., Ltd., though ending of the large-scale
project contracted in China, its profit and revenue are on the rise compared to the previous
consolidated fiscal year. Ever Progressing System Pte. Ltd. has reduced its profit and revenue
compared to the previous consolidated fiscal year in spite of its efforts to acquire newcustomers independently. ADM Korea Inc. has joined the Group since this consolidated fiscal
year and is operating contract clinical trial services in Korea (an associate subject to equity
mothed, located in Seoul, South Korea; capitalized at 153 million won (approximately 19
million yen); voting right ratio: 35.0%). The associate is developing the system for joint
contract projects in Korea. EPS International Co., Ltd. established its Taiwan Branch in July
2007 to develop the system for joint contract projects there.
EPLUS Co., Ltd. has become a 100% subsidiary through the transfer of proprietary right from
Sosei Group Corporation in June 2007.
As a result, the consolidated sales of the CRO business reached 12,254 million yen (increaseof 18.9% compared to the previous consolidated fiscal year) and the consolidated operating
profit was 2,157 million yen (increase of 25.8% on the same basis), leading to a steadyincrease of profit and revenue.
The SMO business is operated by EP-Mint Co., Ltd.
EP-Mint Co., Ltd, while continuing to engage in the CRC business, is developing the internalorganization after the merger with focus on the site support business for clinical trial bureaus
in cooperation with local medical organizations, making available the management system
according to branch with the result of enhanced sales and cost management.
Sogo Mediplus Co., Ltd., an associate subject to equity method established on November 1,
2005 to promote the partnership with Sogo Clinical Holdings Co., Ltd (Voting right ratio of
EP-Mint: 20%, the same of Sogo Clinical Holdings: 80%), has terminated its role andcompleted liquidation on July 31, 2007.
As a result, the consolidated sales of the SMO business was 3,375 million yen (increase of
13.2% compared to the previous consolidated fiscal year) with the consolidated operating
profit of 643 million yen (increase of 624.8% on the same basis), achieving a significant
increase in profit and revenue.
The pre-clinical study business is operated by the LSG Corporation Group.
LSG Corporation has been an uphill struggle under the influence of the group reorganizationof overseas pre-clinical study contractors in the previous consolidated fiscal year, though theagent service for new overseas pre-clinical study contractors is looking up.
As a result, the consolidated sales of the pre-clinical study business reached 1,259 million yen(increase of 5.2% compared to the previous consolidated fiscal year) with the consolidated
operating profit of 77 million yen (increase of 7.0% on the same basis), leading to enhanced
profit and revenue.
The software development business is operated by the All Right Software Inc. Group.
All Right Software Inc. continues to promote the business using Chinese IT engineers, and thecontract SE service for the backbone system for financial institutions and major companies is
growing significantly.
As a result, the consolidated sales of the software development business reached 1,250 million
yen (increase of 35.7% compared to the previous consolidated fiscal year) with theconsolidated operating profit of 89 million yen (increase of 33.5 % on the same basis), leading
to a significant increase in profit and revenue.
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EPS Co., Ltd.

(4282) September 2007 Edition of Accounting Briefing

The above-mentioned consolidated sales and operating profits by segment include those forthe internal transactions between segments. Therefore, after deducting them, the current
consolidated sales was 17,980 million yen (increase of 17.8% compared to the previous
consolidated fiscal year) with the consolidated operating profit of 2,980 million yen (increaseof 52.2% on the same basis) and the consolidated ordinary profit of 3,042 million yen(increase of 53.7% on the same basis), leading to a significant increase in profit and revenue.
Despite the extraordinary loss of 345 million yen due to the valuation loss on investment
securities, the current consolidated net profit was 1,384 million yen (increase of 28.3% on thesame basis) resulting in enhanced profit and revenue.
(Outlook for the next term)
Though it is assumed that the Japanese economy will remain strong, we expect that various
concerns are yet to be confirmed, including the exchange rate, overseas economies, raisedinterest, etc.
Our CRO business is mainly composed of the Clinical Development Division engaging inclinical development related to monitoring, medical devices, etc. and the Biometrics Division
engaging in data management, statistical analysis, registration and progress management,
medical writing, pharmacovigilance services, etc., supplemented by the Clinical Coordination
Center planning and offering services for new projects, the Business Development Division
engaging in information collection and order reception, and other divisions. As we have split
the International Division engaging in overseas clinical trial-related services in the previous
consolidated fiscal year, we concentrates on winning new domestic projects related to clinical
trials, as well as are pushing hard for increased operating rate, cost reduction, monitoring anddata management for achieving the full-year profit plan.
As for our consolidated subsidiaries, e-Trial Co., Ltd. continues to be committed to winning
new projects from pharmaceutical companies and medical institutions. We expect that theestablishment of partnership with Medidata Solutions, Inc. (New York, U.S.A.; Product name:
Medidata Rave), which has a good track record in the software for global clinical trials, in
October 2007 will give e-Trial Co., Ltd. an impetus to win new projects.
EP-Mate Co., Ltd. engaging in the dispatched CRO services will aim for full-scale businessdevelopment mainly for the Company and pharmaceutical companies. EPMedical Co., Ltd.
engaging in the CSO services such as MR dispatch continues to makes efforts to generate
profit, working towards the performance of relatively large-scale projects contracted in theprevious consolidated fiscal year and the acquisition of new projects.
As for overseas businesses, EPS International Co., Ltd. will continue to take a leadership indeveloping the system for the contract of multi-national clinical trials, and its groupcompanies such as EPS China Co., Ltd., Ever Progressing System Pte. Ltd., ADM Korea Inc.,as well as the Taiwan Branch of EPS International will pursue the synergetic effect throughcollaboration to enhance their overseas clinical trial contract services, focusing on winning
new clinical trial contracts mainly in Asia.
EP-Mint Co., Ltd. engaging in the SMO business will continue to be involved in thereinforcement of the system for winning contracts and the development of the management
system according to branch, working towards maintaining its high operating rate and acquiring
new projects.
LSG Corporation involved in the pre-clinical study business intends to increase its agent
revenue through the increased contracts with new partners such as overseas pre-clinical study
institutions, and to expand its operation in new fields such as supply of experimental animals
and special animal feeds.
All Right Software Inc., involved in the software development business, will continue toutilize Chinese IT engineers to promote contract SE services and offshore softwaredevelopment and to acquire new development projects of communication, financial andnetwork software industries.
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EPS Co., Ltd.

(4282) September 2007 Edition of Accounting Briefing(2) Analysis on Financial Status
1) Analysis on status of assets, liabilities, net assets and cash flow
The following describes the changes of the financial status during the current consolidated
fiscal term since the end of the previous consolidated fiscal year.
The current assets for the current consolidated accounting term increased to 10,954 million
yen by 2,553 million yen, with the increases by 1,467 million yen in cash and cash equivalents,
518 million yen in notes and accounts receivables, 200 million yen in investment securities,
and 138 million yen in deferred income tax assets. The fixed assets increased to 3,582 million
yen by 9 million yen, as a result of the decreases by 68 million yen due to amortization of
goodwill and 200 million yen due to sales and valuation loss on investment securities, with theincreases by 61 million yen due to new acquisition of tangible fixed assets and 132 million
yen in deferred income tax assets (long term). Consequently, the total assets at the end of thecurrent consolidated fiscal year were 14,537 million yen, an increase by 2,563 million yen
compared to the previous consolidated fiscal year.
As for liabilities, the increases by 687 million yen in income tax payable, 690 million yen inother current liabilities, and 227 million yen in provision for bonuses, and the decreases by
263 million yen in long-term debts by repayment, the total liabilities of 4,826 million yen forthe current consolidated fiscal year, an increase by 1,423 million yen compared to the previous
consolidated fiscal year.
As for net assets, the increases by 1,024 million yen in retained earings and 111 million yen inminority interest left us with the net assets of 9,710 million yen in the current consolidated
fiscal year, an increase by 1,140 million yen compared to the total net assets of the previous
consolidated fiscal year.
2) Analysis on consolidated cash flow status
As for the cash and cash equivalents (hereinafter referred to as “capitals”) for the current
consolidated fiscal year, the cash inflow generated through operating activities reached 2,697
million yen, while the cash outflow incurred through investing and financing activities were
605 million yen and 637 million yen, respectively. As a result, the capitals for the current
consolidated fiscal year reached 5,260 million yen (increase by 1,467 million yen compared tothe previous consolidated fiscal year) with the addition of the exchange difference related tothe cash and cash equivalents.
(Cash flow from operating activities)
The capitals acquired through operating activities reached 2,697 million yen, an increase by
1,340 million yen compared to the previous consolidated fiscal year.
This increase of inflow is mainly attributable to the current net income before income taxes
reaching 2,722 million yen (increase by 881 million yen from the previous consolidated
fiscal year), the adjustments of the valuation loss on investment securities and the loss on
sales and disposal of fixed assets with 345 million yen (increase by 258 million yen on thesame basis) and 61 million yen (increase by 46 million yen on the same basis) respectively,
the inflow of 667 million yen (increase by 484 million yen on the same basis) from theincrease in other current liabilities, the outflow of 511 million yen (increase by 603 million
yen on the same basis) associated with the increase in notes and accounts receivables, andthe payment of income taxes of 731 million yen (decrease by 275 million yen on the same
basis).
(Cash flow from investing activities)
The capital outflow by investing activities was 605 million yen, a decrease by 534 million
yen compared to the previous consolidated fiscal year. This decrease was mainly attributable-4-

EPS Co., Ltd.

(4282) September 2007 Edition of Accounting Briefing

to the outflow of 340 million yen incurred through the business assignment in the previous
consolidated fiscal year, and the inflow of 95 million yen from the sales of investment
securities in the current consolidated fiscal year.
(Cash flow from financing activities)
The capital outflow by financing activities was 637 million yen, an increase by 2,247
million yen compared to the previous consolidated fiscal year.
This is mainly due to the inflow of 1,997 million yen from the issuance of corporate bonds
and 1,092 million yen from a new loan, and the redemption of corporate bonds of 900
million yen in the previous consolidated fiscal year.
(3) Basic profit distribution policy and dividends for the current and next terms
The Company considers it an important management agenda to improve the profit return tothe shareholders while reinforcing the business structure for the enhancement of profitability.
As for profit distribution, we basically intend to distribute the profit steadily considering theimprovement of our financial infrastructure to respond to rapid market change, with the yearlytargeted 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.
2. Status of Corporate Group
Businesses of Our GroupWe and our Group companies (excluding the All Right Group) belong to the drug
development-related industry composed mainly by pharmaceutical companies. The
pharmaceutical companies make vast efforts in the development of so-called “new drugs”,
spending enormous amounts of money and time. “New drugs” are required to be subjected toclinical trials by the medical institutions consigned by pharmaceutical companies before they
are approved as pharmaceutical products.
Clinical trials require subjects (patients) who give their informed consent. In other words,
clinical trials are conducted by three parties of pharmaceutical companies, medical institutions
and subjects.
As of September 30, 2007, our Group is composed of the Company, 14 consolidated
subsidiaries and 3 associates subject to equity method, engaging in four businesses of CRO,
SMO, pre-clinical study and software development.
The Company engages in the CRO business, offering various professional services related tooperation and management of clinical trials under contract with pharmaceutical companies in
conducting clinical trials (including Post-Marketing Study Practice).
The services include support for preparation of clinical trial protocols and case reports, caseregistration and progress management, data management and statistic analysis, monitoring,preparation of summary reports, support for pharmaceutical applications, and construction of
the management system associated with these services.
EPMedical Co., Ltd. engages in the CSO services such as MR dispatch, and EP-Mate Co., Ltd.
dispatches staff to the Company and pharmaceutical companies (dispatched CRO services).
e-Trial Co., Ltd. offers the system development and support services for EDC-based clinical
trials to pharmaceutical companies and medical research institutions.
As for overseas businesses, EPS International Co., Ltd. will continue to take a leadership indeveloping the system for the contract of multi-national clinical trials, and its Group
companies and branches as described below will pursue the synergetic effect throughcollaboration to enhance their overseas clinical trial contract services, focusing on winning
new clinical trial contracts mainly in Asia.
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(4282) September 2007 Edition of Accounting Briefing

EPS China Co., Ltd. offers contract clinical trial services mainly in China while Ever
Progressing System Pte. Ltd. mainly in East and Southeast Asia. In South Korea, ADM Korea
Inc. (Seoul, South Korea; voting right ratio: 35.0%), an accociate subject to equity method,
operating clinical trial contract services, develops the system for contract clinical trials. The
Taiwan Branch of EPS International Co., Ltd. was established in July 2007 to develop thesystem for contract clinical trials in Taiwan.
EP-Mint Co., Ltd. operates the SMO business. The subsidiary provides professional services
such as CRC dispatch to medical institutions and clinical trial bureaus under contract withmedial institutions which conduct clinical trials.
LSG Corporation engages in the pre-clinical study business such as mediating of various
safety tests in pre-clinical study phases and supply of research materials and experimental
animals.
All Right Software Co., Ltd. operates the software development business, offering offshore
software development and contract SE services to major software developers and clients.
3. Management Policy(1) Basic Management Policy of Our Group
Our Group has managed our businesses, making it our basic management philosophy toprovide the satisfactory services for costumers by pursing, implementing and establishing ourbusiness style of solving the contradicting matters in high efficiency and high quality, withvarious legal compliance.
We are committed to managing our businesses to be “Ever Progressing System” as theCompany name suggests, for the purpose of further expanding our businesses and playing arole as the industry leader under the above management philosophy.
(2) Target Management Index
Our Group defines the management targets as below:
Sales growth rate of approximately 15%, andOrdinary profit rate of about 13-15%.
Our Group is promoting the following management strategies to achieve the above targets.
(3) Mid and Long-term Corporate Management Strategies
Our Group has managed our businesses, making it our basic management philosophy toprovide the satisfactory services for costumers by pursing, implementing and establishing ourbusiness style of solving the contradicting matters in high efficiency and high quality, withvarious legal compliance.
We are committed to managing our businesses to be “Ever Progressing System” as theCompany name suggests, for the purpose of further expanding our businesses and playing arole as the leading company under the above management philosophy. Our Group has adopted
the following specific management strategies.
1) Establishment of CRO businessIn order to fully respond to full-scale outsourcing of the development of pharmaceuticalproducts, we will not only manage clinical trials but also promote the construction of the
full-service system ranging from planning to pharmaceutical applications.
We also aim to establish our leading position in this industry as the CRO which can provide
total support for the development of pharmaceutical products including development of
medical devices and specified health foods as well as active response to bioventure- anddoctor-led clinical trials.
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EPS Co., Ltd.

(4282) September 2007 Edition of Accounting Briefing

2) Promotion of SMO business
As the clinical trial support service for medical institutions expands, EP-Mint Co., Ltd, ourconsolidated subsidiary, develops the internal system after the merger, pursing the merger
effect and expanding its scope of SMO business, with the aim of being ranked as top 3 in
the industry.
3) Promotion of overseas businesses
EPS International Co., Ltd. will continue to take a leadership in responding to the shift tointernational simultaneous development and its Group companies and branches will pursue
the synergetic effect through collaboration and continue to develop the system for thecontract of multi-national clinical trials, with a view towards enhancing clinical trial
contract services in overseas (especially East Asia). We also maintain a marketing
partnership with Progenitor International Research, GmbH (based on Germany) whichdevelops the proposal-based CRO business in Europe, as a part of our reinforcement ofoverseas services.
4) Entry into drug discovery and development business
In Japan, we intend to engage in the drug discovery business through capital investment,
consulting and contracting of development services under partnership with bioventures,
rather than being directly involved in this business alone.
In China, we plan to develop our own strategy in drug discovery and development businessthrough collaboration with bioventures utilizing our local subsidiaries.
5) Reinforcement of group management
Currently, the EPS Group is composed of the Company and 14 consolidated subsidiaries
that belong to the industry related to the development of pharmaceutical products.
We consider it essential to recruit, develop and effectively allocate human resources as
expanding our scope of business. We also intend to reinforce the group management bypursing the synergetic effect of launching of new business promotion and M&A.
(4) Agendas to be addressed by the Company
As the outsourcing from customers and their international diversification are expected toincrease in the future, the entire Group will work together to improve the quality via thereinforcement of QC/QA divisions, compliance with standardized operating procedures andenhanced skills through education and training.
As a part of these efforts, our divisions and departments handling clinical trial information(CRO services including pharmaceutical products, medical devices and specified healthfoods, etc.) have been awarded ISO 27001 certification (valid until December 8, 2009) by
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.
In order to respond to increasingly intensive cost competition, we will promptly establish
the process management system ranging from receipt of orders to delivery, improving theefficiency of our businesses.

-7-

CONSOLIDATED BALANCE SHEETSSEPTEMBER 30, 2007 AND SEPTEMBER 30, 2006
(UNAUDITED)(IN THOUSANDS,JPY)ASSETS
CURRENT ASSETS
Cash and cash equivalents
Notes and accounts receivable
Investment securities
Inventories
Deferred tax assets
Pocket through expense
OthersAllowance for doubtful accounts
Total current assets

2007

2006

5,260,080
4,126,574
200,012437,696
391,347
243,601
296,927△ 1,523
10,954,717

3,792,223
3,607,909
339,862
252,655
145,275
264,222△ 1,4118,400,737

383,711△ 200,747
238,233△ 143,660
175,931△ 77,075
376,393

344,453△ 180,245
203,274△ 131,006
133,053△ 54,723
314,805

247,666
97,410345,077

315,666
67,993
383,660

1,074,612
47,268681,724

1,275,110
45,617
666,687−

FIXED ASSETS

Tangible Assets ;Leasehold improvements
Accumulated depreciation
Furniture and fixtures
Accumulated depreciation
Others
Accumulated depreciation
Total property and equipment

Intangible Assets ;Goodwill
OthersTotal intangible assets
Investments and other assets ;Investment securities
Long-term loans receivable
Deposits
Time deposits and banking arrangements
other than cash equivalents
Deferred tax assets
OthersAllowance for doubtful accounts
Total investments and other assets

500,000

500,000

320,997
246,456△ 10,000
2,861,059

188,142
198,9612,874,519

Total fixed assets

3,582,530

3,572,985

TOTAL ASSETS

14,537,247

11,973,723

201,903214,300
1,063,181
649,722
1,861,952
3,991,058

182,795
213,200
375,282
422,541
1,171,583
2,365,403

405,700
258,448
155,023
2,518
14,204
835,895

670,000
227,604
130,499
4,258
5,825
1,038,188

4,826,953

3,403,591

1,875,251
1,825,298
5,205,599△ 322,080

1,875,251
1,825,298
4,180,774△ 322,080

66,07689,590485
67,262
8,717,892

40,552
7,689,386

Minority interests
TOTAL NET ASSETS

992,401
9,710,293

880,745
8,570,131

TOTAL LIABILITIES AND NET ASSETS

14,537,247

11,973,723

LIABILITIESCURRENT LIABILITIES
Accounts payable
Current portion of long-term debt
Income taxes payable
Provision for bonuses
OthersTotal current liabilities
LONG-TERM LIABILITIESLong-term debt
Provision for employee's retirement benefits
Provision for director's retirement benefits
Deferred tax liabilities
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' equity−−

CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED SEPTEMBER 30, 2007 AND 2006
(UNAUDITED)
2007

2006

NET SALES

17,980,875

15,257,985

COST OF SALES

12,046,656

10,892,074

Gross profit

5,934,218

4,365,911

2,953,488

2,407,205

2,980,730

1,958,705

Interest income

38,06927,690Interest expenses(15,771)(20,682)

Gain on cancellation of life insurance

16,746

10,919Service fee income

6,056

3,317

Gain on consumption tax filing

14,618

7,988

−

7,711

(5,350)(3,050)−(3,884)Equity in losses of associated companies(5,708)(9,213)Gain on sales of property and equipment

584

995

Gain on sale of investments in securities

51,186−Compensation for office removal

61,080

−

−

4,001

Loss on sales and disposal of property and equipment(61,266)(14,743)

Loss on devaluation of investment in securities(345,918)(87,593)

Impairment loss−

(3,635)

Loss on devaluation of software−(28,083)

Provision for doubtful accounts(10,000)−

Others- net(2,860)(9,830)

Other income (expenses)-net(258,533)(118,093)

Income before income taxes and minority interests

2,722,197

1,840,612

Current

1,409,739

782,199

Deferred(255,795)(89,728)

1,153,944

692,470

183,865

69,055

1,384,387

1,079,085(IN THOUSANDS,JPY)SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Operating income
OTHER INCOME (EXPENSES)

Incentive on re-investment in overseas subsidiaries
Payment to the Association for employment of persons with disabilities

Foreign exchange loss

Gain on decrease of shares in associated company

INCOME TAXES

Total
MINORITY INTERESTSNET INCOME

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETSFOR THE YEARS ENDED SEPTEMBER 30, 2007 AND 2006

(UNAUDITED)2007(IN THOUSANDS,JPY)
Attributable to equity holders of the Company
Common stock

Balance at 30
September 2006

1,875,251

Additional paid-in
Common stock for
Retained earnings
capitaltreasury

1,825,298

Changes during the period
Cash dividends
Net income
Others4,180,774△ 322,080△ 357,592
1,384,387△ 1,970

Sub total

7,559,243△ 357,592
1,384,387△ 1,970

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

Balance at 30
September 2007−−

1,024,824−

1,024,824

1,875,251

1,825,298

5,205,599△ 322,080

8,584,068

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

Balance at 30
September 2006

89,590

Deferred gain on
hedges−Foreign currencytranslation
adjustments

40,552

Total evaluationand translation
adjustments

130,142

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

Balance at 30
September 2007

Total
Shareholders'equity7,689,386

Minority interest

Total net assets

880,745

8,570,131△ 357,592
1,384,387△ 1,970△ 357,592
1,384,387△ 1,970△ 23,514△ 23,514

485
485

26,70926,709

3,681
3,681

3,681
1,028,505

111,655
111,655

115,337
1,140,161

66,076

485

67,262

133,823

8,717,892

992,401

9,710,293

2006(IN THOUSANDS,JPY)
Attributable to equity holders of the Company
Common stock

Balance at 30
September 2005

Additional paid-in
Common stock for
Retained earnings
capitaltreasury

1,325,250

1,275,300

550,001

549,998

3,336,628△ 321,251

Sub total

5,615,927

Changes during the period

Issuance of new stocks△ 232,508
1,079,085

Cash dividends
Net income
Acquisition of treasury stock
Retirement of treasury stock△ 212△ 2,219

Others△ 1,041212

1,100,000△ 232,508
1,079,085△ 1,041△ 2,219

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

Balance at 30
September 2006

550,001

549,998

844,145△ 829

1,943,316

1,875,251

1,825,298

4,180,774△ 322,080

7,559,243

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

Balance at 30
September 2005

366,394

Foreign currencytranslation
adjustments

18,085

Total evaluationand translation
adjustments

384,480

Total
Shareholders'equity6,000,407

Minority interest

Total net assets

836,187

6,836,595

Changes during the period

Issuance of new stocks

1,100,000△ 232,508
1,079,085△ 1,041△ 2,219

Cash dividends
Net income
Acquisition of treasury stock
Retirement of treasury stock

Others
Net increase/decrease in valuation,translation adjustment and minority
interest
Total changes during the period

Balance at 30
September 2006

1,100,000△ 232,508
1,079,085△ 1,041△ 2,219△ 276,803△ 276,803

22,466
22,466△ 254,337△ 254,337△ 254,337
1,688,979

44,55744,557△ 209,780
1,733,536

89,59040,552130,142

7,689,386

880,745

8,570,131

CONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE YEARS ENDED SEPTEMBER 30, 2007 AND 2006

(UNAUDITED)(IN THOUSANDS,JPY)

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
Impairment loss
Amortization of Goodwill
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
Loss on devaluation of investments in securities
Loss on sales and disposal of property and equipment
Changes in operating assets and liabilities:
Decrease in accounts receivable-trade（△Increase)
Increase in inventories
Increase in pocket through expense
Increase in accounts payable -trade
Increase in other current liabilities
Others , Net
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
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 securities
Payment for deposit for rent office and others
Collection of deposits for rent office and others
Payment for insurance reserve fund
Payment for acquisition of goodwill
Others , Net
Net cash provided by (used in) investing activities
FINANCING ACTIVITIES:
Disbursements for repayments of finance leases
Proceeds from borrowing long-term debt
Disbursements for repayment of long-term debt
Proceeds from issuance of bonds
Disbursements for redemption of bonds
Disbursement for acquisition of treasury stock
Proceeds from issuance of common stock to minority stock holders
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

2007

2006

2,722,197

1,840,612

109,352

133,848
3,635
15,80250,76922,0588,163△ 28,890
20,682−

61,983
226,430
30,844
24,524△ 39,569
15,771△ 51,186
345,918
61,266−87,593
14,743△ 511,143△ 71,298△ 97,874
16,734
667,652△ 104,848
3,406,754
37,797△ 15,749△ 731,149
2,697,652

92,792△ 109,861△ 45,255
24,351
182,905
43,1092,357,062
27,986△ 20,682△ 1,006,887
1,357,478△ 178,665△ 37,714△ 439,793
95,186△ 197,211
173,885△ 52,289△ 146,885△ 25,686△ 477,290−

31,592△ 605,009−−△ 263,200−−−−△ 357,397△ 15,813△ 1,553△ 637,964
13,1781,467,856
3,792,223
5,260,080−△ 82,086−△ 45,897△ 340,000△ 21,192△ 1,139,038△ 43,678
1,092,000△ 295,624
1,997,743△ 900,000△ 1,041
14,055△ 231,444△ 18,794△ 4,018
1,609,198
17,722
1,845,361
1,946,862
3,792,223

STATEMENT OF ORDER ENTRY AND SALES BY ITEMSFOR THE YEAR ENDED SEPTEMBER 30, 2007

(UNAUDITED)(1) RESULT OF ORDER ENTRY
2007.09<2006.10.1-2007.9.30>(In Thousands, JPY)DIVISION

year-to-year
AMOUNT OF
ORDER ENTRY comparison (%)

ORDER
BACKLOG

CRO
Monitoring
9,761,380
9,640,141
231.7
Data Management
5,784,498
5,361,274
115.2
CRO others
1,492,121
386,914146.5
TOTAL OF CRO
17,038,000
15,388,331
166.2
SMO
3,483,043
1,900,632
111.1
Preclinical Service
1,218,658
115,750103.9
1,474,089
477,775
System development
149.8
TOTAL
23,213,791
17,882,488
149.3* These figures are expressed by sales price.
* These above figures do not include consumption tax.

year-to-yearcomparison (%)

164.2
119.5
170.8
145.4
109.7
78.1
257.6
141.4

(2) RESULT OF SALESDIVISION

2007.09<2006.10.1-2007.9.30>(In Thousands,JPY)

CRO
Monitoring
Data Management
OthersTOTAL OF CRO
SMO
Preclinical Service
System development
TOTAL

5,992,628
4,908,245
1,331,747
12,232,620
3,315,293
1,251,190
1,181,770
17,980,875

year-to-yearcomparison (%)

122.6
111.2
135.6
119.0
112.8
105.0
140.0
117.8

INDUSTRY SEGMENT
FOR THE YEARS ENDED SEPTEMBER 30, 2007 AND 2006

(UNAUDITED)2007 (2006.10.1-2007.9.30)(In Thousands,JPY)
CRO

SALES
Sales to customers
Intersegment sales

Total
Operating expenses
Operating income

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

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

Preclinical
Service

SystemDevelopment

1,251,190
8,251
1,259,441
1,182,427
77,014

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

Preclinical
Service

SystemDevelopment

1,192,139
4,735
1,196,874
1,124,926
71,948844,145
77,866922,012854,777
67,234

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

2006 (2005.10.1-2006.9.30)

Intersegment sales

Total
Operating expenses
Operating income

Consolidation− 17,980,875(159,488)−(159,488) 17,980,875(172,817) 15,000,144
13,3282,980,730(In Thousands,JPY)
CRO

SALES
Sales to customers

Eliminations/
Corporate

10,281,994
26,017
10,308,011
8,592,823
1,715,188

SMO
2,939,705
42,7382,982,444
2,893,671
88,773

Total
15,257,985
151,357
15,409,343
13,466,198
1,943,144

Eliminations/
Corporate

Consolidation− 15,257,985(151,357)−(151,357) 15,257,985(166,917) 13,299,280
15,5601,958,705