Financial Highlights
1. INFORMATION OF EPS Co,Ltd & CONSOLIDATED SUBSIDIARIES 2009.09(2008.10.1-2009.9.30)(UNAUDITED)(1) CONSOLIDATED OPERATING RESULTS( UNIT:JPY MILLION )Net sales
Sep-09Sep-0823,56821,182((

11.3% )
17.8% )Net Income per Share (yen)Sep-09Sep-08

Ordinary Income

Operating Income
4,008
3,487

(
(

14.9% )
17.0% )Net Income per Share,
diluted (yen)

4,050
3,562

Return on
Shareholders'equity(%)
16.5
18.4

19,149.73
19,074.29

19,162.75
19,110.92((

Net Income

13.7% )
17.1% )

Ordinary
income tototal
assets(%)
24.2
23.2

1,713
1,708

(
(

0.3% )
23.4% )

Operatingincome tonet sales(%)
17.0
16.5

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-0989,400 shares
Sep-0889,399 shares(2) CONSOLIDATED FINANCIAL INFORMATION
Total Assets

Net assets

17,306
16,181

12,107
10,949Sep-09Sep-08Note :( UNIT:JPY MILLION )Shareholders' Equity
per share (yen)122,278.26
110,067.48

Shareholders'Equity ratio (%)
63.2
60.8

Total shareholders' Equity and valuation and translaion adjustments as of :Sep-0910,931 Million yen
Sep-08

9,840

Million yen(3) CONSOLIDATED CASH FLOW INFORMATION( UNIT:JPY MILLION )Sep-09Sep-08Net cash provided by(used in) operating
activities
2,062
1,995

Net cash provided by(used in) investing activities

Ending balance of cash andNet cash provided bycash equivalents(used in) financing activities
△ 750
△ 542

△ 277
△ 1,061

6,607
5,638

(4) CONSOLIDATED SUBSIDIARIES
Consolidated subsidiaries :Associated companies by equity accounting method :173companies
companies

2.OVERALL SITUATION OF DIVIDEND DISTRIBUTION( UNIT:JPY )Total
Dividend ratio
Dividend ratio
dividendtoto net income
amountshareholders'(%)(Million Yen)equity (%)

Cash Dividends per share

Sep-08
Sep-09Sep-10(Result)(Result)(Projection)

Interim
Dividend

Year end
Dividend

Annual2,400.00
2,800.00
3,200.00

3,000.00
3,200.00
3,400.00

5,400.00
6,000.00
6,600.00

482
536
－

28.3
31.3
28.5

5.2
5.2
－

3. INFORMATION OF CONSOLIDATED BUDGET 2010.09 (2009.10.1-2010.9.30)( UNIT:JPY MILLION )Operating Income

Net sales
Mar-10
Sep-1013,95529,438((

19.4% )
24.9% )

Budgeted net income per share :

1,704
4,222
Mar-10
Sep-10((Ordinary Income△ 13.3% )5.3% )

1,714
4,245

9,618.21
23,162.39

yen
yen

(
(

△ 13.4% )
4.8% )Net Income
859
2,070

(
(

53.1% )
20.8% )

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-0990,400sharesSep-0890,400sharesSep-08

1,000

shares(2) Common stock for treasury as of :Sep-091,000

shares

5. INFORMATION OF NON-CONSOLIDATED 2009.09(1) OPERATING RESULTS( UNIT:JPY MILLION )Net sales
Sep-09Sep-0815,403
13,108((Operating Income
17.5% )
20.4% )Net Income per Share (yen)Sep-09Sep-08Note :

17,715.12
15,220.18

3,347
2,442

(
(

37.1% )
23.1% )

Ordinary Income
3,507
2,610

(
(

Net Income

34.3% )
24.0% )

1,583
1,360

(
(

16.4% )
26.1% )Net Income per Share,
diluted (yen)－15,203.86

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

(2) FINANCIAL INFORMATION
Total Assets

Net assets

13,035
12,159

9,462
8,400

Sep-09Sep-08Note :

Total shareholders' Equity as of :Sep-099,462 Million yen( UNIT:JPY MILLION )Shareholders' Equity
per share (yen)105,841.81
93,967.76

Shareholders'Equity ratio (%)
72.6
69.1

Sep-088,400

Million yen

6. INFORMATION OF NON-CONSOLIDATED BUDGET 2010.09 (2009.10.1-2010.9.30)( UNIT:JPY MILLION )Net sales
Mar-10
Sep-108,157
16,767((

Operating Income
9.8% )
8.9% )

Budgeted net income per share :

1,519
3,235
Mar-10
Sep-10((Ordinary Income△ 0.0% )△ 3.4% )

1,594
3,344

10,159.91
21,635.32

yen
yen

(
(

△ 2.4% )△ 4.7% )Net Income
908
1,934

(
(

101.2% )22.1% )

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.

November 6, 2009

Summary of Financial Results for Year Ending September 2009
1. Management Results(1)Analysis of Operating Results(Operating results of the current period)
As the Japanese economy in the current consolidated financial year period wasaffected by global economic downturn against the backdrop of US-triggered
subprime loan problem, the economy went through a major downward swing. Since
then, it is now said that the worst period is over. However, the climate of future
economy remains uncertain with evidences seen in the decrease of capital spending
as a result of stagnant performance of the corporate sector, weak consumer
spending due to employment insecurity and trends in exchange and interest rates
among others.
Even under such circumstances, the CRO (Contract Research
Organization) industry and the SMO (Site Management Organizations) industry, inwhich one of our consolidated subsidiaries EP-Mint Co., Ltd. operates, are continuing
to grow in the process of reorganization as the impact of economic downturn has
remained minimal. The pre-clinical study industry, in which our LSG Co., Ltd. Group
operates, is also performing steadily. However, the software development industry,in which our All Right Software Inc. Group operates, is experiencing a slower growth
as the impact of economic downturn has been significant.
The CRO business is operated mainly by the Company.
As regards the monitoring service of the Company, the Clinical Development Division
has been favorably performing clinical trials in both development andpost-marketing stages, centering on implementation of existing projects, acquisitionof new projects and testing for anti-cancer, diabetes, high blood pressure and CNS(Central Nerves System) drugs. The sales have steadily increased compared with theprevious consolidated fiscal year.
As for the data management service, statistical analysis service andpharmacovigilance service, the Biometrics Division is vigorously pushing forwardwith both implementation of existing projects and acquisition of new projects. For
each service, the sales have increased compared with the previous consolidated

fiscal year.
In registration and project management service, acquisition of new projects has
been vigorously pursued, however, increase in sales has remained small comparedwith the previous consolidated fiscal year.
Also, the data center service that had been mainly working on post-marketing study
practice and other contracts reviewed its structure in the current operating year,
leading to the flexible structure where contracted projects can be accepted
according to their size. The sales for this service have achieved a large increase
compared with the previous consolidated fiscal year with the great contribution
from the Special Drug Use Survey contracted during the previous consolidated fiscal
year.
The Clinical Coordination Center, which provides new business planning andassociated services, now incorporates medical device development service as aresult of the structural review and has vigorously pushed forward with executing
existing projects and acquisition of new business. With regards to medical device
development service, the financial standing has returned to profitability in thecurrent consolidated fiscal year.
On the non-consolidated basis, sales have steadily developed in almost all
departments and the sales increase due to steady development of contracted
projects, costs saving efforts and other factors has led to an increase in income aswell as profit compared to the previous consolidated fiscal year.
As regards our consolidated subsidiaries in Japan, E-trial Co., Ltd., which wasestablished for the purpose of acquiring clinical trial contracts using the EDC system,
is continuously striving to acquire new contract orders. Although sales haveincreased, costs of forward investment, such as labor costs have also increased.
EP-Mate Co., Ltd., engaged in the staff dispatching service (dispatched CRO
business) for pharmaceutical companies, extended its business growth and saw asignificant increase in income as well as profit compared with the previous
consolidated fiscal year.
Moreover, EP-Medical Co., Ltd., providing a MR (Medical Representatives)

dispatching service (CSO business), has been improving its performance throughexecuting big projects contracted during the previous consolidated fiscal year andalso winning new contracts which has led to successful performance as well as
significant increase in profit.
On the other hand, as for our overseas CRO business, EPS International Co., Ltd.,
together with its group companies, is continuing to improve a structure to deal with
the increased demand for CRO services relating to clinical trials across borders(especially those in Asia).
Individually, EPS International Co., Ltd., is progressing in execution of contracted
projects which has led to successful performance compared with the previous
consolidated fiscal year and has returned to profitability. Moreover, Ever
Progressing System Hong Kong Limited (Hong Kong, China), a 100% subsidiary, wasestablished in May 2009 in order to facilitate winning even more new contracts in
multinational clinical trials.
EPS International (China) Co., Ltd., (Shanghai China) is making efforts to acquire
new orders while a big project carried on since the previous consolidated fiscal year
has been completed, however, is also facing difficulties and as a result, sales andprofit have significantly decreased compared with the previous consolidated fiscal
year.
Ever Progressing System Pte. Ltd. in Singapore has been smoothly performing
contracts acquired in the previous consolidated fiscal year while promoting newcustomer acquisition activities on its own and has extended its businessperformance.
ADM Korea Inc., (Seoul Korea) providing clinical trials contract service in Korea, isimproving the structure for joint contracts in Korea and is seeing an increases insales compared with the previous consolidated fiscal year. However, profit has
decreased despite the increase in sales due to rise in costs of forward investment
including facility costs and labor costs.
Furthermore, the Taiwan Branch of EPS International Co., Ltd. has started executing
contracts and its performance is steadily improving. Additionally, the Company
established EPS China Co., Ltd. in December 2008, a wholly- owned subsidiary of theCompany in Suzhou, Jiangsu Province of China with the purpose of supervisingvarious businesses of Group companies in China as well as expanding the CRO, IT

and Drug development, then under preparation for operation start.
Consequently, increase in sales and profit has been achieved with our consolidated
net sales for the CRO business amounting to ¥17,525 million, up 15.0 % comparedwith the previous consolidated fiscal year, and consolidated operating income
standing at ¥3,547 million, up 33.3% on the same basis.
The SMO business is operated by EP-Mint Co., Ltd.
EP-Mint Co., Ltd. has been continuously working towards enhancing thebranch-based management system, centering on the site-supporting business by theclinical administration in cooperation with local trial sites, in addition to its CRC
service. However, it has not been able to cover the delay in the progress ofprojects experienced during the first half due to a shift in contracts to patientregistration performance and decline in contract rate.
Consequently, sales and profit have decreased in our SMO business with theconsolidated net sales amounting to ¥3,347 million, down 4.4% compared with theprevious consolidated fiscal year and the consolidated operating income standing at¥501 million, down 27.9% on the same basis.
The pre-clinical study business is operated by LSG Corporation Group.
Within the LSG Group, Simian Conservation Breeding & Research Center, Inc., asubsidiary, is engaged in sales of laboratory animals to new customers and thewhole Group is making cost saving and other efforts.
Consequently, our pre-clinical study business posted a decrease in sales andincrease in profit with the consolidated net sales of ¥1,054 million, down 3.5%
compared with the previous consolidated fiscal year and consolidated operating
income standing at ¥54 million (operating loss of the previous consolidated fiscal
year was ¥1 million).
The software development business is operated by All Right Software Inc Group.
All Right Software Inc. acquired through business transfer from Digital Technology
Co., Ltd. on October 2008, the software development business and visualcommunication business mainly merchandising TV conference system. Although
the company is vigorously pushing forward with winning new contracts whilestreamlining the company structure after acquisition and pursuing synergy effectwith existing businesses, it is facing difficulties with impact of economic downturn,together with All Right Software Beijing Co., Ltd. and Qingdao Tidever Software Co.,
Ltd., a consolidated subsidiary of which 43.4 % of the shares were acquired in May
2009 through ownership transfer.
Consequently, our software development business has seen a significant increase insales and decrease in profit with the consolidated net sales amounting to ¥1,753
million, up 16.9% compared with the previous consolidated fiscal year and theconsolidated operating loss standing at ¥100 million (consolidated operating incomeof the previous fiscal year was ¥136 million).
After deducting inter-segmental transactions from the segmental figures shown
above, the consolidated net sales amounted to ¥23,568 million, up 11.3% comparedwith the previous consolidated fiscal year, the consolidated operating income was\4,008 million, up 14.9% on the same basis, the consolidated ordinary income was¥4,050 million, up 13.7% on the same basis and the current consolidated net income
has reached ¥1,713 million, up 0.3% on the same basis, showing an increase in sales
and profit.
(Outlook for the next period)
Although the global recession stemming from sub-prime loan crisis in the UnitedStates is showing signs of bottoming-out, the future economy is expected to remain
uncertain due to stagnant capital investment, employment insecurity, weak
consumer spending and fluctuation in currency exchange rates and other factors.
Our CRO business is mainly composed of the Clinical Development Division
responsible for monitoring and Biometrics Division responsible for services such asdata management, Data center for post-marketing surveillance , statistical analysis,
registration & project management, medical writing, pharmacovigilance,
supplemented by the Clinical Coordination Center, in charge of new business planningand associated services as well as clinical development in the area of medical
devices and the Planning and Business Development Division, which engages in
information collection and order receiving activities. These departments aim topursue wining new contracts, enhancing oprating rate and making cost cutting
efforts while expanding offshore business through EPS China’s DM Office incollaboration with group companies based in China in order to meet offshore service
demand. We are driving forward with focuses on monitoring, data managementand data center in order to achieve annual profit budget.
As regards our consolidated subsidiaries, E-Trial Co., Ltd. will continuously strive toacquire new orders centering on EDC based contracts from pharmaceuticalcompanies and medical research facilities.
EP-Mate Co., Ltd., a dispatched CRO service provider, will continue to expand its
business with the focus on the Company and pharmaceutical companies.
Medical Line Co., Ltd. (located in Toshima Ward, Tokyo), which is engaged incontract call center service mainly consisting of pharmacists, serving specialized to
medical, pharmaceutical and healthcare sectors, was acquired through stocktransfer dated October 1, 2009 and has since been a subsidiary with equity holding
ratio of 56.4%. It is pushing forward with winning new contracts while pursuingsynergy with EPS Group companies.
Pharma Network Co., Ltd. (formerly EP-Medical Co., Ltd. (surviving corporation)
merged with Pharma Network Co., Ltd. (extinct corporation) as of October 1, 2009and has changed the company name to Pharma Network Co., Ltd.) is engaged in CSO
business including MR dispatching. Pharm Network Co., Ltd. will aim to improve
performance by executing projects contracted during the previous consolidated
fiscal year and to continuously pursue acquiring new projects while proceeding withstreamlining post-merger corporate structure and pursuing synergy of the merger
As for our overseas businesses, EPS International Co., Ltd., will play the main role incontinuing the development of the structure for acquiring contracts of multinational
clinical trials, and together with its group companies, EPS International (China) Co.,
Ltd., EPS Singapore and ADM Korea Inc., as well as EPS International Taiwan Branch,will pursue the synergy effect of its collaboration , proceed with starting up theoperation of EPS Hong Kong, aim to enhance overseas clinical trial services,
endeavor to execute contracted projects and acquire new contracts mainly in Asia.
EPS China Co., Ltd. will continue to proceed with operation preparation, such as
securing offices and staff and also develop a sales structure.

EP-Mint Co, Ltd., engaged in SMO business, will actively play out M&A’s whileworking on maintaining its high operating rate and acquiring new orders bycontinuing to strengthen its structure to acquire contracts and enhancing
branch-based management system.
LSG Co., Ltd., engaged in pre-clinical studies, intends to expand its operation bycontinuing to increase its agency revenue through greater number of contracts with
the new partners, overseas pre-clinical trial institutions and adding a new growing
field, such as laboratory animal supply and special feed.
All Right Software Inc., a software developer, will proceed with streamlining thecompany structure amidst the slowing growth of the sector and pursue the synergy
effect of software development and TV conference system while making use ofChinese IT engineers. Together with the group companies, All Right Software(Beijing) Co, Ltd. and Qingdao Tidever Software Co., Ltd., it will promote SE service
contracts and offshore software development in communication-, finance-, andnetwork-related fields, as well as vigorously push forward with winning newcontracts for equipment sales and maintenance service of the TV conference systemand development of new services in collaboration with our group companies.
Accordingly, the consolidated budget for the fiscal year ending September 2010 is asfollows:
On consolidated basis(Unit : JPY Million)

Net sales

OperatingincomeOrdinary
incomeSep-2009

23,568

4,008

4,050

1,713

Sep-2010

29,438

4,222

4,245

2,070

Changes

5,870

214

195

357

Year-to-year
rate

24.9%

5.3%

4.8%

20.8%

Net income

On non-consolidated basis(Unit : JPY Million)

Net sales

OperatingincomeOrdinary
incomeSep-2009

15,403

3,347

3,507

1,583

Sep-2010

16,767

3,235

3,344

1,934

Changes

1,364

△112

△163

351

Year-to-year
rate

8.9%

△3.4%

△4.7%

22.1%

Net income(2) Analysis on Consolidated Financial Status
1) Status of assets, liabilities, net assets
The following describes the changes of the financial status during the current
consolidated fiscal year since the end of the previous consolidated fiscal year.
The current assets for the current consolidated fiscal year increased to \13,442
million by \1,134 million, mainly with the increases by \968 million in cash and cash
equivalents, \610 million in notes and accounts receivables and \93 million in othercurrent assets respectively despite of the decrease by \500 million in maturity ofinvestment securities.
The fixed assets decreased to \ 3,864 million by \9 million,
with the increases by \25 million in tangible fixed assets and \180 million in
deposits, and \48 million in investment securities respectively despite of thedecrease by \255 million in deferred income tax assets. Consequently, the total
assets at the end of the current consolidated fiscal year were \17,306 million, an
increase by \1,125 million compared with the previous consolidated fiscal year.
As for liabilities, the increases were \56 million in provision for bonuses, \176million in other current liabilities and 38 million in provisions for directors’ retirement
benefits respectively despite of the decreases were \126 million in income taxes
payable and \200 million in repayment of long-term debts respectively. As a result,
total liabilities at the end of the current consolidated fiscal year were \5,199 million,a decrease by \33 million compared with the previous consolidated fiscal year.
As for net assets, the net assets amounted to \12,107 million at the end of thecurrent consolidated fiscal year, an increase by \1,158 million compared with thetotal net assets of the previous consolidated fiscal year mainly due to an increase of\1,194 million in retained earnings.
2) Status of consolidated cash flow
As for the cash and cash equivalents (hereinafter referred to as “capitals”) for thecurrent consolidated fiscal year, the cash inflow generated through operating
activities reached \2,062 million, while the cash outflow incurred through investing
and financing activities were \277 million and \750 million respectively. As aresult, the capitals for the current consolidated fiscal year reached \6,607 million(increase by \968 million compared with the previous consolidated fiscal year)
factoring in the effect of exchange difference of \66 million related to the capitals.
(Cash flow from operating activities)
The capitals acquired through operating activities reached \2,062 million, an
increase by \67 million compared with the previous consolidated fiscal year.
The increase in inflow is mainly attributable to the current net income before income
taxes reaching \3,753 million (increase by \548 million compared with the previous
consolidated fiscal year), decrease by \55 million in inventories and products(increase by 195 million on the same basis) despite of increase by \60 million inprovision for bonuses (decrease by \377 million on the same basis), increase by\621 million in accounts receivable-trade (increase by \139 million on the same
basis), and outflow of \1,895 million in income taxes payment (increase by \164million on the same basis) .
(Cash flow from investing activities)
The capital outflow by investing activities was \277 million, a decrease by \783
million compared with the previous consolidated fiscal year. This decrease of theoutflow is mainly due to inflow of \560 million in proceeds from sales and maturityof investment securities (increase by \312 million on the same basis), total outflow
of \205 million in disbursements for purchasing tangible and intangible fixed assets(decrease by \126 million on the same basis) and \239 million in payments forpurchase of investment securities (decrease by \572 million on the same basis),
despite of \213 million outflow in acquisition of business during current consolidated
fiscal year.

(Cash flow from financing activities)
The capital outflow by financing activities was \750 million, an increase by \207million compared with the previous consolidated fiscal year.
This is mainly due to inflow of \150 million in short-term debt by new loan during theprevious consolidated fiscal year and outflow of \519 million in payment ofdividends to shareholders (increase by \72 million on the sama basis).
The company’s cash flow index is as follows;
Fiscal year
ended Sep
2005

Fiscal year
ended Sep
2006

Fiscal year
ended Sep
2007

Fiscal year
ended Sep
2008

Fiscal year
ended Sep
2009

Shareholders’equity ratio(%)

62.9

64.2

60.0

60.8

63.2

Shareholders’equity ratio bymarket price(%)

292.8

189.6

230.0

182.9

192.7

Cashflow-interest
bearing debt ratio
(%)

－

0.7

0.2

0.3

0.2

Interest coverage
ratio(times)

－

65.6

171.3

181.6

212.2

Shareholders’ equity ratio : Capital / Total assets
Shareholders’ equity ratio by market price : Total market value of shares / Total
assetsCashflow-interest bearing debt ratio : Interest bearing debt / operating cashflow
Interest coverage ratio : Operating cashflow / Interest payment
Notes;
1. Each index is calculated based on the consolidated financial values
2. The total market value of shares is calculated based on the number of sharesissued at end of each period excluding common stock for treasury.
3. The cashflow uses net cash provided in operating activities in the consolidated
cashflow statement of each period.
4. Interest-bearing debt includes all debts of which interest is being paid amongdebts that are posted on the consolidated balance sheet. In addtion, interest
paid and posted in the consolidated cashflow statement is used for interest
payment.

(3) Basic profit distribution policy and dividends for the current and next period
The Company considers it an important management agenda to improve the profit
return to the shareholders while reinforcing the business structure for theenhancement of profitability. As for profit distribution, we basically intend to
distribute the profit steadily considering the improvement of our financial
infrastructure to respond to rapid market change, with yearly target dividend
payout ratio set to 30%.
The Company intends to continue to pay out dividends twice a year as interim andyear-end dividends even after the implementation of the Corporate Law.
(Reference)(JPY)
Interim dividend

Year-end dividend

AnnualCurrent period

2,800

3,200

6,000

Next period(forecast)

3,200

3,400

6,600

2. Status of the Corporate GroupEPS group companies’ business activities
The Company and Group companies (excluding All Right software Inc Group) belongs
to the business sector related to pharmaceutical product development consisting
mainly of pharmaceutical companies. At pharmaceutical companies, much effort isbeing made in development of so-called “new drugs” which involves high researchand development costs and long periods. “New drugs” must go through clinicalstudies at medical institutions commissioned by pharmaceutical companies prior to
gaining approval as pharmaceutical products.
This process requires participation of clinical trialists who agree to the studies byinformed consent. In other words, clinical studies are implemented by three parties
comprised by pharmaceutical companies, medical institutions and clinical trialists.
Our Group consists of 17 consolidated subsidiaries and 3 equity method affiliates asof September 30, 2009 that are engaged in four business activities including CRO,
SMO, pre-clinical study and software development businesses.
The CRO business is operated by the Company and its core business is provision ofvarious expert services in clinical study implementation (including post-marketing
research and studies) to contracted pharmaceutical companies related to operationand management of clinical studies.
The CRO services include formulating protocols, support for the formulation of casereport forms, management of case registration and study progress, data
management and statistical analysis, monitoring, formulation of clinical study
reports and support for the formulation of pharmaceutical approval applications inaddition to the development of management system that accompanies these
services.
EP-Medical Co., Ltd. is pursuing MR dispatching service which is a CSO businesswhile EP-Mate Co., Ltd. is going forward with staff dispatching service to theCompany as well as pharmaceutical companies (dispatched CRO business).
E-Trial Co., Ltd. is pushing forward with providing system development and support
services to pharmaceutical companies and medical research institutions in relation
to clinical studies using EDC system.
As for the overseas business, EPS International Co., Ltd. is taking the lead incontinuing to develop the structure of winning multinational clinical study contracts.
While pursuing the synergy effect of collaboration with the following groupcompanies and branches, it aims to improve overseas contracts in clinical study
service as well as to further its drive to win more contracts in new clinical studies
located mainly in Asia.
EPS International (China) Co., Ltd., (Shanghai China) is engaged mainly in contract
clinical study service in China. Ever Progressing System Pte., Ltd. in Singapore isengaged mainly in contract clinical study service in East and Southeast Asia. Also,
ADM Korea (located in Seoul, Korea with voting right ratio of 35%) which is engaged
in contract clinical study service in Korea has been designated as an equity method
affiliate and is developing the structure to conduct contract clinical studies in Korea.
Moreover, EPS International Co., Ltd. has established Ever Progressing System(Hong Kong) Limited in May 2009 and is working towards developing a structure toreceive contracts in clinical studies in Hong Kong.
The SMO business is carried out by EP-Mint Co., Ltd. By contracting with medical
institutions that implement clinical studies, EP Mint conducts SMO business in which
expert services are provided with focuses on CRC dispatching to medical
institutions and clinical study secretariat service.
The pre-clinical study business is carried out by LSG Co., Ltd. Group and operates
pre-clinical businesses targeted at pharmaceutical companies, such as acting as anintermediary for various safety tests conducted at pre-clinical trial stage as well as
providing research materials and animals.
The software development business is carried out by All Right Software Co., Ltd.
Group and it is engaged in offshore software development and contract SE services
targeting major software development companies and large-scale clients.
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 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 andplaying a role as the industry leader under the above management philosophy.
(2) Target Management Index
Our Group has set improvements in sales growth rate and sales profit rate of eachgroup company as the important management indices. Our Group will pursue toachieve continuous enhancement of the corporate value through sustainableimprovement of these management indices.
At the same time, in order to attain scale expansion on mid to long-term basis, it isessential to strengthen the management foundation which includes human resources,
organization and corporate structure that support the synergy among groupcompanies and business expansion. Therefore, further quality improvement ofthese factors will also be emphasized.
(3) Mid and Long-Term Management Strategies
Our Group has managed our business, setting it our basic management philosophy toprovide services that will satisfy our customers by pursuing, implementing, andestablishing a business style to fulfill contracting missions of high efficiency andhigh 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 andplaying a role as the industry leader under the above management philosophy. Our
Group has adopted the following specific management strategies.
1) Establishment of CRO businessIn order to respond to full-scale outsourcing of the development of pharmaceuticalproducts, we will not only manage clinical trials but also promote the establishmentof a full-service system ranging from planning to pharmaceutical applications.
Furthermore, we also aim to establish our leading position in this industry as the
CRO which can provide total support for the development of pharmaceuticalproducts including development of medical devices, specified health foods as well asactive response to bio-venture-and doctor-led clinical trials.
2) Promotion of SMO business
As the clinical trial support service for medical institution expands, EP-Mint Co, Ltd.,
our consolidated subsidiary, promotes reinforcement of branch-based management
system, achieving more effective management of sales and expenses, and expanding
its scope of SMO business with the aim of being ranked 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 theshift to international simultaneous clinical development and decisions of the ICH(International Conference on Harmonization of Technical Requirements for
Registration of Pharmaceuticals for Human Use) and pursue a synergy effectthrough collaboration between its Group companies and branches while continuing todevelop the system for contract of multi-national clinical trials, and improve clinicalcontract service in our overseas operations (especially East Asia).
4) Entry into drug discovery
In Japan, we intend to engage in the drug discovery business through capital
investment, consulting and contracting of development services under partnershipwith bio-ventures, rather than being directly involved in this business alone.
In China, EPS China CO., Ltd. will lead the development of our own strategy in drug
discovery and development business through collaboration with bio-ventures.
5) Reinforcement of group management
Currently, the EPS Group is composed of the Company and 17 consolidated
subsidiaries that belong to the industry related to the development ofpharmaceutical products.
We consider it essential to recruit, develop and effectively allocate human resourcesin expanding our scope of business. We also intend to reinforce the groupmanagement by pursuing the synergetic effect of launching new business promotionand M&A.
(4) Issues to be addressed by the Company
As the outsourcing from customers and their international diversification are
expected to increase in the future, the entire Group will work together to improve
the quality via the reinforcement of QC/QA divisions, compliance with standardized
operating procedures and enhance skills through education and training.
As a part of these efforts, ISO 27001 certification by the international certification
institution has been obtained. The Company will continue to develop our system toenhance the security of information management and to win more trust from ourcustomers.
Furthermore, in order to respond to increasingly intensive cost competition, we willpromptly establish the process management system ranging from receipt of orders
to delivery, improving the efficiency of our business.

STATEMENT OF ORDER ENTRY AND SALES BY ITEMSFOR THE YEAR ENDED SEPTEMBER 30, 2009

(UNAUDITED)(1) RESULT OF ORDER ENTRY
2009.09<2008.10.1-2009.9.30>(In Thousands, JPY)DIVISION

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

ORDER
BACKLOG

CRO
Monitoring
6,355,268
10,925,621
62.7
Data Management
9,471,781
14,720,811
71.9
CRO others
2,201,372
686,182
95.6
TOTAL OF CRO
18,028,422
26,332,615
70.4
SMO
3,993,988
4,103,040
106.6
Preclinical Service
1,023,045
87,72594.1
1,565,233
259,468
System Development
122.0
TOTAL
24,610,689
30,782,850
77.6* These figures are expressed by sales price.
* These above figures do not include consumption tax.

year-to-yearcomparison (%)

87.6
116.3
100.5
102.0
118.7
76.3
73.7
103.5

(2) RESULT OF SALESDIVISION

2009.09<2008.10.1-2009.9.30>(In Thousands, JPY)

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

7,902,697
7,403,369
2,197,932
17,503,999
3,347,671
1,050,321
1,666,510
23,568,503

year-to-yearcomparison (%)

108.1
125.9
109.5
115.2
95.9
96.5
118.3
111.3

INDUSTRY SEGMENT
FOR THE YEARS ENDED SEPTEMBER 30, 2009 AND 2008

(UNAUDITED)2009 (2008.10.1-2009.9.30)(In Thousands,JPY)
CRO

SALES
Sales to customers
Intersegment sales

Sales total
Operating expenses
Operating income

17,503,999
21,13017,525,130
13,977,526
3,547,603

SMO
3,347,671－
3,347,671
2,846,638
501,032

Preclinical
Service

SystemDevelopment

1,050,321
4,140
1,054,461
999,899
54,562

1,666,510
86,941
1,753,451
1,854,288(100,836)

Preclinical
Service

SystemDevelopment

1,088,309
4,140
1,092,449
1,093,806(1,357)

1,408,555
90,8691,499,425
1,362,948
136,476

Total
23,568,503
112,21123,680,715
19,678,353
4,002,362

2008 (2007.10.1-2008.9.30)

Intersegment sales

Sales total
Operating expenses
Operating income

Consolidation

23,568,503－(112,211)－(112,211) 23,568,503(118,194) 19,560,159
5,982
4,008,344(In Thousands,JPY)
CRO

SALES
Sales to customers

Eliminations/
Corporate

15,195,024
38,343
15,233,368
12,571,491
2,661,876

SMO
3,490,979
9,315
3,500,295
2,805,135
695,159

Total
21,182,869
142,668
21,325,537
17,833,382
3,492,155

Eliminations/
Corporate

Consolidation

21,182,869－(142,668)－(142,668) 21,182,869(137,976) 17,695,405(4,691)
3,487,463

(IN THOUSANDS,JPY)CONSOLIDATED BALANCE SHEETSSEPTEMBER 30, 2009 AND 2008
(UNAUDITED)2009

ASSETS
CURRENT ASSETS
Cash and cash equivalents
Notes and accounts receivable
Investment securities
Inventories and products
Works in progress
Deferred tax assets
OthersAllowance for doubtful accounts
Total current assets

2008

6,607,331
5,211,905－
231,824
253,598
645,892494,226△ 2,108
13,442,670

5,638,984
4,601,623
500,492
234,108
327,948607,790
400,242△ 3,288
12,307,901

444,596△ 224,094
385,317△ 252,448
167,856△ 76,061
445,165

420,635△ 211,667
282,876△ 179,497
177,777△ 70,929
419,193

159,358
204,830
364,189

179,666
201,784
381,451

881,700
1,012,144

832,702
831,360

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
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

314,360
346,629－3,054,836

569,486
349,142△ 10,000
3,072,691

Total fixed assets

3,864,190

3,873,335

17,306,861

16,181,236

204,226
150,000
200,000
944,772
1,145,169
75,6501,899,275
4,619,093

233,212150,000
205,700
1,070,965
1,088,414
57,0001,722,684
4,527,976－
307,137
247,397
25,378579,912200,000
282,215
209,060
12,840704,115

5,199,006

5,232,092

1,875,251
1,825,431
7,657,862△ 321,437
11,037,108

1,875,251
1,825,431
6,463,232△ 321,437
9,842,478△ 39,782△ 36,111△2△ 65,647△ 105,431

3
33,661△ 2,445

Minority interests
TOTAL NET ASSETS

1,176,178
12,107,854

1,109,111
10,949,144

TOTAL LIABILITIES AND NET ASSETS

17,306,861

16,181,236

TOTAL ASSETSLIABILITIESCURRENT LIABILITIES
Accounts payable
Short-term debt
Current portion of long-term debt
Income taxes payable
Provision for bonuses
Provision for loss on order received
OthersTotal current liabilities
LONG-TERM LIABILITIESLong-term debt
Provision for employee's retirement benefits
Provision for director's retirement benefits
OthersTotal long-term liabilities
TOTAL LIABILITIESNET ASSETS
Shareholders' equity
Common stock
Additional paid-in capital
Retained earnings
Common stock for treasury
Total shareholders' equity
Valuation and translation adjustments
Unrealized gain (or △loss) on
available-for-sale securities
Deferred gain (or △loss) on hedges
Foreign currency translation adjustments
Total valuation and translation adjustments

CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED SEPTEMBER 30, 2009 AND 2008
(UNAUDITED)
2009

2008

NET SALES

23,568,503

21,182,869

COST OF SALES

16,031,681

14,378,094

7,536,821

6,804,774

3,528,477

3,317,311

4,008,344

3,487,463

Interest income

25,57042,224

Interest expenses△ 9,720△ 10,920

Gain on cancellation of life insurance

6,132

14,014Service fee income

5,829

4,363

Gain or loss of equity in associated companies (△ loss)

5,107

11,722Gain on sales of property and equipment

697

1,992

Foreign exchange gain or loss (△ loss)△ 7,446

4,976

Dividends income

7,675

3,030

Gain on sale of investment securities

53,69526,500Loss on sales and disposal of property and equipment△ 28,583△ 30,495

Loss on devaluation of investment securities△ 173,746△ 360,787

Impairment loss on goodwill△ 125,666－

Others- net△ 14,843

10,195

Other income (expenses)-net△ 255,298△ 283,182

Income before income taxes and minority interests

3,753,045

3,204,281

Current

1,729,771

1,726,381

Deferred

219,840△ 395,445

1,949,611

1,330,936

90,283

164,847

1,713,150

1,708,497(IN THOUSANDS,JPY)

Gross profit

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Operating income
OTHER INCOME (EXPENSES)INCOME TAXES

Total
MINORITY INTERESTSNET INCOME

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETSFOR THE YEARS ENDED SEPTEMBER 30, 2009 AND 2008

(UNAUDITED)(IN THOUSANDS,JPY)

2009

2008

1,875,251

1,875,251－
1,875,251－
1,875,251

1,825,431

1,825,298－－
1,825,431

133
133
1,825,431

6,463,232

5,205,599△ 518,520
1,713,150－
1,194,630
7,657,862△ 446,990
1,708,497△ 3,873
1,257,633
6,463,232△ 321,437△ 322,080－－△ 321,437

642
642△ 321,437

9,842,478

8,584,068△ 518,520
1,713,150－－
1,194,630
11,037,108△ 446,990
1,708,497
776△ 3,873
1,258,409
9,842,478△ 36,111

66,076△ 3,671△ 102,187△ 3,671△ 39,782△ 102,187△ 36,111

3

485

△5

△ 481

△5
△2

△ 481
3

Shareholders' equity
Common stock
Balance at beginning of the year
Changes during the period
Net changes during the period
Balance at ending of the year
Additional paid-in capital
Balance at beginning of the year
Changes during the period
Sale of common stock for treasury
Net changes during the period
Balance at ending of the year
Retained earnings
Balance at beginning of the year
Changes during the period
Cash dividends
Net income
Other
Net changes during the period
Balance at ending of the year
Common stock for treasury
Balance at beginning of the year
Changes during the period
Sale of common stock for treasury
Net changes during the period
Balance at ending of the year

Total of shareholders' equity
Balance at beginning of the year
Changes during the period
Cash dividends
Net income
Sale of common stock for treasury
Other
Net changes during the period
Balance at ending of the year

Valuation and translation adjustments
Unrealized gain (or △loss) on available-for-sale securities
Balance at beginning of the year
Changes during the period
Net increase（△decrease) during the period
other than shareholders' equity
Net changes during the period
Balance at ending of the year
Deferred gain (or △loss) on hedges
Balance at beginning of the year
Changes during the period
Net increase（△decrease) during the period
other than shareholders' equity
Net changes during the period
Balance at ending of the year

Foreign currency translation adjustments
Balance at beginning of the year
Changes during the period
Net increase（△decrease) during the period
other than shareholders' equity
Net changes during the period
Balance at ending of the year

33,661

67,262△ 99,308△ 33,600△ 99,308△ 65,647△ 33,600
33,661△ 2,445

133,823△ 102,986△ 136,269△ 102,986△ 105,431△ 136,269△ 2,445

1,109,111

992,401

67,066

116,71067,066
1,176,178

116,710
1,109,111

10,949,144

9,710,293△ 518,520
1,713,150－－△ 446,990
1,708,497
776△ 3,873△ 35,919△ 19,558

1,158,710
12,107,854

1,238,850
10,949,144

Total of valuation and translation adjustments
Balance at beginning of the year
Changes during the period
Net increase（△decrease) during the period otherthan shareholders' equity
Net changes during the period
Balance at ending of the year

Minority interests
Balance at beginning of the year
Changes during the period
Net increase（△decrease) during the period otherthan shareholders' equity
Net changes during the period
Balance at ending of the year

TOTAL NET ASSETS
Balance at beginning of the year
Changes during the period
Cash dividends
Net income
Sale of common stock for treasury
Other
Net increase（△decrease) during the period otherthan shareholders' equity
Net changes during the period
Balance at ending of the year

CONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE YEARS ENDED SEPTEMBER 30, 2009 AND 2008

(UNAUDITED)(IN THOUSANDS,JPY)2009
OPERATING ACTIVITIES:
3,753,045
Income before income taxes and minority interests
Adjustments to reconcile income before income taxes and minority interests to
net cash provided by operating activities:
272,090
Depreciation and amortization
125,666
Impairment loss on goodwill
60,924
Increase in provision for bonuses
24,922
Increase in allowance for retirement benefits for employees
38,336
Increase in allowance for retirement benefits for directors△ 33,246
Interest and dividends income
9,720Interest expense△ 51,960
Gain (or loss) on sale of investments in securities (-net)
173,746
Loss on devaluation of investments in securities
27,886
Gain (or loss) on sales and disposal of property and equipment (-net)
Changes in operating assets and liabilities:△ 621,311
Decrease (△ increase) in accounts receivable-trade55,143
Decrease (△ increase) in inventories and products△ 15,320
Increase （△decrease) in accounts payable -trade119,948
Increase （△decrease) in other current liabilities△ 8,251
Others , Net
3,931,339
Subtotal
36,683
Interest and dividends received△ 9,720
Interest paid－
Compensation for office removal△ 1,895,528
Income taxes paid
2,062,773
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 and maturity of investment securities
Payment for deposit for rent office and others
Payment for insurance reserve fund
Payments for acquisition of business
Proceeds from purchase of investments in capital of subsidiaries
resulting in change in scope of consolidation
Others , Net
Net cash provided by (used in) investing activities
FINANCING ACTIVITIES:
Proceeds from borrowing short-term debt
Disbursements for repayment of long-term debt
Proceeds from capital increase by minority stockholders
Dividends paid
Dividends paid to minority stockholders
Others , Net
Net cash provided by (used in) financing activities
EFFECT OF EXCHANGE DIFFERENCE ON CASH & CASH EQUIVALENTS
NET INCREASE （△DECREASE) IN CASH AND CASH EQUIVALENTS

BEGINNING OF BALANCE, CASH AND CASH EQUIVALENTS
ENDING OF BALANCE, CASH AND CASH EQUIVALENTS

2008

3,204,281

217,605－
438,322
23,76654,036△ 45,254
10,920△ 26,500
360,787
28,502△ 481,773△ 140,573
34,259△ 160,376
78,0783,596,082
47,678△ 10,984
93,650△ 1,731,249
1,995,178△ 162,555△ 42,697△ 239,339
560,892△ 187,968△ 75,400△ 213,753△ 215,834△ 116,191△ 812,148
248,000△ 175,406△ 60,472－

72,975－

10,253△ 277,594

71,004△ 1,061,050－△ 205,700
9,942△ 519,428△ 31,661△ 3,923△ 750,770△ 66,062
968,346
5,638,984
6,607,331

150,000△ 214,300－△ 447,392△ 30,508△ 777△ 542,978△ 12,244
378,904
5,260,080
5,638,984