Consolidated Earnings Report for the Fiscal Year Ended September 30, 2019
[Japanese GAAP]
November 7, 2019
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EPS Holdings, Inc.
First Section, Tokyo Stock Exchange4282
http://www.eps-holdings.co.jp
Yan Hao, Chairman & CEO
Kazuki Sekitani, Director, Vice President and Corporate Officer+81-3-5684-7873
December 20, 2019
December 23, 2019
December 20, 2019
Yes
Yes (for institutional investors and analysts)(¥ million are rounded down)
1. Consolidated Results for the Fiscal Year Ended September 30, 2019 (October 1, 2018 to September 30, 2019)(1) Consolidated Operating Results(¥ million; percentage figures represent year-on-year changes)
Fiscal years ended
September 30

Net sales

Operating income

Recurring profit

Profit attributable toowners of parent

Fiscal 201969,009

4.9%

6,279

(12.7)%

6,271(15.7)%

3,633(17.2)%

Fiscal 2018

65,769

8.7%

7,193

(5.2)%

7,436(4.8)%

4,388(5.9)%

Fiscal years ended
September 30

Profitper share (¥)

Note: Comprehensive income: Fiscal 2019: ¥2,727 million [(46.5)%], Fiscal 2018: ¥5,100 million [(17.7)%]

Fiscal 2019

Profitper share(diluted) (¥)

81.02

Return on equity(ROE)

Recurring profit/
Total assets

8.4%

9.5%

－

Operatingmargin9.1%

Fiscal 2018
95.66
－
10.3%
11.5%
10.9%
Reference: Loss (gain) on entities accounted for using equity method: Fiscal 2019: ¥(0) million, Fiscal 2018: ¥(0) million
Note: The Company has adopted “Partial Amendments to Accounting Standard for Tax Effect Accounting, etc.” (Accounting Standards
Board of Japan (ASBJ) Statement No. 28, February 16, 2018) from the beginning of the fiscal year ended September 30, 2019.
Accordingly, the Company has retroactively applied these amendments to “recurring profit/total assets” for the fiscal year ended
September 2018.

(2) Consolidated Financial Position
Total assets
September 30, 2019

66,566

Net assets
46,337(¥ million)
Net assets per share(¥)

Equity ratio
(%)
65.1

976.58September 30, 2018
65,40546,743
66.6
Reference: Equity: September 30, 2019: ¥43,301 million, September 30, 2018: ¥43,534 million

961.84

Note: The Company has adopted “Partial Amendments to Accounting Standard for Tax Effect Accounting, etc.” (Accounting Standards
Board of Japan (ASBJ) Statement No. 28, February 16, 2018) from the beginning of the fiscal year ended September 30, 2019.
Accordingly, the Company has retroactively applied these amendments to total assets and the equity ratio for the fiscal year ended
September 2018.

(3) Status of Consolidated Cash Flows
Fiscal years ended
September 30

Cash flows fromfinancing activities(¥ million)
Cash and cash
equivalents, endingbalance

Cash flows fromoperating activities

Cash flows frominvesting activities

Fiscal 2019

5,725

(956)

(4,324)

19,141

Fiscal 2018

3,465

(3,489)(4,259)18,753

Dividends

Dividend per share (¥)
First
Quarter

SecondQuarter

Third
Quarter

Fiscal 2018

－

12.00

Fiscal 2019
Fiscal 2020
(forecast)－－

Total dividend
amount(¥ million)

Dividend
payout ratio(consolidated)

Ratio ofdividends to
net assets(consolidated)

Year
End

Full
Year

－

17.00

29.00

1,323

30.3%

3.1%

13.00

－

15.00

28.00

1,250

34.6%

2.9%

13.00

－

15.00

28.00

36.2%

Note: The year-end dividend for fiscal 2018 includes a special dividend of ¥4 per share.

3.

Forecast of Consolidated Results for Fiscal 2020 (October 1, 2019 to September 30, 2020)(¥ million; percentage figures represent year-on-year changes)
Profit attributable toProfitNet sales
Operating income
Recurring profit
owners of parent
per share (¥)
Full year

72,500

5.1%

6,170

(1.7)%

6,320

0.8%

3,540

(2.6)%

77.39

Note: The Company plans to dispose of 1,400,000 shares of treasury stock to (Hongkong Tigermed Co., Ltd.) through a third-party
allocation in December 2019.
Profit per share in the forecasts of consolidated results for the year ending September 30, 2020 has been calculated based on thenumber of shares reflecting the aforementioned disposal of shares.

*Notes(1) Changes to important subsidiaries during the period (changes in specified subsidiaries resulting in revised scope of
consolidation): None
(2) Changes in accounting principles, accounting estimates and restatements
a. Changes in accounting policies in conjunction with revisions to accounting standards: Noneb. Other changes: Nonec. Changes in accounting estimates: None
d. Restatements: None
(3) Number of shares issued (common stock)a. Number of shares issued at end of
Fiscal 2019 end
period (including treasury stock):

46,311,389 Fiscal 2018 end

46,311,389

b. Number of treasury stock at end of
period:Fiscal 2019 end

1,971,195 Fiscal 2018 end

1,049,754

c. Average number of stock during theperiod:Fiscal 201944,843,327 Fiscal 201845,871,729

Note: The number of treasury shares at end of the fiscal year ended September 30, 2019 includes 93,090 shares of the Company held by
EPS EKISHIN Co., Ltd.

(Reference) Summary of Non-Consolidated Results for Fiscal 2019 (October 1, 2018 to September 30, 2019)
Non-Consolidated Results for Fiscal 2019 (October 1, 2018 to September 30, 2019)(1) Operating Results(¥ million; percentage figures represent year-on-year changes)
ProfitNet sales
Operating income
Recurring profit
Fiscal 2019

4,321

19.0%

2,536

12.9 %

2,570

12.8%

3,060

35.0%

Fiscal 2018

3,630

(8.1)%

2,246(18.5)%

2,277(19.0)%

2,266

7.0%

Profitper share (¥)

Profit per sharediluted (¥)

Fiscal 2019

68.12

－

Fiscal 2018

49.41

－

(2) Financial Position
Total assets
September 30, 2019

43,675

Net assets
32,773(¥ million)
Net assets per share(¥)

Equity ratio
(%)
75.0

737.59September 30, 201840,25032,66781.2
Reference: Equity: September 30, 2019: ¥32,773 million, September 30, 2018: ¥32,667 million

721.75

Note: The Company has adopted “Partial Amendments to Accounting Standard for Tax Effect Accounting, etc.” (Accounting Standards
Board of Japan (ASBJ) Statement No. 28, February 16, 2018) from the beginning of the fiscal year ended September 30, 2019.
Accordingly, the Company has retroactively applied these amendments to total assets and the equity ratio for the fiscal year ended
September 2018.

* This financial report is outside the scope of the audit reviews performed by certified public accountants or auditing firms.
* Explanation concerning the appropriate use of financial forecasts and other notable matters.
Earnings forecasts and other forward-looking statements in this report are based on data currently available to management
and certain assumptions that management believes are reasonable. Actual results may differ materially from thesestatements for various reasons.

Table of Contents of Supplementary Materials
1. Summary of Operating Results and Other Matters .................................................................................................................. 2(1) Summary of Operating Results for the Fiscal Year Ended September 30, 2019................................................................ 2(2) Summary of Financial Position as of September 30, 2019................................................................................................. 4(3) Summary of Cash Flows for the Fiscal Year Ended September 30, 2019.......................................................................... 5(4) Outlook .............................................................................................................................................................................. 5
2. Basic Policy Regarding Selection of Accounting Standards ................................................................................................... 7
3. Consolidated Financial Statements and Main Notes ................................................................................................................ 8(1) Consolidated Balance Sheets ............................................................................................................................................. 8(2) Consolidated Statements of Income and Comprehensive Income ................................................................................... 10
Consolidated Statements of Income ............................................................................................................................. 10
Consolidated Statements of Comprehensive Income ................................................................................................... 11(3) Consolidated Statements of Changes in Shareholders Equity .......................................................................................... 12(4) Consolidated Statements of Cash Flow ............................................................................................................................ 14(5) Notes Concerning Consolidated Financial Statements ..................................................................................................... 16(Notes Concerning the Going Concern Assumption) .................................................................................................. 16(Additional Information) ............................................................................................................................................ 16(Segment Information) ................................................................................................................................................. 16(Per Share Information) ............................................................................................................................................... 19(Important Subsequent Events) .................................................................................................................................... 20
4. Other ...................................................................................................................................................................................... 21(1) Orders Received ............................................................................................................................................................... 21

1

1. Summary of Operating Results and Other Matters(1) Summary of Operating Results for the Fiscal Year Ended September 30, 2019
Fiscal 2018 (Year Ended
September 30, 2018)
Amount%Fiscal 2019 (Year Ended
September 30, 2019)
Amount%(¥ million)
ChangeAmount%Net sales

65,769100.0

69,009

100.0

3,239

4.9

Operating income

7,193

10.9

6,279

9.1

(913)

(12.7)

Recurring profit

7,436

11.3

6,271

9.1

(1,164)(15.7)

4,388

6.7

3,633

5.3

(754)

(17.2)

95.66

－

81.02

－

－

－

Profit attributable toowners of parent
Profit per share (¥)

Operating Results for the Fiscal Year Ended September 30, 2019
Forward-looking statements contained in this document are based on a judgment of operating results as of September 30,
2019.
In the pharmaceutical and medical devices industry, which has a major bearing on the consolidated operating results ofthe EPS Group, the business environment is seeing adverse changes such as a decrease in profitability due to trends such as
the contraction of the domestic market due to population decline and the promotion of use of generic drugs and NHI drug
price revisions under the Japanese government's policy to curtail social security expenditures. In this environment, companies
are seeking to ensure profitability by achieving greater economies of scale through industry realignment such as acquisitions
and business alliances. They are also trying various cost reduction measures, such as streamlining research and development
activities and shortening development lead times through the application of cutting-edge technologies. Moreover, there is a
growing market presence of biotech ventures specializing in regenerative medicine, specified drug discovery technologies,
and therapeutic fields, as well as small- and medium-sized manufacturers.
In the market for outsourcing services for the healthcare industry, which spans the development of pharmaceutical andmedical devices to post-market surveillance, there has been growing demand from customers such as pharmaceuticalcompanies and medical device manufacturers to reduce development lead times and curtail development costs in an effort toenhance their competitiveness. These customers have also seen growing needs to address issues such as accelerating thedevelopment of new drugs for the treatment of cancer, for the central nervous system, and for intractable and orphan
diseases. On the other hand, competition with global CROs (Contract Research Organizations) is becoming more intensewith the globalization of pharmaceutical development bases and advances in international joint trials.
In this environment, in the three domestic segments undertaken by the EPS Group, specifically the CRO, SMO (SiteManagement Organization), and CSO (Contract Sales Organization) segments, the Group strove to carefully identify
customer needs, regulatory changes, and the future course of innovation in tandem with bolstering its organization andproject management, with a view to both maintaining its high operating efficiency and providing high-quality services.
Turning to the Group’s overseas segment, the Global Research Business, the Group has been working to strengthen its sales
activities that target global pharmaceutical companies, along with reducing costs by centralizing administration functions. In
the EKISHIN (China) Business, which operates the China business, the Group has been working to continuously step up thedevelopment of existing markets and cultivate new markets as a specialist trading company in the healthcare industry, andhas seen growth particularly in the pharmaceutical manufacturing and sales business.
In the year ended September 30, 2019, the EPS Group posted consolidated net sales of ¥69,009 million, an increase of 4.9%
year on year. The overall increase in net sales was mainly due to the acquisition of AC MEDICAL INC. and steady sales
increases in segments other than the CRO Business and Global Research Business. The increase in sales was partially offset
by the impacts of sluggish growth in newly awarded projects, which reflected intensified competition with global CROs in
the CRO Business and Global Research Business, and the loss of large projects and the cancellation of clinical trials in
operation amid a trend toward smaller scale trials.
Consolidated operating income declined by 12.7% year on year to ¥6,279 million. This overall decline was due to adecrease in capacity utilization rates, mainly reflecting impacts such as the loss of large projects in the CRO Business andGlobal Research business, and the cancellation of clinical trials in operation. It also reflects a high profit margin recorded in
the previous fiscal year owing to favorable progress on projects in the CRO Business. The decline in consolidated operating
income was partially offset by solid performances in the SMO Business, the CSO business, and the EKISHIN (China)
Business.
Operational segment are outlined as follows.
2

Segment Overview
The Group primarily operates businesses in the following five segments (three domestic segments and two overseas
segments).
(¥ million)
Fiscal 2018
Fiscal 2019(Year Ended(Year Ended
ChangeSeptember 30, 2018) September 30, 2019)

Domestic
Business

Overseas
Business

CRO

Net sales
Operating income

31,004
6,651

32,362
5,459

1,358(1,192)SMO

Net sales
Operating income

14,297
1,269

14,339
1,679

42
410

CSO

Net sales
Operating income

7,813
384

9,399
489

1,585
105

GlobalResearch

Net sales
Operating income (loss)

4,942
13

3,990
(3)

(951)
(16)

EKISHIN(China)Business

Net sales
Operating income

11,093
121

11,543
381

450
259

1) CRO BusinessIn the CRO Business, the Group conducts operations mainly based on the following structure:a. Contract-based clinical study and post-marketing surveillance (PMS) services: EPS Corporation*1, EPS Associates Co.,
Ltd., and AC MEDICAL INC.*1
b. Clinical research services: EP-CRSU Co., Ltd.
c. Pharmaceutical and medical IT services: EP-Techno Co., Ltd.*2
Looking at performance in the CRO Business by service, in clinical study services, net sales and operating income were both
below forecasts, due to the impact of the loss of a large order for monitoring services, cancellations and delays of clinical
trials and related issues, and the lack of growth in new orders, while resource management did not proceed as planned. In
PMS and related services, net sales and operating income were both higher than forecast, as projects currently under way
performed steadily.
In clinical research services, net sales were slightly below forecast as orders for new projects fell short of expectations.
However, operating income was higher than forecast, reflecting an increase in capacity utilization by aggressive capture oforders for investigator-initiated clinical trials.
In pharmaceutical and medical IT services, net sales and operating income were both slightly below forecast due to adelayed start on a new project.
As a result, net sales were ¥32,362 million, an increase of ¥1,358 million, or 4.4%, year on year, partly reflecting theacquisition of AC MEDICAL INC., despite the impact of a trend towards smaller scale trials and a decrease in capacity
utilization for monitoring services. Operating income decreased by ¥1,192 million, or 17.9%, to ¥5,459 million, strongly
impacted by the decrease in capacity utilization for monitoring services.
2) SMO Business
The SMO Business is undertaken by EP-SOGO Co., Ltd.
In this business, the Group won a record amount of orders by bolstering the sales structure through such means as fully
expanding proposal-based sales activities and by providing clinical trial administrative support. The Group increased thenumber of research subjects attending clinical trials by concentrating its resources on the best facilities with strong trackrecords of case studies and by strengthening the project management system.
Moreover, the Group worked to reduce expenses through rationalizing, such as organizing internal systems andoptimizing the allocation of personnel, training for CRC in fields such as oncology and dermatology, and develop newservices.
As a result, in the SMO Business, net sales were rose ¥42 million, or 0.3%, year on year, to ¥14,339 million. Operating
income was ¥1,679 million, an increase of ¥410 million, or 32.4%, year on year.

33) CSO Business
The CSO Business is undertaken by EP-PharmaLine Co., Ltd., AC MEDICAL INC.*1, and ES-Link Co., Ltd.
CMR (Contract Medical Representative) services for pharmaceuticals performed largely in line with forecasts, with theend of a downturn in demand for CMRs caused by an ongoing decrease in the number of MRs in the pharmaceutical industry
over the past few years, and a recovery trend in inquiries. Moreover, the medical contact center and academic materials
production businesses grew, while the BPO business performed largely in line with forecasts.
ES-Link Co., Ltd., a joint venture between the Group and SUZUKEN Co., LTD., seeks to strengthen sales of newservices through the fusion of MS (marketing specialists) and call centers with BPO. The joint venture is working to widen
recognition of its main service, ES Navi, and to prepare a structure for expanding orders.
Moreover, in March 2019, the Group integrated the CMR (Contract Medical Representative) services for pharmaceuticals(the UPSHE business) of AC MEDICAL INC. into the Group’s CSO Business, enabling it to deliver high quality services byleveraging the abundant human resources of AC MEDICAL INC.
As a result, with a positive contribution from the acquisition of AC MEDICAL INC. in addition to growth in sales ofexisting business, net sales were ¥9,399 million, an increase of ¥1,585 million or 20.3% year on year, and operating income
was ¥489 million, an increase of ¥105 million or 27.3% year on year.
4) Global Research Business
The Global Research Business comprises EPS International Holdings Co., Ltd. and its overseas group companies. Thisbusiness, which encompasses the CRO business in China, is primarily carried out in the Asia-Pacific region.
In the Asia-Pacific region, the Group has been focusing on winning new projects while laying solid business foundationsin the region. However, net sales and operating income both were below forecasts, partly due to sluggish growth in neworders, which reflected intensified competition with global CROs. The Group has formed a strategic partnership with theAustralian CRO George Clinical Pty Ltd and is working to strengthen its sales platform in the Asia-Pacific region.
Concurrently, the Group is bolstering its quality control system and enhancing its business platform aiming for stablebusiness performance in the Chinese CRO business.
As a result, net sales were ¥3,990 million, a decrease of ¥951 million or 19.3% year on year. Due partly to the impact ofintegrating into this segment the CRO business that is currently being rebuilt in China and that had been conducted by the
EKISHIN (China) Business in the previous year, the Group recorded an operating loss of ¥3 million, compared to operating
income of ¥13 million in the same period of the previous fiscal year.
5) EKISHIN (China) Business
The EKISHIN (China) Business is undertaken by the two regional holding companies EPS EKISHIN Co., Ltd. and EPS(China) Co., Ltd., and related Group companies in China.
In this business, under a solid capital and business partnership with SUZUKEN Co., Ltd., the Group provides four typesof services, specifically product-related services centered on pharmaceuticals and medical devices, specialist services,international trading-related services and peripheral support services. The Group is working to further expand earnings as a
specialist trading company in the healthcare industry linking Japan and China.
In the product-related services, the Group made steady progress with the continuous development of existing markets andcultivation of new regional markets. Notably, the Chinese domestic pharmaceutical manufacturing and marketing business
contributed positively to increased earnings. Furthermore, the Group optimized its product portfolio and concentrated
management resources in highly profitable products.
As a result, net sales were ¥11,543 million, up ¥450 million or 4.1% year on year, and operating income was ¥381
million, an increase of ¥259 million or 213.6% from the same period of the previous fiscal year.
*1. On February 28, 2019, the Company acquired all of the issued shares of AC MEDICAL INC., and incorporated each ofits businesses into the CRO segment and CSO segment. In addition, on April 1, 2019, EPS Corporation absorbed EPMate
Co., Ltd. through a merger.
*2. On April 1, 2019, e-Trial Co., Ltd. absorbed All Right Technology Inc. through a merger, and was renamed as EPTechno Co., Ltd.
(2) Summary of Financial Position as of September 30, 2019
Status of Assets, Liabilities and Net Assets
Changes in the Group's financial position during the fiscal year under review, compared with the previous fiscal year-end, areoutlined as follows:
Current assets amounted to ¥40,834 million as of September 30, 2019, an increase of ¥507 million from the previous
fiscal year-end. The main contributing factors were increases of ¥379 million in notes and accounts receivable – trade and¥501 million in marketable securities. These increases were partly offset by a decrease of ¥574 million in cash and time
deposits. Fixed assets amounted to ¥25,732 million, an increase of ¥653 million from the previous fiscal year-end. The main
contributing factors were increases of ¥710 million in land, ¥133 million in goodwill, ¥200 million in lease and guarantee
deposits, and ¥320 million in other under investments and other assets. These increases were partly offset by a decrease of¥1,213 million in investment securities. As a result, total assets stood at ¥66,566 million, an increase of ¥1,161 million fromthe previous fiscal year-end.
4

In terms of liabilities, total liabilities amounted to ¥20,229 million as of September 30, 2019, an increase of ¥1,567
million compared with the previous fiscal year-end. This mainly reflected increases of ¥1,200 million short-term loans, ¥638
million in accounts payable – other, and ¥718 million in net defined benefit liability. These increases were partly offset bydecreases of ¥845 million in other current liabilities and ¥493 million in long-term debt.
In terms of net assets, total net assets amounted to ¥46,337 million as of September 30, 2019, a decrease of ¥406 million
from the previous fiscal year-end. This mainly reflected decreases of ¥317 million in foreign currency translation adjustmentand ¥461 million in remeasurements of defined benefit plans, and an increase of ¥1,598 million in treasury common stock at
cost. These factors were partly offset by an increase of ¥2,280 million in retained earnings.
(3) Summary of Cash Flows for the Fiscal Year Ended September 30, 2019
In the fiscal year ended September 30, 2019, net cash provided by operating activities was ¥5,725 million, net cash used ininvesting activities was ¥956 million and net cash used by financing activities was ¥4,324 million. These cash flows were
adjusted for the effect of exchange rate change on cash and cash equivalents of ¥379 million and adjusted or an increase of
cash and cash equivalents of ¥323 million due to a share exchange. As a result, cash and cash equivalents at September 30,
2019 stood at ¥19,141 million, an increase of ¥388 million from the previous fiscal year-end.
(Cash flows from operating activities)
Net cash provided by operating activities was ¥5,725 million, an increase of ¥2,260 million from the previous fiscal year.
The main reasons for this increase in net cash provided by operating activities were an increase in provision for bonusesof ¥196 million (an increase of ¥343 million year on year), a decrease in notes and accounts receivable – trade of ¥177
million (an increase a decrease of ¥2,480 million year on year), an increase in notes and accounts payable – trade of ¥194
million (an increase of ¥851 million year on year), and income taxes paid of ¥2,741 million (a decrease of ¥860 million year
on year).
(Cash flows from investing activities)
Net cash used in investing activities was ¥956 million, a decrease of ¥2,533 million year on year. The main reasons for thisdecrease in net cash used in investing activities were proceeds from withdrawal of time deposits of ¥528 million (notrecorded in the previous fiscal year), and the purchase of investment securities of ¥460 million (a decrease of ¥373 million
year on year), proceeds from sales of investment securities of 2,065 million (not recorded in the previous fiscal year), and thepurchase of shares of subsidiaries resulting in change in scope of consolidation of ¥663 million (a decrease of ¥458 million
year on year). Cash was also reduced by purchase of shares of subsidiaries and associates of ¥497 million (not recorded in theprevious fiscal year) and an outflow of ¥73 million in other, net (cash inflow of ¥501 million in the previous fiscal year).
(Cash flows from financing activities)
Net cash used in financing activities was ¥4,324 million, a change an increase of ¥65 million year on year.
The main factors behind the increase in cash used in financing activities were decrease in short-term loans payable andrepayment of long-term loans payable totaling ¥2,131 million (an increase of ¥1,217 million year on year) and purchase oftreasury shares of ¥2,790 million (an increase of ¥801 million year on year). These increases were partially offset by anincrease in short-term loans payable of ¥2,100 million.
(4) Outlook
The EPS Group will strengthen Group management capabilities across both the horizontal and vertical dimensions of theorganization by encouraging autonomous activities in each segment and streamlining management operations, whilestrengthening its business operation functions as One EPS. In this way, we aim to realize “three aspects of growth”: basegrowth, sound growth, and sustainable growth.
In terms of measures, under the “One EPS” concept, the Company will support each segment in identifying andunderstanding issues in its organization, business structure, and management, and resolving them. Moreover, the Group willconduct unified sales activities and promote project management across segments to further evolve and develop its corebusinesses.
Moreover, from a medium- to long-term, Groupwide perspective, the Group will expand its business and aggressively
promote the necessary upfront investments. Specific measures including creation of added value through new businesses andnew products and services, exploration of M&A opportunities with a view to business synergies, and capital participation,such as incubation investments to create new businesses.
Furthermore, on the human resources front, the Group will formulate Groupwide human resource measures, as well as
strengthening development of management human resources and reforming the personnel structure for the entire Group.
The measures for each business segment are as follows:
1) CRO BusinessIn the CRO business, the Group will aim to realize solid base growth underpinned by its existing business models. At thesame time, it will examine new business models in response to changes in the business environment and provide operations
5

utilizing new technologies. The Group will also enhance its sales capabilities both domestically and overseas, and work to
maximize profit by rigorously enforcing cost controls and promoting operating efficiency.
In clinical study and PMS services, the Group will take proactive steps to expand the range of new services in order tobolster its competitiveness. Specifically, it will utilize its capacity to provide high quality data science services, which are astrength of AC MEDICAL INC., enhance its specialization and therapeutic fields, and differentiate itself by its response tonext-generation clinical studies and digitalization. On the earnings front, the Group will strengthen management throughbudget control, resource management, manpower management, and inquiry management, create a lean, rational organization,and execute operations utilizing new technologies.
In the fiscal year ended September 30, 2019, the Group reorganized clinical research services and pharmaceutical andmedical IT services into the NRO (Next-Stage (New) Research Organization) business. In this business, the Group will
supply more efficient data management services that harness nearshore and offshore capabilities and the integration of
specialized services and IT services. These services will be supplied as a platform for supporting the implementation of nextgeneration pharmaceutical development, including clinical research, investigator-initiated clinical trials, and databaseresearch. At the same time, the Group will expand its customer fields and strengthen relationships with existing customers bypromoting academic alliances with leading university hospitals.
2) SMO BusinessIn the SMO Business, the Group will leverage its industry-leading business scale while making effective use of resources byexecuting regional and facility strategies and building an unrivaled position in areas of high customer need, such as oncology,
dermatology, and central nervous system. The Group will focus its efforts in these fields and develop CRCs (ClinicalResearch Coordinators) with experience in them. Furthermore, the Group will make use of resources and promote thedevelopment of new business models through links with the CRO business. In addition, a new approach to IT will enableproductivity gains for CRCs and quality improvements in clinical trials, as the Group aims to achieve higher customer
satisfaction.
3) CSO BusinessIn the CSO business, the Group will work to differentiate itself from competitors by integrating the Group’s wide range of
unique services into traditional CSO services such as CMR and call center operations. In DI (Drug Information) services, theGroup will continue improving the quality of its highly specialized operators, while aiming to develop and expand newservices, such as expanding consultation recommendation services in addition to call centers for pharmaceuticals. In PMS
services, the Group will strive to enhance productivity by reshaping the supply structure. In medical devices services, theGroup will focus on expanding new businesses such as field engineer and materials base services. In addition, the Group will
utilize AC MEDICAL INC.’s strengths in academic materials production, education and training services, and specializationin the field of oncology, etc. to enhance synergies with the CSO Business.
Furthermore, at ES-Link Co., Ltd., a joint venture established with SUZUKEN Co., Ltd. the Company will combine its
advanced specialization in virtual MR with SUZUKEN’s driving power to promote distribution management as a measure in
response to new needs related to promotion services and orphan drugs, as well as medical devices.
4) Global Research BusinessIn the Global Research Business, the Group merged EPS Associates Co., Ltd. in the CRO Business with EPS International
Holdings Co., Ltd. in the Global Research Business in October 2019, aiming to create a firm foundation capable ofresponding rapidly to global clinical trials. The Global Research Business aims to become a CRO leader in the Asia-Pacificregion, and will proceed to build a solid business base in Japan, Asia, and China. Specifically, the Group will increase thenumber of orders received by strengthening its sales and marketing capabilities through alliances with overseas CROs suchas Hangzhou Tigermed Consulting Co., Ltd. and George Clinical Pty Ltd., as well as links with domestic CROs. In addition,
the Group aims to achieve stable growth by providing high-quality products (services) required for international joint trials
and by strengthening human resource management.
5) EKISHIN (China) BusinessIn the EKISHIN (China) Business, the Group will work to upgrade and expand its business foundations and create new added
value as a specialist trading company in the healthcare industry linking Japan and China.
The EKISHIN (China) Business comprises four core businesses, specifically the products-related business, thespecialized services-related business, the international trading-related business, and the peripheral support-related business.
At the same time, the Group will ensure sustained operating performance through stable management of its existing corebusinesses, while utilizing its internal resources and those of its partner companies. In product-related services, the Grouprevised and improved the production process for interferon manufacture at Shanghai Hua Xin High Biotechnology Co., Ltd.
The Group will promote business development centered on the cultivation of sales markets and pioneering of new markets,and the introduction of new products.

6Forecast of Operating Results for Fiscal 2020 (October 1, 2019 to September 30, 2020)
Fiscal 2020
Consolidated performance
forecast

Year-on-year change(%)¥ million

Net sales

72,500

5.1

Operating income

6,170

(1.7)

Recurring profit

6,320

0.8

Profit attributable toowners of parent

3,540

(2.6)

（Segment Outlook）
Forecasts of net sales for each segment include inter-segment transactions.
Net sales
Year-on-year change(¥ million)(%)
CRO

32,705

1.1

SMO

15,000

4.6

CSO

10,80014.9

Global Research

5,100

27.8

EKISHIN (China) Business

12,000

4.0

2. Basic Policy Regarding Selection of Accounting Standards

The EPS Group prepares its consolidated financial statements based on Japanese accounting standards, taking into
consideration the need to ensure the comparability of the consolidated financial statements between different accounting
periods and between different companies.
The Group intends to appropriately address the issue of adopting International Financial Reporting Standards (IFRS)
based on consideration of various conditions in Japan and abroad.

7

3. Consolidated Financial Statements and Main Notes(1) Consolidated Balance Sheets

AssetsCurrent assets:
Cash and time deposits
Notes and accounts receivable – tradeMarketable securities
Merchandise and finished goods
Work in process
Other current assets
Less: Allowance for doubtful accounts
Total current assets
Fixed assets:
Property, plant and equipment:
Buildings:
Accumulated depreciation
Buildings, net
Furniture and fixtures:
Accumulated depreciation
Furniture and fixtures, net
Land
Other:
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible fixed assets:
Goodwill
Other intangible fixed assets
Total intangible fixed assets
Investments and other assets:
Investment securities
Long-term loans receivable
Lease and guarantee deposits
Deferred tax assets
Net defined benefit asset
Other investments and other assets
Less: Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets

8

Fiscal 2018
As of September 30, 2018(¥ million)
Fiscal 2019
As of September 30, 201917,857
15,746
1,357
849
1,473
3,094
(51)
40,326

17,283
16,125
1,858
992
1,464
3,248
(137)
40,834

4,589(1,676)
2,912
1,826(1,150)
675
898
843
(438)
405
4,892

4,623
(1,792)2,831
2,004(1,352)
652
1,608
984
(417)
566
5,658

6,629
773
7,402

6,762
991
7,754

5,999
887
1,867
2,526
147
2,254
(898)
12,78425,07865,405

4,786
59
2,067
2,697
160
2,575
(27)
12,31925,732
66,566(¥ million)

Liabilities
Current liabilities:
Notes and accounts payable – trade
Short-term loans
Current portion of long-term loans payable
Accounts payable – other
Income taxes payable
Allowance for employees’ bonuses
Provision for loss on order received
Other current liabilities
Total current liabilities
Non-current liabilities:
Long-term debt
Allowance for directors’ and corporate auditors’
retirement benefits
Net defined benefit liability
Asset retirement obligations
Other non-current liabilities
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity:
Capital stock
Additional paid-in capital
Retained earnings
Treasury common stock, at cost
Total shareholders’ equity
Accumulated other comprehensive income:
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

Fiscal 2018
As of September 30, 2018

Fiscal 2019
As of September 30, 2019

456
65
602
4,307
1,251
2,732
242
4,929
14,587

648
1,265
449
4,946
1,302
3,051
242
4,084
15,991

918

424

453

395

1,428
556
716
4,073
18,661

2,146
614
656
4,238
20,2293,888
13,601
26,347(2,167)
41,6703,888
13,66928,628(3,765)42,420

1,012
861
(9)
1,864
3,209
46,74365,450

808
544
(470)
881
3,035
46,33766,5669

(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statements of Income
Fiscal 2018
(October 1, 2017
to September 30, 2018)
65,76942,46923,299Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses:
Promotion expenses
Directors’ compensations
Salaries and bonuses
Provision for bonuses
Provision for directors’ retirement benefits
Retirement benefit expenses
Rent expenses
Commission fee
Other
Total selling, general and administrative expenses
Operating income
Non-operating income:Interest income
Gain on insurance cancellation
Commission fee
Subsidy income
Dividend income
Other non-operating income
Total non-operating income
Non-operating expenses:
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses
Recurring profit
Extraordinary gains:
Gain on sales of investment securities
Gain on sales of shares of subsidiaries and associates
Gain on step acquisitions
Total extraordinary gains
Extraordinary losses:
Loss on valuation of investment securities
Loss on transition of retirement benefit plans
Total extraordinary losses
Profit before income taxes
Income taxes
Income tax adjustment
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

10(¥ million)
Fiscal 2019
(October 1, 2018
to September 30, 2019)69,00944,412
24,596

4,283
774
4,209
381
134
85
787
360
5,088
16,106
7,193

5,063
592
4,928
579
72
134
921
536
5,487
18,316
6,279

58
59
10
77
52
95
354

110
102
11
37
55
28
345

18
62
30
110
7,436

16
248
89
353
6,271

―
―
―
―

661
41
198
901

24
184
208
7,228
2,960
(322)
2,637
4,590
202
4,388

228
84
313
6,859
2,789
93
2,882
3,977
344
3,633

Consolidated Statements of Comprehensive Income

ProfitOther comprehensive income:
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income(Breakdown)Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

11

Fiscal 2018
(October 1, 2017
to September 30, 2018)
4,590(¥ million)
Fiscal 2019
(October 1, 2018
to September 30, 2019)
3,977

639
(228)
97

(204)
(586)
(460)

0

0

509
5,100

(1,250)
2,727

4,979

2,650

120

77

(3) Consolidated Statements of Changes in Shareholders Equity
Fiscal 2018 (From October 1, 2017 to September 30, 2018)(¥ million)
Shareholders’ Equity

Capital stock
Balance at beginningof current period
Changes of items
during period
Changes in equity
in consolidated
subsidiaries
Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury
shares
Disposal of treasury
sharesNet changes of items
other thanshareholders’ equity
Total changes of
items during period
Balance at end ofcurrent period

Additional paid-in
capitalRetained earnings

13,451

23,437

3,888

Total shareholders’equityTreasury shares
(230)

150

40,545150(1,477)(1,477)

4,388

4,388
(1,988)(1,988)

52

52

–

150

2,910

(1,936)

1,124

3,888

13,601

26,347(2,167)

41,670

Accumulated other comprehensive income
Valuationdifference on
available-for-salesecurities
Balance at beginningof current period
Changes of items
during period
Changes in equity
in consolidated
subsidiaries
Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury
shares
Disposal of treasury
sharesNet changes of items
other thanshareholders’ equity
Total changes of
items during period
Balance at end ofcurrent period

372

Foreigncurrencytranslation
adjustment

Total
Remeasurements accumulated Non-controlling Total net assetsinterestsof defined benefit
other
plans
comprehensive
income

1,007

(107)

1,272

3,043

44,862150(1,477)
4,388(1,988)
52
639

(145)

97

591

165

756

639

(145)

97

591

165

1,881

1,012

861

(9)

1,864

3,209

46,743

Consolidated Statements of Changes in Shareholders Equity
12

Fiscal 2019 (From October 1, 2018 to September 30, 2019)(¥ million)
Shareholders’ Equity

Capital stock
Balance at beginningof current period
Changes of items
during period
Change by shareexchange
Changes in equity
in consolidated
subsidiaries
Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury
sharesChange of scope of
consolidation
Net changes of items
other thanshareholders’ equity
Total changes of
items during period
Balance at end ofcurrent period

Additional paid-in
capitalRetained earnings

13,601

26,347

3,888

Total shareholders’equityTreasury shares88(2,167)

41,670

1,325

1,414

(37)

(37)
(1,352)(1,352)

3,633

3,633
(2,923)15(2,923)
15

–

67

2,280

(1,598)

750

3,888

13,66928,628(3,765)42,420

Accumulated other comprehensive income
Valuationdifference on
available-for-salesecurities
Balance at beginningof current period
Changes of items
during period
Change by shareexchange
Changes in equity
in consolidated
subsidiaries
Dividends of surplus
Profit attributable toowners of parent
Purchase of treasury
sharesChange of scope of
consolidation
Net changes of items
other thanshareholders’ equity
Total changes of
items during period
Balance at end ofcurrent period

1,012

Foreigncurrencytranslation
adjustment

Total
Remeasurements accumulated Non-controlling Total net assetsinterestsof defined benefit
other
plans
comprehensive
income

861

(9)

1,864

3,209

46,7431,414(37)(1,352)
3,633(2,923)
15
(204)

(317)

(461)

(983)

(173)

(1,156)

(204)

(317)

(461)

(983)

(173)

(406)

808

544

(470)

881

3,035

46,33713

(4) Consolidated Statements of Cash Flow

Cash flow from operating activities
Profit before income taxes
Depreciation
Amortization of goodwill
Increase (decrease) in provision for bonuses
Increase (decrease) in net defined benefit liability
Increase (decrease) in provision for directors’ retirement benefits
Interest and dividend income
Interest expenses
Loss (gain) on sales of investment securities
Loss (gain) on valuation of investment securities
Loss on transition of retirement benefit plans
Subsidy income
Loss (gain) on cancellation of insurance contract
Gain on step acquisitions
Loss (gain) on sale of investments in capital of subsidiaries andassociates
Decrease (increase) in notes and accounts receivable – trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable – trade
Increase (decrease) in other current liabilities
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Subsidy received
Income taxes paid
Net cash provided by (used in) operating activities
Cash flow from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Purchase of shares of subsidiaries and associates
Proceeds from sales of investment securities
Payments for lease and guarantee deposits
Purchase of insurance funds
Purchase of shares of subsidiaries resulting in change in scope of
consolidation
Other, net
Net cash provided by (used in) investing activities

14

Fiscal 2018
(October 1, 2017
to September 30, 2018)(¥ million)
Fiscal 2019
(October 1, 2018
to September 30, 2019)

7,228
827
1,152
(147)
279
(42)
(111)
18
－
24
184
(77)
(59)
－

6,859
801
1,207
196
242
(87)
(165)
16
(661)
228
84
37
(102)
(198)

－

(41)

(2,302)
457
(656)
380
(257)
6,896
111
(18)
77
(3,601)
3,465

177
(6)
194
32
(458)
8,356
165
(18)
(37)
(2,741)
5,725

(134)
－
(1,312)
(195)
(833)
－
－
(231)
(161)

(80)
528
(1,309)
(306)
(460)
(497)
2,065
(160)
－

(1,121)(663)

501(3,489)

(73)
(956)

Cash flows from financing activities
Increase in short-term loans payable
Decrease in short-term loans payable
Repayments of long-term loans payable
Purchase of treasury shares
Proceeds from sales of treasury shares
Proceeds from share issuance to non-controlling shareholders
Cash dividends paid
Dividends paid to non-controlling interests
Payments from changes in ownership interests in subsidiaries that do
not result in change in scope of consolidation
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Increase in cash and cash equivalents by share exchanges
Cash and cash equivalents at end of period

15

Fiscal 2018
(October 1, 2017
to September 30, 2018)(¥ million)
Fiscal 2019
(October 1, 2018
to September 30, 2019)

－
－
(914)
(1,988)113
456(1,476)
(28)

2,100
(900)
(1,231)(2,790)－14(1,352)
(19)

(339)

(48)

(81)
(4,259)(61)(4,344)23,097－18,753(97)(4,324)(379)
64
18,753323
19,141

(5) Notes Concerning Consolidated Financial Statements(Notes Concerning the Going Concern Assumption)
None(Segment Information)【Segment Information】
1. Summary of Reportable Segment(1) Method of Determining Reportable Segments
The EPS Group’s reportable segments are components of the Group for which discrete financial information is available andwhich the Board of Directors reviews regularly to make decisions about the allocation of resources and to assess businessperformance.
The EPS Group operates in industries related to pharmaceuticals development, primarily serving pharmaceuticalcompanies worldwide. The Group provides various services incidental to various stages of pharmaceuticals development,along with services associated with healthcare, pharmaceuticals, BPO and related areas in China. The Group has fivereportable segments: the CRO Business, SMO Business, CSO Business, Global Research Business, and EKISHIN (China)
Business.
(2) Types of services in each reportable segment
In the CRO Business, the Group provides various specialized services concerning the operation and management of clinicalstudies based on service contracts with pharmaceutical companies and other entities in connection with the implementation ofclinical studies (including post-marketing surveillance (PMS) and studies) in Japan.
In the SMO Business, the Group primarily provides specialized services centered on the assignment of CRCs (ClinicalResearch Coordinators), who assist medical institutions with the implementation of clinical trials, to medical institutions andthe provision of clinical study administrative support and related services.
In the CSO Business, the Group is contracted by pharmaceutical companies to provide services related to the sale ofpharmaceuticals. The Group primarily provides contract-based MR (Medical Representative) services and undertakes theassignment of MRs. Their main duties are to provide information on the quality, efficacy, safety and other attributes ofpharmaceuticals and collect and communicate information on side effects and other matters to medical professionals, for the
purpose of ensuring the proper use and widespread adoption of pharmaceuticals. In addition, the Group provides
pharmaceutical-related information and support services.
In the Global Research Business, the Group provides a variety of services in connection with the implementation ofclinical studies (including post-market surveillance (PMS) services and studies) overseas, primarily in Asia.
In the EKISHIN (China) Business, the Group mainly provides optimal business solutions in China in the healthcare field,
including the research, development, manufacture and sales of pharmaceuticals, as well as the manufacture and sales of medical
devices.
2. Information Concerning the Calculation Method for the Amounts of Net Sales, Profit or Loss, Assets, Liabilities and Other
Items by Reportable Segment
The accounting treatment method for reportable segments is largely the same as the accounting treatment methods used in the
preparation of the Consolidated Financial Statements.
The segment operating income is based on the operating income.
Inter-segment net sales are generally based on reasonable transaction prices.

16

3. Information Concerning the Amounts of Net Sales, Profit or Loss, Assets, Liabilities and Other Items by Reportable
Segment
Fiscal 2018 (From October 1, 2017 to September 30, 2018)

Net sales
Sales to outside
customers
Inter-segment sales
and transfers
Total
Segment operating
income(¥ million)
EKISHIN(China)Business

Others

Total

Adjustment(Note 1)

Amountrecorded on
consolidated
financialstatements

CRO

SMO

CSO

GlobalResearch
Business

27,738

14,237

7,718

4,930

10,923220

65,769–65,769

3,266

59

95

11

170

1,447

5,050

(5,050)–31,004

14,297

7,813

4,942

11,093

1,667

70,819(5,050)65,769

6,651

1,269

384

13

121

61

8,501

(1,308)

7,193

27,557
16,425
3,445
1,854
14,111
1,383
64,777627
65,405
Segment assets
Other items
371
86
108
9
166
46
789
38
827
Depreciation
Amortization of
122
717
11
–
338
–
1,189
(37)
1,152
goodwill
Investment inentities accounted
–
–
–
–
57
–
57
–
57
for using the equity
methodIncrease in property,
plant and equipment
363
717
26
2
111
43
1,265
909
2,174
and intangible assets
Notes: 1. Eliminations/Corporate for operating income of ¥(1,308) million includes intersegment transactions of ¥37 million and nonattributable corporate expenses not distributed to each segment of ¥(1,345) million. The main corporate expenses compriseexpenses related to the Company (the holding company).
2. Adjustment for segment assets of ¥627 million includes intersegment transactions of ¥(6,865) million and non-attributablecorporate assets not allocated to each segment of ¥7,492 million. The main corporate assets comprise assets related to theCompany (the holding company).

17

Fiscal 2019 (From October 1, 2018 to September 30, 2019)

Net sales
Sales to outside
customers
Inter-segment sales
and transfers
Total
Segment operating
income(¥ million)
EKISHIN(China)Business

Others

Total

Adjustment(Note 1)

Amountrecorded on
consolidated
financialstatements

CRO

SMO

CSO

GlobalResearch
Business

29,78914,292

9,264

3,928

11,504229

69,009–69,009

2,573

47

135

62

38

1,762

4,620

(4,620)–32,362

14,339

9,399

3,990

11,543

1,992

73,629(4,620)69,009

5,459

1,679

489

(3)

381

46

8,054

(1,774)

6,279

30,02017,133
4,451
2,632
14,002
1,204
69,444(2,878)66,566
Segment assets
Other items
266
69
109
2
260
56
765
35
801
Depreciation
Amortization of
182
717
6
–
327
–
1,233
(26)
1,207
goodwill
Investment inentities accounted
–
–
–
–
53
–
53
495
548
for using the equity
methodIncrease in property,
plant and equipment
1,971
160
79
14
91
46
2,362
718
3,081
and intangible assets
Notes: 1. Eliminations/Corporate for operating income of ¥(1,774) million includes intersegment transactions of ¥9 million and nonattributable corporate expenses not distributed to each segment of ¥(1,784) million. The main corporate expenses compriseexpenses related to the Company (the holding company).
2. Adjustment for segment assets of ¥(2,878)million includes intersegment transactions of ¥(10,511) million and non-attributablecorporate assets not allocated to each segment of ¥7,633 million. The main corporate assets comprise assets related to theCompany (the holding company).

18

(Per Share Information)
Fiscal 2018
(October 1, 2017
to September 30, 2018)

Fiscal 2019
(October 1, 2018
to September 30, 2019)

Net assets per share¥961.84¥976.58

Amount of profit per share¥95.66¥81.02

Notes: 1. The amounts of diluted profit per share for the fiscal years ended September 30, 2018 and 2019 are not disclosed because there
were no dilutive shares.
2. The Company introduced an Employee Stock Ownership Trust-type ESOP in its 24th consolidated fiscal year. The number of theCompany’s own shares remaining in the employees’ shareholding trust is included in the treasury shares that are deducted from thecalculation of the average number of shares during the period for the purpose of calculating the amount of profit per share.
Moreover, since the employees’ shareholding trust sold all of its shares during the fiscal year ended September 30, 2018, there
were no shares held in the trust as of September 30, 2019. The average number of the treasury shares during the period that werededucted for the purpose of calculating the amount of profit per share for the fiscal year ended September 30, 2018 was 14,600
shares.
3. The basis for calculating the amount of profit per share is as follows:

Fiscal 2018
(October 1, 2017
to September 30, 2018)

Fiscal 2019
(October 1, 2018
to September 30, 2019)

4,388

3,633

–

–

4,388

3,633

45,871,729

44,843,327

Amount of profit per share
Profit attributable to owners of parent (¥ million)
Amount not attributable to shareholders of common
stock (¥ million)
Profit attributable to shareholders of common stockof the parent (¥ million)
Average number of common shares during theperiodDilutive stocks that were not included in the calculationof profit per share after adjustment for dilution, because
they do not have a dilutive effect19

(Important Subsequent Events)
Disposal of Treasury Stock through Third-Party Allocation
The Company resolved at a Board of Directors meeting held on October 29, 2019 to conduct a disposal of treasury stock by
third-party allocation, with Hong Kong Tigermed Co., Limited. as the recipient.
1. Overview of the disposal(1) Disposal period(2) Type and number of shares(3) Disposal price(4) Total amount of funds procured(5) Subscription and disposal method(planned recipient of the disposal)(6) Other

December 2 to December 16, 2019
1,400,000 shares of common stock¥1,377 per share¥1,927,800,000
Disposal of all shares to Hong Kong Tiger Medical Technology Co., Ltd. by wayof third-party allocation.
Payment is conditional upon receiving the necessary approval, etc. from therelevant Chinese authorities regarding the entry into force of the securities
notification document in accordance with the Financial Instruments andExchange Act and the execution of the disposal of treasury stock.

2. Purpose and reason for the disposal
The Company, which has a long history of dealing with Japanese pharmaceutical companies, and Hangzhou Tigermed
Consulting Co., Ltd (Tiger Pharmaceuticals), which provides high quality services to European and U.S. pharmaceuticalcompanies, entered into a strategic alliance in August 2017. Under this alliance, they aim to mutually develop thepharmaceutical medical data service and general CRO business in China, where the pharmaceutical and medical market is
expected to expand. As part of this agreement, the Company will build a stronger relationship with Tiger Pharmaceuticals
over the long-term and utilize the management resources and expertise of both companies, in the region of Asia, particularly
China. The two companies will jointly undertake contracts for CRO services and engage in other business cooperation todevelop the service. A further purpose is to promote the business of a joint venture established through the 2017 alliance(clinical data management, statistical processing, etc.). It was to achieve these purposes that the Company decided to conduct
a disposal of treasury stock with Hong Kong Tiger Medical Technology Co., Ltd. as the recipient. Through the disposal oftreasury stock, the Company will further strengthen its relationship with the Tiger Pharmaceuticals Group, paving the way todevelopment and expansion of their business, leading to an increase in corporate value over the medium and long term.

20

4. Order(1) Orders Received

CRO Business
SMO Business
CSO Business
Global Research Business
EKISHIN (China) Business
OthersTotal

New orders

30,83416,0959,720
4,186
11,890228
72,957

Fiscal 2019
(October 1, 2018 to September 30, 2019)
YoY (%)
Backlog
116.7
102.5
134.4
99.4
113.0
105.2
113.5

Notes: 1. Figures represent sales prices.
2. The above figures do not include consumption taxes.

21

43,461
21,22010,0858,294
440
683,509(¥ million)
YoY (%)

111.8
109.3
127.4
104.8
252.9
82.7
112.4