24thInterim

Business Report
October 1, 2013, to March 31, 2014

To Our Shareholders and Investors

During the year, we achieved positive results from sales activities and various
policies aimed at efficiency and succeed in boosting income and profit levels.
Could you sum up your businessQ2 each business segment?

Income grew during the first half of the fiscal year
ending September 30, 2014, thanks to satisfactory
results from sales activities in all three domestic
businesses. We also strove to reduce cost of salesand selling, general and administrative expenses in thedomestic SMO and CSO businesses. As a result of
these efforts, operating income, ordinary income andnet income enjoyed double-digit growth comparedwith the first half of the preceding fiscal year.
On a consolidated basis, net sales for the firsthalf came to ¥19,852 million, up 8.9% year on year.
Operating income grew 10.5%, to ¥1,923 million;
ordinary income expanded 20.7%, to ¥1,978 million;
and net income increased 33.4%, to ¥896 million.

Domestic CRO Business

Yan Hao, Chairman, Representative Director of EPS Corporation
Yan Hao was born in 1962 in Jiangsu Province, China.
In 1979, he entered Tianjin University. In 1981, he attended theUniversity of Yamanashi as a government-sponsored exchange
student from China. He went on to specialize in medical statistics
in a doctoral program at the University of Tokyo graduate school,
pursuing research and the handling of clinical studies.
In 1991, when he was studying at the University of Tokyo
graduate school, he established EPS Corporation. In 2001, its
10-year anniversary of establishment, the company was listed on
the JASDAQ market, and in September 2006, it was listed on
the First Section of the Tokyo Stock Exchange.

1

Could you outline conditions in

Q1 results for the first half?

Sales from the domestic CRO business amounted to¥11,640 million, up 9.8% year on year, while
operating income decreased 10.2%, to ¥1,681
million. With these figures, we met the targets we had
set in our initial plan at the beginning of the year.
Sales of monitoring and support for clinical studies,
investigator-initiated clinical trials and medical devices
increased steadily.

Domestic SMO Business
Sales in the domestic SMO business increased
13.0% year on year, to ¥3,166 million, while operating
income shot up 738.8%, to ¥475 million. Goodprogress on large-scale projects contributed to sales
growth, and significant reductions in cost of sales andselling expenses, including streamlining through theuse of CRCs, led to the dramatic increase in profit.
Domestic CSO Business
Sales in the domestic CSO business came to ¥2,859
million, up 2.6% year on year, with operating incomeup 271.3%, to ¥120 million. The enhanced
employment of MRs and operational efficiency in thepost-marketing surveillance (PMS) business provedeffective, resulting in significant profit growthcompared with the previous term.
Global Research Business
Sales in our global research business amounted to¥1,070 million, up 31.9% year on year, but we recorded
an operating loss of ¥158 million, compared with a lossof ¥1 million in the same period of the previous year.
Sales promotion led to the higher sales; however, profit
was affected by exchange rate fluctuations.
China Business
Sales in our China business amounted to ¥1,577
million, up 89.8%, but the business generated anoperating loss of ¥172 million, compared with a lossof ¥217 million in the same period of the preceding
year. Stronger sales of digital radiography machines
and X-ray film in the medical device business helped
to reduce the operating loss.

What is your forecast for the full fiscal

Q3 year, and what are your performanceprospects?

We have been promoting a variety of measures. We
are supporting independent operational policies foreach business and strengthening our overall Groupmanagement system. One such measure involved
organizational improvements, which we implementedin April 2014. We aim to achieve our targets for thefull fiscal year by strengthening our functions under
this new organization. For the full fiscal year, we
expect to generate consolidated net sales of ¥40,961
million, operating income of ¥4,110 million, ordinary
income of ¥4,150 million and net income of ¥2,006
million, reaching the targets set in our initial plan at
the beginning of the year.

Key Points of Organizational Improvement• Strengthening Group management and support∙ The Management Strategy Division and Administration
Division were closed and replaced by the newly createdGroup Management Center.

• Strengthening business operation functionin the CRO Business∙ We created the CRO Management Center to support theGeneral Administration Section, Accounting Section andPersonnel Section and to control IT-related issues.
∙ We restructured our organization for data management,
which is a core part of our business, and established theManagement Promotion Center.
∙ We set up a new division specializing in promoting
services conforming to CDISC standards, which will bemandated in fiscal 2016. (See the Topics Column on page
5 for details of the service.)

2EPS GroupThe EPS Group contributes to the development of the healthcare
industry through the creation of valuable solutions.
Contract Research Organization
Support for implementation, operation and managementof clinical studies (clinical trials) and PMS bypharmaceutical companies

Site Management Organization
CRC dispatch and organization of clinical studies (clinicaltrials) and PMS by medical institutions

Contract Sales Organization
Dispatch services for contracted medical representative(MR) and call center services for pharmaceutical products

Global Research
CRO and SMO businesses in the Asia-Pacific region andsupport for Asian and global clinical studies bypharmaceutical companies

China BusinessServices as a trading company specialized in healthcare
connecting Japan and China, developing the twobusinesses of selling pharmaceutical products andmanufacturing medical devices

Business Process Outsourcing
Specialized services to spur innovation in the businessprocesses of collecting, analyzing and processing various
information

3Business Trends

Net Sales

Operating Income(Millions of yen)Interim22nd Term
FY9/12

17,34223rd Term
FY9/13

18,237

Annual

37,58410,00020,00030,00040,000

3,497
1,923
4,110

(Forecasted)

50,000Net Income

0

1,000

2,000

3,000

4,000

5,000

6,000

Net Income per Share(Millions of yen)Interim

Annual

1,182

22nd Term
FY9/12

2,207671

23rd Term
FY9/1324th Term
FY9/142,006
500

1,0001,500

Interim

2,000

Annual33

22nd Term
FY9/12611848

24th Term
FY9/14896(Forecasted)(yen)

23rd Term
FY9/13

1,709

0

5,174
1,741

24th Term
FY9/1440,9610

Annual2,750

23rd Term
FY9/13

19,852(Forecasted)

Interim22nd Term
FY9/1235,20224th Term
FY9/14(Millions of yen)

2556(Forecasted)

2,5000204060

Note: The Company conducted a 100-for-1 stock split on common shares on
April 1, 2014.
Net income per share is calculated as if this stock split had been
conducted at the beginning of the 22nd fiscal period.

Sales by Segment (24th Term FY9/14, interim)

Operating Income by Segment (24th Term FY9/14, interim)(Millions of yen)

(Millions of yen)

CROSMOCSO
Global Research
CHINACRO
SMO
CSO
Global Research
CHINA

Others (BPO, Others)

Others (BPO, Others)
1,681

11,640
3,166

475

2,859

120(158)

1,070

(172)

1,577

(35)

1,025
0

2,000

4,000

6,000

8,000

10,00012,000

-500

0500

1,000

1,500

2,000

Note: Segment information does not include adjustments.

4Topics
Introduction of a New ServiceCompliant with CDISC Standards
In January 2014, we began offering a new service forpharmaceutical companies that is compliant with CDISC
standards.
From fiscal 2016, it will become obligatory tosubmit principal clinical data in a format conforming to
CDISC standards for electronic applications for new
drug manufacturing approval.
With this in mind, in 2012 we began preparations forthe contracting of operations based on CDISC standards.
Developed in the United States, CDISC have become thede facto global standards for new drug development andare beginning to function as a shared system, regardlessof nation or region. We believe that it is necessary not justto apply CDISC standards to the data submitted to theagency but also to reconstruct the overall clinical data
treatment process surrounding the CDISC standards. We
have already made progress on internal operational flows,internal implementation training programs and the outfittingof basic documentation, as well as the implementation oftools necessary for checking data mapping and results.
Taking this new service as our first step, we aredeveloping our abilities to contribute to our customers’ efforts
to comply with the international-level CDISC standards.

Acquiring a Japanese CRO Company toStrengthen Our CRA System
In February 2014, we acquired JGC Pharma Services
Co., Ltd., a company involved in the CRO business inJapan, and converted it to a Group company. Thecompany changed its name to EPS Associates Co.,
Ltd., in February 2014.
The inclusion of EPS Associates brings our Group
total of clinical research associates (CRAs) to 900,
enabling us to respond to the needs of our customers ina more detailed and timely manner. We plan to furtherenhance capabilities of our business operation.

Business Partnership with theHewlett-Packard Japan, Ltd.
Along with EPS subsidiary e-Trial Co., Ltd., we haveentered into a business partnership involving IT
solutions for pharmaceutical companies withHewlett-Packard Japan, Ltd., the Japanese arm of
Hewlett-Packard Company.
The three companies will jointly expand sales of IT
solutions for post-marketing surveillance.

Dividends
We awarded an interim dividend of ¥800 per share for the 24th
fiscal year. As always, we greatly appreciate the continued
support of our shareholders.
(Note 1) We had planned for interim dividends of ¥1,600 per share for the fiscal year
ending September 30, 2014; current dividends are calculated as ¥800 for
the interim dividend and ¥1,000 for the year-end dividend, taking into
account the 2-for-1 stock split on common stock on April 1, 2013.
(Note 2) Dividends for the full year ending September 30, 2014 (the 24th fiscal year)
will be ¥10 per share and the annual dividend will be ¥18 per share, taking
into account the 100-for-1 stock split conducted on April 1, 2014.

5Interim(Yen)

2,000
1,500
1,000
500
0Year-End(Note 2)

1,800

1,800

1,000

1,000

1,600(800)800

23rd Term
FY9/13 (Note 1)

24th Term
FY9/14 (forecasted)(Note 2)

Stock Information (as at March 31, 2014)

Company Information

Authorized shares

1,296,000

Shares of common stock issued

361,600

Number of shareholders

3,641

Company Profile (as at March 31, 2014)
Capital:¥1,875.25 million

Main Services:

Domestic Business∙ CRO Business∙ SMO Business∙ CSO Business

Principal Shareholders
SharesheldPercentageof total

Y&G Limited

97,44026.94

BBH FOR MATTHEWS ASIA DIVIDEND FUND

21,583

5.9

GOLDMAN, SACHS & CO. REG

13,062

3.6

Japan Trustee Services Bank, Ltd.
(Trust Account)11,805

3.2

Sumitomo Life Insurance Company

10,8002.9

PLEASANT VALLEY

9,952

2.7

Members of the Board andStatutory Auditors (as at April 1, 2014)

JP MORGAN CHASE BANK 385078

Shareholder

Overseas Business∙ Global Research Business∙ China Business

9,071

2.5

Chairman & CEO

Yan Hao

BNP PARIBAS SEC SERVICES LUXEMBOURG/JASDEC/ABERDEEN GLOBAL CLIENT ASSETS

7,951

2.1

President & COO

Shinro Tashiro

Tokio Marine & Nichido Fire Insurance Co., Ltd.

6,480

1.7

JPM CHASE OMNIBUS US PENSION TREATYJASDEC ACCOUNTDirectors

Shuzo Orihashi6,288

1.7

Hisashi Tanaka
Junichi Nishizuka

Shareholder Breakdown
Other Japanese
corporations 28.58%
103,369 shares,
21 shareholders

Dan Weng
Foreign shareholders
38.84%
140,460 shares,
131 shareholders

Treasury stock
1.09%
3,948 shares,
1 shareholder
Securities
companies 1.44%
5,226 shares,
20 shareholders
Other Japanesefinancial institutions 14.88%
53,818 shares, 28 shareholders

Yoshinori Ando
Statutory auditors

Motohisa Fujii
Koichi Shibuya
Haruo Funabashi

Individuals / Others
15.14%
54,779 shares,
3,440 shareholders

6Notice

LocationsCenter Office

Tsuruya Bldg. 2-23 Shimomiyabicho,Shinjuku-ku, Tokyo 162-0822
TEL: +81-3-5684-7797

Annex. 1

Kagurazaka AK Bldg. 1-8 Tsukudocho,Shinjuku-ku, Tokyo 162-0821

Annex. 2Iidabashi MF Bldg. 1-1 Shinogawamachi,Shinjuku-ku, Tokyo 162-0814

Annex. 3

Acropolis TOKYO. 6-29 Shinogawamachi,Shinjuku-ku, Tokyo 162-0814

Annex. 5

KDX Iidabashi Bldg. 2-26 Shimomiyabicho,Shinjuku-ku, Tokyo 162-0822

Tsuruse Laboratory 2662 Tsuruma, Fujimi-shi, Saitama 354-0021
Osaka Branch

Nissei Shin-osaka Bldg. 11-12F 3-4-30 Miyahara,
Yodogawa-ku, Osaka-shi, Osaka 532-0003

Nagoya BranchHoriuchi Bldg. 4F 3-25-9 Meieki, Nakamura-ku,Nagoya-shi, Aichi 450-0002

Kofu Branch

101 Aria, Kawadamachi, Kofu-shi, Yamanashi
400-0811

Outline of Stock Split
We conducted a 1:100 split on shares of common stock, effective
April 1, 2014. At the same time, we adopted a new unit stock systemwith a basic trading unit of 100 shares, changing the unit oftransaction at the Tokyo Stock Exchange from 1 share to 100 shares
as of March 27, 2014.

Forward-Looking Statements
The items in this report include descriptions of future plans and forecasts. Actual
performances may differ substantially due to various factors.

MIX
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