To Shareholders and Investors

Business Report

Report for the fiscal year ended March 2010
April 1, 2009 – March 31, 2010

(Securities code: 2181 )0

We will continue to connect people and jobs
while responding to changes in the market and society.

Interview

Steady progress to reinforce the outsourcing businessWith demand for human resources remaining sluggish, sales were 224.6 billion yen and ordinary income was 6.7 billion yen for
the fiscal year ended March 2010.
Companies’ needs are changing reflecting the recent economic situation. Under such circumstances, we steadily made efforts
to ensure new growth potential during the period under review.
One of these efforts was to enhance the outsourcing business, one of our key themes. In the fiscal year under review, weconverted JAPAN TECSEED CO., LTD., which has strong know-how about the R&D outsourcing business, into our subsidiary,solidifying the foundation for expanding the outsourcing business. In April 2010, the headquarters of the outsourcing business
was set up in Tempstaff Co., Ltd. We will develop the said business as a new pillar, aiming to provide a comprehensive outsidehuman resource service that is excellent in the balance of business.

Our business meeting society’s needs
Thirty-seven years ago, we proposed a new option of working through a staffing
agency to the Japanese society. Since then, we have continued to create job
opportunities thanks to the support of both people hoping work more flexibly andcompanies wishing to leverage these people’s power. The business of the Temp
Group is to contribute to society by meeting society’s needs, creating job
opportunities, and helping people grow.
It is very regrettable that negative rumors have recently spread about thetemporary staffing industry. However, we are rather pleased that taking thisopportunity, a trend to implement stricter compliance is growing in the industry.
We believe this is a valuable business opportunity for us who have pursued
compliance.

Highlights of the fiscal year
ended March 2010

224.6 billion yen•Operating Income
6.3 billion yen•Ordinary Income
6.7 billion yen•Term-End Dividend per Share
6 yen•SalesFor People, Corporations and Society
1Yoshiko Shinohara, President
After leaving Mitsubishi Heavy Industries, Ltd. in 1957,
Ms. Shinohara studied in Europe and worked in Australia
in 1971. Upon her return to Japan in 1973, Ms. Shinohara
established Tempstaff Co., Ltd. inspired by encounterswith temporary staffing in Australia. Since 2000, Ms.
Shinohara has been named as one of “the Most Powerful
Women in Business” in FORTUNE for 10 consecutive
years. She was awarded the Kigyoka Prize in 2007.

Temp Holdings Mid-term Management Strategy
Strengthening localized services
Local operating companies provide well-thought-out local
community-based services and pursue an increasing market share ineach region.

Developing business in specialized fields
We will work on expanding job / industry specialized services andnetworks to respond to needs in the market which is getting
increasingly specialized.

Providing job assistance to women
We will totally support employment of women, who hold the key tolabor shortages arising from the declining birth rate and aging
workforce, by offering job search support for child-raising mothers
and providing seminars and counseling services.

Improving management efficiency
We strived to thoroughly reduce costs in all aspects as represented
by improving operational efficiency by adopting a holding company
system. We will firmly maintain steady profit growth and a healthyfinancial standing.

Expanding our presence in the global
We will focus human resources into the global network mainly in Asiawith the aim of establishing operational foundations and aggressively
expanding businesses.
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Topics
With operations added, growth fields arefurther expanding and deepening
We will introduce our efforts regarding the centerpieces of mid-term management strategy, that is, “developing
business in specialized fields”and “expanding our presence in the global market,”as well as one of new pillars for our
growth: the “outsourcing business.”

Deepening specialized fields
November 2009

Turning R&D outsourcing company JAPAN TECSEED
into a subsidiary
In November 2009, we turned JAPAN TECSEED CO., LTD. into a
consolidated subsidiary through a takeover bid. JAPAN TECSEED, as agroup of R&D experts, provides R&D outsourcing services primarily forthe automobile and aircraft industries. JAPAN TECSEED trains
excellent engineers and has a reputation for its high-quality services.
From now on, we will aggressively develop the R&D outsourcing
business, by leveraging the synergy from combination with the Temp
Group’s strengths, including high recruitment abilities and nationwide
marketing capabilities.

JAPAN TECSEED

May 2010●Two companies’ strengths and synergy from M&A
JAPAN TECSEED
R&D outsourcing and know-how on specialist staffing
Strong training know-how andabundant opportunities of practical jobs

TEMP GROUP＋

Acquisition of human resources using brand power
Extensive customer bases and marketing network

Desired synergy
Expansion in business areas and improvement in earnings
Promotion of engineer training
Further improvement in customer satisfaction

In the fiscal year ended March 2010, we conducted two more large-scale
M&A transactions, strengthening our business foundation.

Turning IT support company HOWCOM into a subsidiary
Tempstaff Co., Ltd. turned HOWCOM Co., Ltd., an IT support company
that provides help desk service and operations of IT infrastructure, into its
subsidiary. Using HOWCOM’s operations know-how and infrastructure,
we will launch the help desk business and focus on training humanresources.

HOWCOM

Outplacement service

May 2009

Drake Beam Morin-Japan, Inc. became a subsidiaryComprehensive staffing services

July 2009

Fuji Xerox Career Net Co., Ltd. became a subsidiary and changed its tradename to TEMPSTAFF CROSS CO., LTD.

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Spread of outsourcing
Sales

January 2010

Established a team specialized in entrusted sales
operations for in-shop outlets that sell fashion clothing,sundries and Japanese- and Western-style confectionery
Amid the sluggish consumption, in-shop outlets within commercial
facilities are in want of know-how about personnel assignment, operations
and management to reduce personnel expenses and promote efficientsales. To cope with growing demand, we set up a team dedicated to
entrusted sales operations, which is consisted mainly of those who haveworked in the retail industry. The team provides comprehensive support
for outlet operations in such areas as: planning of operations for the sales
space; recruitment, training and assignment of staff; labor management;
and proposal of sales improvement measures.

Tempstaff Marketing
Personal

Public sector

Global market expanding
Asia

December 2009

Started distributing the “Asian HRM Report” that contains
information on the employment trend in Asia
We began to distribute the “Asian HRM Report” in a tie-up with
JobStreet.com, which has information on 6.0 million job seekers and 80,000
companies in Asia.

Tempstaff

Global

May 2010

Acquired shares in Kelly Services, a major U.S. humanresource service company

April 2010

Selected by the Shinjuku-ku Ward Office as designatedmanager of local cultural exchange centers and children’shalls

To accelerate an active expansion into the global market, Temp Holdings
acquired shares in Kelly Services Inc., a leading U.S. provider of humanresources. The two companies will join hands in raising theircompetitiveness in the global market, while aiming to establish a systemthat can respond flexibly to the diverse needs of corporations and job
seekers.

Temp Holdings

Tempstaff Wish Co., Ltd., a provider of childcare and children’s day-careservices, was selected as designated manager of local cultural exchange
centers and children’s halls in Shinjuku-ku, Tokyo. We will aim to operatethese facilities in a homelike and warm manner, while ensuring the safety
and security of users.

Tempstaff Wish

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Overview of Consolidated Financial Results

POINT 1Business performance began to pick up
gradually in the second half of the fiscal
year ended March 2010. However, demandremained generally weak hurt chiefly by theeffects of economic slowdown started in thesecond half of the fiscal year ended March
2009.

Statement of Income(Unit: million yen)

2009/3

2010/3

Change2011/3245,062

224,613△8.3%

229,500

236,533

211,018△ 10.8%General Office Work132,423

114,628△ 13.4%

Specialized Office Work

42,92038,364△ 10.6%

IT / Engineering

21,44918,335△ 14.5%

Other

35,03236,603

4.5%

Recruitment Services

4,707

3,086

△ 34.4%R&D Outsourcing

−

2,281

−

Outsourcing

6,911

6,132

△ 11.3%

Other Business

1,617

5,180

220.4%

4 Ordinary Income

9,245

6,734

△ 27.2%

6,750

Net Income

4,076

2,950

△ 27.6%3,000

Dividend per Share (yen)

11.00

12.00

−

12.00

Sales
1

POINT 2
Earnings of JAPAN TECSEED CO., LTD.
which was turned into a consolidated
subsidiary on November 30, 2009 througha takeover bid, for the period between
January and March were booked under a
new business segment.

POINT 3
Sales rose substantially year on year due
to a strong performance of thereemployment support business, and theeffects of converting Drake Beam MorinJapan, Inc., which operates the saidbusiness, into a subsidiary.

POINT 4
Efforts were made to thoroughly reduce
costs such as recruiting expenses andadvertising expenses, but this failed tooffset a decline in profits caused byweakened sales. As a result, ordinary
income decreased 27.2%.

2

3

Temporary Staffing, Contracting
and Recruitment Services(Forecast)5Balance Sheet(Unit: million yen)

POINT 1The size of assets increased due
to tender offer for JAPANTECSEED CO., LTD. and M&A
conducted in the fiscal year ended
March 2010.

2009/3
1 Assets

75,912

1,929

62,324

61,644△680

29,61028,545△ 1,064

11,65814,2682,609

23,122

27,595

4,473

Current liabilities

21,43420,094△ 1,339

Noncurrent liabilities

1,688

7,500

5,812

−

5,000

5,000

50,86048,317△ 2,543

49,58145,778△ 3,803−△5,636△ 5,636

Cash and deposits
Noncurrent assets

Temp Holdings Co., Ltd. issued
convertible bond-type bonds withstock acquisition rights while
acquiring its own shares.
This is a method for procuring
funds at a zero coupon rate byissuing bonds with stockacquisition rights while improving
capital efficiency throughacquisition of treasury shares.
This is a capital strategy designed
to improve earnings per share until
stock acquisition rights are
executed, and allocate treasury
shares in case of the execution of
the rights to prevent cash out,
maintaining the healthy financial
system.

Liabilities

2

Convertible bond-type bonds
with subscription rights to shares
Net assets
Shareholders' equity

2

Change73,982Current assets

POINT 2

2010/3

Treasury stock
Valuation and translation adjustments

△32

46

78

Minority interests

1,310

2,492

1,181

6

The Temp Group has steadily expanded its business fields by responding
to the needs of corporations and workers that change with the times.
You can see our presence in all fields related to your daily life.
We will introduce some of them.
At cosmetics
Developing business in specialized fields

Featurecounters indepartment stores

Providing job assistance to womenAt customer consultation counters

Cosmetics staff

Telemarketing staff
A call center, which needs to be well staffed to reply to phone calls from customers
at any time, is one of the business fields where demand for human resources is high.
There, the staff is required to have deep knowledge of merchandise. Hence, forexample, food processors may look for specialists such as national registereddietitians. With the capability to provide a broad range of human resources, theTemp Group meets such needs, too.

At hospitals
Receptionists(medical administrativework),

nurses, etc.

Developing business in specialized fields

By the elderly
Licensed nursing care worker

Helpers

Nursing care is a field that is expected to continue
growing. However, it is said that the field is inchronic shortage of human resources. The Temp
Group provides temporary staffing andoutplacement services for the nursing care industry,and supports the employed in obtaining the 2nd
Grade Helper License. We are also making every
effort to create jobs and eliminate the shortage ofhuman resources, while advancing staff’s career.

In metabolic
examination

Care managers

Operations of
medical examinations
Company
Hospital

Temp’s Capabilities Seen Around You
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Strengthening localized services

Developing business in specialized fields

Providing job assistance to women

At nearby financial institutions
Various financial institution staff
The financial industry is one of the fields where the Temp Group has a good trackrecord. At bank outlets, many temporary staff are carrying out a wide range of
operations, from account opening to investment consultation. In the fiscal year
ended March 2010, Tempstaff Life Advisory Co., Ltd. launched specialist staffing
service for dispatching temporary staff with experience in the insurance industry tobanks, which aim at further reinforcing retailing services. We will expand businessareas for these staff.

At shopping centers
Promotion of card
membership application

Providing job assistance to womenAt places to sendout new fashions

By children

Apparel sales clerks

Child carers
The Temp Group, which aims to provide job search support for women, isfocusing on various efforts in the child care field. We are actively expanding
temporary staffing and outplacement services for child care facilities. In addition,
Tempstaff runs day-care centers at three locations in Shibuya-ku, Tokyo, andTempstaff Wish at two locations in Yokohama, Kanagawa Prefecture.

Pure Temp Yoyogi-Uehara’s Manager
Children try to tell something by crying. We pay close attention so that we cancatch their messages promptly. It is an important job for children to play with all
their might. We accept what they want to do, and provide individuals with care thatis suitable for each of them, through which we are growing together with children
every day. Pure Temp Yoyogi-Uehara is a workplace where we practice thecorporate philosophy “Individual growth.”

At food selling areas
Salesclerks at stores
selling Japanese- andWestern-styleconfectionery, beverage
stores, etc.

Department
store

Bank

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CSR

For the disabled
October 2009

For society

Certified as a “Model Employer of the Physically
Challenged” by the Ministry of Health, Labor and Welfare

Temp Holdings Co., Ltd. and Thanks Temp Co., Ltd. were awarded the “Certification
Mark for the Model Employer of the Physically Challenged (Heartfelt Ribbon Mark),”
whose winner is recognized as a company that implements particularly superior
measures for promoting employment of the challenged.
The Temp Group supports physically challenged employees in their sports and athletic
activities by providing both employment and financial assistance. We will continue tohelp the challenged expand their possibilities.

Our business aims to contribute to society bycreating jobs and supporting individual growth.
Hence, our business itself is one of corporatesocial responsibility (CSR) activities. We willcontinue to promote the human resource services
business, and pursue CSR by conducting various
social contribution activities.

For Women
May 2009

Received the “2nd Best Mother Award 2009,
Corporate Sector”

We were awarded the “2nd Best Mother Award 2009, Corporate Sector” for operating
day-care centers and implementing various activities to help women find a job andreinstate women in their former office. We will continue to support women who wish tocontinue working.

2008 - 2009

Implementation of the Pink Ribbon Campaign tohelp eradicate breast cancer

The Temp Group, which supports the “Pink Ribbon Campaign” to encourage andpromote breast cancer examination, donated contributions of 225,154 yen collected
through sales of original cookies to the “Japan Fund for Breast Cancer.”

For individual growth
March 2010

Invitation to “20th Temp Group Youth International
Scholarship”

The Temp Group offers an overseas study scholarship program for students andworking adults every year. The fiscal year ended March 2010 marked the 20th
anniversary of the program, through which we had sent 1,115 people out into theworld. We will continue to support individual growth from the global perspective.

Business
activities

Creation of jobs andsupport for individual
growth through thepromotion of humanresource services
business

SocialContribution
activities

Corporate
Philosophy
Creating jobs
Individual growth
Contributing tosocietySocial contribution
activities leading to“employment” and“individual growth”

9Information
Distribution of shareholders As of March 31, 2010

Stock Information

Company Outline

As of March 31, 2010

As of March 31, 2010

(Unit: shares)●Authorized number of shares: 240,000,000

Company Name

Temp Holdings Co., Ltd.

●Total number of shares issued: 65,521,500

Established

October 1, 2008

President

Yoshiko Shinohara

Head Office2-1-1 Yoyogi, Shibuya-ku,
Tokyo, JAPANType of Business

Management planning,
administration, and operations
related to subsidiary and groupcompanies that handle
temporary staffing andrecruitment services.

Capital2,000 million yen●Shareholders: 10,045●Major shareholders (top 10)
Name of shareholders

Shares held
(shares)

Percenta
ge ofvotingrights(%)

Shareholder Information As of March 31, 2010

Yoshiko Shinohara

31,077,200

47.43

Temp Holdings Co., Ltd.

7,700,025−

State Street Bank andTrust Company

5,547,900

9.59

Kelly Services Japan Inc.

3,000,000

5.18●Business year
Yoshimi Iyadomi
1,812,800
3.13
From April 1 to March 31 of the following year
●Annual general meeting of shareholders
The Bank of Tokyo1,760,000
3.04
June every year
Mitsubishi UFJ, Ltd.
●Record date
Nikko Cordial Securities
1,300,000
2.24
Annual general meeting of shareholders March 31
Term-end dividend March 31
Investment Enterprise
2nd quarter dividend September 30
Partnership●Administrator of shareholders’ register /Temp Holdings
1,264,700
2.18
Special account management institution
Mitsubishi UFJ Trust and Banking Corporation
employee shareholders●Contact
association
Mitsubishi UFJ Trust and Banking Corporation
Woman Staff Ltd.
1,206,000
2.08
Custody Service Department
7-10-11 Higashisuna, Koto-ku, Tokyo 137-8081, JAPANNanako Yamamoto
1,108,800
1.91
Tel: 0120-232-711(toll free number available only within Japan)
Taro Iyadomi
1,108,800
1.91●Stock Listing
Tokyo Stock Exchange, First Section* 7,700,025 shares of the Temp Holdings Co., Ltd. ownership●Website address of public notice
do not have the voting rights for the treasury stock.
http://www.temp-holdings.co.jp/
When electronic public notices are not possible due toincidents or other unavoidable circumstances,announcements will appear in the Nihon Keizai Shimbun newspaper.

Board of Members

As of June 24, 2010

President

Yoshiko Shinohara

Vice-President

Mikihiko Hibino

Executive Director

Masamichi Mizuta

Executive Director

Toshio Saburi

Director

Takao Wada

Director

Carl T. Camden

Full-time Auditor

Izuki Hiraga

AuditorHaruo Shimada

Auditor

Kaoru Arai

Auditor

Ryosuke Tamakoshi

10Procedures for Shares■Shares recorded in the accounts of securities companies
Procedures, inquiries, etc.

Contact

Inquiries about the sending and returning of mails
Inquiries about dividends after completion of thepayment period
General inquires about administrative work related
to shares

Administrator ofshareholders’registerProcedures and inquiries not included above

Please contact your securities company.

Custody Service Department
Mitsubishi UFJ Trust and Banking Corporation
7-10-11, Higashisuna, Koto-ku, Tokyo 137-8081, JAPAN
Tel: 0120-232-711(toll-free number available only within Japan)■Shares recorded in the special accountProcedures, inquiries, etc.

Contact

Requests for transfer from a special account to a
general accountRequests for purchase/additional purchase ofshares less than one unit
Changes in address, name, etc.
Account balance inquiries
Designation of method for receiving dividends (*)

Special accountmanagement
institution

Custody Service Department
Mitsubishi UFJ Trust and Banking Corporation
7-10-11, Higashisuna, Koto-ku, Tokyo 137-8081, JAPAN
Tel: 0120-232-711(toll-free number available only within Japan)Inquiries about the sending and returning of mails
Inquiries about dividends after completion of thepayment period
General inquires about administrative work related
to shares

Administrator ofshareholders’register

Method for requesting procedural documentsRequest through the automatic answering system: 0120244-479 (toll-free number available only within Japan)
Download online: http://www.tr.mufg.jp/daikou/(*) Shareholders who own shares recorded in the special account may not choose the method for receiving dividends in proportion to the amount of shares held.

Shinjuku Maynds Tower, 2-1-1 Yoyogi, Shibuya-ku, Tokyo 151-0053, JAPAN

Tel: +81-(0)3-3375-2220(*) The items in this report include descriptions of future plans and forecasts. Actual performances may differ substantially due to various factors.
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