Note: This document has been translated from the Japanese original for reference purposes only. In the event ofany discrepancy between this translated document and the Japanese original, the original shall prevail.

July 15, 2022

CONSOLIDATED FINANCIAL REPORT (Japanese GAAP)FY2021 (June 1, 2021 to May 31, 2022)
Listed company name:
Pasona Group Inc.
Listing stock exchange:
The Prime Section of the Tokyo Stock Exchange
Securities code number:
2168
URL:
https://www.pasonagroup.co.jp
Representative:
Yasuyuki Nambu, Group CEO and President
For further information contact: Yuko Nakase, Senior Managing Executive Officer and CFO
Tel. +81-3-6734-0200
Date of Annual General Meeting of Shareholders: August 19, 2022
Scheduled payment date of cash dividends: August 5, 2022
Scheduled filing date of the securities report: August 22, 2022
Supplemental materials prepared for financial results: Yes
Holding of financial results meeting: Yes (for analysts and institutional investors)(All amounts are in millions of yen rounded down unless otherwise stated.)

1. CONSOLIDATED BUSINESS RESULTS(1) Consolidated Financial Results
Percentage figures are the increase / (decrease) for the corresponding period of the previous fiscal year.
Operating
IncomeNet Sales

FY2021
FY2020(Note) Comprehensive income%

Profitattributable toowners of parent

Ordinary
Income%%%366,096
9.4 22,083
10.7 22,496 10.4
8,621
27.1
—
334,540
2.9 19,940
88.5 20,379 99.1
6,784
FY2021: ¥14,433 million (40.8%) FY2020: ¥10,251 million (204.3%)
DilutedNet Income
per Share

Net Income
per Share
Yen

Return on Equity

Yen

Ordinary Income
to Total Assets%

FY2021220.19219.6319.6
173.36—19.4
FY2020(Reference) Equity in earnings of unconsolidated subsidiaries and affiliates
FY2021: ¥142 million FY2020: ¥(110) million

%

12.7
14.0

Operating Income
to Net Sales

6.0
6.0

%

(2) Consolidated Financial Position
Total Assets

Net Assets

Equity Ratio (%)

Net Assets per Share(Yen)

203,746
67,14624.5
1,276.00
May 31, 2022
151,641
49,77925.2
974.85
May 31, 2021
(Reference) Equity As of May 31, 2022: ¥49,986 million
As of May 31, 2021: ¥38,155 million(Note) Total assets for the fiscal years ended May 31, 2021 and May 31, 2022 include temporary "deposits
received" from customers for contracted projects and the corresponding "cash and deposits" in assets andliabilities. For details, please refer to "1. Summary of Business Results, etc. (2) Summary of Financial Position
for the Fiscal Year under Review."-1-(3) Consolidated Cash Flows
Cash Flows fromOperating Activities

Cash Flows from
Investing Activities

Cash Flows from
Financing Activities

10,115
18,868(29,624)(9,665)23,543(5,147)

FY2021
FY2020Cash and Cash
Equivalents,
End of Period

56,57852,298

2. DIVIDENDSDividends per Share (Yen)End ofFirst
Quarter

End ofSecondQuarter

End ofThird
Quarter

FiscalYear-End

Annual

Total
Dividend
Payment(Annual)Dividend
Payout Ratio(Consolidated)

Ratio of
Dividends to
Net Assets(Consolidated)

17.3%
15.9%
15.8%

3.4%
3.1%

FY2020—30.00 30.00
0.00
—
1,196
FY2021—35.00 35.00
0.00
—
1,396
35.00
FY2022(Forecast)
—
0.00
—
35.00
(Note) Breakdown of year-end dividend for the fiscal year ending May 31, 2022
Ordinary dividend ¥30.00 Special dividend ¥5.00
3. FORECAST OF RESULTS FOR THE FISCAL YEAR ENDING MAY 31, 2023

Percentage figures are the increase / (decrease) for the corresponding period of the previous fiscal year.
Net
Profit attributable to
Income per
Ordinary Income
Net Sales
Operating Income
owners of parent
Share
%
%
%
%
Yen

FY2022 First Half
FY2022 Full Fiscal Year

189,000
385,000

3.6
5.2

7,800 (35.0)
22,3001.0

8,000 (34.2)
22,5000.0

3,000 (37.5)
8,700
0.9

4. NOTES(1) Changes in significant subsidiaries during the fiscal year under review: None

(Changes in specified subsidiaries that caused changes in the scope of consolidation)(2) Changes in accounting policies, changes in accounting estimates and retrospective restatement
1) Changes in accounting policies in line with revisions to accounting and other standards: Yes
2) Changes in accounting policies other than 1) above: None
3) Changes in accounting estimates: None
4) Retrospective restatement: None
(3) Number of shares issued and outstanding (common shares)
1) Number of shares issued and outstanding as of the period-end (including treasury shares)
May 31, 2022: 41,690,300 shares
May 31, 2021: 41,690,300 shares
2) Number of treasury shares as of the period-end
May 31, 2022: 2,516,094 shares
May 31, 2021: 2,550,899 shares
3) Average number of shares for the period
FY2021: 39,154,774 shares
FY2020: 39,132,377 shares

-2-

76.58
222.08eference) NON-CONSOLIDATED BUSINESS RESULTS
1. FY2021 (June 1, 2021 to May 31, 2022)(1) Non-consolidated Financial Results
Percentage figures represent year-on-year increase / (decrease).
Net Sales

Operating Income (Loss)%

FY2021
FY202010,06014,477%(30.5)
52.4.5(3,655)
3,312

Net Income per ShareFY2021
FY2020

34.18
33.10

Ordinary Income (Loss)——Net Income%(4,231)
2,846

—
—

%

1,338
1,295

3.3
(17.5)

Diluted Net Income per Share
Yen

Yen

—
—

(2) Non-Consolidated Financial Position
Total Assets

Net Assets

May 31, 2022
89,955
May 31, 2021
80,170(Reference) Equity as of May 31, 2022: ¥18,758 million

Equity Ratio (%)

Net Assets per Share (Yen)

18,75820.9
18,57823.2
As of May 31, 2021: ¥18,578 million

478.85474.67(Note)The Company has introduced "Board Benefit Trust (BBT)" and "Employment Stock Ownership Plan (J-ESOP)."
The Company’s shares in BBT and J-ESOP, which are reported as treasury shares under Shareholders’ equity,
are counted as the number of treasury shares as of the average number of shares outstanding for the period forthe purpose not including computing earnings and net assets per share.

This Financial Report is not subject to a review conducted by CPA or audit firm.
Cautionary statement and other explanatory notes
The aforementioned forecasts are based on assumptions and beliefs in light of information available to management
at the time of document preparation and accordingly include certain unconfirmed factors. As a result, readers areadvised that actual results might differ materially from forecasts for a variety of reasons. Please refer to (Attachment)"1. Summary of Business Results, etc., (4) Future Outlook" on page 11 for the assumptions used in the forecast of
business results.
We are planning to hold a financial results online meeting for analysts and institutional investors on July 21, 2022.
Supplemental materials for the financial results will be posted on the Company’s website(https://www.pasonagroup.co.jp/ir/) immediately after the meeting.

-3-

FY2021 Consolidated Financial Report

INDEX

1.

Summary of Business Results, etc.

・・・・・

p.5

(1) Summary of Business Results for the Fiscal Year under Review

・・・・・

P5

(2) Summary of Financial Position for the Fiscal Year under Review

・・・・・

P.10

(3) Summary of Cash Flows for the Fiscal Year under Review

・・・・・

P.10

(4) Future Outlook

・・・・・

P.11

(5) Policy on the Appropriation of Profits and Dividends for FY2021 and

・・・・・

P.12

FY2022
2.

Basic Consideration on Selecting our Accounting Standard

・・・・・

p.12

3.

Consolidated Financial Statements and Primary Notes

・・・・・

P.13

(1) Consolidated Balance Sheets

・・・・・

p.13

(2) Consolidated Statements of Income & Comprehensive Income

・・・・・

p.16

(3) Consolidated Statements of Changes in Shareholders’ Equity

・・・・・

p.18

(4) Consolidated Statements of Cash Flows

・・・・・

p.20

(5) Note to Consolidated Financial Statements

・・・・・

p.22

(Notes to Going Concern Assumption)

・・・・・

p.22

(Important Items Considered Fundamental
to the Preparation of Consolidated Financial Statements)

・・・・・

p.22

(Changes in Accounting Policies)

・・・・・

P.23

(Changes in Presentation Method)

・・・・・

P24

(Additional Information)

・・・・・

P24

(Business Combinations, etc.)

・・・・・

p.24

(Segment Information, etc.)

・・・・・

p.27

(Per Share Information)

・・・・・

p.32

(Important Subsequent Event)

・・・・・

p.33

-4-

1. Summary of Business Results, etc.
(1) Summary of Business Results for the Fiscal Year under Reviewi) Business results for the fiscal year ended March 31, 2022
During the fiscal year under review, the Japanese economy continued to face an uncertain outlook due tothe recurring re-expansion of COVID-19 infections. However, there was a trend toward returning to full socioeconomic activities, and a sign of recovery has been seen in economic conditions.
In this environment, the Group continued to capture demand for BPO (Business Process Outsourcing)
services from the corporate and public sectors, while Expert Services (Temporary Staffing) and Career
Solutions (Placement / Recruiting) also expanded business steadily against the backdrop of recovering demandfor human resources.
As a result, all business segments reported year-on-year revenue growth in the fiscal year under review,
with consolidated net sales of ¥366,096 million (up 9.4% year-on-year).
Although the gross profit margin declined slightly from the previous fiscal year, gross profit amounted to¥89,671 million (up 8.1% year-on-year) due, in part, to the contribution of higher revenue from BPO services.
SG&A expenses rose due to an increase in personnel expenses in line with business expansion, but efforts tocurb costs by improving operational efficiency resulted in operating income of ¥22,083 million (up 10.7%
year-on-year).
Ordinary income amounted to ¥22,496 million (up 10.4% year-on-year), and profit attributable to ownersof parent amounted to ¥8,621 million (up 27.1% year-on-year).
Consolidated Business Results(Millions of yen)

FY2020

FY2021YoY

Net sales

334,540

366,096

Operating income

19,94022,083

9.4%
10.7%

Ordinary income

20,37922,496

10.4%

Profit attributable toowners of parent

6,784

8,621

27.1%

ⅱ) Business Segment Information (before elimination of intersegment transactions)
HR Solutions
Expert Services (Temporary staffing), BPO Services (Contracting and outsourcing), etc.
Net sales ¥308,093 million Operating income ¥18,793 million[Expert Services]
Net sales: ¥152,067 million
In this business, the Group provides a wide range of human resource services, including office work support,
clerical work, the provision of highly specialized skilled personnel, engineers, sales, and marketing personnel,
and Expert Services (Temporary Staffing) for a wide range of age groups and job types, from new graduates tosenior citizens.
Although sales in relation to certain industries, such as airlines, and some occupations, such as sales andmarketing, continued to decline from the previous year, the temporary staffing business continued to recovermoderately from May 31, 2021, amid a recovery in economic conditions, mainly among manufacturers andtrading companies, as well as in a wide range of other industries. In addition, demand increased from thecorporate and public sectors for time-limited work related to COVID-19 countermeasures in fiscal year 2021.
As a result, net sales amounted to ¥152,067 million (up 2.0% year-on-year).

-5-

[BPO Services]
Net sales: ¥139,272 million
In this business, the Group is entrusted with general affairs, accounting and finance, reception, sales
administration and ordering, personnel and labor affairs, and other operations and provides BPO services, while
Bewith, Inc., a consolidated subsidiary, provides contact center and BPO services using its own digitaltechnology.
In response to diverse demand from the corporate and public sectors, our business expanded steadily throughactive collaboration among group companies, taking advantage of the group's strength in being able to undertake
all operations, from business design and construction to center operation and staffing. Demand from the public
sector increased in line with the promotion of diverse workstyles and support for securing and finding humanresources. In the private sector, demand continued to increase in line with organizational restructuring and DX
promotion in line with the business environment. In addition, during the fiscal year 2021, demand increased
from the corporate and public sectors for time-limited work related to COVID-19 countermeasures and for work
related to the hosting of the Tokyo 2020 Olympic and Paralympic Games.
As a result, net sales amounted to ¥139,272 million (up 22.1% year-on-year).
[HR Consulting, Education & Training, Others]
Net sales: ¥8,418 million
In this business, in addition to management support by professional personnel such as freelancers and former
executives of listed companies, we also provide education and training business commissioned by companies
and the public sector, along with HR tech implementation support business such as talent management.
In the area of professional and advisory personnel, the advisory consulting business, which continues to matchsales support personnel and Outside Directors, expanded. In addition, the work-style innovation business, inwhich freelance professional personnel work remotely amid the diversification of workstyles in the COVID-19
pandemic, grew significantly. In the education and training business, as part of companies' efforts to strengthen
human capital management, training in management areas such as training for promoting women's activities
increased, and the overall recovery trend continued. In the HR tech implementation support business, growth
was achieved by expanding the service lineup, including task management and AI implementation.
As a result, net sales amounted to ¥8,418 million (up 10.6% year-on-year).
[Global Sourcing]
Net sales: ¥8,335 million Operating income:¥447 million
This segment provides a full line of human resource-related services overseas, including placement andrecruiting, temporary staffing and outsourcing, payroll, and education and training.
In the North America region, "new normal" economic activity has been increasing, and the placement andrecruiting, temporary staffing, and BPO businesses all exceeded the previous fiscal year. In the Asian region,
although there are differences in each country concerning the stagnation of socioeconomic activities due to
COVID-19, the gradual easing of the situation continues. In Taiwan, the placement and recruiting, temporary
staffing, and BPO businesses all exceeded the previous fiscal year, while in Indonesia and all other regions, thetemporary staffing business grew. In Indonesia, temporary staffing services grew, and in all other regions,business grew from the previous fiscal year. On the other hand, as business activities have been returning tonormalcy, sales-related expenses, such as business travel, increased from the previous fiscal year, as well as
personnel recruitment and system-related investments.
As a result, net sales amounted to ¥8,335 million (up 18.0% year-on-year), and operating income amounted
to ¥447 million (up 285.6% year-on-year).
Net sales for the segment consisting of the above businesses amounted to ¥308,093 million (up 10.9% yearon-year), and operating income amounted to ¥18,793 million (up 7.1% year-on-year) due to increased revenue
from BPO services, despite the gross profit margin declining slightly from the previous fiscal year.

-6-Career Solutions (Placement/Recruiting, Outplacement)
Net sales ¥14,700 million Operating income ¥4,470 million
This business segment provides the Placement/Recruiting business, which supports companies' mid-career
recruitment activities and matches job-transfer candidates, and the Outplacement business, which supports
companies' personnel transitions based on their human resource strategies.
In the Placement/Recruiting business, the willingness of companies to hire talented personnel has recovered to
the level prior to the spread of COVID-19. In this market environment, the Company focused on placementbusiness in the administrative and specialized job categories of companies that are relatively less affected by the
economy, and as a result, the unit price per contract rose continuously from the previous fiscal year. In addition,
due in part to the revision of the Corporate Governance Code, needs for female managers, an area in which theCompany excels, have become stronger, and services in this area expanded.
In the outplacement business, the large-scale restructuring of the business has settled down in the fiscal year
under review, and the demand that expanded significantly in the previous fiscal year is subsiding. On the other
hand, the implementation of Japan’s revised Act on Stabilization of Employment of Elderly Persons and thegrowing interest in human capital management have led to continued expansion of "Safe Placement Total
Service," which supports employees' career development.
As a result, net sales amounted to ¥14,700 million (up 6.0% year-on-year), and operating income amounted
to ¥4,470 million (up 14.1% year-on-year).
Outsourcing
Net sales ¥38,359 million Operating income ¥12,765 million
In this business, Benefit One Inc., a consolidated subsidiary of the Company, provides services mainly as anagent for companies, government agencies, and municipalities in the area of employee benefit programs.
In the welfare and benefit services business, while the number of members remained in a flat range during theperiod, the use of services by members began to recover from last October after the declaration of the state of
emergency, and subsidy expenditures increased accordingly. In addition, JTB BENEFIT SERVICE, Inc. (mergedwith the Company on April 1, 2022), which became a subsidiary of the Company by acquiring its shares during
the period, has been contributing to the expansion of business results since the fourth quarter of the fiscal year
under review.
In the healthcare business, our focus on developing new health support services in response to the demandsof the social economy, such as support for vaccination against COVID-19 infection, resulted in better-thanexpected results at the beginning of the fiscal year and contributed to boosting profits.
As a result, net sales amounted to ¥38,359 million (up 1.4% year-on-year), and operating income amounted
to ¥12,765 million (up 30.3% year-on-year), despite a ¥7,682 million decrease in net sales compared to theprevious accounting standard due to the impact of the application of the "Accounting Standard for Revenue
Recognition" and other standards from the beginning of the fiscal year under review.
Life Solutions
Net sales ¥7,158 million Operating income ¥232 million
This business includes: the childcare business, which includes the operation of licensed and certified childcare
centers, in-house childcare facilities, and childcare for school-age children; the nursing care business, which
includes daycare services and home-visit nursing care; and the life support business, which includes
housekeeping services.
In the nursing care field, the number of new facility users decreased due to the impact of COVID-19. On theother hand, in the life support business, including housekeeping services, demand for sterilization anddisinfection services continued to be strong from the previous fiscal year due to an increase in orders fromexisting contract customers and the continued spread of COVID-19. In addition, in the childcare business, childrearing family support services for local governments, such as the operation of children's clubs, grew.
-7-

As a result, net sales amounted to ¥7,158 million (up 9.0% year-on-year), and operating income amounted to¥232 million (up 14.2% year-on-year).
Regional Revitalization Solutions
Net sales ¥4,426 million Operating income ¥(2,612) million
In this business, we are engaged in regional development projects to create new industries and employment
in rural areas in cooperation and collaboration with local residents, local businesses, and local governments.
During the fiscal year under review, the flow of people to tourist destinations gradually began to return, despite
repeated outbreaks of COVID-19. On Awaji Island, Hyogo Prefecture, the number of visitors, mainly to theattraction "Dragon Quest Island: The Daimao Zoma and the Island of Beginnings," which opened last May at"Nijigen no Mori" Animation Park in Awaji Island Park, Hyogo Prefecture, remained steady, partly due to theeffects of aggressive promotional activities in the Kansai region. The number of visitors remained steady. In
addition, "Haru sansan" a restaurant in a field that offers locally produced and locally consumed cuisine usingisland ingredients, and "Auberge -La Forêt française-" which offers authentic French cuisine and an elegant
lodging experience in the midst of nature, each opened last year. In April of this year, we opened "Zenbo Seinei,"
which offers Zen and other activities and healthy meals on a 100-meter-long wooden deck in the great nature of
Awaji Island, being featured in various media and social networking sites.
As a result, net sales amounted to ¥4,426 million (up 36.4% year-on-year), but operating income was ¥(2,612)
million (operating income of ¥(2,327) million in the previous fiscal year) due to expenses incurred from theopening of new facilities.
Eliminations and Corporate
Net sales ¥(6,642) million Operating income ¥(11,566) million
This includes costs for eliminating intergroup transactions and maximizing group synergies, incubation costs
for new businesses, and administrative costs as a holding company.
In the fiscal year under review, new initiatives were launched, including the opening of the "Awaji Chef
Garden" on Awaji Island, Hyogo Prefecture, which recruits chefs and cooks from all over Japan affected by
COVID-19 and supports them in taking on new challenges, as well as IT-related expenses to promote DX ofgroup businesses, and expenses related to the gradual relocation of some head office functions to Awaji Island,
Hyogo Prefecture, increased.
As a result, net sales for the elimination of intergroup transactions amounted to ¥(6,642) million (¥(4,846)
million in the previous fiscal year), and operating income amounted to ¥(11,566) million (¥(9,191) million in
the previous fiscal year).
Effective from the beginning of the fiscal year under review, the Company has adopted the "AccountingStandard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020). For details, please refer to "3.
Consolidated Financial Statements and Primary Notes (5) Notes to Consolidated Financial Statements (Changes
in Accounting Policies)."-8-Segment Information (Figures include intersegment sales)
Consolidated Net Sales by Segment(Millions of yen)

FY2020
HR Solutions

FY2021

YoY

329,572

361,1549.6%

660
277,864

308,093

10.9%

149,133
114,055
7,613

152,067
139,272
8,418

2.0%
22.1%
10.6%

7,061

8,335

18.0%

13,863

14,700

6.0%

Eliminations and Corporate

37,8446,570
3,244(4,846)38,3597,158
4,426(6,642)

1.4%
9.0%
36.4%
－

Total

334,540366.096

9.4%

Expert Services (Temporary staffing),
BPO Services (Contracting), Others
Expert Services (Temporary staffing)
BPO Services (Contracting)
HR Consulting, Education & Training, Others
Global Sourcing (Overseas)
Career Solutions (Placement / Recruiting, Outplacement)
Outsourcing
Life Solutions
Regional Revitalization Solutions

Consolidated Operating Income (Loss) by Segment(Millions of yen)

FY202031,256FY202136.030

YoY
15.3%

17,543

18,793

7.1%

17,427

18,345

5.3%

116

447

285.6%

Career Solutions (Placement / Recruiting, Outplacement)

3,919

4,470

14.1%

Outsourcing

9,794
203

12,765
232

30.3%
14.2%

(2,327)(9,191)
19,940(2,612)(11,566)
22,083－－
10.7%

HR Solutions
Expert Services (Temporary staffing),
BPO Services (Contracting), Others
Expert Services (Temporary staffing)
BPO Services (Contracting)
HR Consulting, Education & Training, Others
Global Sourcing (Overseas)

Life Solutions
Regional Revitalization Solutions
Eliminations and Corporate
Total

-9-

(2) Summary of Financial Position for the Fiscal Year under Review
Status of Assets, Liabilities and Net Assets
Assets and liabilities as of May 31, 2022 included ¥10,123 million (¥1,989 million as of May 31, 2021)
in temporary "deposits received" from customers related to contract projects for which use by the Group isrestricted and a corresponding amount of "cash and deposits."
AssetsTotal assets as of May 31, 2022, amounted to ¥203,746 million, an increase of ¥52,104 million or 34.4%,
compared with May 31, 2021. This was mainly attributable to an increase of ¥12,417 million in cash anddeposits, an increase of ¥6,714 million in notes, accounts receivable-trade, and contract assets due to theincrease in contracted projects, an increase of ¥8,768 million in property, plants, and equipment mainly inthe regional revitalization business, and an increase of ¥13,336 million in goodwill and customer-related
assets due to the acquisition of all shares of JTB BENEFIT SERVICE, Inc.
Liabilities
Total liabilities as of May 31, 2022, amounted to ¥136,599 million, an increase of ¥34,737 million or
34.1%, compared with May 31, 2021. This was mainly attributable to an increase of ¥17,788 million in longterm loans payable as a result of fundraising, an increase of ¥7,533 million in deposits received, and anincrease of ¥2,358 million in accounts payable-trade due to the above-mentioned contracted projects andother factors.
Net Assets
Net assets as of May 31, 2022, amounted to ¥67,146 million, an increase of ¥17,367 million or 34.9%,
compared with May 31, 2021. This was mainly attributable to an increase of ¥3,757 million in capital surplus
due to the sale of some shares of a subsidiary in connection with the listing of the subsidiary and an increaseof ¥7,437 million in retained earnings due to the payment of ¥1,196 million in dividends, while profit
attributable to owners of the parent amounted to ¥8,621 million.
As a result, the equity ratio decreased by 0.7 percentage points, compared with May 31, 2021, to 24.5%.
Total assets, after deducting "cash and deposits" associated with "deposits received" for contracted projects,
amounted to ¥193,622 million, and the equity ratio was 25.8%, an increase of 0.3% compared to the previous
fiscal year.
(3) Summary of Cash Flows for the Fiscal Year under Review
Cash and cash equivalents (hereafter “net cash”) in FY2021 increased by ¥4,279 million, compared with
May 31, 2021, to ¥56,578 million.
Cash Flows from Operating Activities
Net cash provided by operating activities decreased by ¥8,753 million, compared with the previous fiscal
year, to ¥10,115 million (an increase of ¥18,868 million in the previous fiscal year).
Major cash inflows included profit before income taxes totaling ¥22,290 million ( ¥16,706 million in theprevious fiscal year), depreciation and amortization totaling ¥4,419 million ( ¥3,794 million in the previous
fiscal year), and an increase in impairment loss totaling ¥2,823 million (a decrease of ¥845 million in theprevious fiscal year) due to an increase in contracted projects.
Major cash outflows included an increase in notes and accounts receivable-trade and contract assets totaling¥6,112 million (an increase of ¥1,422 million in the previous fiscal year), due to an increase in contracted
projects, and income taxes paid totaling ¥8,084 million ( ¥7,820 million in the previous fiscal year).

- 10 -Cash Flows from Investing Activities
Net cash used in investing activities increased by ¥19,959 million, compared with the previous fiscal year,to ¥29,624 million (a decrease of ¥9,665 million in the previous fiscal year).
Major cash outflows included the purchase of property, plants, and equipment with the establishment ofcommercial facilities in the regional revitalization business and new offices in company-wide segments
totaling ¥11,632 million (¥7,031 million from the previous fiscal year); acquisition of shares in subsidiaries
resulting in change in scope of consolidation, including acquisition of shares in JTB BENEFIT SERVICE
Inc. totaling 10,451 million yen (¥183 million yen from the previous fiscal year); purchase of intangible
assets with system investment totaling ¥4,683 million (¥1,721 million from the previous fiscal year); andlease and guarantee deposits related to rented properties used in relation to contracted projects totaling¥2,493 million (¥1,592 million from the previous fiscal year).
Cash Flows from Financing Activities
Net cash provided by financing activities increased by ¥28,690 million, compared with the previous fiscal
year, to ¥23,543 million (a decrease of ¥5,147 million in the previous fiscal year).
Major cash inflows included proceeds from long-term loans payable totaling ¥29,129 million (¥7,511 million
in the previous fiscal year) to prepare for securing long-term working capital and capital investment funds
and included proceeds from changes in ownership interests in subsidiaries that do not result in a change inthe scope of consolidation including the sale of shares in connection with the initial public offering of Bewith,
Inc. totaling ¥6,523 million (¥0 in the previous fiscal year).
Major cash outflows included repayment of long-term loans payable totaling ¥11,098 million (¥8,901 million
in the previous fiscal year) and dividends paid totaling ¥3,584 million (¥2,797 million in the previous fiscal
year).
(Reference) Cash Flow Benchmarks
FY2017
Equity ratio
Equity ratio based on market
capitalization
Ratio of interest-bearing debt
to cash flows (years)
Interest coverage ratio

FY2018FY2019FY2020

FY2021

21.0%

23.7%

22.7%

25.2%

24.5%

58.9%

54.8%

35.7%

49.0%

40.3%

2.5

2.7

3.2

1.8

5.3

51.1

41.9

57.9

64.5

35.4

Notes:
1. Equity ratio: Shareholders’ equity / Total assets
Equity ratio based on market capitalization: Market capitalization / Total assets
Ratio of interest-bearing debt to cash flows: Interest-bearing debt / Cash flows
Interest coverage ratio: Cash flows / Interest payments
2. Each benchmark is calculated based on the consolidated financial statements.
3. Market capitalization is calculated by multiplying the period-end closing share price with the number ofoutstanding shares at period-end (after deducting treasury shares).
4. Cash flows from operating activities are used in calculations for cash flows.
5. Interest-bearing debt includes all interest-bearing debt under liabilities recorded on the consolidated balance
sheets.

(4) Future Outlook
Although COVID-19 is now under control and the suppression of human flow is easing, and with the economic
situation showing signs of recovery, the international situation is becoming increasingly unstable, and at thesame time, the effects of soaring resource prices and other factors are becoming more pronounced. Against thisbackdrop, we expect demand for human resources from domestic companies to remain stable. In addition, we
expect demand for BPO services to continue to grow steadily as companies seek to improve business productivity,
reform workstyles, and promote outsourcing.
The Group will seize on the trends associated with the post-COVID-19 era so as to support the employment- 11 -

of individuals that are active with diverse lifestyles amid a society of increasing numbers of centenarians,
including support for the employment of sole proprietors and personnel engaged in dual or multiple occupations,recurrent education for middle-aged and senior workers, and the promotion of migration from urban areas torural areas, along with teleworking. In addition, the Company will steadily capture demand for human resources
and BPO services as well as education and training demand from companies that are working to improve humancapital management, workstyle reforms, and business productivity.
For the fiscal year ending May 31, 2023, although temporary demand related to COVID-19 countermeasures,
which has expanded since the year before last, will shrink, as mentioned above, we expect an increase in demandfor human resources from companies and steady expansion of BPO services, as well as further growth in theregional revitalization business by easing restrictions on human resources flow.
Based on the above, for the fiscal year ending May 31, 2023, we forecast net sales of ¥385,000 million (up5.2% year-on-year), operating income of ¥22,300 million (up 1.0% year-on-year), ordinary income of ¥22,500
million (up 0% year-on-year), and profit attributable to owners of parent of ¥8,700 million (up 0.9% year-onyear).
These are aggregate estimates and projections of the impact of each company in our group based on currently
available information and forecasts, etc. Actual results can vary depending on various factors, such as the timingof the end of COVID-19 and economic conditions.
Consolidated Business Results Forecast(Millions of yen)

FY2022(Forecast)

FY2021YoY

Net sales

366,096

385,000

Operating income

22,08322,300

5.2%
1.0%
%

Ordinary income
Profit attributable toowners of parent

22,49622,500

0.0%

8,621

8,700

0.9%

(5) Policy on the Appropriation of Profits and Dividends for FY2021 and FY2022
In connection with the appropriation of profits, the Company takes into consideration the funds for growthrequired to engage in new businesses and capital investments aimed at fulfilling the Company’s responsibilities
as a sustainably developing company, so as to strengthen the Company’s operating platform and earnings
capacity and to expand shareholders’ returns by enhancing corporate value. On this basis and for the foreseeable
future, the Company has adopted the basic policy to implement a consolidated dividend payout ratio target of
30% in an effort to continuously deliver adequate and stable returns to shareholders taking into consideration
operating performance.
The year-end dividend for the fiscal year under review was approved at the Board of Directors meeting heldon May 25, 2022, taking into consideration current business performance and other factors, as well as the factthat our consolidated subsidiary, Bewith, Inc., newly listed on March 2, 2022, moved to the Tokyo Stock
Exchange's Prime Market on April 4, the Company decided to pay a special dividend of ¥5.00 per share to
express its gratitude to its shareholders for their continued support.
As a result, the year-end dividend per share will be ¥35.00, consisting of an ordinary dividend of ¥30.00 anda special dividend of ¥5.00. The effective date of the dividend payment will be August 5, 2022, the same as lastyear, but earlier than before.
For the next fiscal year, we plan to pay a dividend of ¥35.00 per share, as we will strive to maintain continuousand stable dividends based on our dividend policy.

2. Basic Consideration on Selecting our Accounting Standard
The Group has adopted Japanese GAAP as our accounting standard, considering the period comparability of theconsolidated financial statements and the comparability between companies. Regarding the application for IFRS
(International Financial Reporting Standards), we will proceed with consideration based on domestic andinternational situations.

- 12 -

3. Consolidated Financial Statements and Primary Notes(1) Consolidated Balance Sheets(Millions of yen)

As of May 31, 2021

As of May 31, 2022

ASSETS
Current assets
Cash and deposits
Notes and accounts receivable-trade
Notes receivable-trade
Accounts receivable-trade
Contract assets
Inventories
Income taxes receivable
Other
Allowance for doubtful accounts
Total current assets

54,53344,267
－
－
－
2,717
486
6,913
(57)
108,862

66,951－
101
40,872
10,008
3,560
70
9,648
(89)
131,123

13,479(6,217)
7,261
3,676
(570)
3,105
3,234
2,982
(2,092)
890
2,683
6,962
(5,569)1,393
18,56819,410(7,201)
12,208
4,431
(791)
3,639
7,308
3,256
(2,505)
751
1,605
7,982
(6,160)1,821
27,336

1,644
4,104
58
434
119
6,361

6,833
7,644
18
8,581
116
23,195

4,966
39
1,348
3,182
6,751
1,490
(97)

6,938
39
1,942
2,720
9,063
1,247
(10)

Non-current assets
Property, plants, and equipment
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
Land
Lease assets
Accumulated depreciation
Lease assets, net
Construction in progress
Other
Accumulated depreciation
Other, net
Total property, plants, and equipment
Intangible assets
Goodwill
SoftwareLease assets
Customer assets
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Net defined benefit asset
Deferred tax assets
Lease and guarantee deposits
Other
Allowance for doubtful accounts- 13 -

As of May 31, 2021
Total investments and other assets
Total non-current assets

As of May 31, 2022

17,681
42,61021,941
72,473

168
168
151,641

149
149
203,746

Deferred assets
Bond issue cost
Total deferred assets
Total assets- 14 -

(Millions of yen)

As of May 31, 2021

As of May 31, 2022

LIABILITIESCurrent liabilities
Accounts payable-trade
Short-term loans payable
Lease obligations
Accounts payable-otherAccrued expenses
Income taxes payable
Accrued consumption taxes
Contract liabilities
Unearned revenue
Deposit received
Provision for bonuses
Provision for directors' bonuses
Asset retirement obligations
Other
Total current liabilities

6,377
9,433
660
8,359
15,152
4,071
7,187
－
3,362
5,518
4,580
17
17
6,036
70,775

8,735
9,611
411
10,52316,016
5,877
5,250
8,453
－
13,051
4,741
19
43
819
83,555

2,176
20,990
562
457
438
2,263
1,028
2,125
1,043
31,086
101,861

3,810
38,779
554
598
571
2,300
3,506
2,280
643
53,044
136,599

5,000
14,02920,801(2,417)37,4135,000
17,78628,238(2,378)48,646

694
10
36
741
4
11,61949,779151,641

1,131
197
10
1,339
4
17,155
67,146
203,746

Non-current liabilities
Bonds payable
Long-term loans payable
Lease obligations
Provision for directors’ stock benefit
Provision for employees’ stock grant
Net defined benefit liability
Deferred tax liabilities
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
NET ASSETS
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders' equity
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total other comprehensive income
Share acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets- 15 -

(2) Consolidated Statements of Income & Comprehensive Income
Consolidated Statements of Income(Millions of yen)

FY2020Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income

FY2021

334,540
251,570
82,96963,02819,940366,096
276,424
89,671
67,58822,083

40
－
636
743
283
1,704

28
142
720
735
363
1,991

290
110
56
635
171
1,265
20,379

293
－
460
611
212
1,578
22,496

0
4
0
5

4
－
24
28

367
3,238
0
14
56
3,678
16,706
7,939
(915)
7,024
9,682
2,898
6,784

80
132
2
19
0
234
22,290
8,826
69
8,895
13,394
4,773
8,621

Non-operating income
Interest income
Equity in earnings of affiliates
Subsidy
Real estate rent
Other
Total non-operating income
Non-operating expenses
Interest expenses
Share of loss of entities accounted for using equity methodCommitment fee
Rent expenses on real estates
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Gain on sale of shares of subsidiaries and associates
Total extraordinary income
Extraordinary loss
Loss on sales and retirement of non-current assets
Impairment loss
Loss on sale of investment securities
Loss on valuation of investment securities
Loss on valuation of shares of subsidiaries and associates
Total extraordinary loss
Profit before income taxes
Income taxes-current
Income taxes-deferred
Income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent- 16 -

Consolidated Statements of Comprehensive Income(Millions of yen)

FY2020
ProfitFY2021

9,682

13,394

449
117
2

867
198
(28)

－

(0)

569
10,251

1,038
14,433

7,074
3,177

9,219
5,213

Other 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
Comprehensive income attributable toComprehensive income attributable to owners of the parent
Comprehensive income attributable to non-controlling interests- 17 -

(3) Consolidated Statements of Changes in Shareholders' Equity
FY2020 (For the fiscal year ended May 31, 2021)(Millions of yen)
Shareholders' equity
Capitalstock

Capitalsurplus

5,000

Balance at beginning of current period

Retained
Earnings

14,013

Total
shareholders'equityTreasuryshares

14,789(2,442)

31,360

24

(758)
6,784
24
0
(0)

Changes of items during the period

(758)
6,784

Dividends from surplus
Profit attributable to owners of parent
Purchase of treasury stock by stock benefit trust

14

Change of scope of consolidation

(14)
(0)

Change of scope of equity method
Change in treasury shares of parent arising fromtransactions with non-controlling shareholders
Capital increase of consolidated subsidiaries

3

3

(0)

(0)
－
6,052
37,413

Net changes of items other than shareholders' equity

－
5,000

Total changes of items during the period
Balance at the end of current period

16
14,0296,012
20,80124(2,417)

Total accumulated other comprehensive income
Total
Share
NonValuation
Foreign Remeasureme
accumulated acquisition controlling
difference on currency
nts
other
rightsinterests
available-for- translationof definedcomprehensive
sale securities adjustment benefit plansincomeTotal
netassets451－ 10,504 42,316

－
－

(758)
6,784

Purchase of treasury stock by stock benefit
trust

－

24

Change of scope of consolidation

－
－

0
(0)

Change in treasury shares of parent arisingfrom transactions with non-controllingshareholders－

3

Capital increase of consolidated subsidiaries－(0)

Balance at beginning of current period

499

(90)

41

Changes of items during the period
Dividends from surplus
Profit attributable to owners of parent

Change of scope of equity method

Net changes of items other than shareholders'equityTotal changes of items during the period
Balance at the end of current period

194

100

(5)

290

4

194
694

100
10

(5)
36

290
741

4 1,114 7,462
4 11,619 49,779- 18 -

1,114

1,410

FY2021 (For the fiscal year ended May 31, 2022)(Millions of yen)
Shareholders' equity
Capitalstock
Balance at beginning of current period

CapitalsurplusTreasury
stock

Total
shareholders'equity5,000

14,02920,80112(2,417)37,41312

5,000

14,02920,813(2,417)37,425(0)
39(1,196)
8,621
(0)
39

Cumulative effect of changes in accounting policies
Balance at beginning of current period reflectingchanges in accounting policies

Retained
Earnings

Changes of items during the period(1,196)
8,621

Dividends from surplus
Profit attributable to owners of parent
Acquisition of treasury stock
Disposal of treasury shares by stock benefit trust
Change in treasury shares of parent arising fromtransactions with non-controlling shareholders
Capital increase of consolidated subsidiaries

2,993

2,993

763

763
－
11,22048,646

Net changes of items other than shareholders' equity

3,757
17,786－
5,000

Total changes of items during the period
Balance at the end of current period

7,424
28,23839(2,378)

Total accumulated other comprehensive income
Valuation
Foreigndifference on currency
available-for- translation
sale securities adjustment
Balance at beginning of current period

694

10

Remeasure
Total
Share
Nonments
accumulated acquisition controllingof definedotherrightsinterests
benefitcomprehensive
plansincome36

Cumulative effect of changes in accounting
policies
Balance at beginning of current period
reflecting changes in accounting policies

741

4

11,619

10

36

741

49,779
12

－
694

Total
net
assets4

11,61949,792

Changes of items during the period－－－(1,196)8,621(0)

Disposal of treasury shares by stock benefit
trust

－

39

Change in treasury shares of parent arisingfrom transactions with non-controllingshareholders

－

2,993

Capital increase of consolidated subsidiaries－

763

Dividends from surplus
Profit attributable to owners of parent
Acquisition of treasury stock

Net changes of items other than shareholders'equityTotal changes of items during the period
Balance at the end of current period

436

187

(26)

597

－

5,535

6,133

436
1,131

187
197

(26)
10

597
1,339

－
4

5,535
17,155

17,354
67,146- 19 -

(4) Consolidated Statements of Cash Flows(Millions of yen)

FY2020

FY2021

Cash flows from operating activities
Profit before income taxes
Depreciation and amortization
Impairment loss
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in net defined benefit liability
Decrease (increase) in net defined benefit asset
Increase (decrease) in provision for directors’ stock benefit
Increase (decrease) in provision for employees’ stock grantInterest and dividends income
Interest expenses
Subsidy income
Share of (profit) loss of entities accounted for using equity method
Loss (gain) on sales and retirement of non-current assets
Loss (gain) on sales of investment securities
Loss (gain) on valuation of investment securities
Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in notes, accounts receivable-trade and contract assets
Decrease (increase) in inventories
Decrease (increase) in other assets
Increase (decrease) in operating debt
Increase (decrease) in accrued consumption taxes
Increase (decrease) in deposits received
Increase (decrease) in other liabilities
Other
SubtotalInterest and dividends income received
Interest expenses paid
Proceeds from subsidy
Income taxes paid
Net cash provided by operating activities- 20 -

16,706
3,794
3,238
662
(106)
464
128
(177)
159
139
(75)
290
(636)
110
367
(3)
71
(1,422)
－
(458)
975
(845)
527
(886)
3,127
104
26,25687(292)
636(7,820)18,86822,290
4,419
132
709
20
153
(41)
(629)
171
138
(71)
293
(720)
(142)
76
2
19
－
(6,112)(315)(1,907)
2,823(862)(1,201)(1,669)104
17,67986(286)
720(8,084)
10,115

(Millions of yen)

FY2020

FY2021

Cash flows from investment activities

755(7,031)10(1,721)(33)
7

10(11,632)
13(4,683)
(744)
95

(183)

(10,451)(59)
61(1,592)
326
(123)
(14)
(66)
(9,665)(7)
11(2,493)
256
(50)
－
52
(29,624)

5
7,511(8,901)
－
(645)
－
(306)
－
－

(61)
29,129(11,098)
257
(686)
2,500
(586)
1,171
(0)

Purchase of treasury shares of subsidiaries

(0)

(0)

Payments from changes in ownership interests in subsidiaries
that do not result in change in scope of consolidation
Proceeds from changes in ownership interests in subsidiaries
that do not result in change in scope of consolidation
Cash dividends paid

(19)

(0)

0

6,523

(756)
(2,041)
5(5,147)95
4,150
48,147(1,194)(2,390)(20)
23,543244
4,278
52,298－1

52,29856,578Decrease (increase) in time deposits
Purchase of property, plants, and equipment
Proceeds from sales of property, plants, and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of shares of subsidiaries resulting in charge in scope of
consolidation
co c
Payments
of loans receivableCollection of loans receivable
Payments for lease and guarantee deposits
Proceeds from collection of lease and guarantee deposits
Payments for asset retirement obligation
Payments for transfer of business
Other
Net cash used in investment activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Proceeds from sale and leaseback
Repayments of finance lease obligations
Proceeds from issuance of bonds
Redemption of bonds
Proceeds from payments from noncontrolling interests
Purchase of treasury shares

Dividends paid to non-controlling interests
Other
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 the beginning of the period
Decrease in cash and cash equivalents resulting from exclusionof subsidiaries from consolidation
Cash and cash equivalents at the end of the period―21 ―(5) Note to Consolidated Financial Statements(Notes to Going Concern Assumption)
None(Important Items Considered Fundamental to the Preparation of Consolidated Financial Statements)
1. Scope of Consolidation
1) Consolidated subsidiaries
a. No. of consolidated subsidiaries: 66 companies
b. Major consolidated subsidiaries

Pasona Inc.
Benefit One Inc.
Bewith, Inc.
Pasona Tech, Inc.
Pasona Panasonic Business Service Co., Ltd.
Nijigennomori Inc.
c. New consolidated subsidiaries: 6 companies
Establishment
Pasona HR HUB Inc.
Koshunoya Inc.
awajishima resort Inc.
All Japan Tourism Alliance Inc.
Share acquisition
JTB BENEFIT SERVICE, Inc.*1
Change from equity method affiliates
Takumi Sousei Inc.*2
d. Exclusion from the scope of consolidation: 2 companies
DG1 Inc.*3
More-Selections Inc.*4*1

Merged with Benefit One Inc., a consolidated subsidiary of the Company, on April 1, 2022, and was
dissolved*2 Transferred from an affiliated company accounted for by the equity method due to increase inmateriality*3 Excluded from scope of consolidation due to the sale of all shares held by Benefit One Inc., aconsolidated subsidiary of the Company*4 Merged with Pasona Inc., a consolidated subsidiary of the Company, and was dissolved2) Non-consolidated subsidiarya. No. of non-consolidated subsidiaries: 12 companies
b. Major non-consolidated subsidiaries Pasona Force Inc.
c. Reasons for exclusion from the scope of consolidation
The assets, sales, net profit & loss (the amount equivalent to equity shareholdings), and retained earnings(the amount equivalent to equity shareholdings) are considered insignificant and deemed to haveimmaterial impact on the consolidated financial statements. As a result, these non-consolidated
subsidiaries have been excluded from the scope of consolidation.
2. Application of the Equity Method
1) Affiliated companies that are accounted for by the equity method
a. No. of affiliated companies that are accounted for by the equity method: 9 companies
b. Major affiliated companies that are accounted for by the equity method
e-staffing Co., Ltd.
National Examination Center Inc.
circlace Inc.
c. Exclusion from affiliated companies that are accounted for by the equity method: 1 company
Takumi Sousei Inc. (Note)(Note) Transferred to consolidated subsidiary due to increase in materiality
2) Non-consolidated subsidiaries and affiliated companies not accounted for by the equity method
a. No. of non-consolidated subsidiaries and affiliated companies not accounted for by the equity method: 9companies―22 ―b. Major non-consolidated subsidiaries and affiliated companies not accounted for by the equity method
Pasona Force Inc.
c. Reasons for exclusion from the scope of the equity method
Non-consolidated subsidiaries and affiliated companies not accounted for by the equity method were
excluded from the scope of consolidation, as their net profit and loss (the amount equivalent to equity
shareholdings) and retained earnings (the amount equivalent to equity shareholdings) had an immaterial
impact on the Group and as their overall importance to the Group’s performance was limited.
(Changes in Accounting Policies)(Application of Accounting Standard for Revenue Recognition, etc.)
The "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020;
hereinafter referred to as the "Revenue Recognition Accounting Standard") and other standards are applied
from the beginning of the fiscal year under review, and revenue is recognized at the amount expected to bereceived in exchange for the promised goods or services when control of the goods or services is transferredto the customer. The main changes as a result of this change are as follows
In the Outsourcing business, for transactions in which the Company previously recognized as revenue
the gross amount of consideration received from the customer, the Company now recognizes as revenue thenet amount of consideration received from the customer less the amount paid to the service provider fortransactions in which the role of the consolidated subsidiary in providing services to the customer isdetermined to be that of an agent. The Company has changed its method of accounting for such transactions.
In addition, in the Expert Services business, the Company previously recognized revenue for the amountequivalent to commuting and transportation expenses related to temporary staff received from clients on a
net amount to be paid to the temporary staff from the consideration received from the client. However, theCompany has changed the method of recognizing revenue on a gross basis, judging that it is a part of theconsideration for providing temporary staffing services and that the role of the consolidated subsidiary falls
under this category.
In accordance with the transitional treatment prescribed in the proviso to Paragraph 84 of the Revenue
Recognition Accounting Standard, the cumulative effect of the retrospective application of the new
accounting policy prior to the beginning of the fiscal year under review is added to or deducted from retained
earnings at the beginning of the fiscal year under review, and the new accounting policy is applied from thebalance at the beginning of the fiscal year under review. However, the new accounting policy was not applied
retrospectively to contracts for which almost all revenue amounts were recognized in accordance with theprevious treatment prior to the beginning of the fiscal year under review by applying the method prescribedin Paragraph 86 of the Revenue Recognition Accounting Standard. In addition, the Company has applied themethod prescribed in the proviso (1) to Paragraph 86 of the Revenue Recognition Accounting Standard andhas accounted for contract modifications made prior to the beginning of the fiscal year under review basedon the contract terms after reflecting all contract modifications, with the cumulative effect of themodifications added to or subtracted from retained earnings at the beginning of the fiscal year under review.
Due to the application of the Revenue Recognition Accounting Standard, etc., "notes and accounts
receivable-trade," which was presented in "current assets" in the consolidated balance sheet in the previous
fiscal year, is presented separately from "notes receivable-trade,” “accounts receivable-trade," and "contract
assets" in the fiscal year under review, and "unearned revenue" related to revenue, which was presented in"current liabilities," is included in "contract liabilities" from the fiscal year under review. In addition,"decrease (increase) in notes and accounts receivable-trade," which was presented in "cash flows fromoperating activities" in the consolidated statements of cash flows for the previous fiscal year, is included in"Decrease (increase) in notes, accounts receivable-trade, and contract assets" from the fiscal year underreview. However, in accordance with the transitional treatment prescribed in Paragraph 89-2 of the Revenue
Recognition Accounting Standard, no reclassification has been made for the previous fiscal year using thenew presentation.
As a result, compared with the figures before the application of the Revenue Recognition AccountingStandard, etc., net sales decreased ¥5,046 million, cost of sales decreased ¥5,175 million, selling, general,and administrative expenses increased ¥160 million, and operating income, ordinary income, and profit
before income taxes each decreased ¥31 million in the consolidated statement of income for the fiscal year
under review.
―23 ―The balance of retained earnings in the consolidated statement of changes in net assets at the beginning of
the current period increased by ¥12 million due to the cumulative effect on net assets for the current period.
The impact on per share information is shown in "Per Share Information."(Application of "Accounting Standard for Fair Value Measurement," etc.)
The "Accounting Standard for Fair Value Measurement" (ASBJ Statement No. 30, July 4, 2019;
hereinafter referred to as the "Fair Value Measurement Accounting Standard") and other standards are applied
from the beginning of the fiscal year under review, in accordance with the transitional treatment prescribedin Paragraph 19 of the Fair Value Measurement Accounting Standard and Paragraph 44-2 of the "AccountingStandard for Financial Instruments" (ASBJ Statement No. 10, July 4, 2019). The new accounting policies
prescribed by the accounting standards will be applied prospectively. There is no impact on the consolidated
financial statements.
(Changes in Presentation Method)“Deposits received," which was included in "other" under "current liabilities" in the previous fiscal year,
is presented as a separate line item in the current consolidated fiscal year due to its increased importance interms of amount. To reflect this presentation, the consolidated financial statements for the previous fiscal
year have been reclassified.
As a result, "other" of ¥11,555 million in "current liabilities" in the consolidated balance sheets for theprevious fiscal year has been reclassified as "deposits received" of ¥5,518 million and "other" of ¥6,036
million.
(Additional Information)(Accounting estimate of the impact of the COVID-19 infection)
Due to COVID-19, the Group was affected by the suspension of operations and shortened operating hours,
especially in the Regional Revitalization Solutions business, which operates food and beverage, amusement,
and lodging businesses, while taking measures to prevent the spread of infection at each facility, but theGroup is aggressively opening new facilities with an eye on the post-COVID-19 era. Since March this year,
when the priority measures to prevent the spread of infections were lifted, domestic tourist visits have been
increasing, and inbound demand is expected to gradually recover as countries ease their entry into the country.
Accounting estimates for the impairment of fixed assets, etc., are based on the current business conditions
and information available at the time of preparation of the consolidated financial statements and are estimatedbased on the assumption that further increase in domestic tourists and increase in overseas tourists is expectedin the medium term.
Because accounting estimates, including forecasts of the future impact of COVID-19, are subject touncertainty, changes in assumptions related to accounting for the impairment of fixed assets, such as
prolonged impact of COVID-19, could necessitate the recording of impairment losses on fixed assets in thenext consolidated fiscal year. In this case, the Company might be required to record an impairment loss on
fixed assets in the next fiscal year.
(Business Combinations, etc.)(Business combination through acquisition)
Benefit One Inc., a consolidated subsidiary of the Company (a company with a fiscal year end in March,hereinafter referred to as "Benefit One") acquired all shares of JTB BENEFIT SERVICE, Inc. (hereinafterreferred to as "JTB Benefit") on October 29, 2021, and made JTB Benefit a subsidiary. Benefit One mergedwith JTB Benefit effective April 1, 2022.
1. Outline of Business Combination(1) Name of acquired company and its business
Name of acquired company: JTB BENEFIT SERVICE, Inc.
Description of business:
Employee benefit agency services―24 ―(2) Main reason for business combination
While COVID-19 has had a major impact on the social economy, it has also provided an opportunity formany companies to accelerate their efforts to reform workstyles, health management, and digitalization, etc.
The use of outsourcing services will continue to increase in corporate HR departments, and the use of HRDX
(digital transformation in the HR domain) will also increase. In the future, HR departments will increasingly
utilize outsourcing services, and HRDX (digital transformation in the HR domain) is expected to become an
important management issue.
Benefit One recognizes these socioeconomic trends as an opportunity and has developed the "Bene One
Platform," which enables the management and utilization of HR and health data in conjunction with a varietyof outsourcing services related to human resources and labor affairs, as well as outsourcing services for
employee benefits and healthcare. The company is promoting a platform strategy to support corporate HRDX
and is working to widely disseminate this platform and accelerate membership growth as its core mid- to longterm strategy.
JTB Benefit, on the other hand, has been a leading player in employee benefit services since its
establishment in 2000, aiming to contribute to "work-life balance of workers" and "creation of an energetic
workplace."
In line with Benefit One's mid-term management plan, we have decided to welcome "JTB Benefit" into ourgroup with the expectation of a dramatic expansion of its membership base and service distribution.
(3) Date of business combination
October 29, 2021
(4) Legal form of business combination
Acquisition of shares for cash consideration(5) Name of company after business combination
Benefit One Inc.
(6) Percentage of voting rights acquired
100%(7) Main basis for determining the acquiring company
Benefit One was designated as the acquiring company due to the acquisition of its shares for cash
consideration.
2. Period of performance of the acquired company included in the consolidated financial statements
January 1, 2022 to March 31, 2022
3. Acquisition cost and breakdown by type of consideration
Consideration for acquisition Cash ¥12,177 million
Acquisition cost
¥12,177 million
4. Details and amounts of major acquisition-related expenses
Compensation for advisory services¥139 million
5. Amount of goodwill incurred, reason for incurring goodwill, amortization method, and amortization period(1) Amount of goodwill incurred¥5,898 million(2) Cause of goodwill
Because the acquisition cost exceeded the net assets of the acquired company, the excess amount wasrecorded as goodwill.
(3) Amortization method and period
Equal amortization over 20 years
6. Amounts of assets acquired and liabilities assumed on the date of business combination and their breakdown
Current assets¥3,183 million
Non-current assets¥9,054 million
Total assets¥12,238 million
Current liabilities¥3,253 million―25 ―Non-current liabilities
Total liabilities¥2,706 million¥5,959 million

7. Amounts allocated to intangible assets other than goodwill and amortization periods
Customer-related assets Amount¥8,441 million
Amortization period
22 years
8. Estimated effect of the business combination on the consolidated statement of income for the current
consolidated fiscal year as if the business combination had been completed on the first day of theconsolidated fiscal year and the method of calculation
Net sales¥5,800 million
Operating income¥328 million
Ordinary income¥354 million
Profit before income taxes¥354 million
Profit attributable to owners of the parent¥89 million
Net income per share¥2.28(Method of calculation of estimated amount)
The difference between the net sales and profit/loss information calculated as if the business combination
had been completed on the first day of the consolidated fiscal year and the net sales and profit/loss
information in the consolidated statement of income of the Group is the estimated amount of impact. These
notes are unaudited.
(Partial sale of shares of a subsidiary)
Bewith, Inc. (hereinafter referred to as "Bewith"), a consolidated subsidiary of the Company, was newly
listed on the First Section of the Tokyo Stock Exchange on March 2, 2022, and issued new shares (900,000
common shares) through a public offering. In conjunction with the listing, the Company sold a portion of its
holdings in Bewith. Bewith moved to the Tokyo Stock Exchange Prime Market on April 4, 2022.
1. Outline of Transaction(1) Name and Business of Subsidiary
Name of subsidiary
Bewith, Inc.
Description of business Provision of contact center and BPO services utilizing digital technology suchas Omnia LINK, a cloud-based PBX developed in-house, and thedevelopment and sales of various AI and DX solutions(2) Date of share saleFirst sale date
March 2, 2022
Second sale date
April 1, 2022 (over-allotment)(3) Legal form of business combination
Partial sale of shares of a subsidiary to a non-controlling shareholder without changing the scope of
consolidation(4) Outline of the transaction including purpose of transaction
Following the initial listing of our consolidated subsidiary Bewith on the First Section of the Tokyo
Stock Exchange on March 2, 2022, we sold a portion of our holdings in Bewith.
The listing of Bewith's stock will enhance the company's social credibility and name recognition bothin Japan and overseas and will promote the expansion of its business partners and the hiring of excellent
human resources, leading to the continuous expansion of its business. We believe that the expansion of
Bewith's business will contribute to the further enhancement of the corporate value of our entire group.
After the listing, our company will maintain a majority shareholding in Bewith, and we will promote
the growth of the entire group while taking advantage of group synergies.
2. Outline of Accounting Procedures Implemented
In accordance with the "Accounting Standard for Business Combinations" (ASBJ Statement No. 21,
January 16, 2019) and the "Implementation Guidance on Accounting Standard for Business Combinations―26 ―and Accounting Standard for Business Divestitures" (ASBJ Guidance No. 10, January 16, 2019),
transactions under common control etc., as a transaction with non-controlling shareholders, the equity
corresponding to the shares sold is reduced from the Company's equity, the non-controlling shareholders'equity is increased, and the difference between the decrease in the Company's equity due to the sale andthe sale price is recorded as additional paid-in capital.
3. Matters related to changes in the Company's interest in transactions with non-controlling shareholders(1) Main reasons for changes in capital surplus
Due to the difference between the amount of decrease in the Company's equity interest from the saleand the sale price(2) Amount of capital surplus increased by transactions with non-controlling shareholders¥2,984 million(Segment Information, etc.)[Segment Information]
1. Overview of reportable segments
The business segments reported by the Group are the business units for which the Group is able to obtainrespective financial information separately in order for the Board of Directors to conduct periodic
investigations to determine the distribution of management resources and evaluate their business results.
The Group’s principal business activities are comprehensive human resource-related support services.
Accordingly, the Group has designated "Expert Services (Temporary staffing), BPO Services (Contracting),
Others," "Career Solutions (Placement/Recruiting, Outplacement)," "Outsourcing," "Life Solutions," and"Regional Revitalization Solutions" as reporting segments. Pasona Group Inc., a holding company, pursues
the formulation of strategies for Group management and supports operation execution, governance ofmanagement, and the proper allocation of management resources, as well as developing new businesses
related to job creation.
2. Method of computing net sales, income (loss), assets, liabilities, and other items by reporting segment
The accounting treatment method for the Group’s reporting segments is generally same as the consolidated
financial statements.
Also, segment income is based on operating income.
The prices of intersegment transactions and transfers are determined by price negotiations based on theGroup’s submission of preferred prices after taking market conditions into account.
(Application of Accounting Standards for Revenue Recognition, etc.)
As described in "Change in Accounting Policies," the Company has applied the Revenue Recognition
Accounting Standard and other standards to its consolidated financial statements for the fiscal year underreview, and has changed its accounting method for revenue recognition, and has therefore changed its method
for calculating profit or loss by business segment as well.
As a result of this change, compared with the previous method, net sales and segment income of "Expert
Services, BPO Services and Others" increased ¥2,680 million and ¥18 million, respectively, while net sales
and segment income of "Career Solutions" decreased ¥47 million and ¥47 million, respectively. Net sales of"Outsourcing" decreased ¥7,682 million, and segment income decreased ¥1 million. Net sales of "Life
Solutions" increased ¥3 million, and net sales of "Regional Development Solutions" decreased ¥0 million,
with segment income decreasing by ¥0 million.

―27 ―3. Information regarding net sales, income (loss), assets, liabilities, and other items by reporting segment
FY2020 (For the fiscal year ended May 31, 2021)(Millions of yen)
Reporting segments
HR Solutions
ExpertServices,
BPO
Services,
Others(Note 1)

Regional
Life
CareerRevitalization
Outsourcing Solutions
Solutions
Solutions

Total

Figures in
Adjustment consolidated
statements(Note 2)of incomeNet sales
Net sales to outside
customers
Intersegment sales andtransfers

274,957

13,83336,747

6,257

2,744

334,540－

334,540

2,906

30

1,097

312

500

4,846

(4,846)－

Total

277,864

13,86337,844

6,570

3,244

339,387(4,846)

334,540

Segment income (loss)

17,543

3,919

9,794

203

(2,327)

29,132(9,191)

19,940

Segment assets

75,655

18,53135,855

2,136

11,273

143,452

8,188

151,641

1,419

257

778

52

683

3,192

602

3,794

Amortization of Goodwill

649

－

8

0

2

662

－

662

Impairment losses
Increase in tangible andintangible fixed assets

736

－

－

－

2,502

3,238

－

3,238

1,188

84

1,300

173

4,210

6,957

2,431

9,388

Other items
Depreciation andAmortization

Notes:
1. The “Expert Services, BPO Services, Others” segment includes each of the businesses of Expert Services(Temporary staffing), BPO Services (Contracting), HR Consulting/Education & Training/Others and Global
Sourcing (Overseas).
2. The following are included in the adjustment item.
(1) Adjustment of segment loss totaling ¥9,191 million includes Group management costs relating to theCompany and incubation cost of our new business totaling ¥9,237 million, as well as intersegment sales
and transfers totaling ¥45 million.
(2) Adjustment of segment assets totaling ¥8,188 million includes the Company’s cash and deposits andassets relating to Group management totaling ¥46,926 million, as well as intersegment sales and transfers
totaling ¥(38,737) million.
(3) Adjustment of depreciation and amortization totaling ¥602 million is mainly comprised of depreciation
and amortization of assets relating to Group management totaling ¥610 million, as well as intersegment
sales and transfers totaling ¥(7) million.
(4) Adjustment of increase in tangible and intangible fixed assets totaling ¥2,431 million is mainly comprisedof an increase of assets relating to Group management totaling ¥2,478 million and intersegment sales
and transfers totaling ¥(46) million.
3. Segment income is adjusted with operating income under consolidated statements of income.

―28 ―FY2021 (For the fiscal year ended May 31, 2022)(Millions of yen)
Reporting segments
HR Solutions
ExpertServices,
BPO
Services,
Others(Note 1)Net Sales
Expert Services
Net
BPO Services
HR Consulting,
Education & Training,
Other
Global Sourcing
Career Solution
Outsourcing
Life Solution
Regional
Revitalization Solution
Revenue from contracts
with customers
Other revenue
Net sales to outside
customers
Intersegment sales andtransfers

Life
CareerOutsourcing Solutions
SolutionsRegional
Revitalization
Solutions

Total

Figures in
Adjustment consolidated
statements(Note 2)of income

151,520
137,319

－
－

－
－

－
－

－ 151,520－ 137,319

7,181

－

－

－

－

7,181

－

7,181

8,043
－
－
－

－
14,665－－－－37,040
－

－
－
－
6,686

－
－
－
－

8,043
14,66537,040
6,686

－
－
－
－

8,043
14,66537,040
6,686

－

－

－

－

3,639

3,639

－

3,639

304,064

14,66537,040

6,686

－

－

－

－

304,064

14,66537,040

6,686

4,028

34

1,319

472

Total

308,093

14,70038,3597,158

Segment income (loss)

18,793

4,470

12,765232

Segment assets

89,23020,61458,074

2,322

1,072

191

1,059

59

950

3,333

1,086

4,419

631

－

77

－

－

709

－

709

－

－

－

－

132

132

－

132

1,093

57

17,9005

4,703

23,760

7,633

31,394

Other items
Depreciation andAmortization
Amortization of
Goodwill
Impairment losses
Increase in tangible andintangible fixed assets

3,639 366,096－－

3,639 366,096
786

6,642

4,426 372,739(2,612)－ 151,520－ 137,319－ 366,096－－ 366,096(6,642)－(6,642) 366,096

33,650 (11,566)

15,654 185,896－

22,083

17,849 203,746

Notes:
1. The following are included in the adjustment item.
(1) Adjustment of segment loss totaling ¥(11,566) million includes Group management costs relating to theCompany and incubation cost of our new business totaling ¥(11,711) million, as well as intersegment
sales and transfers totaling ¥145 million.
(2) Adjustment of segment assets totaling ¥17,849 million includes the Company’s cash and deposits andassets relating to Group management totaling ¥51,703 million, as well as intersegment sales and transfers
totaling ¥(33,854) million.
(3) Adjustment of depreciation and amortization totaling ¥1,086 million is mainly comprised of depreciation
and amortization of assets relating to Group management totaling ¥1,151 million, as well as intersegment
sales and transfers totaling ¥(64) million.
(4) Adjustment of increase in tangible and intangible fixed assets totaling ¥7,633 million is mainly comprisedof an increase of assets relating to Group management and headquarters functions totaling ¥7,658 million,
as well as intersegment sales and transfers totaling ¥(24) million.
2. Segment income is adjusted with operating income under consolidated statements of income.

―29 ―[Related information]
FY2020 (For the fiscal year ended May 31, 2021)
1. Information by product and service
Nothing is stated herein as similar information is disclosed in segment information.
2. Information on geographic areas(1) Net sales
Since the percentage of net sales in Japan exceeds 90%, information on geographic areas is omitted in thisreport.
(2) Property, plants, and equipment
Because the percentage of total property, plants, and equipment located in Japan exceeds 90%,
information on geographic areas is omitted in this report.
3. Information by major customer
No major customer is stated because no customer accounted for more than 10% of net sales.
FY2021 (For the fiscal year ended May 31, 2022)
1. Information by product and service
Nothing is stated herein, as similar information is disclosed in segment information.
2. Information on geographic areas(1) Net sales
Because the percentage of net sales in Japan exceeds 90%, information on geographic areas is omitted inthis report.
(2) Property, plants, and equipment
Because the percentage of total property, plants, and equipment located in Japan exceeds 90%,
information on geographic areas is omitted in this report.
3. Information by major customer
No major customer is stated because no customer accounted for more than 10% of net sales.

(Information regarding Impairment Loss on fixed assets by reporting segment)
FY2020 (For the fiscal year ended May 31, 2021)
Because an impairment loss on fixed assets has been already disclosed in the segment information, it is omitted
in this report.
FY2021 (For the fiscal year ended May 31, 2022)
Because an impairment loss on fixed assets has been already disclosed in the segment information, it is omitted
in this report.

―30 ―[Information regarding Unamortized Balance of Goodwill by reporting segment]
FY2020 (For the fiscal year ended May 31, 2021)(Millions of yen)
Reporting segments

Balance at the end of
the period

Expert Services,
BPO Services,
Others

CareerSolutionsOutsourcing

1,640

－

4

Regional
Life Solutions Revitalization
Solutions－－

Adjustment

Total

1,644

－

FY2021 (For the fiscal year ended May 31, 2022)(Millions of yen)
Reporting segments

Balance at the end of
the period

Expert Services,
BPO Services,
Others

CareerSolutionsOutsourcing

1,008

－

5,824

Regional
Life Solutions Revitalization
Solutions(Information regarding Gain on Bargain Purchase by reporting segment)
FY2020 (For the fiscal year ended May 31, 2021)
None
FY2021 (For the fiscal year ended May 31, 2022)
None

―31 ―

－

－

Adjustment

－

Total

6,833

(Per Share Information)(Yen)

FY2020

FY2021

Net assets per share

974.85

1,276.00

Net income per share

173.36220.19－219.63

Diluted net income per share(Notes)Diluted net income per share for the previous fiscal year is not shown because there are no residual
securities with dilutive effects.
2. The Company’s shares in BBT and J-ESOP, which are reported as treasury shares under Shareholders’equity, are not counted toward the number of treasury shares as of the period-end and the average numberof shares outstanding for the period, for the purpose of computing earnings and net assets per share.
The number of treasury shares deducted for calculation of net assets per share was 452,100 in FY2020
and 424,862 in FY2021, in terms of BBT, and was 305,752 in FY2020 and 298,114 in FY2021 in termsof J-ESOP (year-end basis). The number of treasury shares deducted for calculation of net income pershare was 455,964 in FY2020 and 443,070 in FY2021, in terms of BBT, and was 308,912 in FY2020
and 299,370 in FY2021 in terms of J-ESOP (year-average basis).
3. The Company has applied the "Revenue Recognition Accounting Standard" and other standards from the
beginning of the fiscal year under review as prescribed in "Changes in Accounting Policies." The effectof this change on net assets per share, net income per share, and diluted net income per share for thecurrent consolidated fiscal year is immaterial.
1.

4.

The following shows the basis for calculating net income per share and diluted net income per share.
(Millions of yen)

Items

FY2020

FY2021

Profit attributable to owners of the parent

6,784

8,621

Amount not applicable to shareholders ofcommon stock－－

Profit attributable to owners of the parent
applicable to common stock

6,784

8,621

Average number of shares for the period(shares)

39,132,377

39,154,774

－

(22)

－

(22)

Diluted net income per share
Adjustment to net income attributable toowners of the parent(Adjustment due to latent shares of
consolidated subsidiaries)
Overview of diluted shares excluded fromthe calculation of net income per share after
adjusting for diluted share because of lackof diluting effect

Share acquisition rights ofconsolidated subsidiary:
2 types (Number of stockacquisition rights: 5,450)－

5 . The following shows the basis of calculating net assets per share.
(Millions of yen)

Items

As of May 31, 2021

As of May 31, 2022

Total net assets
Amount deducted from total net assets
Net assets applicable to common stock as of the fiscal
period-end

49,779
11,624

67,146
17,16038,15549,986

Number of common stock shares used to calculate net
assets per share (shares)

39,139,401

39,174,206―32 ―(Important Subsequent Events)(Acquisition and Cancellation of Treasury Stock of Consolidated Subsidiary)
Benefit One Inc. ("Benefit One") resolved at a meeting of its Board of Directors held on May 10, 2022,
regarding matters pertaining to the acquisition of treasury stock in accordance with the provisions of its
Articles of Incorporation pursuant to Article 459, Paragraph 1 of the Companies Act of Japan, and also
resolved to cancel a portion of treasury stock held by the Company in accordance with Article 178 of theCompanies Act.
1. Reasons for the share repurchase and cancellation
To improve capital efficiency and to return profits to shareholders
2. Details of matters relating to the acquisition(1) Type of shares to be acquired: Common stock of Benefit One Inc.
(2) Total number of shares to be acquired: 800,000 shares (maximum)(0.50% of the total number of shares issued excluding treasury stock (as of March 31, 2022))
Note: Benefit One has introduced a stock benefit trust (J-ESOP) and a stock benefit trust (BBT), andthe Custody Bank of Japan, Ltd. (Trust E account) (hereinafter referred to as "Trust E account") owns
Benefit One shares, but the above treasury stock does not include Benefit One shares owned by Trust E
account.
(3) Total amount of shares to be acquired: ¥1,500 million (maximum)(4) Period of acquisition: May 12, 2022 to June 10, 2022
(5) Method of acquisition: Purchase on the market at the Tokyo Stock Exchange based on a discretionary
trading agreement
3. Results of acquisition(1) Type of shares acquired: Common stock of Benefit One Inc.
(2) Total number of shares acquired: 779,100 shares(3) Total amount of shares acquired: ¥1,499,989,399(4) Date of share acquisition: May 12, 2022 to June 8, 2022 (contract basis)(5) Method of acquisition: Purchase on the market at the Tokyo Stock Exchange based on a discretionary
trading agreement
4. Details of matters pertaining to retirement(1) Type of shares retired: Common stock of Benefit One Inc.
(2) Number of shares retired: Same as the total number of shares of treasury stock acquired in accordancewith 3. above(3) Date of retirement: June 30, 2022

―33 ―