Consolidated Financial Results for the First Nine Months of FY 3/2022[Japanese GAAP]
February 7, 2022
Company Name
Securities CodeNISSO CORPORATION

Representative(Title)6569

ＵＲＬ

Stock Exchange Listing: Tokyo

https://www.nisso.co.jp/

Representative Director,
President & CEO
Sr. Executive Officer（Name）Ryuichi Shimizu

Contact Person(Title)（Name）Norihiro Sekido ＴＥＬ +81-45-514-4323
Scheduled date of filing
Scheduled date of
February 10, 2022－
Quarterly Report
payment of dividend
Preparation of supplementary materials for(Scheduled to be posted on the Company's website on February 7, 2022 (Mon.))quarterly financial results: Yes
Holding of quarterly financial results(Scheduled to be held for institutional investors and analysts on February
meeting: Yes
10, 2022 (Thu.))（All amounts are rounded down to the nearest million yen）

1.

Consolidated Financial Results for the First Nine Months of the Fiscal Year Ending March 31, 2022
(April 1, 2021 - December 31, 2021)(1) Consolidated results of operations（Percentages represent year-on-year changes）
Net salesFirst nine months ended

December 31, 2021
December 31, 2020
(Note) Comprehensive income

Million yen％

56,97750,44213.0(9.5)

Operating profit

Ordinary profit

Million yen

Million yen

First nine months ended

December 31, 2021
December 31, 2020

Yen

Yen

30.48
37.81

(2) Consolidated financial position
Total assets
December 31, 2021
March 31, 2021

2.

Million yen％

1,036 (19.3)
1,284 (1.8)

1,027 Million yen (-20.1%)
1,285 Million yen ( 1.8%)

Diluted net income
per share

30.50
37.96

As of

％

1,595 (20.4)
2,005
3.4

For the first nine months ended December 31, 2021:
For the first nine months ended December 31, 2020:

Net income per share(Reference) Equity capital％

1,406 (16.2)
1,678 (11.5)

Profit attributableto owners of parent

Net assets

Equity ratio

Million yen

Million yen％

23,401
21,631

12,89012,76355.1
59.0

As of December 31, 2021:
As of March 31, 2021:

12,890 Million yen
12,763 Million yen

Dividends
Dividend per share
1Q-endFiscal year ended
March 31, 2021
Fiscal year ending
March 31, 2022
Fiscal year ending
March 31, 2022
(Forecast)

2Q-end3Q-endYear-end

Total

Yen

Yen

Yen

Yen

Yen

－

0.00

－

20.10

20.10

－

0.00

－
18.00

18.00

(Note) Revisions to the most recently announced dividend forecast: None

3. Consolidated Forecast for the Fiscal Year Ending March 31, 2022
(April 1, 2021 – March 31, 2022)（Percentages represent year-on-year changes）
Profit attributable Net income
Net sales
Operating profit Ordinary profit
to owners of parent per share

Full year

Millionyen％

Millionyen％

78,000

14.3

2,400

(7.7)

Millionyen(Note) Revisions to the most recently announced dividend forecast: None％

Million
yen

％

Yen

2,600 (11.9)

1,750

9.9

51.51

※

Notes
(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting inchanges in the scope of consolidation): None
(Note) Although not applicable to changes in specified subsidiaries, Vector Shinwa Co., Ltd. has been included in the scopeof consolidation from the consolidated cumulative second quarter.

(2) Application of special accounting methods for the presentation of quarterly consolidated financial
statements: None
(3) Changes in accounting policies and accounting estimates, and restatements① Changes in accounting policies due to revisions in accounting standards, etc.:② Changes in accounting policies other than ① above:③ Changes in accounting estimates:④ Restatements:

Yes
None
None
None

(Note) For details, please refer to "2. Quarterly Consolidated Financial Statements and Notes (3) Notes regarding Quarterly
Consolidated Financial Statements (Changes in Accounting Policies)" on P.9 of the attachments.

(4) Number of outstanding shares (Common stock)① Number of shares outstanding at
As of Dec. 31,
the end of the period (including
2021
treasury shares)②③

Number of treasury shares at theend of the period

As of Dec. 31,

Average number of shares
outstanding during the period(Quarterly total)

First nine2021

34,327,600 Shares

348,444 Shares

As of Mar. 31,
2021
As of Mar. 31,
2021

34,320,400 Shares

366,381 SharesFirst ninemonths ended

33,968,784 Shares months ended

Dec. 31, 2021

Dec. 31, 2020

33,823,943 Shares※

The quarterly financial statement is not subject to the quarterly review procedures of certified public
accountants or auditing corporations※

Cautionary statement on the appropriate use of earning forecasts, and other special items（Notes on forward-looking statements, etc.）
・Earnings forecasts regarding future performance and other forward-looking statements in thismaterial are based on certain assumptions judged to be valid and on information that is currently
available to the Company, and do not represent promises by the Company that these figures will beachieved. In addition, actual results may differ significantly due to a variety of factors. For
prerequisite conditions, etc. regarding the earnings forecasts, please refer to "1. Qualitative
Information on Quarterly Financial Results, (3) Description of Future Forecast Information such as
Consolidated Forecasts, etc." on P.5 of the attachments.
（Supplementary materials for quarterly financial results and method of obtaining content for quarterly
financial results meeting）
The Company is planning to hold a briefing session for institutional investors and analysts on
Thursday, February 10, 2022.
Quarterly financial results briefing materials to be used on that day will be posted on the Company's
website on the day of the announcement of financial results (Monday, February 7, 2022).

（Reference）Summary of Non-consolidated Financial Results
Non-consolidated Financial Results for the First Nine Months of the Fiscal Year Ending March 31, 2022
(April 1, 2021 – December 31, 2021)(1) Non-consolidated results of operations（Percentages represent year-on-year changes）
Net salesFirst nine months ended

Million yen

December 31, 2021
December 31, 2020％

Operating profit

Ordinary profit

Million yen

Million yen

1,429 (16.8)
1,718 (10.3)

Net income per share

Diluted net income
per shareFirst nine months ended

December 31, 2021
December 31, 2020

Yen

Yen

29.14
37.37

29.12
37.21

(2) Non-consolidated financial position
Total assets
As ofEquity capital％

1,528 (22.1)
1,962
2.3

Net assets

Million yen％

989 (21.7)
1,263 (3.1)

Equity ratio

Million yen

Million yen％

21,241
19,811

12,278
11,95557.8
60.3

December 31, 2021
March 31, 2021
(Reference)％

52,66814.0
46,191 (10.2)

Quarterly net profit

As of December 31, 2021:

12,278 Million yen

As of March 31, 2021

11,955 Million yen

○Contents of Attachments
１．Qualitative Information on Quarterly Financial Results ……………………………………………………

2（１）Description of Results of Operations ………………………………………………………………………

2（２）Description of Financial Position ……………………………………………………………………………

5（３）Description of Future Forecast Information such as Consolidated Forecasts, etc. ………………

5

２．Quarterly Consolidated Financial Statements and Notes ………………………………………………………

6（１）Quarterly Consolidated Balance Sheet ………………………………………………………………………

6（２）Quarterly Consolidated Statements of Income and Comprehensive Income ……………………………

7

Quarterly Consolidated Statement of Income
For the First Nine Months ended December 31, 2021 ……………………………………………………

7

Quarterly Consolidated Statement of Comprehensive Income
For the First Nine Months ended December 31, 2021 ……………………………………………………

8（３）Notes regarding Quarterly Consolidated Financial Statements …………………………………………

9（Notes regarding the Going Concern Assumption） …………………………………………………………

9（Notes on Significant Changes in the Amount of Shareholders' Equity） ……………………………

9（Changes in Accounting Policies） ……………………………………………………………………………

9（Additional Information） ………………………………………………………………………………………

9（Business Combinations, etc.）…………………………………………………………………………………

10（Significant Subsequent Events） ………………………………………………………………………………

10

- 1 -

１．Qualitative Information on Quarterly Financial Results（１）Description of Results of Operations
Japan's economy during the current consolidated cumulative third quarter (hereinafter, the "period
under review") showed signs of gradual recovery as the severe situation eased due to the decrease in
the number of people infected with the new coronavirus (hereinafter, "COVID-19”). However, it isnecessary to pay close attention to the impact on both domestic and overseas economies, such as supply
constraints and trends in raw material prices due to the supply chain stagnation resulting fromlockdowns in Southeast Asia, and the re-expansion of the number of COVID-19 infections, mainly the
Omicron strain, which occurred around November 2021.
As for the business environment surrounding the Nisso Group (hereinafter, the "Group"), althoughsome auto-body manufacturers, who are important clients, continued to make operational adjustments dueto the effects of shortages of semiconductors and parts, in the electronic devices-related industry,
production has remained high as a result of strong demand for semiconductors. In addition, in terms of
employment conditions, there is a growing need for external human resources utilization at NISSOCORPORATION's (hereinafter, the "Company") client manufacturers, such as hiring human resources withan eye on the future in the manufacturing industry.
In this environment, based on its mission of "Creating opportunities and hopes for people to work",
the Group aims to create workplaces where workers can feel motivated and grow, with Human Resources
Solution Services that support the growth of companies and people, and "to transform into a corporategroup with high-growth potential", which is the goal of the Medium-term Management Plan. With the aimof providing services that can respond to social changes and changes in industrial structures, theGroup is promoting the following initiatives.
During the period under review, net sales in the existing areas of manufacturing dispatching andcontracting, and administrative human resources services amounted to 50,721 million yen, and net sales
in the third quarter consolidated accounting period (hereinafter, the "third quarter") amounted to
18,066 million yen (up 8.9% from the second quarter consolidated accounting period, hereinafter, the"second quarter").
Based on the strategy of strengthening its service provision system, increasing the market share of
Account Companies, expanding recruitment, providing more educational opportunities, and assigningskilled staff to Account Company Groups, which the Group positions as important clients, the number ofskilled staff at the end of the third quarter amounted to 5,244 (up 121 from the end of the second
quarter), and net sales at Account Companies for the period under review amounted to 24,687 million
yen, as well as net sales of 8,721 million yen for the third quarter (up 7.8% from the second
quarter). On the other hand, due to operational adjustments of some auto-body manufacturers as aresult of shortages of semiconductor and parts, the share of net sales of Account Companies for thethird quarter has remained virtually unchanged at 46.7% (which was at 46.8% in the second quarter).
In the engineering area, net sales for the period under review amounted to 4,015 million yen, as
well as net sales of 1,470 million yen for the third quarter (up 12.8% from the second quarter).
In order to increase the number of engineers, the Company will utilize its unique recruitment site"engineer works", which specializes in engineers, by promoting career changes from skilled staff toengineers. By doing so, the number of engineers at the end of the third quarter amounted to 982 (up 81
from the end of the second quarter), and the average monthly net sales per capita for the period underreview was 512 thousand yen (which was 509 thousand yen in the consolidated cumulative second
quarter). In order to achieve the targets of the Medium-term Management Plan, the Group is promoting
M&A and alliances, and is making efforts to create a structure to expand the existing areas ofengineers and to provide new services.
Net sales in the new business area for the period under review were insignificant.
In addition, in order to achieve the Medium-term Management Plan, the Company concluded an agreement
on January 18, 2022, to underwrite a third-party allotment of shares to TSUNAGU HC SUPPORT Inc.
(hereinafter, the "Target Company"), a consolidated subsidiary of TSUNAGU GROUP HOLDINGS Inc.
(hereinafter, the "TSUNAGU GROUP"), and the establishment of the Target Company as a joint venturecompany. Through these efforts, the Company and the TSUNAGU GROUP aim to provide new value by
integrating the businesses and expertise possessed by both parties in order to further revitalize thehuman resources market. The Target Company will sequentially provide a variety of sustainable andcyclical services in the human resources area, by taking advantage of the Company's contracting,dispatching, and placement businesses, as well as the expertise and knowledge of human resources
development and management that is responsible for those businesses, the TSUNAGU GROUP's humanresources recruitment expertise, dispatching and short-term placement businesses, as well as the- 2 -operational expertise and achievements of dispatching centers, and systems developed in-house tosupport them.
Net sales in the nursing care business for the period under review amounted to 2,240 million yen, as
well as well as net sales of 745 million yen for the third quarter (down 0.8% from the second
quarter).
As a result of measures to improve the quality of services provided at the "Sweetpea" nursing carefacilities located in 6 locations in Yokohama, the occupancy rate of the nursing care facilities hasremained high at 92.0%. In addition, the Group is working to build a stable revenue base by continuing
its efforts to improve its management structure, such as promoting operational efficiency.
As a result, the results of operations for the period under review are as follows: net sales of
56,977 million yen (up 13.0% year-on-year), operating profit of 1,406 million yen (down 16.2% year-onyear), ordinary profit of 1,595 million yen (down 20.4% year-on-year), and profit attributable toowners of parent amounted to 1,036 million yen (down 19.3% year-on-year).
Based on its policy of putting the safety of its clients and employees as a top priority, the Grouphas established the "COVID-19 Countermeasures Headquarters", and is promoting business activities thatstrengthen measures to prevent the spread of COVID-19 infections. Despite production adjustments dueto the impact of the supply chain, it is believed that the Group's business performance is expected toremain firm going forward as economic activities of clients related to the Company continue torecover. On the other hand, in the event of an occurrence where individuals are affected by the virus
at its clients, workplaces or nursing care facilities, the Group may be affected.
The results of operations by segment are as follows:（General Human Resources Services Business）
FY 3/2022 Net sales
Cons. cumulative 3rd Qtr.
Amount (YoY)YoY Amount
Manufacturing-related
Human Resources Services
Administrative Human
Resources Services
Adjustment amount
Total(Unit: Million yen)
FY 3/2022 Operating profit
Cons. cumulative 3rd Qtr.
Amount (YoY)YoY Amount

52,907（up 14.5％）

46,222

1,364（down 17.5％）

1,654

1,862 （down 8.2％）

2,029

7（down 83.8％）48(26) （ - ）54,742（up 13.5％）(22)
48,2290（ - ）1,373（down 19.3％）

(0)
1,702

Manufacturing-related Human Resources Services (NISSO CORPORATION, Vector Shinwa Co., Ltd., Nisso
Pure Co., Ltd.)For clients of manufacturing-related human resources services, the core business which accounted
for 92.9% of consolidated net sales during the period under review, while some manufacturers in theautomobiles-related industry were forced to suspend operations due to a shortage of parts,
production remained strong as a result of strong demand for semiconductors in the electronic
devices-related industry and increased production related to in-vehicle products. From the second
half of the third quarter, the Group will be strengthening its efforts to secure personnel in orderto respond to recovery production, mainly for auto-body manufacturers, and has been actively
investing in manufacturing staff recruitment measures, such as starting the broadcasting of TV
commercials from October 1, 2021, in order to improve the visibility of the Company's recruitment
website, "Kojo Kyujin Navi".
During the period under review, recruitment interview opportunities were expanded by enhancing
promotions such as TV commercials, compensation was provided for the decrease in operations as aresult of production adjustments in order to improve the retention rate of manufacturing staff, andthere was also an increase in the stability orientation of manufacturing staff due to social unrest.
As a result, the turnover rate of manufacturing staff during the period under review remained low at
3.7% (which was at 4.2% in the previous consolidated fiscal year), and the number of enrolled
manufacturing staff of the Company at the end of the third quarter was 14,715 (up 1,569 from theprevious consolidated fiscal year). In addition, production in the automobiles-related industry has- 3 -been on a recovery trend since November 2021, with monthly average net sales per capita of 412
thousand yen during the period under review (up 6 thousand yen from the consolidated cumulative
second quarter).
As the first step in the growth strategy for expanding existing areas outlined in the Medium-termManagement Plan, the Company acquired all shares of Vector Shinwa Co., Ltd., which is mainly engaged
in contracting operations in the manufacturing industry such as semiconductors and precision
instruments, on August 31, 2021.
Based in Aichi Prefecture, Hiroshima Prefecture, and Fukuoka Prefecture, Vector Shinwa Co., Ltd.
focuses on human resources development with a slogan of "Minority Elite". In the contracting
business for the manufacturing of semiconductor manufacturing equipment and precision equipment,
which is the main pillar of Vector Shinwa's business, despite the impact of the shortage of parts,
client production is on an increasing trend due to strong semiconductor demand, and the Company isworking to expand its business performance by starting the launch of new processes.
As a result, revenue increased and profits decreased year-on-year.
Nisso Pure Co., Ltd., a special-purpose subsidiary of the Company, promotes the employment of
persons with disabilities. With the aim of creating a workplace environment where diverse humanresources can flourish, the Group not only hires employees with disabilities, but also promotes
activities that take advantage of each individual's characteristics, such as being entrusted withlight work operations from external clients, and promotes coexistence with local communities,
including those related to schools, support organizations, and the government, and as of the end of
the third quarter, the number of employees with disabilities was 196.
Administrative Human Resources Services (Nisso Brain Co., Ltd.)The administrative human resources services carry out general office work dispatching and BPO(Business Process Outsourcing: the outsourcing of operations and processes of specific businessrelated tasks to a [third-party] specialized company).
In the period under review, in order to stabilize existing businesses, although the Company ispromoting recruitment activities centered on public relations and customer attraction activities,
due to sluggish growth in the number of registrants, the number of employees dispatched foradministrative work was 663 (down 27 from the end of the previous fiscal year). As a result, thedecrease in net sales did not absorb personnel and operating expenses, resulting in a decrease inrevenue and profits year-on-year.
（Other Businesses）
FY 3/2022 Net sales
Cons. cumulative 3rd Qtr.
Amount (YoY)YoY AmountNursing care・welfare
business

2,240（up 0.9％）

2,220(Unit: Million yen)
FY 3/2022 Operating profit
Cons. cumulative 3rd Qtr.
Amount (YoY)YoY Amount
35（

- ）

(21)

Nursing care・welfare services business (Nisso Nifty Co., Ltd.)In the facilities nursing care business, which is the core business of this business segment,
during the period under review, the number of visitors has increased as a result of the promotion of
on-line facility preview events and other activities, and the occupancy rate of the nursing carefacility "Sweetpea Higashi Totsuka" (Building 6) remained high at 89.4%, and the occupancy rate of
Buildings 1-5 was 92.9%. In addition, revenue and profits increased year-on-year as a result ofefforts to reduce cost of sales and improve profitability through initiatives such as streamlining
personnel and operating expenses.

- 4 -（２）Description of Financial Position（Assets）
Current assets at the end of the current third quarter amounted to 15,348 million yen, which was anincrease of 534 million yen from the end of the previous consolidated fiscal year. This was mainly due
to an increase of 689 million yen in notes and accounts receivable (trade).
Non-current assets at the end of the current third quarter amounted to 8,053 million yen, which was
an increase of 1,235 million yen from the end of the previous consolidated fiscal year. This was
mainly due to an increase of 996 million yen in goodwill.
As a result, total assets amounted to 23,401 million yen, which was an increase of 1,769 million yen
from the end of the previous consolidated fiscal year.
（Liabilities）
Current liabilities at the end of the current third quarter amounted to 9,446 million yen, which was
an increase of 1,268 million yen from the end of the previous consolidated fiscal year. This was
mainly due to an increase of 1,024 million yen in accrued expenses.
Non-current liabilities at the end of the current third quarter amounted to 1,064 million yen, which
was an increase of 374 million yen from the end of the previous consolidated fiscal year. This was
mainly due to an increase of 131 million yen in net defined benefit liability.
As a result, total liabilities amounted to 10,510 million yen, which was an increase of 1,642
million yen from the end of the previous consolidated fiscal year.
（Net assets）
Total net assets at the end of the current third quarter amounted to 12,890 million yen, which was
an increase of 127 million yen from the end of the previous consolidated fiscal year This was mainly
due to the 1,036 million yen in profit attributable to owners of parent, and 682 million yen in
dividends of surplus.
As a result, the equity ratio was at 55.1% (which was at 59.0% at the end of the previous
consolidated fiscal year).
（３）Description of Future Forecast Information such as Consolidated Forecasts, etc.
There are no changes to the Full-year Consolidated Forecast announced in the "Notice of Revisions ofFull-year Consolidated Forecast for the Fiscal Year Ending March 31, 2022" on Monday, November 8,
2021.

- 5 -

２．Quarterly Consolidated Financial Statements and Notes（１）Quarterly Consolidated Balance Sheet(Unit: Million yen)
FY 3/21

3Q of FY 3/22

(As of Mar. 31, 2021)(As of Dec. 31, 2021)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Land
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Current portion of long-term loans payable
Accrued expenses
Income taxes payable
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
Net defined benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders' equity
Accumulated other comprehensive income
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets

- 6 -

5,873
8,094
850
(5)
14,813

5,651
8,784
917
(4)
15,348

1,799
2,704
150
4,654

1,793
2,710
139
4,643

305
305

996
728
1,724

1,876
(19)
1,857
6,817
21,631

1,711
(26)
1,685
8,053
23,401

4,541
494
950
2,191
8,178

26
5,566
33
552
3,268
9,446

345
344
689
8,868

65
476
522
1,064
10,510

2,015
2,368
8,674
(313)
12,744

2,015
2,368
8,794
(298)
12,8791
17
18
12,763
21,6311
9
10
12,89023,401

（２）Quarterly Consolidated Statements of Income and Comprehensive Income（Quarterly Consolidated Statement of Income）（For the First Nine Months ended December 31, 2021）(Unit: Million yen)First nine months of FY 3/21
First nine months of FY 3/22
(Apr. 1, 2020 - Dec. 31, 2020) (Apr. 1, 2021 - Dec. 31, 2021)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted forusing equity method
Subsidy income
House rent income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Rent expenses
Provision for loss on cancellation
Other
Total non-operating expenses
Ordinary profit
Extraordinary losses
Loss on sales of non-current assets
Directors' retirement benefits
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to non-controllinginterests
Profit attributable to owners of parent- 7 -50,44242,009
8,433
6,754
1,678

56,97747,483
9,493
8,086
1,406

2
0

2
0

6

18

359
30
18
417

149
30
29
230

8
16
26
38
91
2,005

0
12
28
41
1,595

50
50
1,954
578
92
670
1,284

7
7
1,588
425
127
552
1,036

-

-

1,284

1,036

（Quarterly Consolidated Statement of Comprehensive Income）（For the First Nine Months ended December 31, 2021）(Unit: Million yen)First nine months of FY 3/21
First nine months of FY 3/22
(Apr. 1, 2020 - Dec. 31, 2020) (Apr. 1, 2021 - Dec. 31, 2021)

ProfitOther comprehensive income
Remeasurements of defined benefit plans, netof taxShare of other comprehensive income ofentities accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable toowners of parent
Comprehensive income attributable to noncontrolling interests

- 8 -

1,284

1,036

1

(8)

0

(0)

1
1,285

(8)
1,027

1,285

1,027

-

-

（３）Notes regarding Quarterly Consolidated Financial Statements（Notes regarding the Going Concern Assumption）
Not applicable.
（Notes on Significant Changes in the Amount of Shareholders' Equity）
Not applicable.
（Changes in Accounting Policies）（Application of Accounting Standards for Revenue Recognition）"Accounting Standards for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020. Hereinafter,the "Revenue Recognition Accounting Standards") etc., have been applied from the beginning of thefirst quarter, and revenue was recognized at the amount expected to be received in exchange for thepromised goods or services when the control of those goods or services is transferred to clients.
The main changes resulting from the application of Revenue Recognition Accounting Standards are as
follows:（General Human Resources Services Business）
Previously, although consideration paid to clients, such as rent, was treated as cost of sales, it
has been changed to a method of reducing it from the transaction price.
（Other Businesses）
In the past, the lump-sum payment received from a client in a nursing care facility's occupancy
contract was recognized as revenue after the expiration of the amortization period under theoccupancy contract. However, the method has been changed to recognize revenue over the period ofresidence in which the service is expected to be provided.
The application of the Revenue Recognition Accounting Standards is in accordance with thetransitional treatment set forth in the Revenue Recognition Accounting Standards No. 84. The
cumulative effect of retroactively applying the new accounting policy prior to the beginning of thefirst quarter was added to or subtracted from retained earnings at the beginning of the firstquarter, and the new accounting policy was applied from the beginning balance.
As a result, net sales for the period under review decreased by 194 million yen, cost of sales
decreased by 202 million yen, and operating profit, ordinary profit, and profit before income taxes
each increased by 7 million yen. In addition, the balance at the beginning of the current period ofretained earnings decreased by 233 million yen. Furthermore, "other" under the current liabilities
category increased by 226 million yen at the end of the current third quarter.
In accordance with the transitional treatment set forth in Paragraph 28-15 of the "AccountingStandard for Quarterly Financial Statements" (ASBJ Statement No. 12, March 31, 2020), the revenue
generated from contracts with clients for the previous year's consolidated cumulative third quarter
is not presented.
（Additional Information）（Accounting Estimates Associated with the Spread of COVID-19 Infections）
There are no significant changes to the assumptions, including the timing of the convergence of theeffects of COVID-19 infections, as described in the (Additional Information) section of the Notes
regarding Quarterly Consolidated Financial Statements for the previous period under review (second
quarter consolidated accounting period).

- 9 -（Business Combinations, etc.）
Finalization of Provisional Accounting Treatment for Business Combination
Although the business combination with Vector Shinwa Co., Ltd., which was conducted on August 31,
2021 (Date of Deemed Acquisition: September 30, 2021) was provisionally accounted for in the second
quarter, it was finalized in the third quarter.
As a result, the provisionally calculated amount of goodwill of 1,345 million yen decreased by 323
million yen to 1,022 million yen due the finalization of accounting treatment. The decrease in goodwill
was mainly due to increases of 493 million yen of "other" under the intangible assets category and 169
million yen of "other" under the non-current liabilities category (deferred tax liabilities).
Goodwill is amortized using the straight-line method over a 10-year period.
（Significant Subsequent Events）（Capital and Business Alliance with TSUNAGU GROUP HOLDINGS Inc.）The Company announced that it resolved to conclude an agreement on the underwriting of a third-party
allotment of shares to TSUNAGU HC SUPPORT Inc. (President: Koji Ishibashi, Chiyoda-ku, Tokyo,
hereinafter, the "Target Company"), a consolidated subsidiary of TSUNAGU GROUP HOLDINGS Inc.
(President: Mitsuhiro Yoneda, Chiyoda-ku, Tokyo, hereinafter, the "TSUNAGU GROUP"), and theestablishment of the Target Company as a joint venture company, at the Board of Directors’ Meeting
held on January 18, 2022.
１．Reason for Joint Venture
The Company and the TSUNAGU GROUP have decided to convert the Target Company into a joint venturecompany in order to further revitalize the human resources market and to provide new value by
integrating the businesses and expertise possessed by both parties.
The Target Company will sequentially provide a variety of sustainable and cyclical services in thehuman resources area, by taking advantage of the Company's contracting, dispatching, and placementbusinesses, as well as the expertise and knowledge of human resources development and managementthat is responsible for those businesses, the TSUNAGU GROUP's human resources recruitment expertise,dispatching and short-term placement businesses, as well as the operational expertise andachievements of dispatching centers, and systems developed in-house to support them. In the future,by combining such knowledge, the plan will be to commercialize a training business for on-site
staff, and to develop services that will convert human resources into human capital. The intention
is to respond to the needs of companies for the visualization of human capital investment, which is
now becoming the mainstream. Through these services, the Company and the TSUNAGU GROUP will maximize
the values of both parties, such as improving the skills of workers and improving the level ofservices provided to clients, and strive to realize a human-centered society that balances economic
development and the resolution of social issues.

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２．Overview of Joint Venture Company to be Established(1)

Company name

TSUNAGU HC SUPPORT Inc.
※Company name scheduled to be changed to LeafNxT Co., Ltd.

(2)

Location

3-1-16 Kandamisaki-cho, Chiyoda-ku, Tokyo(3)

Representative

Representative Director Koji Ishibashi

Business description

Human resources dispatching business, development-type qualified
personnel dispatching business, recruitment platform business,by March 1, 2022

(4)

media direction business, etc.
(5)

Capital

124 Million JPY(6)Date of establishment

August 3, 2021

(7)

Scheduled date ofjoint venture

March 1, 2022

(8)

Fiscal year-end

September 30(9)Net assets

39 Million JPY (As of the end of September, 2021)(10)

Total assets

40 Million JPY (As of the end of September, 2021)(11)

Investment ratio

TSUNAGU GROUP HOLDINGS Inc. : 51.3%
NISSO CORPORATION : 48.7%

３．Content of Capital Alliance
TSUNAGU HC SUPPORT Inc. will issue common shares to the Company through a third-party allotment ofshares, which the Company will underwrite.

(1) No. of shares held before change

0 shares(No. of voting rights: 0)(Percentage of voting rights held: 0.0%)(2) No. of shares to be acquired

3,800 shares(No. of voting rights: 3,800)(Percentage of voting rights held: 48.7%)(3) Acquisition value

209 Million yen(4) No. of shares to be held after change

3,800 shares

４．Schedule(1) Date of conclusion of joint venture agreement

January 18, 2022

(2) Start date of joint venture business

March 1, 2022 (Scheduled)

５．Future Prospects
Although the impact of this transaction on the consolidated financial results of the Company for
FY 3/2022 will be minor, the Company believes that it will contribute to the improvement of businessperformance in the long-term.

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