To Shareholders and Investors

Business Report

Report for the fiscal year ended March 2011
April 1, 2010 – March 31, 2011

(Securities code: 2181 )For Japan’s tomorrow
We continue connecting people to work

Top Message

We would like to extend our heartfelt sympathy to those who were affected by the Great East Japan Earthquake and Tsunami. We sincerely
hope for the earliest possible recovery from the tragedy.
The Earthquake fortunately had only one-off and limited effects on the business results of the Temp Group. Damage from the Earthquake andsubsequent rolling blackouts, however, forced our client companies to temporarily suspend their operations, temporary staff to take paid
holidays and projects to be put off. We have offered financial assistance to some hard-hit franchisees.
Under such circumstances, consolidated sales amounted to 225.2 billion yen with ordinary income coming in at 6.2 billion yen.

New page turned in FY ended March 2011
The Temp Group is working to expand new service menus to meet the drastically changing market needs. Playing a role in this approach, theOutsourcing business had its operating foundations dramatically reinforced during the current fiscal year. HOWCOM Co., Ltd. and TOYOSOFTWARE ENGINEERING CO., LTD. were included in the list of subsidiaries of the Group through M&As conducted under a consistentstrategy. In collaboration with these companies and Group companies, a one-stop system has been established to meet needs for IT solutions.
Another part of the approach is the Group’s presence in markets around the world. The Group actively expanded its services by forming astrategic alliance with a word-class staffing services company, Kelly Services, Inc. In addition, Group companies overseas achieved excellent
results.

Realizing afresh our missions
Many people lost various things critical to their daily life in the Earthquake. Onesuch thing is their employment. The Group set up a project called “Temp Group
Let’s Work! Reconstruction Project (*)” for those who are looking for a job in theaffected areas or temporary places of residence. We will do our best to support
those people by offering them job opportunities.
What we can do for disaster reconstruction is to connect people and work.
Helping people grow and contributing to society by creating jobs — with thiscorporate vision in mind we will continue to carry out our social missions.

11FY March 20
Highlights ofSales 225.2 billion yen

Ordinary Income 6.2 billion yen DOWNNet Income 2.4 billion yen(*) Temp Group Let’s Work! Reconstruction Project
We help people get back to work by offering jobs in disaster areas, holding job introduction and registration
sessions, giving face-to-face job counseling and offering free voluntary OA training sessions.

UPDOWN

Term-End Dividend per Share 6 yen

YoY

YoYYoYTemp Holdings
ment StrategygenaaM
rm-teMid
Strengthening localized services
Regional companies will provide community-based, finely tuned
services.
We will work to expand our market share in each region.

Developing business in specialized fields and new job
categories
To meet sophisticated and diversified needs, we will expand new job
categories, services and networks.

Expanding our presence in the global market
We will concentrate our resources on global networks, particularly inAsia, to establish bases and actively develop our businesses.

Providing job assistance to women
Women are the key to eliminating labor shortages in this aging society
with fewer children.
We will offer overall support their employment by supporting childraising mothers, holding seminars and giving counseling.

Improving management efficiency
We have increased the efficiency of our operations by building aholding company system and reduced costs radically.
We will firmly maintain solid earnings growth and a sound financial
position.

Yoshiko Shinohara, Chairman & President
Sets up Tempstaff Co., Ltd. in 1973; Ranked among the “50 Most
Powerful Women in Business: International” by the US magazine“Fortune” for the 11th consecutive year since 2000; Invited to“ADVANCE WOMEN’S LEADERSHIP SUMMIT” in Australia as
one of the 50 FOR THE FUTURE in March 2011.

Creating Jobs
Corporatephilosophy
AddingContributing
Value to the to Society
Individuals

Introduction ofBusiness Segments

One step forward with practicality
Companies are looking to make more efficient use of outside personnel given the gradual economic recovery after the protractedrecession. Meanwhile interpretations and applications of the Worker Dispatching Act have been getting stricter and stricter, as seenin the Ministry of Health, Labour and Welfare’s “Plan for Proper Dispatching in 26 Specialist Jobs.”
To change these shifts in the business environment into good opportunities, the Temp Group offers services centered on fourbusiness segments. The Group has steadily moved forward with efforts to expand its service menus and has started enjoying theresults.
(*) The segment structure was changed in the fiscal year ended March 2011 for segment disclosure under the management approach.
Figures for the fiscal year ended March 2010 are recalculated after the change in segment structure.

Segment 1
Temporary Staffing&Recruitment Services

Spurred on by trustIn accordance with the Plan for Proper Dispatching in 26 Specialist Jobs, the Temp Group checked theappropriateness of services for all contracts and received confirmation from the Labor Department. We have won thetrust of client companies and expanded our business opportunities by maintaining our stance that places top priority
on compliance. We enjoyed this trust again in the current fiscal year, and it led us to purchasing businesses frommultiple companies. We were on a gradual recovery track until the third quarter, focusing on developing small andmedium-sized clients to expand our customer base. However, sales of this segment totaled only 193.8 billion yen,dragged down by rolling blackouts and suspensions of recruiting activities after the Earthquake.

Temporary StaffingandRecruitment Services
R&D
Outsourcing

Outsourcing

OtherGlobal Presence
Ready to win in Asia
We established networks in Asian countries from early on.
Now with Asian markets increasing their presence, suchapproach has emerged as one of our strengths. These bases
predominantly promote sales activities, as they deepen
cooperation, smoothly share information on market trends
and support recruitment activities across national boundaries.

porary Staffing
Sales for Tem&ervices
emRecruit nt S

(Unit: million yen)

To further bolster our competitiveness in Asia, we started astrategic alliance with Kelly Services, Inc., one of the world’s
leading staffing services companies, in May 2010. We
expect this will broaden our service areas, enhance ourcapabilities to supply personnel and expand our business
opportunities.

Shinohara gives speech at Women’s Summit
in Australia
Australia is a place for Shinohara toencounter temporary personnel services
and to be motivated to set up a company.
She delivered a lecture about
her own experiences in startinga business and diversity
management at a party at theend of the Summit.

UPDOWNFY March 2010

Women’s Summit, March 2011

Office Clerk
Other(forecast)FY March 2011

FY March 2012

Technical Clerk
IT Professional
Recruitment Services

SalesSegment 3
Sales for R&D

Outsourcing

Outsourcing

Segment 2(Unit: million yen)

R&D Outsourcing(forecast)Strength of next
generation starts
gaining momentum

UPDOWNFY March2010

FY March2012(*) Sales for FY ended March 2010 include those only for the fourth quarter as JAPANTECSEED became a consolidated subsidiary in November 2009.

ourcing
Sales for Outs
(Unit: million yen)(forecast)FY March2010

FY March2011

UPUP

FY March2011

FY March2012

Complete change:
Toward an era of activeness
Full-term sales of JAPAN TECSEED, which is engaged in the specialized R&D
outsourcing business, were 8.8 billion yen for the fiscal year ended March 2011,
remaining at about the same level as the previous year. However, demand fordesign development has recovered steadily. Utilization, an indicator ofprofitability of specified worker dispatching, recovered as well to the level before
the economic crisis that began in 2008. For the fiscal year ending March 2012,
we expect profitability to increase despite seeing little growth in sales. This is
attributable to the selling off of one of the subsidiaries of the TECSEED Group inMay 2011 as part of business restructuring within the group. After the TECSEEDGroup becomes a wholly owned subsidiary, scheduled to take place in August
2011, we will promote business management coupled with companies in
specialized fields within the Temp Group and increase our competiveness andpresence in technological fields.

Segment 4
OtherBusinesses
Sales forses
Other Busines(Unit: million yen)(forecast)

We have been working to form the foundations of the outsourcing businesssince the previous fiscal year, and this is now yielding results. Companies
shifting from staffing to outsourcing and more medium- and long-term
contracts drastically boosted our business performances. Sales advanced
20% YoY to 18.6 billion yen. We have also actively promoted M&As to add
HOWCOM, which is engaged in planning and management of help desks
services, and TOYO SOFTWARE ENGINEERING, which has abundant
experience in outsourced software development, to the list of oursubsidiaries in May 2010 and January 2011, respectively. We will expand
the areas of services offered by the Group through cross-segmental
combinations with the R&D outsourcing business. The call center businesswill also be reinforced by setting up a new call center in Miyazaki
Prefecture in October 2011. We will strive to expand our businesses
through proactive sales activities.

●Temp Group Outsourcing ServicesUP

Physicallychallenged
employment
consultingDOWN

FY March2010

FY March2011

FY March2012

Designdevelopment
Help desks

Call centersChildcare

System restructuring;
Decision in anticipation of changes
Demand for outplacement, which picked up during past recessions,
has slowed down with the improvement of corporate earnings.
Meanwhile, needs for outplacement are tending to become
diversified as companies begin permanently establishing voluntary
early retirement programs. In February 2011, Tempstaff Career
Transition merged with Japan Drake Beam Morin to start as a newcompany called Tempstaff Drake Beam Morin. We will improve
competitiveness by combining the expertise of both companies
while increasing business efficiency.

Trainingsessions

IT technicalservices

Healthcare

Various typesof clerical work

Sales
promotion

Back officecenters
Reception

Sales
MarketingOverview of Consolidated Financial Results
ShDividend Per

areme
Ordinary Inco

Net Income(Unit: yen)

(Unit: million yen)

Sales

(Unit: million yen)(forecast)(Unit: million yen)(forecast)(forecast)(forecast)

UP

UP
DOWN

DOWN

FY March
2010

FY March
2011

FY March2012

For the fiscal year ended March
2011, we paid an interim dividendof 6 yen per share as initiallyplanned, making for a term-end
dividend of 6 yen per share.
Similarly, for the fiscal year
ending March 2012, we will pay 6yen per share each at the interimand term-end, making for a fullyear dividend of 12 yen per share.

FY March
2010

FY March
2011

FY March
2012

With the application ofAccounting Standards for Asset
Retirement Obligation, anextraordinary loss of 569 million
yen was recorded. As a result,net income fell 18.3% YoY.

FY March
2010

FY March
2011

UPDOWNFY March2012

Ordinary income continued toincrease until the third quarter,
supported by cost control effortssuch as reviewing the locations ofbases by integrating Group
companies and continually reducing
recruitment advertising expenses.
However, affected by theEarthquake full-term ordinary
income declined 7.5% YoY.

FY March2010

FY March2011

FY March
2012

Owing to increases in the numberof paid holidays for staff as a resultof a business suspension at clientcompanies after the Great East
Japan Earthquake, sales fell for thefourth quarter. However, full-termsales rose 0.3% YoY as favorable
recovery trends had been
continuing until the third quarter.

【Reference】The Temp Group applied “Accounting Standards for Presentation of Comprehensive Income” inthe fiscal year ended March 2011. “Comprehensive Income” is calculated by marking assets
and liabilities to market and adding the profits or losses to net income.

Comprehensive
IncomeFY ended March 2010

FY ended March 2011

3,076 million yen

2,825 million yen

Balance Sheet(Unit: million yen)

POINT 1
HOWCOM joined the Group in May 2010, andTOYO SOFTWARE ENGINEERING did so inJanuary 2011. This helped us expand thelineups of services in the outsourcing businessand improve services through cooperation
among groups. We will continue to actively
promote M&As which will improve our corporate
value and customer satisfaction.

2010/3
1 Assets

79,336

3,423

61,644

63,124

1,479

28,54531,4482,902

14,268

16,212

1,943

1,839

4,589

2,749

27,59529,015

1,420

Current liabilities

20,094

21,224

1,130

Noncurrent liabilities

7,500

7,791

290

48,31750,320

2,003

Shareholders' equity

45,77847,495

1,716

Treasury stock△5,636△5,636

−

2,492

2,528

36

Current assets
Cash and deposits

2We acquired a 4.8% equity stake in Kelly
Services, Inc., one of the world’s leading
staffing services companies, in May 2010,
followed by the conclusion of a global sales &marketing contract in September. A cooperative
system in sales has started between Kelly
Services, with sufficient infrastructure andknow-how overseas, and the Company, which
has established operating bases mainly in Asia.
Through this cooperative relationship, we willcontinue to strongly promote “Expanding ourpresence in the global market,” which is one of
the med-term management strategies.

Change75,912

Noncurrent assets
POINT 2

2011/3

Investment securities
Liabilities

Net assets

Minority interests
For more detailed IR information, please visit our website.
Website address

CSR

For the sake of a happy society
Through its staffing business, the Temp Group will fulfill its corporate social responsibilities (CSR) and make efforts
in various social action programs to realize a world where everyone feels happy.

Contributing to women’s health
The Temp Group is actively engaged in activities
that help women detect cancer to realize a society
where women can work with vigor and enthusiasm.

August2010

For women

Our various efforts were appreciated and we were certified
as a “Supporter for Tokyo Cancer Detection”.

September
2010

The “Breast Cancer Palpation ModelCaravan” was held as part of the pinkribbon campaign.

Increasing contacts with society

reFor the futu

The Temp Group is working to improvecooperation with local communities and unique social
action programs in the childcare and welfare fields.
February
2011

February
2011

Work experience in producing cookies was offered tocommunity kindergarten children at “Yokohama Dream
Factory,” which is the Thanks Temp’s facility that employs
challenged people.
“Tempstaff Children Fiesta”, wherenursery school toddlers, parents andlocal residents can participate, washeld in Shibuya-ku, Tokyo.

Supporting studying overseas

For
growthpersonal

We have offered overseas study scholarshipprograms for students and working people formany years. We will continue to support the development of
human resources who will be able to work globally.
October
2010“The 20th Temp Group Worldwide Scholarship” was offered
as a short-term study abroad program for working people.

March2011“The 21st Temp Group Youth International Scholarship”
was offered for students aged 18 and over.

Supporting challenged athletes

icallyFor the physchallenged

We provide jobs and funds to support physicallychallenged employees engaged in sport.
Two athletes from Thanks Temp performed brilliantly in thecurrent fiscal year.
●Yusuke Hatsuse (judo, visually impaired)December Won a gold medal at the Guangzhou 2000 Asia
2010
Paralympic Games.
March2011

Won a Sasebo City Culture & Sports
Special Award for the fourth consecutiveyear.

●Yuya Kimura (track & field, mentally impaired)
August2010Won second prize, posting a meetrecord at the Japan Paralympic trackand field meet (1,500 meters).

Information
Distribution of shareholders As of March 31, 2011

Stock Information

Company Outline

As of March 31, 2011

As of March 31, 2011

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

Company Name

Temp Holdings Co., Ltd.

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

Established

October 1, 2008

President

Yoshiko Shinohara

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

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

Capital2,000 million yen●Shareholders: 9,227●Major shareholders (top 10)
Name of shareholders

Shares held(shares)% ofvotingrights

Yoshiko Shinohara

23,377,200

40.43

State Street Bank andTrust Company

5,692,100

9.84

Kelly Services Japan Inc.

3,000,000

5.18

Yoshimi Iyadomi

1,812,800

3.13

The Bank of TokyoMitsubishi UFJ, Ltd.

1,760,000

3.04

Shareholder Information●Business year
From April 1 to March 31 of the following year
Nikko Cordial Securities
1,300,000
2.24●Annual general meeting of shareholders
Investment
EnterpriseJune every yearPartnership●Record date
Annual general meeting of shareholders March 31
Temp Holdings
1,263,500
2.18
Term-end dividend March 31
employeeshareholders
2nd quarter dividend September 30
association●Administrator of shareholders’ register /Special account management institution
Woman Staff Ltd.
1,206,000
2.08
Mitsubishi UFJ Trust and Banking Corporation●ContactNanako Yamamoto
1,108,800
1.91
Mitsubishi UFJ Trust and Banking Corporation
Custody Service Department
Taro Iyadomi
1,108,800
1.91
7-10-11 Higashisuna, Koto-ku, Tokyo 137-8081, JAPAN
Tel: 0120-232-711* Voting rights is calculated based on the number of shares(toll free number available only within Japan)(57,821,390) excluding shares in the treasury stock from the●Stock Listing
total number of shares outstanding.
Tokyo Stock Exchange, First Section●Website address of public notice
http://www.temp-holdings.co.jp/
When electronic public notices are not possible due toincidents or other unavoidable circumstances,announcements will appear in the Nihon Keizai Shimbun newspaper.

Board of Members

As of June 23, 2011

Chairman & President

Yoshiko Shinohara

Executive Vice-President

Mikihiko Hibino

Executive Vice-President

Masamichi Mizuta

Executive Director

Toshio Saburi

Director

Takao Wada

Director

Kazuomi MorimotoDirector

Carl T. Camden

Full-time Auditor

Izuki Hiraga

AuditorHaruo Shimada

Auditor

Kaoru Arai

Auditor

Ryosuke Tamakoshi

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

Contact

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

Administrator ofshareholders’registerProcedures and inquiries not included above

Please contact your securities company.

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

Contact

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

Special accountmanagementinstitution

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

Administrator ofshareholders’register

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

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

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