The 18th Fiscal Year Annual Securities Report

Annual Securities Report

18th Fiscal Year From June 1, 2024 to May 31, 2025

Pasona Group Inc.

Annual Securities Report

This document was prepared by outputting and printing the annual securities report prepared based on Article 24, Paragraph 1 of Japan's Financial Instruments and Exchange Act and by adding a Table of Contents and pages to the data submitted by using the electronic data processing system for disclosure (EDINET) set forth in Article 27-30-2 of said act.

Table of Contents

Page

18th Fiscal Year Annual Securities Report

Cover 1

Part I: Company Information 2

1. 1: Company overview 2

   1. Transition of major management indicators, etc 2

   2. Company history 4

   3. Contents of business 6

   4. Status of associated companies 9

   5. Status of employees 10

I-2. Status of business 13

1. Management policies, management environment, challenges to address, etc 13

2. Approach to sustainability and initiatives 16

3. Risk of business, etc 29

4. Analysis of financial position, operating results, and cash flow status by the management 34

5. Important business contracts, etc 42

6. R&D activities 42

I-3. Status of equipment 43

1. Outline of capital investment, etc 43

2. Status of major equipment 43

3. Plans for new equipment, equipment retirement, etc 45

I-4. Status of the reporting company 46

1. Status of shares, etc 46

2. Status of the acquisition of treasury shares, etc 50

3. Dividend policy 51

4. Status of corporate governance, etc. 52

I-5. Status of accounting 83

1. Consolidated financial statements, etc. 84

2. Financial statements, etc. 135

I-6. Outline of stock affairs of the reporting company 150

I-7. Reference information on the reporting company 151

1. Information on the reporting company's parent company, etc 151

2. Other reference information 151

Part II: Information on the Reporting Company's Guarantor Company, etc 152

Cover

Document submitted: Annual Securities Report

Grounds: Article 24, Paragraph 1 of Japan's Financial Instruments and Exchange Act

Submitted to: Director-general of the Kanto Finance Bureau

Date of submission: August 20, 2025

Fiscal year: 18th fiscal year (June 1, 2024 to May 31, 2025)

Company name: Pasona Group Inc.

Name and title of representative: Hirotaka Wakamoto, Representative Director, President and CEO Location of head office: 5-1, 1-chome, Marunouchi, Chiyoda-ku, Tokyo, Japan

Telephone no.: +81-3-6734-0200 (main)

Name of contact person: Keisuke Nemoto, Executive Officer, General manager of Investor Relations

Headquarters

Nearest contact point: 1-30, 3-chome, Minami-Aoyama, Minato-ku, Tokyo, Japan

Telephone No.: +81-3-6734-0200 (main)

Name of the contact person: Keisuke Nemoto, Executive Officer, General manager of Investor Relations

Headquarters

Places where a copy is to be made available for public inspection:

Tokyo Stock Exchange, Inc.

(2-1, Kabuto-cho, Nihonbashi, Chuo-ku, Tokyo, Japan)

I-1 Company overview

1. Transition of major management indicators, etc.

   1. Consolidated management indicators, etc.

      Fiscal period		14th	15th	16th	17th	18th
      Closing month/year		May 2021	May 2022	May 2023	May 2024	May 2025
      Net sales	(¥, millions)	334,540	366,096	372,579	356,733	309,240
      Ordinary profit (loss)	(¥, millions)	20,379	22,496	15,366	7,152	(460)
      Profit (loss) attributable to owners of parent	(¥, millions)	6,784	8,621	6,099	95,891	(8,658)
      Comprehensive income	(¥, millions)	10,251	14,433	10,468	99,351	(8,416)
      Net assets	(¥, millions)	49,795	67,162	71,640	154,677	141,134
      Total assets	(¥, millions)	151,641	203,746	275,504	301,090	265,038
      Net assets per share	(¥)	975.26	1,276.41	1,378.81	3,789.83	3,517.00
      Net profit (loss) per share	(¥)	173.36	220.19	155.70	2,447.56	(221.80)
      Diluted per share amount of profit	(¥)	-	219.41	155.22	2,446.80	-
      Equity ratio	(%)	25.2	24.5	19.6	49.3	50.9
      Return on equity	(%)	19.4	19.6	11.7	94.7	(6.1)
      Price earnings ratio	(times)	10.9	9.5	11.2	0.9	-
      Cash flow from operating activities	(¥, millions)	18,868	10,115	5,961	7,397	4,327
      Cash flow from investing activities	(¥, millions)	(9,665)	(29,624)	(12,502)	94,252	(47,600)
      Cash flow from financing activities	(¥, millions)	(5,147)	23,543	(2,292)	(12,879)	(15,055)
      Cash and cash equivalents, end of period	(¥, millions)	52,298	56,578	47,919	137,047	78,664
      Number of employees (Average number of temporary workers)	(persons)	9,498 (12,291)	10,364 (13,124)	9,786 (15,132)	10,001 (15,045)	8,894 (14,088)

      Note 1: The number of employees is the number of full-time employees and does not include contract employees. The number of employees and average number of temporary employees up to the 17th fiscal year include the number of employees and average number of temporary employees of Benefit One Inc. and its subsidiaries, which were excluded from the scope of consolidation as of the end of the 17th fiscal year.

      Note 2: Diluted profit per share for the 14th fiscal years is not shown in the above table, as there are no residual securities with dilutive effects. In addition, although there are potential shares, no information is provided regarding diluted profit per share for the 18th fiscal year because there is a net loss per share.

      Note 3: The price-earnings ratio for the 18th fiscal year is not stated because it is a loss attributable to owners of parent.

      Note 4: The number of shares remaining in the stock benefit trust (BBT) and the stock benefit trust (J-ESOP), which are recorded as treasury stock in shareholders' equity, is not included in the above table.

      The number of shares of treasury stock held by the Company at the end of the fiscal year is used to calculate net assets per share and profit per share, as well as the number of shares outstanding at the end of the fiscal year and the average number of shares outstanding during the fiscal year.

      The number of shares of treasury stock is included as a deduction in the calculation of the number of shares of treasury stock.

      Note 5: The "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and other related accounting standards have been applied from the beginning of the 15th fiscal year, and the key management indicators and other indicators for the 15th fiscal year onwards are those after the application of these accounting standards.

      Note 6: The "Accounting Standard for Current Income Taxes" (ASBJ Statement No. 27, October 28, 2022) has been applied from the beginning of the 18th fiscal year, and the key management indicators and other indicators for the 14th to 17th fiscal years are those after retrospective application of these accounting standards.

      (Reference) Assets and liabilities in the above management indexes include temporary "deposits" from clients related to contracted projects whose use by the Group is restricted, and the corresponding "cash and deposits". Total assets and equity ratio after deduction of these assets and liabilities are as follows.

      Fiscal period	16th	17th	18th
      Closing month/year	May 2023	May 2024	May 2025
      Total assets (¥, millions)	200,634	246,115	229,719
      Equity ratio (%)	26.9	60.3	58.7

   2. Management indicators, etc., of the reporting company

   Fiscal period		14th	15th	16th	17th	18th
   Closing month/year		May 2021	May 2022	May 2023	May 2024	May 2025
   Sales	(¥, millions)	14,477	10,060	15,646	10,004	7,645
   Ordinary profit (loss)	(¥, millions)	2,846	(4,231)	691	(8,778)	(9,411)
   Profit (loss)	(¥, millions)	1,295	1,338	2,033	100,843	(13,099)
   Share capital	(¥, millions)	5,000	5,000	5,000	5,000	5,000
   Total number of issued shares	(shares)	41,690,300	41,690,300	41,690,300	41,690,300	40,190,300
   Net assets	(¥, millions)	18,578	18,758	19,396	118,855	100,998
   Total assets	(¥, millions)	80,170	89,955	97,963	194,284	175,638
   Net assets per share	(¥)	474.67	478.85	495.11	3,033.18	2,632.46
   Dividend per share (Interim dividends per share)	(¥) (¥)	30.00 (－)	35.00 (－)	35.00 (－)	75.00 (－)	75.00 (－)
   Profit per share	(¥)	33.10	34.18	51.90	2,573.96	(335.56)
   Diluted profit per share	(¥)	-	-	-	-	-
   Equity ratio	(%)	23.2	20.9	19.8	61.2	57.5
   Return on equity	(%)	6.7	7.2	10.7	145.9	(11.9)
   Price earnings ratio	(times)	57.3	61.3	33.5	0.8	-
   Payout ratio	(%)	90.6	102.4	67.4	2.9	-
   Number of employees (Average number of temporary workers)	(persons)	645 (324)	674 (296)	731 (370)	770 (479)	880 (544)
   Total shareholder return (Comparative indicator: TOPIX including dividends)	(%) (%)	150.6 (125.6)	168.8 (127.9)	143.6 (146.4)	184.4 (195.0)	197.8 (201.9)
   Highest share price	(¥)	2,283	3,860	2,215	3,030	2,479
   Lowest share price	(¥)	1,117	1,847	1,707	1,298	1,861

   Note 1: The dividend per share for the 15th fiscal year includes a special dividend of 5 yen per share, and the dividend per share for the 17th fiscal year and 18th fiscal year includes a special dividend of 60 yen per share.

   Note 2: The number of employees is the number of full-time employees and does not include contract employees.

   The number of employees increased by 110 compared to the 17th fiscal year, mainly due to an increase in the number of new employees hired.

   Note 3: Diluted profit per share is not stated because there are no dilutive shares.

   Note 4: The price-earnings ratio for the 18th fiscal year is not listed because there was a loss for the fiscal year.

   Note 5: The shares of the Company remaining in the Stock Benefit Trust (BBT) and the Stock Benefit Trust (J-ESOP), which are recorded as treasury stock in shareholders' equity, are used to calculate net assets per share and profit per share, as well as the total number of shares issued and outstanding at the end of the fiscal year and the average number of shares during the fiscal year.

   Note 6: The highest and lowest share prices are those quoted on the First Section of the Tokyo Stock Exchange before April 3, 2022, and on the Prime Market of the Tokyo Stock Exchange after April 4, 2022.

2. Company history

   The predecessor of Pasona Inc. was established in February 1976 with the primary objective of creating employment opportunities for housewives.

   Since then, Pasona Inc. has expanded its business to include temporary staffing & contracting, placement, outsourcing, human resources consulting, education and training, and other services (hereinafter "Human Resources-related Business"). On June 1, 2000, Pasona Inc. separated its "Human Resources-related Business" from its other businesses and concentrated its management resources into the Human Resources-related Business. In addition, on the same day, the former Pasona Inc. took over the domestic Human Resources-related Business from Nambu Enterprise Inc. At the same time, Pasona Sunrise Inc. changed its trade name to Pasona Inc.

   Pasona Inc. established Pasona Group Inc. (the Company) as its wholly owned parent company through a share transfer on December 3, 2007 and became a wholly owned subsidiary of the Company. On March 1, 2008, the Company transferred its shares to Pasona Inc. through an absorption-type demerger, with the Company as the successor company. The Company took over the affiliate management function and a portion of the business from Pasona Inc.

   Company history (As of May 31, 2025)

   Feb. 1976	Temporary Center Inc. established in Kita-ku, Osaka City to undertake temporary staffing as its main
   Jun. 1993	business Corporate name Temporary Center Inc. changed to Pasona Inc.
   Jun. 2000	Pasona Sunrise Inc. obtained operational rights of Human resource-related business from the former
   	Pasona Inc. (currently Nambu Enterprise, Inc.) and changed corporate name to Pasona Inc.
   Dec. 2001	Pasona Inc. listed on the Osaka Securities Exchange NASDAQ Japan market
   Oct. 2003	Pasona Inc. listed on the First Section of the Tokyo Stock Exchange
   Mar. 2004	Pasona Tech, Inc. registered its shares on the over-the-counter market of the Japan Securities Dealers
   	Association (JASDAQ)
   Sep. 2004	Benefit One Inc. registered its shares on the over-the-counter market of the Japan Securities Dealers
   	Association (JASDAQ)
   Mar. 2006	Benefit One Inc. listed on the Second Section of the Tokyo Stock Exchange
   Dec. 2007	Pasona Group Inc. established as a pure holdings company through a share transfer
   	Company listed on the First Section of the Tokyo Stock Exchange and the Osaka Securities Exchange
   	Hercules
   Dec. 2008	Company delisted from Osaka Securities Exchange Hercules
   Jul. 2009	Pasona Inc. merged with MITSUI BUSSAN HUMAN RESOURCES CORPORATION
   Nov. 2009	Pasona Tech, Inc. included in the scope of consolidation as a wholly owned subsidiary following the
   	acquisition of shares by way of public tender
   Feb. 2010	All shares of AIG Staff Co., Ltd. (currently Pasona Inc.) acquired and made a wholly owned subsidiary
   Mar. 2010	Pasona Career Inc. merged with Pasona Inc. and changed its corporate name to Pasona Inc.
   Mar. 2011	Acquired shares of KIS Corporation (currently Pasona Inc.) and made it a subsidiary
   Jun. 2011	Pasona Inc. acquired all rights and obligations relating to the temporary staffing business of Ricoh Human
   Dec 2011	Creates Co., Ltd. and Ricoh San-ai Life Inc. by succeeding to through an absorption-type demerger Acquired shares of International transaction Center Ltd. (currently Pasona Inc.), made it a wholly owned
   	subsidiary
   	Pasona Agri-Partners Inc. established as a wholly owned subsidiary
   Mar. 2012	Acquired shares of CAPLAN Corporation (currently Pasona HR Solution Inc.) and made it a wholly owned
   	subsidiary
   Apr. 2012	Acquired shares of YASUKAWA BUSINESS STAFF CORPORATION (currently Pasona YBS Inc) and
   	made it a subsidiary
   May 2012	Acquired shares of Bewith, Inc. and made it a subsidiary
   Sep. 2012	Pasona Furusato Incubation Inc. established as a joint-venture company with Benefit One Inc.
   Nov. 2012	Pasona Tequila Inc. (currently circlace Inc.) established as a subsidiary
   Jan. 2013	CAPLAN Corporation (currently Pasona HR Solution Inc.) acquired shares of Asahi Beer Communications
   	Co., Ltd. and made it a subsidiary
   Feb. 2013	Established Pasona Life Care Inc. as a wholly owned subsidiary
   Mar. 2013	Pasona Tequila Inc. (currently circlace Inc.) became joint venture with Tequila International PTE Ltd. and

   Dec. 2013

   Apr. 2014

   Jan. 2015

   Apr. 2015

   Aug 2015

   Oct. 2015

   Apr. 2016

   Dec. 2016

   Aug. 2017

   Sep. 2017

   Feb. 2018

   Apr. 2018

   Nov. 2018

   Jun. 2019

   Jan. 2020

   Mar. 2020

   Apr. 2020

   Sep. 2020

   Dec. 2020

   Jul. 2021

   Aug. 2021

   Sep. 2021

   Dec. 2021

   Mar. 2022

   Apr. 2022

   Jun. 2022

   Sep. 2022

   Oct. 2022

   Jan. 2023

   Jun. 2023

   Apr 2024

   May 2024

   Jun 2024

   Sep 2024

   Feb 2025

   salesforce.co

   Acquired shares of Eco LOVE Co. (Currently Pasona art now Co., Ltd.) and made it a wholly owned subsidiary

   Acquired shares of Medical Associa Inc. (currently Pasona Inc.) and made it a subsidiary Established Tango Kingdom Inc. (currently Tango Kingdom Brewery Inc.) as a subsidiary Pasona Tohoku Sosei Inc. established as a subsidiary

   Acquired shares of Panasonic Business Service Co., Ltd. (currently Pasona Nihon Somubu Co., Ltd.) and made it and its subsidiary, Shin Nihon Kogyo Co. Ltd. (currently gotop Co., Ltd.), subsidiaries

   Benefit One Payroll Inc. (currently Pasona HR Solutions Inc.) was established as a joint venture with Benefit One Inc.

   Acquired shares of PT. Dutagriya Sarana in Indonesia and made it a subsidiary

   Pasona Inc. acquired shares of Osaka Gas Excellent Agency Co. (currently Pasona Inc.) and made it a subsidiary

   Pasona Knowledge Partner Inc. was established as a joint venture with Panasonic IP Management Co. and Japan Employment Creation Organization, Inc. (currently Pasona Masters, Inc.)

   Nijigennomori Inc. established as a subsidiary

   Pasona Inc. acquired shares of NTT Human Solutions Corporation (currently Pasona HS Inc.) and Telwell Job Support Inc. (currently Pasona HS Inc.) and made it a subsidiary

   Took over of temporary staffing business of NTT-ME Service Corporation, NTT Solco and Hokkaido Telemart Corporation, Telwell West Nippon Corporation and DOCOMO Datacom, Inc.

   Pasona Inc. acquired shares of Drop System Inc. (currently Pasona Inc.) and made it a subsidiary Acquired shares of Agensi Pekerjaan Pasona Sdn. Bhd. in Malaysia and made it a subsidiary

   Acquired shares of MHI Diamond Staff Corporation (currently Nagasaki diamond staff), a subsidiary of Mitsubishi Heavy Industries, Ltd. and made it a subsidiary

   Job-Hub Inc. (currently Pasona JOB HUB Inc.) established as a subsidiary Benefit One Inc. listed shares on the First Section of the Tokyo Stock Exchange

   Pasona Advisor Network Inc. (currently Pasona JOB HUB Inc.) established as a subsidiary Pasona HR Consulting (Thailand) Co., Ltd. established as a subsidiary

   Tango Kingdom Brewery Inc. took over the business of Tango Kingdom Co.

   Acquired all shares of Tango Kingdom Brewery Inc. and made it a wholly owned subsidiary Pasona Smile Inc. established as a subsidiary

   Pasona Knowledge Partners Inc. established Pasona Intellectual Property Trust Inc. Pasona Oversea Recruitment (Thailand) Co., Ltd. established as a subsidiary Established Pasona HR HUB Inc. as a subsidiary

   Established Kosyunoya Inc. as a subsidiary Established awajishima resort Inc. as a subsidiary

   Established All Japan Tourism Alliance Inc. as a subsidiary

   Subsidiary Bewith, Inc. listed on the First Section of the Tokyo Stock Exchange. Benefit One Inc. merged with JTB BENEFIT SERVICE, Inc.

   Pasona Group Inc., Benefit One Inc. and Bewith, Inc. moved from First Section of the Tokyo Stock

   Exchange to the Prime Market due to a revision of the Tokyo Stock Exchange's market classification Pasona Nouentai Inc. establishes Awaji Nature Farm Inc. as a wholly owned subsidiary.

   Pasona Furusato Incubation Inc. and Nijigennomori Inc. established as a wholly owned subsidiary Bewith, Inc. acquires shares of Doinet Co., Ltd. and made it a subsidiary.

   Acquired shares of KANDEN JOINUS Co., Ltd. (currently Pasona Joinus Inc.) and made it a subsidiary Kosyunoya Inc. established Japanese Kosyukura Inc. as a subsidiary

   Pasona Panasonic Business Service Co., Ltd. Changed its name to Pasona Nihon Somubu Co., Ltd. Transferred all shares of Benefit One Inc. and made it a non-subsidiary company

   Pasona Furusato Incubation Inc. merged with Pasona Smile Inc. Established Pasona Safety Net Inc. as a subsidiary.

   Merger with Pasona Tech Inc.

   Pasona HR Solutions Inc. established Pasona Sustainability Inc.

   Mar 2025 Pasona Tech Vietnam Co., Ltd. changed its name to Pasona Vietnam Co., Ltd. Apr 2025 Established Pasona Furusato Marche Inc. as a subsidiary.

   Established Pasona Wellness Tourism Inc. as a subsidiary.

3. Contents of business

   The Group consists of the Company as a holding company, 62 consolidated subsidiaries, and five equity-method affiliates. Regarding reporting segments, we have reorganized some segments from the beginning of the current consolidated fiscal year and classified them into six segments: BPO Solutions (Contracting & Outsourcing), Expert Solutions (Temporary Staffing), Career Solutions (Placement/Recruiting, Outplacement), Global Solutions (Overseas Human Resources Services), Life Solutions (Childcare support, Nursing care, etc.), and Regional Revitalization and Tourism Solutions. We are engaged in human resources-related businesses and regional revitalization businesses. In addition, due to the sale of shares in Benefit One Inc., which was a consolidated subsidiary at the end of the previous consolidated fiscal year, the Outsourcing segment has been discontinued from the beginning of the current consolidated fiscal year.

   The business segments and main group companies as of May 31, 2025 are as follows.

   1. Business Segments and Major Group Companies

      Business Segments		Major Group Companies
      HR Solutions
      	BPO Solutions (Contracting & Outsourcing)	Pasona Inc. Pasona HS Inc.	Bewith, Inc. Pasona Nihon Somubu Co., Ltd.
      	Expert Solutions (Temporary Staffing)	Pasona JOB HUB Inc. PASONA LOGICOM Inc. Pasona art now Inc.	Asahi Beer Communications Co., Ltd. Nagasaki diamond staff gotop Co., Ltd.
      		Pasona HR Solution Inc.	Pasona Joinus Inc．
      		Pasona Masters, Inc.	Pasona Force Inc.
      		Pasona Knowledge Partner Inc.	Smart Style Co., Ltd.
      		Pasona Intellectual Property Trust Inc.	Profelier, Inc.
      		Pasona Safety Net Inc.	TECHNORESEARCH CO.,LTD.
      		Pasona Sustainability Inc.	iBRID Co., Ltd.
      		Pasona Heartful Inc.	Doinet Co., Ltd.
      	Career Solutions (Placement/Recruiting, Outplacement)	Pasona Inc.
      GLOBAL Solutions (Overseas Human Resources Services)		Pasona N A, Inc. Pasona India Private Limited Pasona Canada, Inc. Pasona Vietnam Co., Ltd. PT. Dutagriya Sarana PT Pasona HR Indonesia
      		Pasona Taiwan Co., Ltd. Pasona Singapore Pte. Ltd.
      		MGR Consulting Co., Ltd. Pasona Education Co. Limited
      		Pasona Asia Co., Limited Pasona HR Malaysia Sdn. Bhd.
      		Pasona Korea Co., Ltd. Agensi Pekerjaan Pasona Sdn. Bhd.
      		Pasona Human Resources (Shanghai) Co., Ltd.
      		Pasona Recruitment (Thailand) Co., Ltd.
      		Pasona HR Consulting (Thailand) Co., Ltd.
      		Pasona Oversea Recruitment (Thailand) Co., Ltd.
      Life Solutions (Childcare support, Nursing care, etc.)		Pasona Foster Inc.	Pasona Life Care Inc.
      Regional Revitalization and Tourism Solutions		Pasona Furusato Incubation Inc. Nijigennomori Inc.	Pasona Tohoku Sousei Inc. Chihou Sousei Inc.
      		Pasona Agri-Partners Inc.	Tango Kingdom Brewery Inc
      		Pasona HR Hub Inc.	Pasona Furusato Marche Inc.
      		RE BORN Inc.	Pasona Wellness Tourism Inc.
      		Takumi Sousei Inc.	All Japan Tourism Alliance Inc.
      		Kosyunoya Inc.	awajishima resort Inc.
      		Japanese Kosyukura Inc.	Awaji Nature Farm Inc.
      		Tangokura Inc.

   2. Major Segments Details

      *The reporting segments of our group were classified as "Expert Services," "BPO Services," "HR Consulting, Education and Training, and Others," "Global Sourcing," "Career Solutions," "Outsourcing," "Life Solutions," and "Regional Revitalization Solutions." However, as of the beginning of the current fiscal year, these have been changed to "BPO Solutions," "Expert Solutions," "Career Solutions," "Global Solutions," "Life Solutions," and "Regional Revitalization and Tourism Solutions." Additionally, the figures for the previous fiscal year have been restated to reflect the new classifications for comparison purposes.

      HR Solutions

      1. BPO Solutions (Contracting & Outsourcing)

         We accept and undertake work from customers, and our group companies process the work using our group employees and workers employed under employment contracts for the purpose of performing the work. Transactions based on business consignment and subcontracting agreements include forms in which consigned work is performed on-site (at the customer's premises) and forms in which our group owns its own equipment and systems and undertakes the customer's business processes, such as BPO (business process outsourcing) and contact center operations. Both forms are included in BPO services.

         Under temporary staffing contracts, the client company issues commands and instructions to temporary staff, whereas under business consignment and subcontracting contracts, our group issues commands and instructions to workers.

      2. Expert Solutions (Temporary Staffing)

         In accordance with the provisions of the Act on Securing the Proper Operation of Worker Dispatching Undertakings and the Protection of Dispatched Workers (hereinafter referred to as the "Worker Dispatching Act"), we conduct "worker dispatching undertakings" in which we recruit and register dispatch staff with the permission of the Minister of Health, Labor and Welfare and dispatch them to companies and other organizations. When our group dispatches workers, we first recruit and register dispatch staff, match their preferences with the conditions of the dispatch destination, conclude employment contracts between the dispatch staff and our group, and then dispatch them to the destination.

      3. Career Solutions (Placement/Recruiting, Outplacement)

         "Recruitment services" are paid employment services that, based on the Employment Security Act and with the permission of the Minister of Health, Labor, and Welfare, recruit and register job seekers and job applicants, while also collecting job listings to match the needs of both parties.

         In addition, "outplacement" is a business that provides outplacement services to those that have retired or are scheduled to retire from a company due to company reasons (hereinafter referred to as "service users") by preparing their work history, preparing for job interviews, providing job information, and supporting independence until they find their next new job. When a company implements an early retirement program or transfers an employee to an external company, we enter into a basic contract with such a company and receive compensation from the company to support the career development of the service user.

         Global Solutions (Overseas Human Resources Services)

         We provide full-line human resource-related services overseas, including placement & recruiting, temporary staffing and outsourcing of contracting, payroll processing, education and training.

         Life Solutions (Childcare support, Nursing care, etc.)

         This segment includes the childcare business, which operates licensed and certified childcare centers, in-house childcare facilities, and childcare for school-age children; the nursing care business, which provides daycare services and home-visit nursing care services; and the housekeeping service business.

         Regional Revitalization and Tourism Solutions

         In cooperation and collaboration with local residents, local businesses, and local governments, we conduct regional revitalization projects with the aim of creating new industries and employment opportunities for sustainable regional revitalization. In addition to food & beverages, amusement, and lodging businesses that utilize local specialties, we also conduct projects related to tourism promotion and business attraction to revitalize the region.

         Business Overview

         Pasona Groue Inc. (a holding company)

         Grouo management strategy formulation, business management, and ootimjzatjon of business resources.

         New business development related to job creation and regional development, etc.

Exoert Services (Temporary Staffing), BPO Services (Contracting & Outsourcing), HR Consu lting, Education & Training, and Others

Employment Educational & Training Seances.etc

Pasona Inc Pasona HP Inc

Pasona JCiB HUB Inc Pasona Lo9icom Inc Pasona art now Inc Pasona HR Solution Inc Pasona Masters Inc Pasona Heart1'ul Inc

Pasona K nowled9e Partner Inc

Pasona Intellectual Prooert y Trust Inc Pasona Safety Net Inc

Pasona Sustainabilit y Inc

Be^/it h, Inc Ltd.

Pasona Japanese Somubu Co., Pasona Joinus Inc

Pasona Force Inc

Asah Beer Communicmion, Co. Lid. tgomki diamond MAñ

TECHNORESEA R CH CCi.,LTD.

Pro1'elier, Inc Doinet Co., Ltd

T ary

Seaf ng

Outplacement

Career Solutions (Placement/Recruiting and Outolacement) Pasona Inc.

Employment, Outplacement, Educational& Training Seances.etc

rooat o utions

Pasona N A, Inc. Pasona Canada, Inc. PT. DutagriYa Sarana Pasona Taiwan Co., Ltd.

MGR Consu Sting Co., Ltd. Pasona Asia Co., Limited

Pasona India Private Limited Pasona Tech Vietnam Co., Ltd. PT Pasona HR Indonesia Pasona Singapore Re. Ltd.

Pasona Education Co. Limited Pasona HR Malaysia Sdn. Bhd.

T

Pasona Korea Co., Ltd.

Agensi Pekerjaan Pasona Sdn.Bhd.

Pasona Human Resources (Shanghai) Co., Ltd. Pasona Recruitment (Thai hand) Co., Ltd.

Placement

Seaf ng

Outsourced

Pasona HR Consu Sting (Thailand) Co., Ltd. Pasona Oversea Recruitment (Thai and) Co., Ltd.

Childcare, Nursing care,

Pasona Foster Inc.

Pasona Life Care Inc.

Customers

Various Service Users

Placement Re-

Housekeeping Srevice,etc.

Tourism. Saes Seoices.etc

Employee 5upport,etc.

Revitaliz ation,

etc.

1. Status of associated companies

   Our group is engaged in BPO Solutions (contracting & outsourcing), Expert Solutions (temporary staffing), Career Solutions (placement/recruiting, outplacement), Global Solutions (overseas human resources services), Life Solutions (childcare support, nursing care, etc.), Regional Revitalization and Tourism Solutions, and other businesses. As of May 31, 2025, we have 62 consolidated subsidiaries and five equity-method affiliates, as follows.

   Company name	Location	Share capital or investments in capital (millions of yen)	Contents of major business	Ratio of voting rights holding or held (%)	Relationship
   (Consolidated subsidiaries) Pasona Inc. (Note 1, 5, 8)	Minato-ku, Tokyo	100	Temporary staffing, BPO (contracting and outsourcing), placement and outplacement	100.00	Business management Trademark licensing Business consignee Concurrent director 2 Receipt of funds Debt guarantees/guarantees
   Bewith, Inc. (Note 1, 2, 3, 6, 7)	Shinjuku-ku, Tokyo	915	Contact center, BPO (outsourcing & contracting)	55.52	Business consignee Concurrent director 1
   Pasona Nihon Somubu Co., Ltd.	Osaka City, Osaka	20	General administration and office support, production of manuals and promotional materials, digital content production, document services, etc.	66.50	Trademark licensing Business consignee Concurrent director 1 Receipt of funds
   Nijigennomori Inc.	Awaji City, Hyogo Prefecture	30	Operation of "Nijigen-no-mori" animation park, regional revitalization projects, etc.	100.00	Business management Concurrent Director 1 Deposit of funds Guarantee of debt
   Pasona HS Inc. (Note 4)	Minato-ku, Tokyo	100	Temporary staffing, BPO (contracting and outsourcing), placement and outplacement	100.00 (100.00)	Business management Trademark licensing Receipt of funds
   Pasona Life Care Inc.	Minato-ku, Tokyo	100	Welfare and nursing care services, housekeeping service, etc.	100.00	Business management Trademark licensing Concurrent Director 1 Receipt of funds
   Pasona Joinus Inc. (Note 4)	Osaka City, Osaka	70	Temporary staffing, BPO (contracting and outsourcing), placement	100.00 (0.25)	Business management Trademark licensing Receipt of funds
   Pasona JOB HUB Inc.	Minato-ku, Tokyo	50	BPO (contracting and outsourcing), Advisory consulting business, executive search business, etc.	100.00	Business management Trademark licensing Receipt of funds
   54 other companies
   (Equity method-applied affiliated companies) 5 companies

   Note 1: The company is a specified subsidiary company. Note 2:The company submits annual securities reports.

   Note 3:The following companies are consolidated subsidiaries of the Group that are publicly traded on securities markets in Japan.

   Prime Market of the Tokyo Stock Exchange: Bewith, Inc.

   Note 4: Figures in parentheses in the "Percentage of voting rights held" column indicate indirect ownership.

   Note 5: Pasona Inc. accounts for more than 10% of consolidated net sales (excluding inter-company sales among consolidated companies).

   Principal financial information

   1. Net sales ¥193,643 million

   2. Ordinary profit ¥8,258 million

   3. Profit ¥5,062 million

   4. Net assets ¥41,617 million

   5. Total assets ¥106,967 million

      Note 6: Although Bewith, Inc. accounts for more than 10% of consolidated net sales (excluding inter-company sales among consolidated companies), the description of major profit & loss information is omitted because the said

      consolidated subsidiary is a company that submits annual securities reports.

      Note 7: The calculation of the percentage of voting rights held by Bewith, Inc. includes voting rights for 128,000 shares lent under a stock lending agreement.

      Note 8: Mr. Yasuyuki Nambu, who also served as a director of Pasona Inc., resigned as Representative Director on May 31, 2025, and as of the date of submission, his concurrent position as a director has been terminated.

2. Status of employees

1. Status of consolidated companies

   As of May 31, 2025

   Segment	Number of employees
   BPO Solutions (Contracting, Outsourcing) Expert Solutions (Temporary Staffing)	6,299	( 12,784 )
   Career Solution (Placement/Recruiting, Outplacement)	385	( 109 )
   Global Solutions (Overseas Human Resources Services)	604	( 56 )
   Life Solutions (Childcare Support, Nursing Care, etc.)	542	( 473 )
   Regional Revitalization and Tourism Solutions	247	( 319 )
   Companywide	817	( 347 )
   Total	8,894	( 14,088 )

   Note 1: The number of employees is the total number of full-time employees of all consolidated companies, and the average number of temporary employees for the year is shown in parentheses.

   Note 2: The number of employees decreased by 1,107 compared to the end of the previous consolidated fiscal year. This is mainly due to the exclusion of Benefit One Inc. and its subsidiaries, which were responsible for outsourcing at the end of the previous consolidated fiscal year, from the scope of consolidation. In addition, due to a review of the segment classification of some subsidiaries in the Regional Revitalization and Tourism Solutions segment, the number of employees increased by 130 and the number of temporary employees increased by 131 compared to the end of the previous consolidated fiscal year.

   Note 3: Since the segment classification was revised at the beginning of the current consolidated fiscal year, Global Solutions (overseas human resources services) is presented separately.

2. Status of the reporting company

   As of May 31, 2025

   Number of employees	Average age	Average years of service	Average annual salary (¥, thousands)
   880 ( 544 )	34.9	7.7	6,289

   Segment	Number of employees
   BPO Solutions (Contracting & Outsourcing), Expert Solutions (Temporary Staffing)	63 ( 197 )
   Companywide	817 ( 347 )
   Total	880 ( 544 )

   Note 1: The number of employees is the number of full-time employees, and the average number of temporary employees for the year is shown in parentheses. The number of employees increased by 110 compared to the end of the previous fiscal year, mainly due to an increase in the number of new employees hired.

   The Company hires new employees as a group in batches.

   Note 2: In calculating average years of service, employees transferred from consolidated subsidiaries of the Company are included in the total number of years of service at the relevant companies.

   Note 3: Average annual salary is calculated for employees who have been with the company for at least one year and includes bonuses and non-standard wages.

3. Status of labor unions

   There is nothing special to report.

4. Percentage of female workers in management positions, percentage of male workers taking childcare leave, and differences in wages between male and female workers.

Since its establishment in 1976, our group has been working toward the realization of a society in which everyone, regardless of age, gender, nationality, or disability, can freely use their talents with hope and pride. Within the company, we promote the creation of a workplace environment where each employee can work with peace of mind, including proposals for diverse work styles that maximize each employee's abilities and support for career building.

Therefore, the same personnel system is applied regardless of gender, and a common system is used for evaluation, promotion, and salary levels. There are no gender differences in salary rules or wage items, and there are no wage differences between men and women in the personnel system at the same qualification level.

Submitting company and consolidated subsidiaries (Note 1)

Note 1: The periods covered by each are as follows.

・Percentage of female workers in management positions

Period covered: As of May 31, 2025. * as of March 31, 2025

・Ratio of male workers taking childcare leave, wage differences between men and women Period covered: June 1, 2024 to May 31, 2025. * is from April 1, 2024 to March 31, 2025

Indicators that are not disclosed in cases where there are no employees applicable to the calculation are indicated with "－".

Note 2: Calculated in accordance with the provisions of Japan's Act on the Promotion of Women's Active Engagement in Professional Life (Act No. 64, 2015).

Note 3: Based on the provisions of Japan's Act on Childcare Leave, Caregiver Leave, and Other Measures for the Welfare

of Workers Caring for Children or Other Family Members (Act No. 76, 1991), the percentage of employees who took child care leave, etc., as stipulated in Article 71-6-1 of Japan's Ordinance for Enforcement of the Act on Childcare Leave, Caregiver Leave, and Other Measures for the Welfare of Workers Caring for Children or Other Family Members (Ordinance of Ministry of Labor No. 25, 1991) was calculated.

Note 4: The ratio of average annual wages for women to average annual wages for men is calculated.

• Wages include base salary, compensation for overtime work, and bonuses, and exclude retirement and commuting allowances.

・Regular workers: Executive officers, regular employees (including those who work shorter hours or more than 3 days per week)

・Part-time and fixed-term workers: Fixed-term contract employees, contract employees, part-time, etc., temporary staff

The high ratio of women using the shorter work-hour system and the high ratio of men in higher grades, including management positions resulted in differences in per capita wages between men and women.

There is no difference in the salary system between male and female part-time and fixed-term workers, but there is a difference in average salaries due to differences in job types and job descriptions.

Note 5: Bewith, Inc. are listed on the Prime Market of the Tokyo Stock Exchange, so please refer to their annual securities reports for details.

I-2. Status of business

1. Management policies, management environment, challenges to address, etc.

   Our group's management policy, business environment, and issues to be addressed are as follows.

   Please note that the forward-looking statements in this document are based on our group's judgment as of the date of submission of the securities report (August 20, 2025).

   1. Basic policy for company management

      Since its founding, the Pasona Group has been committed to its clear corporate philosophy of providing "Solutions to Society's Problems." We have promoted diversity and built various forms of social infrastructure aimed at creating a society where everyone can freely choose their desired work and have access to employment opportunities.

      The Pasona Group's work is "to harness the potential of the individual" which means creating a fulfilling life for people-as a "Life Producer." We believe that our corporate social responsibility (CSR) lies in "Always striving with high aspirations to create a society where those seeking to reintegrate into society, those who seek the challenges of a new life, and those who boldly pursue their life goals can all design a rich life according to their individual lifestyles."

      To fulfill this social responsibility, we have established the Pasona Group Corporate Action Charter, which is clearly communicated understood and shared by all executives and employees across all PASONA entities worldwide, from top management down.

      We shall further enhance our corporate value for all stakeholders through pursuit of the roles and responsibilities outlined in our Pasona Way philosophy, by actively tackling rapidly changing social issues, and through our Pasona Group efforts to realize SDGs.

      As a social solutions company, we will continue to engage in sound corporate activities with social responsibility, aiming to realize a 'NATUREVERSE' based society that creates fulfilling lives for people.

      
      
      

      Pasona Group Corporate Philosophy

      Solutions to Society's Problems

      Our work at Pasona Group is "to harness the potential of the individual" and to support the creation of fulfilling life for people-in other words, to be a "Life Producer." To fulfill this role, we are committed to always maintaining high aspirations and a strong sense of mission, building new social infrastructure, and continuously taking on bold challenges.

      1. Building a society where everyone can freely choose their preferred work and design a work style that aligns with their life plans.

      2. Aiming to create a society where companies and individuals are connected by an equal relationship, allowing everyone to freely utilize their talents.

      3. Promoting diversity and continually creating opportunities where each person can pursue their dreams and take pride in their achievements.

The Pasona Way represents our core values, which indicate how each employee should act and behave, based upon our Corporate Philosophy and Corporate Mission. All executive officers and employees pass along and share these values enshrined at Pasona's establishment, which also serve as a consistent basis for making judgments.

For Society

We consider what each individual can do for society and we take on bold challenges with high aspirations, a strong sense of mission, and an entrepreneurial spirit.

We aim to create a society where everyone who wishes to work can do so with confidence, envisioning a bright future they can build themselves.

We continue to be a company with a long and fruitful history, with relevance and social impact.

Embracing the Pasona Group's Challenge Values of Pure, Passion, and Power, we call for meaningful societal changes while making our own contributions to society.

For Working People

As Life Producers, we work hand-in-hand with people, helping each individual design a fulfilling life plan.

We walk together to realize the rich future that lies beyond dreams, for "Dreams Belong to People."

We bring out and encourage each person's talents, abilities, and hidden potential. We support everyone who relies on us with sincerity and compassion.

For Clients and Customers

"The strength of Pasona is me." Act with confidence and pride, providing services as a professional that inspire trust and a sense of security.

"Hearts Touch Hearts, Hearts Move Hearts." Always approach others with sincerity, putting yourself in their shoes.

"Not a Think Tank, but a Do Tank." Don't just think about what you can do for the customer-take action first.

"Even the soles of our shoes shine" We work diligently, sparing no effort for our customers.

For Colleagues

Our smiles are always bright, our words are always happy and gentle, and our hands and feet are always working hard.

We express feelings of gratitude to our workplace colleagues, seniors, bosses, juniors, and those around us.

We share our enjoyment in working, and we nurture a healthy environment in which we can work energetically.

We honor the Pasona Group's history of meeting challenges and its inherent qualities, and, together with our colleagues, we seek to meet new challenges to realize an ideal future.

For Shareholders

We will conduct high-quality management for shareholders who share our corporate philosophy and promote business activities that fulfill our corporate social responsibility.

1. 1. Management Strategy

      This year marks the 50th anniversary of our company's founding. In the fiscal year ending May 2024, we sold shares in our consolidated subsidiaries, which changed the composition of our business portfolio, and we have been working on formulating a new growth strategy with a view to the next 50 years. Looking ahead to the next 50 years, we will build on our business expertise and network to create a new "well-being industry" and aim to realize a world of "NATUREVERSE" (*), where everyone can enjoy physical, mental, and social health.

      Currently, the business environment surrounding our company is characterized by a declining working-age population due to the aging and declining birthrate in Japan, as well as increasingly diverse values and lifestyles among the population. In addition, technological advances in AI and other digital technologies are remarkable, and not only the way we work but also the nature of work itself is changing significantly.

      Under these circumstances, we will strengthen our profitability by providing higher-value-added services in the business areas that we have cultivated thus far, while also working to reform our revenue structure. As we enter an era of 100-year lifespans, people are working longer throughout their lives, and society is shifting toward flexible working styles that can be adjusted according to lifestyle and career advancement. In this context, efforts to support and maintain the health of individuals will become an important issue for companies, individuals, and society as a whole in Japan, where the population is declining. We will leverage our business expertise to create a new industry around the concept of "well-being" that can solve future social issues and contribute to the growth of our business.

      Therefore, we have designated the five-year period beginning in May 2026 as "PASONA GROUP VISION 2030" and will aim for sustainable corporate growth and further enhancement of corporate value through a growth strategy focused on reforming our revenue structure and pursuing new business growth.

      Under the "PASONA GROUP VISION 2030," the Group aims to achieve net sales of ¥400 billion yen, ordinary income margin of 5%, ROE of over 8%, and PBR of over 1x as its financial targets for the fiscal year ending May 2030.

      (*) NATUREVERSE refers to the truly prosperous world that the Pasona Group aims to achieve, where people, nature, and technology coexist, and people are connected by a spirit of compassion.

2. Approach to sustainability and initiatives

   The Group's approach to sustainability and its initiatives are as follows. Forward-looking statements are based on the judgment of the Group as of the end of the current consolidated fiscal year.

   Based on our corporate philosophy of "solving society's problems," the Group is committed to business activities aimed at realizing a sustainable society and promoting sustainability management for the sustainable growth of our Group. In order to clarify the significance of our sustainability efforts and the future vision that we are aiming for, we have clearly stated this as "Sustainability Policy " and have made it the common understanding of the Group. For more information on our ESG and sustainability initiatives, please refer to our website.(URL: https://www.pasonagroup.co.jp/english/ir/esg/)

   1. Governance and Risk Management

      In the Group, various internal meetings and committees play a role in promoting sustainability management. For climate change issues, the "Environmental Management Strategy Board" formulates strategies, policies, and targets for the Group's environmental management and response to climate change, while the Environmental Management Promotion Committee promotes effective action plans for each division and group based on these policies. Regarding human capital, the Group Human Resources Department discusses and promotes initiatives concerning important issues in the area of human resources for the entire Group. Important sustainability-related matters are monitored by each meeting or committee, which reports to the Board of Directors or the Management Meeting, with each providing appropriate advice as necessary.

      In addition to climate change risk, the Group has established its Risk Management Regulations and a Risk Management Committee as an organization that oversees risk in order to prevent crises that could have significant impact on management and to minimize losses in the event that such crises should occur.

      Various risks related to sustainability in general are identified at various internal meetings and committees, where relevant laws and regulations and matters affecting the business are discussed, and are then integrated into the overall risk management process by the Risk Management Committee. In addition, the contents of these reports are regularly reported to the Board of Directors to enable the Board of Directors to appropriately monitor the status of the Group and its response.

   2. ESG/Sustainability Management

1. Commitment to Sustainable Global Environment

   Since the Team Minus 6% project led by the Japanese Government commenced in 2005, Pasona Group established an Environment Committee consisting of the directors of each of the Group companies. We have made every effort to treat limited resources as precious and have engaged in environmental conservation through our corporate activities in order to preserve a beautiful and healthy global environment for future generations.

   Amidst the increasing severity of global warming, abnormal weather, damage to the ecosystem, and environmental damage in recent years, as a social solutions company, Pasona Group is disseminating its ideal way of sustainable management, and in order to continue to be a successful long-established company trusted by society, the Company determined the Pasona Group Environmental Innovation Strategy in 2021, and announced its support for the Task Force on Climate-Related Financial Disclosures (TCFD) in the same year. The Company has also launched an Environmental Management Promotion Committee, conducted climate change scenario analyses, and clarified the business impact of risks and opportunities related to climate change. In 2023, the Environmental Management Strategy Board was launched, and strategies, policies, and goals for the Group's environmental management and response to climate change were formulated.

   1. Major efforts to reduce CO2 emissions

      The entire group is actively promoting energy-saving activities to reduce CO2 emissions. Company-owned vehicles are being switched to electric and hybrid vehicles, and efforts are being made to make operations paperless through the promotion of digitalization. Furthermore, our group is progressing the switch to electricity derived from renewable energy sources at the facilities that we utilize. For the fiscal year ended May 31, 2025, 32 facilities on Awaji Island, Hyogo Prefecture-including offices, restaurants, cafés, and an anime park-are using electricity derived from renewable energy sources that does not emit greenhouse gases. Furthermore, on Awaji Island, Hyogo Prefecture, we have introduced a large-scale composter to collect food waste from catering facilities and convert it into compost. Currently collecting waste from nine facilities on the island, it generates approximately 500 kg of compost monthly. This circular resource utilization approach reduces waste disposal while cutting CO2 emissions from incineration

   2. Environmental Conservation initiatives

      With the aim of raising Group-wide awareness of environmental issues and encouraging behavioral change, we held study sessions with internal and external experts, attended by 3,300 executives and employees from all over Japan in the fiscal year ended May 31, 2025. In addition, as part of our efforts to protect the environment, we are promoting activities to preserve satoyama through tree planting and tree raising in every region of Japan, as well as environmental beautification activities in Japan and overseas in conjunction with Earth Day (April) and World Clean Up Day (September), which were adopted by the UN. In the fiscal year ended May 31, 2025, we conducted 276 such activities in Japan and overseas, with a total of 6,788 employees.

      In April 2024, Pasona Inc. acquired ISO 14001:2015 certification, the international standard for environmental management systems, at its headquarters office, promoting voluntary environmental conservation efforts.

   3. Compliance with the Task Force on Climate-related Financial Disclosure (TCFD) Governance

      The Environmental Management Strategy Board formulates strategies, policies, and targets for the Group's environmental management and climate change response. Based on this policy, the Environmental Management Promotion Committee promotes effective action plans for each division and group company and conducts environmental education to raise the environmental awareness of each employee. The Risk Management Committee deliberates on matters related to climate change risk management, and the Internal Audit Department conducts environmental audits of each department and each affiliated company. The Board of Directors monitors important matters related to climate change by receiving reports and providing appropriate advice from the Environmental Management Strategy Board.

      
      
      

      Strategies

      The Group analyzed risks and opportunities for 2030 based on several climate change scenarios (1.5-2°C and 4°C global increases). The scenario analysis is based on reports issued by the Intergovernmental Panel on Climate Change (IPCC), the International Energy Agency (IEA), and Japan's Ministry of the Environment, and other organizations. The process of analysis and the main risks and opportunities identified in the scenario analysis are as follows.

      
      
      

      For each risk and opportunity identified, we drew up specific scenarios and examined the financial impact on our business, quantitatively and qualitatively. As a result, the major risks and opportunities identified by the Group through this scenario analysis and our policy for dealing with them are as follows. No significant risks affecting the business were identified. We will continue to review our assessments and enhance information disclosure.

      
      
      

      Strategies (Opportunities)

      As the movement toward decarbonization accelerates in Japan and abroad, listed companies are required to disclose climate-related financial information and take actions to achieve carbon neutrality, including in their supply chains. However, many companies lack not only the know-how to visualize CO2 emissions, but also the resources to perform the complicated tasks involved. Another challenge is educating employees about the SDGs.

      The Group offers diverse services to support environmental management for companies, municipalities, and others pursuing GX (Green Transformation), including consulting and BPO solutions for disclosing climate-related risks and reducing CO2 emissions.

      Environmental management support and sustainability human resources development

      Pasona Sustainability Co., Ltd. provides environmental management support services, including BPO services for visualizing CO2 emissions and calculating electricity usage, as well as strategic planning for decarbonization management. We also support companies in advancing their Sustainability Transformation (SX) through human capital management support, including consulting on human capital data collection and human capital management, and by providing training programs to develop sustainability human resources.

      Support for sustainable management by professional human resources

      Pasona JOB HUB Inc. provides professional advisors who are well-versed in various fields to support the formulation of SDGs and ESG management strategies, planning of circular economy business strategies, and establishment of recycling-oriented supply chain business models to promote sustainable management.

      Energy-Saving Consulting Services to Reduce Environmental Impact

      Pasona Nihon Somubu Co., Ltd.'s "Energy Conservation Consulting Service" provides comprehensive support for resolving corporate environmental issues, from the visualization of CO2 emissions to initiatives for decarbonization, leveraging our expertise in facility management. Based on the results of the simplified energy efficiency and conservation diagnosis, we will conduct a detailed analysis, formulate improvement measures, estimate their effects, and support the implementation of measures to resolve issues.

      Sustainable training program for co-creation, circulation, and diversity

      Pasona Agri-Partners Inc. offers training programs on Awaji Island, Hyogo Prefecture, for companies, organizations, and educational institutions to learn about "SDGs" such as those involving food safety and the natural environment. The program offers agricultural experiences to learn about soil cultivation, food safety, and production processes, as well as classroom training to learn about issues related to abandoned farmland and de-plasticized materials, with approximately 5,900 participants in the fiscal year ending May 31, 2025.

      Risk management

      The Group has established Risk Management Regulations to prevent crises that could have serious impact on management and to minimize losses if such crises should occur.

      Risks due to climate change are identified by the Environmental Management Strategy Board, where relevant laws and regulations and natural disasters that can affect business are discussed.

      In addition, the Board of Directors is regularly informed of the details of these measures, the status of response is monitored, and progress is managed and reviewed. We are building a management system for climate change risk.

      Indicators and Targets

      The Group calculates and measures greenhouse gas emissions from its business activities and has set a reduction target of "achieving carbon neutrality* in FY2030." In addition to actively using electricity derived from renewable energy sources in our offices and the facilities we operate, we are also switching to electric and hybrid vehicles for company vehicles.

      Item	Fiscal year 2024 (ending May 31, 2025)
      Scope 1	2,094
      Scope 2	4,015
      Scope 3	128,848
      Total	134,957

      (*) "Scope 1" and "Scope 2" of greenhouse gas emissions from the Group's business activities are covered. The following table shows greenhouse gas emissions associated with business activities. (Unit: t-CO2)

      Notes: 1 The scope of our group includes the results of our company alone and the results of 11 consolidated companies that account for a large percentage of consolidated net sales.

      1. Scope 3 refers to emissions in categories 1, 2, 3, 4, 5, 6, 7 and 8.

      2. Actual results may vary due to the refinement of the aggregation method.

2. Initiatives for human capital

Since our founding in 1976, we have worked to realize a society in which everyone, regardless of age, gender, nationality, or disability, can freely use their talents to fulfill their dreams and take pride in their work. Within the company, we promote the creation of a workplace environment where employees can work with peace of mind, including proposing diverse work styles that maximize each employee's abilities and providing support for career building, thereby leading to the sustainable development and value enhancement of the Group.

Human resources development policy and the internal environmental improvement policy, indicators, and targets Our group's job is to "harness the potential of the individual." That is, to "Life Produce" and to support the creation of a comfortable lifestyle for people everywhere. To fulfill this role, under our human resources development policy of "Creating your own future by yourself," we have put in place various personnel systems and measures that encourage the exercise of talent and ability, and we support employees' autonomous career-building so that each employee can have high aspirations and a sense of purpose, while continuing to boldly take on challenges.

Based on our medium-term vision, "PASONA GROUP VISION 2030," we have established a human resources strategy to realize our key strategies, focusing on the following three pillars: "Discovering human resources who will help create the future," "Developing human resources who will create new value," and "Creating an environment where diverse human resources can thrive." By supporting the growth of our employees, we are promoting the development of human resources who will contribute not only to the growth of our group but also to the realization of a sustainable society.

In addition, based on a corporate philosophy that has remained unchanged since the company's founding, "the Pasona Way," which represents the core of the Pasona Group, serves as a guideline for action, carrying on the spirit of the Company's founding and providing an unwavering axis for decision-making at all times. Every year, the two-month period beginning on February 16-the anniversary of Pasona Group's founding-is designated as "Pasona Way Week" as a month of reinforcement, during which all executives and employees share the corporate philosophy by reflecting on the Group's business history and the role that it plays, along with holding discussions and setting individual action goals under the theme of the corporate philosophy.

・Promotion of women's activities

The Group, which was founded with the desire to "support housewives in finding new employment," has been practicing human resource development and placement of the right person in the right job without gender bias, with the aim of realizing a society with no gender disparities, with all employees joining the Company as career-track employees since its establishment. In order to enable employees to work through milestones in their lives such as childbirth, child-rearing, and nursing care, Pasona has established flexible work systems since the 1990s, including "telecommuting," "short-time work," and "flextime," and has set up on-site childcare facilities at Minami-Aoyama office, currently, and Pasona Family Office on Awaji Island in Hyogo Prefecture. Pasona has also established an on-site daycare center at the Group's headquarters and a Pasona Family Office on Awaji Island, Hyogo Prefecture, where employees can work in the same space as their children. In the area of human resource development and career development support for women, the "Wonder Woman Training," a next-generation female leadership development program launched in 2014, has produced positive results, with 3 of its graduates promoted to Group company presidents, 24 to executive officers, 14 to deputy directors, and 54 to higher positions of responsibility.

As a result of these activities, we have produced many female managers and female executives, with women accounting for 53.9% of all employees, 50.2% of all managers, and 26.8% of directors and executive officers.

In addition, the rate of male employees taking childcare leave is 77.1%, with an average of 86.1 days taken. We will continue to improve and expand our measures to further promote participation in childcare, such as strengthening internal awareness and information dissemination, with the aim of creating an environment where both men and women can balance work and childcare.

・Support for families raising children

We provide a variety of support services to help employees balance work and child rearing. We hold "IDOBATA meetings" to support information exchange and career development among employees, targeting fathers, mothers, and those with caregiving experience, as well as seminars and employee roundtable discussions on various topics tailored to children's growth. At our Minami-Aoyama Office, we operate the Pasona Family Nursery School within the office premises, and during long breaks such as summer vacation, we run the Miracle Kids holiday daycare program, offering various activities such as English lessons taught by native speakers and programming classes using drones. More than 600 children participate in these programs each year.

In Awaji Island, Hyogo Prefecture, we have partnered with an international school to offer an educational program called "Awaji Island International School," which focuses on communication in English and brings out the diverse talents of children. We also offer "Awaji Kids Garden," where children are exposed to English from an early age and nurture their rich sensibilities in a natural environment, as well as a variety of programs such as ballet, karate, piano, and violin, tailored to the interests and preferences of each child.

In addition, since 2020, we have been working on a project in Awaji Island, Hyogo Prefecture, to provide comprehensive support in terms of employment, housing, and education to single-parent families facing difficult circumstances in both employment and living situations. Awaji Island offers a safe environment in which to work, as well as a natural setting in which to raise children and receive a fulfilling education. To date, 39 households comprising 90 individuals have moved to Awaji Island.

・Diverse nationalities play an active role

The Group has approximately 1,000 foreign employees from 51 countries in Japan and abroad, and the percentage of foreign nationals among the employees of domestic consolidated subsidiaries is 2.6% (8.9% when including overseas consolidated subsidiaries). By having personnel of various nationalities with diverse values interact with each other, and by assigning and appointing the right people to the right positions, we can respond to changes in our business and to develop new ideas.

The Awaji Youth Federation, a human resources development program launched in 2017 that aims to create new industries and realize regional development, has accepted 118 talented young people and social entrepreneurs from 50 countries and regions around the world to date. After completing the program, they continue to work on creating new innovations to solve local issues on Awaji Island.

In the fiscal year ended May 31, 2025, we will sign MOUs (Memorandums of Understanding) with six new organizations, including governments, the United Nations, and educational institutions such as universities, to promote the creation of employment opportunities in Japan and the development of human resources for regional revitalization. In addition, we accept 49 foreign students from nine countries from universities and other educational institutions in Japan and overseas as interns in Tokyo and at Awaji Island, providing them with opportunities to build their careers.

・Supporting the dual careers of entertainment and athletic talent Since 2006, our group has been supporting musicians in balancing their music and artistic activities with their work through our "Music Mate" program, which supports the activities of entertainment professionals engaged in cultural creation. In 2020, we launched the "Music Island" project on Awaji Island in Hyogo Prefecture, bringing together musicians from across Japan to promote regional revitalization through music. In 2022, we hosted the "Pasona Awaji World Ballet" performance, featuring professional ballet dancers and instructors from around the world, including Ukrainian ballet dancers. Both domestic and international entertainment

talent are contributing to cultural creation initiatives at our group facilities, not only through performances but also through music activities on the island that enrich people's hearts and lives.

In the fiscal year ending May 2025, approximately 160,000 people attended performances held at our group facilities on the island.

In 2005, the company launched its "Sports Mate" business to support athletes in balancing work and athletic activities, helping active and retired athletes, coaches and others to realize hybrid careers that combine athletic activities and work, as well as second careers. In addition to providing work opportunities at locations nationwide, the company supports the long-term career development of each individual, with 22 athletes currently working as employees.

・Promotion of middle and senior human resources

Since the 1980s, the Group has promoted the creation of new employment infrastructures and skill development support for seniors with abundant experience and abilities. Currently, our Group has a 100% re-employment rate from the retirement age of 60, and over 1,000 employees is over the age of 60, of which over 500 are over the age of 65, making a large number of senior personnel active in the Group.

We believe that creating an environment in which senior employees can remain active and vigorous for a long time will lead to further growth of the company, and we provide comprehensive support for their career development, including a "Career Discovery Program" for employees in their 40s and 50s to reaffirm their own values and potential and to design their future career and way of life. We also provide support for comprehensive and continuous career development. Furthermore, in order to further enrich professional lives, which are becoming longer with the advent of a period in Japan where people commonly live to 100 years old, we have also established a benefit program that provides employees with cost subsidies and leaves of absence when they need recurrent education as they take stock of their careers.

Externally, Pasona will leverage its accumulated expertise to offer "Safe Placement Total Service" (introduced by approximately 930 companies), which provides support for autonomous career development for all generations, including middle and senior citizens, from 2021, and the "Pasona Recurrent" (number of courses: 2,100, number of participants: 3,500) reskilling program, which provides learning opportunities suited to individual career and life plans, from 2022.

・Employment of disabled persons

We have also created an environment where people with disabilities that are willing to work but find it difficult to do so can work vigorously and a place of "symbiosis" where they can participate in society with able-bodied people, based on the concept of " "Disability is Individuality, and Talent Knows No Handicap!" In addition to office work, we have created an "art village," where artist employees work in order to expand the field of employment through "art," and we have also established a professional agriculture business that produces safe and assured vegetables (using no agricultural chemicals) and organics. "Yume Farm" grows safe and assured vegetables, rice, and herbs using organic and

nonagricultural methods, and the "Bakery" produces and sells additive-free bread and baked goods under the guidance of top-class craftsmen. Members of Pasona Heartful, a special subsidiary, are expanding their fields of activity by making the most of their individual abilities at Pasona Heartful and other group companies. In addition, we also focus on consulting and CSR activity support for companies that are proactive in employing people with disabilities, utilizing our accumulated know-how in various aspects of employment of people with disabilities.

・"Hybrid Career Program" to support multilayered career building

In order to develop human resources who can contribute to society by acquiring the human skills necessary to respond flexibly to changes in the social environment, we launched the Hybrid Career Program in 2022, and to date, 850 people have participated in hybrid careers.

New employees are given the opportunity to spend one day a week challenging themselves with tasks unrelated to their assigned duties, such as "sales × agriculture," "human resources × new business development," and "management planning × entrepreneurship." This allows them to gain new perspectives and build networks inside and outside the company that they would not otherwise be able to obtain through their assigned duties. In 2024, we developed "Awajiku Beer" using figs, a specialty of Awaji Island, and expanded our sales channels by offering it at our facilities on Awaji Island.

In addition to new employees, employees in their fourth and fifth years of employment also undergo one year of training (in communication, digital technology, English, etc.). We have created an environment where employees can build multiple career paths through concurrent positions within the group or within the company.

・Supporting Employees' Career Challenges

Since 1989, we have had an "open position system" that allows employees to raise their hands and take on the challenge of open positions within the company. In the fiscal year ended May 2025, 56 employees took on new career challenges through this program. In addition, since 1993, we have been supporting employees' autonomous career development through "My Career Bank," a program that allows employees to report their own career plans directly to the Human Resources Department each year.

・Respect for human rights initiatives

Our group has established respect for human rights in the Pasona Group Code of Conduct.

In addition, we conduct human rights due diligence at each group company in order to identify any negative impact that our business activities may have on human rights and to prevent and mitigate such impact. In the fiscal year ended May 31, 2025, we conducted human rights due diligence at 56 group companies in Japan and overseas, using evaluation steps to identify business areas with significant risks, identify the process by which human rights violations occur, and evaluate and prioritize responses to human rights violations.

For more information on our efforts to respect human rights, please refer to our website. (URL: https://www.pasonagroup.co.jp/ir/esg/humanrights.html)

・Developing DX human resources to create new added value

In order to realize the three key strategies of our medium-term vision, "PASONA GROUP VISION 2023," we are focusing on developing DX human resources who can use digital technology to solve problems, and we are working to strengthen the competitiveness and innovative power of our organization.

In the fiscal year ended May 31, 2025, we cultivated approximately 1,200 DX human resources internally and 12,461 across our organization. This included developing internal talent through tiered DX training programs and launching a new initiative. This program, based on our internal training success, brings together customers from diverse industries, including manufacturing, finance, and chemicals to learn about advancing DX through cross-industry exchange.

Going forward, for realization of "DX VISION 2030," we will implement reskilling for all employees while actively promoting the placement of DX specialists through new roles. By the fiscal year ending May 31, 2030, we aim to recruit and develop 3,000 employees internally and 17,000 externally. This will strengthen our management foundation and create new added value in our services. Furthermore, Pasona Inc. has launched "Code; Without Barriers in Japan" in partnership with Microsoft Corporation. This initiative focuses on developing digital talent for 10,000 temporary staff, aiming to enhance human capital by providing opportunities to learn AI utilization.

・Corporate university "Pasona 'Kokorozashi' University"

We have systematized and implemented a training and education program for all Pasona Group employees via the "Pasona 'Kokorozashi' University," an in-house university. We offer a variety of education and training programs to support the autonomous career development of each employee, including the acquisition of abilities and expertise required for each grade, position, and function, selective training to maximize the talents and potential of each individual, diverse training to acquire digital skills, and the development of management personnel that will lead the next generation of the Group.

・Training cost per employee/person*1: 2 ¥558 million/6,940 persons

・Average training hours per employee*1: 2 59.2 hours

・Number of participants in annual, position-, and function-specific training* 2 6,906 in total

*1:Including personnel, utilities, transportation, and other expenses related to the implementation of the training

*2:Calculated for: The Company and its 28 domestic consolidated subsidiaries

・Providing a wide variety of "career" and "life" counseling services

Our nationally certified career consultants work with each individual to help them build a clear career vision, and we support a total of 198,200 people in creating their careers each year. Pasona also offers the Pasona Career College, which offers 8,800 specialized courses to help students improve their skills and acquire qu alifications, and 115,000 people have taken these courses.

Work-Life Facilitators, who are nationally certified career consultants, provide a wide range of consultation services, including work, health, childcare, nursing care, and money planning, to help working people build autonomous careers and design life plans.

・Career Consulting Technician Level 1: 15

・Nationally Qualified Career Consultants: 641

・Second-class career consulting technician: 407

・Other career consulting related qualifications such as industrial counselor: 601

・Work-Life Facilitator Training Course 380 participants 283 certified participants

・Developing next generation leaders

To develop human resources and identify talent, we have various personnel training and selection systems, including the "Junior Board System," which was started in 1993 to develop the next generation of senior managers. We have a total of eight selection systems for identifying next-generation leaders, including the "Deputy Officer System" for developing candidates for executive officers at Group companies, the "Wonder Woman Training Program" for developing female executive candidates, the "CBO Board System" for promoting Group-wide business and ensuring cross-functional alignment, and the "Instructor System" for training new employees.

・Developing human resources for regional revitalization

We are developing unique regional revitalization businesses by "attracting human resources" in cooperation with local governments, companies, and residents in Tohoku, Kyotango, Okayama, Awaji Island, Kotohira, and other areas throughout Japan.

In 2024, we renovated the former Toshima Elementary School, which had been closed down in Awaji City, Hyogo Prefecture, and established "Toshima Scuola" to hire and train personnel in the food sector, one of the well-being industries. At this base, we have launched the Awaji Chef's Scuola program to train "local revitalization

chefs" who will create new value from local resources and food culture while working as employees of our group, and

promote the appeal of the region. In 2024, we trained eight chefs, and in 2025, 19 chefs are participating in the program. After the program ends, we will utilize our nationwide network of locations to provide employment and entrepreneurship support so that participants can play an active role in various regions as the next generation of chefs contributing to regional revitalization.

・In-house venture program "Challenge Day"

In order to carry on the spirit of the company's founding, which since its establishment has been committed to solving social issues through its business activities based on the corporate philosophy of "solving society's problems," the company has designated February 16, the anniversary of its founding, as "Challenge Day" since 1995, and solicits new business and business improvement proposals from all employees. We are promoting the creation of an autonomous organization for innovation creation, while providing opportunities for all employees to return to the spirit of our founding and realize the "dreams" and "aspirations" of each and every employee. In the fiscal year ended May 31, 2025, we received approximately 1,800 applications from new employees to employees of overseas subsidiaries.

・Fostering a corporate culture of solving social issues "Pasona Shadow Cabinet

The "Social Issues Discussion Group" was established in 2007 as an internal organization for the purpose of having executives and employees of our group, regardless of their year of employment, discuss "social issues" and propose specific measures to society. The Group deepens discussions on various social issues that change with the times, and employees participating in the discussions vote on bills (new business proposals, social proposals, etc.). In the fiscal year ending May 2025, a new company called Pasona Sustainability Inc. was established to provide comprehensive support for corporate sustainability transformation (SX).

・Health management promotion systems

Under the top management's policy on health management, industrial physicians, the Health Promotion Office, and the Human Resources Department promote health management that enables employees to be active and vigorous based on periodic health checkup data and lifestyle surveys in the Group. In addition, together with public health nurses, nutritionists, sports trainers, and other specialists, we have developed unique programs to support employees' physical and mental health. The health committee members are located at each site and area throughout Japan.

・Health management initiative policy

The Group's policy on health promotion is set forth in the Pasona Group Health Declaration. The Group is promoting various measures in line with its five health management policies: "promotion of healthy behaviors," "fostering a common understanding of gender differences," "health support for those who are high risk" "mental health measures," and "promotion of a social work-life balance."

In addition, we have formulated a "strategy map" for health management to organize and understand the linkage between specific initiatives and expected effects and management issues to be resolved.

For more information, please refer to our website (URL https://www.pasonagroup.co.jp/company/health.html).

・Conducting lifestyle surveys

In addition to regular health checkups and stress checks, we conduct a unique "lifestyle survey" of all employees to score their lifestyle habits in the categories of exercise, diet, sleep, and preferences (drinking, snacking, smoking). By providing feedback on individual results and the position of one's own health within the entire company, we help employees review their lifestyle habits and improve the health literacy of every employee. In 2024, 7,050 employees from 32 Group companies responded to the lifestyle survey.

・Promoting healthy behaviors to improve lifestyle

The results of the lifestyle survey showed that approximately 60% of employees indicated that they needed to improve their lifestyles, with many employees facing challenges with exercise and diet. The survey results showed that the worse the lifestyle, the worse the job performance, indicating a correlation between "lifestyle" and "job performance." to improve their lifestyle, we made it mandatory for them to participate in training sessions to learn how to take action to improve their own health issues. We also implemented measures such as distributing health information via LINE through our independently developed "Online Health Promotion Office" and accepting consultations via chat, web, and telephone.

As a result of supporting the improvement of work performance through daily lifestyle improvements, there was an improvement trend in indicators such as

Training gym where you can work out in a suit for a short period of time.

(at PASONA SQUARE, Minami Aoyama,, Tokyo).

presenteeism (a situation in which employees are at work but are unable to perform at full capacity due to health problems) and absenteeism (absenteeism due to injury or illness).

・Promote mutual understanding of gender differences in health

We are promoting "improved health literacy" not only for women but also for men, and creating an "environment conducive to consultation" where people can easily seek advice. Obstetricians and gynecologists gave lectures on women's health to all employees. We provided opportunities to deepen understanding of women's health by holding a series of 12 lectures for all employees on topics such as learning about differences in health issues between men and women.

The Group's efforts have been highly evaluated externally, and we have been recognized as a company that practices excellent health management. We have been selected as a "2025 KENKO Investment for Health Stock," and both our company and Pasona Inc. have been selected as "2025 Outstanding Organizations of KENKO Investment for Health White 500" (large enterprise category). Pasona HS Inc., Pasona JOB HUB Inc., Asahi Beer Communications Co., Ltd., Pasona Foster Inc., and Pasona Life Care Inc. have been certified as "2025 Outstanding Organizations of KENKO Investment for Health" (large enterprise category), and Pasona Nihon Somubu Co., Ltd. and Pasona Safety Net Inc. have been certified as "2025 Outstanding Organizations of KENKO Investment for Health Bright 500" (SME category).

・Realizing a truly fulfilling lifestyle and work style

In order to resolve various social issues caused by the concentration of population in Tokyo and to realize a truly enriching lifestyle and work environment for our employees, we are relocating part of our headquarters and administrative functions to Awaji Island in Hyogo Prefecture. Many employees working on Awaji Island have commented that "it is wonderful to be able to raise children in such a rich natural environment" and "living close to work has eliminated the physical and mental fatigue caused by rush hour commuting," expressing that their lives have become richer than before they moved. In addition, many local residents and people from both inside and

outside the region have joined our group and are actively contributing to our business, helping to create approximately 2,000 jobs on the island and contributing to employment creation in the region.

Going forward, we will continue to strive to create an attractive environment for our employees and other workers, with the aim of realizing a truly rich lifestyle and work style on Awaji Island, our "Well-being Island." Through these efforts, we will attract a diverse range of talent and promote regional revitalization initiatives aimed at creating a sustainable society.

・"Wellness Farm" to support the development of mental and physical health The "Wellness Farm," which opened in 2022 within the Awaji Nature Lab & Resort, a sustainable garden on Awaji Island, Hyogo Prefecture, provides employees with a place to "think about food" and to develop "mental and physical health."

Employees can experience "farming" that takes into consideration their physical health and the environment by cultivating soil and vegetables using the power of nature at the "Wellness Farm" and can also taste the freshly picked vegetables they have grown themselves at the restaurant attached to the farm.

By creating opportunities to experience new lifestyles and an environment where

people and nature coexist in harmony, we are helping to improve the well-being of our employees.

・Expansion of life design support

One of our welfare programs is the cafeteria plan system, which grants employees cafeteria points that can be used for a variety of purposes, such as self-improvement, health promotion, refreshment, savings plans, and home ownership support. In order to increase utilization rates, we increased the number of points awarded and expanded the range of available services, resulting in a more than 10% increase in utilization rates compared to the previous year. In addition, to improving the financial well-being of our employees, we held an "Life Design Seminar from a Financial Perspective" to support them in building assets tailored to their respective life stages with an eye toward the future. We will continue to implement further measures to improve employee engagement.