Consolidated Financial Statements for the Six Months Ended June 30, 2021 (IFRS)
These financial statements have been prepared for reference only.

Link and Motivation Inc.

August 11, 2021

Stock exchange listing: Tokyo, First Section
Code number: 2170

https://www.lmi.ne.jp/english
Representative: Ozasa Yoshihisa, Chairman and Representative Director
Contact: Ohno Shunichi, Director andManager of Group Design Office
Phone: +81-3-6779-9494
Filing of Quarterly Report (Shihanki Hokokusho) (scheduled):
August 11, 2021
Start of distribution of dividends (scheduled):
September 24, 2021
Supplementary documents for quarterly results:
No
Quarterly results briefing:No(Amounts are rounded down to the nearest million.)

1. Consolidated Results for the Six Months Ended June 30, 2021
(January 1, 2021 – June 30, 2021)(1) Revenues and Income

Revenues(¥ million)
Six months ended
June 30, 2021
Six months ended
June 30, 2020

Six months ended
June 30, 2021
Six months ended
June 30, 2020

(Percentages represent change compared with the same quarter of the previous year.)
IncomeOperatingNet
ChangebeforeChangeChangeChangeincomeincome(%)
income taxes
(%)
(%)
(%)
(¥ million)(¥ million)(¥ million)

18,370

5.6

1,484

97.7

1,398

103.8

905

109.6

17,400(9.1)

750(49.0)

686(51.9)

431(50.9)Net income
attributable toowners of theparent(¥ million)

Change(%)

Comprehensive
income(¥ million)

Change(%)

Basic earnings
per share (¥)

834

124.0

942

–

7.95

7.95

372

(57.8)

(411)

–

3.55

3.55

Dilutedearnings per
share (¥)

(Note) Figures for the six months ended June 30, 2020 reflect the finalization of provisional accounting treatment for businesscombinations on December 31, 2020.

(2) Financial Position
Total assets(¥ million)
As of June 30, 2021
As of December 31, 2020

31,212
41,083

Total equity(¥ million)
5,230
4,917

2. Dividends
1st Qtr.
1.80
1.80

2nd Qtr.
1.80
1.80

Equity attributableto owners of theparent(¥ million)
3,985
3,760

Ratio of equity
attributable to ownersof the parent to total
assets (%)
12.8
9.2

Dividends per share
3rd Qtr.
Year-end
1.80
1.80

Total
7.20

1.90

7.40

2020
2021
2021 (est.)
1.90
Note: Revisions since the most recently announced dividend forecast: Yes

3. Forecast of Results for 2021 (January 1, 2021 – December 31, 2021)(Percentages represent change compared with the previous fiscal year.)
Net income
Basic
Net
Revenues
Operating income
attributable toearnings
incomeowners of the parent
per share(¥ million)(%) (¥ million)(%)(¥ million)(%)(¥ million)(%)(¥)
Full-year
38,200
8.3
2,010
732.2
1,000
–
900
–
8.58
Note: Revisions since the most recently announced forecast of results: Yes

Notes(1) Changes in Significant Subsidiaries during the Period (Changes in Specified Subsidiaries Due to Change in Scopeof Consolidation): No(2) Changes in Accounting Policies and Changes in Accounting Estimates(a) Changes in accounting policies required by IFRS: No(b) Changes in accounting policies other than (a) above: No(c) Changes in accounting estimates: Yes(3) Number of Shares Issued and Outstanding (Common Stock)(a) Number of shares at the end of the period (including treasury stock)Six months ended June 30, 2021: 113,068,000; Year ended December 31, 2020: 113,068,000(b) Number of treasury shares at the end of the period:
Six months ended June 30, 2021: 8,145,796; Year ended December 31, 2020: 8,145,796(c) Average number of shares outstanding (cumulative with earlier quarters):
Six months ended June 30, 2021: 104,922,204; Six months ended June 30, 2020: 104,922,204* These Financial Statements Are Not Subject to Review by a Certified Public Accountant or Auditing Firm
* Explanation of the Proper Use of Performance Forecasts and Other Special Instructions
Consolidated forecasts and other statements regarding the future contained in this document are based on information
currently available to the Company and certain reasonable assumptions. Actual performance may differ substantially
due to numerous factors.

Contents of Attachments
1. Overview of Results of Operations and Other Information ............................................................................ 2(1) Overview of Results of Operations for the Six Months Ended June 30, 2021 ......................................... 2(2) Overview of Financial Position for the Six Months Ended June 30, 2021 ............................................... 8(3) Overview of Cash Flow for the Six Months Ended June 30, 2021............................................................ 8(4) Forecast ......................................................................................................................................................... 8
2. Condensed Consolidated Financial Statements and Main Notes ................................................................... 9(1) Condensed Consolidated Statements of Financial Position ..................................................................... 9(2) Condensed Consolidated Statements of Operations and Comprehensive Income ............................... 11(3) Condensed Consolidated Statements of Changes in Equity.................................................................... 15(4) Condensed Consolidated Statements of Cash Flow ................................................................................. 16(5) Notes to Condensed Consolidated Financial Statements ....................................................................... 17
Significant Accounting Policies ............................................................................................................17
Notes Regarding Significant Accounting Estimates and Judgements ............................................. 17
Changes in Presentation Method ........................................................................................................ 18
Notes Regarding Assumption of Going Concern ............................................................................... 18
Significant Subsequent Events ............................................................................................................ 18

1

1. Overview of Results of Operations and Other Information
Forward-looking statements in the following text are based on judgments as of June 30, 2021, the last day of theconsolidated quarterly accounting period under review. During the first half of the previous fiscal year, provisional
accounting treatment was given to the business combination with OpenWork Inc., which was conducted on January 1,
2020. However, because the business combination was finalized at the end of the previous fiscal year, the amount after
the revision due to finalization of the provisional accounting treatment is used for comparison and analysis with regard to
the same period of the previous year.
(1) Overview of Results of Operations for the Six Months Ended June 30, 2021
The Link and Motivation Group (the “Group”) supports the transformation of numerous companies and individuals
using “Motivation Engineering,” which is the Group’s core technology, backed by psychology, behavioral economics,social systems theory and other disciplines, under its corporate philosophy: “Through Motivation Engineering, we
provide opportunities to transform organizations and individuals and create a more meaningful society.” Due to theongoing impact of the novel coronavirus (“COVID-19”) pandemic, the economic outlook is uncertain, but the Group
perceives rising needs for improving employee engagement during telework and for individual learning.
In this economic environment, the Group’s revenues for the six months ended June 30, 2021 (the “first half of 2021”)
were ¥18,370 million (a 5.6% increase compared with the same period of the previous year), gross profit was ¥8,271
million (a 15.8% increase), operating income was ¥1,484 million (a 97.7% increase) and net income attributable toowners of the parent was ¥834 million (a 124.0% increase).
The segment and business classifications of the Group are as shown below, and an overview of the first half of 2021
by segment and business follows.

Link and
Motivation Group

Organizational
Development Division

Individual
Development Division

Matching Division

Cloud Business

Career School Business

GlobalPersonnel Placement &Temp Staff Business

Link and Motivation Inc.

Link Academy Inc.

Link Interac Inc.

Link Global Solution Inc.

Dean Morgan K.K.

Link Japan Careers Inc.

Event & Media Business

Cram School Business

Domestic
Personnel Placement &Temp Staff Business

Link Corporate
Communications Inc.

Motivation Academia Inc.

Link Staffing Inc.

Consulting &Link Event Produce Inc.

Link-i Inc.

a2media Corporation

OpenWork Inc.

2

Organizational Development Division
The Organizational Development Division offers corporate customers services that provide support for building andstrengthening relationships with a company’s stakeholders (employees, job applicants, customers, shareholders) using“Motivation Engineering,” which is the core technology of the Group.
In this segment, segment revenues for the first half of 2021 were ¥5,324 million (a 9.0% increase), and segment
income was ¥3,748 million (a 12.0% increase). An overview of operating results by business for the first half of 2021 is
as follows.
Consulting & Cloud Business
The Consulting & Cloud business acts under the concept of creating numerous “Motivation Companies” in which
employee motivation is the growth engine of an organization. As its method of providing services, the business diagnoses
employee engagement based on its original diagnostic framework and offers one-stop solutions for innovations related toorganizations and personnel, including hiring, training, systems and culture. The business is also rolling out the
Motivation Cloud series of cloud-based services that allow customer companies to manage employee engagement
themselves.
In this business, revenues for the first half of 2021 were ¥4,351 million (a 14.7% increase) and gross profit was¥3,403 million (a 13.3% increase). Results by product in the Consulting & Cloud business were as follows.
Table 1. Revenues by ProductProduct (¥ million)[Gross profit in brackets]
Consulting & Cloud Business
Consulting
Cloud

Six months ended
June 30, 2020
3,794
[3,004]
2,502
1,291

Six months ended
June 30, 2021
4,351
[3,403]
2,993
1,357

YoY change
(%)
14.7
13.3
19.6
5.1

In the first half of 2021, both revenues and gross profit increased substantially compared with the same period of theprevious fiscal year due to continued strong sales of online training of new employees and managers and personnel
system planning. With the perception that the COVID-19 pandemic is increasingly bringing organizational issues to thefore, these conditions are expected to continue. Moreover, the expansion of ESG investment is also increasing investor
attention to human capital, and we see this as a major opportunity for the Group. The business will continue to steadily
capture these needs and increase sales per customer by providing one-stop solutions using “Motivation Engineering.”
Monthly fee revenue increased compared with the same period of the previous year for the Motivation Cloud series of
products, which are part of the Cloud category and are priority services for the Group. The number of deliveries andmonthly fee revenue were as follows.
Table 2. Number of Deliveries and Monthly Fee Revenue for the Motivation Cloud Series at Quarter-End
2020
2021
March
June
September
December
March
June
Number of
906
795
770
759
747
743
deliveries
Monthly fee
revenue
203,789
183,600
190,423
200,927
206,485
218,928(¥ thousand)
The Motivation Cloud series is a group of cloud-based services in the field of HR Tech (human resources combinedwith technology) for managing employee engagement (mutual understanding, empathy and commitment between
companies and employees). The business began providing these subscription-model products in July 2016.
Recently, shifting to adapt to the labor market, which consists of human resources, both employees and job applicants,
has been a management issue for many companies. Under these circumstances, improving employee engagement has
become a key management theme for corporations. In addition, the widespread adoption of telework due to the COVID19 pandemic has made it difficult to monitor employees. As a result, the premise of this business is that the importance ofimproving employee engagement, including visualization of organizational status, is increasing.
3During the first half of 2021, the Group stepped up introductions at major corporations, which increased comparedwith same period of the previous year. Monthly fee revenue had already bottomed out and has shifted to a steady growth
track, increasing to ¥218,928 thousand for the month of June 2021.
The business will continue working to further step up new introductions at major corporations, mainly leading
companies, and conducting a rollout to companies nationwide, including superior regional companies. In addition, it will
accelerate the rollout of Motivation Cloud by steadily taking advantage of the global trend toward more robust humancapital disclosure and promoting disclosure of Engagement Ratings as a driving force in the employee engagement
market.
Event & Media Business
The Event & Media business produces events and media for various types of communication associated with businessactivities to support the “creation of Motivation Companies” at corporations. In its event production, the business assists
in stimulating the interest and promoting the understanding of stakeholders through support for creation of physical andvirtual forums such as anniversary events, recruiting presentations, promotional events and shareholders’ meetings. In its
media production, the business is involved in printed media such as company newsletters, corporate brochures and annual
reports for shareholders, as well as web-based media such as corporate websites and investor relations (IR) sites andvisual media such as videos that explain products and webcasts of shareholders’ meetings.
In this business, revenues for the first half of 2021 were ¥1,167 million (a 16.0% decrease) and gross profit was ¥487
million (a 3.8% decrease). Results by product in the Event & Media business were as follows.
Table 3. Revenues by ProductProduct (¥ million)[Gross profit in brackets]
Event & Media Business
Event
Media

Six months ended
June 30, 2020
1,389
[506]
324
1,064

Six months ended
June 30, 2021
1,167
[487]
213
954

YoY change(%)(16.0)(3.8)(34.3)(10.4)In the first half of 2021, although assembly-type productions of the Event business and in-house media, which havebeen substantially impacted by the COVID-19 pandemic, were undergoing a recovery, they did not exceed the same
period of the previous year and segment revenues decreased substantially. On the other hand, the decrease in gross profit
was slight compared with the same period of the previous year due to factors including an improved gross profit margin
for events associated with a shift online.
The business will continue to actively promote online events using its Internet and video production capabilities as it
focuses on its strongly performing IR-related media business.

4

Individual Development Division
The Individual Development Division supports the creation of “i-Companies,” which it defines as individuals who
independently and autonomously develop their own careers and lives. Specifically, it applies “Motivation Engineering,”
which is the core technology of the Group, to businesses in areas including career schools and cram schools, to provide
one-stop services to customers from elementary school students to working adults. These services range from helping to
set goals to understanding individual issues and formulating and implementing study plans.
In this segment, segment revenues for the first half of 2021 were ¥3,760 million (a 21.7% increase) and segment
income was ¥1,418 million (a 70.8% increase). An overview of operating results by business for the first half of 2021 is
as follows.
Career School Business
The Career School business provides one-stop services for individual career advancement, targeting mainly university
students and working adults, under the five service brands of “Aviva” personal computer schools, “Daiei” qualification
schools, and “Rosetta Stone Learning Center,” “Rosetta Stone Premium Club” and “Hummingbird” foreign language
schools. Previously, the business mainly conducted classroom lectures, but currently provides support of continuing
learning by offering both in-school and online services.
In this business, revenues for the first half of 2021 were ¥3,481 million (a 24.2% increase) and gross profit was¥1,297 million (an 83.9% increase). Results by product in the Career School business were as follows.
Table 4. Revenues by ProductProduct (¥ million)[Gross profit in brackets]
Career School BusinessIT
Qualifications
English conversation

Six months ended June30, 2020

Six months ended June30, 2021

YoY change
(%)

2,803
[705]
1,494
1,032
276

3,481
[1,297]
1,938
1,231
311

24.2
83.9
29.7
19.3
12.7

Despite the continuation of the declaration of a state of emergency during the first half of 2021, a recovery wasapparent in the number of enrollees for courses in all areas of IT, qualifications and English conversation due to thepromotion of online courses, and revenues and gross profit both increased substantially compared with the same period of
the previous year.
Going forward, the business will continue helping to generate results for students by providing value in virtual space
without depending solely on business bases and ramping up matching with companies as employers. In addition, theevolution of “i-Company Club” as a platform to support these efforts will help to increase the true market value ofindividuals.
Cram School Business
Unlike typical cram schools, the Cram School business operates under the business concept of producing numerous“i-Companies” in addition to improving the academic ability of its students. Its services consist of operating “Motivation
Academia” cram schools for junior high and high school students to provide a place where students can not only prepare
for school entrance exams but also develop skills to play a role in society. The business also operates “SS-1,” anindividualized instruction school for students preparing for junior high school entrance exams. The Cram School business
utilizes its assets in programming education and English conversation education to provide a place for students fromelementary school straight through to high school to develop skills that will be of use in society. Like the Career School
business, it now offers both in-school and online services in response to Japan’s state of emergency and new lifestyles.
In this business, revenues for the first half of 2021 were ¥281 million (an 3.0% decrease) and gross profit was ¥121
million (a 2.9% decrease).
In first half of 2021, despite a recovery trend in the number of new enrollees, revenues and gross profit both decreasedslightly compared with the same period of the previous year as the price per enrollee decreased. This business has only
one product.

5

By proactively promoting a shift of classes and one-on-one meetings online and applying the know-how in training
adults that has been cultivated in the Consulting & Cloud business, this business aims to achieve one-stop services
unattainable by conventional cram schools, ranging from elementary to high school students and adults.
Matching Division
The Matching Division provides services under the concept of “engagement matching,” which applies “Motivation
Engineering,” the core technology of the Group, to its personnel placement and temp staff businesses. It creates affinities
between organizations with hiring needs and individuals who want to advance their careers by matching not only thetechnical skill requirements of companies but also the respective characteristics of individuals and companies based on
the Group’s proprietary data. Its main targets are foreign nationals who want to work in Japan, students who want to finda job, employees who want to change jobs and temporary workers.
In this segment, segment revenues for the first half of 2021 decreased slightly to ¥9,777 million (a 1.5% decrease) andsegment income increased slightly to ¥3,522 million (a 3.5% increase) compared with the same period of the previous
year. An overview of operating results by business for the first half of 2021 is as follows.
Global Personnel Placement & Temp Staff Business
The Global Personnel Placement & Temp Staff business dispatches foreign assistant language teachers (ALTs) of
foreign languages to elementary, junior high and high schools throughout Japan and provides English-language
instruction services on contract. In this business, where barriers to entry are extremely high due to the importance placedon relationships of trust with customers and a company’s track record, the Group has established the predominant
number-one share among private companies. The business is also capturing needs for employment of foreigners throughits business that provides one-stop foreigner recruiting, training and labor support to companies seeking to hire them.
In Japan, reforms of English education by the Ministry of Education, Culture, Sports, Science and Technology(MEXT) are promoting an earlier start for English-language learning. From fiscal 2020, English education starts from thethird grade of elementary school, and is treated as a formal subject from the fifth grade of elementary school. Accordingly,
ALT placement is proceeding rapidly. Meanwhile, because dispatch to all local governments has not been completed, thebusiness expects continuing expansion of the English education market in Japan.
In this business, revenues for the first half of 2021 were ¥6,673 million (a 7.3% increase) and gross profit was ¥2,143
million (a 10.0% increase).
During the first half of 2021, revenues and gross profit both increased, despite ongoing restrictions on entry into Japan
from the previous year, as a result of the steady progress of measures such as extension of employment terms and hiring
within Japan. This business has only one product.
In June 2021, the business launched “teachers cloud,” a cloud service for teachers that posts extensive content forelementary, junior high and high school students and practical sample lessons using ALTs nationwide to improve theefficiency of teachers’ preparation for English classes and their teaching skills. The business will achieve greater market
share by continuing to improve its brand power.
Domestic Personnel Placement & Temp Staff Business
The Domestic Personnel Placement & Temp Staff business provides solutions in the form of referrals and temp
staffing of the human resources an organization needs to grow. The main businesses include new graduate recruiting andreferral that connects university students looking for employment with company orientation meetings and interviews,
mid-career referral that matches working adults looking to change jobs with companies, and temp staffing that dispatches
personnel for sales, clerical work and other fields. OpenWork Inc., which was added to the scope of consolidation as of
the first half of 2020, operates OpenWork, one of Japan’s largest employee online review platforms for job seekers, andits main source of income is from referrals to employment agencies.
In this business, revenues for the first half of 2021 were ¥3,147 million (a 15.7% decrease) and gross profit was¥1,405 million (a 5.3% decrease). Results by product in the Domestic Personnel Placement & Temp Staff business wereas follows.

6Table 5. Revenues by ProductProduct (¥ million)[Gross profit in brackets]
Domestic Personnel Placement & Temp Staff
Business
Temp staff dispatch
Personnel placement

Six months ended
June 30, 2020
3,731
[1,484]
2,545
1,186

Six months ended
June 30, 2021
3,147
[1,405]
2,039
1,107

YoY change(%)(15.7)(5.3)(19.9)(6.6)

During the first half of 2021, although there was a recovery in revenues from temp staff dispatch, which weresignificantly affected by the COVID-19 pandemic, improvements to the portfolio were delayed, and revenues and grossprofit both decreased compared with the same period of the previous year.
In temp staff dispatch, the business will continue to conduct a portfolio shift to supermarkets and call centers, where
demand is expected. In personnel placement, the number of registered users and employee online reviews have grownsteadily during the pandemic, but neither recovered to the level of the same period of the previous year before the impact
of COVID-19. By linking the assets held by OpenWork Inc. with the organizational and individual data assets held by theGroup, the business will increase the number of job offers and enhance its matching engine to expedite engagement
matching that achieves true mutual understanding and affinity between organizations and individuals.
Venture Incubation
In addition to its divisions, the Group conducts venture incubation. In venture incubation, the Group provides its
know-how in organizational and personnel consulting in addition to funding, as well as support for growing venturecompanies on an organizational level with the aim of listing their stock. The two main criteria for selection of investees
are (1) sympathy with creating a “Motivation Company” and (2) aim to list stock. Gains on sales and other results
generated from venture incubation are recorded as other components of equity on the consolidated statements of financial
position.

7

(2) Overview of Financial Position for the Six Months Ended June 30, 2021
Total assets as of June 30, 2021 were ¥31,212 million, a decrease of ¥9,871 million from the end of the previous year.
This was mainly due to factors including a ¥9,138 million decrease in right-of-use assets associated with a decision to
relocate the Tokyo integrated office.
Total liabilities as of June 30, 2021 were ¥25,982 million, a decrease of ¥10,183 million from the end of the previous
year. This was mainly due to factors including a ¥9,298 million decrease in lease liabilities associated with a decision to
relocate the Tokyo integrated office.
Total equity as of June 30, 2021 was ¥5,230 million, an increase of ¥312 million from the end of the previous year.
Principal factors included a ¥643 million increase in retained earnings as a result of recording net income attributable toowners of the parent and other factors, offset by a ¥268 million decrease in capital surplus due to change in ownershipinterest in subsidiaries.
(3) Overview of Cash Flow for the Six Months Ended June 30, 2021
Cash and cash equivalents (“cash”) as of June 30, 2021 were ¥6,249 million, a decrease of ¥200 million during theperiod.
Cash flow during the six months ended June 30, 2021 was as follows.
Cash Flow from Operating Activities
Net cash provided by operating activities was ¥2,162 million, an increase of ¥1,372 million compared with the same
period of the previous year. The principal factor decreasing cash was a ¥522 increase in trade and other receivables
compared with the same period of the previous year, while the principal factors increasing cash included an increase of¥712 million in income before income taxes, an increase in trade and other payables of ¥320 million, an increase of ¥411
million in income tax refund, and a decrease of ¥414 million in income taxes paid.
Cash Flow from Investing Activities
Net cash used in investing activities was ¥169 million (in the same period of the previous year, net cash provided byinvesting activities was ¥2,355 million). Principal factors included a decrease in cash due to the absence of proceeds fromacquisition of subsidiary stock associated with change in scope of consolidation (in the same period a year earlier, cash
and cash equivalents increased ¥2,290 million as a result of making OpenWork Inc. a subsidiary).
Cash Flow from Financing Activities
Net cash used in financing activities was ¥2,197 million (in the same period of the previous year, net cash provided
by financing activities was ¥1,777 million). The principal factors increasing cash included ¥406 million in proceeds fromlong-term financial liabilities, while the principal factors decreasing cash included the absence of a net change in shortterm financial liabilities (compared with a ¥4,400 million increase in the same period of the previous year).

(4) Forecast
Despite requests for people to voluntarily refrain from unnecessary travel and the declaration of a state of emergency,
we have revised our forecast of results for the fiscal year ending December 31, 2021 due to growth exceeding our
expectations in the Organizational Development Division, particularly the Consulting & Cloud Business targeting major
corporations. With the spread of telework and other major changes in working styles due to the COVID-19 pandemic,organizational and personnel issues are increasingly coming to the fore, and corporate needs for employee engagement
are rising. We expect these conditions to continue in the future.
As a result of the above factors, for our results for the fiscal year ending December 31, 2021, we forecast ¥38,200
million in revenues (an increase of 8.3% year on year); ¥3,000 million in adjusted operating income (an increase of
45.8%); ¥2,010 million in operating income (an increase of 732.2%) and ¥900 million in net income attributable toowners of the parent. Adjusted operating income is a profit indicator that measures operating results by excluding
temporary factors such as impairment of goodwill, right-of-use assets and fixed assets from operating income.
Going forward, we plan to secure record high profit in 2022 from significant growth in the Consulting & CloudBusiness, OpenWork Inc., which boasts overwhelming advantages, and the Global Personnel Placement & Temp Staff
Business, which conducts the ALT placement business, together with reforms of our cost structure.
82. Condensed Consolidated Financial Statements and Main Notes(1) Condensed Consolidated Statements of Financial Position(Millions of yen, rounded down to the nearest million)

ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other current financial assets
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Goodwill
Intangible assets
Other non-current financial assets
Deferred tax assets
Other non-current assets
Total non-current assets
Total assets

9

As of
December 31, 2020

As ofJune 30, 2021

6,449
3,680
187
14
1,057
11,389

6,249
4,038
236
19
728
11,272

1,162
12,790
9,376
2,266
3,203
646
245
29,69441,083

805
3,652
9,317
2,341
2,753
830
240
19,94031,212

(Millions of yen, rounded down to the nearest million)

LIABILITIES AND EQUITY
LIABILITIESCurrent liabilities
Trade and other payables
Contract liabilities
Interest-bearing and other financial liabilities
Lease liabilities
Income tax payable
Provisions
Other current liabilities
Total current liabilities
Non-current liabilities
Interest-bearing and other financial liabilities
Lease liabilities
Provisions
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities
EQUITY
Equity attributable to owners of the parent
Share capital
Capital surplus
Treasury shares
Retained earnings
Other components of equity
Total equity attributable to owners of the parent
Non-controlling interests
Total equity
Total liabilities and equity

10

As of
December 31, 2020

As ofJune 30, 2021

2,174
1,786
7,440
1,778
484
129
2,149
15,944

1,807
1,936
8,794
1,417
632
252
2,115
16,957

7,104
12,056560
362
138
20,222
36,166

5,154
3,119
304
311
135
9,025
25,982

1,380
1,855(1,733)
3,989(1,731)
3,760
1,157
4,917
41,083

1,380
1,587(1,733)
4,632(1,881)
3,985
1,244
5,230
31,212

(2) Condensed Consolidated Statements of Operations and Comprehensive Income
Condensed Consolidated Statements of Operations
Six Months Ended June 30(Millions of yen, rounded down to the nearest million)

Revenues
Cost of sales
Gross profit
Selling, general and administrative expenses
Other income
Other expenses
Operating income
Financial revenues
Financial expenses
Equity in earnings of associates
Income before income taxes
Income taxes
Net income(Attributable to)
Owners of the parent
Non-controlling interests
Total

Six months
ended
June 30, 2020

Six months
ended
June 30, 2021

17,400
10,257
7,142
6,411
42
22
750
7
90
19
686
254
431

18,37010,099
8,271
6,681
28
135
1,484
2
87

372
59
431

834
70
905

—

1,398
493
905

(Yen)
Earnings per share attributable to owners of the parent
Basic earnings per share
Diluted earnings per share

3.55
3.55

11

7.95
7.95

Condensed Consolidated Statements of Operations
Three Months Ended June 30(Millions of yen, rounded down to the nearest million)

Revenues
Cost of sales
Gross profit
Selling, general and administrative expenses
Other income
Other expenses
Operating income
Financial revenues
Financial expenses
Equity in earnings of associates
Income before income taxes
Income taxes
Net income(Attributable to)
Owners of the parent
Non-controlling interests
Total

Three months
ended
June 30, 2020Three months
ended
June 30, 2021

8,055
4,919
3,135
3,027
41
3
145
5
44
14
120
86
34

9,408
5,120
4,287
3,370
10
74
853
0
30

7
26
34

588
35
624

—

823
198
624

(Yen)
Earnings per share attributable to owners of the parent
Basic earnings per share
Diluted earnings per share

0.07
0.07

12

5.61
5.61

Condensed Consolidated Statements of Comprehensive Income
Six Months Ended June 30(Millions of yen, rounded down to the nearest million)

Six months
ended
June 30, 2020

Net income
Other comprehensive income
Items that will not be reclassified to profit or loss:
Net gain (loss) on revaluation of financial assets
measured at fair value through othercomprehensive income
Total items that will not be reclassified to profit orloss
Items that may be reclassified to profit or loss:
Exchange differences on translation of foreign
operations
Total items that may be reclassified to
profit or loss
Total other comprehensive income
Total comprehensive income(Attributable to)
Owners of the parent
Non-controlling interests
Comprehensive income

13

Six months
ended
June 30, 2021

431

905

(842)

32

(842)

32

(0)

4

(0)
(842)
(411)

4
37
942

(470)
59
(411)

871
70
942

Condensed Consolidated Statements of Comprehensive Income
Three Months Ended June 30(Millions of yen, rounded down to the nearest million)

Three months
ended
June 30, 2020

Net income
Other comprehensive income
Items that will not be reclassified to profit or loss:
Net gain (loss) on revaluation of financial assets
measured at fair value through othercomprehensive income
Total items that will not be reclassified to profit orloss
Items that may be reclassified to profit or loss:
Exchange differences on translation of foreign
operations
Total items that may be reclassified to
profit or loss
Total other comprehensive income
Total comprehensive income(Attributable to)
Owners of the parent
Non-controlling interests
Comprehensive income

14

Three months
ended
June 30, 2021

34

624

(403)

48

(403)

48

(0)

0

(0)
(403)
(368)

0
48
673

(395)
26
(368)

637
35
673

(3) Condensed Consolidated Statements of Changes in Equity
Six Months Ended June 30, 2020
(Millions of yen, rounded down to the nearest million)

Equity attributable to owners of the parent

January 1, 2020
Net income
Other comprehensive
incomeTotal comprehensive
incomeChange due tobusiness combination
Change in ownershipinterest in subsidiaries
Dividends fromsurplus
Exercise of shareoptions
Transfer from othercomponents ofequity to retained
earnings
Total transactions withthe owners
June 30, 2020

Total equity
attributableto owners of
the parent

Noncontrollinginterests

Total
equity

7,043
372

(10)
59

7,033
431

(842)

(842)

—

(842)

372

(842)

(470)

59

(411)

—

—

—

—

1,050

1,050

(94)

—

—

—

(94)

4

(90)

—

—

—

(377)

—

(377)

—

(377)

—

(37)

—

—

—

(37)

45

8

—

—

—

305

(305)

—

—

—

—
1,380

(132)
1,855

—
(1,733)

(72)
5,740

(305)
(1,179)

(509)
6,063

1,101
1,149

591
7,213

Share
capitalCapitalsurplusTreasurysharesRetainedearnings

Other
componentsof equity

1,380
—

1,987
—

(1,733)
—

5,440
372

(31)
—

—

—

—

—

—

—

—

—

—

—

Six Months Ended June 30, 2021
(Millions of yen, rounded down to the nearest million)

Equity attributable to owners of the parent

January 1, 2021
Net income
Other comprehensive
incomeTotal comprehensive
incomeChange in ownershipinterest in subsidiaries
Dividends fromsurplusTransfer from othercomponents ofequity to retained
earnings
Total transactions withthe owners
June 30, 2021

Total equity
attributableto owners of
the parent

Noncontrollinginterests

Total
equity

3,760
834

1,157
70

4,917
905

37

37

—

37

834

37

871

70

942

—

—

—

(268)

16

(251)

—

—

(377)

—

(377)

—

(377)

—

—

—

186

(186)

—

—

—

—
1,380

(268)
1,587

—
(1,733)

(190)
4,632

(186)
(1,881)

(646)
3,985

16
1,244

(629)
5,230

Share
capitalCapitalsurplusTreasurysharesRetainedearnings

Other
componentsof equity

1,380
—

1,855
—

(1,733)
—

3,989
834

(1,731)
—

—

—

—

—

—

—

—

—

(268)

—

15

(4) Condensed Consolidated Statements of Cash Flow
(Millions of yen, rounded down to the nearest million)

Cash flow from operating activities
Income before income taxes
Depreciation and amortization
Loss on impairment
Loss (gain) on sales of fixed assets
Financial revenues and financial expenses
Equity in (earnings) losses of associates
Decrease (increase) in trade and other receivables
Loss (gain) on step acquisition
Decrease (increase) in inventories
Increase (decrease) in trade and other payables
Other
SubtotalInterest and dividends received
Interest paid
Income tax refund
Income taxes paid
Net cash provided by operating activities
Cash flow from investing activities
Payments for acquisition of property, plant and equipment
Proceeds from sale of property, plant and equipment
Payments for acquisition of intangible assets
Proceeds from acquisition of subsidiary stock associatedwith a change in consolidation
Proceeds from sale of investment securities
Payments for security deposits and guarantees
Proceeds from refund of security deposits and guarantees
Payments for fulfillment of asset retirement obligations
Other
Net cash provided used in investing activities
Cash flow from financing activities
Net increase (decrease) in short-term financial liabilities
Proceeds from log-term financial liabilities
Repayment of long-term financial liabilities
Payments for acquisition of interests in subsidiaries from
non-controlling interests
Payments of cash dividends
Repayment of lease liabilities
Proceeds from sale of interests in subsidiaries tonon-controlling interests
Net cash used in financing activities
Cash and cash equivalents translation adjustment
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the quarter
Cash and cash equivalents at end of the quarter16

Six months
ended
June 30, 2020

Six months
ended
June 30, 2021

686
1,287
1
—
83
(19)
162
16
24
(698)
170
1,716
5
(88)
28
(871)
789

1,398
1,586
115
(0)
85

(147)

(134)
0
(396)

—

(385)
2,290
636
(20)
27
(14)

(31)
2,355

—
(359)
—
(49)
(377)
(126)

2,272
0
(92)
439
(457)
2,162

—
513
(155)
135
(137)
3

(169)

4,400

—
(1,126)

—
406
(996)

(90)
(377)
(1,036)

(251)
(378)
(976)

8

1,777
(0)
4,922
2,160
7,082

—

(2,197)
4
(200)
6,449
6,249

(5) Notes to Condensed Consolidated Financial Statements(Significant Accounting Policies)
The significant accounting policies applied in these condensed consolidated financial statements are the same as those
applied in the consolidated financial statements for the previous fiscal year.
Income taxes expense for the six months ended June 30, 2021 was calculated using the estimated average annual
effective tax rate.
(Notes Regarding Significant Accounting Estimates and Judgements)
In preparing the consolidated financial statements, management makes judgments, estimates and assumptions that
affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. The
results of accounting estimates may differ from actual results.
The estimates and their underlying assumptions are reviewed on an ongoing basis. The effects of a review ofaccounting estimates are recognized in the accounting period in which the estimates are reviewed as well as in future
periods.
Other than a change in accounting estimates of useful life of property, plant and equipment, estimates and estimaterelated judgments that have a significant impact on the condensed consolidated financial statements are the same as thosein the consolidated financial statements for the previous fiscal year.
(Useful Life of Property, Plant and Equipment)
The Group passed a resolution in February 2021 to relocate its Tokyo head office, and the move is expected to becompleted by the end of 2021. Therefore, the Group has shortened the future useful life of the building equipment,
appliances and fixtures belonging to the Tokyo head office that will become unusable due to relocation from the date of
the relocation resolution to the scheduled relocation date.
In addition to the above change, as of the three months ended March 31, 2021 the Group has changed the useful lifeof some property, plant and equipment from 15 years to 6 years. This change has been made to reflect a more realistic
useful life for the right-of-use assets related to each integrated office nationwide, primarily the head office, inconsideration of the actual usage of each integrated office, based on the abovementioned relocation resolution.
As a result of the above two changes, right-of-use assets and lease liabilities decreased approximately ¥8,814 million
compared with their previous useful life, and the operating income and income before income tax for the six months
ended June 30, 2021 each decreased ¥170 million yen, respectively.
(Accounting Estimates Related to the COVID-19 Pandemic)
Estimates and judgments that have a significant impact on the amounts in these consolidated financial statements are
the same as those in the consolidated financial statements for the previous fiscal year in principle, but include thefollowing factors in consideration of the impact of COVID-19.
Due to requests for people to voluntarily refrain from unnecessary travel and the declaration of a state of emergency
associated with the COVID-19 pandemic, the Group lost opportunities to provide its services. These lost opportunities
included the postponement or cancellation of group training activities and other services in the Organizational
Development Division, a decrease in the number of new enrollees due to the temporary closure of all schools nationwide
in the Individual Development Division, and a decrease in the number of domestic personnel placements and temp staff
dispatched in the Matching Division. However, the business environment has gradually been recovering since the third
quarter of 2020, when the state of emergency that had been declared on April 7, 2020 was completely lifted, and theGroup perceives a growing trend for greater needs for individual learning in the Individual Development Division, which
was most impacted by COVID-19. Even since the declaration of a state of emergency on April 25, 2021, the impact on
business results has been minor, despite temporary closures of commercial facilities, and therefore the Group has madevarious estimates and judgments regarding the demand forecast for 2022 onward assuming that recovery will continue in
2021 and thereafter, and the impact of the COVID-19 pandemic will not be prolonged.
17Despite the extreme difficulty of predicting factors such as the timing of the end of the spread of COVID-19 and thescope of infection, in light of the above, the Group has made accounting estimates regarding impairment of fixed assets,
including goodwill, the recoverability of deferred tax assets and other matters based on the information available as of thedate of preparation of these consolidated financial statements.
The financial position and operating results of the Group may be affected by the state of the spread of infection in the
future.
(Changes in Presentation Method)
Consolidated Financial Statements“Right-of-use assets,” which was included in “Property, plant and equipment” under non-current assets in theprevious fiscal year, has been presented independently as of the current fiscal year for a clearer, more realisticpresentation.
The consolidated financial statements for the previous fiscal year have been changed to reflect this change inpresentation method.
As a result, in the consolidated statement of financial position for the previous fiscal year, ¥13,953 million in“Property, plant and equipment” under non-current assets has been restated as ¥1,162 million in “Property, plant andequipment” and ¥12,790 million in “Right-of-use assets.”
In addition, “Lease liabilities,” which were included in “Interest-bearing and other financial liabilities” under current
liabilities and non-current liabilities in the previous consolidated fiscal year, has been presented independently as of thecurrent fiscal year for a clearer, more realistic presentation.
The consolidated financial statements for the previous fiscal year have been changed to reflect this change inpresentation method.
As a result, in the consolidated statement of financial position for the previous fiscal year, ¥9,218 million in “Interestbearing and other financial liabilities” under current liabilities has been restated as ¥7,440 million in “Interest-bearing andother financial liabilities” and ¥1,778 million in “Lease liabilities,” and ¥19,161 million in “Interest-bearing and otherfinancial liabilities” under non-current liabilities has been restated as ¥7,104 million in “Interest-bearing and otherfinancial liabilities” and ¥12,056 million in “Lease liabilities.”(Notes Regarding Assumption of Going Concern)
None applicable(Significant Subsequent Events)
None applicable18