Consolidated Financial Statements for the Year Ended December 31, 2021 (IFRS)
These financial statements have been prepared for reference only.
February 14, 2022
Link and Motivation Inc.
Stock exchange listing: Tokyo, First Section
http://www.lmi.ne.jp/english
Code number: 2170
Representative: Ozasa Yoshihisa, Chairman and Representative Director
Contact: Yokoyama Hiroaki, Corporate Officer andManager of System Design Office
Phone: +81-3-6853-8111
Ordinary General Meeting of Shareholders (scheduled):
March 30, 2022
Start of distribution of dividends (scheduled):
March 25, 2022
Filing of Securities Report (Yuka Shoken Hokokusho) (scheduled): March 30, 2022
Supplementary documents for quarterly results:
No
Quarterly results briefing:No(Amounts are rounded down to the nearest million.)

1. Consolidated Results for the Year Ended December 31, 2021
(January 1, 2021 – December 31, 2021)(Percentages represent change compared with the previous year.)(1) Revenues and Income
Revenues
Year ended
Dec. 31, 2021
Year ended
Dec. 31, 2020

Income before
income taxes

Operating income

Net
incomeNet income
attributable to ownersof the parent(¥ million)(%)(¥ million)(%)(¥ million)(%)(¥ million)(%)(¥ million)(%)

32,644

6.0

2,066

140.2

1,903

184.0

1,020

—

918

—

30,785

—

860

—

670

—

(929)

—

(996)

—

Comprehensive
incomeDilutedearnings per
share
(¥)

Basic earnings
per share

Return on
equityReturn on
assetsOperatingmargin(¥ million)
(%)
(¥)
(%)
(%)
(%)
Year ended
Dec. 31, 2021
1,047
—
8.73
8.73
16.3
5.4
6.3
Year ended
Dec. 31, 2020
(2,329)—(9.50)(9.50)(18.4)
1.6
2.8
Note: As of the fiscal year ended December 31, 2021, the domestic temp staff business of Link Staffing Inc. has been classified as
discontinued operations. As a result, profits from discontinued operations are presented separately from continuing operations in
the consolidated statements of operations. Accordingly, revenues, operating income and income before taxes present the amounts
for continuing operations. Because amounts for the fiscal year ended December 31, 2020 have been restated in the same mannerfor presentation, rates of increase or decrease from the previous fiscal year are not presented for these items.

(2) Financial Position

As of Dec. 31, 2021
As of Dec. 31, 2020

(3) Cash Flow

Year ended
Dec. 31, 2021
Year ended
Dec. 31, 2020

Total equity(¥ million)

30,062
41,083

8,648
4,917

Cash flow fromoperating activities(¥ million)

2. Dividends

2020
2021
2022 (est.)

Total assets(¥ million)

Equity attributableto owners of theparent(¥ million)
7,493
3,760

Cash flow frominvesting activities(¥ million)

Ratio of equity
attributable toowners of the parent
to total assets (%)
24.9
9.2

Equity per share
attributable toowners of the parent
(¥)
67.17
35.84

Cash flow fromfinancing activities(¥ million)

Cash and cash equivalents
at end of period(¥ million)

4,316

(728)

(5,124)

4,917

3,970

1,969

(1,647)

6,449

Dividends per share
1st Qtr.

2nd Qtr.

3rd Qtr.

Year-end

Full year

1.80
1.80
1.90

1.80
1.80
1.90

1.80
1.90
1.90

1.80
1.90
1.90

7.20
7.40
7.60

Total dividends
paid (full year)(¥ million)

Payout
ratio
(%)

755
789

(81.2)
84.7
39.0

Dividends/
Net assets(Consolidated)
(%)
13.9
14.3

3. Forecast of Consolidated Results for 2022 (January 1, 2022 – December 31, 2022)
Revenues
Full-year(¥ million)
35,000(%)
7.2(Percentages represent change compared with the previous fiscal year.)Net
Net income attributable
Basic earnings
Operating income
incometo owners of the parent
per share(¥ million)(%)(¥ million) (%)(¥ million)
(%)
(¥)
4,000
93.6
2,200
115.6
2,050
123.1
19.48

Notes
(1) Changes in Significant Subsidiaries during the Period (Change 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)
Year ended December 31, 2021: 113,068,000; Year ended December 31, 2020: 113,068,000(b) Number of treasury shares at the end of the period:
Year ended December 31, 2021: 1,506,443; Year ended December 31, 2020: 8,145,796(c) Average number of shares outstanding:Year ended December 31, 2021: 105,249,619; Year ended December 31, 2020: 104,922,204(Reference) Summary of Non-consolidated Results
1. Non-consolidated Results for 2021 (January 1, 2021 – December 31, 2021)(Percentages represent change compared with the previous year.)(1) Revenues and Income
Net salesYear ended
December 31, 2021
Year ended
December 31, 2020

Operating income

Net
income(¥ million)(%)(¥ million)(%)(¥ million)(%)(¥ million)

(%)

8,304

11.3

161

(80.3)

(356)

—

(413)

—

7,460

(11.1)

818(16.2)

2,311

189.7

337

(46.1)

Basic earnings
per share
Year ended
December 31, 2021
Year ended
December 31, 2020

Ordinary income(¥)

Dilutedearnings per
share
(¥)

(3.93)—

3.22—(2) Financial Position

Total assets
Net assets
Net assets/
Net assets(¥ million)(¥ million)
Total assets (%)
per share (¥)
As of December 31, 2021
24,002
7,205
30.0
64.59
As of December 31, 2020
26,976
4,181
15.5
39.85
(Reference) Net worth: As of December 31, 2021: ¥7,205 million; As of December 31, 2020: ¥4,181 million
Note: Figures for non-consolidated results are based on Japanese standards.

* These Financial Statement 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 2021....................................................................................................... 2(2) Overview of Financial Position for 2021 ............................................................................................................ 8(3) Overview of Cash Flow for 2021 ......................................................................................................................... 8(4) Forecast ................................................................................................................................................................8
2. Basic Policy Regarding Selection of Accounting Standards..................................................................................... 9
3. Consolidated Financial Statements and Main Notes ..............................................................................................10(1) Consolidated Statements of Financial Position ................................................................................................10(2) Consolidated Statements of Operations and Comprehensive Income ............................................................12(3) Consolidated Statements of Changes in Equity ................................................................................................14(4) Consolidated Statements of Cash Flow..............................................................................................................15(5) Notes to Consolidated Financial Statements ................................................................................................... 16
Notes Regarding Assumption of Going Concern ........................................................................................16
Notes Regarding Significant Accounting Estimates and Judgements ......................................................16
Changes in Presentation Method ................................................................................................................17
Segment Information, Etc. ............................................................................................................................17
Per Share Information...................................................................................................................................20
Significant Subsequent Events .....................................................................................................................20

1

1. Overview of Results of Operations and Other Information

Forward-looking statements in the following text are based on judgments as of December 31, 2021, the last day of theconsolidated accounting period under review. Because the Link and Motivation Group (the “Group”) transferred the domestic
temp staff business operated by its subsidiary Link Staffing Inc. to iDA K.K. (Location: Shibuya-ku, Tokyo; Representative
Director, President and CEO: Kafuku Shinsuke) as of January 1, 2022, these operations are classified as discontinued. Therefore,
the amount from continuing operations is shown for revenues, gross profit and operating income, and the total from continuingand discontinued operations is shown for net income attributable to owners of the parent. In addition, for year-on-yearcomparisons, figures for the previous year have been restated according to the classification after the transfer.
(1) Overview of Results of Operations for 2021
The Group supports the transformation of numerous companies and individuals using “Motivation Engineering,” whichis 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 andindividuals and create a more meaningful society.” The Japanese economy was on a recovery track in 2021 as the impact of
COVID-19 gradually eased with the increase in the vaccination rate, but the situation remains unpredictable, with factors
including the confirmation of new variants, and the outlook continues to be as unclear as before. On the other hand, evenunder these economic conditions, the Group perceives rising needs for improving employee engagement due to changes inwork style, including the continuation of telework from the previous fiscal year, and for enhancing the skills of individuals
due to rapid Digital Transformation (“DX”).
In this economic environment, the Group’s revenues were ¥32,644 million (a 6.0% increase compared with theprevious year), gross profit was ¥15,340 million (a 9.5% increase), operating income was ¥2,066 million (a 140.2%
increase) and net income attributable to owners of the parent was ¥918 million (compared with net loss attributable toowners of the parent of ¥996 million in the previous fiscal year).
The segment and business classifications of the Group are as shown below, and an overview of 2021 by segment andbusiness 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.

Because the domestic temp staff business operated by Link Staffing Inc. was transferred to iDA K.K. as of January 1,
2022, its operations have been classified as discontinued.

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 2021 were ¥10,819 million (a 9.0% increase), and segment income was ¥7,534
million (a 10.4% increase). An overview of operating results by business for 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 2021 were ¥8,716 million (an 11.6% increase) and gross profit was ¥6,703 million (a9.1% increase). Results by product in the Consulting & Cloud business were as follows.
Table 1. Revenues by ProductProduct (¥ million)[Gross profit in brackets]
Consulting & Cloud BusinessYear ended
December 31, 2020
7,808
[6,146]
5,230
2,578

Consulting
CloudYear ended
December 31, 2021
8,716
[6,703]
5,818
2,897

YoY change
(%)
11.6
9.1
11.2
12.4

In 2021, as the business continued to steadily capture needs for improving employee engagement, mainly at major
companies, revenues increased and gross profit increased substantially compared with the previous fiscal year. According
to the Databook of International Labour Statistics 2019 from the Japan Institute for Labour Policy and Training, Japan’s
workforce is forecast to shrink at the fastest rate in the world, and with the recent increasing mobility of human resources,a key management issue for many corporations is shifting to securing and retaining human resources who can play anactive role in their own companies. In addition, the push for human capital disclosure is gaining momentum around theworld through measures such as the issuance of ISO 30414 for human resource management by the International
Organization for Standardization and new requirements for human capital reporting in the United States. Perceiving thatneeds for employee engagement and human resource development are rising greatly amid these conditions and that theseneeds will continue over the long term, the Group, which has supported the organizational transformation of numerous
companies since its establishment in 2000, is taking advantage of this major opportunity. The business will continue toincrease sales per customer by providing one-stop solutions using “Motivation Engineering.”
Monthly fee revenue increased substantially compared with 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

September

DecemberNumber ofdeliveries

906

795

770

759

747

743

772

738

Monthly fee
revenue(¥ thousand)

203,789

183,600

190,423

200,927

206,485

218,928

235,859

240,5453

Since its founding in 2000, Link and Motivation has not only diagnosed the engagement status of companies andemployees, but has also supported organizational transformation at many companies. The Motivation Cloud series is agroup of cloud-based services in the field of HR Tech (human resources combined with technology) for improving
employee engagement (mutual understanding, empathy and commitment between companies and employees). The
Company migrated the organization diagnosis service it has offered since its founding to the cloud and started providing
the Motivation Cloud service in July 2016. At present, the Company has been ranked number one in share of sales byvendor in the employee engagement market for the fourth consecutive year (fiscal 2017 to fiscal 2020 forecast) in ITRMarket View: Human Resources Management Market 2021, a market research report published by ITR Corporation.
During 2021, the Group succeeded in stepping up introductions at major companies, which increased substantiallycompared with the previous year. Monthly fee revenue has been firm, increasing to ¥240,545 thousand for the month ofDecember 2021.
The business will continue to step up new introductions at major companies and to advance a global rollout that
includes support for the global branch offices of Japanese companies through promotion of multilingual capabilities. In
addition, the Company plans to migrate its human resource development services, with their proven track record ofdeliveries, to the cloud during fiscal 2022 for a launch as a new cloud service that offers opportunities for transformation.
By rolling out this new cloud-based service in addition to Motivation Cloud, the Group forecasts ¥320 million in fee
revenues from the Motivation Cloud series for the month of December 2022 (a year-on-year increase of 33.0%). To
achieve this target, it will accelerate the development of its cloud series by proactively investing in human resources and
IT to become the 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 2021 were ¥2,479 million (a 4.8% decrease) and gross profit was ¥1,081 million (a12.6% increase). 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

Year ended
December 31, 2020
2,604
[960]
523
2,080

Year ended
December 31, 2021
2,479
[1,081]416
2,062

YoY change
(%)
(4.8)
12.6
(20.4)(0.9)

In 2021, revenues decreased compared with the previous year due to the continuing impact of the COVID-19
pandemic on the Event business. On the other hand, gross profit increased substantially compared with the previous year
due to factors including an improved gross profit margin associated with a shift online.
The business will continue to promote online events using its Internet and video production capabilities and focus onproviding Internet and video media services for IR.

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 2021 were ¥7,471 million (an 11.0% increase) and segment income was ¥2,904
million (a 36.9% increase). An overview of operating results by business for 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 2021 were ¥6,824 million (a 12.4% increase) and gross profit was ¥2,596 million (a44.3% 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

Year ended
December 31, 2020

Year ended
December 31, 2021

YoY change
(%)

6,071
[1,799]
3,331
2,146
593

6,824
[2,596]
3,791
2,406
626

12.4
44.3
13.8
12.1
5.6

In 2021, gross profit significantly exceeded the level of the previous year due to growth in revenues from IT courses
along with rising needs for skills for DX and success in improving the gross profit margin as a result of the promotion of
online courses. In addition, DX support services for individuals at companies have also been growing steadily as needs
increase for employees to strengthen their skills for DX.
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 achieve greater growth in the DX market, which is expected to further
expand, by utilizing the IT skill support know-how and customer assets cultivated by the Organizational Development
Division and the Matching Division.
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 2021 were ¥651 million (a 2.2% decrease) and gross profit was ¥310 million (a 3.9%
decrease).
In 2021, despite a recovery trend in the number of new enrollees, revenues and gross profit both decreased comparedwith the previous year as the price per enrollee decreased. This business has only one product.
In addition to continuing to provide stable services to increase the number of new enrollees through further
improvements to the quality of its online classes and one-on-one meetings, this business aims to achieve one-stop services
unattainable by conventional cram schools, ranging from elementary to high school students and adults.
5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 businesses. It creates matches with a highretention rate, consisting of affinities between organizations with hiring needs and individuals who want to advance theircareers by matching not only the technical skill requirements of companies but also the respective characteristics ofindividuals and companies based on the Group’s proprietary data. Its main targets are foreign nationals who want to workin Japan, students who want to find a job, and employees who want to change jobs.
In this segment, segment revenues for 2021 were ¥15,043 million (a 1.3% increase) and segment income was ¥5,534
million (a 1.8% decrease). An overview of operating results by business for 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. Meanwhile,
because many local governments still have few classes that use ALTs, the business expects continuing expansion of the
English education market in Japan.
In this business, revenues for 2021 were ¥13,123 million (a 1.5% increase) and gross profit was ¥3,650 million (a3.5% decrease).
In 2021, revenues increased, despite the continuation of restrictions on entry into Japan, as a result of the steadyprogress of measures such as extension of employment terms and hiring within Japan. On the other hand, gross profit
decreased slightly due to the impact of increased costs associated with hiring in Japan, support during the quarantine
period after entering the country and other factors. This business has only one product.
In addition, there was a steady increase in the number of schools using “Teachers Cloud,” a cloud service launched inJune 2021 to improve the efficiency of teachers’ preparation for English classes, their English ability and their teachingskills. As of December 31, 2021, more than 4,300 schools were using the product, which is about 15% of public
elementary, junior high and high schools nationwide, and the business plans to provide it to 14,000 schools, or about 40%,
by 2024. The business will increase the contract renewal rate for ALTs and further expand market share by continuing to
improve its brand power through Teachers Cloud.
Domestic Personnel Placement Business
The Domestic Personnel Placement business provides the human resources an organization needs to grow in the formof a referral service for human resources. The main businesses include new graduate recruiting and referral that connects
university students looking for employment with company orientation meetings and interviews, and mid-career referralthat matches working adults looking to change jobs with companies. OpenWork Inc., which was added to the scope of
consolidation as of the first three months of 2020, operates OpenWork, one of Japan’s largest employee online review
platforms for job seekers, and its main sources of income are from referrals to employment agencies and direct hiring
services on its platform.
In this business, revenues for 2021 were ¥1,943 million (a 0.1% decrease) and gross profit was ¥1,907 million (a1.2% increase).

6

OpenWork Inc., which is the main source of revenue, has been steadily accumulating registered users and the numberof employee online reviews and evaluation score data during the COVID-19 pandemic, and its direct hiring service hasgrown substantially, by about 80% compared with the previous year. By continuing to utilize the customer base of theOrganizational Development Division, to add to its stockpile of resumes of job-seekers, and to improve its matching rate,
this business will ramp up “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 2021
Total assets as of December 31, 2021 were ¥30,062 million, a decrease of ¥11,021 million from the end of theprevious year. This was mainly due to factors including a ¥8,641 million decrease in right-of-use assets associated with adecision to relocate the Tokyo integrated office.
Total liabilities as of December 31, 2021 were ¥21,413 million, a decrease of ¥14,752 million from the end of theprevious year. This was mainly due to factors including ¥5,667 million in interest-bearing and other financial liabilities
and a ¥8,825 million decrease in lease liabilities associated with a decision to relocate the Tokyo integrated office.
Total equity as of December 31, 2021 was ¥8,648 million, an increase of ¥3,731 million from the end of the previous
year. Principal factors included a ¥2,024 million increase in capital surplus due to disposition of treasury shares and otherfactors, and a ¥1,413 million decrease in treasury shares.
(3) Overview of Cash Flow for 2021
Cash and cash equivalents (“cash”) as of December 31, 2021 were ¥4,917 million, a decrease of ¥1,532 million
during the year.
Cash flow during 2021 was as follows.
Cash Flow from Operating Activities
Net cash provided by operating activities was ¥4,316 million, an increase of ¥346 million compared with the previous
year. The principal factors decreasing cash were a ¥1,629 million decrease in loss on impairment, a ¥676 million increasein trade and other receivables and a ¥1,205 million decrease in other cash flow from operating activities compared withthe previous year, while the principal factors increasing cash included an increase of ¥1,233 million in income before
income taxes, a decrease in loss before income taxes from discontinued operations of ¥597 million, a decrease in gain on
valuation of investment securities of ¥563 million, an increase of ¥411 million in income tax refund, and a decrease of¥858 million in income taxes paid compared with the previous year. The main reasons for the decrease in other cash flowfrom operating activities included a ¥224 million increase in prepaid expenses such as license fees for core systems.
Cash Flow from Investing Activities
Net cash used in investing activities was ¥728 million (in the previous year, net cash provided by investing activitieswas ¥1,969 million). Principal factors included a decrease in cash due to the absence of proceeds from acquisition ofsubsidiary stock associated with change in scope of consolidation in the previous year (in the previous year, 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 ¥5,124 million (in the previous year, net cash used in financing activitieswas ¥1,647 million). The principal factor increasing cash was ¥4,029 million in proceeds from sale of treasury shares,
while the principal factors decreasing cash included the absence of a net change in short-term financial liabilities that had
been recorded in the previous year (compared with a ¥3,640 million increase in the previous year) and a ¥3,796 million
increase in repayment of long-term financial liabilities.
(4) Forecast
In 2021, by conducting reforms in the areas of both businesses and costs to overcome the COVID-19 pandemic,
the Company has completed laying the groundwork for growth from 2022 onward and has evolved into a robust
management structure.
For its businesses, the Company has been promoting new models of providing value including a shift to online
services in each division, and has been focusing on four businesses that can be expected to grow in anticipation of market
expansion (the Motivation Cloud series in the Organizational Development Division, DX support for individuals at
companies in the Individual Development Division, and OpenWork Inc. and the ALT dispatch business in the Matching
Division). In addition, by transferring the domestic temp staff business to specialize in the high-margin personnel
placement business, the operating margin improved 5.7 percentage points compared with the previous year to 6.3%.
As for costs, the Company completed the relocation and downsizing of business bases throughout Japan, including theTokyo Head Office, premised on “Compatible Work,” a new style of working that balances office work and telework.
Although the Company recorded one-time expenses of approximately ¥1.0 billion associated with the relocation in 2021,8

due to the approximately 60% reduction in floor space it expects a decrease in rent of approximately 70% compared withthe previous year in 2022. In addition, the Company worked to achieve more sound finances through measures including
the disposition of treasury shares, which improved the ratio of equity attributable to owners of the parent to total assets to
24.9%.
Having prepared for dramatic growth through the above reforms, for the fiscal year ending December 31, 2022, theCompany forecasts ¥35,000 million in revenues (an increase of 7.2% year on year); ¥4,500 million in adjusted operating
income (an increase of 43.1%); ¥4,000 million in operating income (an increase of 93.6%) and ¥2,050 million in net
income attributable to owners of the parent (an increase of 123.1%). Adjusted operating income is a profit indicator thatmeasures operating results by excluding temporary factors such as impairment of goodwill, right-of-use assets and fixed
assets from operating income, and operating income is forecast to reach a record high. Out of all the Group’s businesses,
the greatest growth is expected from the Consulting & Cloud business in the Organizational Development Division. Dueto the recent changes in working styles caused by the COVID-19 pandemic and the global trend toward human capital
disclosure, the Company perceives that needs for improving employee engagement are increasing all the more, especiallyamong major companies. While continuing to capture these needs, the Company will accelerate growth by responding ona global scale and launching a new cloud-based product for human resource development. For the Organizational
Development Division, the Company forecasts ¥12,000 million in revenues (a year-on-year increase of 10.9%), ¥8,700
million in gross profit (a year-on-year increase of 15.5%), and ¥320 million in subscription revenues from the Motivation
Cloud series for the month of December 2022 (a year-on-year increase of 33.0%). Moreover, the Company will alsoachieve further growth in the Individual Development Division and the Matching Division by focusing on strengthening
businesses and technologies that can be expected to generate synergies with the Organizational Development Division.
2. Basic Policy Regarding Selection of Accounting Standards
The Group has applied International Financial Reporting Standards (IFRS) since the first quarter of the year ended
December 31, 2017 to improve the international comparability of its financial information in capital markets. The Group
formerly applied generally accepted accounting principles in Japan (Japanese GAAP).

93. Consolidated Financial Statements and Main Notes(1) Consolidated Statements of Financial Position(Millions of yen, rounded down to the nearest million)
As of
As of
December 31, 2020
December 31, 2021

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

10

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

4,917
3,851
200
9
753
9,732

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

637
4,149
9,410
2,234
2,744
984
168
20,32930,062

(Millions of yen, rounded down to the nearest million)
As of
As of
December 31, 2020
December 31, 2021
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

11

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

2,094
1,615
7,161
1,079
716
274
2,075
15,018

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

1,716
3,929
359
256
134
6,395
21,413

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

1,380
3,879
(320)
4,406
(1,853)
7,493
1,154
8,648
30,062

(2) Consolidated Statements of Operations and Comprehensive Income
Consolidated Statements of Operations(Millions of yen, rounded down to the nearest million)
Year ended
Year ended
December 31, 2020
December 31, 2021
Continuing Operations
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 (loss) from continuing operations
Discontinued Operations
Loss from discontinued operations
Net income (loss)(Net income (loss) attributable to)
Owners of the parent
Non-controlling interests
Net income (loss)

30,785
16,777
14,00812,084
757
1,820
860
8
240
41
670
977
(307)

32,64417,304
15,34012,625
112
760
2,066
12
174

(622)
(929)

(82)
1,020

(996)
66
(929)

918
101
1,020

—

1,903
801
1,102

(Yen)
Net income (loss) per share attributable to owners of theparentBasic earnings (loss) per share
Continuing operations
Discontinued operations
Basic earnings (loss) per share
Diluted earnings (loss) per share
Continuing operations
Discontinued operations
Diluted earnings (loss) per share

12(3.56)(5.93)(9.50)

9.51(0.78)
8.73(3.56)(5.93)(9.50)

9.51(0.78)
8.73

Consolidated Statements of Comprehensive Income(Millions of yen, rounded down to the nearest million)
Year ended
Year ended
December 31, 2020 December 31, 2021

Net income (loss)
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 of items that will not be reclassified to profit or loss
Items that may be reclassified to profit or loss:
Exchange differences on translation of foreign
operations

(929)

1,020

(1,397)(1,397)22
22

Total other comprehensive income
Total comprehensive income(2)(2)(1,399)(2,329)

4
4
26
1,047

(Attributable to)
Owners of the parent
Non-controlling interests
Comprehensive income(2,396)66(2,329)

945
101
1,047

13

(3) Consolidated Statements of Changes in Equity
Year ended December 31, 2020
(Millions of yen, rounded down to the nearest million)

Equity attributable to owners of the parent
SharecapitalJanuary 1, 2020
Net income (loss)
Other comprehensive
incomeTotal comprehensive
incomeChange due to businesscombination
Change in ownershipinterest in subsidiaries
Dividends from surplus
Exercise of shareoptions
Transfer from othercomponents of equity
to retained earnings
Total transactions with theowners
December 31, 2020

CapitalsurplusTreasurysharesRetainedearnings

Other
componentsof equity

Total equity
attributableto owners of
the parent

Noncontrollinginterests

Total
equity

7,043
(996)

(10)
66

7,033
(929)

1,380
—

1,987
—

(1,733)
—

5,440
(996)

(31)
—

—

—

—

—

(1,399)(1,399)—(1,399)

—

—

—

(996)

(1,399)(2,396)66(2,329)

—

—

—

—

—

—

1,050

1,050

—
—

(94)
—

—
—

—
(755)

—
—

(94)
(755)

4
—

(90)
(755)

—

(37)

—

—

—

(37)

45

8

—

—

—

300

(300)

—

—

—

—
1,380

(132)
1,855

—
(1,733)

(454)
3,989

(300)
(1,731)

(887)
3,760

1,101
1,157

213
4,917

Year ended December 31, 2021
(Millions of yen, rounded down to the nearest million)

Equity attributable to owners of the parent
SharecapitalJanuary 1, 2021
Net income
Other comprehensive
incomeTotal comprehensive
incomeAcquisition of treasury
shares
Disposition of treasury
sharesChange in ownershipinterest in subsidiaries
Dividends from surplus
Share-based paymenttransactions
Transfer from othercomponents of equity
to retained earnings
Total transactions with theowners
December 31, 2021

CapitalsurplusTreasurysharesRetainedearnings

Other
componentsof equity

Total equity
attributableto owners of
the parent

Noncontrollinginterests

Total
equity

3,760
918

1,157
101

4,917
1,020

1,380
—

1,855
—

(1,733)
—

3,989
918

(1,731)
—

—

—

—

—

26

26

—

26

—

—

—

918

26

945

101

1,047

—

—

(0)

—

—

(0)

—

(0)

—

2,673

1,413

—

—

4,087

—

4,087

—
—

(649)
—

—
—

—
(764)

—
—

(649)
(764)

(103)
—

(753)
(764)

—

—

—

—

115

115

—

115

—

—

—

263

(263)

—

—

—

—
1,380

2,024
3,879

1,413
(320)

(501)
4,406

(148)
(1,853)

2,787
7,493

(103)
1,154

2,683
8,648

14

(4) Consolidated Statements of Cash Flow

(Millions of yen, rounded down to the nearest million)
Year ended
Year ended
December 31, 2020 December 31, 2021

Cash flow from operating activities
Income before income taxes
Loss before income taxes from discontinued operations
Depreciation and amortization
Loss on impairment
Gain on valuation of investment securities
Loss (gain) on sales of fixed assets
Gain on cancellation of insurance
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 associated with achange in the scope of consolidation
Proceeds from sale of investment securities
Payments for security deposits and guarantees
Proceeds from recovery of security deposits and guarantees
Payments for asset retirement obligations
Proceeds from cancellation of insurance
Other
Net cash provided by (used in) investing activities
Cash flow from financing activities
Net increase (decrease) in short-term financial liabilities
Proceeds from long-term financial liabilities
Repayment of long-term financial liabilities
Payments of cash dividends
Repayments of lease liabilities
Payments from non-controlling interests
Payments for acquisition of interest in subsidiary from noncontrolling interests
Payments for acquisition of treasury shares
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 year
Cash and cash equivalents at end of year

15

670
(611)
2,798
2,386
(563)
(7)
—
224
(41)
503
16
68
(263)
657
5,837
5
(226)
28
(1,675)
3,970

1,903
(13)
2,870
756
—
(3)
(8)
163
—
(173)
—
(12)
(78)
(547)
4,856
0
(162)
439
(816)
4,316

(222)
16
(699)

(330)
3
(889)

2,290
636
(56)
56
(44)
—
(9)
1,969

—
513
(272)
291
(142)
85
13
(728)

3,640
—
(2,376)(754)(2,075)8—506(6,173)(765)(1,968)—(90)—(1,647)
(2)
4,289
2,160
6,449

(753)
4,029
(5,124)
4(1,532)
6,449
4,917

(5) Notes to Consolidated Financial Statements(Notes Regarding Assumption of Going Concern)
None applicable(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 consolidated financial statements are the same as those in 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 was completed in
October 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 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 year ended
December 31, 2021 each decreased ¥188 million, 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
2022 and thereafter, and the impact of the COVID-19 pandemic will not be prolonged.
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.
16

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 was included in “Interest-bearing and other financial liabilities” under current
liabilities and non-current liabilities in the previous fiscal year, has been presented independently as of the current 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.”(Consolidated Statements of Cash Flow)“Payments for asset retirement obligations,” which were included in “Other” under “Cash flow from investing
activities” in the previous fiscal year, is presented separately from the fiscal year ended December 31, 2021 due to its
increased monetary importance.
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 cash flow for the previous fiscal year, negative ¥53 million in “Other”
under “Cash flow from investing activities” has been restated as negative ¥44 million in “Payments for asset retirement
obligations” and negative ¥9 million in “Other.”(Segment Information, Etc.)(Segment Information)
1. Overview of Reportable Segments
The reportable segments of the Group are based on available financial information divided among the constituent
units of the Group and are subject to periodic analysis by the Board of Directors to determine allocation of management
resources and to evaluate operating results.
The Group draws up comprehensive strategies and conducts business activities for the services it handles.
The Group is composed of divisional segments based on the form in which services are provided, with threereportable segments: the “Organizational Development Division,” the “Individual Development Division,” and the“Matching Division.”
The Group classified the domestic temp staff business of Link Staffing Inc. as discontinued operations in the fiscal
year ended December 31, 2021. As a result, relevant figures for the previous fiscal year have been restated.
2. Revenues, Income or Loss, and Other Items in Reportable Segments
The accounting policies for reportable segments are the same as the Group’s accounting policies.
Income of reportable segments is based on gross profit on the Consolidated Statement of Operations.
Values of intersegment transactions are decided using the same method as for sales to outside customers.
17

Revenues, income or loss, and other items for each reportable segment of the Group are as follows.
Year ended December 31, 2020
(Millions of yen)
Reportable Segment
Organizational
Development
Division

Individual
Development
Division

Matching
Division

Total

Other
(Note 1)

Adjustment(Note 2)

Consolidated

Segment revenues
Revenue to outside
customers
9,518
6,726
14,521
30,76618—
30,785Intersegment revenues
and transfers
404
6
325
736
27
(764)
—
Total
9,923
6,732
14,84631,50346(764)
30,785
Segment income (profit)(Note 1)
6,824
2,121
5,637
14,582(42)(531)
14,008Selling, general andadministrative expenses
12,084
Other revenue/expenses(net)(1,063)Financial
revenue/expenses (net)(231)
Equity in earnings ofassociates
41
Income before income
taxes
670
Other items
Depreciation andamortization
1,866
733
103
2,703
0
—
2,704
Impairment loss
113
1,621
21
1,755
38
—
1,794
Notes: 1. The Other segment consists of the restaurant business and other operations not included in the other reportable segments.
2. Adjustment is the elimination of intersegment transactions.

18Year ended December 31, 2021

(Millions of yen)
Reportable Segment

Organizational
Development
Division

Individual
Development
Division

Matching
Division

Total

Other
(Note 1)

Adjustment(Note 2)

Consolidated

Segment revenues
Revenue to outside
customers
10,461
7,449
14,72832,6404—
32,644
Intersegment revenues
and transfers
357
21
314
694
14
(708)
—
Total
10,8197,471
15,04333,33418(708)
32,644
Segment income (profit)(Note 1)
7,534
2,904
5,534
15,973(46)(587)
15,340
Selling, general andadministrative expenses
12,625
Other revenue/expenses
(net)
(648)
Financial
revenue/expenses (net)(162)
Equity in earnings ofassociates—
Income before income
taxes
1,903
Other items
Depreciation andamortization
1,997
647
64
2,709
0
—
2,709
Impairment loss
48
516
166
732
—
—
732
Notes: 1. The Other segment consists of the restaurant business and other operations not included in the other reportable segments.
2. Adjustment is the elimination of intersegment transactions.

19(Per Share Information)
1. Basic earnings per share and diluted earnings per share

Year ended
December 31, 2020
(3.56)(5.93)(9.50)(3.56)(5.93)(9.50)

Continuing operations
Discontinued operations
Basic earnings per share (Yen)Continuing operations
Discontinued operations
Diluted earnings per share (Yen)

2. Basis for calculating basic earnings per share and diluted earnings per share
Year ended
December 31, 2020
Profit used to calculate basic and diluted earnings per share
Net income (loss) attributable to owners of the parent(Millions of yen)(996)
Amount not attributable to ordinary shareholders of theparent (Millions of yen)—
Profit (loss) used to calculate basic earnings per share(Millions of yen)
(996)
Continuing operations(373)
Discontinued operations(622)
Profit adjustment amount
Adjustment for share options to be issued by consolidated
subsidiaries (Millions of yen)—
Profit (loss) used to calculate diluted earnings per share(Millions of yen)
(996)
Continuing operations(373)
Discontinued operations(622)
Weighted average number of ordinary shares used to calculate
basic and diluted earnings per share (Shares)
Weighted average number of ordinary shares used to
calculate basic earnings per share (Shares)
104,922,204
Effect of dilutive shares: stock options—
Weighted average number of ordinary shares used to calculate
diluted earnings per share (Shares)
104,922,204(Significant Subsequent Events)
None applicable

20

Year ended
December 31, 2021
9.51
(0.78)
8.73
9.51(0.78)
8.73
Year ended
December 31, 2021
918
—
918
1,001
(82)
—
918
1,001
(82)

105,249,619—
105,249,619