Consolidated Financial Statements for the Year Ended December 31, 2020 (IFRS)
These financial statements have been prepared for reference only.
February 12, 2021
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: Ohno Shunichi, Director andManager of Group Design Office
Phone: +81-3-6779-9494
Ordinary General Meeting of Shareholders (scheduled):
March 30, 2021
Start of distribution of dividends (scheduled):
March 25, 2021
Filing of Securities Report (Yuka Shoken Hokokusho) (scheduled): March 30, 2021
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, 2020
(January 1, 2020 – December 31, 2020)(1) Revenues and Income(Percentages represent change compared with the previous year.)
Revenues

Year ended
December 31,
2020
Year ended
December 31,
2019

Income before
income taxes

Operating income(¥ million)(%)(¥ million)(%)(¥ million)

35,278(7.6)

241(88.0)

38,191

(4.4)

2,007

(47.5)

Comprehensive
incomeYear ended
December 31,
2020
Year ended
December 31,
2019

(%)

(¥ million)

(%)

58

(97.0)(929)(185.2)(996)(191.7)1,904(43.8)

1,090(43.2)

1,086(44.2)

Dilutedearnings per
share
(¥)

Basic earnings
per share

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

Net
incomeReturn on
equityReturn on
assetsOperatingmargin

(%)

(%)

(%)

(¥ million)

(%)

(¥)

(2,329)(311.2)(9.50)(9.50)(17.2)

0.1

0.7

1,103

(39.8)

10.30

10.28

14.7

5.3

5.3

(2) Financial Position

As of December 31, 2020
As of December 31, 2019

Total assets(¥ million)

Total equity(¥ million)

41,08344,787

4,917
7,033

Equity attributableto owners of theparent(¥ million)
3,760
7,043

Ratio of equity
attributable toowners of the parent
to total assets (%)
9.2
15.7

Equity per share
attributable toowners of the parent
(¥)
35.84
67.13

(3) Cash Flow
Cash flow fromoperating activities(¥ million)
Year ended
December 31, 2020
Year ended
December 31, 2019

Cash flow frominvesting activities(¥ million)

Cash flow fromfinancing activities(¥ million)

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

3,970

1,969

(1,647)

6,449

3,827

(2,990)

(655)

2,160

2. Dividends
Dividends per share

2019
2020
2021 (est.)

1st Qtr.

2nd Qtr.

3rd Qtr.

Year-end

Full year

1.80
1.80
1.80

1.80
1.80
1.80

1.80
1.80
1.80

1.80
1.80
1.80

7.20
7.20
7.20

Total dividends
paid (full year)(¥ million)

Payout
ratio
(%)

758
755

69.6
(81.2)—

Dividends/
Net assets(Consolidated)
(%)
10.3
13.9

3. Forecast of Consolidated Results for 2021 (January 1, 2021 – December 31, 2021)
Revenues
Full-year(¥ million)
37,700(%)
6.9(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)
(¥)
1,370
467.2
670
—
570
—
5.43

Notes
(1) Changes in Significant Subsidiaries during the Period (Change in Specified Subsidiaries Due to Change in Scopeof Consolidation): Yes
Added: 1 company (OpenWork Inc.)(2) Changes in Accounting Policies and Changes in Accounting Estimates(a) Changes in accounting policies required by IFRS: Yes(b) Changes in accounting policies other than (a) above: No(c) Changes in accounting estimates: No(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, 2020: 113,068,000; Year ended December 31, 2019: 113,068,000(b) Number of treasury shares at the end of the period:
Year ended December 31, 2020: 8,145,796; Year ended December 31, 2019: 8,145,796(c) Average number of shares outstanding:Year ended December 31, 2020: 104,922,204; Year ended December 31, 2019: 105,406,071(Reference) Summary of Non-consolidated Results
1. Non-consolidated Results for 2020 (January 1, 2020 – December 31, 2020)(1) Revenues and Income(Percentages represent change compared with the previous year.)Net salesYear ended
December 31, 2020
Year ended
December 31, 2019

Operating income

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

(%)

7,460

(11.1)

818(16.2)

2,311

189.7

337

(46.1)

8,394(10.5)

977(61.7)

797(67.0)

625(48.2)

Basic earnings
per share(¥)
Year ended
December 31, 2020
Year ended
December 31, 2019

Ordinary income

Dilutedearnings per
share
(¥)

3.22

3.22

5.94

5.93

(2) Financial Position
Total assets
Net assets
Net assets/
Net assets(¥ million)(¥ million)
Total assets (%)
per share (¥)
As of December 31, 2020
27,045
4,181
15.5
39.85
As of December 31, 2019
26,866
5,171
19.3
49.29
(Reference) Net worth: As of December 31, 2020: ¥4,181 million; As of December 31, 2019: ¥5,171 million* 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 2020....................................................................................................... 2(2) Overview of Financial Position for 2020 ............................................................................................................ 8(3) Overview of Cash Flow for 2020 ......................................................................................................................... 8(4) Forecast ................................................................................................................................................................9(5) Important Information Regarding Assumption of Going Concern ................................................................ 9
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
Changes in Accounting Policies ...................................................................................................................16
Notes Regarding Significant Accounting Estimates and Judgements ......................................................17
Segment Information, Etc. ............................................................................................................................18
Per Share Information ..................................................................................................................................21
Significant Subsequent Event ......................................................................................................................21

1

1. Overview of Results of Operations and Other Information(1) Overview of Results of Operations for 2020
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.” In industries
related to the Group, the market grew moderately as demand increased for facilitation of higher labor productivity andpersonnel recruiting associated with the promotion of work style reform. However, since February 2020, the novel
coronavirus (“COVID-19”) pandemic has had a substantial impact. Personal consumption and hiring have trended toward
recovery, but the economic outlook remains uncertain.
In this economic environment, the Group’s revenues were ¥35,278 million (a 7.6% decrease compared with theprevious year), gross profit was ¥14,653 million (a 0.4% increase), operating income was ¥241 million (an 88.0%
decrease) and net loss attributable to owners of the parent was ¥996 million (compared with ¥1,086 million in net income
attributable to owners of the parent in the previous fiscal year).
The segment and business classifications of the Group are as shown below, and an overview of 2020 by segment andbusiness follows. As of the first quarter of 2020, business classifications have changed due to the inclusion of OpenWork
Inc. in the scope of consolidation. Figures for the previous year have been restated for the purpose of comparison.

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 2020 were ¥9,923 million (a 15.4% decrease), and segment income was ¥6,824
million (an 11.3% decrease), both decreasing substantially compared with the previous year. An overview of operating
results by business for 2020 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 2020 were ¥7,808 million (a 12.1% decrease) and gross profit was ¥6,146 million (an11.9% decrease). 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, 2019
8,883
[6,977]
6,521
2,361

Consulting
CloudYear ended
December 31, 2020
7,808
[6,146]
5,230
2,578

YoY change(%)(12.1)(11.9)(19.8)
9.2

In Consulting, both sales and gross profit decreased significantly compared with the previous fiscal year due to factors
including the effects of cancellation or postponement of training and cutbacks in investment in human resources by small
and medium-sized enterprises during the first half of the year.
On the other hand, there was a turnaround from the third quarter onward due to further growth in needs for improving
employee engagement in areas such as online training of new employees and managers under telework conditions.
Moreover, the expansion of ESG investment is also increasing investor attention to human capital, and we see this as amajor opportunity for the Group. Going forward, the business will steadily capture these needs and increase sales per
customer by providing one-stop solutions using “Motivation Engineering.”
Meanwhile, 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 ofdeliveries and monthly fee revenue were as follows.
Table 2. Number of Deliveries and Monthly Fee Revenue for the Motivation Cloud Series at Quarter-End
2019
Number ofdeliveries

2020

March

June

September

December

March

June

September

December

872

889

900

921

906

795

770

759

145,271

158,286

172,027

197,101

203,789

183,600

190,423

200,927

Monthly fee
revenue(¥ 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 at
3

corporations has become a key management theme. 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.
During the second quarter, there were cancellations and suspensions of Motivation Cloud, mainly among small andmedium-sized enterprises and venture companies whose business environment has deteriorated. However, for the fullyear, new introductions increased substantially, mainly among major corporations, and monthly fee revenue for the
Motivation Cloud series of products is once again back on a growth track from the third quarter onward, totaling¥200,927 thousand for the month of December 2020.
The business will work to further step up new introductions at major corporations, mainly leading companies, andwill accelerate a rollout to companies nationwide, including superior local companies, by developing products that
customers can operate on their own to improve their organizations.
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, earnings announcements and webcasts of shareholders’ meetings.
In this business, revenues for 2020 were ¥2,604 million (a 24.1% decrease) and gross profit was ¥960 million (a15.1% 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

Year ended
December 31, 2019
3,430
[1,131]
1,076
2,353

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

YoY change(%)(24.1)(15.1)(51.4)(11.6)In 2020, revenues from the Event business decreased substantially from the second quarter onward due to the impactof the COVID-19 pandemic. IR-related media products, which have a low susceptibility to economic conditions,performed well, but production of internal company media products decreased as customer companies reduced theirbudgets. As a result, segment revenues and gross profit both decreased substantially compared with the previous year.
Going forward, the business will actively promote online events using its Internet and video production capabilities as
it continues to focus 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 2020 were ¥6,732 million (a 14.1% decrease) and segment income was ¥2,121
million (a 24.8% decrease). An overview of operating results by business for 2020 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 six service brands of “Aviva” personal computer schools, “Daiei” qualification
schools, “Aviva Pro” programming schools, and “Rosetta Stone Learning Center,” “Rosetta Stone Premium Club” and“Hummingbird” foreign language schools. Previously, the business mainly used classroom lectures to provide continuing
learning support, but currently provides both in-school and online services in response to Japan’s state of emergency andnew lifestyles. In addition, the “i-Company Club” subscription-model membership service supports continuous learningby students.
In this business, revenues for 2020 were ¥6,071 million (a 15.0% decrease) and gross profit was ¥1,799 million (a29.1% decrease). 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, 2019

Year ended December
31, 2020

YoY change
(%)

7,139
[2,536]
4,016
2,455
667

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

(15.0)(29.1)(17.0)(12.6)(11.2)

Due to factors including temporary classroom closures nationwide because of the COVID-19 pandemic in April andMay, when the number of new enrollees usually increases, revenues and gross profit both decreased substantiallycompared with the previous year.
On the other hand, with the prompt establishment of a system of online classes in the second quarter to steadily
capture needs for learning, revenues have been on a recovery track from the third quarter onward. Going forward, thebusiness will help generate results for students by providing value in virtual space without depending solely on businessbases and will ramp up matching with companies as employers. In addition, the evolution of “i-Company Club” as aplatform to support these efforts will help to increase the true market value of individuals.
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 2020 were ¥666 million (a 5.4% decrease) and gross profit was ¥323 million (a 12.1%
increase).
In 2020, as with the Career Schools business, revenues and gross profit both decreased substantially compared withthe previous year because classrooms were temporarily closed nationwide because of the COVID-19 pandemic in April
and May, when the number of new enrollees usually increases. This business has only one product.
5

By continuing to provide value online and applying the know-how in training adults that has been cultivated in theConsulting & Cloud business, this business aims to offer 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 2020 were ¥19,427 million (a 0.3% decrease) and segment income was ¥6,336
million (a 30.8% increase), with segment revenues decreasing slightly and segment income increasing substantiallycompared with the previous year. An overview of operating results by business for 2020 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. In fiscal 2020, English education will start from thethird grade of elementary school, and will be 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, the business expects continuing expansion of the English education market in Japan.
In this business, revenues for 2020 were ¥12,931 million (a 2.9% increase) and gross profit was ¥3,782 million (a9.9% increase).
During 2020, revenues and gross profit both increased despite temporary school closures nationwide in April andMay, with stable results for the full year due to factors including classes held during summer vacation to make up for theperiod of school closures. This business has only one product.
While continuing to pay close attention to the immigration situation, the business will continue working to improve its
English instruction and profitability by hiring high-quality foreign teachers with a view toward further expanding English
education in Japan.
Domestic Personnel Placement & Temp Staff Business
The Domestic Personnel Placement & Temp Staff business provides services 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 quarter, operates OpenWork, one of Japan’s largest employee online review platforms for job seekers, and its
main source of income is from referrals to employment agencies.
In this business, revenues for 2020 were ¥6,535 million (a 5.9% decrease) and gross profit was ¥2,586 million (an81.2% increase). Results by product in the Domestic Personnel Placement & Temp Staff business were as follows.

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

Year ended
December 31, 2019
6,948
[1,427]
6,332
616

Year ended
December 31, 2020
6,535
[2,586]
4,581
1,954

YoY change
(%)
(5.9)
81.2
(27.7)
217.3

During 2020, revenues decreased as a result of factors including temporary closures by temp staff customer
companies and cutbacks in the number of corporate employees due to the COVID-19 pandemic. On the other hand, grossprofit increased substantially due to the addition to the Group of OpenWork Inc., which has a high profit margin.
In temp staff dispatch, the decline in the number of temp staff dispatched has bottomed out and is on a recovery track
due to a portfolio shift from the former dispatch to apparel retailers to supermarkets and call centers, where demand is
expected. In personnel placement, the business will expedite engagement matching that achieves true mutual
understanding and affinity between organizations and individuals by linking the assets held by OpenWork Inc. with theorganizational and individual data assets held by the Group.
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 2020
Total assets as of December 31, 2020 were ¥41,083 million, a decrease of ¥3,703 million from the end of the previous
year. This was mainly due to factors including a ¥2,788 million decrease in investments in associates in connection withmaking OpenWork Inc. a consolidated subsidiary and a ¥3,848 million decrease in other current assets, offset by a ¥4,289
million increase in cash and cash equivalents as a result of securing working capital and making OpenWork Inc. a
consolidated subsidiary.
Total liabilities as of December 31, 2020 were ¥36,166 million, a decrease of ¥1,587 million from the end of theprevious year. This was mainly due to factors including a ¥1,656 million decrease in interest-bearing and other financial
liabilities associated with a decision to relocate operating bases.
Total equity as of December 31, 2020 was ¥4,917 million, a decrease of ¥2,115 million from the end of the previous
year. This was mainly due to factors including a decrease in other components of equity associated with the sale of listed
stock, in addition to a decrease in retained earnings associated with a decrease in net income.
(3) Overview of Cash Flow for 2020
Cash and cash equivalents (“cash”) as of December 31, 2020 were ¥6,449 million, an increase of ¥4,289 million
during the period.
Cash flow during the year ended December 31, 2020 was as follows.
Cash Flow from Operating Activities
Net cash provided by operating activities was ¥3,970 million, an increase of ¥143 million compared with the previous
year. The principal factor decreasing net cash was a decrease of ¥1,845 million in income before income taxes to ¥58
million, while the principal factors increasing net cash included an increase of ¥1,427 million in loss on impairment andan increase of ¥317 million in depreciation and amortization.
Cash Flow from Investing Activities
Net cash provided by investing activities was ¥1,969 million (in the previous year, net cash used in investing activitieswas ¥2,990 million). Principal factors included an absence of advance payments.
Cash Flow from Financing Activities
Net cash used in financing activities was ¥1,647 million (in the previous year, net cash used in financing activitieswas ¥655 million). The principal factor increasing net cash was a ¥4,640 million net increase in short-term financial
liabilities, while the principal factors decreasing net cash included an absence of proceeds from long-term financial
liabilities, which were ¥5,255 million in the previous year.

8(4) Forecast
During the second quarter of the fiscal year ended December 31, 2020, all divisions were significantly impacted by
the COVID-19 pandemic, but in each business, the Group established new models for providing value including online
operations. In addition, the sudden, drastic change in work styles and lifestyles has further increased needs for improving
employee engagement and individual learning, and steadily capturing those needs led to a substantial recovery from thethird quarter onward. This growth trend is expected to continue in 2021 and beyond.
In addition, the Group will significantly reduce office costs by relocating and reducing the number of its bases
nationwide, including the Tokyo head office. The Group plans to reorganize all its operating bases by the end of 2021 toreduce floor area by about 60% and rent by about 70%. The Group expects temporary large selling, general andadministrative expenses of approximately ¥1.0 billion in 2021 due to the downsizing or relocation of each base.

(5) Important Information Regarding Assumption of Going Concern
None applicable
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, 2019
December 31, 2020
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
Goodwill
Intangible assets
Investments in associates
Other non-current financial assets
Deferred tax assets
Other non-current assets
Total non-current assets
Total assets

10

2,160
4,114
256
17
4,905
11,454

6,449
3,680
187
14
1,057
11,38917,400
5,927
2,095
2,788
4,033
839
248
33,33344,787

13,953
9,376
2,266
—
3,203
646
245
29,69441,083

(Millions of yen, rounded down to the nearest million)
As of
As of
December 31, 2019
December 31, 2020
LIABILITIES AND EQUITY
LIABILITIESCurrent liabilities
Trade and other payables
Contract liabilities
Interest-bearing and other financial liabilities
Income tax payable
Provisions
Other current liabilities
Total current liabilities
Non-current liabilities
Interest-bearing and other financial 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

2,397
1,760
5,943
865
21
1,843
12,831

2,174
1,786
9,218
484
129
2,149
15,94424,092462
218
148
24,92237,754

19,161560
362
138
20,222
36,166

1,380
1,987(1,733)
5,440
(31)
7,043
(10)
7,033
44,7871,380
1,855(1,733)
3,989(1,731)
3,760
1,157
4,917
41,083

(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, 2019
December 31, 2020
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)(Attributable to)
Owners of the parent
Non-controlling interests
Total

38,191
23,58914,602
11,773
171
992
2,007
24
170
43
1,904
814
1,090

35,278
20,624
14,653
12,852
853
2,413
241
18
242
41
58
988
(929)

1,086
4
1,090

(996)
66
(929)
(Yen)

Earnings (loss) per share attributable to owners of theparentBasic earnings per share
Diluted earnings per share

12

10.30

(9.50)

10.28(9.50)

Consolidated Statements of Comprehensive Income(Millions of yen, rounded down to the nearest million)
Year ended
Year ended
December 31, 2019 December 31, 2020
Net income (loss)
Other comprehensive income (loss)
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

1,090

(929)

13
13

(1,397)(1,397)

Total other comprehensive income (loss)
Total comprehensive income (loss)

(0)
(0)
13
1,103

(2)
(2)
(1,399)(2,329)(Attributable to)
Owners of the parent
Non-controlling interests
Comprehensive income (loss)

1,099
4
1,103

(2,396)66(2,329)13

(3) Consolidated Statements of Changes in Equity
Year ended December 31, 2019
(Millions of yen, rounded down to the nearest million)
Equity attributable to owners of the parent
SharecapitalJanuary 1, 2019
Impact of change inaccounting policy
Balance at beginning of
period after reflectingchange in accounting
policyNet income
Other comprehensive
incomeTotal comprehensive
incomeAcquisition of treasury
sharesDividends from surplus
Transfer from othercomponents of equity
to retained earnings
Total transactions with theowners
December 31, 2019

CapitalsurplusTreasurysharesRetainedearnings

Other
componentsof equity

Total equity
attributableto owners of
the parent

Noncontrollinginterests

Total
equity

1,380

1,989

(1,373)

4,763

936

7,696

(15)

7,681

—

—

—

(640)

—

(640)

—

(640)

1,380
—

1,989
—

(1,373)
—

4,122
1,086

936
—

7,055
1,086

(15)
4

7,040
1,090

—

—

—

—

13

13

—

13

—

—

—

1,086

13

1,099

4

1,103

—
—

(1)
—

(360)
—

—
(749)

—
—

(362)
(749)

—
—

(362)
(749)

—

—

—

980

(980)

—

—

—

—
1,380

(1)
1,987

(360)
(1,733)

231
5,440

(980)
(31)

(1,111)
7,043

—
(10)

(1,111)
7,033

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

1,380
—

1,987
—

(1,733)
—

5,440
(996)

(31)
—

7,043
(996)

(10)
66

7,033
(929)

—

—

—

—

(1,399)(1,399)—(1,399)

—

—

—

(996)

(1,399)(2,396)66
1,050(2,329)
1,050

—
—

(94)
—
(37)

—
—

—
(755)

—
—

(94)
(755)
(37)

4
—
45

(90)
(755)
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

14

(4) Consolidated Statements of Cash Flow
(Millions of yen, rounded down to the nearest million)
Year ended
Year ended
December 31, 2019 December 31, 2020
Cash flow from operating activities
Income before income taxes
Depreciation and amortization
Loss on impairment
Gain on valuation of investment securities
Loss (gain) on sales of fixed assets
Financial revenues and financial expenses
Equity in (earnings) losses of associates
Loss (gain) on sales of investments accounted for using the equity
methodDecrease (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
Payments for acquisition of investment securities
Proceeds from sale of investment securities
Proceeds from sales of investments accounted for using the equity
methodPayments for security deposits and guarantees
Proceeds from recovery of security deposits and guarantees
Advance payments
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

1,904
2,480
959
—
—
146
(43)

58
2,798
2,386
(563)
(7)
224
(41)

(160)
418
—
22
8
(43)
5,693
9
(155)
62
(1,783)
3,827

—
503
16
68
(263)
657
5,837
5
(226)
28
(1,675)
3,970

(337)
—
(772)

(222)
16
(699)

—
(204)
1,966

2,290
—
636

498
(122)
120
(4,075)(63)(2,990)

—
(56)
56
—
(53)
1,969

(1,000)5,255(1,972)(747)(1,827)—3,640—(2,376)(754)(2,075)
8

—
(362)
(655)
(0)
180
1,979
2,160

(90)
—
(1,647)
(2)
4,289
2,160
6,449

(5) Notes to Consolidated Financial Statements(Notes Regarding Assumption of Going Concern)
None applicable(Changes in Accounting Policies)
The significant accounting policies applied to the consolidated financial statements for the fiscal year ended
December 31, 2020 are the same as the accounting policies applied to the consolidated financial statements for theprevious fiscal year, except for the following.
As of the second quarter of the current fiscal year, the Group has adopted early application of the following standard.
IFRS
IFRS 16

Overview of New Standard/Amendment
LeasesAmended accounting treatment for COVID-19-related rent concessions

This amendment recognizes the selection of simplified accounting treatment for lessees of leases that have received
rent concessions as a direct consequence of the novel coronavirus (“COVID-19”) pandemic.
This amendment permits lessees, as a practical expedient, to choose not to assess whether particular rent concessions
related to COVID-19 that meet specified requirements are “lease modifications” as stipulated in IFRS 16.
The Group has applied this expedient to rent concessions that meet the above requirements.
The application of this expedient increased income before income taxes by ¥27 million in the year ended December
31, 2020.

16

(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.
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 going out 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, when the state of emergency was completely lifted, and the business results of the Individual Development
Division, which was most impacted by COVID-19, are on a recovery track, despite the closure of its schools forapproximately two months, as the Group perceives a growing trend for greater needs for individual learning. Even atpresent, during the declaration of a second state of emergency, the impact on business results has been minor, andtherefore the Group has made various estimates and judgments regarding the demand forecast for 2021 onward assumingthat recovery will continue in 2021 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.
The financial position and operating results of the Group may be affected by the state of the spread of infection in the
future.

17

(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.”(Matters Related to Changes in Reportable Segments)
From the first quarter of 2020, the importance of the Matching Division has increased with the inclusion of
OpenWork Inc. as a consolidated subsidiary, and as a result of a review of the operations in this division, the Group has
judged it necessary to recognize and manage the Matching Division in its entirety as a single classification for
management of profit and loss.
For this reason, as of the year ended December 31, 2020, the Group has changed from its former four segments
consisting of the “Organizational Development Division,” the “Individual Development Division,” the “Matching
Division ALT Placement Business,” and the “Matching Division Personnel Placement & Temp Staff Business” to threesegments, consisting of the “Organizational Development Division,” the “Individual Development Division,” and the“Matching Division.”
Segment information for the previous fiscal year has been presented based on the classifications after the change.
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 presented in Note 3.
Income of reportable segments is based on gross profit on the Consolidated Statement of Operations.
Figures for intersegment transactions are decided using the same method as for sales to outside customers.

18

Revenues, income or loss, and other items for each reportable segment of the Group are as follows.
Year ended December 31, 2019
(Millions of yen)
Reportable Segment

Segment revenues
Revenue to outside
customers
Intersegment revenues
and transfers
Total
Segment income (profit)(Note 1)
Selling, general andadministrative expenses
Other revenue/expenses(net)
Financial
revenue/expenses (net)
Equity in earnings ofassociates
Income before income
taxes
Other items
Depreciation andOrganizational
Development
Division

Individual
Development
Division

Matching
Division

Total

Other
(Note 1)

Adjustment(Note 2)

11,288

7,824

19,04838,16030—

38,191441
11,729

14
7,838

439
19,487895
39,055

65
95

(960)
(960)

—
38,191

7,696

2,822

4,845

15,363

(15)

(746)

14,602

Consolidated

11,773
(820)
(146)
43
1,904

1,585
719
174
2,479
0
—
2,480
Impairment loss
54
802
102
959
—
—
959
Notes: 1. The Other segment consists of the restaurant business and other operations not included in the reportable segments.
2. Adjustment is the elimination of intersegment transactions.

amortization

19

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
9,469
6,725
19,06435,25918—
35,278Intersegment revenues
and transfers
454
7
362
824
27
(852)
—
Total
9,923
6,732
19,42736,08446(852)
35,278Segment income (profit)(Note 1)
6,824
2,121
6,336
15,281(42)(586)
14,653
Selling, general andadministrative expenses
12,852Other revenue/expenses(net)(1,560)Financial
revenue/expenses (net)(224)
Equity in earnings ofassociates
41
Income before income
taxes
58
Other items
Depreciation andamortization
1,866
733
197
2,797
0
—
2,798
Impairment loss
113
1,621
614
2,348
38
—
2,386
Notes: 1. The Other segment consists of the restaurant business and other operations not included in the reportable segments.
2. Adjustment is the elimination of intersegment transactions.

20

(Per Share Information)
1. Basic earnings per share and diluted earnings per share
Year ended
December 31, 2019
10.30
10.28

Basic earnings per share (Yen)
Diluted earnings per share (Yen)

2. Basis for calculating basic earnings per share and diluted earnings per share
Year ended
December 31, 2019
Profit used to calculate basic and diluted earnings per share
Net income attributable to owners of the parent(Millions of yen)
1,086
Amount not attributable to ordinary shareholders of theparent (Millions of yen)—
Profit used to calculate basic earnings per share(Millions of yen)
1,086
Profit adjustment amount
Adjustment for share options to be issued by associates(Millions of yen)
(2)
Profit used to calculate diluted earnings per share(Millions of yen)
1,084
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)
105,406,071
Effect of dilutive shares: stock options—
Weighted average number of ordinary shares used to calculate
diluted earnings per share (Shares)
105,406,071

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

Year ended
December 31, 2020

(996)
—
(996)
—
(996)

104,922,204—
104,922,204(Significant Subsequent Event)
Relocation of Head Office
At a meeting of the Board of Directors of the Company held on February 12, 2021, it was resolved as follows
regarding the relocation of the Head Office.
1. Destination of relocation
Kabukiza Tower, 4-12-15 Ginza, Chuo-ku, Tokyo
2. Timing of relocation
October 2021 (planned)
3. Purpose of relocation
The Company has used the COVID-19 pandemic as an opportunity to create a new model work style called“Compatible Work.” Compatible Work utilizes real-world and virtual characteristics to achieve simultaneous
improvement in work productivity and employee engagement. Specific dates for working in the office and teleworking
dates will be set for each team, and work will be designed and executed appropriately for the respective dates. As a resultof the reduction of office space due to the promotion of Compatible Work, it was decided to relocate.
4. Impact on financial position and business results
In the fiscal year ending December 31, 2021, the main impact is expected to be a decrease of approximately ¥8,613
million in right-of-use assets and lease obligations, approximately ¥311 million in depreciation as a result of accelerated
amortization, and an increase of approximately ¥51 million in other relocation expenses.

21