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

Link and Motivation Inc.

November 12, 2021

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

https://www.lmi.ne.jp/english
Representative: Ozasa Yoshihisa, Chairman and Representative Director
Contact: Ohno Shunichi, Director andManager of Group Design Office
Phone: +81-3-6853-8111
Filing of Quarterly Report (Shihanki Hokokusho) (scheduled):
November 12, 2021
Start of distribution of dividends (scheduled):
December 24, 2021
Supplementary documents for quarterly results:
No
Quarterly results briefing:No(Amounts are rounded down to the nearest million.)

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

Revenues(¥ million)
Nine months ended
September 30, 2021
Nine months ended
September 30, 2020

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

27,316

4.8

2,097

46.9

1,962

52.2

1,283

50.9

26,056

(8.8)

1,427

(26.3)

1,289(30.9)

850(26.1)Net income
attributable toowners of theparent(¥ million)

Change(%)

Comprehensive
income(¥ million)

Change(%)

Basic earnings
per share (¥)

Dilutedearnings per
share (¥)

Nine months ended
September 30, 2021
1,185
53.3
1,230
—
11.30
11.30
Nine months ended
September 30, 2020
773
(33.0)
(95)
—
7.37
7.37
Note: Figures for the nine months ended September 30, 2020 reflect the finalization of provisional accounting treatment for businesscombinations on December 31, 2020.

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

30,93741,083

Total equity(¥ million)
4,827
4,917

Equity attributableto owners of theparent(¥ million)
3,676
3,760

Ratio of equity
attributable to ownersof the parent to total
assets (%)
11.9
9.2

2. Dividends

Dividends per share
3rd Qtr.
Year-end
2020
1.80
1.80
2021
1.90
2021 (est.)
1.90
Note: Revisions since the most recently announced dividend forecast: No
1st Qtr.
1.80
1.80

2nd Qtr.
1.80
1.80

Total
7.20
7.40

3. Forecast of Consolidated Results for 2021 (January 1, 2021 – December 31, 2021)(Percentages represent change compared with the previous fiscal year.)
Net income
Basic
Net
Revenues
Operating income
attributable toearnings
incomeowners of the parent
per share(¥ million)(%) (¥ million)(%)(¥ million)(%)(¥ million)(%)(¥)
Full-year
32,300
5.1
2,020
881.2
1,010
—
901
—
8.59
Notes: 1. Revisions since the most recently announced forecast of results: Yes
2. See the news release “Notice of Revision of Forecast of Results,” dated November 12, 2021, for details of the revision of theforecast of consolidated results. From the fourth quarter of 2021, the domestic temp staff business of consolidated subsidiary
Link Staffing Inc. will be classified under discontinued operations. As a result, in the forecast of results for 2021, revenues
and operating income indicate the amount for continuing operations. Net income, net income attributable to owners of theparent, and basic earnings per share indicate the total amount for continuing and discontinued operations. The same amounts
have also been used to calculate the rate of change compared with the previous fiscal year.

Notes
(1)

Changes in Significant Subsidiaries during the Period (Changes in Specified Subsidiaries Due to Change in Scopeof Consolidation): No(2)

Changes in Accounting Policies and Changes in Accounting Estimates(a) Changes in accounting policies required by IFRS: No(b) Changes in accounting policies other than (a) above: No(c) Changes in accounting estimates: Yes(3)

Number of Shares Issued and Outstanding (Common Stock)(a) Number of shares at the end of the period (including treasury stock)
Nine months ended September 30, 2021: 113,068,000; Year ended December 31, 2020: 113,068,000(b) Number of treasury shares at the end of the period:
Nine months ended September 30, 2021: 8,145,796; Year ended December 31, 2020: 8,145,796(c) Average number of shares outstanding (cumulative with earlier quarters):
Nine months ended September 30, 2021: 104,922,204; Nine months ended September 30, 2020: 104,922,204* These Financial Statements Are Not Subject to Review by a Certified Public Accountant or Auditing Firm
* Explanation of the Proper Use of Performance Forecasts and Other Special Instructions
Consolidated forecasts and other statements regarding the future contained in this document are based on information
currently available to the Company and certain reasonable assumptions. Actual performance may differ substantially
due to numerous factors.

Contents of Attachments
1. Overview of Results of Operations and Other Information ............................................................................ 2(1) Overview of Results of Operations for the Nine Months Ended September 30, 2021 ............................ 2(2) Overview of Financial Position for the Nine Months Ended September 30, 2021 .................................. 8(3) Overview of Cash Flow for the Nine Months Ended September 30, 2021 ............................................... 8(4) Forecast ......................................................................................................................................................... 8
2. Condensed Consolidated Financial Statements and Main Notes ................................................................. 10(1) Condensed Consolidated Statements of Financial Position ................................................................... 10(2) Condensed Consolidated Statements of Operations and Comprehensive Income ............................... 12(3) Condensed Consolidated Statements of Changes in Equity.................................................................... 16(4) Condensed Consolidated Statements of Cash Flow ................................................................................. 17(5) Notes to Condensed Consolidated Financial Statements ....................................................................... 18
Significant Accounting Policies .............................................................................................................18
Notes Regarding Significant Accounting Estimates and Judgements ............................................. 18
Changes in Presentation Method ........................................................................................................ 19
Notes Regarding Assumption of Going Concern ............................................................................... 19
Significant Subsequent Events ............................................................................................................ 19

1

1. Overview of Results of Operations and Other Information
Forward-looking statements in the following text are based on judgments as of September 30, 2021, the last day ofthe consolidated quarterly accounting period under review. During the first nine months of the previous fiscal year,
provisional accounting treatment was given to the business combination with OpenWork Inc., which was conducted on
January 1, 2020. However, because the business combination was finalized at the end of the previous fiscal year, theamount after the revision due to finalization of the provisional accounting treatment is used for comparison and analysis
with regard to the same period of the previous year.
(1) Overview of Results of Operations for the Nine Months Ended September 30, 2021
The Link and Motivation Group (the “Group”) supports the transformation of numerous companies and individuals
using “Motivation Engineering,” which is the Group’s core technology, backed by psychology, behavioral economics,social systems theory and other disciplines, under its corporate philosophy: “Through Motivation Engineering, we
provide opportunities to transform organizations and individuals and create a more meaningful society.” Extensions of thestate of emergency due to the COVID-19 pandemic have continued since the start of 2021, mainly in urban areas, but
economic activity is expected to gradually recover going forward as the vaccination rate increases. In particular, theGroup perceives rising needs for improving employee engagement due to changes in work style and for enhancing theskills of individuals due to rapid digital transformation.
In this economic environment, the Group’s revenues for the nine months ended September 30, 2021 (the “first ninemonths of 2021”) were ¥27,316 million (a 4.8% increase compared with the same period of the previous year), grossprofit was ¥12,000 million (an 11.8% increase), operating income was ¥2,097 million (a 46.9% increase) and net income
attributable to owners of the parent was ¥1,185 million (a 53.3% increase).
The segment and business classifications of the Group are as shown below, and an overview of the first nine monthsof 2021 by segment and business follows.

Link and
Motivation Group

Organizational
Development Division

Individual
Development Division

Matching Division

Cloud Business

Career School Business

GlobalPersonnel Placement &Temp Staff Business

Link and Motivation Inc.

Link Academy Inc.

Link Interac Inc.

Link Global Solution Inc.

Dean Morgan K.K.

Link Japan Careers Inc.

Event & Media Business

Cram School Business

Domestic
Personnel Placement &Temp Staff Business

Link Corporate
Communications Inc.

Motivation Academia Inc.

Link Staffing Inc.

Consulting &Link Event Produce Inc.

Link-i Inc.

a2media Corporation

OpenWork Inc.

2

Organizational Development Division
The Organizational Development Division offers corporate customers services that provide support for building andstrengthening relationships with a company’s stakeholders (employees, job applicants, customers, shareholders) using“Motivation Engineering,” which is the core technology of the Group.
In this segment, segment revenues for the first nine months of 2021 were ¥8,086 million (a 10.8% increase), andsegment income was ¥5,718 million (a 14.1% increase). An overview of operating results by business for the first ninemonths of 2021 is as follows.
Consulting & Cloud Business
The Consulting & Cloud business acts under the concept of creating numerous “Motivation Companies” in which
employee motivation is the growth engine of an organization. As its method of providing services, the business diagnoses
employee engagement based on its original diagnostic framework and offers one-stop solutions for innovations related toorganizations and personnel, including hiring, training, systems and culture. The business is also rolling out the
Motivation Cloud series of cloud-based services that allow customer companies to manage employee engagement
themselves.
In this business, revenues for the first nine months of 2021 were ¥6,577 million (a 15.5% increase) and gross profit
was ¥5,118 million (a 13.5% increase). Results by product in the Consulting & Cloud business were as follows.
Table 1. Revenues by ProductProduct (¥ million)[Gross profit in brackets]
Consulting & Cloud Business
Consulting
Cloud

Nine months ended
September 30, 2020
5,696
[4,509]
3,817
1,878

Nine months ended
September 30, 2021
6,577
[5,118]
4,456
2,121

YoY change
(%)
15.5
13.5
16.7
12.9

In the first nine months of 2021, the business continued to steadily capture needs for improving employee engagement,
mainly at major companies, and both revenues and gross profit increased substantially compared with the same period of
the previous fiscal year. In addition to the emergence of issues related to organizations and human resource development
during the COVID-19 pandemic, a recent change in the operating environment is that shifting to adapt to the labor market
in order to target human resources—both employees and applicants—has become a management issue for many
companies. Under these circumstances, improving employee engagement has become a key management theme. The
business views this change as a major opportunity for the Group, which has supported the organizational transformationof numerous companies since its establishment in 2000. The business will continue to increase sales per customer by
providing one-stop solutions using “Motivation Engineering.”
Monthly fee revenue increased compared with the same period of the previous year for the Motivation Cloud series of
products, which are part of the Cloud category and are priority services for the Group. The number of deliveries andmonthly fee revenue were as follows.
Table 2. Number of Deliveries and Monthly Fee Revenue for the Motivation Cloud Series at Quarter-End
2020
2021
March
June
September
December
March
June
September
Number of
906
795
770
759
747
743
772
deliveries
Monthly fee
revenue
203,789
183,600
190,423
200,927
206,485
218,928
235,859(¥ 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.
Currently, due to needs for visualizing the status of an organization that has adopted telework and the global trend
toward human capital reporting, which is gaining momentum through measures such as the issuance of ISO 30414 for
3human resource management by the International Organization for Standardization and new requirements for humancapital reporting in the United States, the number of companies that feel the need to improve employee engagement isincreasing, especially among major companies. In addition, because investors are paying greater attention to humancapital as ESG investment increases, this business expects needs for improved employee engagement to continue over thelong term. Since its founding in 2000, Link and Motivation has not only diagnosed the engagement status of companies
and employees, but has also supported organizational transformation at many companies. At present, the Company has
been ranked number one in share of sales by vendor in the employee engagement market for the fourth consecutive year
(fiscal 2017 to fiscal 2020 forecast) in ITR Market View: Human Resources Management Market 2021, a market research
report published by ITR Corporation.
During the first nine months of 2021, the Group succeeded in stepping up introductions at major companies, which
increased substantially compared with same period of the previous year. Monthly fee revenue has been firm, increasing to¥235,859 thousand for the month of September 2021.
The business will continue to step up new introductions at major companies and conduct a nationwide rollout,
including at superior regional companies, as well as work to enhance the functions and expand the lineup of the
Motivation Cloud series. To that end, it will accelerate the development of the Motivation 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 the first nine months of 2021 were ¥1,781 million (a 10.1% decrease) and gross profit
was ¥785 million (a 7.7% 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

Nine months ended
September 30, 2020
1,980
[729]
406
1,574

Nine months ended
September 30, 2021
1,781
[785]
273
1,507

YoY change(%)(10.1)
7.7(32.8)(4.2)

In the first nine months of 2021, revenues decreased compared with the same period of the previous year due to thecontinuing impact of the COVID-19 pandemic on the Event business. On the other hand, gross profit increased comparedwith the same period of the previous year due to factors including an improved gross profit margin associated with a shift
online.
The business will continue to actively promote online events using its Internet and video production capabilities as it
focuses on its strongly performing IR-related media business.

4

Individual Development Division
The Individual Development Division supports the creation of “i-Companies,” which it defines as individuals who
independently and autonomously develop their own careers and lives. Specifically, it applies “Motivation Engineering,”
which is the core technology of the Group, to businesses in areas including career schools and cram schools, to provide
one-stop services to customers from elementary school students to working adults. These services range from helping to
set goals to understanding individual issues and formulating and implementing study plans.
In this segment, segment revenues for the first nine months of 2021 were ¥5,662 million (a 14.7% increase) andsegment income was ¥2,186 million (a 46.2% increase). An overview of operating results by business for the first ninemonths of 2021 is as follows.
Career School Business
The Career School business provides one-stop services for individual career advancement, targeting mainly university
students and working adults, under the five service brands of “Aviva” personal computer schools, “Daiei” qualification
schools, and “Rosetta Stone Learning Center,” “Rosetta Stone Premium Club” and “Hummingbird” foreign language
schools. Previously, the business mainly conducted classroom lectures, but currently provides support of continuing
learning by offering both in-school and online services.
In this business, revenues for the first nine months of 2021 were ¥5,206 million (a 16.4% increase) and gross profit
was ¥1,978 million (a 54.6% 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

Nine months ended
September 30, 2020

Nine months ended
September 30, 2021

YoY change
(%)

4,473
[1,280]
2,416
1,620
436

5,206
[1,978]
2,887
1,856
462

16.4
54.6
19.5
14.6
6.0

Despite the continuation of the state of emergency during the first nine months of 2021, a recovery was apparent incourses in all areas of IT, qualifications and English conversation due to the promotion of online courses. Revenues
increased substantially compared with the same period of the previous year and, due to success in improving the grossprofit margin as a result of the promotion of online courses, gross profit significantly exceeded the level of the previous
year.
Going forward, the business will continue helping to generate results for students by providing value in virtual space
without depending solely on business bases and achieve further growth by providing the IT skill support services
cultivated in the B-to-C domain to individuals in companies.
Cram School Business
Unlike typical cram schools, the Cram School business operates under the business concept of producing numerous“i-Companies” in addition to improving the academic ability of its students. Its services consist of operating “Motivation
Academia” cram schools for junior high and high school students to provide a place where students can not only prepare
for school entrance exams but also develop skills to play a role in society. The business also operates “SS-1,” anindividualized instruction school for students preparing for junior high school entrance exams. The Cram School business
utilizes its assets in programming education and English conversation education to provide a place for students fromelementary school straight through to high school to develop skills that will be of use in society. Like the Career School
business, it now offers both in-school and online services in response to Japan’s state of emergency and new lifestyles.
In this business, revenues for the first nine months of 2021 were ¥459 million (a 1.3% decrease) and gross profit was¥209 million (a 3.0% decrease).
In first nine months of 2021, despite a recovery trend in the number of new enrollees, revenues and gross profit bothdecreased slightly compared with the same period of the previous year as the price per enrollee decreased. This businesshas only one product.

5

By proactively promoting a shift of classes and one-on-one meetings online and applying the know-how in humanresource development that has been cultivated in the Consulting & Cloud business, this business aims to achieve one-stop
services unattainable by conventional cram schools, ranging from elementary to high school students and adults.
Matching Division
The Matching Division provides services under the concept of “engagement matching,” which applies “Motivation
Engineering,” the core technology of the Group, to its personnel placement and temp staff businesses. It creates affinities
between organizations with hiring needs and individuals who want to advance their careers by matching not only thetechnical skill requirements of companies but also the respective characteristics of individuals and companies based on
the Group’s proprietary data. Its main targets are foreign nationals who want to work in Japan, students who want to finda job, employees who want to change jobs and temporary workers.
In this segment, segment revenues for the first nine months of 2021 were ¥14,202 million (a 1.8% decrease) andsegment income was ¥4,663 million (a 1.8% decrease). An overview of operating results by business for the first ninemonths of 2021 is as follows.
Global Personnel Placement & Temp Staff Business
The Global Personnel Placement & Temp Staff business dispatches foreign assistant language teachers (ALTs) of
foreign languages to elementary, junior high and high schools throughout Japan and provides English-language
instruction services on contract. In this business, where barriers to entry are extremely high due to the importance placedon relationships of trust with customers and a company’s track record, the Group has established the predominant
number-one share among private companies. The business is also capturing needs for employment of foreigners throughits business that provides one-stop foreigner recruiting, training and labor support to companies seeking to hire them.
In Japan, reforms of English education by the Ministry of Education, Culture, Sports, Science and Technology(MEXT) are promoting an earlier start for English-language learning. From fiscal 2020, English education starts from thethird grade of elementary school, and is treated as a formal subject from the fifth grade of elementary school. Accordingly,
ALT placement is proceeding rapidly. Meanwhile, because 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 the first nine months of 2021 were ¥9,643 million (a 2.5% increase) and gross profit was¥2,704 million (a 2.0% decrease).
During the first nine months of 2021, revenues increased, despite ongoing restrictions on entry into Japan from theprevious year, as a result of the steady progress 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 inJapan. 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, exceeding 1,300 schools as of September 30, 2021. The business will increase the number of stable repeat
customers and its market share by continuing to improve its brand power.
Domestic Personnel Placement & Temp Staff Business
The Domestic Personnel Placement & Temp Staff business provides solutions in the form of referrals and temp
staffing of the human resources an organization needs to grow. The main businesses include new graduate recruiting andreferral that connects university students looking for employment with company orientation meetings and interviews,
mid-career referral that matches working adults looking to change jobs with companies, and temp staffing that dispatches
personnel for sales, clerical work and other fields. OpenWork Inc., which was added to the scope of consolidation as of
the first three months of 2020, 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 the first nine months of 2021 were ¥4,604 million (a 9.4% decrease) and gross profit
was ¥1,985 million (a 1.5% decrease). Results by product in the Domestic Personnel Placement & Temp Staff businesswere as follows.

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

Nine months ended
September 30, 2020
5,079
[2,017]
3,526
1,553

Nine months ended
September 30, 2021
4,604
[1,985]
3,070
1,534

YoY change
(%)
(9.4)
(1.5)
(12.9)(1.2)

During the first nine months of 2021, although there was a recovery in the number of people dispatched by the temp
staff dispatch business, which was significantly affected by the COVID-19 pandemic, it fell short of the level of the same
period of the previous year, and revenues and gross profit both decreased.
In personnel placement, the number of registered users, employee online reviews and evaluation scores have grownsteadily during the pandemic. By linking the assets held by OpenWork Inc. with the organizational and individual data
assets held by the Group, the business will expedite engagement matching that achieves true mutual understanding andaffinity between organizations and individuals. Specifically, it will promote the further growth of OpenWork Recruiting,which uses a direct recruiting model, by utilizing the customer base of the Organizational Development Division.
Venture Incubation
In addition to its divisions, the Group conducts venture incubation. In venture incubation, the Group provides its
know-how in organizational and personnel consulting in addition to funding, as well as support for growing venturecompanies on an organizational level with the aim of listing their stock. The two main criteria for selection of investees
are (1) sympathy with creating a “Motivation Company” and (2) aim to list stock. Gains on sales and other results
generated from venture incubation are recorded as other components of equity on the consolidated statements of financial
position.

7

(2) Overview of Financial Position for the Nine Months Ended September 30, 2021
Total assets as of September 30, 2021 were ¥30,937 million, a decrease of ¥10,146 million from the end of theprevious year. This was mainly due to factors including a ¥7,957 million decrease in right-of-use assets associated with adecision to relocate the Tokyo integrated office.
Total liabilities as of September 30, 2021 were ¥26,110 million, a decrease of ¥10,056 million from the end of theprevious year. This was mainly due to factors including a ¥8,309 million decrease in lease liabilities associated with adecision to relocate the Tokyo integrated office.
Total equity as of September 30, 2021 was ¥4,827 million, a decrease of ¥89 million from the end of the previous
year. Principal factors included a ¥649 million decrease in capital surplus due to change in ownership interest in
subsidiaries, offset by a ¥739 million increase in retained earnings as a result of recording net income attributable toowners of the parent and other factors.
(3) Overview of Cash Flow for the Nine Months Ended September 30, 2021
Cash and cash equivalents (“cash”) as of September 30, 2021 were ¥4,773 million, a decrease of ¥1,676 million
during the period.
Cash flow during the nine months ended September 30, 2021 was as follows.
Cash Flow from Operating Activities
Net cash provided by operating activities was ¥2,408 million, an increase of ¥896 million compared with the same
period of the previous year. The principal factors decreasing cash were a ¥667 million increase in trade and otherreceivables and a ¥904 million decrease in other cash flow from operating activities compared with the same period of theprevious year, while the principal factors increasing cash included an increase of ¥672 million in income before income
taxes, an increase in trade and other payables of ¥290 million, an increase of ¥411 million in income tax refund, and adecrease of ¥846 million in income taxes paid. The main reasons for the decrease in other cash flow from operating
activities included a ¥224 million increase in prepaid expenses such as license fees for core systems and a ¥347 million
payment for withholding income tax on dividends between Group companies.
Cash Flow from Investing Activities
Net cash used in investing activities was ¥333 million (in the same period of the previous year, net cash provided byinvesting activities was ¥2,169 million). Principal factors included a decrease in cash due to the absence of proceeds fromacquisition of subsidiary stock associated with change in scope of consolidation in the same period of the previous year
(in the same period of 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 provided by financing activities was ¥3,755 million (in the same period of the previous year, net cash usedin financing activities was ¥22 million). The principal factor decreasing cash was the absence of a net change in shortterm financial liabilities that had been recorded in the same period of the previous year (compared with a ¥3,800 million
increase in the same period of the previous year).
(4) Forecast
As announced today (November 12, 2021), the Company has decided that in order to further expedite engagement
matching, which efficiently and effectively achieves true mutual understanding and affinity between organizations andindividuals, it would be best to concentrate management resources on strengthening the domestic personnel placementbusiness in its Matching Division, which includes the domestic temp staff business, and therefore resolved to transfer thedomestic temp staff business of its consolidated subsidiary Link Staffing Inc. to iDA K.K. and entered into an agreement
to that effect. Reassigning human resources that have been hired and trained by the Group, mainly to the domestic
personnel placement business, will support higher profitability and expedite engagement matching.
Based on the above, the Company has decided to treat the domestic temp staff business as discontinued operations in
its consolidated financial statements based on International Financial Reporting Standards (IFRS). Due to the change inclassification, revenues and other items from the relevant business will be deducted from the full-year consolidated
financial results from continuing operations for 2021.
8

As a result, for the fiscal year ending December 2021, the Company forecasts ¥32,300 million in revenues (a year-onyear increase of 5.1%), ¥3,030 million in adjusted operating income (a year-on-year increase of 48.2%), ¥2,020 million in
operating income (a year-on-year increase of 781.2%) and ¥901 million in net income attributable to owners of the parent.
Adjusted operating income is a profit indicator that measures operating results by excluding temporary factors such as
impairment of goodwill, right-of-use assets and fixed assets from operating income.
In addition, gain on the transfer of this business will be recorded in income from discontinued operations.
The Company expects corporate needs for improving employee engagement to continue to grow in 2022 andthereafter. The Company plans to achieve record-high profits in 2022 by establishing support for higher profitability
through this business transfer and other means, in addition to the ongoing driving force of the Consulting & Cloudbusiness.

92. Condensed Consolidated Financial Statements and Main Notes(1) Condensed Consolidated Statements of Financial Position(Millions of yen, rounded down to the nearest million)

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

10

As of
December 31, 2020

As of
September 30, 2021

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

4,773
3,922
260
18
883
9,858

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

705
4,833
9,317
2,440
2,832
780
168
21,07830,937

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

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

11

As of
December 31, 2020

As of
September 30, 2021

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

1,807
1,685
8,606
1,402
471
253
1,976
16,203

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

4,959
4,122
388
301
135
9,907
26,1101,380
1,855(1,733)
3,989(1,731)
3,760
1,157
4,917
41,083

1,380
1,206(1,733)
4,728(1,904)
3,676
1,151
4,827
30,937

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

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

Nine months
ended
September 30,
2020

Nine months
ended
September 30,
2021

26,05615,326
10,729
9,487
208
23
1,427
17
187
31
1,289
439
850

27,31615,31512,000
9,792
62
173
2,097
13
148

773
76
850

1,185
97
1,283

—

1,962
679
1,283

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

7.37
7.37

12

11.30
11.30

Three Months Ended September 30(Millions of yen, rounded down to the nearest million)

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

Three months
ended
September 30,
2020

Three months
ended
September 30,
2021

8,655
5,068
3,586
3,075
166
0
677
10
96
12
603
185
418

8,945
5,216
3,729
3,111
33
37
613
11
60

400
17
418

350
27
377

—

563
185
377

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

3.82
3.82

13

3.34
3.34

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

Nine months
ended
September 30, 2020

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

14

Nine months
ended
September 30, 2021

850

1,283

(944)

(56)

(944)

(56)

(1)

3

(1)
(946)
(95)

3
(52)
1,230

(172)
76
(95)

1,132
97
1,230

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

Three months
ended
September 30, 2020

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

15

Three months
ended
September 30, 2021

418

377

(102)

(89)

(102)

(89)

(0)

(0)

(0)
(103)
315

(0)
(89)
288

297
17
315

260
27
288

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

Equity attributable to owners of the parent

Total equity
attributableto owners of
the parent

Noncontrollinginterests

Total
equity

7,043
773

(10)
76

7,033
850

(946)

(946)

—

(946)

773

(946)

(172)

76

(95)

—

—

—

—

1,050

1,050

(94)

—

—

—

(94)

4

(90)

—

—

—

(566)

—

(566)

—

(566)

—

(37)

—

—

—

(37)

45

8

—

—

—

305

(305)

—

—

—

—
1,380

(132)
1,855

—
(1,733)

(261)
5,952

(305)
(1,282)

(698)
6,172

1,101
1,167

402
7,339

CapitalsurplusTreasurysharesRetainedearnings

Other
componentsof equity

1,380
—

1,987
—

(1,733)
—

5,440
773

(31)
—

—

—

—

—

—

—

—

—

—

—

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

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

Equity attributable to owners of the parent

Total equity
attributableto owners of
the parent

Noncontrollinginterests

Total
equity

3,760
1,185

1,157
97

4,917
1,283

(52)

(52)

—

(52)

1,185

(52)

1,132

97

1,230

—

—

—

(649)

(103)

(753)

—

—

(566)

—

(566)

—

(566)

—

—

—

120

(120)

—

—

—

—
1,380

(649)
1,206

—
(1,733)

(446)
4,728

(120)
(1,904)(1,216)
3,676

(103)
1,151

(1,320)4,827

CapitalsurplusTreasurysharesRetainedearnings

Other
componentsof equity

1,380
—

1,855
—

(1,733)
—

3,989
1,185

(1,731)
—

—

—

—

—

—

—

—

—

(649)

—

Share
capitalJanuary 1, 2021
Net income
Other comprehensive
incomeTotal comprehensive
incomeChange in ownershipinterest in
subsidiaries
Dividends fromsurplusTransfer from othercomponents ofequity to retained
earnings
Total transactions withthe owners
September 30, 202116

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

Cash flow from operating activities
Income before income taxes
Depreciation and amortization
Loss on impairment
Loss (gain) on sales of fixed assets
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 associatedwith a change in consolidation
Proceeds from sale of investment securities
Payments for security deposits and guarantees
Proceeds from refund of security deposits and guarantees
Payments for asset retirement obligations
Proceeds from cancellation of insurance
Other
Net cash provided 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 for acquisition of interests in subsidiaries from
non-controlling interests
Payments of cash dividends
Repayment of lease liabilities
Payments from non-controlling interests
Net cash used in financing activities
Cash and cash equivalents translation adjustment
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the quarter
Cash and cash equivalents at end of the quarter

17

Nine months
ended
September 30, 2020
1,289
2,024
1
—
—

169
(31)
423
16
38
(703)
101
3,329
5
(170)
28
(1,681)
1,512
(175)
—

(530)
2,290
636
(25)
45
(24)

Nine months
ended
September 30, 2021
1,962
2,263
122
(0)
(8)
135
—
(244)
—
(72)
(413)
(802)

2,940
0
(137)
439
(835)
2,408
(155)
0
(655)

(45)
2,169

—
513
(272)
284
(137)
85
3
(333)

3,800
—
(1,683)506(1,486)

—

(90)
(565)
(1,492)
8
(22)
(1)
3,657
2,160
5,817

—

(753)
(567)
(1,454)—(3,755)
3(1,676)
6,449
4,773

(5) Notes to Condensed Consolidated Financial Statements(Significant Accounting Policies)
The significant accounting policies applied in these condensed consolidated financial statements are the same as those
applied in the consolidated financial statements for the previous fiscal year.
Income taxes expense for the nine months ended September 30, 2021 was calculated using the estimated averageannual effective tax rate.
(Notes Regarding Significant Accounting Estimates and Judgements)
In preparing the consolidated financial statements, management makes judgments, estimates and assumptions that
affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. The
results of accounting estimates may differ from actual results.
The estimates and their underlying assumptions are reviewed on an ongoing basis. The effects of a review ofaccounting estimates are recognized in the accounting period in which the estimates are reviewed as well as in future
periods.
Other than a change in accounting estimates of useful life of property, plant and equipment, estimates and estimaterelated judgments that have a significant impact on the condensed consolidated financial statements are the same as thosein the consolidated financial statements for the previous fiscal year.
(Useful Life of Property, Plant and Equipment)
The Group passed a resolution in February 2021 to relocate its Tokyo head office, and the move 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 nine months
ended September 30, 2021 each decreased ¥250 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
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,18

including goodwill, the recoverability of deferred tax assets and other matters based on the information available as of thedate of preparation of these consolidated financial statements.
The financial position and operating results of the Group may be affected by the state of the spread of infection in the
future.
(Changes in Presentation Method)
Consolidated Financial Statements“Right-of-use assets,” which was included in “Property, plant and equipment” under non-current assets in theprevious fiscal year, has been presented independently as of the current fiscal year for a clearer, more realisticpresentation.
The consolidated financial statements for the previous fiscal year have been changed to reflect this change inpresentation method.
As a result, in the consolidated statement of financial position for the previous fiscal year, ¥13,953 million in“Property, plant and equipment” under non-current assets has been restated as ¥1,162 million in “Property, plant andequipment” and ¥12,790 million in “Right-of-use assets.”
In addition, “Lease liabilities,” which were included in “Interest-bearing and other financial liabilities” under current
liabilities and non-current liabilities in the previous consolidated fiscal year, has been presented independently as of thecurrent fiscal year for a clearer, more realistic presentation.
The consolidated financial statements for the previous fiscal year have been changed to reflect this change inpresentation method.
As a result, in the consolidated statement of financial position for the previous fiscal year, ¥9,218 million in “Interestbearing and other financial liabilities” under current liabilities has been restated as ¥7,440 million in “Interest-bearing andother financial liabilities” and ¥1,778 million in “Lease liabilities,” and ¥19,161 million in “Interest-bearing and otherfinancial liabilities” under non-current liabilities has been restated as ¥7,104 million in “Interest-bearing and otherfinancial liabilities” and ¥12,056 million in “Lease liabilities.”(Notes Regarding Assumption of Going Concern)
None applicable(Significant Subsequent Events)
At a Board of Directors meeting held on November 12, 2021, the Company resolved to transfer the domestic temp
staff business of Link Staffing Inc. to iDA K.K. as of January 1, 2022 and entered into an agreement for an absorptiontype split on the same date. After entering into the agreement, the Company decided to treat the business as discontinued
operations.
1. Reason for Business Transfer
The Company decided that in order to further expedite engagement matching, which achieves true mutual
understanding and affinity between organizations and individuals, mainly through OpenWork Inc. in its Matching
Division, it would be best to concentrate management resources on strengthening the domestic personnel placementbusiness of its subsidiary Link Staffing Inc., and therefore resolved to transfer the domestic temp staff business of Link
Staffing Inc. Reassigning all the human resources that have been hired and trained by the Group within the Group to
focus on strengthening the personnel placement business will support higher profitability.
2. Overview of Subsidiary Transferring Business
Name

Link Staffing Inc.

Address (Head Office)Kabukiza Tower 15th floor, 4-12-15 Ginza, Chuo-ku, Tokyo

Representative

Odaka Masayoshi

Business description

Worker dispatch business specializing in sales and retail positions, temp staffing
business for personnel placement, etc.
19Capital¥100 million

Established2005

Main shareholder andequity ratio

Link and Motivation Inc.: 100%

3. Overview of Business Transfer(1) Business to Be Transferred
Domestic temp staff business(2) Reporting Segment That Includes the Business to Be Transferred
Matching Division(3) Business Results for the Past Three Years and Most Recent Business Results(Millions of yen, rounded down to the nearest million)

2019

2018
Revenues

Nine months
ended
September 30, 2021

2020

7,420

6,378

4,614

3,093

Operating income (loss)

109

93

(133)

(30)

Ordinary income (loss)

110

98

(64)

(21)

(4) Assets and Liabilities to Be Transferred
None applicable(5) Schedule
Date of Board of Directors resolution

November 12, 2021

Date of agreement

November 12, 2021

Date of business transfer

January 1, 2022 (scheduled)

4. Overview of Transferee
Name

iDA K.K.

Address

Head Office

Websitehttps://ida-mode.com/company/info/

Representative

Kafuku Shinsuke, Representative Director, President and CEO

Business description

Human resources business specializing in the fashion industry

Capital¥151.9 million

Established1999

Odakyu Southern Tower 7th floor,
2-2-1 Yoyogi, Shibuya-ku, Tokyo

5. Impact of Business Transfer and Outlook
After entering into the agreement, the Company confirmed that the domestic temp staff business will be treated as
discontinued operations in its consolidated financial statements based on International Financial Reporting Standards(IFRS). Due to the change in classification, revenues and other items from the relevant business will be deducted from thefull-year consolidated financial results from continuing operations for 2021. In addition, gain on the transfer of this20business will be recorded in income from discontinued operations, the amount and impact of which is currently being
calculated.

21