Consolidated Financial Results for the Fiscal Year Ending December 31, 2021
[Japanese GAAP]
February 10, 2022
Listed Tokyo Stock Exchange

Listed company name

Frontier Management Inc.

Code number

7038

URL

Representative(Title)Representative Director,
Co-President and Executive Officer(Name) Shoichiro OnishiContact person(Title)Executive Officer, Head ofCompany Planning and
Administration Department(Name) Hiroaki Hamada

TEL

Scheduled date ofcommencement ofdividend payment

March 25, 2022

https://www.frontier-mgmt.com

Scheduled date of the ordinary
general meeting of shareholders

March 24, 2022

Scheduled date to file Securities
ReportMarch 24, 2022

Preparation of supplementarymaterial on financial results: Yes
Financial results briefing: Yes

03-6862-8335(for institutional investors and analysts)(Millions of yen are rounded down)
Consolidated financial results for the fiscal year ending December 31, 1.2021 (January 1, 2021-December 31, 2021)(1) Consolidated Operating Results(Percentages indicate year-on-year changes.)
Net sales
JPY mil.
5,741

%
10.6

End of FY2020

5,192

8.8

(NOTE)
Comprehensive
incomeFY12/2021

336

End of FY2021

Ordinary income

JPY mil.
501

%
△13.7

JPY mil.
514

%
△10.6

580

△12.4

575

△15.2

JPY
mil

Yen
29.70
36.89
FY12/2021(△20.0%)FY12/2020

Fully diluted
Net income per share

Net income per share
End of FY2021
End of FY2020(Reference) Equity inearnings of affiliates

Operating income

6

JPY
mil

Yen
29.24
36.05
FY12/ 2020

420

Net income attributable toowners of parent
JPY mil.
%
338
△19.5
420
JPY
mil

△2.1

(△2.4%)

Shareholders'
Total assets
Net sales
equityOrdinary income Operating income
Net income ratio
ratio
margin
%
%
%
14.0
13.5
8.7
18.1
16.3
11.2
7 JPY
mil

(NOTE)We conducted a 2-for-1 stock split on January 1, 2021. Net income per share and diluted net income per share are calculated as if the stock split had
taken place at the beginning of the previous fiscal year.

(2) Consolidated Financial Position
Total assets
JPY mil.
End of FY2021
3,819
End of FY2020
3,792
Reference:
FY12/2021
2,407
Shareholders' equity

JPY
mil

Net assets
JPY mil.
2,454
2,448
FY12/2020

Equity ratio
%
63.0
64.6

Net assets per share
Yen
215.40213.052,448 JPY
mil

(NOTE)We conducted a 2-for-1 stock split on January 1, 2021. Net assets per share are calculated on the assumption that the stock split was implemented at the
beginning of the previous fiscal year.

(3) Consolidated Cash Flows
Operating

InvestingCash and cash equivalents
end of fiscal year

Financing

JPY mil.

JPY mil.

JPY mil.

JPY mil.

End of FY2021

316

△31

△404

1,784

End of FY2020

456

△59

△230

1,899

2.Dividend Status
Dividend per share
End of First
quarter

End ofsecondquarter

End of thethird quarter

Term end

Total dividend
amount(Total)Total

Ratio of
Dividend
dividends topayout ratio
net assets(Consolidated)(consolidated)

Yen

Yen

Yen

Yen

Yen

JPY mil.

%%End of FY2020

-

0.00

-

24.00

24.00

137

32.5

5.9

End of FY2021

-

0.00

-

10.00

10.00

113

33.7

4.7

End of FY2022
0.00(forecast)(NOTE) 1. We plan to pay a dividend for the year ending December 31, 2022, but we have not yet decided on the expected amount of year-end dividend.
2. We conducted a 2-for-1 stock split on January 1, 2021. For the year ended December 31, 2020, the actual amount of dividends prior to the stock split
is stated.

3.Forecasts for the fiscal year ending December 31, 3.2022 (January 1, 2022 to December 31, 2022)(Percentages indicate year-on-year changes.)
Net sales

Full year

JPY
mil.
7,000

Operating income
%

21.9

JPY
mil.
800

%
59.6

Ordinary income
JPY
mil.
800

%
55.5

Attributable toowners of parent
Net income
JPY
mil.
500

Per share
Net income

%

Yen

47.6

43.88

(NOTE)Due to the timing of recording sales of incentive fees in the Financial Advisory Business, the Group's performance fluctuates significantly during the
fiscal year, making it difficult to calculate consolidated earnings forecasts for the second quarter (cumulative) and managing earnings for the fiscal year.
Accordingly, the Group only announces full-year earnings forecasts.

※ Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries accompanied by changes in the scope of
consolidation): None
(2) Changes in accounting policies and changes or restatement of accounting estimates① Changes in accounting policies due to revisions to accounting standards, etc.: None
② Changes in accounting policies other than ①: None
③ Changes in accounting estimates: None
④ Restatement of revisions: None
(3) Number of shares of common stock outstanding① Number of shares issued at the end of theperiod (including treasury stock)② Number of treasury stock at the end of theperiod③ Average number of shares during the period

FY12/2021

11,418,398

Shares

FY12/2020

11,555,800

Shares

FY12/2021

25,819

Shares

FY12/2020

63,080Shares

FY12/2021

11,404,286

Shares

FY12/2020

11,397,504

Shares(NOTE)We conducted a 2-for-1 stock split on January 1, 2021. The number of outstanding shares at the end of the period (including treasury shares), thenumber of treasury shares at the end of the period, and the average number of shares during the period have been calculated as if this stock split
had taken place at the beginning of the previous fiscal year.

(Reference) Summary of Non-consolidated Financial Results
Non-consolidated results for the year ending December 31, 1.2021 (January 1, 2021 to December 31, 2021)(1) Explanations of Non-Consolidated Results of Operation(Percentages indicate ear-on-year changes.)
Net sales
Operating income
Ordinary income
Net income
End of FY2021
End of FY2020

JPY mil.
5,732
5,188

%
10.5
8.9

Net income per share
End of FY2021
End of FY2020

Yen
30.29
36.24

JPY mil.
512
569

%
△10.0
△13.2

JPY mil.
513
556

%
△7.9
△15.7

JPY mil.
345
413

%
△16.4
△1.0

Fully diluted
net income per share
Yen
29.82
35.42

(NOTE)We conducted a 2-for-1 stock split on January 1, 2021. Net income per share and diluted net income per share are calculated as if the stock split had
taken place at the beginning of the previous fiscal year.

(2)Non-Consolidated Financial Position
Total assets
Net assets
JPY mil.
JPY mil.
End of FY2021
3,800
2,429
End of FY2020
3,759
2,414
Reference:
FY12/2021
2,382 JPY mil.
FY12/2020
Shareholders' equity

Equity ratio
%
62.7
64.2
2,414 JPY mil.

Net assets per share
Yen
213.24210.09(NOTE)We conducted a 2-for-1 stock split on January 1, 2021. Net assets per share are calculated on the assumption that the stock split was implemented at the
beginning of the previous fiscal year.

※ This financial results report is not subject to the audit by a certified public accountant or an auditing firm.
※ Explanations and other special notes concerning the appropriate use of business performance forecasts(Cautionary Statement with Respect to Forward-Looking Statements)
The earnings forecasts and other forward-looking statements herein are based on information currently available to us andcertain assumptions that we believe to be reasonable, and are not intended to guarantee the achievement of the forecasts.
Actual results may differ materially from the forecast depending on a range of factors. Please refer to "1. Overview ofOperating Results, etc., (4) Future Outlook" on page 3 of the attached materials for the assumptions for the forecasts and cautions
regarding the use of the forecasts.

○Accompanying Materials – Contents
1. Overview of Financial Results, etc. …………………………………………………………………………………………

2(1) Overview of Operating Results for the Fiscal Year………………………………………………………………………

2(2) Overview of Financial Position for the Fiscal Year………………………………………………………………………

2(3) Overview of Cash Flows for the Fiscal Year……………………………………………………………………………...

3(4) Future outlook …................................................................................................................. ...............................................

3

2.Basic Concept to Selection of Accounting Standards…...........................................................................................................

4

3.Consolidated Financial Statements……………………………………………………………………………………………

5(1) Consolidated Balance Sheets ….............................................................................................................. ...........................

5(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income…………………………

7

Consolidated Statements of Income…………………………………………………………………………………

7

Consolidated Statement of Comprehensive Income …...............................................................................................

8(3) Consolidated Statements of Shareholders’ Equity…..........................................................................................................

9(4) Consolidated Statements of Cash Flows…………………………………………………………………………………

11(5) Notes to Consolidated financial statements …...................................................................................................................

12(Notes on the Going Concern) ....................................................................................... ..................................................

12(Additional Information) ............................................................................................................................................. ...

12(Segment Information) ……………………………………………………………………………………………........

12(Per Share Information) ................................................................................................................................................. ..

12(Significant Subsequent Events) .....................................................................................................................................

13

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1. Overview of Financial Results, etc.
(1) Overview of Operating Results for the Fiscal Year
During the fiscal year (from January 1, 2021 to December 31, 2021), the Japanese economy continued to face severe
conditions due to the impact of the new Corona Virus infectious disease (COVID-19). The outlook is unclear, as the vaccination
progresses and the spread of infections is expected to converge and economic activities are expected to normalize. However, there
are concerns about the negative impact on the economy due to the emergence of new variant stocks, a shortage ofsemiconductors, and an increase in logistics costs.
Under such a company environment, our group continued to focus on proposals for one-stop solutions to corporate issues by
providing comprehensive services that leverage management consulting, financial advisory, revitalization support, and otherfunctions.
As a result of the above, the Group's financial results for the fiscal year were JPY5,741,654 k (up 10.6% from the previous
fiscal year) as a result of a significant increase in sales in the Management Consulting Business due to the utilization of thehuman resources of the Revitalization Support Business in the Management Consulting Business, despite a decrease in sales in
the Revitalization Support Business compared to the previous fiscal year due to the fact that the revitalization support needs ofcompanies in financial difficulties did not materialize due to the continuation of emergency loans by financial institutions tocompanies. In addition, personnel expenses have increased due to aggressive recruitment that has been ongoing since last year,
but amid the ongoing expansion of earnings through increased staff, operating income was JPY501,285 k (down 13.7%), ordinary
income was JPY514,576 k (down 10.6%), and profit attributable to owners of parent was JPY338,707 k (down 19.5%).
An overview of operating results by business segment is as follows.
< Management Consulting Business >The business results of the management consulting business for the current consolidated fiscal year were JPY3,280,302 k in net
sales (up 35.7%). In the fiscal year, the positive effect of an increase in personnel was realized, and the continuation of large-scaleclient projects also contributed. In addition, the steady start-up of the Digital Strategy Office, which was established during the
fiscal year, resulted in an accumulation of sales. As a result, net sales in the Management Consulting Business increased
significantly.
< Financial Advisory Business >The financial advisory business posted net sales of JPY1,725,210 k for the fiscal year (down 3.0%). In the fiscal year, there
were no large-scale M&A deals carried over from the previous fiscal year that were originally anticipated, and net sales declined
slightly compared with the previous fiscal year.
< Revitalization Support Business >The results of the Revitalization Support Business for the current fiscal year were net sales of JPY662,331 k (down 29.9%). In
the fiscal year, the Company had expected that the need for regeneration support would expand due to the impact of the newCorona contagious disease. However, although business performance was deteriorating due to the continuation of emergency
loans to companies by financial institutions, many companies had no cash flow tightening, and the need for regeneration support
was not expanding more than anticipated at present. As a result, net sales decreased compared with the previous fiscal year.
< Other Business >The results of the Other Business for the fiscal year were net sales of JPY73,810 k (up 37.3%).
(2) Overview of Financial Position for the Fiscal Year
(Assets)
Total assets at the end of the fiscal year were JPY3,819,274 k (the end of the previous fiscal year was JPY3,792,731 k),increased of JPY26,542 k from the end of the previous fiscal year. Current assets were JPY2,998,206 k (the end of the previous
fiscal year was JPY2.994,271 k) and non-current assets were JPY821,068 (the end of the previous fiscal year was JPY798,459
k). Current assets increased by JPY3,934 k and non-current assets increased by JPY22,608 K compared with the end of theprevious fiscal year. The main changes in current assets were an increase of JPY110,731 k in notes and accounts receivabletrade, an increase of JPY8,473 k in operational investment securities, and a decrease of JPY114,882 k in cash and depo

-2-

sits. The main changes in non-current assets were an increase of JPY53,119 k in deferred tax assets and a decrease of
JPY27,703 k in other investments and other assets due to a decrease in long-term prepaid expenses.
(Liabilities)
Total liabilities at the end of the fiscal year were JPY1,365,207 k (the end of the previous fiscal year was JPY1,344,132 k),
an increase of JPY21,075 k from the end of the previous fiscal year. Current liabilities were JPY1,282,944 k yen (the end of theprevious fiscal year was JPY1,261,874 k) and non-current liabilities were JPY82,262 k (the end of the previous fiscal year was
JPY82,257 k). Current liabilities increased by JPY21,070 k and non-current liabilities increased by JPY4 k compared with theend of the previous fiscal year. The main factors of the change in current liabilities were an increase of JPY31,045 k in income
taxes payable, an increase of JPY47,277 k in provision for bonuses, and a decrease of JPY53,213 k in accounts payable-other.
(Net Assets)
Net assets at the end of the fiscal year were JPY2,454,066 k (the end of the previous fiscal year was JPY2,448,598 k), an
increase of JPY5,467 k from the end of the previous fiscal year. This was mainly due to the recording of profit attributable toowners of parent of JPY338,707 k and the recording of stock-based compensation expenses of JPY74,161 k, while there was adecrease due to the shareholder of dividends of JPY137,912 k from retained earnings and the purchase of treasury stock of
JPY270,080 k.
(3) Overview of Cash Flows for the Fiscal Year
Cash and cash equivalents (hereinafter referred to as "funds") at the end of the fiscal year decreased by JPY114,882 k from theend of the previous fiscal year to JPY1,784,218 k.
The status of cash flows and their factors for the current consolidated fiscal year are as follows.
Cash flows from operating activities
Net cash provided by operating activities was JPY316,813 k (net cash provided by operating activities was JPY456,102 k inthe previous fiscal year). This was mainly attributable to an increase in income before income taxes and minority interests of
JPY514,576 k and stock-based compensation expenses of JPY102,189 k, and a decrease in income taxes paid of JPY204,740 k
and an increase in notes and accounts receivable-trade of JPY109,713 k.
Cash flows from investing activities
Net cash used in investing activities was JPY31,524 k (net cash used of JPY59,305 k in the previous fiscal year). This was
mainly due to purchase of property, plant and equipment of JPY25,876 k.
Cash flows from financing activities
Net cash used in financing activities was JPY404,765 k (net cash used of JPY230,684 k in the previous fiscal year). This was
mainly due to dividend payments of JPY137,880 k and purchase of treasury stock of JPY270,080 k.
(4) Future outlook
In the 16th fiscal year ending December 2022, we will maintain our medium-term management policy of achieving the targets
for the fiscal year ending December 2023 (sales of JPY8,700 m, operating income margin of 20% and ROE20% or more) in the"Mid-term Management Plan for the Fiscal Year 2021-2023" announced on February 9, 2021. We will continue to work hard as
the second year of the Mid-term Management Plan.
Priority measures in the fiscal year ending December 2022 include: (1) establishing an organizational coverage system forbusiness corporations to increase sales across the company, (2) enhancing branding (raising the name of our front members
through our FRONTIER EYES ONLINE, webinars, magazines, and books publishing, etc.), (3) enhancing our investment
business (an investment business involving the dispatch of management personnel through a new investment company, which
was announced on February 10, 2022), and (4) improving the working environment for employees (including the creation of aworking environment in which diverse human resources can work, the suppression of overtime work, the elimination ofharassment, and training for management).
In order to realize these priority measures, in the Management Consulting Business, we have strengthened our consulting
services in the digital transformation (DX) field and have begun providing comprehensive SR/IR strategy advice to increase thecorporate value of our customers, and we have already achieved results. We are also building a system to provide new solutions,-3-

such as carbon neutral response and portfolio restructuring, to increase the corporate value of the manufacturing industry. In
addition, we have established a system to support management execution in the overseas business expansion of Japanesecompanies and support business investment and the dispatch of managers from the entry phase to the growth phase of overseas
companies into the Japanese market.
In addition, in January 2022, we welcomed Celebrain Corporation. to our Group, which now has personnel consulting
functions.
In the Financial Advisory Business, the M&A market is expected to remain brisk, so we will also aim to steadily expand ourbusiness. In particular, for cross-border M&A to cultivate overseas markets, we have become a full member of CFI (Corporate
Finance International: an M&A firm that operates in more than 20 countries around the world, mainly in Europe), and havebecome more accessible to information on trading candidates for overseas companies than in the past, thereby strengthening ourcross-border M&A functions.
In the revitalization support business, it is anticipated that the need for regeneration support will increase after the outbreak of
the new Corona Virus infections converges, and the Group is strengthening its system to respond to this need. Until therevitalization support needs begin to fully fledged, the Group is working to maximize earnings by allocating human resources tothe management consulting business.
In addition to the existing businesses mentioned above, we plan to commence an investment business involving the dispatch ofmanagement personnel from April 2022 onward. In this business, we will conduct investment businesses aimed at enhancing thelong-term corporate value of the companies in which we invest. We believe that this will enable us to grow over the medium tolong term by transforming the business models of investee companies and reorganizing the industry, thereby solving social issues.
In addition, the investment business of this investment subsidiary is, in principle, assumed to be subject to our consolidated
accounting by the investee companies, and we believe that accelerating the scale expansion of our group will also contribute toenhancing shareholder value.
Based on the above, the forecasts for the next fiscal year are for net sales of JPY7,000,000 k (up 21.9% from the current fiscal
year), operating income of JPY800,000 k (up 59.6%), ordinary income of JPY800,000 k (up 55.5%), and profit attributable toowners of parent of JPY500,000 k (up 47.6%).

2.Basic Concept to Selection of Accounting Standards
The Group prepares its consolidated financial statements in accordance with Japanese GAAP, considering the comparability ofconsolidated financial statements between periods and between companies. With regard to the adoption of International Financial
Reporting Standards, the Company's policy is to respond appropriately, taking into account various domestic and overseas
circumstances.

-4-

3.Consolidated Financial Statements(1) Consolidated Balance Sheets(Thousands of yen)
End of fiscal year
(As of December 31, 2020)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable
Operational investment securities
Other
Allowance for doubtful accounts
Total current assets
Fixed assets
Property, plant and equipment
Buildings, net
Tools, furniture and fixtures, net
Total property, plant and equipment
Intangible assets
Software
OthersTotal intangible assets
Investments and other assets
Investment securities
Stocks of subsidiaries and affiliates
Lease deposits
Deferred tax assets
Other
Total investments and other assets
Total noncurrent assets
Total assets-5-

End of fiscal year
(As of December 31, 2021)

1,899,100
962,644
1,364
146,795△15,633
2,994,271

1,784,218
1,073,376
9,837
147,710△16,9362,998,206

198,844
19,951
218,795

193,854
14,473208,328

11,043102
11,145

11,267102
11,36956,80037,127211,126
224,236
39,228568,518
798,459
3,792,731

56,80043,633
212,055
277,356
11,524
601,370821,068
3,819,274

(Thousands of yen)
End of previous fiscal year
(As of December 31, 2020)
Liabilities
Current liabilities
Accounts payable
Accounts payable-other
Income taxes payable
Provision for bonuses
Provision for directors' bonuses
Provision for shareholder benefit program
Other
Total current liabilities
Long-term liabilities
Asset retirement obligations
Total noncurrent liabilities
Total liabilities
Net assets
Shareholders' equity
Paid-in Capital
Capital surplus
Retained earnings
Treasury stock
Total shareholders' equity
Other accumulated comprehensive income
Foreign currency translation adjustment
Total accumulated other comprehensive income
Stock acquisition right
Total net assets
Total liabilities and net assets-6-

End of current fiscal year
(As of December 31, 2021)

59,407
147,912228,587505,7361,000
319,230
1,261,874

45,424
94,699259,633
553,014
7,079
323,095
1,282,944

82,257
82,257
1,344,132

82,26282,262
1,365,207

163,530
835,220
1,496,027△58,1632,436,614

178,723558,745
1,696,822△36,575
2,397,717

11,984
11,9842,448,598
3,792,731

9,380
9,380
46,9692,454,066
3,819,274

(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income(Consolidated Statement of Income)(Thousands of yen)
End of previous fiscal year
(January 1, 2020
to December 31, 2020)
Net sales
Cost of sales
Gros profit
Selling, general and administrative expenses
Salaries and allowances
Provision for bonuses
Provision for directors' bonuses
Retirement benefit expenses
Provision of allowance for shareholder benefit
program
Transfer of allowance for doubtful accounts
Other
Cost of sales and totals general administrative
expenses
Operating income
Non-operating income
Interest income
Equity in earnings of affiliates
Insurance dividend income
Income from insurance claim
Administrative fees received
Subsidy from Government etc.
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expense
Market change costs
Charges for stock compensation
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income
Income before income taxes
Income taxes
Income taxes-deferred
Total income taxes
Net income
Net income attributable to owners of parent-7-

End of current fiscal year
(January 1, 2021
to December 31, 2021)

5,192,527
2,083,943
3,108,583

5,741,654
2,247,959
3,493,695

1,013,018
237,237
1,000
19,452

1,302,744
269,041
23,174

-

7,079

1,981
1,255,088

1,303
1,389,067

2,527,778

2,992,409

580,805

501,285

78
7,255
968
72
2,268
2,759
52
13,456

125
6,506
1,125
2,268
686
6,751
239
17,702667
17,376328
256
18,628575,633
575,633
204,444△49,326
155,118
420,515420,515

1,253
2,902
256
4,411
514,576
514,576
228,988△53,119
175,868
338,707
338,707

(Consolidated Statements of Comprehensive Income)(Thousands of yen)
End of previous fiscal year
(January 1, 2020
to December 31, 2020)
Net income
Other comprehensive income
Foreign currency translation adjustments
Total other comprehensive income
Comprehensive income(Comprehensive income attributable to)Comprehensive income attributable to owners of theparentComprehensive income attributable to non-controllinginterests-8-

End of current fiscal year
(January 1, 2021
To December 31, 2021)

420,515

338,707△210△210
420,304△2,603△2,603
336,103420,304

336,103--

(3)Consolidated Statements of Shareholders’ Equity
Previous fiscal year (January 1, 2020, to December 31, 2020)(Thousands of yen)
Shareholders' equity
Paid-in Capital
Opening balance

Capital surplus

158,137

808,967

5,392

5,392

Retained earnings
1,206,655

Treasury stock△613

Total shareholders'equity2,173,146

Change during the year
Issuance of new shares(exercise of subscription rights to shares)
Dividends
Net income attributable to owners of parent

10,785△131,143△131,143

420,515420,515

Purchase of treasury stock
Disposal of treasury stock

20,860△112,127△112,127

54,57775,438Net changes of items other thanshareholders' equity(Net)
Total changes during the period
Closing Balance

5,392

26,253289,372△57,550

263,468

163,530

835,220

1,496,027△58,1632,436,614

Other accumulated comprehensive income

Opening balance

Foreign currencytranslation
adjustments

Total
other
accumulatedcomprehensive
income12,194

12,194

Total net assets

2,185,341

Change during the year
Issuance of new shares(exercise of subscription rights to shares)

10,785

Dividends△131,143

Net income attributable to owners of parent

420,515

Purchase of treasury stock△112,127

Disposal of treasury stock

75,438Net changes of items other thanshareholders' equity
(Net)

△210

△210

△210

Total changes of items during the period

△210

△210

263,257

Closing Balance

11,984

11,9842,448,598-9-

Current fiscal year (from January 1, 2021 to December 31, 2021)(Thousands of yen)
Shareholders' equity
Paid-in Capital
Opening balance

Capital surplus

163,530

835,220

1,597

1,597

Retained earnings

Total shareholders'equityTreasury stock

1,496,027

2,436,614△58,163

Change during the year
Issuance of new shares(exercise of subscription rights to shares)
Dividends
Net income attributable to owners of parent

3,195△137,912△137,912

338,707

338,707

Purchase of treasury stock
Retirement of treasury stock
Restricted stock awards△291,668△270,080△270,080

291,668-

13,596

13,59627,192

Total changes of items during the period

15,193△276,474

200,794

21,588△38,897

Closing Balance

178,723558,745

1,696,822△36,575

2,397,717

Net changes of items other thanshareholders' equity (Net)

Other accumulated comprehensive income
Foreign currencytranslation
adjustments
Opening balance

Total
other
Stock acquisition rightaccumulatedcomprehensive
income11,984

11,984-

Total net assets

2,448,598

Change during the year
Issuance of new shares(exercise of subscription rights to shares)

3,195

Dividends△137,912

Net income attributable to owners of parent

338,707

Purchase of treasury stock△270,080

Retirement of treasury stock-

Restricted stock awards
Net changes of items other thanshareholders' equity (Net)
Total changes during the period
Closing Balance

27,192△2,603△2,603

46,96944,365△2,603△2,603

46,969

5,467

9,380

9,380

46,9692,454,066- 10 -

(4) Consolidated Statements of Cash Flows(Thousands of yen)
End of previous fiscal year
(January 1, 2020
to December 31, 2020)
Net cash provided by (used in) operating activities
Income before income taxes
Depreciation and amortization
Share of investment (loss) of entities accounted forusing equity method (△: profit)
Charges for stock compensation
Increase (decrease) in accrued bonuses
Increase (decrease) in provision for directors' bonuses(△)
Increase (decrease) in provision for shareholder benefit
program (△)
Increase (decrease) in allowance for doubtful accounts(△)
Interest income
Interest expense
Decrease (△) in notes and accounts receivable-trade
Decrease (△) in operational investment securities
Increase (△) in notes and accounts payable-trade
Increase (decrease) in accounts payable-other (△)
Other
Sub totalInterest received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flow from investing activities
Purchases of property, plant and equipment
Purchase of intangible assets
Purchases of investment securities
Payments for lease and guarantee deposits
Cash flow from investing activities
Cash flow from financing activities
Purchase of treasury stock
Cash dividends paid
Proceeds from exercise of stock options
Cash flow from financing activities
Effect of exchange rate changes on cash and cash
equivalents
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period- 11 -End of current fiscal year
(January 1, 2021
to December 31, 2021)

575,633
38,694

514,576
36,478△7,255△6,506△5,810102,189
47,277△24,098△1,000

-

7,079

1,981

1,303

△78
667
△267,373
55,03040,75650,446132,016
590,60978△667△133,918
456,102△125
1,253△109,713△8,473△14,741△51,600
4,685
522,681125△1,253△204,740
316,813△1,767△707△56,800△31△59,305△25,876△4,800△847△31,524△112,127△129,342
10,785△230,684△270,080△137,880
3,195△404,765

△246

4,593

165,865△114,882

1,733,235
1,899,100

1,899,100
1,784,218

(5) Notes to Consolidated financial statements(Notes on the Going Concern Assumption)
Not applicable.
(Additional Information)(Accounting Estimate of the Impact of Infectious Disease of COVID-19)
With respect to the status of the COVID-19, we make accounting estimates, such as the recoverability of deferred tax
assets, based on currently available information, assuming that current conditions will continue for at least FY2022.
As a consequence, we are not aware of any material impact on the valuation of our accounting estimates; however, due tothe highly uncertain impact of the spread of the COVID-19, our financial condition and results of operations may be
impacted depending on the future..
(Segment Information)
Disclosure is omitted because the business segments of the Group are a single segment.
(Per Share Information)
End of previous fiscal year
(January 1, 2020
to December 31, 2020)

End of current fiscal year
(January 1, 2021
to December 31, 2021)

Net assets per share

JPY 213.05

JPY 215.40

Net income per share

JPY 36.89

JPY 29.70

Net income-diluted

JPY 36.05

JPY 29.24(NOTE)1. We conducted a 2-for-1 stock split on January 1, 2021. Net assets per share, net income per share and diluted net income
per share are calculated as if this stock split had taken place at the beginning of the previous fiscal year.
2. The basis for calculating net income per share and diluted net income per share is as follows:
End of previous fiscal year
(January 1, 2020
to December 31, 2020)

End of current fiscal year
(January 1, 2021
to December 31, 2021)

420,515

338,707

Net income per share
Net income attributable to owners of parent(Thousands of yen)Amount not attributable to common stock(Thousand yen)
Net income attributable to owners of parent
attributable to common stock (Thousand yen)
Average number of shares of common stock
outstanding during the period (shares)-

Net income-diluted
Adjustment of net income attributable to owners ofparent (Thousands of yen)
Increase in common stock (shares)(Stock acquisition rights (shares))
Explanation of residual stock not included in
calculation of diluted net income per share due to lackof dilutive potential- 12 -

420,515

338,707

11,397,504

11,404,286--

264,812(264,812)

177,288(177,288)--(Significant Subsequent Events)(Business Combination through Acquisition)
At a meeting of the Board of Directors held on December 27, 2021, we resolved to acquire the shares of Celebrain Corporation.
and make it a consolidated subsidiary. On the same day, we concluded a share transfer agreement and acquired the shares on January
14, 2022.
(1) The outline of the Business Combination①Name of the purchase company and the contents of its business
Name of purchase company: Celebrain Corporation
Business: Human Resources Strategy Consulting, Human Resources Development and Education Training, and HR
Technology Consulting②Main reasons for the business combination
In HR consulting, there is growing demand from clients who face issues such as the promotion of work style reforms
and retention due to a shortage of human resources. By providing HR-related consulting functions as an integrated solution
for our group, we can realize the enhancement of our functions as a comprehensive consulting firm.
In addition, HR consulting will enable us to transform our clients' corporate culture from the perspective of "people" andenhance our ability to realize strategies. At the same time, by broadly exploring CXO candidates from our networks, wewill be able to provide management personnel that are suitable for our clients.
In addition, we will be able to develop the HR Tech domain, which is growing through collaboration between our
Digital Strategy Office and HR Consulting.
We believe that we can expect significant synergies between the two companies through this matter, and we will further
accelerate our growth strategy as a comprehensive consulting firm for the Group.
③Date of business combination
January 14, 2022
④Legal form of business combination
Acquisition of shares⑤Name following business combination
Celebrain Corporation⑥Percentage of voting rights acquired
60%⑦Main grounds for deciding on the purchase company
This is due to our acquisition of shares in exchange for cash.
(2) Acquisition cost of the purchase company and breakdown by type of consideration
We will refrain from disclosing the information depending on the intention of the other party.
(3) Details and amount of major acquisition-related expenses
Advisory fees, commissions, etc. JPY10,651 k(4) Goodwill, reason for recognizing goodwill, amortization method and amortization termThis is not fixed at this time.
(5) The amount of assets accepted and liabilities assumed on the date of the Business Combination, and major breakdown thereofThis is not fixed at this time.

- 13 -

(Establishment of a Subsidiary)
We hereby announce that at the Board of Directors meeting held on February 10, 2022, we resolved to establish a subsidiary
upon the commencement of a new business.
(1) Objective of establishing a subsidiary
Over the past few years, the global society has undergone major changes. Japanese companies are also required to reformtheir business models, such as responding to environmental issues such as carbon neutrality, responding to productivity
improvements such as digitization, responding to the revitalization of local economies, which are facing issues such as thedeclining birthrate and aging population and business succession issues, and responding to the after covid-19 convergence.
We believe that in order to solve these important corporate issues and solve social issues, it is necessary to establish an
investment company that will enable investment in the medium to long term and involve the dispatch of management personnel.
The newly established investment subsidiary does not invest for the purpose of short-term return on investment, but rather
directly invests capital raised in common stock or class shares from financial institutions and operating companies with the aimof enhancing corporate value over the long term. This will enable the company to grow by reforming the business model of theinvestee company and reorganizing the industry over the medium to long term.
In addition to the Investment Company, in principle, the Investment Company's portfolio companies are also assumed to be
subject to our consolidated accounting. Accordingly, we anticipate that the size of our group will be much larger than it is now,and we believe that accelerating the scale expansion of our group while significantly strengthening our investment business will
also contribute to enhancing our shareholder value.
(2) Overview of newly established subsidiaries
(1)

Name

Frontier Capital Co., Ltd. (tentative name)(2)

Address

3-2-1, Roppongi, Minato-ku, Tokyo

Job Title/Name of

Shoichiro Onishi Representative Director

Representative

Masahiro Matsuoka Representative Director

(3)
(4)

Descriptionof Businesses

Investment business involving the dispatch of management personnel
Undecided(Note 1) Although we plan to invest a total of approximately JPY1 billion, the amount to(5)

Paid-in Capital

be included in capital has not been determined.
(Note 2) We plan to raise funds totaling 20 billion yen from financial institutions,operating companies, etc. that have agreed with the purpose of establishing a new
subsidiary, but the amount to be included in capital has not been determined.

(6)

Date of Incorporation

April 1, 2022 (planned)(7)

Fiscal year end

December 31 (planned)

Major shareholders(8)and percentage ofsharesFrontier Management Inc. (percentage of voting rights is undecided, but we hold amajority).
(NOTE)We plan to issue common stock or class shares to financial institutions andoperating companies that have agreed with the purpose of establishing a new subsidiary.
Capital relationship

Listed companies and(9)

the companies
concerned
Relationship with

Personnel
relationship
Business relationship

Our Subsidiary
Shoichiro Onishi and Masahiro Matsuoka, Representative
Directors of us, will also serve as Representative Directors of therelevant companies.
There is no business relationship with us because newly
established subsidiaries have not commenced operations.

- 14 -