DIP : Financial Results for the Fiscal Year Ended February 28, 2021 (Japanese GAAP, Consolidated)

Financial Results for the Fiscal Year Ended February 28, 2021

(Japanese GAAP, Consolidated)

April 7,

2021

Name of company:

DIP Corporation

Stock exchange listing:

Tokyo Stock Exchange

Stock code:

2379

URL:

https://www.dip-net.co.jp/

Representative:

Hideki Tomita, Representative Director, President and CEO

Contact:

Haruhiko Arai, Corporate Officer, CFO, Head of Corporate Management Group

Phone: [phone]

Scheduled date of general shareholders meeting:

May 26, 2021

Dividend payment date:

May 27, 2021

Scheduled date of filing financial statements:

May 27, 2021

Supplementary documents to the financial results:

Available

Financial results briefing:

Scheduled (for institutional investors and analysts)

(All figures are rounded down to the nearest million yen)

1. Consolidated Operating Results for FY2021 (from March 1, 2020 to February 28, 2021)

(1) Consolidated business performance

(Percentage figures indicate year-on-year change)

Net Income

Sales

Operating Income

Ordinary Income

Attributable to

Owners of Parent

¥ million

%

¥ million

%

¥ million

%

¥ million

%

FY2021

32,494

-

7,312

-

6,501

-

607

-

FY2020

-

-

-

-

-

-

-

-

(Reference) Comprehensive income:

FY2021

¥594 million (-%)

FY2020

- million (-%)

Net Income

Diluted Net Income

Return on Equity

Return on Assets

Operating Income to

per Share

per Share

Sales Ratio

¥

¥

%

%

%

FY2021

11.09

-

2.0

18.1

22.5

FY2020

-

-

-

-

-

(Reference) Equity in earnings of affiliates:

FY2021

¥(741) million

FY2020

- million

Note: Figures for FY2020 and year-on-year changes are not shown since consolidated accounting has been adopted from FY2021. The calculations of Return on Equity and Return on Assets for FY2021 are based on year-end shareholders' equity and year-end total assets, respectively. Diluted net income per share for FY2020 is not disclosed due to the absence of dilution effects although dilutive shares exist.

(2) Consolidated financial position

	Total Assets		Net Assets	Shareholders' Equity Ratio		Net Assets per Share
	¥ million		¥ million	%		¥
FY2021		35,869		31,178	84.4		547.13
FY2020		-		-	-		-
(Reference) Shareholders' equity:	FY2021	¥30,269 million	FY2020 - million

Note: Figures for FY2020 are not shown since consolidated accounting has been adopted from FY2021.

(3) Consolidated cash flows

	Cash Flows from	Cash Flows from	Cash Flows from	Balance of Cash and Cash
	Operating Activities	Investing Activities	Financing Activities	Equivalent at End of Period
	¥ million	¥ million	¥ million	¥ million
FY2021	5,905	(9,643)	(3,041)	12,462
FY2020	-	-	-	-

Note: Figures for FY2020 are not shown since consolidated accounting has been adopted from FY2021.

2. Dividends

			Annual Dividends			Total Dividend	Dividend	Ratio of
					Dividends to
								Payment	Payout Ratio
	End of Q1		End of Q2	End of Q3		Year-end	Total	Net Assets
	¥		¥	¥		¥	¥	¥ million	%	%
FY2020		-	27.00	-		29.00	56.00	3,138	-	-
FY2021		-	27.00	-		29.00	56.00	3,195	505.0	10.2
FY2022 (forecast)		-	27.00	-		34.00	61.00		56.0
		~52.00	~79.00		~68.2

Note: The dividend payout ratio and ratio of dividends to net assets for FY2020 are not shown since consolidated accounted has been adopted from FY2021.The ratio of dividends to net assets for FY2021 is based on year-end consolidated net assets per share since it is the first year of consolidation.

3. Consolidated Operating Results Forecast for FY2022 (from March 1, 2021 to February 28, 2022)

(Percentage figures indicate year-on-year change)

								Net Income	Net Income
	Sales		Operating Income	Ordinary Income	Attributable to
		per Share
								Owners of Parent
	¥ million		%	¥ million	%	¥ million	%	¥ million	%	¥
1st Half	18,050		-	2,000	-	1,800	-	1,200	-	21.69
~20,000		~3,150	~2,950	~2,050	~37.05
Full-year	42,800		31.7	7,700	5.3	7,300	12.3	4,950	714.6	89.47
~49,000		~50.8	~11,800	~61.4	~11,400	~75.4	~7,800	~ -	~140.99

Year-on-year changes for the first half forecast are not shown since consolidated accounting has been adopted from the third quarter of FY2021.

• Notes

1. Changes in significant subsidiaries during the period (Changes in specified subsidiaries causing changes in scope of consolidation): Yes
   Newly included: 1 (Company name: DIP Labor Force Solution Investment Business Limited Partnership)
   Excluded: None

(2) Changes in accounting policies, changes in accounting estimates and restatements during the period under review

1.	Changes in accounting policies resulting from revisions to accounting standards:	None
2.	Changes in accounting policies other than those in 1 above:	None
3.	Changes in accounting estimates:	None
4.	Restatements:	None

(3) Number of outstanding shares (Common stock)
1.	Number of shares issued at end of period	FY2021	60,140,000 shares	FY2020	62,000,000 shares
	(including treasury shares)
2.	Number of treasury shares at end of period	FY2021	4,815,802 shares	FY2020	7,720,493 shares
3. Average number of shares outstanding	FY2021	54,809,478 shares	FY2020	54,475,989 shares
	during the period

Treasury shares include the number of Company shares owned by the ESOP trust account (1,718,935 shares at the end of FY2020; 1,644,240 shares at the end of FY2021) and the number of Company shares owned by BIP trust account (74,206 shares at the end of FY2020; 74,206 shares at the end of FY2021).

(Reference) Overview of non-consolidated operating results
Non-consolidated Operating Results for FY 2021 (from March 1, 2020 to February 28, 2021)
(1) Non-consolidated business performance				(Percentage figures indicate year-on-year change)
	Sales			Operating Income	Ordinary Income	Net income
	¥ million		%		¥ million		%	¥ million		%	¥ million		%
FY2021	32,494		(30.0)		7,363		(48.7)	7,231		(49.8)	620		(93.8)
FY2020	46,415		10.1		14,356		11.9	14,393		11.9	10,012		9.9
	Net Income			Diluted Net Income
	per Share			per Share
			¥				¥
FY2021			11.32				-
FY2020			183.80				183.76

Diluted net income per share for FY2021 is not disclosed due to the absence of dilution effects although dilutive shares existed

(2) Non-consolidated financial position

	Total Assets		Net Assets	Shareholders' Equity Ratio	Net Assets per Share
		¥ million		¥ million	%	¥
FY2021		36,471		31,749	84.6	557.76
FY2020		41,114		31,512	74.3	563.13
(Reference) Shareholders' equity:	FY2021	¥30,857 million	FY2020 ¥30,566 million

• The Financial Results are not subject to audit by a certified public accountant or an audit firm.
• Explanation on the appropriate use of operating results forecasts and other notes

(Notes on forward-looking statements)

The forward-looking statements contained herein are based on the information currently available to the Company's management and certain assumptions the Company deems reasonable at the time of preparing Financial Results. Actual results may differ significantly from the forecasts due to a variety of factors. For assumptions regarding operating results forecasts and notes on the use of the forecasts, see the section "(5) Outlook" under "1. Qualitative Information" on page 5.

(Delivery of supplementary documents on the financial results)

Supplementary documents on the financial results are scheduled to be posted on the Company's website on April 7, 2021.

○Table of Contents
1. Analysis of Operating Results and Financial Position .........................................................................................................................	2
(1)	Operating Results.............................................................................................................................................................................	2
(2)	Financial Position ............................................................................................................................................................................	3
(3)	Cash Flows ......................................................................................................................................................................................	4
(4)	Basic Policy on Profit Distribution and Dividends for the Current and Upcoming Fiscal Years ...................................................	4
(5)	Outlook ............................................................................................................................................................................................	5
2. Situation of the Corporate Group ..........................................................................................................................................................	7
3. Basic Approach towards Selection of Accounting Standards ................................................................................................................	9
4. Consolidated Financial Statements and Primary Notes .......................................................................................................................	10
(1)	Consolidated Balance Sheet...........................................................................................................................................................	10
(2)	Consolidated Statements of Income and Comprehensive Income .................................................................................................	12
	Consolidated Statement of Income ................................................................................................................................................	12
	Consolidated Statement of Comprehensive Income ......................................................................................................................	13
(3)	Consolidated Statement of Changes in Equity .............................................................................................................................	14
(4)	Consolidated Statement of Cash Flows..........................................................................................................................................	15
(5)	Notes on Consolidated Financial Statements .................................................................................................................................	16
(Notes on Going Concern Assumption)...........................................................................................................................................	16
(Bases of Presenting Consolidated Financial Statements) ...............................................................................................................	16
(Notes on Accounting Standards, etc. not yet Applied) ...................................................................................................................	18
(Additional Information) .................................................................................................................................................................	20
(Consolidated Balance Sheet)..........................................................................................................................................................	21
(Consolidated Statement of Income) ...............................................................................................................................................	21
(Consolidated Statement of Comprehensive Income)......................................................................................................................	22
(Consolidated Statement of Changes in Equity) ..............................................................................................................................	23
(Consolidated Statement of Cash Flows).........................................................................................................................................	26
(Segment Information etc.)..............................................................................................................................................................	26
(Per share Information)....................................................................................................................................................................	28
(Significant Subsequent Events)......................................................................................................................................................	28
(Reference Information) ..................................................................................................................................................................	29

―1－

1. Analysis of Operating Results and Financial Position

A comparative analysis with FY2020 has not been made since the Group has adopted consolidated accounting from the third quarter of FY2021.

For year-on-year comparisons in the non-consolidated financial statements for FY2021, see "(Reference Information)" under "(5) Notes on Consolidated Financial Statements" of "4. Consolidated Financial Statements and Primary Notes."

The AI/RPA business has been renamed DX business, starting FY2022.

(1) Operating Results

Since its establishment in 1997, DIP Corporation (hereinafter, the "Company") has assisted its client companies with recruiting and the utilization of human resources by providing online job information sites, as well as creating an environment where each individual can work with enthusiasm and energy, based on its corporate philosophy of "Here at DIP, we want to tap into dreams, ideas and passion to create a better society."

Since FY2020, under a new corporate vision of becoming a "Labor force solution company," the Company has been striving to solve diverse labor-related issues as a "General Trading Company Dealing in Labor Force" that provides clients with personnel recruiting services and DX (digital transformation) services.

In FY2021, client companies' reduction in hiring activities and hiring budgets following the COVID-19 pandemic had a spillover effect on their job advertisements. As a result, sales for FY2021 ended at ¥32,494 million.

In terms of costs, the Company made investments in human resources such as in recruiting new graduates*1, while substantially cutting SG&A costs mainly by reducing advertising spending. As a result, for FY2021, operating income and ordinary income ended at ¥7,312 million and ¥6,501 million, respectively. In March 2020, the Company purchased investment securities as a financial hedge against an economic downturn to secure employees' jobs. It sold said securities in the fourth quarter for various reasons including the mitigation of economic uncertainty compared to when the securities were purchased. As a result, net income attributable to owners of parent came at ¥607 million. For details, please refer to the press release "Notice of Reversal of Loss on Valuation of Investment Securities and Posting of Loss on Sale of Investment Securities" dated January 27, 2021.

*1 The Company hired 399 new graduates in April 2020.

The following is an overview of results by segment.

(i) Personnel Recruiting Services Business

The personnel recruiting services business operates job advertising platforms, including Baitoru, a job information site for part-time workers, Baitoru NEXT, a job information site for regular employees and contract employees, and Hatarako.net, a comprehensive job information site. The Company aims to expand the user and customer base for these platforms through the vigorous efforts of its sales force and the award-winning quality of its websites.

During the fiscal year under review, the continued COVID-19 pandemic since April 2020 had an adverse impact on job advertisement placement by client companies as restaurants and retailers shortened their business hours or suspended business, forced by the government's declarations of a state of emergency*2. As a result, sales and segment profit for FY2021 were ¥31,671 million and ¥11,844 million, respectively.

Although market conditions were again affected by the declaration of a state of emergency in January 2021, mainly in the restaurant and retail sectors, they have recovered in March after bottoming out in February 2021.Amid these circumstances, the Company has been making efforts to increase the number of subscriber companies by holding online business meetings and utilizing sales tools developed internally, which enables us to capture clients' hiring needs on a timely basis. We will continue to strive to expand our customer base by strengthening the offering of proposals that differentiate us from competitors using a combination of personnel recruiting services and DX services, as well as aiming to increase job seekers' use of our services by advertising aggressively.

*2: A state of emergency was declared in April 2020 and January 2021.

(ii) AI/RPA Business

DX service has recently been attracting considerable attention as a technology with the potential to solve labor shortages and improve productivity. Furthermore, coupled with the proliferation of working from home and changes in work styles due to the COVID-19 pandemic, the need for business automation has been increasing rapidly.

The Company launched its AI/RPA business in the fiscal year ended February 2020 and since September 2019 has been offering KOBOT, a DX service that can be introduced easily and used at a low cost. The Company's uniquely packaged KOBOT, which combines existing DX tools, is offered in different formats such as a monthly payment model that includes maintenance and support.

―2－

During the fiscal year under review, sales of the KOBOT series increased (led by sales of Interview KOBOT, the services of which include the automatic setting of interview dates), due to a reinforced sales system featuring collaboration with sales staff from personnel recruiting services.

The enhancement of our product lineup saw steady progress with the launch of Sales Pack, a sales support tool for staffing agencies, the addition of services to Real Estate KOBOT, a work efficiency tool for real estate companies, and the commencement of sales of KOBOT Platform, a DX development and management tool. As a result, sales and loss of the segment for FY2021 ended at ¥823 million and ¥541 million, respectively.

The Company will strive to further expand its business by continuing to enhance its products, while at the same time ensuring stable stock revenue.

(2) Financial Position

(Current assets)

Total current assets recorded in the consolidated financial statements at the end of FY2021 were ¥17,782 million. Major components are cash and deposits of ¥12,462 million and accounts receivable - trade of ¥3,564 million.

(Non-current assets)

Total non-current assets recorded in the consolidated financial statements at the end of FY2021 were ¥18,087 million. Major components are property, plant and equipment of ¥1,698 million, intangible assets of ¥6,831 million, and investments and other assets of ¥9,557 million.

(Current liabilities)

Total current liabilities recorded in the consolidated financial statements at the end of FY2021 were ¥3,576 million. Major components are accounts payable - trade of ¥283 million and other current liabilities of ¥3,024 million.

(Non-current liabilities)

Total non-current liabilities recorded in the consolidated financial statements at the end of FY2021 were ¥1,114 million. Major components are asset retirement obligations of ¥480 million and other non-current liabilities of ¥438 million.

(Net assets)

Total net assets recorded in the consolidated financial statements at the end of FY2021 were ¥31,178 million. The major component is retained earnings of ¥28,270 million.

―3－

(3) Cash Flows

Cash and cash equivalents (hereinafter, "cash") amounted to ¥12,462 million at the end of the fiscal year under review. The breakdowns of cash flows are as follows:

(Cash flows from operating activities)

Net cash provided by operating activities amounted to ¥5,905 million. This was mainly because inflows such as net income before income taxes of ¥1,139 million, depreciation of ¥1,999 million, loss on sales of investment securities of ¥5,724 million, and a decrease in trade receivables of ¥2,241 million exceeded outflows such as income taxes paid of ¥3,430 million and a decrease in accounts payable - other of ¥1,703 million.

(Cash flows from investing activities)

Net cash used in investing activities amounted to ¥9,643 million. This was mainly because the purchase of intangible assets of ¥3,213 million and the purchase of investment securities of ¥9,869 million exceeded proceeds from sales of investment securities of ¥3,593 million.

(Cash flows from financing activities)

Net cash used in financing activities amounted to ¥3,041 million. This mainly reflected dividends paid of ¥3,163 million.

(Reference) Trend of indicators for cash flows is as follows.

	FY2017	FY2018	FY2019	FY2020	FY2021
Shareholders' equity ratio (%)	69.6	72.4	74.0	74.3	84.4
Shareholders' equity ratio	617.0	662.9	323.4	345.0	447.0
on a market value basis (%)
Ratio of cash flow to interest-	-	-	-	-	-
bearing debts (annual)
Interest coverage ratio (times)	-	36,689.5	-	-	-

Shareholders' equity ratio: Shareholders' equity/Total assets

Shareholders' equity ratio on a market value basis: Market capitalization/Total assets

Ratio of cash flow to interest-bearing debts: Interest-bearing debts/Operating cash flow

Interest coverage ratio: Operating cash flow/Interest payments

(Note 1) The figures for FY2017 and FY2020 are based on the non-consolidated financial statements.

(Note 2) Operating cash flow is based on cash flow from operating activities according to the Statement of Cash Flows. Interest- bearing debts include all liabilities on which interest is paid that are recorded in the Balance Sheet. Interest payments are based on interest paid recorded in the Statement of Cash Flows.

(Note 3) The ratio of cash flow to interest-bearing debt is not stated, as there has been no interest-bearing debt since FY2017. (Note 4) The interest coverage ratio is not stated for FY2017 nor FY2019 through FY2021 since there were no interest payments.

(4) Basic Policy on Profit Distribution and Dividends for the Current and Upcoming Fiscal Years

The Company considers income distribution to shareholders to be one of its most important management responsibilities. We pay a regular dividend twice a fiscal year (an interim dividend and a year-end dividend), while maintaining the internal reserves necessary to invest in the future growth of the company and to address changes in the business environment.

The Company previously used the dividend payout ratio of 30% as a guide in determining its dividend payments, and from the fiscal year ended February 28, 2021 onwards, we will use the dividend payout ratio of 50% as a guide as well as take into consideration the dividend results in the prior fiscal year in determining dividend payments.

Guided by the above profit distribution policy, the Company paid an interim dividend of ¥27 per share in FY2021 after taking into account the dividend amount of the previous fiscal year. It plans to pay a year-end ordinary dividend of ¥29 per share, bringing the annual dividend to ¥56 per share.

For FY2022, the Company plans to pay an annual ordinary dividend of ¥61~79 per share, which is broken down into an interim dividend of ¥27 per share and a year-end dividend of ¥34~52 per share, after taking into consideration its outlook for full-year operating results, financial position, and other matters.

―4－

(5) Outlook

(i) Business risks related to COVID-19

In FY2021, client companies' reduction in hiring activities and hiring budgets following the COVID-19 pandemic had a spillover effect on their job advertisements. The Company has been making efforts to increase the number of subscriber companies by holding online business meetings and utilizing sales tools developed internally, which enables us to capture clients' hiring needs on a timely basis. It is also striving to establish a broad customer base to avoid being significantly affected by the operating performances of certain industries and clients. We will continue our efforts to further strengthen our direct marketing sales capabilities, as well as expanding our user and customer bases through new services and promotions.

In the AI/RPA business, the need for business automation has been increasing rapidly amid changes in work styles due to the pandemic, such as the spread of working from home. We will continue to strive to expand our customer base in the small and medium-sized company sectors, as well as increase the lineup of subscription-based products packaged for each workflow of the customer which can be introduced easily and continue to be used for an extended period. We will also make efforts to extend customers' subscription periods and boost upselling by strengthening our "customer success" system to offer continuous support after the introduction of products.

There is also a risk of employees contracting COVID-19 and causing hindrance to the Company's business and operations. However, since the end of January 2020 the Company has been managing its offices with a focus on preventing employees from being infected based on its "Guidelines for Preventing the Spread of COVID-19," as well as striving to ensure the safety of employees by recommending working from home, staggered commuting and work rotation. In addition, to prevent the spread of infection within and outside the company, we are striving to reduce the risks of infection such as by making it a rule to conduct business meetings with clients online. We will continue our efforts to prevent the spread of the virus and strive to achieve a quick recovery of earnings.

(ii) Outlook of FY2022

With regard to the macro environment in FY2022, we expect economic activities to normalize over late FY2022 and FY2023 due to the progress in vaccination combined with the easing of financial and monetary policies in Japan and other major economic zones, although the number of COVID-19 infections in Japan is expected to see modest rises and falls for the time being.

Amid such circumstances, we expect operating margins of the personnel recruiting services business to return to FY2020 levels in the second half of FY2022 as we continue our efforts to increase the number of subscriber companies through various sales measures.

In the DX business, we expect sales to significantly increase due to continued efforts to increase business activities by sales representatives of the personnel recruiting services business, as well as through the expansion of the product lineup.

The full-year consolidated operating results forecast for FY2022 based on the above is as follows.

Consolidated operating results forecast for FY2022 (from March 2021 to February 2022)

	FY2021	FY2022	Change	Change
	(Actual)	(Forecast)	(in amount)	(in percentage)
	¥	million		¥ million	¥	million		%
Sales		32,494	42,800 ~ 49,000	10,305 ~ 16,505	+31.7%	~ +50.8%
Operating Income		7,312	7,700	~ 11,800	387	~ 4,487	+5.3%	~ +61.4%
Ordinary Income		6,501	7,300	~ 11,400	798	~ 4,898	+12.3%	~ +75.4%
Net Income Attributable		607	4,950 ~ 7,800	4,342	~ 7,192	+714.6% ~ -%
to Owners of Parent

Please also refer to the charts on the following page indicating the results and forecasts of monthly sales and operating margin, which are the basis of the above forecasts.

―5－

―6－

2. Situation of the Corporate Group

The main businesses of the Company are the personnel recruiting services business, which provides human work force, and the DX business, which provides digital labor force.

The AI/RPA business has been renamed DX business, starting FY2022.

(Personnel Recruiting Services Business)

In the personnel recruiting services business, the Company operates job information sites and a recruitment business specifically for the nursing field. In the operation of job information sites, the Company provides job seekers with job information by posting recruitment ads of its client companies.

(1) Baitoru	………… Operation of website Baitoru, which focuses on offering part-time employment information. The main
	customers of the business are employment agencies and companies seeking part-time staff. We charge a
	posting fee for posting job information on the website.

1. Baitoru NEXT……… Operation of website Baitoru NEXT, which focuses on regular employee job information. The main customers of this business are employment agencies and companies seeking regular employees. We charge a posting fee for posting job information on the website.
2. Hatarako.net………… Operation of website Hatarako.net, which is a comprehensive job information website. The main

customers of this business are dispatch staffing agencies and companies seeking regular employees and part-time workers. We charge a posting fee for posting job information on the website.

In our recruitment business for nurses, the Company offers the following services:

Nurse de Hatarako…… Introduces the medical institution that best suits the needs of nurses and nurse assistants who seek a new

workplace and who have registered with our website, Nurse de Hatarako, through interviews and consultation with a career advisor.* The Company charges a brokerage fee from the medical institution when a successful employment contract is realized.

• A career advisor is a consultant specialized in matching nurses looking to change jobs with workplaces that best suits their employment needs.

(AI/RPA Business)

In the AI/RPA business, the Company has been supporting the DX of small and medium-sized companies since September 2019 through the provision of KOBOT, which can be conveniently introduced and used at an inexpensive price. KOBOT is a uniquely packaged service according to workflows and is mainly offered on a monthly subscription basis that includes maintenance and support.

―7－

Business flow chart

―8－

3. Basic Approach towards Selection of Accounting Standards

The company currently carries out business and fund procurement mainly in Japan and will adopt Japanese standards for the time being. Regarding the application of IFRS (International Financial Reporting Standards), we plan to deal with the matter as appropriate based on future business development and trends of domestic competitors.

―9－

4. Consolidated Financial Statements and Primary Notes

(1) Consolidated Balance Sheet

			(Thousand Yen)
			FY2021
			As of February 28, 2021
	Assets
	Current assets
	Cash and deposits		12,462,677
	Notes and accounts receivable - trade	3,564,913
	Supplies		5,421
	Other	1,862,167
	Allowance for doubtful accounts		(113,149)
	Total current assets	17,782,031
	Non-current assets
	Property, plant and equipment
	Buildings and structures		1,752,278
	Accumulated depreciation	(575,256)
	Buildings and structures, net		1,177,021
	Tools, furniture and fixtures	977,204
	Accumulated depreciation		(686,393)
	Tools, furniture and fixtures, net	290,810
	Land		227,782
	Construction in progress	2,455
	Total property, plant and equipment		1,698,070
	Intangible assets
	Software		6,155,008
	Other	676,615
	Total intangible assets		6,831,623
	Investments and other assets
	Investment securities		※ 5,663,928
	Long-term prepaid expenses	1,825,956
	Long-term loans receivable		300,000
	Deferred tax assets	619,641
	Other		1,159,593
	Allowance for doubtful accounts	(11,455)
	Total investments and other assets		9,557,664
	Total non-current assets	18,087,358
	Total assets		35,869,390
	Liabilities
	Current liabilities
	Accounts payable - trade	283,333
	Provision for refund		19,912
	Provision for bonuses	203,690
	Asset retirement obligations		44,715
	Other	3,024,936
	Total current liabilities		3,576,588
	Non-current liabilities
	Provision for share-based remuneration		78,260
	Provision for share-based remuneration for directors	116,840
	Asset retirement obligations		480,554
	Other	438,946
	Total non-current liabilities		1,114,601
	Total liabilities		4,691,190

―10－

			(Thousand Yen)
			FY2021
			As of February 28, 2021
	Net assets
	Shareholders' equity
	Share capital		1,085,000
	Capital surplus	3,234,282
	Retained earnings		28,270,725
	Treasury shares	(2,287,095)
	Total shareholders' equity		30,302,911
	Accumulated other comprehensive income
	Valuation difference on available-for-sale securities		(33,575)
	Total accumulated other comprehensive income	(33,575)
	Share acquisition rights		892,247
	Non-controlling interests	16,615
	Total net assets		31,178,199
	Total liabilities and net assets		35,869,390

―11－

1. Consolidated Statements of Income and Comprehensive Income Consolidated Statement of Income

			(Thousand Yen)
			FY2021
			From March 1, 2020
			To February 28, 2021
	Sales		32,494,768
	Cost of sales	3,303,654
	Gross profit		29,191,113
	Selling, general and administrative expenses		※ 21,878,955
	Operating income		7,312,158
	Non-operating income
	Interest income		3,891
	Dividend income of insurance	14,887
	Insurance claim income		5,353
	Subsidy income	4,265
	Other		10,491
	Total non-operating income	38,889
	Non-operating expenses
	Share of loss of entities accounted for using equity method	741,572
	Loss on amortization of restricted share-based renumeration		91,346
	Other	17,085
	Total non-operating expenses		850,005
	Ordinary income	6,501,042
	Extraordinary income
	Gain on change in equity	159,368
	Gain on reversal of share acquisition rights		203,006
	Total extraordinary income	362,375
	Extraordinary losses
	Loss on sales of investment securities	5,723,762
	Total extraordinary losses		5,723,762
	Net income before income taxes	1,139,655
	Income taxes - current		361,927
	Income taxes - deferred	169,826
	Total income taxes		531,753
	Net income	607,901
	Income attributable to non-controlling interests		230
	Net income attributable to owners of parent		607,671

―12－

Consolidated Statement of Comprehensive Income

			(Thousand Yen)
			FY2021
			From March 1, 2020
			To February 28, 2021
	Net income		607,901
	Other comprehensive income
	Valuation difference on available-for-sale securities		(14,711)
	Share of other comprehensive income of entities accounted for using equity	1,758
	method
	Total other comprehensive income		※ (12,953)
	Comprehensive income	594,948
	(Breakdown)
	Comprehensive income attributable to owners of parent	594,717
	Comprehensive income attributable to non-controlling interests		230

―13－

(3) Consolidated Statement of Changes in Equity FY2021 (From March 1, 2020 to February 28, 2021)

										(Thousand Yen)
					Shareholders' equity
	Share capital		Capital surplus			Retained earnings		Treasury shares		Total shareholders'
						equity
Balance at beginning of period	1,085,000	2,194,544		30,784,271	(4,140,840)	29,922,975
Changes during period
Dividends of surplus					(3,167,083)			(3,167,083)
Net income attributable to					607,671			607,671
owners of parent
Purchase of treasury shares							(145)	(145)
Disposal of treasury shares		2,209,854				663,677	2,873,531
Cancellation of treasury shares		(1,190,212)				1,190,212	-
Increase due to					45,865			45,865
decrease in affiliates
Change in ownership interest of
parent due to transactions with		20,096						20,096
non-controlling interests
Changes in items other than
shareholders' equity (net)
Total changes during period	-	1,039,737		(2,513,546)	1,853,744	379,936
Balance at end of period	1,085,000	3,234,282		28,270,725	(2,287,095)	30,302,911
	Accumulated other comprehensive income
					Share acquisition		Non-controlling
	Valuation difference		Total accumulated				Total net assets
		other		rights		interests
	on available-for-sale
		comprehensive
	securities
		income
Balance at beginning of period	(20,621)		(20,621)		946,142		-		30,848,497
Changes during period
Dividends of surplus										(3,167,083)
Net income attributable to										607,671
owners of parent
Purchase of treasury shares										(145)
Disposal of treasury shares										2,873,531
Cancellation of treasury shares										-
Increase due to decrease in										45,865
affiliates
Change in ownership interest of
parent due to transactions with										20,096
non-controlling interests
Changes in items other than	(12,953)		(12,953)		(53,895)		16,615		(50,233)
shareholders' equity (net)
Total changes during period	(12,953)		(12,953)		(53,895)		16,615		329,702
Balance at end of period	(33,575)		(33,575)		892,247		16,615		31,178,199

―14－

(4) Consolidated Statement of Cash Flows

			(Thousand Yen)
			FY2020
			From March 1, 2020
			To February 28, 2021
	Cash flows from operating activities
	Net income before income taxes	1,139,655
	Depreciation		1,999,686
	Share-based remuneration expenses	497,597
	Share of loss (profit) of entities accounted for using equity method		741,572
	Interest and dividend income	(3,453)
	Insurance claim income		(5,353)
	Commission expenses	14,928
	Loss (gain) on sales of investment securities		5,724,610
	Loss (gain) on change in equity	(159,368)
	Gain on reversal of share acquisition rights		(203,006)
	Decrease (increase) in trade receivables	2,241,001
	Increase (decrease) in trade payables		28,729
	Increase (decrease) in unearned revenue	(32,902)
	Increase (decrease) in accounts payable - other		(1,703,879)
	Increase (decrease) in allowance for doubtful accounts	(16,447)
	Increase (decrease) in provision for bonuses		(52,005)
	Increase (decrease) in provision for refund	(5,362)
	Decrease (increase) in other assets		(118,518)
	Increase (decrease) in other liabilities	(794,427)
	Other, net		37,624
	Subtotal	9,330,682
	Interest and dividends received		66
	Proceeds from insurance income	5,353
	Income taxes paid		(3,430,261)
	Cash flows from operating activities	5,905,840
	Cash flows from investing activities
	Purchase of property, plant and equipment	(155,438)
	Purchase of intangible assets		(3,213,099)
	Purchase of investment securities	(9,869,461)
	Proceeds from sales of investment securities		3,593,469
	Payments of leasehold and guarantee deposits	(4,246)
	Proceeds from refund of leasehold and guarantee deposits		5,338
	Cash flows from investing activities	(9,643,438)
	Cash flows from financing activities
	Purchase of treasury shares	(145)
	Proceeds from sales of treasury shares		88,768
	Proceeds from exercise of employee share options	12,275
	Dividends paid		(3,163,372)
	Proceeds from share issuance to non-controlling shareholders	36,152
	Other payments		(14,928)
	Cash flows from financing activities	(3,041,250)
	Increase (decrease) in cash and cash equivalents		(6,778,848)
	Cash and cash equivalents at beginning of period	19,241,526
	Cash and cash equivalents at end of period		※ 12,462,677

―15－

1. Notes on Consolidated Financial Statements (Notes on Going Concern Assumption)

Not applicable

(Bases of Presenting Consolidated Financial Statements)

The Company has adopted consolidated accounting from FY2021. The basis of presenting consolidated financial statements is as follows.

1. Scope of consolidation

1. Number of consolidated subsidiaries: 1
   Name of consolidated subsidiary: DIP Labor Force Solution Investment Business Limited Partnership ("DIP Labor Force Solution Fund")
   DIP Labor Force Solution Investment Business Limited Partnership has been newly established during the fiscal year under review and included in the scope of consolidation.
2. Non-consolidatedsubsidiaries

Name of non-consolidated subsidiary: DIP America, Inc. Reason for exclusion from scope of consolidation:

The non-consolidated company has been excluded from the scope of consolidation since it is minor in size and its total assets, sales, net income/loss (amount proportional to the equity share) and retained earnings (amount proportional to the equity share), etc., do not have a significant impact on consolidated financial statements.

2. Application of equity method

(1) Number of affiliates accounted for using the equity method: 5

Names of affiliates:	JOLLY GOOD Inc.
	GAUSS, inc.
	hachidori, inc.
	Marketing-Robotics INC.
	TRUNK Co., Ltd.

Due to a third-party allotment of shares, SpeakBUDDY Ltd., which was an affiliate accounted for using the equity method, has been excluded from the scope of application of the equity method due to a decrease in the Company's ownership.

(2) Non-consolidated subsidiaries and affiliates not accounted for using the equity method

Names of non-consolidated subsidiaries and affiliates not accounted for using the equity method: DIP America, Inc.

Bioworks Corporation

Reason for not applying the equity method:

These companies have been excluded from the scope of application of the equity method since they have a minor impact on consolidated financial statements in terms of net income (amount proportional to the equity share) and retained earnings (amount proportional to the equity share), etc., and have no significance as a whole if they are excluded from the target of the equity method.

(3) Matters deemed necessary to be stated regarding procedures for application of the equity method

The most recent financial statements have been used for companies accounted for using the equity method that have a different fiscal year-end date.

The consolidated statements have been adjusted to reflect significant transactions that took place between their fiscal year- end dates and the consolidated fiscal year-end date.

3. Fiscal periods of consolidated subsidiaries

The fiscal year-end date of consolidated subsidiary DIP Labor Force Solution Investment Business Limited Partnership is November 30. The financial statements as of its fiscal year-end date have been used in the preparation of consolidated financial statements. The consolidated statements have been adjusted to reflect significant transactions that took place between its fiscal year-end date and the consolidated fiscal year-end date.

―16－

4. Significant Accounting Policies

1. Valuation standards and methods for significant assets
2. 1. Securities

Available-for-sale securities

Securities without market value……The moving-average cost method

(ii)Valuation standards and methods for inventories Supplies……Last purchase cost method

(Balance sheet amounts are determined by writing down the book value according to the decrease in profitability.)

1. Depreciation methods for major depreciation assets
2. 1. Tangible fixed assets

Depreciation of buildings is calculated by the straight-line method, and depreciation of tangible fixed assets except for buildings is based on the declining-balance method. However, depreciation of facilities attached to buildings and structures acquired on or after April 1, 2016 is based on the straight-line method.

Useful lives of major assets are as follows:

Buildings:	3 to 47 years
Structures:	15 to 40 years
Tools, furniture and fixtures:	2 to 20 years

1. Intangible fixed assets
   Depreciation of intangible fixed assets is calculated by the straight-line method. However, depreciation of software for internal use is based on the usable period (5 years) in the Company.

1. Reporting basis for significant allowances

1. Allowance for doubtful accounts

To prepare for bad debt losses from accounts receivable, loans receivable, etc., the Company provides for the estimated uncollectible amount of normal receivables based on historical loss ratios. Specific claims including doubtful receivables, etc. are individually evaluated for the likelihood of recovery and the estimated uncollectible amount is provided.

1. Provision for refund
   To prepare for future refunds of recruitment fees in the human resources introduction service for nurses, the estimated amount

of future refunds in recorded.

(iii) Provision for bonuses

To provide for payment of bonuses to employees, an estimated amount of bonuses to be paid is recorded at the end of the fiscal year.

(iv) Provision for employee benefit trust

To provide for stock-based incentives for employees pursuant to the Stock Granting Regulations, an estimated amount according to points allotted to employees is recorded at the end of the fiscal year.

(v) Provision for management board benefit trust

To provide for stock-based compensation to directors pursuant to the Stock-based Compensation Regulations, an estimated amount according to points allotted to directors in office at the end of the fiscal year is recorded.

―17－

(4) Scope of cash and cash equivalents in the statement of cash flows

Cash and cash equivalents in the statement of cash flows comprise cash in hand, demand deposits, and short-term investments with maturities of three months or less from the date of acquisition, that are liquid, readily convertible into cash and are subject to minimum risk of price fluctuation.

1. Other important matters related to the preparation of the financial statements Accounting for consumption taxes
   Consumption taxes are accounted for using a tax-exclusive system.

(Notes on Accounting Standards, etc. not yet Applied)

1. Accounting Standard for Revenue Recognition, etc.

・Accounting Standard for Revenue Recognition (ASBJ Statement No. 29; March 31, 2020)

・Implementation Guidance on Accounting Standard for Revenue Recognition (ASBJ Guidance No. 30; March 31, 2020)

(1) Overview

They are comprehensive accounting standards for revenue recognition. Revenue is recognized after applying the following five steps:

Step 1: Identify contract with the customer.

Step 2: Identify performance obligations within a contract.

Step 3: Calculate the transaction price.

Step 4: Allocate the transaction price to performance obligations within a contract.

Step 5: Revenue is recognized when performance obligations are fulfilled or as they are fulfilled.

1. Scheduled date of application The beginning of FY2023
2. Impact of application of the accounting standards, etc.

The impact is being assessed as of the time of preparation of these financial statements.

2. Accounting Standards for Fair Value Measurement, etc.

・Accounting Standard for Fair Value Measurement (ASBJ Statement No. 30; July 4, 2019)

・Implementation Guidance on Accounting Standard for Fair Value Measurement (ASBJ Guidance No. 31; July 4, 2019) ・Accounting Standard for Measurement of Inventories (ASBJ Statement No. 9; July 4, 2019)

・Accounting Standard for Financial Instruments (ASBJ Statement No. 10; July 4, 2019)

・Implementation Guidance on Disclosures about Fair Value of Financial Instruments (ASBJ Guidance No. 19; March 31, 2020)

(1) Overview

The Accounting Standard for Fair Value Measurement and the Implementation Guidance on Accounting Standard for Fair Value Measurement (hereinafter, "Accounting Standards for Fair Value Measurement, etc.") were developed to improve comparability with international accounting standards, and guidance, etc. on the method of fair value measurement were set forth. The Accounting Standards for Fair Value Measurement, etc. will be applied to the fair value of the following items: ・Financial instruments in the Accounting Standard for Financial Instruments

・Inventories held for trading purposes in the Accounting Standard for Measurement of Inventories

In addition, the Implementation Guidance on Disclosures about Fair Value of Financial Instruments was revised to set forth notes such as the breakdown for each fair value level of financial instruments.

1. Scheduled date of application The beginning of FY2023
2. Impact of application of the accounting standards, etc.

The impact of the application of the Accounting Standard for Fair Value Measurement and others on consolidated financial statements has not yet been determined at present.

―18－

3. Accounting Standard for Accounting Policy Disclosures, Accounting Changes and Error Corrections

Accounting Standard for Accounting Policy Disclosures, Accounting Changes and Error Corrections (ASBJ Statement No. 24; March 31, 2020)

(1) Overview

It is aimed at indicating the outline of the accounting principles and procedures that were adopted when the provisions of related accounting standards, etc. are not clear.

1. Scheduled date of application The end of FY2022

4. Accounting Standard for Disclosure of Accounting Estimates

Accounting Standard for Disclosure of Accounting Estimates (ASBJ Statement No. 31; March 31, 2020)

(1) Overview

It is aimed at disclosing information that contributes to the understanding of users of financial statements on the details of accounting estimates that were the basis of amounts recorded in the financial statements of the current fiscal year and were in items that may have a significant impact on the financial statements of the following fiscal year.

1. Scheduled date of application The end of FY2022

―19－

(Additional Information)

(Employee Stock Ownership Plan (ESOP) Trust)

In May 2012, the Company introduced an employee stock ownership plan trust ("ESOP trust") to enhance corporate value in the medium and long term by motivating Company employees to work harder and creating a greater awareness of participation in management and by further promoting management aimed at increasing the value of Company shares.

(1) Summary of plan

By contributing funds for the acquisition of Company shares, the Company established a trust with employees who satisfy certain requirements as the beneficiaries. Over a predetermined acquisition period, the trust acquires from the stock market Company shares in the number expected to be delivered to Company employees in accordance with pre-established Stock Granting Regulations. Subsequently, the trust delivers or pays to employees without compensation, either whilst in employment or on retirement, Company shares or the proceeds from their sale according to the rank and years of service of employees during the trust period in accordance with the Stock Granting Regulations.

(2) Company shares remaining in the trust

Company shares held in the ESOP trust account are recorded as treasury shares under net assets at book value to the trust (excluding ancillary expenses). The book value and number of treasury shares are ¥105,409 thousand and 1,644,240 shares, respectively, at the end of FY2021.

(Board Incentive Plan (BIP) Trust)

In August 2016, the Company introduced a Board Incentive Plan (BIP) trust for directors (excluding outside directors and overseas residents; the same applies hereinafter) to increase their motivation to contribute to improving corporate value in the medium to long term and to share a common sense of interest with the shareholders.

(1) Summary of plan

By contributing funds for the acquisition of Company shares, the Company established a trust with directors who satisfy certain requirements as the beneficiaries. The trust acquires, by way of third-party allotment from the Company, Company shares in the number expected to be delivered to Company directors in accordance with pre-establishedStock-based Compensation Regulations. Subsequently, the trust delivers to directors who meet certain beneficiary requirements on the fixed date of the beneficiary right such as their retirement Company shares or the cash equivalent of the proceeds from their sale determined according to performance indicators, etc. each fiscal year in accordance with the Stock-Based Compensation Regulations.

(2) Company shares remaining in trust

Company shares held in the BIP trust account are recorded as treasury shares under net assets at book value to the trust (excluding ancillary expenses). The book value and number of treasury shares are ¥221,950 thousand and 74,206 shares, respectively, at the end of FY2021.

(Accounting estimates following the COVID-19 pandemic)

The weakening of companies' motivation to hire due to the COVID-19 pandemic has impacted the Company's business activities as job advertisement from client companies has been affected.

Although we expect the situation to begin to recover as the second state of emergency declared in January 2021 was lifted in late March, it is extremely difficult to accurately forecast when the pandemic will abate.

Accounting estimates for impairment loss on fixed assets and the collectability of deferred tax assets are based on information available at the time of the preparation of financial statements under the assumption that the impact of the pandemic will continue for a certain period of time.

―20－

(Consolidated Balance Sheet)

Amounts related to non-consolidated subsidiaries and affiliates are as follows. (Thousand yen)

FY2021

(As of February 28, 2021)

Investment securities (shares)

686,235

Overdraft agreements and commitment line agreements

To facilitate efficient procurement of operating capital, the Company has entered into overdraft agreements with three banks.

In addition, to ensure flexibility and stability in financing, the Company has entered into commitment line agreements with three financial institutions. The unused balance of loans under these agreements as of the end of the fiscal year under review is as follows.

(Thousand yen)

	FY2021
	(As of February 28, 2021)
Total of overdraft limits	10,000,000
Total of commitment line	30,000,000
Used loans	-
Available	40,000,000

The above commitment line agreements are subject to the following financial covenants. If the Company violates all of the following covenants, a lump sum repayment of the loan will be required at the lender's request.

FY2021 (As of February 28, 2021)

1. The total amount of net assets on the consolidated balance sheet as of the last day of each fiscal year must be maintained at ¥0 or more.
2. The amount of operating income or loss (or net income or loss after income taxes) on the consolidated statement of income as of the last day of each fiscal year must not be in the red for two consecutive years.

(Consolidated Statement of Income)

Major items and their amounts included in "selling, general and administrative expenses" are as follows. (Thousand yen)

	FY2021
	(From March 1, 2020
	To February 28, 2021)
Salaries and allowances	8,990,002
Advertising expenses	2,919,166
Provision of allowance for doubtful accounts	11,788
Provision for bonuses	193,540
Provision for share-based renumeration	6,281
Provision for share-based renumeration for	16,734
directors
Retirement benefit expenses	24,371
Research and development expenses	158,439

―21－

(Consolidated Statement of Comprehensive Income)

Amount of reclassification adjustment and tax effect relating to other comprehensive income (Thousand yen)

	FY2021
	(From March 1, 2020
	To February 28, 2021)
Valuation difference on available-for-sale
securities
Valuation difference arising during the year	(5,744,960)
Reclassification adjustment	5,723,762
Before tax-effect adjustment	(21,198)
Tax effect	6,486
Valuation difference on available-for-sale	(14,711)
securities
Amount equivalent to equity share in entities
accounted for using equity method
Amount arising during the year	1,758
Total other comprehensive income	(12,953)

―22－

(Consolidated Statement of Changes in Equity) FY2021 (March 1, 2020 to February 28, 2021)

1. Type and total number of outstanding shares and of treasury shares

	Number of shares at		Number of shares		Number of shares	Number of shares at the
Type of shares	the beginning of the		increased during the		decreased during the
		end of the fiscal year
	fiscal year		fiscal year			fiscal year
Shares issued
Common stock (Notes 1)	62,000,000		-			1,860,000	60,140,000
Total	62,000,000		-			1,860,000	60,140,000
Treasury shares
Common stock (Notes 2, 3)	7,726,205		35,053			2,945,456	4,815,802
Total	7,726,205		35,053			2,945,456	4,815,802
Notes: 1. Outline of reason for changes in shares issued
The number of shares decreased can be broken down as follows.
Decrease due to retirement of treasury shares:	1,860,000 shares
2. Outline of reason for change in treasury shares
The number of shares increased can be broken down as follows.
Increase due to purchase of restricted shares without consideration:		35,000 shares
Increase due to request for purchase of odd-lot shares:		53 shares
The number of shares decreased can be broken down as follows.
Decrease due to disposal by an affiliate accounted for using equity method	5,712 shares
Decrease due to exercise of stock options:				4,500 shares
Decrease due to sale or delivery of shares in the ESOP trust account:		74,695 shares
Decrease due to retirement of treasury shares:	1,860,000 shares
Decrease due to delivery of restricted shares:			1,000,549 shares

3. The number of shares of Company stock held in the ESOP trust account that are included in the number of treasury shares at the beginning and end of the consolidated fiscal year is 1,718,935 shares and 1,644,240 shares, respectively, and the number of shares of Company stock held in the BIP trust account is 74,206 shares and 74,206 shares, respectively.

―23－

2. Share acquisition rights

			Type of	Number of shares subject to share acquisition rights
			shares
							Balance at the end
			subject to	At the
Company name	Breakdown			At the end	of the fiscal year
share	beginning
			Increase	Decrease	of the	(thousand yen)
			acquisition	of the
					fiscal year
			rights	fiscal year
	6th series of stock options
	based on resolution of the	-	-	-	-	-	273,972
	Board of Directors on June
	28, 2016
	7th series of stock options
	based on resolution of the	-	-	-	-	-	331,760
	Board of Directors on
The Company	September 15, 2017
8th series of stock options
	based on resolution of the	-	-	-	-	-	244,840
	Board of Directors on June
	21, 2018	(Note 1)
	9th series of stock options
	based on resolution of the	-	-	-	-	-	41,674
	Board of Directors on June
	21, 2019	(Note 2)
		Total		-	-	-	-	892,247

(Notes) 1. The exercise period for the 8th series of stock options based on the resolution of the Board of Directors on June 21, 2018 has not yet commenced.

2. The exercise period for the 9th series of stock options based on the resolution of the Board of Directors on June 21, 2019 has not yet commenced.

3. Dividends

(1) Dividend payments

Resolution	Type	Total dividends	Dividend	Record date	Effective date	Source of
(thousand yen)	per share (yen)	dividends
Meeting of Board
of Directors on	Common stock	1,626,106	29	February 29,	May 27,2020	Retained
April 7, 2020	2020	earnings
(Note 1)
Meeting of Board
of Directors on	Common stock	1,540,976	27	August 31,	November 12,	Retained
October 8, 2020	2020	2020	earnings
(Note 2)

(Notes) 1.Total dividends based on the resolution of the annual general meeting of shareholders on April 7, 2020 include dividends of ¥49,849 thousand in relation to 1,718,935 shares of Company stock held in the ESOP trust account and dividends of ¥2,151 thousand in relation to 74,206 shares of Company stock held in the BIP trust account.

2. Total dividends based on the resolution of the annual general meeting of shareholders on October 8, 2020 include dividends of ¥45,428 thousand in relation to 1,682,525 shares of Company stock held in the ESOP trust account and dividends of ¥2,003 thousand in relation to 74,206 shares of Company stock held in the BIP trust account.

―24－

(2) Dividends with a record date in the fiscal year but an effective date in the following fiscal year

Resolution	Type	Total dividends	Source of	Dividend per	Record date	Effective date
(thousand yen)	dividends	share (yen)
Meeting of Board of	Common		Retained
Directors on April 7,	1,654,236	29	February 28, 2021	May 27, 2021
stock	earnings
2021 (Note)

(Note) Total dividends include dividends of ¥47,682 thousand in relation to 1,644,240 shares of Company stock held in the ESOP trust account and dividends of ¥2,151 thousand in relation to 74,206 shares of Company stock held in the BIP trust account.

―25－

(Consolidated Statement of Cash Flows)

Reconciliation of cash and cash equivalents as of the end of the fiscal year and the accounts reported in the balance sheet (Thousand yen)

	FY2021
	From March 1, 2020
	To February 28, 2021
Cash and deposits account	12,462,677
Cash and cash equivalents	12,462,677

(Segment Information etc.) [Segment information]

1. Overview of reported segments

(1) Method of determining reported segments

The reported segments of the Company are those units for which separate financial statements can be obtained among the constituent units of the Company and which are regularly examined by the Board of Directors for decisions on the allocation of management resources and for assessing business performance.

1. Types of products and services included in each reported segment
   The Company's reported segments are the personnel recruiting services business, which consists of online job information

advertising and the recruitment of nursing staff, and the AI/RPA business, which develops and provides services that use AI or RPA.

2. Methods for calculating sales, profit or loss, assets, liabilities, and other items by reported segment

The accounting methods used for reported segments are generally the same as those described in "Bases of Presenting Consolidated Financial Statements."

The income figures stated in the reported segments are based on operating income.

3. Information on amounts of sales and profit or loss by reported segment Fiscal year 2021 (March 1, 2020 to February 28, 2021)

(Thousand Yen)

		Reported segment			Amount recorded in
				Adjustment
				statement of income
	Personnel recruiting			(Note 1)
	AI/RPA business	Total	(Note 2)
	services business
Sales
Sales ― outside	31,671,534	823,233	32,494,768	-	32,494,768
customers
Sales and transfer	-	-	-	-	-
- inter-segment
Total	31,671,534	823,233	32,494,768	-	32,494,768
Segment profit (loss)	11,844,100	(541,326)	11,302,774	(3,990,615)	7,312,158
Other items
Depreciation	1,844,070	46,809	1,890,879	108,806	1,999,686

(Notes) 1. Adjustment of segment profit (loss) of (¥3,990,615 thousand) is corporate expenses not allocated to any reported segment. Corporate expenses are mainly selling, general, and administrative expenses that are not attributable to reported segments.

2. Segment profit (loss) was adjusted with operating income on the statement of income.

3. Assets, liabilities and other items of the reported segments are not disclosed because, based upon a management decision by the highest decision-making body, such information was not allocated to each segment.

―26－

[Related information]

FY2021(March 1, 2020 to February 28, 2021) 1. Information by product and service

						(Thousand yen)
	Baitoru	Hatarako.net	Nurse de Hatarako	AI/RPA	Others	Total
Sales to outside	24,462,807	5,672,602	1,526,429	823,199	9,730	32,494,768
customers

2. Regional information

1. Sales

Not applicable, since there are no sales to overseas customers.

(2) Tangible fixed assets

Not applicable, since the Company has no tangible fixed assets located overseas.

3. Information on main clients

Since no sales to a specific customer exceeded 10% of the sales reported on the income statement, the disclosure of information on main clients is omitted.

[Impairment loss on fixed assets by reported segment] Not applicable

[Goodwill amortization and unamortized balance by reported segment] Not applicable

[Information on gain from negative goodwill by reported segment] Not applicable

―27－

(Per Share Information)

	FY2021
	From March 1, 2020
	To February 28, 2021
Net assets per share	¥547.13
Net income per share	¥11.09

Notes: 1. Diluted net income per share is not shown due to the absence of dilutive shares with dilution effects. 2. The basis for calculation of net income per share is as follows.

	FY2021
	From March 1, 2020
	To February 28, 2021
Net income attributable to owners of parent (thousand yen)	607,671
Amount not attributable to common stock shareholders	-
(thousand yen)
Net income attributable to owners of common stock of parent	607,671
(thousand yen)
Average number of shares of common stock outstanding	54,809,478
during the fiscal year (shares)

Note: The number of Company shares held in the ESOP trust account (1,687,691 shares) and the number of Company shares held in the BIP trust account (74,206 shares) are excluded from the average number of shares of common stock outstanding during the fiscal year that was used in the calculation of per share information for FY2021.

(Significant Subsequent Events)

None

―28－

(Reference Information)

(1) Statement of Income

					(Thousand Yen)
		FY2020	FY2021	Change	Change
		From March 1, 2019	From March 1, 2020
		(in amount)	(in percentage)
		To February 29, 2020	To February 28, 2021
Sales	46,415,333	32,494,768	(13,920,565)	(30.0)
Cost of sales	3,036,482	3,303,654	267,171	8.8
Gross profit
43,378,851	29,191,113	(14,187,737)	(32.7)
Selling, general and administrative
29,022,516	21,827,205	(7,195,311)	(24.8)
expenses
Operating income	14,356,334	7,363,908	(6,992,426)	(48.7)
Non-operating income
Interest income	3,483	3,453	(30)	(0.9)
Dividend income of insurance	2,145	14,887	12,742	593.9
Insurance claim income	17,766	5,353	(12,413)	(69.9)
Subsidy income	4,034	4,265	230	5.7
Other	13,795	10,491	(3,303)	(23.9)
Total non-operating income
41,225	38,450	(2,774)	(6.7)
Non-operating expenses
Loss on investments in investment	-	62,628	62,628	-
partnerships
Loss on amortization of restricted	-	91,346	91,346	-
share-based payment
Other	3,864	17,085	13,221	342.2
Total non-operating expenses
3,864	171,061	167,197	4,326.8
Ordinary income
14,393,695	7,231,297	(7,162,397)	(49.8)
Extraordinary income
Gain on reversal of share	43,284	203,006	159,722	369.0
acquisition rights
Total extraordinary income	43,284	203,006	159,722	369.0
Extraordinary losses
Loss on valuation of investment	2,758	-	(2,758)	-
securities
Loss on sales of investment	-	5,723,762	5,723,762	-
securities
Loss on sales of shares of	152,600	-	(152,600)	-
subsidiaries and associates
Loss on valuation of shares of	-	810,040	810,040	-
subsidiaries and associates
Total extraordinary losses	155,358	6,533,802	6,378,444	4,105.6
Net income before income taxes
14,281,622	900,502	(13,381,119)	(93.7)
Income-taxes - current
4,380,319	361,927	(4,018,392)	(91.7)
Income taxes - deferred	(111,144)	(81,667)	29,476	(26.5)
Total income taxes
4,269,175	280,259	(3,988,916)	(93.4)
Net income
10,012,446	620,242	(9,392,203)	(93.8)

―29－

(2) Statement of Cash Flows

			(Thousand Yen)
		FY2020	FY2021
		From March 1, 2019	From March 1, 2020
		To February 29, 2020	To February 28, 2021
Cash flow from operating activities
Net income before income taxes	14,281,622	900,502
Depreciation	1,693,153	1,999,686
Share-based remuneration expenses	224,808	497,597
Interest and dividend income	(3,483)	(3,453)
Insurance claim income	(17,766)	(5,353)
Commission expenses	968	14,928
Gain on reversal of share acquisition rights	(43,284)	(203,006)
Loss (gain) on valuation of investment securities	2,758	-
Loss (gain) on sales of investment securities	-	5,724,610
Loss on valuation of shares of subsidiaries and associates	-	810,040
Loss on sales of shares of subsidiaries and associates	152,600	-
Loss on investments in investment partnerships	-	62,628
Decrease (increase) in trade receivables	(1,018,169)	2,241,001
Increase (decrease) in trade payables	27,426	28,729
Increase (decrease) in unearned revenue	36,723	(32,902)
Increase (decrease) in accounts payable - other	381,585	(1,703,879)
Increase (decrease) in allowance for doubtful accounts	(6,702)	(16,447)
Increase (decrease) in provision for bonuses	27,817	(52,005)
Increase (decrease) in provision for refund	(19,060)	(5,362)
Decrease (increase) in other assets	(149,895)	(118,079)
Increase (decrease) in other liabilities	659,962	(796,627)
Other, net	113,833	37,844
Subtotal	16,344,895	9,380,451
Interest and dividends received	95	66
Proceeds from insurance income	17,766	5,353
Income taxes paid	(3,971,222)	(3,430,261)
Cash flow from operating activities	12,391,533	5,955,610
Cash flows from investing activities
Purchase of property, plant and equipment	(200,147)	(155,438)
Purchase of intangible assets	(2,245,474)	(3,213,099)
Purchase of investment securities	(671,498)	(9,519,461)
Proceeds from sales of investment securities	-	3,593,469
Purchase of shares of subsidiaries and associates	(380,490)	-
Proceeds from sales of shares of subsidiaries and associates	200,000	-
Payments for investments in capital of subsidiaries and	-	(414,084)
associates
Payments of leasehold and guarantee deposits	(82,716)	(4,246)
Proceeds from refund of leasehold and guarantee deposits	18,625	5,338
Payments for asset retirement obligations	(14,240)	-
Cash flows from investing activities	(3,375,942)	(9,707,523)
Cash flow from financing activities
Purchase of treasury shares	(1,805,344)	(145)
Proceeds from sales of treasury shares	83,970	88,768
Proceeds from exercise of employee share options	199,474	12,275
Dividends paid	(2,992,653)	(3,163,372)
Other	(968)	(14,928)
Cash flow from financing activities	(4,515,520)	(3,077,402)
Increase (decrease) in cash and cash equivalents	4,500,071	(6,829,315)
Cash and cash equivalents at beginning of period	14,741,455	19,241,526
Cash and cash equivalents at end of period		19,241,526	12,412,211
―30－

(3) Selling, general and administrative expenses

The breakdown of SG&A in accordance with the categories stated in the presentation materials is disclosed below.

			(Thousand Yen)
	FY2020	FY2021	Change	Change
	From March 1, 2019	From March 1, 2020
	(in amount)	(in percentage)
	To February 29, 2020	To February 28, 2021
Personnel expenses (Note)	12,667,492	12,856,167	188,674	1.5
Advertising and sales	11,855,457	4,981,074	(6,874,383)	(58.0)
promotion expenses
Rent expenses on land and	1,075,328	1,159,718	84,390	7.8
buildings
Other	3,424,238	2,830,245	(593,992)	(17.3)
Total	29,022,516	21,827,205	(7,195,311)	(24.8)

(Note) Personnel expenses include salaries, welfare benefits, etc., as well as recruitment-related expenses and educational expenses.

―31－

(4) Segment Information

• FY2020 (March 1, 2019 to February 29, 2020)

1. Overview of reported segments

(1) Method of determining reported segments

The reported segments of the Company are those units for which separate financial statements can be obtained among the constituent units of the Company and which are regularly examined by the Board of Directors for decisions on the allocation of management resources and for assessing business performance.

(2) Types of products and services included in each reported segment

The Company's reported segment is the personnel recruiting services business, which consists of online job information advertising and the recruitment of nursing staff.

2. Methods for calculating sales, profit or loss, assets, liabilities, and other items by reported segment

The accounting methods used for reported segments are generally the same as those described in "Significant Accounting Policies." The income figures stated in the reported segments are based on operating income.

3. Information on amounts of sales, profit or loss, assets, liabilities, and other items by reported segment

							(Thousand yen)
			Reported segment	Others		Adjustment	Amount recorded in
				Total	statement of income
			Personnel recruiting	(Note 1)	(Note 2)
				(Note 3)
			services business
Sales
Sales	-	outside	46,369,290	46,043	46,415,333	-	46,415,333
customers
Sales	and	transfer	-	-	-	-	-
- inter-segment
	Total		46,369,290	46,043	46,415,333	-	46,415,333
Segment profit (loss)	18,809,768	(535,595)	18,274,173	(3,917,838)	14,356,334
Other items
Depreciation	1,576,377	2,227	1,578,605	114,547	1,693,153

(Notes) 1. The "Others" segment includes businesses not included in the reported segment, the AI/RPA Business.

2. Adjustment of segment of profit (loss) of (¥3,917,838 thousand) are corporate expenses not allocated to any reported business segment. Corporate expenses are mainly selling, general, and administrative expenses that are not attributable to reported segments.

1. Segment profit (loss) was adjusted with operating income on the statement of income.
2. Assets, liabilities and other items of the reported segments are not disclosed because, based upon a management decision by the highest decision-making body, such information was not allocated to each segment.

―32－

[Related information]

1. Information by product and service

					(Thousand yen)
	Baitoru	Hatarako.net	Nurse de Hatarako	Others	Total
Sales to outside	37,008,556	7,790,636	1,561,762	54,379	46,415,333
customers

2. Regional information

1. Sales

Not applicable, since there are no sales to overseas customers.

(2) Tangible fixed assets

Not applicable, since the Company has no tangible fixed assets located overseas.

3. Information on main clients

Since no sales to a specific customer exceeded 10% of the sales reported on the income statement, the disclosure of information on main clients is omitted.

[Impairment loss on fixed assets by reported segment] Not applicable

[Goodwill amortization and unamortized balance by reported segment] Not applicable

[Information on gain from negative goodwill by reported segment] Not applicable

• FY 2021 (March 1, 2020 to February 28, 2021)
  1. Overview of reported segments
• 1. Method of determining reported segments

The reported segments of the Company are those units for which separate financial statements can be obtained among the constituent units of the Company and which are regularly examined by the Board of Directors for decisions on the allocation of management resources and for assessing business performance.

1. Types of products and services included in each reported segment
   The Company's reported segments are the personnel recruiting services business, which consists of online job information

advertising and the recruitment of nursing staff, and the AI/RPA business, which develops and provides services that use AI or RPA.

2. Methods for calculating sales, profit or loss, assets, liabilities, and other items by reported segment

The accounting methods used for reported segments are generally the same as those described in "Bases of Presenting Consolidated Financial Statements."

The income figures stated in the reported segments are based on operating income.

―33－

3. Information on amounts of sales and profit or loss by reported segment

(Thousand Yen)

		Reported segment			Amount recorded in
				Adjustment
				statement of income
	Personnel recruiting			(Note 1)
	AI/RPA business	Total	(Note 2)
	services business
Sales
Sales ― outside	31,671,534	823,233	32,494,768	-	32,494,768
customers
Sales and transfer	-	-	-	-	-
- inter-segment
Total	31,671,534	823,233	32,494,768	-	32,494,768
Segment profit (loss)	11,844,100	(541,326)	11,302,774	(3,938,865)	7,363,908
Other items
Depreciation				108,806
1,844,070	46,809	1,890,879	1,999,686

(Notes) 1. Adjustment of segment profit (loss) of (¥3,938,865 thousand) is corporate expenses not allocated to any reported segment. Corporate expenses are mainly selling, general, and administrative expenses that are not attributable to reported segments.

2. Segment profit (loss) was adjusted with operating income on the statement of income.

3. Assets, liabilities and other items of the reported segments are not disclosed because, based upon a management decision by the highest decision-making body, such information was not allocated to each segment.

[Related information]

1. Information by product and service

						(Thousand yen)
	Baitoru	Hatarako.net	Nurse de Hatarako	AI/RPA	Others	Total
Sales to outside	24,462,807	5,672,602	1,526,429	823,199	9,730	32,494,768
customers

2. Regional information

1. Sales

Not applicable, since there are no sales to overseas customers.

(2) Tangible fixed assets

Not applicable, since the Company has no tangible fixed assets located overseas.

3. Information on main clients

Since no sales to a specific customer exceeded 10% of the sales reported on the income statement, the disclosure of information on main clients is omitted.

[Impairment loss on fixed assets by reported segment] Not applicable

(Note) English documents are prepared as a courtesy to our stakeholders. In the event of any inconsistency between English-language documents and the Japanese-language documents, the Japanese-language documents will prevail.

―34－