Quarterly Report(54th Term 3rd Quarter)
Started April 1, 2020
Ended June 30, 2020

TKC Corporation
1758 Tsurutamachi, Utsunomiya-shi, Tochigi– 1 –Table of Contents
Page[Front Cover]Section 1[Information on the Company] ............................................................................................................................................. 4

Part 1[Overview of the Company]................................................................................................................................................. 4
1 [Key Financial Data] ............................................................................................................................................................ 4
2 [Description of Business] ..................................................................................................................................................... 4

Part 2[Business Overview] ............................................................................................................................................................ 5
1 [Risk Factors] ....................................................................................................................................................................... 5
2 [Management Analysis of Consolidated Financial Conditions, Operating Results, and Cash Flows].................................. 5
3 [Material Agreements, etc.] ................................................................................................................................................ 14

Part 3[Information on the Company] ........................................................................................................................................... 15
1 [Information on the Company’s Stock] .............................................................................................................................. 15(1) [Total number of shares, etc.] .................................................................................................................................... 15(2) [Share subscription rights, etc.] ................................................................................................................................. 15(3) [Exercise of bonds with share subscription rights containing a clause for exercise price adjustment, etc.] ............... 15(4) [Changes in total number of issued shares, capital stock, etc.] .................................................................................. 15(5) [Major shareholders].................................................................................................................................................. 15(6) [Status of voting rights] ............................................................................................................................................. 16
2 [Officers] ............................................................................................................................................................................ 16

Part 4[Financial Information] ...................................................................................................................................................... 17
1 [Quarterly Consolidated Financial Statements] .................................................................................................................. 18(1) [Quarterly consolidated balance sheets] .................................................................................................................... 18(2) [Quarterly consolidated statements of income and quarterly consolidated statements of comprehensive income] ... 20[Quarterly consolidated statements of income].......................................................................................................... 20[Quarterly consolidated statements of comprehensive income]................................................................................. 21
2 [Other] ................................................................................................................................................................................ 25

Section 2[Information on Guarantors, etc. of the Company] ............................................................................................................. 26[Quarterly Review Report] [Confirmation Letter]– 2 –[Front Cover][Document filed]

Quarterly Report[Applicable law]

Article 24-4-7, Paragraph 1 of the Financial Instruments and Exchange Act of Japan[Filed with]

Director of Kanto Local Finance Bureau[Date filed]

August 11, 2020

[Quarterly accounting period]

54th Term 3rd Quarter (from April 1, 2020 to June 30, 2020)[Company name]

Kabushiki Kaisha TKC[Company name in English]

TKC Corporation[Title and name of representative]

Masanori Iizuka, Representative Director, President and Executive Officer[Address of head office]1758 Tsurutamachi, Utsunomiya-shi, Tochigi[Phone number]

028-648-2111[Contact person]

Hitoshi Iwata, Representative Director, Vice President and Executive Officer[Contact address]

2-1 Ageba-cho, Shinjuku-ku, Tokyo[Phone number]

03-3235-5511[Contact person]

Hitoshi Iwata, Representative Director, Vice President and Executive Officer[Place available for public inspection]

TKC Corporation, Tokyo Head Office(2-1 Ageba-cho, Shinjuku-ku, Tokyo)
Tokyo Stock Exchange, Inc.
(2-1 Nihonbashikabutocho, Chuo-ku, Tokyo)– 3 –Section 1 [Information on the Company]
Part 1 [Overview of the Company]
1 [Key Financial Data]
Term & Period

53rd Term
3rd quarter consolidated
cumulative period

54th Term
3rd quarter consolidated
cumulative period

53rd Term

Accounting period

Started October 1, 2018;
ended June 30, 2019

Started October 1, 2019;
Ended June 30, 2020

Started October 1, 2018;
ended September 30, 2019

Net sales(millions of yen)

47,721

51,31066,120Ordinary income(millions of yen)

7,564

10,245

9,669

Quarterly (current) net income
attributable to owners of(millions of yen)
parent

5,171

6,792

6,721

Quarterly comprehensive
income or comprehensive
income(millions of yen)

4,242

6,298

4,082

Net assets(millions of yen)

73,03775,87373,121

Total assets(millions of yen)

88,922

93,622

96,989Quarterly (current)
net .5income per share
Quarterly (current) diluted net
income per share
Equity ratio(yen)

196.46258.46255.52(yen)

195.94－255.01

(%)

80.4

81.0

73.8

Term & Period

53rd Term
3rd quarter consolidated
accounting period

54th Term
3rd quarter consolidated
accounting period

Accounting period

Started April 1, 2019;
ended June 30, 2019

Started April 1, 2020;
ended June 30, 2020

65.00

79.13

Quarterly net income per share(yen)(Notes) 1. Changes in key financial data, etc. of the Company are not stated here, as they are included in the Company’s quarterly
consolidated financial statements.
2. Net sales do not include consumption taxes (consumption tax and local consumption tax; hereinafter the same).
3. The Company introduced the Board Incentive Plan (BIP) Trust starting from the 2nd quarter consolidated accounting periodof the 53rd Term, and recorded the stocks held by said Trust as treasury stocks. Accordingly, for the purpose of calculating
the quarterly (current) net income per share for the 54th Term 3rd quarter consolidated cumulative period and for the 53rdTerm, they are included in the treasury stocks to be deducted in calculating the average number of shares outstanding.
4. The quarterly diluted net income per share for the current 3rd quarter consolidated cumulative period is not stated as there
were no dilutive shares.

2 [Description of Business]
There are no significant changes in the description of business operated by the TKC Group (TKC Corporation and its affiliatedcompanies) for the current 3rd quarter consolidated cumulative period. There are no changes in the major affiliated companies.

– 4 –Part 2 [Business Overview]
1 [Risk Factors]
There are no risks pertaining to new business operations, etc. arisen during the current 3rd quarter consolidated cumulative period.
There are no significant changes in risks regarding business operations, etc. described in the Annual Securities Report of theprevious fiscal year.

2 [Management Analysis of Consolidated Financial Conditions, Operating Results, and Cash Flows]
I. Operating Results
The Japanese economy in the current 3rd quarter consolidated cumulative period under review (October 1, 2019 - June 30, 2020)
started out with a gradual growth trend, but resulted in extremely serious circumstances impacted by the global spread of the novel
coronavirus disease (COVID-19). As the outlook for the containment of the disease is still unpredictable, future prospects of thedomestic economy is unclear and long-term impacts on our customers, namely the accounting firms and their clients are anticipated.
Under such situation, the Company has placed priority on the safety of our employees and customers, and promoted teleworking,staggered working hours, and customer support using the web meeting system.
Certified public tax accountants and certified public accountants that are customers of TKC (hereinafter, “TKC Members”) worked
to support small and medium sized companies (SMEs) whose businesses were worsened by the spread of COVID-19 in resolving
financing situations and preparing applications for subsidies. The Accounting Firm Business Division made it a policy to focus all
its effort on supporting TKC Members and their clients, and took actions including: (1) provision of the latest information to TKC
Members; (2) offering of the COVID-19 Emergency Financial Measures Corner; (3) offering of a check function for clients requiring
emergency support; (4) strengthening of on-demand training; and (5) provision of equipment necessary to work from home. Details
are as indicated under “3. Business Activities and Operating Results of the Accounting Firm Business Division.”
The Local Governments Business Division provided to customers using mission-critical systems, support on systems for theadministrative tasks related to the application procedure for Special Cash Payment of 100,000 yen per person that the Japanese
Government decided to make in response to the spread of COVID-19.
In addition, the Division received orders and conducted the change-over of systems for orders from new customers won during theprevious fiscal year, as well as system revisions, etc. in response to the free preschool education & nursing subsidy program.
As a result of these activities, the operating results for the current 3rd quarter consolidated cumulative period (hereinafter, “thecurrent 3rd quarter”) of the TKC Group recorded a net sales of 51,310 million yen (increased 7.5% year-on-year), operating incomeof 9,977 million yen (increased 37.1% year-on-year), ordinary income of 10,245 million yen (increased 35.4% year-on-year), andquarterly net income attributable to owners of parent of 6,792 million yen (increased 31.3% year-on-year).
Net sales for the current 3rd quarter by business division are shown below.
1. Business results of the Group for the 3rd quarter(1) Net sales of the Accounting Firm Business Division
Net sales of the Accounting Firm BD were 34,917 million yen (increased 4.5% year-on-year); operating income was 8,649 million
yen (increased 22.0% year-on-year). Breakdown of sales is as follows:(i) Sales from computer services increased by 4.2% year-on-year. This was attributable to the following factors: that amid the
spread of COVID-19, TKC Members were able to continue the financial processing in order to support clients with theirfinancing situations and application for subsidies; that the number of customers of the FX4 Cloud Integrated Accounting
Information System for mid-size companies increased; and that, in light of the rapid increase in the need to work from home,the number of customers increased of the OMS Mobile and TKC Cyber Security Services, which allow users to access the
TKC systems from home while maintaining a highly secure environment.
(ii) Software sales increased by 4.1% year-on-year. This is the result of increase in the number of users of financial accounting
systems that meet the requirements of the Electronic Books Maintenance Act of Japan as well as steady increase in the numberof users of our electronic tax filing system for corporations (ASP1000R) in response to the electronic filing of income taxes
mandated to large enterprises with a capital of more than 100 million yen starting April 1, 2020.
(iii) Hardware sales increased by 27.7% year-on-year. This was caused by the continuing increase in demands for PC replacements
in response to the termination of Windows 7 support by Microsoft in January 2020, and the increase in demands for notebook
PCs equipped with a web camera as a result of increase in the number of accounting firms that encourage teleworking.
The improvement in operating income year-on-year was a result of decrease in travel expenses due to enforcement of teleworking
impacted by COVID-19 and decrease in costs to host seminars by using webinars for its marketing activities.

– 5 –(2) Net sales of the Local Governments Business Division
Net sales of the Local Governments BD were 13,763 million yen (increased 21.6% year-on-year); operating income was 1,104
million yen (increased 1,235 million yen year-on-year). The major improvement in operating income year-on-year was due toincrease in software sales from system revision works in response to the free preschool education & nursing subsidy program.
Breakdown of sales is as follows:(i) Sales from computer services increased by 18.0% year-on-year. This was partly driven by increase in sales from data center
usage fees for the use of TASK Cloud Local Taxes Electronic Filing Support Service in response to the launch of the common
tax payment system for local taxes.
(ii) Software sales increased by 49.9% year-on-year. This was due to increase in sales from system revisions in response to the freepreschool education & nursing subsidy program, as stated above.
Meanwhile, as emergency economic policy to respond to the spread of COVID-19, the Japanese Government established theSpecial Cash Payment program to pay 100,000 yen per person, and municipalities were mandated to carry out the administrative
tasks related to applications from and payments for their residents. The Company provided customers using our mission-criticalsystem with emergency support on related systems, and offered as outsourcing service a full special cash payment application
document package including explanation material and return envelopes, thereby contributing to early cash payments to 1.52
million households by 112 agencies mandated to carry out the administrative tasks.
To customers using our mission-critical system, the Company gave discounts equivalent to the differences of sales and actual
costs incurred for system revisions and application form printing as relief money in an aim to help, for example, prevent the
spread of COVID-19 in local communities. As such, there was little impact on the business results from the support for responseto the Special Cash Payment program.
(iii) Sales from consulting services decreased 0.6% year-on-year. This was attributable to decrease in revenue from services suchas equipment installation as a result of decrease in hardware sales, despite increased sales related to the change-over andimplementation of mission-critical systems for orders from new customer agencies won during the previous fiscal year.
(iv) Hardware sales decreased by 21.4% year-on-year. This was due to the absence of the renewal of Registration Network Systemrelated devices during this quarter, for which orders concentrated during the 3rd quarter in the previous fiscal year.
(3) Net sales of the Printing Business Division (Subsidiary: TLP Corporation)
Net sales of the Printing BD were 2,629 million yen (decreased 11.5% year-on-year); operating income was 229 million yen(decreased 27.2% year-on-year). Breakdown of sales is as follows:(i) Sales of products related to data printing service (DPS) decreased by 2.4% year-on-year. While orders for notice-related
services from municipalities and other authorities increased, orders for direct mail and other productions from private
enterprises decreased significantly due to impacts of COVID-19.
(ii) Sales of printing of commercial arts (catalogs, flyers, books, etc.) decreased by 27.2% year-on-year as a result of decrease inorders for booklets, flyers, books, etc. related to events, etc. that were canceled or postponed due to impacts of COVID-19.
2. Important matters with respect to the Company as a whole(1) Prevention of novel coronavirus infection and actions for business continuity
In light of the spread of COVID-19 and the anticipated long-term impacts, the Company has adopted preventive measures against
the infectious disease within the Company, and in addition, provides the following initiatives to provide information to and support
the business continuity of our clients, namely the accounting firms and their clients, and local governments.
(i) To enable customers to use with no worries our cloud services, business form printing services, and help desk services, we
strengthen our business continuity measures (such as sterilizing door knobs, handrails, etc. twice a day, prohibiting the entryof outside personnel at important offices, developing the infrastructure for remote operation in case of an outbreak of COVID19, and distributing the help desk functions to multiple sites).
(ii) As measures to prevent infection within the Company, we enforced the measurement of temperature every morning, installed
protective panels, sterilized mats, and sanitizers, distributed masks, procured equipment for teleworking, etc.
(2) CSR activities in the coronavirus-related confusion
The Company engaged in the following initiatives to prevent the collapse of the medical system and to support students, etc. ineconomic hardship.
(i) As relief money, the Company donated 300 million yen, and Masaharu Iizuka, Chairman Emeritus, and Mrs. Runako Iizuka,
wife of the founder of the Company, each donated 100 million yen as individuals to Tochigi prefecture to be used to preventthe collapse of the medical system due to coronavirus infections.
(ii) The Company also donated a total of 169 million yen as relief money to our client agencies (130 municipalities).

– 6 –(iii) To provide support to students studying online at Utsunomiya University, the Company donated 75 notebook PCs, andMasaharu Iizuka, Chairman Emeritus of the Company, personally donated 10 million yen to the University for the purpose of
supporting students facing economic hardship.
(3) Acquisition of patent pertaining to the Operation Checklist in the eCA-DRIVER consolidated accounting system
On June 11, 2020, the Company acquired a patent for the function to enable visual confirmation of whether the system processing
was performed in the correct order and in an appropriate manner, which is in the Operation Checklist incorporated in the eCADRIVER consolidated accounting system. (Patent No. 6715886)
Expansion into large-scale enterprise market, including this system, is as described below.
3. Business Activities and Operating Results of the Accounting Firm Business Division
The Accounting Firm BD operates in accordance with the business objectives set forth in the Articles of Incorporation (Article 2,
Paragraph 1: Management of electronic data processing centers to defend the business domain and maintain control over the fateof accounting firms) and works under close ties with the TKC National Federation, which consists of 11,400 certified public tax
accountants and certified public accountants (as of June 30, 2020) that are customers of TKC.
TKCNF was established in 1971 and is engaged in various activities in an aim to realize the following six business objectives:
1) Realize tax justice;2) Conduct tax consultant business completely;3) Support SMEs for their prosperity and success;4) Enhance managerial infrastructure of TKC Member firms;
5) Make full use of TKC systems;
6) Promote mutual enlightenment, support and friendship.
(Note) For more information on the TKC National Federation, see the booklet "All About TKC National Federation" or visit the
TKC Group website (http://www.tkc.jp/).
(1) Activities of the TKC National Federation ("TKCNF")
TKCNF sets its 3-year activity policy from 2019 to 2021 and Strategic Targets 2020 based on the policy agenda in view of its
50th anniversary (in 2021). The content is as follows:[Activity policy to change society with the TKC brand](i) Promote Shomen-tempu (attachment of tax audit reports) by the TKC methods (FY2020 year-end target: Corporate Shomentempu by 144,000 companies)(ii) Promote TKC Monitoring Information Service (FY2020 year-end target: 140,000 companies, 245,000 cases)(iii) Promote self-accounting practice by the TKC methods (FY2020 year-end target: 285,000 companies)
In addition, as the initiatives of TKCNF are beginning to draw the attention of many financial institutions, the following measures
have been launched to take advantage of this opportunity to further enhance the managerial infrastructure of TKC Member firms:(i) Understand and practice the Standards of Conduct for TKC Accountants(ii) Increase the numbers of Field Auditors and Assistant Field Auditors(iii) Enhance the managerial advisory services as a Certified Support Agency
TKCNF sent out messages to TKC Members: “Now is the time to exert the true values as professional accountants!” “Taxaccountants should be an ‘empathetic counselor’ for SMEs during this crisis.” While continuing to engage in the activities outlined
above, TKCNF was committed to supporting SMEs whose businesses were worsened by the spread of COVID-19 in resolving
cash flow situations and preparing applications for subsidies.
(2) Activities to achieve the strategic goals of the Accounting Firm Business Division(i) Support of SMEs affected by the spread of the novel coronavirus infections
In the current 3rd quarter under review, the Company engaged in the following support activities under the policy to focus all
its effort on supporting TKC Members and their clients.

– 7 –1) Provision of the latest information to TKC Members
To accurately and quickly convey information on SME support policies released by the national government and SME
support organizations to TKC Members, the Company provided the latest information on a daily basis on the exclusive
Intranet (ProFIT) for TKC Members. We began this activity on February 25, and posted 152 entries as of the end of thecurrent 3rd quarter.
2) Offering of the COVID-19 Emergency Financial Measures Corner
The Company developed a special website where TKC Members can check through their website SME support policies
offered by the national, prefectural, and municipal governments and financial institutions under the categories: Financing,
Subsidies, Employment, and Taxation. Through this site, we established a system to send out information widely acrossclients of TKC Members and other SMEs. The website has 8,469 entries on support policies as of the end of the current 3rdquarter.
3) Offering of a check function for clients requiring emergency support
The Company provided a check function for clients requiring emergency support on the Tax Accountants Office
Management system (OMS). This function can automatically evaluate the eligibility of each client for 19 items of various
emergency economic policies such as the subsidy program for sustaining businesses, employment adjustment subsidy, andrent support benefit, special loans by government-affiliated financial institutions, and temporary loan under the mutual aid
system. This function also features automatic generation of the Application for Decrease in Sales Affected by COVID-19
which is required in order to apply for the Special Loans for Coronavirus offered by the Japan Finance Corporation. With
this, we established a system to enable TKC Member firms to provide to their clients advice on optimal financing and to
file relevant applications quickly.
4) Strengthening of on-demand training
The Company provided on-demand training on specific application procedures for the above-mentioned SME support
policies and extensions of tax returns/tax payments, and on accounting and tax practices upon receiving said benefits, andalso encouraged viewing the contents.
5) Provision of equipment necessary to work from home
To enable TKC Members and their staff to work from home in complete compliance with “The Services of Certified Public
Tax Accountants and Teleworking (Working from Home) ― Measures to Prevent the Novel Coronavirus Infection”
published by the Japan Federation of Certified Public Tax Accountants' Associations on April 15, the Company provided
communication equipment such as web meeting systems and microphone headsets for users to access their office fromhome and to use the TKC systems in a highly secured environment.
(ii) Sales activities to achieve Strategic Targets 2020
Continuing on from the 2nd quarter, the Company operates to achieve the Strategic Targets 2020 in collaboration with TKCNF.
1) Promotion of TKC Monitoring Information Service
TKC Monitoring Information Service is a free cloud-based service in which the TKC Member firms, upon request by the
management of their clients, provide to financial institutions such information as monthly trial balance sheets, annual
financial statements and tax returns prepared by them after monthly field audits and monthly settlements. Monthly trial
balance sheets will be made available immediately upon completion of the monthly settlement, and annual financial
statements and tax returns are disclosed immediately after the client electronically files its financial documents to the tax
authorities.
While promoting the TKC Monitoring Information Service, we communicated to financial institutions that the reliabilityof financial statements prepared by SMEs can be verified by the following three documents:a. Supporting documents submitted by TKC Members as provided for under Article 33-2 of the Certified Public Tax
Accountant Act of Japanb. Certificate of Bookkeeping Timeliness, with which TKC Corporation certifies the timeliness in the preparation of
accounting books as required under Article 432 of the Companies Act of Japan and the connection between the financial
statements and tax returns for the past three yearsc. The Chusho Kaikei Yoryo checklist developed by the Japan Federation of Certified Public Tax Accountants' Associations
and Japan Federation of Credit Guarantee Corporations
As a result of these activities, the number of financial institutions adopting this Service is increasing rapidly, adopted by
445 financial institutions including all local banks throughout Japan (64 institutions) as of June 30, 2020. Also, over 210,000
companies provided their financial statements to financial institutions as of June 30, 2020.
We have also seen cases, for example, where SMEs were able to obtain financing quickly by utilizing the TKC Monitoring
Information Service for examination of loans in response to the current increasing impacts of the COVID-19 pandemic.

– 8 –This could be seen as evidence that financial institutions consider financial statements prepared by TKC Members to behighly reliable.
In addition, the Ministry of Economy, Trade and Industry established a program to enable financial institutions to offer
interest-free, collateral-free loans in order to strengthen financial support to SMEs in response to the increasing impacts of
COVID-19 pandemic. Many financial institutions provided emergency loans to SMEs under this program. These financial
institutions are required to check the performance of borrowers and report to the credit guarantee association on a regularbasis. That is why the service to provide monthly trial balance sheets under the TKC Monitoring Information Service is
attracting attention. The Company provides support to enable TKC Members and financial institutions to promote thisService together.
2) Promotion of self-accounting by the TKC methods (promotion of FX series)
TKC has incorporated the 365 Days Variable Income Statement, Fund Management, and other strategic functions in the FX
series to assist the strategic decision-making by the management of clients. In addition, in response to the advancement of
ICT in recent years, the Company provides functions that enable management of clients to check its latest business resultsfrom a smart phone any time and any place (Smart Business Results Verification Functions). In order for management ofclients to utilize these functions, the accounting staff need to enter the accounting transaction data in a timely and efficientmanner. To support these tasks, the Company develops and provides the Bank Credit Data Receiving Functions that enable
users to receive bank deposit transaction data through Internet banking and generate journal entries automatically. With
these functions, management of clients can check the business results, balance of funds, and schedules of payment andreceipts of their company anytime and anywhere.
During the current 3rd quarter under review, we provided support on the use of FX Series for management of clients who
were concerned about the impacts of COVID-19 on their businesses results.
3) Supporting complete compliance with the Electronic Books Maintenance Act of Japan
Last year, the Company became the first among its competitors to acquire the certification under the Electronic Books
Software Legal Compliance Certification System by Japan Image and Information Management Association (JIIMA) for
its FX series and other systems. Through the promotion of the certified FX series, etc., we support complete compliancewith the Electronic Books Maintenance Act of Japan.
4) Soliciting new members (promotion of joining TKCNF)
TKCNF is engaged in a project to increase TKC membership to over 10,000 firms by the end of September 2021. The
Company is working closely with the New Members Service Committee of TKCNF and other organizations in soliciting
new members to achieve this goal.
During the 3rd quarter under review, we were unable to visit potential accounting firms that we intended to solicit due tothe coronavirus-related confusion, so the Company held on-demand seminars and promoted joining TKCNF by introducing
practices to support clients’ cash flow situations and case studies on teleworking of accounting firms.
As a result of these activities, the number of TKC Members totaled approximately 9,700 accounting firms and 11,400
accountants as of June 30, 2020. The difference in numbers of firms and accountants are because some firms have multiple
accountants who are members.
(3) Activities to support the preparation of highly reliable financial statements based on timely and accurate bookkeeping(i) Support activities for diffusion of Chusho Kaikei Yoryo (Guidelines for SME accounting)
The TKCNF recommends the use of Basic Guidelines with Respect to the Accounting Procedures at Small- and Medium-sizedEnterprises (hereinafter, “Chusho Kaikei Yoryo” (Guidelines for SME Accounting)), an accounting standard formulated in
February 2012 with which SME clients should comply.
These Guidelines have been formulated based on the following principles: 1) accounting that helps to grasp the company's
business situation; 2) accounting that contributes to providing information to stakeholders (financial institutions, etc.); 3)
accounting that complies with the Ordinance on Company Accounting while achieving harmony between accounting andtaxation system; and 4) accounting that does not place excessive burden on SMEs.
In order to support the activities of the TKCNF towards the diffusion and utilization of the Guidelines, the Company continues
to develop training materials and work in collaboration with other organizations supporting SMEs.
(ii) Issuance of Certificate of Bookkeeping Timeliness
The Company utilizes the processing log data and historical time series data that are automatically logged at our data centerswhen TKC Members access our accounting system to issue a Certificate of Bookkeeping Timeliness free of charge. This
Certificate serves as reference for financial institutions and other third parties to objectively evaluate the business performanceof TKC Member firms.
This service was developed in an aim to improve reliability of financial statements and tax returns prepared by TKC Members
and to provide a passport for smooth financing to the clients of TKC Members. This utilizes the features of the Company's
financial accounting processing at TKC data centers, which prohibits any retroactive insertions, deletions and corrections to– 9 –past data, and TKC Corporation proves, as a third party, that TKC Members have visited clients on a monthly basis to provide
guidance on accurate bookkeeping (monthly Field Audits), and that all work processes from monthly settlements to the final
settlement of accounts and electronic tax filings have been completed by a one-stop, full line process in a timely manner.
(4) Expansion into large-scale enterprise market
By utilizing the TKC systems, the Company contributes to the compliance and rationalization of tax and accounting operationsof large enterprises, mainly of listed companies, and is actively working to solicit these companies and their affiliates to becomeclients of TKC Members.
As systems to supplement these activities, the Company provide the TKC Consolidated Group Solution package (which includes:
the eCA-DRIVER consolidated accounting system, the eConsoliTax consolidated tax payment system, the eTaxEffect tax effectaccounting system, the ASP1000R electronic tax filing system for corporations, the FX5 integrated accounting information system,
the e-TAX series electronic tax filing system, the FAManager non-current asset management system, the TDS TKC documented
evidence storage service, the OBMonitor overseas business monitoring system, etc.).
Starting April 2020, large enterprises with a capital of more than 100 million yen are mandated to use electronic filing of income
tax, consumption tax, and local taxes. With this reform, large sized companies must file their income tax returns electronically, as
well as submit any attachments to tax returns (financial statements, statement classified by accounting items, etc.) in electronic
data form. According to statistics of the National Tax Agency, electronic filing of corporate income tax was conducted by
2,268,473 companies in FY2018. While the percentage of companies using the electronic filing system was 84.3%, only 66.1%
of large sized companies uses electronic tax filings. This means that many of the large enterprises to which electronic filing is
mandated will be using the electronic filing system for the first time. To enable these companies to switch smoothly to the
mandated electronic filing system, the Company released the Guidebook on Complying with Mandatory Electronic Filing on the
Company’s website and held on-demand seminars, etc. in collaboration with TKCNF’s Medium- and Large-sized Companies
Support Council (1,431 members as of June 30, 2020). We also entered into alliance agreements with four ERP vendors, working
on the development of systems linking to financial statements data. As a result, the number of users of ASP1000R electronic tax
filing system for corporations reached 3,170 companies as of June 30, 2020.
As a result of these activities, the number of corporate groups using the TKC Consolidated Group Solution counted approximately
4,000 corporate groups as of June 30, 2020. Our tax filing systems are adopted by 86% of the 100 largest Japanese listed companies
by sales amount. The market shares among Japanese listed companies reached 32%.
(5) Expansion of markets for legal information database services
The LEX/DB Internet legal information database, developed originally by the Company, maintains an archive of over 309,000
judicial precedents, decisions, etc. as of June 30, 2020, covering all legal fields from precedents set in the former Supreme Court
dating back to 1875 to those most recently published, being the largest database of its kind in Japan.
The TKC Law Library is a comprehensive legal information database which uses the LEX/DB Internet as its core content andcontains over 956,000 bibliographic information references with links to 60 of the legal information databases operated by 18
specialized legal publishers, etc. (including Gyosei Corporation, Nippon Hyoron-Sha Co., Ltd., Yuhikaku Publishing Co., Ltd.,
Chuokeizai-Sha, Inc., Hanrei Times Co., Ltd., and Japan Institute of Business Law) with total accessible number of information
now exceeding 2,640,000 items.
(i) Increase of user base of TKC Law Library
Many customers were forced to work online as a result of transitioning to teleworking due to COVID-19. This has consequently
caused users who are unable to conduct research at the data room or library to reconsider the advantages of TKC Law Librarythat covers laws and regulations, judicial precedents, bibliographic information references and also contents of major
specialized law magazines, which could be accessed any time, from any place. As a result, the numbers of user IDs and contracts
to access additional contents are growing. In the current 3rd quarter under review, as a result of on-line promotional activities
through the website, SNS, etc. towards TKC Member firms, universities, law schools, government offices, law firms, patentoffices and corporate legal departments, the number of users exceeded 52,000 IDs and the Library is used by over 23,000
institutions as of June 30, 2020.
(ii) Progress in the academic market
Due to the impacts of COVID-19, universities are prohibiting an entrance to their campuses and almost all of them are
conducting online classes. Our systems, such as the TKC Educational and Research Support System and TKC Law Library,
can be accessed online and used anytime, anywhere. They contain a huge number of diverse contents compared to those ofother companies, and include various functions such as report generation, exercises and testing. These features are being
reconsidered as tools to support online classes and learning for faculty and students during the COVID-19 confusion. Since
April, the Company conducted web meetings with each university as needed, responded to requests for additional access rights
to our basic services, and provided support in the development of online learning environments tailored to meet the situationof each university.
In addition, we are receiving more positive responses for our study tools for civil service examination and practical businesslaw examination which are mainly offered to the faculty of law of universities. As examinations are postponed and learning
environment incomplete, students must rely only on online study tools that contain well-developed learning materials. Suchstudents are therefore using our systems more frequently. As of June 30, 2020, the Company has ongoing contracts with 24
universities, and is focusing in particular on supporting senior students to respond to the postponed civil service examinations– 10 –

by allowing extended use of the systems. In addition, we are encouraging monitor users to expand the use in the next fiscal
year.
4. Business activities and operating results of the Local Governments Business Division
The Local Governments BD operates in accordance with the business objectives set forth in the Articles of Incorporation (Article
2 Item 2: "Management of electronic data processing centers to improve the administrative efficiency of local governments") andoffers specialized information services in order to help promote the welfare of residents by improving administrative efficiency.
(1) Development and provision of mission-critical system-related services
The Japanese government is accelerating its actions to promote the implementation of cloud systems, setting a target to haveapproximately 1,600 agencies using cloud systems (of which, approximately 1,100 agencies to be users of local government cloudsystems) by the end of FY2023.
The Company provides TKC Government Cloud Service to municipalities (mainly for cities, wards, towns and villages). This
Cloud Service consists of the TASK Cloud Service which supports mission-critical functions and information services within
agencies, and the TASK Outsourcing Service which supports massive batch output and processing of tax papers and otherdocuments.
In particular, the TASK Cloud Service is a common platform package system operated at TKC data centers that allows the shareduse of cloud across Japan, attracting attention as a local government cloud system promoted by the Ministry of Internal Affairs
and Communications and, as to mission-critical systems, adopted by nine groups nationwide for shared use. We conducted
aggressive promotional activities together with the seven partner companies across Japan with whom we have on-going alliancepartner agreements, and our mission-critical systems are adopted by over 150 agencies nationwide as of June 30, 2020.
In the current 3rd quarter under review, we supported agencies that placed new orders having mission-critical operation systems
that are scheduled for a full-scale launch after June 2020 in enabling smooth system transition.
Also for the Welfare Consultation Support System, we enhanced the functionalities of various systems through the provision offunctions to support “streamlining of record preparation” and “smooth sharing of information between relevant parties” based on
the F-SOAIP lifestyle support recording method (*) that began in April 2020.
In addition the Company provided emergency support on related systems for the Special Cash Payment program conducted as
emergency economic policy, and offered as outsourcing service a full special cash payment application document package
including explanatory materials and return envelopes, thereby contributing to early cash payments to 1.52 million households by
112 agencies mandated to carry out the administrative tasks.
* About lifestyle support recording method F-SOAIP
F-SOAIP is a progress recording method developed for the purpose of creating a common language among the areas of welfare,nursing care, and health care. It can standardize terms/expressions to be used in recording necessary information in itemized format,
which is drawing attention because it allows users to record the progress of support in an efficient and accurate manner and to
facilitate sharing of information among relevant parties.
(2) Response to digitalization of administrative services
The Company positions its TASK Cloud Convenience Store Certificate Issuing System and the TASK Cloud Easy Counter Service
System that uses the features of the former system as “administrative service digitization support solutions,” and works to enhancefunctionalities and to expand product offerings.
For the Convenience Store Certificate Issuing System, continuing on from the 2nd quarter, the Company supported the ninemunicipalities of the Kanagawa Prefecture Collective Business Partnership for Information Systems in Municipalities(Administrator Yuji Yukawa, Mayor of Yamakita Town) in preparation for the sequential launch and smooth operation of theConvenience Store Certificate Issuing Service using the Company’s systems.
For the Easy Counter Service System, we also participated in the Demonstration Experiment for the Improvement of Counter
Services Using ICT (Smart Counter Services) conducted by Nara City in Nara Prefecture, and engaged in the research anddevelopment of a new smart counter service system.
In addition, we began the offering of the TASK Cloud My Number Card Issuance Reservation and Management System which
has been under development, and launched the operation of our first user (Goka-machi, Ibaraki Prefecture).
Moreover, as a result of functional enhancements of various systems and aggressive promotional activities, the Convenience Store
Certificate Issuing System is adopted by over 120 agencies nationwide including government ordinance-designated cities such as
Kobe and Kitakyushu, and the Easy Counter Service System is adopted by approximately 10 agencies as of June 30, 2020.

– 11 –

(3) Response to digitization of local tax administrative procedures
The Company is an authorized contractor of the Local Tax Agency, and provides a cloud-based service for the standard systems
such as inspection system for eLTAX (local tax portal system) offered by the Agency. We also develop and provide Data
Connection Services as our own functionality to connect the individual tax systems of each municipality.
These services are proposed in collaboration with 50 partner companies nationwide with whom we have on-going alliance partner
agreements. As a result, our TASK Cloud Local Taxes Electronic Filing Support Service is adopted by more than 770 agencies
which account for more than 40% of all prefectures and local municipalities as of June 30, 2020.
In the current 3rd quarter, we engaged in the enhancement and expansion of functionalities of related systems and active
promotional activities for data connection services.
(4) Response to standardized local public accounting
Municipalities are required to adopt the system of accrual basis accounting (double entry bookkeeping) to replace the current cash
basis accounting (single entry bookkeeping), and to prepare and disclose their financial documents as well as to utilize such data
for administrative operations.
In order to support this, the Company provides the TASK Cloud Public Accounting System, which is compatible with the daily
journalizing method encouraged by the Japanese government, and its related systems TASK Cloud Non-current AssetManagement System and TASK Cloud Consolidated Financial Document Preparing System.
In the current 3rd quarter, the Company newly received orders from a lot of agencies including ones (7 cities, 26 towns, 4 villages,
and 14 partial-affairs associations) that are members of the Kagoshima Prefecture Municipal Association, Kumamoto Prefecture
Municipal Association, Nagasaki Prefecture Municipal Administration Promotion Council, and Kyoto Prefecture Municipal
Information Promotion Council, and provided to them support for the smooth system launch and operation. We also engaged in
the development and enhancement of various functions to support the “visualization” and “utilization” of local public accounting
information as well as in aggressive promotional activities. As a result, our public accounting systems are adopted by more than
260 agencies as of June 30, 2020.
(5) Research and development of next-generation products
Following the Law for Partial Revision to the Act on Use of Information and Communications Technology in Administrative
Procedure, etc. for the Improvement of Convenience of Related Parties Engaged in Administrative Procedure Using Information
and Communications Technology and for the Promotion of Simplifying and Streamlining Administrative Operations (Digital
Administrative Procedures Act, enacted in May 2019) which allows all administrative procedures in general to be conducted online, some procedures that local governments should prioritize in putting on-line were indicated under the Digital Government
Implementation Plan that the Japanese cabinet approved in December 2019. On top of this, with the recent spread of COVID-19,
municipalities are accelerating their efforts to digitize the administrative services.
To respond to the change in the environment surrounding our customers, the Company is working to further accelerate theplanning and development of new products as well as to strengthen customer support including the collection and communicationof the latest information.
During the 3rd quarter under review, we worked on gathering and communicating information related to “the digitalization ofadministrative services,” as well as conducting surveys, research and development of next generation solutions which will support
the “new normal” such as TASK Cloud Smart Application System (to begin offering in August 2020).
5. Business activities and operating results of the Printing Business Division
The Group’s Printing BD operates with the main focus on data print services (DPS) and business form printing.
In the DPS area, sales dropped by 2.4% year-on-year, as while orders for notice-related services from municipalities and otherauthorities increased, orders for direct mail and other productions from private enterprises decreased significantly due to impactsof COVID-19.
In the area of business form printing, sales decreased by 4.1% year-on-year due to decline in demands for business forms as wellas ongoing low consumption levels impacted by COVID-19.
In the area of printing of commercial arts (catalogs, flyers, booklets, books, etc.), sales decreased 27.2% year-on-year due todecrease in demands for paper media with the advancement of browsing of electronic data, etc., and also due to large decrease inorders for booklets, flyers, books, etc. because of the cancellation/postponement of events, etc. impacted by COVID-19.

– 12 –

II. Financial Conditions
Assets, liabilities and net assets at the end of the current 3rd quarter consolidated accounting period are stated below.
1. Assets
Total assets as of the end of the current 3rd quarter consolidated accounting period amounted to 93,622 million yen, a 3,367 million
yen decrease compared to 96,989 million yen as of the end of the previous consolidated fiscal year.
(1) Current assets
Current assets as of the end of the current 3rd quarter consolidated accounting period amounted to 34,123 million yen, a 6,950
million yen decrease compared to 41,073 million yen as of the end of the previous consolidated fiscal year.
This was mainly attributable to 5,002 million yen decrease in cash and deposits, 1,521 million yen decrease in notes and accounts
receivable, and 348 million yen decrease in work in progress.
(2) Non-current assets
Non-current assets as of the end of the current 3rd quarter consolidated accounting period amounted to 59,498 million yen, a
3,582 million yen increase compared to 55,915 million yen as of the end of the previous consolidated fiscal year.
This was mainly due to a 4,100 million yen increase in long-term deposits, 623 million yen increase in investment securities, and
130 million yen increase in loans receivables despite a 543 million yen decrease in long-term deferred tax assets, 280 million yen
decrease in intangible assets, 271 million yen decrease in buildings and structures (net amount), and 189 million yen decrease intools, furniture & fixtures included in Other (net amount).
2. Liabilities
Total liabilities as of the end of the current 3rd quarter consolidated accounting period amounted to 17,748 million yen, a 6,119
million yen decrease compared to 23,868 million yen as of the end of the previous consolidated fiscal year.
(1) Current liabilities
Current liabilities as of the end of the current 3rd quarter consolidated accounting period amounted to 11,335 million yen, a 4,942
million yen decrease compared to 16,278 million yen as of the end of the previous consolidated fiscal year.
This was mainly attributable to 2123 million yen decrease in provisions for bonuses, 1,783 million yen decrease in accounts
payable–trade, 1,378 million yen decrease in accounts payable–other, and 1,362 million yen decrease in income taxes payable,
despite a 1,404 million yen increase in suspense receipt of consumption taxes and 204 million yen increase in electronicallyrecorded obligations-operating.
(2) Non-current liabilities
Non-current liabilities as of the end of the current 3rd quarter consolidated accounting period amounted to 6,413 million yen, a
1,177 million yen decrease compared to 7,590 million yen as of the end of the previous consolidated fiscal year.
This was mainly attributable to a decrease of 1,069 million yen in retirement benefit liabilities.
3. Net assets
Total net assets as of the end of the current 3rd quarter consolidated accounting period amounted to 75,873 million yen, a 2,752
million yen increase compared to 73,121 million yen as of the end of the previous consolidated fiscal year.
This was mainly attributable to a 3,880 million yen increase in retained earnings and 877 million yen increase in capital surplus,
despite a 1,504 million yen decrease in non-controlling interests and 600 million yen decrease in valuation difference on availablefor-sale securities.
Equity ratio as of the end of the current 3rd quarter consolidated accounting period was 81.0%, a 7.2 percentage point increase
compared to the ratio of 73.8% as of the end of the previous consolidated fiscal year.
III. Operational and Financial Challenges Facing the TKC Group
There are no significant changes in challenges faced by the TKC Group during the current 3rd quarter consolidated cumulative
period.
IV. Research and Development Activities
Research and development expenses spent by the TKC Group during the current 3rd quarter consolidated cumulative period were 1
million yen.

– 13 –

There are no significant changes in the status of research and development activities of the TKC Group during the current 3rd quarter
consolidated cumulative period.

3 [Material Agreements, etc.]
There has been no decision or conclusion of material agreements, etc., during the current 3rd quarter consolidated accounting
period.

– 14 –

Part 3 [Information on the Company]
1 [Information on the Company’s Stock](1) [Total number of shares, etc.](i) [Total number of shares]
Class

Total number of shares authorized to be issued (shares)

Common stock

60,000,000

Total

60,000,000(ii) [Issued shares]

Class

Number of shares issued asof the end of 3rd quarteraccounting period (shares)(June 30, 2020)

Number of shares issued asof the filing date (shares)(August 11, 2020)

Name of stock exchange
on which the Company islisted, or name of
Authorized Financial
Instruments Firms
Association

Common stock

26,731,033

26,731,033

First Section of theTokyo Stock Exchange

Total

26,731,033

26,731,033－

Description

Number of sharesconsisting a unit:
100 shares－(2) [Share subscription rights, etc.](i) [Stock option scheme]
None to be disclosed.
(ii) [Other share subscription rights, etc.]
None to be disclosed.
(3) [Exercise of bonds with share subscription rights containing a clause for exercise price adjustment, etc.]
None to be disclosed.
(4) [Changes in total number of issued shares, capital stock, etc.]

Date

April 1, 2020 June 30, 2020

Increase or
Balance of total
decrease in total number of issued
number of issued sharesshares(shares)(shares)－

26,731,033

Increase or
decrease incapital stock

Balance ofcapital stock

Increase or
decrease incapital reserve

Balance ofcapital reserve(millions of yen)(millions of yen)(millions of yen)(millions of yen)

－

5,700

－

(5) [Major shareholders]
There is nothing applicable to be disclosed as the current quarter is the 3rd quarter accounting period.

– 15 –

5,409

(6) [Status of voting rights]
The status of voting rights as of the end of the current 3rd quarter accounting period indicated hereunder are based on theshareholders registry as of the most recent record date (March 31, 2020) because the content of the shareholders registry as of theend of the current 3rd quarter cannot be confirmed.
(i) [Shares issued]

As of March 31, 2020

Number of shares (shares)

Number of voting rights(units)Shares without voting right

－

－

－

Shares with restricted voting right (treasury
stock, etc.)

－

－

－

Shares with restricted voting right (others)

－

－

－

－

－

263,969－Classification

Shares with full voting right

Description

Common stock

263,100

Shares with full voting right (others)

Common stock

26,396,900

Shares less than one share unit

Common stock

71,033－－

26,731,033－－

263,969－(treasury stock, etc.)

Total number of shares issued
Total voting rights held by all shareholders－(Note) Shares with full voting right (others) includes 600 shares (6 units of voting rights) registered in the name of Japan Securities
Depository Center, Inc., and 189,700 shares (1,897 units of voting rights) owned by the BIP Trust.
(ii) [Treasury stock, etc.]

Name of shareholder

TKC Corporation

Total

Address ofshareholder
1758 Tsurutamachi,
Utsunomiya-shi,
Tochigi－

As of March 31, 2020
Percentage ofshares held to the
Total shares held
total number of(shares)issued shares (%)

Number of shares
held under own
name (shares)

Number of shares
held under othernames (shares)

263,100－

263,100

0.98

263,100－

263,100

0.98(Note) In addition to the above, the 189,700 shares owned by the BIP Trust are recorded as treasury stocks in the quarterly consolidated
financial statements.

2 [Officers]
There has been no change in the officers during the current quarter cumulative period since the date of submission of the Annual
Securities Report for the previous fiscal year.

– 16 –

Part 4 [Financial Information]
1. Method of Preparing Quarterly Consolidated Financial Statements
The quarterly consolidated financial statements of the Company have been prepared in accordance with the Ordinance on
Terminology, Forms, and Preparation Methods of Quarterly Consolidated Financial Statements (Cabinet Office Ordinance No.64
of 2007).
2. Auditing and Attestation
The quarterly consolidated financial statements of the Company for the 3rd quarter consolidated accounting period (from April 1,2020 to June 30, 2020) and the 3rd quarter consolidated cumulative period (from October 1, 2019 to June 30, 2020) have been
audited by Ernst & Young ShinNihon LLC pursuant to the provision of Article 193-2, Paragraph 1 of the Financial Instruments
and Exchange Act of Japan.

– 17 –

1 [Quarterly Consolidated Financial Statements](1) [Quarterly consolidated balance sheets](Unit: millions of yen)
Current 3rd quarter consolidated
Previous consolidated fiscal year
accounting period(September 30, 2019)(June 30, 2020)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable–trade
Inventories
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures (net amount)
Land
Other (net amount)
Total property, plant and equipment
Intangible assets
Investments and other assets
Investment securities
Long-term deposits
Guarantee deposits
Other
Total investments and other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Accounts payable–trade
Electronically recorded obligations–operating
Short-term loans payable
Accounts payable–other
Income taxes payable
Provisions for bonuses
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
Retirement benefit liabilities
Provisions for stocks payment
Other
Total non-current liabilities
Total liabilities– 18 –

29,810
8,755
1,090
1,459
(41)
41,07324,807
7,233
768
1,351
(37)
34,123

8,404
6,892
2,666
17,963
3,290

8,133
6,892
2,470
17,496
3,010

15,527
9,500
1,339
8,294
34,661
55,91596,98916,15013,6001,418
7,822
38,99159,49893,622

3,602
916
142
3,924
2,450
3,600
1,640
16,278

1,818
1,120
212
2,546
1,087
1,476
3,072
11,335

438
4,764
562
1,825
7,590
23,868

348
3,695
601
1,768
6,413
17,748

(Unit: millions of yen)
Current 3rd quarter consolidated
Previous consolidated fiscal year
accounting period(September 30, 2019)(June 30, 2020)
Net assets
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Accumulated remeasurements of retirement
benefits
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets– 19 –

5,700
5,711
63,623(1,630)73,4045,700
6,588
67,504(1,659)78,133

(83)

(684)

(1,704)(1,575)(1,787)
1,504
73,121
96,989(2,259)－75,87393,622

(2) [Quarterly consolidated statements of income and quarterly consolidated statements of comprehensive income][Quarterly consolidated statements of income][3rd quarter consolidated cumulative period]

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividends income
Insurance dividends income
Land and house rent received
Equity in earnings of affiliates
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gains on sales of non-current assets
Gain on reversal of subscription rights to shares
Other
Total extraordinary income
Extraordinary losses
Loss on sale of non-current assets
Loss on retirement of non-current assets
Other
Total extraordinary losses
Quarterly net income before taxes and adjustments
Income taxes–current
Income taxes–deferred
Total income taxes
Quarterly net income
Quarterly net profit (loss) attributable to non-controllinginterests(Unit: millions of yen)Previous 3rd quarter consolidated Current 3rd quarter consolidated
cumulative period
cumulative period(Started October 1, 2018;(Started October 1, 2019;
ended June 30, 2019)
ended June 30, 2020)
47,721
51,31016,187
17,222
31,53434,08824,254
24,1107,280
9,977

Quarterly profit (loss) attributable to owners of parent– 20 –

23
135
6
43
18
58
286

26
146
3
37
－
55
269

1
0
0
2
7,564

1
0
0
1
10,245

1
274
8
283

1
－
－
1

10
5
0
16
7,832
2,112
450
2,563
5,269

－
21
－
21
10,225
2,729
723
3,453
6,771

97

(20)

5,171

6,792

[Quarterly consolidated statements of comprehensive income][3rd quarter consolidated cumulative period]

Quarterly net income
Other comprehensive income
Valuation difference on available-for-sale securities
Remeasurements of retirement benefits
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Quarterly comprehensive income(Breakdown)
Quarterly comprehensive income attributable toowners of parent
Quarterly comprehensive income attributable to noncontrolling interests(Unit: millions of yen)Previous 3rd quarter consolidated Current 3rd quarter consolidated
cumulative period
cumulative period(Started October 1, 2018;(Started October 1, 2019;
ended June 30, 2019)
ended June 30, 2020)
5,269
6,771

– 21 –(1,026)
－

(602)
128

(0)

－

(1,026)
4,242

(473)
6,298

4,145

6,320

96

(22)

[Notes to Financial Statements](Additional Information)(Stock-based compensation plan for officers)
1. Outline of transaction
Based on the resolution of the Board of Directors’ Meeting held on October 31, 2018 followed by approval at the Ordinary General
Meeting of Shareholders held on December 21, 2018, the Company introduced a stock-based compensation plan called “BIP Trust.”
The objectives of the plan are to clarify the linkage between the Company’s shareholder value and the remuneration for Directors,
etc. and to motivate Directors, etc. to contribute more to enhancing the medium- to long-term corporate value by sharing common
interest with shareholders, including not only the merit derived from the rising share price, but also the risk associated with the
decline in share price.
The proposal to change the stock-based compensation plan for Directors, etc. (excluding directors who do not concurrently serveas an executive officer) and Full-time Auditors to performance-linked compensation has been deliberated by the Nomination andCompensation Advisory Committee whose chairperson and half of the members are independent outside officers and outside
experts, and approved at the Ordinary General Meeting of Shareholders held on December 20, 2019.
2. Stocks of the Company remaining in trust
The stocks of the Company remaining in trust are recorded as treasury stock under Net Assets with the book values in the trust(not including expenses attributable thereto). The book value of said treasury stocks was 750 million yen for 189,700 shares as ofthe end of this current 3rd quarter consolidated accounting period.
(Implementation of Treatment of Tax Effect Accounting for the Transition from the Consolidated Taxation System to Group Tax
Sharing System)
Based on the treatment set forth under Item 3 of the Treatment of Tax Effect Accounting for the Transition from the Consolidated
Taxation System to Group Tax Sharing System (Practical Solution No. 39, March 31, 2020), the Company and some of its domestic
consolidated subsidiaries do not implement the provisions of Paragraph 44 of the Implementation Guidance on AccountingStandard for Tax Effect Accounting (ASBJ Guidance No. 28, February 16, 2018) for items that were transitioned to the group tax
sharing system which was established in the Law for Partial Revisions to the Income Tax Act, etc. (Law No. 8 of 2020) and items
that were revised under the non-consolidated taxation system in line with the transition to the group tax sharing system. The
amounts of deferred tax assets and deferred tax liabilities are based on the provisions of the Tax Act prior to revisions.

– 22 –

(Notes to the quarterly consolidated statements of cash flows)
The Company does not prepare the quarterly consolidated statements of cash flows for the current 3rd quarter consolidated
cumulative period. The depreciation (including amortization of intangible assets) for the current 3rd quarter consolidated
cumulative period is as follows:
Previous 3rd quarter consolidated
cumulative period(Started October 1, 2018;
ended June 30, 2019)

Current 3rd quarter consolidated
cumulative period(Started October 1, 2019;
ended June 30, 2020)

2,280 million yen

2,286 million yen

Depreciation(Notes to shareholders’ equity, etc.)

I. Previous 3rd quarter consolidated fiscal year (Started October 1, 2018; ended June 30, 2019)
Dividend payments
Total amount of Dividend per
cash dividends share (yen)(millions of yen)

Resolution

Class of shares

December 21, 2018
Ordinary General
Meeting of
Shareholders

Common stock

1,450

May 8, 2019
Meeting of theBoard of Directors

Common stock

1,453

Record date

Effective date

Source ofdividends

55

September 30, 2018

December 25, 2018

Retainedearnings

55

March 31, 2019

June 10, 2019

Retainedearnings(Note) The total amount of cash dividends determined by resolution of the Board of Directors on May 8, 2019 includes a cash dividendof 10 million yen to the stocks of the Company owned by the BIP Trust.
II. Current 3rd quarter consolidated cumulative period (Started October 1, 2019; ended June 30, 2020)
Dividend payments
Resolution

Class of shares

Total amount of Dividend per
cash dividends share (yen)(millions of yen)

Record date

Effective date

Source ofdividends

December 20, 2019
Ordinary General
Common stock
Meeting of
Shareholders

1,456

55

September 30, 2019

December 23, 2019

Retainedearnings

May 1, 2020
Meeting of theBoard of Directors

1,455

55

March 31, 2020

June 15, 2020

Retainedearnings

Common stock(Notes) 1. The total amount of cash dividends determined by resolution of the Ordinary General Meeting of Shareholders on December
20, 2019 includes a cash dividend of 10 million yen to the stocks of the Company owned by the BIP Trust.
2. The total amount of cash dividends determined by resolution of the Board of Directors on May 1, 2020 includes a cash
dividend of 10 million yen to the stocks of the Company owned by the BIP Trust– 23 –

(Segment information, etc.)[Segment information]
I. Previous 3rd quarter consolidated cumulative period (Started October 1, 2018; ended June 30, 2019)
Information on net sales and profit or loss for each reportable segment
Reportable segment(Unit: millions of yen)Amounts inquarterly
Adjustments
consolidated(Note 1)statements ofincome(Note 2)

Accounting
Firm BD

Local
Governmen
ts BD

Printing BD

Total

33,43011,322

2,969

47,721－47,721

8

0

1,613

1,622

(1,622)－

Total

33,438

11,322

4,583

49,343(1,622)47,721

Segment profit (loss)

7,088

(130)

315

7,273

6

7,280

Net sales(1) Sales to outside customers(2) Inter-segment sales ortransfers(Notes) 1. Adjustments of segment profit of 6 million yen include amounts for elimination of inter-segment transactions andfor adjustments of inventory assets, etc.
2. Segment profit is adjusted with the operating profit presented in the quarterly consolidated statements of income.
II. Current 3rd quarter consolidated cumulative period (Started October 1, 2019; ended June 30, 2020)
Information on net sales and profit or loss for each reportable segment
Reportable segment(Unit: millions of yen)Amounts inquarterly
Adjustments consolidated(Note 1)statements
of income(Note 2)

Accounting
Firm BD

Local
Governmen
ts BD

Printing BD

Total

34,917

13,763

2,629

51,310－51,310

6

0

1,763

1,770

(1,770)－Total

34,924

13,763

4,393

53,081(1,770)51,310

Segment profit

8,649

1,104

229

9,984

(6)

9,977

Net sales(1) Sales to outside customers(2) Inter-segment sales ortransfers(Notes) 1. Adjustments of segment profit of -6 million yen include amounts for elimination of inter-segment transactions andadjustment of inventory assets, etc.
2. Segment profit is adjusted with the operating profit presented in the quarterly consolidated statements of income.

– 24 –

(Earnings per share information)
The amount of quarterly net income per share and the basis for the calculation thereof as well as the amount of quarterly diluted
net income per share and the basis for the calculation thereof are as follows:
Previous 3rd quarter consolidated
cumulative period(Started October 1, 2018;
ended June 30, 2019)

Current 3rd quarter consolidated
cumulative period(Started October 1, 2019;
ended June 30, 2020)

196.46 yen

258.46 yen

5,171

6,792

－

－

5,171

6,792

263,221262,799

195.94 yen

－

－

－

710

－

－

－

(1) Quarterly net income per share(Basis for calculation)
Quarterly net income attributable to owners ofparent(millions of yen)Amount not attributable to common shareholders(millions of yen)
Quarterly net income from common stocks
attributable to owners of parent (millions of yen)
Average number of common stocks outstanding(hundreds of shares)(2) Quarterly diluted net income per share(Basis for calculation)
Adjustments to quarterly net income attributableto owners of parent(millions of yen)
Number of common stocks increased (hundredsof shares)
Outline of the diluted shares not included in thecalculation of quarterly diluted net income per sharefor not having dilutive effect, but having significant
changes since the end of the previous consolidated
fiscal year

(Notes) 1. The average number of stocks outstanding used in the calculation of earnings per share information has been determined byincluding the stocks of the Company owned by the BIP Trust (which has been established with the introduction of the BIP
Trust plan) as deductible treasury stocks.
The average number of said treasury stocks outstanding deducted for the calculation of quarterly net income per share was
190,193 shares for the current 3rd quarter consolidated cumulative period.
2. The quarterly diluted net income per share for the current 3rd quarter consolidated cumulative period is not stated as there
were no dilutive shares.
(Material subsequent events)
None to be disclosed.

2 [Other]
The resolution regarding the current interim dividends was adopted at the Board of Directors’ meeting held on May 1, 2020, statedas follows.
(a) Total amount of cash dividends to be paid as interim dividends

1,455 million yen(b) Dividend per share

55.00 yen(c) Effective date for payment claim and commencement date for payment

June 15, 2020

(Note) Dividends are payable to the shareholders listed or recorded on the Register of Shareholders as of March 31, 2020– 25 –

Section 2 [Information on Guarantors, etc. of the Company]
None to be disclosed.

– 26 –

[Quarterly Review Report of Independent Auditors]
August 11, 2020

TKC Corporation
To: The Board of Directors
Ernst & Young ShinNihon LLC
Designated Limited
Liability Partner
Executing Partner

Certified Public
Kanji Tako
Accountant(seal)

Designated Limited
Liability Partner
Executing Partner

Certified Public
Toru Iizuka
Accountant(seal)

Pursuant to the provision of Article 193-2, Paragraph 1 of the Financial Instruments and Exchange Act of Japan, we have conducted areview of the quarterly consolidated financial statements of the consolidated fiscal year of the Company (started from October 1, 2019and ending September 30, 2020) for the 3rd quarter consolidated accounting period (from April 1, 2020 to June 30, 2020) and for the
3rd quarter consolidated cumulative period (from October 1, 2019 to June 30, 2020) stated in [Financial Information], namely, thequarterly consolidated balance sheet, quarterly consolidated statements of income, quarterly consolidated statements of comprehensive
income, and notes.
Management's Responsibility for the Quarterly Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the quarterly consolidated financial statements in accordancewith accounting principles of quarterly consolidated financial statements generally accepted in Japan. Responsibilities include those fordesigning and operating an internal control system as the management deems necessary in order to prepare and properly present thequarterly consolidated financial statements that are free from material misstatement due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an independent conclusion regarding the quarterly consolidated financial statements based on ourquarterly review. We conducted our quarterly review in accordance with quarterly review standards generally accepted in Japan.
A quarterly review consists principally of making inquiries, performing analytical procedures and other quarterly review procedures ofthe management and persons responsible for financial and accounting matters. The quarterly review procedure is a limited procedurecompared to the audit procedure of annual financial statements performed in accordance with auditing standards generally accepted inJapan.
We believe that we have obtained evidences to support the basis for our conclusion.
Auditor's Conclusion
Based on our quarterly review, nothing has come to our attention that causes us to believe that the quarterly consolidated financial
statements referred to above does not properly represent, in all material respects, the financial conditions of TKC Corporation and its
consolidated subsidiaries as of June 30, 2020 and their operating results for the 3rd quarter consolidated cumulative period ending on
the same date in accordance with accounting principles of quarterly consolidated financial statements generally accepted in Japan.
Interest
Our firm and the executing partners have no interest in the Company for which disclosure is required under the provisions of the Certified
Public Accountants Act of Japan.
End of document(Notes) 1. The above is a digitized version of the original copy of the quarterly audit report, the original of which is stored by TKC
Corporation (the Company filing this quarterly report).
2. XBRL data is not included in the scope of this quarterly review.

– 27 –

[Front Cover][Document filed]

Confirmation letter[Applicable law]

Article 24-4-8, Paragraph 1 of the Financial Instruments and Exchange Act of Japan[Filed with]

Director of Kanto Local Finance Bureau[Date filed]

August 11, 2020

[Company name]

Kabushiki Kaisha TKC[Company name in English]

TKC Corporation[Title and name of representative]

Masanori Iizuka, Representative Director, President and Executive Officer[Title and name of Chief Financial Officer]

Hitoshi Iwata, Representative Director, Vice President and Executive Officer[Address of head office]1758 Tsurutamachi, Utsunomiya-shi, Tochigi[Place available for public inspection]

TKC Corporation, Tokyo Head Office(2-1 Ageba-cho, Shinjuku-ku, Tokyo)
Tokyo Stock Exchange, Inc.
(2-1 Nihonbashikabutocho, Chuo-ku, Tokyo)– 28 –

1 [Matters Related to Adequacy of Statements Contained in the Quarterly Report]
Masanori Iizuka, Representative Director, President and Executive Officer of the Company and Hitoshi Iwata, Chief Financial
Officer of the Company hereby confirm that the statements contained in the quarterly report of the Company for the 3rd quarterof the 54th term (started April 1, 2020; ended June 30, 2020) are adequate under the Financial Instruments and Exchange Act ofJapan.
2 [Special Notes]
None to be disclosed.

– 29 –