Quarterly Report(55th Term 1st Quarter)
Started October 1, 2020
Ended December 31, 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.] ................................................................................................................................................ 12Part 3[Information on the Company] ........................................................................................................................................... 13
1 [Information on the Company’s Stock] .............................................................................................................................. 13(1) [Total number of shares, etc.] .................................................................................................................................... 13(2) [Share subscription rights, etc.] ................................................................................................................................. 13(3) [Exercise of bonds with share subscription rights containing a clause for exercise price adjustment, etc.] ............... 13(4) [Changes in total number of issued shares, capital stock, etc.] .................................................................................. 13(5) [Major shareholders].................................................................................................................................................. 13(6) [Status of Voting Rights] ........................................................................................................................................... 14
2 [Officers] ............................................................................................................................................................................ 14

Part 4[Financial Information] ...................................................................................................................................................... 15
1 [Quarterly Consolidated Financial Statements] .................................................................................................................. 16(1) [Quarterly consolidated balance sheets] .................................................................................................................... 16(2) [Quarterly consolidated statements of income and quarterly consolidated statements of comprehensive income] ... 18[Quarterly consolidated statements of income].......................................................................................................... 18[Quarterly consolidated statements of comprehensive income]................................................................................. 19
2 [Other] ................................................................................................................................................................................ 23

Section 2[Information on Guarantors, etc. of the Company] ............................................................................................................. 24[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]February 12, 2021

[Quarterly accounting period]

55th Term 1st Quarter (from October 1, 2020 to December 31, 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]

Kiyotsugu Nakanishi, Director & Executive Officer, Chief Director of
Business Administration[Contact address]

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

03-3235-5511[Contact person]

Kiyotsugu Nakanishi, Director & Executive Officer, Chief Director of
Business Administration[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]
54th Term
1st quarter consolidated
cumulative periodTerm & Period

55th Term
1st quarter consolidated
cumulative period

54th Term

Started October 1, 2019; Started October 1, 2020 Started October 1, 2019;
ended December 31, 2019 ended December 31, 2020 ended September 30, 2020

Accounting period
Net sales(millions of yen)

16,32014,837

67,814

Ordinary income(millions of yen)

2,581

2,816

11,685(millions of yen)

1,594

1,873

7,821

(millions of yen)

1,953

2,213

7,501

Net assets(millions of yen)

73,376

77,291

77,075

Total assets(millions of yen)

92,093

93,79997,671

Quarterly (current) net
income attributable toowners of parent
Quarterly comprehensive
income or comprehensive
incomeQuarterly (current) net
income per share
Quarterly (current) diluted
net income per share
Equity ratio

(yen)

60.68

71.29

297.63

(yen)

－

－

－

(%)

79.3

82.4

78.9

(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 maintains a Board Incentive Plan (BIP) Trust and records the stocks held by said Trust as treasury stocks.
Accordingly, for the purpose of calculating the quarterly (current) net income per share, they are included in the treasury
stocks to be deducted in calculating the average number of shares outstanding.
4. The quarterly (current) diluted net income per share 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 1st 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 1st quarter consolidated cumulative period.
There are no significant changes in risks regarding business operations, etc. described in the annual securities report of the previous
fiscal year.

2 [Management Analysis of Consolidated Financial Conditions, Operating Results, and Cash Flows]
I. Operating Results
The outlook for the containment of the novel coronavirus disease (hereinafter, “COVID-19”) was still unpredictable, the Company
continued on from the previous fiscal year to place highest priority on supporting our customers, and worked to develop systems
and provide services for them.
The Accounting Firm Business Division supported the efforts of certified public tax accountants and certified public accountants
that are customers of TKC (hereinafter, “TKC Members”) in providing assistance in financing and managerial advisory services as
escort supporters of SMEs. In addition, the Company worked to promote the use of TKC Monitoring Information Service, in which
TKC Members, upon request by their clients, disclose the company’s settlement to financial institutions at the same time as theelectronic tax filings of settlement documents, and as a result, the Service was used for more than 255,000 cases as of December 31,
2020.
The Local Governments Business Division began preparations in response to the release of the administrative circular“Implementation Outline of Establishing COVID-19 Vaccination Systems” on October 23, 2020 from the Ministry of Health, Labourand Welfare, including system revision of vaccination ledger system and printing of notices on vaccination.
As a result of these activities, the operating results for the current 1st quarter consolidated cumulative period (hereinafter, “the current
1st Quarter”) of the consolidated Group comprising of TKC Corporation and its six consolidated subsidiaries recorded a net sales of
14,837 million yen (decreased 9.1% year-on-year), operating income of 2,670 million yen (increased 8.4% year-on-year), ordinary
income of 2,816 million yen (increased 9.1% year-on-year), and net income attributable to owners of parent of 1,873 million yen(increased 17.5% year-on-year).
The decrease in net sales year-on-year was caused by decreasing demands for PC replacements as customers completed their firstround of PC replacements in response to the termination of Windows 7 support by Microsoft. In addition, it was also due to theCompany’s decision on the early application of the Accounting Standard for Revenue Recognition (hereinafter, “Revenue
Recognition Accounting Standard”), which will be implemented for listed companies starting April 1, 2021. The reason for theCompany’s early application of the Revenue Recognition Accounting Standard was in an aim to compile the know-how gained
through the application of the Standard and provide such know-how in its consulting services for listed companies.
Net sales for the current 1st Quarter by business division are shown below.
1. Results of operation of the Group for the 1st Quarter(1) Net sales of the Accounting Firm Business Division
Net sales of the Accounting Firm BD was 10,631 million yen (decreased 5.8% year-on-year); operating income was 2,632 million
yen (increased 12.1% year-on-year). Breakdown of sales is as follows:(i) Sales from computer services increased by 2.6% year-on-year. Medium-size companies are rapidly working towards digitaltransformation (DX), and in such climate, this was attributable to the continuing growth in number of implementations of the
FX4 Cloud Integrated Accounting Information System for mid-size companies, which enables the linking of sales management
systems, salary calculation systems and other business systems with accounting data, and the increase in the number of tax
accounting firms adopting the Office Management System (OMS Cloud) for Tax Accounting Firms.
(ii) Software sales increased by 6.3% year-on-year. This is the result of increase in the number of users of financial accounting
systems, such as FX4 Cloud Integrated Accounting Information System for mid-size companies, that meet the requirements ofthe Electronic Books Maintenance Act of Japan, as well as strong growth in the number of users of our electronic tax filingsystem for corporations (ASP1000R) in response to the electronic filing of income taxes mandated to large enterprises with acapital of 100 million yen or greater starting April 1, 2020.
(iii) Hardware sales decreased by 31.4% year-on-year. This was due to customers having completed their first round of PC
replacements in response to the termination of Windows 7 support by Microsoft, and PC sales reverting back to the usual level.
(iv) Sales from supplies decreased by 63.7% year-on-year. This was because transactions of business forms and office equipment
offered to accounting firms were recorded as agent transactions under the Revenue Recognition Accounting Standard. Net
sales prior to applying the Revenue Recognition Accounting Standard increased by 1.6% year-on-year.

– 5 –(v) The improvement in operating income year-on-year was a result of decrease in travel expenses by switching the style ofcustomer support to remote using the online meeting system, and decrease in costs related to hosting seminars by using
webinars for marketing activities.
(2) Net sales of the Local Governments Business Division
Net sales of the Local Governments BD was 3,523 million yen (decreased 16.2% year-on-year); operating income was 212 million
yen (decreased 6.6% year-on-year). Breakdown of sales is as follows:(i) Sales from computer services increased by 8.2% year-on-year. This was driven by increase in sales from the new customer
outsourcing services whose system was fully launched in FY2020, and increase in data center usage fees.
(ii) Software sales decreased by 35.6% year-on-year. This was due to the absence of temporary sales in response to the partial
revisions to the Order for Enforcement of the Residential Basic Book Act which were recorded in the previous fiscal year.
(iii) Sales from consulting services decreased 57.5% year-on-year. This was because the change-over of systems for orders fromnew customers won during the previous fiscal year is still ongoing, and its delivery inspection is still pending. System changeover is scheduled to be completed during this fiscal year.
(iv) Hardware sales decreased by 5.7% year-on-year. This was due to decrease in renewal of server equipment by customers.
(v) The reason for decrease in operating income year-on-year was due to the absence in the current fiscal year of temporary sales
in response to the partial revisions to the Order for Enforcement of the Residential Basic Book Act which were recorded in theprevious fiscal year.
(3) Net sales of the Printing Business Division (Subsidiary: TLP Corporation)
Net sales of the Printing BD was 683 million yen (decreased 17.6% year-on-year); operating loss was 170 million yen (operating
loss of 95 million yen in the 1st quarter of the previous fiscal year). Breakdown of sales is as follows:(i) Sales of data printing service-related products decreased by 24.3% year-on-year. This was due to suppressed orders for direct
mail and other productions for sales promotion from private enterprises due to impacts of COVID-19.
(ii) Business form-related sales decreased by 12.2% year-on-year. This was due to ongoing decline in demands for business forms,
as companies are switching over to digitalization in response to COVID-19 and further reducing business form printing.
(iii) Sales of printing of commercial-use creative materials (catalogs, flyers, books, etc.) decreased by 16.0% year-on-year. Thiswas due to decrease in demands for printed materials and flyers for events from the cancellation/postponement of many events
impacted by COVID-19 and switching to webinars.
2. Important matters with respect to the Company as a whole(1) Prevention of COVID-19 infection and actions for new working styles
As the outlook for the containment of COVID-19 is still unpredictable, the Group is taking the following infection prevention
measures and adaptation to new working styles in order to continue the provision of services to its customers:(i) To enable customers to continue using our cloud services, business form printing services, and help desk services, we havebeen continuing from the previous fiscal year to strengthen our business continuity measures (including prohibiting the entryof outside personnel at important offices and developing the infrastructure for remote access to the data center).
(ii) By introducing teleworking and staggered working hour programs, we have set our target for attendance at 30% for throughout
the Company. We also make it a general rule to conduct customer support and business meetings using the Web meetingsystems.
(2) Application of the Revenue Recognition Accounting Standard
The Company began the early application of the Revenue Recognition Accounting Standard in the current fiscal year (started
October 1, 2020).
This is in an aim to compile the know-how gained through the application of the Revenue Recognition Accounting Standard andprovide such know-how in our consulting services for listed companies.
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 December 31, 2020) that are customers of TKC.

– 6 –

(1) Activities to achieve the strategic goals of the Accounting Firm Business Division(i) Support of SMEs affected by COVID-19
In the current 1st 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.
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, 2020 and posted a total of 182 entries as of the end of December 2020.
2) Offering of “COVID-19 management support information & emergency financial measures” corner
The Company developed a special website where TKC Members can check SME support policies offered by the national
governments, prefectural governments, as well as cities with a population of 40,000 or greater, and financial institutions
under the categories: Loans, Employment, Subsidies, and Taxation. The site has enabled TKC Members to send out
information on emergency financial measures widely across clients and other SMEs. The website had 9,591 entries on
support policies and has become the largest database dedicated to SME support policies in Japan as of the end of December
2020.
3) Upgrading of a check function for clients requiring emergency support
The Company provided a function for clients requiring emergency support on the Tax Accountants Office Management
system (OMS). This function can automatically evaluate the eligibility of each client in the form of a checklist of various
governmental emergency economic policies and special loans by government-affiliated financial institutions. Further in thecurrent 1st Quarter, we rapidly achieved compliance with the Fixed Assets Tax Reduction System which provides for
reduction of fixed assets tax and city planning tax for FY2021, and added a function to extract eligible clients that are likely
to meet the conditions with a single click. Through these efforts, we are establishing a system to enable TKC Members toprovide information to their clients in a timely manner.
4) Strengthening of on-demand training
The Company provided on-demand training in which we explained the practices for the application and filing for the abovementioned Fixed Assets Tax Reduction System, as well as training on the formulation of a medium-term management planamidst the COVID-19 pandemic, and also encouraged viewing of the contents.
(ii) Sales activities to achieve TKCNF’s Strategic Targets 2020
The Company has been engaged in sales activities 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 Members, upon request by the
management of their clients, provide to financial institutions such information as monthly trial balance sheets, financial
statements and tax returns prepared by TKC Member firms after monthly field audits and monthly settlements. Monthly
trial balance sheets will be made available immediately upon completion of the monthly settlement, and fiscal financial
settlements 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:
i. Supporting documents submitted by TKC Members as provided for under Article 33-2 of the Certified Public Tax
Accountant Act of Japan
ii. 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 years
iii. 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 458 financial institutions including all local banks throughout Japan (64 institutions) as of December 31, 2020. Also,
over 255,000 companies provided their financial statements to financial institutions as of December 31, 2020.
Going forward, financial institutions are expected to check the performance of borrowers on a regular basis and provide
management support. There is growing interest among financial institutions because the services to provide monthly
trial balance sheet under the TKC Monitoring Information Service enable clients of TKC Members to submit the resultsof monthly settlements electronically.

– 7 –2) Promotion of self-accounting by the TKC methods (promotion of FX series)
During the current 1st Quarter, we provided support for the utilization of functions for the management strategy level(budget registration, management by division, financing results spreadsheet) incorporated in the FX series, which hasenabled the management of clients to accurately understand the impacts of COVID-19 pandemic and to determine the next
actions. In order for management to utilize these functions effectively, they need to enter the accounting transaction data ina timely and accurate manner, so the Company also provided support on functions for business execution level, including
support for the bank credit data receiving function to receive bank deposit transaction data through online banking andgenerate journal entries automatically, and the linking of salary journal with the strategic salary information system (PX2).
In addition, the FX Cloud series which was released on September 25, 2020 features enhanced functions to “strengthen thecompany through accounting” and enhanced functions to support the field auditing by accounting firms. By offering
assistance to implement the FX Cloud series, the Company will work to support SMEs in strengthening their financial
management and capital procurement capabilities.
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.
The easing of the requirements of the Electronic Books Maintenance Act of Japan was announced in the outline of the
FY2021 tax reform approved by the cabinet on December 21, 2020. We will adapt our systems for accounting firms tocomply with electronic books that meet the revised requirements (general electronic books). In addition, we will work tofurther promote superior electronic books that meet the requirements on history of corrections, etc.
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 in soliciting new members to achieve
this goal.
On November 19, 2020, we held TKC New Members Form 2020 in the form of live streaming with the participation of 346
non-member tax accountants who were considering joining the TKCNF. This was the largest number of participants ever.
Due to COVID-related confusion, the Company is actively hosting webinars as we are unable to visit potential accounting
firms that we intended to solicit.
As a result of these activities, the number of TKC Members totaled approximately 9,700 accounting firms and 11,400
accountants as of December 31, 2020. The difference in numbers of firms and accountants are because some firms havemultiple accountants who are members.
(2) 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) formulated in February 2012 with which
SME clients should comply.
These Guidelines have been formulated based on the following principles: i) accounting that helps to grasp the company’sbusiness situation; ii) accounting that contributes to providing information to stakeholders (financial institutions, etc.); iii)
accounting that complies with the Ordinance on Company Accounting while achieving harmony between accounting andtaxation system; and iv) 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 promote the development of training materials and to strengthen 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 topast 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.

– 8 –(3) 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 are actively working to solicit these companies and their affiliates to becomeclients of TKC Members.
Starting April 2020, large enterprises with a capital of 100 million yen or greater 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. 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 incollaboration with TKCNF’s Medium- and Large-sized Companies Support Council (1,474 members as of December 31, 2020).
We also entered into alliance agreements with four ERP vendors, working on the development of systems linking to financial
statements data. Moreover, as many listed companies encouraged telecommuting in response to COVID-19, we switched oursales activities from visiting sales to inside sales, consequently reducing the time to visit clients and increasing the number ofnegotiations.
As a result, the number of users of systems such as ASP1000R electronic tax filing system for corporations and the eConsoliTax
consolidated tax payment system reached 6,800 companies as of December 31, 2020. This is equivalent to approximately 30% of
the 23,000 some companies with a capital of 100 million yen or greater.
Also, as companies having business abroad are refraining from overseas travel due to COVID-19, they are facing challenges inmanaging their foreign subsidiaries and ensuring governance. In such environment, the number of companies implementing the
OBMonitor overseas business monitoring system is increasing rapidly, as it is a cloud service that allows companies to check thefinancial data of their foreign subsidiaries from their office in Japan. As a result, the number of users of the OBMonitor exceeded
1,000 companies and is currently used in 34 countries around the world as of the end of December 2020.
As a result of these activities, the number of corporate groups using the TKC Consolidated Group Solution counted approximately
4,400 corporate groups as of December 31, 2020. Our taxation-related information systems are adopted by 89% of the 100 largest
Japanese listed companies by sales amount. The market shares among Japanese listed companies reached 34%.
(4) Expansion of markets for legal information database services(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 were 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 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 1st Quarter under review, as a result of active online promotional activities
through the website and SNS towards TCK 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 December 31, 2020.
(ii) Progress in the academic market
Due to the impacts of COVID-19, many universities after October 2020 are conducting hybrid-style classes combining faceto-face and online lectures. 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, computing and testing. These features are being
reconsidered as tools to support online classes and learning for faculty and students. To date, the Company conducts web
meetings with various universities, and continues to respond to requests for additional access to our basic services and provide
support in the development of online learning environments tailored to meet the situation of each university.
Also, the study tools (for civil service examination and practical business law examination) offered mainly to the faculty oflaw of universities have been adopted by 25 universities as of December 31, 2020. As examinations are postponed and learning
environment incomplete, students must rely on online study tools that contain well-developed learning materials. Such students
used our systems much more frequently. In September 2020, we began offering a new study tool for the jurisprudence
examination. Because the jurisprudence exam for academic year 2020 (November) was limited to group examinees, we arepromoting trial use among 63 target universities and conducting surveys in an aim to expand use in academic year 2021. As
we anticipate that established computer-based examinations already used for qualification tests (CBT/IB method) will be usedin the future, we are working to understand the needs of users, develop web-based testing functions, and promote the use of
study tools compatible with computer-based examinations.
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.

– 9 –(1) Development and provision of mission-critical system-related services
The Company provides TKC Government Cloud Service to municipalities (mainly for cities, wards, towns and villages). This isa Cloud Service that 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.
On July 17, 2020, the Declaration to be the World’s Most Advanced IT Nation: Basic Plan for the Advancement of Public andPrivate Sector Data Utilization was approved by the cabinet. In an aim to reduce administrative costs, standardize administrative
tasks, improve information security, and ensure business continuity in the event of a disaster, the Japanese government has set atarget to have approximately 1,600 institutions using cloud for their administrative systems (of which, approximately 1,100
institutions to be users of local government cloud systems that can be shared by multiple users) by the end of FY2023.
Our TASK Cloud Service is a single version package system operated at TKC data centers that is designed to allow shared use bymultiple institutions. It has been attracting attention as being an optimal system for a local government cloud system promotedby the government, and has been adopted by eleven groups for shared use. The seven alliance partners across the country are also
actively promoting our TASK Cloud Service. As a result, the TASK Cloud Service has been adopted by more than 160 local
municipalities as of December 31, 2020.
In the current 1st Quarter under review, we continued to undertake proposal activities to win new contracts, as well as supported
newly implementing municipalities that were scheduled for a full-scale launch by March 2021 in enabling smooth systemtransition.
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 (*).
In addition, we engaged in gathering and communicating information to enable customers to respond quickly and effectively to
e project of establishing COVID-19 vaccination systems, and prepared ourselves to provide support for system revisions ofvaccination ledger system as well as printing and mailing of notices on vaccination and individual notices for residents as
outsourcing services.
* 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 ofwelfare, nursing care, and health care. It can standardize terms/expressions to be used in recording necessary information initemized format, which allows users to record the progress of support in an efficient and accurate manner and to facilitatesharing of information among relevant parties.
(2) Support for digitalization of administrative services
In an aim to contribute to promoting digital transformation of local governments, the Company provides administrative service
digitization support solutions which support governments to achieve “no writing, no waiting, no visiting” administrative services.
In this quarter under review, we engaged in the development of the TASK Cloud Smart Application System with the cooperationof Osaka city, Osaka Prefecture for commercialization in Spring of 2021, and enhanced the functionalities of the TASK CloudEasy Counter Service System and TASK Cloud My Number Card Issuance Reservation and Management System.
In addition, as a result of aggressive promotional activities of these systems and services, the Convenience Store Certificate
Issuing System is adopted by over 130 agencies including government ordinance-designated cities such as Kobe and Kitakyushu,
the Easy Counter Service System is used by more than 10 municipalities, and the My Number Card Issuance Reservation &Management System is adopted by over 20 municipalities as of December 31, 2020.
(3) Response to digitization of local tax administrations
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 with whom we have on-going alliance partner agreements.
As a result, our TASK Cloud Local Taxes Electronic Filing Support Service is currently used by more than 780 agencies which
account for more than 40% of all prefectures and local municipalities as of December 31, 2020.
In the current 1st Quarter, we engaged in the enhancement of functionalities of related systems in response to the launch of theCommon Tax Payment System for Local Taxes, and active promotional activities for our own data connection services.
(4) Response to standardized local public accounting
Municipalities are required to further promote their initiatives in local public accounting and to focus on streamlining the
preparation of financial documents in order to utilize such data for financial analysis.

– 10 –

According to the report by the Study Group on the Promotion of Local Public Accounting (FY2019) released by the Ministry ofInternal Affairs and Communications in March 2020, it is believed that smooth implementation of the daily journalizing method
and reduction of checking tasks in year-end bulk journalizing can be achieved by implementing a local public accounting systemthat has an integrated financial accounting system, linking, in advance, the expenditure items with account headings, and by
establishing a system that can journalize and convert the budget items automatically upon budget execution. The report alsosuggests that “it may be possible to streamline the ledger registration tasks by linking and integrating the data in the public domain
ledger and data in the fixed assets ledger” and encourages municipalities to consider implementation of a local public accounting
system that has an integrated financial accounting system and adopt the daily journalizing method upon system updating.
The Company provides the TASK Cloud Public Accounting System, as a public accounting system integrated with a financial
accounting system which is compatible with the daily journalizing method encouraged by the Japanese government, and its related
systems TASK Cloud Non-current Assets Control System and TASK Cloud Consolidated Financial Statement Preparing System.
In the current quarter, the Company received new orders from many agencies including Sodegaura City, Chiba Prefecture andKanuma City, Tochigi Prefecture, and provided 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 as well as in aggressive promotional activities. As a result, our public accounting systems are adopted by morethan 270 agencies as of December 31, 2020.
(5) Research and development of next-generation products
In response to the lagging in digitization and moving online that became apparent from the spread of COVID-19, the Basic Policy
on Economic and Fiscal Management and Reform 2020 (Cabinet Decision of July 2020) positioned all-out promotion of a digital
government as top priority, and decided to speed up the implementation of digitization to “move as many administrative
procedures as possible online and make them ‘one stop and once only.’ ” In addition, on December 25, 2020, the Ministry ofInternal Affairs and Communications announced the Local Governments Digital Transformation (DX) Promotion Plan,
committing to focus on initiatives such as standardization & commonization of the local governments’ information systems,
promotion of My Number card, and online connection of local government’s administrative procedures during the project period
ending March 31, 2026. In such climate, initiatives for the digitization of municipal administrative services are also speeding up.
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 current 1st Quarter under review, we gathered and communicated information on the digitalization of administrative
services and standardization of operational systems, and conducted surveys, research and development on next-generation
solutions through experimental projects with advanced organizations to support the post-COVID-19 “New Normal Lifestyle.”
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 as a result of failure to receive large projects from government offices, decline in contract prices
due to lower pricing, and decrease in orders for direct mail and other productions from private enterprises due to impacts of
COVID-19.
Currently, we are approaching local municipalities to win contracts on tasks related to COVID-19 vaccination notices for residents,and engaging in sales activities towards private enterprises to receive orders for new direct mail projects.
In the area of business form printing, sales decreased as a result of weak demands for business forms, less demands for business
forms at major accounts, and decline in use of business forms due to impacts of COVID-19.
In the area of printing of commercial-use creative materials (catalogs, flyers, booklets, books, etc.), with the continuing
cancellation/postponement of events impacted by COVID-19, more customers are shifting to web-based seminars and events, andsales dropped due to decrease in orders for reference materials and flyers that used to be needed for such events.
II. Qualitative Information on Consolidated Financial Conditions
1. Assets
Total assets as of the end of the current 1st quarter consolidated accounting period amounted to 93,799 million yen, a 3,871 million
yen decrease compared to 97,671 million yen as of the end of the previous consolidated fiscal year.
(1) Current assets
Current assets as of the end of the current 1st quarter consolidated accounting period amounted to 32,554 million yen, a 3,289
million yen decrease compared to 35,844 million yen as of the end of the previous consolidated fiscal year.

– 11 –

This was mainly attributable to a 2,771 million yen decrease in cash and deposits, a 779 million yen decrease in notes and accounts
receivable, and a 260 million yen decrease in work in progress, despite a 210 million yen increase in advances payments includedin Other.
(2) Non-current assets
Non-current assets as of the end of the current 1st quarter consolidated accounting period amounted to 61,245 million yen, a 581
million yen decrease compared to 61,826 million yen as of the end of the previous consolidated fiscal year.
This was mainly due to an 824 million yen decrease in deferred tax assets included in Other and a 104 million yen decrease inbuildings and structures (net amount), despite a 420 million yen increase in investment securities.
2. Liabilities
Total liabilities as of the end of the current 1st quarter consolidated accounting period amounted to 16,508 million yen, a 4,086
million yen decrease compared to 20,595 million yen as of the end of the previous consolidated fiscal year.
(1) Current liabilities
Current liabilities as of the end of the current 1st quarter consolidated accounting period amounted to 10,798 million yen, a 3,903
million yen decrease compared to 14,701 million yen as of the end of the previous consolidated fiscal year.
This was mainly attributable to a 2,243 million yen decrease in provisions for bonuses, a 2,455 million yen decrease in income
taxes payable, and a 1,677 million yen decrease in accounts payable–other, despite a 1,143 million yen increase in deposits
received included in Other.
(2) Non-current liabilities
Current liabilities as of the end of the current 1st quarter consolidated accounting period amounted to 5,710 million yen, a 183
million yen decrease compared to 5,893 million yen as of the end of the previous consolidated fiscal year.
This was mainly attributable to an 86 million yen decrease in provisions for stocks payment and a 63 million yen decrease inlong-term lease obligations (sublease) included in Other.
3. Net assets
Total net assets as of the end of the current 1st quarter consolidated accounting period amounted to 77,291 million yen, a 215
million yen increase compared to 77,075 million yen as of the end of the previous consolidated fiscal year.
This was mainly attributable to a 296 million yen increase in valuation difference on available-for-sale securities and an 89 million
yen increase in treasury stock, despite a 213 million yen decrease in retained earnings.
Equity ratio as of the end of the current 1st quarter consolidated accounting period was 82.4%, a 3.5 percentage point increase
compared to the ratio of 78.9% 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 1st quarter consolidated cumulative period.
IV. Research and Development Activities
There were no research and development expenses spent by the TKC Group during the current 1st quarter consolidated cumulative
period.
There are no significant changes in the status of research and development activities of the TKC Group during the current 1st quarter
consolidated cumulative period.

3 [Material Agreements, etc.]
There has been no decision or conclusion of material agreements, etc., during the current 1st quarter consolidated accounting
period– 12 –

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 1st quarteraccounting period (shares)(December 31, 2020)

Number of shares issued asof the filing date (shares)(February 12, 2021)

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

Description

Common stock

26,731,033

26,731,033

First Section of theTokyo Stock Exchange

Number of sharesconsisting a unit:
100 shares

Total

26,731,033

26,731,033－－(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

Increase or
decrease in total
number of issued
shares(shares)

From October 1, 2020
To December 31, 2020－

Balance of total Increase or
Balance of capital Increase or
number of issued decrease in capital stock
decrease insharesstock
capital reserve(shares)(millions of yen)

26,731,033－(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 1st quarter accounting period.

– 13 –

Balance ofcapital reserve

5,409

(6) [Status of Voting Rights]
The status of voting rights as of the end of the current 1st quarter accounting period indicated hereunder are based on theshareholders registry as of the most recent record date (September 30, 2020) because the content of the shareholders registry asof the end of the current 1st quarter cannot be confirmed.
(i)[Shares issued]
As of September 30, 2020
Classification

Shares without voting right
Shares with restricted voting right(treasury stock, etc.)
Shares with restricted voting right(others)
Shares with full voting right (treasury
stock, etc.)

Number of shares (shares)

Number of voting rights (units)

Description

－

－

－

－

－

－

－

－

－

Common stock

263,600－－

Shares with full voting right (others)

Common stock

26,397,200

263,972－

Shares less than one share unit

Common stock

70,233－－

26,731,033－－

263,972－

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.]
Number of shares
held under own
name (shares)

Number of shares
held under othernames (shares)

1758 Tsurutamachi,
Utsunomiya-shi,
Tochigi

263,600－

263,600

0.99－

263,600－

263,600

0.99

Name of shareholder

Address ofshareholder

TKC Corporation
Total

As of September 30, 2020
Percentage ofTotal shares held
shares held to the(shares)
total number ofissued shares (%)(Note) In addition to the above, the 189,700 shares owned by the BIP Trust are recorded as treasury stocks. The number of treasury
stocks owned by the BIP Trust as of the end of the current 1st quarter accounting period was 166,420 shares.

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.

– 14 –

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 1st quarter consolidated accounting period (from October
1, 2020 to December 31, 2020) and the 1st quarter consolidated cumulative period (from October 1, 2020 to December 31, 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.

– 15 –

1 [Quarterly Consolidated Financial Statements](1) [Quarterly consolidated balance sheets](Unit: millions of yen)
Current 1st quarter consolidated
Previous consolidated fiscal year
accounting period(September 30, 2020)(December 31, 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– 16 –

26,769
7,014
723
1,357
(19)
35,84423,997
6,234
486
1,851
(15)
32,554

8,182
6,911
2,699
17,794
3,120

8,078
6,911
2,774
17,764
3,034

16,282
14,6001,438
8,591
40,911
61,826
97,671

16,703
14,6001,423
7,719
40,446
61,245
93,799

2,181
802
142
4,227
2,549
3,673
1,124
14,701

2,100
833
134
2,549
94
1,429
3,656
10,798

295
3,400
599
1,598
5,893
20,595

285
3,403
513
1,507
5,710
16,508

(Unit: millions of yen)
Current 1st quarter consolidated
Previous consolidated fiscal year
accounting period(September 30, 2020)(December 31, 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-sale securities
Accumulated remeasurements of defined benefit plans
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets– 17 –

5,700
6,588
68,533(1,660)79,161

5,700
6,588
68,319(1,571)
79,036(553)(1,532)(2,085)77,07597,671(256)(1,489)(1,745)77,291
93,799(2) [Quarterly consolidated statements of income and quarterly consolidated statements of comprehensive income][Quarterly consolidated statements of income][1st 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
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Total extraordinary losses
Quarterly net income before taxes and adjustments
Income taxes–current
Income taxes–deferred
Total income taxes
Quarterly net income
Quarterly net loss attributable to non-controlling interests
Quarterly net profit attributable to owners of parent(Unit: millions of yen)Previous 1st quarter consolidated Current 1st quarter consolidated
cumulative period
cumulative period(Started October 1, 2019;(Started October 1, 2020;
ended December 31, 2019)
ended December 31, 2020)
16,32014,837
5,928
4,295
10,392
10,542
7,928
7,871
2,464
2,670

– 18 –

7
70
3
12
23
117

11
70
12
12
38
145

0
0
0
0
2,581

0
－
－
0
2,816

0
0

0
0

3
3
2,578
236
773
1,009
1,568
(26)
1,594

0
0
2,815
106
834
941
1,873
－
1,873

[Quarterly consolidated statements of comprehensive income][1st quarter consolidated cumulative period]

Quarterly net income
Other comprehensive income
Valuation difference on available-for-sale securities
Remeasurements of retirement benefits
Total other comprehensive income
Quarterly comprehensive income(Breakdown)
Quarterly comprehensive income attributable toowners of parent
Quarterly comprehensive income attributable to noncontrolling interests

Previous 1st quarter consolidated
cumulative period(Started October 1, 2019;
ended December 31, 2019)
1,568– 19 –(Unit: millions of yen)
Current 1st quarter consolidated
cumulative period(Started October 1, 2020;
ended December 31, 2020)
1,873

342
42
384
1,953

296
42
339
2,213

1,978

2,213

(25)

－

[Notes to Financial Statements](Changes in Accounting Policies)
As its has become possible to apply the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 30, 2018)(hereinafter, “Revenue Recognition Accounting Standard”) and Implementation Guidance on Accounting Standard for Revenue
Recognition (ASBJ Guidance No. 30, March 30, 2018) from the beginning of a consolidated fiscal year commencing after April
1, 2018, the Company applies the Revenue Recognition Accounting Standard, etc. from the beginning of the current 1st quarter
consolidated accounting period. Accordingly, we will recognize revenues at the time the controls over promised goods or services
are transferred to customers, in the amounts that we expect to receive in exchange for such goods or services.
Conventionally, we have been recognizing the total amounts of compensation received from customers as revenue for sometransactions, but going forward, for transactions in which the Group acts as agent in the provision of goods or services to customers,
we will recognize as revenues, the net amount after deducting the amounts we pay to suppliers from the amounts we receive from
customers.
In applying the Revenue Recognition Accounting Standard, etc., we have followed the transitional measures set forth in the notes
to Section 84 of the Revenue Recognition Accounting Standard. Therefore, we have adjusted the retained earnings at the beginningof the current 1st quarter consolidated accounting period to include the cumulative effects of retroactive application of the new
accounting policy prior to the beginning of the said period, and applied the new accounting policy to the balance at the beginningof the said period.
As a result, the amounts of cumulative effects are reflected in the net assets at the beginning of the current 1st quarter consolidated
accounting period, and the beginning balance of retained earnings has decreased by 367 million yen.
Also, compared to the conventional method, net sales for the current 1st quarter consolidated cumulative period decreased by 451
million yen, cost of sales decreased by 547 million yen, while the amounts of operating income, ordinary income, and quarterly
net income before taxes and adjustments increased by 95 million yen each.
(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 not holding executive positions)and Full-time Auditors to performance-linked compensation has been deliberated by the Nomination and Compensation Advisory
Committee whose chairperson and half of the members are independent Outside Directors 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 658 million yen for 166,420 shares as ofthe end of this current 1st quarter consolidated accounting period.
(Application 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 its consolidated
subsidiaries do not implement the provisions of Paragraph 44 of the Implementation Guidance on Accounting Standard 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.

– 20 –

(Notes to the quarterly consolidated statements of cash flows)
The Company does not prepare the quarterly consolidated statements of cash flows for the current 1st quarter consolidated
cumulative period. The depreciation (including depreciation of intangible assets) for the current 1st quarter consolidated
cumulative period is as follows:
Previous 1st quarter consolidated
cumulative period(Started October 1, 2019; ended
December 31, 2019)
743 million yen

Depreciation

Current 1st quarter consolidated cumulative
period(Started October 1, 2020; ended
December 31, 2020)
727 million yen(Notes to shareholders’ equity, etc.)
I. Previous 1st quarter consolidated cumulative period (started October 1, 2019; ended December 31, 2019)
Dividend payments
Type of shares

Total amount ofcash dividends(millions of yen)

Dividend pershare (yen)December 20, 2019
Ordinary General
Common stock
Meeting of
Shareholders

1,456

55

Resolution

Record date

Effective date

September 30, 2019 December 23, 2019

Source ofdividends
Retainedearnings(Note) 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.
II. Current 1st quarter consolidated cumulative period (started October 1, 2020; ended December 31, 2020)
Dividend payments
Type of shares

Total amount ofcash dividends(millions of yen)

Dividend pershare (yen)December 18, 2020
Ordinary General
Common stock
Meeting of
Shareholders

1,720

65

Resolution

Record date

Effective date

September 30, 2020 December 21, 2020

Source ofdividends
Retainedearnings(Note) The total amount of cash dividends determined by resolution of the Ordinary General Meeting of Shareholders on December
18, 2020 includes a cash dividend of 12 million yen to the stocks of the Company owned by the BIP Trust.

– 21 –

(Segment information, etc.)[Segment information]
I. Previous 1st quarter consolidated cumulative period (started October 1, 2019; ended December 31, 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
of income(Note 2)

Accounting
Firm BD

Local
Governments
BD

Printing BD

Total

11,288

4,203

828

16,320－16,320

2

0

395

398

(398)

－

11,291

4,203

1,224

16,719(398)

16,320

2,347

227

(95)

2,479

(15)

2,464

Net sales(1) Sales to outside customers(2) Inter-segment sales ortransfers
Total
Segment profit (loss)(Notes) 1. Adjustments of segment loss of 15 million yen include amounts for elimination of inter-segment transactions andadjustment of inventory assets.
2. Segment profit (loss) is adjusted with the operating profit presented in the quarterly consolidated statements ofincome.
II. Current 1st quarter consolidated cumulative period (started October 1, 2020; ended December 31, 2020)
1. 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
Governments
BD

Printing BD

Total

10,631

3,523

683

14,837－

14,837

2

0

295

297

(297)

－

10,6333,523

97815,134(297)

14,837

2,632

212

(170)

2,673

(2)

2,670

Net sales(1) Sales to outside customers(2) Inter-segment sales ortransfers
Total
Segment profit (loss)(Notes) 1. Adjustments of segment loss of 2 million yen include amounts for elimination of inter-segment transactions andadjustment of inventory assets.
2. Segment profit (loss) is adjusted with the operating profit presented in the quarterly consolidated statements ofincome.
2. Changes, etc. to reportable segments
As stated in the (Changes in Accounting Policies), the Company applies the Revenue Recognition Accounting Standard,
etc. from the beginning of the current 1st quarter consolidated accounting period, and changed its accounting processing
methods on revenue recognition. As such, the method of measurements of profit/loss of the reportable segments have beenchanged accordingly.
As a result of these changes, for the current 1st quarter consolidated cumulative period: for the Accounting Firm BD, net
sales decreased by 405 million yen, and segment profit increased by 125 million yen; for the Local Governments BD, net
sales decreased by 31 million yen, and segment profit decreased by 29 million yen; and for the Printing BD, net sales
decreased by 15 million yen.

– 22 –

(Earnings per share information)
The amount of quarterly net income per share and the basis for the calculation thereof are as follows:
Previous 1st quarter consolidated
cumulative period(Started October 1, 2019;
ended December 31, 2019)

Current 1st quarter consolidated
cumulative period(Started October 1, 2020;
ended December 31, 2020)

60.68 yen

71.29 yen

Quarterly net income attributable to owners ofparent (millions of yen)

1,594

1,873

Amount not attributable to common shareholders(millions of yen)－－

Quarterly net income from common stocks
attributable to owners of parent (millions of yen)

1,594

1,873

Average number of common stocks outstanding(hundreds of shares)

262,827

262,813

Quarterly net income per share(Basis for calculation)(Notes) 1. The average number of stocks outstanding used in the calculation of earnings per share information has been
determined by including the stocks of the Company owned by the BIP Trust (which has been established with theintroduction of the BIP Trust plan) as deductible treasury stocks.
The average numbers of said treasury stocks deducted for the calculation of quarterly net income per share were
190,500 shares for the previous 1st quarter consolidated cumulative period, and 185,841 shares for the current 1stquarter consolidated cumulative period.
2. The quarterly diluted net income per share is not stated as there were no dilutive shares.
(Material subsequent events)
None to be disclosed.

2 [Other]
None to be disclosed.

– 23 –

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

– 24 –

Quarterly Review Report of Independent Auditors
February 12, 2021

TKC Corporation
To: The Board of Directors

Ernst & Young ShinNihon LLC
Tokyo Office
Designated Limited
Liability Partner
Executing Partner

Certified Public
Kanji Tako
Accountant(seal)

Designated Limited
Liability Partner
Executing Partner

Certified Public
Toru Iizuka
Accountant(seal)

Auditor’s Conclusion

Pursuant to the provision of Article 193-2, Paragraph 1 of the Financial Instruments and Exchange Act of Japan, we haveconducted a review of the quarterly consolidated financial statements of the consolidated fiscal year of the Company(started from October 1, 2020 and ending September 30, 2021) for the 1st quarter consolidated accounting period (fromOctober 1, 2020 to December 31, 2020) and for the 1st quarter consolidated cumulative period (from October 1, 2020 to
December 31, 2020) stated in [Financial Information], namely, the quarterly consolidated balance sheet, quarterly
consolidated statements of income, quarterly consolidated statements of comprehensive income, and notes.
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 December 31, 2020 and their operating results for the 1st quarter
consolidated cumulative period ending on the same date in accordance with accounting principles of quarterly
consolidated financial statements generally accepted in Japan.
Basis for Auditor’s Conclusion
We conducted our quarterly review in accordance with quarterly review standards generally accepted in Japan. Our
responsibilities under those standards for quarterly reviews are further described in the Auditor’s Responsibilities for the
Quarterly Review of the Quarterly Consolidated Financial Statements section of our report. We are independent of theCompany and its consolidated subsidiary in accordance with the ethical requirements that are relevant to our audit of thefinancial statements in Japan, and we have fulfilled our other ethical responsibilities in accordance with theserequirements. We believe that we have obtained evidences to support the basis for our conclusion.
Emphasis of Matter
As stated in the Notes (Changes in Accounting Policies), the Company applies the Accounting Standard for Revenue
Recognition (ASBJ Statement No. 29, March 30, 2018) and Implementation Guidance on Accounting Standard for
Revenue Recognition (ASBJ Guidance No. 30, March 30, 2018) from the current 1st quarter consolidated accounting
period.
Our opinion is not modified in respect of this matter.
Responsibilities of Management, Corporate Auditors and Board of Auditors for the Quarterly Consolidated Financial
Statements
Management is responsible for the preparation and fair presentation of the quarterly consolidated financial statements inaccordance with principles setting forth the preparation and proper presentation of the quarterly consolidated financial
statements generally accepted in Japan. Responsibilities include those for designing and operating an internal control
system as the management deems necessary in order to prepare and properly present the quarterly consolidated financial
statements that are free from material misstatement due to fraud or error.
In preparing the quarterly consolidated financial statements, management is responsible for assessing the Group’s ability
to continue as a going concern and disclosing, as required by accounting principles of quarterly consolidated financial
statements generally accepted in Japan, matters related to going concern.
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Corporate auditors and the Board of Auditors are responsible for overseeing the Directors’ performance of their duties
including the design and implementation of the Group’s financial reporting process.
Auditor’s Responsibilities for the Quarterly Review of the Quarterly Consolidated Financial Statements
Our responsibility is to express, in the Quarterly Review Report, an independent conclusion regarding the quarterly
consolidated financial statements based on our quarterly review.
As part of our audit in accordance with the quarterly review standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the quarterly review. We also:
・ A quarterly review consists principally of making inquiries to the management and persons responsible for financial
and accounting matters, performing analytical procedures and other quarterly review procedures. The quarterly
review procedure is a limited procedure compared to the procedure of annual financial statements performed inaccordance with auditing standards generally accepted in Japan.
・ If we conclude that a material uncertainty exists related to events or conditions that may cast significant doubt on theGroup’s ability to continue as a going concern, based on the evidence obtained, we will conclude whether anything
has come to our attention that causes us to believe that the quarterly consolidated financial statements are not properly
presented in accordance with accounting principles of quarterly consolidated financial statements generally acceptedin Japan. If we conclude that a material uncertainty exists, we are required to draw attention in our quarterly review
report to the related disclosures in the quarterly consolidated financial statements or, if such disclosures are inadequate,
to modify our opinion on the quarterly consolidated financial statements. Our conclusions are based on the audit
evidence obtained up to the date of our quarterly review report. However, future events or conditions may cause theGroup to cease to continue as a going concern.
・ Evaluate whether anything has come to our attention that causes us to believe that the presentation and disclosures in
the quarterly consolidated financial statements are not in accordance with accounting principles generally acceptedin Japan; the overall presentation, structure and content of the quarterly consolidated financial statements, including
the disclosures; and whether anything has come to our attention that causes us to believe the quarterly consolidated
financial statements do not represent the underlying transactions and events in a matter that achieves fair presentation.
・ Obtain evidence regarding the financial information of the Company and its consolidated subsidiaries to express an
opinion on the quarterly consolidated financial statements. We are responsible for the direction, supervision andperformance of the quarterly review of the quarterly consolidated financial statements. We remain solely responsible
for our audit opinion.
We communicate with corporate auditors and the Board of Auditors regarding the planned scope and timing of thequarterly review and significant findings therein.
We also provide corporate auditors and the Board of Auditors with a statement that we have complied with relevant
ethical requirements regarding independence, and communicate with them all relationships and other matters that
may reasonably be thought to bear on our independence, and where applicable, related safeguards.
Interest
Our firm and the executing partners have no interest in the Company or its consolidated subsidiaries which should be
disclosed pursuant to 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 review report, the original of which isstored by TKC Corporation (the Company filing this quarterly report).
2. XBRL data is not included in the scope of this quarterly review.

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[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]February 12, 2021

[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]

Kiyotsugu Nakanishi, Director & Executive Officer, Chief Director of Business
Administration[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)– 27 –

1 [Matters Related to Adequacy of Statements Contained in the Quarterly Report]
Masanori Iizuka, Representative Director, President and Executive Officer of the Company and Kiyotsugu Nakanishi, Chief
Financial Officer of the Company hereby confirm that the statements contained in the quarterly report for the 1st quarter of the
55th term (started October 1, 2020; ended December 31, 2020) are adequate under the Financial Instruments and Exchange Act ofJapan.

2 [Special Notes]
None to be disclosed.

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