Quarterly Report(53rd Term 1st Quarter)
Started October 1, 2018
Ended December 31, 2018

TKC Corporation
1758 Tsurutamachi, Utsunomiya-shi, Tochigi－ 1 －Table of Contents
Page[Front Cover] ............................................................................................................................................................................................. 3
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] ......................... 17(4) [Changes in total number of issued shares, capital stock, etc.] ..................................................................................... 17(5) [Major shareholders] .................................................................................................................................................... 17(6) [Voting rights] .............................................................................................................................................................. 17
2 [Officers] ............................................................................................................................................................................. 18
Part 4 [Financial Information]......................................................................................................................................................... 19
1. Method of Preparing Quarterly Consolidated Financial Statements.................................................................................... 19
2. Auditing and Attestation ..................................................................................................................................................... 19
1 [Quarterly Consolidated Financial Statements] ................................................................................................................... 20(1) [Quarterly consolidated balance sheets] ....................................................................................................................... 20(2) [Quarterly consolidated statements of income and quarterly consolidated statements of comprehensive income] ...... 22[Quarterly consolidated statements of income] ............................................................................................................ 22[Quarterly consolidated statements of comprehensive income] ................................................................................... 23
2 [Other]................................................................................................................................................................................. 26
Section 2 [Information on Guarantors, etc. of the Company] ................................................................................................................ 27[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 7, 2019

[Quarterly accounting period]

53rd Term 1st Quarter (from October 1, 2018 to December 31, 2018)[Company name]

Kabushiki Kaisha TKC[Company name in English]

TKC Corporation[Title and name of representative]

Kazuyuki Sumi, 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]
Fiscal year

52nd Term
1st quarter consolidated
cumulative period

53rd Term
1st quarter consolidated
cumulative period

Accounting period

Started October 1, 2017;
ended December 31, 2017

Started October 1, 2018;
Started October 1, 2017;
ended December 31, 2018 ended September 30, 2018

Net sales(millions ofyen)(millions ofyen)

Fiscal 52nd Term

14,66414,141

61,621

2,524

1,729

8,961

(millions of
yen)

1,698

1,170

6,158

Quarterly comprehensive income (millions ofor comprehensive income
yen)

2,248

204

6,517

69,603

71,332

72,55081,79484,342

90,202

Ordinary income
Quarterly (current) net income
attributable to owners of parent

Net assets
Total assets(millions ofyen)(millions ofyen)

Quarterly (current) net income per
share

(yen)

64.38

44.38

233.46

Quarterly (current) diluted net
income per share

(yen)

64.12

44.17

232.41Equity ratio

(%)

83.1

82.6

78.6

(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).

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 ofthe previous fiscal year.

2 [Management Analysis of Consolidated Financial Conditions, Operating Results, and Cash Flows]
I. Operating Results
The operating results for the current 1st quarter consolidated cumulative period (hereinafter, "the current 1st quarter") of theconsolidated Group comprising of TKC Corporation and its six consolidated subsidiaries recorded a net sales of 14,141 million
yen (decreased 3.6% year-on-year), operating income of 1,618 million yen (decreased 33.4% year-on-year), ordinary income of
1,729 million yen (decreased 31.5% year-on-year), and net income attributable to owners of parent of 1,170 million yen (decreased
31.1% year-on-year).
This was due to the absence in the current 1st quarter of sales from system revision works in response to amendments to the My
Number, National Health Insurance and long-term care insurance systems which was generated by the Local Governments BD in
the 1st quarter of the previous fiscal year.
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(i) Net sales of the Accounting Firm BD was 10,408 million yen (increased 2.6%year-on-year); operating income was 2,001
million yen (increased 0.1% year-on-year).
(ii) Sales from computer services increased by 3.9% year-on-year. This was attributable to the growth in number of users of thecloud service-based FX4 Cloud Integrated Accounting Information System for mid-sized companies and Office Management
System (OMS) for Tax Accounting Firms.
(iii) Software sales increased only by 0.1% year-on-year. This is the result of the discount campaigns we offered for the packaged
sales of the Inheritance Tax Declaration-related Systems (TPS8000 series) in response to the establishment of special
measures under the business succession taxation scheme provided under the FY2018 tax reform, despite the steady growth in
the numbers of users of FX4 Cloud and e21-Meister.
(iv) Sales from consulting services decreased 6.3% year-on-year. This was due to decrease in revenues from client/server system
launch support services and hardware maintenance as a result of growth in the number of users of FX4 Cloud and othersystems.
(v) Hardware sales increased by 3.7% year-on-year. This was caused by increasing demands for PC replacements in response totermination of Windows 7 support in 2020.
(2) Net Sales of the Local Governments Business Division(i) Net sales of the Local Governments BD was 2,835 million yen (decreased 20.1% year-on-year); operating loss was 344
million yen (operating profit of 455 million yen in 1st quarter of the previous fiscal year). The full year operating results are
expected to recover with services related to the common tax payment system for local taxes to be launched in October 2019.
(ii) Sales from computer services increased by 5.2% year-on-year. This was driven by the increased sales from outsourcing
services and the use of TKC data centers generated by orders for mission-critical systems from new customers, and theincrease in the number of users of LGWAN cloud services such as the Convenience Store Certificate Issuing System and theTaxation Document Image Management System.
－ 5 －(iii) Software sales decreased 44.6% year-on-year. This was, as stated above, due to the absence in the current 1st quarter of sales
from system revision works in response to amendments to the My Number, National Health Insurance and long-term careinsurance systems which existed in the 1st quarter of the previous fiscal year.
(iv) Sales from consulting services decreased 0.2% year-on-year. This was due to decrease of sales in the current 1st quarter fromorders for mission-critical systems from new municipalities in comparison to the 1st quarter of the previous fiscal year.
(v) Hardware sales increased by 2.8% year-on-year. This was due to increase in the sales of servers and network devices such as
Registration Network System-related devices.
(3) Net Sales of the Printing Business Division (Subsidiary: TLP Corporation)(i) Net sales of the Printing BD was 897 million yen (decreased 7.3% year-on-year); operating loss was 38 million yen(operating loss of 29 million yen in the 1st quarter of the previous fiscal year).
(ii) Sales of data printing service-related products decreased by 6.3% year-on-year. This was due to decrease in sales, including
decrease in spot orders in relation to the general election received in the 1st quarter of the previous fiscal year and decreasein orders for direct mail productions from private enterprises.
(iii) Business form-related sales decreased by 10.6% year-on-year. This is due to ongoing decline in demands for business forms.
2. Important Matters with respect to the Company as a Whole(1) Acquisition of patents for TKC Monitoring Information Service
Following the acquisition of the patent for “Accounting information monitoring system, authentication method, and program(Invention related to setup procedures for the use of TKC Monitoring Information Service and mechanism for authentication)”(Patent No. 6375425) in July 2018, the Company acquired the patent for “Accounting information monitoring system (Invention
related to a mechanism for services to provide monthly trial balance data and financial statement data, etc.)” (Patent No.
6419378) in October 2018.
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 11,200 certified public tax
accountants and certified public accountants (as of December 31, 2018) that are customers of TKC (hereinafter, "TKC
Members").
(Note) For more information on the TKC National Federation, visit the TKC Group website (https://www.tkc.jp/).
(1) Activities of the TKC National Federation ("TKCNF")
TKCNF currently sets the following two focus activities and is actively taking actions to accomplish them:(i) Focus activity 1: Commit ourselves to the following three major themes and fulfill our roles in society!
1) Prepare highly reliable financial statements in compliance with Chusho Kaikei Yoryo (Guidelines for SME Accounting)and make them widely known to financial institutions as well as raise their awareness to the guidelines
2) Promote Shomen-tempu (attachment of tax audit reports) (ensure the reliability of financial statements and tax returns
pursuant to the principle of final settlement of accounts)
3) Promote self-accounting practices (achievement of positive balance and support for proper filing)(ii) Focus activity 2: Achieve the maximum use of the overall capability of accounting firms and build up a system that createshigh added values!
－ 6 －Actively provide clients with the following three services in collaboration with local financial institutions:
1) TKC Monitoring Information Service2) Support for business improvement (support for the early drafting of business improvement plans)3) Support for founding of businesses, succession of businesses, and overseas expansion, etc.
(2) Strategic goals of the Accounting Firm Business Division
In order to support these activities of TKCNF, the Company has operated to achieve its strategic goals: to promote selfaccounting by the TKC methods (promotion of FX series); to solicit new members (promotion of joining TKCNF); and topromote the use of Tax Accountant Office Management System (OMS).
We have further established new strategic goals: to support the promotion of TKC Monitoring Information Service; to supportcomplete compliance with the Electronic Books Maintenance Act; and to support responding to special measures under thebusiness succession taxation scheme.
(i) Promotion of self-accounting by the TKC methods (promotion of FX series)
During the current 1st quarter, the Company provided TKC Member firms with internal seminars on practical issues that
require attention in applying the reduced tax rate upon the enactment of consumption tax changes under the 2016 tax reform
to be effected in October 2019, as well as support for each firm in setting and identifying targets for the promotion of selfaccounting and support for hosting self-accounting promotion meetings to determine specific action plans. As a result of
these activities, the number of FX series users came to approximately 260,000 companies as of December 31, 2018.
(ii) 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 December 2020. The
Company is working closely with the New Members Service Committee of TKCNF in soliciting new members to achieve
this goal.
During the current 1st quarter, we solicited new members through seminars held for non-members targeting medium- andlarge-sized firms and certified public accountants who plan to begin private practice.
As a result of these activities, the number of TKC Members totaled approximately 9,600 firms and 11,200 accountants as ofDecember 31, 2018. The difference in numbers of firms and accountants are because some firms have multiple accountants
who are members.
(iii) Promoting the use of Tax Accountants Office Management system (OMS)
The Company positions its Tax Accountants Office Management system (OMS) as a platform for all of the services it
provides to TKC Member firms.
During the current 1st quarter, we promoted the use of OMS, highlighting the enhanced services available through the use of
OMS including improved information security, stronger collaboration with financial institutions by utilizing the TKC
Monitoring Information Service, and better compliance management by TKC Member firms.
(iv) Supporting the promotion of TKC Monitoring Information Service
TKC Monitoring Information Service is a cloud-based service in which the TKC Members, upon request by the managementof their clients, provide to financial institutions, free of charge, financial information such as monthly trial balance sheets andfinancial statements prepared by TKC Member firms after monthly field audits and monthly settlements. Information will bemade available at the earliest timing, for example, at the same time the client electronically files its fiscal financial settlement
to the tax authorities.
During the current 1st quarter, we worked to communicate that the reliability of financial statements prepared by SMEs forfinancial institutions can be verified by the following three documents:－ 7 －1) Supporting documents submitted by TKC Members as provided for under Article 33-2 of the Certified Public Tax
Accountant Act of Japan
2) Certificate of Bookkeeping Timeliness, with which TKC certifies the timeliness in the preparation of accounting books asrequired under Article 432 of the Companies Act of Japan for three years (and at the same time certifies the one-stop, fullline process of accounting books = financial statements = tax returns for corporate tax and consumption tax)3) The Chusho Kaikei Yoryo checklist developed by the Japan Federation of Certified Public Tax Accountants' Associations
and Japan Federation of Credit Guarantee Corporations
Thanks to high acclaims, the service has been adopted by Japan Finance Corporation (Micro Business and IndividualUnit) to be used for its services (starting October 2018) as well as by 22 credit guarantee corporations nationwide.
As a result of these activities, the number of financial institutions adopting this service is increasing rapidly with morethan 380 institutions throughout Japan, and nearly 70,000 companies providing their financial information through thisService as of December 31, 2018.
(v) Supporting complete compliance with the Electronic Books Maintenance Act
Under the FY 2018 tax reform, provisions were added in which a tax benefit of 100,000 yen in special reduction for blue
income tax returns shall be offered if the declarer 1) is subject to the Electronic Books Maintenance Act for bookkeeping, or2) files the income tax return electronically. This is a groundbreaking revision that offers favorable tax treatment for business
entities that keep the history of additions, deletions and revision to the book record, which serves as basis of tax returns inaccordance with the Electronic Books Maintenance Act. We anticipate that the same treatment will be applied to the filing ofcorporate taxes in the future.
(vi) Support in response to special measures under the business succession taxation scheme
In the FY2018 tax reform, the Japanese government set forth a special measure under the business succession taxation
scheme in addition to the provisions of the conventional business succession taxation scheme. In order to be eligible, SMEs
are required to submit to the prefectural governments a special business succession plan prepared under the guidance andadvice of a certified business innovation support agency (“Certified Support Agency”). Additionally, under the FY2019 tax
reform, a new business succession taxation scheme for one-person business has been established.
In an aim to enable TKC Members who are Certified Support Agency to efficiently support SMEs in the smooth successionof business, the Company launched the TKCNF Project for Special Measures under the Business Succession Taxation
Scheme in collaboration with the TKCNF to develop systems, provide various support tools, and plan and host seminars.
(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 Mediumsized Enterprises (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: 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 and taxation system; and 4) accounting that does not to 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.

－ 8 －(ii) Issuance of Certificate of Bookkeeping Timeliness
The Company utilizes the processing log data and historical time series data that are automatically logged at the TKC data
centers when TKC Members access our 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 businessperformance of 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 theCompany's Financial Accounting Processing Using TKC Data Centers, which prohibits any retroactive insertions, deletions
and corrections to past data, and TKC Corporation proves, as a third party, that TKC Members have visited their clients on amonthly basis to provide guidance on accurate bookkeeping (monthly Field Audits), and that all work processes frommonthly settlements to the final settlement of accounts and electronic tax filings have been completed in a timely manner.
(4) Expansion into large-scale enterprise market
By utilizing the TKC systems, the Company contributes to the rationalization of tax and accounting operations of large
enterprises, mainly of listed companies, and are actively working to solicit these companies and their affiliates to become clientsof 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 eTaxEffecttax effect accounting 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, theTDS documented evidence storage service, and the OBMonitor overseas business monitoring system, etc.).
In the current 1st quarter, the Company held seminars in collaboration with the TKCNF's Medium and Large-size Support
Research Committee (consisting of approximately 1,300 members as of December 31, 2018) and the TKCNF's Overseas
Deployment Support Research Committee (consisting of approximately 630 members as of December 31, 2018), in order toenhance the awareness and brand power of system offered by the Company. Seminars on responses to electronic filingmandated to large enterprises with a capital of 100 million yen or greater under the FY2018 tax reforms, as well as on
accounting standards with respect to the recognition of revenue and how to deal with non-compliance risks of foreignsubsidiaries were held.
As a result of these activities, the number of corporate groups using the TKC Consolidated Group Solution counted
approximately 3,470 corporate groups as of December 31, 2018. Our systems are adopted by over 85% of the 100 largest
Japanese listed companies by sales amount.
(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 294,000
judicial precedents and decisions as of December 31, 2018, covering all legal fields from precedents, etc. 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 932,000 bibliographic information references with links to 57 of the legal information databases operated by 18
specialized legal publishers (including Gyosei Corporation, Nippon Hyoron-Sha Co., Ltd., Yuhikaku Publishing Co., Ltd.,
Chuokeizai-Sha Holdings, Inc., and Hanrei Times Holdings Co., Ltd.) with accessible number of information now exceeding
2,600,000 items.
(i) Increase of user base of TKC Law Library
The Company has continuously engaged in sales promotions for the TKC Law Library, highlighting its usefulness inbusiness operations and putting the contents that are useful for business practices into customer-specific packages (Law Firm
Package for law firms, Corporate Legal Package for corporate legal departments).

－ 9 －In the current 1st quarter, as a result of active promotional activities towards TCK Member firms, universities, law schools,
government offices, law firms, patent offices and corporate legal departments, the number of users exceeded 50,000 IDs andthe Library is used by over 19,600 institutions as of December 31, 2018.
(ii) Promotion in the academic market
The Company proposes the implementation of system-based early learning support programs to 54 law schools using the
TKC Law School Educational and Research Support System and supports such schools in applying for the Public Support
Program for Law Schools Concerning the Revision of Budget Distribution initiative by the Ministry of Education, Culture,
Sports, Science and Technology.
Also, starting the current 1st quarter, we made a full-scale launch of the promotional activities for Civil Service Examination
Study Tool for undergraduates and concluded contracts with 16 universities and trial use by 56 schools as of December 31,
2018.
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") and offers specialized information services in order to help promote the welfare of residents by improving
administrative efficiency.
(1) Development and provision of cloud services designed for local municipalities
The Company provides TKC Government Cloud Service to municipalities (mainly for cities, wards, towns and villages)
nationwide. This Cloud Service consists of the TASK Cloud Service which supports a range of services for residents, missioncritical functions and information services within agencies, and the TASK Outsourcing Service which supports massive batch
output and processing of tax papers and other documents.
In particular, the TASK Cloud Service is a common platform package system operated at TKC data centers and shared by all
municipalities across Japan, and is attracting attention from the perspective of policy-making for the promotion of local
government cloud systems by the Japanese government.
In the current 1st quarter, we supported municipalities that newly implemented our services and is scheduled for a full-scalelaunch after December 2018 in enabling smooth system transition, while enhancing the functions of existing systems. As aresult of the aggressive promotional activities, our mission-critical systems are adopted by over 150 municipalities nationwide
as of December 31, 2018.
(2) Expansion of cloud services for residents
To promote the utilization of My Number Cards, more and more municipalities are introducing or considering adopting theIssuance of Certificates at Convenience Store service in view of providing more convenience to residents.
In response, the Company provides the TASK Cloud Convenience Store Certificate Issuing System as the system to realize thisservice. The System has an extensive track record as the first cloud service for municipalities across Japan and has been adopted
in over 70 municipalities nationwide including government ordinance-designated cities as of December 31, 2018.
In the current 1st quarter, we worked to enhance and expand various functions, as well as provided the TASK Cloud Easy
Counter Service System to support the counter services within municipal offices using the features of our System, andconducted active promotional activities.
(3) Support for cloud-based electronic filing of local taxes
The Company is an authorized contractor of the Council for the Digitization of Local Taxes, and provides a cloud-based service
for the standard system of the electronic filing of local taxes and the electronic tax payment offered by the Council. We also
develop and provide Data Connection Services as our own functionality to connect the individual tax systems of various
municipalities with the Council's platform.
－ 10 －

These services are proposed in collaboration with 47 companies nationwide with whom we have on-going alliance partner
agreements. As a result, our core system TASK Cloud Local Taxes Electronic Filing Support Service is currently used by morethan 760 agencies which account for more than 40% of all municipalities as of December 31, 2018.
In the current 1st quarter, we engaged in the enhancement of functionalities and active promotional activities for data
connection services and related services in view of the common tax payment system for local taxes to be launched nationwidein October 2019.
(4) Support for the development of standardized local public accounting
Municipalities are required to organize the system of accrual basis accounting (double entry bookkeeping) to complement thecurrent cash basis accounting (single entry bookkeeping), and to prepare and disclose their financial documents as well as toutilize 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 Assets Control
System and TASK Cloud Consolidated Financial Statement Preparing System.
In the current 1st quarter, we engaged in the development and promotion of new functionalities such as the financial statement
analysis functions by segment. As a result of our promotional activities for new customers, the TASK Cloud Public Accounting
System has been adopted by Shibukawa City and Numata City in Gunma Prefecture as their Project for the Common Use of
Financial Accounting System, and is also used in over 190 organizations across Japan as of December 31, 2018.
(5) Compliance with other revised laws and systems
In June 2018, the Japanese cabinet approved the Declaration to be the World's Most Advanced IT Nation: Basic Plan for the
Advancement of Public and Private Sector Data Utilization to set forth the policy to push through the reform of administrative
services with the full utilization of the digital technology in order to enhance competitiveness of Japan in the international arena.
With this decision, municipalities throughout Japan will be required to realize administrative services in line with the Three
Principles of Digitalization (digital first, once-only and connected one-stop) to improve the convenience of the entire user base(government, citizens and businesses).
In light of these circumstances, we underwent major organizational reform as of October 1, 2018 including the new
establishment of the System Planning Department in order to further accelerate the planning and development of new products
and services as well as to strengthen customer support including the collection and communication of the latest information.
In the current 1st quarter, the Company supported the My Number Card Utilization Demonstration Test for Himeji City, Hyogo
Prefecture under the leadership of the System Planning Department, as well as conducted surveys, research and development ofnext generation systems and services which utilize cutting-edge digital technology.
5. Business Activities and Operating Results of the Printing Business Division
The Group’s Printing BD conducts its manufacturing and sales activities with the main focus on data print services (DPS) andbusiness form printing.
Sales in the area of DPS decreased from the 1st quarter of the previous year, due to decrease in spot orders such as orders related
to the general election of members of the House of Representatives in October 2017, and also due to decrease in large orders for
direct mail production from private enterprises.
In the area of business form printing, sales decreased from the 1st quarter of the previous year due to decline in demands forbusiness forms.

－ 11 －

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 84,342 million yen, a 5,859
million yen decrease compared to 90,202 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 27,270 million yen, a 4,477
million yen decrease compared to 31,747 million yen as of the end of the previous consolidated fiscal year.
This was mainly attributable to 2,878 million yen decrease in Cash and deposits, and 1,780 million yen decrease in Notes andaccounts receivable - trade.
(2) Non-current assets
Non-current assets as of the end of the current 1st quarter consolidated accounting period amounted to 57,072 million yen, a
1,381 million yen decrease compared to 58,454 million yen as of the end of the previous consolidated fiscal year.
This was mainly attributable to a decrease of 1,443 million yen in Investment securities.
2. Liabilities
Total liabilities as of the end of the current 1st quarter consolidated accounting period amounted to 13,010 million yen, a 4,640
million yen decrease compared to 17,651 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 9,109 million yen, a 4,845
million yen decrease compared to 13,955 million yen as of the end of the previous consolidated fiscal year.
This was mainly attributable to decreases of 1,030 million yen in accounts payable-trade, 1,291 million yen in accounts
payable-other, 1,611 million yen in income taxes payable, and 1,813 million yen in provisions for bonuses, despite increases of
475 million yen in deposits received included under other and 593 million yen in suspense receipt of consumption taxes
included under other.
(2) Non-current liabilities
Non-current liabilities as of the end of the current 1st quarter consolidated accounting period amounted to 3,901 million yen, a
204 million yen increase compared to 3,696 million yen as of the end of the previous consolidated fiscal year.
This was mainly attributable to 139 million yen increase in long-term lease obligations (for use by the Company) and 59 million
yen increase in liabilities from retirement benefits.
3. Net assets
Total net assets as of the end of the current 1st quarter consolidated accounting period amounted to 71,332 million yen, a 1,218
million yen decrease compared to 72,550 million yen as of the end of the previous consolidated fiscal year.
This was mainly attributable to a decrease of 280 million yen in retained earnings and an decrease of 953 million yen invaluation difference on available-for-sale securities, despite an increase of 38 million yen in subscription rights to shares.
Equity ratio as of the end of the current 1st quarter consolidated accounting period was 82.6%, a 4.0 percentage point increase
compared to the ratio of 78.6% as of the end of the previous consolidated fiscal year.

－ 12 －

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 1stquarter consolidated cumulative period.

－ 13 －

3 [Material Agreements, etc.]
There has been no decision or conclusion of material agreements, etc., during the current 1st 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 1st quarteraccounting period (shares)(December 31, 2018)

Number of shares issued asof the filing date (shares)(February 7, 2019)

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 the Tokyo
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]
Share subscription rights issued during the current 1st quarter accounting period are as follows:
Date of Resolution

October 31, 2018

Category and number of persons eligible for subscription rights
to shares

92
23

Number of subscription rights to shares*

Directors of the Company (excluding Outside Directors)
Auditors of the Company (excluding Outside Auditors)
Executive Officers
133

Class, content and number of shares to be issued upon exerciseof subscription rights to shares*
Amount to be paid in upon exercise of subscription rights toshares*Common stocks: 13,300 shares (Note 1)
1 yen
From December 11, 2018
To December 10, 2053

Period for exercise of subscription rights to shares*
Price of issuing shares and amount of capitalization upon
exercise of subscription rights to shares*

Price of issuing shares: 3,373 yen
Amount of capitalization: 1,687 yen(Note 2)

Conditions for exercise of subscription rights to shares*(Note 3)Matters concerning the transfer of subscription rights to shares*

Acquisition of subscription rights to shares through transfers
shall be subject to approval by resolution of the Board of
Directors.

Matters concerning the grant of subscription rights to shares
upon organizational restructuring*(Note 4)(Notes) 1. When performing a share split (including gratis allotment of common shares of the Company; the same shall apply to allshare splits described hereinafter) or share consolidation with respect to common shares of the Company after the
allotment date of subscription rights to shares, the number of shares granted will be adjusted using the following formula:
Number of shares granted after adjustment = Number of shares granted before adjustment × ratio of share split or shareconsolidation－ 15 －

Fractions of less than one share resulting from the foregoing adjustment shall be disregarded.
In addition, when the number of shares granted needs to be adjusted after the allotment date due to reasons other thanthose listed above, such as when the Company is engaged in a merger, a company split, a share exchange, or for any otherreason where such an adjustment is required, the Company may adjust the number of shares granted as deemed necessary
by the Board of Directors.
2. The price of issuing shares is the sum of the amount to be paid upon subscription and the amount to be paid in upon
exercise of subscription rights to shares.
3. Conditions for exercise of subscription rights to shares(1) A holder of subscription rights to shares may only exercise the share option rights within 10 days (or the next business
day if the 10th day falls on a holiday) from the date following the day such holder loses his/her position as a Directoror Auditor or as an employee of the Company. However, if a person who has lost his/her position as Director or
Auditor or as an employee of the Company is appointed Director of the Company or employed by the Company withcertain or specific entrustment within 10 days of having lost his/her original position, such person shall not be entitled
to exercise the subscription rights to shares.
(2) Notwithstanding (1) above, should a proposal for the approval of a merger agreement where the Company would
become dissolved, a proposal for the approval of a company split agreement or a company split plan where theCompany would become a split company, or a proposal for the approval of a share exchange agreement or a sharetransfer plan where the Company would become a wholly owned subsidiary were to be approved at a General Meetingof Shareholders of the Company (or if a Board of Directors resolution is passed in case a resolution of General
Meeting of Shareholders is not required), subscription rights to shares may be exercised within 30 days from the datefollowing the date of such approval or resolution. However, this shall exclude cases where subscription rights to sharesof a restructured company are to be issued in accordance with the matters concerning the issuing of subscription rights
to shares upon reorganization.
(3) All other applicable conditions shall be as set forth in the "Stock Option Allocation Agreement" concluded between the
Company and holders of subscription rights to shares.
4. If the Company is to engage in a merger with another (limited to cases where the Company is to be dissolved as a result of
the merger), an absorption-type split or incorporation-type split (both limited to cases where the Company is to be a split
company), or a share exchange or a share transfer (both limited to cases where the Company is to be a wholly owned
subsidiary) (hereafter jointly referred to as a "restructuring transaction"), subscription rights to shares in the entity set forthin Article 236, Paragraph 1, Item 8 (a) to (e) of the Companies Act of Japan (hereafter, the "restructured company") shallbe issued to the holders of the subscription rights to shares remaining in effect at a time immediately before the effective
date of the restructuring transaction (hereinafter respectively referring to the date an absorption-type merger comes into
effect, the date the new corporation is incorporated following a consolidation-type merger, the date an absorption-type
split comes into effect, the date the new corporation is incorporated following an incorporation-type company split, thedate a share exchange comes into effect, or the date the new joint-stock corporation is incorporated following a sharetransfer) (hereinafter the "remaining subscription rights to shares"). However, such rights may be granted only ifprovisions for issuing the subscription rights to shares of the restructured company in accordance with the items described
below are included in an absorption-type merger agreement, a consolidation-type merger agreement, an absorption-type
split agreement, an incorporation-type split plan, a share exchange agreement or a share transfer plan.
(1) The number of subscription rights to shares of the restructured company to be issued
The same number of subscription rights to shares as the number of remaining subscription rights to shares held byrespective holders of subscription rights to shares.
(2) Class of shares of the restructured company shares to be issued upon exercise of subscription rights to shares
Common shares of the restructured company.
(3) The number of shares of the restructured company shares to be issued upon exercise of subscription rights to shares
To be determined in proportion to the class and number of shares to be issued upon exercise of subscription rights toshares defined in Note 1 above upon considering the conditions, etc. of the restructuring transactions.
(4) The amount of assets to be contributed upon exercise of subscription rights to shares
The amount shall be obtained by multiplying the amount to be paid in after restructuring as prescribed below by the
number of shares of the restructured company to be issued upon exercise of each subscription right to shares as
determined in accordance with (3) above. The amount to be paid in after restructuring shall be 1 yen per share of therestructured company to be issued upon exercise of each subscription rights to shares to be issued.
(5) Period in which subscription rights to shares can be exercised
The period shall start on the start date of the exercise period listed in the "Period to exercise subscription rights toshares" in the table above, or the date the restructuring transactions come into effect, whichever the later, and shall last
until the expiration date of the period in which subscription rights to shares can be exercised.
(6) Matters concerning increases in capital stock and the capital reserve occurring when issuing shares upon exercise ofsubscription rights to shares:－ 16 －

1) The amount of capital to be increased shall be one half of the amount of the maximum increase in capital
calculated in accordance with the provisions of Article 17, Paragraph 1 of the Ordinance on Company Accounting.
Fractions under 1 yen resulting from these calculations shall be rounded up.
2) The amount of capital reserve to be increased shall be the amount calculated by subtracting the amount of capitalincrease stipulated in 1) above from the amount of maximum increase in capital described in 1) above.
(7) Restrictions on the acquisition of subscription rights to shares through transfers
Acquisition of subscription rights to shares through transfers shall require the approval by resolution of the Board of
Directors of the restructured company.
(8) Other conditions for exercise of subscription rights to shares
To be determined in conformity with Note 3 above.
(9) Provisions for the acquisition of subscription rights to shares
Subscription rights to shares may be acquired without compensation on a date separately specified by the Board of
Directors should the following resolutions, 1), 2), 3), 4), or 5) be approved at a General Meeting of Shareholders of theCompany (or through a resolution of a Meeting of Board of Directors of the Company, or upon the decision of an
executive officer entrusted with such a matter pursuant to the provisions set forth in Article 416 Item 4 of theCompanies Act of Japan in case a resolution of a General Meeting of Shareholders of the Company is not required):
1) Resolution approving a merger agreement where the Company would become a dissolved company;
2) Resolution approving a company split agreement or a company split plan where the Company would become asplit company;
3) Resolution approving a share exchange agreement or a share transfer plan where the Company would become awholly owned subsidiary;4) Resolution approving an amendment to the Articles of Incorporation to establish a provision requiring the approvalof the Company for the acquisition of all shares issued by the Company through a transfer;5) Resolution approving an amendment to the Articles of Incorporation to establish a provision requiring the approvalof the Company for the acquisition of the class of shares to be issued upon exercise of subscription rights to shares,
or a provision to acquire all of such class of shares by resolution of the General Meeting of Shareholders of theCompany.
(ii) [Other share subscription rights, etc.]
Not applicable.
(3) [Exercise of bonds with share subscription rights containing a clause for exercise price adjustment]
Not applicable.
(4) [Changes in total number of issued shares, capital stock, etc.]

Date

From October 1, 2018
To December 31, 2018

Increase or
decrease intotal number
of issued
shares(shares)

Balance of
total number
of issued
shares－

26,731,033(shares)

Increase or
decrease incapital stock(millions ofyen)－

Balance ofcapital stock(millions ofyen)

Increase or
decrease incapital reserve

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

－

5,409

5,700

(5) [Major shareholders]
There is nothing applicable to be disclosed as the current quarter is the 1st quarter accounting period.
(6) [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, 2018) because the content of the shareholders registry asof the end of the current 1st quarter cannot be confirmed.

－ 17 －

(i) [Issued shares]
As of September 30, 2018
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)

－

－

－

Classification

Description

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

Commonstock

356,300－－

Shares with full voting right (others)

Commonstock

26,337,300

263,373－

Shares less than one share unit

Commonstock

37,433－－

26,731,033

－

－

－

263,373－

Total number of issued shares
Total voting rights held by all shareholders(Note) Shares with full voting right (others) includes 600 shares registered in the name of Japan Securities Depository Center, Inc.
Number of voting rights includes 6 units of voting rights held under the name of Japan Securities Depository Center, Inc.
(ii) [Treasury stock, etc.]
Number of shares
held under own
name (shares)

Number of shares
held under othernames (shares)

1758 Tsurutamachi,
Utsunomiya-shi,
Tochigi

350,800－

350,800

1.31

4-8-8 Kudanminami,
Chiyoda-ku, Tokyo

5,500

－

5,500

0.02

－

356,300－

356,300

1.33

Name of shareholder

Address ofshareholder

TKC Corporation
TKC Shuppan
Corporation
Total

As of September 30, 2018
Percentage ofTotal shares held
shares held to the(shares)
total number ofissued 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.

－ 18 －

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 August 2007).

2. Auditing and Attestation
The quarterly consolidated financial statements of the Company for the 1st quarter consolidated accounting period (fromOctober 1, 2018 to December 31, 2018) and the 1st quarter consolidated cumulative period (from October 1, 2018 to December
31, 2018) 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.

－ 19 －

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, 2018)(December 31, 2018)
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 time 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
Shore-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
Other
Total non-current liabilities
Total liabilities－ 20 －

22,268
7,690
619
1,204
(35)
31,747

19,390
5,910
813
1,187
(32)
27,270

7,991
6,922
2,550
17,464
3,707

8,084
6,922
2,788
17,795
3,514

24,026
6,000
1,318
5,937
37,28258,45490,202

22,583
6,000
1,318
5,860
35,762
57,072
84,342

2,824
1,080
142
3,661
1,689
3,169
1,387
13,955

1,794
866
212
2,369
77
1,356
2,432
9,109

580
2,036
1,078
3,696
17,651

563
2,096
1,241
3,901
13,010(Unit: millions of yen)
Current 1st quarter consolidated
Previous consolidated fiscal year
accounting period(September 30, 2018)(December 31, 2018)
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
Total accumulated other comprehensive income
Subscription rights to shares
Non-controlling interests
Total net assets
Total liabilities and net assets－ 21 －

5,700
5,409
59,806(971)
69,9445,700
5,409
59,526(965)
69,670

917
917
235
1,453
72,55090,202

(36)
(36)
274
1,423
71,332
84,342

(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
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
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Total extraordinary loss
Quarterly net income before taxes and adjustments
Income taxes - current
Income taxes - deferred
Total income taxes
Quarterly net income
Quarterly profit (loss) attributable to non-controlling interests
Quarterly profit (loss) attributable to owners of parent(Unit: millions of yen)Previous 1st quarter consolidated Current 1st quarter consolidated
cumulative period
cumulative period(Started October 1, 2017;(Started October 1, 2018;
ended December 31, 2017)
ended December 31, 2018)
14,66414,141
4,859
4,719
9,804
9,421
7,375
7,802
2,429
1,618

－ 22 －

16
54
4
11
1
7
96

8
63
5
13
3
17
111

0
0
0
0
2,524

0
0
－
0
1,729

0
0

－
－

2
2
2,522
258
573
832
1,690
(8)
1,698

0
0
1,729
37
532
569
1,159
(11)
1,170

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

Quarterly net income
Other comprehensive income
Valuation difference on available-for-sale securities
Share of other comprehensive income of entities accounted
for using equity method
Total other comprehensive income
Quarterly comprehensive income(Breakdown)
Quarterly comprehensive income attributable to owners ofparentQuarterly comprehensive income attributable to noncontrolling interests(Unit: millions of yen)Previous 1st quarter consolidated Current 1st quarter consolidated
cumulative period
cumulative period(Started October 1, 2017;(Started October 1, 2018;
ended December 31, 2017)
ended December 31, 2018)
1,690
1,159

－ 23 －

557

(955)

0

(0)

557
2,248

(955)
204

2,249

217

(1)

(13)

[Notes to Financial Statements](Additional Information)
The Company applies the partially amended Accounting Standard for Tax Effect Accounting (ASBJ Standard No. 28, February
16, 2018), etc. as of the beginning of the current 1st quarter consolidated accounting period. Accordingly, deferred tax assets areindicated under the investments and other assets category, and deferred tax liabilities are indicated under the non-current
liabilities category.
(Notes to 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, 2017;
ended December 31, 2017)
Depreciation

Current 1st quarter consolidated cumulative
period(Started October 1, 2018;
ended December 31, 2018)

618 million yen

678 million yen(Notes to shareholders’ equity, etc.)
I. Previous 1st quarter consolidated cumulative period (started October 1, 2017; ended December 31, 2017)
Dividend payments

Resolution
December 22, 2017
Ordinary General
Meeting of
Shareholders

Total amount of
Dividend perClass of shares cash dividends
share (yen)(millions of yen)
Common stock

1,582

Record date

60 September 30, 2017

Effective date

December 25, 2017

Source ofdividends
Retainedearnings

II. Current 1st quarter consolidated cumulative period (started October 1, 2018; ended December 31, 2018)
Dividend payments

Resolution
December 21, 2018
Ordinary General
Meeting of
Shareholders

Total amount of
Dividend perClass of shares cash dividends
share (yen)(millions of yen)
Common stock

1,450

55

－ 24 －

Record date

Effective date

Source ofdividends

September 30, 2018

December 25, 2018

Retainedearnings

(Segment information, etc.)[Segment information]
I. Previous 1st quarter consolidated cumulative period (started October 1, 2017; ended December 31, 2017)
Information on net sales and profit or loss for each reportable segment(Unit: millions of yen)Amounts inReportable segment
quarterly
consolidated
Adjustments
statements
Local(Note 1)of incomeAccounting Governments
Printing
Total
Firm BD
BD
BD(Note 2)
Net sales(1) Sales to outside customers

10,146

3,548

968

14,664－

14,664

0

－

323

323

(323)

－

Total

10,147

3,548

1,291

14,987(323)

14,664

Segment profit (loss)

2,000

455

(29)

2,426

2

2,429

(2) Inter-segment sales ortransfers(Notes) 1. Adjustments of segment profit (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 of income.
II. Current 1st quarter consolidated cumulative period (started October 1, 2018; ended December 31, 2018)
Information on net sales and profit or loss for each reportable segment

Reportable segment

Accounting
Firm BD

Local
Governments
BD

Printing
BD

Total(Unit: millions of yen)Amounts inquarterly
consolidated
Adjustments
statements(Note 1)of income(Note 2)

Net sales(1) Sales to outside customers

10,4082,835

897

14,141－14,141

1

0

341

342

(342)

－

Total

10,409

2,835

1,238

14,484(342)

14,141

Segment profit (loss)

2,001

(344)

(38)

1,618

0

1,618

(2) Inter-segment sales ortransfers(Notes) 1. Adjustments of segment profit (loss) of 0 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 of income.

－ 25 －

(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 1st quarter consolidated
cumulative period(Started October 1, 2017;
ended December 31, 2017)

Current 1st quarter consolidated
cumulative period(Started October 1, 2018;
ended December 31, 2018)

64.38 yen44.38 yen

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

1,698

1,170

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

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

1,698

1,170

Average number of common stocks outstanding(hundreds of shares)

263,791

263,786

64.12 yen

44.17 yen

Adjustments to quarterly net income attributable toowners of parent (millions of yen)－－

Number of common stocks increased (hundreds ofshares)

1,096

1,253

－

－

(1) Quarterly net income per share(Basis for calculation)(2) Quarterly diluted net income per share(Basis for calculation)

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
(Material subsequent events)
None to be disclosed.

2 [Other]
None to be disclosed.

－ 26 －

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

－ 27 －

Quarterly Review Report of
Independent Auditors
February 7, 2019

TKC Corporation
To: The Board of Directors

Ernst & Young ShinNihon LLC

Designated Limited Liability Partner
Executing Partner,
Certified Public Accountant

Kanji Tako

(seal)

Designated Limited Liability Partner
Executing Partner,
Certified Public Accountant

Yuichi Noda

(seal)

Pursuant to the provisions of Article 193-2, Paragraph 1 of the Financial Instruments and Exchange Act of Japan, we conducted aquarterly review of the quarterly consolidated financial statements of the consolidated fiscal year of the Company (started from
October 1, 2018 and ending September 30, 2019) for the 1st quarter consolidated accounting period (from October 1, 2018 to
December 31, 2018) and for the 1st quarter consolidated cumulative period(from October 1, 2018 to December 31, 2018) stated in[Financial Information] hereunder, which consists of the quarterly consolidated balance sheet, quarterly consolidated statements ofincome, 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 principles setting forth the preparation and properly 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.
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 procedure of annual financial statements performed in accordance with auditing standards generally accepted in Japan.
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 December 31, 2018 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 inJapan.
Interest
Our firm and the executing partners have no interest in the Company for which disclosure is required under the provisions of theCertified 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 is stored by TKC
Corporation (the Company filing this quarterly report).
2. XBRL data is not included in the scope of this quarterly review.

－ 28 －

[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 7, 2019

[Company name]

Kabushiki Kaisha TKC[Company name in English]

TKC Corporation[Title and name of representative]

Kazuyuki Sumi, 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)－ 29 －

1 [Matters Related to Adequacy of Statements Contained in the Quarterly Report]
Kazuyuki Sumi, 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 for the 1st quarter of the 53rd term(started October 1, 2018; ended December 31, 2018) are adequate under the Financial Instruments and Exchange Act of Japan.

2 [Special Notes]
None to be disclosed.

－ 30 －