Quarterly Report(55th Term 2nd Quarter)
Started January 1, 2021
Ended March 31, 2021

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.] ................................................................................................................................................ 13

Part 3[Information on the Company] ........................................................................................................................................... 14
1 [Information on the Company’s Stock] .............................................................................................................................. 14(1) [Total number of shares, etc.] .................................................................................................................................... 14(2) [Share subscription rights, etc.] ................................................................................................................................. 14(3) [Exercise of bonds with share subscription rights containing a clause for exercise price adjustment, etc.] ............... 14(4) [Changes in total number of issued shares, capital stock, etc.] .................................................................................. 14(5) [Major shareholders].................................................................................................................................................. 15(6) [Voting rights] ........................................................................................................................................................... 15
2 [Officers] ............................................................................................................................................................................ 16

Part 4[Financial Information] ...................................................................................................................................................... 17
1 [Quarterly Consolidated Financial Statements] .................................................................................................................. 18(1) [Quarterly consolidated balance sheets] .................................................................................................................... 18(2) [Quarterly consolidated statements of income and quarterly consolidated statements of comprehensive income] ... 20[Quarterly consolidated statements of income].......................................................................................................... 20[Quarterly consolidated statements of comprehensive income]................................................................................. 21(3) [Quarterly consolidated statements of cash flows] .................................................................................................... 22
2 [Other] ................................................................................................................................................................................ 28

Section 2[Information on Guarantors, etc. of the Company] ............................................................................................................. 29[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]

May 10, 2021

[Quarterly accounting period]

55th Term 2nd Quarter (from January 1, 2021 to March 31, 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[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]
Term & Period

54th Term
2nd quarter consolidated
cumulative period

55th Term
2nd quarter consolidated
cumulative period

Accounting period

Started October 1, 2019;
ended March 31, 2020

Started October 1, 2020; Started October 1, 2019;
ended March 31, 2021 ended September 30, 2020

54th Term

Net sales(millions of yen)

35,13733,372

67,814

Ordinary income(millions of yen)

7,149

8,086

11,685(millions of yen)

4,712

5,495

7,821

(millions of yen)

4,112

6,319

7,501

Net assets(millions of yen)

75,144

81,611

77,075

Total assets

Quarterly (current) net
income attributable toowners of parent
Quarterly comprehensive
income or comprehensive
income(millions of yen)

95,412

101,067

97,671

Quarterly (current) net
income per share

(yen)

89.66

104.42148.81

Quarterly (current) diluted
net income per share

(yen)

－

－

－

Equity ratio

(%)

78.8

80.7

78.9

Cash flows from operating
activities(millions of yen)

2,726

3,154

10,569Cash flows from investing
activities(millions of yen)

(6,702)(3,074)(10,124)

Cash flows from financing
activities(millions of yen)

(1,545)(1,852)(3,786)

Cash and cash equivalents at
end of quarter(millions of yen)

21,28921,69723,469Term & Period

54th Term
2nd quarter consolidated
accounting period

55th Term
2nd quarter consolidated
accounting period

Accounting period

Started January 1, 2020;
ended March 31, 2020

Started January 1, 2021;
ended March 31, 2021

59.32

68.73

Quarterly net income per share(yen)(Notes) 1. Changes in key financial data, etc. of the Company are not stated here, as they are included in the Company’s quarterly
consolidated financial statements.
2. Net sales do not include consumption taxes (consumption tax and local consumption tax; hereinafter the same).
3. The Company 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.
5. The Company conducted a stock split of its common shares at a ratio of 1:2 as of April 1, 2021. The quarterly (current) net
income per share has been calculated assuming that the stock split was conducted at the beginning of the previous
consolidated fiscal year.
6. The reason for decrease in net sales compared to the previous fiscal year is because the Company started applying the
Accounting Standard for Revenue Recognition as of the beginning of fiscal year ending 2021. For details, please refer toNotes (Changes in Accounting Policies) on Page 23.

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 2nd 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 2nd 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. Explanation on Operating Results
The economic climate in Japan during the 2nd quarter consolidated cumulative period under review (“current 2nd Quarter”) remains
severe due to the impacts of global spread of the novel coronavirus disease (COVID-19). In Japan, companies are forced to take
infection prevention measures in conducting their economic activities, and it is anticipated that companies must continue making
careful judgments.
In such economic climate, the Company continued on from the previous fiscal year with its policy to focus all its efforts 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 their clients with 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 Member firms, upon request by their clients, disclose the company’s settlement, etc. to financial institutions
at the same time as the electronic tax filings of settlement documents, and as a result, the Service was used for more than 260,000
cases as of March 31, 2021.
The Local Governments Business Division began providing services 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 revision of the vaccination ledger system, etc., issuance of vaccine coupons, and vaccination reservation &registration system.
As a result of these activities, the operating results for the current 2nd Quarter of the consolidated Group comprising of TKC
Corporation and its six consolidated subsidiaries recorded a net sales of 33,372 million yen (decreased 5.0% year-on-year), operating
income of 7,906 million yen (increased 13.1% year-on-year), ordinary income of 8,086 million yen (increased 13.1% year-on-year),and quarterly net income attributable to owners of parent of 5,495 million yen (increased 16.6% year-on-year).
The reason for decrease in net sales compared to the previous fiscal year is due to the Company’s decision on the early applicationof the Accounting Standard for Revenue Recognition (hereinafter, “Revenue Recognition Accounting Standard”), which will bemandatory for listed companies starting April 1, 2021. As a result of applying the Revenue Recognition Accounting Standard, net
sales decreased by 1,135 million yen compared to the amount recognized if said Standard had not been applied. 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 said Standard and provide such know-how in its consulting services for listed companies.
Net sales for the current 2nd Quarter by business division are shown below.
1. Results of operation of the Group for the 2nd Quarter(1) Net sales of the Accounting Firm Business Division
Net sales of the Accounting Firm BD were 22,466 million yen (decreased 4.4% year-on-year); operating income was 5,990 million
yen (increased 11.7% year-on-year). Breakdown of sales is as follows:
As a result of applying the Revenue Recognition Accounting Standard, net sales decreased by 876 million yen, while operating
income increased by 262 million yen compared to the amounts if said Standard had not been applied.
(i) Sales from computer services increased by 1.6% year-on-year. Medium-size companies are rapidly working towards digitaltransformation (DX), and in such climate, this increase was attributable to the continuing growth in number of implementationsof 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 thenumber of tax accounting firms adopting the Office Management System (OMS Cloud) for Tax Accounting Firms and the
OMS Mobile which allows accounting firms to perform works using the OMS from home or outside their offices.
(ii) Software sales increased by 6.6% 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 fully meet therequirements of the Electronic Books Maintenance Act of Japan, as well as strong growth in the number of users of ourelectronic tax filing system for corporations (ASP1000R) in response to the electronic filing of income taxes mandated to large
enterprises with a capital of 100 million yen or greater starting April 1, 2020. As a result of applying the Revenue Recognition
Accounting Standard, net sales increased by 266 million yen compared to the amount recognized if said Standard had not been
applied. This was because the Company changed the method of recognizing the net sales of software which were conventionally– 5 –recognized as lump sum upon shipment, where now, software subject to proportional division are recognized on a monthly
basis. Note that this difference will occur only in the first fiscal year in which the Revenue Recognition Accounting Standard
is applied.
(iii) Hardware sales decreased by 19.4% year-on-year. This was due to customers having completed their first round of PC
replacements last year in response to the termination of Microsoft’s Windows 7 support in January 2020, and PC sales revertingback to the usual level.
(iv) Sales from supplies decreased by 67.0% year-on-year. With the application of the Revenue Recognition Accounting Standard,transactions of accounting slips and office equipment for accounting firms now fall under “agent transaction.” As such, whilesales from office equipment for remote works and infection prevention supplies were strong, net sales decreased by 1,099
million yen compared to the amount recognized if said Standard had not been applied.
(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 were 9,358 million yen (decreased 4.8% year-on-year); operating income was 2,028
million yen (increased 22.7% year-on-year). Breakdown of sales is as follows:
As a result of applying the Revenue Recognition Accounting Standard, net sales decreased by 233 million yen, while operating
income increased by 163 million yen compared to the amounts if said Standard had not been applied.
(i) Sales from computer services increased by 12.0% year-on-year. This was driven by increase in sales from the new customer
outsourcing services whose system was fully launched in FY2020, increase in data center usage fees, the winning of vaccination
coupon issuance service under the government’s project of Establishing COVID-19 Vaccination Systems, etc.
(ii) Software sales decreased by 21.0% year-on-year. This was due to decrease in temporary sales in response to legal reforms
recorded in the previous fiscal year, including sales from system revisions for the free preschool education subsidy program.
As a result of applying the Revenue Recognition Accounting Standard, net sales decreased by 109 million yen compared to theamount recognized if said Standard had not been applied.
(iii) Sales from consulting services decreased 12.2% year-on-year. This was due to the accounting processing which is unique tothe first fiscal year of applying the Revenue Recognition Accounting Standard (recognizing the development costs prior to theprevious fiscal year as cumulative effect of changes in accounting principle). As a result of applying the Revenue Recognition
Accounting Standard, net sales decreased by 122 million yen compared to the amount recognized if said Standard had not been
applied.
(iv) Hardware sales increased by 10.3% year-on-year. This was due to increase in renewal of servers and peripheral equipment bycustomers compared to the previous fiscal year.
(v) The increase in operating income year-on-year was a result of significant decrease in travel expenses by switching the style ofcustomer support and promotional activities to remote using the online meeting system.
(3) Net sales of the Printing Business Division (Subsidiary: TLP Corporation)
Net sales of the Printing BD were 1,547 million yen (decreased 13.9% year-on-year); operating loss was 117 million yen(operating loss of 17 million yen in the 2nd quarter of the previous fiscal year). Breakdown of sales is as follows:
As a result of applying the Revenue Recognition Accounting Standard, net sales decreased by 25 million yen compared to theamount recognized if said Standard had not been applied. There were no impacts to the amount of operating loss.
(i) Sales of data printing service-related products decreased by 7.8% year-on-year. This was due to continuously 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 10.7% year-on-year. This was due to ongoing decline in demands for business forms,
as companies are switching over to digitization 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 18.2% year-on-year. Thiswas due to decrease in demands for printed materials and flyers for events, etc. from the cancellation/postponement of events,
etc. and switching to webinars one after another impacted by COVID-19.
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:– 6 –(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 areas
subject to declaration of state of emergency. For other areas, our target for attendance is 70% (40% for the development
division). We also make it a general rule to conduct customer support and business meetings using the Web meeting systems.
(2) Transfer of shares without charge by the Chairman Emeritus of the Company to TKC Members
In March 2021, Masaharu Iizuka, Chairman Emeritus of the Company, transferred without charge, the common shares of theCompany personally owned by himself to 155 TKC Members who practice Shomen-tempu (attachment of tax audit reports)
pursuant to Article 33-2 of the Certified Public Tax Accountant Act of Japan.
This transfer without charge has been conducted since March 2018, transferring up to one million shares of the Company. TKC
Members who promote Shomen-tempu are eligible, and transfer without charge was made to a total of 1,138 Members in the past
four years.
Masaharu Iizuka, together with his brother late Kazuaki Iizuka (former vice president of the Company), had also transferred atotal of three million shares of the Company owned in person to 6,653 TKC Members without charge in 2006.
(3) Acquisition of patents pertaining to systems, etc.
The Company acquired the following four patents:(i) Patent pertaining to “System, Method, and Program for Welfare Consultation Support” (Acquired on October 16, 2020; Patent
No. 6780144)(ii) Patent pertaining to “Instrument, Method, and Program for the Generation of Genogram and Eco-map” (Acquired on January
8, 2021; Patent No. 6821846)(iii) Patent pertaining to “Instrument, Method, and Program for the Reading of Card Information” (Acquired on January 8, 2021;
Patent No. 6821847)(iv) Patent pertaining to “Instrument, Method, and Program for Facility Acceptance Coordination” (Acquired on February 19, 2021;
Patent No. 6840882)(4) Conducting of Stock Split
With the record date of March 31, 2021, each common stock held by shareholders listed or recorded in the final Register of
Shareholders of the day will be divided at a ratio of two for one. The purpose is for the Company to aim to reduce the amount ofinvestment unit of the Company’s shares through a stock split, thereby improving the liquidity of the Company’s shares andexpanding the investor base. Details are described in Part 4 [Financial Information], 1. Quarterly Consolidated Financial
Statements, [Notes to Financial Statements] (Material subsequent events).
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 March 31, 2021) that are customers of TKC.
(1) Activities to achieve the strategic goals of the Accounting Firm Business Division(i) Support of SMEs affected by COVID-19
In the current 2nd 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 for TKC Members (ProFIT). We began this activity on February 25, 2020 and posted a total of 222 entries as ofthe end of March 2021.
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 7,216 entries on– 7 –support policies and has become the largest database dedicated to SME support policies in Japan as of the end of March
2021.
Information is updated twice a week to ensure that the latest information are available at all times.
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 SME
support policies such as governmental emergency economic policies and special loans by government-affiliated financial
institutions. Further in the current 2nd Quarter, we rapidly achieved compliance with the Business Reestablishment Subsidy,
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 to provide information to their clients in a timely manner.
4) Provision of guidebook on subsidies and other public support programs
The Company produced a guidebook “Responding to the Third Supplementary Budget (Flash Report)–Q&A on UsefulSupport for Financial Measures and Subsidies,” which provides guidance on important public support programs foraccounting firms to share with their clients. The guidebook was made available to all TKC Members, also in the form of
downloadable PDF files.
(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 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, reaching 463
financial institutions including all local banks throughout Japan (64 institutions) as of March 31, 2021. Also, over 260,000
financial statements, etc. were disclosed to financial institutions as of March 31, 2021.
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 many 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 results ofmonthly settlements electronically.
2) Promotion of self-accounting by the TKC methods (promotion of FX series)
During the current 2nd 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 on their businessperformance and to determine the next actions. In order for management to utilize these functions effectively, they need toenter the accounting transaction data in a timely and accurate manner, so the Company also provided support on functions
for daily task level, including support for the bank credit data receiving function to receive bank deposit transaction data
through online banking and generate 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– 8 –The requirements of the Electronic Books Maintenance Act of Japan were eased in accordance with the outline of the
FY2021 tax reform approved by the cabinet on December 21, 2020. With this, there will be two types of electronic books(which are electromagnetic records of national tax-related books): (a) “superior electronic books” that contain the historyof additions, deletions and revisions to the accounting data (traceable); and (b) “non-traceable electronic books” that are
prepared using accounting software that do not keep record of such additions/deletions/revisions. This legal reform negates“the power of evidence” of the books, implying that the government has approved the use of accounting software that mightenable falsification of books.
To counter this issue, the Company will promote self-accounting practice by the TKC methods for the preparation of“superior electronic books,” and to overcome this crisis, support the nation-wide implementation and overwhelming spreadof the TKC Monitoring Information Service which will enable companies to submit to financial institutions their electronic
books together with the financial statements prepared in line with the superior electronic books, along with the appropriate
tax returns, etc. evidenced by Shomen-tempu (attachment of tax audit reports) pursuant to Article 33-2 of the CPTA Act ofJapan.
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.
Due to COVID-19-related confusion, the Company is actively hosting webinars as we are unable to visit potential
accounting firms that we intend to solicit.
As a result of these activities, the number of TKC Members totaled approximately 9,800 accounting firms and 11,400
accountants as of March 31, 2021. The difference in numbers of firms and accountants are because some firms have multiple
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's
business 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.
(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 webinars in collaboration withTKCNF’s Medium- and Large-sized Companies Support Council (1,495 members as of March 31, 2021). We also entered into
alliance agreements with four ERP vendors, working on the development of systems linking to financial statements data. Moreover,– 9 –as more listed companies encouraged telecommuting in response to COVID-19, we switched our sales activities from visiting
sales to inside sales, consequently reducing the time to visit clients and increasing the number of business meetings.
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 7,280 companies as of March 31, 2021. This is equivalent to approximately 31% of the
23,000 some companies with a capital of 100 million yen or greater.
Also, as companies having business abroad are restricted from traveling overseas due to COVID-19, they are facing challenges
in managing their foreign subsidiaries and ensuring governance. More and more companies facing such hardship are implementing
our OBMonitor overseas business monitoring system, as it is a cloud service that allows companies to check the financial data of
their foreign subsidiaries from their offices in Japan. The number of users of the OBMonitor reached 1,050 companies, and it iscurrently used in 37 countries around the world.
As a result of these activities, the number of corporate groups using the TKC Consolidated Group Solution counted approximately
4,570 corporate groups as of March 31, 2021. 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 35%.
Based on the know-how gained through the early application of the Revenue Recognition Accounting Standard, the Company isconducting webinars to explain the practical measures in complying with said Standard and to introduce the case studies of early
application of said Standard by the Company. To date, we have received over 4,000 requests in total to participate in the webinars.
(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 main 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 2nd Quarter under review, as a result of active online promotional activities
through the website and SNS towards TKC Member firms, universities, law schools, government offices, law firms, patentoffices, corporate legal departments, etc., the number of users exceeded 52,200 IDs and the Library is used by over 23,000
institutions as of March 31, 2021.
(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, exercise 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 as necessary, 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 March 31, 2021. As examinations are postponed and learning
environment remains incomplete, students must rely on online study tools that contain well-developed learning materials. Suchstudents used our systems much more frequently. In September 2020, we began offering a new study tool for the jurisprudence
examination. We are promoting trial use among 63 target universities offering group examinations and conducting
questionnaire surveys in an aim to expand use. Also, it has been announced that the practical business law examination andvarious other qualification examinations will be implementing and conducting established computer/Internet based testing(CBT/IBT). We consider this as an opportunity, and are working to understand the needs of users and promoting the use of
web-based testing functions and other effective study tools of the Company for 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.
(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.
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 nationwide by twelve groups for shared use.
– 10 –

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 March 31, 2021.
In the current 2nd Quarter, 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 system transition.
In addition, we engaged in offering the latest information to enable customers to respond quickly and effectively to the project of
establishing COVID-19 vaccination systems, and began providing services for the revision of the vaccination ledger system andlaunch of the COVID-19 vaccination reservation & registration system.
(2) Support for digitization 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 counter
services.
In this 2nd Quarter, we engaged in the development of the TASK Cloud Smart Application System with the cooperation of Osaka
city, Osaka Prefecture, and also enhanced the functionalities of the TASK Cloud Easy Counter Service System and TASK CloudMy Number Card Issuance Reservation and Management System.
In addition, as a result of aggressive promotional activities of these systems and services, the TASK Cloud Convenience Store
Certificate Issuing System is adopted by over 150 agencies including government ordinance-designated cities such as Kobe andKitakyushu, the TASK Cloud Easy Counter Service System is adopted by more than 20 agencies, and the TASK Cloud My
Number Card Issuance Reservation & Management System is adopted by over 40 agencies as of March 31, 2021.
(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 March 31, 2021.
In the current 2nd Quarter, we worked to enhance the functionalities of our proprietary data connection services, as well as
engaged in aggressive promotional activities and implementation support together with our partner companies.
(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.
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 adoption of the daily journalizing method upon system updating.
The Company provides the TASK Cloud Public Accounting System, as a local public accounting system integrated with afinancial accounting system which is compatible with the daily journalizing method encouraged by the Japanese government, andits related systems TASK Cloud Non-current Assets Control System and TASK Cloud Consolidated Financial Statement Preparing
System.
In the current 2nd Quarter, the Company received new orders from many agencies including Sodegaura City, Chiba Prefecture,
and Kanuma 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 information as well as in aggressive promotional activities. As a result, our public accounting systems are
adopted by more than 270 agencies as of March 31, 2021.
(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,– 11 –

committing to focus on initiatives such as standardization and 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 further
speeding up.
To respond to the change in the environment surrounding our customers, the Company is working to accelerate the planning anddevelopment of new products as well as to strengthen customer support including the collection and communication of the latest
information.
During the current 2nd Quarter, we gathered and communicated information on the digitization of administrative services andstandardization of operational systems, and conducted surveys, research and development on next-generation solutions throughexperimental projects, etc. 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 for customer attraction and other productions from private enterprises
due to impacts of COVID-19 pandemic. Currently, we are working to fulfill the contracts with local municipalities by ensuringthat tasks related to COVID-19 vaccination notices for residents are performed properly, and engaging in sales activities towards
private enterprises to receive orders for new direct mail projects now showing recovering trends.
In the area of business form printing, sales decreased as a result of weakening demands for business forms, less demands forbusiness forms at major accounts, decline in use of business forms due to impacts of COVID-19, etc.
In the area of printing of commercial-use creative materials (catalogs, flyers, booklets, books, etc.), with the continuing
cancellation/postponement of events, etc. impacted by COVID-19, more customers are shifting to web-based seminars and events,and sales dropped due to decrease in orders for reference materials, flyers, etc. that used to be needed for such events.
II. Financial Conditions
Assets, liabilities and net assets at the end of the current 2nd quarter consolidated accounting period are stated below.
1. Assets
Total assets as of the end of the current 2nd quarter consolidated accounting period amounted to 101,067 million yen, a 3,396
million yen increase 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 2nd quarter consolidated accounting period amounted to 37,325 million yen, a 1,480
million yen increase compared to 35,844 million yen as of the end of the previous consolidated fiscal year.
This was mainly attributable to an increase of 3,096 million yen in Notes and accounts receivable, despite a 1,771 million yen
decrease in Cash and deposits.
(2) Non-current assets
Non-current assets as of the end of the current 2nd quarter consolidated accounting period amounted to 63,742 million yen, a
1,915 million yen increase compared to 61,826 million yen as of the end of the previous consolidated fiscal year.
This was mainly attributable to a 3,065 million yen increase in Investment securities, despite a 468 million yen decrease inDeferred tax assets included in Investments and other assets, a 246 million yen decrease in Tools, furniture & fixtures included in
Other (net amount), and a 232 million yen decrease in Buildings and structures (net amount), included in Property, plant andequipment.
2. Liabilities
Total liabilities as of the end of the current 2nd quarter consolidated accounting period amounted to 19,456 million yen, a 1,139
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 2nd quarter consolidated accounting period amounted to 14,090 million yen, a 611
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 decrease of 1,520 million yen in Consumption tax payable included in Accounts payable–other,
despite an increase of 1,029 million yen in Accounts payable.
– 12 –

(2) Non-current liabilities
Non-current liabilities as of the end of the current 2nd quarter consolidated accounting period amounted to 5,365 million yen, a
527 million yen decrease compared to 5,893 million yen as of the end of the previous consolidated fiscal year.
This was mainly attributable to a 293 million yen decrease in Provisions for stocks payment and a 159 million yen decrease inLong-term lease obligations (sublease) included in Other.
3. Net assets
Total net assets as of the end of the current 2nd quarter consolidated accounting period amounted to 81,611 million yen, a 4,535
million yen increase compared to 77,075 million yen as of the end of the previous consolidated fiscal year.
This was mainly attributable to an increase of 3,407 million yen in Retained earnings and an increase of 738 million yen in
Valuation difference on available-for-sale securities.
Equity ratio as of the end of the current 2nd quarter consolidated accounting period was 80.7%, a 1.8 percentage point increase
compared to the ratio of 78.9% as of the end of the previous consolidated fiscal year.
III Cash FlowsThe balance of cash and cash equivalents as of the end of the current 2nd quarter consolidated accounting period amounted to 21,697
million yen, a 1,771 million yen decrease compared to the end of the previous consolidated fiscal year.
The overview of cash flows for the current 2nd quarter consolidated cumulative period and major factors contributing to the results
are as follows:(1) Cash flows from operating activities
Cash flows from operating activities increased by 3,154 million yen (427 million yen increase in revenue compared to the samequarter of the previous year). Major factors include the recognition of 8,050 million yen in Quarterly net income before taxes andadjustments, an increase of 3,128 million yen in Notes and accounts receivable–trade, and an increase of 2,442 million yen in
Income taxes paid.
(2) Cash flows from investing activities
Cash flows from investing activities decreased by 3,074 million yen (3,628 million yen decrease in spending compared to thesame quarter of the previous year). Major factors include expenditure of 1,700 million yen into time deposits, revenue of 1,700
million yen from withdrawal of time deposits, expenditure of 2,030 million yen for the acquisition of investment securities,
expenditure of 473 million yen for the acquisition of tangible fixed assets, and an expenditure of 604 million yen for the acquisitionof intangible fixed assets.
(3) Cash flows from financing activities
Cash flows from financing activities decreased by 1,852 million yen (306 million yen increase in spending compared to the samequarter of the previous year). Major factors include the payment of 1,726 million yen for year-end dividends as of end of
September 2020 (a dividend of 65 yen per share).
IV. Operational and Financial Challenges Facing the TKC Group
There are no significant changes in challenges faced by the TKC Group during the current 2nd quarter consolidated cumulative
period.
V. Research and Development Activities
There were no research and development expenses spent by the TKC Group during the current 2nd quarter consolidated cumulative
period.
There are no significant changes in the status of research and development activities of the TKC Group during the current 2nd quarter
consolidated cumulative period.

3 [Material Agreements, etc.]
There has been no decision or conclusion of material agreements, etc., during the current 2nd quarter consolidated accounting
period.

– 13 –

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(Note) Based on the resolution of the Board of Directors’ meeting held on March 10, 2021, the Company made a partial amendment of
the Articles of Incorporation to conduct a stock split, effective as of April 1, 2021. As a result, the total number of authorizedshares of the Company was increased by 60,000,000 shares to 120,000,000 shares.
(ii) [Issued shares]

Class

Number of shares issued as
Number of shares issued as ofof the end of 2nd quarterthe filing date (shares)
accounting period (shares)(May 10, 2021)(March 31, 2021)

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

Description

Common stock

26,731,033

53,462,066

First Section of theTokyo Stock Exchange

Number of sharesconsisting a unit:
100 shares

Total

26,731,033

53,462,066－－(Note) Based on the resolution of the Board of Directors’ meeting held on March 10, 2021, the Company conducted a stock split of its
common shares at a ratio of 1:2, effective as of April 1, 2021. As a result, the total number of shares issued increased by
26,731,033 shares to 53,462,066 shares.
(2) [Share subscription rights, etc.](i) [Stock option scheme]
None to be disclosed.
(ii) [Other share subscription rights, etc.]
None to be disclosed.
(3) [Exercise of bonds with share subscription rights containing a clause for exercise price adjustment, etc.]
None to be disclosed.
(4) [Changes in total number of issued shares, capital stock, etc.]

Date

From January 1, 2021
To March 31, 2021

Increase or
Balance of total
Increase or
Balance ofIncrease or
Balance of
decrease in total number of issued
decrease incapital stock
decrease incapital reserve
number of issued
sharescapital stock
capital reserve
shares(shares)(shares)(millions of yen) (millions of yen) (millions of yen) (millions of yen)－

26,731,033

－

5,700

－

5,409

(Note) Based on the resolution of the Board of Directors’ meeting held on March 10, 2021, the Company conducted a stock split of its
common shares at a ratio of 1:2, effective as of April 1, 2021. As a result, the total number of shares issued increased by
26,731,033 shares to 53,462,066 shares.

– 14 –

(5) [Major shareholders]

As of March 31, 2021

Names of shareholders

Percentage of shares
Number of shares held to total number
heldof issued shares(hundreds of shares) (excluding treasury
stock) (%)

Address

Iizuka Takeshi ScholarshipFoundation

1758 Tsurutamachi, Utsunomiya-shi, Tochigi

37,53014.2

Daido Life Insurance Company

1-2-1 Edobori, Nishi-ku, Osaka-shi, Osaka

25,690

9.7

Sozeishiryokan (Institute of Tax
Research and Literature)

3-45-13 Minamidai, Nakano-ku, Tokyo

15,465

5.8

The Master Trust Bank of Japan, Ltd.
2-11-3 Hamamatsucho, Minato-ku, Tokyo(Trust account)

14,776

5.6

TKC Employee Shareholding
Association

2-1 Ageba-cho, Shinjuku-ku, Tokyo

14,581

5.5

SSBTC CLIENT OMNIBUS
ACCOUNT(Standing proxy: The Hong Kong &Shanghai Banking Corporation,
Tokyo Branch)

One Lincoln Street, Boston, MA 02111 USA(3-11-1 Nihonbashi, Chuo-ku, Tokyo)

11,231

4.2

Masaharu Iizuka

Utsunomiya-shi, Tochigi

8,098

3.1

Custody bank of Japan, Ltd. (Trustaccount)

1-8-12 Harumi, Chuo-ku, Tokyo

7,037

2.7

Tokio Marine & Nichido Fire
Insurance Co., Ltd.

1-2-1 Marunouchi, Chiyoda-ku, Tokyo

6,664

2.5

Aioi Nissay Dowa Insurance Co., Ltd. 1-28-1 Ebisu, Shibuya-ku, Tokyo

5,983

2.3

Sompo Japan Insurance Inc.

5,983

2.3

153,040

57.8

1-26-1 Nishishinjuku, Shinjuku-ku, Tokyo

Total

－

(Notes) 1. The 111,500 shares of the Company held by the BIP Trust are not included in the treasury stocks to be deducted in calculating
the percentage of shares held to the total number of issued shares.
2. The Company conducted a stock split of its common shares at a ratio of 1:2, effective as of April 1, 2021. The above numbersof shares held are the numbers prior to the stock split.
(6) [Voting rights](i) [Shares issued]
Classification

As of March 31, 2021
Number of shares (shares)

Number of voting rights (units)

Description

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.)

Common stock

264,400－－

Shares with full voting right (others)

Common stock

26,397,700

263,977－

Shares less than one share unit

Common stock

68,933－－

26,731,033－－

263,977－

Total number of shares issued
Total voting rights held by all
shareholders－(Notes) 1. 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 111,500 shares (1,115 units of voting rights) owned by the BIP Trust.
2. The Company conducted a stock split of its common shares at a ratio of 1:2, effective as of April 1, 2021. The above numbersof shares and number of voting rights are figures prior to the stock split.
– 15 –

(ii) [Treasury stock, etc.]

Name of shareholder

TKC Corporation
Total

As of March 31, 2021
Percentage ofTotal shares held shares held to the(shares)
total number ofissued shares (%)

Address ofshareholder

Number of shares
held under own
name (shares)

Number of shares
held under othernames (shares)

1758 Tsurutamachi,
Utsunomiya-shi,
Tochigi

264,400－

264,400

0.99－

264,400－

264,400

0.99(Notes) 1. In addition to the above, the 111,500 shares owned by the BIP Trust are recorded as treasury stocks.
2. The Company conducted a stock split of its common shares at a ratio of 1:2, effective as of April 1, 2021. The above numbersof shares held are the numbers prior to the stock split.

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

– 16 –

Part 4 [Financial Information]
1. Method of Preparing Quarterly Consolidated Financial Statements
The quarterly consolidated financial statements of the Company have been prepared in accordance with the Ordinance on
Terminology, Forms, and Preparation Methods of Quarterly Consolidated Financial Statements (Cabinet Office Ordinance No.64
of 2007).
2. Auditing and Attestation
The quarterly consolidated financial statements of the Company for the 2nd quarter consolidated accounting period (from January
1, 2021 to March 31, 2021) and the 2nd quarter consolidated cumulative period (from October 1, 2020 to March 31, 2021) havebeen audited by Ernst & Young ShinNihon LLC pursuant to the provision of Article 193-2, Paragraph 1 of the Financial
Instruments and Exchange Act of Japan.

– 17 –

1 [Quarterly Consolidated Financial Statements](1) [Quarterly consolidated balance sheets]

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(Unit: millions of yen)
Current 2nd quarter consolidated
Previous consolidated fiscal year
accounting period(September 30, 2020)(March 31, 2021)– 18 –

26,769
7,014
*723
1,357
(19)
35,84424,997
10,110
*579
1,654
(16)
37,325

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

7,950
6,911
2,581
17,443
2,995

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

19,34814,6001,404
7,950
43,30363,742
101,067

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

3,210
740
116
2,232
2,396
3,141
2,252
14,090

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

250
3,403
305
1,406
5,365
19,456

(Unit: millions of yen)
Current 2nd quarter consolidated
Previous consolidated fiscal year
accounting period(September 30, 2020)(March 31, 2021)

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– 19 –

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

5,700
6,588
71,940(1,357)
82,872(553)

185(1,532)(1,446)(2,085)77,07597,671(1,260)81,611
101,067(2) [Quarterly consolidated statements of income and quarterly consolidated statements of comprehensive income][Quarterly consolidated statements of income][2nd 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 sale of non-current assets
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 2nd quarter consolidated Current 2nd quarter consolidated
cumulative period
cumulative period(Started October 1, 2019;(Started October 1, 2020;
ended March 31, 2020)
ended March 31, 2021)
35,13733,372
12,1999,640
22,93823,731*15,946*15,825
6,991
7,906

– 20 –

19
70
3
25
40
159

23
70
12
25
48
180

0
0
0
1
7,149

0
0
－
0
8,086

0
0

1
1

－
4
4
7,144
2,310
142
2,452
4,692
(20)
4,712

22
14
36
8,050
2,277
277
2,555
5,495
－
5,495

[Quarterly consolidated statements of comprehensive income][2nd 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 to owners ofparentQuarterly comprehensive income attributable to noncontrolling interests(Unit: millions of yen)Previous 2nd quarter consolidated Current 2nd quarter consolidated
cumulative period
cumulative period(Started October 1, 2019;(Started October 1, 2020;
ended March 31, 2020)
ended March 31, 2021)
4,692
5,495

– 21 –

(666)
85
(580)
4,112

738
85
824
6,319

4,134

6,319

(22)

－

(3) [Quarterly consolidated statements of cash flows]

Cash flows from operating activities
Quarterly net income before taxes and adjustments
Depreciation
Loss (gain) on sale of non-current assets
Loss on retirement of non-current assets
Increase (decrease) in provisions for stocks payment
Increase (decrease) in provisions for bonuses
Increase (decrease) in retirement benefit liabilities
Decrease (increase) in notes and accounts receivable–trade
Decrease (increase) in other assets
Increase (decrease) in accounts payable–trade
Increase (decrease) in other liabilities
Other
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Cash flows from operating activities
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from redemption of investment securities
Purchase of subsidiary stock
Other
Cash flows from investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Repayment of long-term loans payable
Proceeds from disposal of treasury stock
Purchase of treasury stock
Payment of dividends
Payment of dividends to non-controlling interests
Other
Cash flows from financing activities
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of quarter(Unit: millions of yen)Previous 2nd quarter consolidated Current 2nd quarter consolidated
cumulative period
cumulative period(Started October 1, 2019;(Started October 1, 2020;
ended March 31, 2020)
ended March 31, 2021)– 22 –

7,144
1,573
(0)
4
24
(619)
(993)
(1,565)487(1,039)
(65)
(75)
4,875
99
(0)
(2,247)
2,726

8,050
1,464
20
14
(293)
(531)
127
(3,128)72
990(1,525)
224
5,487
110
(0)
(2,442)
3,154(5,800)
1,500
(623)
(507)
(4,504)
4,000
(593)
(172)
(6,702)(1,700)
1,700
(473)
(604)
(2,030)－－34(3,074)

70
(71)
0
(31)
(1,452)(11)(50)(1,545)(5,521)
26,810*21,289

－
(71)
－
(5)
(1,726)－(48)(1,852)(1,771)
23,469*21,697

[Notes to Financial Statements](Changes in Accounting Policies)
As it 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 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 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 beginning of the said
period.
As a result, the amounts of cumulative effects are reflected in the net assets at the beginning of the 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 2nd quarter consolidated cumulative period decreased by
1,135 million yen, cost of sales decreased by 1,561 million yen, while the amounts of operating income, ordinary income, andquarterly net income before taxes and adjustments increased by 425 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 440 million yen for 223,000 shares as ofthe end of this current 2nd quarter consolidated accounting period.
(Note) The Company conducted a stock split of its common shares at a ratio of 1:2, effective as of April 1, 2021. The number ofstocks has been calculated assuming that the stock split was conducted at the beginning of the previous consolidated fiscal
year.
(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.

– 23 –

(Notes to quarterly consolidated balance sheets)* Breakdown of inventories is as follows:

Merchandise and finished goods
Work in progress

238 million yen
307 million yen

Current 2nd quarter consolidated
accounting period(March 31, 2021)
290 million yen
132 million yen

Raw materials and stored items

177 million yen

156 million yen

Previous consolidated fiscal year
(September 30, 2020)(Notes to quarterly consolidated statements of income)* Major items included in selling, general and administrative expenses are as follows.
Previous 2nd quarter consolidated
cumulative period(Started October 1, 2019;
ended March 31, 2020)
5,754 million yen

Current 2nd quarter consolidated
cumulative period(Started October 1, 2020;
ended March 31, 2021)
5,930 million yen

Provision for bonuses
Retirement benefit expenses

2,563 million yen
541 million yen

2,740 million yen
491 million yen

Provisions for stocks payment
Depreciation

27 million yen
315 million yen

15 million yen
352 million yen

1,131 million yen

1,215 million yen

Salaries

Rent expenses(Notes to the quarterly consolidated statements of cash flows)* The relationship between the quarterly ending balance of cash and cash equivalents and account items stated in the quarterly
consolidated balance sheets is as stated below.

Cash and deposits
Time deposits with deposit period
greater than three months
Cash and cash equivalents

Previous 2nd quarter consolidated
cumulative period(Started October 1, 2019;
ended March 31, 2020)
24,489 million yen

Current 2nd quarter consolidated
cumulative period(Started October 1, 2020;
ended March 31, 2021)
24,997 million yen(3,200 million yen)

(3,300 million yen)

21,289 million yen

21,697 million yen– 24 –

(Notes to shareholders’ equity, etc.)
I. Previous 2nd quarter consolidated cumulative period (Started October 1, 2019; ended March 31, 2020)(1) Dividend payments
Resolution

Type of shares

December 20, 2019
Ordinary General
Common stock
Meeting of
Shareholders

Total amount ofcash dividends(millions of yen)

Dividend pershare (yen)

1,456

55

Record date

Effective date

Source ofdividends

September 30, 2019

December 23, 2019

Retainedearnings(Notes) 1. The total amount of cash dividends determined by resolution of the Ordinary General Meeting of Shareholders on December
20, 2019 includes a cash dividend of 10 million yen to the stocks of the Company owned by the BIP Trust.
2. The Company conducted a stock split of its common shares at a ratio of 1:2, effective as of April 1, 2021. The dividend pershare shows the amount prior to the stock split.
(2) Of the dividends with record dates during the current 2nd quarter consolidated cumulative period, those with effective
dates for the dividends after the end of the current 2nd quarter consolidated accounting period
Resolution

Type of shares

Dividend pershare (yen)May 1, 2020
Meeting of theBoard of Directors

Total amount ofcash dividends(millions of yen)

Common stock

1,455

55

Record date

Effective date

Source ofdividends

March 31, 2020

June 15, 2020

Retainedearnings(Notes) 1. The total amount of cash dividends determined by resolution of the Board of Directors on May 1, 2020 includes a cash
dividend of 10 million yen to the stocks of the Company owned by the BIP Trust.
2. The Company conducted a stock split of its common shares at a ratio of 1:2, effective as of April 1, 2021. The dividend pershare shows the amount prior to the stock split.
II. Current 2nd quarter consolidated cumulative period (Started October 1, 2020; ended March 31, 2021)(1) Dividend payments
Resolution

Type of shares

December 18, 2020
Ordinary General
Common stock
Meeting of
Shareholders

Total amount ofcash dividends(millions of yen)

Dividend pershare (yen)

1,720

65

Record date

Effective date

Source ofdividends

September 30, 2020

December 21, 2020

Retainedearnings(Notes) 1. 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.
2. The Company conducted a stock split of its common shares at a ratio of 1:2, effective as of April 1, 2021. The dividend pershare shows the amount prior to the stock split.
(2) Of the dividends with record dates during the current 2nd quarter consolidated cumulative period, those with effective
dates for the dividends after the end of the current 2nd quarter consolidated accounting period
Resolution

Type of shares

Dividend pershare (yen)May 7, 2021
Meeting of theBoard of Directors

Total amount ofcash dividends(millions of yen)

Common stock

1,720

65

Record date

Effective date

Source ofdividends

March 31, 2021

June 14, 2021

Retainedearnings(Notes) 1. The total amount of cash dividends determined by resolution of the Board of Directors on May 7, 2021 includes a cash
dividend of 7 million yen to the stocks of the Company owned by the BIP Trust.
2. The Company conducted a stock split of its common shares at a ratio of 1:2, effective as of April 1, 2021. The dividend pershare shows the amount prior to the stock split.

– 25 –

(Segment information, etc.)[Segment information]
I. Previous 2nd quarter consolidated cumulative period (Started October 1, 2019; ended March 31, 2020)
Information on net sales and profit or loss for each reportable segment
Reportable segment(Unit: millions of yen)Amounts inquarterly
Adjustments consolidated(Note 1)statements
of income(Note 2)

Accounting
Firm BD

Local
Governments
BD

Printing BD

Total

23,510

9,830

1,796

35,137－35,137

6

0

891

897

(897)

－

23,516

9,830

2,688

36,034(897)

35,137

5,364

1,653

(17)

6,999

(8)

6,991

Net sales(1) Sales to outside customers(2) Inter-segment sales ortransfers
Total
Segment profit (loss)(Notes) 1. Adjustments of segment loss of 8 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 2nd quarter consolidated cumulative period (Started October 1, 2020; ended March 31, 2021)
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

22,466

9,358

1,547

33,372－33,372

4

0

802

806

(806)

－

22,470

9,358

2,350

34,179(806)

33,372

5,990

2,028

(117)

7,900

5

7,906

Net sales(1) Sales to outside customers(2) Inter-segment sales ortransfers
Total
Segment profit (loss)(Notes) 1. Adjustments of segment profit of 5 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 Notes (Changes in Accounting Policies), the Company applies the Revenue Recognition AccountingStandard, etc. from the beginning of the 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, compared to the conventional method, for the current 2nd quarter consolidated cumulative
period: for the Accounting Firm BD, net sales decreased by 876 million yen, and segment profit increased by 262 million
yen; for the Local Governments BD, net sales decreased by 233 million yen, and segment profit increased by 163 million
yen; and for the Printing BD, net sales decreased by 25 million yen.

– 26 –

(Earnings per share information)
The amount of quarterly net income per share and the basis for the calculation thereof are as follows:
Previous 2nd quarter consolidated
cumulative period(Started October 1, 2019;
ended March 31, 2020)
Quarterly net income per share

Current 2nd quarter consolidated
cumulative period(Started October 1, 2020;
ended March 31, 2021)

89.66 yen

104.42 yen

4,712

5,495

－

－

4,712

5,495

525,616

526,251(Basis for calculation)
Quarterly net income attributable to owners ofparent (millions of yen)Amount not attributable to common shareholders(millions of yen)
Quarterly net income from common stocks
attributable to owners of parent (millions of yen)
Average number of common stocks outstanding(hundreds of shares)(Notes) 1. The average number of stocks outstanding used in the calculation of earnings per share information has been determined byincluding the stocks of the Company owned by the BIP Trust (which has been established with the introduction of the BIP
Trust plan) as deductible treasury stocks.
The average numbers of said treasury stocks outstanding deducted for the calculation of quarterly net income per share were
380,877 shares for the previous 2nd quarter consolidated cumulative period, and 308,813 shares for the current 2nd quarter
consolidated cumulative period.
2. The quarterly diluted net income per share is not stated as there were no dilutive shares.
3. The Company conducted a stock split of its common shares at a ratio of 1:2, effective as of April 1, 2021. The quarterly net
income per share has been calculated assuming that the stock split was conducted at the beginning of the previous
consolidated fiscal year.
(Material subsequent events)
Stock split and partial amendment of the Articles of Incorporation therewith
The Company, based on the resolution of the Board of Directors’ meeting held on March 10, 2021, conducted a stock split andpartial amendment of the Articles of Incorporation therewith, effective as of April 1, 2021.
1. Purpose of stock split
In response to a request from the Tokyo Stock Exchange (TSE Listing Dept. No. 1580 for Disclosure regarding Reduction of
Investment Unit Price dated October 9, 2020, the Company, on November 4, 2020, disclosed its Approach to and Policy on the
Reduction of Investment Unit Price. Under this Policy, the Company aims to reduce the amount of investment unit of theCompany’s shares through a stock split, thereby improving the liquidity of the Company’s shares and further expanding theinvestor base.
2. Outline of the stock split(1) Procedure for the stock split
With the record date of Wednesday, March 31, 2021, each common stock held by shareholders listed or recorded in the final
Register of Shareholders of the day will be divided at a ratio of two for one.
(2) Number of increase in shares as a result of the stock split(i) Total number of shares issued before the stock split:

26,731,033 shares(ii) Number of shares increased as a result of the stock split:

26,731,033 shares(iii) Total number of shares issued after the stock split:

53,462,066 shares(iv) Total number of authorized shares after the stock split:

120,000,000 shares(3) Schedule for the stock split(i) Date of public notice of the record date:(ii) Record date:

Tuesday, March 16, 2021

Wednesday, March 31, 2021(iii) Effective date: Thursday, April 1, 2021
– 27 –

(4) Impacts on earnings per share information
Impacts on earnings per share information are indicated in the relevant sections.
3. Partial amendment of the Articles of the Incorporation therewith(1) Reason for amending the Articles of the Incorporation
As a result of this stock split, the total number of authorized shares set forth in Article 6 of the Company’s Articles of Incorporation
has been changed effective as of April 1, 2021, in accordance with Article 184, paragraph 2 of the Companies Act.
(2) Details of the amendment
Amendments are as follows:(The amended texts are underlined.)

Before amendment

After amendment

Article 6 (Total number of authorized shares)
The total number of authorized shares of theCompany shall be 60,000,000 shares.

Article 6 (Total number of authorized shares)
The total number of authorized shares of theCompany shall be 120,000,000 shares.

(3) Schedule for the amendment of the Articles of Incorporation
Effective date: Thursday, April 1, 2021
4. Other
The amount of stated capital shall remain unchanged as a result of this stock split.

2 [Other]
The resolution regarding the current interim dividends was adopted at the Board of Directors’ meeting held on May 7, 2021, statedas follows.
(a) Total amount of cash dividends to be paid as interim dividends

1,720 million yen(b) Dividend per share

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

June 14, 2021

(Notes) 1. Dividends are payable to the shareholders listed or recorded on the Register of Shareholders as of March 31, 2021.
2. Because the record date is March 31, 2021, the dividend per share shows the amount prior to the stock split which was
effected as of April 1, 2021.

– 28 –

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

– 29 –

Quarterly Review Report of Independent Auditors
May 10, 2021

TKC Corporation
To: The Board of Directors
Ernst & Young ShinNihon LLC
Tokyo Office

Designated Limited
Liability Partner
Executing Partner

Certified Public
Accountant

Kanji Tako

(seal)

Designated Limited
Liability Partner
Executing Partner

Certified Public
Accountant

Toru Iizuka(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 2nd quarter consolidated accounting period (fromJanuary 1, 2021 to March 31, 2021) and for the 2nd quarter consolidated cumulative period (from October 1, 2020 toMarch 31, 2021) stated in [Financial Information], namely, the quarterly consolidated balance sheets, 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 do not properly represent, in all material respects, the financial conditions of TKC
Corporation and its consolidated subsidiaries as of March 31, 2021 and their operating results and cash flows for the 2nd
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 subsidiaries in accordance with the ethical requirements that are relevant to our audit of
the financial 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 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.
– 30 –

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:• principally make inquiries to the management, persons responsible for financial and accounting matters, etc.,
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 in accordance with auditing standards
generally accepted in Japan.
• Conclude, based on the evidence obtained, whether anything has come to our attention that causes us to believe thatthe quarterly consolidated financial statements are not properly presented in accordance with accounting principles ofquarterly consolidated financial statements generally accepted in Japan, if we conclude that a material uncertainty
exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty related to the Group’s ability to continue as a going concern 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 the Group 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 accepted inJapan; the overall presentation, structure and content of the quarterly consolidated financial statements, including thedisclosures; 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 manner 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.

– 31 –

[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]

May 10, 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)– 32 –

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 2nd quarter of the
55th term (started January 1, 2021; ended March 31, 2021) are adequate under the Financial Instruments and Exchange Act ofJapan.

2 [Special Notes]
None to be disclosed.

– 33 –