The 15th term
Business Report
From April 1, 2020
To March 31, 2021

I. Business Report
II. Balance Sheet
III. Income Statement
IV. Statement of Changes to Shareholders’ Equity
V. Notes

Tokyo International Air Terminal Corporation

(Attachments)

Business Report
From April 1, 2020
To March 31, 2021

1． Matters Concerning the Company’s Status(1)

Progress and Results of Operations
During this fiscal year, in which continuation and enhancement of restrictions on and prohibitionof entry and exit due to the global COVID-19 pandemic were extended over a lengthy period,
business conditions related to Japan's inbound and outbound demand were highly severe, with thenumber of inbound and outbound travelers falling by 98% to just 1.4 million.
Haneda Airport's international flights also were impacted by restrictions on overseas travel andexpansion and enhancement on entry restrictions from the start of the fiscal year, as inbound andoutbound travel to and from China and South Korea were suspended overall and flights serving
destinations and routes in Southeast Asia, Europe, the Americas, Australia, and elsewhere also
suffered large-scale reductions and suspensions. As a result, the newly constructed internationalterminal facility in the Terminal 2 Building (which began serving the public on March 29, 2020)
was closed on April 11 and all international arrivals and departures were concentrated in the
Terminal 3 Building. In the following month of May, inbound and outbound passengers decreased
by 99% from the same month in the previous year. While a slight increase in demand was seen lateras entry and exit restrictions were eased through means such as the commencement of special
business-track and residence-track measures beginning in October, entry and exit restrictions wereenhanced and expanded again in December in response to the spread of virus variants in Europe.
As a result, the number of passengers in this fiscal year was down 97% from the previous year toan annual total of 440,000 persons—the smallest figure since the Company launched its
international passenger terminal business.
It was under such conditions that the Company marked, in October 2020, the 10th anniversary of
the launch of its international passenger terminal business. During this fiscal year, the Company's
terminal operations continued to be based thoroughly on safety and security, striving to stop the
spread of COVID-19 among users and employees of our terminals based on the Guidelines for
Stopping the Spread of COVID-19 in the Air-travel Field (prepared jointly by the Scheduled
Airlines Association of Japan and the All Japan Airport Terminal Association) as well as
cooperating fully in the Japanese government's expansion of airport quarantine services, throughmeans including provision of the necessary facilities and space.
Initiatives to stop the spread of COVID-19 inside airport terminals included requiring all
employees and staff to wear masks indoors and managing health through measuring temperaturesand other means, as well as asking passengers using the terminals to wear masks, practice social
distancing, and use the hand sanitizer available throughout the terminals, via public-address‐1‐

announcements, signage, websites, and other means of communication. Facility and environmental
measures include improvement of indoor ventilation as well as enhancement of disinfection andcleaning of fixtures and areas involving high rates of use and contact, such as baggage carts, elevator
buttons, door knobs, and rails. Through measures such as these, we are striving to deliver facility
services reflecting greater consideration for health and safety. In addition, as part of our fast travelmeasures intended to realize smooth departure procedures without stress for passengers, throughnow we have moved ahead with expanded installation of state-of-the-art self-check-in kiosks,
automated baggage drop machines, automated gates at security checkpoints, and automatedboarding gates. We are striving to encourage and promote use of such automated equipment in order
not only to improve convenience but also to eliminate face-to-face interaction and contact with staff.
Furthermore, in April 2021 we began feasibility testing of the new Face Express service (a One ID
service using facial recognition technology) in preparation for its full-fledged launch this summer.
As its name implies, this service will enable passengers who have registered their facial photographs
to pass through gates or complete procedures using their faces alone, with no need to show theirboarding passes or passports in this series of procedures.
Currently, most of the countries and regions to which international travelers are destined requirepresentation of certificates of testing for COVID-19 before departure. As part of efforts to enableairport clinics to provide such services in addition to medical institutions and clinics in thecommunity, in October 2020 the Toho University Haneda Airport Terminal 3 Clinic opened a PCR
testing center. In addition to making testing available seven days a week, including weekends, thiswill enable passengers to receive highly convenient medical and testing services including
immediate issue of certificates.
As Haneda Airport plays an increasingly important role in border quarantine operations in Japan,
it faces unprecedented need for facilities and spaces for airport quarantine inspection. While testingsuch as PCR testing and antigen testing was conducted for nearly all passengers entering Japan, as
pre-immigration quarantine testing, in order to facilitate smooth flows for arriving passengers while
maintaining social distancing in layouts for testing areas, areas for awaiting results, and installationof testing equipment, the Company is providing a total of about 14,000 square meters in facilities
and spaces, including a total of 10 locations in the departure and arrival gate lounges in the North
Satellite of Terminal 3 and concourses. In addition, as use of a smartphone app for healthmanagement of those entering Japan has been established as a further measure to enhance
immigration controls in March 2021, the Company added a smartphone rental tenant in the airport
quarantine service area in the North Satellite.
In light of these large-scale decreases in numbers of flights and passengers resulting from such
expansion and continuation of entry and exit restrictions, all international facilities and areas in the
Terminal 2 Building have been closed and provision of terminal facilities and services has been
contracted in the Terminal 3 Building as well. As measures to improve business efficiency interminal operations and to reduce the cost burden on and provide support to airlines and other‐2‐terminal tenants, partial suspension and closure and reduction of business hours were conducted for
air passenger facilities, retail area shops, interterminal mobility services, and other facilities andservices. In addition, to ensure that passenger convenience and comfort would not suffer even as
numbers of flights were limited, provision of necessary facilities, services, and shops wasmaintained.
In light of the importance of education and training in order to be prepared for emergencies at all
times as part of international terminal risk management even under such conditions, drills wereconducted to enable terminal employees to respond immediately to accidents near their workplaces,
as part of general disaster drills conducted throughout the international passenger terminal zone,
and air security recurrent training was conducted again this fiscal year for all employees in theterminals, as part of continuous efforts to verify awareness of crisis management and ensure
thorough understanding of security measures. In addition, efforts to enhance cybersecurity havebeen implemented since the fiscal year ended March 31, 2019, in light of the Japanese government's
designation of airport buildings as important infrastructure. Again this fiscal year, the Company has
maintained internal and external cooperation systems through means such as participation in the
Cybersecurity Council organized by the Japanese government, after having established theInformation Security Committee and the Computer Security Incident Response Team (CSIRT ), andhas maintained robust computer systems and structures for responding to irregularities throughdaily management and monitoring by the Security Operation Center (SOC).
Since its founding, the Company has stressed the universal design (UD) concept. It continues
efforts to identify issues and implement related improvements and enhancements through continualand repeated assessment and verification through means including semiannual meetings of the UD
Study Committee, whose membership includes experts such as academics and experienced
practitioners as well as experts experienced with disabilities, airport-related businesses, andCompany employees. In this fiscal year, pursuant to the Barrier-Free Act the Company posted to its
website the Practical Plan for Efforts Related to Facilitating Mobility as well as revising its
Communication Support Boards, which enable communication by pointing without use of language,as a measure for providing information when seniors and people with disabilities use public
transportation, and issuing braille floor guides for not only general areas of the airport but
international departure areas as well.
In the area of initiatives to maintain and increase customer satisfaction (CS), continual CS efforts
are underway based on a shared CS philosophy among employees inside the terminal, in order todeliver high-quality service and hospitality. Once again this fiscal year, the Haneda Airport
International Area Passenger CS Liaison Committee strived to implement more practical measuresto raise the level of CS knowledge and skills while involving relevant organizations and employees,
by planning and operating the CS award system, holding CS campaigns, and issuing CS bulletins.
Other initiatives included training on interacting with passengers such as seniors and those withdisabilities with consideration for stopping the spread of disease.

‐3‐

In these ways, despite difficult circumstances the Company strived to carry out business
operations while maintaining and enhancing the functions of terminal facilities, ensuring disasterprevention and air security, and improving facilities and services. As a result, in this fiscal year theCompany reported operating revenue of 8,383 million yen (down 90.5% year-on-year), an operating
loss of 29,582 million yen (vs. an operating profit of 9,217 million yen in the same period of theprevious year), an ordinary loss of 32,909 million yen (vs. an ordinary profit of 6,345 million yen
in the same period of the previous year), and a net loss of 34,348 million yen (vs. a net current profitof 4,068 million yen in the same period of the previous year).
The business performance by each business segment is as follows:<Facilities Management and Operation Business Segment>
In the international passenger terminal, despite rent reductions intended to help lessen the burdenof operating costs and provide support for airlines and tenants, rent revenue generated from renting
offices for airlines and shop spaces for tenants was 5,370 million yen (up 8.1% year-on-year), due
in part to rent on use of spaces for pre-immigration COVID-19 testing.
Passenger service facility charge (PSFC) revenue, which the Company receives from air
travelers at departure and during transit for connecting flights, was 486 million yen (down 97.5%
year-on-year), due to the decrease in passengers and other factors.
The facility usage fee revenue from air transport service operators' use of facilities, including
boarding bridges, the luggage handling system, and gates dedicated for business jet airplanes,
totaled 566 million yen (a 83.7% decrease year-on-year).
Consequently､ the operating revenue of the Facilities Management and Operation Businesses
Segment was 6,422 million yen (a 76.9% decrease year-on-year).
In the area of costs, facility maintenance and management costs were reduced through partial
terminal closures and revisions to operation methods in accordance with passenger trends,
conducted in order to address the impact of decreased revenues.
<Directly-Managed Business Segment>
In the Merchandise Sales Business, the sales of goods generated from general duty-free storesand branded boutiques totaled 668 million yen (a 98.7% decrease year-on-year).
The sales from the Restaurant Business totaled 133 million yen (a 95.4% decrease year-on-year).
Among the other businesses, the revenues from the parking lot business and other businesses,
such as the lounge business and advertising in the building, were, respectively, 182 million yen (a89.4% decrease year-on-year) and 976 million yen (a 67.9% decrease year-on-year).
Consequently, the Directly-Managed Business Segment reported an operating revenue of 1,961
million yen (a 96.8% decrease year-on-year).
In the area of costs, business consignment costs were reduced through reduction of merchandise
inventories, closure of some shops and shortening of working hours, and other revisions to‐4‐

operation methods, conducted in order to address the impact of decreased revenues.

(2) Status of Capital Expenditure
During the fiscal year, the Company made capital expenditures of 6,759 million yen in total, which
included 2,730 million yen in construction etc. for installation of equipment related to fast-travelmeasures (self-check-in kiosks, automated baggage drop machines, automated gates at security
checkpoints, and automated boarding gates), 1,452 million yen in construction etc. for remodelingof existing shops, and 1,140 million yen in construction etc. for renovation of security checkequipment.

(3) Status of financing(i). As the 4th funds for the work to extend and reconstruct the international passenger terminals, etc.
under the Alteration Contract of Limited Loan Contract signed with the loan syndication as ofDecember 28, 2017, the borrowing of 25.4 billion yen was conducted on April 28, 2020. As aresult, the outstanding balance of the loan from the syndicate stood at 109,054 million yen as ofthe end of the fiscal year.
(ii). A loan of 2,550 million yen was executed March 31, 2021 based on the Shareholder
Subordinated Loan Agreement concluded March 27, 2008. In addition, the fourth issue of 6,000
million yen in subordinated bonds was issued March 31, 2021 based on the Shareholder
Subordinated Bond Agreement concluded March 31, 2012. As a result, the total outstandingbalance of funds raised through shareholder subordinated loans and shareholder subordinatedbonds stood at 41,130 million yen as of the end of the fiscal year.

(4) Issues to Be Addressed
Conditions related to demand for international air travel remain very difficult as countries andregions around the world continue to maintain restrictions on entry and exit in response to the global
COVID-19 pandemic. Giving top priority to maintaining the safety and security of customers using
the international flights serving Haneda Airport even under such conditions, the Company willcontinue to provide essential facilities and services while preventing any deterioration inconvenience and comfort. In addition, further changes and additions to the immigration quarantine
system and border control measures can be expected, and these will be responded to through close
cooperation with related agencies and institutions, including provision of related facilities, space,and passenger flows.
The 2020 Tokyo Olympic and Paralympic Games are scheduled for July-September of this year.
As a member of the group of companies of Japan Airport Terminal Co., Ltd., an official partner of
the Olympic Games, the Company will provide airport services to support safe and smooth entry
and exit by Olympic teams, related parties, and others. In addition, since demand related to business
jets is expected to increase with the Tokyo Olympic and Paralympic Games even though passenger
demand for commercial flights is expected to take some time to recover, the Company is moving
forward with construction of a dedicated international business jet facility larger in scale than theexisting business jet gate. (Conduction of this facility began in December 2020.) We plan to meet‐5‐

growing business jet demand by completing construction of this facility safely and without incident
in preparation for opening in mid-July 2021.
In the area of operation of terminal facilities and services, together with continued streamliningof operating costs through means such as review of various facility and service plans andcontraction, we also will strive to maintain and continue business operations reflecting
consideration for all terminal stakeholders, while continuing to provide support for tenantbusinesses through means such as reduction and exemption of facility leases, usage charges, andrents. Also, to ensure that stable terminal maintenance and operation services can be provided overthe medium to long term as an international terminal business operator, the Company has negotiatedand made arrangements with the PFI lead firm Japan Airport Terminal Co., Ltd., the Japanese
government, the loan syndicate, and shareholders, enjoying their support as it prepares to formulate
and implement medium to long term terminal maintenance and operation plans with an eye towarda recovery in demand for international travel.
While responding diligently to these issues, and based on a full recognition of the role andimportance of Haneda Airport as an international airport serving the greater Tokyo area, theCompany will continue everyday operation and management as well as repeated communication to
identify the views and needs of customers and all other stakeholders, as it strives to provide facilities
and services with outstanding levels of safety, convenience, and comfort as an international terminalthat will contribute to realizing Japan's vision of being a leading tourism destination and toenhancing transport functions in the greater Tokyo area in preparation for the post-COVID age.

(5) Changes in Assets and Income
Category

Operating revenue

Net income (loss)

Net income (loss) persha

Net assetsre

The 12th term
FY2017The 13th term
FY2018The 14th term
FY2019The 15th term
FY202089,539 million

96,685 million

88,660 million

8,383 million

yen

yen

yen

5,440 million

7,077 million

4,068 million

yen

yen

yen

1,497,353 yen

1,383,905 yen

772,489 yen△6,618,710 yen

22,021 million

38,015 million

42,892 million

7,971 million

yen

yen

yen

yen
△34,348 million
yen

yen

(6) Important matters concerning the parent company(i). Matters concerning the parent company
The Company’s parent company, Japan Airport Terminal Co., Ltd,. owns 2,706 shares（51%) of Company stock. The Company and Japan Airport Terminal Co., Ltd. are in a‐6‐

consignment and entrustment relationship regarding purchase of goods for retail sale,including duty-free items, management of stores, etc. and in a leasing relationship for theinternational facilities in Terminal 2.
(ii). Transactions with the parent company
Among transactions between the Company and Japan Airport Terminal Co., Ltd.,transactions that must be noted in the Notes to Non-Consolidated Financial Statements forthe fiscal year consist of financing, borrowing of funds, procurement of goods, and leasingof real estate from Japan Airport Terminal Co., Ltd., and business consignment and payment
of interest to Japan Airport Terminal Co., Ltd.
(a) Matters noted not to harm the interests of the Company when carrying out the transactions
The Company is a special-purpose company that operates the PFI business, therefore
regarding transactions with its parent company such as financing, borrowing, andpayment of interest, the Company properly determines terms and conditions oftransactions according to the contracts with the government, financial institutions, andshareholders.
Additionally, regarding goods to be sold at stores in the terminal, the Company procures
goods from Japan Airport Terminal Co., Ltd. Prices and other terms and conditions fortransactions are determined after negotiations with a reference to market prices.
Furthermore, rents on the international terminal facility in Terminal 2 are determinedbased on the facility's maintenance and management costs, costs for use of state-owned
property, etc. in addition to the amount invested by Japan Airport Terminal Co., Ltd. andthe amount of remodeling necessary for existing terminal facilities.
Furthermore, prices, other terms and conditions for the business consignment are
determined after consultations between both companies while taking into consideration
details of business with a reference to general terms and conditions, etc.
(b) The board of directors meeting's decision and the reason as to whether the transactions
will harm the Company's income
For the transactions, the board of directors meeting of the Company makes a final
decision independent of its parent company based on internal regulations, and it has
decided that the transactions will not harm the Company's income.
(c) The opinions in the case where the decision of the board of directors meeting is different
from opinions of external directors
There are no applicable matters.

(7) Main Businesses(i). Management and operation of the international passenger terminal building(ii). Leasing of offices and shop spaces for air transport service operators and business operators on thepremises of the airport(iii). Provision of various services including guiding the users of the international passenger terminal building,‐7‐

operation of lounges and rental meeting rooms and operation of parking lots(iv). Sales of merchandise to the users of the international passenger terminal building(v). Operation of restaurants and coffee shops for the users of the international passenger terminal(8) Status of employees
Increase/decrease from the end of

Number of employees

the previous fiscal year

61 (4)

decreased by 9 (decreased by 9)(Note) The numbers indicate employed workforce. The numbers in parentheses are those of nonregular employees and not included in the numbers before them.

(9) Main lenders
Lenders

AmountDevelopment Bank of Japan Inc.

25,978 million yen

Mizuho Bank, Ltd.

18,112 million yen

MUFG Bank, Ltd.

14,709 million yen

Japan Airport Terminal Co., Ltd.

8,510 million yen

Sumitomo Mitsui Banking Corporation

7,527 million yen

The Bank of Yokohama, Ltd.

6,176 million yen

Shinkin Central Bank

5,798 million yen* The amount borrowed from Japan Airport Terminal Co., Ltd. has increased due to thecontribution of additional lending of 1,850 million yen in addition to the previous amountof 6,660 million yen.

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2． Status of the Company's shares(1) Total Number of Shares Outstanding:

5,306 shares(2) Number of shareholders

13(3) Shareholders

Number of shares

Shareholder nameownedJapan Airport Terminal Co., Ltd.

2,706 shares

Japan Airlines Co., Ltd.

895 shares

ANA Holdings Inc.

895 shares

Narita International Airport Corporation

162 shares

TEPCO Energy Partners Incorporated

126 shares

Secom Co., Ltd.

108 shares

Tokyo Gas Co., Ltd.

108 shares

Keikyu Corporation

72 shares

Tokyo Monorail Co., Ltd.

72 shares

NTT Data Corporation

54 shares

Development Bank of Japan Inc.

36 shares

Mizuho Bank, Ltd.

36 shares

MUFG Bank, Ltd.

36 shares
Total

5,306 shares(4) Other Important Matters Regarding the SharesAmong the Company's 5,306 outstanding shares, the 36 shares held by Development Bank ofJapan Inc., Mizuho Bank, Ltd., and MUFG Bank, Ltd. each are preferred shares with preferred
dividends.

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3． Status of Company Executives(1)

Directors and corporate auditors
Corporate position

Name

Supervising area; and important position held
concurrently

Representative Director and President & CEO

Director, Japan Airport Terminal Co. Ltd.

Katsuji Doi

Managing Director

Hiroto Kuniwake

Managing Director

Akira Asai

In charge of Administration Department and Planning Department

Managing Director

Hiroki Kato

In charge of Passenger Service Department and Disaster Prevention and Security Department

Managing Director

Shinsaku Yamaki

In charge of Finance Department

Directors

Toshihiro Kawasaki

Fellow, in charge of Promotion of Electrification, Tokyo Electric Power Company Holdings, Inc.

Directors

Akihiko Shina

Corporate Auditor

In charge of Facilities Department, Sales Department, and International Operation Office

Representative Director and Senior Executive Vice President, Narita International Airport Corporation

Masakazu Owashi

External Corporate Auditor

Hiroshi Tobita

Tobita & Partners LPC

External Corporate Auditor

Hiroyuki Gotoh

Managing Executive Officer, Tokio Marine & Nichido Fire Insurance Co., Ltd.

Note 1: Toshihiro Kawasaki and Akihiko Shina are external directors stipulated in Article 2-15 of theCompanies Act.
2. All three corporate auditors are external corporate auditors stipulated in Article 2-16 of theCompanies Act.
3. Masakazu Owashi, Corporate Auditor, is a certified public accountant and has adequate
knowledge about finance and accounting.
4. Hiroshi Tobita, External Corporate Auditor, is an attorney-at-law specializing in corporate laws
and has adequate knowledge about finance and accounting.

(2) Amount of Compensation etc. for Directors and Corporate Auditors for the Fiscal Year under
Review
7 directors

86 million yen(of whom, 3 external corporate
auditors: 4 million yen)

3 corporate auditors

16 million yen(of whom, 3 external corporate
auditors: 16 million yen)(3) Matters Concerning External Officers(i). Directors
Toshihiro Kawasaki and Akihiko Shina attend the board of directors meeting held every monthand offer appropriate remarks including necessary opinions and questions concerning theCompany's overall management.

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(ii). External Corporate Auditor
Masakazu Owashi, Hiroshi Tobita and Hiroshi Goto offer appropriate counseling andsuggestions from the standpoint of ensuring legal compliance and fairness at the monthly boardof directors meeting and the board of auditors meeting held as necessary.

4． Accounting Auditor(1) Name of the Accounting Auditor
Ernst & Young ShinNihon LLC(2) The Amount of Compensation, etc. for the Accounting Auditor for the Fiscal Year under
Review
Audit and attestation services compensation stipulated in Article 2, Paragraph 1 of the Certified
Public Accountants Act: 16 million yen(3) Reasons for the Board of Auditors Consent to the Compensation, etc. of the Accounting
Auditor
The Company's board of auditors, after considering the accounting auditor's audit plan details,
the status of the accounting auditing work executed and the grounds for the calculation of thequoted compensation amount, consents under Paragraph 1, Article 399 of the Companies Act,to the amount of compensation, etc. for the accounting auditor.

(4) Policy on Dismissal or Refusal of Reappointment of the Accounting Auditor
The Company's board of auditors may, in accordance with provisions stipulated in items of
Paragraph 1, Article 340 of the Companies Act, dismiss the accounting auditor, and if
appropriate auditing is deemed difficult due to the occurrence of situations that hinder thecompetence and independence of the accounting auditor, shall submit a proposal for
dismissing or refusing the reappointment of the accounting auditor to the General Meeting of
Shareholders based on a resolution of the board of auditors.

5． Company Structure and Policy(1)

Structure to Ensure the Directors' and Employees' Execution of Duties in Compliance with
the Laws and Regulations and the Articles of Incorporation as well as the Appropriatenessof Other Operations(i). Structure to ensure the directors' and employees' execution of duties in compliance with the laws andregulations and the Articles of Incorporation
1)

The director in charge of Administration Department is placed in charge of compliance, and is toestablish the compliance structure and strive to understand the issues. The Administration‐11‐

Department ensures the maintenance and improvement of the compliance structure.
The Internal Audit Department monitors the operational status of the compliance structure and reports2)

the result regularly to the representative director and president & CEO and the board of corporate
auditors.
(ii). Structure related to storage and management of information concerning the execution of duties bydirectors
Information related to the execution of duties by directors is recorded, stored and managed inaccordance with the Regulations of the Board of Directors and Document Management
Regulations, and the stored and managed information is accessible to the directors and auditors at
all times.
(iii). Regulations and other structures concerning the management of risk of losses
1) A risk management structure will be established, with supervising departments determined respectively
for individual risks related to compliance, disaster, business, information security, etc.
2) The Audit Department conducts regular internal audits of departments, points out any matters that need
to be improved with respect to the management of risk of losses, and reports the results to therepresentative director and president & CEO and corporate auditors(iv). Structure for ensuring efficient execution of duties by directors
1) With the Regulations of the Board of Directors established, the board of directors meeting is held, inprinciple, once a month and when needed to ensure communication between the directors and mutuallymonitor the execution of duties in accordance with laws and ordinances.
2) The important matters that must be resolved at the board of directors meeting are stipulated in theRegulations of the Board of Directors. Such matters will be resolved at the board of directors meeting
after being deliberated at the Managing Directors' Meeting, which comprises the president & CEO andthe standing directors.
3) A supervising director is assigned to each of the organizational units. Organizational Regulations andRegulations for Official Authority have been established that specify the duties and authorities oforganizational units and employees.
(v). Matters relating to employees who assist corporate auditors in their duties in the case of such request
made by the corporate auditor
1)

The representative director and president & CEO assigns employees, who are independent ofbusiness execution departments, to assist with the audit conducted by the board of auditors and thecorporate auditors.
2)

Pursuant to the Regulations of the Board of Auditors, the employees appointed to assist in the dutiesof the corporate auditors in accordance with the provisions stipulated in the preceding paragraph conduct
administrative work related to the operation of the board of auditors, such as convocation-related workand the preparation of minutes of meetings.
(vi). Matters concerning the independence of the employees assigned to assist in the duties of the corporate
auditors from the directors
1) The transfer and evaluation of the employees assigned to assist in the corporate auditors' duties, as‐12‐

stipulated in the above article, requires the consent of the board of auditors.
(vii). Structure of reporting to the corporate auditors, including the structure of reporting by directors andemployees to them
1) In addition to statutory matters, the Company is establishing a structure where directors and employees
report any matters that might have a significant impact on the Company to the board of auditors in atimely manner.
2) Pursuant to the Regulations of the Board of Auditors, the board of auditors may seek reports as necessary
from accounting auditors, directors, and employees in the internal audit departments etc., and others.
(viii).

Structure to ensure the effectiveness of audits conducted by the corporate auditors

1) The Company has a structure in place where the corporate auditors attend the board of directors meeting
and, when necessary, offer opinions. They also attend important meetings including the Managing
Directors' Meeting to directly grasp important matters deliberated and/or reported.
2) The board of corporate auditors exchanges opinions with, and makes requests deemed necessary to, therepresentative director regarding matters to be addressed by the Company, the status of readiness foraudits by corporate auditors, and important audit-related issues.

(2)

Overview of the Operational Status of the Structure for Ensuring the Appropriateness of
Operations
The Company's board of directors is comprised of seven directors (of whom two are external
directors) and meets once a month in accordance with the Regulations of the Board of Directors. At
the board of directors meetings, attended by the directors and corporate auditors, each director
reports the status of business execution. The board of directors meetings also discusses and resolves
important matters.
At the meetings, the external directors participate in the resolutions from an independent
perspective and supervise and monitor the management, with the corporate auditors also monitoring
the management in a similar manner.
Corporate auditors attend not only the board of directors meetings but other important internal
meetings such as the Managing Directors' Meetings. Furthermore, they directly interview directors
regarding the status of business execution and monitor on a daily operational basis any issues
concerning the status of business execution and compliance. With these structures in place, theCompany seeks to strengthen and improve its management monitoring function.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Note: The amounts stated in this Business Report are rounded down to the nearest unit indicated.

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Balance Sheet(As of March 31, 2021)(Millions of yen)
AssetsLiabilities

Account title
Current assets

Account title

AmountCurrent liabilities

44,70735,272

Accounts payable – trade

Accounts receivable - trade

1,672

Current portion of long-term loans
payableMerchandise

4,395

Accounts receivable - other

3,017

Cash on hand and deposits(Senior loan)

Amount19,19818
9,928( 9,928)

Accounts payable - other

1,746

Prepaid expenses

29

Accrued expenses

5,277

Supplies

168

Income taxes payable

143

Other

196

Accrued interest expenses

738

Allowance for doubtful
accounts (current)△44

Lease obligations (current)

12

Special suspense account for
reduction entry

915

Other

418

Noncurrent assets
Property, plant and equipment:

Noncurrent liabilities

127,376

144,914

124,609

Shareholder subordinated bonds

20,580

Building

104,734

Long-term loans payable

119,676

Structures

1,342(Senior loan)( 99,126)

11,745(Shareholder subordinatedloans)( 20,550)

Machinery and equipment
VehiclesTools, furniture and fixtures

6
5,805

Long-term lease deposit received

467

Unearned revenue

42
71
96

Leased assets

97

Provision for directors' retirement
benefits

Construction in progress

875

Deferred tax liabilities (non-current)

Intangible assets

1,758Interest-rate swap liabilities

Software

1,758

Lease obligations (non-current)

38

Asset retirement obligations (noncurrent)

341

Total liabilities
Investments and other assets
Separately managed penalty in
trust
Other

164,113

1,008

Net assets

1,000

Shareholder's equity

11,571

Capitalization

13,265

Capital surplus

13,2658

Legal capital surplus
Retained earnings
Other retained earnings
Retained earnings brought
forwardValuation and translation
adjustments
Deferred gains or losses on hedges
Total equity
Total assets

3,600

172,084- 14 -

Total liabilities and net assets

13,265△ 14,958△ 14,958△ 14,958△ 3,600△ 3,600
7,971
172,084

Income Statement
From April 1, 2020
To March 31, 2021
(Millions of yen)Account title

AmountOperating revenue
Rents

5,370

Facility rental income

1,052

Sales of goods

668

Restaurant sales

133

Other revenue

1,158

8,383

Cost of sales
Cost of goods sold468

Operating gross profit

7,914

Selling, general, and administrative expenses

37,497△ 29,582

Operating loss
Non-operating income
Interest income0

Miscellaneous income

368

368

Non-operating expenses
Interest expenses

3,595

Miscellaneous losses

100

3,695
△ 32,909

Ordinary loss
Extraordinary income
Gain on sales of property,
plant and equipment

11

Government subsidy

5,052

5,063

Extraordinary loss
Loss on retirement of noncurrent assets
Loss on reduction of noncurrent assets

575
4,987

5,563
△ 33,408

Loss before income taxes
Income taxes - current

157

Income taxes - deferred

782

939
△ 34,348

Net loss- 15 -

Statement of Changes to Shareholders’ Equity
From April 1, 2020 to March 31, 2021
(Millions of yen)
Shareholder's equity
Capital surplus
Capitalization

Balance as of April 1, 2020

Retained earnings
Other retained
earnings

Legal capitalsurplus

Total capital surplus

Retained earnings
brought forward

Total shareholders'equityTotal retained
earnings

13,265

13,265

13,265

19,39019,39045,920Net loss－－－△ 34,348△ 34,348△ 34,348

Net changes of items otherthan shareholders' equity

－

－

－

－

－

－

Total changes during theperiod－－－△ 34,348△ 34,348△ 34,348

Balance as of 31, 2021

13,265

13,265

13,265△ 14,958△ 14,958

11,571

Changes during the period

Valuation and translation adjustments

Balance as of April 1, 2020

Deferred gains orlosses on hedges

Total valuation andtranslation
adjustments△ 3,028△ 3,028

42,892－－△ 34,348

Total equity

Changes during the period

Net loss
Net changes of items otherthan shareholders' equity

△

572

△

572

△

Total changes during theperiod

△

572

△

572

△ 34,920

Balance as of March 31, 2021

△ 3,600

△

3,600

7,971

－ 16 －

572

NotesI.

I. Notes on Matters Related to Important Accounting Policies

1.

Criteria and methods for evaluating assets（1）

Derivatives:

Market value method（2）

Inventory assets:

Based on cost method using retail method (balance sheet values are calculatedusing method of reducing book value when the contribution of inventories toprofitability declines)

2.

Method of depreciation of noncurrent assets（1）

Property, plant, and equipment (notincluding leased assets)

Straight line method（2）Intangible assets (not including leased
assets)Straight line method

Leased assets

Straight-line method, using the term of the lease as theuseful life and a residual value of zero, is used.

（3）

3.

As for the software used in-house, the Company adopts
the straight-line method based on an expected usage
period of five years for internal use.

Criteria for recording reserves（1）

Allowance for doubtful
accounts

In preparation for losses from default on claims, the Company records
the anticipated unrecoverable amount for specific claims such as thoseconsidered at risk of default, considering the possibility of recovery foreach claim individually.

（2）

Provision for directors'
retirement benefits

The Company records the required allowance as of the end of the term inaccordance with internal rules on payment of directors' retirement
benefits to prepare for the payment of retirement benefits to directors.

4.

Treatment of consumption tax, etc.
The accounting treatment of consumption tax and local consumption tax is based on the tax exclusion method.

5.

Inclusion of interest payable, etc. in noncurrent assets acquisition cost
The interest payable and loan-related ancillary cost incurred during the construction of the passenger
terminal building have been added to the acquisition cost (for the fiscal year under review: -- million yen;cumulative at the end of the fiscal year under review -- 4,517 million yen) and recorded as part ofnoncurrent assets.

6.

Hedge accounting method:(1)

Hedge accounting method:(2)

Hedge procedure and hedge target(3)

Deferred hedge treatment⚫

Hedge procedure:

Derivative trading (interest swap trading)⚫

Items hedged:

Borrowings based on variable interest rate

Hedge policy:

It is carried out with the aim of avoiding risks risingfrom future fluctuation of the interest rate and theCompany's policy not to carry out any speculativetransactions.

- 17 -

Method to evaluate the hedge
effectiveness

(4)

7.

The assessment on the effectiveness is conducted bycomparing the cumulative amount of market
movements of hedge procedures and the cumulative
amount of market movements of hedge target.

Additional information
Impact of the COVID-19 pandemic
Regarding the determination, etc. of the recoverability of deferred tax assets, scenarios are plannedand evaluated in light of accessible information based on external sources of information when thefinancial statements are prepared. Based on certain assumptions, it is expected to take roughly three
years for passenger numbers, through which the COVID-19 pandemic has impacted operating revenue
and other results, to recover to their FY2019 level.

II.

Notes on Balance Sheet

1． Reported amounts are rounded down to the nearest million yen.
2.

Pledged assets

Assets pledged as collateral

Liabilities corresponding to

Ordinary deposits

35,141 million yen

Accounts receivable - trade

23 million yen

Building

98,718 million yen

Structures

1,342 million yen

Machinery and equipment

11,745 million yen

Software527 million yen

Separately managed penalty in trust

1,000 million yen

Current portion of long-term loans payable

9,928 million yen

Long-term loans payable

99,126 million yen

the above

3.

4.

5.

The amount of reduction entry that is directly reduced from the acquisition price
Building

82 million yen

Machinery and equipment

4,905
yen

Total depreciation of property, plant andequipment

90,122 million yen

Monetary claims and obligations to subsidiaries and affiliates

Monetary claims
Monetary obligations

Accounts receivable - trade

135 million yen

Accounts receivable - other247 million yen

Accounts payable – trade

18 million yen

Accounts payable - other344 million yen

Accrued expenses

860 million yen

Shareholder subordinated bonds

18,890 million yen

Long-term loans payable

15,170 million yen- 18 -

millionLong-term lease deposit received

266 million yen

III. Notes on Income Statement
1． Reported amounts are rounded down to the nearest million yen.
2． Transactions with subsidiaries and affiliates
Operating transactions
17,869 million yen
Non-operating transactions

300 million yen

IV. Notes on Tax Effect Accounting
Breakdown of main causes for deferred tax assets and deferred tax liabilities(Deferred tax assets)
Accrued enterprise tax, etc.

323 million yen

Provision for directors' retirement
benefits

21 million yen

Deferred losses on hedges

1,102 million yen

Asset retirement obligations

104 million yen

Allowance for doubtful accounts

13 million yen

Retained loss

10,075 million yen

Other

543 million yen

Deferred tax assets subtotal

12,184 million yen

Valuation reserve△12,184 million yen

Deferred tax assets total- million yen(Deferred tax liabilities)
Asset retirement obligations

V.

96 million yen

Deferred tax liabilities total

96 million yen

Subtraction: Net amount of deferred
tax liabilities

96 million yen

Notes on Related Party Transaction

1. Main corporate shareholders etc.
T y p eName of thecompanye t c .

Ratio of Relationship Transactions
votingwith therights andp a r t yo t h e rownership- 19 -

Transaction
amount(Millions of yen)Account Title

Balance at theend of theperiod(Millions of yen)

Financing

1,860(Note 1)

ParentcompanyJapan
AirportTerminalCo., Ltd.

51.00％(direct)

Borrowing of
funds
Payments(Note 2)for goods,
consignme Business
nt ofconsignment
operation(Note 3)of shops
Procurementetc.,of goods
borrowing(Note 4)of funds,
Payment ofand rent oninterest
real estate
Rent expenses
on real estate

1,850

8,131

Shareholder
subordinated
bonds

8,520

Long-term loans
payable8,510

Accruedexpenses860

Accounts
payable – trade

18

△182

300

9,270

Accrued interest
expenses299(Note 8)Financing

1,855

Shareholder
subordinated
bonds

5,185

150 Long-term loans
payable3,330

Accrued interest
expenses149

Shareholder
subordinated
bonds

5,185

150 Long-term loans
payable3,330(Note 1)Main
shareholder

Japan
AirlinesCo., Ltd.

16.87%(direct)

Borrowingof funds

Borrowing offunds(Note 2)

Payment ofinterest

Financing

-

1,855

(Note 1)Main
ANA Holdings
shareholdeInc.
r16.87%(direct)

Borrowingof funds

Borrowing offunds(Note 2)

Payment ofinterest-

149
Accrued interest
expenses

Akihiko
Shina
Director

Director

NaritaInternational Airport
Corporation
Representat
ive Director
SeniorExecutive
Vice
President

Borrowing offunds-

Borrowingof funds

Long-term loans
payable1,620

36 Accrued interest

36-(Note 2)
(Note 5)

Payment ofinterest

expenses

Terms and conditions of transactions and policy on determining them
Note 1

Financing terms and conditions are in accordance with the Shareholder Subordinated Bond Agreement
signed between the Company and its six shareholders including the above three companies on March
30, 2012, following the approval by the Board of Directors Meeting on February 23, 2012 (preparedbased on the loan terms of the Shareholders Agreement agreed among the shareholders as of theestablishment of the Company).

- 20 -

As for the repayment of the principal, it has been agreed that the order of the settlement of claims isafter that of repayment of preferred loans from the loan syndication based on the Limited Loan
Contract Alteration Contract signed with the loan syndication.
Note 2

Loan terms and conditions are in accordance with the Shareholder Subordinated Loan Agreement signed
between the Company and its nine shareholders including the above three companies on March 27, 2008
following the approval by the Board of Directors Meeting on March 18, 2008 (prepared based on theloan terms of the Shareholders Agreement agreed among the shareholders as of the establishment of theCompany).
As for the repayment of the principal, it has been agreed that the order of the settlement of claims isafter that of repayment of preferred loans from the loan syndication based on the Limited Loan
Contract Alteration Contract signed with the loan syndication.

Note 3

Prices, and other terms and conditions for business consignment are determined through negotiation
between both companies taking into consideration details of the businesses.

Note 4The prices, terms and conditions for procurement of goods are determined after negotiations with areference to market prices.

Note 5This transaction was conducted for a third party by Akihiko Shina, a director at our company, in thecapacity of a representative of Narita International Airport Corporation.

Note 6Among the amounts indicated in the table above, transaction amounts do not include consumption tax.

Note 7

The ratios of voting rights and other ownership are rounded down to the nearest two decimal places.

Note 8Rents on the international terminal facility in Terminal 2 are determined based on the facility's
maintenance and management costs, costs for use of state-owned property, etc. in addition to the amountinvested by Japan Airport Terminal Co., Ltd. and the amount of remodeling necessary for existingterminal facilities. In addition, the Company reports rents to the Japanese government and obtains its
approval, based on an agreement with the government concerning the facility.

VI. Notes on data per share
1．

Net asset per share:

1,343,433.13 yen

2．

Net loss per share△6,618,710.62 yen

VII. Matters concerning important subsequent events
There are no applicable matters.

- 21 -

The 15th term
Annexed detailed statements toBusiness Report
From April 1, 2020
To March 31, 2021

Tokyo International Air Terminal Corporation

1.

Details of our company executives who hold a position as an executive director in another company

Refer to "3. Status of Company Executives" in the Business Report and "Ⅷ. Notes on Related Party Transaction" in Notes to
Non-Consolidated Financial Statements.

－１－

The 15th term
Annexed detailed statements tofinancial statements
From April 1, 2020
To March 31, 2021

Tokyo International Air Terminal Corporation

1.

Details of tangible and intangible non-current assets(Millions of yen)

Ca
teg
ory

Property, plant and equipment:

Book value
atthebeginning of
the period

Increase intheterm
under review

Declineduring theterm underreview

Depreciationin the term
under review

Book value
at the end of
the period

Total
depreciation

Acquisition
cost at theend of theperiodBuilding

111,306

1,796

306

8,062

104,734

61,997

166,732

Structures

1,449

94

-

200

1,342

1,451

2,794

Machinery andequipment

13,535

4,080

4,935

935

11,7455,010

16,756

8

0

-

2

6

191

198

Tools, furnitureand fixtures

6,773

606

65

1,509

5,805

21,44627,252

Leased assets

3

118

-

24

97

24

122

（6,694）（5,306）（10,732）（123,733）（90,122）（213,856）

Type of assets

Vehicles(Subtotal)（133,077）

Intangible
assetsConstruction inprogress

3,092

6,539

8,756

-

875

-

875

Total

136,170

13,23314,062

10,732

124,609

90,122214,732

Software

1,542

722

12

494

1,758

-

1,758

Notes: The increase in the term under review consisted mainly of 3,598 million yen in construction etc. for installation ofequipment related to fast-travel measures (self-check-in kiosks, automated baggage drop machines, automated gatesat security checkpoints, and automated boarding gates), 1,674 million yen in construction etc. for renovation of
security check equipment, and 1,497 million yen in construction etc. for remodeling of existing shops. The decreasein the term under review consisted mainly of 4,987 million yen in reduction entries related to construction etc. for
installation of equipment related to fast-travel measures and renovation of security check equipment.

2.

Details of the reserves(Millions of yen)

Decline during the term underreview
Used for the
relevant
Other
purposeBalance atthe beginningof the period

Increaseduring theterm underreview

Provision for directors'
retirement benefits

55

16

-

-

71

Allowance for doubtful
accounts

-

44

-

-

44

Category

Balance at theend of theperiodNote: The reason for recording reserves and the calculation method for the amounts are described in item 3 under
section I "Notes on Matters Related to Important Accounting Policies" of "Notes to Non-Consolidated
Financial Statements."

－１－

3.

Details of selling, general and administrative expenses(Millions of yen)Account Title

AmountRemarks

Directors' compensations

104

Employees' salaries

571

Provision for directors' retirement benefits

16

Legal welfare expenses

6

Welfare expenses

2

Transportation expenses

5

Supplies expenses

9

Furniture and fixtures

13

Utilities expenses

373

Communication expenses

106

Insurance expenses

559

Repair expenses

92

Rent expenses

13,223

Conference expenses

0Entertainment expenses

1

Taxes and public charges

1,261

Donations

5

Advertising expenses

49

Cleaning expenses

15

Fees payable13

Temporary staffing expenses

19

Educational and training expenses

1

Business consignment expenses

9,670

Miscellaneous expenses

153

Depreciation

11,231

Total

37,497－２－