Quarterly Report(57th Term 2nd Quarter)(Started January 1, 2023;
ended March 31, 2023)

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
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) [Status of voting rights] ......................................................................................................................................................... 16
2 [Officers] ...................................................................................................................................................................................... 16
Part 4 [Financial Information] ............................................................................................................................................................. 17
1 [Quarterly Consolidated Financial Statements] ............................................................................................................................ 18(1) [Quarterly consolidated balance sheets] ................................................................................................................................. 18(2) [Quarterly consolidated statements of income and quarterly consolidated statements of comprehensive income]................ 20[Quarterly consolidated statements of income]........................................................................................................................ 20[Quarterly consolidated statements of comprehensive income]............................................................................................... 21(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 15, 2023

[Quarterly accounting period]

57th Term 2nd Quarter (from January 1, 2023, to March 31, 2023)[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, Managing Executive Officer, Chief of the Business
Administration Headquarters[Contact address]

2-1 Agebacho, Shinjuku-ku, Tokyo[Phone number]

03-3235-5511[Contact person]

Kiyotsugu Nakanishi, Director, Managing Executive Officer, Chief of the Business
Administration Headquarters[Place available for public inspection]

TKC Corporation, Tokyo Head Office(2-1 Agebacho, 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

56th Term
2nd Quarter
consolidated cumulative
period57th Term
2nd Quarter
consolidated cumulative
period56th Term

Accounting period

Started October 1,
2021;
ended March 31,
2022

Started October 1,
2022;
ended March 31,
2023

Started October 1,
2021;
ended September 30,
2022(millions ofyen)

Net sales(millions of

Ordinary income

yen)33,76836,05067,838

8,431

8,858

13,677

5,816

6,134

9,317

Quarterly (current) net income(millions of

attributable to owners of parent

yen)

Quarterly comprehensive income
or comprehensive income(millions of
yen)

6,038

6,815

8,902

Net assets(millions ofyen)

86,33891,91687,325

105,934

111,179

109,225(yen)

110.82117.01

177.62

Quarterly (current) diluted net
income per share

(yen)

－

－

－

Equity ratio

(%)

81.5

82.7

80.0

Cash flows from operating
activities(millions of
yen)

5,086

4,314

13,050Cash flows from investing(millions of(3,229)(2,547)(4,342)(3,219)(2,324)(5,214)

21,765

26,063

26,620Term & Period

56th Term
2nd Quarter
consolidated accounting
period57th Term
2nd Quarter
consolidated accounting
periodAccounting period

Started January 1,
2022;
ended March 31,
2022

Started January 1,
2023;
ended March 31,
2023(millions of

Total assets

yen)Quarterly (current) net income per
share

activities

yen)

Cash flows from financing
activities(millions ofyen)Cash and cash equivalents at endof quarter (period)

Quarterly net income per share(millions of
yen)

(yen)

68.44

61.89

(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. 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.
3. The quarterly (current) diluted net income per share is not stated as there were no dilutive shares.

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

Part 2 [Business Overview]
1 [Risk Factors]
There are no risks pertaining to new business operations, etc., that arose 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. Operating Results
During the 2nd Quarter consolidated cumulative period under review (hereinafter “current 2nd Quarter”), the Japanese economy
showed signs of normalization amid an easing of the impact of the novel coronavirus (hereinafter “COVID-19”). In spite of this,inflation resulting from the soaring prices of raw materials, etc., and the financial instability around the world have weighed on
economic recovery, and the future of the economy remains uncertain. Under these circumstances, the Japanese government has beenworking to revitalize the economy through monetary and fiscal policies that support the people and SMEs as well as by promoting
growth strategies.
The Group has continued to develop systems and provide services that promptly cater to such a social environment and government
initiatives while carrying out business operations that contribute to our customers as well as local communities and society.
The Accounting Firm Business Division supports certified public tax accountants and certified public accountants that are customers
of TKC (hereinafter “TKC Members”) in their efforts to provide their clients with advisory services related to tax, accounting,guarantees, and management as escort supporters of SMEs.
The Local Governments Business Division has extended the necessary support to help client municipalities smoothly cope with thepartial amendment to the Basic Resident Register Act, etc.
As a result of these activities, the operating results for the current 2nd Quarter of the consolidated Group comprising TKC
Corporation and its six consolidated subsidiaries recorded net sales of 36,050 million yen (increased 6.8% year on year), operating
income of 8,735 million yen (increased 6.2% year on year), ordinary income of 8,858 million yen (increased 5.1% year on year),and quarterly net income attributable to owners of parent of 6,134 million yen (increased 5.5% year on year).
Net sales for the current 2nd Quarter by business division are as shown below.
1. Results of operation for the 2nd Quarter(1) Net sales of the Accounting Firm Business Division
Net sales of the Accounting Firm BD were 23,710 million yen (increased 4.1% year on year); operating income was 6,233
million yen (decreased 3.5% year on year). Breakdown of key sales is as follows:(i) Sales from computer services increased by 2.8% year on year. This was due to an increase in the number of accounting firms
adopting the use of the Office Management System (OMS Cloud) for Tax Accounting Firms, which offers integrated
management of the operations of accounting firms, for the first time.
(ii) Software sales increased by 3.6% year on year. This was due to an increase in the number of clients of accounting firms thathave introduced the use of FX Cloud, which is equipped with accounting and sales management features as standard features,as they are required to comply with the Revised Consumption Tax Act (hereinafter “invoicing system”) that will be enforced
from October 2023. TKC also plans to offer an accounting and sales management system that is fully compliant with theinvoicing system from June 2023.
(iii) Sales from consulting services increased by 4.6% year on year. This was due to strong sales of FX4 Cloud, an accounting
system that caters to mid-size companies, and an increase in orders for startup support services.
(iv) Hardware sales increased by 12.6% year on year. This was mainly due to funding under the FY2022 Subsidy Program for
Introducing IT to Businesses for Productivity Improvement in Services, etc. (“Subsidies for Introduction of IT”), that also
covers the purchase of hardware, as well as an increase in the number of clients of accounting firms that purchased new
scanners for the purpose of using the documentary proof storage feature that comes as a standard feature of FX Cloud in viewof the expiration of safe harbor rules concerning electronic transaction data under the Act on Book and Record Keeping
through Electronic Methods in January 2024.
(v) Sales from supplies decreased by 5.1% year on year. While sales of office equipment that supports remote work anddigitalization were strong, more clients of accounting firms are now transitioning to self-accounting and paperless operations,-5-

resulting in a decline in the demand for paper-based accounting supplies and printing-related consumables.
(vi) The year-on-year decrease in operating income was due to the resumption of face-to-face sales and large-scale event
activities, as well as an increase in hardware sales, which have low profit margins.
(2) Net sales of the Local Governments Business Division
Net sales of the Local Governments BD were 10,921 million yen (increased 17.3% year on year); operating income was 2,562
million yen (increased 47.2% year on year). Breakdown of key sales is as follows:(i) Sales from computer services increased by 0.5% year on year. Despite the lack of preparation work for entry tickets for theHouse of Representatives election during the period under review as it had been contracted in the previous fiscal year, thisincrease was attributable to the newly contracted preparation of application forms for the payment of emergency support
benefits to address the rising prices of electricity, gas, food, etc., as well as the preparation of vaccination tickets for COVID19 vaccinations that started in the fall of 2022.
(ii) Software sales increased by 3.0% year on year. This was due to an increase in sales from one-time system modifications
associated with the launch of online moving-out notifications and in-person appointments through Mynaportal (one-stop
service for completing moving in/out procedures) on February 6, 2023, under the amendment to the Basic Resident RegisterAct.
(iii) Sales from consulting services increased by 280.2% year on year. In addition to supporting the introduction of systems tofacilitate the one-stop service for completing moving in/out procedures, the Company also supported the introduction ofsystems for the payment of local taxes using standardized local tax QR codes launched on April 1, 2023, under theamendment to the Local Tax Act, while providing support for the introduction of services that integrate the mission-criticalsystems of client municipalities with the one-stop service for procedures related to the ownership of light vehicles (Light
Vehicles OSS) as well as the light vehicle tax payment confirmation system (Light JNKS).
(iv) Hardware sales increased by 34.2% year on year. This was driven by the introduction of hardware associated with therenewal of devices for mission-critical systems as well as the introduction of network devices associated with the renewal ofdevices to ensure network resilience.
(v) Improvement in operating income year on year was mainly a result of an increase in sales from consulting services centeredon support for the introduction of new systems that will go into operation.
(3) Net sales of the Printing Business Division (Subsidiary: TLP Corporation)
Net sales of the Printing BD were 1,418 million yen (decreased 15.6% year on year); operating loss was 72 million yen(compared to an operating income of 28 million yen in the 2nd Quarter of the previous fiscal year). Breakdown of key sales is asfollows:(i) Sales of data printing service-related products decreased by 24.6% year on year. This was due to the lack of a need for printing
services for entry tickets for the House of Representatives election held in October 2021 in the current period, as well as thecancellation of a large direct-mail order by a private company due to the customer’s personal circumstances.
(ii) Business form-related sales increased by 7.5% year on year. This was driven by an increase in slip printing orders received
from client companies that the Company had newly acquired in the previous fiscal year.
(iii) Sales related to the printing of commercial-use creative materials (catalogs, books, etc.) increased by 1.5% year on year. Thiswas due to orders for manuals, etc., explaining the invoicing system as well as printing orders received from client companies
for their anniversary activities.
2. Important matters with respect to the Company as a whole(1) Absorption-type merger of subsidiary (simplified merger)
Since its establishment in 1977, our subsidiary TKC Financial Guarantee Co., Ltd. has developed and provided financial
guarantees, direct loans, leases, and other financial products to clients of TKC National Federation (TKCNF) members. However,as compared to when the company was first established, the financial support environment surrounding SMEs has evolved
dramatically, and we have come to the conclusion that the company has achieved the purpose for which it was initiallyestablished. For this reason, TKC Financial Guarantee Co., Ltd. has been merged and absorbed into TKC Corporation (simplified
merger) as of April 1, 2023.
(2) Start of sending and receiving of Peppol invoices through Invoice Manager 2022
A trial has been launched with over 30 companies on sending and receiving Peppol invoices (e-invoices) based on theinternational standard specification Peppol by utilizing Invoice Manager 2022, a cloud-based system developed and provided by
the Company. In anticipation of the invoicing system that will be introduced in October 2023, the Company plans to utilize
Peppol invoices in its billing operations to develop expertise in Peppol invoices and share this expertise with user companies in
the future, thereby supporting the digitalization of billing operations and manpower reduction for accounting operations.
(3) Acquisition of patents for features to be incorporated into systems
The Company acquired a patent for an internal audit support feature (deviation analysis of transaction dates/input dates) for the-6-Overseas Business Monitor (OBMonitor). (Acquired on March 24, 2023; Patent No. 7250992)(4) TKC Customer Support Service Co., Ltd. (TCSS) rated “3 Star” for the second consecutive year in HDI Benchmarking
TCSS is a fully owned subsidiary of the Company that specializes in offering call center services. On March 8, 2023, TCSS wasawarded the highest “3 Star” rating by HDI-Japan in its quality ranking benchmark for the phone support services provided. This
marks the second consecutive year following 2022 that TCSS has received the highest rating.
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 in close collaboration with the TKC National Federation (TKCNF), which consists of 11,400
certified public tax accountants and certified public accountants (as of March 31, 2023) that are customers of TKC.
(1) Activities aimed at achieving positive balance and proper filing
Activity policy of TKCNF and sales activities to achieve targets(i) Activity policy of TKCNF
TKCNF has set a three-year activity policy starting from 2022: “TKC accountants taking on the challenge of the future–push
through field auditing and support companies in achieving positive balance and proper filing!” It has also set the following threetargets to achieve the vision elaborated in this policy.
1) Massively expand superior electronic books
Promotion of self-accounting by the TKC method
2) Become guardians of tax justice
Promotion of shomen-tempu (attachment of tax audit reports) by the TKC method
3) Support the achievement of positive balance and foster companies in good standing
Promotion of field auditing and managerial advisory services
TKCNF has taken an oath that it will contribute to the achievement of positive balance for companies through the practice offield auditing and legal compliance. To support TKCNF in achieving these three targets, the Company will engage in sales
activities focused on the promotion of self-accounting by the TKC method.
(ii) Initiatives aimed at fostering companies in good standing
TKC Group has established the following six criteria as indicators that SMEs should aim to achieve:- Implementation of self-accounting by the TKC method- Practice of shomen-tempu (attachment of tax audit reports)- Compliance with “Chusho Kaikei Yoryo” (Guidelines for SME Accounting)- Increase of marginal income for two consecutive fiscal years- Equity ratio of 30% or greater- Positive net income before taxes
Companies that satisfy these criteria are defined as “BAST good-standing companies” in the TKC Management Indicators(BAST), which contains the financial statement data of more than 250,0000 companies.
By supporting an increase in the number of companies that abide by compliance requirements and work towards high valueadded management under the guidance of TKC Members, we seek to appeal more broadly to society that TKC Members are
escort supporters that work to foster companies in good standing.
(iii) Promotion of the use of the 365 Days Floating Income Statement
TKC’s self-accounting system (FX series) includes features that support monthly settlements and the 365 Days Floating
Income Statement, which supports decision-making by management. Unlike ordinary income statements, the 365 Days
Floating Income Statement allows users to review their operating results by classifying their variable costs and fixed costs
separately. Corporate managers using the FX series can keep track of the marginal profit (gross revenue) in managing theirbusiness. The Company is engaged in activities that seek to raise awareness that the 365 Days Floating Income Statement is
an indispensable tool for management. In January 2023, the documentary program “Strategic Management: A Documentary”
featuring the growth of companies through rigorous monthly settlements and utilization of the 365 Days Floating Income
Statement was broadcasted on BS11. In March 2023, the Company prepared over 1 million sheets of printed materials
explaining the 365 Days Floating Income Statement and the performance evaluation matrix, and distributed these materials to
TKC member firms and their clients.
(iv) Promotion of self-accounting by the TKC method (promotion of the FX series)
With the start of repayment of the virtually interest-free/unsecured loans (“zero/zero loans”) extended during the COVID-19
pandemic, coupled with inflation and the soaring prices of resources, SMEs are currently facing a challenging businessenvironment. In view of this, we have provided support for the utilization of management-strategy-level features (the 365
Days Floating Income Statement, performance evaluation matrix, budget registration, etc.) included in the FX series.

-7-Moreover, in order for management to utilize these features effectively, it is necessary for them to enter accounting
transaction data in a timely and accurate manner and establish a system for monthly settlements. Therefore, the Company has
also provided support for daily-task-level features, including the utilization of a feature for receiving bank credit data, throughwhich bank deposit transaction data can be received via online banking and journal entries generated automatically, as well as
the integration of salary journals with the strategic salary information system (PX2).
As a result of these activities, the FX series has been implemented at over 300,000 companies as of March 31, 2023. Throughthe implementation of the FX series, the Company will continue working to support SMEs in establishing a system formonthly settlements and achieving positive balance and proper filing.
(v) Supporting complete compliance with the Act on Book and Record Keeping through Electronic Methods
Under the Revised Act on Book and Record Keeping through Electronic Methods effective from January 1, 2022, there will
be a distinction among electronic books (i.e., electromagnetic records of national tax-related books): (a) “superior electronic
books” that contain the history of additions, deletions, and revisions made to the accounting data (traceable) (electronic books
that satisfy the requirements of both Article 2 and Article 5 of the Ordinance for Enforcement of the revised Act); and (b)“other electronic books” that are prepared using accounting software that does not keep records of such
additions/deletions/revisions (electronic books that satisfy only the requirements of Article 2 of the Ordinance for
Enforcement of the revised Act). This legal reform also negates the “power of evidence” of the books, and the acceptance ofsuch accounting software may allow for the falsification of books. To address this issue, the Company is promoting the use of
the FX series for the preparation of “superior electronic books” on a national level.
In addition, electronic retention of electronic transaction data will be mandated under the Revised Act on Book and Record
Keeping through Electronic Methods. We will also continue to support the use of the documentary proof storage feature of the
FX series so that all businesses can support electronic transactions.
(vi) Supporting complete compliance with the invoicing system
To enable accounting firms to provide smooth support for their clients to comply with the invoicing system that will belaunched on October 1, 2023, the Company is organizing seminars, providing explanatory materials, and planning otherforms of support.
The FX series includes features to cross-check the names of business contacts in the Business Contacts Master against the
information on NTA’s qualified invoice issuer disclosure website, as well as to register or update their Business Operator
Registration Numbers. This feature can automatically determine on a per-transaction basis whether the counterpart of acertain business transaction is a qualified invoice issuer, thereby allowing companies using the FX series to perform accurate
consumption tax calculations.
Additionally, the Company was certified as the first Peppol (Pan European Public Procurement Online) service provider inJapan on August 19, 2022, by the Digital Agency (the Japan Peppol Authority) and OpenPeppol (an association in Belgium
responsible for the development and management of Peppol specifications). TKC’s self-accounting system will utilize thisframework and enhance its features to allow the issuance and receipt of Peppol-compliant e-invoices in a standardized
manner.
(vii) Promotion of TKC Monitoring Information Service
TKC Monitoring Information Service is a free cloud-based service that allows TKC Members, upon the request of the
management of their clients, to disclose to financial institutions information such as monthly trial balance sheets, financial
statements, and tax returns prepared by TKC member firms after monthly field audits and monthly settlements.
While promoting the TKC Monitoring Information Service, the Company communicated to financial institutions that thereliability of financial statements prepared by SMEs can be verified by the following three sets of documents:
1) Supporting documents submitted by TKC Members as stipulated under Article 33-2 of the Certified Public Tax
Accountants Act of Japan;
2) 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 correlation between financial
statements and tax returns for the past three years; and
3) The Chusho Kaikei Yoryo (Guidelines for SME Accounting) checklist developed by the Japan Federation of Certified
Public Tax Accountants' Associations and the Japan Federation of Credit Guarantee Corporations.
As a result of these activities, TKC Monitoring Information Service has been adopted by 482 financial institutions, including
all local banks throughout Japan (62 institutions), as of March 31, 2023, with over 320,000 instances of use by companies.
This service has been rated highly by financial institutions and credit guarantee corporations that support the management ofSMEs, as it contributes to ensuring transparency through an accurate understanding of financial conditions and the timely
and appropriate disclosure of information. It is expected to serve as a bridge between financial institutions and TKC
Members in their efforts to play the role of escort supporters of SMEs.

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(viii) Soliciting new members (promoting membership of TKCNF)
TKCNF has set a goal of having over 1,000 firms join the federation as new TKC Members over the three-year period from2022 to 2024. To achieve this goal, the Company has engaged in efforts to strengthen its collaboration with the TKCNFNew Members Service Committee. At the same time, the Company has also strengthened its support system to facilitate
effective utilization of TKC systems, including the Office Management System (OMS Cloud) for Tax Accounting Firms, byaccounting firms that recently joined TKCNF.
(2) Activities aimed at supporting the preparation of highly reliable financial statements based on timely and accurate bookkeeping(i) Activities to support the adoption of Chusho Kaikei Yoryo (Guidelines for SME accounting)
TKCNF recommends the use of the “Basic Guidelines with Respect to Accounting Procedures at Small- and Medium-sizedEnterprises” (hereinafter “Chusho Kaikei Yoryo” (Guidelines for SME Accounting)) formulated in February 2012, with which
SMEs should comply.
These Guidelines have been formulated based on the following principles: (i) accounting that helps to clarify the company's
business conditions; (ii) accounting that contributes to providing information to stakeholders (financial institutions, etc.); (iii)
accounting that complies with the Regulation on Corporate Accounting while achieving greater unity of accounting and thetaxation system; and (iv) accounting that does not place excessive burden on SMEs.
In order to support the activities of TKCNF aimed at the adoption and utilization of these Guidelines, the Company continues
to develop training materials and collaborate with other organizations supporting SMEs.
(ii) Issuance of Certificate of Bookkeeping Timeliness
The Company utilizes the processing log data and historical time series data automatically logged at its data centers when
TKC Members access its accounting system to issue Certificates of Bookkeeping Timeliness free of charge. This Certificate
serves as reference for financial institutions, etc., to objectively evaluate the business performance of TKC member firms.
This service was developed with the aim of improving the reliability of financial statements and tax returns prepared by TKC
Members and facilitating smooth financing for the clients of TKC Members. By utilizing a feature of the Company's
financial/accounting processing operations at TKC data centers that prohibits any retroactive insertions, deletions, orcorrections to past data, the Company can prove, as a third party, that TKC Members have visited clients on a monthly basis toprovide guidance on accurate bookkeeping (monthly field audits), and that all work processes from monthly settlements to thefinal settlement of accounts and electronic tax filings have been completed in a comprehensive and timely manner.
(3) Expansion into the large-scale enterprise market
The Company contributes to the compliance and rationalization of tax and accounting operations at large enterprises through theuse of TKC systems, especially at listed companies, and is actively working to solicit these companies and their affiliates tobecome clients of TKC Members.
(i) Compliance with the invoicing system
As the invoicing system will be introduced in October 2023, the Company is currently working on the development of asystem that supports e-invoices as well as initiatives to promote the system. In December 2022, the Company started to offer
Invoice Manager 2022, which allows users to send and receive e-invoices through the Peppol network operated by
OpenPeppol (headquartered in Belgium). As part of the Company’s efforts to comply with the invoicing system, it plans totransition to Peppol invoices for the invoices (sales invoices) it issues to customers. In anticipation of this, a trial has beenlaunched in early January 2023 with over 30 user companies utilizing TKC systems on sending and receiving Peppol invoices
through Invoice Manager 2022. So far, the equivalent of over 100 sales invoices worth of data has been sent and received, withthe 30 user companies rating Peppol invoices and Invoice Manager 2022 highly, stating that this system will contribute to thedigitalization of their business operations and a reduction in costs related to the delivery of invoices.
Since January 2023, the Company has been holding bi-weekly seminars designed to share information on TKC systems that
support e-invoices, for which over 400 applications have been received in three months. The Company will continue toactively promote the use of Peppol invoices going forward.
(ii) Expansion of market share among large-scale enterprises and support for expanding the client base of TKC Members
As a result of the Company’s efforts to support the electronic filing of corporate and local taxes and compliance with thegroup tax sharing system by leveraging its expertise accumulated to date, approximately 40% of the estimated 20,700
companies with a capital of 100 million yen or greater (i.e., companies for which electronic filing is mandatory) now use its
electronic tax filing system for corporations (ASP1000R), consolidated tax payment system (eConsoliTax), and Group Tax
Sharing System (e-TAX Group Sharing) as of March 31, 2023. At the same time, the number of corporate groups using the
TKC Consolidated Group Solution totaled approximately 5,020 corporate groups as of March 31, 2023.
With this, 93 of the 100 largest listed companies in Japan by sales now use our systems. As a result of these activities, theCompany’s market share among listed companies in Japan has reached 42%. We intend to further expand our market share in
the future.
(4) Market expansion for legal information database services-9-(i) Expanding the user base of TKC Law Library
To enhance the added value provided by TKC Law Library as a standard service for legal research, we are working to expand
the basic services of the Library that offer access to judicial precedents, laws, documents, etc., as well as law journals, otherarticle collections, and related sources of supplementary information. We are also promoting the use of our packaging service
that gathers such content into collections that cater to law firms and corporate legal departments. Since November 2022, wehave been providing support for the effective use of this service by periodically sending out email magazines containing
recommended articles, etc., to our customers and establishing a system that offers direct access to the service. As a result of
these activities, there has been a transition from paper-based research that makes use of reference rooms and libraries to online
research, as well as a greater number of customers adopting our packaging service. TKC Law Library has been rated highly as
the only legal research service that encompasses comprehensive law-related information by providing access to information on
judicial precedents, laws, and documents, as well as major law journals and specialized books, leading to a steady rise in thenumber of subscriptions.
For the period under review, the number of users has surpassed 58,000 IDs as a result of promotional efforts aimed at TKC
member firms, universities, law schools, government offices, law firms, patent offices, corporate legal departments, as well as
overseas institutions and universities, with over 25,000 institutions using the Library as of March 31, 2023.
(ii) Progress in the academic market
Many universities and law schools are promoting the digital transformation of their learning environment to allow for online
access to materials and research. Our TKC Educational and Research Support System and TKC Law Library are rated highly
by faculty members and students because they can be used online anytime, anywhere, and contain a diverse variety of content
that surpasses that of other companies. They are also equipped with various features such as report submission, online
exercises, tests, and other components that support classes and self-study. They have thus contributed to the development of
the learning environment in universities by serving as part of the online system infrastructure that supports classes andlearning.
(iii) Learning support for students preparing for the bar exam
For law school students, graduates, individuals who have passed the preliminary exam, etc., who aim to sit for the bar exam,
we support their preparation for the bar exam by providing a learning environment equipped with a system that contains
practice questions for the bar exam and by conducting the TKC Standardized Nationwide Mock Exam. Changes will be madeto the examination system starting from the 2023 bar exam, including shifting the examination period to mid-July andallowing law school students who satisfy certain criteria to take the bar exam when they are still in school. As a result of
these changes, the TKC Standardized Nationwide Mock Exam has attracted more than 2,500 examinees, nearly 70% of thetotal number of candidates, and has ranked first in the industry for six consecutive years.
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, Paragraph 2: "Management of electronic data processing centers to improve the administrative efficiency of local
governments") and offers specialized information services that serve to help promote the welfare of residents by improving
administrative efficiency.
The Company provides the TKC Government Cloud Service to municipalities. This cloud service comprises two separate
services: the TASK Cloud Service and the TASK Outsourcing Service. The TASK Cloud Service consists of mission-criticalsystem-related services for managing Basic Resident Registers and tax affairs information, internal information system-related
services that include financial accounting (public accounting) and payroll calculations, and support services for the digitalizationof administrative services that include online applications for administrative procedures. The Service has been adopted by morethan 1,140 municipalities (prefectures, cities, wards, towns, villages, etc.) as of March 31, 2023.
(1) Development and provision of mission-critical system-related services
The TASK Cloud Service is a single-version package system operated at the Company’s data centers that is designed to allow
shared usage by multiple institutions. Service fees are charged in the form of a subscription fee, which also includes one regularupgrade per year. The TASK Outsourcing Service, on the other hand, is a service that supports massive batch output processing offorms such as tax papers and entry tickets for elections. During the period under review, it actively supported client municipalities
in the payment of benefits by allowing them to promptly prepare application forms for the payment of emergency support
benefits to address the rising prices of electricity, gas, food, etc. In recognition of this, our mission-critical system-related services
have been adopted by approximately 170 local municipalities as of March 31, 2023.
(2) Support for the digitalization and online provision of administrative services (administrative procedures)
The Company provides support services for the digitalization of administrative services to achieve digital counter services withthe “3 No’s (no visiting, no waiting, and no writing).” During the period under review, we have greatly enhanced thefunctionalities of the TASK Cloud Smart Application System, the TASK Cloud Easy Counter Service System, and the TASKCloud My Number Card Issuance Reservation and Management System. As a result of this, the TASK Cloud Smart Application
System has been adopted by at least 40 agencies, including government ordinance-designated cities such as Osaka and-10-

Yokohama, while the TASK Cloud Easy Counter Service System and the TASK Cloud My Number Card Issuance Reservationand Management System have been adopted by at least 60 and 150 agencies, respectively, as of March 31, 2023.
(3) Support for the digitalization of local tax administrative procedures
As an authorized contractor of the Local Tax Agency, the Company provides cloud-based services for standard systems such as
the inspection system eLTAX (local tax portal system) offered by the Agency. We also develop and provide a Data Integration
Service as our proprietary feature to integrate these systems with the individual tax systems of various municipalities.
In promoting these services, we have jointly developed proposals with approximately 50 partner companies with which we haveongoing alliance partner agreements. As a result, our TASK Cloud Local Taxes Electronic Filing Support Service is currently
used by approximately 790 agencies, which account for more than 40% of all prefectures and local municipalities, as of March
31, 2023.
During the period under review, we worked together with our partner companies to support the introduction of systems for thepayment of local taxes using standardized local tax QR codes in conjunction with the expansion of tax items for the common
local tax payment system launched in April 2023.
(4) Development and provision of a financial accounting system that is fully compliant with the local public accounting system
The Company provides the TASK Cloud Public Accounting System, which is compatible with the daily journalizing method andthe financial statement generation features based on the standardized criteria formulated by the Ministry of Internal Affairs andCommunications, as well as its related systems TASK Cloud Non-current Assets Control System and TASK Cloud Consolidated
Financial Statement Generation System.
During the period under review, we launched the next-generation version of our public accounting system with enhanced featuresthat support sustainable financial management through the visualization of financial status and the digital transformation ofinternal administrative tasks through electronic payments and integration with electronic invoicing. As a result, the TASK Cloud
Public Accounting System has been adopted by at least 300 agencies as of March 31, 2023.
Since local governments are also required to comply with the invoicing system that will be introduced in October 2023, we will
share the relevant expertise with the Accounting Firm Business Division, implement the necessary features in the system, andexplain the system to municipalities, etc.
(5) Research and development of next-generation products
On October 7, 2022, the Basic Policy on the Standardization of Local Government Information Systems was approved by the
Cabinet. This requires municipalities to migrate their mission-critical operational systems (20 operations) to applications(standard spec-compliant systems) built on Gov-Cloud that comply with the standardized criteria by the end of FY2025.
To respond to changes in the environment surrounding local governments, the Company has organized Local Government Digital
Transformation Promotion Seminars designed for client municipalities and is working to strengthen customer support through thecollection and dissemination of the latest information on the standardization of local government information systems. In
addition, Misato Town in Saitama Prefecture launched the operation of its mission-critical operational system on October 31,
2022, as part of the Gov-Cloud Preliminary Project, in which the Company is involved as a partner developer (application
developer). This was followed by Kawajima Town’s launch of its system in December. These were the first cases in Japan ofoperating on Gov-Cloud, and we aim to harness the knowledge gained from this preliminary project to complete the migration of
all customers to systems that are compliant with the standard specifications by the target deadline stipulated by the Government(end of FY2025).
Also, to support the digitalization of administrative services as set out in Version 2.0 of the Local Government Digital
Transformation (DX) Promotion Plan announced by the Ministry of Internal Affairs and Communications on September 2, 2022,
we have continued to engage in the research, study, and development of next-generation solutions through joint demonstration
projects with leading organizations, etc.
5. Business activities and operating results of the Printing Business Division
The Group’s Printing BD operates with a primary focus on data print services (hereinafter “DPS”), business form printing, andthe printing of commercial-use creative materials.
In the area of DPS, sales declined year on year due to the lack of a need for printing services for entry tickets for the House ofRepresentatives election held in October 2021 in the current period, as well as the cancellation of a large direct-mail (hereinafter“DM”) order by a private company due to the customer’s personal circumstances, even though we received orders frommunicipalities for vaccination tickets for their vaccination programs and for notifications of payment of emergency support
benefits to address inflation. On the other hand, we have launched new initiatives to add value to our products, such as theEffectiveness Measurement Service, which measures the effectiveness of DMs by inserting QR codes into DMs and counting thenumber of customers who accessed the links embedded in the QR codes.
In the area of business form printing, net sales increased year on year as a result of slip printing orders received from clientcompanies that we had newly acquired in the previous fiscal year despite the declining use of business forms and slips as morebusinesses are going paperless.
In the area of commercial-use creative materials (catalogs, books, etc.), net sales increased year on year thanks to orders for-11-manuals, etc., explaining the invoicing system that will be introduced in October 2023 as well as printing orders received fromclient companies for their anniversary activities.
At the same time, TLP Corporation, the Group’s printing business division, acquired the FSC® certification (CoC
certification/FSC-C182216) on October 3, 2022. Against the backdrop of an increasing number of environmentally conscious
customers, we have steadily increased the use of FSC-certified paper. In addition, we have begun producing and selling paper
files as an environmentally friendly alternative to clear files. We seek to cater to the needs of customers who are environmentallyconscious through the development and production of these environmentally friendly products.
Furthermore, overall production costs have risen as a result of a 20% increase in the cost of paper and other raw materials fromthe previous year, along with the soaring prices of electricity. We have continued to negotiate with our customers about passing
on to them the portion of the higher production costs that cannot be absorbed through our business efforts in the form of higher
product prices.
II. Financial Conditions
Assets, liabilities, and net assets as of the end of the current 2nd Quarter consolidated accounting period are as stated below.
1. Assets
Total assets as of the end of the current 2nd Quarter consolidated accounting period amounted to 111,179 million yen, a 1,953
million yen increase from the 109,225 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 41,896 million yen, a 1,180
million yen increase from the 40,715 million yen as of the end of the previous consolidated fiscal year.
This was mainly attributable to a 2,051 million yen increase in accounts receivable included in notes, accounts receivable, andcontract assets, despite a 557 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 69,283 million yen, a
773 million yen increase from the 68,510 million yen as of the end of the previous consolidated fiscal year.
This was mainly due to a 1,000 million yen increase in long-term deposits and an 859 million yen increase in investment
securities, despite a 729 million yen decrease in long-term deferred tax assets included in Other.
2. Liabilities
Total liabilities as of the end of the current 2nd Quarter consolidated accounting period amounted to 19,262 million yen, a 2,636
million yen decrease from the 21,899 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 15,098 million yen, a
2,580 million yen decrease from the 17,679 million yen as of the end of the previous consolidated fiscal year.
This was mainly attributable to a 1,656 million yen decrease in provisions for bonuses and a 684 million yen decrease in income
taxes payable.
(2) Non-current liabilities
Non-current liabilities as of the end of the current 2nd Quarter consolidated accounting period amounted to 4,163 million yen, a56 million yen decrease from the 4,219 million yen as of the end of the previous consolidated fiscal year.
This was mainly attributable to a 35 million yen decrease in long-term loans payable and a 24 million yen decrease in retirement
benefit liabilities.
3. Net assets
Total net assets as of the end of the current 2nd Quarter consolidated accounting period amounted to 91,916 million yen, a 4,590
million yen increase from the 87,325 million yen as of the end of the previous consolidated fiscal year.
This was mainly attributable to a 3,924 million yen increase in retained earnings and a 593 million yen increase in valuationdifference on available-for-sale securities.
Equity ratio as of the end of the current 2nd Quarter consolidated accounting period was 82.7%, a 2.7 percentage point increase
from the ratio of 80.0% 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
26,063 million yen, a 557 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 the major factors contributing to theresults are as follows.
(1) Cash flows from operating activities
Cash flows from operating activities increased by 4,314 million yen (771 million yen decrease in revenue compared to the samequarter of the previous year). Major factors include the recording of 8,849 million yen in quarterly net income before taxes and-12-adjustments, an increase of 2,019 million yen in notes and accounts receivable–trade, and payment of 2,925 million yen inincome taxes.
(2) Cash flows from investing activities
Cash flows from investing activities decreased by 2,547 million yen (682 million yen decrease in expenditure compared to thesame quarter of the previous year). Major factors include an expenditure of 2,700 million yen for payment into time deposits,
proceeds of 1,700 million yen from the withdrawal of time deposits, and an expenditure of 1,219 million yen for the purchase ofintangible assets.
(3) Cash flows from financing activities
Cash flows from financing activities decreased by 2,324 million yen (894 million yen decrease in expenditure compared to thesame quarter of the previous year). Major factors include the payment of 2,209 million yen as year-end dividends for the fiscal
year ended September 2022 (a dividend of 42 yen per share).
IV. Operational and Financial Challenges Facing TKC Group
There are no significant changes in the challenges faced by TKC Group during the current 2nd Quarter consolidated cumulative
period.
V. Research and Development Activities
There were no research and development expenses spent by TKC Group during the current 2nd Quarter consolidated cumulative
period.
Additionally, there are no significant changes in the status of research and development activities under TKC Group during thecurrent 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
Common stock

120,000,000

Total

120,000,000(ii) [Issued shares]
Number of sharesissued as of the end of
the 2nd QuarterClassaccounting period(shares)(March 31, 2023)
Commonstock
Total

Total number of shares authorized to be issued (shares)

Number of shares issued
as of the filing date(shares)(May 15, 2023)

53,462,066
53,462,066

53,462,066

Name of stock exchange on which theCompany is listed, or name of
Authorized Financial Instruments Firms
Association

Description

Number of sharesconstituting a unit:

Prime Marketof the Tokyo Stock Exchange

53,462,066

100 shares－－(2) [Share subscription rights, etc.](i) [Stock option scheme]
None to be disclosed.
(ii) [Other share subscription rights, etc.]
None to be disclosed.
(3) [Exercise of bonds with share subscription rights containing a clause for exercise price adjustment, etc.]
None to be disclosed(4) [Changes in total number of issued shares, capital stock, etc.]
Increase or
Balance ofIncrease or
decrease intotal number of decrease inDate
total number of issued shares
capital stock
issued shares(shares)(millions of(shares)yen)
January 1, 2023 53,462,066－－
March 31, 2023

-14-

Balance ofcapital stock

Increase or
decrease incapital reserve

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

5,700

－

5,409

(5) [Major shareholders]Name of shareholder

Iizuka Takeshi Scholarship

Address

As of March 31, 2023
Percentage ofshares held to the
Number of shares
total number ofheldissued shares(hundreds of shares)(excluding treasury
stock) (%)

1758 Tsurutamachi, Utsunomiya-shi, Tochigi

75,17014.3

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

51,3809.8

2-11-3 Hamamatsucho, Minato-ku, Tokyo

49,5499.4

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

30,930

5.9

2-1 Agebacho, Shinjuku-ku, Tokyo

28,692

5.5

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

24,518

4.7

Masaharu Iizuka

Utsunomiya-shi, Tochigi

14,626

2.8

Tokio Marine & Nichido Fire
Insurance Co., Ltd.

2-6-4 Otemachi, Chiyoda-ku, Tokyo

13,328

2.5

Custody Bank of Japan, Ltd. (Trustaccount)

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

12,9102.5505025(Standing proxy: Mizuho Bank, Ltd.,

P.O. Box 351, Boston, MA 02101, USA(Shinagawa Intercity Bldg. A, 2-15-1 Konan,

12,512

2.4

Settlement & Clearing Services
Department)

Minato-ku, Tokyo)
313,61759.6

Foundation
Daido Life Insurance Company
The Master Trust Bank of Japan, Ltd.
(Trust account)Sozeishiryokan (The Institute of Tax
Research and Literature)
TKC Group Employee Shareholding
Association
SSBTC Client Omnibus Account(Standing proxy: The Hong Kong &Shanghai Banking Corporation,
Tokyo Branch)

State Street Bank and Trust Company

Total

－

(Note) The 206,000 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.

-15-

(6) [Status of voting rights](i) [Shares issued]
As of March 31, 2023
Classification

Number of voting rights(units)Number of shares (shares)

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

833,300－－

Shares with full voting right (others)

Common stock

52,556,900

525,569－

Shares less than one share unit

Common stock

71,866－－53,462,066

－

－

－

525,569－

Total number of issued shares
Total voting rights held by all shareholders(Note) Shares with full voting right (others) include 1,300 shares (13 units of voting rights) registered in the name of the Japan
Securities Depository Center, Inc., and 206,000 shares (2,060 units of voting rights) held by the BIP Trust.
(ii) [Treasury stock, etc.]

Name of shareholder

TKC Corporation

Address ofshareholder
1758 Tsurutamachi,
Utsunomiya-shi,

As of March 31, 2023
Percentage ofTotal shares held
shares held to the(shares)
total number ofissued shares (%)

Number of shares
held under own
name (shares)

Number of shares
held under othernames (shares)

833,300－

833,300

1.56

833,300－

833,300

1.56

Tochigi
Total－(Note) In addition to the above, the 206,000 shares held by the BIP Trust are recorded as treasury stocks.

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 the
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 (fromJanuary 1, 2023, to March 31, 2023) and the 2nd Quarter consolidated cumulative period (from October 1, 2022, to March 31,2023) have undergone quarterly review by Ernst & Young ShinNihon LLC pursuant to the provisions 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, accounts receivable, and contract assets
Inventories
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant, and equipment
Buildings and structures (net amount)
Land
Other (net amount)
Total property, plant, and equipment
Intangible assets
Investments and other assets
Investment securities
Long-term time deposits
Guarantee deposits
Other
Total investments and other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Accounts payable–trade
Electronically recorded obligations–operating
Short-term loans payable
Accounts payable–other
Income taxes payable
Contract liabilities
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, 2022)(March 31, 2023)-18-

29,920
8,320
*494
1,993
(12)
40,71529,363
10,142
*620
1,781
(11)
41,896

7,651
6,802
2,699
17,153
4,666

7,412
6,852
2,567
16,833
4,905

18,74817,7001,486
8,754
46,68968,510109,225

19,60818,7001,456
7,779
47,544
69,283111,179

2,973
799
71
3,499
3,167
811
4,953
1,403
17,679

3,308
741
71
2,377
2,482
711
3,297
2,108
15,098

142
2,806
306
964
4,219
21,899

107
2,781
327
947
4,163
19,262

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(Unit: millions of yen)
Current 2nd Quarter consolidated
Previous consolidated fiscal year
accounting period(September 30, 2022)(March 31, 2023)

-19-

5,700
6,589
78,743(2,359)88,672

5,700
6,589
82,667(2,373)92,582(138)454(1,207)(1,120)(1,346)87,325109,225(666)
91,916111,179

(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
Dividend income
Insurance dividend income
Land and house rent received
Equity in earnings of affiliates
Other
Total non-operating income
Non-operating expenses
Interest expenses
Surcharges
Provisions for damages
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sale of investment securities
Gain on sale of non-current assets
Total extraordinary income
Extraordinary loss
Loss on retirement of non-current assets
Total extraordinary loss
Quarterly net income before taxes and adjustments
Income taxes–current
Income taxes–deferred
Total income taxes
Quarterly net income
Quarterly net income attributable to owners of parent(Unit: millions of yen)Previous 2nd Quarter consolidated Current 2nd Quarter consolidated
cumulative period
cumulative period(Started October 1, 2021;(Started October 1, 2022;
ended March 31, 2022)
ended March 31, 2023)
33,76836,0509,689
10,78524,07925,265*15,854*16,529
8,225
8,735

-20-

34
83
18
26
－
65
228

35
96
21
20
25
30
229

0
20
－
1
21
8,431

0
－
106
0
106
8,858

－
1
1

0
0
1

1
1
8,431
2,382
232
2,615
5,816
5,816

9
9
8,849
2,285
429
2,714
6,134
6,134

[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 defined benefit plans
Total other comprehensive income
Quarterly comprehensive income(Breakdown)
Quarterly comprehensive income attributable toowners of parent(Unit: millions of yen)Previous 2nd Quarter consolidated Current 2nd Quarter consolidated
cumulative period
cumulative period(Started October 1, 2021;(Started October 1, 2022;
ended March 31, 2022)
ended March 31, 2023)
5,816
6,134

-21-

134
87
222
6,038

593
87
680
6,815

6,038

6,815

(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 investment securities
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
Penalties 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
Other
Cash flows from investing activities
Cash flows from financing activities
Repayment of long-term loans payable
Proceeds from disposal of treasury stock
Purchase of treasury stock
Payment of dividends
Other
Cash flows from financing activities
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
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, 2021;(Started October 1, 2022;
ended March 31, 2022)
ended March 31, 2023)

-22-

8,431
1,494
－
(1)
1
7
(933)
184

8,849
1,730
(0)
(0)
9
20
(1,656)100(2,416)(2,019)

(21)
144
184
(104)
6,970
135
(0)
(2,018)
－
5,086

54
198
(19)
(154)
7,113
138
(0)
(2,925)(11)
4,314(2,800)1,700(97)(1,045)(1,014)28(3,229)(2,700)1,700(398)(1,219)(0)71(2,547)(45)
0(1,034)(2,088)(51)(3,219)(1,361)
23,126*21,765

(35)
－
(13)
(2,209)(65)(2,324)(557)
26,620*26,063

[Notes to Financial Statements](Additional Information)(Stock-based compensation plan for officers)
1. Outline of transaction
Based on a resolution at the Meeting of the Board of Directors held on October 31, 2018, which was approved at theOrdinary General Meeting of Shareholders held on December 21, 2018, the Company introduced a stock-based
compensation plan called the “BIP Trust.” The objectives of the plan are to clarify the correlation between the Company’s
shareholder value and the remuneration for Directors, etc., and to motivate Directors, etc., to contribute more to enhancing
our medium- to long-term corporate value by sharing a common interest with shareholders, including not only the benefitsof rising share prices but also the risks associated with declining share prices.
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 andCompensation Advisory Committee, whose chairperson and half of whose members are independent Outside Directors andoutside experts, and it was 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 based on the book values in thetrust (not including expenses attributable thereto). The book value and number of stocks of said treasury stocks were 407
million yen and 206,000 shares, respectively, as of the end of the current 2nd Quarter consolidated accounting period.
(Application of the Practical Solution on Accounting and Disclosure Under the Group Tax Sharing System)
The Company and its consolidated subsidiaries have transitioned from the consolidated taxation system to the group tax
sharing system as of the 1st Quarter consolidated accounting period. In accordance with this, the Company and its
consolidated subsidiaries have adopted the “Practical Solution on Accounting and Disclosure Under the Group Tax Sharing
System” (ABSJ Practical Solution No. 42, issued August 12, 2021; hereinafter “Practical Solution No. 42”) for theaccounting processing and disclosure of income taxes, local corporate taxes, and tax effect accounting. Based on Paragraph32(1) of Practical Solution No. 42, we have deemed that there is no impact from the change in accounting policy resulting
from the application of Practical Solution No. 42.

-23-

(Notes to quarterly consolidated balance sheets)* Breakdown of inventories is as follows:
Previous consolidated fiscal year
(September 30, 2022)
Merchandise and finished goods

278 million yen

Work in progress
Raw materials and supplies

69 million yen
146 million yen

Current 2nd Quarter consolidated
accounting period(March 31, 2023)
297 million yen
164 million yen
158 million yen(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, 2021;
ended March 31, 2022)
Salaries
5,940 million yen
Provisions for bonuses
2,572 million yen
Retirement benefit expenses
Provisions for stocks payment
Depreciation
Rent expenses

Current 2nd Quarter consolidated
cumulative period(Started October 1, 2022;
ended March 31, 2023)
6,030 million yen
2,743 million yen

469 million yen
16 million yen

481 million yen
20 million yen

348 million yen
1,286 million yen

316 million yen
1,272 million yen(Notes to quarterly consolidated statements of cash flows)* The relationship between the balance of cash and cash equivalents at the end of quarter and account items stated in thequarterly consolidated balance sheets is as follows:
Previous 2nd Quarter consolidated
Current 2nd Quarter consolidated
cumulative period
cumulative period(Started October 1, 2021;(Started October 1, 2022;
ended March 31, 2022)
ended March 31, 2023)
Cash and deposits
25,065 million yen
29,363 million yen
Time deposits with deposit period
longer than three months(3,300 million yen)

(3,300 million yen)

Cash and cash equivalents

21,765 million yen

26,063 million yen-24-(Notes to shareholders’ equity, etc.)
I. Previous 2nd Quarter consolidated cumulative period (Started October 1, 2021; ended March 31, 2022)(1) Dividend payments
Resolution
December 17, 2021
Ordinary General
Meeting of
Shareholders

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

2,090

39.50

Record date

Effective date

September 30, 2021

December 20, 2021

Source ofdividends
Retainedearnings(Note) The total amount of cash dividends determined by resolution at the Ordinary General Meeting of Shareholders held on
December 17, 2021, includes a cash dividend of 8 million yen for the stocks of the Company held by the BIP Trust.
(2) Dividends whose record dates fall within the current 2nd Quarter consolidated cumulative period but whose
effective dates are after the end of the current 2nd Quarter consolidated accounting period
Total amount of
Dividend
Source of
Resolution
Class of shares cash dividends
Record date
Effective date
per share (yen)dividends(millions of yen)
May 10, 2022
Retained
Meeting of theCommon stock
1,894
36.00
March 31, 2022
June 13, 2022
earnings
Board of Directors(Note) The total amount of cash dividends determined by resolution at the Meeting of the Board of Directors held on May 10, 2022,
includes a cash dividend of 7 million yen for the stocks of the Company held by the BIP Trust.
II. Current 2nd Quarter consolidated cumulative period (Started October 1, 2022; ended March 31, 2023)(1) Dividend payments
Resolution
December 16, 2022
Ordinary General
Meeting of
Shareholders

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

2,210

42.00

Record date

Effective date

September 30, 2022

December 19, 2022

Source ofdividends
Retainedearnings(Note) The total amount of cash dividends determined by resolution at the Ordinary General Meeting of Shareholders held on
December 16, 2022, includes a cash dividend of 8 million yen for the stocks of the Company held by the BIP Trust.
(2) Dividends whose record dates fall within the current 2nd Quarter consolidated cumulative period but whose
effective dates are after the end of the current 2nd Quarter consolidated accounting period
Total amount of
Dividend
Source of
Resolution
Class of shares cash dividends
Record date
Effective date
per share (yen)dividends(millions of yen)
May 12, 2023
Retained
Meeting of theCommon stock
2,052
39.00
March 31, 2023
June 12, 2023
earnings
Board of Directors(Note) The total amount of cash dividends determined by resolution at the Meeting of the Board of Directors held on May 12, 2023,
includes a cash dividend of 8 million yen for the stocks of the Company held by the BIP Trust.

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(Segment information, etc.)[Segment information]
I. Previous 2nd Quarter consolidated cumulative period (Started October 1, 2021; ended March 31, 2022)
Information on net sales and profit or loss for each reportable segment
Reportable segment(Unit: millions of yen)Amounts inquarterly
Adjustment
consolidatedsstatements(Note 1)of income(Note 2)

Accounting
Firm BD

Local
GovernmentsBD

22,776

9,311

1,680

33,768－33,768

1

0

926

927

(927)

－

Total

22,778

9,311

2,606

34,696(927)

33,768Segment profit

6,456

1,740

28

8,226

(1)

8,225

Printing
BD

Total

Net sales(1) Sales to outside customers(2) Inter-segment
sales or transfers(Notes) 1. Adjustments of segment profit of -1 million yen include amounts for elimination of inter-segment transactions andadjustment of inventory assets.
2. Segment profit is adjusted with the operating profit presented in the quarterly consolidated statements of income.
II. Current 2nd Quarter consolidated cumulative period (Started October 1, 2022; ended March 31, 2023)
Information on net sales and profit or loss for each reportable segment
Reportable segment(Unit: millions of yen)Amounts inquarterly
Adjustment
consolidatedsstatements(Note 1)of income(Note 2)

Accounting
Firm BD

Local
GovernmentsBD

23,71010,921

1,418

36,050－36,050

2

0

901

904

(904)

－

23,713

10,921

2,320

36,955(904)

36,050

6,233

2,562

(72)

8,724

11

8,735

Printing
BD

Total

Net sales(1) Sales to outside customers(2) Inter-segment
sales or transfers
Total
Segment profit (loss)(Notes) 1. Adjustments of segment profit of 11 million yen include amounts for elimination of inter-segment transactions
and adjustment of inventory assets.
2. Segment profit (loss) is adjusted with the operating profit presented in the quarterly consolidated statements ofincome.

-26-

(Revenue recognition)
Net sales of the Company are primarily revenue recognized from contracts with customers. The Company’s reportablesegments can be disaggregated into the following categories of goods and services:
Previous 2nd Quarter consolidated cumulative period (Started October 1, 2021; ended March 31, 2022)(Unit: millions of yen)
Reportable segment
Accounting Firm
BD

Local
Governments
BD

Total

Printing BD

Revenue from computer services

7,764

4,197

－

11,962

Software sales

9,092

3,347

－

12,439

Revenue from consulting

3,446

358

－

3,804

Office equipment sales

1,918

1,409

－

3,328

Accounting supplies sales

554

－

－

554

Revenue from printing-related services

－

－

1,680

1,680

22,776

9,311

1,680

33,768

Sales to outside customers

Current 2nd Quarter consolidated cumulative period (Started October 1, 2022; ended March 31, 2023)(Unit: millions of yen)
Reportable segment
Accounting Firm
BD

Local
Governments
BD

Total

Printing BD

Revenue from computer services

7,984

4,219

－

12,204

Software sales

9,420

3,447

－

12,868

Revenue from consulting

3,603

1,361

－

4,965

Office equipment sales

2,161

1,891

－

4,053

Accounting supplies sales

540

－

－

540

Revenue from printing-related services

－

－

1,418

1,418

23,71010,921

1,418

36,050

Sales to outside customers-27-

(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 Current 2nd Quarter consolidated
cumulative period
cumulative period(Started October 1, 2021;(Started October 1, 2022;
ended March 31, 2022)
ended March 31, 2023)
Quarterly net income per share

110.82 yen

117.01 yen

5,816

6,134

－

－

5,816

6,134

524,798524,248(Basis for calculation)
Quarterly net income attributable to owners ofparent (millions of yen)Amount not attributable to commonshareholders (millions of yen)
Quarterly net income from common stocks
attributable to owners of parent (millions ofyen)
Average number of common stocks outstanding(hundreds of shares)(Notes) 1. The average number of stocks outstanding used in the calculation of the earnings per share information has been determinedby including the stocks of the Company held by the BIP Trust (which was 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 219,016 shares for the previous 2nd Quarter consolidated cumulative period and 206,000 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.
(Material subsequent events)
None to be disclosed.

2 [Other]
The following resolution regarding the current interim dividends was adopted at the Meeting of the Board of Directors held on
May 12, 2023.
(a) Total amount of cash dividends to be paid as interim dividends: 2,052 million yen(b) Dividend per share: 39.00 yen(c) Effective date of payment request and payment start date: June 12, 2023
(Note) Dividends are payable to the shareholders listed or recorded in the shareholders registry as of March 31, 2023.

-28-

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

-29-

Quarterly Review Report of Independent Auditors
May 15, 2023

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

Designated Limited Liability Partner
Engagement Partner

Certified Public
Shigeyuki Honda
Accountant

Designated Limited Liability Partner
Engagement Partner

Certified Public
Toru Iizuka
Accountant

Auditor's Conclusion
Pursuant to Article 193-2, Paragraph 1, of the Financial Instruments and Exchange Act, we have conducted a quarterly review of thequarterly consolidated financial statements presented in the Financial Information section, which comprise the quarterly consolidatedbalance sheets, quarterly consolidated statements of income, quarterly consolidated statements of comprehensive income, quarterly
consolidated statements of cash flows, and notes of TKC Corporation applicable to the 2nd Quarter consolidated accounting period(from January 1, 2023, to March 31, 2023) and the 2nd Quarter consolidated cumulative period (from October 1, 2022, to March 31,2023) of the consolidated fiscal year started October 1, 2022, and ending September 30, 2023.
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 position of TKC Corporation and its
consolidated subsidiaries as of March 31, 2023, as well as their financial performance and cash flows for the 2nd Quarter consolidated
cumulative period then ended, in conformity with the principles for the preparation of quarterly consolidated financial statements
generally accepted in Japan.
Basis for Auditor's Conclusion
We have conducted our quarterly review in accordance with the 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 Quarterly Consolidated Financial Statements section of our report. We are independent of the Company and its consolidated
subsidiaries in accordance with the code of professional ethics in Japan, and we have also fulfilled our other ethical responsibilities asauditors. We believe that we have obtained the evidence required to provide a basis for our conclusion.
Responsibilities of Management, Corporate Auditors, and Board of Auditors for Quarterly Consolidated Financial Statements
Management is responsible for the preparation and proper presentation of quarterly consolidated financial statements in accordancewith the principles for the preparation of quarterly consolidated financial statements generally accepted in Japan. Responsibilities
include designing and implementing the internal control determined by management as necessary to enable the preparation and proper
presentation of quarterly consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the quarterly consolidated financial statements, management is responsible for assessing the Group’s ability to continue asa going concern and disclosing, where applicable, matters related to going concern in accordance with the principles for the
preparation of quarterly consolidated financial statements generally accepted in Japan.
Corporate auditors and the Board of Auditors are responsible for overseeing the Directors’ performance of their duties in designing andimplementing the financial reporting process.
Auditors’ Responsibilities for the Quarterly Review of Quarterly Consolidated Financial Statements
Our responsibility as auditors is to express a conclusion on the quarterly consolidated financial statements in our quarterly review
report from an independent standpoint based on our quarterly review.
In accordance with the quarterly review standards generally accepted in Japan, we perform the following by exercising professional
judgment and maintaining professional skepticism throughout the quarterly review.
・We principally make inquiries to management and persons responsible for financial and accounting matters and perform analyticalprocedures and other quarterly review procedures. The procedure for quarterly reviews is a limited procedure compared to theprocedure for annual financial statements performed in accordance with the auditing standards generally accepted in Japan.
・If we determine that there exists a material uncertainty related to events or conditions that may cast significant doubt on the Group’s-30-ability to continue as a going concern, we will present our conclusion, based on the evidence obtained, on whether anything hascome to our attention that causes us to believe that the quarterly consolidated financial statements have not been properly presented
in accordance with the principles for the preparation of quarterly consolidated financial statements generally accepted in Japan. If
we conclude that such material uncertainty exists, we are required to draw attention in our quarterly review report to the notes to thequarterly consolidated financial statements or, if such notes are inadequate to address the material uncertainty, to express a qualified
conclusion or negative conclusion on the quarterly consolidated financial statements. Our conclusions are based on the evidence
obtained up to the date of our quarterly review report. However, future events or conditions may cause the Group to cease tocontinue as a going concern.
・We evaluate whether anything has come to our attention that causes us to believe that the presentation of and notes to the quarterly
consolidated financial statements are not in accordance with the principles for the preparation of quarterly consolidated financial
statements generally accepted in Japan; and whether anything has come to our attention that causes us to believe that the overall
presentation, structure, or content of the quarterly consolidated financial statements, including the notes thereto, or the quarterly
consolidated financial statements themselves, do not represent the underlying transactions and accounting-related events in amanner that constitutes proper presentation.
・We obtain evidence regarding the financial information of the Company and its consolidated subsidiaries to express a conclusion on
the quarterly consolidated financial statements. We are responsible for the direction, supervision, and performance of the quarterly
review of the quarterly consolidated financial statements. We remain solely responsible for our conclusion.
We communicate with corporate auditors and the Board of Auditors regarding the planned scope and timing of the quarterly review
and our significant findings therein.
We also provide corporate auditors and the Board of Auditors with a statement that we have complied with regulations on
professional ethics in Japan regarding independence and communicate with them all matters that may reasonably be thought to bearon our independence as well as, where applicable, the measures taken to eliminate factors that may hinder our independence or thesafeguards adopted to mitigate such factors to an acceptable level.
Conflicts of Interest
Our firm and its engagement partners have no interest in the Company or its consolidated subsidiaries that should be disclosed
pursuant to the provisions of the Certified Public Accountants Act of Japan.
End of document(Notes) 1. The original copy of the above quarterly review report is retained 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 15, 2023

[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, Managing Executive Officer, Chief of the Business
Administration Headquarters[Address of head office]1758 Tsurutamachi, Utsunomiya-shi, Tochigi[Place available for public inspection]

TKC Corporation, Tokyo Head Office(2-1 Agebacho, 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 the57th term (started January 1, 2023; ended March 31, 2023) are adequate under the Financial Instruments and Exchange Act ofJapan.

2 [Special Notes]
None to be disclosed.

-33-