Quarterly Report(56th Term 2nd Quarter)
Started January 1, 2022
Ended March 31, 2022

TKC Corporation
1758 Tsurutamachi, Utsunomiya-shi, Tochigi- 1 -Table of Contents
Page[Front Cover]Section 1 [Information on the Company] ............................................................................................................................................. - 4 Part 1 [Overview of the Company] ................................................................................................................................................ - 4 1 [Key Financial Data] ............................................................................................................................................................ - 4 2 [Description of Business] ..................................................................................................................................................... - 5 Part 2 [Business Overview] ............................................................................................................................................................ - 5 1 [Risk Factors]........................................................................................................................................................................ - 5 2 [Management Analysis of Consolidated Financial Conditions, Operating Results, and Cash Flows] .................................. - 5 3 [Material Agreements, etc.]................................................................................................................................................. - 14 Part 3 [Information on the Company] .......................................................................................................................................... - 15 1 [Information on the Company’s Stock] ............................................................................................................................... - 15 (1) [Total number of shares, etc.] ........................................................................................................................................ - 15 (2) [Share subscription rights, etc.] ..................................................................................................................................... - 15 (3) [Exercise of bonds with share subscription rights containing a clause for exercise price adjustment, etc.] .................. - 15 (4) [Changes in total number of issued shares, capital stock, etc.]...................................................................................... - 15 (5) [Major shareholders] ..................................................................................................................................................... - 16 (6) [Status of voting rights] ................................................................................................................................................. - 17 2 [Officers]............................................................................................................................................................................. - 17 Part 4 [Financial Information] ...................................................................................................................................................... - 18 1 [Quarterly Consolidated Financial Statements]................................................................................................................... - 19 (1) [Quarterly consolidated balance sheets] ........................................................................................................................ - 19 (2) [Quarterly consolidated statements of income and quarterly consolidated statements of comprehensive income] ....... - 21 [Quarterly consolidated statements of income]............................................................................................................. - 21 [Quarterly consolidated statements of comprehensive income] .................................................................................... - 22 (3) [Quarterly consolidated statements of cash flows] ........................................................................................................ - 23 2 [Other]................................................................................................................................................................................. - 29 Section 2 [Information on Guarantors, etc. of the Company] ............................................................................................................. - 30 -[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 11, 2022

[Quarterly accounting period]

56th Term 2nd Quarter (from January 1, 2022 to March 31, 2022)[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 Ageba-cho, 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 Ageba-cho, Shinjuku-ku, Tokyo)
Tokyo Stock Exchange, Inc.
(2-1 Nihonbashikabutocho, Chuo-ku, Tokyo)- 3 -Section 1 [Information on the Company]
Part 1 [Overview of the Company]
1 [Key Financial Data]

Term & Period

55th Term
2nd quarter consolidated
cumulative period

56th Term
2nd quarter consolidated
cumulative period

Accounting period

Started October 1, 2020;
ended March 31, 2021

Started October 1, 2021; Started October 1, 2020;
ended March 31, 2022 ended September 30, 2021

55th Term

Net sales(millions of yen)

33,372

33,76866,221

Ordinary income(millions of yen)

8,086

8,431

12,673(millions of yen)

5,495

5,816

8,686

income or comprehensive
income(millions of yen)

6,319

6,038

9,839

Net assets(millions of yen)

81,611

86,33883,416

Total assets(millions of yen)

101,067

105,934

103,406(yen)

104.42110.82164.93

(yen)

－

－

－

(%)

80.7

81.5

80.7

(millions of yen)

3,154

5,086

10,550Cash flows from investing
activities(millions of yen)

(3,074)(3,229)(7,201)

Cash flows from financing
activities(millions of yen)

(1,852)(3,219)(3,691)(millions of yen)

21,697

21,76523,126

Term & Period

55th Term
2nd quarter consolidated
accounting period

56th Term
2nd quarter consolidated
accounting period

Accounting period

Started January 1, 2021;
ended March 31, 2021

Started January 1, 2022;
ended March 31, 2022

68.73

68.44

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

Quarterly (current) net income
per share
Quarterly (current) diluted net
income per share
Equity ratio
Cash flows from operating
activities

Cash and cash equivalents at endof quarter (period)

Quarterly net income per share(yen)(Notes) 1. Changes in key financial data, etc. of the Company are not stated here, as they are included in the Company’s quarterly
consolidated financial statements.
2. 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.
4. The Company conducted a stock split of its common shares at a ratio of 1:2 as of April 1, 2021. The quarterly (current) net
income per share has been calculated assuming that the stock split was conducted at the beginning of the previous
consolidated fiscal year.

- 4 -2 [Description of Business]
There are no significant changes in the description of business operated by the TKC Group (TKC Corporation and its affiliatedcompanies) for the current 2nd quarter consolidated cumulative period. There are no changes in the major affiliated companies.

Part 2 [Business Overview]
1 [Risk Factors]
There are no risks pertaining to new business operations, etc. arisen during the current 2nd quarter consolidated cumulative period.
There are no significant changes in risks regarding business operations, etc. described in the annual securities report of the previous
fiscal year.

2 [Management Analysis of Consolidated Financial Conditions, Operating Results, and Cash Flows]
I. Operating Results
The Japanese economy during the 2nd quarter consolidated cumulative period under review (“current 2nd Quarter”) remains unclear
due to inflation and supply chain disruptions caused by weak yen and Russia’s invasion of Ukraine, while the outlook for thecontainment of the novel coronavirus disease (COVID-19) pandemic is still unpredictable.
In such situations, the Japanese government has been offering booster vaccinations and taking various measures to support the people
and SMEs towards resuming the socio-economic activities. The Group carried out its business in an aim to contribute to the local
communities and society by quickly complying with such governmental initiatives and offering compatible systems and services.
The Accounting Firm Business Division supports certified public tax accountants and certified public accountants that are customers
of TKC (hereinafter, “TKC Members”) in enabling them to provide their clients with financing support and managerial advisory
services as escort supporters of SMEs. We also support SMEs in achieving profitable results and proper filing by providing cloudbased accounting systems.
The Local Governments Business Division quickly provided services in response to the release of the administrative circular“Printing and Mailing of Vaccination Vouchers, etc. for COVID-19 Vaccine Booster Shots (3rd Dose)” on October 20, 2021 from
the Ministry of Health, Labour and Welfare, including services for the production of COVID-19 vaccination vouchers and provisionof vaccination reservation & registration systems, thereby supporting customer local municipalities in their COVID-19 vaccination
projects.
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 a net sales of 33,768 million yen (increased 1.2% year-on-year), operating
income of 8,225 million yen (increased 4.0% year-on-year), ordinary income of 8,431 million yen (increased 4.3% year-on-year),and quarterly net income attributable to owners of parent of 5,816 million yen (increased 5.8% year-on-year).
Net sales for the current 2nd Quarter by business division are 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 22,776 million yen (increased 1.4% year-on-year); operating income was 6,456
million yen (increased 7.8% year-on-year). Breakdown of sales is as follows:(i) Sales from computer services increased by 3.7% year-on-year. Medium-size companies are rapidly working towards digitaltransformation (DX), and in such climate, this was attributable to the growth in number of implementations of the FX4 Cloud
Integrated Accounting Information System for mid-size companies, which enables the accounting of journal entries from sales
management systems, salary calculation systems and other business systems in connection with accounting data, and theincrease in the number of accounting firms adopting the Office Management System (OMS Cloud) for Tax Accounting Firms
and the OMS Mobile which allows them to work using the OMS from home or outside their offices.
(ii) Software sales increased by 2.5% year-on-year. This was attributable to increase in clients who began using the FX Cloud
Series to comply with the Revised Electronic Books Maintenance Act of Japan enacted as of January 1, 2022. The FX Cloud
Series meet the legal requirements of “superior electronic books” and come equipped with documented evidence storage
functions as standard feature.
(iii) Sales from consulting services increased 2.6% year-on-year. This was due to strong sales of the FX4 Cloud, leading to increasein orders for system launch support services.
(iv) Hardware sales decreased by 4.6% year-on-year. This was due to many companies postponing the replacement of PCs, asInternet banking services offered by financial institutions are not yet compatible with Windows 11. As companies may be able

- 5 -

to receive funding to cover the purchase of hardware under the Subsidy Program for Introducing IT to Businesses for
Productivity Improvement in Services, etc. (“subsidies for introduction of IT”) for this fiscal year, many companies decided
to purchase their PCs after the calls for applicants for subsidies open in April. Consequently, the number of PC sales decreased.
(v) Sales from supplies decreased by 1.6% year-on-year. While sales of office equipment to support remote works anddigitalization were strong, more clients are now using self-accounting and moving to paperless operations, and demands forpaper accounting supplies and printing-related consumables have declined.
(vi) Improvement in operating income year-on-year was a result of increase in sales of computer services and software with higher
profit margins, while sales of hardware and office supplies with lower profit margins decreased from the previous year.
(2) Net sales of the Local Governments Business Division
Net sales of the Local Governments BD were 9,311 million yen (decreased 0.5% year-on-year); operating income was 1,740
million yen (decreased 14.2% year-on-year). Breakdown of sales is as follows:(i) Sales from computer services increased by 13.8% year-on-year. This was driven by increase in data center usage fees by new
clients whose systems ordered in the previous fiscal year were fully launched, new contracts for printing of vouchers, etc., for
COVID-19 vaccine booster shots (3rd dose), and new contracts for production of entry tickets, etc., for the election of membersof the House of Representatives.
(ii) Software sales decreased by 4.8% year-on-year. This was due to decrease year-on-year in temporary sales in response to system
reforms recorded in the previous fiscal year, including sales from system revisions for vaccination projects and revisions to
the Digital Administrative Procedures Act. Revenue from software usage fees for our mission-critical system is growing
steadily as the customer base continues to expand.
(iii) Sales from consulting services decreased by 37.9% year-on-year. This is because the fees for the change-over ofmunicipalities’ intermediate servers & platforms recorded in the previous fiscal year will not be generated this fiscal year.
(iv) Hardware sales decreased by 10.8% year-on-year. This was due to factors such as decrease in renewal of servers and otherequipment which was intense in the previous fiscal year.
(v) Decrease in operating income year-on-year was a result of decrease in sales for temporary system revisions and consulting
services to address system reforms, etc., despite increase in sales of computer services for the launch of systems for new
customers.
(3) Net sales of the Printing Business Division (Subsidiary: TLP Corporation)
Net sales of the Printing BD were 1,680 million yen (increased 8.6% year-on-year); operating income was 28 million yen(operating loss of 117 million yen in the 2nd quarter of the previous fiscal year). Breakdown of sales is as follows:(i) Sales of data printing service-related products increased by 18.3% year-on-year. This was due to winning of contracts for the
printing of entry tickets for the election of members of the House of Representatives, vouchers for COVID-19 vaccination by
local municipalities, notices for special cash payments for households exempted from inhabitant tax, and Notice on 2021
Income Tax Report postcards.
(ii) Business form-related sales decreased by 3.2% year-on-year. This was due to decline in demands for business forms as a resultof progress in digital transformation among client companies.
(iii) Sales of printing of commercial-use creative materials (catalogs, books, etc.) increased by 10.8% year-on-year. This was due
to winning many new contracts for the printing of books and other materials illustrating the Revised Electronic Books
Maintenance Act, new invoicing system, and FY2022 tax reforms.
(iv) The increase in operating income year-on-year was a result of increase in amounts of orders for DPS-related products
described above.
2. Important matters with respect to the Company as a whole(1) Prevention of COVID-19 infection and actions for new working styles
As the outlook for the containment of COVID-19 pandemic is still unpredictable, the Company continues to take the following
infection prevention measures and adapt to new working styles in order to continue the provision of services to its customers:(i) To enable customers to continue using our cloud services, business form printing services, and help desk services, we arecontinuing to strengthen our business continuity measures (including prohibiting the entry of outside personnel at important
offices and developing the infrastructure for remote access to the data center).

- 6 -(ii) By introducing teleworking and staggered working hour programs, in principle we encourage employees in areas subject todeclaration of state of emergency and pre-emergency measures to work from home. We also make it a general rule to utilize
Web meeting systems for customer support and business meetings.
(2) Selection of Prime Market for the new market segment and disclosure of results of ESG activities
The Company resolved at the meeting of the Board of Directors held in November 2021, to select the Prime Market under the
new market segments on the Tokyo Stock Exchange, Inc. Accordingly, we disclosed our Sustainability Policy and Results of
ESG Activities through our website.
(3) Acquisition of a patent on the functions of the FX Cloud Series
The Company acquired a patent on the field auditing functions to be incorporated in its financial accounting system FX Cloud
Series. (Acquired on January 20, 2022; Patent No. 7012895)(4) TKC Customer Support Service Co., Ltd. (TCSS) rated “3 Star” in HDI Benchmarking
TCSS is a fully owned subsidiary of the Company that specializes in offering call center services. On February 16, TCSS became
the first company in the package software industry to be awarded the highest “3 Star” rating in the “quality ranking” benchmark
by HDI-Japan.
3. Business activities and operating results of the Accounting Firm Business Division
The Accounting Firm BD operates in accordance with the business objectives set forth in the Articles of Incorporation (Article 2,
Paragraph 1: Management of electronic data processing centers to defend the business domain and maintain control over the fateof accounting firms) and works under close ties with the TKC National Federation (TKCNF), which consists of 11,500 certified
public tax accountants and certified public accountants (as of March 31, 2022) that are customers of TKC.
(1) Activities to achieve “positive balance” and “proper filing”(i) Support of SMEs affected by COVID-19 pandemic
The Company aggressively engages in activities to support customers under the policy to focus all its effort on supporting TKC
Members and their clients.
1) Provision of the latest information to TKC Members
To accurately and quickly deliver information on SME support policies released by the national government and SME support
organizations, the Company offers TKC Members on-demand webinars on the latest information and systems over the
exclusive Intranet (ProFIT). We began this activity on February 25, 2020, and posted a total of 265 entries as of the end of
March 2022.
2) Offering of “COVID-19 management support information & emergency financial measures” corner
The Company developed a special website where TKC Members can check SME support policies offered by the national
governments, prefectural governments, as well as cities with a population of 40,000 or greater, and financial institutions under
the categories: Loans, Employment, Subsidies, and Taxation. As of the end of March 2022, the website had 6,949 entries on
support policies and is the largest database dedicated to SME support policies in Japan. The site is updated twice a week since
the launch to ensure that the latest information is available at all times.
3) Upgrading of check function for clients requiring emergency support
The Company provides check function for clients requiring emergency support on the Tax Accountants Office Management
system (OMS Cloud). The function enables automatic evaluation of eligibility of each client in the form of a checklist ofvarious governmental emergency economic policies, special loans by government-affiliated financial institutions and other
SME support policies. We update the function each time the eligibility requirements for new subsidies and emergency loans
are made available, and offer the capability to extract eligible clients with a single click. In February 2022, it was upgraded toenable users to evaluate the eligibility for the Subsidy Program for Business Recovery.
4) Provision of TKC Monthly Indicators (Monthly BAST)TKC Monthly Indicators (Monthly BAST) contains monthly settlement data of over 250,000 companies that receive monthly
field audits by TKC Members, and is offered free of charge. It is a statistical summary unprecedented in Japan, allowing users
to view the latest information on the shift of sales and loans, etc. of companies, on a nation-wide scale or by prefecture, by
annual revenue, or by industry. The Monthly BAST is utilized by those in charge of supporting SMEs at financial institutions
and administrative agencies, and economists analyzing the trends of SMEs for the purpose of determining measures to support
SMEs going forward.

- 7 -(ii) New activity policy of TKCNF and sales activities to achieve targets
1)

New activity policy of TKCNF
TKCNF has set a new activity policy for the next three years: “TKC accountants challenging the future–push through fieldauditing and support companies in achieving positive balance and proper filing!” It also set the following three targets toachieve this policy.
i) Massively expand superior electronic books
Promotion of self-accounting by the TKC methodsii) Become guardians of tax justice
Promotion of Shomen-tempu (attachment of tax audit reports) by the TKC methodsiii) Support the achievement of positive balance and foster good-standing companies
Promotion of field auditing and managerial advisory services
TKCNF has taken oath to society that it will contribute to the achievement of positive balance of companies through thepractice of field auditing and legal compliance. To support TKCNF in achieving these three targets, the Company will
engage in aggressive sales activities focusing around the promotion of self-accounting by the TKC methods.

2)

Change in the definition of “good-standing companies” in the Business Analyses & Statistics by TKC (BAST)
Starting from the 2022 edition of “Business Analyses & Statistics by TKC (BAST)” (scheduled to be released in June2022), the definition of “good-standing companies” will be changed. Companies that satisfy all of the requirements below
will be included in the analyses and statistics as good-standing companies.
- 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- Net income before taxes positive
By setting the criteria with emphasis on companies that implement compliance and work towards high value-added
management under the guidance of TKC Members, we will make appeal to society that “TKC Members are supporters
working to foster good-standing companies in the community.”

3)

Promotion of self-accounting by the TKC methods (promotion of FX series)
As many SMEs are in need to plan for repaying the virtually interest-free, no-collateral loans that were obtained during the
pandemic, we provided support for the utilization of functions for the management strategy level (budget registration,
management by division, financing results spreadsheet) incorporated in the FX series. In order for management to utilize
these functions effectively, they need to enter the accounting transaction data in a timely and accurate manner, so theCompany also provided support on functions for daily task level, including support for the bank credit data receiving
function to receive bank deposit transaction data through online banking and generate journal entries automatically, and thelinking of salary journal with the strategic salary information system (PX2).
We also found that management using our cloud-based financial accounting system FX Cloud series tends to access thesystem quite frequently by themselves to check the performance. The advantage of cloud is utilized, in that managers canaccess the system from their own PCs. By offering assistance to implement the FX Cloud series, the Company will work
to support SMEs in achieving “positive balance” and “proper filing.”
As a result of these activities, the FX series has been implemented by approximately 295,000 companies as of March 31,
2022.

4)

Supporting complete compliance with the Electronic Books Maintenance Act of JapanThe requirements for the retention of electronic books have been eased in the Revised Electronic Books Maintenance Act
enacted as of January 1, 2022. With this, there will be a distinction among electronic books (which are electromagnetic
records of national tax-related books): (a) “superior electronic books” that contain the history of additions, deletions and- 8 -revisions to the accounting data (traceable) (electronic books that satisfy the requirements of Article 2 and Article 5 of theOrdinance for Enforcement of the revised Act); and (b) “other electronic books” that are prepared using accounting softwarethat do not keep record 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 negates “the power of evidence” of the books,
and the acceptance of such “other electronic books” implies that the government has approved the use of accounting
software that might enable falsification of books. To address this issue, the Company promotes the use of the FX series forthe preparation of “superior electronic books” on a national level.
In addition, electronic retention of electromagnetic transaction data will be mandated under the Revised Electronic Books
Maintenance Act. While recording in paper form will be accepted up to December 2023, all business operators must comply
with the obligation within two years. We are providing support for the use of the FX series, which is equipped with astandard function to enable electronic storage of transaction data in electromagnetic form.
5)

Supporting complete compliance with the new invoicing system
A new invoicing system will be implemented on October 1, 2023. Business entities subject to consumption tax must prepare
for a new invoicing system by the time the new rule comes into effect, including application for registration as qualified
invoice issuer, preparation for issuing qualified invoices, and gaining knowledge on bookkeeping from qualified invoices.
To enable accounting firms to provide smooth support to SMEs, the Company is developing on-demand seminars, offeringreference materials, and planning other supports.

6)

Promotion of TKC Monitoring Information Service
TKC Monitoring Information Service is a free cloud-based service in which the TKC Members, upon request by the
management of their clients, provide to financial institutions such information as monthly trial balance sheets, financial
statements and tax returns prepared by TKC Member firms after monthly field audits and monthly settlements. Monthly
trial balance sheets will be made available immediately upon completion of the monthly settlement, and financial statements
and tax returns are disclosed immediately after the client electronically files its financial documents to the tax authorities.
While promoting the TKC Monitoring Information Service, the Company communicated to financial institutions that thereliability of financial statements prepared by SMEs can be verified by the following three documents:i) Supporting documents submitted by TKC Members as provided for under Article 33-2 of the Certified Public Tax
Accountant Act of Japanii) Certificate of Bookkeeping Timeliness, with which TKC Corporation certifies the timeliness in the preparation of
accounting books as required under Article 432 of the Companies Act of Japan and the connection between thefinancial statements and tax returns for the past three yearsiii) The Chusho Kaikei Yoryo checklist developed by the Japan Federation of Certified Public Tax Accountants'
Associations and Japan Federation of Credit Guarantee Corporations
As a result of these activities, TKC Monitoring Information Service is adopted by 474 financial institutions including all
local banks throughout Japan (64 institutions) as of March 31, 2022. The Service was used for more than 300,000 cases asof March 31, 2022.
While the issue of excessive debt of SMEs is gradually surfacing amidst the pandemic, our TKC Monitoring Information
Service, which can quickly provide monthly trial balance sheets, financial statements, and tax returns, is gaining highacclaims from financial institutions and credit guarantee corporations that are striving to support the businesses of SMEs.
This Service is expected to serve as a bridge between financial institutions and TKC Members in their efforts to support
the businesses of SMEs.

7)

Soliciting new members (promotion of joining TKCNF)
TKCNF continues to engage in a project to increase TKC membership to exceed 10,000 firms. To achieve this goal, theCompany worked closely with the New Members Service Committee and other members of TKCNF in activities such asactive hosting of webinars.
As a result of these activities, the number of TKC Member firms totaled approximately 9,900 accounting firms (11,500
accountants) as of March 31, 2022. The difference in numbers of firms and accountants are because some firms havemultiple accountants who are members.

(2) Activities to support the preparation of highly reliable financial statements based on timely and accurate bookkeeping(i) Support activities for diffusion of Chusho Kaikei Yoryo (Guidelines for SME accounting)
The TKCNF recommends the use of Basic Guidelines with Respect to the Accounting Procedures at Small- and Medium-sized- 9 -Enterprises (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 grasp the company's
business situation; (ii) accounting that contributes to providing information to stakeholders (financial institutions, etc.); (iii)
accounting that complies with the Ordinance on Company Accounting while achieving harmony between accounting andtaxation system; and (iv) accounting that does not place excessive burden on SMEs.
In order to support the activities of the TKCNF towards the diffusion and utilization of the Guidelines, the Company continues
to promote the development of training materials and to strengthen collaboration with other organizations supporting SMEs.
(ii) Issuance of Certificate of Bookkeeping Timeliness
The Company utilizes the processing log data and historical time series data that are automatically logged at our data centerswhen TKC Members access our accounting system to issue a Certificate of Bookkeeping Timeliness free of charge. This
Certificate serves as reference for financial institutions, etc. to objectively evaluate the business performance of TKC Member
firms.
This service was developed in an aim to improve reliability of financial statements and tax returns prepared by TKC Members
and to provide a passport for smooth financing to the clients of TKC Members. This utilizes the features of the Company's
financial accounting processing at TKC data centers, which prohibits any retroactive insertions, deletions and corrections to pastdata, and TKC Corporation proves, as a third party, that TKC Members have visited clients on a monthly basis to provide
guidance on accurate bookkeeping (monthly Field Audits), and that all work processes from monthly settlements to the final
settlement of accounts and electronic tax filings have been completed by a one-stop, full line process in a timely manner.
For private businesses who will be using the TKC systems for accounting and tax return process starting in January 2022 andreceive issuance of Certificate of Bookkeeping Timeliness, we have enhanced the functions to enable them to submit their blue
returns and other documents to financial institutions through the TKC Monitoring Information Service. We will continue tosupport private businesses in strengthening their collaboration with financial institutions.
(3) Expansion into large-scale enterprise market
By utilizing the TKC systems, the Company contributes to the compliance and rationalization of tax and accounting operationsof large enterprises, mainly of listed companies, and is actively working to solicit these companies and their affiliates to becomeclients of TKC Members.
(i) Responding to the Group Tax Sharing System
The consolidated taxation system has been reformed and the group tax sharing system will apply to the fiscal year starting after
April 1, 2022. The parent company and each subsidiary of the corporate group subject to the group tax sharing system must filetheir corporate income tax returns electronically.
The Company has been providing aggressive support to large enterprises with a capital of 100 million yen or greater in complying
with the new obligation to use electronic tax filing. Through such activities, approximately 36% of the 22,000 some companies
with a capital of 100 million yen or greater now use our ASP1000R electronic tax filing system for corporations and theeConsoliTax consolidated tax payment system as of the end of March 2022.
Based on the expertise accumulated to date, the Company is developing a new “Group Tax Sharing System” service tofacilitate compliance with the group tax sharing system, and works closely with TKCNF’s Medium- and Large-sizedCompanies Support Council (1,524 members as of the end of March 2022) in providing support to ensure smooth transition ofcompanies that choose to apply the group tax sharing system.
(ii) Responding to the Revised Electronic Books Maintenance Act and Consumption Tax Invoicing System
The requirements for retention of electronic books have been eased in the Revised Electronic Books Maintenance Act of Japan
enacted as of January 2022, and at the same time, electronic retention of electromagnetic transaction data has been mandated(with safe harbor rules). Moreover, as the consumption tax invoicing system will be implemented in October 2023, theformulation of standard specifications of electronic invoices and initiatives to promote the system are currently underway. To
provide support for compliance with these legal reforms, we started providing the “Invoice Manager” service in January 2022,
which has been adopted by 350 medium- and large-sized companies.
(iii) Support for managing the performance of foreign subsidiaries
With overseas traveling currently restricted due to COVID-19 pandemic, companies having business abroad are facing
challenges in managing the performance of their foreign subsidiaries and ensuring governance. More and more companies facingsuch hardship are implementing our OBMonitor overseas business monitoring system, as it is a cloud service that allows
companies to check the financial data of their foreign subsidiaries from their offices in Japan. The number of corporate users of
the OBMonitor reached 1,200 companies, and it is currently used in 37 countries around the world. We also concluded business- 10 -

matching agreements with financial institutions to provide powerful support for overseas expansion of their customers and assist
them in discovering and diverting errors and frauds in the business performance control and accounting processing. We havealready entered into business matching agreements with nine financial institutions nationwide, and will continue to increase ourpartnership with other financial institutions.
As a result of these activities, the number of corporate groups using the TKC Consolidated Group Solution counted
approximately 5,000 corporate groups as of March 31, 2022. With this, 91% of the 100 largest Japanese listed companies bysales amounts now adopt our systems. The market shares among Japanese listed companies reached 41%.
(4) Expansion of markets for legal information database services(i) Increase of user base of TKC Law Library
We are currently offering package services of the TKC Law Library which are complied with related contents suitable for law
firms and for corporate legal departments to facilitate their legal research. Due to the pandemic, working online has become acommon practice today, and adopting these package services is now the mainstream instead of conducting research at data rooms
or libraries. As such, the TKC Law Library which offers access to laws and regulations, judicial precedents, bibliographic
information references and also articles in major specialized law magazines, any time, from any place is now earning greater
reputation. As a result, the numbers of users and contracts to access additional contents have grown.
Also, in June 2021, the Company launched a new optional service of the TKC Law Library called the Legal Book Search whichallows users to access PDF versions of specialized books on laws, accounting, tax accounting, business management, etc. This
service is a fixed rate service for attorneys to access the free book search functions and view (for fee) the PDF versions on theirtablets and PCs. We are continuing to add more accessible books and expanding the service successfully.
In the current 2nd Quarter, as a result of online promotional activities towards TKC Member firms, universities, law schools,
government offices, law firms, patent offices, corporate legal departments, and customers, the number of users exceeded 57,000
IDs and the Library is used by over 25,000 institutions as of March 31, 2022.
(ii) Progress in the academic market
Due to the impacts of COVID-19, many universities and law schools continue to conduct hybrid-style classes combining faceto-face and online lectures or full online classes after October 2021. Our systems, such as the TKC Educational and Research
Support System and TKC Law Library, can be accessed online and used anytime, anywhere. They contain a huge number ofdiverse contents compared to those of other companies, and include various functions such as report generation, exercises andtesting. These features are being reconsidered as tools to support online classes and learning for faculty and students. To date,
the Company conducts web meetings with various universities as needed, and continues to provide support in the developmentof online learning environments tailored to meet the situation of each university.
Also, the online study tools (for civil service examination, practical business law examination, and jurisprudence examination)offered mainly to the faculty of law of universities have been adopted by 26 universities as of March 31, 2022. Currently, many
qualification examinations are adopting computer-based testing (CBT/IBT method). We will promote the use of our online
testing functions and other effective online study tools to prepare for computer-based examinations among examination bodies
and applicants.
4. Business activities and operating results of the Local Governments Business Division
The Local Governments BD operates in accordance with the business objectives set forth in the Articles of Incorporation (Article
2 Item 2: "Management of electronic data processing centers to improve the administrative efficiency of local governments") andoffers specialized information services in order to help promote the welfare of residents by improving administrative efficiency.
(1) Development and provision of mission-critical system-related services
The Company provides TKC Government Cloud Service to municipalities (mainly for cities, wards, towns and villages). Thisis a cloud service that consists of the TASK Cloud Service which supports mission-critical functions and information services
within agencies, and the TASK Outsourcing Service which supports massive batch output and processing of tax papers and otherdocuments.
The TASK Cloud Service is a single version package system operated at TKC data centers that is designed to allow shared use
by multiple institutions. Service fees are charged in the form of fixed rate subscription fee depending on the scale of themunicipality, which also include one regular upgrade per year. Acknowledged for these benefits, the TASK Cloud Service has
been adopted by approximately 170 local municipalities as of March 31, 2022.
In the current 2nd Quarter, we provided these client municipalities with aggressive support for their vaccination projects bypromptly offering systems for the COVID-19 Vaccine Booster Shots (3rd Dose).
(2) Support for digitalization of administrative services- 11 -

In an aim to contribute to promoting digital transformation of local governments, the Company provides administrative service
digitalization support solutions which support governments to achieve “no visiting, no waiting, no writing” administrative
counter services.
In the current 2nd Quarter, we greatly enhanced the functionalities of the TASK Cloud Easy Counter Service System, the TASKCloud My Number Card Issuance Reservation and Management System, and the TASK Cloud Smart Application System.
As a result of proposing the effective utilization of these services, the TASK Cloud Smart Application System has been adopted
by approximately 30 agencies including government ordinance-designated cities such as Osaka, Yokohama, and Sakai cities,
the TASK Cloud Easy Counter Service System is used by nearly 30 agencies, and the TASK Cloud My Number Card IssuanceReservation and Management System is adopted by almost 110 agencies as of March 31, 2022.
(3) Support for digitalization of local tax administrations
The Company is an authorized contractor of the Local Tax Agency, and provides a cloud-based service for the standard systems
such as inspection system for eLTAX (local tax portal system) offered by the Agency. We also develop and provide Data
Connection Services as our own functionality to connect the individual tax systems of each ward and municipality.
These services are proposed in collaboration with 50 partner companies with whom we have on-going alliance partner
agreements. As a result, our TASK Cloud Local Taxes Electronic Filing Support Service is currently used by approximately 780
agencies which account for more than 40% of all prefectures and local municipalities as of March 31, 2022.
In the current 2nd Quarter, we worked to enhance the functionalities of our proprietary data connection services, as well as
engaged in aggressive promotional activities and implementation support together with our partner companies.
(4) Response to standardized local public accounting
The Company provides the TASK Cloud Public Accounting System, as local public accounting systems integrated with financial
accounting system which is compatible with the daily journalizing method encouraged by the Japanese government, and its
related systems TASK Cloud Non-current Assets Control System and TASK Cloud Consolidated Financial Statement Preparing
System.
There is a section in the report by the Study Group on the Promotion of Local Public Accounting (FY2019) released by the
Ministry of Internal Affairs and Communications in March 2020 that suggests: “It is believed that smooth implementation of
the daily journalizing method and reduction of checking tasks in year-end bulk journalizing can be achieved by implementing a
local public accounting system that has an integrated financial accounting system, linking, in advance, the budget items withaccount headings, and by establishing a system that can journalize and convert the budget items automatically upon budget
execution. It may also be possible to streamline the ledger registration tasks by linking and integrating the data in the publicdomain ledger and data in the fixed assets ledger.”
In light of these governmental policies, we encourage municipalities to consider implementing the TASK Cloud Public
Accounting System upon updating their system. It is a local public accounting system that is compatible with the daily
journalizing method recommended by the Japanese government.
In the current 2nd Quarter, we started providing the next generation version of public accounting system with enhanced functions
to help the municipalities achieve sustainable administrative management including features such as accurate visualization offinancial status and utilization of accounting data.
As a result, our local public accounting systems are adopted by approximately 300 agencies as of March 31, 2022.
(5) Research and development of next-generation products
The COVID-19 pandemic has highlighted the delay in digitalization and moving online in administrative areas. In response, thegovernment formulated the Basic Policy on Economic and Fiscal Management and Reform 2020 (Cabinet Decision of July2020) in which it positioned all-out promotion of a digital government as top priority, and accelerated its efforts of digitalization
to move administrative procedures online and make them one stop and once only. Also, on December 25, 2020, the Ministry ofInternal Affairs and Communications announced the Local Governments Digital Transformation (DX) Promotion Plan, and six
legislative bills on digital reform were adopted on May 12, 2021. With these policies, local governments throughout Japan aremandated to standardize and commonize their information systems by March 31, 2026.
To respond to changes in the environment surrounding our customers, the Company set up a new Local Government DX
Promotion Headquarters as of November 1, 2021, and is working to accelerate the planning and development of new products
and services as well as to strengthen customer support including the collection and communication of the latest information.
Also in the current 2nd Quarter, a joint proposal of clients of the Company (Misato Town and Kawajima Town, Saitama Pref.)was selected for the Government Cloud Predecessor Project procured by the Digital Agency of Japan. The Company began
working on the Project with both towns as application vendors. We also continued conducting surveys, research and development
on next-generation solutions through, for example, experimental projects with advanced organizations, to support the- 12 -

digitalization of administrative services.
5. Business activities and operating results of the Printing Business Division
The Group’s Printing BD operates with the main focus on data print services (hereinafter, “DPS”), business form printing, andprinting of commercial-use creative materials.
In the current 2nd Quarter, net sales increased year-on-year thanks, in particular, to orders from local municipalities for the printingof entry tickets for the election of members of the House of Representatives, vaccination vouchers under their COVID-19
vaccination projects, and notices for special cash payments for households exempted from inhabitant tax, and orders from the
National Tax Agency for the printing of Notice on 2021 Income Tax Report postcard.
In the DPS area, the Company provides products to support local municipalities in their operations to send various notifications toresidents and private enterprises in posting direct mails, etc., including products to eliminate document inserting/sealing tasks basedon our unique pressure bonding technology and printed products using our variable printing/typing technologies.
In the area of business form printing, net sales decreased year-on-year as a result of decline in demands for business forms in
response to paperless trends.
In the area of commercial-use creative materials (catalogs, books, etc.), net sales increased year-on-year thanks to orders for the
printing of books and other materials explaining the new system under the Revised Electronic Books Maintenance Act, measures
for the new invoicing system, and the 2022 tax system revisions.

II. Financial Conditions
Assets, liabilities and net assets at the end of the current 2nd quarter consolidated accounting period are stated below.
1. Assets
Total assets as of the end of the current 2nd quarter consolidated accounting period amounted to 105,934 million yen, a 2,527
million yen increase compared to 103,406 million yen as of the end of the previous consolidated fiscal year.
(1) Current assets
Current assets as of the end of the current 2nd quarter consolidated accounting period amounted to 37,010 million yen, a 902
million yen increase compared to 36,107 million yen as of the end of the previous consolidated fiscal year.
This was mainly attributable to a 2,593 million yen increase in accounts receivable included in notes, accounts receivable, andcontract assets, despite a 1,361 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 68,923 million yen, a
1,625 million yen increase compared to 67,298 million yen as of the end of the previous consolidated fiscal year.
This was mainly attributable to a 1,190 million yen increase in investment securities and 1,100 million yen increase in longterm deposits, despite a 330 million yen decrease in long-term deferred tax assets included in Other and 234 million yen
decrease in buildings and structures (net amount).
2. Liabilities
Total liabilities as of the end of the current 2nd quarter consolidated accounting period amounted to 19,595 million yen, a 394
million yen decrease compared to 19,990 million yen as of the end of the previous consolidated fiscal year.
(1) Current liabilities
Current liabilities as of the end of the current 2nd quarter consolidated accounting period amounted to 14,308 million yen, a
413 million yen decrease compared to 14,721 million yen as of the end of the previous consolidated fiscal year.
This was mainly attributable to a 933 million yen decrease in provisions for bonuses, despite a 368 million yen increase inincome taxes payable.
(2) Non-current liabilities
Non-current liabilities as of the end of the current 2nd quarter consolidated accounting period amounted to 5,287 million yen,an 18 million yen increase compared to 5,268 million yen as of the end of the previous consolidated fiscal year.

- 13 -

This was mainly attributable to a 59 million yen increase in retirement benefit obligations, despite a 35 million yen decreasein long-term debts.
3. Net assets
Total net assets as of the end of the current 2nd quarter consolidated accounting period amounted to 86,338 million yen, a 2,922
million yen increase compared to 83,416 million yen as of the end of the previous consolidated fiscal year.
This was mainly attributable to an increase of 3,725 million yen in retained earnings, despite decrease in net assets as a result of a
1,025 million yen increase in treasury stocks.
Equity ratio as of the end of the current 2nd quarter consolidated accounting period was 81.5%, a 0.8 percentage point increase
compared to the ratio of 80.7% as of the end of the previous consolidated fiscal year.
III. Cash FlowsThe balance of cash and cash equivalents as of the end of the current 2nd quarter consolidated accounting period amounted to 21,765
million yen, a 1,361 million yen decrease compared to the end of the previous consolidated fiscal year.
The overview of cash flows for the current 2nd quarter consolidated cumulative period and major factors contributing to the results
are as follows:(1) Cash flows from operating activities
Cash flows from operating activities increased by 5,086 million yen (1,932 million yen increase in revenue compared to thesame quarter of the previous year). Major factors include the recognition of 8,431 million yen in Quarterly net income before
taxes and adjustments, an increase of 2,416 million yen in Notes and accounts receivable–trade, and payment of 2,018
million yen in Income taxes paid.
(2) Cash flows from investing activities
Cash flows from investing activities decreased by 3,229 million yen (155 million yen increase in spending compared to thesame quarter of the previous year). Major factors include expenditure of 2,800 million yen into time deposits, revenue of 1,700
million yen from withdrawal of time deposits, expenditure of 1,014 million yen for the acquisition of tangible investment
securities, and expenditure of 1,045 million yen for the acquisition of intangible assets.
(3) Cash flows from financing activities
Cash flows from financing activities decreased by 3,219 million yen (1,366 million yen increase in spending compared to thesame quarter of the previous year). Major factors include payment of 2,088 million yen for year-end dividends as of end of
September 2021 (a dividend of 39.5 yen per share), and 1,034 million yen for acquisition of treasury stocks.
IV. Operational and Financial Challenges
There are no significant changes in challenges faced by the TKC Group during the current 2nd quarter consolidated cumulative
period.
V. Research and Development Activities
There were no research and development expenses spent by the TKC Group during the current 2nd quarter consolidated cumulative
period.
There are no significant changes in the status of research and development activities of the TKC Group during the current 2nd quarter
consolidated cumulative period.

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

- 14 -

Part 3 [Information on the Company]
1 [Information on the Company’s Stock](1) [Total number of shares, etc.](i) [Total number of shares]
Class

Total number of shares authorized to be issued (shares)

Common stock

120,000,000

Total

120,000,000(ii) [Issued shares]

Class

Number of shares issued asof the end of 2nd quarteraccounting period (shares)(March 31, 2022)

Number of shares issued as of
the filing date (shares)(May 11, 2022)

Commonstock

53,462,066

53,462,066

Total

53,462,066

53,462,066

Name of stock exchange on
which the Company is listed,or name of Authorized
Financial Instruments Firms
Association
Tokyo Stock Exchange, Inc.
First Section (as of the end of
2nd quarter accounting
period)Prime Market (as of the filing
date)－

Description

Number of sharesconstituting a
unit: 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.]

Date

January 1, 2022March 31, 2022

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

Balance of total
number of issued
sharesIncrease or
decrease incapital stock

Balance ofcapital stock

Increase or
decrease in capitalreserve

Balance ofcapital reserve(shares)(millions of yen)(millions of yen)(millions of yen)(millions of yen)－

53,462,066

－

5,700

－

5,409

- 15 -

(5) [Major shareholders]
As of March 31, 2022

Name of shareholder

Address

Number of shares
held(hundreds of shares)

Percentage ofshares held to total
number of issued
shares (excluding
treasury stock) (%)

Iizuka Takeshi ScholarshipFoundation

1758 Tsurutamachi, Utsunomiya-shi, Tochigi

75,17014.3

Daido Life Insurance Company

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

51,3809.8

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

48,752

9.3

Sozeishiryokan (Institute of Tax
Research and Literature)

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

30,930

5.9

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

29,125

5.5

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

28,006

5.3

Masaharu Iizuka

Utsunomiya-shi, Tochigi

14,626

2.8

Custody Bank of Japan, Ltd. (Trustaccount)

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

13,7382.6

Tokio Marine & Nichido Fire
Insurance Co., Ltd.

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

13,328

2.5

Aioi Nissay Dowa Insurance Co.,Ltd.

1-28-1 Ebisu, Shibuya-ku, Tokyo

11,966

2.3

Sompo Japan Insurance Inc.

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

11,966

2.3

328,991

62.5

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

Total

－

(Note) The 215,200 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.

- 16 -

(6) [Status of voting rights](i) [Shares issued]
As of March 31, 2022
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

829,300－－

Shares with full voting right (others)

Common stock

52,555,300

525,553－

Shares less than one share unit

Common stock

77,466－－53,462,066

－

－

－

525,553－

Total number of issued shares
Total voting rights held by all shareholders(Note) Shares with full voting right (others) includes 1,300 shares (13 units of voting rights) registered in the name of Japan Securities
Depository Center, Inc., and 215,200 shares (2,152 units of voting rights) owned by the BIP Trust.
(ii) [Treasury stock, etc.]

Number of shares
held under own
name (shares)

Number of shares
held under othernames (shares)

1758 Tsurutamachi,
Utsunomiya-shi,
Tochigi

829,300－

829,300

1.55－

829,300－

829,300

1.55

Name of shareholder

Address ofshareholder

TKC Corporation
Total

As of March 31, 2022
Percentage ofTotal shares held shares held to the(shares)
total number ofissued shares (%)(Note) In addition to the above, the 215,200 shares owned 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.

- 17 -

Part 4 [Financial Information]
1. Method of Preparing Quarterly Consolidated Financial Statements
The quarterly consolidated financial statements of the Company have been prepared in accordance with the Ordinance on
Terminology, Forms, and Preparation Methods of Quarterly Consolidated Financial Statements (Cabinet Office Ordinance No.64
of 2007).

2. Auditing and Attestation
The quarterly consolidated financial statements of the Company for the 2nd quarter consolidated accounting period (from January
1, 2022 to March 31, 2022) and the 2nd quarter consolidated cumulative period (from October 1, 2021 to March 31, 2022) havebeen audited by Ernst & Young ShinNihon LLC pursuant to the provision of Article 193-2, Paragraph 1 of the Financial
Instruments and Exchange Act of Japan.

- 18 -

1 [Quarterly Consolidated Financial Statements](1) [Quarterly consolidated balance sheets](Unit: millions of yen)
Current 2nd quarter consolidated
Previous consolidated fiscal year
accounting period(September 30, 2021)(March 31, 2022)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable–trade
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- 19 -

26,426
6,973
－
*412
2,309
(14)
36,10725,065
－
9,791
*562
1,602
(10)
37,010

7,855
6,802
2,882
17,540
3,605

7,621
6,802
2,782
17,206
3,901

19,705
16,6001,440
8,406
46,152
67,298103,406

20,89517,7001,436
7,783
47,81568,923105,934

2,402
834
80
3,034
2,211
－
4,073
2,083
14,721

2,768
840
71
2,450
2,579
288
3,140
2,168
14,308

214
3,554
307
1,192
5,268
19,990

178
3,613
314
1,180
5,287
19,595

(Unit: millions of yen)
Current 2nd quarter consolidated
Previous consolidated fiscal year
accounting period(September 30, 2021)(March 31, 2022)
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Accumulated remeasurements of defined benefit
plans
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets- 20 -

5,700
6,589
73,411(1,352)
84,348

5,700
6,589
77,136(2,377)87,048449

584(1,382)(1,294)(932)
83,416
103,406(710)
86,338105,934

(2) [Quarterly consolidated statements of income and quarterly consolidated statements of comprehensive income][Quarterly consolidated statements of income][2nd quarter consolidated cumulative period]

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividends income
Insurance dividends income
Land and house rent received
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Surcharges
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gains on sale of non-current assets
Total extraordinary income
Extraordinary loss
Loss on sale of non-current assets
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 profit (loss) attributable to owners of parent(Unit: millions of yen)Previous 2nd quarter consolidated Current 2nd quarter consolidated
cumulative period
cumulative period(Started October 1, 2020;(Started October 1, 2021;
ended March 31, 2021)
ended March 31, 2022)
33,372
33,7689,640
9,689
23,731
24,079*15,825*15,854
7,906
8,225

- 21 -

23
70
12
25
48
180

34
83
18
26
65
228

0
0
－
－
0
8,086

0
－
20
1
21
8,431

1
1

1
1

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

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

[Quarterly consolidated statements of comprehensive income][2nd quarter consolidated cumulative period]

Quarterly net income
Other comprehensive income
Valuation difference on available-for-sale securities
Remeasurements of retirement benefits
Total other comprehensive income
Quarterly comprehensive income(Breakdown)
Quarterly comprehensive income attributable toowners of parent(Unit: millions of yen)Previous 2nd quarter consolidated Current 2nd quarter consolidated
cumulative period
cumulative period(Started October 1, 2020;(Started October 1, 2021;
ended March 31, 2021)
ended March 31, 2022)
5,495
5,816

- 22 -

738
85
824
6,319

134
87
222
6,038

6,319

6,038

(3) [Quarterly consolidated statements of cash flows](Unit: millions of yen)Previous 2nd quarter consolidated Current 2nd quarter consolidated
cumulative period
cumulative period(Started October 1, 2020;(Started October 1, 2021;
ended March 31, 2021)
ended March 31, 2022)
Cash Flows from Operating Activities
Quarterly net income before taxes and adjustments
Depreciation
Loss (gain) on sale of non-current assets
Loss on retirement of non-current assets
Increase (decrease) in provisions for stocks payment
Increase (decrease) in provisions for bonuses
Increase (decrease) in retirement benefit liabilities
Decrease (increase) in notes and accounts receivable–
trade
Decrease (increase) in other assets
Increase (decrease) in accounts payable–trade
Increase (decrease) in other liabilities
Other
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Cash Flows from Operating Activities
Cash Flows from Investing Activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
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 the year
Cash and cash equivalents at end of quarter- 23 -

8,050
1,464
20
14
(293)
(531)
127

8,431
1,494
(1)
1
7
(933)
184

(3,128)(2,416)72
990(1,525)
224
5,487
110
(0)
(2,442)
3,154

(21)
144
184
(104)
6,970
135
(0)
(2,018)5,086(1,700)
1,700
(473)
(604)
(2,030)34(3,074)(2,800)1,700(97)(1,045)(1,014)28(3,229)(71)－(5)(1,726)(48)(1,852)(1,771)
23,469*21,697(45)
0(1,034)(2,088)(51)(3,219)(1,361)
23,126*21,765

[Notes to Financial Statements](Changes in Accounting Policies)
The Company has decided to apply the Accounting Standard for Fair Value Measurement (ASBJ Statement No. 30, July 4, 2019)(hereinafter, “Fair Value Measurement Accounting Standard”) etc., from the beginning of the 1st quarter consolidated accounting
period. Further, in accordance with the transitional measures set forth in Section 19 of said Fair Value Measurement AccountingStandard and Section 44-2 of the Accounting Standard for Financial Instruments (ASBJ Statement No. 10, July 4, 2019), theCompany will apply the new accounting policies under the Fair Value Measurement Accounting Standard, etc. in the future. There
are no impacts on the quarterly consolidated financial statements.
(Additional Information)(Application of Revenue Recognition Accounting Standard, etc.)
The Company applies the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020) (hereinafter,“Revenue Recognition Accounting Standard”) etc. from the beginning of the 1st quarter consolidated accounting period.
As a result of applying the Revenue Recognition Accounting Standard, “Notes and accounts receivable–trade” under “Current
assets” in the consolidated balance sheets for the previous consolidated fiscal year will be included and presented under “Notes,
accounts receivable, and contract assets” from the 1st quarter consolidated accounting period, and “Contract liabilities” that was
included in “Other” under “Current liabilities” will be presented as an independent item. Note that, in accordance with thetransitional measures set forth in Section 89-4 of the Revenue Recognition Accounting Standard, the figures for the previous
consolidated fiscal year have not been restated based on the new presentation method.
Moreover, in accordance with the transitional measures set forth in Section 28-15 of the Accounting Standard for the Quarterly
Financial Reporting (ASBJ Statement No. 12, March 31, 2020), information on disaggregation of revenue from contracts withclients in the previous 2nd quarter consolidated cumulative period is not presented herein.
(Stock-based Compensation Plan for Officers)
1. Outline of transaction
Based on the resolution of the Board of Directors’ Meeting held on October 31, 2018 followed by approval at the Ordinary
General Meeting of Shareholders held on December 21, 2018, the Company introduced a stock-based compensation plan called“BIP Trust.” The objectives of the plan are to clarify the linkage between the Company’s shareholder value and the remuneration
for Directors, etc. and to motivate Directors, etc. to contribute more to enhancing the medium- to long-term corporate value by
sharing common interest with shareholders, including not only the merit derived from the rising share price, but also the risk
associated with the decline in share price.
The proposal to change the stock-based compensation plan for Directors, etc. (excluding Directors not holding executive
positions) and Full-time Auditors to performance-linked compensation has been deliberated by the Nomination andCompensation Advisory Committee whose chairperson and half of the members are independent Outside Directors and outside
experts, and approved at the Ordinary General Meeting of Shareholders held on December 20, 2019.
2. Stocks of the Company remaining in trust
The stocks of the Company remaining in trust are recorded as treasury stock under net assets with the book values in the trust(not including expenses attributable thereto). The book value of said treasury stocks was 425 million yen for 215,200 shares asof the end of this current 2nd quarter consolidated accounting period.
(Application of Tax Effect Accounting for the Transition from the Consolidated Taxation System to Group Tax Sharing System)
Based on the treatment set forth under Item 3 of the Treatment of Tax Effect Accounting for the Transition from the Consolidated
Taxation System to Group Tax Sharing System (Practical Solution No. 39, March 31, 2020), the Company and its consolidated
subsidiaries do not implement the provisions of Paragraph 44 of the Implementation Guidance on Accounting Standard for Tax
Effect Accounting (ASBJ Guidance No. 28, February 16, 2018) for items that were transitioned to the group tax sharing system
which was established in the Law for Partial Revisions to the Income Tax Act, etc. (Law No. 8 of 2020) and items that wererevised under the non-consolidated taxation system in line with the transition to the group tax sharing system. The amounts ofdeferred tax assets and deferred tax liabilities are based on the provisions of the Tax Act prior to revisions.

- 24 -

(Notes to Quarterly Consolidated Balance Sheets)* Breakdown of inventories is as follows:

Merchandise and finished goods

222 million yen

Current 2nd quarter consolidated
accounting period(March 31, 2022)
278 million yen

Work in progress
Raw materials and stored items

51 million yen
138 million yen

133 million yen
149 million yen

Previous consolidated fiscal year
(September 30, 2021)(Notes to Quarterly Consolidated Statements of Income)* Major items included in selling, general and administrative expenses are as follows.

Salaries
Provision for bonuses
Retirement benefit expenses
Provisions for stocks payment
Depreciation
Rent expenses

Previous 2nd quarter consolidated
cumulative period(Started October 1, 2020;
ended March 31, 2021)
5,930 million yen
2,740 million yen

Current 2nd quarter consolidated
cumulative period(Started October 1, 2021;
ended March 31, 2022)
5,940 million yen
2,572 million yen

491 million yen
15 million yen

469 million yen
16 million yen

352 million yen
1,215 million yen

348 million yen
1,286 million yen(Notes to the Quarterly Consolidated Statements of Cash Flows)* The relationship between the quarterly ending balance of cash and cash equivalents and account items stated in the quarterly
consolidated balance sheets is as stated below.
Previous 2nd quarter consolidated
cumulative period(Started October 1, 2020;
ended March 31, 2021)

Current 2nd quarter consolidated
cumulative period(Started October 1, 2021;
ended March 31, 2022)

Cash and deposits

24,997 million yen

25,065 million yen

Time deposits with deposit period
greater than three months(3,300 million yen)

(3,300 million yen)

Cash and cash equivalents

21,697 million yen

21,765 million yen- 25 -

(Shareholders’ Equity, etc.)
I. Previous 2nd quarter consolidated fiscal year (Started October 1, 2020; ended March 31, 2021)(1) Dividend payments
Resolution
December 18, 2020
Ordinary General
Meeting of
Shareholders

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

1,720

65

Record date

Effective date

Source ofdividends

September 30, 2020

December 21, 2020

Retainedearnings(Notes) 1. The total amount of cash dividends determined by resolution of the Ordinary General Meeting of Shareholders on December
18, 2020 includes a cash dividend of 12 million yen to the stocks of the Company owned by the BIP Trust.
2. The Company conducted a stock split of its common shares at a ratio of 1:2 as of April 1, 2021. The dividend per shareshows the amount prior to the stock split.
(2) Of the dividends with record dates during the current 2nd quarter consolidated cumulative period, those with effective
dates for the dividends after the end of the current 2nd quarter consolidated accounting period
Resolution
May 7, 2021
Meeting of theBoard of Directors

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

1,720

65

Record date

Effective date

Source ofdividends

March 31, 2021

June 14, 2021

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

2,090

39.50

Record date

Effective date

Source ofdividends

September 30, 2021

December 20, 2021

Retainedearnings(Note) The total amount of cash dividends determined by resolution of the Ordinary General Meeting of Shareholders on December
17, 2021 includes a cash dividend of 8 million yen to the stocks of the Company owned by the BIP Trust.
(2) Of the dividends with record dates during the current 2nd quarter consolidated cumulative period, those with effective dates
for the dividends after the end of the current 2nd quarter consolidated accounting period
Resolution
May 10, 2022
Meeting of theBoard of Directors

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

1,894

36

Record date

Effective date

Source ofdividends

March 31, 2022

June 13, 2022

Retainedearnings(Note) The total amount of cash dividends determined by resolution of the Board of Directors on May 10, 2022 includes a cash dividendof 7 million yen to the stocks of the Company owned by the BIP Trust.

- 26 -

(Segment Information, etc.)[Segment information]
I. Previous 2nd quarter consolidated cumulative period (Started October 1, 2020; ended March 31, 2021)
Information on net sales and profit or loss for each reportable segment(Unit: millions of yen)
Reportable segment
Adjustments(Note 1)

Amounts inquarterly
consolidated
statements
of income(Note 2)

Accounting
Firm BD

Local
Governments
BD

Printing BD

22,466

9,358

1,547

33,372－33,372

4

0

802

806

(806)

－

22,470

9,358

2,350

34,179(806)

33,372

5,990

2,028

(117)

7,900

5

7,906

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 5 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 of income.
II. Current 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
Adjustments consolidated(Note 1)statements
of income(Note 2)

Accounting
Firm BD

Local
Governments
BD

Printing BD

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

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.

- 27 -

(Revenue Recognition)
Net sales of the Company are primarily revenue recognized from contracts with clients. The Company’s reportable segments canbe disaggregated into the following goods and services:
Current 2nd quarter consolidated cumulative period (Started October 1, 2021; ended March 31, 2022)(Unit: millions ofyen)
Reportable segment
Total

Accounting Firm
BD

Local
Governments 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

Printing BD(Earnings per share information)
The amount of quarterly net income per share and the basis for the calculation thereof are as follows:
Previous 2nd quarter consolidated
cumulative period(Started October 1, 2020;
ended March 31, 2021)
Quarterly net income per share

Current 2nd quarter consolidated
cumulative period(Started October 1, 2021;
ended March 31, 2022)

104.42 yen

110.82 yen

5,495

5,816

－

－

5,495

5,816

526,251524,798(Basis for calculation)
Quarterly net income attributable to owners of parent(millions of yen)Amount not attributable to common shareholders(millions of yen)
Quarterly net income from common stocks
attributable to owners of parent (millions of yen)
Average number of common stocks outstanding(hundreds of shares)(Notes) 1. The average number of stocks outstanding used in the calculation of earnings per share information has been determined byincluding the stocks of the Company owned by the BIP Trust (which has been established with the introduction of the BIP
Trust plan) as deductible treasury stocks.
The average numbers of said treasury stocks deducted for the calculation of quarterly net income per share were 308,813
shares for the previous 2nd quarter consolidated cumulative period, and 219,016 shares for the current 2nd quarter
consolidated cumulative period.
2. The quarterly diluted net income per share is not stated as there were no dilutive shares.
3. The Company conducted a stock split of its common shares at a ratio of 1:2 as of April 1, 2021. The quarterly net income
per share has been calculated assuming that the stock split was conducted at the beginning of the previous consolidated fiscalyear.

- 28 -

(Material Subsequent Events)
None to be disclosed.

2 [Other]
The resolution regarding the current interim dividends was adopted at the Board of Directors’ meeting held on May 10, 2022, statedas follows.
(a) Total amount of cash dividends to be paid as interim dividends

1,894 million yen(b) Dividend per share

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

June 13, 2022

(Note) Dividends are payable to the shareholders listed or recorded on the Register of Shareholders as of March 31, 2022.

- 29 -

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

- 30 -

Quarterly Review Report of Independent Auditors
May 11, 2022

TKC Corporation
To: The Board of Directors
Ernst & Young ShinNihon LLC
Tokyo Office
Designated Limited
Liability Partner
Engagement Partner

Certified Public
Accountant

Shigeyuki Honda

Designated Limited
Liability Partner
Engagement Partner

Certified Public
Accountant

Toru Iizuka

Auditor's Conclusion
Pursuant to Article 193-2, Paragraph 1 of the Financial Instruments and Exchange Act, we have conducted a quarterly
review of the quarterly consolidated financial statements presented in the Financial Information section, which comprisethe quarterly consolidated balance sheets, the quarterly consolidated statements of income, the 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, 2022 to March 31, 2022) and the 2nd
quarter consolidated cumulative period (from October 1, 2021 to March 31, 2022) of the consolidated fiscal year started
October 1, 2021 and ending September 30, 2022.
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, 2022, and their financial performance and cash flows forthe 2nd quarter consolidated cumulative period then ended in conformity with accounting principles of quarterly
consolidated financial statements generally accepted in Japan.
Basis for Auditor's Conclusion
We conducted our quarterly review in accordance with quarterly review standards generally accepted in Japan. Our
responsibilities under those standards for quarterly reviews are further described in the Auditor’s Responsibilities for the
Quarterly Review of the Quarterly Consolidated Financial Statements section of our report. We are independent of theCompany and its consolidated subsidiaries in accordance with the code of professional ethics in Japan, and we havefulfilled our other ethical responsibilities as the auditors. We believe that we have obtained evidence to provide a basis
for our conclusion.
Responsibilities of Management, Corporate Auditors and Board of Auditors for the Quarterly Consolidated Financial
Statements
Management is responsible for the preparation and fair presentation of the quarterly consolidated financial statements inaccordance with the principles for the preparation of quarterly consolidated financial statements generally accepted inJapan. Responsibilities include those for designing and operating such internal control as management determines isnecessary to enable the preparation and fair presentation of the quarterly consolidated financial statements that are freefrom 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 as a going concern and disclosing, as applicable, matters related to going concern in accordance with theprinciples for the preparation of quarterly consolidated financial statements generally accepted in Japan.
Corporate auditors and the Board of Auditors are responsible for overseeing the execution of duties by Directors indesigning and implementing the Group’s financial reporting process.
Auditor’s Responsibilities for the Quarterly Review of the Quarterly Consolidated Financial Statements
Our responsibility 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 exercisingprofessional judgment and maintaining professional skepticism throughout the quarterly review.

- 31 -

・ We principally make inquiries to management and persons responsible for financial and accounting matters, andperform analytical procedures and other quarterly review procedures. The quarterly review procedure is a limited
procedure compared to the procedure of auditing the annual financial statements performed in accordance withauditing standards generally accepted in Japan.
・ If we determine that a material uncertainty exists related to events or conditions that may cast significant doubt on
the Group’s ability to continue as a going concern, we conclude, based on the evidence obtained, whether anything
has come to our attention that causes us to believe that the quarterly consolidated financial statements are notproperly presented in accordance with 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 related notes in the quarterly consolidated financial statements or, if such notes
about the material uncertainty are inadequate, to express a conclusion with limitations or negative conclusion on thequarterly consolidated financial statements. Our conclusions are based on the evidence obtained up to the date ofour quarterly review report. However, future events or conditions may cause the Group to cease to continue as agoing concern.
・ We evaluate whether anything has come to our attention that causes us to believe that the presentation and notes of
the quarterly consolidated financial statements are not in accordance with principles for the preparation of quarterly
consolidated financial statements generally accepted in Japan; and whether anything has come to our attention thatcauses us to believe that the overall presentation, structure and content of the quarterly consolidated financial
statements, including the related notes thereto, nor the quarterly consolidated financial statements do not represent
the underlying transactions and events in a manner that achieves fair 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, supervisionand performance of the quarterly review of the quarterly consolidated financial statements. We remain solely
responsible for our conclusions.
We communicate with corporate auditors and the Board of Auditors regarding the planned scope and timing of thequarterly review and significant findings therein.
We also provide corporate auditors and the Board of Auditors with a statement that we have complied withregulations on professional ethics in Japan regarding independence, and communicate with them all matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards to eliminate or mitigate
factors that may hinder our independence.
Conflicts of Interest
Our firm or its engagement partners have no interest in the Company and its consolidated subsidiaries which should be
disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.
End of document(Notes) 1. The original copy of the above quarterly review report is stored by TKC Corporation (the Company filing this quarterly
report).
2. XBRL data is not included in the scope of this quarterly review.

- 32 -

[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 11, 2022

[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 Ageba-cho, Shinjuku-ku, Tokyo)
Tokyo Stock Exchange, Inc.
(2-1 Nihonbashikabutocho, Chuo-ku, Tokyo)- 33 -

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 the56th term (started January 1, 2022; ended March 31, 2022) are adequate under the Financial Instruments and Exchange Act ofJapan.

2 [Special Notes]
None to be disclosed.

- 34 -