Consolidated Financial Statements
Consolidated Balance Sheets (As of March 31, 2009 and 2010)¥ (thousands)$ (thousands)(Note 4)
2010

2009

2010

¥ 2,355,978
3,161,085
561,386
31,531,872
519,023(6,895)
38,122,450¥ 3,468,876
3,318,125
87,514
33,121,473
355,804(6,480)40,345,313$ 37,284
35,663940
355,9923,824(69)433,634

Less: Accumulated depreciation
Total Property and Equipment

1,062,907
5,560,074
56,023
6,679,004(4,170,881)
2,508,121

842,948
5,386,775
81,823
6,311,546(4,502,678)
1,808,867

9,060
57,897879
67,836(48,395)
19,441Intangible Assets, Net:
SoftwareConstruction in progress (Software)
Lease assets
Other intangible assets
Total Intangible Assets

19,759,147
67,821
9,517
18,15419,854,639

15,988,208
43,0559,165
18,03816,058,467

171,842463
98
194
172,597

Investment and Other Assets:
Investment securities
Long-term prepaid expenses
Deferred income taxes (Note 12)Long-term refundable lease deposits
Claims provable in bankruptcy, rehabilitation and other
OthersAllowance for doubtful accounts
Total Investment and Other Assets

308,418
86,770
194,434
514,775
41,394—(15,878)
1,129,914

356,179
46,642774,595
506,282
44,356
1,000(16,621)
1,712,434

3,828
501
8,325
5,441
477
11
(178)
18,405¥61,615,125¥59,925,084$644,078

ASSETS
Current Assets:
Cash and deposits
Accounts receivable – trade
Deferred income taxes (Note 12)
Designated assets for clearing funds (Note 3)
Other current assets
Allowance for doubtful accounts
Total Current Assets

Property and Equipment:
Buildings and structures
Tools and furniture
Lease assets

Total Assets

The accompanying notes are an integral part of these statements.

44

Jap an Secu ritie s Deposito ry C e n te r, I n c . A NNUA L R E P O RT 2 0 1 0

$ (thousands)(Note 4)2010

¥ (thousands)
2009

2010

LIABILITIESCurrent Liabilities:
Accounts payable – trade
Short-term borrowings (Note 5 and 9)¥

868,426¥

823,303$8,849

8,400,000

4,800,000

51,591

13,84220,003

215—

101,677

1,093

Allowance for employees’ bonuses

185,102

182,234

1,958

Allowance for executives’ bonuses

20,30020,700222—

391,978

4,213

31,531,872

33,121,473

355,992

Allowance for loss on business trust agreement cancellation

940,103——

Allowance for loss on computer center transfer

242,379——

Other current liabilities

235,736

182,401

1,960

42,437,763

39,643,774

426,093

Lease obligations (Note 9)45,78552,668566

Allowance for employees’ retirement benefits (Note 10)

199,422

256,723

2,759

Allowance for executives’ retirement benefits

41,16041,160442—

62,694674

286,367

413,246

4,441

42,724,131

40,057,021

430,535

Lease obligations (Note 9)
Income taxes payable

Consumption taxes payable
Deposits received for clearing funds (Note 3)

Total Current Liabilities
Long-term Liabilities:

Allowance for loss on business trust agreement cancellation
Total Long-term Liabilities
Total Liabilities

42,724,131
NET ASSETS
Shareholders’ Equity:
Common stock
Authorized: 10,000 shares
Issued: 8,500 shares

4,250,000

4,250,000

45,679

Capital surplus

4,250,000

4,250,000

45,679Retained earnings

10,390,994

11,368,062

122,185

Total Shareholders’ Equity

18,890,994

19,868,062

213,543

Total Net Assets

18,890,994

19,868,062

213,543

Total Liabilities and Net Assets¥61,615,125¥59,925,084$644,078

The accompanying notes are an integral part of these statements.

J a p a n S e c u r i t i e s D e p o s i t o r y C e n t e r , I n c . A N N U A L REPORT 201045

Consolidated Financial Statements
Consolidated Statements of Income (For the years ended March 31, 2009 and 2010)

2009

2010

$ (thousands)(Note 4)
2010

¥27,163,871¥20,973,007$225,419

206,738
1,972,209
97,3208,424,000
2,463,436
1,523,801
6,362,311
525,941
668,434
2,210,250
24,454,444
2,709,427

209,497
1,918,927
102,9706,868,608
358,300—
6,386,058
670,626
109,835
1,713,850
18,338,677
2,634,330

2,251
20,625
1,107
73,824
3,852—
68,6387,208
1,180
18,420
197,105
28,314254

219,76759,261(66,265)(43,900)

212
637
(712)
(471)

(7,794)(178,610)(83)(1,919)

—

—

1,010
33,200(52,878)—
9,091(226,865)
2,407,464

11
356
(568)
—
97
(2,438)25,875

224,403
972,282(106,289)¥ 1,317,068

2,412
10,450(1,142)$ 14,155¥ (thousands)

Operating Revenues
Operating Expenses:
Executives’ compensation and bonuses
Salaries and bonuses
Severance costs for employees (Note 10)
Maintenance of systems
Outside services
Registration fees
Depreciation and amortization
Rent
Advertisements
OthersTotal Operating Expenses
Operating Income

Other Income (Expenses):
Interest income
212
Operational revenue on designated assets
for clearing funds
75,684Equity in earnings (losses) of affiliates(28,229)
Interest expenses (Note 9)(93,932)
Commitment fees
(43,011)Fees for fund operation of designated assets
for clearing funds(7,558)Loss on disposal of fixed assets (Note 11)(43,350)
Non-recurring depreciation of property andequipment(78,430)(Provision) reversal of allowance for loss on business trust
agreement cancellation(112,402)(Provision) reversal of allowance for loss on computer center transfer(35,835)
Loss on business trust agreement cancellation—
Provision of allowance for doubtful accounts(15,878)
4,978
Others, net
Total(377,755)
Income before Income Taxes
2,331,672
Income Taxes (Note 12)
Current
659,662
Prior years—
338,068
Deferred¥ 1,333,941
Net Income

U.S.Dollars(Note 4)Yen
Per Share (Note 17)
Net income – primary
Dividends
Weighted-average number of common
stock shares outstanding (in shares)¥156,934.33
40,000¥154,949.18
40,000

8,500

8,500

$1,665429—

The accompanying notes are an integral part of these statements.

46

Jap an Secu ritie s Deposito ry C e n te r, I n c . A NNUA L R E P O RT 2 0 1 0

Consolidated Statements of Changes in Net Assets (For the years ended March 31, 2009 and 2010)¥ (thousands)
Number ofcommon stock
sharesCommonstock

CapitalsurplusRetainedearnings

Total
shareholders’equityTotal
net assets

8,500¥4,250,000¥4,250,000¥ 9,397,052¥17,897,052¥17,897,052

Cash dividends

—

—

—

(340,000)(340,000)(340,000)

Net income for the year

—

—

—

1,333,941

1,333,941

1,333,941

Balance as of March 31, 2009

8,500

¥4,250,000¥4,250,000¥10,390,994¥18,890,994¥18,890,994

Cash dividends

—

—

—

(340,000)(340,000)(340,000)

Net income for the year

—

—

—

1,317,068

1,317,068

1,317,068

Balance as of March 31, 2010

8,500

¥4,250,000¥4,250,000¥11,368,062¥19,868,062¥19,868,062

Balance as of March 31, 2008

$ (thousands) (Note 4)
Number ofcommon stock
sharesCommonstock

CapitalsurplusRetainedearnings

Total
shareholders’equityTotal
net assets

8,500$45,679$45,679$111,683$203,041$203,041

Cash dividends

—

—

—

(3,654)(3,654)(3,654)

Net income for the year

—

—

—

14,15614,15614,156

Balance as of March 31, 2010

8,500

$45,679$45,679$122,185$213,543$213,543

Balance as of March 31, 2009

The accompanying notes are an integral part of these statements.

J a p a n S e c u r i t i e s D e p o s i t o r y C e n t e r , I n c . A N N U A L REPORT 201047

Consolidated Financial Statements
Consolidated Statements of Cash Flows (For the years ended March 31, 2009 and 2010)¥ (thousands)

Cash Flows from Operating Activities:
Income before income taxes
Depreciation and amortization
Non-recurring depreciation of property and equipment
Increase in allowance for doubtful accounts
Increase (decrease) in allowance for employees’ bonuses
Increase in allowance for employees’ retirement benefits
Increase in allowance for executives’ retirement benefits
Increase (decrease) in allowance for loss on business trust
agreement cancellation
Increase (decrease) in allowance for loss on computer centertransfer
Interest income
Interest expenses
Equity in losses (earnings) of affiliates
Foreign exchange loss
Loss on sale of property and equipment
Loss on disposal of property and equipment
Loss on disposal of intangible assets
Decrease (increase) in accounts receivable – trade
Decrease in accounts payable – trade
Decrease (increase) in other assets
Decrease (increase) in other liabilities
Sub-totalInterest and dividends received
Interest paid
Income taxes paid
Income taxes paid for prior years
Income taxes refunded
Net Cash Provided by Operating Activities
Cash Flows from Investing Activities:
Payments for purchase of property and equipment
Payments for purchase of intangible assets
Proceeds from repayment of lease deposits
Payment of lease deposits
Other payments
Net Cash Used in Investing Activities
Cash Flows from Financing Activities:
Short-term borrowings
Repayment of short-term borrowings
Repayment of lease obligations
Cash dividends paid
Net Cash Provided by (Used in) Financing Activities
Effect of exchange rate changes on cash and cash equivalents
Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year$ (thousands)(Note 4)

2009

2010

¥ 2,331,672
6,362,311
78,43022,774
6,193
51,267—¥ 2,407,464
6,386,058—
327(2,867)57,300400$ 25,875
68,637
—
3
(30)
616
4

112,402(940,103)(10,104)(77,977)(242,379)(2,605)(212)
93,932(28,229)
666
—
9,998
33,352(130,383)(688,057)
52,137(20,677)
8,266,061
212(66,543)(1,788,073)——
6,411,657(254)
66,265(59,261)294
730
47,232
131,378(157,039)(45,122)
98,970828,786
8,578,181
11,754(92,300)(685,984)(903,351)
200,702
7,109,001

(2)
712
(636)
3
7
507
1,412
(1,687)
(484)
1,063
8,907
92,198127(992)(7,373)(9,709)2,157
76,408(370,597)(11,153,312)———(11,523,909)(314,290)(1,734,155)
266,575(258,082)(1,000)(2,040,953)(3,378)(18,638)
2,865(2,775)(10)(21,936)

20,400,000(14,400,000)(7,779)(340,000)
5,652,220(666)
539,301
1,816,676¥ 2,355,97822,800,000(26,400,000)(14,855)(340,000)(3,954,855)(294)
1,112,897
2,355,978¥ 3,468,876

245,055(283,748)(159)(3,654)(42,507)(4)
11,961
25,322$ 37,283

2010

The accompanying notes are an integral part of these statements.

48

Jap an Secu ritie s Deposito ry C e n te r, I n c . A NNUA L R E P O RT 2 0 1 0

Notes to the Consolidated Financial Statements
1. Basis of Presenting the Consolidated Financial
Statements
The accompanying consolidated financial statements
have been compiled from the accounts maintainedby Japan Securities Depository Center, Inc. (“theCompany”) and its subsidiary in accordance with theprovisions set forth in the Financial Instruments andExchange Act in conformity with accounting principles
and practices generally accepted in Japan, which
are different in certain respects as to the applicationand disclosure requirements of International Finance
Reporting Standards.

2. Summary of Significant Accounting Principles(1) Consolidation
The consolidated financial statements include theaccounts of Japan Securities Depository Center,
Inc. and its wholly owned subsidiary, JASDEC
DVP Clearing Corporation (hereafter, “JDCC”)
which is the only subsidiary of the Company.
JDCC operates under a fiscal year ending March
31, which is the same as that of the Company.

(2) Application of equity method
The equity method is applied to shares of Tosho
System Services Co., Ltd. (hereafter, “TSS”).

(3) Property and equipment(except lease assets)
Depreciation for buildings, excluding improvements, is calculated using the straight-line method.
Depreciation for other capital assets is calculatedusing the declining-balance method.
The main estimated useful lives are as follows:
Buildings and structures 3-50 years
Tools and furniture
2-15 years(4) Intangible assets (except lease assets)
Costs of software for internal use are capitalized
and amortized on a straight-line basis over an estimated useful life of 5 years. Other intangible assets
are amortized using the straight-line method overthe period registered by the Corporate Taxes Law.

(5) Lease assets
The straight-line method is applied to leased assetsof finance leases without ownership transfer and theresidual value is zero. The Company accounts forfinance lease without ownership transfer as operating leases if the transaction commenced prior to theprevious financial year ended March 31, 2009.

(6) Allowance for doubtful accounts
The allowance for doubtful accounts is provided
at an amount determined based on the Company’s
historical average charge-off ratio for ordinary
receivables, and estimates of uncollectible amounts
determined by reference to specific doubtfulreceivables from customers which are experiencing
financial difficulties.

(7) Allowance for bonuses
Allowance for employees’ bonuses and allowancefor executives’ bonuses are provided for bonuses
attributable to each fiscal year based on theestimated amount of the respective payments.

(8) Allowance for loss on business trust agreement cancellation
Allowance is provided for an adjustment fee on
cancellation of entrusted operations due to dematerialization of stock certificates.

(9) Consumption taxes
The consumption taxes withheld by the Company
and its subsidiary on sales and the consumption
taxes paid by the Company and its subsidiary onpurchases of goods and services are not included in
the amounts of the relevant accounts in the accompanying statements of income. The consumption
taxes withheld and paid are recorded as an asset ora liability, as the case may be, and the net balanceis shown in the balance sheets.

J a p a n S e c u r i t i e s D e p o s i t o r y C e n t e r , I n c . A N N U A L REPORT 201049

3. Assets and Liabilities Held for Sound
Settlement System Operation and Management
In order to secure the Delivery Versus Payment(“DVP”) for Non-Exchange Transaction Deliveries(“NETDs”) settlement system, JDCC, a consolidated
subsidiary of the Company, receives cash or securities
as collateral from the DVP participants whom JDCC
officially acknowledge as parties who undertake
securities obligations in accordance with the provisions
set forth in JDCC’s general provisions in accordancewith Article 156, Paragraph 7-1, of the Financial
Instruments and Exchange Act (Law No. 25, 1948).
JDCC manages cash and securities entrusted by the
DVP participants as clearing funds defined in Article
156-11 of the Financial Instruments and Exchange
Act separately from other assets in accordance with
JDCC’s general provisions and Article 7 of the Cabinet
Office Ordinance on Financial Instruments Clearing
Organization. (Cabinet Office Ordinance No. 76,
2002).

(1) Participant fund specified assets andparticipant funds under management
Under the DVP for NETDs settlement system,
when JDCC accepts DVP participants’ obligations
to counterparties, the DVP participants involved in
the transactions shall assume the same obligations
to JDCC.
JDCC requires each DVP participant to establish
a participant fund in excess of the minimum
amount set forth in JDCC’s general provisions
to ensure that the respective obligations of DVP
participants are covered. The aggregate amount ofminimum participant funds required by JDCC’s
general provisions as of March 31, 2009 and 2010was ¥15,000,000 thousand ($161,220 thousand). In
the event a DVP participant defaults on the required
payment obligations of the DVP for the NETDs
settlement system, JDCC shall take deposits fromthe participant fund of this DVP participant tofulfill its obligations to other DVP participants.

50

Jap an Secu ritie s Deposito ry C e n te r, I n c . A NNUA L R E P O RT 2 0 1 0

The participant funds entrusted to JDCC will be
managed as money trusts, in line with the statedgeneral provisions of JDCC.
These money trusts are evaluated at cost, just as
available-for-sale securities with no market value.
Assets and liabilities pertaining to participant
funds are presented as designated assets for clearing assets and deposits received for clearing funds,
respectively.

(2) Collateral securities
Under the DVP for NETDs settlement system, DVP
participants are able to entrust marketable securities
listed in JDCC’s general provisions (hereafter,“collateral securities”) to ensure that obligations to
JDCC are met.
When a DVP participant fails to meet its obligations to JDCC, JDCC is authorized to dispose of
the entrusted collateral securities by selling themin securities markets or through other methods
deemed appropriate by JDCC.
As of March 31, 2009 and 2010, the market valueof collateral securities entrusted to JDCC was¥99,489,867 thousand and ¥109,579,182 thousand($1,177,764 thousand), respectively.

4. U.S. Dollar Amounts
Amounts in U.S. dollars are included solely for theconvenience of readers outside Japan. The rate of¥93.04=US $1, the rate of exchange as of March 31,
2010, has been used in translation. The inclusion ofsuch amounts is not intended to imply that Japanese
yen have been or could be readily converted, realized
or settled in U.S. dollars at this or any other rate.

5. Commitment Line and Overdraft Contracts
To ensure agile and stable fund raising, the Company
has overdraft contracts (¥7,000,000 thousand ($75,236
thousand) in total) with four banks. To prepare fora possible deficiency of funds due to a default by
DVP participants, JDCC has concluded commitmentline agreements (¥45,000,000 thousand ($483,662
thousand) in total) with three banks, as part of a liquid
fund for completing fund settlement on the required
day. As of March 31, 2009 and 2010, the Company
was utilizing ¥8,400,000 thousand ($90,283 thousand)and ¥4,800,000 thousand ($51,591 thousand) of therespective commitment lines. In addition, ¥3,600,000
thousand ($38,693 thousand) of the ¥4,800,000 thousand ($51,591 thousand) utilized as of March 31, 2010
will be repaid after the maturity date of the commitmentline.

6. Net Assets
The Companies Act of Japan provides that an amountequal to 10% of the amount to be distributed as
distributions of capital surplus (other than the capitalreserve) and retained earnings (other than the legal
reserve) be transferred to the capital reserve andthe legal reserve, respectively, until the sum of thecapital reserve and the legal reserve equals 25% of
the common stock account. Such distributions can bemade at any time by resolution of the shareholders orby the Board of Directors if certain conditions are met,
but neither the capital reserve nor the legal reserve isavailable for distributions.

7. Lease Transactions
Finance lease transactions, other than those in which
the ownership of the leased asset is transferred to thelessee that commenced before the first fiscal year inwhich the new accounting standard is applied continue
to be accounted for as operating lease transactions. The
following table shows the amounts which would havebeen recorded as finance leases as of March 31, 2009
and 2010 and for the years then ended:¥ (thousands)
2009

2010

Tools and furniture:
Acquisition cost ¥1,882,666 ¥1,882,666
Accumulated(558,663) (935,196)
depreciation
Net book value ¥1,324,003 ¥ 947,469
Software:Acquisition cost ¥ 216,774 ¥ 216,774
Accumulated(65,029) (108,384)
depreciation
Net book value ¥ 151,744 ¥ (108,389)$ (thousands)
2010$20,235(10,052)$10,183$ 2,329(1,164)$ (1,165)

Lease obligations
including interest
thereon:Due within one year ¥ 422,218 ¥ 421,227
1,067,833
642,797
Due over one year
Total
¥1,490,052 ¥1,064,075$ 4,527
6,909$11,436

Finance leasecharges$ 4,501

Depreciation
expenseInterest portion¥ 557,408 ¥ 418,839
550,187
11,876412,437
7,557

4,432
81

(Note) 1. Methods applied in calculating the above data are as follows:
Depreciation: Straight-line method with zero residual value over thelease contract period
Interest: Computed as the difference between the lease obligations andthe acquisition cost, allocated over the lease term based on theinterest rate method.
2. Finance lease transactions
 Lease assets: Property and equipment: Backup system hardware
Intangible assets: Back up system software Depreciation: Based on zero residual value over the lease term

J a p a n S e c u r i t i e s D e p o s i t o r y C e n t e r , I n c . A N N U A L REPORT 201051

8. Fair value measurements for financial
instruments(Additional Information)
From the current fiscal year, the Company has appliedthe “Accounting Standards for Financial Instruments”(Accounting Standards Board of Japan Statement
No.10, revised March 10, 2008) and the associated“Guidance on Disclosures about Fair Value of
Financial Instruments” (Accounting Standards Boardof Japan Guidance No.19, March, 2008).
1. Basic policies for financial instruments(1) Cash and deposits(2) Accounts receivable-trade
Allowance for doubtful accounts (*1)
(3) Designated assets for clearing funds(4) Accounts payable-trade(5) Short-term borrowings(6) Deposits received for clearing funds

The Company limits financial investment to short-term
deposits, and fund raising to borrowings from banks
and others. Because accounts receivable are subject tocounterparty risk from participants in the book-entry
transfer system, the Company continuously monitors
the financial conditions of the participants.
2. Estimated fair value of financial instruments
The following table presents carrying amount on thebalance sheet, fair value and difference between carrying amount and fair value as of March 31, 2010.

Carrying amount on the
Fair value (*2)
balance sheet¥ (thousand) $ (thousand) ¥ (thousand) $ (thousand)¥ 3,468,876$ 37,283¥ 3,468,876$ 37,283
3,318,125
35,663(6,480)(69)
3,311,644
35,594
3,311,644
35,594
33,121,473
355,992
33,121,473
355,992(823,303)(8,849)(823,303)(8,849)(4,800,000)(51,591)(4,800,000)(51,591)(33,121,473) (355,992) (33,121,473) (355,992)

Difference
—
—
—
—
—
—
—

*1: Allowance for doubtful accounts is deducted from Accounts receivable-trade.
*2: Figures in brackets indicate liabilities.

(Note) 1: Calculation methods for fair value of financial
instruments(1) Cash and deposits, and (2) Accounts
receivable-trade
The book value was deemed to be fair value forthese items since the book value approximatesfair value because of the short settlement
period.
(4) Accounts payable-trade, and (5) Short-termborrowings
The book value was deemed to be fair value forthese items since the book value approximatesfair value because of the short settlement
period.
(3) Designated assets for clearing funds, and(6) Deposits received for clearing funds
The book value was deemed to be fair value
since these items represent assets and liabilities
reflecting their roles in maintaining a stablesecurities trading environment.
2: Investment securities totaling ¥356,179 thousand($3,828 thousand) as of March 31, 2010 are
affiliated companies’ stocks for which market
quotes are not available and future cash flow
is extremely difficult to estimate. Accordingly,
such Investment securities are not included in the52

Jap an Secu ritie s Deposito ry C e n te r, I n c . A NNUA L R E P O RT 2 0 1 0

above table.
3: Estimated redemptions for monetary claims andsecurities with maturities after the end of theconsolidated financial period:
All deposits and accounts receivable-trade in
the above table have settlement dates within oneyear.
4: Estimated repayments for bonds, long-termloans payable, lease obligations and otherinterest-bearing liabilities after the end of theconsolidated financial period:
There were no material long-term liabilities.
Short-term borrowings are due within one year.

9. Borrowings
Short-term borrowings comprised loans from bankswith a weighted average interest rate of 0.9% perannum. The Company had short-term borrowings of¥4,800,000 thousand ($51,590 thousand) as of March
31, 2010. The current portion of lease obligations was¥20,003 thousand ($215 thousand) and of long-termlease obligations was ¥52,668 thousand ($566
thousand). The weighted average interest rate of leaseobligations was 2.8% per annum. Total borrowings
were ¥4,872,672 thousand ($52,371 thousand) as ofMarch 31, 2010.

10. Allowance for severance indemnities for
employees

13. Income Taxes(1) Deferred tax assets

Allowance for employees’ retirement benefits on
March 31, 2009 and 2010 represented the amountthat would be payable by the Company if all eligible
employees voluntarily terminated their employment at
the balance sheet dates. Severance costs for employeescharged to income for the years ended March 31, 2009
and 2010 amounted to ¥97,320 thousand and ¥102,970
thousand ($1,106 thousand), respectively.

11. Non-recurring depreciation of property andequipment
Non-recurring depreciation of fixed assets arose due toa decision to move computer sites and the dematerialization of stock certificates.
¥ (thousands)$ (thousands)

Buildings
Tools and furniture
Software2009¥19,32258,685
421

2010
¥
—
—
—

2010
$ —
—
—

Long-term prepaid
expenses

—

—

—

Total

¥78,430

¥

—

$

—

12. Loss on disposal of fixed assets
The following table shows disposal of fixed assets:¥ (thousands)$ (thousands)

2009

2010

2010

Buildings andequipments¥ 1,236¥ 32,723$ 351

Tools and furniture
Software

8,761
33,352

14,508125,594156
1,350

Long-term prepaid
expenses
Total

—

5,783

62

¥43,350¥178,610$1,919The following table shows the breakdown ofdeferred tax assets:¥ (thousands)
2009
2010

$ (thousands)
2010

Deferred tax assets:
Allowance for
employees’ bonuses¥ 73,987$ 795

Business facility taxes¥ 75,151
4,212

4,364

46

Accrued social
insurance premiums

10,489

9,502

102

Allowance forloss onbusiness trust
agreement cancellation

381,681——

98,405

—

—

2,799

3,035

32

80,965104,229

1,120

—

4,005

43

Allowance for
executives’retirement benefits—

16,710

179

Excess depreciationof fixed assets

113,468

666,360

7,162

Total deferred tax
assets¥767,175¥882,195$9,481—(16,710)(179)

Enterprise taxes
payable11,354

3,375

36

Net deferred tax
assets¥755,820¥862,109$9,266

Allowance forloss on computer
center transfer
Allowance for
doubtfulaccounts
Allowance for
employees’
retirement benefits
Excess amortizationof deferred charges
for tax purposes

Valuation
allowance
Deferred tax
liabilities:

J a p a n S e c u r i t i e s D e p o s i t o r y C e n t e r , I n c . A N N U A L REPORT 201053

(2) Reconciliation between the nominal
statutory income tax rate and the effective
income taxes rate
No disclosure is required under this item, as thedifference between the statutory tax rate and theeffective tax rate for the years ended March 31,
2009 and 2010 is less than 5% of the statutory tax
rate.

14. Notes to the consolidated statements ofchanges in net assets(1) Outstanding shares

2 Dividends for which the record date is in the year
ended March 31, 2010 and for which the effective
date is in the year ended March 31, 2011

Resolution

Total of
Dividends Dividend
Class of Payment¥
Per Share Record Effective
Share Source (thousands)
¥
Date
Date

Ordinary General¥340,000¥ 40,000 March 31, June 22,
Shareholders Ordinary Retained($3,654
2010
2010
Meeting
Shares Earnings($429)
thousand)(June 21, 2010)15. Stock Options
Not applicable.

Class ofshare
OrdinarysharesClass ofshare
OrdinarysharesMarch 31,
2008

Increase

Decrease

March 31,
2009

8,500

—

—

8,500

March 31,
2009

Increase

Decrease

March 31,
2010

8,500

—

—

8,500

(2) Treasury Stock
Not applicable.

(3) Stock Subscription Rights and Other
Securities
Not applicable.

(4) Dividends
1 Payment of the dividends

Resolution

Total of
Dividends Dividend
Class of Payment¥
per Share Record Effective
Share Source (thousands)
¥
Date
Date

Ordinary General
Shareholders Ordinary Retained
March 31, June 23,¥340,000 ¥40,000
Meeting
Shares Earnings
2009
2009
(June 22, 2009)54

Jap an Secu ritie s Deposito ry C e n te r, I n c . A NNUA L R E P O RT 2 0 1 0

16. Segment Information(1) Business segment
Disclosure is omitted because the Company operates a single business unit, the book-entry transfer
system for securities.

(2) Geographic information
Disclosure is omitted because the Company had
neither overseas consolidated subsidiaries nor
overseas branches for the years ended March 31,
2009 and 2010.

(3) Overseas sales
Disclosure is omitted because the Company did nothave any overseas sales for the years ended March
31, 2009 and 2010.

17. Related party transactions
The material transactions of the Company with related companies or individuals, excluding transactions with the consolidated subsidiary that are eliminated in the consolidation and those disclosed elsewhere in these financial statements,
for the years ended March 31, 2009 and 2010 are as follows:

For the year ended March 31, 2009
(Additional Information)
Commencing with the current fiscal year, the consolidated financial statements confirm to “Accounting Standard for
Related Party Disclosures” (Accounting Standards Board of Japan Statement No.11) and “Guidance on AccountingStandard for Related Party Disclosures” (Accounting Standards Board of Japan Guidance No.13). There are no additional matters to disclose.

Related party transactions(1) Subsidiaries and affiliates
Relationship
CapitalNames ofcompanies¥
Address (thousands)

Tosho System
Koto-ku,
Service Co. Ltd.
Tokyo
(An affiliate)¥100,000

Principal
businessAmountEnding(Note 1)
Balance
Percentage Directorsof owner- holding
Descriptions¥
ship with concurrent
Business¥voting right positions relationship Transactions (thousands) (Note 2) (thousands)

Design &20% directly
development
heldof software

Two

Purchasing
softwarePurchase of¥6,188,427
and system
softwaremaintenance——(Note) 1. The transaction amounts above exclude consumption taxes. However, the ending balance includes consumption taxes.
2. The terms and conditions of the above transactions are on an arm’s-length basis.

(2) Others

CapitalNames ofcompanies¥
Address (thousands)

Principal
business

Japan Securities
Chuo-ku,¥1,700,000
Clearing
Tokyo
Corporation

Clearing
securities

RelationshipAmountEndingPercentage(Note 1)
Balanceof owner- Directors
holding
ship with
Descriptions¥
voting concurrent
Business¥
positions relationship Transaction (thousands) (Note 2) (thousands)
rights—Two

Commission Commission¥3,645,891
incomeincomeAccounts
receivabletrade¥297,755(Note) 1. The transaction amounts above exclude consumption taxes. However, the ending balance includes consumption taxes.
2. The terms and conditions of the above transactions are on an arm’s-length basis.

J a p a n S e c u r i t i e s D e p o s i t o r y C e n t e r , I n c . A N N U A L REPORT 201055

For the year ended March 31, 2010
(1) Subsidiaries and affiliates
Relationship
CapitalNames ofcompanies¥
Address (thousands)

Principal
businessAmountEndingPercentage Directors(Note 1)
Balanceof owner- holding
Descriptions
ship with concurrent
Business¥¥voting right positions relationship Transactions (thousands) (Note 2) (thousands)¥100,000
Design &Tosho System Koto-ku,($1,074 development ofService Co. Ltd. Tokyo
thousands)
software20%
directly
held

Two

Purchasing
softwareand system
maintenance

Payment ofcomputermaintenancefee¥1,830,588($19,675
thousands)¥246,133
Accounts
payable-trade($2,645thousands)¥431,170
Purchase ofsoftware—($4,634
thousands)—(Note) 1. The transaction amounts above exclude consumption taxes. However, the ending balances include consumption taxes.
2. The terms and conditions of the above transactions are on an arm’s-length basis.

(2) Subsidiaries of Other Consolidated Financial Statements companies and Related Parties
Relationship
CapitalNames ofcompanies¥
Address (thousands)

Principal
business

Japan Securities¥1,700,000
Clearing
Chuo-ku,
Corporation
Tokyo ($18,271(Subsidiary of
thousands)
other affiliates)

Clearing
securities

EndingAmountBalance(Note 1)
Percentage Directorsof owner- holding¥
Descriptions
ship with concurrent
Business¥voting right positions relationship Transaction (thousands) (Note 2) (thousands)

—

Three

Commission Commission
incomeincome¥2,459,261($26,432
thousands)¥293,347
Accounts($3,152
receivablethousands)
trade(Note) 1. The transaction amounts above exclude consumption taxes. However, ending balance includes consumption taxes.
2. The terms and conditions of the above transactions are on an arm’s-length basis.

18. Earnings Per Share
The basis for calculating earnings per share for the years ended March 31, 2009 and 2010 is as follows:$ (thousands)¥ (thousands)
2009

2010

2010

Net income as reported in the consolidated statements of income¥1,333,941¥1,317,068$14,155

Net income pertaining to common stock shareholders¥1,333,941¥1,317,068$14,155

8,500

8,500

—

Weighted-average number ofcommon stock shares outstanding (in shares)

56

Jap an Secu ritie s Deposito ry C e n te r, I n c . A NNUA L R E P O RT 2 0 1 0

Report of Independent Auditors
The Board of Directors and Shareholders ofJapan Securities Depository Center, Incoporated
We have audited the accompanying consolidated balance sheets of Japan Securities Depository
Center, Incoporated and consolidated subsidiaries as of March 31, 2010 and 2009, and the related
consolidated statements of income, changes in net assets, and cash flows for the years thenended, all expressed in yen. These financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted in Japan. Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects,
the consolidated financial position of Japan Securities Depository Center, Incoporated andconsolidated subsidiaries at March 31, 2010 and 2009, and the consolidated results of theiroperations and their cash flows for the years then ended in conformity with accounting principles
generally accepted in Japan.
The U.S. dollar amounts in the accompanying consolidated financial statements with respect tothe year ended March 31, 2010 are presented solely for convenience. Our audit also included thetranslation of yen amounts into U.S. dollar amounts and, in our opinion, such translation has been
made on the basis described in Note 4.

June 18, 2010

J a p a n S e c u r i t i e s D e p o s i t o r y C e n t e r , I n c . A N N U A L REPORT 201057