Consolidated Financial Statements
Consolidated Balance Sheets (As of March 31, 2008 and 2009)¥ (thousands)$ (thousands)(Note 5)
2009

2008

2009

¥ 1,816,676
3,072,097
156,655
29,884,895
356,531—
35,286,855¥ 2,355,978
3,161,085
561,386
31,531,872
519,023(6,895)
38,122,450$ 23,984
32,1805,715
321,000
5,284(70)
388,093

Less: Accumulated depreciation
		 Total Property and Equipment

1,125,677
9,018,616—
10,144,293(6,262,276)
3,882,017

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

10,82056,603570
67,993(42,460)
25,533

Intangible Assets, Net:
SoftwareConstruction in progress (Software)
Lease assets
Other intangible assets
		 Total Intangible Assets

7,171,014
6,586,807—
14,882
13,772,704

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

201,152
690
97
184
202,123

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
Allowance for doubtful accounts
		 Total Investment and Other Assets

336,647
109,154937,233
514,775——
1,897,811

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

3,140
883
1,979
5,240
421
(161)
11,502¥54,839,389¥61,615,125$627,253ASSETS
Current Assets:
Cash and deposits
Accounts receivable – trade
Deferred income taxes (Note 12)
Designated assets for clearing funds (Note 4)
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.

50

J a p a n Securi ti es Depo si to ry C enter, Inc. A nn u al R e p ort 2 0 0 9

$ (thousands)(Note 5)2009

¥ (thousands)
2009

2008
LIABILITIESCurrent Liabilities:
Accounts payable – trade¥ 1,556,483¥

868,426$8,841

2,400,000

8,400,000

85,514—

13,842

141

Income taxes payable

931,071——

Allowance for employees’ bonuses

178,909

185,102

1,884

Allowance for executives’ bonuses

20,30020,300207

Consumption taxes payable

4,030

—

—

29,884,895

31,531,872

321,000

Allowance for loss of business trust agreement Cancellation—

940,103

9,570

Allowance for loss of computer center transfer—

242,379

2,467

Other current liabilities

629,274

235,7362,400

		 Total Current Liabilities

35,604,964

42,437,763

432,024—

45,785466

Allowance for employees’ retirement benefits (Note 10)

148,155

199,422

2,030

Allowance for executives’ retirement benefits

41,16041,160419

Allowance for loss of business trust agreement cancellation

827,700——

Allowance for loss of computer center transfer

320,356——

1,337,372

286,367

2,915

36,942,336

42,724,131

434,939

42,724,131

434,940

Short-term borrowings (Note 6 and 9)
Lease obligations (Note 9)

Deposits received for clearing funds (Note 4)Long-term Liabilities:
Lease obligations (Note 9)

Total Long-term Liabilities
		 Total Liabilities
NET ASSETS
Shareholders’ Equity:
Common stock
Authorized: 10,000 shares
Issued: 8,500 shares

4,250,000

4,250,000

43,266

Capital surplus

4,250,000

4,250,000

43,266

Retained earnings

9,397,052

10,390,994

105,781		 Total Shareholders’ Equity

17,897,052

18,890,994

192,313

		 Total Net Assets

17,897,052

18,890,994

192,313

		 Total Liabilities and Net Assets¥54,839,389¥61,615,125$627,253

The accompanying notes are an integral part of these statements.

J ap an S e c urit ie s De p os it ory C e nt e r, I nc . A nnu al R e p ort 2 0 0 951

Consolidated Financial Statements
Consolidated Statements of Income (For the years ended March 31, 2008 and 2009)
2008

2009

$ (thousands)(Note 5)
2009

¥26,022,586¥27,163,871$276,533

206,673
1,822,149
81,945
6,974,215
2,597,821
1,286,788
5,604,745
509,500
720,881
1,925,132
21,729,855
4,292,730

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

2,105
20,077991
85,75825,077
15,51364,7695,354
6,805
22,501
248,950
27,582

272

212

2

111,385
21,375(3,637)(49,391)

75,684(28,229)(93,932)(43,011)

770
(287)
(956)
(438)

(7,576)(16,041)(7,558)(43,350)

(77)
(441)

(590,625)(827,700)(320,356)—
3,304(1,678,991)
2,613,739(78,430)(112,402)(35,835)(15,878)4,978(377,755)
2,331,672(798)(1,144)
(364)
(161)
50
(3,845)23,737

1,781,626(715,589)¥ 1,547,702

659,662
338,068¥ 1,333,941

6,715
3,442
$ 13,579¥ (thousands)

Operating Income
Operating Expenses:
Executives’ compensation and bonuses
Salaries and bonuses
Severance costs for employees (Note 10)
Maintenance for systems
Outside services
Registration fees
Depreciation and amortization
Rent
Advertisement
Others		 Total Operating Expenses
		 Income from Operations
Other Income (Expenses):
Interest income
Operational revenue on the designated assets
for clearing funds
Equity in earnings (losses) of the affiliate
Interest expenses (Note 9)
Commitment fees
Fees for fund operation of designated assets
for clearing funds
Loss on disposal of fixed assets
Non-recurring depreciation of property andequipment (Note 11)
Allowance for loss of business trust agreement cancellation
Allowance for loss of computer center transfer
Provision of allowance for doubtful account
Others, net
Total
		 Income before Income Taxes
Income Taxes (Note 12)
Current
Deferred		 Net Income

U.S.Dollars(Note 5)Yen
Per Share (Note 17)
Net income – primary
Dividends
Weighted-average number of common
stock shares outstanding (in shares)¥182,082.62
40,000¥156,934.33
40,000

8,500

8,500

$1,598407—

The accompanying notes are an integral part of these statements.

52

J a p a n Securi ti es Depo si to ry C enter, Inc. A nn u al R e p ort 2 0 0 9

Consolidated Statements of Changes in Net Assets (For the years ended March 31, 2008 and 2009)¥ (thousands)
Number ofcommon stock
sharesCommonstock

CapitalsurplusRetainedearnings

Total
shareholders’equityTotal
net assets

8,500¥4,250,000¥4,250,000¥ 8,189,350¥16,689,350¥16,689,350

Cash dividends

—

—

—

Net income for the year

—

—

—

(340,000)
9,397,052
1,547,702
10,390,994(340,000)
17,897,052
1,547,702
18,890,994(340,000)
17,897,052
1,547,702
18,890,994

Balance as of March 31, 2008

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

Balance as of March 31, 2007

$ (thousands) (Note 5)
Number ofcommon stock
sharesCommonstock

CapitalsurplusRetainedearnings

Total
shareholders’equityTotal
net assets

8,500$42,419$42,419$ 95,663$182,195$182,195

Cash dividends

—

—

—

(3,461)(3,461)(3,461)

Net income for the year

—

—

—

13,58013,57913,579Balance as of March 31, 2009

8,500

$42,419$42,419$105,781$192,313$192,313

Balance as of March 31, 2008

The accompanying notes are an integral part of these statements.

J ap an S e c urit ie s De p os it ory C e nt e r, I nc . A nnu al R e p ort 2 0 0 9

53

Consolidated Financial Statements
Consolidated Statements of Cash Flows (For the years ended March 31, 2008 and 2009)$ (thousands)(Note 5)¥ (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
Decrease in allowance for executives’ retirement benefits
Increase in allowance for loss on cancellation ofagreement for entrustment of operations
Increase (decrease) allowance for loss of computer centertransfer
Interest income
Interest expenses
Equity in losses (earnings) of the affiliate
Foreign exchange loss
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 in other liabilities
		 Sub-total
Interest and dividends received
Interest paid
Income taxes paid
		 Net Cash Provided by Operating Activities
Cash Flows from Investing Activities:
Payments for purchase of investment securities
Payments for purchase of property and equipment
Payments for purchase of intangible assets
Payments of guarantee money deposits received
		 Net Cash Flows 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 Flows Provided by 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

2008

2009

2009

¥ 2,613,739
5,604,745
590,625—(1,961)
33,746(6,960)¥ 2,331,672
6,362,311
78,43022,774
6,193
51,267—$ 23,737
64,769
798
232
63
522
—

827,700

112,402

1,144

320,356(77,977)

(794)

(272)
3,637
(21,375)
556
9,297
6,744
383,014(367,373)(137,867)(5,311)
9,853,041
272(3,101)(1,789,007)
8,061,204(212)
93,932
28,229666
9,998
33,352(130,383)(688,057)
52,137(20,677)
8,266,061
212(66,543)(1,788,073)
6,411,657

(2)
956
287
7
102
339
(1,327)(7,004)531(210)
84,1502(678)(18,203)65,271(315,272)(3,975,197)(6,758,275)(79,273)(11,128,018)—(370,597)(11,153,312)—(11,523,909)—(3,772)(113,543)—(117,315)

3,360,000(960,000)—(340,000)
2,060,000(556)(1,007,370)
2,824,047¥ 1,816,676

20,400,000(14,400,000)(7,779)(340,000)
5,652,220(666)
539,301
1,816,676¥ 2,355,978207,675(146,595)(79)(3,461)57,540(6)
5,490
18,494$ 23,984

The accompanying notes are an integral part of these statements.

54

J a p a n Securi ti es Depo si to ry C enter, Inc. A nn u al R e p ort 2 0 0 9

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) Cash and deposits
Cash and cash equivalents include all highly liquid
investments, with original maturities of threemonths or less, which are readily convertible to
known amounts of cash and are so near maturity
that they present only an insignificant risk ofchanges in value because of changes in interest
rates. Cash and deposits in the consolidated balance
sheets and consolidated statements of cash flows
are identical.

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

(4) Property and equipment(Except Lease assets)
Depreciation for buildings, excluding improvements, is computed on the straight-line method.
Depreciation for other capital assets is computed on
the declining-balance method.
The main estimated useful lives are as follows:		
Buildings and structures 3-49 years
		
Tools and furniture
2-15 years(5) Intangible assets (Except Lease assets)
Costs of software for internal use are capitalized
and amortized on the straight-line method over theestimated useful life of 5 years. Other intangible
assets are amortized using the straight-line method
over the period registered by the Corporate Taxes
Law. Software regarding physical stock certificates,
which became redundant after dematerialization ofstock certificates, was useful until January 2009,
the date which all interested parties had set as thetarget for the commencement of dematerialization.

(6) Lease assets
The straight-line method is applied to leased assetsof finance lease without ownership transfer andthe residual value is zero. The company applies
accounting principle for general methods for
operating lease without ownership transfer if thetransaction commenced prior to the adoption of the
new standards.

(7) 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 estimate of uncollectible amounts
determined by reference to specific doubtfulreceivables from customers which are experiencing
financial difficulties.

(8) Allowance for bonuses
Allowance for employees’ bonuses and allowancefor executives’ bonuses are provided for bonuses
to employees and executives attributable to eachfiscal year based on an amount expected to pay,
respectively.

(9) Allowance for loss of business trust
agreement cancelation
Allowance is provided for a loss on cancellationof entrusted operations due to dematerialization ofstock certificates.

(10) Allowance for loss ofcomputer center transfer
Allowance is provided for estimated restoration
costs and other related relocation costs to be paid
upon the movement of computer facilities.

J ap an S e c urit ie s De p os it ory C e nt e r, I nc . A nnu al R e p ort 2 0 0 955

(11) 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.

3. Changes in Basis of Presenting theConsolidated Financial Statements
Accounting Standards for Lease Transactions
Previously the Company treated finance leasetransactions without ownership transfer to lessee asan ordinary method for operational lease. However,since application of “Accounting Standard forLease transactions” (ASBJ, Accounting Standards
Board of Japan-statement No. 13, revised on March
30th, 2007) and “Guidance on Accounting Standard
for Lease Transaction (ASBJ Guidance No. 16,
revised on March 30th, 2007) from the beginningof reporting term, such leases are accounted for as
general sale and purchase.
Depreciation of lease assets is based on zero
residual value over the lease contract term.
Meanwhile, for finance lease transactions without ownership transfer, the Company continues toapply accounting principles for ordinary method for
operational lease if such transactions commenced
prior to the adoption of the new standards.
The impact of this change on the statement ofincome is immaterial.

4. 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 a party who undertakes
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

56

J a p a n Securi ti es Depo si to ry C enter, Inc. A nn u al R e p ort 2 0 0 9

156-11 of the Financial Instruments and Exchange
Act separately from other assets in accordance with
JDSS’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 the 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, 2008 and 2009was ¥15,000,000 thousand ($152,703 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.
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 the NETDs settlement system,
DVP participants are able to entrust marketablesecurities listed in JDCC’s general provisions(hereafter, “collateral securities”) to ensure thatobligations 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, 2008 and 2009, the market value

of collateral securities entrusted to JDCC was¥235,795,655 thousand and ¥99,489,867 thousand($1,012,826 thousand), respectively.

have been recorded as finance leases as of March 31,
2008 and 2009 and for the years then ended:¥ (thousands)

5. U.S. Dollar Amounts
Amounts in U.S. dollars are included solely for theconvenience of readers outside Japan. The rate of¥98.23=U.S. $1, the rate of exchange as of March 31,
2009, 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.

6. Commitment Line and Overdraft Contracts
To ensure agile and stable fund-raising, the Company
concludes commitment line agreements (¥12,000,000
thousand ($122,162 thousand) in total) and overdraft
contracts (¥5,000,000 thousand ($50,900 thousand) intotal) with three banks. To prepare for a possible deficiency of funds due to a default by DVP participants,
JDCC has concluded commitment line agreements(¥45,000,000 thousand ($458,108 thousand) in total)
with three banks, as part of a liquid fund for completing fund settlement on the required day. ¥2,400,000
thousand and ¥8,400,000 thousand ($85,513 thousand)of the commitment line were utilized by the Company
as of March 31, 2008 and 2009, respectively.

7. 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.

2008$ (thousands)

2009

Tools and furniture:
Acquisition cost ¥2,497,402 ¥1,882,666
Accumulated(697,698) (558,663)
		 depreciation
Net book value ¥1,799,703 ¥1,324,003
Software:Acquisition cost ¥ 608,081 ¥ 216,774
Accumulated(297,240)(65,029)		 depreciation
Net book value ¥ 310,841 ¥ 151,744

2009$19,165(5,687)$13,478$ 2,206(662)$ 1,544

Lease obligations
including interest
thereon:Due within one year ¥ 565,538 ¥ 422,218
1,564,035 1,067,833
Due over one year
			
Total
¥2,129,573 ¥1,490,052$ 4,298
10,870$15,169

Finance leasecharges¥ 474,604 ¥ 557,408$ 5,674

550,187
11,876

5,601
120

Depreciation
expenseInterest portion

468,042
16,477(Note) 1. Methods applied in computation of the above data are as follows:		 Depreciation: S traight-line method with zero residual value over the lease
contract period
		 Interest: C omputed as the difference between the lease obligations andthe acquisition cost, allocated over the lease term based on theinterest rate method.
2. Finance lease transactions
		 aLease assets: P roperty and Equipment; Hardware of back up system
Intangible assets; Software of back up system		 bDepreciation: Based on zero residual value over the lease term

8. 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, continues to be accounted for as operating lease transactions.
The following table shows the amounts which would

J ap an S e c urit ie s De p os it ory C e nt e r, I nc . A nnu al R e p ort 2 0 0 957

9. Borrowings
Short-term borrowings comprised loans from bankswith a weighted average interest rate of 1.2% perannum. The Company had short-term borrowingsof ¥8,400,000 thousand ($85,513 thousand). The
Company has current portion of lease obligations of¥13,842 thousand ($140 thousand) and long-term leaseobligations of ¥45,785 thousand ($466 thousand).
Weighted average interest rate of lease obligations is
2.5% per annum. Total borrowings are ¥8,456,650
thousand ($86,090 thousand) as of March 31, 2009.

10. Allowance for Severance Indemnities for
Employees
Allowance for employees’ retirement benefits on
March 31, 2008 and 2009 represented the amountthat would be payable for 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, 2008
and 2009 amounted to ¥81,945 thousand and ¥97,320
thousand ($991 thousand), respectively.

11. Non-recurring Depreciation of Property andEquipment
Non-recurring depreciation of fixed assets was due tothe decision to move computer sites and dematerialization for stock certificates.
¥ (thousands)

Buildings
Tools and furniture
Software
Long-term prepaid
expensesTotal$ (thousands)

2008¥ 37,956
308,800
243,360

2009¥19,32258,685
421

2009
$197
597
4

507
¥590,625—¥78,430—$798

12. Income Taxes(1) Deferred tax assets
The following table shows the breakdown ofdeferred tax assets:¥ (thousands)
2008
2009

$ (thousands)
2009

Deferred tax assets:
Allowance for
employees’ bonuses ¥¥ 75,151$ 765

Enterprise taxes payable
Business facility taxes

72,637
71,293
4,166

4,212

43

Accrued social
insurance premiums

8,557

10,489107

Allowance forloss ofbusiness trust
agreement cancelation

336,046

381,6813,885

130,064

98,405

1,002

—

2,799

28

60,15180,965824

Allowance for
executives’retirement benefits

16,710——

Excess depreciationof fixed assets

377,206

113,468

1,155

Excess amortizationof deferred charges
for tax purposes

17,053—--—¥1,093,888¥767,175$7,579Enterprise taxes
payable11,354115

Net deferred tax
assets¥755,820$7,694

Allowance forloss of computer
center transfer
Allowance for
doubtfulaccounts
Allowance for
employees’
retirement benefits

Total Deferred tax
assetsDeferred tax
liabilities:

58

J a p a n Securi ti es Depo si to ry C enter, Inc. A nn u al R e p ort 2 0 0 9

(2) Reconciliation between the nominal
statutory income tax rate and the effective
income tax rate

2 Dividends for which record date belongs to the year
ended March 31, 2009 and for which effective date
will belong to the year ending March 31, 2010

The difference between the statutory tax rate andthe effective tax rate for the years ended March 31,
2008 and 2009 is less than 5% of the statutory tax
rate, thus the note is omitted.

Total of
Revenue Dividends Dividend
Type ofof¥per Share Record Effective
Stocks Dividends (thousands)
¥
Date
Date

Resolution

Ordinary General¥340,000¥ 40,000 March 31, June 23,
Shareholders Ordinary Retained($3,461
2009
2009
Meeting
Share Earnings($407)
thousand)(June 22, 2009)

13. Note to the Consolidated Statements of
Changes in Net Assets(1) Outstanding stock

14. Stock Option
Type ofstocksMarch 31,
2007

Increase

Ordinary
8,500
—
share
Type of March 31,
2008
IncreasestocksOrdinary
8,500
—
share

Decrease

March 31,
2008

—

8,500

Decrease

March 31,
2009

—

8,500

(2) Treasury Stock
Not applicable.

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

(4) Dividends
1 Payment of the dividends

Resolution

Not applicable.

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

(2) Geographic information
Disclosure is omitted because the Company has
neither overseas consolidated subsidiaries nor
overseas branches for the years ended March 31,
2008 and 2009.

(3) Overseas sales
Disclosure is omitted because the Company does
not have any overseas sales for the years ended
March 31, 2008 and 2009.

Total of
Revenue Dividends Dividend
Type ofof¥per Share Record Effective
Stocks Dividends (thousands)
¥
Date
Date

Ordinary General
Shareholders Ordinary Retained
March 31, June 24,¥340,000 ¥40,000
Meeting
Share Earnings
2008
2008
(June 23, 2008)

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16. 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, 2008 and 2009 are as follows:

For the year ended March 31, 2008
(1) Directors
Title

Name

Business

Transactions

Amount¥ (thousands)

Account

Ending Balance¥ (thousands)

Director

Koichiro
Miyahara(Note 2 (1))

Director of the Company
President and CEO of Japan
Securities Settlement &Custody, Inc.

Outsourcing¥639,952($6,514thousands)——

Director

Hironaga
Miyama(Note 2 (2))

Director of the Company
President and CEO of Japan
Securities Settlement &Custody, Inc.

Outsourcing¥1,730,028($17,612
thousands)

Accounts
payable-trade¥33,063($336
thousands)(Note) 1. The transaction amounts above exclude consumption taxes. However, the ending balances include consumption taxes.
2. Terms and conditions(1) These amounts represent transactions for the period from April 1, 2007 to June 30, 2007 because Koichiro Miyahara resigned from the Board of Directors of theCompany on June 21, 2007, and ending balance is the amount as of June 30, 2007.
(2) These amounts represent transactions for the period from July 1, 2007 to March 31, 2008 because Hironaga Miyama was assigned to the Board of Directors of
the Company on June 25, 2007.
(3) The terms and conditions of the above transactions are on an arm’s-length basis.

(2) Principal shareholder and its subsidiaries
Relationship

CapitalNames ofcompanies¥
Address (thousands)

Principal
business

Tokyo Stock¥11,500,000
Exchange
Exchange, Inc. Chuo-ku,
of financial(Subsidiary of Tokyo ($117,072
instruments
other affiliates)
thousands)
Japan Securities¥1,700,000
Clearing
Chuo-ku,($17,306
CorporationTokyo
thousands)(Subsidiary ofother affiliates)

Clearing
securities

AmountEnding(Note 1)
Balance
Percentage Directorsof owner- holding
Descriptions¥
ship with concurrent
Business¥voting right positions relationship Transactions (thousands) (Note 2) (thousands)—(Note 3)—

One

Secondment¥315,272of staffs,
Purchase oflease ofinvestment($3,214computer sites, securities
thousands)
etc.

One

Commission Commission
incomeincome——¥4,154,800 Accounts ¥384,800($42,205 receivable- ($3,917
thousands)
trade
thousands)(Note) 1. These 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 except for the transaction of the investment securities. Acquisition cost of the investment security was based on book value of net assets.
3. Tokyo Stock Exchange Group, Inc. succeeded the holding of the Company’s stocks from Tokyo Stock Exchange, Inc. due to reorganization effective October 1, 2007,
and replaced Tokyo Stock Exchange, Inc. as a principal shareholder of the Company. As such, these amounts represent transactions for the period from April 1, 2007
to September 30, 2007. Tokyo Stock Exchange, Inc. held 21.82% of the Company’s outstanding shares on September 30, 2007.

60

J a p a n Securi ti es Depo si to ry C enter, Inc. A nn u al R e p ort 2 0 0 9

(3) Subsidiaries and affiliates
Relationship
CapitalNames ofcompanies¥
Address (thousands)

Principal
business

Tosho System¥100,000
Design &Koto-ku,
Service Co. Ltd.
($1,018 development ofTokyo(An affiliate)
thousands)
softwareAmountEndingPercentage Directors(Note 1)
Balanceof owner- holding
Descriptions
ship with concurrent
Business¥¥voting right positions relationship Transaction (thousands) (Note 2) (thousands)
Directly
holds
20%

Two

Purchasing¥1,491,226
softwarePurchase of($15,180and system
softwarethousands)
maintenanceAccounts
payableother¥240,008($2,443
thousands)(Note) 1. These 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.

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

(1) Principal shareholder and its subsidiaries
Relationship

CapitalNames ofcompanies¥
Address (thousands)

Principal
business

Japan Securities¥1,700,000
Clearing
Chuo-ku,
Corporation
Tokyo ($17,306(Subsidiary of
thousands)
other affiliates)

Clearing
securities

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

Commission Commission
incomeincome¥3,645,891($37,115
thousands)¥297,755
Accounts($3,031
receivablethousands)
trade(Note) 1. These 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.

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(2) Subsidiaries and affiliate
Relationship

CapitalNames ofcompanies¥
Address (thousands)

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

Tosho System¥100,000
Design &Koto-ku,
Service Co. Ltd.
($1,018 development ofTokyo(An affiliate)
thousands)
softwareDirectly
holds
20%

Two

Purchasing¥6,188,427
softwarePurchase of($62,999and system
softwarethousands)
maintenance——(Note) 1. These 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.

17. Earnings Per Share
The basis for calculating earnings per share for the years ended March 31, 2008 and 2009 is as follows:$ (thousands)¥ (thousands)
2008

2009

2009

Net income as reported in the consolidated statements of income¥1,547,702¥1,333,941$13,579

Net income pertaining to common stock shareholders¥1,547,702¥1,333,941$13,579

8,500

8,500

—

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

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Report of Independent Auditors
The Board of Directors and Shareholders ofJapan Securities Depository Center, Inc.
We have audited the accompanying consolidated balance sheets of Japan Securities Depository
Center, Inc. and its consolidated subsidiary as of March 31, 2009 and 2008, 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 audit.
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, Inc. and its consolidated
subsidiary at March 31, 2009 and 2008, and the consolidated results of their operations and their
cash flows for the years then ended in conformity with accounting principles generally accepted inJapan.
The U.S. dollar amounts in the accompanying consolidated financial statements with respect tothe year ended March 31, 2009 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 5.

June 17, 2009

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