Consolidated
Financial Statements

Consolidated Balance Sheets (As of March 31, 2012 and 2013)¥ (thousands)

2013

2013

¥ 7,794,677
3,163,166
171,898
47,168416,189
35,293,686
4,426(1,848)46,889,364¥ 5,433,419
3,146,777
180,864
240,051
134,935
28,935,881
30,745(6,767)38,095,907$ 57,771
33,458
1,923
2,552
1,434
307,664326(71)
405,060

Noncurrent Assets:
Property and Equipment:
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Tools and furniture
Accumulated depreciation
Tools and furniture, net
Lease assets
Accumulated depreciation
Lease assets, net
Total Property and Equipment

926,465(440,666)
485,798
5,713,609(5,105,378)
608,230
93,323(59,488)
33,834
1,127,863

957,512(498,484)
459,028
7,717,751(5,460,153)
2,257,598
93,323(82,145)
11,1772,727,803

10,180(5,300)4,880
82,060(58,055)
24,004
992
(873)
118
29,003

Intangible Assets:
Software
Software in progress
Lease assets
Other intangible assets
Total Intangible Assets

8,365,514
3,796,200
3,771
17,80812,183,294

3,632,949
11,438,204
902
17,692
15,089,748

38,627
121,6189
188
160,443

429,980
10,970407,456
503,534
30,6201,000(9,934)
1,373,627
14,684,786¥ 61,574,151

428,237
79,589519,615
503,534
32,1381,000(26,318)
1,537,797
19,355,349¥ 57,451,257

4,553
846
5,524
5,353
341
10
(279)
16,350205,798$ 610,858

ASSETS
Current Assets:
Cash and deposits
Accounts receivable—trade
Prepaid expenses
Consumption taxes receivable
Deferred tax assets
Designated assets for clearing funds (Note 1)
Other current assets
Allowance for doubtful accounts
Total Current Assets

42$ (thousands)

2012

Annual Report 2013

Investment and Other Assets:
Investment securities (Note 2)Long-term prepaid expenses
Deferred tax assets
Long-term refundable lease deposits
Claims provable in bankruptcy, rehabilitation and other
OthersAllowance for doubtful accounts
Total Investment and Other Assets
Total Noncurrent Assets
Total Assets
The accompanying notes are an integral part of these statements.

¥ (thousands)

2012
LIABILITIESCurrent Liabilities:
Accounts payable—trade
Lease obligations
Accounts payable—other
Income taxes payable
Allowance for employees’ bonuses
Allowance for executives’ bonuses
Consumption taxes payable
Deposits received for clearing funds (Note 1)
Allowance for loss on changes of system development policy
Other current liabilities
Total Current Liabilities

NET ASSETS
Shareholders’ Equity:
Common stock
Capital surplus
Retained earnings
Total Shareholders’ Equity
Total Net Assets
Total Liabilities and Net Assets

849,724
23,207
896,670
744,703
202,087
20,6002,575
35,293,686
700,592
67,48938,801,335¥

865,312
10,462
976,411
209,735
219,297
21,800—28,935,881—
83,90731,322,808

2013

$

9,200
111
10,381
2,230
2,331
231
—
307,664—892
333,044—
17,156383,304
30,000—67,121
497,582
39,298,917

2,000,000
6,693
442,447
30,000124,585
67,1212,670,846
33,993,655

21,265
71
4,704
318
1,324
713
28,398361,442

4,250,000
4,250,000
13,775,233
22,275,233
22,275,233¥ 61,574,151

4,250,000
4,250,000
14,957,602
23,457,602
23,457,602¥ 57,451,257

45,18845,188159,038
249,416
249,416$ 610,858

43
Annual Report 2013

Noncurrent Liabilities:
Long-term loans payable (Note 3)
Lease obligations
Allowance for employees’ retirement benefits
Allowance for executives’ retirement benefits
Allowance for assets removal
Long-term guarantee deposited
Total Noncurrent Liabilities
Total Liabilities¥$ (thousands)

2013Consolidated
Financial Statements

Consolidated Statements of Income and Comprehensive Income (For the years ended March 31, 2012 and 2013)¥ (thousands)

44
Annual Report 2013

Operating Revenue
Operating Expenses:
Executives’ compensations
Salaries
Allowance for employees’ bonuses
Allowance for executives’ bonuses
Retirement benefit expenses
Maintenance of systems
Depreciation and amortization
Rent
Advertising
Allowance for assets removal
OthersTotal Operating Expenses
Operating Income
Non-Operating Income:Interest income
Operational revenue on designated assets for clearing funds
Equity in earnings of an affiliate
OthersTotal Non-Operating Income
Non-Operating Expenses:
Interest expenses
Commitment fees
Commission fees
Fees for fund operation of designated assets for clearing fund
OthersTotal Non-Operating Expenses
Ordinary Income
Extraordinary Income:Reversal of allowance for loss on changes of system development policy
Total Extraordinary Income
Extraordinary Losses:
Loss on disposal of fixed assets (Note 1)
Loss on changes of system development policy (Note 2)
Total Extraordinary Losses
Income before Income Taxes and Minority Interests
Income taxes—current
Income taxes—deferred
Total Income Taxes
Income before Minority Interests
Net Income
Income before Minority Interests
Comprehensive Income(Comprehensive Income attributable to)Comprehensive income attributable to owners of the parent
Comprehensive income attributable to minority interests
The accompanying notes are an integral part of these statements.

$ (thousands)

2012¥ 19,698,237

2013¥ 17,316,021

2013$ 184,115¥¥$

194,378
1,621,253
202,087
20,600121,514
6,130,854
5,341,802
546,867
46,283—
1,762,423
15,988,063
3,710,173

196,847
1,608,082
219,297
21,800126,242
5,273,956
5,085,062
547,025
10,952
124,585
1,708,863
14,922,715
2,393,305

2,093
17,098
2,331
231
1,342
56,07654,067
5,816
116
1,324
18,169158,667
25,447

8
14,91020,151
6,323
41,393

6
11,878537
6,025
18,447

0
126
5
64
196

713
42,974—8,035
182
51,906
3,699,661

349
42,936
21,5007,443
1272,242
2,339,510

3
456
228
79
0
768
24,875——

216,433
216,433

2,301
2,301

5,763
1,067,384
1,073,148
2,626,513
1,212,473(64,219)
1,148,253
1,478,259
1,478,259
1,478,259¥ 1,478,259

62,669—62,6692,493,274
801,811
169,094970,906
1,522,368
1,522,368
1,522,368¥ 1,522,368

666
—
666
26,5108,525
1,797
10,323
16,186
16,186
16,186$ 16,186

1,478,259—

1,522,368—

16,186—

Consolidated Statements of Changes in Net Assets (For the years ended March 31, 2012 and 2013)¥ (thousands)

The accompanying notes are an integral part of these statements.

2013

2013

¥ 4,250,000——
4,250,000¥ 4,250,000——
4,250,000$ 45,188——
45,1884,250,000——
4,250,000

4,250,000——
4,250,000

45,188——45,188

12,636,974

13,775,233

146,467(340,000)
1,478,259
1,138,259
13,775,233(340,000)
1,522,368
1,182,368
14,957,602(3,615)
16,186
12,571
159,038

21,136,974

22,275,233

236,844(340,000)
1,478,259
1,138,259
22,275,233(340,000)
1,522,368
1,182,368
23,457,602(3,615)
16,186
12,571
249,416

21,136,974

22,275,233

236,844(340,000)
1,478,259
1,138,259¥ 22,275,233(340,000)
1,522,368
1,182,368¥ 23,457,602(3,615)
16,186
12,571$ 249,416

45
Annual Report 2013

Shareholders’ Equity
Common Stock:
Balance at the beginning of current period
Change of items during the period
Total change of items during the period
Balance at the beginning of current period
Capital Surplus:
Balance at the beginning of current period
Change of items during the period
Total change of items during the period
Balance at the end of current period
Retained Earnings:
Balance at the beginning of current period
Change of items during the period
Dividends from surplus
Net income
Total change of items during the period
Balance at the end of current period
Total Shareholders’ Equity:
Balance at the beginning of current period
Change of items during the period
Dividends from surplus
Net income
Total change of items during the period
Balance at the end of current period
Total Net Assets:
Balance at the beginning of current period
Change of items during the period
Dividends from surplus
Net income
Total change of items during the period
Balance at the end of current period$ (thousands)

2012Consolidated
Financial Statements

Consolidated Statements of Cash Flows (For the years ended March 31, 2012 and 2013)¥ (thousands)

46
Annual Report 2013

Cash Flows from Operating Activities:
Income before income taxes
Depreciation and amortization
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in allowance for employees’ bonuses
Increase (decrease) in allowance for executives’ bonuses
Increase (decrease) in allowance for employees’ retirement benefits
Increase (decrease) in allowance for assets removalInterest income
Interest expenses
Equity in loss (earnings) of affiliates
Foreign exchange losses (gains)
Reversal of allowance for loss on changes of system development policy
Loss on disposal of property and equipment
Loss on disposal of intangible assets
Loss on changes of system development policy
Decrease (increase) in accounts receivable—trade
Increase (decrease) in accounts payable—trade
OthersSub-totalInterest and dividends received
Interest paid
Settlement money paid
Income taxes paid
Net Cash Provided by Operating Activities
Cash Flows from Investing Activities:
Payments for purchase of property and equipment
Payments for purchase of intangible assets
Net Cash Used in Investing Activities
Cash Flows from Financing Activities:
Proceeds from long-term loans payable
Repayment of lease obligations
Cash dividends paid
Net Cash Used in Financing Activities
Effect of exchange rate changes on cash and cash equivalents
Increase (decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year (Note 1)
The accompanying notes are an integral part of these statements.

$ (thousands)

2012

2013

2013

¥ 2,626,513
5,341,802(5,655)18,990100
71,970—(8)713(20,151)(1,254)—
4,911
852
1,067,384
280,969
79,726
6,104
9,472,968
4,308
(713)
—
(1,361,122)
8,115,440¥ 2,493,274
5,085,062
21,303
17,2101,200
59,142
124,585
(6)
349
(537)
(582)
(216,433)
12,53650,132—
14,86915,587(301,878)
7,375,817
2,286
(349)
(484,159)(1,331,530)
5,562,065(284,317)(4,191,558)(4,475,876)(2,270,330)(7,290,367)(9,560,698)(24,139)(77,515)(101,655)—(22,789)(340,000)(362,789)
1,254
3,278,029
4,516,648¥ 7,794,677

2,000,000(23,207)(340,000)
1,636,792
582(2,361,257)
7,794,677¥ 5,433,419

21,265(246)(3,615)
17,403
6(25,106)
82,878$ 57,771$

26,51054,067
226
182
12
628
1,324
0
3
(5)
(6)
(2,301)
133
533
—
158
165
(3,209)78,42424(3)(5,147)(14,157)
59,139

Notes to the Consolidated
Financial Statements

Note on Going Concern’s Premise
None.

Basis of Preparation of the Consolidated
Financial Statements
1. Basis of Presentation
The accompanying consolidated financial statements havebeen compiled from the accounts maintained by Japan
Securities Depository Center, Inc. (“the Company”) and its
subsidiary in accordance with the provisions set forth in the
Financial Instruments and Exchange Act in conformity withaccounting principles and practices generally accepted inJapan, which are different in certain respects as to theapplication and disclosure requirements of International
Financial Reporting Standards.

3. Application of the Equity Method(1)	Number of associated companies accounted for by theequity method: One(2)	Name of the associated company accounted for by theequity method: Tosho System Services Co., Ltd. (“TSS”)(3)	The Company does not have any other associatedcompanies to which the equity method is not applied.
4. Fiscal Year of the Consolidated Subsidiary
The fiscal year-end of the consolidated subsidiary is the samedate as the consolidated balance sheet date.
5. Significant Accounting Policies(1)	Depreciation and amortization of major depreciable assets
q Property and equipment (excluding lease assets)	Depreciation of property and equipment excluding leaseassets is calculated using the straight-line method.
		 The major estimated useful lives are as follows:
			 Buildings and structures: 3–50 years
			 Tools and furniture: 2–15 years
w Intangible assets (excluding lease assets)
	Amortization of intangible assets is calculated using thestraight-line method.

e Lease assets
	The straight-line method is applied to the depreciation ofassets leased under finance leases without ownershiptransfer, over their respective lease term with zero
residual value.
		 The Company accounts for finance leases withoutownership transfer as operating leases if their transactioncommenced before April 1, 2008.
(2) Provision of major allowancesq Allowance for doubtful accounts
	Allowance for doubtful accounts is provided at an amountdetermined based on the Company’s historical averagecharge-off ratio for ordinary receivables, and estimates of
uncollectible amounts determined by reference to specificdoubtful receivables from customers which areexperiencing financial difficulties.
w Allowance for employees’ bonuses	Allowance for employees’ bonuses is provided for bonuses
attributable to each fiscal year based on the estimatedamount of the respective payments.
e Allowance for executives’ bonuses	Allowance for executives’ bonuses is provided for bonuses
attributable to each fiscal year based on the estimatedamount of the respective payments.
r Allowance for employees’ retirement benefits	Allowance for employees’ retirement benefits is provided at
the amount that would be payable by the Company if alleligible employees voluntarily terminated their employment
at the balance sheet dates.
t Allowance for executives’ retirement benefits	Allowance for executives’ retirement benefits is provided at
the amount that would be payable by the Company if alleligible executives terminated their appointment at thebalance sheet dates.
		 As of June 20, 2006, the executives’ retirement benefit
scheme has been abolished. Thus the balance of allowancefor executives’ retirement benefits represents the payableamount for executives who were appointed when thescheme existed, attributable to the period from their
appointment to the date of abolishment of the scheme.

47
Annual Report 2013

2. Consolidation
The accounts of all subsidiaries are included in the
consolidated financial statements.
(1) Number of consolidated subsidiaries: One(2)	Name of the consolidated subsidiary: JASDEC DVP
Clearing Corporation (“JDCC”)

		 Costs of software for internal use are capitalized andamortized over an estimated useful life of 5 years.

Notes to the Consolidated
Financial Statementsy Allowance for assets removal
	Allowance for assets removal is provided at the amountestimated to be incurred for the anticipated assets
dismantlement.
(3)	Scope of cash and cash equivalents for the consolidated
statements of cash flows
	Cash and cash equivalents include cash on hand, deposits
at demand, and short-term investments with a maturity of
three months or less carrying insignificant risk of any
fluctuation in market value.
(4) Consumption taxes
	Consumption taxes are excluded from income or expenses.

48
Annual Report 2013

6. U.S. Dollar Amounts
The accompanying consolidated financial statements are
expressed in yen, and solely for the convenience of the reader,have been translated into U.S. dollars at the rate of ¥94.05=U.
S.$1, the approximate rate of exchange prevailing at March
31, 2013. The approximate rate of exchange prevailing at May
31, 2013 is ¥101.18=U.S.$1. This translation should not be
construed as a representation that all amounts shown could
be converted into U.S. dollars at such rate.

The effects of this accounting change on income wereimmaterial.

Accounting Standards Applicable after theConsolidated Balance Sheet Date
None.

Changes in Presentation
None.

Changes in Accounting Estimates
Revision in the estimated useful lives of property, equipment
and software
Effective for the fiscal year ended March 31, 2013, theCompany revised the estimated useful lives of the property,
equipment and software disposal of which was anticipatedupon replacement by next-generation systems.
As a result of this revision, operating income, ordinary
income, and income before income taxes and minority
interests decreased by ¥573,004 thousand ($6,092 thousand)compared with what would have been with the previous
estimate useful lives.

Accounting Changes
Change in the depreciation method applied to property andequipment (excluding lease assets)
Through the fiscal year ended March 31, 2012, the Company
and its subsidiary had applied the declining-balance method
to calculate depreciation of property and equipment (excluding
lease assets) other than buildings and structures for which thestraight-line method was used. Effective for the fiscal year
ended March 31, 2013, the straight-line method is applied to
all property and equipment.
The Company reviewed the usage status of property andequipment of the Company and its subsidiary when thenumber of system investment projects showed considerable
increase. As a result, it was proved that most of the property
and equipment would be utilized constantly and stably, andthat the maintenance and repair expenses for these assets
would be incurred also at a constant level. Accordingly, theCompany judged that the straight-line method which equalizes
the depreciation expenses allocated over a certain period
should better reflect the economic positions of the Company
and its subsidiary, thus should calculate periodical profit andloss more appropriately.

Notes to the Consolidated Balance Sheets
1. ‌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 theprovisions set forth in JDCC’s general provisions inaccordance with Article 156-7, Paragraph 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 otherassets in accordance with JDCC’s general provisions andArticle 18 of the Cabinet Office Ordinance on Financial
Instruments Clearing Organization (Cabinet Office Ordinance
No. 76, 2002).

(2) Collateral securities	Under the DVP for NETDs settlement system, DVP
participants are able to entrust marketable securities listed
in JDCC’s general provisions (“collateral securities”) toensure 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 them in securities markets or
through other methods deemed appropriate by JDCC.
The market value of collateral securities entrusted to JDCC asof March 31, 2012 and 2013 was as follows:¥ (thousands)
As of March 31

Market valueof collateral securities
entrusted to JDCC

2012

2013

¥ 91,472,213 ¥ 92,917,708

2. Accounts Relating to the Associated Company
Accounts and their amounts relating to the associatedcompany were as follows:¥ (thousands)

Investment securities(equity securities)

2013

2013

¥ 429,980¥ 428,237$ 4,553

3. Overdraft Contracts and Commitment Line Agreements
To ensure agile and stable fundraising, the Company has
concluded overdraft contracts with four banks. In addition, forthe purpose of capital investment regarding development of
next-generation systems, the Company has concluded
commitment line agreements with four banks.
To prepare for a possible deficiency of funds due to adefault by DVP participants, JDCC has concluded
commitment line agreements with three banks, as part of aliquid fund for completing fund settlement on the required day.
The unused balances of these overdraft contracts andcommitment line agreements were summarized as follows:(1) Overdraft contracts¥ (thousands)

Aggregate maximum
amount of overdraft
amounts

2013

2013

¥ 7,000,000¥ 7,000,000$ 74,428

Amount used
Unused balance$ 987,960$ (thousands)

2012

As of March 31

—

—

—

¥ 7,000,000¥ 7,000,000$ 74,428(2) Commitment line agreements
q The Company¥ (thousands)$ (thousands)

2012

2013

2013

Aggregate amountof credit limit*—¥ 3,500,000$ 37,214

Amount used—

2,000,000

21,265

Unused balance—¥ 1,500,000$ 15,948

As of March 31

* The
‌
aggregate amount of credit limit for each respective period is summarized
as follows.

$ (thousands)

2013$ (thousands)

2012

As of March 31¥ (thousands)
Period$ (thousands)

Aggregate amount of credit limit

March 21, 2013–March 31, 2013

¥ 3,500,000$ 37,214

April 1, 2013–May 31, 2013

¥ 5,000,000$ 53,163

June 1, 2013–July 31, 2013

¥ 5,500,000$ 58,479

August 1, 2013–February 28, 2014

¥ 10,000,000$ 106,326

March 1, 2014–March 20, 2014

¥ 13,500,000$ 143,540

49
Annual Report 2013(1)	Participant fund specified assets and participant 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 aparticipant 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 of minimum participant funds required by JDCC’s
general provisions as of March 31, 2013 was ¥15,000,000
thousand ($159,489 thousand)). In the event a DVP
participant defaults on the required payment obligations of
the DVP for the NETDs settlement system, JDCC shall takedeposits from the participant fund of this DVP participant
to fulfill its obligations to other DVP participants.
		 The participant funds entrusted to JDCC will be
managed as money trusts, in line with the stated generalprovisions of JDCC.
		 These money trusts are evaluated at cost, as availablefor-sale securities with no market value.
		 Assets and liabilities pertaining to participant funds arepresented as Designated assets for clearing assets andDeposits received for clearing funds, respectively.

Notes to the Consolidated
Financial Statements

Notes to the Consolidated Statements ofIncome and Comprehensive Income

w JDCC¥ (thousands)

2012

As of March 31

Aggregate amountof commitment line
agreements

2013

2013

¥ 45,000,000 ¥ 45,000,000

Amount used—

Unused balance$ (thousands)$ 478,468—¥ 45,000,000 ¥ 45,000,000

1. Loss on Disposal of Noncurrent Assets
The following table shows details of loss on disposal of
noncurrent assets:¥ (thousands)—
For the years ended March 31$ 478,468

Buildings and structures$ (thousands)

2012

2013

2013

¥

¥

$

Tools and furniture

894

784

8

4,016

11,752

124

Software852

36,652389

Construction inprogress (software)—

13,480143¥ 5,763¥ 62,669

$ 666

Total

2. Loss on Changes in System Development Policies
Loss on changes in system development policies wasrecorded in the year ended March 31, 2012, the amount of
which represented the loss incurred due to changes in thedevelopment policies of the next-generation system that was
being developed.

50
Annual Report 2013

Notes to the Consolidated Statements of Changes in Net Assets
For the year ended March 31, 2012
1. Outstanding SharesClass of share

Ordinary shares

April 1, 2011

Increase

Decrease

March 31, 2012

8,500

—

—

8,500

Class ofshare

Total amount¥ (thousands)

Dividend
per share ¥Record date

Effective dateOrdinaryshares¥ 340,000¥ 40,000March 31, 2011

June 21, 2011

2. Treasury Stock
None.
3. Stock Subscription Rights and Other Securities
None.
4. Dividends(1) Payment of the dividends
Resolution

Ordinary General
Shareholders Meeting (June 20, 2011)(2)	Dividends for which the record date is in the year ended March 31, 2012 and for which the effective date is in the year ended
March 31, 2013
Resolution

Ordinary General
Shareholders Meeting (June 18, 2012)

Class ofshare

Payment source

Total amount¥ (thousands)

Dividend
per share ¥Record date

Effective dateOrdinarysharesRetainedearnings¥ 340,000¥ 40,000March 31, 2012

June 19, 2012

For the year ended March 31, 2013
1. Outstanding SharesClass of share

Ordinary shares

April 1, 2012

Increase

Decrease

March 31, 2013

8,500

—

—

8,500

2. Treasury Stock
None.
3. Stock Subscription Rights and Other Securities
None.
4. Dividends(1) Payment of the dividends
Resolution

Ordinary General
Shareholders Meeting (June 18, 2012)

Class ofshare

Total amount¥ (thousands)

Dividend
per share ¥Record date

Effective dateOrdinaryshares¥ 340,000($ 3,615 thousand)¥ 40,000($ 425)

March 31, 2012

June 19, 2012(2)	Dividends for which the record date is in the year ended March 31, 2013 and for which the effective date is in the year ending
March 31, 2014
Resolution

Payment source

Total amount¥ (thousands)

Dividend
per share ¥Record date

Effective dateOrdinarysharesRetainedearnings¥ 340,000($ 3,615 thousand)¥ 40,000($ 425)

March 31, 2013

June 18, 2013

Notes to the Consolidated Statementsof Cash Flows

Lease Transactions

1. ‌The Balance of Cash and Cash Equivalents and Its
Reconciliation to the Balance of Cash and Deposits in theConsolidated Balance Sheets¥ (thousands)$ (thousands)

2012

2013

2013

Cash and deposits¥ 7,794,677¥ 5,433,419$ 57,771

Cash andcash equivalents

7,794,677

5,433,419

57,771

As of March 31

1. Finance Lease Transactions
Finance lease transactions that do not transfer the ownershipof the leased assets to the lesseeq Leased assetsa)	Property and equipment: Mainly backup system
hardwareb) Intangible assets: Mainly backup system software
w Depreciation method
	As described in Basis of Preparation of the Consolidated
Financial Statements, 5. Significant Accounting Policies, (1)Depreciation and amortization of major depreciable assets.
Finance lease transactions other than those in which theownership of the leased assets is transferred to the lessee thatcommenced before April 1, 2008 continue to be accounted for
as operating lease transactions. The followings are theamounts which would have been recorded as finance leases
as of March 31, 2012 and 2013 and for the years then ended:

Annual Report 2013

Ordinary General
Shareholders Meeting (June 17, 2013)

Class ofshare

51

Notes to the Consolidated
Financial Statements(1)	Acquisition cost, accumulated depreciation andnet book value¥ (thousands)$ (thousands)

2012

2013

2013

¥ 1,882,666¥—$—

As of March 31

2. Operating Lease Transactions
Minimum lease payment on the operating lease transactions
that are not cancellable
None.

Tools and furniture:
Acquisition cost
Accumulated
depreciation(1,688,262)

—

—

¥

194,403¥—$—¥

216,774¥—$—(195,094)——

21,679¥—$—Acquisition cost

¥ 2,099,440¥—$—

Accumulated
depreciation(1,883,356)——

216,083¥—$—

Net book value

Financial Instruments
1. General Information on Financial Instruments(1) Basic policies for financial instruments
	The Company limits financial investment to short-term
deposits, and fundraising to borrowings from banks
and others.

Software:Acquisition cost
Accumulated
depreciation
Net book value¥

Total:Net book value

52¥(2) Minimum lease payment including interest thereon¥ (thousands)$ (thousands)

2012

2013

2013

Due within one year

¥ 218,847¥—$—

Due over one year

—

—

—

¥ 218,847¥—$—

As of March 31

Annual Report 2013

Total(3)	Finance lease charges, depreciation expenses andinterest portions¥ (thousands)$ (thousands)

For the years ended March 31

2012

2013

2013

Finance lease charges¥ 426,663¥ 219,193$ 2,330

Depreciation expenses

419,887

216,083

2,297

2,713

346

3

Interest portions(4)	Methods applied in calculating depreciation expenses andinterest portions
	Methods applied in calculating depreciation expenses:
Straight-line method with zero residual value over the lease
contract period		 Methods applied in calculating interest portions:
Computed as the difference between the lease obligations
and the acquisition cost equivalents, allocated over therespective lease term based on the interest rate method.
Loss on impairment of leased assets
There was no impairment loss allocated to leased assets forthe years ended March 31, 2012 and 2013.

(2)	Details and risks of financial instruments and the risk
control system	Accounts receivable—trade are subject to credit risks ofparticipants in the book-entry transfer system. The
Company continuously monitors the financial conditions of
the participants.
		 Designated assets and deposits received for clearing
funds are assets and liabilities that are held to secure the
DVP for NETDs settlement system.
		 Most of the accounts payable—trade are due within
3 months.
		 Long-term borrowings aim mainly at capital investment
regarding development of next-generation systems, andmature on or before March 31, 2018. As they carry variableinterest rates, they are subject to interest volatility risk.
2. Estimated Fair Value of Financial Instruments
The following table presents carrying amount on the
consolidated balance sheet, fair value, and difference between
carrying amount and fair value as of March 31, 2012 and 2013.
It does not, however, include those for financial instruments
for which the fair value is extremely difficult to estimate (seeNote 2).

As of March 31, 2012
¥ (thousands)
Carrying amount on
the balance sheet(1) Cash and deposits¥(5) Deposits received for clearing funds
Liabilities total

Difference—

3,161,320

3,161,320—

35,293,686

35,293,686—¥ 46,249,684¥ 46,249,684

—

¥

¥

—

(1,845)(3) Designated assets for clearing funds(4) Accounts payable—trade¥

3,163,166

Allowance for doubtful accounts*

Assets total

Fair value

7,794,677(2) Accounts receivable—trade

7,794,677(849,724)(849,724)(35,293,686)(35,293,686)—¥ (36,143,410)¥ (36,143,410)—* Allowance for doubtful accounts is deducted from Accounts receivable—trade.

As of March 31, 2013
¥ (thousands)$ (thousands)¥ (thousands)

Carrying amount on the balance sheet(1) Cash and deposits¥(2) Accounts receivable—trade

5,433,419
3,146,777

Allowance for doubtful accounts*(3) Designated assets for clearing funds(4) Accounts payable—trade

57,771¥

5,433,419

Difference$

57,771—

33,386—33,458(6,762)(71)

3,140,015

33,38653
3,140,015

28,935,881

307,664

28,935,881

307,664—¥ 37,509,316$ 398,823¥ 37,509,316$ 398,823

—

¥

$

¥

$

(9,200)—(5) Deposits received for clearing funds(28,935,881)(865,312)(307,664)(9,200)(28,935,881)(865,312)(307,664)—(6) Long-term loans payable(2,000,000)(21,265)(2,000,000)(21,265)

Liabilities total¥ (31,801,193)$ (338,130)¥ (31,801,193)$ (338,130)—* Allowance for doubtful accounts is deducted from Accounts receivable—trade.

Notes:
1. Calculation methods for fair value of financial instruments(1)	Cash and deposits, (2) Accounts receivable—trade, and (4)Accounts payable—trade:	The book value was deemed to be fair value for these items
since the book value approximates fair value because of
the short settlement period.
(3)	Designated assets for clearing funds, and (5) Deposits
received for clearing funds:
	The book value was deemed to be fair value since these
items represent assets and liabilities reflecting their roles inmaintaining a stable securities trading environment for the
DVP for NETDs settlement system.
(6) Long-term loans payable:
	The book value was deemed to be fair value since they
carry contracted variable interest rates which reflect market
interest rates, thus the book value approximates fair value.

2. ‌Financial instruments the fair value of which is extremely
difficult to estimate(As of March 31)
Category

Affiliated companies’ stocks¥ (thousands)$ (thousands)

2012

2013

2013

¥ 429,980¥ 428,237$ 4,553

These financial instruments are excluded from the above tablebecause their market quotes are not available thus their fairvalue is deemed to be extremely difficult to estimate.
3. ‌Estimated redemptions for monetary claims and securities
with maturities after the consolidated balance sheet date
All deposits and accounts receivable—trade in the above table
have settlement dates within one year.
4. ‌Maturity analysis for long-term borrowings and leaseobligations as of March 31, 2013
Please refer to “Details of Borrowings” in the Consolidated
Supplementary Schedules.

Annual Report 2013

Assets total$$ (thousands)

Fair valueNotes to the Consolidated
Financial Statements

Securities

Income Taxes

None.

1. Breakdown of Deferred Tax Assets¥ (thousands)

Derivative Transactions
The Company and its consolidated subsidiary did not engage
in derivative transactions.

Employees’ Retirement Benefits
1. Outline of Retirement Benefit Schemes Adopted
The Company and its subsidiary adopt a lump-sum retirement
allowance scheme and a defined contribution pension plan.

2013(As of March 31)

Accrued business tax¥ 56,458¥ 23,356

Allowance for
employees’ bonuses

76,813

83,354

886

Business facility taxes

3,961

4,056

43

Accrued social
insurance premiums

10,513

11,614123

Allowance for loss
on changes in systemdevelopment policies

266,295——

54¥ (thousands)$ (thousands)

2012

2013

2013

¥ 383,304¥ 442,447$ 4,704

Allowance for employee’s
retirement benefits¥ 383,304¥ 442,447$ 4,704

Annual Report 2013

3. Net Periodic Benefit Costs
Years ended March 31
Category

Service cost
Other*Net periodic benefit costs¥ (thousands)$ (thousands)

2012

2013

2013

¥ 74,157¥ 77,839

47,356

48,403514¥ 121,514¥ 126,242$ 1,342$827* ‌“Other” represents the amount of contribution to the defined contribution
pension plan.

4. Actuarial Assumptions
Not applicable.

Stock Options
Not applicable.

$

248

2,146

12,553133¥ 416,189¥ 134,935$ 1,434

Allowance for
employees’
retirement benefits

136,609

157,688

1,676

Allowance for executives’retirement benefits

10,692

10,692

113

Excess depreciationof noncurrent assets

257,231

293,455

3,120

Excess amortizationof deferred charges
for tax purposes

9,839

7,502

79

—

47,354503

Subtotal

Retirement benefit
obligation

Category

2013

Deferred tax assets—
current:

Other

2. Retirement Benefit Obligation$ (thousands)

2012

As of March 31

Deferred tax assets—
noncurrent:

Allowance forassets removal
Other

3,776

13,614

144(10,692)(10,692)(113)

Subtotal¥ 407,456¥ 519,615$ 5,524

Total deferred
tax assets¥ 823,645¥ 654,551$ 6,959

Valuation allowance

2. ‌Reconciliation between the nominal statutory income tax
rate and the effective income taxes rate
The effective tax rates for the years ended March 31, 2012 and2013 differ from the Company’s statutory tax rates for thefollowing reasons:
For the years ended March 31

2012

2013

Statutory tax rate

40.7%

38.0%

0.6

0.6

Inhabitants’ per capita taxes

0.2

0.2

Other

(0.3)

0.1

Reduction of deferred tax assets
due to changes in statutory tax rate

2.5

—

43.7%

38.9%

(Reconciliation)
Entertainment expenses andother items not deductible permanently

Effective tax rates

Business Combinations

For the year ended March 31, 2013
1. Information by Product or Service
The Company omitted information by product or service
because operating revenues from external customers in one
business product or service exceeded 90% of total operating
revenues recorded in consolidated statements of income andcomprehensive income.

None.

Asset Retirement Obligations
None.

2. Information on Geographic Areas(1) Operating revenues	Disclosure is omitted because the Company had no
operating revenues from external customers in overseas.

Investment and Rental Property
None.

Segment Information
Segment Information
The Company and its subsidiary have one business segmentof Book-entry Transfer of Securities, therefore omitted thesegment information.

2. Information on Geographic Areas(1) Operating revenues	Disclosure is omitted because the Company had no
operating revenues from external customers in overseas.
(2) Property and equipment
	Disclosure is omitted because the Company had noproperty and equipment in overseas.
3. Information by Major Customers
Name of the customers

Operating revenues¥ (thousands)

Related segment

Japan Securities
Clearing Corporation¥2,163,412

Book-entry Transfer
of Securities

3. Information by Major Customers
Name of thecustomers

Operating revenues¥ (thousands) $ (thousands)

Japan Securities¥ 1,755,569
Clearing Corporation$ 18,666

Related segment

Book-entry Transfer
of Securities

Disclosure of Information on Impairment Loss on Noncurrent
Assets by Reportable Segment
None.
Disclosure of Information on Amortization and Year-end
Balance of Goodwill by Reportable Segment
None.
Disclosure of Information on Gain on Negative Goodwill by
Reportable Segment
None.

55
Annual Report 2013

Related Information
For the year ended March 31, 2012
1. Information by Product or Service
The Company omitted information by product or service
because operating revenues from external customers in one
business product or service exceeded 90% of total operating
revenues recorded in consolidated statements of income andcomprehensive income.

(2) Property and equipment
	Disclosure is omitted because the Company had noproperty and equipment in overseas.

Notes to the Consolidated
Financial Statements

Related Party Information
1. Transactions with Related Parties(1) Transactions between the Company and the related partiesa) Unconsolidated subsidiaries and associated companies
For the year ended March 31, 2012Type

Names ofcompanies

Address

Tosho
Associated System Chuo-ku,
company Service
Tokyo
Co. Ltd.

Capital¥ (thousands)

Percentage ofvoting rightowning/owned

Principal
business

Design and¥100,000 developmentof software

20%
owningdirectly

BusinessrelationshipTransactions

Amount¥ (thousands)

Descriptions

Payment ofcomputer
Accounts
Purchasing¥ 1,777,388
payable—trade
software and maintenancefeesystemmaintenance Purchase of
Account¥ 1,376,281
softwarepayable—other

Balance at
end of period¥ (thousands)¥ 145,541¥ 170,247

For the year ended March 31, 2013Type

Names ofcompanies

Address

Capital¥ (thousands)

Percentage ofvoting rightowning/owned

Principal
business

Businessrelationship

56
Annual Report 2013

Tosho
¥100,000 Design and
Associated System Chuo-ku,($1,063 development
company Service
Tokyo
thousand) of software
Co. Ltd.

20%
owningdirectly

Transactions

Amount¥ (thousands)

Descriptions

Balance at
end of period¥ (thousands)

Payment of¥1,600,293
computer
Accounts($17,015
maintenancepayable—trade
thousand)fee¥154,676($1,644thousand)¥1,144,764
Accounts($12,171
payable—otherthousand)¥101,150($1,075
thousand)Purchasing
software and Purchase of
systemsoftwaremaintenance
Payment ofsettlementmoney (*3)¥484,159($5,147thousand)——

Notes:
1. The transaction amounts above exclude consumption taxes, while end balances include consumption taxes.
2. The terms and conditions of the above transactions are on an arm’s-length basis.
3. Settlement money was paid upon settlement of arbitration.

b) ‌Corporations that share the same parent company with the Company, subsidiaries of other affiliated companies of theCompany, and others
For the year ended March 31, 2012Type

Names ofcompanies

Address

Capital¥ (thousands)

Principal
business

SubsidiaryJapanof other
Securities Chuo-ku,
Clearing¥4,850,000
affiliatedClearingTokyo
securities
companies Corporation

Percentage ofvoting rightowning/owned—

BusinessrelationshipTransactions

Amount¥ (thousands)

Descriptions

Balance at
end of period¥ (thousands)

Commission Commission
Accounts¥2,163,412
incomeincomereceivable—trade¥255,871

Businessrelationship

Balance at
end of period¥ (thousands)

For the year ended March 31, 2013Type

Names ofcompanies

Address

Capital¥ (thousands)

Principal
business

SubsidiaryJapan¥7,350,000
of other
Securities Chuo-ku,
Clearing($78,149
affiliatedClearingTokyo
securities
thousand)companies Corporation

Percentage ofownership withvoting right—Transactions

Commission Commission
incomeincomeNotes:
1. The transaction amounts above exclude consumption taxes, while end balances include consumption taxes.
2. The terms and conditions of the above transactions are on an arm’s-length basis.

Amount¥ (thousands)

Descriptions¥1,755,569¥249,107
Accounts($18,666($2,648
receivable—trade
thousand)thousand)c) Executives, major shareholders and others of the Company (individuals only)
For the year ended March 31, 2012
None.
For the year ended March 31, 2013Type

Names ofcompanies

Address

Capital¥ (thousands)

Principal
business

Percentage ofvoting rightowning/owned

Businessrelationship

The Bank¥1,711,958,104
of Tokyo- Chuo-ku,($18,202,638 Banking
Mitsubishi Tokyo
thousand)UFJ, Ltd.

Commission
5% owned income anddirectly
borrowingof funds

Banking

Commission
5% owned income anddirectly
borrowingof funds

Corporation
where
executivesof theCompany holdrepresentative Mitsubishi¥324,279,038
posts
UFJ Trust Chuo-ku,($3,447,942
and Banking Tokyo
thousand)Corporation

Transactions

Amount¥ (thousands)

Descriptions

Balance at
end of period¥ (thousands)

Borrowingof funds¥600,000($6,379
thousand)Long-termloans payable¥600,000($6,379
thousand)

Payment
of interest¥15($0
thousand)——Borrowingof funds¥300,000($3,189
thousand)Long-termloans payable¥300,000($3,189
thousand)

Payment
of interest¥7($0
thousand)——Note: The terms and conditions of the above transactions are on an arm’s-length basis.

57
Annual Report 2013

(2) Transactions between consolidated subsidiary of the Company and the related parties
None.
2. Notes on the Parent Company and Important Affiliated Companies
None.

Special Purpose Entities Subject to Disclosure
None.

Per Share Information
¥

$

2012

2013

2013

Net assets per share¥ 2,620,615.75¥ 2,759,717.91$ 29,343.09

Net income per share¥¥$ 1,904.32

As of/for years ended March 31

173,912.87

179,102.15

Notes:
1. Diluted net income per share is not presented because no shares with potential dilutive effect were outstanding.
2. The basis for calculating net assets per share as of March 31, 2012 and 2013 is as follows:¥ (thousands)
As of March 31

Total net assets as reported in the consolidated balance sheets
Amount to be deducted from total net assets
Net assets pertaining to common stock shareholders
Number of common stock shares outstanding as of the consolidatedbalance sheet dates used to calculate net assets per share (in shares)$ (thousands)

2012

2013

2013

¥ 22,275,233¥ 23,457,602$ 249,416———¥ 22,275,233¥ 23,457,602$ 249,416

8,500

8,500

—

Notes to the Consolidated
Financial Statements

3. T he basis for calculating net income per share for the years ended March 31, 2011 and 2012 is as follows:¥ (thousands)
For years ended March 31

Net income as reported in the consolidated statements of income

2013

2013

¥ 1,478,259¥ 1,522,368$ 16,186

Net income not pertaining to common stock shareholders
Net income pertaining to common stock shareholders
Weighted-average number of common stock
shares outstanding during the period (in shares)$ (thousands)

2012
—

—

—

¥ 1,478,259¥ 1,522,368$ 16,186

8,500

8,500

—

Subsequent Events
None.

[Consolidated Supplementary Schedules]
Details of Bonds
None.

58
Annual Report 2013

Details of Borrowings¥ (thousands)
Category

Short-term borrowings
Long-term loans payable due within one year
Lease obligations due within one year
Long-term loans payable due over one year
Lease obligations due over one year
Other interest-bearing debts
Total$ (thousands)¥ (thousands)$ (thousands)

Balance as of April 1, 2012

Balance as of March 31, 2013

¥

¥

—

$ —

—

—

23,207—$

Averageinterest rate (%)

Maturity

—

—

—

—

—

—

—

246

10,462

111

0.4%

—

—

—

2,000,000

21,265

1.1%

April 3, 201717,156

182

6,693

71

0.4%

April 1, 2013 – July 31, 2015

—

—

—

—

—

—

¥ 40,363$ 429¥ 2,017,156$ 21,447——

Notes:
1. Average interest rate above represents the weighted-average of the interest rates applicable to the balances as of March 31, 2013.
2. Aggregate‌annual maturities of long-term loans payable and lease obligations due over one year for five years subsequent toMarch 31, 2013 are as follows:
Due
Category

Long-term loans payable
Lease obligations

April 1, 2014–
March 31, 2015

April 1, 2016–
March 31, 2017

April 1, 2017–
March 31, 2018

¥ (thousands)

—

—

—

¥ 2,000,000$ (thousands)

—

—

—

$ 21,265¥ (thousands)¥ 10,462¥ 5,880¥ 812—$ (thousands)

$ 111

$ 62

$8

—

Details of Asset Retirement Obligations
None.

April 1, 2015–
March 31, 2016

Independent
Auditor’s Report59
Annual Report 2013