Consolidated Balance Sheets
Japan Securities Depository Center, Inc.
As of March 31, 2005 and 2006

2005

2006

$ (thousands)(Note 4)2006

¥ 1,203,318
4,056,477
50,47054,570,594
266,278
60,147,137¥ 1,839,815
3,625,987
202,807
49,970,274
183,106
55,821,992$ 15,636
30,817
1,723
424,700
1,556
474,434

756,824
4,190,155
4,946,979(2,830,335)
2,116,644

776,667
4,138,412
4,915,079(3,163,263)
1,751,816

6,600
35,172
41,773(26,884)
14,8889,694,192
920,785
10,462
10,625,439

9,679,743
611,745
10,766
10,302,254

82,2685,199
91
87,559509,657
31,999154,948
696,604¥73,585,824

464,904
35,456140,958
641,320¥68,517,382

3,951
301
1,198
5,450
$582,333¥ 2,281,906
4,500,000
26,223
115,199
160,541
54,570,594
363,243
62,017,706¥ 1,826,047—
1,555,985
129,554240,382
49,970,274
302,698
54,024,942$ 15,519—
13,224
1,101
2,043
424,700
2,572
459,161

52,24955,260107,509
62,125,215—

79,50860,840140,348
54,165,290
—

675
517
1,192
460,354—

4,250,000
4,250,000
2,960,609
11,460,609¥73,585,824

4,250,000
4,250,000
5,852,092
14,352,092¥68,517,382

36,121
36,12149,737
121,979$582,333¥ (thousands)

AssetsCurrent Assets:
Cash and cash equivalents
Accounts receivable—trade
Deferred income taxes (Note 8)
Designated assets for clearing funds (Note 3)
Other current assets
Total Current Assets
Property and Equipment:
Buildings
Tools and furniture
Less: Accumulated depreciation
Total Property and Equipment
Intangible Assets, Net:
SoftwareConstruction in progress (software)
Other intangible assets
Total Intangible Assets
Investment and Other Assets:Long-term refundable lease deposits
Long-term prepaid expenses
Deferred income taxes (Note 8)
Total Investment and Other Assets
Total Assets

Liabilities and Shareholders’ Equity
Current Liabilities:
Accounts payable—trade
Short-term debt (Note 6)
Income taxes payable
Accrued employees’ bonuses
Consumption tax payable
Deposits received for clearing funds (Note 3)
Other current liabilities
Total Current Liabilities
Long-term Liabilities:
Accrued employees’ retirement benefits (Note 7)
Accrued executives’ retirement benefits
Total Long-term Liabilities
Total Liabilities
Minority Interest in Subsidiaries
Shareholders’ Equity:
Common stock
Authorized: 10,000 shares
Issued: 8,500 shares
Capital surplus
Retained earnings
Total Shareholders’ Equity
Total Liabilities and Shareholders’ Equity
The accompanying notes are an integral part of these statements.

19

Consolidated Statements of Income
Japan Securities Depository Center, Inc.
For the years ended March 31, 2005 and 2006

2005

2006

$ (thousands)(Note 4)
2006

Operating Income¥19,003,966¥21,745,176$184,813

Operating Expenses:
Executives’ compensation
Salaries and bonuses
Severance costs for employees
Executives’ retirement benefits
Maintenance for systems
Outside services
Registration fees
Depreciation and amortization
Rent
Advertisement
OthersTotal Operating Expenses
Income from Operations

135,545
1,240,492
26,643
21,4104,871,921
2,688,531
2,302,067
3,923,948
290,398
463,429
1,127,454
17,091,838
1,912,128

142,293
1,433,418
39,86020,3704,734,433
2,539,628
2,202,171
3,732,944
416,600
420,613
1,206,912
16,889,247
4,855,929

1,209
12,182338
173
40,23821,584
18,716
31,726
3,540
3,574
10,257
143,542
41,270

34

0

0

478
77,617(65,616)(33,294)508—(31,457)(38,095)

4
—
(267)
(323)

(8,984)(55,038)(192,285)(27,923)588(304,423)
1,607,705(9,609)(35,548)(6,445)—226(120,420)
4,735,509

(81)
(302)
(54)
—
1
(1,023)40,247

602,519(45,058)¥ 1,050,244

1,752,475(138,348)¥ 3,121,382

14,894(1,175)$ 26,528¥ (thousands)

Other Income (Expenses):
Interest income
Operational revenue on the designated assets
for clearing funds
Adjustments for prior year consumption taxes
Interest expenses
Commitment fees
Fees for fund operation of designated assets
for clearing funds
Loss on disposal of property and equipment
Loss on disposal of intangible assets
Cancellation fee for system operations
Others, net
Total
Income before Income Taxes
Income Taxes (Note 8)
Current
Deferred
Net Income

U.S. dollars(Note 4)Yen

Per Share (Note 11):Net income—primary
Dividends
Weighted-average number of common stock shares
outstanding (in shares)
The accompanying notes are an integral part of these statements.

20¥121,511.06
25,000¥365,197.98
35,000$3,103.84
297.46

8,500

8,500

—

Consolidated Statements of Shareholders’ Equity
Japan Securities Depository Center, Inc.
For the years ended March 31, 2005 and 2006
¥ (thousands)

Balance as of March 31, 2004
Net income for the year
Cash dividends
Bonuses to executives
Balance as of March 31, 2005
Net income for the year
Cash dividends
Bonuses to executives
Balance as of March 31, 2006

Number ofcommon stock
sharesCommonstock

CapitalsurplusRetainedearnings

Total
shareholders’equity

8,500
—
—
—
8,500
—
—
—
8,500

¥4,250,000———
4,250,000———¥4,250,000¥4,250,000———
4,250,000———¥4,250,000¥2,136,565
1,050,244(212,500)(13,700)
2,960,609
3,121,382(212,500)(17,400)¥5,852,092¥10,636,565
1,050,244(212,500)(13,700)
11,460,609
3,121,382(212,500)(17,400)¥14,352,092$ (thousands) (Note 4)

Balance as of March 31, 2005
Net income for the year
Cash dividends
Bonuses to executives
Balance as of March 31, 2006

Number ofcommon stock
sharesCommonstock

CapitalsurplusRetainedearnings

Total
shareholders’equity

8,500
—
—
—
8,500

$36,121———$36,121$36,121———$36,121$25,162
26,528(1,806)(147)$49,737$ 97,404
26,528(1,806)(147)$121,979

The accompanying notes are an integral part of these statements.

21

Consolidated Statements of Cash Flows
Japan Securities Depository Center, Inc.
For the years ended March 31, 2005 and 2006
¥ (thousands)
2005

2006

Cash Flows from Operating Activities:
Income before income taxes
Depreciation and amortization
Increase in accrued employees’ bonuses
Increase in accrued employees’ retirement benefits
Increase in accrued executives’ retirement benefits
Interest income
Interest expense
Loss on disposal of property and equipment
Loss on disposal of intangible assets(Increase) decrease in accounts receivable—trade
Increase (decrease) in accounts payable—trade
Decrease (increase) in other assets
Increase in other liabilities
Others, net
Sub-totalInterest and dividends received
Interest paid
Income taxes paid
Income taxes refund
Net Cash Provided by Operating Activities¥ 1,607,705
3,923,948
14,524
19,386
12,090(34)
65,61655,038
192,285(253,428)
435,044
3,308
122,028(13,697)
6,183,813
34(64,009)(1,327,274)—
4,792,564¥ 4,735,509
3,732,944
14,35527,2595,580(0)31,45735,5486,445
430,490(455,858)(15,916)
136,111(17,400)
8,666,527
0(18,151)(257,216)
76,412
8,467,571$ 40,247
31,726
122
231
47
(0)
267
302
54
3,658
(3,874)
(135)
1,156
(147)
73,6570(154)(2,186)649
71,966

Cash Flows from Investing Activities:
Payments for purchases of property and equipment
Payments for purchases of intangible assets
Payment of guarantee money deposits received
Proceeds from refund of guarantee money deposits
Net Cash Flows Used in Investing Activities(1,130,647)(3,394,399)(85,037)—(4,610,083)(255,017)(2,908,309)(19,399)
64,151(3,118,574)(2,167)(24,717)(164)
545(26,504)

Cash Flows from Financing Activities:
Proceeds from short-term debt
Repayment of short-term debt
Cash dividends paid
Net Cash Flows Used in Financing Activities

1,000,000(1,500,000)(212,500)(712,500)—(4,500,000)(212,500)(4,712,500)—(38,245)(1,806)(40,051)

Net (Decrease) Increase in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year

(530,019)
1,733,337¥ 1,203,318

636,497
1,203,318¥ 1,839,815

5,409
10,227$ 15,636

The accompanying notes are an integral part of these statements.

22$ (thousands)(Note 4)2006

Notes to the Consolidated Financial Statements
Japan Securities Depository Center, Inc.

1.
Basis of Presenting the Consolidated Financial Statements

The accompanying consolidated financial statements have been prepared from the accounts maintained by Japan
Securities Depository Center, Inc (“the Company”) and its subsidiary in accordance with the provisions set forth in the
Securities and Exchange Law and in conformity with accounting principles and practices generally accepted in Japan,
which are different in certain respects as to application and disclosure requirements of International Finance ReportingStandards. Certain items presented in the consolidated financial statements filed with the Director of the Kanto Local
Finance Bureau in Japan have been reclassified for the convenience of readers outside Japan.

2.
Summary of Significant Accounting Principles(1) Consolidation
The consolidated financial statements include the accounts 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 uses a fiscal year ended on March 31, which is the same as that of the Company.
(2) Cash and cash equivalents
Cash and cash equivalents include all highly liquid investments, with original maturities of three months or less,which are readily convertible to known amounts of cash and are so near maturity that they present only an
insignificant risk of changes in value because of changes in interest rates. Cash and cash equivalents in consolidated balance sheets and consolidated statement of cash flows are identical in the financial statements.
(3) Property and equipment
Depreciation for buildings, excluding improvements, is computed on the straight-line method using the estimateduseful lives prescribed by Japanese Corporate Tax Laws. Depreciation for other capital assets is computed on the
declining-balance method at the rates based on the estimated useful lives prescribed by such laws.
(4) Software cost
Costs of software for internal use are capitalized and amortized on the straight-line method over the estimated useful life of five years.
(5) Accrued bonuses
Accrued employees’ bonuses represent liabilities estimated as of the balance sheet date. Bonuses to directors,
which are subject to approval at the shareholders’ meeting, are accounted for as an appropriation of retained
earnings.
(6) Severance indemnity benefits
The Company has a severance indemnity plan covering all employees who meet the eligibility requirements of theCompany’s retirement regulations. The Company records accrued employees’ retirement benefit costs based on theamount that would be payable if all eligible employees voluntarily terminated their employment with the Company
at the balance sheet date.
Retirement benefits payable to directors and statutory auditors are accrued as accrued executives’ retirement
benefits at the amount computed based on the Company’s internal rules and regulations on these benefits.
(7) Finance leases
In the normal course of business, the Company enters into lease agreements. Finance lease agreements, except for
those agreements where the ownership of the leased assets is transferred to the Company, are accounted for as
operating leases.
(8) Accounting standard for impairment of non-current assets
On August 9, 2002, the Business Accounting Council in Japan issued “Accounting Standard for Impairment of
Non-current Assets”. The standard requires that non-current assets be reviewed for impairment whenever events orchanges in circumstances indicate that the carrying amount of assets may not be recoverable. An impairment loss isrecognized in the income statement by reducing the carrying amount of impaired assets or a group of assets to the23Notes to the Consolidated Financial Statements

recoverable amount to be measured as the higher of net selling price and value in use. However, earlier adoption
was permitted for fiscal years beginning April 1, 2004 and for fiscal years ending between March 31, 2004 andMarch 30, 2005. The Company has applied this new standard as well as “Guidance for Accounting Standards for
Impairment of Non-current Assets” (the Accounting Standards Board of Japan issued Financial AccountingStandards Implementation Guidance No. 6, October 31, 2003) for the fiscal year ended March 31, 2006. The
Company’s profit and loss are not influenced by this standard.
(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 on its purchases 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 or a liability, as the case may be, and the net balance is shown in the balance sheets.
(10) Appropriation of retained earnings
Under the Japanese Commercial Code and the Articles of Incorporation of the Company, the appropriation ofretained earnings (including year-end cash dividend payments proposed by the Board of Directors) must be
approved at the shareholders’ meeting, which must be held within three months of the end of each financial year.
The appropriation of retained earnings reflected in the accompanying consolidated financial statements represents
the results of appropriations which were applicable to the immediately preceding financial year, approved at theshareholders’ meeting and disposed of during that year. Year-end cash dividends are paid to shareholders on theshareholders’ register at the end of each financial year.
The payment of bonuses to directors and statutory auditors is made out of retained earnings instead of being
charged to income for the year, and constitutes a part of the appropriations cited above.

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 a party who undertakes securities obligations in accordance with the provisions set in JDCC’s general provisions in accordance with Article 156, Paragraph 7-1, of the Securities Exchange Law(Law No. 25, 1948).
JDCC manages cash and securities entrusted by the DVP participants as clearing funds defined in Article 156-11 of
the Securities Exchange Law separately from other assets in accordance with Article 7 of the cabinet ordinance related tosecurities clearing agencies (Cabinet Ordinance No. 76, 2002).
(1) Participant fund specified assets and participant funds under management
Under the DVP for the NETDs settlement system, when JDCC accepts obligations from DVP participants, the DVP
participants involved in the transactions make JDCC responsible for payment obligations and the content thereof.
JDCC requires each DVP participant to establish a participant fund in excess of the necessary amount set forth
in JDCC’s general provisions to ensure that the respective obligations of DVP participants are covered. The aggregate amount of participant funds entrusted to JDCC as of March 31, 2005 and 2006 was ¥15,000 million ($127
million). In the event a DVP participant defaults on the required payment obligations of the DVP for the NETDs
settlement system, JDCC shall take deposits 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 general provisions of JDCC.
The evaluation technique applied to money trusts will be the cost basis for investments with no market value, a
process corresponding to that used for other marketable securities.
Assets and liabilities pertaining to participant funds are expressed as line items for this purpose, with assets
indicated as designated assets for clearing assets, and liabilities indicated as deposits received for clearing funds.

24Notes to the Consolidated Financial Statements(2) Collateral securities
Under the DVP for the 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 them in securities markets or through other methods deemed appropriate by JDCC.
As of March 31, 2005 and 2006, the market value of collateral securities entrusted to JDCC was ¥128,125,806
thousand and ¥140,341,857 thousand ($1,192,774 thousand), respectively.

4.
US Dollar Amounts

Amounts in U.S. dollars are included solely for the convenience of readers outside Japan. The rate of ¥117.66=U.S.$1,
the rate of exchange as of March 31, 2006, has been used in translation. The inclusion of such 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.
Lease Transactions

Finance lease transactions, other than those in which the ownership of the leased asset is transferred to the lessee, areaccounted for as operating leases. Certain key information (in equivalent data) on such lease contracts of the Company
for the periods ended March 31, 2005 and 2006 is as follows:¥ (thousands)

Tools and furniture:
Acquisition cost
Accumulated depreciation
Net book value$ (thousands)

2005

2006

¥265,068(97,836)¥167,232¥ 267,272(148,786)¥ 118,486

2006$ 2,271(1,264)$ 1,007

The scheduled maturities of future lease payments, including the portion of interest thereon, on such lease contracts as of March 31, 2005 and 2006 are as follows:¥ (thousands)

Due within one year
Due over one year
Total

$ (thousands)

2005

2006

¥ 52,469
117,128¥169,597¥ 54,803
66,247¥121,050

2006

$ 465
563
$1,028Finance lease charges as well as depreciation and interest amounts (in equivalent data) for the years ended March
31, 2005 and 2006 are as follows:¥ (thousands)

Finance lease charges
Depreciation (in equivalent data)
Interest (in equivalent data)$ (thousands)

2005

2006

¥55,80153,5933,140¥56,132
53,909
2,421

2006

$477
458
20

(Note) Methods applied in computation of the equivalent data are as follows:
Depreciation: Straight-line method with zero residual value over the lease contract period.
Interest: Computed as the difference between the lease obligations and the acquisition cost, allocated for the lease contract period based on theinterest rate method.

25

Notes to the Consolidated Financial Statements

6.
Debts and Other Borrowings

Short-term debts at March 31, 2005 comprised loans from banks with a weighted-average interest rate of 1.675% perannum. The Company does not have any debts or borrowings for the year ended March 31, 2006.

7.
Accrued Severance Indemnities for Employees

Accrued employees’ retirement benefits at March 31, 2005 and 2006 represented the amount that would be payable for
the Company if all eligible employees voluntarily terminated their employment at the balance sheet date. Severance
costs for employees charged to income for the year ended March 31, 2006 amounted to 39,860 thousand yen (338thousand U.S. dollars). Severance costs for employees charged to income for the year ended March 31, 2005 amounted
to 26,643 thousand yen. In addition to the existing lump-sum retirement allowance plan, the Company has adopted adefined contribution pension plan for the year ended March 31, 2006.

8.
Income Taxes

The Company and its subsidiary are subject to a number of different income taxes which, in the aggregate, indicate anominal statutory tax rate in Japan of approximately 40.6% for the period ended March 31, 2005 and 2006.
Reconciliation between the nominal statutory income tax rate and the effective income tax rate in the consolidated statements of income for the years ended March 31, 2005 and 2006 is as follows:
Nominal statutory income tax rate
Adjustments:
Permanent non-deductible difference
Equal proportion of inhabitant taxes
Income tax credit on investment in IT
Other, net
Effective income tax rate

2005

2006

40.6%

40.6%

0.3
0.3
(6.9)
0.4
34.7%

0.2
0.1
(7.0)
0.1
34.1%

¥ (thousands)

Deferred tax assets:
Accrued bonuses
Enterprise tax payable
Unpaid social insurance premiums
Business facility tax
Accrued retirement benefits to employees
Accrued retirement benefits to executives
Excess depreciation of fixed assets
Excess deferred asset depreciation for tax purposes
Other
Deferred tax assets$ (thousands)

2005

2006

¥ 46,936(5,421)
6,275
2,681
21,21322,43588,624
22,572103¥205,418¥ 52,599
140,503
6,569
3,135
32,28024,701
66,195
17,781—¥343,765

2006

$ 447
1,194
55
26
274
209
562
151
—
$2,921

9.
Segment Information(1) Business segment
The Company operates a single business unit, the central securities custody and book-entry transfer system.
(2) Geographic information
The Company has no overseas consolidated subsidiaries and no overseas branches for the years ended March 31,
2005 and 2006.
(3) Overseas sales
The Company does not have any overseas sales for the years ended March 31, 2005 and 2006.
26

Notes to the Consolidated Financial Statements

10.
Related Party Transactions

The material transactions of the Company with related companies or individuals, excluding transactions with the consolidated subsidiary that are excluded from the consolidated financial statements, and other than those disclosed elsewhere in these financial statements, for the years ended March 31, 2005 and 2006 are as follows:(1) Directors
As of March 31, 2005
TitlesName

Director

Director

Toshitsugu Shimizu(Note 1)

Fumiyuki Akikusa

Transactions

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

Outsourcing(Note 1)

¥2,499,104

Use ofequipment(Note 1)
Director of the Company,
Repayment ofManaging Director of The
borrowings
Bank of Tokyo–Mitsubishi, Ltd. Interest on
borrowings(Note 2)
Short-termborrowing
Interest(Note 2)

¥71

—

—

¥645,000——¥2,693——¥430,000

Short-term
debt
Prepaidinterest¥1,925,000¥315

Account¥ (thousands)Ending balance

Business

Account
payable—trade¥337,704¥5,918Notes: 1. The transaction amounts above exclude consumption tax. However, ending balance includes consumption tax.
2. Terms and conditions(1) These amounts include transactions with Japan Securities Settlement & Custody, Inc. (JSSC) for the period from April 1, 2004 to
March 31, 2005.
(2) The terms and conditions of the above transactions are on an arm’s-length basis.
(3) Interest on borrowing is determined based on the market interest rate from banks.
As of March 31, 2006
TitlesName

Director

Director

Toshitsugu Shimizu(Note 1)

Fumiyuki Akikusa

Business

Transactions

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

Outsourcing(Note 1)¥2,357,861($20,039
thousand)¥63($0.5
thousand)¥7,243($61
thousand)¥3,744($31
thousand)

Use ofequipment(Note 1)
Director of the Company,
Interest on
Managing Director of The
borrowings
Bank of Tokyo–Mitsubishi, Ltd. (Note 2)
Interest(Note 2)

Account¥ (thousands)Ending balance

Account
payable—trade—

Short-term
debt—¥88,369($751
thousand)—¥1,925,000($16,360
thousand)—

Notes: 1. The transaction amounts above exclude consumption tax. However, ending balance includes consumption tax.
2. Terms and conditions(1) These amounts include transactions with Japan Securities Settlement & Custody, Inc. (JSSC) for the period from April 1, 2005 to
March 31, 2006.
(2) These amounts include transactions for the period from April 1, 2005 to June 21, 2005 because Fumiyuki Akikusa resigned from theBoard of Directors of the Company, and ending balance is the amount as of June 21, 2005.
(3) The terms and conditions of the above transactions are on an arm’s-length basis.
(4) Interest on borrowing is determined based on the market interest rate from banks.

27

Notes to the Consolidated Financial Statements(2) Principal shareholder and its subsidiaries
As of March 31, 2005

¥ (thousands)

Principal
business

Relationship
Percentage
Directors Businessof ownership holding
relationshipwith voting
concurrent
right
positions

Name of company

Address

Capital

Tosho System
Service Co.
(Subsidiary ofother affiliates)

Koto-ku,Tokyo

100,000 Design &development ofsoftware——Japan Securities
Clearing Corporation(Subsidiary ofother affiliates)
Japan Securities
Settlement &Custody, Inc.
(Subsidiary ofother affiliates)

Chuo-ku, 1,700,000 ClearingTokyo
securities

—

Three

Chuo-ku,
Tokyo

—

One

300,000 Custody &settlementof securities

Amount oftransactions(Note 1)

Transactions

Descriptions(Note 2)Endingbalance

Purchase of Outsourcing ¥1,325,628 Trade account ¥123,467
softwarepayablePurchase of¥942,028 Other account ¥151,438
softwarepayableCommission Commission ¥3,536,034 Trade account ¥647,525
incomeincomereceivable

Outsourcing Outsourcing ¥2,499,104

Trade account ¥337,704
payable¥71 ——Use ofequipment

Notes: 1. These transaction amounts above exclude consumption tax. However, ending balance includes consumption tax.
2. The terms and conditions of the above transactions are on an arm’s-length basis.
As of March 31, 2006

¥ (thousands)

CapitalPrincipal
business

Relationship
Percentage
Directors Businessof ownership holding
relationshipwith voting
concurrent
right
positions

Amount oftransactions(Note 1)Endingbalance

Address

Japan Securities
Clearing Corporation(Subsidiary ofother affiliates)
Japan Securities
Settlement &Custody, Inc.
(Subsidiary ofother affiliates)

Chuo-ku, 1,700,000 ClearingTokyo
securities

—

Three

Commission Commission ¥4,656,889 Trade account ¥564,292
incomeincome($39,579 receivable($4,795
thousand)thousand)

Chuo-ku,
Tokyo

—

One

Outsourcing Outsourcing ¥2,357,861 Trade account ¥88,369($20,039 payable($751
thousand)thousand)
Use of¥63 ——equipment($0.5
thousand)

300,000 Custody &settlementof securities

Descriptions

Descriptions(Note 2)Name of company

Notes: 1. These transaction amounts above exclude consumption tax. However, ending balance includes consumption tax.
2. The terms and conditions of the above transactions are on an arm’s-length basis.

11.
Net Income per Share

The basis for calculating earnings per share for the years ended March 31, 2005 and 2006 is as follows:¥ (thousands)

Net income as reported in the consolidated statements of income
Directors’ bonuses through the appropriation of retained earnings
Net income pertaining to common stock shareholders
Weighted-average number of common stock shares
outstanding (in shares)$ (thousands)

2005

2006

¥1,050,244
17,400¥1,032,844¥3,121,382
17,200¥3,104,182$26,528146$26,382

2006

8,500

8,500

—

12.
Subsequent Events

Appropriations of retained earnings:
Appropriations of retained earnings are recorded in the accounts only after shareholders’ approval has been obtained.
The following appropriation of retained earnings of the Company for the year ended March 31, 2006 was approved at
the Ordinary General Shareholders Meeting held on June 20, 2006:
Cash dividends
Bonuses to executives(Including bonuses to statutory auditors amounting to 2,900 thousand yen (24 thousand U.S. dollars))28¥ (thousands)$ (thousands)¥297,500
17,200$2,528146