Consolidated Financial Statements
Consolidated Balance Sheets (As of March 31, 2010 and 2011)¥ (thousands)
2010
2011
ASSETS
Current Assets:
Cash and deposits
Accounts receivable – trade
Deferred income taxes (Note 12)
Designated assets for clearing funds (Note 3)
Other current assets
Allowance for doubtful accounts
Total Current Assets$ (thousands)(Note 4)2011

¥ 3,468,876
3,318,125
87,514
33,121,473
355,804(6,480)40,345,313¥ 4,516,648
3,443,641
160,592
33,530,047
323,882(7,256)
41,967,555$ 54,319
41,415
1,931
403,2483,895(87)504,721

Less: Accumulated depreciation
Total Property and Equipment

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

859,4745,460,708
93,323
6,413,505(5,073,347)
1,340,158

10,336
65,673
1,122
77,131(61,014)
16,117

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

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

12,218,911
346,479
6,468
17,923
12,589,781

146,950
4,167
78
215
151,410Investment and Other Assets:
Investment securities (Note 2-(2))
Long-term prepaid expenses
Deferred income taxes (Note 12)Long-term refundable lease deposits
Claims provable in bankruptcy, rehabilitation and other
OthersAllowance for doubtful accounts
Total Investment and Other Assets

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

414,128
18,265598,833
503,534
31,1141,000(10,181)
1,556,695

4,980
219
7,202
6,056
374
12
(122)
18,721¥59,925,084¥57,454,190$690,970

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

Total Assets

The accompanying notes are an integral part of these statements.

44

Japan Securities Depository Center, Inc. Annual Report 2011$ (thousands)(Note 4)2011

¥ (thousands)
2010
2011
LIABILITIESCurrent Liabilities:¥   823,303¥   769,998$   9,260

4,800,000——

Lease obligations (Note 9)

20,00322,789274

Income taxes payable

101,677

894,525

10,758

Allowance for employees’ bonuses

182,234

183,096

2,202

Allowance for executives’ bonuses

20,70020,500247

Consumption taxes payable

391,978

117,831

1,417

33,121,473

33,530,047

403,248

182,401

329,609

3,964

39,643,774

35,868,397

431,370

Lease obligations (Note 9)

52,66840,363485

Allowance for employees’ retirement benefits (Note 10)

256,723

311,333

3,744

Allowance for executives’ retirement benefits

41,16030,000361

Allowance for loss on business trust agreement cancellation

62,694

67,121

807

Total Long-term Liabilities

413,246448,818

5,397

40,057,021

36,317,216

436,767

4,250,000

4,250,000

51,112

Capital surplus

4,250,000

4,250,000

51,112Retained earnings

11,368,062

12,636,974

151,979

Total Shareholders’ Equity

19,868,062

21,136,974

254,203

Total Net Assets

19,868,062

21,136,974

254,203

Total Liabilities and Net Assets¥59,925,084¥57,454,190$690,970

Accounts payable – trade
Short-term borrowings (Note 5)

Deposits received for clearing funds (Note 3)
Other current liabilities
Total Current Liabilities

Long-term Liabilities:

Total Liabilities

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

The accompanying notes are an integral part of these statements.

Japan Securities Depository Center, Inc. Annual Report 201145

Consolidated Financial Statements
Consolidated Statements of Income and Comprehensive Income (For the years ended March 31, 2010 and 2011)

Operating Revenues
Operating Expenses:
Executives’ compensation and bonuses
Salaries and bonuses
Severance costs for employees (Note 10)
Maintenance of systems
Outside services
Depreciation and amortization
Rent
Advertisements
OthersTotal Operating Expenses
Operating Income
Other Income (Expenses):
Interest income
Operational revenue on designated assets for clearing funds
Equity in earnings of affiliates
Interest expenses (Note 9)
Commitment fees
Fees for fund operation of designated assets for clearing funds
Loss on disposal of fixed assets (Note 11)
Reversal of allowance for loss on business trust agreement cancellation
Reversal of allowance for loss on computer center transfer
Reversal of allowance for doubtful accounts
Loss on business trust agreement cancellation
Others, net
Total
Income before Income Taxes and Minority Interests
Income Taxes (Note 12)
Current
Prior years
Deferred
Total income taxes
Income before Minority Interests
Net Income
Income before Minority Interests
Comprehensive Income
Comprehensive income
Comprehensive income attributable to JASDEC shareholders
Comprehensive income attributable to minority shareholders¥ (thousands)
2010
2011
¥20,973,007¥19,726,909$ (thousands)(Note 4)2011
$237,244

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

210,976
1,966,166
102,322
6,779,277
2,350
5,725,759
551,479
78,4601,651,664
17,068,456
2,658,452

2,537
23,646
1,230
81,531
28
68,861
6,632
944
19,864205,273
31,971

254
19,76759,261(66,265)(43,900)(7,794)(178,610)
1,010
33,200—(52,878)
9,091(226,865)
2,407,464

110
18,19062,249(20,812)(42,678)(7,790)(3,191)
—
—
8,126
—
5,812
20,017
2,678,469

1
219
748
(250)
(513)
(93)
(38)
—
—
97
—
69
241
32,212

224,403
972,282(106,289)
1,090,396—
1,317,068—¥        —966,873—
102,684
1,069,557
1,608,911
1,608,911
1,608,911¥ 1,608,911

11,628—1,235
12,863
19,34919,34919,349$ 19,349——

1,608,911—

19,349—The accompanying notes are an integral part of these statements.

46

Japan Securities Depository Center, Inc. Annual Report 2011

Consolidated Statements of Changes in Net Assets (For the years ended March 31, 2010 and 2011)¥ (thousands)
Number ofcommon stock
sharesCommonstock

CapitalsurplusRetainedearnings

Total
shareholders’equityTotal
net assets

8,500¥4,250,000¥4,250,000¥10,390,994¥18,890,994¥18,890,994

Cash dividends

—

—

—

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

Net income for the year

—

—

—

1,317,068

1,317,068

1,317,068

Balance as of March 31, 2010

8,500

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

Cash dividends

—

—

—

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

Net income for the year

—

—

—

1,608,911

1,608,911

1,608,911

Balance as of March 31, 2011

8,500

¥4,250,000¥4,250,000¥12,636,974¥21,136,974¥21,136,974

Balance as of March 31, 2009

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

CapitalsurplusRetainedearnings

Total
shareholders’equityTotal
net assets

8,500$51,112$51,112$136,718$238,942$238,942

Cash dividends

—

—

—

(4,088)(4,088)(4,088)Net income for the year

—

—

—

19,34919,34919,349Balance as of March 31, 2011

8,500

$51,112$51,112$151,979$254,203$254,203

Balance as of March 31, 2010

The accompanying notes are an integral part of these statements.

2010

2011

U.S.Dollars(Note 4)2011

¥154,949.18
40,000¥189,283.71
40,000$2,276
481

8,500

8,500

Yen
Per Share (Note 17)
Net income – primary
Dividends
Weighted-average number of common stock outstanding (in shares)—

Japan Securities Depository Center, Inc. Annual Report 201147

Consolidated Financial Statements
Consolidated Statements of Cash Flows (For the years ended March 31, 2010 and 2011)¥ (thousands)
2010
2011
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 in allowance for employees’ retirement benefits
Decrease in allowance for executives’ retirement benefits
Decrease in allowance for loss on business trust agreement cancellation
Decrease in allowance for loss on computer center transfer
Interest income
Interest expenses
Equity in earnings of affiliates
Foreign exchange loss
Loss on sale of property and equipment
Loss on disposal of property and equipment
Loss on disposal of intangible assets
Increase in accounts receivable – trade
Decrease in accounts payable – trade
Decrease (increase) in other assets
Decrease (increase) in other liabilities
Sub-totalInterest and dividends received
Interest paid
Income taxes paid
Income taxes paid for prior years
Income taxes refunded
Net Cash Provided by Operating Activities
Cash Flows from Investing Activities:
Payments for purchase of property and equipment
Payments for purchase of intangible assets
Proceeds from repayment of lease deposits
Payment of lease deposits
Other payments
Net Cash Used in Investing Activities
Cash Flows from Financing Activities:
Short-term borrowings
Repayment of short-term borrowings
Repayment of lease obligations
Cash dividends paid
Net Cash used in Financing Activities
Effect of exchange rate changes on cash and cash equivalents
Net Increase in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year$ (thousands)(Note 4)2011

¥ 2,407,464
6,386,058
327(2,867)400
57,300—(940,103)(242,379)(254)
66,265(59,261)294
730
47,232
131,378(157,039)(45,122)
98,970828,786
8,578,181
11,754(92,300)(685,984)(903,351)
200,702
7,109,001¥2,678,469
5,725,759(5,664)861(200)
54,610(11,160)——(110)
20,812(62,249)
2,607
—
3,000
190
(112,274)(53,305)(103,819)(269,088)
7,868,440
4,410(22,167)(197,796)(59,016)
233,786
7,827,657$32,21268,860
(68)
10
(2)
656
(134)
—
—
(1)
250
(748)
31
—
36
2
(1,350)(641)(1,248)(3,236)
94,62953(266)(2,379)(710)
2,811
94,138(314,290)(1,734,155)
266,575(258,082)(1,000)(2,040,953)(66,637)(1,551,786)
4,128(1,380)—(1,615,676)(801)(18,663)49(16)—(19,431)22,800,000(26,400,000)(14,855)(340,000)(3,954,855)(294)
1,112,897
2,355,978¥ 3,468,876—(4,800,000)(21,600)(340,000)(5,161,600)(2,607)
1,047,772
3,468,876¥4,516,648—(57,727)(260)(4,088)(62,075)(31)
12,601
41,718$54,319

The accompanying notes are an integral part of these statements.

48

Japan Securities Depository Center, Inc. Annual Report 2011

Notes to the Consolidated Financial Statements
1. Basis of Presenting the Consolidated Financial Statements
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
with accounting principles and practices generally acceptedin Japan, which are different in certain respects as to theapplication and disclosure requirements of International
Financial 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 undera fiscal year ending March 31, which is the same as thatof the Company.
(2) Application of equity method
The equity method is applied to shares of Tosho System
Services Co., Ltd. (hereafter, “TSS”) included andpresented in Investment securities.
(3) Property and equipment (except lease assets)
Depreciation for buildings, excluding improvements, iscalculated using the straight-line method. Depreciationfor other capital assets is calculated using the decliningbalance method.
The main estimated useful lives are as follows:		
Buildings and structures
3-50 years
		
Tools and furniture
2-15 years(4) Intangible assets (except lease assets)
Costs of software for internal use are capitalized andamortized on a straight-line basis over an estimateduseful life of 5 years. Other intangible assets are amortized using the straight-line method over the period
registered by the Corporation Tax Act.
(5) Lease assets
The straight-line method is applied to assets leased
under finance leases without ownership transfer andthe residual value is zero. The Company accounts forfinance leases without ownership transfer as operatingleases if the transaction commenced prior to the previous fiscal year ended March 31, 2009.
(6) Allowance for doubtful accounts
The allowance for doubtful accounts is provided at an
amount determined based on the Company’s historical

average charge-off ratio for ordinary receivables, andestimates of uncollectible amounts determined by reference to specific doubtful receivables from customers
which are experiencing financial difficulties.
(7) Allowance for bonuses
Allowance for employees’ bonuses and allowance for
executives’ bonuses are provided for bonuses attributable to each fiscal year based on the estimated amountof the respective payments.
(8) Allowance for loss on business trust agreement
cancellation
Allowance is provided for an adjustment fee on cancellation of entrusted operations due to dematerializationof stock certificates.
(9) Consumption taxes
The consumption taxes withheld by the Company andits subsidiary on sales and the consumption taxes paidby the Company and its subsidiary on purchases ofgoods 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) Adoption of new accounting standardsi) From the fiscal year ended March 31, 2011, theCompany has applied the Accounting Standard
for Equity Method of Accounting for Investments(Accounting Standard Board of Japan Statement
No.16, March 10, 2008) and the Principal Solution
on Unification of Accounting Policies Applied to
Associates Accounted for Using the Equity Method(Practical Issues Task Force No. 24, March 10, 2008).
This has not resulted in any significant effect on
income.
ii) From the fiscal year ended March 31, 2011, theCompany has applied the Accounting Standard for
Asset Retirement Obligations (Accounting Standard
Board of Japan Statement No.18, March 31, 2008)
and the Guidance on Accounting Standard for Asset
Retirement Obligations (Accounting Standard Boardof Japan Guidance No.21, March 31, 2008). This has
not resulted in any significant effect on income.
(11) Changes to presentation
From the fiscal year ended March 31, 2011, theCompany has disclosed “Income before minority
interests” based on the Partial Amendments to Cabinet
Office Ordinance on the Regulation for Terminology,
Forms and Preparation of Financial Statements (Cabinet
Japan Securities Depository Center, Inc. Annual Report 201149

Office Ordinance No. 5, March 24, 2009) according with
the Accounting Standard for Consolidated Financial
Statements (Accounting Standard Board of Japan
Statement No. 22, December 26, 2008).
(12) Supplemental information
From the fiscal year ended March 31, 2011, theCompany has applied the Accounting Standard for
Presentation of Comprehensive Income (AccountingStandard Board of Japan Statement No. 25, June 30,2010).
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 theCompany, receives cash or securities as collateral from the
DVP participants whom JDCC officially acknowledge as
parties who undertake securities obligations in accordancewith the provisions set forth in JDCC’s general provisions inaccordance with Article 156, Paragraph 7-1, of the Financial
Instruments and Exchange Act (Law No. 25, 1948).
JDCC manages cash and securities entrusted by the DVP
participants as clearing funds defined in Article 156-11 of
the Financial Instruments and Exchange Act separatelyfrom other assets in accordance with JDCC’s generalprovisions and Article 7 of the Cabinet Office Ordinanceon Financial Instruments Clearing Organization (Cabinet
Office Ordinance No. 76, 2002).
(1) Participant fund specified assets andparticipant funds under management
Under the DVP for NETDs settlement system, when
JDCC accepts DVP participants’ obligations to counterparties, the DVP participants involved in the transactions
shall assume the same obligations to JDCC.
JDCC requires each DVP participant to establish aparticipant fund in excess of the minimum amount set
forth in JDCC’s general provisions to ensure that therespective obligations of DVP participants are covered.
The aggregate amount of minimum participant funds
required by JDCC’s general provisions as of March 31,
2010 and 2011 was ¥15,000,000 thousand ($180,390
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
from the participant fund of this DVP participant to

50

Japan Securities Depository Center, Inc. Annual Report 2011

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
are presented as Designated assets for clearing assets
and Deposits received for clearing funds, respectively.
(2) Collateral securities
Under the DVP for NETDs settlement system, DVP
participants are able to entrust marketable securities
listed in JDCC’s general provisions (hereafter, “collateral securities”) to ensure that obligations to JDCC
are met.
When a DVP participant fails to meet its obligations to JDCC, JDCC is authorized to dispose of
the entrusted collateral securities by selling them insecurities markets or through other methods deemed
appropriate by JDCC.
As of March 31, 2010 and 2011, the market valueof collateral securities entrusted to JDCC was¥109,579,182 thousand and ¥84,977,948 thousand($1,021,983 thousand), respectively.
4. U.S. Dollar Amounts
Amounts in U.S. dollars are included solely for the convenience of readers outside Japan. The rate of ¥83.15=US $1,
the rate of exchange as of March 31, 2011, has been used intranslation. 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. Commitment Line and Overdraft Contracts
To ensure agile and stable fund raising, the Company has
overdraft contracts (¥7,000,000 thousand ($84,185 thousand) in total) with four 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 ($541,190 thousand) in total) withthree banks, as part of a liquid fund for completing fundsettlement on the required day.
6. Net Assets
The Companies Act of Japan provides that an amountequal to 10% of the amount to be distributed as distribu-

tions of capital surplus (other than the capital reserve)
and retained earnings (other than the legal reserve) betransferred to the capital reserve and the legal reserve,
respectively, until the sum of the capital reserve and thelegal reserve equals 25% of the common stock account.
Such distributions can be made at any time by resolutionof the shareholders or by the Board of Directors if certain
conditions are met, but neither the capital reserve nor thelegal reserve is available for distributions.
7. Lease Transactions
Finance lease transactions, other than those in which
the ownership of the leased asset is transferred to thelessee that commenced before the first fiscal year inwhich the new accounting standard is applied continue
to be accounted for as operating lease transactions. The
following table shows the amounts which would have beenrecorded as finance leases as of March 31, 2010 and 2011
and for the years then ended:¥ (thousands)
2010
2011
Tools and furniture:
Acquisition cost
Accumulated
depreciation
Net book value
Software:Acquisition cost
Accumulated
depreciation
Net book value¥1,882,666¥1,882,666$ (thousands)
2011(15,775)$ 6,866¥  216,774$ 2,607(108,384)(151,739)¥ (108,389) ¥    65,034(1,825)$   782

Lease obligations includinginterest thereon:
Due within one year¥  421,227
Due over one year
642,797			
Total¥1,064,075¥  423,950
218,847¥  642,797$ 5,098
2,632$ 7,730

Finance lease charges
Depreciation expense
Interest portion¥  426,663
419,887
5,359$ 5,1315,049
64¥  418,839
412,437
7,557

8. Fair Value Measurements for Financial Instruments
1. Basic policies for financial instruments
	The Company limits financial investment toshort-term deposits, and fund raising to borrowings
from banks and others. Because accounts receivable
are subject to counterparty risk from participantsin the book-entry transfer system, the Company
continuously monitors the financial conditions of theparticipants.
2. Estimated fair value of financial instruments
	The following table presents carrying amount on
the balance sheet, fair value and difference between
carrying amount and fair value as of March 31, 2010
and 2011.
For the year ended March 31, 2010
Carrying
amount on thebalance sheet

Notes 1. Methods applied in calculating 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 and the acquisition cost, allocated over the leaseterm based on the interest rate method.

Fair value

Difference¥ (thousand)$22,641(935,196) (1,311,729)¥  947,469 ¥  570,936¥  216,774

2. Finance lease transactions① Lease assets:	Property and equipment: Backup system hardware
Intangible assets: Back up system software② Depreciation: Based on zero residual value over the lease term

(1) Cash and deposits(2) Accounts
receivable-tradeAllowance for
doubtful accounts*¥ 3,468,876 ¥ 3,468,876
3,318,125(6,480)3,311,644——

3,311,644(3) Designated assets forclearing funds
33,121,473 33,121,473(4) A ccounts payable-trade(823,203)(823,303)(5) Short-termborrowings(4,800,000) (4,800,000)(6) Deposits received forclearing funds(33,121,473) (33,121,473)

—
—
—
—
—

*Allowance for doubtful accounts is deducted from Accounts receivable-trade.
Notes 1. Calculation methods for fair value of financial instruments(1) Cash and deposits, and (2) Accounts receivable-trade	The book value was deemed to be fair value for these items
since the book value approximates fair value because of theshort settlement period.
(4) Accounts payable-trade, and (5) Short-term borrowings
	The book value was deemed to be fair value for these items
since the book value approximates fair value because of theshort settlement period.
(3) Designated assets for clearing funds, and (6) Deposits received
for clearing funds
	The book value was deemed to be fair value since these
items represent assets and liabilities reflecting their roles inmaintaining a stable securities trading environment.

Japan Securities Depository Center, Inc. Annual Report 201151

2. Investment securities totaling ¥356,179 thousand as of March 31,
2010 are affiliated companies’ stocks for which market quotes
are not available and future cash flow is extremely difficult
to estimate. Accordingly, such Investment securities are notincluded in the above table.

3. Estimated redemptions for monetary claims and securities withmaturities after the end of the consolidated financial period:
All deposits and accounts receivable-trade in the above table
have settlement dates within one year.

For the year ended March 31, 2011
Carrying amount on
the balance sheet(1) Cash and deposits(2) Accounts receivable-tradeA llowance for doubtful accounts *(3) Designated assets for clearing funds(4) Accounts payable-trade(5) Deposits received for clearing funds

Fair value

Difference¥ (thousand)$ (thousand)¥ (thousand)$ (thousand)¥ 4,516,648$ 54,319¥ 4,516,648$ 54,319—

3,443,641

41,415(7,021)84

3,436,620

41,3303,436,620

41,330—33,530,047

403,248

33,530,047

403,248—(769,998)(9,260)(769,998)(9,260)—(33,530,047)(403,248)(33,530,047)(403,248)—* 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 in maintaining a stablesecurities trading environment.
2. Investment securities totaling ¥414,128 thousand ($4,980 thousand) as of March 31, 2011 are affiliated companies’ stocks for which market
quotes are not available and future cash flow is extremely difficult to estimate. Accordingly, such Investment securities are not included in theabove table.
3. Estimated redemptions for monetary claims and securities with maturities after the end of the consolidated financial period:
All deposits and accounts receivable-trade in the above table have settlement dates within one year.

9. Lease Obligations
The Company had ¥40,363 thousand ($485 thousand)long-term lease obligations, and ¥22,789 thousand ($274
thousand) short-term lease obligations. The weighted
average interest rate of lease obligations was 1.4% perannum. Total borrowings by lease obligations were ¥63,152
thousand ($759 thousand) as of March 31, 2011.
10. Allowance for Severance Indemnities for Employees
Allowance for employees’ retirement benefits on March
31, 2010 and 2011 represented the amount that would bepayable by the Company if all eligible employees voluntarily terminated their employment at the balance sheet
dates. Severance costs for employees charged to income
for the years ended March 31, 2010 and 2011 amounted
to ¥102,970 thousand and ¥102,322 thousand ($1,230
thousand), respectively.

52

Japan Securities Depository Center, Inc. Annual Report 2011

11. Loss on Disposal of Fixed Assets
The following table shows disposal of fixed assets:

Buildings andequipments¥ (thousands)
2010
2011

$ (thousands)
2011¥ 32,723¥1,633$20

Tools and furniture

14,5081,367

16Software
Long-term
prepaid expenses

125,594

190

2

5,783

—

—

Total

¥178,610¥3,191$38

12. Income Taxes(1) Deferred tax assets
The following table shows the breakdown of deferred
tax assets:¥ (thousands)
2010
2011
Deferred tax assets:
Accrued business tax ¥      — ¥ 71,133
Allowance for
employees’ bonuses
73,98774,337
Business facility taxes
4,364
4,131
Accrued social
insurance premiums
9,502
10,100Allowance for
doubtful accounts
3,035
888
Allowance for
employees’
retirement benefits
104,229
126,401
Excess amortizationof deferred charges
for tax purposes
4,005
1,657
Allowance for
executives’retirement benefits
16,71012,180
Excess depreciationof fixed assets
666,360
470,774
Sub-total deferred tax assets 882,195
771,605
Valuation allowance(16,710)(12,180)
Total deferred tax assets 865,485
759,425
Deferred tax liabilities:
Enterprise taxes payable
3,375—
Total deferred tax liabilities
3,375—
Net deferred tax assets¥862,109 ¥759,425$(thousands)
2011$  855
894
50
121
11
1,520
20
146
5,662
9,279
(146)
9,133
—
—
$9,133(2) Reconciliation between the nominal statutory income
tax rate and the effective income taxes rate
This disclosure requirement is not applicable because
the difference between the statutory tax rate and theeffective tax rate for the years ended March 31, 2010
and 2011 is less than 5% of the statutory tax rate.

13. Notes to the Consolidated Statements of Changes in Net
Assets(1) Outstanding sharesClass ofshare
OrdinarysharesClass ofshare
OrdinarysharesMarch 31,
2009

Increase

Decrease

March 31,
2010

8,500
March 31,
2010

—

—

Increase

Decrease

8,500
March 31,
2011

8,500

—

—

8,500

(2) Treasury stock
Not applicable.
(3) Stock subscription rights and other securities
Not applicable.
(4) Dividends
1. Payment of the dividends
Total
Amount Dividendper Share Record Effective
Class of Payment
¥
¥
Date
Date
Resolution Share Source (thousands)
Ordinary
GeneralMarch 31, June 22,
Ordinary Retained¥340,000 ¥40,000
Shareholders
2010
2010
Shares Earnings
Meeting(June 21, 2010)

2. D
 ividends for which the record date is in the year ended
March 31, 2011 and for which the effective date is in theyear ending March 31, 2012
Total
Amount Dividendper Share Record Effective
Class of Payment
¥
¥
Date
Date
Resolution Share Source (thousands)
Ordinary¥340,000
General¥40,000 March 31, June 21,
Ordinary Retained($4,088
Shareholders($481)
2011
2011
Shares Earnings
thousand)Meeting(June 20, 2011)

Japan Securities Depository Center, Inc. Annual Report 201153

14. Stock Options
Not applicable
15. Segment Information(1) B usiness segment (From April 1, 2009 to March 31,
2010)
Disclosure is omitted because the Company operates asingle business unit, the book-entry transfer system forsecurities.
(2) G eographic information (From April 1, 2009 to March
31, 2010)
Disclosure is omitted because the Company had
neither overseas consolidated subsidiaries nor overseas
branches.
(3) O verseas sales (From April 1, 2009 to March 31, 2010)
Disclosure is omitted because the Company did nothave any overseas sales for the years ended March 31,
2010.
(4) D
 isclosure and Measurement (From April 1, 2010 toMarch 31, 2011)
The Company has one business segment for Bookentry Transfer of Securities, therefore omitted thesegment information.
(5) E nterprise-wide disclosures (From April 1, 2010 toMarch 31, 2011)① Information by products and services
	The Company omitted segment information because
operating revenues in consolidated statements ofincome and comprehensive income from externalcustomers in one business product exceeded 90%
from April.
② Information about geographic areasi) Operating revenues
Disclosure is omitted because the Company had
no operating revenue from external customers inoverseas.

54

Japan Securities Depository Center, Inc. Annual Report 2011ii) Tangible assets
Disclosure is omitted because the Company had
no tangible assets in overseas.
③ I nformation about major customers
Name of the customers
Japan Securities Clearing Corporation
Amount of Revenue¥2,195,894 (thousands) ($26,408 thousands)
Reportable Segment
Book-entry and Transfer Securities(6) Disclosure of information about impairment loss on
fixed assets in reportable segments (From April 1, 2010
to March 31, 2011)None(7) Disclosure of information about amortization andyear-end balance of goodwill in reportable segments(From April 1, 2010 to March 31, 2011)None(8) Disclosure of information about bargain purchasegain negative goodwill in reportable segments (FromApril 1, 2010 to March 31, 2011)None(9) Supplemental information
From the current fiscal year, the Company has applied
the Revised Accounting Standard for Disclosures about
Segments of an Enterprise and Related information(ASBJ Statement No. 17 revised March 27, 2009),
and its Implementation Guidance (Guidance on the
Accounting Standard for Disclosure No. 20, March 21,2008).

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, 2010 and 2011 are as follows:
For the year ended March 31, 2010
Related party transactions(1) Subsidiaries and affiliates
Relationship

CapitalNames ofcompanies¥
Address (thousands)

Principal
business

Design &Tosho System Chuo-ku,¥100,000 development ofService Co. Ltd. TokyosoftwareAmountBalance
Percentage Directors(Note 1)at end ofof owner- holding
periodDescriptions
ship with concurrent
Business¥¥voting right positions relationship Transactions (thousands) (Note 2) (thousands)

20%
directly
held

Two

Payment ofcomputer ¥1,830,588 Accounts¥246,133
payable-trade
Purchasing maintenancefee
softwareand system
maintenance Purchase of¥431,170——
softwareNotes 1. The transaction amounts above exclude consumption taxes. However, the end balances include consumption taxes.
2. The terms and conditions of the above transactions are on an arm’s-length basis.

(2)Others
Relationship
CapitalNames ofcompanies¥
Address (thousands)

Principal
business

Japan Securities
Clearing
Chuo-ku,¥1,700,000
Corporation
Tokyo(Subsidiary ofother affiliates)

Clearing
securities

Percentage Directorsof owner- holding
ship with concurrent
Businessvoting right positions relationship

—

Three

Amount(Note 1)

Balanceat end ofperiodDescriptions¥¥
Transaction (thousands) (Note 2) (thousands)

Commission Commission¥2,459,261
incomeincomeAccounts
receivabletrade¥293,347

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

Japan Securities Depository Center, Inc. Annual Report 201155

For the year ended March 31, 2011
(1) Subsidiaries and affiliates
Relationship

CapitalNames ofcompanies¥
Address (thousands)

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

Principal
business¥100,000
Design &($1,202 development of
thousands)
softwareAmountBalance
Percentage Directors(Note 1)at end ofof owner- holding
periodDescriptions
ship with concurrent
Business¥¥voting right positions relationship Transactions (thousands) (Note 2) (thousands)

20%
directly
held

Two

Payment of¥173,220¥1,960,369
Accounts
computer($2,083($23,576
payable-trademaintenance
Purchasing
thousands)
thousands)
fee
softwareand system
Current¥26,132
maintenance Purchase of ¥373,488($4,491
liabilities($314
softwarethousands) (Others) thousands)

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

(2) Others
Relationship
CapitalNames ofcompanies¥
Address (thousands)

Principal
business

Japan Securities¥2,600,000
Clearing
Chuo-ku,($31,268
CorporationTokyo
thousands)(Subsidiary ofother affiliates)

Clearing
securities

Percentage Directorsof owner- holding
ship with concurrent
Businessvoting right positions relationship

—

Three

Amount(Note 1)

Balanceat end ofperiodDescriptions¥¥
Transaction (thousands) (Note 2) (thousands)

Commission Commission
incomeincome¥2,195,894($26,408
thousands)

Accounts¥304,962
receivable($3,667
trade
thousands)

Notes 1. The transaction amounts above exclude consumption taxes. However, the end balances include 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, 2010 and 2011 is as follows:

Net income as reported in the consolidated statements of income¥ (thousands)
2010
2011
¥1,317,068¥1,608,911

Net income pertaining to common stock shareholders¥1,317,068¥1,608,911$19,349

8,500

8,500

—

Weighted-average number of common stock shares outstanding (in shares)

56

Japan Securities Depository Center, Inc. Annual Report 2011

$ (thousands)
2011$19,349

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 consolidated subsidiaries as of March 31, 2010 and 2011, and the related consolidated
statements of income and comprehensive income, changes in net assets, and cash flows for the years
then ended, all expressed in yen. These financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted in Japan. Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects,
the consolidated financial position of Japan Securities Depository Center, Inc. and consolidated
subsidiaries at March 31, 2010 and 2011, 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, 2011 are presented solely for convenience. Our audit also included thetranslation of yen amounts into U.S. dollar amounts and, in our opinion, such translation has been
made on the basis described in Note 4.

June 17, 2011

Japan Securities Depository Center, Inc. Annual Report 201157