Operating revenue for the consolidated group includes not only trading participants' dues and fees, listing fees and information services income, as listed on TSE's unconsolidated sheets, but also income from TSS for software development and JSSC for securities clearing. At mid year this operating revenue stood at 20.731 billion yen . Operating costs of 18.914 billion yen were recorded for this period, reflecting subsidiary personnel costs and depreciation expenses at TSS. Together these produced a consolidated operating income of 1.817 billion yen (unconsolidated operating income for the same period was 1.590 billion yen ).
Non-operating revenue had a large influence on the consolidated financial sheets for the first half of FY 2002. Compared to the unconsolidated figure of 2.142 billion yen , the consolidated non-operating revenue represented a 1.052 billion yen decrease at 1.090 yen billion. There are two main reasons for this discrepancy. First, unconsolidated revenue of 1.5 billion yen that was booked as dividend income from JSSC is erased when accounting for the consolidated company. This was partially offset, however, by investment income received by TSE's claim on the earnings of the three companies it accounts for with equity method accounting.
As a result, consolidated current profits for the period reached 2.458 billion yen , down from the unconsolidated figure of 3.247 billion yen , and net income was 1.489 billion yen , also a decrease when compared to the unconsolidated net income of 2.315 billion yen . As stated at the beginning of this fiscal year, TSE still expects an operating revenue for the entire fiscal year of 43 billion yen . However, based on the results achieved in the first half of FY 2002, it has revised its estimates upward for both yearly current profit and net income to 3.1 billion yen and 1.8 billion yen , respectively.
Establishment of a Corporate Governance Committee
In order to increase the attractiveness of its investment products, TSE has sought fuller corporate governance from its listed companies. To help promote this effort, TSE has hosted international conferences and seminars on corporate governance, demanded greater disclosure materials from companies and worked to increase the accountability of firms on behalf of the investors. However, issues surrounding corporate governance have changed drastically this year, and TSE recognizes the need for more progressive policies to meet the changing investing environment. Therefore TSE, as market operator, has established a Corporate Governance Committee. This committee will meet to discuss and decide upon a principled way of thinking of corporate governance as well as what policies on corporate governance TSE should employ.
TSE has asked OMRON Corporation chairman and TSE Director Nobuo Tateisi to chair this new committee, and Tokyo University Law Department Professor Hideki Kanda to work as chair representative. The committee will meet once every 1 to 3 months and after one year will report its findings to TSE.
Survey on companies that have lowered their stock trading unit size
One year has passed since TSE released its Action Program to Decrease the Size of Stock Trading Units. In order to understand the effectiveness of this action program, TSE created a survey for listed companies who have implemented stock trading unit size reductions. This survey sought to gain a better understanding of the reasons why companies implemented such policies and what results and costs they experienced because of it. Furthermore, TSE hopes that the results of this survey will be used as a reference for other companies that wish to lower their stock unit size. Since releasing the action program last year, over 140 companies have implemented or decided to implement trading unit size reductions.
Since last year TSE has worked hard to create a better environment for trading unit size reductions. To help lower the costs of this change that listed companies bear, TSE has repeatedly urged the related organizations for the introduction of electronic stocks as well as a repeal of the stamp tax. TSE plans to continue these efforts to encourage more companies to lower their trading unit sizes.
Barrier-less Heart Gallery
As a solid corporate citizen that aims to be worthy of the trust that people place in it, TSE proactively participates in activities that positively contribute to the society around it. As part of this policy, TSE will cosponsor and host the '3rd Barrier-less Heart Gallery' in Kabuto-cho, which supports the works of handicapped artists. The opening ceremony for the event will be held on Monday, December 2 and the gallery will last until January 10, 2003
