JASDEC, Japan’s central
securities depository,
opened a new chapter
in its business history
in the fiscal year ended
March 31, 2003, by
taking its place as astock corporation.

Annual Report 2003
Printed in Japan on recycled paper
Uses soybean ink inconsideration of the environment

For the year ended
March 31, 2003

Corporate Information(As of June 30, 2003)

The Japan Securities Depository Center, Inc. (JASDEC), is the only central securities
depository in Japan, designated under the Law Concerning Central Securities
Depository and Book-Entry Transfer of Stock Certificates and Other Securities (CSD
Law). JASDEC provides depository and book-entry transfer services for marketablesecurities, in accordance with the CSD Law.
In June 2002, JASDEC assumed all businesses previously undertaken by theJapan Securities Depository Center—its predecessor organization, which was established in December 1984 under the CSD law as a not-for-profit foundation—andbegan operations as a stock company.
JASDEC aims to contribute to the formation of a Japanese financial market thatis highly competitive on an international basis. Toward this end, the Company will
utilize its status as a stock company to make its operations more transparent andstrengthen its financial position, while working to improve the safety, efficiency andconvenience of securities settlement systems.

COMPANY NAME:

Japan Securities Depository Center, Inc.

DATE OF INCORPORATION:

January 4, 2002

DATE OPERATIONS BEGAN:

June 17, 2002

CAPITAL:¥4.25 billion

COMMON STOCK ISSUED:

8,500 shares

NUMBER OF SHAREHOLDERS:

198

NUMBER OF EMPLOYEES:95

ADDITIONAL PERSONNEL:

217 (working for entrustees)
101 (working on outsourced systems development and operations)

REGISTERED HEAD OFFICE

1-1, Nihombashi-Kayaba-cho 2-chome
Chuo-ku, Tokyo 103-0025, Japan
Phone:+81-3-3661-0161

Facsimile: +81-3-3661-2810
Website:http://www.jasdec.com

OPERATIONS OFFICES

Commenced
business

Expansion

Osaka Office:6-10, Kitahama 1-chome, Chuo-ku, Osaka 541-0041

December 6, 1984

October 9, 1991

November 26, 2001

Nagoya Office:3-17, Sakae 3-chome, Naka-ku, Nagoya 460-0008

The Japan Securities Depository Center established as a
not-for-profit foundation inline with the November 1984
enforcement of the CSD Law.

Commenced business asJapan’s only central securities
depository for stock
certificates.

Began handling convertible
bonds.

Fukuoka Office:14-2, Tenjin 2-chome, Chuo-ku, Fukuoka 810-0001

Sapporo Office:14-1, Minamiichijo-Nishi 5-chome, Chuo-ku, Sapporo 060-0061

EstablishedContents

At a Glance
1
Financial Highlights
2
President’s Message
3
Spurring Greater Confidence in the Japanese Market
7
Business Overview
14
Financial Statements
17
Report of Independent Auditors
27
Board Members and Auditors
28
List of Participants
30
History
Cover:
32
The character on the cover—pronounced “sou”—means
Corporate Information
creation. To JASDEC, this character is not merely a part33
of language but a true symbol of the creativity that
infuses the Company, in the activities it undertakes
Organization Structure
today and those that it plans for tomorrow.
33

Tokyo Office:6th Floor, Daini-Shoken Kaikan Bldg.
1-1, Nihombashi-Kayaba-cho 2-chome, Chuo-ku, Tokyo 103-0025

March 31, 2003
Began handling commercial
paper in dematerialized form,in accordance with the Law
Concerning Book-Entry
Transfer of Corporate andOther Debt Securities.

Organization Structure(As of June 30, 2003)● M EETING OF S HAREHOLDERS● A UDITORS O FFICE● B OARD OF D IRECTORS● P RESIDENT & CEO● A UDITORS● General Administration Department● General Affairs Section● Accounting Section● Corporate Planning Department● Business Administration Department● Commercial Paper Department● Business Planning Department● First System Department● Second System Department● Tokyo Operations Office● Osaka Operations Office● Nagoya Operations Office● Fukuoka Operations Office● Sapporo Operations Office33

At a Glance

PARTICIPANTS BY CATEGORYSHARES IN CUSTODY(As of March 31, 2003)

203

billion shares
The number of shares in custody exceeded 200
billion in September 2002 and reached 203.1
billion by the end of March 2003.

Securities
finance companies 3
1.1%

Stock exchanges,
etc. 14
5.1%

Life and non-life
insurancecompanies 7
2.6%
Banks 43

15.8%
75.4%

SHARES TRANSFERRED BY BOOK ENTRY

Securities
companies
205

580

Total 272
billion shares
Of the 580.8 billion shares transferred by book entry, non-exchange trade transfers
accounted for 355.0 billion shares, or 61.1% of the total.

New corporate
structure

Our mission
In view of our duty to serve the public,

January 4, 2002
The Japan Securities
Depository Center, Inc.
incorporated as a stockcompany.
June 17, 2002
Assumed all the businessesof the Japan Securities
Depository Center, in
accordance with the CSD
Law.

our mission is to provide a highly secure,efficient and convenient securities
clearing and settlement infrastructure,
which in turn contributes to functional
improvement of the securities market.
Toward this end, we place a special focus
on reducing settlement risks, promoting
straight-through processing (STP), andencouraging greater use of depository
services for further immobilizationof securities amid progress in thedematerialization of securities certificates.

NUMBER OF ELIGIBLE ISSUING COMPANIES

3,626

companies
We handle the share certificates of nearly all publicly traded companies in Japan.
CUSTODY RATIO

59%
Shares in custody represents 59.1% of the entire domestic stock market. Our custodyratio for convertible bonds reached 93.5% as of the end of March 2003.

1

Financial Highlights
Thousands of
US dollars

Thousands of yen
2002

2003

2003

—

¥11,143,857$ 92,711

Income (loss) from operations(11,518)

1,218,075

10,134

Net income (loss)(11,167)

722,202

6,008

Total assets¥2,489,145¥14,590,662$121,387

Shareholders’ equity

2,488,833

9,211,035

76,631(14,339)3,059,656

25,455

1,250,000

4,250,000

35,358

2,500

8,500

For the year:
Operating income¥

At year end:

Net cash provided by (used in)operating activities
Common stock
Number of shares outstanding
Per share (yen and US dollars):
Net income (loss)—primary¥(4,466)

Cash dividends applicable to the year—¥

84,29725,000$701
208

Notes: 1. The amounts stated in US dollars in this report are translated, solely for convenience, at ¥120.20=US$1, the exchange
rate prevailing on March 31, 2003.
2. The Company was established on January 4, 2002. Therefore, “2002” represents the period from January 4, 2002, toMarch 31, 2002, and “2003” represents the period from April 1, 2002, to March 31, 2003, in the above table.

REVENUES BY OPERATIONSYear ended March 31, 2003

Millions of yen

Otherservices¥3,383Book-entry
transfer¥9,370

Custody¥4,407

Note: The above figures indicate the amount before refund of fees,
which amounted to ¥6,018 million for the year ended March 31, 2003.

2

President’s Message

Yoshinobu Takeuchi
President & CEO

INDISPENSABLE TO SECURITIES CLEARINGAND SETTLEMENT SYSTEM REFORM
Overview

On June 17, 2002, JASDEC opened a new chapter in its corporate history with the commencement of services as a stock company. Through this transformation, we have gained the governance function of shareholders, which will increase management transparency and strengthen
our financial position. We are now able to engage in strategic
JASDEC posted a corporate
activities with greater flexibility, including the ability to diversify
milestone, and Japan achieved
financial resources.
steady progress in securities
To more accurately address the needs of users under our
new structure, we assembled a Board of Directors on which theclearing and settlement system
majority of members are representatives from participant compareform.
nies. We also established the Committee for Business Operations
to ensure that comments from users are reflected in all aspects of our business activities.
Our transformation into a stock company has also afforded administrative merits, such asheightened awareness of the importance of cost reduction and improvement in operating efficiency.
It is our ongoing objective to provide users with an expedient securities clearing and settlement system. Toward this end, we have identified four goals—to promote securities clearing andsettlement system reform; to encourage greater use of securities depository and book-entry transfer services; to reinforce operating systems and ensure security; and to reduce the cost burden on
participants—and we have embarked on several strategic projects to ensure successful implementation of each goal.
As part of this effort, we began providing book-entry transfer services for commercial
paper in March 2003, in accordance with the amended Law Concerning Book-Entry Transfer of3

President’s Message

Corporate and Other Debt Securities (Transfer of Corporate Debt Securities Law). Also in March
2003, we implemented the Securities Information Tracing System (SITRAS) for lost stock certificates, paralleling revision of the Commercial Code and the subsequent introduction of a registration system for lost stock certificates.
Furthermore, we launched an advertising campaign using newspapers, television andother media to encourage individual investors to utilize our securities depository and book-entry
services.
As a result, the number of shares in custody topped 200 billion, settling at 203.1 billion,
as of March 31, 2003. This represented 59.1% of all outstanding shares in Japan.

Themes in the Reform of Japan’s Securities Clearing and
Settlement System
Paralleling liberalization

In recent years, we have taken to compiling the many recommen-

dations and proposals for enhancing the safety and efficiency of
securities clearing and settlement systems that have been issued by
and globalization ofsuch international organizations as the Committee on Payment
financial markets, JASDEC
and Settlement Systems and the International Organization ofhas made risk control andSecurities Commissions (CPSS/IOSCO), the International Securities Services Association (ISSA); and the Group of Thirty (G30).
higher efficiency in securities
JASDEC fully supports these recommendations and advocatessettlement its highest
appropriate responses and implementation of required processes
priorities.
in Japan. We have been successful in many areas already, and wewill strive to realize those areas still outstanding.
Of issues related to the securities clearing and settlement system that require attention in
Japan, three are of particular importance.
The first issue is cost to users, in terms of both money and time, which arises because
clearing and settlement functions are divided according to type of securities, such as stocks, government bonds, corporate bonds and investment trusts.
The second issue is realization of STP, viewed as the key to reducing settlement risks andcurbing costs. Currently, the shift toward shorter settlement periods has become a worldwide
trend. Already, many markets in Europe and Asia have adopted the T+2 cycle. A shorter settlement period is also preferred for Japan to make the market safer, more convenient and morecompetitive with overseas markets. The introduction of STP is indispensable to shorter settlement
periods, but Japan lags behind other countries, especially in the establishment of an infrastructure for a delivery versus payment (DVP) settlement system for trades other than exchange trades,a crucial component of STP.

Straight-through processing (STP) An electronic system with little or no human intervention for handling all trade-to-settlement
processes involved in securities transactions.

4President’s Message

The third issue is the standardization of trading data and the harmonization of communication protocols that will facilitate the processing of securities clearing and settlement following
completion of securities transactions.
As Japan’s central securities depository, JASDEC will aggressively tackle these issues fromvarious approaches, including expansion of eligible securities and reform of the securities clearing
and settlement system infrastructure.

New Businesses

In the area of eligible securities, in 2001 we expanded our depository services to include Real
Estate Investment Trust (REIT) and Exchange Traded Fund (ETF) beneficiary certificates, as well
as bonds with subscription warrants for new shares (convertible bonds). We further augmented
the range of eligible securities in March 2003 with commercial paper issued in dematerialized
form. We are also making headway in our preparations to handle corporate straight bonds andinvestment trust beneficiary certificates, both of which will be
Seeking to build a securities
issued and traded in a paperless environment.
In September 2001, we launched the Pre-Settlement
clearing and settlement system toMatching System (PSMS), which functions as an importantinternational standards, JASDEC
building block of the STP infrastructure. Since then, we haveis aggressively tackling various
expanded the scope of applicable securities and trades. The
first phase targeted stock transactions by domestic instituissues.
tional investors. The second phase focused on trades by nonresidents and trades on bonds with subscription warrants for new shares. In May 2003, we
implemented the third and final phase of the first stage of the PSMS with the addition of a matching function for government bonds and exchange-traded futures and options.
The second stage of PSMS development is now under way. In this stage, we aim to connect
to the DVP system for non-exchange transaction deliveries (NETD) that is scheduled to go online
in May 2004. With the establishment of a clearing agency for government bonds, we are looking
into the potential of a matching function used by the agency for government bonds and othersecurities.
In our effort to promote STP, we are pushing ahead with preparations geared toward
implementation of the DVP system for NETD. To date, we have identified major points for processing, established a subsidiary to act as a clearing agency, and continued system development
activities.
A revision of the Commercial Code has been broached that would lead to dematerialization of stocks in 2009. We are looking into the creation of an infrastructure that will facilitate theintroduction of this new paperless system.

Pre-Settlement Matching System (PSMS) Please refer to page 8.
Delivery versus payment (DVP) Please refer to page 8.

5

President’s Message

User-Oriented Services

We have always endeavored to expand operations and cut costs to users through greater operating efficiency and steady fee reductions. Because profits were higher than initially anticipated forthe term in review, we offered refunds to participants at the fiscal year-end. Comparing averagecustody fees in 1991, when we began operations, and today after the recent refund, we find thatfees have dropped 94%. We plan additional reductions on fees, including custody, deposit andbook-entry transfer fees, to lessen the cost burden carried by participants.
We utilized the opportunity afforded by our transformation into a stock company to reaffirm three business principles. The first is to ensure highly transparent business activities thatplace the users first and foremost. This principle has always been absolutely fundamental to ouroperations. The second is to provide capabilities on a par with overseas central securities depositories. The third is to extend highly reliable, cost-effective
System fortification and security as
services.
JASDEC will redouble its efforts to raise its deposit
well as reduced cost burdens are theratio and realize securities clearing and settlement system
most valued aspects of the services
reform in Japan. Specifically, we will strive to pinpoint the
we provide to users.
needs of users, participants and investors with even greater
accuracy, make the clearing and settlement system infrastructure more user friendly, and further refine our capabilities.
On behalf of senior management and all the employees of JASDEC, I ask for the continued
support of all parties that utilize and benefit from our operations, including shareholders, participants and issuers.

June 2003
Yoshinobu Takeuchi
President and CEO

6

Special Feature

S P U R R I N G G R E AT E R
CONFIDENCE IN
T H E J A PA N E S E M A R K E T

DVPReform of the securities settlement system has become an urgent
priority in Japan. Dematerialization—paperless securities—and the

reduction of settlement risks paralleling shorter settlement periods

have gained favor in global financial markets. It is therefore important to Japan to establish integrated STP schemes linking a DVP
system to the PSMS. JASDEC is also working on its own securities

settlement system to enhance the reputation of the Japanese market
in the eyes of overseas investors.

PSMS

Electronic CP
7

Special Feature

Pre-Settlement Matching System
The move toward STP for securities settlement has acquired greater urgency as a means of reducing settlement risks and lowering costs. The indispensable steps toward implementing STP in
Japan are the introduction of the PSMS and the creation of a DVP system that links to the PSMS.
Expanding PSMS to handle DVP for non-exchange transaction deliveries

The third phase of the first stage in our development of the PSMS, which went online in May
2003, has expanded the system to cover transactions for government bonds and stock
exchange–traded futures and options. We also added a transmission function that routes net asset
value on investment trusts as well as information on the subscription and redemption of such
trusts by investment trust management companies to trust banks.
In the second stage, we will be working to connect the system to DVP for non-exchangetransaction deliveries (NETD). Once linked, PSMS-generated instruction data on settlements will
be relayed to the DVP system automatically, obviating the need to input instructions through a sepCONTROLLING RISKS IN THE DVP FOR NETD
arate step and bringing the settlement process to a
We are preparing several schemes for the DVP
smooth conclusion.
system, based on a risk-control perspective.

DVP for NETD
W e plan to apply a gross–net type DVP settlement system that links book-entry transfer ofstocks and other securities with payment of funds,
based on settlement instruction data generated by
the PSMS. Under this structure, each book-entry
delivery of securities will be processed on a tradefor-trade—or gross—basis, while payment offunds will be made on a net basis, wherein eachparticipant pays or receives at the end of the day
the balance that remains when payable amounts
for receipts of securities and receivable amounts
for deliveries of securities are offset.
Connecting the PSMS and the DVP for
NETD will mark a major step forward in realizing
STP for securities settlement in Japan.

1. PRINCIPAL RISK MANAGEMENT: We will limit riskby having our clearing subsidiary hold assets foreach DVP participant that exceeds the balanceowing by that DVP participant.
2. LIQUIDITY RISK MANAGEMENT: We will establish
participant funds and credit lines with banks to maintain an appropriate level of fund liquidity and offset
possible participant default on final payment. To
avert a shortfall in fund liquidity, we have set a net
debit cap for each DVP participant.
3. PARTICIPANT MANAGEMENT: We will require DVP
participants to meet certain financial criteria, andwe will watch for any change in status.
* We will establish a clearing subsidiary to executefund netting with participants, thereby separating
the netting function from our book-entry functionand ensuring compliance with rules for risk management and netting.

Pre-Settlement Matching System (PSMS) This system electronically matches information, such as trade reports and investment instructions, on trades and settlements among institutional investors, securities firms, trust banks and other entities, once stock certificates or othersecurities have been traded.

Delivery versus payment (DVP) This system establishes a strong connection between the delivery of and payment for securities.
International standards, recommended by the G30 and other organizations, require the use of a DVP system in all securities settlements toeliminate settlement risk.

8

PROGRESS ON PSMS AND
DVP SYSTEMS
2001 May DVP for exchange tradetransfers begins.
September First phase of firststage of PSMS implemented.
(Covers stock transactions by
domestic institutional investors.)

2002 February Second phase of
first stage of PSMS implemented.
(Covers convertible bonds, initial offerings
and trades by nonresidents.)
2003 May Third phase of first stage of PSMS
implemented.
(Covers government bonds and stock
exchange traded futures and options.)
2004 May Anticipated start of DVP for NETD.

LINKING PSMS AND DVP SYSTEMS
Pre-Settlement Matching System
Trade Matching
Delivering
Participant

1
DVP book-entry
transfer request

SSI
Settlement
Matching

1
DVP book-entry
transfer request

Receiving
Participant

2 Settlement instructions

DVP Book-Entry Transfer System for Securities
ParticipantA
Account

Execution

JDCC
3
Account
Conditions for Executing
Book-Entry Transfer of Securities–Securities balance is sufficient.
–Net debit cap is not exceeded.
–Assurance asset monitor remains positive.
If all conditions have been satisfied, stocks
will be delivered to the JDCC account.

Completion

Participant

7
B
Conditions for Completing
Account
Book-Entry Transfer of Securities–Delivery conditions are met.
–Net receivable amount is confirmed.
–Payment of balance owing is completed.
If any condition has been satisfied, thestocks will be delivered to the receiver's account.

Book-entry transfer of securities executed/completed according to instructions
Funds recorded by netting/recording value of settlement based on book-entry of securities
4 Transmit settlement value (net owing)

BOJ Financial Network System
ParticipantA
Account

Payment
6

JDCC
Account

Payment
5

Funds received by book-entry transfer of settlement amount.
Notes: 1.Approval from BOJ required to use the BOJ Financial Network System.
2. Assurance asset monitor = Value of assurance asset — Net debit
3. JDCC: JASDEC DVP Clearing Corporation, a subsidiary of JASDEC.
4. SSI: Standing Settlement Instructions.

9Participant
B
Account

Special Feature

Preparing to Handle Corporate and Municipal Straight
Bonds and Investment Trust Beneficiary Rights
JASDEC is studying approaches for handling corporate straight bonds and local government
bonds, as well as investment trust beneficiary rights in 2005.
Corporate and Municipal Straight Bonds

In Japan, registering agencies, which number about 150, are used to settle the majority of corporate bond transactions through registration. These agencies execute the required book-entry
transfer and essentially dematerialize the securities into registered bonds. In January 2003, introduction of the Transfer of Corporate Debt Securities Law enabled a new system for corporate andmunicipal straight bonds (SBs).
This law confirms the trend toward paperless securities and consolidates SB settlement
operations with JASDEC, wherein the Company is the sole book-entry transfer institution for SB
settlement. To execute this duty, we will adopt a book-entry transfer system for SBs to realize a
DVP system and take us one step closer to the use of STP for securities settlement in Japan.
Through these efforts, we aim to raise SB liquidity, enhance settlement efficiency, and set the stage
for shorter settlement periods in the future.
Discussions in our Subcommittee on Corporate and Municipal Straight Bonds led to an
implementation document for a book-entry transfer system for SBs. The document addresses thescope of eligible bonds; the participation format for interested parties; the content of the bookentry transfer account ledger; the procedures for issuing, transferring and redeeming bonds; bondsettlement methods for all DVP systems; payment methods for principal and interest; andschemes for switching outstanding bonds to the new system.
We will utilize this document as a guide to determine book-entry operations and todevelop the appropriate computer systems.

Investment Trust Beneficiary Rights

The basic legal framework for a book-entry system applied to investment trust beneficiary rights
is similar to that applied to commercial paper (CP) and SBs. We will dispense with processes previously deemed necessary to accommodate certificated beneficiary rights, and we will utilize
book-based records on such aspects of investment trusts as subscription, transfer and redemption
to streamline book-entry operations.
Our Subcommittee on Investment Trusts is discussing the scope of eligible investment
trusts, the procedures for establishing, distributing and redeeming investment trusts, the application of DVP for each type of investment trust, procedures for handling earnings dividends, andmethods to ensure that the pool of some two million beneficiary certificates already issued will
make a smooth transition to the new system.

Registered Bonds The Corporate Bond Registration Law (1942) allows a registering agency to register municipal and corporate
bonds on the registry that the registering agency maintains so investors may settle transactions without bond certificates.

10

TRANSITION SCHEDULE FORCORPORATE AND
MUNICIPAL STRAIGHT BONDS
2003

January 6 Transfer of Corporate Debt
Securities Law goes into effect.
(Abrogation of the Corporate Bond
Registration Law expected within five
years of the new law’s implementation.)

2005

Second half of 2005 JASDEC plans

start of book-entry transfer system forSBs.
2006–07

Registered bonds already in issue will bechanged to book-entry bond status.

2008

January 5 Temporary grace period

applied to interest income tax onregistered bonds ends.
(No more registered bonds will be issued.)

TRANSITION SCHEDULE FOR EXISTING REGISTERED BONDS

The Corporate Bond Registration Law, which regulates existingregistered bonds, will be abolished by January 5, 2008. JASDEC isthus working toward the start of book-entry transfer of new corporate and municipal bonds in the second half of 2005. We willthen establish a transition period lasting about two years during
which we anticipate trouble-free conversion of existing bonds
from registered status to the book-entry status used in our system.

11

Special Feature

Creation of Book-Entry Transfer System
for Electronic Commercial Paper
On January 10, 2003, JASDEC was designated as a book-entry transfer institution, under theTransfer of Corporate Debt Securities Law. The Company launched a book-entry transfer system
for CP on March 31, 2003.
The development of a book-entry transfer system for dematePROMOTING ELECTRONIC
rialized CP was prompted by a strong appeal from companies using
COMMERCIAL PAPER
CP to procure funds. JASDEC began discussions on such a system
As of June 30, 2003, the book-entry
in January 2002, first identifying the primary points of a system fortransfer system for electronic CP
CP and then moving on preparations for implementation, including
covered 85 issues, and the accountthe creation of computer systems.
balance stood at ¥424 billion. We plan
CP in the conventional paper form, or paper-based CP, is preenergetic marketing and promotional
pared in certificates of certain denominations, and these certificates
campaigns, including informationmust be delivered or presented to the assigned holder at settlement.
forums and advertisements, toOur system, however, dematerializes CP, from issuance throughencourage more issuers and investors
redemption, and records ownership and transfer of rights in a transto utilize electronic CP.
fer account book. The use of “paperless” or “electronic” CP shortens
the settlement period, removes the risks inherent in transporting
certificates and eliminates the cost of safekeeping the certificates—
all drawbacks of paper-based CP.
The book-entry transfer system for CP utilizes
a gross–gross-type DVP settlement system. This feaFEATURES OF THE BOOK-ENTRY
ture makes settlement safer and more efficient than
TRANSFER SYSTEM FOR
with paper-based CP.
COMMERCIAL PAPER
Paper-based CP is also hampered by a limited
assortment of denominations in circulation,
SHORTER
IMPROVEDSETTLEMENTCIRCULATION
because the stamp duty that is charged on each cerPERIOD
Circulation in
No need to produce,tificate encourages issuers to cut the burden of costsmaller denominationsdeliver or present
possibleby issuing large-denomination certificates.
certificatesElectronic CP circumvents this restriction, allowing
the issue and transfer of CP in smaller denominaELECTRONIC
tions and thus presenting greater investment flexiDVPREDUCED COSTSCPSETTLEMENT
bility.
No space needed
Simultaneousfor safekeeping
The current paper-based CP market counts ansettlement of cash
certificatesand CP possible
average issuing balance of slightly more than ¥20
REDUCEDtrillion. JASDEC expects remaining paper-based CP
DELIVERY RISK
to be converted into electronic CP soon.
Avoidance of loss
and theft

Commercial paper in Japan CP is issued by companies as a measure for procuring unsecured short-term funds. To date, in Japan,
only companies with a rating for CP above a set mark have been able to issue CP in the form of promissory notes of less than one
year in duration and more than ¥100 million in value. Under the Transfer of Corporate Debt Securities Law, CP is viewed as a shortterm corporate bond rather than a note, and processing, from issuance to redemption, is handled electronically through JASDEC’s
computer systems.

12

MILESTONES IN HANDLING ELECTRONICCOMMERCIAL PAPER

2002 April 1 The Law Concerning Transfer of
Short-Term Corporate and Other Debt
Securities was introduced
2003 January 6 The law was amended andrenamed the Law Concerning Book-Entry
Transfer of Corporate and Other Debt
Securities (Transfer of Corporate Debt
Securities Law)
January 10 JASDEC was designated as atransfer institution under the Transfer ofCorporate Debt Securities Law
March 31 JASDEC commenced book-entry
transfer services for commercial paper

Electronic CP Book-Entry
Transfer System
Issuing Flow
CP
Issuer(Including
issuing agent)

1
Application forissue

6 Fund transfer
execution report

Fund
Settlement
Corporations
Including financial
institutions

JASDEC
Transfer
AccountBook
New record on
6 investor’s acccountFund transfer 5
execution notice5
Fund transfer
execution noticeBank of Japan

13

2
Notice of CP issue
and fund settlement
data

Investor

Fund settlement 3
data report

4
Fund transfer
request

Fund
Settlement
Corporations
Including financial
institutions

Business Overview

Participants and Accounts
The domestic securities depository and book-entry transfer system involves JASDEC, its participants, participants’ clients and issuing companies.
Entities eligible to become JASDEC participants are stipulated in the CSD Law, and include
securities companies, banks, clearing agencies, insurance companies, securities finance companies, stock exchanges and the Japan Securities Dealers Association (JSDA). Investors participate
in the system via client accounts opened on their behalf by participants. Participants may open
up to 99 subaccounts with JASDEC.
As of March 31, 2003, accounts with JASDEC numbered 453, held by 272 participants.
Compared with fiscal 2001, these figures represent losses of 18 in the number of participants and
24 in the number of accounts opened, mainly due to mergers between participants.

Issuing Companies
P articipation in the JASDEC system is voluntary at most domestic stock and securities
exchanges, so JASDEC is generally required to have the consent of issuing companies to handle
their shares. However, issuing companies whose shares are listed on the Tokyo Stock Exchange
are required to participate in the JASDEC system according to that exchange’s listing requirements.
As of March 31, 2003, 3,626 public companies in Japan had lodged their consent withJASDEC. During fiscal 2002, a further 143 issuers lodged their consent with JASDEC while 127
withdrew theirs, leading to a rise of 16 companies from the previous fiscal year.

Handling of Shares
Deposits and Withdrawals

Participants may deposit their own shares and those of their clients (with their consent) withJASDEC. Clients may deposit shares with JASDEC only through participants.
Deposited share certificates are taken into custody and a record of all deposits is enteredinto the participants’ accounts at JASDEC as well as into the accounts set up for clients by participants. The deposit of shares with JASDEC is entirely voluntary, and participants and clients may
withdraw their shares any time. Like deposit requests, clients’ withdrawal requests must be filed
through participants.
In fiscal 2002, a total of 37,494 million shares were deposited, a decrease of 18,721 million shares, or 33.3%, from the previous fiscal year. Shares withdrawn totaled 25,875 million, an
increase of 4,148 million shares, or 19.1%.

Custody

Shares deposited by participants are kept collectively by JASDEC and are not categorized by participant or by client. In accordance with the CSD Law, participants and their clients are legally
regarded as having co-ownership of the shares in the proportions stated in their JASDEC
accounts or participant accounts, respectively.
The re-registration of share certificates in the name of JASDEC is nominal, and JASDEC’srights are limited to conducting administrative procedures. Shareholders’ rights, such as the rightto claim dividends and residual assets, vote and request the resignation of directors or auditors
rest with the beneficial shareholders (see the section on Beneficial Shareholder Notification on
page 16).
14

Business Overview

Although deposited shares are kept collectively by JASDEC, the Company provides separate accounting for shares owned by participants (i.e their own shares) and shares they receivefrom clients for safekeeping. This provides legal protection for the shares held on behalf of clientsin the event of participant bankruptcy.
As of March 31, 2003, shares held in custody totaled 203,181 million, an increase of
11,619 million shares, or 6.1 %, over the previous fiscal year. The ratio of shares held in custodyto total domestic shares outstanding increased 5.6 percentage points, to 59.1%. Compared withcountries in which securities depository systems have been fully accepted, Japan is still lagging
behind. To hasten an increase in the proportion of shares held in custody in the domestic market,
we will further reduce costs and fees applicable to participants, and vigorously pursue wide-ranging promotional activities.

Uncertification of Certificates

In Japan, shareholders may request issuers to replace their shares in an uncertificated form.
As a nominal shareholder, under the CSD Law JASDEC is also entitled to request this procedure. By exercising this right, we are able to rationalize administrative procedures and save
space, while reducing the risk of losing physical share certificates.
Elimination of physical share certificates also offers advantages for issuing companies, particularly the opportunity to cut issuing costs for new share certificates and administrative costs
related to stock splits or changes of corporate name.
In fiscal 2002, JASDEC had requested issuing companies to replace 105,490 million sharesin uncertificated form, an increase of 9,933 million shares over the previous fiscal year, representing 51.9% of all shares kept in custody with JASDEC, up 2.0 percentage points.

Book-Entry Transfer

When a participant or client trades the shares held in custody by JASDEC, or transfers suchshares for collateral or other purposes, delivery of shares is effected by book-entry transfer
between accounts. JASDEC offers two types of book-entry transfer between accounts: exchange
trade transfers and non-exchange trade transfers.
Exchange trade transfers are transfers of shares between participants as a result of trades
executed on stock exchanges or in the over-the-counter market (JASDAQ). Book-entry transfersfor other purposes are non-exchange trade transfers. Regulations set by stock exchanges andJSDA require that trades of JASDEC-eligible issues executed in their respective markets be settled
by book-entry transfers between participant accounts held with JASDEC.
The Japan Securities Clearing Corporation (JSCC), which is the body responsible for clearing all trades in the stock exchanges and JASDAQ, sends transfer instructions directly to JASDEC
for settlement purposes. In the case of non-exchange trade transfers, the seller sends transfer
instructions to JASDEC. Non-exchange trade transfers are most commonly used by institutional
investors and non-resident investors, who keep shares in their accounts with custodian bank participants. In order to settle their trades in the stock exchanges or in the JASDAQ market, sharesare transferred by book-entry between the custodian bank participant and the securities company
participant.
In fiscal 2002, exchange trade transfers totaled 225.7 billion shares, down 5.9% from theprevious year. Non-exchange trade transfers rose 5.3%, to 355.0 billion shares, and accounted for
61.1% of aggregate domestic book-entry transfers.

15

Business Overview

The number of exchange trade transfers in fiscal 2002 was 20.1 million, down 6.5%, whilethat of non-exchange trade transfers, which generally involve transfers of large amounts of shares,
was 14.9 million, up 2.1%.

Beneficial Shareholder Notification

Under the securities custody and book-entry transfer system in Japan, issuers are informed of
the names of beneficial shareholders to facilitate the direct distribution of dividends and anyother rights to beneficial shareholders, and beneficial shareholders exercise their rights directly tothe issuers. Accordingly, JASDEC prepares and provides issuers with beneficial shareholder data.
Our beneficial shareholder notification service includes collection of information on beneficial shareholders as of the record date in accordance with reports from participants, and notification of this information to issuers. Issuers draw up beneficial shareholder lists based on thisdata and send notices of shareholder meetings and other information directly to the beneficial
shareholders. Beneficial shareholders thus receive dividends directly from issuers, and exercise
voting rights directly to issuers.
When new shares are distributed to beneficial shareholders, such as through stock splits,
such stock allocation is also processed by book-entry in the accounts of concerned participants
maintained with JASDEC as well as in the accounts of customers maintained with the participants.
JASDEC issued 54.7 million such notifications in fiscal 2002, up 2.1% from fiscal 2001.
These notifications represented 430.2 billion shares, up 17.2%. Reflecting an increase in shares incustody, notifications to beneficial shareholders on record as of March 31, 2003, rose 2.3 million,or 11.1%, to 23.2 million notifications. These notifications represented 185.7 billion shares, anincrease of 10.0 billion shares, or 5.7%, from the year before. These are the highest figures JASDEC has ever recorded.

Other Securities Operations
Year ended March 31, 2003

Convertible Bonds(Millions of yen)
Deposits
Withdrawals
CustodyBook-entry transfer
Exchange trade transfer
Non-exchange trade transfer
Number of issues

Exchange Traded Funds (ETFs)(Thousands of units)
Deposits
Withdrawals
CustodyBook-entry transfer
Exchange trade transfer
Non-exchange trade transfer
Number of issues

Real Estate Investment Trusts (REITs)(Number of units)
Deposits
687,055
Withdrawals
100,419
Custody
1,346,318
Book-entry transfer
Exchange trade transfer
917,114
Non-exchange trade transfer
1,312,682
Number of issues
7

794,755
2,228,492
6,651,418
2,102,721
10,537,845
379

Preferred Investment Securities of Financial
Institutions Established by Cooperative
Associations(Number of units)
Deposits
34,359Withdrawals
7,449
Custody
237,438
Book-entry transfer
Exchange trade transfer
36,532Non-exchange trade transfer
52,975
Number of issues
12,247,915
372,8622,567,313
1,555,507
7,482,241
19

16

Non-consolidated Balance Sheets
Japan Securities Depository Center Inc.
As of March 31, 2002 and 2003
¥ (thousands)

ASSETS
Current Assets:
Cash and cash equivalents
Accounts receivable—trade
Prepaid expenses
Short-term loan receivable
Consumption tax receivable
Deferred income taxes (Note 8)
Other current assets
Total current assets
Property and Equipment
Buildings
Automobiles
Tools and furniture

2002

2003

¥

85,661——2,400,000——
3,484
2,489,145

Less: accumulated depreciation
Total property and equipment
Intangible Assets, Net
SoftwareConstruction in progress (software)
Rights for telephone
Rights for usage of telephone facilities
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’ EQUITYCurrent Liabilities:
Short-term debt (Note 6)
Accounts payable—trade
Accounts payable—other
Income tax payable
Returnable deposits
Accrued employees’ bonuses
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
Shareholders’ Equity
Common stock
Authorized: 10,000 shares at March 31,
2002 and 2003
Issued, 2,500 shares at 31 March, 2002 and
8,500 shares at 31 March, 2003, respectively
Additional paid-in capital
Retained earnings (accumulated loss)
Total shareholders’ equity
Total liabilities and shareholders’ equity
The accompanying notes are an integral part of these statements.

17¥427,882
3,099,506
98,271—
382,927
95,88050,664
4,155,130$ (thousands)(Note 3)
2003

$

3,560
25,786
818
—
3,186
798
421
34,569—————108,437
1,112
3,523,995
3,633,544(1,000,617)
2,632,927

902
9
29,31830,229(8,324)
21,905—————

4,804,087
2,513,294
2,976
1,892
7,322,249

39,967
20,90925
1660,917————¥2,489,145

426,888
36,277
17,191
480,356¥14,590,662

3,551
302
143
3,996
$121,387

¥

—
—
154
158
—
—
—
312

¥ 3,100,000
1,290,719
215,219
641,0103,370
88,062315
5,338,695$ 25,790
10,738
1,790
5,333
28
733
3
44,415———
312

22,572
18,36040,932
5,379,627

188
153
341
44,756

1,250,000
1,250,000(11,167)2,488,833¥2,489,145

4,250,000
4,250,000
711,035
9,211,035¥14,590,662

35,35835,358
5,915
76,631$121,387

Non-consolidated Statements of Income
Japan Securities Depository Center, Inc.
For the period from January 4, 2002 (date of incorporation) to March 31, 2002 and the year ended March 31, 2003
¥ (thousands)(Note 1)
2002
2003

Operating Income¥$ (thousands)(Note 3)
2003—

¥11,143,857$92,711

Operating Expense
Executives’ compensations
Salaries
Severance costs for employees
Executives’ retirement benefits
Maintenance for systems
Outside service
Registration fees
Depreciation
Rent
Advertisement
OthersTotal operating expense
Income (loss) from operation

—
—
—
—
—
—
—
—
—
—
11,518
11,518(11,518)

92,310811,465
2,823
18,3602,467,192
2,059,809
1,353,945
2,142,283
151,447
175,150
650,998
9,925,782
1,218,075

768
6,751
23
153
20,526
17,137
11,264
17,823
1,260
1,456
5,416
82,577
10,134

Other Income (Expenses):
Interest income
Other income
Interest expense
Loss on disposal of property and equipment
Stock issuance cost
Others, net
Total
Income (loss) before income taxes

583
—
—
—
—
(74)
509
(11,009)

55,047
8,324(1,138)(1,368)(28,800)—
32,065
1,250,140

458
69
(9)
(12)
(240)
—
266
10,400

Income Taxes (Note 8)
Current
Deferred
Net income (loss)

158—¥(11,167)

641,010(113,072)¥ 722,202

5,333
(941)
$ 6,008
U.S. Dollars(Note 3)Yen

Per Share (Note 10)
Net income (loss)—primary
Dividends
Weighted Average Number ofCommon Stock Shares Outstanding (in shares)
The accompanying notes are an integral part of these statements.

18¥(4,466)—¥84,297
25,000

$701
208

2,500

8,417

—

Non-consolidated Statements of Shareholders’ Equity
Japan Securities Depository Center Inc.
For the period from January 4, 2002 (date of incorporation) to March 31, 2002 and the year ended March 31, 2003
¥ (thousands)
Number ofcommon stock
sharesCommonstock

Additional
paid-in capital

2,500¥1,250,000¥1,250,000

—
2,500
6,000

—
1,250,000
3,000,000—
1,250,000
3,000,000(11,167)(11,167)
—

—
8,500

—
¥4,250,000—¥4,250,000

722,202¥711,035

New stock issued for January 4, 2002
Net loss for the year ended
March 31, 2002
Balance as of March 31, 2002
New stock issued
Net income for the year ended
March 31,2003
Balance as of March 31, 2003

Retainedearnings¥—$ (thousands) (Note 3)
Number ofcommon stock
sharesCommonstock

Additional
paid-in capital

2,500
6,000

$10,399
24,958$10,399
24,958

$

—
8,500

—
$35,358—$35,358

6,008$5,915

Balance as of March 31, 2002
New stock issued
Net income for the year ended
March 31, 2003
Balance as of March 31, 2003
The accompanying notes are an integral part of these statements.

19

Retainedearnings(93)—Non-consolidated Statements of Cash Flows
Japan Securities Depository Center, Inc.
For the period from January 4, 2002 (date of incorporation) to March 31, 2002 and the year ended March 31, 2003
¥ (thousands)(Note 1)2002

$ (thousands)(Note 3)

2003

2003

(11,009)
—
—
—
—
(583)
—
—
—
—
—
(3,032)
153—(14,469)130——(14,339)¥ 1,250,140
2,142,283
88,062
166
18,360(55,047)
1,138
28,8001,368(853,265)
555,081(63,374)(65,104)(32,755)
3,015,853
55,499(13,230)
1,534
3,059,656$ 10,400
17,823
733
1
153
(458)
9
240
11
(7,099)
4,618
(527)
(542)
(272)
25,090462(110)
1325,455

Cash Flows from Investing Activities:
Payments for purchase of property
and equipment
Payments for purchase of intangible assets
Disbursements for loans
Acquisition of business net of cash acquired
OthersNet cash flows used in investing activities——(2,400,000)——(2,400,000)(1,495,721)(3,867,261)(5,900,000)(474,366)(51,287)(11,788,635)(12,444)(32,174)(49,085)(3,946)(427)(98,076)

Cash Flows from Financing Activities:
Proceeds from short-term debt
New stock issued net of stock issuance costs
Net cash flows provided by financing activities—
2,500,000
2,500,000

3,100,000
5,971,200
9,071,200

25,79149,67775,468Net Increase in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Period/YearCash and Cash Equivalents at End of Period/Year

85,661—
85,661

342,22185,661
427,882

2,847
713
3,560

Cash Flows from Operating Activities:
Income (loss) before income taxes¥
Depreciation
Increase in accrued bonuses to employees
Increase in accrued employees’ retirement benefits
Increase in accrued executives’ retirement benefits
Interest income
Interest expense
Stock issuance costs
Loss on disposal of property and equipment
Increase accounts receivable, trade
Increase in accounts payable, trade
Increase in other assets
Increase (decrease) in other liabilities
Others, net
Sub-totalInterests and dividends received
Interest paid
Income tax paid
Net cash provided by (used in) operating activities

The accompanying notes are an integral part of these statements.

20

¥

¥

$

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

1.
Basis of Presenting the Non-Consolidated Financial Statements
The accompanying non-consolidated financial statements have been prepared from the accounts
maintained by Japan Securities Depository Center, Inc. (the “Company”) with the provisions set forthin the Commercial Code of Japan (the “Code”) and 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 Accounting Standards.
Certain items presented in the non-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.
Consolidated financial statements have not been prepared by the Company as the Company
has neither subsidiary nor affiliate companies to be consolidated in the fiscal periods ended March 31,
2002 and 2003.
The Company was newly incorporated on January 4, 2002 and, accordingly, the non-consolidated statements of income, shareholders’ equity and cash flows of the Company for the period ended
March 31, 2002 include the results of operations and cash flows of the Company for the period fromJanuary 4, 2002 to March 31, 2002.

2.
Summary of Significant Accounting Principles(1) Cash and cash equivalents
Cash and cash equivalents include all highly liquid investments, with original maturities of threemonths or less, that 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.
(2) Property and equipment
Depreciation for buildings, excluding improvements, is computed on the straight-line method
using the estimated useful lives prescribed by Japanese Corporate Tax Laws. Depreciation forother capital assets is computed on the declining-balance method at the rates based on the estimated useful lives prescribed by such laws.
(3) Software
Software for internal use is amortized on the straight-line method computed over the estimateduseful life of 5 years.
(4) Stock issuance costs
Stock issuance costs are charged to income as incurred.
(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 eligibility
requirements of the Company’s retirement regulations. The Company records accrued employees’ retirement benefit costs based on the amount 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 on the Company’s internal rules and regulations for the benefits.
21

Notes to the Non-Consolidated Financial Statements(7) Finance leases
In the normal course of business, the Company has entered into lease agreements. Finance leaseagreements, except for those agreements where the ownership of the leased assets is transferred to
the Company, are accounted for as operating leases.
(8) Consumption taxes
The consumption taxes withheld by the Company on sales and the consumption taxes paid by theCompany on its purchases of goods and services are not included in the amounts of relevant
accounts in the accompanying statements of income. The consumption taxes withheld and paid
is recorded as an asset or a liability, as the case may be, and the net balance is shown in the balance sheets.
(9) Appropriation of retained earnings
Under the Japanese Commercial Code and the Articles of Incorporation of the Company, theappropriation of retained 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 after the end of each financial year. The appropriation of retained earnings reflectedin the accompanying non-consolidated financial statements represents the results of appropriations which were applicable to the immediately preceding financial year and approved at theshareholders’ meeting and disposed of during that year. Year-end cash dividends are paid toshareholders on the shareholders’ register at the end of each financial year.
As is customary practice in Japan, the payment of bonuses to directors and statutory auditors ismade out of retained earnings, instead being charged to income for the year, and constitutes apart of the appropriations cited above.
(10)Reclassification
Certain accounts in the non-consolidated financial statements for the period ended March 31,
2002 have been reclassified to conform to the 2003 presentation.

3.
US Dollar Amounts
Amounts in U.S. dollars are included solely for the convenience of readers outside Japan. The rate of¥120.20=U.S. $1, the rate of exchange as of March 31, 2003, 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 the rate or any other rates.

4.
Business Transfer from Japan Securities Depository Center, Zaidan
On January 28, 2002, the Company reached an agreement with Japan Securities Depository Center,
Zaidan (hereinafter referred as “Zaidan”) for a transfer of the business of custody and book-entry
transfer to the Company. Pursuant to the agreement, the Company effectively took over the businessfrom Zaidan with approval at the Company’s shareholders’ meeting held on April 23, 2002 and was
authorized by competent ministers in accordance with the “Law Concerning Central Securities
Depository and Book-Entry Transfer of Stock Certificates and Other Securities” on June 11, 2002.

22

Notes to the Non-Consolidated Financial Statements

The assets and liabilities increased in the year ended March 31, 2003 as a result of the transferof the business from Zaidan are summarized follow:¥ (thousands)$ (thousands)

Current assets
Non-current assets
Total assets¥2,697,989
6,955,744¥9,653,733$22,446
57,868$80,314

Current liabilities
Long-term liabilities
Total liabilities¥ 856,962
22,406¥ 879,368$ 7,129186$ 7,316

In the settlement of the consideration for the business transferred from Zaidan, the loan receivable from Zaidan amounting to 8,300,000 thousand yen (69,052 thousand U.S. dollars) was netted
against to it.

5.
Lease Transactions
Finance lease transactions, other than those of which the ownership of the leased asset transferred to
the lessee, are accounted for as operating leases. Certain key information (in equivalent data) on suchlease contracts of the Company for the periods ended March 31, 2002 and 2003 is as follows:
2002:
There are no finance lease transactions to be disclosed.
2003:
As of March 31, 2003

Tools and furniture:
Acquisition cost
Accumulated depreciation
Net book value¥ (thousands)$ (thousands)¥90,549(4,527)¥86,022

$753
(37)
$716

The scheduled maturities of future lease payments, which includes the portion of interest thereon, onsuch lease contracts as of March 31, 2003 is as follow:
As of March 31, 2003

Due within one year
Due over one year
Total

¥ (thousands)$ (thousands)¥17,590
68,606¥86,196

$146
571
$717

Finance lease charges as well as depreciation and interest amounts (in equivalent data) for the year
ended March 31, 2003 is as follow:
For the year ended March 31, 2003

Finance lease charges
Depreciation (in equivalent data)
Interest (in equivalent data)¥ (thousands)$ (thousands)¥4,719
4,527
367

$39
37
3

(Note) Methods applied in computation of the equivalent data are as follow:
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 and allocated for theperiod based on the interest rate method.

23

Notes to the Non-Consolidated Financial Statements

6.
Short-Term Debts
Short-term debts at March 31, 2003 comprised loans from banks with weighted average interest rateof 1.675% per annum.

7.
Accrued Severance Indemnities for Employees
Accrued employees’ retirement benefits at March 31, 2003 represented the amount that would bepayable 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, 2003
amounted to 2,823 thousand yen (23 thousand U.S. dollars).

8.
Income Taxes
The Company is subject to a number of different income taxes which, in the aggregate, indicate anominal statutory tax rate in Japan of approximately 42.0% for the periods ended March 31, 2002
and 2003.
The significant components of deferred tax assets and liabilities at March 31, 2002 and 2003
are as follows:¥ (thousands)

Deferred tax assets:
Accrued bonuses
Enterprise tax payable
Business facility tax
Accrued retirement benefits to employees
Accrued retirement benefits to executives
Tax loss carried forwards

2002

2003

2003

—
—
—
—
—
4,612
¥ 4,612(4,612)¥—¥ 36,986
58,184
711
9,480
7,711
—
¥113,072—¥113,072

$308
484
6
79
64
—
$941
—
$941

¥

Less-valuation allowance
Net deferred tax assets

24$ (thousands)

Notes to the Non-Consolidated Financial Statements

9.
Related Party Transactions
Material transactions of the Company with related companies or individuals, for the year ended March
31, 2002 and 2003 are as follows:
2002(in thousand yen)

TitlesNameBusiness

Transactions

Director

Yoshinobu
TakeuchiRepresentative
Director
President ofJapan Securities
Depository Center,
ZaidanRepresentative
Director
Managing Directorof Japan Securities
Depository Center,
ZaidanLoans

2,400,000

Short-term loans

2,400,000

Interest

452

Other receivable

452

Hiromi Murai

AmountAccount

Ending Balance

1. Interest on loans is determined based on the market interest rate
2. This transaction is for the sake of third party

2003(in thousand yen)

TitlesNameBusiness

Transactions

Director

Yoshinobu
TakeuchiRepresentative
Director
Liquidator ofJapan Securities
Depository Center,
ZaidanLoans

5,900,000

Short-term loans—

Collections

8,300,000

Short-term loans—

55,004——Hiromi Murai

Director

Tatsunori
Imagawa

Director
Senior Managing
Director of Bank ofTokyo-Mitsubishi,
Ltd.

AmountInterest

Account

Ending Balance

Net payment
for business
transfer
8,774,965
Borrowings 1,330,000—
Short-term debt—
1,330,000

Interest

Prepaid interest

5,187

1. Interest on loans is determined based on the market interest rate.
2. This transaction is for the sake of third party.
3. Interest of borrowings is determined based on the regular rule of the bank.

25

488

Notes to the Non-Consolidated Financial Statements

10.
Net Income per Share
Basis for calculating earnings per share for the year ended March 31, 2003 is as follows:¥ (thousands)$ (thousands)
2003

Net income (statements of income)Net income per common stock
Directors bonus by appropriation of retained earnings
Weighted average number of common stock shares
outstanding (in shares)¥722,202
709,60212,600$6,008
5,904
105

8,417

8,417

11.
Subsequent Events(1) Establishment of a subsidiary company:
The Company’s board of directors voted in the affirmative on June 3, 2003 to establish a subsidiary which would deal with clearing for non-exchange transaction deliveries, which is to be settled on a DVP basis. The subsidiary was established on June 6, 2003.
The outline of the subsidiary follows:
Entity’s name:Location of head office:● Business details:●●●

Capital:JASDEC DVP Clearing Corporation
2-1-1 Kayaba-cho Nihombashi Chuo-ku Tokyo
Undertaking obligations concerning securities and incidental or otherrelated business10 million yen* It is expected that additional capital will be paid by May, 2004, when the subsidiary starts its operations.
●●Shareholders:
The number of shares held:

This is a 100% subsidiary of the Company
20 shares acquired for 20 million yen.

(2) Appropriations of retained earnings:
Appropriations of retained earnings are recorded in the accounts only after shareholders’ approvalhas been obtained. The following appropriation of retained earnings of the Company for the year
ended March 31, 2003 were approved at the Ordinary General Shareholders Meeting held on June20, 2003:
Cash dividends
Bonuses to executives¥ (thousands)$ (thousands)¥212,500
12,600$1,767
104(Including bonuses to statutory auditors amounting to 2,700 thousand yen ( 22 thousand U.S. dollars))

26

Report of Independent Auditors

TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
JAPAN SECURITIES DEPOSITORY CENTER, INC.
We have audited the accompanying non-consolidated balance sheets of Japan Securities Depository
Center, Inc. as of March 31, 2002 and 2003, and the related non-consolidated statements of income,shareholders' equity and cash flows for the period from January 4, 2002 (Date of Incorporation) to
March 31, 2002 and for the year ended March 31, 2003, all expressed in Japanese Yen. These nonconsolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these non-consolidated 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 non-consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the non-consolidated 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 non-consolidated financial statements referred to above present fairly, in all material respects, the financial position of Japan Securities Depository Center, Inc. as of March 31, 2002
and 2003, and the results of its operations and its cash flows for the period from January 4, 2002
(Date of Incorporation) to March 31, 2002 and for the year ended March 31, 2003 in conformity withaccounting principles and practices generally accepted in Japan.
The amounts expressed in U.S. dollars, which are provided solely for the convenience of readers, havebeen translated on the basis set forth in Note 3 to the accompanying non-consolidated financial statements.

ChuoAoyama Audit Corporation
Tokyo, Japan
June 20, 2003

Notice to Readers:
The accompanying non-consolidated financial statements are not intended to present the financial positions, results ofoperations and cash flows in accordance with accounting principles and practices generally accepted in countries and jurisdictions other than Japan. The standards, procedures and practices to audit such financial statements are those generally
accepted and applied in Japan.

27

Board Members and Auditors(As of June 30, 2003)

BOARD OF DIRECTORSPRESIDENT & CEO

Yoshinobu Takeuchi

DIRECTORSENIOR MANAGING DIRECTOR

Hiromi Murai

DIRECTORMANAGING DIRECTOR

Masao Yagi

DIRECTOR

Katsuro Kanzaki

Mamoru Kikuichi

Mikio Goto

Honorary Professor,
Kobe University

Managing Director,
Japan Securities Dealers Association

Senior Executive Officer,
UFJ Trust Bank Limited

DIRECTORDIRECTORDIRECTOR

Toshitsugu Shimizu

Masaru Takei

Shinichiro Tanaka

Executive Officer,
Tokyo Stock Exchange, Inc.

General Manager,
Tokyo Electric Power Company

Managing Executive Officer,
Mizuho Corporate Bank, Ltd.

28

Board Members and Auditors

DIRECTORDIRECTORDIRECTORDIRECTOR

Masayuki Tanaka

Nobuyoshi Nakano

Akihiko Nakamura

Kunihisa HamaManaging Director,
The Bank ofTokyo–Mitsubishi, Ltd.

Managing Director,
Nikko Citigroup
Securities Inc.

Member of Board of
Executive Officers,
Nomura Securities Co., Ltd.

Lawyer

DIRECTORDIRECTOR

Fumiyuki Hara

Teruo Watanabe

Executive Director,
UBS Securities (Japan) Limited

Senior Executive Officer,
Mitsui Asset Trust and Banking
Company, Limited

DIRECTOR

Hideo Watanabe
Executive Officer,
Daiwa Securities SMBC Co., Ltd.

AUDITORSSTANDING AUDITOR

Takashi Daigo

AUDITOR

AUDITOR

Masari Ugai

Takeshi Kusakabe

Vice Chairman,
Japanese Bankers Association

Executive Advisor,
Shinko Securities Co., Ltd.

29

List of Participants(As of July 1, 2003)

Total: 271
Securities Companies

Access Securities Co., Ltd.
* Ace Securities Co., Ltd.
* Aioi Securities Co., Ltd.
* Aizawa Securities Co., Ltd.
* Akakiya Securities Co., Ltd.
* Alps Securities Co., Ltd.
* Ando Securities Co., Ltd.
Aramachi Securities Co., Ltd.
* Ark Securities Co., Ltd.
* Awa Securities Co., Ltd.
Axes Japan Securities Co., Ltd.
* Banyo Securities Co., Ltd.
* Bright Securities Co., Ltd.
Capital Partners Securities Co.,
Ltd.
Central Tanshi Securities Co., Ltd.
* Century Securities Co., Ltd.
* Chuo Securities Co., Ltd.
Core Pacific – Yamaichi Securities
Co., Ltd.
* Cosmo Securities Co., Ltd.
* Daikumamoto Securities Co., Ltd.
* Daiman Securities Co., Ltd.
* Daisei Securities Co., Ltd.
* Daitoku Securities Co., Ltd.
* Daiwa Securities Co., Ltd.
* Daiwa Securities SMBC Co., Ltd.
D. Brain Securities Co., Ltd.
DLJ direct SFG Securities Inc.
* Dojimakanto Securities Co., Ltd.
* E. Trade Securities Co., Ltd.
* Eiwa Securities Co., Ltd.
* Firstmake Securities Co., Ltd.
Get Securities Co., Ltd.
* H. S. Securities Co., Ltd.
* Hikari Securities Co., Ltd.
* Himawari Securities, Inc.
* Hinode Securities Co., Ltd.
* Hirota Securities Co., Ltd.
* Ichiyoshi Securities Co., Ltd.
Imamura Securities Co., Ltd.
* IRIYA BANSEI SECURITIES CO.,LTD.
* Ise Securities Co., Ltd.
ITM Securities Co., Ltd.
ITOCHU Capital Securities Ltd.
* Iwai Securities Co., Ltd.
* Izumi Securities Co., Ltd.
* Japan Asia Securities Co., Ltd.
* Japan Cross Securities Co., Ltd.
* Japan Electronic Securities Co., Ltd.
* Jet Securities, Inc.
* Joko Securities Co., Ltd.
* Jonan Securities Co., Ltd.

* Jujiya Securities Co., Ltd.
* JVIC Securities Co., Ltd.
* Kabu. com Securities Co., Ltd.
* Kadoya Securities Co., Ltd.
* Kagawa Securities Co., Ltd.
* Kaneju Securities Co., Ltd.
* Kaneyama Securities Co., Ltd.
* Kaneyoshi Securities Co., Ltd.
* Kanzaki Securities Co., Ltd.
* Kimura Securities Co., Ltd.
* Kobe Securities Co., Ltd.
* Kokufu Securities Co., Ltd.
* Kotobuki Securities Co., Ltd.
* Kurokawakitoku Securities Co.,Ltd.
* Kyokuto Securities Co., Ltd.
* Kyowa Securities Co., Ltd.
* Maeda Securities Co., Ltd.
* Maruchika Securities Co., Ltd.
* Marudai Securities Co., Ltd.
* Marufuku Securities Co., Ltd.
* Maruhachi Securities Co., Ltd.
* Maruko Daika Securities Co., Ltd.
* Marukuni Securities Co., Ltd.
* Marusan Securities Co., Ltd.
* Maruwa Securities Co., Ltd.
* Matsui Securities Co., Ltd.
* Meiwa Securities Co., Ltd.
Me Net Securities Co., Ltd.
* Merrill Lynch Japan Securities
Co., Ltd.
Mirai Securities Co., Ltd.
* Mita Securities Co., Ltd.
* Mito Securities Co., Ltd.
Mitsubishi Securities Co., Ltd.
MITSUI SECURITIES CO., LTD.
Mitsubishi Tokyo WealthManagement Securities Ltd.
Miyako Securities Co., Ltd.
* Mizuho Securities Co., Ltd.
* Monex, Inc.
* Murosei Securities Co., Ltd.
* Musashi Securities Co., Ltd.
* Nagano Securities Co., Ltd.
* Naito Securities Co., Ltd.
* Nakaizumi Securities Co., Ltd.
* Nara Securities Co., Ltd.
* Naruse Securities Co., Ltd.
* NCS Securities Ltd.
* New–S Securities Co., Ltd.
Nihon Kyoei Securities Co., Ltd.
* Niigata Securities Co., Ltd.
* Nikko Beans, Inc.
* Nikko Cordial Securities Inc.
Nippon First Securities Co., Ltd.
* Nippon Global Securities Co., Ltd.
* Nishimura Securities Co., Ltd.

30

* Nishiwaki Securities Co., Ltd.
* Nissan Securities Co., Ltd.
Nissho Iwai Securities Co., Ltd.
* Nomura Securities Co., Ltd.
* Norinchukin Securities Co., Ltd.
* Nozomi Securities Co., Ltd.
* Odawara Securities Co., Ltd.
* Okachi Securities Co., Ltd.
* Okasan Securities Co., Ltd.
* Okinawa Securities Co., Ltd.
One Asia Securities Co., Ltd.
* Orient Securities Co., Ltd.
* Orix Securities Co., Ltd.
* Otsuka Securities Co., Ltd.
* Panta Rhei Securities, Co., Ltd.
* Port Satellite Securities. Co., Ltd.
Privee Zurich Securities Co., Ltd.
* Retela Crea Securities Co., Ltd.
Rokuwa Securities Co., Ltd.
* Sakamoto Hokuriku Securities
Co., Ltd.
* Sanei Securities Co., Ltd.
* Sanko Securities Co., Ltd.
* Sankyo Securities Co., Ltd.
* Sasayama Securities Co., Ltd.
* Shinbayashi Securities Co., Ltd.
* Shinko Securities Co., Ltd.
* Shin-Ogaki Securities Co., Ltd.
Shinsei Securities Co., Ltd.
* Shinwa Securities Co., Ltd.
Shizugin TM Securities Co., Ltd.
* Shizuoka Tokai Securities Co.,Ltd.
* Shonai Securities Co., Ltd.
* Sieg Securities Co., Ltd.
* SMBC Friend Securities Co., Ltd.
Sparx Securities Co., Ltd.
* Star Futures Securities Co., Ltd.
Starts Securities Co., Ltd.
* Taicom Securities Co., Ltd.
* Takagi Securities Co., Ltd.
* Tama Securities Co., Ltd.
* Tamaki Securities Co., Ltd.
* The Asahi Retail Securities Co.,Ltd.
* The Kosei Securities Co., Ltd.
* The Miki Securities Co., Ltd.
* The Mizuho Investors Securities
Co., Ltd.
* The Nakahara Securities Co., Ltd.
* The Tachibana Securities Co., Ltd.
* Tobu Securities Co., Ltd.
* Tokai Tokyo Securities Co. Ltd.
* Toyo Securities Co., Ltd.
Traders Securities Co., Ltd.
* Tsukamoto Securities Co., Ltd.
* Tsuyama Securities Co., Ltd.
* UFJ Tsubasa Securities Co., Ltd.

List of Participants* Usuki Securities Co., Ltd.
* Utsumiya Securities Co., Ltd.
* Utsunomiya Securities Co., Ltd.
* WORLD NICHIEI Securities
Co., Ltd.
* Yahata Securities Co., Ltd.
* Yamagata Securities Co., Ltd.
* Yamagen Securities Co., Ltd.
* Yamamaru Securities Co., Ltd.
* Yamani Securities Co., Ltd.
* Yamawa Securities Co., Ltd.
* YOKOHAMA securities Co., LTD.
* Yutaka Securities Co., Ltd.
Zukawa Securities Co., Ltd.
ABN Amro Securities (Japan)
Limited* Banc of America Capital Markets– Japan, Inc.
* Barclays Capital Japan Limited* Bear Stearns (Japan) Limited* BNP Paribas Securities (Japan)
Limited* Citicorp International Securities
Ltd.
* Commerz Securities (Japan) Co.,Ltd.
Credit Agricole Indosuez
Securities (Japan) Limited* Credit Lyonnais Securities
Europe Switzerland AG* Credit Suisse First Boston
Securities (Japan) Limited* Deutsche Securities Limited,Tokyo Branch* Dresdner Kleinwort WassersteinLtd.
E*T Institutional Securities
LimitedFidelity Brokerage Services(Japan), LLC* Goldman Sachs (Japan) Limited* HSBC Securities (Japan) Limited
HVB Capital Asia Limited
Hyundai Securities Co., Ltd.
ING Securities Japan Limited* Instinet Japan Limited* J.P. Morgan Securities Asia
LimitedJefferies (Japan) Limited* KBC Securities Japan
Lehman Brothers Japan Inc.
* Morgan Stanley Japan Limited* Nikko Citigroup Limited
RBC Dominion Securities (Japan)
LimitedSociété Générale Securities(North Pacific) Ltd.
* UBS Securities Japan Limited* WestLB Securities Pacific Limited

Banks and Other Financial
Institutions

Aozora Bank, Ltd.
* Japan Trustee Services Bank, Ltd.
* JSF Trust & Banking Co., Ltd.
* Mitsui Asset Trust and Banking
Company, Limited
Mizuho Bank, Ltd.
* Mizuho Corporate Bank, Ltd.
Mizuho Trust & Banking Co.,Ltd.
NikkoCiti Trust and Banking
Corporation
ORIX Trust and Banking
Corporation* RESONA BANK LIMITED
Shinkin Trust Bank, Ltd.
Shinsei Bank, Limited
Shinsei Trust and Banking Co.,Ltd.
* Sumitomo Mitsui Banking
Corporation* The Bank of Tokyo–Mitsubishi,
Ltd.
* The Bank of Yokohama, Ltd.
* The Chuo Mitsui Trust andBanking Company, Limited
The Daishi Bank, Ltd.
The Hiroshima Bank, Ltd.
The Kyoto Shinkin Bank
* The Master Trust Bank of Japan,
Ltd.
* The Mitsubishi Trust andBanking Corporation* The Nagano Bank, Ltd.
The Nomura Trust and Banking
Co., Ltd.
* The Norinchukin Bank
* The Norinchukin Trust &Banking Co., Ltd.
* The Sumitomo Trust & Banking
Co., Ltd.
* The Tokyo Tomin Bank, Limited
Tokyo Bankers Association* Tokyo Shoken Credit
Cooperative* Trust & Custody Service Bank, Ltd.
* UFJ Bank Limited* UFJ Trust Bank Limited
Barclays Global Investors Japan
Trust & Banking Co., Ltd.
BNP Paribas Private Bank (Japan)
Limited
Citibank, N.A.
Cititrust and Banking
Corporation
Deutsche Trust Bank Limited
J.P. Morgan Trust Bank, Ltd.
SG Private Banking (Japan)
Limited31

Standard Chartered Bank
State Street Trust and Banking
Company, Limited
The Hongkong and Shanghai
Banking Corporation Limited
UBS (Trust and Banking) Limited

Insurance Companies

Mitsui Sumitomo Insurance Co.,
Ltd.
Nippon Life Insurance Company
Sompo Japan Insurance Inc.
The Dai-Ichi Mutual Life
Insurance Company
The Meiji Mutual Life Insurance
Company* The Taiyo Life Insurance
Company
The Tokio Marine & Fire
Insurance Co., Ltd.

Stock Exchanges and Others* Central Tanshi Co., Ltd.
* Chubu Securities Finance Co.,Ltd.
* Daiko Shoken Business Co., Ltd.
* Fukuoka Stock Exchange* Japan Securities Agents, Ltd.
Japan Securities Clearing
Corporation* Japan Securities Dealers
Association* Japan Securities Finance Co., Ltd.
* Japan Securities Settlement
Custody, Inc.
Jasdaq Market, Inc.
* Nagoya Stock Exchange, Inc.
* Osaka Securities Exchange, Inc.
* Osaka Securities Finance Co.,Ltd.
* Sapporo Securities Exchange
The Tokyo Tanshi Co., Ltd.
* Tokyo Securities Transfer AgentCo., Ltd.
* Tokyo Stock Exchange, Inc.
Ueda Yagi Tanshi Co., Ltd* Shareholder
Note: Overseas CSDs participating in
JASDEC through JSSC;
The Central Depository (Pte)
Limited (Singapore)HISTORY

May 1984

The Law Concerning Central Securities Depository and Book-Entry Transfer of Share
Certificates and Other Securities (CSD Law) was passed, and enforced in November 1984.

Dec. 1984

Japan Securities Depository Center (JASDEC) was founded as a not-for-profit foundation
under a permit granted by the Minister of Finance and the Minister of Justice (competent
ministers) pursuant to Article 34 of the Civil Code.

May 1985

JASDEC was designated as a depository under the CSD Law by the competent ministers.

Oct. 1991

JASDEC began offering its depository services for stocks listed on the Tokyo Stock Exchange.

Oct. 1992

JASDEC expanded its depository services, covering all stock exchange–listed stocks and OTCregistered stocks.

Jun. 1993

The U.K. Securities and Futures Authority approved JASDEC as an eligible foreign custodian.

Aug. 1993

The U.S. Securities and Exchange Commission issued a no-action letter to exempt JASDEC
from Section 17(f) of the Investment Company Act of 1940 and Rule 17f-5(c)(2)(iii).

Jun. 1997

The Association of German Bankers approved JASDEC as an eligible foreign custodian.

May 2000

JASDEC replaced its securities depository and book-entry transfer system with new systems.

Sep. 2000

JASDEC constructed a back-up center in Osaka.

Dec. 2000

JASDEC started handling preferred investment securities.

May 2001

JASDEC launched its system for DVP settlement of exchange trades in Tokyo and Osaka.

July 2001

JASDEC started handling ETFs.

Sep. 2001

JASDEC started handling REITs.
JASDEC implemented the Pre-Settlement Matching System (PSMS) for domestic trades bydomestic institutional investors.

Nov. 2001

JASDEC started handling of corporate convertible bonds.

Jan. 2002

Japan Securities Depository Center, Inc, was established.

Feb. 2002

PSMS was expanded to cover trades by nonresident investors.

Jun. 2002

All central custody and book-entry transfer business was transferred to the new, incorporated
entity and the former entity was dissolved.
The Association of German Bankers approved the new incorporated entity as an eligible
foreign custodian.

Jan. 2003

The Law Concerning Book-Entry Transfer of Corporate and Other Debt Securities became
effective and JASDEC was designated as a transfer institution under the terms of the new law.

Mar. 2003

JASDEC launched the Securities Information Tracing System (SITRAS) for lost stocks.
JASDEC inaugurated its Electronic Commercial Paper book-entry system.

May 2003

PSMS was expanded to cover transactions for government bonds and stock exchange–tradedfutures and options.

32Corporate Information(As of June 30, 2003)

The Japan Securities Depository Center, Inc. (JASDEC), is the only central securities
depository in Japan, designated under the Law Concerning Central Securities
Depository and Book-Entry Transfer of Stock Certificates and Other Securities (CSD
Law). JASDEC provides depository and book-entry transfer services for marketablesecurities, in accordance with the CSD Law.
In June 2002, JASDEC assumed all businesses previously undertaken by theJapan Securities Depository Center—its predecessor organization, which was established in December 1984 under the CSD law as a not-for-profit foundation—andbegan operations as a stock company.
JASDEC aims to contribute to the formation of a Japanese financial market thatis highly competitive on an international basis. Toward this end, the Company will
utilize its status as a stock company to make its operations more transparent andstrengthen its financial position, while working to improve the safety, efficiency andconvenience of securities settlement systems.

COMPANY NAME:

Japan Securities Depository Center, Inc.

DATE OF INCORPORATION:

January 4, 2002

DATE OPERATIONS BEGAN:

June 17, 2002

CAPITAL:¥4.25 billion

COMMON STOCK ISSUED:

8,500 shares

NUMBER OF SHAREHOLDERS:

198

NUMBER OF EMPLOYEES:95

ADDITIONAL PERSONNEL:

217 (working for entrustees)
101 (working on outsourced systems development and operations)

REGISTERED HEAD OFFICE

1-1, Nihombashi-Kayaba-cho 2-chome
Chuo-ku, Tokyo 103-0025, Japan
Phone:+81-3-3661-0161

Facsimile: +81-3-3661-2810
Website:http://www.jasdec.com

OPERATIONS OFFICES

Commenced
business

Expansion

Osaka Office:6-10, Kitahama 1-chome, Chuo-ku, Osaka 541-0041

December 6, 1984

October 9, 1991

November 26, 2001

Nagoya Office:3-17, Sakae 3-chome, Naka-ku, Nagoya 460-0008

The Japan Securities Depository Center established as a
not-for-profit foundation inline with the November 1984
enforcement of the CSD Law.

Commenced business asJapan’s only central securities
depository for stock
certificates.

Began handling convertible
bonds.

Fukuoka Office:14-2, Tenjin 2-chome, Chuo-ku, Fukuoka 810-0001

Sapporo Office:14-1, Minamiichijo-Nishi 5-chome, Chuo-ku, Sapporo 060-0061

EstablishedContents

At a Glance
1
Financial Highlights
2
President’s Message
3
Spurring Greater Confidence in the Japanese Market
7
Business Overview
14
Financial Statements
17
Report of Independent Auditors
27
Board Members and Auditors
28
List of Participants
30
History
Cover:
32
The character on the cover—pronounced “sou”—means
Corporate Information
creation. To JASDEC, this character is not merely a part33
of language but a true symbol of the creativity that
infuses the Company, in the activities it undertakes
Organization Structure
today and those that it plans for tomorrow.
33

Tokyo Office:6th Floor, Daini-Shoken Kaikan Bldg.
1-1, Nihombashi-Kayaba-cho 2-chome, Chuo-ku, Tokyo 103-0025

March 31, 2003
Began handling commercial
paper in dematerialized form,in accordance with the Law
Concerning Book-Entry
Transfer of Corporate andOther Debt Securities.

Organization Structure(As of June 30, 2003)● M EETING OF S HAREHOLDERS● A UDITORS O FFICE● B OARD OF D IRECTORS● P RESIDENT & CEO● A UDITORS● General Administration Department● General Affairs Section● Accounting Section● Corporate Planning Department● Business Administration Department● Commercial Paper Department● Business Planning Department● First System Department● Second System Department● Tokyo Operations Office● Osaka Operations Office● Nagoya Operations Office● Fukuoka Operations Office● Sapporo Operations Office33

JASDEC, Japan’s central
securities depository,
opened a new chapter
in its business history
in the fiscal year ended
March 31, 2003, by
taking its place as astock corporation.

Annual Report 2003
Printed in Japan on recycled paper
Uses soybean ink inconsideration of the environment

For the year ended
March 31, 2003