Japan Securities Depository Center, Inc.
A N N U A L

R E P O R T

2 0 0 4F O R T H E Y E A R E N D E D M A R C H 31, 2004

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

Corporate Information
As of June 30, 2004

T he Japan Securities Depository Center, Inc. (JASDEC), is the sole central securities

COMPANY NAME:

Japan Securities Depository Center, Inc.

DATE OF INCORPORATION:

January 4, 2002

depository in Japan, designated under the Law Concerning Central Securities Depository

DATE OPERATIONS BEGAN:

June 17, 2002

CAPITAL:¥4.25 billion (shareholders’ equity ¥10.6 billion)

COMMON STOCK ISSUED:

8,500 shares

NUMBER OF SHAREHOLDERS:

193

NUMBER OF EMPLOYEES:106

REGISTERED HEAD OFFICE

1-1, Nihombashi-Kayaba-cho 2-chome

and Book-Entry Transfer of Stock Certificates and Other Securities (CSD Law). JASDEC
provides depository and book-entry transfer services for publicly traded securities, inaccordance with the CSD Law.
In June 2002, JASDEC assumed all businesses previously undertaken by the Japan

Chuo-ku, Tokyo 103-0025, Japan
Phone:

Securities Depository Center — its predecessor organization, which was established in+81-3-3661-0161

Facsimile: +81-3-3661-2810

December 1984 under the CSD Law as a not-for-profit foundation — and began operations as a stock company.

Website:http://www.jasdec.com

OPERATIONS OFFICESJASDEC aims to contribute to the formation of a Japanese financial market that isTokyo Office:6th Floor, Daini-Shoken Kaikan Bldg.
1-1, Nihombashi-Kayaba-cho 2-chome, Chuo-ku, Tokyo 103-0025

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 and strengthen its
financial position, while working to improve the safety, efficiency and convenience of securities settlement systems.

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

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

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

SUBSIDIARY COMPANY
Company Name:JASDEC DVP Clearing Corporation

Date of Incorporation:

June 6, 2003

Commenced Operations: May 17, 2004
Capital:¥310 million

Registered Head Office:1-1, Nihombashi-Kayaba-cho 2-chome, Chuo-ku, Tokyo 103-0025

Contents

EstablishedNew corporate
structure

December 6, 1984

January 4, 2002

The Japan Securities Depository
Center established as a not-forprofit foundation in line with theNovember 1984 enforcement of
the CSD Law.

The Japan Securities Depository
Center, Inc., incorporated as a stockcompany.

1 At a Glance
2 Financial Highlights
3 President’s Message
6 An Interview with the President
9 Ongoing Securities Settlement
System Reform in Japan
14 Business Overview
17 Financial Statements

October 9, 1991
26 Report of Independent Auditors
27 Non-Consolidated Financial
Highlights
28 Board Members and Auditors
30 List of Participants
32 History
33 Corporate Information
33 Organization Structure

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

Organization Structure(As of June 30, 2004)● M EETING OF S HAREHOLDERS

June 17, 2002
Assumed all the businesses of theJapan Securities Depository
Center, in accordance with the
CSD Law.

● 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● Bond and Commercial Paper Department● Business Planning Department

June 6, 2003
Established JASDEC DVP Clearing
Corporation (JDCC) to undertake
clearing services related to the
DVP settlement system for nonexchange transaction deliveries(NETD).

● First System Department● Second System Department● Tokyo Operations Office● Osaka Operations Office● Nagoya Operations Office● Fukuoka Operations Office● Sapporo Operations Office233

At a Glance

SHARES IN CUSTODY

228

billion shares
The number of shares in custody reached 228.2 billion as of the endof March 2004.

SHARES TRANSFERRED BY BOOK ENTRY

754

billion shares
Of the 754.7 billion shares transferred by book entry, nonexchange trade transfers accounted for 442.7 billion shares, or
58.7% of the total.

Revenues by Operation
Year ended March 31, 2004
Billions of yen

Otherservices¥4.7
Custody¥5.0Book-entry
transfer¥11.1

Note: Refund of fees amounted to¥3.7 billion for the year
ended March 31, 2004.

NUMBER OF ELIGIBLE ISSUING COMPANIES

3,665

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

64%
Shares in custody represents 64.1% of the entire domestic stock
market. Our custody ratio for convertible bonds reached 96.2% asof the end of March 2004.

Further Expansion

Our Mission
In view of our duty to serve theNovember 26, 2001

public, our mission is to provide ahighly secure, efficient and convenient securities clearing andsettlement infrastructure, which inturn contributes to further development of the securities market.
Toward this end, we place a special
focus on reducing settlement risks,
promoting straight-through processing (STP), and encouraging
greater use of depository services
for further immobilization of securities amid progress in the dematerialization of securities certificates.

Began handling convertible bonds.
March 31, 2003
Began handling commercial paper in dematerialized form, in accordancewith the Law Concerning Book-Entry Transfer of Corporate Bonds, etc.
August 20, 2003
Signed a memorandum of understanding with The Depository Trust &Clearing Corporation (DTCC) of the United States.
May 17, 2004
Commenced DVP settlement services for NETD.

1

Financial Highlights

CONSOLIDATED
For the the year ended
March 31, 2004

Thousands of yen

Thousands of
US dollars

2004

2004

¥17,124,010$ 162,021

Income from operations

2,600,333

24,603

Net income

1,650,629

15,618

Total assets¥18,904,383$ 178,866

Shareholders’ equity

10,636,565

100,639

Net cash provided by operating activities

4,708,979

44,555

Common stock

4,250,000

For the year:
Operating income

At year end:

Yen

US dollars

192,579$1,822.12

Per share:
Net income—primary¥

Note: The amounts stated in US dollars in this report are translated, solely for convenience, at¥105.69=US$1, the exchange rate prevailing on March 31, 2004.

Thousands of
US dollars

Thousands of yen
2003

NON-CONSOLIDATED
For the the years ended
March 31, 2004 and 2003

2004

2004

For the year:
Operating income¥11,143,854 ¥17,124,010

Income from operations$162,021

1,218,075

2,623,374

24,821

722,202

1,664,558

15,749¥14,590,662 ¥18,914,630$178,963

Net income
At year end:
Total assets
Shareholders’ equity

9,211,035

10,650,494

100,771

Common stock

4,250,000

4,250,000

40,212

8,500

8,500

Number of shares outstanding

Yen

US dollars

Per share:
Net income—primary
Cash dividends applicableto the year¥

84,297 ¥194,218$1,837.63

25,00025,000236.54

Note: The amounts stated in US dollars in this report are translated, solely for convenience, at¥105.69=US$1, the exchange rate prevailing on March 31, 2004.

2

2

President’s Message

SEEKING TO BUILD
A MARKET INFRASTRUCTURE
TO THE WORLD’S HIGHEST
STANDARD
Fiscal 2003 Review

It is our ongoing objective to provide users with an expedient securities
clearing and settlement system. Therefore, in fiscal 2003, ended March 31,
2004, we maintained our focus on four goals. They are: 1) to promote securities clearing and settlement reform; 2) to encourage greater use of securities
depository and book-entry transfer services; 3) to reinforce operating systems
and ensure security; and 4) to reduce the cost burden on participants.
A notable development during the fiscal year in review was the fullscale implementation of a book-entry transfer system for commercial paper(CP) — Japan’s first dematerialization for marketable securities — that totally
dematerializes CP, from its issuance and transfer through to redemption.
In May 2003, we put the third and final phase of the first stage of the
pre-settlement matching system (PSMS) online and added a matching function for government bonds and exchange-traded futures and options. Thenin June 2003, we established JASDEC DVP Clearing Corp., a wholly owned
subsidiary, to undertake clearing services related to DVP settlement system
for non-exchange transaction deliveries (NETD), and pushed ahead withpreparations, including systems development, geared to the start of the delivery
versus payment (DVP) system for NETD in May 2004.
We also launched an advertising campaign, using newspapers, television and other media, to encourage investors andissuers to utilize our services. As a result, the number of sharesin custody reached 228.2 billion as of March 31, 2004, andexpanded our custody ratio to 64.1% of all outstanding sharesin Japan.
As part of our efforts to reinforce ties with international organizations,in August 2003, we signed a memorandum of understanding with The
Depository Trust & Clearing Corporation in the United States to foster businesscooperation mutually beneficial to both companies and promote an exchange
of information.

228.2

billion

NUMBER OF SHARESIN CUSTODY3

President’s Message

Yoshinobu Takeuchi, President & Chief Executive Officer

2OO3

HIGHLIGHTS OF THE YEAR

Fiscal

May 2003

Implemented third phase of first stage ofpre-settlement matching system.
June 2003

Established JASDEC DVP Clearing Corp.,
a wholly owned subsidiary.
August 2003

Signed a memorandum of understanding
with The Depository Trust & Clearing Corp.
of the United States.

4

President’s Message

Operations Reflecting Social Demands

J ASDEC utilized its June 2002 transformation into a stock company toenhance its governance function, thereby enhancing the transparency ofoperations and strengthening its financial position. The Company also
appointed a Board of Directors on which 10 members are representatives
from participant companies and established the Committee for Business
Operations to ensure that business activities properly reflect the needs andfeedback of users.
We have always maintained a trend toward reduced fees for users andremain committed to lessening the cost burden on users by achieving greater
operating efficiency to minimize costs.
Our management direction is guided by three principles:1) to ensure highly transparent business activities that put users before anything else;2) to provide capacity on a par with overseas central securities depositories; and3) to extend exceedingly reliable and cost-effective services.
These principles underpin ongoing efforts to identify user needs with greater
accuracy, elicit a more user-friendly infrastructure for clearing and settlement,
and polish our capabilities still further, all of which will lead to a higher
deposit ratio and pave the way for securities clearing and settlement system
reform in Japan.
On behalf of the Board and employees of JASDEC, I sincerely ask forthe continued support of all parties, including participants, shareholders,issuers, and investors.
June 2004

Yoshinobu Takeuchi
President and Chief Executive Officer

Pre-Settlement Matching System (PSMS) A system that automatically matches various information, including the name andvalue of trades and settlements. Please refer to page 10.
Delivery versus payment (DVP) Please refer to page 10.

5

An Interview with the President

IN THE FOLLOWING Q&A SECTION, PRESIDENT TAKEUCHI TOUCHESON ISSUES PERTAINING TO THE DOMESTIC SECURITIES CLEARING AND
SETTLEMENT SYSTEM AND JASDEC’S RESPONSES.

D OMESTIC S ECURITIESC LEARING AND S ETTLEMENTS YSTEM R EFORM
Question

What progress has Japan made in securities clearing andsettlement system reform?

I n 2000, the Financial Services Agency released a report highlighting“safety” and “efficiency” in securities clearing and settlement system reform,
and Japan embarked on the task of creating an internationally competitive
financial infrastructure of the world’s highest standard.
Three issues have been raised with regard to the domestic securities
clearing and settlement system.
The first issue is costs — that is, the time and money expended byusers — arising from clearing and settlement functions separated by type of
securities, be they stocks, government bonds, corporate bonds, investment
trusts or some other type of securities.
The second issue is the realization of straight-through processing(STP), which has been tipped as the key to trimming costs and reducing thesettlement risks that accompany shorter settlement cycles.
The third issue is the standardization of trading data and the harmonization of communication protocols.
Efforts to achieve reform thus hinge on the question of how to maintain safety and efficiency — specifically, how to minimize inherent risks andcosts by enhancing system design and applying information technology —while successfully addressing the three issues outlined above.
JASDEC has tackled its reform in three particular areas.
First, to improve efficiency of the systems used in securities clearing
and settlement, we worked to promote STP for the PSMS and expand eligible
securities and applicable trades.

Straight-through processing (STP) An electronic system that eliminates human intervention from all trade-to-settlement
processes involved in securities transactions.
T+1 (Trade date plus one day)A movement to compress the settlement cycle — from trade date to payment and settlement — to one day after trading, from thecurrent three days after trading.

6

An Interview with the President

Target and Theme

1

2

Target 3

TargetTargetCatch up with major foreign
markets

Establish competitive market
infrastructures

Realize most advanced market
infrastructures

Theme

Theme

Improving Efficiency

Improving Efficiency

PROMOTING STPPROMOTING PAPERLESS SYSTEM● September 2001

Start of book-entry transfer system:

Theme

Reducing Principal Risk
PROMOTING DVPStart PSMS

● May 2004

Start DVP for NETD

INCREASING ELIGIBLE SECURITY TYPES● March 2003

Electronic CP● January 2006

● November 2001

Start convertible bondtransactions
ENHANCING CSD GOVERNANCE● June 2002

Corporate and Municipal SBs● 2006–

Investment trust beneficiaryrights● 2009–Reorganization of JASDEC

StocksPROMOTING DEPOSITSREDUCING LIQUIDITY RISKS● Shorter settlement cycle (T+1)

Second, we utilized our transformation into a stock company to reinforce our corporate governance capabilities as a central securities depository,
while raising our profile through advertising to attract more investors andissuers to our services.
And third, to minimize principal risk, we targeted the development of
a DVP settlement system, and in May 2004, we connected the PSMS to our
newly implemented DVP system for NETD.
Through these efforts, we have contributed to the establishment of aninternationally competitive financial market infrastructure in Japan and theachievement of first-half objectives set out for securities clearing and settlement system reform.

JASDEC’ S T OPICS
Question

What major systems issues must be tackled now and how
will JASDEC respond?

The next major task of reform is dematerialization. In March 2003, JASDEC
began providing book-entry transfer services for dematerialized CP. As of7

An Interview with the President

March 31, 2004, these services covered 257 issues, and the outstanding amountstood at ¥1,403.2 billion.
By and large, dematerialization of securities removes the risks inherent
in transporting physical certificates and cuts the cost of safekeeping them.
Moreover, dematerialization leads to safer, more efficient settlement andclearing operations, because no certificates have to be produced, delivered orpresented, and CP trades are now settled with the DVP system. Dematerialization also boosts trading of CP, because issuers can use smaller denominations without worrying about the cost of stamp duties on every certificate.
In addition to a book-entry transfer system for corporate and municipal straight bonds scheduled for implementation in January 2006, JASDEC iscurrently preparing for the introduction of a book-entry transfer system forinvestment trust beneficiary rights as well as the further implementation of asystem geared to the dematerialization of stock certificates, the final goal of
the reform process. This corresponds to legislative amendments such as revisionof the Commercial Code.
A higher custody ratio will facilitate the conversion of paper stocks
into dematerialized form, so we aim to pull our custody ratio into the 80%
range through the use of advertising aimed at investors, including individual
investors.

R ISK M ANAGEMENT
Question

How is JASDEC reinforcing computer system management?
We are fortifying computer systems considerably, paralleling expansion ofservices. Coinciding with the May 2001 start of DVP for exchange tradedeliveries of stock certificates, etc., we upgraded central processing units todouble their processing capability. Then, in March 2002, we installed new
storage equipment in order to boost processing capacity for beneficial shareholder notifications from 21.6 million cases to 30 million cases for eachrecord date.
On the safety front, we established a backup center in September
2000 with the Bank for International Settlements’ Lamfalussy Standards inmind. In addition, we have set up an action plan incorporating all possible
measures to deal with a natural or non-natural disaster.
To reinforce management of information systems, we formulated ourown security policy, based on such international standards as BS ISO/
IEC17799 for information security management.

8

Special Feature

ONGOING SECURITIESSETTLEMENT SYSTEMR E F O R M I N J A PA N

The implementation of a DVP system for NETD, including stock
certificates, marked the halfway point for securities settlement system reform in Japan. The next challenge is to introduce changes
geared toward the ultimate goal of dematerializing stock certificates.
The following section highlights JASDEC’s efforts in this area, specifically the DVP for NETD launched in May 2004 and the special features and structure of the book-entry transfer system for straightbonds that is scheduled to go online in January 2006.

99

Special Feature

SYSTEM IMPLEMENTED MAY 2004

DVP for NETD

PROGRESS ON
PSMS AND DVP
SYSTEMS2001
May DVP for exchangeBASIC STRUCTURE

trade transfers begins.
DVP for NETD is a gross-net-type DVP settlement system that links book-entry transfer of stocks and other securities
September First phasewith payment of funds, based on settlement instruction data produced byof first stage of PSMS
the pre-settlement matching system (PSMS). With this type of system,
implemented.
book-entry delivery of securities is processed on a trade-for-trade — orCovers stock transactions
gross — basis, whereby at the end of the day each participant pays or
by domestic institutional
receives the balance that remains when payable amounts for receipts ofinvestors.
securities and receivable amounts for deliveries of securities are netted out.
These procedures, already adopted by the Depository Trust & Clearing Corporation, effectively
reduce securities settlement risk and facilitate efficient processing of numerous settlements.
Connecting PSMS and the DVP for NETD represents the last step on
the road to achieving STP for securities settlement in Japan. Once the two
JASDEC DVP CLEARING CORPORATION
systems are connected, PSMS-generated instruction data on settlements
In June 2003, we established JDCC as
will be relayed to the DVP system automatically, obviating the need to input
a wholly owned subsidiary to provide
instructions through a separate process and bringing settlements to their
DVP settlement services. In April 2004,
respective quick conclusions.
the company was licensed as a securities
CONTROLLING RISKS IN THE DVP FOR NETD Controlling
clearing agency to undertake securities
risk in the DVP for NETD is a priority for us. Major risk-management
obligations, in accordance with theefforts are outlined below.
Securities Exchange Law, and it launched
1. Principal Risk Management: We will limit risk by having our clearing
DVP settlement services for NETD in
subsidiary hold assets for each DVP participant that exceeds the
May 2004.
balance owing by that same DVP participant.
LOCATION: TokyoDATE OF INCORPORATION: June 6, 2003
CAPITALIZATION: ¥310 million
SHAREHOLDER: Japan Securities
Depository Center, Inc. (100% equity)
PRESIDENT AND CEO:Yoshinobu Takeuchi
NUMBER OF EMPLOYEES:Four directors (including one auditor)and eight full-time staff
BUSINESS CONTENT: Undertaking
securities obligations and providing
supplementary and related services.

2. Liquidity Risk Management: We will establish participant funds andcredit lines with banks to maintain an appropriate level of fundliquidity and to 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 satisfy a
set standard for management soundness, such as a certain capital
adequacy ratio, and will monitor each participant against this standard
for any changes in status.
4. JASDEC DVP Clearing Corporation (JDCC), our recently establishedsubsidiary, ensures thorough legal compliance with rules for risk
management and netting.

Pre-Settlement Matching System (PSMS) 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 a PSMS
and the creation of a DVP system that links to the PSMS. The PSMS is a system that electronically matches information related to trades
and settlements among institutional investors, securities firms, trust banks and other entities once stock certificates or other securities havebeen traded.
Delivery versus payment (DVP) A system that simultaneously attaches specific conditions to the delivery of and payment for
securities. International standards, recommended by the G30 and other organizations, require the application of a DVP system toall securities settlements to eliminate settlement risk.

10

2002

2003

2004

February Second

May Third phase of
first stage of PSMS
implemented.

May DVP for
NETD went online.

phase of first stage ofPSMS implemented.

Covers convertible
bonds, initialofferings and tradesby nonresidents.

Covers government
bonds, and listed
futures and options.

Pre-Settlement Matching System
Trade Matching

Delivering
Participant

1
DVP book-entry
transfer request

SSI
Settlement

1
DVP book-entry
transfer request

Receiving
Participant

LINKING PSMS
AND DVP SYSTEMS
Matching

2 Settlement instructions

DVP Book-Entry
Transfer System for Securities

ParticipantA
Account

Execution
Completion
Participant
JDCC
3
7
B
Account Conditions for
Conditions for
Account
Executing Book-Entry
Completing Book-Entry
Transfer of Securities
Transfer of Securities–Securities balance is sufficient.
–Delivery conditions are met.
–Net debit cap is not exceeded.
–Net receivable amount is confirmed.
–Assurance asset monitor–Payment of balance owing
remains positive.
is completed.
If all conditions have been
If any condition has beensatisfied, stocks will besatisfied, the stocks will bedelivered to the JDCC account.
delivered to the JDCC account.
Book-entry transfer of securities executed/completed according to instructions
Funds recorded by netting/recording valueof 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

Participant
B
Account

Funds received by book-entry transfer of settlement amount.

Notes: 1. Assurance asset monitor = Value of assurance asset — Net debit
2. JDCC: JASDEC DVP Clearing Corporation, a subsidiary of JASDEC
3. SSI: Standing Settlement Instructions

11

Special Feature

NEW BOOK-ENTRY TRANSFER SYSTEMCORPORATE AND MUNICIPAL STRAIGHT BONDS
SOLE BOOK-ENTRY TRANSFER INSTITUTION FOR STRAIGHT BONDS In Japan,
registering agencies, which number about 160, are used to settle the majority of corporate bondtransactions through registration. These agencies execute the required book-entry transfer and essentially dematerialize the securities into registered bonds. In January 2003, introduction of The Law
Concerning Book-Entry Transfer of Corporate Bonds, etc. 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 inJapan. Through these efforts, we expect to raise SB liquidity, enhance settlement efficiency and set
the stage for shorter settlement periods.
JASDEC announced a breakdown of the book-entry transfer procedures for corporate andmunicipal SBs in June 2003 and a summary of the book-entry transfer system processing in October
2003. It is our goal to place ourselves at the center of an STP system that electronically executes aseries of procedures, from trade matching to securities and cash settlement.
TWO SETTLEMENT METHODS A choice of two settlement methods will be available: by DVP
system and by non-DVP system, otherwise known as free-of-payment settlement. For the DVP system, we will apply the real-time, gross-net format known as BIS model 1, which transfer instructions
settle for both securities and funds, with delivery of securities occurring at the same time as paymentof funds. In August 2005, we will initiate a comprehensive test — our final check — to confirm connections with the systems of users, with a view to launching the book-entry transfer system for SBs in
January 2006. In addition, management has prioritized the development of high-quality systems andthe trouble-free conversion of existing SBs, with an outstanding amount of about ¥200 trillion, fromtheir current registered status to book-entry status.

TRANSITION PERIOD By government ordinance, the prevailing Corporate Bond Registration
Law will be abolished by January 5, 2008. JASDEC will establish a transition period lasting about two
years, during which registered bonds will be issued either as book-entry transfer bonds, based on the
new law, or actual delivery of bonds, based on the principles of the Commercial Code. With theapproval of issuers and investors, it will become possible to convert an outstanding registered bondinto a book-entry transfer bond for handling by our system. To maintain a smooth transition, we willcontinue to pursue activities that elevate awareness of book-entry transfer bonds.

INVESTMENT TRUST BENEFICIARY RIGHTS
The basic legal framework for a book-entry system applied to investment trust beneficiary rights issimilar 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 bookbased 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 canceling investment trusts, settlement systems foreach type of investment trust, procedures for handling earnings dividends, and methods to ensurethat the pool of some three 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 corporate and municipal
bonds on its registry so investors may settle transactions without bond certificates.

12

SCHEDULE FOR CORPORATE AND
MUNICIPAL STRAIGHT BONDS
2004

2005

October

May JASDEC

August JASDEC

JASDECannounced
summary of bookentry transfer
system processing.

announced
connection
specifications.

plans to startcomprehensive
connection test.

2006

2006-72008

January JASDEC

Registered bonds
already in issue will
be changed to bookentry bond status.
By government
ordinance, registeredbonds will no longer
be issued afterJanuary 2008.

January End of

2003
January The Law

concerning Book-Entry
Transfer of Corporate
Bond, etc. goes into
effect. (Abrogation of
the Corporate Bond
Registration Law
expected within five
years of the new law’s
implementation.)
June JASDEC

announced breakdownof book-entry transfer
procedures forcorporate andmunicipal straightbonds.

expects to launch
book-entry transfer
system for straightbonds.

temporary grace
period applied tointerest income tax
on registered bonds.

JASDEC
Pre-Settlement
Matching System
1
Trade Report Data
4
Notice ofAffirmation

Affirmation/
Disaffirmation

SSI
Notice ofSettlement Matching
Status7

6

Settlement
Matching

8
Transfer Application(linked with 6)

JASDEC
Participant2
Trade Report Data
3
Affirmation of Trade5
Automatic
Generation of
Settlement
Instruction Data
7
Notice ofSettlement Matching
StatusJASDEC
Participant

Transfer
System9(Deliverer)
10
Notice of Recording

15
16
Securities Transfer
Notice(Receiver)

Record inTransfer
Account
Security
Transfer

14
Settlement
Completion

Securities Transfer
Notice16

11
Fund
Settlement Data

12
Notice of Receipt
14
Notice of Receipt
Completion

Fund
Transfer
Bank of Japan

13
Payment Instruction
14
Notice of Payment
Completion

13

Business Overview

PARTICIPANTS AND ACCOUNTS
Participant firms open an account at JASDEC and deposit the certificates they wish to consign. Suchfirms include securities companies, banks, trust banks, insurance companies, securities finance companies and stock exchanges.
As of the end of March 2004, the number of participants stood at 275, and the number ofaccounts stood at 459.
PARTICIPANTS BY
CATEGORY

Stock exchange
and others 15(As of March 31, 2004)

NUMBER OF
ACCOUNTS BY
CATEGORY

Securities
financecompanies 3

Stock exchange
and others 29

Securities
financecompanies 4(As of March 31, 2004)

Life and non-life
insurance companies 7
Note: Customers of participant
firms do not deposit certificatesdirectly to JASDEC. Instead, theyutilize JASDEC’s services through theaccounts they establish at participant
firms.

Life and non-life
insurance companies 9

Banks
45
Securities
companies 205

Securities
Banks 182 companies
235

Total 459

Total 275

ISSUING COMPANIESAs of the end of March 2004, 3,665 companies, representing all publicly traded companies in Japan,
have consented to JASDEC handling their stocks.
Number of Companies
4,500

4,000

3,500

3,000

0

FY1999FY2000FY2001

FY2002

FY2003

3,366

3,498

3,610

3,626

3,665

ELIGIBLE SECURITIESJASDEC accepts the securities described in the CSD Law. Consent of the issuing company is also a
prerequisite. Currently, securities deemed eligible are domestic securities, including stocks, convertible bonds (CBs; corporate bonds with subscription warrants to new shares), beneficiary certificatesof exchange-traded funds (ETFs), certificates of real estate investment trust (REITs), and preferredinvestment bonds of financial institutions established by cooperative associations, which are listed on
stock exchanges or registered with the Japan Securities Dealers Association (JSDA).

ELIGIBLE SECURITIES BY CATEGORY (As of March 31, 2004)
StocksPreferred investment securities
Beneficiary certificates of ETFs
Certificates of REITs
CBs

14

228,201 million shares
243,387 units
1,993 million units
2,359 thousand units
4,302,455 million yen

3,666 issues
1 issue
18 issues
14 issues
207 issues

Business Overview

HANDLING OF STOCK CERTIFICATES(a) Deposits and withdrawals
The number of shares deposited is influenced by market trends and corporate actions. On the other
hand, the withdrawals to deposits ratio has decreased year by year, and stood at 21.4% as of the endof March 2004.
(Years ended March 31)

Billions of shares
60

%
40

45

30

30

20

15

10

0

Number of Shares Deposited
Number of Shares Withdrawn
Withdrawals to Deposits Ratio

FY1999
36.2
14.5
40.0%

FY2000
47.3
20.0
27.6%

FY2001
56.2
21.7
19.8%

FY2002
37.4
25.8
28.5%

FY2003
37.3
12.2
21.4%

0

Note: The above ratios are calculated based on the number of shares deposited, excluding shares deposited by stock splits, and shares
withdrawn, excluding the shares by stock transfer and merger.

(b) Custody
As of the end of March 2004, the number of shares held in JASDEC’s custody amounted to 228,201
million shares and the balance held accounted for 64.1% of the total outstanding shares issued bypublicly owned companies in Japan.
Billions of shares
240

%
80

180

60

120

40

60

20

0

Custody Balance
Ratio of Custody Balance to Shares Issued in Japan
Uncertificated Part of Shares in Custody

FY1999
129.7
34.1%
41.8%

FY2000
157.0
42.3%
46.8%

FY2001
191.5
53.5%
49.9%

FY2002
203.1
58.6%
51.9%

FY2003
228.2
64.1%
56.3%

0

(c) Book-entry transfer
As of the end March 2004, exchange trade transfers amounted to 311,970 million shares, and transfers for non-exchange trade deliveries (NETD) amounted to 442,739 million shares.
Billions of shares
500

%
70

400

60

300

50

200

40

0

Transfers for NETD
Transfers for Exchanges Trade Deliveries
Ratio of Transfers for NETD to Total Transfers

FY1999
248.2
204.9
54.8%

FY2000
279.0
205.1
57.6%

FY2001
337.0
239.9
58.4%

FY2002
355.0
225.7
61.1%

FY2003
442.7
311.9
58.7%

0

15

Business Overview(d) Beneficial shareholder notification
As of the end of March 2004, number of beneficial shareholder notification services amounted to61,221million shares or 448,199 thousand cases.
Billions of shares
80

Thousand cases
500

60

375

40

250

20

125

0

FY199930.7
253.1

Number of Shares
Number of Notifications

FY200041.7
307.2

FY200147.8
367.1

FY200254.7
430.2

FY2003
61.2
448.1

0

OTHER SECURITIES OPERATIONSAs of the end of March 2004, an overview of other securities by category is as follows.
(c) Preferred investment securities of financial
institutions(a) Convertible bonds (CBs)(Millions of yen)
Deposits
Withdrawals
CustodyBook-entry transfers
Exchange trade transfers
Non-exchange trade transfers
Number of issues(Number of units)
Deposits
Withdrawals
CustodyBook-entry transfer
Exchange trade transfer
Non-exchange trade transfer
Number of issues

84,495
1,245,315
4,302,455
183,501
1,380,759
207

7,338
4,376
1

(d) Real estate investment trusts (REITs)(b) Exchange-traded funds (ETFs)(Thousands of units)
Deposits
Withdrawals
CustodyBook-entry transfers
Exchange trade transfers
Non-exchange trade transfers
Number of issues

135672
243,387(Number of units)
Deposits
Withdrawals
CustodyBook-entry transfers
Exchange-trade transfers
Non-exchange trade transfers
Number of issues

14,371
192,752
1,993,119
241,771
1,116,516
18

244,725
12,4292,359,380
282,670
542,15914(e) Electronic CP (End-of-month data)
Billions of yen
1,600

280

1,200

210

800

140

400

70

0

Mar.
Apr.
2003
Outstanding Amount 16.5 210.4
3
33
Number of Issues

May

Jun.

Jul.

Aug.

Sept.

Oct.

247.2
47

424.9
85

470.8
92

563.4
110

558.2
117

532.5
132

Note: Electronic CP became eligible to JASDEC in March 2003.

16

Nov.

Dec.

Jan.
Feb.
Mar.
2004
703.9 1,058.1 1,205.5 1,292.1 1,403.2
158
193
214
239
257

0

Consolidated Balance SheetJapan Securities Depository Center, Inc.
As of March 31, 2004ASSETS

Current Assets:
Cash and cash equivalents
Accounts receivable—trade
Deferred income taxes (Note 7)
Other current assets
Total current assets
Property and Equipment
Buildings
Tools and furniture
Less: Accumulated depreciation
Total property and equipment
Intangible Assets, Net
SoftwareConstruction in progress (Software)
Other intangible assets
Total intangible assets
Investment and Other Assets
Long-term refundable lease deposits
Long-term prepaid expenses
Deferred income taxes (Note 7)
Total investment and other assets
Total assets

LIABILITIES AND Current Liabilities:
SHAREHOLDERS’
Short-term debt (Note 5)
EQUITY
Accounts payable—trade

Income tax payable
Accrued employees’ bonuses
Consumption tax payable
Other current liabilities
Total current liabilities
Long-term Liabilities
Accrued employees’ retirement benefits (Note 6)
Accrued executives’ retirement benefits
Total long-term liabilities
Total liabilities
Shareholders’ Equity
Common stock
Authorized: 10,000 shares
Issued, 8,500 shares
Capital surplus
Retained earnings
Total shareholders’ equity
Total liabilities and shareholders’ equity¥ (thousands)
2004$ (thousands)(Note 3)2004

¥ 1,733,337
3,803,049
129,490
190,5715,856,447$ 16,400
35,983
1,225
1,803
55,411

149,075
4,017,025
4,166,100(2,164,535)
2,001,565

1,410
38,00739,417(20,479)
18,9383,625,338
6,912,863
9,755
10,547,956

34,30265,40792
99,801

424,619
42,92730,869498,415¥18,904,383

4,018
406
292
4,716
$178,866¥ 5,000,000
1,846,861
644,945
100,675
77,617
521,687
8,191,785$ 47,308
17,474
6,102
953
734
4,936
77,50732,86343,17076,033
8,267,818

311
409
720
78,2274,250,000
4,250,000
2,136,565
10,636,565¥18,904,383

40,212
40,212
20,215
100,639$178,866

The accompanying notes are an integral part of these statements.

17

Consolidated Statement of Income
Japan Securities Depository Center, Inc.
For the year ended March 31, 2004
¥ (thousands)
2004$ (thousands)(Note 3)
2004

Operating Income¥17,124,010$ 162,021

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

117,438
1,139,758
13,35024,8104,314,280
2,543,018
1,866,472
2,838,420
237,525
264,327
1,164,279
14,523,677
2,600,333

1,111
10,784126
235
40,82024,061
17,66026,856
2,248
2,501
11,016
137,418
24,603

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

19(30,439)(4,557)
1,524(33,453)
2,566,880

0
(288)
(43)
15
(316)
24,287

963,539(47,288)¥ 1,650,629

9,116
(447)
$ 15,618

Yen

U.S. Dollars(Note 3)

¥192,579.99
25,000$1,822.12
236.548,500—

Income Taxes (Note 7)
Current
Deferred
Net income

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

18

Consolidated Statement of Shareholders’ Equity
Japan Securities Depository Center, Inc.
For the year ended March 31, 2004
¥ (thousands)
Number ofcommon stock Commonsharesstock

Balance as of March 31, 2003
Net income for the year
Cash dividends
Bonus to executives
Balance as of March 31, 2004

8,500
—
—
—
8,500

¥4,250,000———¥4,250,000

Capitalsurplus¥4,250,000———¥4,250,000

Retainedearnings

Total
shareholders’equity¥ 711,036 ¥ 9,211,036
1,650,629
1,650,629(212,500)(212,500)(12,600)(12,600)¥2,136,565 ¥10,636,565$ (thousands) (Note 3)

Balance as of March 31, 2003
Net income for the year
Cash dividends
Bonus to executives
Balance as of March 31, 2004

Number ofcommon stock
sharesCommonstock

CapitalsurplusRetainedearnings

Total
shareholders’equity

8,500
—
—
—
8,500

$40,212———$40,212$40,212———$40,212$ 6,727
15,618(2,011)(119)$20,215$ 87,151
15,618(2,011)(119)$100,639

The accompanying notes are an integral part of these statements.

19

Consolidated Statement of Cash Flows
Japan Securities Depository Center, Inc.
For the year ended March 31, 2004
¥ (thousands)
2004$ (thousands)(Note 3)
2004

Cash Flows from Operating Activities:
Income before income taxes
Depreciation
Increase in accrued employees’ bonuses
Increase in accrued employees’ retirement benefits
Increase in accrued executives’ retirement benefits
Interest income
Interest expense
Loss on sales of property and equipment
Loss on disposal of property and equipment
Increase in accounts receivable—trade
Increase in accounts payable—trade
Decrease in other assets
Increase in other liabilities
Other, net
Sub-totalInterests and dividends received
Interest paid
Income tax paid
Net cash provided by operating activities¥ 2,566,880
2,838,420
12,613
10,291
24,810(19)30,43969
4,487(703,543)
556,142
334,505
41,020(12,597)
5,703,517
19(33,260)(961,297)
4,708,979$ 24,287
26,856
119
97
235
(0)
288
0
43
(6,657)
5,262
3,165
388
(119)
53,9640(314)(9,095)44,555

Cash Flows from Investing Activities:
Payments for purchase of property, plantand equipment
Payments for purchase of intangible assets
Procedures from sales of property and equipment
Net cash flows used in investing activities(435,224)(4,656,346)
546(5,091,024)(4,118)(44,056)
5(48,169)

Cash Flows from Financing Activities:
Proceeds from short-term debt
Repayment of short-term debt
Cash dividends paid
Net cash flows provided by financing activities

5,000,000(3,100,000)( 212,500)
1,687,500

47,308(29,331)(2,011)
15,966Net Increase in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year

1,305,455
427,882¥ 1,733,337

12,352
4,048$ 16,400

The accompanying notes are an integral part of these statements.

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

1.
Basis ofPresenting theConsolidated
Financial
Statements

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

2.
Summary of
Significant
Accounting
Principles(1) Consolidation
The consolidated financial statements include the accounts of Japan Securities Depository
Center, Inc. and its wholly-owned subsidiary, JASDEC DVP Clearing Corporation (JDCC)
which is the only subsidiary of the Company. JDCC was newly established during the current
fiscal year. JDCC uses a fiscal year ended on March 31, which is the same as that of theCompany.
(2) Cash and cash equivalents
Cash and cash equivalents include all highly liquid investments, with original maturities ofthree months or less, those 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 ininterest rates.
(3) Property and equipment
Depreciation for buildings, excluding improvements, is computed on the straight-line method
using 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 theestimated useful lives prescribed by such laws.
(4) Software costs
Costs of software for internal use are amortized on the straight-line method computed overthe estimated useful life of capitalized and 5 years.
(5) Accrued bonuses
Accrued employees’ bonuses represent liabilities estimated as of the balance sheet date.
Bonuses to directors, which are subject to approval at the shareholders’ meeting, areaccounted 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 andregulations for the benefits.
(7) Finance leases
In the normal course of business, the Company enters into lease agreements. Finance leaseagreements, except for those agreements where ownership of the leased assets is transferred to
the Company, are accounted for as operating leases.
(8) Accounting standard for impairment of non-current assets
On August 9, 2002, the Business Accounting Council in Japan issued “Accounting Standard
for Impairment of Non-current Assets”. The standard requires that non-current assets bereviewed for impairment whenever events or changes in circumstances indicate that the carrying
21

Notes to the Consolidated Financial Statements

amount of an asset may not be recoverable. An impairment loss shall be recognized in theincome statement by reducing the carrying amount of impaired assets or a group of assets to
the recoverable amount to be measured as the higher of net selling price and value in use. The
standard shall be effective for fiscal years beginning April 1, 2005. However, an earlier adoption is permitted for fiscal years beginning April 1, 2004 and for fiscal years ending between
March 31, 2004 and March 30, 2005. The Company has not yet applied this new standard
nor has determined the effect of applying it on the Company's consolidated financial statements.
(9) Consumption taxes
The consumption taxes withheld by the Company and its subsidiary on sales and the consumption taxes paid by the Company and its subsidiary on its purchases of goods and services are not included in the amounts of relevant accounts in the accompanying statements ofincome. The consumption taxes withheld and paid is recorded as an asset or a liability, as thecase may be, and the net balance is shown in the balance sheets.
(10) Appropriation of retained earnings
Under the Japanese Commercial Code and the Articles of Incorporation of the Company, 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 reflected in the accompanying consolidated financial statements represents the results ofappropriations which were applicable to the immediately preceding financial year andapproved at the shareholders’ meeting and disposed of during that year. Year-end cash dividends are paid to shareholders on the shareholders’ register at the end of each financial year.
The payment of bonuses to directors and statutory auditors is made out of retained earnings, instead being charged to income for the year, and constitutes a part of the appropriations cited above.

3.
US Dollar
Amounts

Amounts in U.S. dollars are included solely for the convenience of readers outside Japan. The rateof ¥105.69=U.S. $1, the rate of exchange as of March 31, 2004, 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.
Lease
Transactions

Finance lease transactions, other than those of which the ownership of the leased asset transferredto the lessee, are accounted for as operating leases. Certain key information (in equivalent data)on such lease contracts of the Company for the periods ended March 31, 2004 is as follows:
As of March 31, 2004

Tools and furniture:
Acquisition cost
Accumulated depreciation
Net book value¥ (thousands)$ (thousands)¥268,933(48,108)¥220,825$ 2,544(455)$(2,089)

The scheduled maturities of future lease payments, which includes the portion of interest thereon,on such lease contracts as of March 31, 2004 is as follows:
As of March 31, 2004

Due within one year
Due over one year
Total

22

¥ (thousands)$ (thousands)¥ 52,660
169,597¥222,257

$ 498
1,605
$2,103

Notes to the Consolidated Financial Statements

Finance lease charges as well as depreciation and interest amounts (in equivalent data) for
the year ended March 31, 2004 is as follows:
For the year ended March 31, 2004

Finance lease charges
Depreciation (in equivalent data)
Interest (in equivalent data)¥ (thousands)$ (thousands)¥31,697

$300
288
20

30,4352,135(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 forthe period based on the interest rate method.

5.
Short-Term
Debts

Short-term debts at March 31, 2004 are comprised of loans from banks with weighted averageinterest rates of 1.675% per annum.

6.
AccruedSeverance
Indemnities for
Employees

Accrued employees’ retirement benefits at March 31, 2004 represented the amount that would bepayable for the Company if all eligible employees voluntarily terminated their employment at thebalance sheet date. Severance costs for employees charged to income for the year ended March 31,
2004 amounted 13,350 thousand yen (126 thousand U.S. dollars).

7.
Income Taxes

The Company and its subsidiary are subject to a number of different income taxes which, in theaggregate, indicate a nominal statutory tax rate in Japan of approximately 42.0% for the period
ended March 31, 2004. A reconciliation between the nominal statutory income tax rate to theeffective income tax rate in the accompanying consolidated statement of income for the year ended
March 31, 2004 is as follows:
2004

Nominal statutory income tax rate
Adjustments:
Permanent non-deductible difference
Equal proportion of inhabitant taxes
Income tax credit on investment in IT
Other, net
Effective income tax rate

42.0%
0.2
0.2
(6.8)
0.1
35.7%

The significant components of deferred tax assets at March 31, 2004 are as follows:

Deferred tax assets:
Accrued bonuses
Enterprise tax payable
Unpaid social insurance premium
Business facility tax
Tax loss carried forwards
Accrued retirement benefits to employees
Accrued retirement benefits to executives
Deferred tax assets¥ (thousands)$ (thousands)

2004

2004

¥ 41,175
72,408
5,465
2,334
8,108
13,342
17,527¥160,359

$ 390
685
51
22
77
126
166
$1,51723

Notes to the Consolidated Financial Statements

8.
Segment
Information(1) Business Segment
The Company operates a single business unit, the central securities custody and book-entry
transfer system, only.
(2) Geographic Information
The Company has no overseas consolidation subsidiaries and no overseas branches for theyear ended March 31, 2004.
(3) Overseas sales
The Company does not have any sales overseas for the year ended March 31, 2004.

9.
Related Party
Transactions

Material transactions of the Company with related companies or individuals, excluding transactions with the consolidated subsidiary that are excluded in the consolidated financial statement,
and other than those disclosed elsewhere in this financial statement, for the year ended March 31,
2004 are as follows:(1) Directors(in thousand yen)
TitlesNameBusiness

Transactions

AmountAccount

Director

Toshitsugu Shimizu(*) 1

Director of the Company
President of Japan Securities
Settlement & Custody, Inc

Outsourcing(*) 1

1,728,381

Account
payable-trade65,113Use ofequipment(*) 1
Repayment ofborrowings
Interest on
borrowings(*) 2
Short term
borrowing
Interest
(*) 2

51

—

—

1,330,000——

10,302——2,140,000

Short-term
deptPrepaidinterest

2,140,000

Director

Masayuki Tanaka

Director of the Company
Senior Managing
Director of The Bank ofTokyo–Mitsubishi, Ltd

2,749

Ending balance

6,383(*) 1. Those transaction amounts mentioned above excluded consumption tax. however, ending balance include consumption tax.
2. Terms and Conditions(1) Those amounts include transaction with Japan Securities Settlement & Custody, Inc (JSSC) for the nine months period from July 2003
because Toshiji Shimizu has been appointed representative director of JSSC at June 19, 2003. JASDEC outsources to JSSC its operation asneeded.
(2) The terms and conditions of the above transactions are on an arms-length basis(3) Interests on borrowing are determined based on the market interest rate from bank24

Notes to the Consolidated Financial Statements(2) Principle shareholder and its subsidiaries(in thousand yen)

Names of companies

Address

Capital

Tosho System
Koto-ku,
Service Co.
Tokyo(Subsidiary of
principal shareholder)Principal
business

100,000 Design,development,& development ofsoftware

Relationship
Percentage
Directors Businessof ownership holding
relationshipwith voting
concurrent
right
positions——

Transactions

EndingbalanceAmountDescriptions

1,359,083

Account
payabletrade148,426

Purchase ofsoftware

1,626,653

Account
payableother

67,200Purchase of Outside
softwareservice

Japan Securities
Chuo-ku, 1,700,000 Clearing
Clearing Corporation Tokyo
securities(Subsidiary of
principal shareholder)

—

Three

Commission Commission
incomeincome2,845,288

Account
556,184
receivabletrade

Japan Securities
Chuo-ku,
Settlement &Tokyo
Custody, Inc(Subsidiary of
principal shareholder)—One

Outsourcing Outsideservice

1,728,321

Account
payabletrade65,113——300,000 Custody &settlementof securities

Using
equipments

51(*) 1. Those transaction amounts mentioned above excluded consumption tax. however, ending balance include consumption tax.
2. The terms and conditions of the above transactions are on an arms-length basis

10.
Net Income
per Share

Basis for calculating earnings per share for the year ended March 31, 2004 is as follows:

Net income as reported in the consolidated statement of income
Directors bonus by appropriation of retained earning
Net income pertaining to common stock shareholders
Weighted average number of common stock shares
outstanding (in shares)¥ (thousands)$ (thousands)

2004

2004

¥1,650,629$15,618130
15,48813,7001,636,929
8,500

11.
Subsequent
Events(1) Launch business of a subsidiary:
A consolidated subsidiary, JDCC was granted a license of securities obligation undertaking
business by the Prime Minister on April 6, 2003. The license enabled JDCC to launch its business from May 6, 2004 and JDCC has started delivery versus payment settlement service fornon-exchange transaction deliveries from May 17, 2004
(2) Appropriations of retained earnings:
Appropriations of retained earnings are recorded in the accounts only after shareholders’approval has been obtained. The following appropriation of retained earnings of the Company
for the year ended March 31, 2004 was approved at the Ordinary General Shareholders
Meeting have held on June 22, 2004:
Cash dividends
Bonuses to executives¥ (thousands)$ (thousands)¥212,500
13,700$2,011
129(Including bonuses to statutory auditors amounting to 2,700 thousands yen (25 thousand U.S. dollars))

25

Report of Independent Auditors

REPORT OF INDEPENDENT AUDITORSTO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
JAPAN SECURITIES DEPOSITORY CENTER, INC.

We have audited the accompanying consolidated balance sheet of Japan Securities Depository
Center, Inc. and its subsidiary as of March 31, 2004 and the related consolidated statements ofincome, shareholders’ equity, and cash flows for the year then ended, all expressed in Japanese
Yen. These consolidated financial statements are the responsibility of the Company’s management.
Our responsibility is to express an opinion on these consolidated financial statements based on our
audits.
We conducted our audits in accordance with auditing standards generally accepted in Japan.
Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the consolidated financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated
financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statements presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Japan Securities Depository Center, Inc. and its
subsidiary as of March 31, 2004, and the consolidated results of their operations and their cash
flows for the year then ended in conformity with accounting principles and practices generally
accepted in Japan.
The amounts expressed in U.S. dollars, which are provided solely for the convenience of readers,have been translated on the basis set forth in Note 3 to the accompanying consolidated financial
statements.

ChuoAoyama PricewaterhouseCoopers
Tokyo, Japan
June 22, 2004

26

Non-Consolidated Financial Highlights

From fiscal year 2004, Japan Securities Depository Center, Inc (“the Company”) discloses consolidated financial statement because the Company established wholly owned subsidiary, JASDEC DVP Clearing
Corporation(JDCC), on June 6, 2003. Therefore the Company presents comparative financial informations
solely for convenience as follows;
Thousands ofThousands of yen

US dollars

2003
2004
2004
(Non-consolidated) (Non-consolidated) (Non-consolidated)

For the year:
Operating income
Operating expense
Income from operations
Other income (expenses)
Income before income taxes
Income taxes
Net income¥11,143,854
9,925,779
1,218,075
32,064
1,250,139
527,937
722,202¥17,124,010
14,500,636
2,623,374(33,451)
2,589,923
925,365
1,664,558$162,021
137,200
24,821(317)
24,505
8,755
15,749At year end:
Current assets
Property and equipment
Intangible assets
Investment and other assets
Total assets¥ 4,155,130
2,632,927
7,322,249
480,356
14,590,662¥ 5,254,043
1,994,881
10,547,678
1,118,028
18,914,630$ 49,712
18,87599,798
10,578
178,963

Current liabilities
Long-term liabilities
Total liabilities
Total shareholders’ equity
Total liabilities and shareholders’ equity

5,338,695
40,932
5,379,627
9,211,035
14,590,662

8,188,104
76,0328,264,136
10,650,494
18,914,630

77,473719
78,192
100,771
178,963

Common stock
Number of shares outstanding

4,250,000
8,500

4,250,000
8,500

40,212Yen

Per share:
Net income—primary
Cash dividends application to the year

¥84,297.73
25,000

US dollars¥194,218.68
25,000$1,837.63
236.54

Note: The amounts stated in US dollars in this report are translated solely for convenience, at ¥105.69=US$1, theexchange rate prevailing on March 31, 2004.

27

Board Members and Auditors
As of June 30, 2004

BOARD OF DIRECTORSPRESIDENT& CEO

SENIOR MANAGINGDIRECTOR

Yoshinobu Takeuchi
President,
JASDEC DVP
Clearing Corporation

Shoji Murata

Hiromi Murai

Masao Yagi

Managing Director,
JASDEC DVP
Clearing Corporation

Managing Director,
JASDEC DVP
Clearing Corporation

DIRECTORDIRECTORDIRECTOR

Fumiyuki Akikusa

Toshio Goto

Akira Sakashita

Managing Director,
The Bank of Tokyo–Mitsubishi, Ltd.

Managing Director,
The Mitsubishi Trust andBanking Corporation

Standing Advisor,
Japan Securities Dealers
Association

DIRECTOR

Toshitsugu Shimizu
Executive Officer,
Tokyo Stock Exchange, Inc.

28

MANAGING
DIRECTORMANAGING
DIRECTORDIRECTORDIRECTOR

Shunichi Suzuki

Masaru Takei

Executive Officer,
Daiwa Securities SMBC
Co., Ltd.

Executive Officer,
Tokyo Electric Power Company

Board Members and Auditors

DIRECTORDIRECTORDIRECTORDIRECTOR

Shinichiro Tanaka

Nobuyoshi Nakano

Akihiko Nakamura

Kunihisa HamaManaging Executive Officer,
Mizuho Corporate Bank, Ltd.

Managing Director,
Nikko Citigroup
Securities Inc.

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

Lawyer

DIRECTORDIRECTOR

Fumiyuki Hara

Shigeyuki Maeda

Managing Director,
UBS Securities (Japan) Limited

Professor of Law,
Gakushuin University Law School

DIRECTOR

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

AUDITORSSTANDING AUDITOR

Michio Sakai
Auditor,JASDEC DVP
Clearing Corporation

AUDITOR

Masari Ugai

AUDITOR

Takeshi Kusakabe
Executive Advisor,
Shinko Securities Co., Ltd.

29

List of Participants
As of July 1, 2004

Total: 275
Securities Companies

Access Securities Co., Ltd.
Ace Securities Co., Ltd.
Aioi Securities Co., Ltd.
Aizawa Securities Co., Ltd.
Akakiya Securities Co., Ltd.
Alba Ace 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.
Cosmo Securities Co., Ltd.
DAIHOKU SECURITIES CO., LTD.
Daikumamoto Securities Co., Ltd.
Daiman Securities Co., Ltd.
Daisei Securities Co., Ltd.
Daisen Hinomaru 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.
Fides Securities Corporation
Firstmake Securities Co., Ltd.
Get Securities Co., Ltd.
H. S. Securities Co., Ltd.
Hibiki Securities, Inc.
Hikari Securities Co., Ltd.
Himawari Securities, Inc.
Hinode Securities Co., Ltd.
Hirota Securities Co., Ltd.
Ichiyoshi Securities Co., Ltd.
IIDA 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.
Japan Asia Securities Co., Ltd.
Japan Electronic Securities Co., Ltd.

30

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.
KITADA 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.
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.
MITOYO 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.
New–S Securities Co., Ltd.
Nihon Kyoei Securities Co., Ltd.
Niigata Securities Co., Ltd.
Nikko Beans, Inc.
Nikko Citigroup Limited

Nikko Cordial Securities Inc.
Nippon First Securities Co., Ltd.
Nippon Global Securities Co., Ltd.
Nishimura Securities Co., Ltd.
Nishiwaki Securities Co., Ltd.
Nissan Securities Co., Ltd.
Nomura Securities Co., Ltd.
Nozomi 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.
PBA Securities Co., Ltd.
Port Satellite Securities. Co., Ltd.
Privée 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.
Socius 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 AIR’S SEA SECURITIES CO.,LTD.
The Arts 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.
Tomioka Securities Co., Ltd.

List of Participants

Toyo Securities Co., Ltd.
Traders Securities Co., Ltd.
Tsukamoto Securities Co., Ltd.
Tsuyama Securities Co., Ltd.
UFJ Tsubasa Securities Co., Ltd.
United World Securities K.K.
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.
Yutaka Securities Co., Ltd.
Zukawa Securities Co., Ltd.
Barclays Capital Japan Limited
Bear Stearns (Japan) Limited
BNP Paribas Securities (Japan)
LimitedCalyon Capital Markets Asia B.V.
Citicorp International Securities
Ltd.
Commerz Securities (Japan) Co.,Ltd.
Credit Agricole Indosuez Securities(Japan) Limited
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 Limited
Jefferies (Japan) Limited
KBC Securities Japan
Lehman Brothers Japan Inc.
Morgan Stanley Japan 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
Saitama 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 and Banking
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.
Citibank, N.A.
Cititrust and Banking Corporation
Deutsche Trust Bank Limited
J.P. Morgan Trust Bank, Ltd.
SG Private Banking (Japan)
LimitedShinGinko Tokyo, LimitedStandard Chartered Bank
State Street Trust and Banking
Company, Limited
The Hongkong and Shanghai
Banking Corporation Limited
UBS (Trust and Banking) Limited

Insurance Companies

Meiji Yasuda Life Insurance
Company
Mitsui Sumitomo Insurance Co.,
Ltd.
Nippon Life Insurance Company
Sompo Japan Insurance Inc.
The Dai-Ichi 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.
JASDEC DVP Clearing Corporation
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

Overseas CSDs participating in JASDEC
through JSSC:
The Central Depository (Pte) Limited(Singapore)31

History

May 1984

The Law Concerning Central Securities Depository and Book-Entry Transfer of Stock
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.
(All stock exchange listed and OTC registered stocks became eligible to JASDEC in Oct.
1992.)

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 Banks approved JASDEC as an eligible foreign custodian.

Sep. 2000

JASDEC constructed a back-up center in Osaka.

May 2001

JASDEC launched its system for delivery versus payment (DVP) settlement of exchange tradesin Tokyo and Osaka.

Sep. 2001

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.

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 Banks approved the new incorporated entity as an eligible foreign
custodian.

Jan. 2003

The Law Concerning Book-Entry Transfer of Corporate Bonds, etc. became effective and
JASDEC was designated as a transfer institution under the law.

Mar. 2003

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

32

Jun. 2003

JASDEC established JASDEC DVP Clearing Corporation (JDCC) to undertake clearing services
related to DVP settlement services for non-exchange transaction deliveries (NETD).

Aug. 2003

JASDEC signed a memorandum of understanding with The Depository Trust & Clearing
Corporation of the United States.

May 2004

JASDEC commenced DVP settlement services for NETD.

Corporate Information
As of June 30, 2004

T he Japan Securities Depository Center, Inc. (JASDEC), is the sole central securities

COMPANY NAME:

Japan Securities Depository Center, Inc.

DATE OF INCORPORATION:

January 4, 2002

depository in Japan, designated under the Law Concerning Central Securities Depository

DATE OPERATIONS BEGAN:

June 17, 2002

CAPITAL:¥4.25 billion (shareholders’ equity ¥10.6 billion)

COMMON STOCK ISSUED:

8,500 shares

NUMBER OF SHAREHOLDERS:

193

NUMBER OF EMPLOYEES:106

REGISTERED HEAD OFFICE

1-1, Nihombashi-Kayaba-cho 2-chome

and Book-Entry Transfer of Stock Certificates and Other Securities (CSD Law). JASDEC
provides depository and book-entry transfer services for publicly traded securities, inaccordance with the CSD Law.
In June 2002, JASDEC assumed all businesses previously undertaken by the Japan

Chuo-ku, Tokyo 103-0025, Japan
Phone:

Securities Depository Center — its predecessor organization, which was established in+81-3-3661-0161

Facsimile: +81-3-3661-2810

December 1984 under the CSD Law as a not-for-profit foundation — and began operations as a stock company.

Website:http://www.jasdec.com

OPERATIONS OFFICESJASDEC aims to contribute to the formation of a Japanese financial market that isTokyo Office:6th Floor, Daini-Shoken Kaikan Bldg.
1-1, Nihombashi-Kayaba-cho 2-chome, Chuo-ku, Tokyo 103-0025

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 and strengthen its
financial position, while working to improve the safety, efficiency and convenience of securities settlement systems.

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

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

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

SUBSIDIARY COMPANY
Company Name:JASDEC DVP Clearing Corporation

Date of Incorporation:

June 6, 2003

Commenced Operations: May 17, 2004
Capital:¥310 million

Registered Head Office:1-1, Nihombashi-Kayaba-cho 2-chome, Chuo-ku, Tokyo 103-0025

Contents

EstablishedNew corporate
structure

December 6, 1984

January 4, 2002

The Japan Securities Depository
Center established as a not-forprofit foundation in line with theNovember 1984 enforcement of
the CSD Law.

The Japan Securities Depository
Center, Inc., incorporated as a stockcompany.

1 At a Glance
2 Financial Highlights
3 President’s Message
6 An Interview with the President
9 Ongoing Securities Settlement
System Reform in Japan
14 Business Overview
17 Financial Statements

October 9, 1991
26 Report of Independent Auditors
27 Non-Consolidated Financial
Highlights
28 Board Members and Auditors
30 List of Participants
32 History
33 Corporate Information
33 Organization Structure

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

Organization Structure(As of June 30, 2004)● M EETING OF S HAREHOLDERS

June 17, 2002
Assumed all the businesses of theJapan Securities Depository
Center, in accordance with the
CSD Law.

● 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● Bond and Commercial Paper Department● Business Planning Department

June 6, 2003
Established JASDEC DVP Clearing
Corporation (JDCC) to undertake
clearing services related to the
DVP settlement system for nonexchange transaction deliveries(NETD).

● First System Department● Second System Department● Tokyo Operations Office● Osaka Operations Office● Nagoya Operations Office● Fukuoka Operations Office● Sapporo Operations Office233

Japan Securities Depository Center, Inc.
A N N U A L

R E P O R T

2 0 0 4F O R T H E Y E A R E N D E D M A R C H 31, 2004

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