NEXI
Missionpeed

1

rofessional

ntegration

eformation

T oriented

ransparency

NEXI is committed to:

1. Providing insurance products that will make customers feel secure andprotected in overseas transactions
2. Readily providing information and advice to customers on their transactions
from a preliminary stage
3. Responding promptly to the inquiries and concerns of customers
4. Meeting the demands of customers and their business needs
5. Speedily completing the assessment of claims and promptly making claim
payments
6. Speedily allocating recovered money

Management Principle

Nippon Export and Investment Insurance (NEXI) is committed tocontributing to the economy and society of Japan through efficient andeffective operations of insurance business by responding precisely to customers'
needs with the quick perception of market changes and by underwriting risks
which are inherent in international transactions, but cannot be adequately
protected by commercial insurance.

NEXI Mission

1

Main Data for
Fiscal 2002

3

Message from the
Chairman and CEO

5

Major Projects
Underwritten During
Fiscal 2002

7

Review of Operations in
Fiscal 2002

11

Financial Results for
Fiscal 2002

17

Outline of NEXI

23

NEXI
Customer Service
Charter

25

Management Policy

1. NEXI as an independent administrative institution servicing the public aims
at contributing to the stability of people's lives and to the sound growth ofthe economy through its operations.
2. NEXI adheres to giving first priority to the interests of customers,
responding promptly and precisely to customers' individual needs, providing
superior-quality customer services, and achieving the highest level ofoperating efficiency and effectiveness.
3. NEXI fully utilizes the talents of all of its management and human resources
with the objective of undertaking more risk, developing new products andbeing creative in risk underwriting schemes that flexibly accommodate theanticipated changes in the market. It further aims at increasing profitability
through prudent risk control and criteria ensuring long-term growth andprosperity.
4. NEXI encourages and fosters the development of knowledge and skills of
employees through training and makes the best use of the staff's diverse
professional background to create an ideal workplace that corresponds tothe changes in society.

2

Main Data for Fiscal 2002
Amount underwritten
Supported by brisk automobile-related exports and other beneficial factors, the amount underwritten in fiscal 2002rose 4.8% from the previous year, to ¥10,618 billion.

■ Amount underwritten (In billions of yen)

■ Breakdown of underwritten
amount in fiscal 2002, by region
Oceania 3%

10,811.6

South America 2%

10,618.0

10,136.6

Africa 4%
Europe 15%
Asia
42%

FY2000FY2001

North
andCentralAmerica
34%

FY2002

Outstanding commitment
The amount of outstanding commitment as of March 31, 2003, totaled ¥7,874.2 billion, up 4.3% fr
om a year earlier.

■ Outstanding commitment (In billions of yen)

■ Breakdown of the outstanding
commitment at the end of FY2002,
by region

7,874.2
7,549.1

7,523.0

Africa 6%

Oceania 1%

South America 7%
Europe 9%
North andCentralAmerica
18%

FY2000FY2001

Asia
59%

FY2002Premium income
Premium income in fiscal 2002 (on the basis of submitted bills) fell 18.5% from the previous year, to ¥34.34 billion— a decline that should be seen in contrast to an ceptionallyexsharp rise in fiscal 2001, when large projects were
underwritten. But the 2002 figure was an improvement over the ¥32.9 billion posted in fiscal 2000.

■ Premium income (In billions of yen)
42.1
34.3

32.9

3

FY2000FY2001

FY2002

Insurance claims paid
Insurance claims paid in fiscal 2002 amounted to ¥65.1 billion, up 30.6% from the previous year due to some large insurance claims
paid. The amount paid for commercial risk events was down 2.5% from fiscal 2001, which had posted a record high, while the amount
paid for political risk events surged 78.6%.

■ Insurance claims paid, by type of risk
(In billions of yen)

65.1

Commercial risks■ Breakdown of insurance claims paid infiscal 2002, by region
North and Central America 0.2%
Europe 0.1%

Africa 0.7%

Political risks

49.9

32.4

28.8
South
America
26%

29.6

13.0

II

FY2000

Asia
73%

20.3

FY2001Main Data for Fiscal 2002

36.3
19.4

FY2002■ Insurance claims paid, by insurance policy term
(In billions of yen)

65.1

Short-term
Medium- and long-term

49.9
30.5
32.4

28.4

8.3
34.6
24.1

FY200021.5

FY2001

FY2002

Recoveries
The amount of recoveries for commercial risk events increased in fiscal 2002, reflecting the fact that the number of such events has beenon the rise in recent years. However, with recoveries decreasing from political risk events, the total recovery amount fell 5.7% from theprevious year, to ¥70.3 billion.

■ Recoveries (In billions of yen)

■ Breakdown of recoveries in fiscal 2002,
by region
Africa 10%

85.3
74.5

North America and Central America 2%
Oceania 0.002%

70.3
South
America
36%

Asia
19%

FY2000FY2001

FY2002Europe33%

4

Message from the Chairman and CEO

Nippon Export and Investment Insurance(NEXI), established in April 2001 as anindependent administrative institution, hasbegun its third year of operation. We wish to
express our sincere appreciation for the
support of our customers during the past two
years.
Japanese exports were comparatively firm in
the first half of fiscal 2002. In the second half,
however, exports began decelerating again
because of such factors as growing uncertainty
about the world situation due to the approachof war in Iraq and the outbreak of severe acuterespiratory syndrome (SARS). In such adifficult business climate, customers are in
greater need of risk control in their businessthan ever before.

Meanwhile, to define the NEXI mission
more clearly, we formulated the Management
Principle and the Management Policy in April
2002. The precept is that we will do ourutmost to satisfy customer requirements byoffering high-quality services. This is the firm
resolution of the entire NEXI management
and staff. The idea has been shaped into theCustomer Service Charter, which has guided
our operations since April 2003.
Today NEXI stands at the midpoint of its
four-year medium-term plan. The results ofour first two years will be assessed in the twoyears to come. With world affairs becoming
increasingly complex, we fully realize thegrowing importance of customer-focused
operations. We will contribute to the further
development of Japan's internationaltransactions, including exports andinvestment, through these operations.
We look forward to the continuing supportand encouragement of our customers.

Hidehiro Konno, Chairman and CEO
5

In fiscal 2002, NEXI worked hard to improve
the quality of services to satisfy customer requirements.

"Customer Service Charter" created.
We promise to see situations from the customer's
standpoint and act quickly at all times. The Customer
Service Charter is on page 33.

In response to customer requirements, we raised thepercentages of indemnity for export credit insurance(medium- and long-term) and overseas untied loan
insurance. The increased percentages are given below.

We concluded reinsurance agreements with overseas
export credit agencies – SACE (Italy), NCM (Netherlands), OND (Belgium), HERMES (Germany) andOeKB (Austria). Under these agreements, NEXI
provides "one-stop shopping" service for export
insurance covering projects in which procurements
are conducted in two or more countries. This willallow customers to reduce transaction costs andorganize a flexible financing structure.

Message from the Chairman and CEO

We increased the percentages of indemnity forinsurance covering medium- and long-termtransactions.

NEXI concluded reinsurance agreements withoverseas export credit agencies to provide "one-stop
shopping" convenience for trade insurance.

Debt collection service using servicers begun.

Political risk Commercial risk
Sovereign*
Bank L/G
Non-L/G

100%
97.5%
97.5%

95%
95% at maximum* Government direct lending or transactions
with government L/G.

"Short-term Trade Insurance for Manufacturers"
started.
Our "Short-term Trade Insurance for Manufacturers"
covers shipping risk and bill collection risk associatedwith exports by manufacturers and intermediary
trade. This insurance dispenses with L/Cs, and itfeatures very simple procedures. We believe, therefore,
any customer, even one unfamiliar with tradeinsurance, will find this new service reassuring.

We began offering a new service that enables
customers who hold NEXI trade insurance policies touse our affiliated servicers for debt collection. This
service will improve the debt collection rate andreduce customer costs.
We were actively involved in environmental
protection.
We have been consistently aware of environmental
principles, mindful of our new environmental
guidelines established on the basis of common
approaches adopted by OECD member countries.
Other moves include the decision that our overseas
investment insurance would cover risk associated withsevere acute respiratory syndrome (SARS). This isconsistent with our desire to place top priority on theneeds of customers at all times. For details about our
improved services, please visit our Web site(http://nexi.go.jp).

6Major Projects Underwritten During
Fiscal 2002
Major projects underwritten by NEXI during FY2002 are listed below by region.

Asia

Malaysia — Semiconductor manufacturing plant

A Japanese company received an order from a manufacturer engaged in upstream operations ofsemiconductor production in Sarawak, Malaysia for the export of a semiconductor
manufacturing plant. NEXI underwrote export credit insurance for loans of about ¥23.3 billion
lent by Japanese banks for the purchase of the plant.
The insurance contract was concluded on April 26, 2002.

Vietnam — Construction of the Phu My 4 combined-cycle
power plant

A Japanese company signed a full turnkey contract for the construction of a 450 MW combined
power plant in the Tantain-Phu My district in Baria-Vungtau, Vietnam. NEXI underwrote
export credit insurance of about ¥8 billion for this project.
The insurance contract was concluded on July 31, 2002.

United Arab Emirates — Supply and installation of the
Shuweihat water conveyance facilities

A Japanese company received an order for the supply and installation of two water pipelines ofabout 480 kilometers total and the related pumping station that transport fresh water producedby the seawater desalination plant in Shuweihat to Mussafah via Mirfa. NEXI underwrote export
credit insurance in the amount of about ¥80 billion for this project.
The insurance contract was concluded on August 6, 2002.

7

Taiwan — Construction of the Taiwan High Speed Railway

A consortium of Japanese companies received an order for track construction (the second to thefifth construction sections) for the Taiwan High Speed Railway, which will link the distance ofabout 345 kilometers between Taipei and Gaoxiong in about 90 minutes. NEXI underwrote
export credit insurance of approximately ¥170 billion for this project.
The insurance contracts were concluded on August 22, 2002,
for the fourth and fifth construction sections, and on February 21, 2003,
for the second and third construction sections.

Major Projects Underwritten During Fiscal 2002

Photo courtesy of Taiwan High Speed Rail Corporation

8

Asia
Indonesia — Capital increase by an automobile-related local
joint venture
A Japanese company increased its capital investment in a joint venture engaged in the
manufacturing and sales of automobiles in Indonesia in order to strengthen its business base.
NEXI underwrote overseas investment insurance for the increased portion of capital(approximately ¥5.6 billion).
The insurance contract was concluded on December 6, 2002.

Philippines — Fiber Optic Backbone Network Project

Globe Telecom, a Philippine full-service telecommunications company engaged in the provisionof both wireless and wireline services, signed a contract with Japanese companies to acquire alarge amount of transmission equipment and fiber optic cable in order to provide facilities for
Globe's growing number of subscribers. The total loan facility amounted to US$72.25 million.
Nippon Export and Investment Insurance (NEXI) guaranteed the portion of the facility fundedby commercial banks.
The insurance contract was concluded on February 23, 2003.

Eastern Europe and Central Asia
Kazakhstan — Modernization of an oil refinery

A Japanese company concluded a turnkey contract with an oil company in Kazakhstan for an oil
refinery modernization project. NEXI underwrote export credit insurance to cover a buyer creditof approximately ¥9.9 billion.
The insurance contract was concluded on February 19, 2003.

Romania — Modernization of a thermal power plant

A Japanese company concluded a turnkey contract with a Romanian electric power company fora thermal power plant modernization project. NEXI underwrote export credit insurance to covera buyer credit of approximately ¥4.3 billion extended by a consortium of Japanese banks.
The insurance contract was concluded on March 19, 2003.
9

Africa
Algeria — Construction of the Arzew desalination and power
generation plant project
A Japanese company won contracts for a seawater desalination plant and a gas turbine power
generation plant in Arzew, Algeria. NEXI underwrote export credit insurance of about ¥30
billion for the contracts.
The insurance contract was concluded on February 27, 2003.

Algeria — Finance for LNG carrier to be chartered to
Sonatrach

NEXI underwrote overseas untied loan insurance to cover the loan of $60 million offered by aJapanese financial institution for an LNG carrier chartering project involving Sonatrach,
Algeria's state-owned oil and gas company. According to this project, Japanese companies,
Sonatrach and its subsidiary are to jointly establish a special purpose company (SPC) to run an
LNG carrier under a time charter agreement between the SPC and Sonatrach.
The insurance contract was concluded on March 28, 2003.

Latin America

I
V
A Japanese company concluded a turnkey contract with Companhia Siderúrgica de Tubarão, amajor Brazilian steelmaker, for the supply and installation of private electric power generation
plant and gas recovery equipment. NEXI underwrote export credit insurance to cover a buyer
credit of approximately ¥1.9 billion by a Japanese bank.
The insurance contract was concluded on February 18, 2003.

Major Projects Underwritten During Fiscal 2002

Brazil — Captive power plant and gas recovery equipment fora steelmaker10

Review of Operations in Fiscal 2002

1. Economic trends in FY2002
The Japanese economy reached a significant turning point in December 2002. Until then, Japanese
exports had been picking up, though only in limited areas. Behind this uptrend were some areas ofrecovery in the economy of the United States despite the continuing structural adjustments following the
bursting of the information technology bubble. Also, exports to China and many other Asian countries
were brisk, reflecting faster-than-expected growth in the region.
Going into January 2003, however, with the possibility of war in Iraq increasing, uncertainty overworld affairs prevailed. In addition, the outbreak of severe acute respiratory syndrome (SARS), which
affected the Asian region in particular, put downward pressure on the regional economy. These negative
factors combined to push Japan's exports and economy overall downward once again.

(Reference) Japanese exports
Exports(Unit: ¥ billion)

FY1998FY1999FY2000FY2001

FY200249,449.3

48,547.6

52,045.2

48,592.8

52,732.9

-3.8

-1.8

7.2

-6.6

8.5

Year-to-year change (%)

Source: Trade Statistics, Ministry of Finance

2. Summary of trade insurance operations
Underwritten amountUnderwritten amount(Unit: ¥ billion)

FY1998FY1999FY2000FY2001

FY2002Year-to-yearchange (%)

13,968.9

12,024.7

10,811.6

10,136.6

10,618.0

4.7

Amount of outstanding commitment

Amount ofoutstanding
commitment(Unit: ¥ billion)

FY1998FY1999FY2000FY2001

FY2002Year-to-yearchange (%)

8,569.2

7,315.6

7,523.0

7,549.1

7,874.2

4.3

Operating income

Premium income1
2

Recovery(Unit: ¥ billion)

FY1998FY1999FY2000FY2001

FY2002Year-to-yearchange (%)

45.4

33.2

32.9

42.1

34.3

-18.5

91.2

84.6

85.3

74.5

70.3

-5.7

Notes: 1. Premium income here does not exclude the amount of premiums returned. Premium income for FY2001 and FY2002 is on
the basis of invoice issued, while that for FY2000 and earlier was based on actual receipt.
2. Recoveries for FY2001 and FY2002 are on the basis of reporting, while those recoveries up to FY2000 were on the basisof actual receipt.

Claims paid

Claims paid

11

(Unit: ¥ billion)

FY1998FY1999FY2000FY2001

FY2002Year-to-yearchange (%)

16.7

21.6

32.4

49.9

65.1

30.6

3. Underwriting
Underwritten amount by type of insurance(Unit: ¥ billion/$ million)
Year-to-yearchange (%)

FY2002

FY2000FY2001

Export Credit Insurance

10,380.99,737.9

10,182.9$84,858

4.6

Short term

10,113.7

9,647.1

9,918.2$82,652

2.8

Medium to long term

267.2

90.8

264.7

$2,206

191.5

Export Bill Insurance

67.3

60.6

53.5

$446

-11.6

Export Bond Insurance

51.6

50.2

-

-

Prepayment Import Insurance

1.2

1.8

0.6

$5

-67.7

Overseas Investment Insurance

85.9

55.6

41.8

$348

-24.9

Overseas Untied Loan Insurance

224.8

230.6

339.3

$2,827

47.1

Total

10,811.6

10,136.6

10,618.0$88,484

4.7

Notes: 1. Exchange rate of US$1=¥120, as at the end of FY2002 (the same rate is used hereafter).
2. Since fractions are rounded up or down to the next whole number, the sum of items in a column does not necessarily equal the total figure (sameapplies to the charts that follow).

The underwritten amount of insurance in FY2002 totaled ¥10,618 billion, an increase of ¥481.5 billion (4.7%) from theprevious fiscal year. This increase resulted from strong automobile-related exports and other factors. Notably, theunderwritten amount of short-term export credit insurance, which accounts for about 90% of total trade insurance, marked
year-on-year growth of ¥271.1 billion due to the strong performance of steel, chemical product and automobile exports.
Reviewed by type of insurance, the amount of medium- and long-term Export Credit Insurance recorded a sharp increaseof 191.5% from the previous fiscal year, thanks mainly to the underwriting of buyer credits extended for large-scale power
plants and fertilizer plants. Furthermore, the underwritten amount of Overseas Untied Loan Insurance continued toincrease, rising 47.1% from the previous fiscal year, on the strength of large-scale gas and oil field development projects.
Overseas Investment Insurance, meanwhile, has showed a downtrend in recent years, marking a year-on-year decrease of
24.9% in FY2002.
(Unit: ¥ billion/$ million)
Year-to-yearchange (%)

FY2000FY2001

Asia

4,101.6

4,334.6

4,943.6$41,197

14.0

Europe2,236.2

1,708.3

1,799.9$14,999

5.4

North and Central America

4,427.3

4,074.3

4,036.4$33,636

-0.9

469.2

379.0

226.8

$1,890-40.2

Africa

211.8

273.8

402.6

$3,35547.0

Oceania

339.9

276.2

341.2

$2,843

23.5

South America

FY2002

V
Review of Operations in Fiscal 2002

Underwritten amount by region

Notes: 1. Methods of recording sums insured by countryPre-shipment – Country of the consignee
Post-shipment – Country of the payer; however, if guaranteed, country where guarantee is provided.
2. Middle East and Central Asia are included in Asia (the same applies hereafter).
3. Central Europe, East Europe and Russia are included in Europe (the same applies hereafter).
4. Since the underwritten amount here is recorded for both the countries of the consignee and the countries of the payer or the guarantor's country,
totals in this table are not consistent with those in "Underwritten amount by type of insurance," above.

Reviewed by region, the underwritten amount of insurance covering transactions in Asia totaled ¥4,943.6 billion, for thelargest share, followed by ¥4,036.4 billion in North and Central America. The underwritten amount for projects in Africa
marked a sharp increase of 47.0% from the previous fiscal year.
The underwritten amount of insurance covering transactions in Asia rose 14.0% from the previous year, lifted by largescale projects in the United Arab Emirates, India and Indonesia. In addition, an increase in the underwriting related to bothautomobile exports to China and the exports of personal computer and automobile component to South Korea also
contributed to the growth.
In North and Central America, in spite of the underwriting of a large-scale project in Mexico, the overall underwritten
amount was down 0.9% from the previous fiscal year due to decreased U.S.-related underwriting concerning projects such as
power plants and power generation equipment, and automobile exports.
European transactions increased 5.4% over the previous fiscal year's level, thanks to the growing amount of automobile
exports to Belgium and Germany.
The top ten countries and regions in terms of amount underwritten by NEXI in FY2002 are shown on the next page.
12

Top ten countries and regions in terms of underwritten amount in FY2002
Country/Region

Country/Region

Underwritten amount(Unit: ¥ billion/$ million)

Underwritten amount1

U.S.A.

2,849.9$23,749

6

Belgium

365.6$3,047

2

China

1,021.0$8,5097

South Korea

354.2$2,951

3

Chinese Taipei

618.4$5,1538

Canada330.8$2,757

4

Hong Kong

404.1$3,368

9

Malaysia

325.0$2.7095

Mexico374.1$3,117

10Singapore

318.4$2,653

Export Credit Insurance (medium- and long-term) andOverseas Untied Loan Insurance underwritten and percentage by sector
Underwritten amount

Sector(Unit: ¥ billion/$ million)

Percentage

Petroleum/gas

325.1$2,70953.8

Electric utilities

113.0

$942

18.7

Shipping

56.0

$467

9.3

Manufacturing

23.5

$196

3.9

Telecommunications

22.4

$186

3.7

Mining

16.2

$135

2.7

Chemical

11.2

$94

1.9

Steel

5.9

$49

1.0

Other
Total

30.7

$256

5.0

603.9

$5,033100.0

The amount of Export Credit Insurance (medium- and long-term) and Overseas Untied Loan Insurance underwritten
totaled ¥603.9 billion in FY2002.
Reviewed by sector, the amount of insurance for the petroleum and gas sector reached ¥325.1 billion, for 53.8% of thetotal, representing the largest share.

13

4. Amount of outstanding commitment
Amount of outstanding commitment by type of insurance(Unit: ¥ billion/$ million)
Year-to-yearchange (%)

End of FY2002

End of FY2000

End of FY2001

Export credit insurance

5,933.9

5,938.9

6,144.4$51,204

3.5

Short term

4,188.6

4,465.8

4,723.3$39,361

5.8

Medium to long term

1,745.3

1,473.1

1,421.1$11,843-3.5

Export bill insurance

16.8

15.4

10.5

$87

-32.0

Export bond insurance

56.7

9.9

8.3

$69

-16.4

Prepayment import insurance

0.5

0.8

0.3

$3

-61.2

Overseas investment insurance

819.0

747.0

630.3

$5,253-15.6

Overseas untied loan insurance

696.1

837.2

1,080.4$9,00329.1

7,523.0

7,549.1

7,874.2$65,618

4.3

Total

Reviewed by type of insurance, Export Credit Insurance represented ¥6,144.4 billion, the largest amount, followed by¥1,080.4 billion for Overseas Untied Loan Insurance.

Amount of outstanding commitment by region(Unit: ¥ billion/$ million)
Year-to-yearchange (%)

End of FY2002

End of FY2000

End of FY2001

Asia

4,466.4

4,396.0

4,719.8$39,331

7.4

Europe

786.7

684.7

693.8

$5,782

1.3

1,476.0

1,427.7$11,897

-3.3

633.1

658.0

607.6

$5,064-7.7

Africa

274.1

349.9

517.7

$4,31447.9

Oceania

87.1

86.4

72.2

$602

-16.4

Notes: 1. Method of recording by countryPre-shipment – Country of the consignee
Post-shipment – Country of the payer; however, if guaranteed, country where guarantee is provided.
2. Because the amount of a contract is included both in the country of consignee and either in the country of payer or in the country of guarantor
when those countries differ, the total amount by region is not consistent with that by type of insurance, above

Reviewed by region, the amount of outstanding commitment involving transactions in Asia totaled ¥4,719.8 billion,
representing the largest regional amount. This was up 7.4% from the previous fiscal year.
The amount of outstanding commitment for the projects in Africa showed a sharp increase of 47.9% from the previous
fiscal year, though the share was relatively small compared with the total amount.

V
Review of Operations in Fiscal 2002

1,411.0

South America

North and Central America

145. Claims paid
Claims paid by type of insurance and by type of risk
Type of insurance
Export Credit Insurance(Unit: ¥ billion/$ million)

FY2000FY2001

Total

Political Commerriskcial risk Total

Political Commerriskcial risk

31.9

19.4

12.5

49.5

FY2002
Total

Political risk

Commercial risk

20.1

29.4

49.6

$414

35.7

$298

13.9

$116

Short term

7.8

0.1

7.7

28.2

0.3

27.9

30.3

$252

16.4

$137

13.9

$116

Medium to long term

24.1

19.3

4.8

21.3

19.8

1.5

19.4

$161

19.3

$161

0.1

$1

Export Bill Insurance

0.4

-

0.4

0.2

-

0.2

0.3

$2

-

-

0.3

$2

Export Bond Insurance

-

-

-

-

-

-

-

-

-

-

-

-

Prepayment Import Insurance

0.1

-

0.1

0.02

-

0.02

-

-

-

-

-

-

Overseas Investment Insurance

-

-

-

-

-

-

-

-

-

-

-

-

Overseas Untied Loan Insurance

-

-

-

0.2

0.2

-

15.2

$127

0.6

$5

14.6

$122

Total

32.4

19.4

13.0

49.9

20.3

29.6

65.1

$543

36.3

$303

28.8

$240

Claims paid by region(Unit: ¥ billion/$ million)

RegionTotal

FY2000FY2001

Political Commerriskcial risk Total

Political Commerriskcial risk

FY2002Year-to-year
Commercial risk change (%)

Political risk

Total

Asia

20.2

14.1

6.2

46.0

18.8

27.2

47.6

$396

19.2

$160

28.4

$236

3.4

Europe

5.7

5.1

0.6

1.5

0.7

0.9

0.1

$1

0

$0

0.1

$1

-95.7

North and Central America

4.5

0.02

4.4

1.0

0

1.0

0.1

$1

0.007 $0.06

0.1

$1

-91.2

South America

1.7

0

1.7

0.2

0

0.2

17.0

$141

16.6

$139

0.3

$3

7,402.2

Africa

0.3

0.2

0.1

1.1

0.9

0.3

0.5

$4

0.5

$4

0

$0

-58.2

0.002 0.009

0

0.009

0

0

0

0

0

0

-

49.9

20.3

29.6

65.1

$543

36.3

$303

28.8

$240

30.6

Oceania
Total

0.002

0

32.4

19.4

13.0

Claims paid during FY2002 amounted to ¥65.1 billion, showing a year-on-year surge of 30.6%, due to large claims paid asin the previous fiscal year. Among political risk-related major events, a default by crisis-hit Argentina and a rescheduling forIndonesia are typical examples; claims paid related to these events amounted to ¥16.6 billion and ¥14.6 billion, respectively.
Major commercial risk-related events include the default of a Thai steelmaker, for which ¥14.6 billion was paid, whereas
the defaults involving buyers in the pulp and paper industry in Indonesia, China and Singapore added ¥13 billion to thepayment of claims.
The top five countries in terms of claims paid in FY2002 are shown below. Payments for credit events involving the fivecountries account for about 96% of total payments.

Top 5 countries in terms of claims paid in FY2002
Country

15(Unit: ¥ billion/$ million)

Total claims paid

Political risk

Commercial risk

1Indonesia

23.0

$192

14.6

$121

2

Argentina

16.9

$141

16.6

$139

0.3

$2

3

Thailand

14.6

$122

-

-

14.6

$122

4

China

4.2

$35

1.0

$8

3.3

$27

5

Pakistan

3.5

$29

3.5

$29

-

-

8.5

$71

6. Recovery(Unit: ¥ billion/$ million)
Year-to-yearchange (%)

FY2002

FY2000FY2001

Asia

16.3

10.4

13.1

$109

25.8

Europe

12.4

28.1

23.2

$193

-17.3

North and Central America

14.0

1.7

1.5

$12

-13.7

South America

36.4

28.3

25.6

$213

-9.7

Africa

6.2

6.0

6.9

$58

15.3

Oceania

0

0

0.001

$0.008

-

85.3

74.5

70.3

$586

-5.7

Total

Note: Recoveries for FY2001 and thereafter are on the basis of reporting, while those up to FY2000 were based on actual receipt.

V
Review of Operations in Fiscal 2002

Recoveries for FY2002 amounted to ¥70.3 billion, down by ¥4.2 billion (5.7%) from the previous fiscal year's ¥74.5 billion.
Of the total recovered amount, only 4.3%, or ¥3 billion, was recovered from commercial risk events. The remaining 95.7%
was in connection with political risk events, such as rescheduling; this type of recovery amounted to ¥67.3 billion. The slight
drop in the amount recovered during FY2002 from the previous year was due in part to the fact that recoveries from
Argentina and Poland decreased.
Reviewed by the amount recovered, the top five countries were Brazil (¥23 billion), Poland (¥10.5 billion), Russia (¥9.3
billion), the Philippines (¥7.3 billion) and Egypt (¥3.4 billion) (all approximate amounts).
By region, among Asian countries, recoveries from the Philippines totaled ¥7.3 billion (¥7.5 billion in FY2001), andrecoveries from China in connection with major commercial risk events amounted to ¥2.3 billion. Thus, recoveries from thetwo countries account for about 74% of total recoveries from Asia. Among North and Central American countries, theamount recovered from the Dominican Republic reached ¥1.2 billion (¥1.4 billion in FY2001), about 81% of the total
recoveries from the region. In South America, recoveries from Brazil, Ecuador and Peru amounted to ¥23 billion (¥19.8
billion in FY2001), ¥1.8 billion (¥0.6 billion in FY2001) and ¥0.6 billion (¥0.3 billion in FY2001), respectively. The
combined amount recovered from these three countries constitutes about 99% of the total recoveries from the region.
Meanwhile, the overall amount recovered from Europe dropped 17.3% compared with the previous fiscal year, owing to thedecline in recoveries from Poland, Russia and Bulgaria. The respective amounts recovered from these countries decreased
from ¥12.5 billion to ¥10.5 billion, from ¥10.8 billion to ¥9.3 billion, and from ¥4.6 billion to ¥3.2 billion (all approximate
amounts).

16

Financial Results for Fiscal 2002
1. Overview
Nippon Export and Investment Insurance (NEXI), an independent administrative institution, submitted
the financial statements for its second period (fiscal 2002, ended March 31, 2003) to the Minister of
Economy, Trade and Industry on June 19, 2003, and obtained the Minister's approval for them on July10.

Financial statements in outline

Administrative service cost

NEXI's financial statements for fiscal 2002 areoutlined below.

The cost of providing administrative services is tobe calculated by adding opportunity costs, etc. to"operational expenses." This is determined bysubtracting income other than grants for working
expenses from expenses on the profit and loss
statements. Since NEXI has received no grants forworking expenses from the government, thenegative net income figure is approximately equal
to operating expenses. Operating expenses plus
opportunity costs related to government
investment, which is the administrative service
cost, was a negative ¥6.1 billion for the year underreview. This negative cost means that NEXI
carried out its operations without imposing aburden on taxpayers in fiscal 2002.

(In millions of yen)

2nd period(FY2002)

1st period(FY2001)

Net premiums written

5,875

7,390

Ordinary profit or loss

825

-1,738Extraordinary profit or loss

6,408

20,140Total profit for the year

7,233

18,402

Total assets

166,125

150,084

Net assets

134,815

122,754

Item

Profits and losses
In fiscal 2002, though underwriting of large-scalemedium- and long-term projects declined, net
premiums totaled ¥5.9 billion as a result of steadyunderwriting of short-term export credit
insurance, which is NEXI's mainstay business.
Ordinary income of ¥0.8 billion was attained in aturnaround from the ordinary loss of ¥1.7 billion
posted the previous year because of a reversal ofunderwriting reserve from the previous year, which
did not arise in fiscal 2001.
Extraordinary profit or loss is booked, in
accordance with an ordinance of the Ministry of
Economy, Trade and Industry that pertains to therecoveries from claims provided by the government
as investment in NEXI (the right to obtain thepayment of the recoveries related to claims paid
under an intergovernmental reschedulingagreement). For the year under review,
extraordinary profit reached ¥6.4 billion.
All told, total profit for fiscal 2002 amounted
to ¥7.2 billion, the entire amount of which wasappropriated to the reserve fund according to theprovisions of the law.

17

2. Financial Statements
Balance Sheet (As of March 31, 2003)
Item(In millions of yen)

Value

(Assets)

Item

Value

(Liabilities)

Cash and cash equivalents

51,131

Outstanding claims

100

Receivables from subrogated claims

262,555

Underwriting reserve

4,734

Accrued income

117,885

Reinsurance payable

6,175

Accrued premiums

5,894

Deposits received

5,866

Reinsurance recoverable

5,418

Prepaid insurance premium

7,166

142

Accrued amount payable

5,350

Buildings2
3

Equipment and fixtures

1,002

Suspense receipts

26

Reserve for bonus payments

129

Vehicles4

3

Deposits

303

Reserve for retirement allowances

Other assets

836

Other liabilities

1,737-279,043

Total liabilities

31,309Allowance for uncollectibles

26(Shareholders' equity)
Capital stock
Government's investment

104,352

Capital surplus5

4,828

Retained earnings
Surplus reserve

Total assets

166,125

18,402

Unappropriated retained earnings

7,233(Of which: total profit for the term)(7,233)

Total retained earnings

25,635

Total shareholders' equity

134,815

Total liabilities and shareholders' equity

166,125

Amount of the difference related to the appraisal of receivables from subrogated claims, etc.
The difference related to the translation of foreign currency of rescheduled claims, etc.

-6,597The difference related to the appraisal of credit claims, etc.

-3,427The difference related to the allowance for uncollectibles

14,852

Net

4,828

VI
Financial Results for Fiscal 2002

Notes: 1. Fractions of less than ¥1 million (¥500,000 and over) are rounded up to ¥1 million. Amounts under ¥500,000 have been eliminated.
2. Accumulated depreciation for buildings is ¥29 million.
3. Accumulated depreciation for equipment and fixtures is ¥496 million.
4. Accumulated depreciation for vehicles is ¥5 million.
5. The breakdown of capital surplus is as follows:(In millions of yen)18

Profit and Loss Statement (From April 1, 2002 to March 31, 2003)
Item

Value

Ordinary Income

6,317

Net premiums written2

5,875

Ordinary Profit and Loss

Reversal for outstanding claims

113

Interest income

2

Other ordinary income

327

Ordinary Expenses

5,492

Net claims paid3

78
4

Expected amount of insurance claim recovery-10

Provision for underwriting reserve

647

Exchange loss

132

Operating and general administrative expenses

4,543Interest paid

28

Other ordinary expenses

74

Ordinary Income

825

Extraordinary
Profit and Loss

Extraordinary Profit

8,338

Profit relating to subrogated claims invested by government5

8,338

Extraordinary Loss

1,930
5

308

Loss relating to subrogated claims invested by government

Reserve for uncollectible subrogated claims invested by government
Total profit for the term

2. The breakdown of net premiums written is as follows:(In millions of yen)
Direct premiums written

29,083

Refund of premiums of reinsurance ceded

1,316

Premiums written from reinsurance accepted

129

Premiums on reinsurance ceded

24,652Net

5,875

3. The breakdown of net claims paid is as follows:(In millions of yen)
Insurance claims paid

65,133

Reinsurance claims recovered

65,054

Recoveries before reinsurance claims
Net

1,621
7,233

Notes: 1. Fractions of less than ¥1 million (¥500,000 and over) arerounded up to ¥1 million. Amounts under ¥500,000 have been
eliminated.

178

4. The breakdown of expected amount of insurance claim recovery
is as follows:(In millions of yen)19

(In millions of yen)

Increase or decrease between the expected
recovery from subrogated claims relating tocommercial risks booked as assets at the endof the previous term and at the end of the term

9

Recovery from subrogated claims relating topolitical risks

1

Total

10

5. Profit and loss relating to assets invested by the government are
booked as an extraordinary profit and loss pursuant to theprovisions of Article 2 of supplementary rules of the ministerial
ordinance relating to the finances and accounts of Nippon Export
and Investment Insurance, an Independent Administrative
Institution (Ordinance No. 104, March 29, 2001, Ministry of
Economy, Trade and Industry).
As is stated in Notes below – 1. Important accounting policies, 7.
Changes in important accounting policies – of the above-noted
assets, profit or loss from the appraisal of those invested by thegovernment (excluding accrued income) was included in capitalsurplus and booked starting from the year under review.
• The breakdown of profit relating to subrogated claims invested bygovernment is as follows:(In millions of yen)
Profit on bad debts recovered

128

Interest income from subrogated claims invested
by government

8,120

Recovery of unrescheduled subrogated claims
invested by government

64

Exchange profit in rescheduled subrogatedclaims invested by government
Total

25
8,338

• The breakdown of loss relating to subrogated claims invested bygovernment is as follows:(In millions of yen)
Recognition of subrogated claims invested
by government

5

Other extraordinary loss

29

Loss on retirement of subrogated claims

275

Total

308

Cash Flow Statement (From April 1, 2002, to March 31, 2003)
I.

(In millions of yen)

Cash flow from operating activities
Premiums received

31,357

Outlays of premiums of reinsurance ceded-23,079

Payments of insurance claims-65,264

Income of premiums on reinsurance ceded

73,766

Income from recovery of subrogated claims, etc.

15,449Outlays in distribution of money recovered in relation to subrogated claims-1,856

Income in recovery of subrogated claims belonging to government

63,136

Outlays in distribution of money recovered in relation to subrogated claims belonging to government-61,898

Personnel expenses-1,434

Other outlays in business activities-3,131Others71

Sub-total

27,116

Interest and dividends received

5,234Interest and dividends paid

-29

Net cash flow provided by operating activities

32,322

II. Cash flow from investment activities
Income from disposition of time deposits, etc.

1,800

Outlays in establishment of time deposits, etc.

-10,900

Outlays in acquisition of securities-3,500

Income on selling securities

3,500

Outlays in acquisition of fixed assets-92

Outlays due to submission of deposits-37

Net cash flow provided by investment activities-9,230III. Cash flow from financial activities
Payments in financial lease-362

Net cash flow provided by financial activities-362

IV. Effect of exchange rate changes on funds-37

V. Net change in funds

22,693
19,338VII. Balance of funds at the end of the term

42,031

Notes: 1. Fractions of less than ¥1 million (¥500,000 and over) are rounded
up to ¥1 million. Amounts under ¥500,000 are eliminated.
2. The breakdown of the balance of funds at the end of the term, byitem of balance sheet(In millions of yen)
Cash and deposit accounts
Time deposits

51,131-900

Certificate of deposits-8,200

Balance of funds at the end of the term

42,031

3. Important noncash transactions• Voluntary transfer from government
Buildings
Equipment and fixtures

VI
Financial Results for Fiscal 2002

VI. Balance of funds at the beginning of the term

(In millions of yen)164
3

Other assets

576

Total

742

• Acquisition of assets in financial lease(In millions of yen)Equipment and fixtures (system assets)

10

Total

10

20

NotesI. Important accounting policies
1. The methods of depreciation(1) The method of depreciation for tangible fixed assets
For depreciation of tangible fixed assets whose acquisition
cost per unit or per set of units exceeds ¥200,000, thestraight-line method is used with 10% of the acquisition
cost as the residual value on the basis of the service life
stipulated in the Corporate Tax Law. However, to calculate
the residual value of buildings (limited to buildings andtheir accessory equipment), the straight-line method is usedon the basis of the memorandum value (¥1).
(2) The method of amortization for intangible fixed
assetsFor amortization of trademark rights, the straight-line
method with ¥0 as the residual value is used on the basis of
the service life stipulated in the Corporate Tax Law.
For amortization of software used in-house, the straightline method is used, with the period of usability (four years)
as the service life and ¥0 as the residual value.
2. The method of appraising monetary debts andcredits in foreign currency
Monetary debts and credits in foreign currency areappraised by converting them into the yen value at theexchange rate prevailing at the time the accounts are settled.
3. Reserve for bonus payments and estimate
Reserve for bonus payments to board members andemployees is calculated based on the rules for remunerationof board members and the pay rules for employees, and theamount allocated to the term under review is recorded.
4. Reserve for retirement allowances andestimate
Reserve for retirement allowances for board members andemployees is recorded based on the rules for board
members' retirement allowances and the retirement
allowance rules for employees in the full amount payable.
5. Underwriting reserve, reserve for outstanding
claims, subrogated claims and allowance foruncollectibles
Underwriting reserve, reserve for outstanding claims,
subrogated claims and allowance for uncollectibles arecalculated according to the "Method of calculation
determined by the Minister of Economy, Trade andIndustry under the provisions of the ministerial ordinanceconcerning the financial affairs and accounting of Nippon
Export and Investment Insurance" (Ordinance of the
Minister of Economy, Trade and Industry Bo No. 2, Heisei
13-03-27, issued March 29, 2001).
6. Opportunity cost in the statement ofadministrative service cost account(1) Opportunity cost for free use of national property
The opportunity cost of using national property, such as
offices and other facilities, free of charge is calculated using
the average prevailing rent stated in "Fudosan Hakusho
2002" as a reference.
21• Computer room: 2nd floor of Annex to the Head Officebuilding of the Ministry of Economy, Trade and Industry• NEXI, Osaka: Osaka Bureau of Economy, Trade andIndustry (joint government building)• NEXI, Nagoya: 1st floor of Nagoya Bureau of Economy,
Trade and Industry(2) Interest rate used for calculation of opportunity cost
related to government investment, etc.
The yield on the benchmark ten-year government bond
(0.7%) was used.
(3) Calculation of the increase in retirement allowances
for staff members on loan from METI
For staff members on loan from the Ministry of Economy,
Trade and Industry, the increase in their retirement
allowances for their period of service at NEXI in the year
under review is booked as opportunity cost.
7. Changes in important accounting policies
Previously, profit or loss associated with the assets specified
in Article 36, 4-1 of the "Government ordinance (2000
ordinance No. 326) regarding revision of relevant
ordinances and interim measures in connection with
enforcement of general rules on independent administrative
institutions" (hereinafter "assets invested by thegovernment") had been recorded as extraordinary loss or
profit pursuant to Article 2 of supplementary provisions ofthe "Ministerial ordinance concerning the financial affairs
and accounting of Nippon Export and Investment
Insurance" (Ordinance of the Ministry of Economy, Tradeand Industry No. 104, issued March 29, 2001). However,in accordance with the "Ministerial ordinance to revise partof the ministerial ordinance concerning the financial affairs
and accounting of Nippon Export and Investment
Insurance" (Ordinance of the Ministry of Economy, Tradeand Industry No. 49, issued March 31, 2003), profit or loss
from appraisal of assets invested by the government (otherthan the amount related to accrued income) is calculated
and included in capital surplus effective from the year underreview.
As a result of this change, extraordinary profit and loss
and net income dropped by ¥13,661 million, ¥8,833
million and ¥4,828 million, respectively, while retained
earnings increased ¥4,828 million, compared with what
would have been recorded under the previous methods.
8. Changes in the methods of presentation
Starting from the year under review, prepaid insurance
premiums, which had previously been included in suspense
receipt, are presented as an independent item for the sake ofclarity.
For information, ¥4,945 million in prepaid insurance
premiums was included in suspense receipt in the previous
year.

II. Important obligations undertaken
There were no obligations undertaken.

III. Important subsequent developments
There were no important developments after thecompilation of the financial statements.

IV. Description of items peculiar to NEXI
Item
Subrogated claims
Accrued premiums
Reinsurance recoverable

Outstanding claims

Underwriting reserve

Reinsurance payable
Prepaid insurance
premiums
Net premiums written

Net claims paid

Expected amount of
insurance claim recovery

Amount of difference
related to the transactionof foreign currency ofrescheduled claims, etc.
Amount of difference
related to the appraisalof credit claims, etc.

Amount of difference
related to the allowance
for uncollectibles

The monetary amount transferred to the underwriting reserve during the year under review is booked.
The difference related to the appraisal of subrogated insurance claims, etc. (excluding the amount related
to accrued income) in accordance with the "Ministerial ordinance to revise part of the ministerial ordinanceconcerning the financial affairs and accounting of Nippon Export and Investment Insurance" (Ordinance ofthe Minister of Economy, Trade and Industry No. 49, issued March 31, 2003). This amount is to be
included in capital surplus.
The difference from currency translation associated with rescheduled subrogated claims pertaining topolitical risks in foreign currency invested by the government as of the end of the year under review.

The difference from valuation of subrogated claims pertaining to commercial risks invested by thegovernment as of the end of the year under review. This amount is to be calculated by the "Method of
calculation determined by the Minister of Economy, Trade and Industry under the provisions of theministerial ordinance concerning the financial affairs and accounting of Nippon Export and Investment
Insurance ("Ordinance of the Minister of Economy, Trade and Industry Bo No. 2, Heisei 13-03-27, issued
March 29, 2001").
The difference associated with allowance for uncollectibles for subrogated claims pertaining to politicalrisks invested by the government as of the end of the year under review. This amount is to be calculatedby the "Method of calculation determined by the Minister of Economy, Trade and Industry under theprovisions of the ministerial ordinance concerning the financial affairs and accounting of Nippon Export andInvestment Insurance" ("Ordinance of the Minister of Economy, Trade and Industry Bo No. 2, Heisei 13-0327, issued March 29, 2001").

Statement of Appropriation of Retained Earnings
I. Unappropriated retained earnings at the end of the year
Total profit for the year

VI
Financial Results for Fiscal 2002

Reversal for outstanding
claimsProvision forunderwriting reserve
Amount of difference
related to the appraisalof receivables fromsubrogated claims, etc.

Description
Subrogated insurance claims booked as assets and the expected subrogated insurance claims relating tooutstanding claims are booked.
Booked as accrued claims against a policyholder that arise as a result of an application for a contract.
Receivables that arise vis-à-vis the government as a result of reinsurance transactions with thegovernment are booked:- Reinsurance premiums to be returned by the government- Reinsurance claims payable by the government
The monetary amount considered necessary for indemnification for losses that have arisen by the end of
the term under review and losses considered to have arisen by the end of the term under review arebooked pursuant to the provisions of "Ordinance of the Minister of Economy, Trade and Industry Bo No. 2,
Heisei 13-03-27, issued March 29, 2001," titled the "Method of calculation determined by the Minister of
Economy, Trade and Industry under the provisions of the ministerial ordinance concerning the financial
affairs and accounting of Nippon Export and Investment Insurance."
The monetary amount necessary for the performance of obligations in the future under an insurance
contract and the monetary amount necessary for the performance of obligation in the future under areinsurance contract accepted are booked pursuant to the provisions of "Ordinance of the Minister of
Economy, Trade and Industry Bo No. 2, Heisei 13-03-27, issued March 29, 2001," titled the "Method of
calculation determined by the Minister of Economy, Trade and Industry under the provisions of theministerial ordinance concerning the financial affairs and accounting of Nippon Export and Investment
Insurance."
Payables that arise on the basis of a reinsurance contract are booked.
Premiums paid under insurance contracts that are to come into effect in the following year or later are
booked.
The monetary amount calculated by subtracting reinsurance premiums paid from gross premium income isbooked. With respect to gross premium income, the sum of direct premiums and premiums for reinsurance
accepted is booked.
The monetary amount calculated by subtracting the collected reinsurance claims from the insurance claims
paid is booked. With respect to gross insurance claims paid, the sum of direct insurance claims paid andclaims paid for reinsurance accepted is booked.
The sum obtained by adding up the following is booked:- Subrogated claims that have arisen by the time of insurance claim payments- Subrogated claims collected in connection with commercial risks- Subrogated claims collected but not booked as an asset in connection with political risks- An increase or decrease between the beginning and end of a fiscal year in the anticipated subrogatedclaims collected booked as an asset accompanying the registration of a reserve fund for outstanding
claims- An increase or decrease between the beginning and end of a fiscal year in the anticipated subrogatedclaims collected booked as an asset in connection with commercial risks
The monetary amount appropriated to the outstanding claims during the year under review is booked.

(yen)

7,232,691,986
7,232,691,986

II. Appropriation of retained earnings
Reserve

7,232,691,986

7,232,691,986
22

Outline of NEXI

Vice Chairman Yukio Kitazume, Chairman and CEO Hidehiro Konno, and Vice Chairman Mutsuo Hatano

Members of the Board
Chairman and CEO Hidehiro Konno
Vice Chairman

Mutsuo Hatano

Vice Chairman

Yukio Kitazume

Members of the Audit Board

23

Corporate Auditor

Yutaka Miyake

Corporate Auditor

Takashi Imai

Corporate Auditor
Yutaka Miyake

Corporate Auditor
Takashi Imai

Established

April 1, 2001

Governing laws

The Law concerning the general rules of Independent Administrative Institutions
The Trade and Investment Insurance Law

PurposeTo conduct, efficiently and effectively, the business of underwriting risks that arise ininternational transactions and from which the policyholders cannot be protected bycommercial insurance.

Competent Minister

The Minister of Economy, Trade and Industry

Paid-in capital¥104,352,324,369 (all invested by the Japanese government) (unchanged from the previous year)

Number of employees

153 (as of March 31, 2003) (5 fewer than a year earlier)History

July 1999

The Law concerning the general rules of the Independent Administrative
Institutions enacted.
December 1999 A law to make a partial amendment to the Trade and Investment Insurance
Law enacted.
April 2001
NEXI established.
(Reference)
The Export Credit Insurance Law (Today's Trade and Investment Insurance Law) was enacted in
March 1950.
Subsequently, the Ministry of Economy, Trade and Industry (the former Ministry ofInternational Trade and industry) managed trade insurance business until March 31, 2001.

Locations of offices

Head Office
Chiyoda First Building, 3-8-1, Nishikanda, Chiyoda-ku, Tokyo 101-8359 Japan
Tel: 81-(0)3-3512-7650
Fax: 81-(0)3-3512-7660

NEXI, Nagoya
Chubu Bureau of Economy, Trade and Industry Building, 2-5-2 Sannomaru, Naka-ku,
Nagoya City, Aichi 460-8510 Japan
Tel: 81-(0)52-951-2101
Fax: 81-(0)52-951-5115

VII
Outline of NEXI

NEXI, Osaka
Aioi-sonpo yodoyabashi Building 8F, 3-1-22, Kitahama, Chuo-ku, Osaka City,
Osaka 541-0041 Japan
Tel: 81-(0)6-6233-4017
Fax: 81-(0)6-6233-4001(From October 14, 2003)

24

NEXI Customer Service Charter
NEXI Spirit(1) NEXI's mission is to assist customers in conducting
international business with a sense of security by
reducing the risks incidental to their businesses.
To this end, NEXI works hard to understand thecustomer viewpoints, precisely meet customer needs
and provide efficient and high-quality services,
thereby enhancing customer satisfaction andestablishing mutual trust.
(2) NEXI, implementing its customer-focused policy,
will continue to:
1. Improve the quality of services,
2. Broaden the range of risk coverage,
3. Promote the efficiency of operations, and
4. Increase the transparency of management.
NEXI Pledges to the Customer
NEXI is committed to:(1) Providing insurance products that will makecustomers feel secure and protected in overseas
transactions(2) Readily providing information and advice tocustomers on their transactions from a preliminary
stage(3) Responding promptly to the inquiries and concernsof customers(4) Meeting the demands of customers and businessneeds(5) Speedily completing the assessment of a claim andpromptly making a claim payment(6) Speedily allocating recovered money(1) Providing insurance products that will makecustomers feel secure and protected in overseas
transactions
1) If you are concerned that your internationaltransactions, including exports, foreign investment
and overseas lending, may incur any risk, please visit
our Web site (http://nexi.go.jp) and find theinsurance product section, or contact the following
offices.
Head Office Customer Relations Office:81-(0)3-3512-7712
Underwriting Group, NEXI Osaka:
81-(0)6-6233-4018 (from Oct. 14, 2003)
NEXI Nagoya: 81-(0)52-951-2101
2) To provide customers with further knowledge about
our insurance products that are beneficial tointernational business, we are always pleased todispatch staff members to your office at your request.
Please feel free to contact us.

25(2) Readily providing information and advice tocustomers on their transactions from a preliminarystage
If you plan to initiate international transactions,such as exports and overseas investment, NEXI's
service is available to you.
We will be pleased to consult with you at an earlystage of project formation and propose the mostappropriate insurance product to minimize any risk
involved.
* For more information, please call or e-mail any of
our groups in the following list or the Customer
Relations Office (telephone: 81-(0)3-3512-7712;
fax: 81-(0)3-3512-7687;
e-mail: okyakusama@nexi.go.jp).
(3) Responding promptly to the inquiries and concernsof customers
1) If you have any questions about insurance
products, please call or e-mail the Customer
Relations Office or any relevant group. We willquickly respond.
2) To estimate an insurance premium, please use thepremium calculation simulator on our Web site.
If you give us information on your plannedtransaction, the group in charge will estimate apremium on the same day of the inquiry, inprinciple, or on the following business day at thelatest. (For medium or long-term non-L/Gtransactions, however, we will answer within fivebusiness days.)
If the group in charge finds it difficult
to answer your inquiry within these periods, thegroup will promptly notify you to that effect and givethe reason for the delay and the expected date ofanswer.
3) Should the group in charge find any inadequacy inthe forms submitted, such as the pre-application form
and the insurance application form (other thanenvironment-related forms), we will notify you
within five business days of our receipt at the latest.
4) If you have any questions about trade insurance
system for a specific project, please consult the groupin charge or the Customer Relations Office. We willanswer within five business days at the latest.
Should we find it difficult to answer within thestated period, you will be promptly notified to that
effect and be given the reason for the delay and the
expected date of answer.
(4) Meeting the demands of customers and businessneeds1) We appreciate the customer consulting with us with
sufficient lead time as our assessment may take longer
than expected.
2) If it becomes necessary to accelerate procedures forsuch reasons as faster-than-expected progress innegotiations for an export contract, please consult
with us.
We always keep in mind the importance of yourbusiness needs and do our utmost to meet accelerated
deadlines.
If we find it difficult to meet an accelerated
deadline, we will promptly report the expected dateof completion of necessary procedures.

(5) Speedily completing the assessment of a claim and promptly
making a claim payment
1) Upon receipt of a customer's insurance claim, we will assess thedetails in light of the insurance policy provisions to determine
the amount of the claim to be paid. We will make a payment
within a stipulated time (within two months of receipt of theclaim, but this rule does not apply in cases in which more timeis required). To file for insurance claims, customers arerequested to steadily execute the duty of notification and the
duty of loss prevention and reduction stipulated in such
documents as the insurance policy provisions. In addition,customers are also requested to submit all necessary documents
stipulated in the insurance policy provisions and otherregulations within a specified time.
2) In the event that any inadequacy is found in the submitted
claim or other documents in light of the insurance policy
provisions and relevant regulations, we will notify the customer
to that effect within three days of the receipt of the documents.
3) In order to pay claims within the period stipulated in theinsurance policy provisions and relevant regulations, weappreciate receiving the customer's understanding andcooperation, including the early submission of documents
necessary for assessment.
(6) Speedily allocating recovered money.
1) When money is recovered with regard to the debt for which acustomer has entrusted us with the exercise of recovery rights,
we will promptly distribute the recovered money in accordancewith the insurance policy provisions, etc.
2) To allocate money recovered according to Paris Club debt
rescheduling or other programs, in principle we will complete
remittance procedures to the relevant customer accounts by thebusiness day following the confirmation of the receipt of thefull amount in a NEXI account.
Disclosure(3) For inquiries regarding our Web site, annual report or any
other public relations material, please contact the Head OfficePublic Relations Group.
Your Complaints and Problems
We work constantly to enhance customer satisfaction. If you
experience difficulty with any procedure or have a complaint
about our services, we will quickly address the problem.
(1) If you have trouble, we will quickly address the problem.
If any problem arises, such as insurance-related procedures,
please let us know the details of the problem and your request.
We will immediately ascertain the cause of the trouble andsolve the problem.
(2) If you have any complaint about our services or handling of a
specific project, please inform the Customer Relations Office.
1) For any complaint about our services, please provide the details
to the Customer Relations Office in writing or via e-mail.
After examining your problem, the Customer Relations
Office will notify you about how we will deal with it. When it
is difficult for us to address the problem promptly, we will let
you know the reason for the difficulty and what action we willtake.
2) If there is any complaint about the handling of a specificproject, please provide the details to the Customer Relations
Office in writing or via e-mail.
After re-examining details about the handling of the
project, the Customer Relations Office will inform you of theresults of our examination without delay.
If it is difficult for us to report the results promptly, theCustomer Relations Office will inform you of its reason and
expected schedule.

VIII
NEXI Customer Service Charter

NEXI discloses various kinds of information on its Web site(http://nexi.go.jp) and in its annual report.
(1) Please visit our Web site for comprehensive information on
trade insurance, which we hope will be helpful.
NEXI Web site features:
1) Recent developments (including changes in systems andunderwriting policies and business results for the last half-year
period)2) Description of our insurance products
3) A listing of rules concerning trade insurance (including
insurance policy provisions for all of our insurance products)
4) Underwriting policies
5) Country categories
6) Simulation of premium calculations
7) Application procedures
8) Brochures on NEXI's insurance products
9) Downloadable insurance policy provisions, detailed rules
concerning procedures, various application forms(2) Our annual report (in Japanese and English) offers the resultsof our trade insurance business and our financial statements.
Other publications are also available, including NEXI
corporate brochures and leaflets on our insurance products.
Please feel free to call the Head Office Public Relations Groupor the Customer Relations Office.

26

Customer Relations Office

NEXI Directory(1) To better serve the customer according to the principles ofour customer-focused policy, NEXI has a Customer
Relations Office at the Head Office (telephone: 81-(0)33512-7712; fax: 81-(0)3-3512-7687; e-mail:okyakusama@nexi.go.jp).
(2) The Customer Relations Office offers customer support bylooking at the situation from the customer's position. All
types of questions and inquiries are welcome, including
those about trade finance, the appropriate group to handle
your planned project, and the handling of a specific project.
We will take prompt action in these matters.

For general inquiries, including questions about theoutline of trade insurance, please contact:

About This Customer Service Charter

Short-term Transactions(Terms of Less Than Two Years)

NEXI staff members act quickly at all times, and this Charter
will be kept under constant review. Please do not hesitate to
make any comments, inquiries, or complaints about thisCharter or NEXI in general.

Customer Relations Office(Tel: 81-(0)3-3512-7712)
Head Office – Business Promotion Group(Tel: 81-(0)3-3512-7665)
NEXI, Osaka – Underwriting Group(Tel: 81-(0)6-6233-4018)*
NEXI, Nagoya(Tel: 81-(0)52-951-2101)
For inquiries about matters ranging from consultation
over trade insurance underwriting to assessment
associated with specific transactions(including underwriting standards, country categories,
international agreements and trade insurance application
procedures, such as buyer registration), please contact any
appropriate group or office listed below according to yourtransaction:

Head Office – Asia, Pacific and Middle East Group,(Tel: 81-(0)3-3512-7668)• Underwriting mainly Export Credit Insurance relating to all
short-term non-standard transactions in the Asia Pacificregion and Middle East.
Head Office – Europe, Africa and Americas Group(Tel: 81-(0)3-3512-7667)• Underwriting mainly Export Credit Insurance relating to all
short-term non-standard transactions in Europe, Africa, andNorth and South America.
Head Office – Contract Documentation Group(Tel: 81-(0)3-3512-7664)• Consultation over underwriting and assessment with regard totransactions that are contracted to be carried out anywhere in
the world with all types of insurance and that meet
underwriting standards for relevant countries.
• Consultation over export bill insurance validity andassessment.
NEXI, Osaka – Underwriting Group(Tel: 81-(0)6-6233-4018)*• Consultation over underwriting and assessment with regard totransactions planned or contracted to be carried out anywherein the world and that meet underwriting standards forrelevant countries.
• Consultation over export bill insurance validity andassessment.
NEXI, Nagoya(Tel: 81-(0)52-951-2101)• Consultation over underwriting and assessment with regard totransactions planned or contracted to be carried out anywherein the world and that meet underwriting standards forrelevant countries.
• Consultation over export bill insurance validity andassessment.

27

Medium- and Long-term Transactions(Terms of Two Years or Over)
Head Office – Asia, Pacific, and Middle East Group,
Underwriting Department(Tel: 81-(0)3-3512-7668)• Consultation over underwriting and assessment with regard totransactions planned or contracted to be carried out in theseareas. (Types of insurance handled: Export Bond Insurance andPrepayment Import Insurance)• Consultation over underwriting and assessment regardingtransactions with direct government loans or government
guarantees, or transactions without government guarantees forwhich insurance cover is requested only for political risks.
Head Office – Europe, Africa and Americas Group(Tel: 81-(0)3-3512-7667)• Consultation over underwriting and assessment with regard totransactions planned or contracted to be carried out in theseareas. (Types of insurance handled: Export Bond Insurance andPrepayment Import Insurance)• Consultation over underwriting and assessment regardingtransactions with direct government loans or government
guarantees, or transactions without government guarantees forwhich insurance cover is requested only for political risks.
Head Office – Overseas Investment Insurance Group(Tel: 81-(0)3-3512-7666)• Consultation over overseas investment insurance andassessment
Head Office – Project Group No. 1(Tel: 81-(0)3-3512-7672)• Consultation over underwriting and assessment with regard tonon-L/G transactions (project finance and corporate finance) in
the oil and gas fields

Issue of insurance policies
Head Office – Contract Documentation Group, Underwriting
Department(Tel: 81-(0)3-3512-7664)
NEXI, Osaka – Underwriting Group (Tel: 81-(0)6-6233-4018)*
NEXI, Nagoya(Tel: 81-(0)52-951-2101)
Collection or refund of insurance premiums
Head Office – Contract Documentation Group(Tel: 81-(0)3-3512-7664)
NEXI, Osaka – Underwriting Group (Tel: 81-(0)6-6233-4018)*
NEXI, Nagoya(Tel: 81-(0)52-951-2101)
Acceptance and handling of applications for alteration
Head Office – Contract Documentation Group(Tel: 81-(0)3-3512-7664)
Head Office – Overseas Investment Insurance Group(Tel: 81-(0)3-3512-7666)
NEXI, Osaka – Underwriting Group (Tel: 81-(0)6-6233-4018)*
NEXI, Nagoya(Tel: 81-(0)52-951-2101)
Various application procedures, including approval ofpledgesHead Office – Contract Documentation Group(Tel: 81-(0)3-3512-7664)
NEXI, Osaka – Underwriting Group (Tel: 81-(0)6-6233-4018)*
NEXI, Nagoya(Tel: 81-(0)52-951-2101)
Various types of notification, such as notification ofredemption date
Head Office – Contract Documentation Group(Tel: 81-(0)3-3512-7664)
NEXI, Osaka – Underwriting Group (Tel: 81-(0)6-6233-4018)*
NEXI, Nagoya(Tel: 81-(0)52-951-2101)

Head Office – Project Group No. 2(Tel: 81-(0)3-3512-7673)• Consultation over underwriting and assessment with regard tonon-L/G transactions (project finance and corporate finance) in
the fields of power generation and mining

Notice of occurrence of risks, notification of losses andcredit advice
Head Office – Claims Services Group (Tel: 81-(0)3-3512-7663)
NEXI, Osaka – Underwriting Group (Tel: 81-(0)6-6233-4018)*
NEXI, Nagoya(Tel: 81-(0)52-951-2101)

Head Office – Project Group No. 3(Tel: 81-(0)3-3512-7674)• Consultation over underwriting and assessment with regard tonon-L/G transactions (project finance and corporate finance) infields related to infrastructure, including communications,railways, and manufacturing

Claim and assessment of insured events
Head Office – Claims Services Group (Tel: 81-(0)3-3512-7663)
NEXI, Osaka – Underwriting Group(Tel: 81-(0)6-6233-4018)*
NEXI, Nagoya(Tel: 81-(0)52-951-2101)

Head Office – Project Group No. 4(Tel: 81-(0)3-3512-7675)• With respect to overseas untied loan insurance, consultation
over underwriting and assessment regarding transactions withdirect government loans or government guarantees andtransactions without government or other guarantees for which
insurance cover is requested only for political risks.

"Guidelines on Environmental and Social Considerationsin Trade Insurance"
Head Office – Environment Group (Tel: 81-(0)3-3512-7685)

Insurance application forms
Head Office – Contract Documentation Group(Tel: 81-(0)3-3512-7664)
Head Office – Overseas Investment Insurance Group(Tel: 81-(0)3-3512-7666)
NEXI, Osaka – Underwriting Group (Tel: 81-(0)6-6233-4018) *NEXI, Nagoya(Tel: 81-(0)52-951-2101)

Disclosure
Head Office – Administration Group (Tel: 81-(0)3-3512-7656)
Public relations, including our Web site and annual report
Head Office – Public Relations Group (Tel: 81-(0)3-3512-7655)

VIII
NEXI Customer Service Charter

For inquiries about the following matters, please contact
the respective office.
Ratings for, and credit management of, non-Japanese trading
companies and banks:
Head Office – Credit Administration Group(Tel: 81-(0)3-3512-7684)
NEXI, Osaka – Administration Group (Tel: 81-(0)6-6233-4017) *NEXI, Nagoya(Tel: 81-(0)52-951-2101)

Recovery of claims paid
Head Office – Debt Management and Recovery Group(Tel: 81-(0)3-3512-7658)
NEXI, Osaka – Underwriting Group (Tel: 81-(0)6-6233-4018)*
NEXI, Nagoya(Tel: 81-(0)52-951-2101)* From October 14, 2003
28