Annual Report & CSR Report

Applying Financial Expertiseto Design the Future2012

http://www.dbj.jp/en
Development Bank of Japan Inc.

9-1, Otemachi 1-chome, Chiyoda-ku, Tokyo 100-0004, Japan

Development Bank of Japan Inc.

This report is printed on paper certified by the Forest Stewardship Council (FSC) as being made from sustainably
managed forests. The report is printed with vegetable ink. All the electricity used in printing and binding thisreport (600 kWh) was supplied by green resources.

Annual Report & CSR Report2012Profile (As of September 1, 2012)

Established:
October 1, 2008
	(The Japan Development Bank [1951] and the Hokkaido-Tohoku Development FinancePublic Corporation [1956] were merged to form the Development Bank of Japan in 1999)
Legal basis:

The Development Bank of Japan Inc. Act (Act No. 85 of 2007)

President:

Toru Hashimoto

Number of employees:

1,147 (As of March 31, 2012)

Capital:¥1,198,316 million (100% owned by the Japanese government)

Address:

9-1, Otemachi 1-chome, Chiyoda-ku, Tokyo 100-0004, Japan

URL:

http://www.dbj.jp/en

Number of offices:

Branch offices, 10; representative offices, 8; overseas representative office, 1; andoverseas subsidiaries, 2Subsidiaries andaffiliated companies: Consolidated subsidiaries, 17; non-consolidated subsidiaries, 23; and affiliated companies, 15(As of March 31, 2012)
Main business:

The provision of long-term funding (investment and loans)

Purpose: 	To conduct business activities utilizing the methods of combining investments and financing andother sophisticated financial methodologies, thereby contributing to the smooth supply of funds
to those who need long-term business funds, as well as to the sophistication of financial functions.
Scope of business operations: A
 s well as such basic businesses as investment, lending and guarantee of obligations, DBJ carriesout businesses in which it develops new financial techniques.
DBJ raises funds in a stable manner by borrowing from the government’s Fiscal Investment and
Loan Program (FILP) and by issuing government-guaranteed bonds, as well as corporate bonds(without government guarantees), and by taking out long-term loans from the private sector.
nnTotal assets:¥15,563.2 billion (As of March 31, 2012)

Loans:¥13,704.9 billion (As of March 31, 2012)

Capital adequacy ratio:

18.30% (As of March 31, 2012)

Issuer ratings:

Aa3 (Moody’s Investors Service, Inc.), A+ (Standard & Poor’s Corp.),
AA (Rating and Investment Information, Inc.),
AAA (Japan Credit Rating Agency, Ltd.)
Note: Information above is on a non-consolidated basis.

Development Bank of Japan Inc.
Published in September 2012 by the Public Relations & Corporate Social Responsibility Office,Corporate Planning & Coodination Department
Forward-Looking Statements
This Annual Report & CSR Report contains statements concerning management policies and future operating
results. Such statements are not guarantees. Please be aware that future performance is subject to various
changes in conditions in the operating environment.

URL: http://www.dbj.jp/en

Contents

Message from the President  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .

2

Special Feature / Toward the Future Prosperity of Japan  .  .  .  .  .  .  .  .  .  .  .  .  .

4

Corporate Philosophy  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 26
Logo and Corporate Color  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 26
DBJ’s Target Business Model  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 28
DBJ's Roles  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 28
Overview of DBJ’s Second Medium-term Management Plan  .  .  .  .  .  .  .  .  .  . 29
History of DBJ  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 30
Privatizing DBJ  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 32
Overview of Operations in Fiscal 2011 .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 34
Operating Results  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 34
Overview of Consolidated Operating Performance  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 36
Overseas Business  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 38
Group Companies  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 39
Topics  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 40
DBJ’s Businesses  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 41
Integrated Investment and Loan Services  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 42
Investments and Loans  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 44
Consulting/Advisory Services  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 55
Crisis Response Operations  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 59
Initiatives Related to the Great East Japan Earthquake  .  .  .  .  .  .  .  .  .  .  .  .  .  . 62
Making Use of Information Functions  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 66
CSR Report  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 71
Implementing CSR Management  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 73
CSR through Investment, Loan and Other Businesses  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 78
Environmental Management  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 101
Business Continuity Plan (BCP)  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 104
Fostering Human Resources andCreating a Comfortable Work Environment  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 106
Intellectual Asset Report  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 109
Intellectual Asset Management  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 110
Financial Platform That Enables DBJ to Meet the Needs of the Times  .  . 114
Management Structure  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 115
Corporate Governance  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 116
Compliance  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 121
Risk Management  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 122
Client Protection Management System/Declaration on Personal
Information Protection/Policy for Managing Conflicts of Interest  .  .  .  .  .  . 126
Disclosure  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 128
Corporate Data  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 129
Financial Condition  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 143

Note:Figures contained herein are rounded
down. Accordingly, the total of eachcolumn of figures may not equal the
total of the individual figures.
In this report, a “0” indicates figuresof less than the indicated unit.
A “—” indicates the absence of anamount.

Annual Report & CSR Report 20121

C

Message from the President

F
2

Annual Report & CSR Report 2012

Issues Japan Faces and DBJ’s Role in
Resolving Them

industries in the affected region. As a designated financial

The Japanese economy faces a number of pressing issues.

financial demands providing financing for crisis response

Following the Great East Japan Earthquake, these include

operations amounting to approximately ¥1 trillion (as of

the need for restoration and reconstruction, as well as

March 31, 2012). In addition, on its own initiative DBJ

electrical power supply problems. Also of growing con-responded to capital funding needs by forming restoration

cern is the hollowing out of industry, owing to yen appre-funds in cooperation with regional banks in the affectedciation. The economy also confronts structural issues,area, thereby putting in place a detailed support structure.

such as deflation, a lower birth rate and an increase inAs part of our efforts to rebuild the industrial structure

the average age. Furthermore, we face concerns about

and support growth fields, we established the DBJ Smartthe impact of the European debt crisis on international

Japan Program to support our own financing activities

financial and capital markets and the world economy.

to boost global competitiveness and target community

In light of these issues and the expected changes indevelopment and the environment and energy fields,

institution for crisis response operations, we met current

the socioeconomic environment, DBJ will continue work-

among others. In growth fields in particular, in addition to

ing toward Japan’s socioeconomic development in thehaving a financial aspect, our efforts focus on nurturing

ways described below, by leveraging its characteristics: athe seeds of success. Given Japan’s lower birth rate andlong-term perspective, large size, integrated investment

increase in the average age, encouraging the participationand loans, and a neutral standpoint.

of women has become essential to supporting economicFirst, by supplying risk capital in an appropriate man-activity. Recognizing this situation, we set up the Womenner, DBJ’s financial function is to help reinforce Japan’s

Entrepreneurs Center (DBJ-WEC). Specific center activities

financial markets. At the same time, to counter the hol-commenced in June 2012, when we held a businesslowing out of Japanese industry we are helping to rebuild

competition targeting female entrepreneurs.

the industrial infrastructure and aiding the reconstruction

Going forward, DBJ will continue playing the rolesof the Japanese industrial structure. Furthermore, DBJ isreferred to earlier as it contributes to addressing the issues

supporting growth in fields that should help to expand

faced by the Japanese economy.

Japan’s economic frontiers.
safety net for financial markets, responding expeditiously

Meeting Our Corporate Social
Responsibilities

and proactively to such events as financial crises and the

We believe that a company’s corporate social responsi-

Great East Japan Earthquake.

bilities center on a commitment to creating social value

In addition, we are taking an active role in providing a

While filling these roles, as a joint stock company wethrough its operations. We meet this responsibility throughmanage DBJ as an autonomous entity, introducing initia-

business activities that address a host of societal needs

tives that are designed to boost our profits.

and issues, and via our financial services. Accordingly, ourbusiness endeavors themselves form the base of our CSR

Specific DBJ Initiatives

activities. We plan to continue increasing our CSR efforts

Based on these precepts, in the preceding fiscal year

by increasing our sensitivity to societal needs and raising

DBJ formulated its second medium-term management

the level of the solutions that we provide.

plan, which is a three-year plan designed to respond
appropriately to current issues such as the Great East

July 2012

Japan Earthquake. At the same time, the plan targets thereconstruction of the Japanese industrial structure andaims to proactively support growth fields.
		Toru Hashimoto

fully leveraging its accumulated expertise and networks

		President & CEO

and making a full-fledged effort to support general		Development Bank of Japan Inc.

DBJ responded to the Great East Japan Earthquake by

Annual Report & CSR Report 20123

C

Special Feature

Toward the Future Prosperity of Japan

Our Initiatives to Address the Issues Our Clients Face
F
4

Initiatives in the
Energy Sector

Providing Investments and Loans to Ensure a
Stable, Long-Term Supply of Energy to Core Industries

P.6

Initiatives in theTransportation
Sector

Providing Investments and Loans to Increase Transportation
Capabilities and Efficiency, Build and Upgrade Transportation
Infrastructure That Has Deteriorated Over Time and Addressing
the Aging Population and Responding to Environmental Issues

P.8

Initiatives in the
Urban
Development (Real
Estate) Sector

Supporting Real Estate Development, Utilization andLiquidization through Various Financing Schemes, Including
Securitization

P.10

Initiatives in theEnvironmental
Business Sector

Promoting Investment and Loans That Address Global
Environmental Issues from a Long-Term, Neutral and PublicMinded Perspective

P.12

Initiatives in the
Healthcare andWelfare Sectors

Supporting Initiatives That Maintain or Improve the Quality of
Healthcare and Welfare in Japan through Finance, Consulting
and Provision of Information

P.14

Annual Report & CSR Report 2012

C

DBJ’s corporate philosophy is “Applying financial expertise to design the
future: We apply creative financing to resolve client issues, as we work toearn the trust of our clients and help them achieve their future prosperity.”
In accordance with this philosophy, we provide financial services tocontribute to the future prosperity of Japan.

F

Restructuring andRevitalization
Initiatives

Supporting Increases in Clients’ Corporate Value throughFinancial Methods That Contribute to Business Restructuring
and Industry Revitalization, Thereby Increasing Competitiveness

P.16

Social Infrastructure
Initiatives

Leveraging Experience and Expertise Gained during Our Time
as a Policy-Based Financial Institution to Provide Appropriate
Solutions and Investments and Loans to Help Build andEnhance Social Infrastructure

P.18

Community
Revitalization
Initiatives

Providing Optimal Solutions by Forming Networks That
Connect Local Companies and Government Bodies, Economic
Organizations, Chambers of Commerce and Other Institutions

P.20

Overseas BusinessInitiatives

Supporting Foreign Companies Investing in Japan and JapaneseCompanies Expanding in Overseas Markets Where HighP.
Growth Can Be Expected

Initiatives Targeting
Crisis Response
Operations

Maintaining Our Long-Term Perspective Even in Times of LargeScale Natural Disasters and Other Emergencies That Have FarP.
Reaching Impacts, Fulfilling Our Role as a Provider of Safety
Nets That Are Dynamic and Proactive

22

24

Annual Report & CSR Report 2012

5

C

Initiatives
in the Energy SectorF

DBJ supports the growth of Japanese industry
through its investments and loans for resource
development, oil storage and other initiatives.
Against the backdrop of global warming, we
also support clients’ efforts to encourage andpromote renewable energy from solar power,
wind, biomass and other sources.
As of March 31, 2012, our balance of loans in
the electric power, gas, heat and water sector
totaled ¥2,357.8 billion, accounting for 17.2%of total loans, by industry.

See pages

6

79–80

Annual Report & CSR Report 2012

C

Toward the Future Prosperity of Japan

F

¥2.3

trillion

Balance of loans in the electric power, gas, heat andwater sector(As of March 31, 2012)

EnergyAnnual Report & CSR Report 2012

7

C

Initiatives in theTransportation SectorF

DBJ is involved in a wide range of initiatives inthe development and improvement of transportation infrastructure (including railroads,
airports, airlines, buses and roads). We also
take part in the formation of a wide range of
projects from a long-term perspective, to support collaboration among multiple companies
from a position of neutrality.
As of March 31, 2012, our balance of loans
in the transportation infrastructure sector (totransportation providers) totaled ¥2,977.9 billion, accounting for 21.7% of total loans, byindustry.

See page

8

81

Annual Report & CSR Report 2012

C

Toward the Future Prosperity of Japan

F

¥2.9

trillion

Balance of loans in thetransportation infrastructure
sector(As of March 31, 2012)

Transportation
Annual Report & CSR Report 2012

9

C

Initiatives
in the Urban Development(Real Estate) Sector

F

DBJ’s long-term financing of real estate projects began in the 1960s. We have participatedin Japan’s real estate securitization market
from its early beginnings and continue striving to invigorate this market by leveraging ouraccumulated expertise and networks.
In fiscal 2011, we introduced the DBJ Green
Building Certification, which is designed toprovide financial support for environmental
and socially considerate initiatives.
As of March 31, 2012, our balance of loans
in the real estate sector totaled ¥1,615.3 billion, accounting for 11.8% of total loans, byindustry.

See pages

10

82–83

Annual Report & CSR Report 2012

C

Toward the Future Prosperity of Japan

F

¥1.6

trillion

Balance of loans to
the real estate sector(As of March 31, 2012)

Real Estate
Annual Report & CSR Report 201211

C

Initiatives
in the Environmental
Business Sector

F

Beginning with antipollution measures implemented in the late 1960s and early 1970s, DBJ
has provided more than ¥3 trillion in investments and loans for environmental projects
over the past 40 years.
In fiscal 2004, DBJ began employing environmental ratings in its financing based on
knowledge we have cultivated for over four
decades.
As of March 31, 2012, we had provided suchfinancing to more than 310 companies, with the
cumulative total amounting to ¥491.2 billion.

See pages

12

84–86,
101–103

Annual Report & CSR Report 2012

C

Toward the Future Prosperity of JapanF¥491.2billionCumulative amount of
DBJ Environmentally Rated
Loan Program(As of March 31, 2012)

Environment
Annual Report & CSR Report 201213

C

Initiatives
in the Healthcare andWelfare Sectors

F

DBJ is engaged in maintaining and improving
the quality including access, cost and technological standards of each area of healthcare
in Japan through finance, consulting andthe dissemination of information. As well as
providing consulting services that include thedevelopment of business plans to support
improvements in hospital management, DBJ
studies and conducts research into a variety of
medical issues.
As of March 31, 2012, our balance of loans in
the healthcare sector stood at ¥46.9 billion, up
4.7% from the preceding fiscal year.

See pages

14

87–89

Annual Report & CSR Report 2012

C

Toward the Future Prosperity of Japan

F

Up

4.7

%

Year-on-year increase in loans
in the healthcare sector(As of March 31, 2012)

Healthcare
Annual Report & CSR Report 201215

C

Restructuring andRevitalization Initiatives

F

In an environment marked by sluggish domestic demand and shifts in the demand structure,
increasingly stringent competition and accelerating change in the corporate business climate,needs are growing for business and industry
restructuring and corporate revitalization thatenhances corporate value by bolstering competitiveness.
Through debtor-in-possession financing,
DBJ helps supply the short-term cash flow thatis essential to revitalization. We also provide
buyout financing and mezzanine financing
to assist corporate acquisitions and capital
restructuring. Through total solutions such asthese, DBJ supports business restructuring andrevitalization.

See pages

16

90–92

Annual Report & CSR Report 2012

C

Toward the Future Prosperity of JapanF

ProvidedJapan’s first
DIP financing in 2001

Restructuring
Annual Report & CSR Report 201217

C

Social Infrastructure
Initiatives

F

Since the era of reconstruction following
World War II, DBJ has supported the development and advancement of Japanese economy
and society. For the development and further sophistication of Japan’s economy andimprovements to quality of life, DBJ applies
its experience and expertise to support theefforts of its clients to build and improve thesocial infrastructure.
As of March 31, 2012, DBJ’s balance of loans
for social infrastructure (electric power, gas,
heating, water, telecommunications, transportand real estate) totaled ¥7,521.5 billion.

See pages

18

93–94

Annual Report & CSR Report 2012

C

Toward the Future Prosperity of Japan

F

¥7.5

trillion

Balance of loans in the electric
power, gas, heating, water,
telecommunications, transportand real estate sector(As of March 31, 2012)

Infrastructure
Annual Report & CSR Report 2012

19

C

Community Revitalization
Initiatives

F

DBJ provides optimal solutions from a longterm perspective that are designed to realize aprosperous lifestyle. To this end, we stimulate
regional economies, build local infrastructuresand construct wide-ranging networks as we
strive to tackle the variety of issues facing theregions. Furthermore, DBJ maintains close relationships with regional financial institutions,which have excellent insights into the companies that operate in their regions. We havecreated a regional banking M&A network thatlinks regional financial institutions with information on corporate M&A activities, thereby
enhancing trust-based relationships and helping to achieve community revitalization.
As of March 31, 2012, a cumulative total of
101 financial institutions had entered into business alliances with DBJ.

See pages

20

95–98

Annual Report & CSR Report 2012

institutions
F

101

C

Toward the Future Prosperity of Japan

Cumulative number of alliedfinancial institutions(As of March 31, 2012)

Network
Annual Report & CSR Report 201221

C

Overseas BusinessInitiatives

F

Since its conversion to a joint-stock company
in October 2008, DBJ has enthusiasticallyembraced international business.
We are building an overseas risk management structure, preparing operating bases,
training personnel and moving forward withcore infrastructure. At the same time, we areworking to expand our network with trustworthy partners and domestic and overseas
financial institutions.
As of March 31, 2012, more than 35 countries were targeted for investments and loans.

See pages

22

38, 99Annual Report & CSR Report 2012

C

Toward the Future Prosperity of Japan

More thancountries

F

35

Number of countries targeted for investments and loans(As of March 31, 2012)

Overseas
Annual Report & CSR Report 201223

C

Initiatives Targeting Crisis
Response Operations

F

DBJ began crisis response operations as adesignated financial institution on October 1,
2008.
Since March 2011, when the Great East
Japan Earthquake struck, we have poured all
our energy into initiatives to support the restoration and reconstruction of the disaster-stricken region. In addition to implementing crisis
responses targeting clients affected directly
and indirectly by the disaster, DBJ is making
a proactive effort to support increases in the
production of materials needed for restoration
and reconstruction.

See pages

24

59–65, 100

Annual Report & CSR Report 2012

C

Toward the Future Prosperity of JapanF

Reconstruction
SupportConsolidating usefulknowledge and financial
expertise

Annual Report & CSR Report 201225

Corporate Philosophy, Logo and Corporate Color

Corporate Philosophy

Corporate Philosophy

Applying financial expertise
to design the future

We apply creative financing to resolve client issues, as we workto earn the trust of our clients and achieve their future prosperity.

Commitment to Stakeholders

Action Guidelines• Commitment to Clients, Society,
Investors and Employees• Customers First• Professional• Global & Local• Speed & Teamwork

Intention
Intellectual
AssetsThe Core Competencies
at the Center of DBJ-SpecificFinancial Expertise

Networks

Logo and Corporate Color

Our ”Earth” logo consists of four colors that represent four themes and embodies our
corporate philosophy of working with clients to realize their goals.

Each Color Represents Two Aspects of DBJ

26

Corporate Values:

Action Guidelines:• Long-Term Perspective• Customers First• Neutrality• Professional• Public-Mindedness• Global & Local• Reliability• Speed & Teamwork

Annual Report & CSR Report 2012

Corporate Philosophy, Logo and Corporate Color

Commitment to Stakeholders, Action Guidelines and Core Competencies
Action Guidelines

Commitment to Stakeholders

n Customers Firstn Commitment to Clients	
Using creative finance, DBJ will resolve its clients’challenges and help them enhance their economic andsocial value.

n Commitment to Society ll business will be based on harmony among the threeA
factors of society, the environment and the economy inorder to contribute to a sustainable, affluent society.

n Commitment to Investors
 BJ will maintain transparency while raising corporateDvalue over the long term.

n Commitment to EmployeesS eeking out and training employees who shareits corporate philosophy and possess high ethicalstandards, DBJ will strive to create an open andcreative work environment.

 BJ will operate from our clients’ viewpoints, addressingDtheir challenges and sharing pleasure in their success.

n Professional	With discernment and creative skill, DBJ will be a uniquefinancial platform providing integrated investment andloans both in Japan and abroad.

n Global & Local
	DBJ will maintain a long-term viewpoint, considering
the needs of the times, the world and the region.

n Speed & Teamwork
	Relying on skilled teamwork, DBJ will act rapidly andin good faith, building strong foundations for clients’
trust.

Core Competencies
Intention

The fundamental stance at the core of ourcorporate values: long-term perspective,
neutrality, public-mindedness and reliability.

Intellectual
AssetsExpertise in fields including industry
research, credit analysis, financial
technology and R&D, based on skills
gathered over many years of experience.

Networks

Networks created with clients, local governments and other financial institutions.

The shade of blue in “DBJ” represents a prosperous future,
youthfulness and growth potential.

Annual Report & CSR Report 201227

DBJ’s Target Business Model, DBJ’s Roles

DBJ’s Target Business Model

We work to resolve the issues clients face by providing specialized financial services involving integrated
investment and loans.
Loans

Investment

Provision of medium- and long-term
financing, as well as project financing
and other forms of structured andsubordinated financing

Provision of mezzanine andequity financing

Integrated Investment
and Loan Services
Consulting/Advisory Services
Arrangement of structured financing,
provision of M&A advisory services,
applying DBJ’s industry researchfunction and expertise in environmental
and technology evaluations

DBJ’s Roles

DBJ has continued to offer distinctive financial services through its integrated investments and loans, andwill fulfill four key roles in financial and capital markets as it addresses the changes that are expected totake place in the socioeconomic environment.
Financial institutions (banks, securities companies, etc.), and other investment companies
Collaboration in providing investments and loans

DBJ
Provision of risk capital, partnerships: (1) Reinforcing the functions of financial and capital markets(long-term perspective, large amounts, integrated investments and loans, neutrality)(4) Providing a safety net
for financial markets
Asset Management• Crisis response financing• Purchase of CP• Investment pursuant to
Act on Special Measure
for Industrial
Revitalization

FundRaising

Clients,
Expertise,
Human Resources,
Information(2) Supporting industrial
restructuring• Industry restructuring andrevitalization, other activities• Regional restructuring• Community infrastructureenhancement, other(3) Providing financial support in growth fields• Support for growth industries (environment-related, healthcare, others)• Support for overseas development, promotion of financing for
inbound business to Japan• Technical sophistication, otherTimes of crisis

Fund-raising backed by government
credit (Two-step loans)

Capital28

Business domains managed byautonomous corporate decisions

Annual Report & CSR Report 2012

Normal times

Expansion of autonomous fund-raising infrastructure

Integrated capital management

After embarking on a new stage as Development Bank

Based on the achievements made and the challenges

of Japan Inc. on October 1, 2008, throughout our First

confronted under our First Medium-term Management

Medium-term Management Plan, “Challenge 2010,” whichPlan, and in light of the unprecedented economical andcovered two and a half years to the fiscal year ended Marchsocial restoration and reconstruction challenges caused by

31, 2011, we focused on establishing integrated invest-

the Great East Japan Earthquake, we have launched ourment and loan services and building a foundation of core

Second Medium-term Management Plan “Endeavor 2013”

strengths with the aim to further solidify our business base.

to cover the next three fiscal years through March 31, 2014.

Overview of DBJ’s Second Medium-term Management Plan

Overview of DBJ’s Second Medium-term Management Plan (Announced May 25, 2011)

Basic Policies of Endeavor 2013, the Second Medium-term Management Plan
(Fiscal Years from April 1, 2011, to March 31, 2014)
1. The Great East Japan Earthquake resulted in an unprecedented level of complex catastrophe. It is essentialthat disaster recovery measures be: (1) implemented on a step-by-step basis according to each stage towards
recovery, and (2) tailored to meet specific needs of varying regions and different disaster categories.
		 As we position crisis response as one of our major roles, we are committed to expending every effort tosupport restoration and reconstruction from the devastating damage caused to our economy and society.
To this end, we will leverage our rich financial experience in regional, industrial, energy and infrastructuredevelopment projects accumulated through our unique financial capabilities in providing long-term debt
and equity capital.
2. In addition to responding to the disaster, we are committed to building a solid foundation on which to
grow by steadily implementing the growth strategy set forth in “Endeavor 2013”: namely, (1) to focus on
strategic priorities among existing business, (2) to further diversify our financial service, and (3) to enhanceinvestment in human capital.

Key Measures under Endeavor 2013, the Second
Medium-term Management Plan

Human Resources andBusiness ProcessuImplementing integrated investment and loan services• Provide optimal financing products and services that best suitcustomer needs• Primary focus on medium risk investments and loansuFocusing on strategic priority industries and segments• Concentrate on restoration and reconstruction efforts in response to
the Great East Japan Earthquake in the near term
• Focus on following areas to promote Japan’s long-term growthsStrengthening existing business: energy, logistics andtransportation, urban developments
Supporting industries with growth potential: environment,
healthcaresIndustry reorganization and revivals
Infrastructure, regional developmentuAccelerating expansion in global markets• Facilitate our customers’ growth strategies in overseas markets• Focus primarily on Asia, strengthen structured financeuDiversifying sources of funds• Strengthen capabilities to raise funds relying on its own credit
standing• Utilize securitization etc.
uStrengthening non-asset business• Diversify fee-based revenue streamsuStrengthening investment in
human resources• Strategic allocation ofhuman resources (strategic
priorities and new businessdevelopment)• Training professionals
equipped with skills requiredin strategic business• Fostering young professionalsuBusiness process
management and risk
management• Enhancing business process
and risk management systemthat properly helps drive
strategic business decisions

Annual Report & CSR Report 201229

History of DBJ

History of DBJ
Here, we introduce DBJ’s history of supporting the reconstruction of post-war Japan
Reconstruction andindependence of theeconomyIn 1951, the Japan Development
Bank was established andcommenced accommodationloans to facilitate thedevelopment of the power
supply, which forms the basisof the economy and industry,
and the rationalization,
modernization and cultivation ofcoal, steel, marine transportationand other major industries.

Economic recovery

1951–1955

High-growth infrastructuredevelopment
To expand and reinforce theenergy and transportation
activities that underpin theindustrial infrastructure, theJapan Development Bank served
as the driving force that powered
new economic expansion. In
addition, it provided loans for
local development to correct
regional disparities.
Established in 1956, the
Hokkaido Development
Finance Public Corporation wasrestructured in 1957 to form the
Hokkaido-Tohoku Development
Finance Public Corporation andbegan providing investments andloans to promote industry in these
two regions of northern Japan.

Developmentof international
competitiveness and social
development loans
Aiming to hone international
competitiveness in accordancewith the transition to an open
economic system, the Japan
Development Bank focused on
support for industrial system
improvements and independent
technological development.
It also emphasized social
development throughregional development, urban
redevelopment, logistics
modernization, pollution
prevention and other measures ina bid to relieve the problems ofhigh-level growth.

Rapid growth

1956–1965

Improvements to qualityof life and stable supply ofenergyAs corrections to the imbalanceof economic growth andstandards of living, the Japan
Development Bank began
to focus on antipollution
measures, regional and urban
development and other social
elements in addition to industrial
development. Against the
backdrop of the first oil crisis,
it provided investment andloans for energy alternatives tofossil fuels, as well as efforts toconserve energy, to ensure stableenergy supplies. It also supported
efforts to develop land into largescale commercial sites.

Stable growth

1966–1971

1972–1984

Kawasaki Steel Corporation:
Construction of Chiba
Steelworks (Chiba Prefecture)(currently JFE Steel Corporation)
Modernization of steelmaking
through construction of the first
postwar blast furnace

Asahi Chemical Industry Co.,
Ltd. (currently Asahi Kasei
Corporation): Construction of
the Fuji Plant for production ofCashmilon acrylic staple fiber(Shizuoka Prefecture)
Promotion of the synthetic fiberindustry

Toyota Motor Corporation:
Modernization of facilities
through procurement ofimported machinery (Aichi
Prefecture)
Modernization of the domestic
automobile industry throughrefurbishment of production
facilities

30

Annual Report & CSR Report 2012

Sony Corporation: Trinitroncolor television factory
Promotion of home-growntechnologies through commercial
application of new technologies

Shinjuku new urban center:
Shinjuku Mitsui Building andothers (Tokyo)
Kawasaki Kisen Kaisha, Ltd.:The Tonegawa Maru tanker
Built tanker that was indispensablefor the import of energy and raw
materials

New urban center formation
through redevelopment of
purification plant siteHistory of DBJ

Source: DBJ website: http://www.dbj.jp/en, etc.

Development of lifestyleand social infrastructure
and a smooth industrial
transformation
Pressing needs arose forincreased domestic demand
and an industrial structuralshift, against a background of
aggravating trade friction withother countries. The Japan
Development Bank focusedon support for social capital
improvement, creative technological development, an industrial
transformation and other issues.
In the 1990s, it stressed environmental and energy measures andregional economic stimulation
with the aim of making Japan alifestyle superpower.

Economic
bubble1985–1995

Yamagata JR Chokko Tokkyu
Holdings: Yamagata Shinkansen
Improvements to regional railway
infrastructure

Creation of a vibrant andaffluent society and stableeconomyThe Japan Development Bank
focused on such important areas
as ongoing improvements tosocial capital, environmental andother measures, and support
for venture businesses. In
addition, it swiftly implemented
reconstruction loans in the wakeof the Great Hanshin-Awaji
Earthquake and loans in responseto the financial environment tostabilize the financial system byfunctioning as a safety net.

Post-bubble

1996–2000

Nakayama Joint Power
Generation Co., Ltd.:
Independent power producer(IPP) power generation
operations (Osaka Prefecture)
In step with relaxation ofregulations, project finance support
for Japan’s first steelmaker to enter
the power generation business

Financial solutions that
support communities,
the environment andtechnology

Providing integrated investment and loan services andconducting crisis response
operations

In 1999, the Japan Development
Bank and the Hokkaido-Tohoku
Development Finance Public
Corporation were dissolved
and the Development Bank ofJapan (DBJ) was established. DBJ
focuses its operations in threeareas: community development,
environmental conservation andsustainable societies and thecreation of new technologies andindustries. In these ways, DBJ
contributes to the sustainable
development of Japan’s economy.

Development Bank of Japan Inc.
was established on October 1,
2008, as a special stock company
through conversion to a joint-stockcompany. By applying its distinctive
financial services through integrated investments and loans, DBJ
addresses the various issues thatclients face. At the same time, we
fulfill our unique role by serving asa designated financial institution forcrisis response operations, responding to financial crises and helping
to meet the restoration and reconstruction challenges presented by
the Great East Japan Earthquake.

Structural reform

From 2001

The Former Niigata Tekkosho Co., Ltd.
Through such methods as DIP
financing, mergers and acquisitions,and business revitalization funds,
DBJ supports local companies,
helping communities maintainexcellent supplies of technicalexpertise and employment
opportunities.

Pacific Convention Plaza
Yokohama: Pacifico Yokohama(Kanagawa Prefecture)
Construction and maintenance of
hotels, international conference
facilities, etc., in the Minato Mirai
21 area of Yokohama

October 1, 2008:
Development Bank ofJapan Inc. established

V-Lease Corporation
By applying the expertise it has
cultivated to date, DBJ entered
the business of operating leases
for aircraft engines, of which core
parts are produced by Japanesecompanies involved inheavy industry. Throughthis business, we aim
to promote the further
development of theJapanese airline industry.

Toyo Tires Turnpike(formerly the Hakone Turnpike)Hankyu Corporation:
Earthquake reconstruction work
(Hyogo Prefecture)
Recovery work on traffic
infrastructure destroyed byearthquakes

DBJ established Japan’s first
infrastructure fund in collaboration
with Australian investment bank
Macquarie Bank, involving equity
investment to facilitate business
transfer transactions for the former
Hakone Turnpike.

Annual Report & CSR Report 201231

Privatizing DBJ

Privatizing DBJ

Development Bank of Japan Inc.
Established as a Joint-stock Company (Privatized) on October 1, 2008
Development Bank of Japan Inc. was established on

establishment, took over all assets of the Development

October 1, 2008, under the terms of the Development

Bank of Japan (the “predecessor”) as investment in kind,Bank of Japan Inc. Act (Act No. 85, 2007; the ”New DBJ

with the exception of assets transferred to the governmentAct”) approved by the Japanese Diet on June 6, 2007, as

under the provisions of Article 15, Paragraph 2, of thepart of the Act on Promotion of Administrative ReformAppendix to the New DBJ Act. Under Article 15, Paragraphfor Realization of Small and Efficient Government (Act No.

1, of the same act, DBJ also assumed all rights and obliga-

47, 2006; the ”Administrative Reform Promotion Act”)

tions of the predecessor, with the exception of assets trans-

approved by the Japanese Diet in May 2006, and the fun-ferred to the government under Article 15, Paragraph 2, ofdamental reform of policy-based finance. DBJ, upon its

the Appendix to the New DBJ Act.

Highlights of the New DBJ Act
Provision of Credit

Predecessor

New DBJ

Loans

Yes

Yes

Equityinvestments

Yes

Yes

Debt guarantees

Yes

Yes

Foreign exchange;
money exchange

No

No

In addition to borrowing and bond issuance, as a complementary measure, DBJ is now able to accept negotiable
deposits and issue bank debentures for institutional investors.

Bond issuanceYes(including bankdebenture bonds)

Transitional Measures

Borrowings

Fiscal Loan FundThe object of the New DBJ Act is to maintain thefoundations of the investment and financing functionsof long-term business funds as the Development Bank ofJapan Inc. by conducting business activities utilizing themethods of combining investments and financing and othersophisticated financial methodologies with the goal of
realizing full-scale privatization.

Fund-raising

In terms of fund-raising, DBJ depends largely on borrowing
from the government and government-guaranteed bonds.
To facilitate a smooth transition toward independent fundraising following full privatization, measures have beenenacted to allow DBJ to issue government-guaranteedbonds and borrow from the Fiscal Loan Fund. Upon theestablishment of the new DBJ, the act provided for longterm borrowing from the private sector.

Yes

Fiscal Loan Fund bonds +private-sector
borrowings

Yes

Deposits

No

Checkable deposits
and small-lot deposits
that are covered bydeposit insurance
for the safe custodyof deposits are notaccepted.

Revision to the New DBJ Act (June 2009)
Since its establishment, DBJ has been engaged in crisis

act was promulgated and went into effect on July 3, 2009.

response operations as a designated financial institution.

Under the New DBJ Act, DBJ was to have achieved full

However, to reinforce DBJ’s financial structure through gov-

privatization within five to seven years after its establish-

ernment capital contribution and enable DBJ to introduce

ment. With the act’s revision, the target date was extended

more broad-ranging initiatives in response to the global finan-

to five to seven years after March 31, 2012. DBJ was to havecial and economic crisis that commenced in autumn of 2008,

become fully privatized within approximately five to seven

the Act for Partial Amendment of the Development Bank ofyears of April 1, 2012. At the end of fiscal 2011, the govern-

Japan Inc. Act (“revision to the New DBJ Act”) was passed

ment was planning a review of DBJ’s organization, which

into law by the Japanese Diet on June 26, 2009, and thewas to have included the future of government-held shares.

Note: Please refer to pages 136–142 for details of the New DBJ Act, the revision to the New DBJ Act and the Act for Extraordinary Expenditure
and Assistance to Cope with the Great East Japan Earthquake.

32

Annual Report & CSR Report 2012

Privatizing DBJ

Act for Extraordinary Expenditure and Assistance to Cope with theGreat East Japan Earthquake (May 2011)
On May 2, 2011, in response to the damage caused by the(to March 31, 2015) the period for government capital con-Great East Japan Earthquake, the Act for Extraordinary

tribution in order to facilitate DBJ’s implementation of crisis

Expenditure and Assistance to Cope with Great East Japan

response operations. Furthermore, the target date has been

Earthquake (Act No. 40 of 2011; the Act for Extraordinary

extended to five to seven years from April 1, 2015. The

Expenditure), which included the partial revision to the New

government is now planning a review of DBJ’s organization,

DBJ Act, was passed into law by the Japanese Diet.

which will include the future of government-held shares,

The revision to the New DBJ Act in Accordance with the
Act for Extraordinary Expenditure extended by three years

by the end of fiscal 2014. The government will continue tohold its shares until then.

Revision to the New DBJ Act in Accordance with the Act for Extraordinary Expenditure
The Amendment of the Development Bank of Japan Inc. Act (based on establishment of the Act for
Extraordinary Expenditure and Assistance to Cope with the Great East Japan Earthquake) was passed at
an Upper House plenary session of the ongoing 177th ordinary session of the Diet.
The act was revised to facilitate implementation of DBJ’s crisis response operations with regard to the damage
resulting from the Great East Japan Earthquake. The main thrust of the revisions is as follows.
u
To strengthen DBJ’s financial base in order to facilitate a smooth response to crisis response operations, theperiod during which the government may make additional capital contributions to DBJ has been extended
by three years, until March 31, 2015. Furthermore, the period for requiring the redemption of delivery bonds
has similarly been extended by three years, to June 30, 2015.
u
In addition to extending the period for repayment of capital contribution and redemption of delivery bonds,
the act extends the disposition period for government-held shares in DBJ. Whereas existing provisions
stipulated a target of “approximately five to seven years after April 1, 2012,” the revised act states that the
government must dispose of all of its shares in DBJ by ”approximately five to seven years after April 2015.”u
In view of the certain level of government involvement in DBJ, such as the government holding in excess of
one-third of its outstanding shares at any given point, to ensure the proper implementation of crisis response
operations, its organizational structure, including crisis response operations and the future of governmentowned shares, are to be reviewed and necessary measures are to be taken. The target deadline for suchactivities is revised to the end of fiscal 2014.

Legal Basis for Revision to the New DBJ Act
FY2006

FY2007

FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019~
Transition Period

Preparation Period(Special stock company with shares
held by the government)(Government-affiliatedfinancial institution)

June 2007
New DBJ Act
goes into effectOctober 2008
Privatization(conversion toa joint-stockcompany)

June 2009
May 2011
Establishment of Revision to thethe Act for
New DBJ Act inPartialAccordance with
Amendment of
the Act for
the New DBJ Act Extraordinary
Expenditure

End of FY2014(Target)Government
review of DBJ’sorganization

Shareholder

100% government

100% government

Company form

Government-affiliated financial institution(special public corporation)

Joint-stock company (special stock company)

Business

Based on former DBJ Act

Based on New DBJ Act

Fund-raising

Government-guaranteed bonds, FILP agency bonds,
independent financing

Independent funding, government-guaranteedbonds and FILP agency bonds* Owing to the Revision to the New
DBJ Act in Accordance with the
Act for Extraordinary Expenditure,
the disposition of DBJ shares wasscheduled for within five to sevenyears from April 2015.
The government plans to review
the organizational and otheraspects of DBJ at the end of 2014.
Based on the review, it will takenecessary measures from thestandpoint of maintaining a
constant level of participation in
DBJ, including the possibility ofholding more than one-third of
DBJ’s shares at any given time.
The government shall not
dispose of its shares in DBJ until
the necessary measures describedabove have been taken.

Annual Report & CSR Report 201233

Overview of Operations in Fiscal 2011

Overview of Operations in Fiscal 2011

Operating Results
Financial-Economic Environment

cies toward the end of the fiscal year, as the sense of risk

During the fiscal year ended March 31, 2012, confusion

waned in both cases, as well as due to the Bank of Japan’s

over the Greek debt crisis continued from the previous

introduction of looser monetary policies.

year and evolved into concerns of a broader European debt

The Nikkei stock average, in the ¥9,000 range on Marchcrisis. These fears spread out into the real economy, caus-

31, 2011, fell to the ¥8,000 neighborhood by September

ing the European economy to decelerate sharply. Plagued

30. By the end of the fiscal year, however, the Nikkei hadby a stalemate over fiscal and monetary policies, the U.S.

rebounded to around ¥10,000.

economy showed stronger signs of faltering on the road torecovery.
In the corporate sector, supply chains that were interrupted by the Great East Japan Earthquake were restored

Demand shortfalls continued to put downward pressure
on prices, but the year-on-year decrease in consumer prices(excluding perishable goods) was small, affected by highenergy prices.

Operating Results

and production activities returned to normal in the first halfof the fiscal year. However, the recovery remained gradual,

Progress and Results of DBJ Group Operations

as more rapid deceleration in the world economy andReview of the Year Ended March 31, 2012

ongoing yen appreciation caused exports to fall off in the

Since its establishment on October 1, 2008, the core ofsecond half.

DBJ’s business has remained the same as that conducted by

For households, the number of people in employment

its predecessor. As a highly specialized financial institution,

returned to pre-disaster levels but income conditions

we sought to resolve clients’ issues by providing integrated

remained problematic. In the household sector, consumer

investment and loan services.

sentiment improved in line with progress on restoration andBelow is an overview of these activities during the fis-reconstruction following the Great East Japan Earthquake.

cal year ended March 31, 2012. The figures provided forThis factor, plus measures to support automobile purchases,

the loans, investment and consulting/advisory services

prompted a return in consumption to pre-disaster levels.

described below are on a non-consolidated basis.

Housing starts remained generally flat.
On the financial front, as the impact of the European

Loansdebt crisis spread, uncertainty about the financial system

We provided senior loans through traditional corporate

prompted heightened efforts to hedge risks. However,loans, non-recourse loans and other types of structured

owing to EU support measures this uncertainty appeared tofinancing as well as a variety of other loans that employ

be nearing resolution toward the end of the fiscal year.

advanced financial methods. During the year ended March

In Japan, the fund-raising environment worsened shortly
after the Great East Japan Earthquake, but monetary easing
helped to improve this situation.
Long-term interest rates (yields on 10-year Japanese government bonds) remained at around 1%, as investors fled

31, 2012, we provided ¥2,849.0 billion in loans, includingloans for crisis response operations.
For details regarding business loans in response to thefinancial crisis, please refer to the section on page 60 entitled “Results of Crisis Response Operations.”

to the relative safety of Japanese government bonds.
Owing to the delayed recovery in the world economy

34

Investment

and low interest rate policies in the United States, the dif-

We work to resolve client issues involving business expan-

ferential between Japanese and U.S. interest rates shranksion and support strategies and the formation of financial

and yen appreciation continued to the neighborhood of 75

infrastructures. We achieve these goals by supporting

yen to the U.S. dollar. The yen also appreciated to aroundthe creation of funds, as well as mezzanine, equity and

97 yen to the euro on the back of the European debt crisis.

other financing methods, providing appropriate financing

The yen depreciated to some degree against both curren-

based on a long-term perspective. During the year under

Annual Report & CSR Report 2012

regional communities and assign advisors to support thesedisaster-afflicted area, we established the Great East Japan

activities. During the year, investment and loan commissions

Earthquake Reconstruction Fund to support the restorationand fees from M&A and other advisory services amounted

and reconstruction of companies affected by the Great Eastto ¥7.8 billion.

Overview of Operations in Fiscal 2011

review, in tandem with regional financial institutions in theJapan Earthquake, and we provided risk capital through thisfund. Owing to these activities, ¥78.0 billion was allocatedSubsidiaries

to investing activities during the year.

In August 2011, we invested in Hitachi Capital Securities
Co., Ltd., to enhance the financial methods that we have

Consulting/Advisory Services

available to meet increasingly diverse customer needs,

Consulting and advisory services utilize the networks cre-including those for disaster response and reconstruction.

ated by DBJ’s predecessor. Through these services, we help

To clarify the connection with DBJ, on October 1, 2011,
the company’s name was changed to DBJ Securities Co.,

tries. We provide consulting on projects that help invigorate

Ltd.

Operating Resultsclients of all sizes grow more competitive in a host of indus-

Loans and Investments and Fund-Raising Conditions (Flow)(Billions of yen)

For the Year Ended
March 31, 2011

For the Year Ended
March 31, 2012

Loan and investment balance

2,116.6

2,927.0

Loans*1

2,034.4

2,849.0

Investment

82.2

78.0

Funds raised

2,116.6

2,927.0

513.4

801.4

300.0

500.0

Of which, government-guaranteed bonds (domestic)

79.5

179.0

Of which, government-guaranteed bonds (overseas)

133.8

122.4

Corporate bonds (FILP bonds)*4, 5

80.0

263.1

Long-term debt

320.1

1,170.7

Recovery, etc.

1,203.0

691.7*2

Fiscal Investment and Loans
Of which, FILP agency bonds

*3

*4

*6

Notes: 1. Figures, including those for corporate bonds, are on a management accounting basis.
2. Figures, including those for securities, money held in trust and other assets (funds), are on a management accounting basis.
3. Includes industrial investment and borrowings.
4. Of government-guaranteed bonds and corporate bonds denominated in foreign currencies, appropriated government-guaranteed bonds and corporate bonds areconverted to yen at market rates according to the conditions at the time of settlement.
5. Does not include short-term corporate bonds.
6. Long-term debt borrowed from Japan Finance Corporation in conjunction with crisis response operations during the fiscal year ended March 31, 2011, amounted
to ¥138.7 billion and during the fiscal year ended March 31, 2012, amounted to ¥959.7 billion.

Annual Report & CSR Report 201235

Overview of Operations in Fiscal 2011

Overview of Consolidated Operating Performance
Consolidated Financial Highlights(Billions of yen)

For the Year Ended
March 31, 2011

For the Year Ended
March 31, 2012

Overview of Consolidated Operating Performance

Total income

363.8

330.2

Net income

101.5

77.3

Total assets

14,845.2

15,579.8

Loans

13,031.4

13,645.4

Securities

1,165.5

1,176.6

Total liabilities

12,435.2

13,118.8

Borrowed money

8,576.4

9,170.5

Debentures and corporate bonds

3,629.3

3,671.8

Total equity

2,409.9

2,461.0

Common stock

1,181.1

1,187.7

Capital adequacy ratio (BIS standard)

20.50%

18.56%

Ratio of risk-monitored loans (Banking Act base)

1.28%

1.47%

Return on equity

4.31%

3.18%

Return on assets

0.67%

0.51%

Number of employees

1,203

1,270

Consolidated operating performance during the year underwhereas net fees and commissions dropped ¥0.4 billion,

review is described below.

to ¥8.9 billion, down year on year, but net other operating income rose ¥2.2 billion, to ¥2.9 billion. However, DBJ

Consolidated Income and Expenses

recorded net other income of ¥14.4 billion, expanding

During the period, DBJ posted total income of ¥330.2 bil-

¥10.1 billion, owing mainly to income on recovery of badlion, down ¥33.6 billion from the previous fiscal year. Of

debts, in line with a change in accounting standards.

this amount, interest income generated ¥277.3 billion,
down ¥21.5 billion, and fees and commissions fell ¥0.5 bil-

¥1.6 billion, for the year stemming from gain on settlement

lion, to ¥9.4 billion. Other operating income dropped ¥7.1of the substitutional portion of the governmental pen-billion, to ¥5.5 billion, while other income dropped ¥4.4 bil-sion program due to return of corresponding plan assets.

lion, to ¥37.8 billion.

Consequently, income before income taxes and minority

Total expenses were ¥220.0 billion, falling ¥39.4 billion.
This amount included interest expenses of ¥155.5 billion,
down ¥16.7 billion, expenses on fees and commissions ofinterests came to ¥110.2 billion, up ¥5.8 billion from theprevious fiscal year.
After posting current income taxes of ¥21.4 billion, ¥21.1¥0.5 billion, falling ¥0.0 billion, other operating expenses ofbillion more than in the preceding fiscal year, deferred¥2.6 billion, dropping ¥9.3 billion, and general and admin-

income taxes amounted to ¥10.4 billion, up ¥9.5 billion,

istrative expenses of ¥37.8 billion, which rose ¥1.1 billion,

and minority interests in net income dropped ¥0.5 billion,

as well as other expenses of ¥23.4 billion, which decreased

to ¥0.9 billion. As a result, consolidated net income came to¥1.4 billion.

¥77.3 billion, ¥24.2 billion less than in the previous term.

Net interest income fell ¥4.8 billion, to ¥121.8 billion,

36

DBJ posted extraordinary income of ¥10.9 billion, up

Annual Report & CSR Report 2012

Overview of Operations in Fiscal 2011

Consolidated Assets, Liabilities and Equity

Total equity at the end of the period was ¥2,461.0 bil-

As of March 31, 2012, total assets amounted to ¥15,579.8

lion, up ¥51.0 billion from one year earlier. The primary

billion, up ¥734.6 billion from one year earlier. Of thatreason for this rise was higher net income. This increaseamount, loans were ¥13,645.4 billion, improving ¥613.9

stemmed from the ¥6,170 million redemption of delivery

billion, and securities rose ¥11.0 billion, to ¥1,176.6 billion.

bonds in December 2011 and ¥424 million in March 2012.

In addition to a response to the financial crisis, the increase

Also, in June 2012, at the DBJ’s General Meeting of

in loans reflects higher provision of loans to electric power

Shareholders a resolution was passed to award dividends oncompanies, given the subdued market reception to issuancecommon stock. This dividend had a record date of Marchof electric utility bonds.

31, 2012, and a total amount of ¥50.0 billion, for dividends

Call loans and bills bought amounted to ¥89.5 billion

per share of ¥1,147, resulting in a payout ratio of 50.01%.
The unrealized gain on available-for-sale securities thatreverse repurchase agreements were ¥152.8 billion, up

DBJ holds independently, as well as shares in listed compa-

from zero the previous year. These figures represent thenies that DBJ owns through funds, came to ¥19.3 billion, up

temporary investment of excess cash on hand.

¥6.1 billion compared with the preceding term. This amount

Total liabilities as of March 31, 2012, stood at ¥13,118.8
billion, ¥683.5 billion more than a year earlier. Of thisincludes valuation gains on shares in listed companies.

amount, debentures and corporate bonds came to ¥3,671.8

Status of Risk-Monitored Loansbillion, an increase of ¥42.4 billion, and borrowed money

DBJ is not subject to the provisions of the Banking Act orwas ¥9,170.5 billion, rising ¥594.0 billion.

the Act on Emergency Measures for the Revitalization of

The increase in borrowed money mainly reflected

the Financial Functions (Act No. 132 of 1998), but it car-borrowings (two-step loans) from the Japan Financeries out independent assessments of liability classes andCorporation to fund crisis response operations related toasset categories based on the Financial Services Agency’s

the Great East Japan Earthquake, as well as borrowings

Financial Inspection Manual. According to these results,

from commercial financial institutions.

on a consolidated basis, DBJ’s holdings of risk-monitored

Also, acceptances and guarantees came to ¥128.5 bil-

Overview of Consolidated Operating Performanceat the end of the term, an increase of ¥27.6 billion, andloans as prescribed by the Banking Act total ¥199.9 billion,
accounting for 1.47% of total loans.

lion, down ¥16.5 billion.

Profit and Loss Surrounding the Conversion to a Joint-Stock Company (Consolidated)(Billions of yen)

For the SixMonth Period
Ended
March 31, 2009

For the Year
Ended
March 31, 2010

For the Year
Ended
March 31, 2011

For the Year
Ended
March 31, 2012

Gross operating profit

45.8

121.8

136.7

133.6

Net operating profit (after
addition to the general provision
for loan losses)(75.6)

86.7

100.0

95.7

Income before income taxes andminority interests(118.1)

51.1

104.3

110.2

Total income taxes(13.5)(10.8)(1.3)(31.9)Net income(128.3)

39.8

101.5

77.3

—

10.0

50.0

37.3

Total dividend amount** Record dates correspond to the total amounts of dividends for those respective fiscal years.

Annual Report & CSR Report 201237

Overview of Operations in Fiscal 2011

Overseas Business

Overseas Business

Since its conversion to a joint-stock company in October
2008, DBJ has worked to make a full-fledged entry into
international business, creating an overseas risk management structure, preparing operating bases, training personnel and moving forward with core infrastructure. At thesame time, we are working to expand our network withtrustworthy partners. Through these efforts we are promoting domestic and overseas financial institutions.
As one aspect of its efforts to build bases overseas,
DBJ established DBJ Singapore Limited as a wholly owned
subsidiary in December 2008, and another wholly owned
subsidiary, DBJ Europe Limited, commenced operations in
November 2009.
By maintaining intensive collaboration with its overseas
offices, DBJ is able to provide global financial services thatmeet broad-ranging client needs, as well as support for clients’ overseas operations.

International Finance Corporation (IFC)
A member of the World Bank Group and an international
financial institution, conducting investment and loan operations primarily in developing countries
China Development Bank
Policy-based financial institution (converted to joint-stockcompany in 2008) handling financing for infrastructure andcore industries in China
China International Investment Company (the CITIC Group)
Corporate group with a wide-ranging financial service network throughout Asia, including China
IE Singapore
Government institution that supports internationalizationand provides overseas investment for Singaporean companies
Bangkok Bank
A major Thai bank that works with Japanese regional banks
to provide lending denominated in local currency to small
and medium-sized regional Japanese companies

Operations at Overseas Locations
New York Representative Office
Covering the Americas, the New York Representative Officemonitors financial, industrial and economic trends as wellas economic policies and urban and infrastructure development and other trends. The office provides information to
Japanese companies and other entities that are planningto commence operations in North America and SouthAmerica, as well as overseas companies that are considering
entry into the Japanese market.
DBJ Singapore Limited
Established:

December 2008

Capital:

S$1,000,000

Business:

Investments and loan support and advisory services

Address:

9 Raffles Place, #30-03 Republic Plaza,
Singapore 048619

CEO & Managing Director: Takashi Sugiyama

In June 2011, DBJ opened the DBJ Asia Financial Support
Center to provide local information and offer consulting
services to regional banks supporting efforts by mediumsized companies and other entities in their regions to promote business in other parts of Asia.
The center’s roles are to liaise with regional banks
throughout Japan and help meet the various needs of local
medium-sized companies and other entities to develop theiroperations in Asia. We achieve this by leveraging the DBJ
Group’s information network, which includes public financial institutions in Asian countries.
As of May 31, 2012, 64 regional banks were members.
By country, 60% of inquiries were related to three countries:
China, Thailand and Vietnam. By type of inquiry, 60% were
investment- or cash-related. DBJ will continue working tostrengthen the transmission of information related to Asia.

Membership in the Long-Term Investors ClubDBJ Europe Limited
Established:

November 2009

Capital:€7,500,000

Business:

Investments and loan support and advisory services

Address:

Level 20, 125 Old Broad Street, London
EC2N 1AR, U.K.

CEO:

Takeshi Kiriyama

Business Tie-Ups with Overseas Institutions
To enhance its financial services, DBJ leverages its businessalliances with the following overseas institutions.

38

DBJ Asia Financial Support Center Opens

Annual Report & CSR Report 2012

The Long-Term Investors Club (LTIC) was established in 2009as the global platform for cooperation among financial institutions in charge of long-term investment in various countries, reflecting the change in financial environment after the
Global Financial Crisis. With members numbering 15 institutions from all over the world including DBJ, LTIC promotes
in areas such as information sharing in long-term financing,academic studies and research and co-investments.
In July 2012, DBJ joined LTIC as the first financial institution from Japan.

Overview of Operations in Fiscal 2011

Group Companies
The DBJ Group, comprising DBJ and its subsidiaries and affiliates, provides a variety of services to meet its clients’ needs.

gies by providing funds and utilizing DBJ’s international anddomestic networks as well as assigning human resources.

Japan Economic Research Institute Inc.

Outline of DBJ Investment Advisory Co., Ltd.

Japan Economic Research Institute, which is wholly capitalized by DBJ, is a research institution that primarily conducts
surveys and provides consulting services.
Operating with a long-term perspective and from astandpoint of fairness and neutrality, the institute generates
synergies from its three fields of research—the public, solutions and international arenas—and targets the public andprivate sectors. The company meets clients’ research andconsulting needs from a comprehensive viewpoint.

Established:

December 2009

Capital:¥68 million

Business:

Operations related to DBJ’s value-added

Established:

December 1989

Capital:¥480 million

Business:

Research, consulting and advisory services

Address:

2-2-1, Otemachi, Chiyoda-ku, Tokyo
100-0004, Japan

President:

Takashi Ando

DBJ Capital Co., Ltd.
Since 1996, the DBJ Group has invested in venture companies that can be expected to achieve high rates of growth,
in an effort to support the creation of new industries inJapan. In June 2010, DBJ Capital Co., Ltd., got off to a newstart involving the reconfiguration of its system for managing investment assets.
DBJ Capital aims to contribute to the growth and development of firms requiring capital by leveraging its expertisein evaluating technology and business and its venture business investment experience.
Outline of DBJ Capital Co., Ltd.
Established:

October 2005
(Commenced operations on June 30, 2010)

Capital:¥99 million

Business:

Investment in venture companies

Address:

2-6-2, Otemachi, Chiyoda-ku,
Tokyo 100-0004, Japan

President & CEO:Akira Ogasawara

DBJ Investment Advisory Co., Ltd. (DBJ-IA)
DBJ-IA was established to promote added-value creative
equity financing (the “Value for Growth” Investment
Program) to support growth strategies from a medium- tolong-term standpoint emphasizing relationships of mutual
trust with entities receiving investment funds.
DBJ-IA aims to contribute to such entities’ growth anddevelopment by helping them achieve their growth targets
in terms of M&A, capital and domestic and overseas strate-

1-9-1, Otemachi, Chiyoda-ku,
Tokyo 100-0004, Japan

President & CEO:

Hiroshi MurakamiGroup Companies

Outline of Japan Economic Research Institute Inc.

equity investment
Address:

DBJ Securities Co., Ltd.
DBJ converted Hitachi Capital Securities Co., Ltd., to a subsidiary in August 2011 in a move to augment the financing
methods available to it to meet increasingly diverse clientneeds. Given DBJ’s increasing involvement with the company, in October 2011 the company’s name was changed to
DBJ Securities Co., Ltd.
DBJ Securities provides a securities function to complement the DBJ Group’s investment and loan functions,
thereby increasing the number of financial solutions that
the Group can offer its clients.
Outline of DBJ Securities Co., Ltd.
Established:

October 1998

Capital:¥500 million

Business:

Securities business

Address:

2-15-12, Nishi-Shinbashi, Minato-ku, 		Tokyo 105-0003, Japan

President & CEO:

Hiroshi Sakamaki

DBJ Asset Management Co., Ltd.
Established as a real estate fund investment company inDecember 2006, in July 2012 DBJ Asset Management Co.,
Ltd., made a new start as an asset management company
wholly owned by DBJ.
In line with DBJ’s corporate philosophy, going forward
the company will operate as a quality and highly reliable
asset management company serving the needs of longterm investors. Centering on the real estate business, thecompany will respond to diverse demands for risk capital as
it works to contribute to the development and increasing
sophistication of financial functions in Japan.
Outline of DBJ Asset Management Co., Ltd.
Established:

December 2006

Capital:¥100 million

Business:

Real estate fund investments, etc.

Address:

2-2-2, Otemachi, Chiyoda-ku, Tokyo
100-0004, Japan

President & CEO:

Masataka Ito
Annual Report & CSR Report 201239

Topics

TopicslEstablished the Tohoku
Revival Reinforcement
Office as an initiative
to support the restoration andreconstruction of the Tohoku region,
which was devastated by the Great
East Japan Earthquake (See page 62.)
lEstablished the DBJ Green
Building Certification targeting
environmentally and societallyfriendly real estate (See page 51.)

Apr.

lOpening of the DBJ Asia
Financial Support Center(See pages 38 and 57.)
lFormation with the Japan Auto
Parts Industries Association of
the Supply Chain Support Limited
Partnership (See page 64.)lAmendment of the Development Bank of Japan Inc. Act, basedon establishment of the Act for Extraordinary Expenditure andAssistance to Cope with the Great East Japan Earthquake passed
into law (See pages 33 and 141.)
lPassing of supplementary budget for fiscal 2011 (May 2, 2011), in which¥2.5 trillion was earmarked for Japan Finance Corporation crisis response
operations targeting medium-sized and large companies
lFormulation of Endeavor 2013, the second medium-term management
plan (See page 29.)

May

Jun.

2011

lOpening of the Comprehensive Special Zone Support
and Counseling Center to promote industry’s increased
international competitiveness and support community
revitalization from a financial perspectiveJul.

lEstablishment of
the DBJ Smart Japan
Program to ensure thesustainability of the Japanese
economy amid a changing
external environment (Seepage 52.)

Oct.
lJoint formation with
regional banks of
the Great East Japan
Earthquake Reconstruction Fund
(See page 64.)lAnnouncement of Capital
Investment Planning Survey(Nationwide and by Region) survey
results (See page 67.)

Aug.

lEstablishment of the
Women Entrepreneurs
Center and holding of new
business plan competition targeting
female entrepreneurs (See page 57.)
lSigning of the Principles for
Financial Action towards a
Sustainable Society (Principles
for Financial Action for the 21stCentury) (See page 103.)

Nov.

lExhibited and conducted presentation at Japan’s largest environmental exhibition, Eco-Products 2011
(11th consecutive year) (See page 76.)lOpening of Special Zones for Reconstruction Support and Counseling Center support regions affected by
the Great East Japan Earthquake
lSettling of investment and loan plans for the fiscal year ending March 31, 2013
The result of the draft budget compiled for the fiscal year ending March 31, 2013 (Cabinet decision on December 24, 2011)
was for aggregate investment and financing of ¥1.85 trillion, comprising ¥850 billion in fiscal investments and loans and ¥1
trillion to be funded independently by DBJ.

Dec.

lNew Financing Employing
DBJ Disaster Preparedness
Ratings introduced in
Global Risk Report 2012, publishedby the World Economic Forum

Jan.

2012
Jun.

40

lCreation of the DBJ Visionary Hospital Program to support
initiatives by excellent hospitals (See page 52.)lReceipt of two awards, for Great East Japan Earthquake
Reconstruction Fund Formation and Opening of the DBJ Asia Financial
Support Center, in the Regional Economic Promotion Division at the
ADFIAP annual meeting (See page 77.)May

lHolding of First DBJ Women Entrepreneurs New Business
Plan Competition award ceremony (See page 57.)

Annual Report & CSR Report 2012

DBJ’s Businesses

To resolve the various issues that society
faces and become its clients’ most supportive
financial institution, DBJ supplies long-term
funds, supports the formation of business andtakes a host of other approaches to ensurethat useful projects operate smoothly. We
are committed to creating financial markets
that allow funds to be raised more efficiently,
and, in recent years, we have developed andintroduced new financing methods to expand
the functions of financial markets.

Integrated Investment and Loan Services  . . . . . . . . 42
Investments and Loans  . . . . . . . . . . . . . . . . . . . . . . . . 44
Consulting/Advisory Services  . . . . . . . . . . . . . . . . . . . 55
Crisis Response Operations  . . . . . . . . . . . . . . . . . . . . 59
Initiatives Related to the Great East Japan Earthquake . . . 62
Making Use of Information Functions  . . . . . . . . . . . 66

Annual Report & CSR Report 201241

DBJ’s Businesses

Integrated Investment and Loan Services

DBJ provides seamlessly integrated investment and loan services. We assist clients with their financing
needs by taking a position of neutrality and a long-term perspective that extends over all their activities,
and by employing leading-edge financial methods.
n We offer integrated investment and loan solutions that range from senior loans to mezzanine and equity financing.
n DBJ also provides a host of services (e.g., M&A advisory and CSR support services) that help raise corporate value.
n In collaboration with its Group companies, DBJ provides finely tuned services to meet individual clients’ needs.

Integrated Investment and Loan Services

DBJ
DBJ Green
Environmentally Building
Rated Loan Certification
Program
DBJ Enterprise
Disaster
Resilience Rated
Loan Program

Debtor-inPossession
FinancingLoans
DBJ Visionary
Hospital

Provision of medium- andlong-term financing, as well as
structured financing and otherforms of structured subordinatedfinancing

DBJ Employee’s
Health Management
Rated Loan Program

Structured
Financing

Syndicated
Loans

EquityMezzanine Financing

Investment

Hybrid Financing

Asset Financing(Real Estate)
Interest Rate
Subsidy
Programs Asset-Based
Lending

Provision of mezzanineand equity financing

LBOs ／MBOs

Integrated Investment and Loan Services
M&A Advisory
Services

Consulting/Advisory
Services
Arrangement of structured

financing, provision of M&A Practical Application
Publicadvisory
services, applying DBJ’s Support Center
Asset
Management industry research function and for Technology
expertise in environmental andtechnology evaluations

DBJ Asia
Financial
SupportCenter

Women Regional Health
Entrepreneurs Checks
Center(DBJ-WEC)

Note: DBJ-designated analysis is required for investment and loan services.

42

Annual Report & CSR Report 2012

DBJ’s Businesses

LoansLoan Amounts Provided (Non-consolidated)

DBJ provides financing to meet the diverse
needs of its clients.
l Provides medium- and long-term loans
l Offers unique high-value-added financial services(environmentally and socially responsible investment,
disaster countermeasures and safety measures andrating-linked financing for technology commercialization)l Responds to diverse needs by offering non-recourse

2,849.0

3,000
2,034.4

2,000

1,000

0
Year ended
March 31, 2010

collateral and structural flexibility (debtor-in-possession
financing, inventory collateral, intellectual property
rights as collateral, etc.)

Investment
DBJ provides investment funding, based ona long-term perspective, to meet specific needs
and address a host of issues that clients face.
l We provide investment to assist businesses in terms

3,682.0

Year ended
March 31, 2011

Year ended
March 31, 2012

Integrated Investment and Loan Services

loans and develops and provides financing offering(Billions of yen)
4,000

Note: Figures, including those for corporate bonds, are on a management
accounting basis.

Investment Amount Provided (Non-consolidated)(Billions of yen)
160

120

111.1
82.2

80

78.0

of their revitalization, restructuring, growth strategies,
international competitiveness and infrastructure opera-

40

tions. We provide such funding through mezzanine
financing, as well as through equity and other funding.

0Year ended
March 31, 2010

Year ended
March 31, 2011

Year ended
March 31, 2012

Note: Figures, including those for securities, money held in trust and other assets(funds), are on a management accounting basis.

Consulting/Advisory Services

M&A Advisory and Consulting Agreements (Cumulative)(Agreements)

Through its advisory support services,
DBJ helps clients become more competitive andinvigorate regional economies.
l Provides M&A advisory services

320
269
240

239
215

160

l Makes proposals that apply its expertise in industry
research and ability to develop new financial technologies

80

l Arranges structured and other types of financing
0
As of March 31,
2010

As of March 31,
2011

As of March 31,
2012

Annual Report & CSR Report 201243

DBJ’s Businesses

Investments and Loans

DBJ provides medium- and long-term loans, meeting a range of funding requirements. In addition to seniorfinancing through traditional corporate loans, we offer project financing, non-recourse loans and other types ofstructured financing, as well as a variety of other loans that employ advanced financial methods.
We provide investment funding to meet specific needs, based on a long-term perspective, to resolve the myriad issues that clients face. For example, DBJ provides investment to help clients expand their operational bases,
meet long-term growth strategies and shore up their financial structures. We offer funding support, mezzanine
financing and financing that employs equity and other methods.
The case study section on pages 78 through 100 introduces DBJ’s “CSR through Investment, Loan andOther Businesses.”

Investments and Loans

Loan Procedures
DBJ is ready at all times to discuss with its clients optimalcomprehensive due diligence of the businesses of its client

financial solutions, as well as the specific terms and conditions

companies, including assessment of their present business

DBJ can offer, including interest rates and loan maturities.

status, project plans and profitabilities.

Financing terms are discussed after DBJ has conducted

Financing Conditions• Loan Amounts• Interest Rates

Loan amounts are determined through consultation

DBJ sets interest rates in line with loan periods andbased on client financing plans.

risk. Fixed- and floating-rate loans are both available.

• Loan Terms

DBJ also considers the application of various interest

Appropriate loan maturities are set in consultation

rate subsidy programs.

with our client companies according to factors such

• Collateral/Guarantees

as repayment plans, business profitability and theLoans may require collateral and guarantees, depend-

expected life of equipment or facilities.

ing on due diligence results.

Note: Please be aware that, based on due diligence results, DBJ may not be able to provide the loans that prospective borrowers
anticipate.

Medium- to Long-Term Loans
By leveraging the long-term financing expertise it cultivatedof the business that requires funding, and then proposes a

as a policy-based financial institution, DBJ provides loans to

medium- to long-term repayment plan. As part of our effort

clients to match their medium- to long-term financing needs.

to meet varied needs, a grace period may be implemented.

When providing funds, clients first look at the profitability

We provide a broad range of information to our clients.
Through our long history of operations, we have accumulated substantial expertise and experience that
we apply when offering advice toaddress the issues our clients face.

44

Annual Report & CSR Report 2012

DBJ puts its wide-ranging
networks to use to help clients
expand their operations.

We provide information generated through our various studies
and research activities, as well asreports, publications and otherinformation from overseas.

DBJ’s Businesses

Mezzanine Financing
Mezzanine financing is an intermediate financing method

Mezzanine financing has the benefit of providing riskthat is between typical senior bank loans and equity financecapital that may be difficult to obtain through senior loans.

in terms of risk.

Such financing also prevents dilution of the voting rights of

Although mezzanine financing is riskier because its payment is subordinated to senior loans, it plays an important

existing shareholders. Redemption and exit methods can be
set to be flexible.
From a long-term perspective, DBJ helps clients resolverole in markets such as the United States, which have abroad range of investors with diverse investment appetites.

their balance sheets issues through total financing solutions

Mezzanine financing helps to secure the economics of thethat range from structuring and arrangement to providing

investment by setting adequate interest rate and dividend

risk capital.

levels to correspond to the intermediate risk. Depending on
Types of mezzanine financing

zanine financing can be set. In recent years, demand for• Subordinated loans, subordinate bonds

mezzanine financing has grown in association with business• Preferred shares, classified sharesacquisitions, spinoffs of subsidiaries and business units,• Hybrid securities, hybrid loans, etc.

Investments and Loansclients’ financing plans and capital policies, flexible mez-

business succession and listed companies that are delisting.

Case Studies: Mezzanine Financing
Case 1: Resolving an Undercapitalization Issue
Before capital expansion

After capital expansion
Debt

Debt
AssetsAssetsPreferred shares

CapitalCapitalObjective
Conventional restructuring methods involve
posting extraordinary losses, which is problematicfor companies that are undercapitalized. Thisissue was resolved by raising capital through theissuance of preferred stock.

Case 2: Supplementary Method of Financing a Business Acquisition
Parent company
AssetsNon-corebusiness

Recipient company

Debt

CapitalTargetbusiness

Acquisition of
non-core business
(MBO)

Debt
(LBO loan)
Mezzanine
CapitalObjective
Provide supplementary financing toovercome a shortfall between thepurchase price and the amount available
through equity funding and loans

Case 3: Avoiding Dilution of Voting Rights during Business Succession
Former company (current company)

New company (recipient)Objective
Debt

Business succession

Note: Successor acquires
common stock

AssetsCapitalDebt
AssetsPreferred shares

Prevent the dilution of successor’s voting
rights when financing is provided forbusiness succession

CapitalAnnual Report & CSR Report 201245

DBJ’s Businesses

EquityIn an environment characterized by growing needs for the

fiscal 2010, DBJ enhanced its “added-value creative equity

operational selection and focus of group businesses, thefinancing to support corporate growth strategies (“Value

formulation of growth strategies and the heightening offor Growth” Investment Program).” This approach aims

corporate governance, equity has become more importantto realize the corporate growth strategies (M&A, capitalthan ever before.

and overseas) of the Japanese entities receiving the equity
investment. Its aim is to support corporate value enhance-

Through equity investment, DBJ helps clients address
the issues they face and supports their long-term develop-

ment over the medium to long term.

ment. After making equity investments, DBJ provides total

Through equity investment, DBJ shares in its clients’solutions involving its networks and strengths in informa-

growth and successes, contributing to a more prosperous

tion, industry research and financing technologies, help-

future.

Investments and Loansing clients maximize their long-term corporate value. In
Client Needs

DBJ’s Solutions

Results• Growing needs for
operational selection andfocus• Formulation of growthstrategies for globalization• Growth strategies making
use of the capital markets(M&A, initial public offerings,
etc.)• Inject growth capital
Capital injections into individual companies,
SPCs, various funds, etc.
•G lobalization measures
Encourage companies from overseas to takepart in the Japanese market, support Japanesecompanies’ efforts to expand overseas•P rovide solutions after making investment
Provide total solutions involving DBJ’s networks
and strengths in information, industry research
and financing technologies• Resolve clients’ issues• Help clients grow over thelong term and maximize
corporate value

uu Structured Financing, Financial Technologies
Syndicated Loans
This type of loan involves multiple arrangers that are com-

institutions involved in the transaction to be increased, andbined into a syndicate. The agreement with the client isclarity of borrowing terms is ensured.

based on a single contractual document, and financing isprovided cooperatively according to a single set of terms.

tering on term loans. DBJ invites a wide range of financial

Having a single arranger in the point negotiating posi-

institutions to participate, making use of its neutral stand-tion reduces the administrative burden. Conducting settle-

point. Structuring loans to include some items from its own

ment operations through an agent reduces the administra-

lending menu, such as the DBJ Environmentally Rated Loantive burden. Large amounts can be raised expeditiously.

Program, helps raise the value-added level of services it pro-

Appointing an arranger allows the number of financial

vides.

Annual Report & CSR Report 2012

Arrangers

Financial
Institutions

Financial
Institutions

Financial
Institutions

Financial
Institutions

Financial
Institutions

Financial
Institutions

MarketArrangement

Appointment

Clients46

As part of its services, DBJ actively structures loans, cen-

DBJ’s Businesses

Structured Financing
l Securitizationthese beginnings, our accumulated expertise in this area,	Through finance methods such as liquidation and secu-

centering on energy and infrastructure projects, has pro-ritization of receivables focusing on their future cash

pelled us to our current position as one of Japan’s leaders inflows, and through whole business securitization inproject financing, including private finance initiatives (PFIs).

which debts are repaid through future cash flows gener-

Since its privatization (conversion to a joint-stock com-

ated by a particular business, DBJ supports its clients’pany) in 2008, DBJ has maximized its unique characteristics

finance strategies and helps optimize their funding. A

to meet Japanese companies’ increasingly diverse andmethod known as whole business securitization enables

global needs. We provide all-around support by offering cli-

certain businesses to securitize their entire operations,ents in Japan and overseas with project finance, PFIs, object

backed by future cash flows. We help clients raise funds

finance, securitization and various other financial products

in optimal ways that match their financing strategies.

Investments and Loans

In 1998, DBJ pioneered project financing in Japan. Fromand optimal financing methods (senior loans, mezzanine
loans, equity, etc.).

l PFIs and PPPs	Since the facilitation of the PFI Act* in 1999, DBJ has

l Project Financing

accumulated expertise by taking advantage of its strong	We have a wealth of expertise in helping companies inrelations with public-sector entities. The support we havethe energy and infrastructure sectors—primarily with

provided to numerous clients in this category has turned

regard to large-scale projects—find project financing thatus into an industry leader in PFIs. Taking advantage ofthey can repay through project cash flow, without relying

this store of knowledge, we provide numerous types ofon specific corporate creditworthiness or collateral value.

support to help clients who are considering PFI/PPP

Such finance solutions we provide help them raise funds

initiatives in Japan and overseas to resolve the issues

and support their efforts to control risks.

they face.
* Act on Promotion of Private Finance Initiativel Object Financing
	DBJ helps clients determine optimal financing methods
that take advantage of the cashflow-generating characteristics of assets with special features, such as ships,
airplanes and railcars, as well as supporting their efforts
to control risks.

Project Financing Example: Electric Power Generation ProjectSponsor A

FundingSponsor B
Banking Syndicate

Electric Power
Generation Company
Special-Purpose
Company (SPC)

FinancingConstruction contract

Plant CElectric power supply
contract (15 years)

Power Plant G
Trading Company F
Fuel (coal, gas)
supply contract

Operational repair and maintenance contract

Factory E

Plant D
Plant delivery contract

Technical guidance contract

Annual Report & CSR Report 201247

DBJ’s Businesses

Asset Financing (Real Estate)
DBJ’s involvement in the long-term financing of real estate

Our track record, expertise and networks in this arena

operations began in the 1960s. We have participated inenable us to provide non-recourse loans and a host of otherJapan’s real estate securitization market from its early

solutions.

beginnings and continue striving to invigorate this market.

Investments and Loans

Liquidization Financing

Development Financing

Example 1: Sell rental real estate that a client owns toa ­special-purpose company, raising capital­efficiency
Example 2: After selling owned real estate that a client isusing to a special-purpose company, conclude
new rental agreements and continue using
the property in this manner

Example: U se investor financing to develop idle owned
real estate into income property

1. Allows diversification of financing methods• Enables funds to be raised based on the property’s capacity
to generate revenue and cash flow
• Preserves the credit availability of the originator (the original owner of the asset)
2. M
 oves property off the balance sheet for better financial­efficiency• Improves ROA• Allows planned recognition of unrealized gains or losses• Improves financial picture by reducing interest-bearing debt
• Eliminates risk of variations in real estate values

1. Realizes profits from development• Enables funds to be raised for real estate development,
which might be difficult for the company to do on its own• By securing required additional funding, helps in terms ofdiversity and the control of the risk of construction delays
and cost overruns
2. Controls risk by moving property off the balance sheet• Maintains the company’s financial soundness• Eliminates risk of fluctuations in real estate values

DBJ’s Distinguishing Features in Asset Financing• Has extensive arrangement expertise on numerous projects, as well as a strong performance record in investment and loans• Retains a network of leading investors and financial institutions in Japan and overseas to help realize projects and arrange

financing• Creates project-tailored solutions to meet clients’ needs, such as providing senior, mezzanine and equity financing• Maintains a neutral standpoint, enabling projects to progress smoothly by appropriately diversifying risk and helping involved

parties realize profits

LBOs/MBOs
Leveraged buyouts (LBOs) are acquisitions of companies or

require that funds be raised to acquire an operation. For

businesses using borrowed money. If the company or busi-

this reason, an MBO may take the form of an LBO. In theness that is being acquired generates fixed cash flows, theevent that borrowed funds alone are insufficient, the man-acquirer (typically, the sponsor providing equity) can pur-agement team may offer equity to a collaborative sponsor,

chase the business or company for relatively little cash. For

such as a buyout fund or partner. In recent years, MBOs

this reason, the borrowed funds are considered the “lever”

have been used more frequently by listed companies thatthat multiplies the return on the purchaser’s funds, which

are delisting and by owner-operated companies.

are constrained.

48

As a financial advisor, DBJ ties together all MBO-related

Management buyouts (MBOs) involve the acquisition bydetails, arranges investment and mezzanine financing, andthe existing corporate management of a company’s shares

works out joint equity financing with sponsors. The ability

or operations. As the existing management team typicallyto handle this range of activities allows DBJ to offer

has a limited amount of cash available, MBOs generally

LBO/MBO solutions.

Annual Report & CSR Report 2012

DBJ’s Businesses

Asset-Based Lending
Asset-based lending (ABL) is a method of financing thatAs a front-runner in corporate revitalization financing,uses as collateral a company’s liquid assets, such as aggre-

DBJ has gained abundant experience in the area of devel-

gate movable property, inventory collateral and receivables.

oping ABL schemes to support companies, while at theAs financing methods become more diverse, expeditious

same time securing their debt. Going forward, we plan tofund-raising, debt restructuring and the sale of surplus inven-apply this expertise to develop ABL schemes that provide

tories also enhance the robustness of internal control systems.

companies with growth capital.

ABL

ClientDBJ

Collateral Transfer

Inventory

Accounts Receivable

Liquidate Inventory
Sell inventories, primarily throughexisting wholesale routes

Collateral Transfer
PledgeCash and Equivalents

Investments and Loans(Buyer)Third-Party
Borrower

Sale

Valuation
Provisional valuation of inventory,
taking into account such factors as thegross margin calculated according topast sales performance(Accounts Receivable)
Valuation based on the diversity andreliability of individual receivables
Management
Monthly valuation of inventories andaccounts receivable

Debtor-in-Possession Financing
Later-stage DIP financing provides the funding that is

Non-performing loans emerged as a major problem beleaguering the Japanese financial system in the late 1990s.

needed to implement restructuring plans. By providing

Against this backdrop, DBJ has developed a host of tools

medium- to long-term financing to fund capital investment

to help underperforming companies sustain or develop

under different conditions than those for revitalization plansprofitable areas of operation. One method of which DBJ isthat are being implemented, an organization that is undera proponent is early debtor-in-possession (DIP) financing.

rehabilitation can refinance its debt, providing exit financing

This temporary financing method provides working capital

more quickly than is possible via the legal liquidation process.
In 2001, DBJ provided the first DIP financing in Japan.

that allows a company in bankruptcy to continue operations
during the period between a request for the application ofSince that time, DBJ has worked to broaden the range

the Civil Rehabilitation Act and the approval of rehabilitationof entities eligible for this financing and the methods ofplans, thereby sustaining the valuable parts of its ­operations.

employing it in response to varied needs.

Capital requirements

Bankruptcy( priority obligation)
Common debts

Working
capitalRestructured
assetsBankruptcy( priority obligation)

Funding forequipment andother items

Exitfinancing

DIP financing
Proceduralapplication

Decision to start

Early stage

Approval of plan

Conclusion of plan

Later stage

Annual Report & CSR Report 201249

DBJ’s Businesses

uu Certification and Unique Programs
DBJ Environmentally Rated Loan ProgramOverview of DBJ Environmentally Rated Loan ProgramFeatures• Varying interest rate levels based on environmental ratings• Screening sheet containing approximately 120 questions
derived from the United Nations Environment Programme
Finance Initiative (UNEP FI) evaluation of fair and neutral
global environmental trends and an exchange of information
with the Ministry of the Environment
Convening of the Environmental Ratings Advisory
Committee, seeking advice from outside experts andrenewing annual visits• Ratings determined through interviews with clients• Applicability to a wide range of clients

Evaluation of corporate credit risk,
collateral, etc.
Financing

Application

incorporation of environmental ratings in financing menus.
In fiscal 2007, we launched an interest rate subsidy program
based on environmental ratings to advance global warming
countermeasures.
Employing the experience we gained through the DBJ
Environmentally Rated Loan Program, in fiscal 2010 we beganoffering a service to help regional banks develop evaluation
tools to use in performing their own environmental ratings.
Through such initiatives, we aim to augment environmental
financing and encourage its proliferation in Japan.

Environmental screening

Investments and Loans

Beginning with the antipollution measures implemented in
the late 1960s and early 1970s, DBJ has provided more than
¥3 trillion in investments and loans for environmental measures over the past 40 years.
In fiscal 2004, DBJ began its DBJ Environmentally Rated
Loan Program based on knowledge cultivated for over
five decades. DBJ developed a screening (rating) systemthat scores companies on the level of their environmental
management and then applies one of three different interest rates reflecting that effort. This was the world’s first

Set interest rate level based onclient’s contribution toenvironmental initiatives(Ineligible)

DBJ Enterprise Disaster Resilience Rated Loan Program
DBJ’s financing track record includes schemes to supporting
the recovery of disaster-stricken areas through anti-disastermeasures and financing related to disaster recovery.
In addition, from the standpoint of business continuity
DBJ assists clients’ total enterprise risk management efforts,
including the formulation of business continuity plans (BCPs),the earthquake-proofing of facilities and the preparation of IT
backup systems. At the same time, DBJ provides new financing methods to assist disaster recovery, including recovery
finance and alternative risk transfer finance.
In fiscal 2006, we introduced Financing Employing DBJ
Disaster Preparedness Ratings, which evaluate companies andselect those engaged in high-level initiatives and anti-disasterand business continuity measures and provide them withpreferential interest rate financing as a reward for their excelOverview of the DBJ Enterprise Disaster
Resilience Rated Loan Program
Evaluation of corporate credit risk,
collateral, etc.

Annual Report & CSR Report 2012

Financing

BCM screening

Application

50

Set interest rate level based onclient’s contribution toanti-disaster/business
continuity measures(Ineligible)

lent disaster preparedness. Financing conditions are set on thebasis of the assessment. In this manner, we introduced theworld’s first disaster preparedness-based financing method.
We revised our financing menus substantially in 2011 as aresult of the Great East Japan Earthquake. Enterprise business
continuity activities are assessed comprehensively, including
resilient strategies and systems for recovering in the event acrisis materializes.
The DBJ Disaster Preparedness Rating (1) is an expressionof the evaluation results and (2) promotes broad awarenessof the concept of BCM. Aiming to realize the goal of a “resilient Japanese society through disaster preparedness ratings,”
in 2012 we changed the name of these ratings to the “DBJEnterprise Disaster Resilience Rated Loan Program.”
We will promote enterprise risk management andbusiness continuity through the DBJ Enterprise Disaster
Resilience Rated Loan Program.
Features• Varying interest rate levels based on BCM Ratings• Fair and neutral assessment of global crisis management
trendsBased on information exchanges with the Japanese Cabinet
Office, World Economic Forum, NPOs and other experts,
developed a screening sheet containing approximately 100
questions. We convene an Advisory Committee to elicit
advice from outside experts and renew visits each year.
• Ratings determined through interviews with clients• Applicability to a wide range of clientsDBJ’s Businesses

DBJ Employee’s Health Management Rated Loan Program
In April 2008, the Ministry of Health, Labour and Welfare

social conditions as a backdrop, the DBJ Employee’s Healthintroduced a special health checkup system, and the JapaneseManagement Rated Loan Program aims to popularize and pro-

Diet is discussing making it mandatory for businesses tomote the concept of health management. DBJ has applied toprovide mental health checks. This is one example of thetake on Ministry of Economy, Trade and Industry (METI) survey

growing importance being placed on maintaining the healthoperations. As part of this effort, we use an evaluation systemof corporate employees. As Japan’s working population isthat we have developed to assess companies and select those

expected to shrink, achieving higher levels of human produc-that are superior in terms of their consideration for employee

tivity has become an issue of growing importance. With these

health and offer them financing terms in line with their assess-Overview of DBJ Employee’s Health Management
Rated Loan Program

ment levels. We have used a specialized method for introduc-

Financing

Health management screening

Application

Interest rate level set based onclient’s contribution to healthmanagement(Ineligible)

the first in the world to offer such a financing menu.

Investments and Loans

Evaluation of corporate credit risk,
collateral, etc.

ing an “employee’s health management rating,” making DBJ
Features• Varying interest rate levels based on employee’s healthmanagement ratings• Formation of “health management consortium” withinstitutions focused on preventive healthcare anddevelopment of screening sheet to promote the HealthManagement Project as an ancillary activity for METI
• Ratings determined through interviews with clients• Applicability to a wide range of clients

DBJ Green Building Certification
Applying the expertise and networks accumulated overment, refurbishment and other activities to clients who own

many years of real estate financing, the DBJ Environmentallyor manage real estate that is environmentally and societally

Rated Loan Program and expertise in other environment-

considerate (green buildings), through this certification

related areas, DBJ inaugurated DBJ Green Building

program, an advanced and unique initiative from a financial

Certification in fiscal 2011.

institution. DBJ also supports environmentally and societally

In addition to providing support through investments

considerate real estate operations among its clients andand loans to meet financial needs for real estate develop-

provides support from such aspects as PR, IR and CSR.

Overview of the DBJ Green Building Certification
Evaluation
Items

For environmentally and societally considerate real estate, evaluation items include the three characteristics indicated below.

Ecology

Amenity & Risk Management

Reducing the burden buildings place on
the environment• Building’s environmental
performance• Energy savings, conservation of
resources, renewable energy+

Comfort, safety and security• Safety and security of people who
use buildings• Comfort and convenience for people
who use buildings

Community & Partnership+

Consideration for and communication
with stakeholders• Relationships with the surrounding
environment and region• Communications between owners andstakeholders

Certification
Clients scoring above a certain level are certified in one of four categories, depending on the status of their initiatives.
Results

DBJ Green Building

DBJ Green Building

DBJ Green Building

DBJ Green Building

PlatinumGold

SilverBronzeBuildings that are top classin Japan for theirconsideration for theenvironment and society

Buildings that are
extremely superior in theirconsideration for theenvironment and society

Buildings that are very
superior in theirconsideration for theenvironment and society

Buildings that are superior
in their consideration for
the environment andsociety
Annual Report & CSR Report 201251

DBJ’s Businesses

DBJ Visionary Hospital Program
In recent years, hospitals have been the source of increas-

ment and BCM evaluation system it developed to certify

ing attention for the role they play as bases for safety andhospitals as DBJ Visionary Hospitals (namely, those that

security in regional societies. In May 2012, we introduced

have in place superior environmental consciousness, disas-

the DBJ Visionary Hospital program to support the advance-

ter prevention and business continuity measures), offering

ment of medical functions, as well as to encourage proac-them a financing menu with financing terms set according

tive environmental consciousness, disaster prevention andto their assessments. Through this measure, DBJ supportsbusiness continuity measures. For institutions that have had

hospitals’ efforts to continue providing good healthcare in

their hospital functions certified by the Japan Council forregional societies.

Quality Health Care, DBJ uses the environmental assessHospital functions certified by
the Japan Council for Quality
Health Care (JCQHC)

Investments and Loans

Assessment of a
Medical Institution’s
Hospital Functions

Certified as a DBJ Visionary Hospital

DBJ Environmentally
Rated Loan Program

DBJ Enterprise Disaster
Resilience Rated Loan Program

Financial screening by DBJ
Assessment of medical
institution’s finances andmanagement

Evaluation of medical
institution’s CSR
responses

DBJ Smart Japan Program
To ensure the sustainability of the Japanese economy amid

structure to provide funding in the areas of “raising com-changes in the external environment, such as post-disaster

petitiveness to global levels,” “community development,”

restoration and reconstruction, yen appreciation, theand “environment and energy” and has earmarked approxi-

European financial crisis and the disruption of supply chainsmately ¥500 billion for this purpose.

that include overseas elements, DBJ has created a support

Raising Competitiveness to Global Levels
Technology, overseas development and alliance, corporate revitalization and restructuring,sightseeing, medical and healthcare, etc.
[Examples]

Support for growth of companies aiming for a leading share of the global market
Industry restructuring to boost international competitiveness● International business development● Establishment of tourism facilities to encourage overseas tourists to visit Japan● Establishment of medical centers that serve the healthcare needs of a wide area●●

DBJ Smart
Japan
ProgramCommunity Development
Special zone for reconstruction, comprehensive special zones, BCPs, investment inearthquake-proofing and other disaster prevention measures, etc.
[Examples]

Community development in special zone for reconstruction in the disaster-stricken region
Establishment of key facilities in comprehensive special zones● Investment in earthquake-proofing by companies that have received BCM Ratings● Creation of eco-towns linked with corporate activities●●

Environment and Energy
Support for renewable energy, the popularization of low-carbon products, etc.
[Examples]●●

52

Annual Report & CSR Report 2012

Mega solar construction and other renewable energy projects
Support for the popularization of low-carbon products using leases

DBJ’s Businesses

Regional Areas Genki Program
Currently, facing the challenges of population constraints,

and funding potential. Specifically, we have enhanced ourfinancial limitations, environmental restrictions and global

information support service through advice and sugges-

competition, Japan’s regions must coordinate with one

tions to regions. In addition, each DBJ branch focuses on its

another and implement diverse regional development

region’s distinctive fields and businesses based on its indus-

schemes that capitalize on their respective strengths, com-

trial structure and partners with regional financial institu-

petitive advantages and latent potential.

tions to offer financial support, including the execution of

DBJ has arranged a unique initiative, the Regional Areasloans with more attractive interest rates than usual.

Genki* Program, to support regional growth that capitalizes on each region’s respective strengths and information*The Japanese word genki implies a positive spirit and good health.

Investments and Loansl Regional Areas Genki Program
Hokkaido Area

Tohoku Area

Food industry
Tourism
Environmental infrastructureClean innovation
Green network

Niigata Area
Food industry: value-added
rice products and services

Kanto-Koshin Area

Hokuriku Area

Manufacturing industry:electronics, pharmaceuticals,
textiles, plastics

Integration business ofhuman resources and goods
Manufacturing industry
globalization
Tourism

Chugoku Area
Manufacturing industry

Tokai Area
Strategic next-generationindustry

Kyushu Area
Enhancing the regional
competitiveness of the Kyushu
region as the door to Asia

Kansai Area
Leading-edge manufacturingindustries

Shikoku Area
Minami-Kyushu Area
Food, health and environment
industry

Material industry andindustries contributing to thefundamental economic cycleof the Shikoku region

Annual Report & CSR Report 2012

53

DBJ’s Businesses

uu Safety Nets and Public Programs
Interest Rate Subsidy Programs
Interest rate subsidy programs are schemes whereby finan-

Japanese government or other organizations provide sub-cial institutions provide financing for specific businesses tosidies corresponding to all or part of the interest payments,

promote specific industries. Alternatively, they may target

thereby reducing the interest burden on the borrower.

operators of specific businesses. Under these programs, theInterest Rate Subsidy Program Menu

Investments and Loans• Interest rate subsidy programs that support therevitalization of regional communities
These interest rate subsidy programs are provided tobusinesses recommended by the national government
in line with the regional revitalization plans of regional
municipal bodies certified by the national government.
• Interest rate subsidy programs for the development ofregional telecommunications and broadcasting businesses
These interest rate subsidy programs can be used by clients
pursuing regional telecommunications or broadcasting businesses in accordance with legally prescribed guidelines.
• Interest rate subsidy system for internationallystrategic comprehensive special zones, interest rate
subsidy system for comprehensive special zones
targeting community revitalization
These interest subsidy systems target operations endorsed by
the national government in line with government plans forcomprehensive special zones of regional municipal bodies.
• Interest rate subsidy system for special zone for reconstruction
This interest subsidy system targets operations endorsedby the national government in accordance with the reconstruction plans of regional municipal bodies designated by
the national government in the areas identified in the Law
for Special Zone for Reconstruction (227 towns and cities).
• Interest rate subsidy programs for crisis response operations
These interest rate subsidy programs can be used by clients
who have sustained damage during a crisis certified assuch by the government and who meet program requirements. At present, such subsidies are being provided toclients affected by the Great East Japan Earthquake and toa special desk for consulting on measures to counter yen
appreciation.

• Interest rate subsidy programs for the promotion ofenvironmentally conscious management (interest
rate 1% subsidy)
These interest rate subsidies are for fixed investment andthe promotion of research and development to prevent
global warming, and target clients involved in businesses
working toward the reduction of energy-derived CO2
emissions, that qualify for the DBJ Environmentally Rated
Loan Program, and that have pledged to improve unit
CO2 emissions or reduce overall CO2 emissions by morethan 5% within five years.
• Interest rate subsidy programs to fund domestic
oil and natural gas development (continental shelfinterest rate subsidy)
These interest rate subsidy programs can be used by clients
involved in oil or natural gas development businesses in Japan.
• Interest rate subsidy programs to fund fixed investment for using natural gas and other resources (natural gas and other resources interest rate subsidy)
These interest rate subsidy programs can be used by clients that are making fixed investment involving the useof natural gas and other resources.
• Interest rate subsidy programs to fund specific andother facilities related to the rationalization of energy
use and to promote the introduction of special equipment (energy conservation interest rate subsidy)
These interest rate subsidy programs can be used by clients who are promoting the conservation of energy.
• Interest rate subsidy programs to fund effective
resource use and other activities
These interest rate subsidy programs can be used by clients who are using resources effectively.

Crisis Response Operations
Crisis response operations on the basis of the Japan FinanceIn the fiscal 2011 supplementary budget (passed on

Corporation Act (Act No. 57 of 2007, later updated) con-

May 2, 2011), ¥2.5 trillion was earmarked for JFC Greatsist of the provision of necessary funds during such crises

East Japan Earthquake crisis response operations targetingas disruptions in domestic or overseas financial markets or

medium-sized and large companies.

large-scale natural disasters. The Japan Finance Corporation

54

This supplementary budget having been passed, as a des-

(JFC) provides risk and other support from the Japanese

ignated financial institution for the crisis response operations

government via designated financial institutions as funds for

DBJ set up a full-fledged structure to facilitate implementa-

responding to crisis-related damage.

tion of crisis response operations for clients affected bothAt the time of its establishment, DBJ was designateddirectly and indirectly by the disaster. In addition, DBJ is mak-as such a financial institution, as was Shoko Chukin Banking a proactive effort to support increases in the production

Limited. In accordance with this designation, DBJ com-of materials needed for restoration and reconstruction in themenced its crisis response operations in October 2008.

aftermath of the recent disaster. (See pages 59–65.)

Annual Report & CSR Report 2012

DBJ’s Businesses

Consulting/Advisory Services

We offer consulting and advisory services and make use of networks with allied financial institutions. Throughour consulting and advisory support services, we help clients become more competitive and contribute to thevigor of regional economies.
Our consulting and advisory services are backed by the know-how we have built up through our structured
and other types of financing, our M&A advisory services and our provision of expertise on industry researchand environmental and technical evaluations. We apply this accumulated expertise to help clients resolve theissues they face.
The advisory services case studies on page 92 introduce DBJ’s “CSR through Investment, Loan and Other
Businesses” approach.

M&A Advisory Services
competitive position. Amid growing interest in M&A activi-

growing more prevalent amid the expansion business over-ties in Japan and overseas, DBJ provides advisory services

seas—centered on Asia, both for businesses restructuring

through its own networks. We offer comprehensive M&A

operationally and for industry restructuring overall. Mergers

solutions that match clients’ varied needs and management

and acquisitions can be a method for achieving higher busi-

strategies.

Consulting/Advisory Services

As corporate development options diversify, M&A activity isness efficiency, better employment stability and a stronger
Strategic Consulting• Comprehensive Business Strategies
We create operating and management strategies thatdraw on the experience we have gained through many
years of providing loan and project support from aneutral, medium- to long-term perspective.
• Information on a Wide Range of Business Partners
DBJ is involved in business entities in a broad range ofindustries, and its business partners in Japan number
more than 3,500. Since 1984, we have provided loans
for more than 700 foreign-capitalized companies,
enabling us to also provide a wide variety of information on overseas companies as well.

• Cohesive Domestic and Overseas Information Network
DBJ maintains close relationships with regional financial institutions, which have excellent insights into thecompanies that operate in their regions, as well aswith Japanese and overseas financial institutions andaccounting and legal firms. Such relationships enable
us to build information networks to accumulate accurate information. We have created a banking M&A
network that links information on financial institutions
throughout Japan (regional banks and trust banks)with information on corporate M&A activities.
• M&A Activities
DBJ provides fundamental advisory services at every
stage of a merger or acquisition, from planning
through to implementation.

M&A Advisory Services
Consulting
Analysis ofmanagement
issuesPerformance
analysis

Buy Side

Buy Side

Select and analyze
acquisition
candidateConnect withpotential acquirer

Sell Side

Sell Side

Select and analyze
potential acquirer

Connect withacquisition
candidate

Execution

Analyze finances, businessrisks and other factors
Assess corporate value
Consider optimal structure
Arrange for due diligence
Support preparation ofcontractual and othernecessary documents

Advise oncontract
negotiations
Process
management

CLOSING

Formulation of
acquisition andselling strategies

Matchmaking

Data gathering

Annual Report & CSR Report 2012

55

DBJ’s Businesses

Regional Health Checks

Consulting/Advisory Services

When diagnosing the health of local community-building­activities, DBJ begins by analyzing communities based on­publicly available data. We augment this trove of information by conducting on-site surveys and local interviews, andthen we make an independent diagnosis of the region’s
health. We discuss our findings (issues and possibilities)
with the region’s constituents, including the issues that wehave uncovered through our interaction with members of
their community.
Mutual awareness of regional issues and possibilities
provides an opportunity for taking action, such as by formulating a project. We have taken part in 36 such projects
to date.

Health Checks Conducted

Takigawa
Hakodate (Hokkaido)
Goshogawara(Hokkaido)
Hirosaki
Tottori (Aomori Prefecture)(Aomori Prefecture)
Kurayoshi
Ayabe (Kyoto)
Hachinohe(Tottori Prefecture)
Mizuho(Aomori Prefecture)
Nakaumi-Shinjiko Economic(Gifu Prefecture)
Morioka
Zone (Tottori Prefecture,(Iwate Prefecture)
Kashiwazaki
Shimane Prefecture)
Sanjo(Niigata
Maniwa(Niigata Prefecture)
Prefecture)(Okayama Prefecture)
Nagaoka (Niigata
ToyamaPrefecture)
Takahashi
Suwa Region(Okayama Prefecture)(NaganoPrefecture)
Soja (Okayama Prefecture)
Tajimi (Gifu Prefecture)
Fuchu(Hiroshima Prefecture)
Choshi (Chiba Prefecture)
Chuyo Area
Seto (Aichi Prefecture)(Ehime Prefecture)
Toyohashi (Aichi Prefecture)
Tosu (Saga Prefecture)
Wakayama
Oita
Shirahama (Wakayama Prefecture)
Komatsushima
Kagoshima(Tokushima Prefecture)
TamanoUwajima(Okayama Prefecture)(Ehime Prefecture)(As of July 1, 2012)

Kurashiki(Okayama Prefecture)

OkayamaPractical Application Support Center for Technology
DBJ established the Practical Application Support Center forTechnology in February 2004 to help manufacturers realize their potential for the commercialization of successfully
developed technologies. The role of this center is to diagnose whether companies have the management strength(technology management expertise) to create value intechnology. Through evaluation, survey analysis and the
proposal of future business models from the perspective oftechnology management, recommendations and technology management training, we support companies in the
manufacturing sector in the development of new value.
For clients and other companies across a broad spectrum
in the manufacturing sector, we support ecosystems (relations between companies) from the viewpoint of innova-

tions (new combinations) that include the consideration oftechnology management strategies to resolve global issues
and the creation of business models. We provide additional
evaluations based on our expertise in operational screening
and help clients, including through consultations on business and financial strategies, consider optimal long-term
strategies and business plans.
From a neutral and specialized standpoint, DBJ serves asa good industry-related consultation partner to management, leveraging its overall base of knowledge related to
manufacturing management to help clients enhance theircorporate value and contribute to the development ofJapanese manufacturing.

Changes in the Manufacturing Business Environment
Past

FutureWays to create value

Values of products themselves

Technical expertise to take a global lead
Combination of diverse elements, including products and services

Desired capabilities

Increasing performance and functionality
Raising efficiency, lowering costs

Valuable design expertise and ability to communicate with society
Overwhelming expertise in manufacturing technologies and quality
management capabilities

The background of
the times

Mass production
Catching up with Europe and the UnitedStatesIncreasing uncertainty due to more-global and flatter markets
Advances by companies from emerging markets
Dramatic advancement in ICT

Support for new value
creation

Practical Application Support Center for Technology
Conduct surveys and provide recommendations ontechnology and industry vision for the future
Analyze business models and support creation of ecosystems
Help train and develop managerial level human resources

56

DBJ’s expertise

DBJ’s networks• Screening• Industrial research• Finance• Independent network with technology advisors• Network with business partners throughout Japan• National, regional and research institute networks

Annual Report & CSR Report 2012

DBJ’s Businesses

DBJ Asia Financial Support Centercial institutions in Asian countries. We provide this information to the companies via their regional banks.
With regard to its services, in June 2011 the center
entered into a comprehensive agreement on collaboration
with Hitotsubashi University. Based on this accord, the twoentities will work to strengthen the transmission of information related to Asia through collaboration in a host ofareas, including Asia-related joint research and personnel
exchanges.
As of May 31, 2012, 64 regional banks were membersof the center. Breaking down inquiries by country, 60%
were in relation to China, Thailand or Vietnam, while 60%of the inquiries concerned investments or funding. DBJ willcontinue augmenting its ability to disseminate information
related to Asia.

Consulting/Advisory Services

DBJ opened the DBJ Asia Financial Support Center in June
2011 to provide local information and consulting services toregional banks supporting efforts by medium-sized companies and other entities in their regions to promote businessin other parts of Asia.
The center’s roles are to liaise with regional banks
throughout Japan and help meet the various needs of local
medium-sized companies and other entities to develop theiroperations in Asia. Specifically, when local medium-sizedcompanies seek to expand their operations in Asia, we
provide their regional banks with necessary information on
investment and the current environment, including industry
trends. In addition, when companies are recommended to
us by regional banks, we provide individual consulting services by leveraging the DBJ Group’s information network,
which includes development banks and other public finan-

Women Entrepreneurs Center (DBJ-WEC)
Japan faces a number of issues, including economic sluggishness, a decrease in the working population promptedby a lower birth rate and an increase in the averageage, and reconstruction following the Great East Japan
Earthquake. Amid these conditions, expectations are risingfor business startups by enterprising women. However, such
startups require extensive support, including on the aspects
of information, networks and financing.
To this end, DBJ established the Women Entrepreneurs
Center (DBJ-WEC) in November 2011 as a platform to provide comprehensive support, including funding, networks
and startup expertise, for women seeking to start new businesses or grow existing enterprises.
To cultivate and foster new businesses, DBJ-WEC
will annually hold a business plan competition targeting
women entrepreneurs. The winner of the competition will
be awarded an incentive payment of up to ¥10 million.
Additionally, DBJ-WEC offers all participants a variety of

support on the planning front, such as by connecting themwith experienced entrepreneurs and experts in various
fields, providing startup expertise and advice and introducing them to networks after the competition.

Award ceremony of the first DBJ Women Entrepreneurs New
Business Plan Competition

First winner of the grand prize (¥10 million): Ms. Yuriko Kato

Renewed growth,
led by women
Fostering ofgrowth indisaster-affected
areas

DBJ

RenewedbusinesscreationWEC

DBJ Women Entrepreneurs Center

Annual Report & CSR Report 201257

DBJ’s Businesses

Public Asset Management

Consulting/Advisory Services

Public asset management describes the method of looking
at the public assets owned by government bodies from amanagement perspective for the purposes of overall planning, control, use and disposal.
The public assets owned by government bodies are large
and varied. They include buildings, such as schools, public
offices and community centers, as well as waterworks,
sewerage, roads and other infrastructure. Two major issues
have come to the fore in this category in recent years.
The first is that facilities that were built in a concentrated
period during Japan’s era of high economic growth are now
deteriorating rapidly. Because many public assets were built
at around the same time, their deterioration is also simultaneous. The second issue is a mismatch between the population—which is shrinking and changing in its makeup—andthe supply of facilities needed to serve the needs of residents. Going forward, as the overall population shrinks andthe average age rises, government bodies will face majorchanges in the amount and types of public assets that arenecessary.
However, long-term economic malaise and a decrease in
the percentage of the population in their productive years
means that tax revenues are down and welfare budgets are
increasing. Owing to factors such as these, it is difficult tosecure the budgets necessary to renovate or reallocate public assets that have deteriorated.
For this reason, government bodies must quickly embark
on the management of public assets and conduct sustainable urban management.
DBJ is working with the Japan Economic ResearchInstitute Inc. to determine the status of owned assets andcalculate their future cost, among other activities. Public
asset management advisory services are just one of the initiatives we offer.
Determine owned assets

Issues Faced by Government Bodies[Buildings]• Elementary and junior highschools..................Declining birthrate, elimination/consolidation• Welfare facilities......................... Aging of society, rising demand• Healthcare facilities.............. Management issues, rising demand• Government office buildings,
community centers......... Decreasing population, excess facilities[Infrastructure]• Water supply................................. Profitable, but demand falling• Sewerage .................................................. Massive regional bonds• Roads and bridges ................................................. Massive volume• Public housing ....................................................... Massive volume• Gas..............................................Privatization becoming standard(Also ports, waterways, parks, etc.)
All deteriorating at same time
Massive burden of funding to renovate• What is the overall volume?
• How serious is the deterioration?
• What is the actual cost ofrenovation?
• What is the available financial
capacity?
• What is the usage status ofindividual facilities?

Public Asset Management• Determine total volume and deterioration
Calculate cost of upgrading• Make asset allocation fully visible• Determine extent of asset use and costs• Disclose information such as “facility white papers” andother documents to residents

Determine population trends• Forecast populations of seniors and people in theirproductive years• Make fully visible populations of seniors and people intheir productive years
Determine mismatches in regional allocations of facilities

Determine financial conditions• Confirm pace of deterioration in tax revenue• Confirm estimated costs to sustain and for societal
protection• Confirm capital expenditures in repairs and renovations

1. Determine policy measures from a management perspective (equalize and prioritize the renovation investment)
2. Shift to specific management of individual assets(First, perform maintenance to extend life of aging assets. PFI and PPP are important to this process, as theyencourage consolidation and disposal and deploy underutilized assets.)

58

Annual Report & CSR Report 2012

DBJ’s Businesses

Crisis Response Operations

Crisis Response Operations
Crisis response operations, on the basis of the Japan

markets, large-scale disasters, terrorism and epidemics ofFinance Corporation Act (Act No. 57 of 2007, later updat-

communicable diseases. Upon the receipt of such credited) consist of the provision of necessary funds during such

(e.g., for two-step loans, financial indemnity or interest sub-crises as disruptions in domestic or overseas financial mar-sidies), institutions designated to provide such funds do sokets or large-scale disasters. The Japan Finance Corporation

quickly and flexibly.

(JFC) provides risk and other support from the JapaneseAt the time of its establishment, DBJ was designatedgovernment via designated financial institutions as funds foras such a financial institution, as was Shoko Chukin Bank

responding to crisis-related damage.

Limited. In accordance with this designation, DBJ com-

These funds are earmarked for use in the event of suchmenced its crisis response operations in October 2008.

crises as disruptions in the domestic or overseas financial
Crisis Response Operations

Crisis Response Operations Scheme(Competent ministers: the Minister of Finance, the Minister of Economy, Trade andGovernment Industry and the Minister of Agriculture, Forestry and Fisheries)• Designated• Capital contribution• Lending of funds• Interest subsidies

Designated financial institutions

Japan Finance Corporation

Private financial institution(Crisis Response Facilitation
Account)

Private financial institution

Prepares and announces “crisis
response facilitation guidelines”
Implements risk support andother measures on the basis ofagreements with designatedfinancial institutions•••

1. Two-step loans
2. Financial indeminities
3. Interest subsidies

Shoko Chukin Bank

DBJ
Business conducted based on
the approval of the competent
ministers
Lending of specificfunds, otherservices

Clients

The Great East Japan Earthquake
In response to the Great East Japan Earthquake, whichcrisis response operations for clients affected both directly

occurred on March 11, 2011, as a designated financial

and indirectly by the disaster.

institution for crisis response operations DBJ set up a fullfledged structure to facilitate the all-around operation ofPlease see pages 62–65 for “Initiatives Related to theGreat East Japan Earthquake.”

Annual Report & CSR Report 201259

DBJ’s Businesses

Results of Crisis Response Operations
international financial order” concluded on March 31, 2011.)

On October 30, 2008, Shoko Chukin and DBJ established“lifestyle measures” in response to the worsening corporate
cashflow conditions resulting from the global financial and

As of March 31, 2012, DBJ’s loan performance and com-economic crisis that commenced in the autumn of 2008.

mercial paper acquisitions of crisis countermeasure loans

On December 11, these measures were granted crisis des-were as follows.

ignation under the category of “incidents related to confu-• Cumulative loans: ¥4,297.0 billion (1,090 cases)sion in the international financial order.” On December 19,•C umulative loans executed with loss guarantee agree-these measures were augmented by economic measures, orments: ¥238.3 billion (46 cases, including those slated for“emergency lifestyle defense measures,” funded throughapplication to JFC)

an expanded budget and the commencement of the com-•C umulative commercial paper acquisitions: ¥361.0 billion

mercial paper acquisition business, and labeled Cashflow
Crisis Response Operations(68 cases)

Countermeasures for Medium-Sized and Large Companies
Employing the Crisis Response Operations of the Japan*1 Of the ¥67.0 billion in loans executed with loss guarantee agreements to Japan Airlines in relation to crisis response operations,¥47.0 billion (amount confirmed in April 2011 owing to DBJ’s
completion of corporate rehabilitation procedures) in compensation was ultimately provided by the Japan Finance Corporation on
the basis of this agreement.
*2 The commencement of corporate rehabilitation procedures for
DBJ business partner Elpida Memory, Inc., was set for March 23,
2012. A portion of loans provided by DBJ were covered by anagreement for the reimbursement of loss guarantee transactions
with the Japan Finance Corporation. Going forward, if theseloans become uncollectable or in the event of capital deterioration, DBJ will request that the Japan Finance Corporation provide
a compensation payment. The agreement between DBJ and theJapan Finance Corporation for the reimbursement of loss guarantee transactions on loans provided by DBJ include ¥10.0 billion
in loans executed with loss guarantee agreements for conducting crisis response operations, as well as an investment amountof ¥28.4 billion as a designated operator set forth in the Law
on Special Measures for Industrial Revitalization and Innovation.
The above-stated amount does not include interest, damages orother charges. Based on this agreement for the reimbursement ofloss guarantee transactions, the amount that DBJ may receive ascompensation payment from the Japan Finance Corporation is a
maximum of ¥27.7 billion. This includes an 80% compensation of
the investment amount (¥22.7 billion) and a 50% compensation
for the loans provided by DBJ (¥5.0 billion).

Finance Corporation. On January 27, 2009, government
regulations were amended, incorporating these items into
the second supplementary budget for fiscal 2008, augmented with funds generated by DBJ’s commercial paper
acquisition business on January 30.
Additional economic crisis countermeasures wereannounced on April 10, 2009, outlining specific measuresfor large-scale crisis response operations and earmarking a
total of ¥15 trillion for crisis response for medium-sized andlarge companies. In line with these measures, authorizationof a supplementary budget for fiscal 2009 was announced
on May 29, 2009. This budget received Diet authorization
on June 26, and the Revision to the New DBJ Act went into
force and was promulgated on July 3, 2009. These measures paved the way to reinforce DBJ’s financial structureand facilitate crisis response operations.
For cases following the Great East Japan Earthquake,
which occurred on March 11, 2011, the Japanese government began conducting crisis certifications on March 12,
2011. Upon notification of such certifications, the implementation period for crisis response operations was re-extended.
(Meanwhile, the implementation period for certain projects,
such as those involving “incidents related to confusion in theLoans as Crisis Countermeasures(Cumulative)

Commercial Paper Acquisition as Crisis Countermeasures(Cumulative)(Billions of yen)
6,000

(Number of cases)
1,200
1,090

(Billions of yen)
400
361.0

361.0

68

68

(Number of cases)
80
361.0

944
4,500

3,111.0

3,000

1,500

0

60

4,297.0

817

300

600

200

300

100

0

0

3,338.5

68

215.0

60

40

36

301
1,060.3

Mar. 31,2009

900

Mar. 31,2010

Annual Report & CSR Report 2012

Mar. 31,2011

Mar. 31,2012

20

Mar. 31,2009

Mar. 31,2010

Mar. 31,2011

Mar. 31,
2012

0

DBJ’s Businesses

Providing a Safety Net
DBJ acts as a social safety net by providing investments andand other illnesses, as well as terrorist attacks and otherloans to support the rehabilitation and rebuilding of areas

emergency situations that cause widespread anxiety about

affected by earthquakes, typhoons or other large-scale

the financial system. In this way, we act as an emergency

natural disasters, the outbreak of severe acute respiratory

response unit to fill the gap that emerges when peacetime

syndrome (SARS), bovine spongiform encephalopathy (BSE)

financial platforms fail to function.

Disaster Recovery
DBJ Initiatives

Required responses to a natural disaster are to (1) ensure

DBJ has provided assistance in response to such disasters asthat people who provide information to local communities

the Great Hanshin-Awaji Earthquake in January 1995 and thebeset by a natural disaster have sufficient knowledge about

Chuetsu Offshore Earthquake in October 2004. In addition

those communities and take that knowledge into consider-to the electricity, gas, rail, communications, broad­casting,ation and (2) provide rapid responses to help rebuild impor-urban development and other infrastructure industries, DBJ

tant infrastructure that was destroyed. What is required is

assisted providers of everyday necessities such as foodstuffs

an entity that through its everyday business relationships

and other retail items. These efforts played a major role inhas accumulated know-how on the industries and business-­revitalizing the employment and economic situations of local

es that provide this core infrastructure. This entity also must

communities, prompting a revival in many fields.

have a wealth of expertise in supplying long-term funds.

Note: DBJ’s cumulative financing for recovery from two­earthquakes
Great Hanshin-Awaji Earthquake: ¥184.8 billion(Year ended March 31, 1995, to year ended March 31, 2003)
Chuetsu Offshore Earthquake: ¥20.3 billion(Year ended March 31, 2005, to year ended March 31, 2007)

Crisis Response Operations

Societal Concerns

Emergency Financing
Societal Concerns

DBJ Initiatives

Society requires institutions whose day-to-day operations

In the year ended March 31, 2002, DBJ established anprovide a solid foundation for financing in response to

emergency response support system that provided financ-terrorist attacks, natural disasters and other emergency

ing to the Japanese airline industry, which was immedi-

situations. These institutions must also have the working

ately affected by a downturn in business following thecapital and funding expertise to respond quickly to theseSeptember 11, 2001, terrorist attacks on the United Statessituations.

and the SARS outbreak.
Note: DBJ’s cumulative emergency financing provided following the terrorist attacks and the SARS outbreak:¥437.0 billion(Year ended March 31, 2002, to year ended March 31, 2005)

Successful Safety Net Initiatives
1995	
Reconstruction following the Great HanshinAwaji Earthquake
1997 Financial climate response (credit crunch)2000 Reconstruction following Mt. Usu eruption
	Restoration support following torrential rains in
the Tokai Region
2001 Terrorist attacks on the United States
SARS countermeasures, BSE countermeasures
2004 Reconstruction following the Chuetsu Offshore
Earthquake
2005 Reconstruction following the Fukuoka Prefecture
Western Offshore Earthquakes

2006 Asbestos countermeasures
Response to major rise in crude oil prices
2007	
Reconstruction following the Noto Peninsula
Earthquake	Reconstruction following the Mid Niigata
Prefecture Earthquake
2008	
Reconstruction following the Iwate-Miyagi
Nairiku Earthquake
Financial crisis response2010 Yen appreciation and other countermeasures2011	
Reconstruction following the Great East Japan
Earthquake

Annual Report & CSR Report 201261

DBJ’s Businesses

Initiatives Related to the Great East Japan Earthquake

Crisis Response Operations
In the fiscal 2011 supplementary budget (passed on May
2, 2011), ¥2.5 trillion was earmarked for the Japan FinanceCorporation (JFC) for Great East Japan Earthquake crisis response
operations targeting medium-sized and large companies.
This supplementary budget having been passed, as adesignated financial institution for the crisis response opera-

tions DBJ set up a full-fledged structure to facilitate implementation of crisis response operations for clients affectedboth directly and indirectly by the disaster. In addition, DBJ
is making a proactive effort to support increases in the production of materials needed for restoration and reconstruction in the aftermath of the recent disaster.

Responding to Electrical Power Supply Problems

Initiatives Related to the Great East Japan Earthquake

Following the Great East Japan Earthquake, Japan’s electric
power utilities have been compelled to suspend operations attheir nuclear power plants. Accordingly, the stable supply ofelectricity has become an important issue from the standpointof maintaining or strengthening Japan’s economic and industrial competitiveness. The need to secure alternate forms offuel has caused electric utilities’ costs to increase and required
them to introduce new safety measures, both of which were
expected to deteriorate their balance of revenues and expenses. Because of the difficulty the utilities would have in issuing
corporate bonds, DBJ responded quickly in collaboration withprivate financial institutions to secure the funding needed toensure a stable supply of electricity.
In the preceding fiscal year, DBJ worked to accurately determine the funding needs of each power company. In particular,
we collaborated with The 77 Bank, Ltd., a local financial institution, to arrange a syndicated loan for Tohoku Electric Power
Co., Inc., totaling ¥120.0 billion. Numerous financial institutions participated, providing broad-ranging support from afinancial perspective for efforts to restore Tohoku ElectricPower facilities that were directly affected by the disaster.

Response to TEPCO Needs
First, in April 2011 DBJ collaborated with leading banks toprovide Tokyo Electric Power Company, Incorporated (TEPCO),
with financing needed to provide long-term working capital,
including for fixed investment for restoration immediately after
the accident and for fuel costs.
Recognizing that the most important issue for TEPCO lies
in balancing appropriate compensation payments to victims
and providing a stable supply of electricity, in September 2011
we launched the Nuclear Damage Liability Facilitation Fund.
This was followed in November 2011 by the establishment ofa backup commitment line to enable empathy and other compensation payments according to an emergency special business plan approved by the minister of finance. Thereafter, in
May 2012 the minister of finance approved a comprehensive
special business plan supporting the utility’s efforts to become
a “new TEPCO.” As a financial institution, we recognize theimportance of responding to this need and cooperating withrelated parties as we continue to support both a stable supplyof electricity and the payment of appropriate compensation to
victims.

Tohoku Revival Reinforcement Office
On April 21, 2011, DBJ established the Tohoku Revival
Reinforcement Office within the Tohoku Branch to consolidate and better provide companywide knowledge andfinancial expertise toward the restoration and reconstruction of the Tohoku region, which was affected by the Great
East Japan Earthquake that struck on March 11, 2011.
The Tohoku Revival Reinforcement Office has a cross-departmental structure that spanning the Regional Planning
Department, Financial Institution Department, and otherdepartments and branches. The office provides beneficial
information related to restoration and reconstruction andcommunicates with government bodies, national institutions, economic organizations and regional financial andother institutions to conduct surveys and introduce plans.

Communications between Tohoku Revival
Reinforcement Office and Related Institutions• Communications with government bodies
Support government body structuring andplanning measures related to infrastructure
creation and community development aimed at
restoration and reconstruction

Government
Bodies• Communications with regional
financial institutions
Create frameworks to facilitatesmooth provision of funds tocompanies and otherdisaster-stricken entities

62

Annual Report & CSR Report 2012

Regional
Financial
Institutions

TohokuRevivalReinforcement
OfficeNational
Institutions
and Economic
Organizations• Communications with national
institutions and economic
organizations
Support information provision and otheractivities in response to various
government measures and industries

DBJ’s Businesses

Restoration and Reconstruction Issues and Responses
The Great East Japan Earthquake was a complex majordisaster, an infrequent type even on a global scale. We
believe that restoration and reconstruction measures must
be implemented on a step-by-step basis, in chronologi-

cal order. Also, given the broad expanse of the damaged
region, restoration and reconstruction measures must take
into careful consideration the regions where they are being
introduced and the type of damage they are targeting.

Restoration and Reconstruction Support through Investment and Loan Activities

Phase A

Phase B

(Emergency responses)(Full-scale reconstruction)

July 29

December 26

February 10,2012

Given “disaster ofextreme severity”
and “crisis”
designations

Basic Guidelines for
Reconstruction in response to
the Great East Japan Earthquake

Law for Special
Zone for
Reconstruction
goes into effectReconstruction
Agencyinaugurated• First supplementary budget (May 2011)

Regional initiatives

April
21

Performance Recordin Investment andLoansbudget (July 2011)• Third supplementarybudget (November 2011)◆ Amount: Scale increase of ¥1.5
trillion

June 30, 2011
Approximately¥57.1 billion

Earthquake Reconstruction Fund
• Joint funds with regional banks in Iwate, Miyagi, Fukushima
and Ibaraki Prefectures• Provision of risk capital to support the revitalization ofaffected companies● Support for formulation of community and other plans● Surveys and advisory activities, other● Initiatives on regional projects

Support Fund
• Joint fund with Japan Auto Parts Industries
Association, aimed at providing long-term,
stable funding for revitalization andrestructuring support

for the fiscal year
ending March 31,
2013

Performance as ofMarch 31, 2012
Approximately ¥946.2 billion● Establishment of Great East Japan● Establishment of Supply Chain• Budget compiled◆ Amount: ¥2.2 trillion
measure● Business continuity plan (BCP)

Support for proliferation andincreasing sophistication• Enhancement through renewal ofdisaster preparedness system

Initiatives addressing
energy problems● Support targeting primary damage, in response to bondmarket confusion

December
12

Opening of the Special Zone for Reconstruction
Support and Counseling CenterIndustry initiatives

Establishment of Tohoku Revival
Reinforcement Office

Emergency
measures owing
to such factors
as repayment
moratoriums• Second supplementary

Detailed
support forcorporate
revitalization
Support for
restructuring ofregional
infrastructure,community
development, etc.

Support forincreasing
globalcompetitivenessParticipation in
renewableenergy projects,
etc.

Provision of independent support (including risk capital)for DBJ Smart Japan Program (approximately ¥500.0 billion)

Crisis response
operations◆ Amount: Scale increase of ¥2.5 trillion◆ Interest rate subsidy programs established• Government extends period for making additional capital
contributions to DBJ (to fiscal 2014 from fiscal 2011)

Present

Initiatives Related to the Great East Japan Earthquake

March 12

March 11,2011

Earthquake
strikes

Phase C

(Early phase ofrestoration works)

Loans to nine electric Responding to funding needs
power companies
since the disaster

Annual Report & CSR Report 201263

DBJ’s Businesses

Supply Chain Support Fund
In June 2011, DBJ joined the Japan Auto Parts Industries
Association (JAPIA) to form the Supply Chain Support Limited
Partnership. The partnership was formed to support the reconstruction of automotive supply chains (parts procurement networks) that were affected by the Great East Japan Earthquake.
The Great East Japan Earthquake disrupted the automotive industry’s supply chains. This fact, compounded byelectric power supply problems created uncertainties about
when the automotive industry production would resume.
Through the establishment of this fund, DBJ aimed toprovide long-term stable funding through equity-type funds
for companies supporting the supply chains employed by
Japan’s automotive industry. By assisting the industry insuch aspects as reconstruction following the earthquake,and supporting business and industry restructuring, we aim
to recover the confidence in the industry as a responsible
global supplier and toughen the supply chain. As a result,
we aim to respond to the mandate of helping to rebuild
one of Japan’s backbone industries and contribute to its
redevelopment and management stability.

Initiatives Related to the Great East Japan Earthquake

Structure of the Supply Chain Support Fund
Completed product manufacturers
Primary parts
manufacturers

EquitysupportSecondary parts
manufacturers

EquitysupportSupply Chain Support
Limited Partnership

Equityinvestment

Japan Auto Parts
Industries
Association (JAPIA)

Investment andfinancing

DBJ

Tertiary parts
manufacturers

Great East Japan Earthquake Reconstruction FundDBJ and financial institutions in areas affected by theearthquake formed the Great East Japan Earthquake
Reconstruction Fund to support the restoration and reconstruction of companies that sustained damage in the earthquake.
The fund is aimed at providing support for the recon-

Name

Iwate Genki Ippai
Investment Limited
Partnership

Scale of fundAugust 2011

General partnerships(GPs)

MiyagiReconstruction
Bridge Investment
Limited Partnership

August 2011
Tohoku Fukko Partners Co., Ltd.

Ibaraki Kizuna
Investment Limited
Partnership

August 2011

September 2011
SFG Partners Inc.

DBJ and
DBJ and
DBJ and
DBJ and
The Bank of Iwate,
The Toho Bank, Ltd.
The 77 Bank, Ltd.
The Joyo Bank, Ltd.
Ltd.
Investment period of three years, duration of 10 years

Period64

Fukushima Booster
Fund Investment
Limited Partnership¥5.0 billion (initially)

Established

Limited partnerships(LPs)

struction of prominent regional companies that were temporarily affected by the disaster. The fund provides suchcompanies with risk capital that makes uses of such instruments as subordinated loans and preferred shares, with theaim of supporting the early reconstruction of the disasterstricken region.

Annual Report & CSR Report 2012

(If necessary, however, it is possible to extend the investment period by up to two years and theduration by up to five years.)

DBJ’s Businesses

Providing Information

Survey on Corporate Disaster Prevention and BusinessContinuity Efforts following the Great East Japan
Earthquake—The Accumulation of Sustainable BCPs
and Competitive Reconstruction (September 2011)
Taking into account the Great East Japan Earthquake, theissue of how companies will introduce future disaster prevention and business continuity initiatives has taken on
increased importance.
Taking these conditions into consideration, this survey
elicits the cooperation of approximately 30 companies.
Emergency hearings were held and questionnaires distributed to corporate personnel in charge of disaster prevention
and their respective BCPs. As a result, based on the awareness and conditions of the companies involved, the state ofexisting disaster prevention and business continuity initiatives was verified. We also considered how the companies
would address these issues in the future and considered
improvements, summarizing efforts to support corporate
business continuity.

Specific Measures Targeting Reconstruction following
the Great East Japan Earthquake—Seven Proposals
for Creating Industries that Leverage the Functions of
Tohoku University (December 2011)
Restoring the lifestyles that were lost during the disasterrequires that working locations and reconstruction activities be considered in tandem. From this starting point, weconsider it extremely important to harness the functions
performed by Tohoku University, which is one of Japan’s
leading centers of knowledge, to unleash the region’s
potential, creating new businesses and industries to generate employment and reconstructing the disaster-stricken
region. Having a shared awareness of this issue, DBJ andValue Management Institute, Inc., cooperated in drafting a
specific policy proposal.
Seven areas—(1) renewable energy, (2) distributed
power sources, (3) electronic medical records, (4) remotehealthcare, (5) nursing and welfare robots, (6) urban minesand (7) micro-electromechanical systems (MEMS)—arecovered by the current proposal, analyzing research themes
being pursued by Tohoku University and drawing up specific projects linking these themes to new industries.

Initiatives Related to the Great East Japan Earthquake

Specific Measures and Issues for Great East Japan
Earthquake Reconstruction—Six Proposals for Creative
Reconstruction Assuming Financial Limitations (July 2011)
Facing the question of how to recover from the Great East
Japan Earthquake, creative reconstruction is necessary, taking into account the financial issues that existed prior to theearthquake and looking toward the growth of Japaneseindustry. Sharing a sense of urgency, DBJ and The Canon
Institute for Global Studies cooperated in formulating a specific policy and preparing a report on recommendations.
This proposal covers six areas: (1) community development, (2) waterworks and sewerages, (3) medical care andwelfare, (4) agriculture, (5) university research functions and(6) PFIs. Although the list of areas covered in the proposal
is not exhaustive, it provides grounds for consideration byrelated parties when formulating future reconstruction plans.

A Year after the Great East Japan Earthquake—
Verification, Area-Specific Data on Restoration andReconstruction and Future Issues (April 2012)
Now that a year has passed since the Great East Japan
Earthquake, the characteristics of different areas havegrown more distinct. Therefore, in order to analyze thedata and produce future strategies, we have summarizedarea-specific data according to (1) the current status of thedisaster-stricken region, (2) the status of formulation ofreconstruction plans by government bodies, (3) key related
legislation and budget measures, and (4) economic, corporate and regional financial trends.

Study Group on Regional Reconstruction
To encourage the creative reconstruction of the Tohoku
region and throughout the entire area afflicted by the Great
East Japan Earthquake, DBJ established the Study Groupon Regional Reconstruction (chaired by University of Tokyo
Professor, Takashi Onishi), comprising experts in such fields
as community development, disaster preparedness andregional public finance.
The Great East Japan Earthquake, which combined anearthquake, tsunami and nuclear accidents, caused damage
on a massive scale. This unprecedented disaster will haveserious repercussions for Japan’s economy, industry andsociety.
The group is expected to consider specific measures tofoster the necessary creative reconstruction in the stricken

areas, including Tohoku, such as a strategic project aiming
for a “Calamity-Proof Nation (Strong in the Face of Major
Disaster),” from three perspectives: (1) safety and security,(2) regional entities and (3) looking to the future. The study
group met for the first time on May 18, 2011, and had
convened six more times by March 2012, meeting in Tokyoand Sendai. In March 2012, the group produced a report
recommending that in addition to repairing physical damage, creative reconstruction was needed that combined
sustained industry promotion and the lifestyle infrastructureby leveraging private-sector expertise and stronger ties withthe public sector (the need for earthquake reconstruction
PPPs, reconstruction and community development companies, and support functions).

Annual Report & CSR Report 201265

DBJ’s Businesses

Making Use of Information Functions

Through its varied activities, DBJ comes into contact with many aspects of society. In addition to companies,
DBJ’s information channels and human networks include domestic and overseas governments, international
institutions, regional government bodies and universities. Through these contacts, DBJ extracts a variety
of information on economic and societal issues, boosting its ability to supply quality information from aneutral standpoint.

Economic and Industrial Research

Making Use of Information Functions

In a broad range of industrial circles, DBJ researches conditions
in various sectors and among different types of businesses,
conducting surveys and performing research on such topics
as international competitiveness. DBJ also prepares reports
on conditions in individual industries, technical development
trends and new industries and innovation. We provide feedback on these reports to our clients, as well as other parties.
Survey Examples
DBJ Monthly Overview
This report provides a brief commentary on
domestic and overseas economic and industrial trends and monthly business indicators.
The report explains domestic and overseas economic trends through an analysis
of economic and financial indices publishedeach month. In recent years, the global
economic and financial markets have grown more closely
linked. With regard to these global markets, the report aims
to further that integration by introducing overseas fiscal andmonetary policy and commenting on current topics.
In addition, the report addresses topics that are timely
from the perspective of industrial trends.
“Forecasting Market Scale for Mass Retailers of Home
Electronics Based on Units Owned by Households”(Preliminary Calculation)(DBJ Monthly Overview, No. 165, October 2011)
Although the size of the domestic retail market for homeelectronics is essentially unchanged, mass retailers of homeelectronics account for a larger portion of this market eachyear. In 2010, their share of the market exceeded 70%.
This report, assuming that “home electronics products
are items owned by households,” seeks to answer “howmany items households own overall” and “how many years
elapse until they replace them.” Taking this approach, thereport forecasts the scale of the domestic home electronics
retail market and makes individual estimates for key items
that account for more than 50% of total
sales: televisions, personal computers andwhite goods (lifestyle appliances). The
report then estimates the size of the homeelectronics retail industry and the market
scale of mass retailers of home electronics
through 2015.

66

Annual Report & CSR Report 2012

“Impact of the Flooding in Thailand on the HDD
Supply Chain”(DBJ Monthly Overview, No. 166, November 2011)
Thailand plays a central role in the supply
chain for hard disk drives (HDDs), which
are key components used in personal
computers, video players and other electronics. Consequently, the impact of therecord-level deluge that affected Thailand
in 2011 rippled throughout the world,
affecting final product supplies. This report looks at theextent to which the flooding in Thailand damaged manufacturers of HDDs and components and the long-term impact
on Japanese companies of the HDD supply chain coming toan operational standstill, and makes specific recommendations for HDD-related manufacturers.
DBJ Long-Term Interest Rate Weekly Outlook
DBJ provides its clients with weekly long-term interest rate
movement information on the first business day of each week.
Focused on Japan and the United States, we offer a brief summary of market trends during the previous week and introduce
key economic indicators, treasury auctions and other events
scheduled in the current week. DBJ economists comment on
the effects of important economic indicators and monetary
policy announced during the week, providing an outlook formarket trends based on the analysis of economic fundamentals.
“Determining Factors of Environmental Activities andCorporate Value—Analysis Based on Case Studies ofFinancing Employing Environmental Ratings”(Economics Today, Vol. 31, No. 1, April 2010)
Assuming that the market values corporate environmental
consciousness activities, which thereby affects corporate value,
we have conducted an empirical analysis of the relationshipbetween environmental activities and corporate value andindividual corporate data based on newspaper reports related
to DBJ Environmentally Rated Loan Program. The results of thisanalysis suggest that environmental consciousness activities
and taking advantage of Financing Employing Environmental
Ratings boost companies’ corporate value and profitability. The
result also indicates that shareholder composition and fund-raising capabilities are determining factors in corporate decisionmaking on whether to employ such financing.

(Hirofumi Uzawa, Toshiaki Tachibanaki, Katsuhisa Uchiyama[eds.], University of Tokyo Press, June 2012)
This collection of essays shares the recognition among its authors that Japan
exists within a disparate society, anddevelops the thesis that its incongruousness is not conducive to the stable andsustained development of Japanesesociety. Each chapter focuses on thetheme of institutional capital (publicfinance, private finance, education, societal protection, etc.)
environment and discusses their relationship to a disparate
society. The collection looks toward the formation of aless-disparate small society, describes the vision needed toachieve sustained development and discusses the role ofshared social capital.

“The Great East Japan Earthquake—Recommendations for Reconstruction for the Formulation of a
Sustainable Society”(Shigeru Ito, Masahiro Okuno, Takashi Onishi and Masaharu Hanazaki [ed.], University of Tokyo Press, July 2011)
The Great East Japan Earthquake highlighted that the Japanese economy and society is built on an
extremely fragile base. With the earthquake having shaken some very fundamental values, this report examines
initiatives suitable for reconstructing thedisaster-stricken region and rebuilding
the Japanese economy and society.

Making Use of Information Functions

as shared social capital, raises topics of the cities and the

DBJ’s Businesses“Beyond a Disparate Society”

This report summarizes disasterreconstruction recommendations by 50 academics who areat the forefront of such fields as economics, urban theory andindustry theory. The report is divided into three sections, Part
I: Regional Revitalization; Part II: Challenges for the Japanese
Economy; and Part III: Reconstruction and Japanese Society.

Capital Investment Planning Survey
One of DBJ’s main businesses is the provision of funds forlong-term capital investment. With a history of more than
50 years (from 1956), the questionnaire-based Capital
Investment Planning Survey looks at community-specificinvesting trends and provides analyses of raw corporate
information. This information is tapped for many purposes,
including investigation of, and policy formation for, theJapanese economy, planning by corporate management
and research and training activities at institutions anduniversities.

Survey Example“Report on June 2011 Survey ofCapital Investment Plans for Years
to March 31, 2011, 2012 and 2013,”(Surveys, No. 103, September 2011)
After completing our questionnairebased survey on corporate capital
investment activity, the Survey ofCapital Investment Plans, we publicized
the results, as well as our analysis.

Combining Surveys, Research and Investment and Loan Activities
In addition to publishing the results of its surveys, researchand other activities, DBJ introduces its information at speaking engagements and seminars. In addition, after reflecting
on the results of its investment and loan functions, DBJ
provides new financial solutions for corporate CSR activities
and commercial technologies.

Environmental
DBJ conducts survey reports on various environmental activities in Japan and overseas, under such themes as global warming prevention measures, promotion of a recycling-oriented
society and sustainable corporate management. DBJ also conducts and contributes to specialty journals, newspapers andmagazines. In the year ended March 31, 2005, these activities
culminated in the introduction of DBJ Environmentally Rated
Loan Program, which are used to determine preferential
financing for environment-friendly projects and are used bymany companies.

Disaster Response
Being prepared to respond to an earthquake or other natural
disaster and continue operations is an issue for every company. DBJ conducts surveys covering the corporate business
continuity plans companies have established. In fiscal 2006,
we incorporated survey results to form the basis for Financing
Employing DBJ Disaster Preparedness Ratings, which we use in
our financing considerations. Financing Employing DBJ Disaster
Preparedness Ratings was substantially revised in August 2011.
Thereafter, the name of this system was changed in 2012 to
the DBJ Enterprise Disaster Resilience Rated Loan Program.

Technology
DBJ’s activities in technology-related fields include conducting trend surveys (for example, on bioethanol). DBJ’s Practical
Application Support Center for Technology provides technicalevaluations and conducts other activities to help companies
realize their potential for technological commercialization.
Annual Report & CSR Report 201267

DBJ’s Businesses

Providing Information to Local Communities
Supplying Information to Help Local Community
Development

Making Use of Information Functions

Local communities areexperiencing increasingly
difficult environmental
circumstances, such asa declining birthrate,
an aging population,
the amalgamation of
towns, cities and villages, and financial crises. Addressingthese issues requires a greater degree of expertise and moreingenuity than ever. DBJ assists by analyzing the information
it accumulates through its network of offices (19 domestic
locations—head office, branches and representative offices—and three overseas locations—subsidiaries and a representative office), economic agencies of regional governments and local communities, and companies in Japan andabroad. DBJ disseminates this information through reports,
publications, lectures and other formats to encourage public/private partnerships, promote tourism, build up local
communities, and contribute to local government financing.

Building Local Communities
One way DBJ puts its expertise to work in building up local
communities is by conducting ”local community-building
diagnostics.” In this process, a DBJ local-community diagnosis team analyzes publicly available data to determine thecurrent state of a local community and then conducts interviews in that community before preparing an independent
diagnosis that interprets its results. We then discuss the diagnosis results with people in the local community, which helps
them to understand what issues they may be able to addresson their own and provides them an opportunity to consider
future directions. (See page 56.)

“Fiscal 2012 Regional Handbook: Regional Data and Policy
Information”
This handbook is a collection of data that include fundamental
economic, industrial, lifestyle and policy indicators for regional
blocks, administrative regions and principal cities, as well as acompilation of individual regional policies and projects to facilitate an overall understanding of regional
policies, economies and societies and thecurrent status of regional projects. In the
Topics section, Takashi Onishi, University ofTokyo professor and president of the Science
Council of Japan, contributed a special section entitled “Issues Related to Restoration
and Reconstruction Following the Great East
Japan Earthquake.”“Issues and Outlook for Tohoku Tourism, Centering on
Overnight Travel—Based on an Earthquake Impact Study”
This report looks at the domestic overnight
tourism industry, which was significantly
affected by the Great East Japan Earthquake,summarizing the industry’s issues and prospects. Leveraging the expertise that DBJ has
accumulated involving the ryokan (Japanesestyle inn) tourism and related industry business, this study involves interviews with various experts and takes an approach combining
a written survey with field research.

“Research Group on Development of theReconstruction Region Report”
Earthquake reconstruction efforts are currently
in full swing in each of the affected regions.
This report argues that in addition to physicalimprovement, the areas could leverage andretain creative wisdom and methods, as wellas private-sector expertise. The report thenmakes specific recommendations on initiatives
for promoting industrial and lifestyle infrastructures.

Branch Reports
Hokkaido Branch“Establishing Hokkaido Food Products as a
Recognized Brand Overseas—Brand Synergies
between Hokkaido Food Products and Hokkaido
Tourism” (Mini Report, May 2011)
In the aftermath of the Great East
Japan Earthquake and the nuclear
power plant accidents, overseas
consumers are exercising voluntary
restraint toward Japanese food andfood products originating in Japan, andsome restrictions are in place. However,
initiatives to encourage food exports
are essential to the future of Hokkaido.

68

Annual Report & CSR Report 2012

This report clarifies the cachet enjoyed by Hokkaido foodproducts that are exported overseas, and then speculates
that initiatives to promote exports of these products dependon (1) getting Japanese restaurants overseas to communicate
the attraction of Hokkaido food products by featuring themon special menus and (2) breaking down the barriers to foodproduct exports from Hokkaido by appealing to their brandstrength and price competitiveness and by strengthening theregion’s ability to establish sales routes. As specific examples,
the report suggests that overseas promotions that emphasize
authentic flavors of Hokkaido ramen (noodle) shops would
expand exports of Hokkaido food products and proposes
exporting Hokkaido ice cream by forging links among companies within the prefecture.

Niigata Branch“Considerations on Rebuilding Food and Agriculture
Growth (Export) Strategies” (Recommendation Report,
March 2012)
This report analyzes the gap between
the reputation that Japanese foodenjoys overseas and actual exports.
The report identifies an insufficientJapanese response to internationalrules pertaining to food exports as
one reason for the gap. It discusses
mainstay Japanese products—fish,
rice and sake—and recommends
response measures for each. Having implemented a Webbased questionnaire for overseas consumers, the reportanalyzes the perceived image of Japanese food and theimpact of the Great East Japan Earthquake.

Hokuriku Branch“Study on Hokuriku Companies’
Awareness of Business Continuity
Plans (BCPs)—Enhancing theBusiness Continuity of Companies
in Hokuriku” (Survey Report, March
2012)
This report examines companies
whose headquarters are locatedwithin the three prefectures of the
Hokuriku region, determining their level of awareness ofmany risks, including a large-scale disaster or major accident, and then studying what preparatory steps are inplace. Specifically, the report looks at the results of a questionnaire sent out to companies to determine their status of
BCP formulation and preparedness for interruptions in the
supply chain, and suggests ways for Hokuriku companies toenhance business continuity.

Tokai Branch“Issues and Future Strategies for
the Aircraft-Related Industry—
Focusing on Second-TierCompanies Involved in Airframe
Construction” (Region Report,
September 2011)
DBJ and The Juroku Bank, Ltd.,
cooperated in the publication of thisreport as one aspect of their businesscooperation agreement. The report examines the current
state of the aircraft industry, describing industry trends incountries of key overseas demand, new entries into emerging markets, and the maintenance, repair & overhaul (MRO)
industry. At the same time, the report looks at the results ofa briefing (conducted in cooperation with The Juroku Bank,Ltd.) by suppliers involved in airframe structures in the Tokai
region, the area of highest concentration for the aircraft
industry. After describing the current state of the industry
and looking into the issues it faces, the report offers six recommendations for future development. It looks at Japan incomparison with the Canadian province of Quebec, extracting the issues associated with Japan’s aircraft cluster policy
and considering three initiatives for the future.

Making Use of Information Functions“Growing Demand for Lumber and Tohoku’s Forest
Resources” (Survey Report, March 2012)
This report studies future trends
in lumber demand, based on theassumption that we are entering
an era that will take advantage ofTohoku’s forest resources. Demand
for lumber is expected to increase,owing to the Act for Promotion of
Use of Wood in Public Buildings,
which went into effect in October
2010, as well as the promotion oftechnologies for designing fire-resistant wooden structures.
As an example showing that making public buildings ofwood is cost effective, this study imagines the case of all
school facilities in Tohoku’s six prefectures being constructed of wood. The report provides preliminary estimates ofthe value of demand created and the resulting increase inemployment.

DBJ’s Businesses

Tohoku Branch

Kansai Branch“Impact of a Major Earthquake on the Regional
Economy—Case Study of the Great Hanshin-Awaji
Earthquake” (Survey Report, December 2011)
This report analyzes various indicatorsin the region affected by the recent
Great East Japan Earthquake in comparison with trends before and after
the Great Hanshin-Awaji Earthquake.
Topping the list of comparisons are
the earthquakes’ economic-related
effects on the respective regions—GDP, population trends, commerce,
domestic finances and labor, tourism and reconstruction
demand. The report then offers a multitude of multifacetedrecommendations for the disaster-stricken region.

Chugoku Branch“Study on the Shift to Urban Concentration in aSociety Characterized by a Decreasing and Aging
Population” (Region Report, May 2012)

Annual Report & CSR Report 2012

69

DBJ’s Businesses
Making Use of Information Functions

This study, which DBJ conductedin cooperation with The Chugoku
Electric Power Co., Ltd., is based on
advance research into urban concentration. It looks at five cities in
the prefectures that comprise the
Chugoku region, grouping them by
DID* population, population densityand patterns of changes in area, andanalyzing the balance between the concentration of people
in the areas of highest population (regions where populations and urban facilities are densest) and the buildup ofurban facilities. The report also introduces methods of creating urban facilities in line with the shift toward urban concentration and looks at the model in place in the Chugoku
region, looking at directional patterns in the urban shift andsuggesting points to keep in mind.
* An acronym for “densely inhabited district.” Wards, which are thebasic unit used in Japan’s national census, are used as the baseunit. DID describes areas with concentrated regional populations inareas of high population density within the borders of cities, wards,
towns and villages.

Shikoku Branch“Evolving Shikoku Companies at
the Top of Their Niches” (Survey
Report, October 2011)
Many companies in Shikoku operate
in niche fields, on either a national oran international level, and this factor
is considered to be one of the distinguishing characteristics of Shikoku’s
economy. This report introduces companies headquarteredin Shikoku that have top shares in their niche fields, listing
the characteristics of their business developments to date,
products they handle and their distinguishing characteristics
from a management perspective. The report then discusses
the reasons behind these companies’ emergence at the topof their fields and future aspects of community revitalization.

Kyushu Branch“Impact of the Opening of JR
HAKATA CITY—Tenjin and Hakata:
Changes in Behavior and Their
Appeal” (Survey Report, November
2011)
March 2011 marked the start of business for the JR HAKATA CITY stationbuilding and the opening of the Kyushu
Shinkansen route, accompanied by expectations of renewed
vigor for the Kyushu region. This report summaries and analyzes environmental changes after the opening of JR HAKATA
CITY in “Tenjin and Hakata: A 1,000-Person Questionnaire”
and “Changes Following the Opening of JR HAKATA CITY.”
Looking at answers to the Tenjin and Hakata questionnaire,the report highlights the characteristics of both regions,concluding that, “The attractiveness of each has increased.
The regions have overcome the difficulties they faced and theoverall increase in the attractiveness of Tenjin and Hakata has
led to further development in Fukuoka.”

Minami-Kyushu Branch“The Chinese Business
Environment, as Seenfrom Shanghai” (Lecture,
September 2011)
To invigorate the local
economy, Kyushu, which hasabundant tourist resources, needs to increase its numberof overseas tourists to supplement the benefits it receives
from its domestic tourism. Above all, it is important for theregion to focus on tourists from China, which is geographically close and enjoying rapid economic growth.
To attract tourists from China, first the region needs tounderstand current Chinese economic and political conditions. To this end, the head of the Shanghai office of DBJ
Business Investment Co., Ltd., a DBJ subsidiary, spoke to
the Industrial Promotion Committee, sponsored by the
Kagoshima Association of Corporate Executives.

The Japan Economic Research Institute
The Japan Economic Research Institute (JERI) is a foundation
established for the purpose of contributing to the improvement of welfare and further development of the Japanese
economy through investigative research into important economic problems in Japan as well as overseas and funding
the promotion of scholarship. JERI’s investigation into issues
that impact the Japanese economic structure in the areasof urban and regional development, social capital infrastructure, energy, economy and industry are supported bya broad network that includes DBJ’s investigative research

70

Annual Report & CSR Report 2012

department, universities, research institutions and otherexperts, as well as national and regional government bodies
and the patronage of approximately 500 companies. DBJ
works in conjunction
with JERI to disseminate the results of
its research.

CSR Report

DBJ provides integrated investment and loan
services to resolve the issues its clients face andcontinues to support the ongoing growth ofsociety from a financial perspective.
At DBJ, corporate social responsibility
involves not only contributing to society
through investment, loan and other business,but also seriously taking into account societal
needs and living up to responsibilities
as a member of society. This requires all
DBJ executives and regular employees to
conduct their daily activities with constantconsideration of society, the environment andthe economy. We believe our efforts will build
DBJ into a financial institution trusted, favoredand chosen by the public.

Implementing CSR Management  . . . . . . . . . . . . . . . 73
CSR through Investment, Loan and Other Businesses  . . 78
Environmental Management  . . . . . . . . . . . . . . . . . . . 101
Business Continuity Plan (BCP)  . . . . . . . . . . . . . . . . . . 104
Fostering Human Resources and Creating a
Comfortable Work Environment  . . . . . . . . . . . . . . . 106

CSR・ディスクロージャー誌
Annual Report & CSR Report 2012
2012

71

CSR Report
Editorial Policy

Editorial Policy

To expand communication with all stakeholders, in 2003, DBJ first issued Environmental Report 2003 for a Sustainable
Society. This was followed by annual sustainability reports in 2004 and 2005. In 2006, DBJ published the CSR Report. Since
the fiscal year ended March 31, 2007, DBJ has combined its annual report and CSR report under the concept of ”disclosure
from a CSR perspective.” DBJ will continue publishing CSR information introducing its initiatives to help realize a sustainable
society.
As in previous years, this report explains how DBJ came into being, as well as the services DBJ provides. The report aims
to show that DBJ fulfills its corporate social responsibility through the careful attention it accords to each of its activities,
incorporating this discussion of the status of its recent activities. Furthermore, we have employed the following guidelines inour effort to enhance the report’s readability.
nnWe explain DBJ’s stance on CSR as a way of addressing the problems society faces.
 o give the reader a clear sense of how DBJ’s services relate to society, the report provides case studies of DBJ’s
T
ongoing emphasis on CSR through investment, loan and other businesses it conducts.

DBJ considers this report an important tool for communicating with all manner of stakeholders and hopes tocontinue improving it. Accordingly, we welcome your comments and suggestions.
Scope of Report
Organizations covered: All DBJ branches, including overseas representative offices and subsidiaries, except where noted.
Japan:

Head office, 10 branch offices and eight representative offices

Overseas: One overseas representative office
Period covered:

The fiscal year from April 1, 2011, to March 31, 2012	As this report is designed to illustrate ongoing initiatives, some of the case studies for investment,
loan and other business contained herein are the same as in past issues. Furthermore, some of
the information indicated herein will have been updated by the time this report is published.
Publishing Details
Published:

September 2012

Next publication:

September 2013 (previous publication: September 2011; frequency: annual)

Reference Guidelines
Sustainability Reporting Guidelines 2006, issued by the Global Reporting Initiative (GRI), and the Financial Services Sector
Supplement were used as reference guidelines.

72

Annual Report & CSR Report 2012

CSR Report

Implementing CSR Management

With corporate governance as its cornerstone, DBJ separates into two fields the scope of the CSR activities
through which it ­addresses the problems society faces: (1) CSR through investment, loan and other businesses and (2) the environmental and social ­contribution activities it undertakes. The combination of thetwo fields enhances corporate value.

Fields of CSR Implementation at DBJ

DBJ’s Two Fields of CSR
CSR through Investment, Loan and Other Businesses

Industry

Building Social
Infrastructure

Implementing CSR Management

Environmental and Social
Contribution Activities

Investment, Loan and Other Services
in Response to Client Issues

Social Organization, Voluntary
Contributions by Employees tothe Environment, Society andthe Community

Regions

Environment
Crisis Response Operations (Disaster Response, etc.)

Community
Revitalization

Reinforcing the functions offinancial and capital markets
Supporting industrial
restructuring

Providing financial
support in growth fields

Communication inInternational Cooperation

Providing a safety net for financial markets

Environmental
Management

Corporate Governance and Other Activities (Sincere Pursuit)
Measures Essential for Forming Sustainable Corporate Foundations• Corporate Governance• Risk Management• Compliance• Information Disclosure• Client Protection, Protectionof Personal Information• Fostering Human Resources

Annual Report & CSR Report 201273

CSR Report

Fields of CSR Implementation at DBJ
DBJ comes into contact with a wide variety of organiza-

DBJ strives to increase its dialogue with stakeholders in its

tions, companies and people in the course of its operations.

effort to realize a sustainable society.

DBJ secures financing through the issuance of Fiscal

DBJ’ s investment and loan services involve clients in

Investment and Loan Program (FILP) agency bonds

numerous regions and across a variety of industries.

and government-guaranteed bonds, through direct

Furthermore, we provide information and expertisefinancing from the financial markets by issuingthrough overseas networks.

corporate bonds and through loans
from private-sectorbanks.

Implementing CSR Management

Investors

Clientsrnme

nt

As of March 31,
2012, DBJ’ snumbered 1,147.
DBJ employee training

Employees

Society

is designed to enable its
employees to act
autonomously and make fulluse of their abilities.

Gove

employees

s/
NPO s
NGO

DBJ seeks to contributeto the realization of anincreasingly prosperous
and sustainable society.
Government: Currently,les 100% of DBJ’s shares are heldca nitioL uby the Japanese government.
m
m
o
Local
Communities: DBJ supportsCthe autonomous development of local

communities through its affiliations with

regional government bodies and regional financial
institutions that are deeply rooted in the local communities.
NPOs/NGOs: DBJ maintains alliances with these organizations
as a part of its environmental preservation efforts, to realize
a sustainable society.

Triple Bottom Line
“Triple bottom line” refers to evaluating corporate activity

Societyfrom the three vital perspectives of the society, environment and the economy. It is not simply evaluating a company’s financial performance, but rather assessing sustainable
development by incorporating environmental, social andeconomic aspects.
Economic issues are tied to DBJ’s investments andloans, and its considerations include region-specific andenvironmentally time-specific concerns, in addition to theeconomic issues that a company faces, thus spanning thethree elements that make up triple bottom line evaluation.
Accordingly, in “CSR through Investment, Loan and Other
Businesses,” DBJ carries out activities based on triple bottom line evaluations to help build a sustainable society.

74

Annual Report & CSR Report 2012

Creation ofSocial Sustainability

Environment

EconomyCSR ReportSocial Effectiveness
During its time as a comprehensive policy-based financial

Even after privatization, DBJ aims to continue contrib-

institution, evaluations of DBJ’s annual operations raiseduting to building an affluent future by solving problems

DBJ’s business effectiveness and results, thereby improving

through creative financial activities. We determine from ourits responses to socioeconomic changes facing Japan. Theseown perspective those businesses that are truly useful toresponses were a way to evaluate CSR through Investment,

society and work to promote the realization of a sustain-

Loan and Other Businesses.

able society.

CSR through Investment, Loan and Other Businesses
societies and the creation of employee-friendly workplaces.

the sustainable development of enterprises. Accordingly,

Accordingly, DBJ considers the application of its intellectual

it is important that a corporation’s business activity brings

assets and service platforms for investments and loans to

new value to, contributes to problem-solving in, and gains

be of vital importance.

Implementing CSR Management

Due consideration of compliance issues is a prerequisite forSpecifically, DBJ will apply the distinctive features andthe trust of society.
Financial institutions can play a specific role in building afinancial services that it has realized in the past to provide

harmonious society over the long term by identifying truly

various solutions to clients that cover expected changes

meaningful projects for the economy and society and pro-and other issues that are forecast for the economic andviding quality financing and other financial solutions.

social environments. In this way, DBJ will fulfill its four

We believe that DBJ can gain the trust of society withroles: reinforcing the functions of financial and capital mar-

CSR through investment, loan and other businesses, such

kets, supporting industrial restructuring, providing financial

as the provision of services that lead to client satisfaction,

support in growth fields and providing a safety net forincreases in corporate value, coexistence with regional

financial markets.

Corporate Philosophy

CSR through Investment, Loan
and Other Businesses

Building Social
Infrastructure

Industry

Regions

Crisis Response Operations (Disaster Response, etc.)
See
page 78.
Reinforcing the functions offinancial and capital markets

Supporting industrial
restructuring

Providing financial support
in growth fields

Providing a safety net for financial markets

Annual Report & CSR Report 201275

CSR Report

Environmental and Social Contribution Activities
DBJ recognizes that today’s social and environmental

Communication on Community Revitalization

problems can best be resolved by communication and the

DBJ considers working with local citizens to build communi-

exchange of opinions. Accordingly, DBJ strives to commu-

ties that suit their unique environments an important part

nicate with as many people as possible through seminars,

of supporting independent community development. To

symposiums, lectures and the Internet.

this end, DBJ sponsors such events as seminars and sym-Communication Focused on the Environment
Environmental problems such as global warming must be
resolved, starting with individual awareness of the severityof the issues.

posiums in collaboration with local authorities and regional
branches of the Japan Chambers of Commerce and Industry
and other economic organizations.
In our Regional Health Checks, we discuss objective
indicators and original analytical methods with residents

DBJ promotes understanding of the relationshipand help them identify their community’s issues and poten-

Implementing CSR Management

between the environment and financial and business activi-

tial. DBJ employees interview community stakeholders inties by participating in the Eco-Products Exhibition, Japan’s

advance, study the region’s resources and, on the final day,largest environmental event, and holding seminars andhold a participatory workshop with residents. (See page 56.)

symposiums in conjunction with relevant organizations.
DBJ has had a booth at the Eco-Products Exhibition every

Tokai Branchyear since fiscal 2001. Through display panels, we introduce

Messe Nagoya

various DBJ activities, such as the DBJ Environmentally Rated

Messe Nagoya 2011 was held to carry forth the philosophies

Loan Program and the DBJ Enterprise Disaster Resilienceof the 2005 World Exposition, Aichi, Japan (in the areas ofRated Loan Program. In fiscal 2011, this year we also lectured

the environment, science and technology, and internationalon the theme of “New Trends in Environmental Financing,”

cooperation).

attracting numerous visitors to our booth.

DBJ’s initiatives were introduced at this exposition,
including the environmentally related DBJ Environmentally

Since fiscal 2009,

Rated Loan Program and disaster preparedness related DBJ

DBJ has been aEnterprise Disaster Resilience Rated Loan Program.

participating sponsor of the eco japan
cup*, Japan’s largest environmentrelated contest.
We are active on
the organization’s”Eco Presentation Stage”(Eco-Products 2011)

executive and judging committees.
Messe Nagoya 2011
*The ”eco japan cup” is sponsored by public and private entities,
including Japan’s Ministry of the Environment, Ministry of Land,
Infrastructure, Transport and Tourism, Ministry of Internal Affairs
and Communications, Sumitomo Mitsui Banking Corporation,
Environmental Business
Women and DBJ. The contest
describes itself as a ”contest
for unearthing and growing
seeds of green business.” This
program is a continuationof the 2005 ”Environmental
Dynamite!” event. Renamedthe ”eco japan cup” in 2006,
this event is held on anannual basis.

76

Annual Report & CSR Report 2012

Communication in International Cooperation
DBJ holds seminars for developing countries’ governmental
and developmental financial institutions, primarily those in
Asia, describing the Bank’s experience in applying policybased financing to support the reconstruction and growthof the industrial economy of postwar Japan. Participantsalso benefit from our accumulated expertise in policy issues
such as energy conservation, environmental measures andprivate infrastructure. The Development Finance Course,
for example, is a seminar that has attracted 346 people
from more than 30 countries since it was inaugurated by
DBJ in 1967. Furthermore, through collaboration with such

CSR Reportinstitutions as the World Bank and the Japan International

Issuing CSR Reports

Cooperation Agency, we provide comprehensive techno-

To expand communication with all stakeholders, in 2003,

logical cooperation to such banks as China Development

DBJ issued Environmental Report 2003 for a Sustainable

Bank and the Infrastructure Development Bank of Malaysia.

Society. This was followed by similar reports in 2004 andNotable in 2011 were such projects as one to support

2005. In 2006, DBJ published the CSR Report.

credit risk management at Vietnam Development Bank

DBJ has combined its annual report and CSR report(annually since 2008) and a detailed design project for theunder the concept of ”disclosure from a CSR perspective.”

Development Bank of Mongolia (since 2009) in response to

DBJ will continue publishing CSR information introducing

requests from their respective governments.

DBJ’s initiatives to help realize a sustainable society.

DBJ is a member of the Association of Development
Financing Institutions in Asia and the Pacific (ADFIAP, based

Participating in Activities That Contribute toSociety

networking with financial institutions from China, SouthTABLE FOR TWO

Korea, ASEAN countries, India and other areas. In 2012,

DBJ began participating in the TABLE FOR TWO* program on

the meeting was held in Istanbul, Turkey. We received an

March 29, 2010. Under this program, one of the meals in our

ADFIAP Award related to our activities on the Great East

company cafeteria each day is designated as a ”healthy menu”

Japan Earthquake Reconstruction Fund, providing us with

option. Through proactive employee participation in this pro-an opportunity to describe Japan’s recovery from the disas-

gram, as of the end of May 2012, DBJ’s contributions totaled

ter and future growth plans in an overseas forum.

¥733,320—enough to provide 36,666 meals.

Implementing CSR Managementin Manila, the Philippines), and since 1976 we have been

*TABLE FOR TWO is a program run by the non-profit organization
TABLE FOR TWO International. Under this program, each time a specific food item is purchased, a ¥20 donation (enough money to purchase
one school lunch in a developing country) is donated to purchase aschool lunch for one child.

Presentation of the ADFIAP Award

Other Communication Efforts
Providing Information
Video Introduction to CSR Initiatives
To make DBJ’s CSR activities more easily understandable, on
our website we have included video content entitled ”DBJ’s
CSR: Strengthening Society through Financial Expertise.” Wealso showed this video at the Eco-Products 2011 exhibition.
http://www.dbj.jp/co/csr/index.html (Japanese only)

A healthy menu

Campaign

Participating in Local Community Activities
Support for the Operation of the Environmentally
Friendly Marunouchi Shuttle Bus
Since the year ended March 31, 2004, DBJ has co-sponsored the operation of environmentally friendly buses carrying passengers free of charge on a route in the Otemachi,
Marunouchi and Yurakucho area of Tokyo’s business district. These buses help raise awareness about environmental
issues. Not only do the buses reduce environmental impact
and noise but also they are barrier-free with a low-floor
design, ensuring easy access for disabled users.

Marunouchi shuttle bus
Annual Report & CSR Report 2012

77

CSR Report

CSR through Investment, Loan and Other Businesses

DBJ promotes CSR through investment, loan and other businesses to solve social problems.
Specifically, DBJ will apply the distinctive features and financial services that it has realized in the past
to provide various solutions to clients that cover expected changes and other issues that are forecast for the
economic and social environments. In this way, DBJ will fulfill its four roles: reinforcing the functions offinancial and capital markets, supporting industrial restructuring, providing financial support in growthfields and providing a safety net for financial markets.

CSR through Investment, Loan and Other Businesses
Building Social
Infrastructure

Industry

Regions

CSR through Investment, Loan and Other Businesses

Crisis Response Operations (Disaster Response, etc.)

Reinforcing the functions offinancial and capital markets
DBJ bolsters its partnership with other financial institutions and helps to reinforce thefunctions of Japan’s financial and capital markets and through the appropriate provisionof risk capital to the market by leveraging the uniqueness of our financing—long terms,
large scale, an approach that integrates investment and loans, and neutrality.

Supporting industrial
restructuring

Providing financial support
in growth fields

We provide financial support for thereconstruction of the Japanese industrial
structure that supports social andeconomic activities.

DBJ provides financial support to help
achieve Japan’s long-term strategies.

Providing a safety net for financial markets
We respond swiftly in times of market dysfunction and other crises.

Case StudiesnEnergy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79n

Restructuring and Revitalization. . . . . . . . . . . . . . . 90nTransportation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81n

M&A and Business Alliances . . . . . . . . . . . . . . . . . . 92nUrban Development . . . . . . . . . . . . . . . . . . . . . . . . 82nPrivate Finance Initiatives . . . . . . . . . . . . . . . . . . . . 93n

DBJ Green Building Certification . . . . . . . . . . . . . . 83nn

DBJ Environmentally Rated Loan Program. . . . . . . 84
Environmental Technology . . . . . . . . . . . . . . . . . . . 86nnCommunity Revitalization . . . . . . . . . . . . . . . . . . . . 95

Healthcare and Welfare . . . . . . . . . . . . . . . . . . . . . 87nOverseas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99

DBJ Employee’s Health Management Rated
Loan Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89nGreat East Japan Earthquake Response Operations. . 100

n

n

78

Annual Report & CSR Report 2012

DBJ Enterprise Disaster Resilience Rated
Loan Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94

CSR Report

EnergyVaried energy usage is essential to ensure the long-term, stable supply of energy. Also, international
interest in using solar power, wind power, biomass and other renewable energy is mounting amid
ongoing concerns about global warming. Utilization of renewable energy is essential for curbing
greenhouse gas emissions and realizing a low-carbon society.

Case Study: Soma Kyodo PowerCSR through Investment, Loan and Other Businesses

Soma Kyodo Power Company, Ltd., headquartered in thecity of Soma, Fukushima Prefecture, operates a thermal
power generation plant and is a wholesale supplier of electricity.
Although the company’s power plant and other facilities
were heavily damaged in the Great East Japan Earthquake,quick recovery efforts on damaged facilities to secure thePower plant before theearthquake

stable supply of electric power enabled the resumption ofelectric power generation in December 2011.

Coal unloader after
the earthquake

DBJ arranged recovery financing in the form of a syndicated loan to the Soma Kyodo Power Company for its
Shinchi power plant, located in Shinchi-machi, Fukushima
Prefecture, which was damaged in the Great East Japan
Earthquake.

Coal unloader repaired after
the earthquake

Case Study: Showa Shell Sekiyu
Showa Shell Sekiyu K.K., headquartered in Minato-ku,

Economy, Trade and Industry (METI).

Tokyo, is a Japanese oil refiner and distributor. While main-

Given this certification, DBJ financed Showa Shell Sekiyu

taining a strong foundation in the oil business, the company

as a designated financial institution defined in Article 8 ofis enterprisingly developing a next-generation CIS photovol-

the same legislation.

taic cell* project via wholly owned subsidiary Solar Frontier
K.K., aiming to turn it into an energy business to help realize a low-carbon society. In February 2011, the company’s* Thin-film photovoltaic cell made primarily from copper, indium andselenium (CIS)

No. 3 photovoltaic cell plant (Kunitomi Plant)—one of
the world’s largest—commenced operations in Miyazaki
Prefecture. Together with plants No. 1 and No. 2, which are
already in operation, it aims to expand annual production
to approximately one gigawatt and to acquire 10% of the
global market.
The new plant satisfies the requirements of a designated business under Paragraph 4, Article 2, of the Bill on
the Promotion of Businesses to Develop and Manufacture
Energy and Environmentally Friendly Products. Accordingly,
on March 22, 2011, the plant received the first certification under the Specified Business Plan of the Ministry ofSolar Frontier’s Kunitomi Plant

Annual Report & CSR Report 2012

79

CSR Report

EnergyCase Study: INPEX
INPEX Corporation, headquartered in Minato-ku, Tokyo, isJapan’s largest oil and natural gas development company. It
was founded in October 2008 through a merger between
the previous INPEX, a leading oil and natural gas development company overseas, and Teikoku Oil Co., Ltd., a pioneer in oil and natural gas development in Japan.
INPEX is constructing a liquefied natural gas (LNG)
acceptance base in Naoetsu Port (in the city of Joetsu,
Niigata Prefecture) scheduled to begin operations in 2014.
CSR through Investment, Loan and Other Businesses

INPEX is planning to receive LNG produced by Ichthys LNG
Project (Australia) and Abadi LNG Project (Indonesia) at thisLNG acceptance base, using the company’s existing natural gas pipeline network to distribute LNG vapor to areas
mainly in the Kanto-Koshinetsu region. INPEX plans on promoting business aggressively to create a global gas supply
chain.
DBJ provided financing to INPEX to ensure sufficient

Naoetsu LNG acceptance base under construction

natural gas provision capabilities over the medium to longterm and support stable gas provision.

Case Study: Seajacks International
Seajacks International Ltd. (hereinafter, “SJ,” headquartered

growth potential of the offshore wind power generationin Great Yarmouth, Norfolk, England), established in 2006,

market, (2) the growth potential of the installation busi-

owns and operates offshore wind power generator instal-ness using specialized vessels (with particular consideration

lations. SJ, a leading company in its industry, is engagedof the high performance and operating capabilities of SJ’s

in the installation of wind power generator turbines andspecialized vessels) and (3) how the exchange of shares withrelated equipment (using specialized wind power instal-

Marubeni Corporation would add experience and expertise

lation vessels, “self-propelled jack-up vessels,”) as well as

in power generation operations and maintenance to SJ’s

in maintenance services for offshore oil and gas platform

operating base.

facilities.
The offshore wind power business has been growing
rapidly under measures promoted by European governments mainly in countries near the North Sea. The demandfor installations using SJ’s specialized vessels in particular
has been extremely high.
DBJ, along with Mizuho Corporate Bank, Ltd., Sumitomo
Mitsui Banking Corporation, Sumitomo Mitsui Trust Bank,
Limited, ING Bank N.V. and Swedbank AB (publ), provided LBO financing for the acquisition of SJ by Marubeni
Corporation and Innovation Network Corporation of Japan.
In terms of financing this project, DBJ assessed (1) the
Seajacks Leviathan

80

Annual Report & CSR Report 2012

CSR Report

Transportation
Transportation infrastructure supports economic activity and is the foundation of a rich and abundant lifestyle. The promotion of investment is necessary for the maintenance and renovation oftransportation infrastructure in accordance with degradation due to aging and the requirements
of increased transport capacity and efficiency, as well as in response to an aging population andenvironmental issues. As transportation infrastructure involves large investment amounts and long
investment periods, the procurement of long-term funding is increasingly important.

Case Study: Shin Nihonkai Ferry
Shin Nihonkai Ferry Co., Ltd., headquartered in Osaka,long-distance ferry operators engaged in the cruise andhotel business with regular service on four routes between
Honshu and Hokkaido.

* A combination of electric POD and conventional diesel engine propulsion systems. The electric POD system combines propulsion via
the combination of an outboard electric motor and propeller thatcan be turned 360 degrees, providing superior handling in harbors
or when maneuvering around docks.

CSR through Investment, Loan and Other Businesses

was established in June 1969 and is one of Japan’s leading

Shin Nihonkai Ferry will replace two vessels, the Suzuran
and Suisen (17,300 tons total), which provide service on
the main route between Tsuruga and Tomakomai. The newships will be equipped with the hybrid CRP-POD system*and exhaust fume power generators to reduce energy consumption. This design contributes to the reduction of environmental burdens compared to the older vessels.
DBJ arranged financing for the construction of new vessels by assembling a syndicated loan to Shin Nihonkai Ferry.

The Suzuran

Case Study: Japan Aeroforge
Japan Aeroforge, Ltd., headquartered in Chuo-ku, Tokyo,

DBJ arranged financing in the form of a syndicatedis a manufacturer of large forgings for use in aircraft andloan totaling ¥16 billion assembled with The Chugoku

power plants created as a joint venture between Kobe

Bank, Ltd., Tomato Bank, Ltd., and local banks in Okayama

Steel, Ltd., and Hitachi Metals, Ltd., Japan’s leading raw

Prefecture, where the Japan Aeroforge plant is located.

materials manufacturers, and IHI Corporation and Kawasaki
Heavy Industries, Ltd., Japan’s leading aircraft engine manufacturers.
The aircraft industry is a growth area where demand isforecast to expand across the globe, and has been positioned as an area that needs strengthening in terms of theJapanese manufacturing industry’s overall growth. Japan
Aeroforge will install Japan’s first 50,000 metric ton forging
press. This will facilitate a stable domestic supply of large
forgings that up to now had to be procured from overseas
in an attempt to create a domestic market in the high value-added raw materials area and strengthen technologicalcapabilities.

Plant exterior (conceptual rendering)

Annual Report & CSR Report 201281

CSR Report

Urban Development
Efforts to develop and upgrade urban infrastructure and functions and the creation of urban culture
and a comfortable environment for the lifestyles of working people through urban development
are the driving forces behind the revitalization of economies and communities at the regional andnational levels.

Case Study: Tobu Railway
Tobu Railway Co., Ltd., headquartered in Sumida-ku, Tokyo,
is a major railway operator that operates two trunk lines,
CSR through Investment, Loan and Other Businesses

the Tobu Isesaki Line (between Asakusa and Isesaki stations) and the Tobu Tojo Line (between Ikebukuro andYorii stations). Including Tokyo Skytree®, the world’s tallest free-standing broadcasting tower, this is a large-scaleurban redevelopment project in the Tokyo Skytree Station/
Oshiage area. Located in the area connecting Narihirabashi
and Oshiage stations, Tokyo Skytree® is the key property ina development that includes commercial facilities, an aquarium, a domed theater and other structures, and is expected
to revitalize the area.
DBJ, together with Mizuho Corporate Bank, Ltd.,
arranged and provided financing for this project, including
Tokyo Skytree®. DBJ has also invested in the tower’s operator, Tobu Tower Sky Tree Co., Ltd., and has provided funding to Tobu Energy Management Co., Ltd. This company,
a wholly owned subsidiary of Tobu Railway, will introduce

Tokyo Skytree®, which began operations in May 2012and operate a heat supply system in Tokyo Skytree’s vicinity.

Case Study: Tokyo Prime Stage
Tokyo Prime Stage Co., Ltd., is an SPC established jointly
by Tokyo Tatemono Co., Ltd., and Taisei Corporation forthe purpose of developing a prime site located in Chiyodaku, Tokyo, that is currently occupied by Mizuho Bank’s
Otemachi head office building and the Otemachi Financial
Center building into a large-scale multipurpose building,tentatively named the Otemachi 1-6 Plan.
The current plan is for a standard floor area of approximately 2,970 square meters. The high-rise building willhouse state-of-the-art office space and a luxury hotel, withthe premises providing around 3,600 square meters ofgreen space. Construction is slated for completion in spring
2014.
With DBJ as the lead arranger, 26 financial institutions
are participating in the ¥270 billion syndicated loan—oneof the largest ever arranged in Japan.

82

Annual Report & CSR Report 2012

Conceptual rendering

CSR Report

DBJ Green Building Certification
Demand is increasing for urban development and revitalization that take environmental conservation and disaster prevention into account in an attempt to realize a sustainable society. Recent years
have seen forward-looking initiatives among real estate providers to offer their stakeholders property that not only is economical but also incorporates consideration for the environment and society.

Case Study: Hulic & Nippon Tochi-Tatemono
DBJ conferred DBJ Green Building Certification to Sendai
First Tower, located in the city of Sendai, Miyagi Prefecture,
CSR through Investment, Loan and Other Businesses

and co-built by Hulic Co., Ltd., headquartered in Chuo-ku,
Tokyo, and Nippon Tochi-Tatemono Co., Ltd., headquartered in Chiyoda-ku, Tokyo. The building was granted Goldcertification as a property that exemplifies high environmental and social awareness.
Sendai First Tower, completed in June 2009, is a stateof-the-art combination office and commercial building.
The high assessment of this certification was based on thebuilding’s use of eco-friendly, energy-saving technologies
and seismic isolation devices; its superior disaster performance, such as emergency reserve power sources enabling
the support of operations for extended periods of time; andits capacity to house community-based operations and hostvarious events in atrium and public indoor spaces.

Sendai First Tower

Case Study: Iino Kaiun
Iino Kaiun Kaisha, Ltd., headquartered in Chiyoda-ku,

Building Certification and the DBJ Environmentally Rated

Tokyo, is engaged in various shipping businesses, including

Loan Program. The Shiodome Shibarikyu Building received

tanker shipping of crude oil, gas and petrochemical prod-

Gold certification.

ucts and dry bulk shipping of coal, fertilizers, and woodchips for paper production. In Tokyo, the company develops
real estate and owns several rental office buildings. Having
positioned these endeavors as the drivers of the company’sbusiness, Iino Kaiun is undertaking initiatives to lessen theirenvironmental impacts.
DBJ conferred DBJ Green Building Certification to Iino
Kaiun’s Iino Building, located in Chiyoda-ku, Tokyo, and its
Shiodome Shibarikyu Building, located in Minato-ku, Tokyo.
The Iino Building, which opened in October 2011, features
the addition of the Iino Hall and Conference Center, avenue for cultural, artistic and intellectual activities such asconcerts and lectures in the heart of Tokyo, as well as plans
for a greenbelt—the Iino Forest—aiming for harmony with
the natural green environment of Hibiya Park. DBJ gave the
Iino Building the highest rank of Platinum, and provided
funding via the DBJ Environmentally Rated Loan Program.
This was the first time DBJ applied both the DBJ Green

Iino Building

Annual Report & CSR Report 201283

CSR Report

DBJ Environmentally Rated Loan Program
The environment is a matter of global concern, and corporations are responsible for conducting business in an environmentally responsible manner. Financial institutions are no exception, being tasked
with the mission of contributing to a sustainable society.

The graph below shows the amount of DBJ Environmentallyto receive outside expert advice and make adjustments to

Rated Loan Program for the past eight years. Financing in thethe DBJ Environmental Ratings system in line with past scor-

year ended March 31, 2012, amounted to ¥129.9 billion, an

ing and results as well as with trends in environmental policy.

increase of approximately 66% year on year. The total for the

The revised DBJ rating sheet for fiscal 2012 will incorporate

eight years to March 31, 2012, stands at ¥491.2 billion.

elements related to ISO 26000 and enhancements related to

CSR through Investment, Loan and Other Businesses

The DBJ Environmental Ratings Advisory Committee meets

corporate social responsibility (CSR) similar to last fiscal year.
In light of the trend towards increasing Scope 3 disclosureTrack Record of DBJ Environmentally Rated Loan Program

requirements overseas in recent years, and with consideration
for the importance of the supply chain, we are reordering(Billions of yen) Reference

questions related to the supply (value) chain.

160
129.9
120
78.2

80
60.3
40

40.3

44.7

36.5

65.5

35.8

0
Year ended Year ended Year ended Year ended Year ended Year ended Year ended Year ended
March 31, March 31, March 31, March 31, March 31, March 31, March 31, March 31,
2005
2006
2007
2008
2009
2010
2011
2012

Notes: 1. Figures for years ended March 31, 2005 to 2008, are for DBJ’s
predecessor.
2. Figure for the year ended March 31, 2009, include those for DBJ’s
predecessor (from April 1 to September 30, 2008).

DBJ environmental logo

Case Study: LIXIL Group
LIXIL Group Corporation, headquartered in Chiyoda-ku,

promotion of the proactive introduction of mega solar andTokyo, is a comprehensive housing and living environment

other reusable energy sources and (5) development andsolutions provider promoting environmental management

deployment of a variety of eco-friendly products as a leader

based on principles aimed at harmonizing human lifestyles

in the housing materials industry.

with the earth we live on. LIXIL Group applies its environmental efforts conscientiously and comprehensively,
improving living arrangements that take into consideration
not only what to do but also how and for whom to do it.
DBJ assigned the entire LIXIL Group environmental rat-

Introduction ofrenewable energy
in production

ings and used them to arrange financing in the form of a
syndicated loan with 15 other financial institutions.
The high evaluation was based on assessment of thecompany’s (1) impact on the ecosystem and promotion of
specific developments regarding biodiversity, (2) promotionof the reuse of waste materials—including other companies’ products—from housing renovation, (3) ambitious
targets set for CO2 emissions reductions at domestic basesof operation and promotion of enhanced efficiency, (4)84Annual Report & CSR Report 2012

Collection and recyclingof housing renovation
waste at the Eco Center

CSR Report

DBJ Environmentally Rated Loan Program
Case Study: Mitsui O.S.K. Lines
Mitsui O.S.K. Lines, Ltd., headquartered in Minato-ku,

Next-generation vessel concept Senpaku ISHIN project

Tokyo, provides an exemplary environmental management
model for the shipping industry based on the MOL Group
Midterm Management Plan’s GEAR UP! MOL, one pillar of
its environmental strategy under an environmental manage-

ISHIN-I
Hybrid car carrier utilizing
renewable energy

ment system that supports its performance as a world topclass shipping line through strengthening its operationalsafety measures and the traditionally high environmental
efficiency of its maritime shipping.

ISHIN-II
Ferry that uses LNG as fuelCSR through Investment, Loan and Other Businesses

DBJ provided financing to MOL based on high evaluations of their (1) promotion of tangible efforts to reduce
environmental burdens through the formulation and execution of a road map for the introduction of eco-ship raw
material technologies focused on enabling realization of
the next-generation vessel concept Senpaku ISHIN project,

ISHIN-III
Large ore carrier with highefficiency waste heat energy
recovery system(2) intangible efforts such as consistent ECO SAILING, theculmination of expertise instrumental to efficient shipping
and the realization of reduced CO2 emissions, (3) initiatives
contributing to safe shipping, such as the establishment of
the Safety Operation Supporting Center (SOSC) to monitor the movement of all ships under operation and provide
information on weather, pirates and terrorism and otherpotential threats 24 hours a day.

We (1) Properly reduce navigation speeds(2) T ake advantage of weather and sea condition forecasts
and the optimum trim
(3) Select optimum routes(4) Reduce vessels’ wetted surfaces(5) O ptimize operation and maintenance of main engines,
auxiliary equipment and other machinery(6) Develop energy-efficient ship designs(7) Equip vessels with Propeller Boss Cap Fins (PBCFs)

Efficient shipping through ECO SAILING

Case Study: Yunokuni Hotel
Yunokuni Hotel Co., Ltd., headquartered in the city of Kaga,of employee environmental improvement proposals andIshikawa Prefecture, operates Yunokuni Tensyo, a Japanese-

promotion of energy conservation activities through dailystyle inn officially registered under the Act on Development

improvements, (2) creation of a building energy manage-of Hotels for Inbound Tourists at Yamashiro Hot Springs. As

ment system via the introduction of energy-saving measure-historic Yamashiro hot spring area’ leading inn, Yunokuni

ment and monitoring equipment and thorough visualization

Hotel is engaged in environmental activities in harmonyof water and fuel consumption and (3) communication ofwith the community, combining customer satisfaction andthe importance of Kaga’s traditional culture and natural

reduction of environmental burdens with eco-friendly ser-environment to tourists through related facilities Traditional

vice providing an opportunity to experience the importance

Culture Amenity Yunokuni No Mori.

of regional culture and the environment.
DBJ provided financing based on a high assessmentof the company’s (1) proactive horizontal deployment

Thorough visualization of water and fuel consumption

Traditional Culture Amenity Yunokuni No Mori

Annual Report & CSR Report 201285

CSR Report

Environmental Technology
To solve global warming, energy problems and a whole range of environmental issues, and to promote the creation of a recycling-oriented society, it is important to support businesses financially sothat they can undertake the development of the required technologies. To achieve these objectives,companies must obtain and accumulate more advanced technical expertise, and a steady stream offunding is necessary to accommodate projects of different scales at varying stages of development.

Case Study: Toho Titanium
Toho Titanium Co., Ltd., headquartered in the city ofChigasaki, Kanagawa Prefecture, is one of the world’s leadCSR through Investment, Loan and Other Businesses

ing titanium metals manufacturers, providing materials foraircraft and general industrial use. They are also involved inelectronic materials, catalysts for propylene polymerization* “Comprehensive Special Zone” refers to a system based on new
growth strategies formulated by the government. Regions are
selected by the government for the implementation of multiple
support measures, including special exemptions primarily focusedon taxes and financing to strengthen international competitivenessand revitalize regional communities.

and other functional chemical businesses.
DBJ provided financing for the construction of a large
electron beam (EB) melting furnace for the world’s first successfully mass-produced direct cast slab (DC Slab®) at Toho
Titanium’s Yahata Plant in the city of Kitakyushu.
Financing was provided to Fukuoka Prefecture, the cityof Kitakyushu and the city of Fukuoka, co-applicants in theGreen Asia Internationally Strategic Comprehensive Special
Zone project. This was the first ”Interest Rate Subsidy
System for Internationally Strategic Comprehensive Special

Yahata Plant

Zone*“ capital investment contributing to the creation of amanufacturing base leading green innovation in Japan.

DC Slab® (left) and traditional ingot (right)

Case Study: Land Solution
Land Solution Inc., headquartered in Minato-ku, Tokyo,

DBJ is investing in Land Solution, which contributes toprovides total risk solutions for soil and underground water

the reduction of environmental burdens through optimal

contamination as part of the Kurita Group, a major water

solutions for soil and underground water contamination

processing and soil and underground water cleanup com-issues. Going forward, DBJ will proactively support com-pany.

panies engaged in developing the market for new environ-

Soil and underground water contamination occur

mentally conscious businesses.

underground out of sight, making it extremely difficult toascertain the extent of the contamination, yet leaving it
untreated poses a threat to the ecosystem.
To rectify this situation, Land Solution developed a soil
and underground water contamination risk quantification
system. Land Solution utilizes this system to inspect andevaluate property and perform cleanups, as well as provide
integrated support for the effective use of land, fluidization and risk hedging. It also develops independent soil andunderground water contamination countermeasure businesses.

86

Annual Report & CSR Report 2012

Excavation site

CSR Report

Healthcare and Welfare
Society faces a wide range of issues on the healthcare front, including an increasingly elderly population, advances in medical procedures, mergers and acquisitions by medical corporations and a needto rebuild aging facilities. Offering uninterrupted medical services involves solving fiscal and administrative problems and improving the skills of medical and other personnel and the quality of related
facilities and medical equipment.

Case Study: Success Academy
Success Acadent Company Limited, headquartered in thenursery schools and the provision of child-rearing support

city of Fujisawa, Kanagawa Prefecture, is a private childcare

services.
CSR through Investment, Loan and Other Businesses

business that, under the theme of child-rearing support,
operates workplace and public childcare facilities. The
company has over 20 years of experience in the workplacechildcare business, operating over 140 childcare facilities,
mainly in hospitals but also in schools and companies. In
the public childcare facility business, the company operates over 50 directly-managed, licensed and certified Nijiiro
nursery schools, schoolchildren clubs and children’s centers,
providing a variety of support services.
Success Academy opened six new Nijiiro nursery schoolsin April 2012 and is aggressively moving ahead with preparations for other new facilities from 2013.
DBJ provided funding to Success Academy through the
DBJ Smart Japan Program to help alleviate waiting lists for

Nijiiro nursery school

Case Study: Kawakita Medical Foundation
Kawakita Medical Foundation’s Kawakita General Hospital,

advanced environmental consideration initiatives and excel-

located in Suginami-ku, Tokyo, provides 24-hour emergen-lent disaster prevention and business continuity efforts.

cy medical care, serving as the main emergency and acutemedical care facility in the area. In recent years, the company has been aggressively upgrading its medical support services with the establishment of the Kawakita Rehabilitation
Hospital, health screening and family medicine centers andgeriatric health care facilities.
With the cooperation of the Japan Council for Quality
Health Care (JCQHC), we created the DBJ Visionary Hospital
program, a new financing menu that supports hospitals
focusing efforts on higher medical functions, environmental
considerations and disaster prevention and business continuity countermeasures.
DBJ certified the Kawakita Medical Foundation a DBJ
Visionary Hospital and provided financing based on their
Operating theater

Annual Report & CSR Report 201287

CSR Report

Healthcare and Welfare
Case Study: Sekishinkai
Sekishinkai Foundation operates two hospitals, six clinics and 11 nursing-related offices centered in the cities ofKawasaki, Kanagawa Prefecture, and Sayama, Saitama
Prefecture. One of Sekishinkai’s main facilities, the Kawasaki
Saiwai Hospital, located in the city of Kawasaki, Kanagawa
Prefecture, has been engaged in regional medicine foralmost 40 years since its opening in 1973. Designated as aGroup II diagnosis procedure combination (DPC) hospital,
this facility is similar to a main university hospital, based on
CSR through Investment, Loan and Other Businesses

its requisite diagnostic measures, training for doctors, highmedical technology and treatment of severely ill patients.
DBJ provided financing to Sekishinkai for the transfer ofrun-down and cramped Kawasaki Saiwai Hospital to a newbuilding, aiming to strengthen the function of the hospital’s
emergency and acute medical services.
Kawasaki Saiwai Hospital, the main medical facility insouthern Kawasaki, is now expected to contribute further
in addressing emergencies and acute medical illnesses.

Kawasaki Saiwai Hospital

Medical Management Database 2012
Edited by DBJ and Japan Economic Research Institute, Inc., and published in July 2012,
this handbook focuses on supporting hospital management reform. The handbook provides a compact and comprehensive overview of essential information, including updates
to basic information such as that indicated below.
l Cover Story: Medical Management in Transition (Examination and Treatment, Nursing

Remuneration Reform, Topics)l Analysis of the current status of the environment surrounding the healthcare sector(trends involving hospital facilities and management)l Analysis of the current status of hospital management (running costs, facility invest-

ment and trends involving fund procurement)l Topics related to hospital management (such as examples of hospital management

improvements and the state of emergency medical care)

88

Annual Report & CSR Report 2012

CSR Report

DBJ Employee’s Health Management Rated Loan Program
The promotion of employee’s health management is linked to improved employee satisfaction andcorporate productivity, the retention of talented human resources and the financial betterment ofhealth insurance organizations. Amid a declining population of future workers, the strategic implementation of employee’s health management from a managerial perspective is an important issue forthe realization of a sustainable society.

Case Study: Kaoin Chuo-ku, Tokyo, has become number one in the toiletry
category as a manufacturer of laundry and kitchen soaps
and healthcare products. From early on, the company madean effort to create a climate that balances work and life,
establishing a safe and clean workplace to maximize thepotential of each and every employee to provide high-quality products and enhance corporate brand value.
DBJ provided financing based on the clear message ofthe Kao Group Health Declaration issued by top management and (1) efforts to precisely ascertain and analyze
employee health levels based on qualitative informationsuch as quantitative health and prescription data figures
and in-house employee surveys, (2) clarification of internal
priority measures based on the above analysis, formulationof a medium-term plan and creation of a system for cooperation with businesses, health insurance organizations,industrial physicians and outside specialists and (3) thecompanywide positioning of health creation as an executive
management issue, establishing a management-level healthcreation committee for reporting and improvements andassigning on-site health creation supervisors and managers
to create a virtual health management PDCA cycle for theentire organization.

CSR through Investment, Loan and Other Businesses

Since its founding in 1887, Kao Corporation, headquartered
Five support measures of the“Kao Group Health Declaration”
1 Measures to address lifestyle-related diseases● Provision of healthcare advice focused on preventing
lifestyle-related diseases● Provision of support for employees’ attempts to improvetheir lifestyles
2 Measures to address mental-health issues● Establishment of a system to deal with employees withmental health problems early on through the introductionof a mental health check system● Implementation of training to deal with mental healthissue for managers
3 Measures to support employees wanting to quit smoking● Implementation of the “Kao Group No Smoking
Marathon”● In fiscal 2010, a total of 293 employees participated in
the program, and 136 employees succeeded in quitting
smoking.
4 Measures to support employees affected by cancer● Addition of cancer detection categories to the annual
physical check-up designated by the Industrial Safety and
Health Act
5 Measures to support women’ s health● Spread of knowledge of gender-specific medicine toincrease the rate of females receiving gynecologicalexams

Kao Group Health Declaration

Annual Report & CSR Report 201289

CSR Report

Restructuring and Revitalization
Since the emergence of non-performing loans as a major problem in Japan in the late 1990s, corporate and business revitalization has become an important issue. In recent years, international
financial disorder and the tide of economic globalization have fomented swift change in the corporate business environment. Smooth revitalization is an important issue for not only the distressedcompanies that are viable businesses themselves but also the financial institutions and other entities
supporting their revitalization.
Case Study: Kirayaka Turn Around Partners

CSR through Investment, Loan and Other Businesses

Kirayaka Turn Around Partners Co., Ltd., headquarteredapproximately ¥12.5 billion in disclosed debt from Kirayaka

in the city of Yamagata, Yamagata Prefecture, is a wholly-

Bank and is engaged in management and restructuring sup-owned subsidiary of Kirayaka Bank, Ltd., and was estab-port for trading partners.

lished to provide centralized support for the restructuring

DBJ agreed to provide Kirayaka Turn Around Partners

activities of the bank’s customers. DBJ entered an agree-with approximately ¥1 billion in financing via the purchasement with Kirayaka Bank, Ltd., to provide capital and busi-

of non-voting preferred shares, and dispatched temporary

ness collaboration. Kirayaka Turn Around Partners inheritedstaff.

Schemes

Joint holding company
establishment

DBJ

Kirayaka BankThe Sendai BankTransferred disclosed debt
(common stock 100% voting rights) via
corporate split● Temporary staff●

Preferred stock investment
Temporary staff● Provided corporate revitalization expertise●●

Kirayaka Turn Around Partners
Provided management and other support
Business partners

Case Study: BookLive
BookLive Co., Ltd., headquartered in Taito-ku, Tokyo, is anelectronic publication business established by the Toppan
Group that operates electronic bookstore BookLive! and aplatform to distribute electronic publications.
DBJ, along with Mitsui & Co., Ltd., Toshiba Corporation
and NEC Corporation, has invested in BookLive.
With the addition of strategic partners DBJ, Mitsui& Co., Ltd., Toshiba and NEC, BookLive will attempt todevelop business pursuing the new potential of electronic
publications and strengthen the main electronic bookstore
BookLive! as an industry standard among a jumble of services in the domestic electronic book market through theconcentrated expertise these four companies have cultivated over many years.
BookLive! website

90

Annual Report & CSR Report 2012

CSR Report

Restructuring and Revitalization
Case Study: Great East Japan Earthquake Reconstruction Funds
To support the restoration and reconstruction of companies

Earthquake, forcing an extended closure. Recovery con-damaged in the Great East Japan Earthquake, DBJ joined

struction commenced, and in February 2012 the entire facil-with financial institutions in stricken regions to launch Greatity reopened. Since it began operations in 1966, SRH has

East Japan Earthquake Reconstruction funds.

demonstrated an ability to attract customers utilizing the

Although the disaster caused a temporary downturn

well-known abundance of its hot springs and a unique hulain industry, each fund utilizes subordinated loans and pre-dance attraction. The recovery of SRH will provide momen-ferred shares to provide capital to local leading companies

tum for recovery in the region.

indispensible to recovery in the region, supporting the quickreconstruction of affected areas.
CSR through Investment, Loan and Other Businesses

DBJ and The Toho Bank, Ltd., launched the Fukushima
Support Fund Limited Partnership, which funds post-Great
East Japan Earthquake reconstruction (Fukushima Support
Fund), and decided to purchase ¥1 billion in preferredshares from Joban Kosan Co., Ltd., headquartered in thecity of Iwaki, Fukushima Prefecture.
Joban Kosan’s core business is Spa Resort Hawaiians(hereinafter, “SRH”), a hot springs theme park featuringindoor pools, leisure facilities and a hotel.
SRH was extensively damaged in the Great East Japan

Monolith Tower, which opened in February 2012

Great East Japan Earthquake Reconstruction Fund Scheme
Wholly capitalized

The Toho Bank

LP financing(Operating company)
Tohoku Reconstruction Partners
GP financing

DBJ

LP financing

Fukushima Support Fund
Limited Partnership
Subordinated loans / Preferred stock financing, etc.

Company

Company

Company

Annual Report & CSR Report 201291

CSR Report

M&A and Business Alliances
Mergers and acquisitions (M&A) have entered the spotlight with their increasing prevalence, owing
to such factors as more diverse forms of business development, Asia-centered overseas expansion, andgrowing activities in business and industry restructuring. M&As are considered effective and essential for aggressive business restructuring and to overhaul and revitalize underperforming businesses.

Case Study: SATS GroupDBJ acted as financial advisor regarding the SATS indica-

SATS, Ltd. (hereinafter, “SATS”), headquartered in

CSR through Investment, Loan and Other Businesses

Singapore and based at Singapore Changi Internationaltion of interest in the tender, providing total support from

Airport, is engaged in the in-flight meal and ground han-tender strategy formulation to acquisition negotiations. The

dling business in Asia. SATS is listed on the Singapore

deal was concluded in December 2011.
With the acquisition of TFK, the leading company in the

Exchange.
In July 2010, SATS indicated an intention to acquirein-flight meal business in Japan, SATS has formally entereda tender of TFK Corporation (hereinafter, “TFK”) shares

the Japan market, and TFK expects to expand its customer(53.8% of all voting rights) held by Japan Airlines Co., Ltd.

base.

TFK Acquisition Scheme

DBJ

Japan Airlines

SATS
53.8%

Financial Advisor
100%

Transfer

SIPL**SATS Investments Pte. Ltd.
SATS Investment Vehicle

TFK
Acquisition

Consulting Practice Systemization: Different Approaches for
Each Stage of the Corporate Life Cycle
The DBJ-edited Consulting Practice Systemitization, published by Kinzai in May 2012,
explains financial service business practices required at each particular stage of the businesslifecycle, including Creation/development of new business (Chapter 1), Growth (Chapter 2),
Management improvement (Chapter 3), Business reconstruction/change in business activities(Chapter 4), Liquidation/bankruptcy (Chapter 5) and Business succession (Chapter 6). This
practical publication provides case studies on numerous businesses for which financial services are in demand, including detailed explanation of essential expertise and Financial Services
Agency guidelines on consulting.

92

Annual Report & CSR Report 2012

CSR Report

Private Finance Initiatives
Private finance initiatives (PFIs) draw on private-sector capital and management expertise, as wellas technology, to build, operate and maintain social infrastructure that has traditionally been theprovince of national and local governments. Advantages of the PFI method include reduced operating costs on the part of national and local governments, while taking advantage of private-sector
knowledge to receive high-quality public services, and business opportunities created for privatesector enterprises. Problems confronting PFIs include such practical operating concerns as allocating
responsibility and accountability across multiple vendors. Numerous financing problems can arise as
well, making the ability to negotiate with, and manage, the various participants very important, as
well as operating the business.

CSR through Investment, Loan and Other Businesses

Case Study: Tokyo International Air Terminal
Tokyo International Air Terminal Corporation, headquartered in Ota-ku, Tokyo, was established to take charge ofan SPC to maintain and manage the international terminalbuildings of Tokyo International Airport, whose largest
shareholder is Japan Airport Terminal Co., Ltd.
This is the first case of national core transportation infrastructure being handled as a PFI.
DBJ, Mizuho Corporate Bank, Ltd., and The Bank ofTokyo-Mitsubishi UFJ, Ltd., co-arranged and provided
financing in the form of project finance. By constructing afinance scheme that is flexible to changes in aviation andcommercial market demand and other trends, DBJ is supporting the implementation of the project up to a period of
30 years from its operational start-up.

©Tokyo International Air Terminal Corporation

Tokyo International Air Terminal, which began operationsin October 2010

Case Study: Long Beach Judicial Partners
Long Beach Judicial Partners LLC (hereinafter, “LBJP”),
headquartered in the city of Long Beach, CA, U.S.A., is a

DBJ, along with Western financial institutions, is providing financing to LBJP via project finance methods.

special purpose company (SPC) established by Meridiam
Infrastructure, a fund focused on infrastructure development in the United States and Europe through public-private partnerships (PPPs), to enable the California state government to carry out the Long Beach Courthouse Project.
The Long Beach Courthouse Project is the first social
infrastructure project in the United States procured under* Similar to a Private Finance Initiative (PFI) purchase of services via
a Build-Operate-Transfer (BOT) contract in Japan, cost, schedules,
quality and other performance indicators must be clearly definedwhen the contract is executed. This kind of scheme aims toencourage competition and high-quality bids, approving flexible
proposals from bidders by focusing on results rather than process
details.

the principles of Performance-Based Infrastructure (PBI)
contracting to utilize a PPP scheme* to reconstruct, operate, and maintain California’s most socially and politicallyimportant courthouse with the largest capacity and highest
number of cases in the state through private financing.
Ninety percent of revenue from this project will comefrom the California state government in the form of stablepayments of annual, performance-based service fees. Using
advanced risk management to adequately reduce risk, an

Rendering of Long Beach
Courthouseappropriate return compared to risk is expected.
Annual Report & CSR Report 201293

CSR Report

DBJ Enterprise Disaster Resilience Rated Loan Program
Such recent disasters as the Great Hanshin-Awaji Earthquake, the Chuetsu Offshore Earthquake,the Iwate-Miyagi Inland Earthquake and last year’s Great East Japan Earthquake caused tremendous
damage to the economy, with many organizations forced to suspend operations for extended periods.
In addition to measures for protecting personnel and property, companies face the need to draft
business continuity plans (BCPs) to hedge themselves against lost revenue and retain their clients inthe event of disaster.

Case Study: Alps Electric
CSR through Investment, Loan and Other Businesses

Alps Electric Co., Ltd., headquartered in Ota-ku, Tokyo,

Alps Electric has seven factories in the Tohoku regionis one of the world’s leading manufacturers of electronicthat were damaged in the Great East Japan Earthquake, but

components for everyday electronic devices, including

disaster prevention and business continuity measures imple-

compact switches and sensors, multi control devices and in-mented in daily operations successfully minimized damage,vehicle units and communication modules.

shortening the time required to resume normal production

DBJ provided financing to Alps Electric based on a highevaluation of (1) the earthquake resistance and seismicline operations to fulfill its supply responsibilities in Japanand overseas.

isolation measures implemented at their headquarters andmain offices in Japan and overseas, as well as their endeavors to disperse production bases geographically, (2) the

TACT Switch®

Bluetooth™ module for automotive
equipment

Electronic compass (Magnetic
sensors)

Touch panels

existing structures, whether damaged or not, in terms of
exposure to various social crises (review ongoing) and (3)the mechanism for the companywide sharing of information in real time and centralization of leadership and command in times of crisis as well as an environment facilitating
the execution of quick decision-making and emergency

One of the world’s leading manufacturers of electronic components

response.

Case Study: TOTO
TOTO Ltd., headquartered in the city of Kitakyushu,

After the Great Hanshin-Awaji Earthquake, TOTO imple-

Fukuoka Prefecture, has established itself as Japan’s leader

mented seismic evaluations and strengthened resistance toin the manufacture and sales of residential fixtures, fromearthquakes at 70% of its buildings and facilities in Japan,

sanitary ceramic ware to toilet seats with a warm-water

but the Great East Japan Earthquake caused them to accel-

shower feature. TOTO adds value to lifestyles in its threeerate initial plans to complete disaster prevention counter-mission areas: universal design, environment and bonds.

measures at all facilities by 2013. Financing provided by DBJ

DBJ provided financing to TOTO based on a high evalu-

was used to fund these plans.

ation of (1) the earthquake resistance and seismic isolation
measures implemented at their headquarters and main
offices in Japan and overseas, as well as their attempt todisperse production bases geographically, (2) efforts toeliminate bottlenecks to business continuity and create astrong supply chain by multiplexing the production of difficult to replace basic components and increasing the use ofgeneral purpose parts, (3) the ongoing implementation ofpractical risk simulations focused primarily on the continuation of core business operations and (4) the application ofdaily business process improvements with concrete measures formulated from the aforementioned simulations.

94

Annual Report & CSR Report 2012

The leading manufacturer of sanitary ceramic ware and residential
fixtures and among the global
elite in technology and quality

CSR Report

Community Revitalization
In recent years, the economic disparity between major urban areas and regional areas in Japan has
expanded as people and businesses continue to concentrate in cities. Moreover, disparities evenamong regions are becoming more stratified and complex, with increasing gaps between hub cities
and other areas.
For local economies to sustainably exist, development having a broad view (involving otherregions in Japan and overseas markets) is important.

Case Study: Mt. Hakodate Ropeway
Mt. Hakodate Ropeway Corporation, headquartered in

DBJ provided financing to Mt. Hakodate Ropeway on thebasis of the Hokkaido Branch’s certification of the company

Hakodate, famous for its dramatic night view and an inte-

under the Regional Areas Genki Program (tourism).

CSR through Investment, Loan and Other Businesses

Hakodate, Hokkaido, operates a ropeway business on Mt.
gral part of the Hakodate tourism industry.
Ahead of the fiscal 2015 start of shinkansen (bullet
train) service between Shin-Aomori and Shin-Hakodate,
the giant pulleys driving the ropeway were replaced, andthe company plans to replace gondolas and remodel theobservation deck to maintain and improve the ropeway’s
appeal through the large-scale renovation of facilities. The
company also promotes initiatives to reduce environmental
burdens under the motto “Clean & Green,” introducing
light fixtures powered by solar and wind, and switching
to electric heating and cooking appliances to reduce theamount of oil and gas used.

Large 125-person capacity gondola

Case Study: Prifoods
Prifoods Co., Ltd., headquartered in the city of Hachinohe,

DBJ provided financing to Prifoods, certifying it under

Aomori Prefecture, was reborn in 2008 after a merger

the Tohoku Branch’s Regional Areas Genki Program (Green

between Daiichi Broiler Co., Ltd., Ichirei Co., Ltd., Gordex

Network Tohoku Program).

Co. and Nihon Hypor Co., Ltd. With each of the four internal companies engaging in their traditional businesses, thecompany is in the livestock-rearing industry, engaged incomprehensive poultry and pig breeding, meat processing,processed food production, sales and engineering of poultry processing facilities and machinery.
In 2003, Daiichi Broiler, which is engaged in the manufacture, processing and sales of broilers, implemented theindustry’s first traceability system in its packaging plant, a
new initiative in the industry to further ensure food productsafety and peace of mind.
Inside Gonohe Food Processing Plant

Annual Report & CSR Report 201295

CSR Report

Community Revitalization
Case Study: Snow PeakSnow Peak Inc., headquartered in the city of Sanjo, Niigata

thoroughly incorporates the user’s input in everything it

Prefecture, is located in the Tsubame-Sanjo region, long

manufactures. Passionate fans of these initiatives, called

known locally as a hardware manufacturing town. The“SnowPeakers,” are increasing around the world.

company is engaged in the manufacture and sales of natu-

DBJ provided financing to Snow Peak, certifying it under

ral lifestyle products for nature-oriented lifestyles. As thethe DBJ Development Support Program (Nihon Genki

industry’s leading company, Snow Peak designs, develops

Program).

and manufactures tents, sleeping bags, compact stoves,lanterns and various kinds of apparel created with advanced
metalworking technologies by local companies sold in
CSR through Investment, Loan and Other Businesses

Japan and 23 countries around the world.
In accordance with its mission statement of adopting theuser’s point of view as their own and delivering products
and services that enable mutual inspiration, Snow Peak
Headquarters and factory exterior

Case Study: Charmant
Charmant, Inc., headquartered in the city of Sabae, Fukui

instruments are highly compatible with living organisms,

Prefecture, develops business globally and is engaged in thepossess superior corrosion resistance and are lightweight,

comprehensive design, development, production and sales

strong and non-magnetic, eliminating any interference withof eyeglass frames, primarily through the Charmant brand.

other instruments in the operating room. Exemplifying the

The company possesses illustrious intellectual property

quality that Japanese-made products are known for, theserights cultivated through many years of product devel-

instruments are equipped with special characteristics neces-

opment, including Excellence Titan (developed throughsary for minimally invasive surgery.

industry-university joint research), which is a new nickel-free

DBJ provided financing to Charmant, certifying it undermaterial that is flexible yet retains shape memory, as well

the Regional Areas Genki Program (manufacturing industry:

as the successful development of laser bonding technology

electronics, pharmaceuticals, textiles, plastics).

enabling microfabrication.
Making use of technology and expertise gathered fromeyeglass frame manufacturing, in April 2012 Charmant
launched production and sales of medical equipment suchas scissors and forceps for use in cataract and glaucoma
surgery under the HORITECH brand. Titanium medical

HORITECH

Case Study: Asahi Intecc
Asahi Intecc Co., Ltd., headquartered in the city of Nagoya,

DBJ provided financing to Asahi Intecc, certifying it

Aichi Prefecture, is a research and development company

under the Tokai Branch Regional Areas Genki Program (stra-

focusing on the development, manufacturing and sales oftegic next-generation industry).

medical devices based on ultrafine stainless steel wire manufacturing technologies. Particularly in the minimally invasive surgery area, the company provides PTCA guide wires
for use in treatment of patients with heart disease, to minimize physical burden on patients and to improve thepatients’ quality of life (QOL). Asahi Intecc is considered aworld leader in this industry.
Wire drawing and wire-forming technology

96

Annual Report & CSR Report 2012

CSR Report

Community Revitalization
Case Study: Kintetsu Corporation
Kintetsu Corporation, headquartered in the city of Osaka,

tiple office support facilities, a department store and a hotel

engages in real estate development, distribution, hotel andand the provision of extremely convenient amenities.

leisure and a variety of other Group businesses, in addition
to operating the largest private railway network, spanningfive prefectures, in the Kinki and Chubu regions.
DBJ granted DBJ Green Building Certification to Abeno
Harukas, located in the city of Osaka, set to become thetallest skyscraper complex in Japan, currently under construction by the Kintetsu Corporation. This was the firststill under construction. The project was evaluated highly

CSR through Investment, Loan and Other Businesses

Platinum plan certification* in Japan granted for a building* F or properties under construction,a mechanism for confirming development plans using the DBJ Green
Building Certification model forscoring plans between other owners and property-related individuals
in terms of environmental featuresand convenience to tenants basedon development plans.

for the incorporation of advanced technology creating
extremely superior environmental functionality, access connecting to seven different rail lines, the introduction of mul-

Abeno Harukas, scheduled toopen in spring 2014

Case Study: Waste Biomass
Waste Biomass Co., Ltd., headquartered in the city of
Sakaiminato, Tottori Prefecture, is a project company involved

for the manufacture of steel or as biomass fuel.
DBJ arranged financing, along with local banks The San-in the operation of sewage sludge carbonization facilities

in Godo Bank, Ltd., and The Tottori Bank, Ltd., in the form

led by Sanko Co., Ltd., the largest industrial waste disposalof a ¥1.9 billion syndicated loan.

company in the Sanin region, along with the Toyota Tsusho
Corporation and Nippon Zoki Pharmaceutical Co., Ltd.
This project, which involves sludge carbonation facilities
built by private-sector companies, is extremely importantfor promoting development in regional economies andreducing greenhouse gas emissions by drying and carbonating sewer sludge collected from Tottori and Shimane
Prefectures and recycling it either as heat insulation material
Rendering of sewage sludge carbonization facility

Case Study: Kyowa Chemical Industry
Since its founding, Kyowa Chemical Industry Co., Ltd.,

DBJ provided financing to Kyowa Chemical Industry toheadquartered in the city of Sakaide, Kagawa Prefecture,

expand its medicinal preparation facility so that it could

has developed products under the motto “Unique Products

respond to increased demand for prescription laxatives, cer-through Unique Technologies” in the field of fine inorganic

tifying the financing

chemicals, creating products developed with consideration

under the Shikoku

for people and the environment.

Branch Regional

Kyowa Chemical Industry’s products are indispensable in

Areas Genkimodern society and widely used in medical and industrial

Program (Materials

applications. Their development and production of medi-

Island Shikoku

cal materials, resin additives and flame-retardant materials

Support Program).

make effective use of natural resources while maintaining
an awareness of environmental conservation.
Plant exterior

Annual Report & CSR Report 2012

97

CSR Report

Community Revitalization
Case Study: Fukuoka Jisho
Fukuoka Jisho Co., Ltd., headquartered in the city of
Fukuoka, Fukuoka Prefecture, is a local developer thatdevelops and manages office and commercial facilities,
mainly in the Fukuoka metropolitan area, including theCanal City HAKATA shopping complex popular with tourists.
Opening the city of Fukuoka to all Kyushu Shinkansen
lines is expected to increase the amount of customers fromwithin and without the Kyushu area. To improve movement
CSR through Investment, Loan and Other Businesses

between the Hakata Station and Tenjin areas in the centerof Fukuoka City, Fukuoka Jisho added the East Building
facing Hakata Ekimae Dori next to the extant Canal CityHAKATA. The East Building, featuring unique fast fashion
tenants, acts as a bridge to the existing building, resulting
in smoother flowing foot traffic between Hakata Station

Canal City Hakata East Building

and Canal City HAKATA.
DBJ, together with The Nishi-Nippon City Bank, Ltd., andother financial institutions, provided financing to Canal CityHAKATA for the expansion, certifying it under the Kyushu
Branch Regional Areas Genki Program (enhancing theregional competitiveness of the Kyushu region as the doorto Asia).

Case Study: KAMICHIKU & Kinkou Farm
KAMICHIKU Co., Ltd., and Kinkou Farm Co., headquartered in the city of Kagoshima, Kagoshima Prefecture, is a
corporate group engaged in the breeding and fattening ofblack-haired beef cows for the meat processing and foodservice industry. Not relying on existing ideas, the company
engages in new initiatives including free-range breedingbusiness and production of feed using farm produce andleftover food to provide high-quality beef at a low cost withsafety and peace of mind.
DBJ provided financing to the KAMICHIKU Group, which
is highly evaluated for its initiatives linked to the enhanced
international competitiveness of the Japanese livestockindustry, certifying the financing under the Minami-Kyushu
Branch Regional Areas Genki Program (food, health andenvironment industry).

98

Annual Report & CSR Report 2012

Yuzuriha rearing ranch

CSR Report

Overseas
Efforts at expansion overseas have become an important factor in Japan’s continued growth.
The rapid economic development of Asia in particular, with its notable growth in middle income
groups, represents a major business opportunity for Japan, because the region is running up against
environmental issues, urbanization-related difficulties and other developmental constraints andgrowth challenges that Japan has already faced and overcome.
In order for Asia’s growth to translate into definite gains for Japan, the country must underpin
Asia’s rise by sharing with each country the wealth of experience it has gleaned from its own processof economic development. Japan must also mobilize its unique profile of strengths in the fields of theenvironment and infrastructure to deploy business operations in the rest of Asia in a comprehensive
and strategic fashion.
CSR through Investment, Loan and Other Businesses

Case Study: Thai Airways International
Thai Airways International Public Company Limited (here-

Given this outlook, DBJ has formally entered the aircraft

inafter, “THAI”), headquartered in Bangkok, Thailand, isequipment finance business, arranging a syndicated loan

the flagship carrier of the Kingdom of Thailand. Boastingwith other international financial institutions for the Airbus

a highly developed route network, THAI is a pillar in the

A330-300 aircraft THAI expects to make integral use ofsightseeing industry, bringing over 1.5 million overseas visi-

going forward.

tors to the Kingdom of Thailand in 2010. At present, THAI
intends to introduce highly fuel-efficient airplanes, with thegoal of replacing its existing fleet. This plan enables provision of service to a greater number of passengers without
increasing burdens on the environment.
All around the world, travelers are increasing as the
economy improves, and with the attendant growth indemand for airplanes, the number of airplanes in use is
expected to double in the next 20 years.
THAI Airbus A330-300

Case Study: China Resources Power
DBJ, along with Electric Power Development Co., Ltd., andand support this project to build high-efficiency power

Mitsui & Co., Ltd., participated in the Hezhou Power Station

plants in China as a way of moving toward a low-carbon

project conducted by China Resources Power Holdingssociety, and by extension, prevent the emission of green-

Company Limited (hereinafter, “China Resources Power”),

house gases.

headquartered in Hong Kong, through investment company
JM Energy.
This project, installation of a new independent power
producer in China’s Hezhou, located in the Guangxi Zhuang*U ltra-supercritical power generation uses steam to increase power
generation efficiency with more heat and pressure than traditional
power generators.

Autonomous Region, is the first ultra-supercritical (USC)*
coal-fired electric power generation plant (two 1 million kW
bases) in the regions. Compared to traditional power generation plants, the USC facility provides higher thermal efficiency and suppression of CO2 emissions. Stable provision ofelectric power will contribute significantly to economic development in southern China, and this project will contribute toenergy conservation and environmental improvements.
DBJ, along with Electric Power Development and Mitsui,
will continue to provide optimal financial solutions for theRendering of power plantdevelopment of new power generation facilities overseas
Annual Report & CSR Report 201299

CSR Report

Great East Japan Earthquake Response Operations
Earthquake, tsunami, nuclear power plant crisis—the Great East Japan Earthquake unleashedunprecedented damage, a major compound disaster the likes of which the world has never seen, seriously impacting the economy of Japan. It is essential that the disaster recovery measures be implemented on a step-by-step basis according to each stage towards recovery and tailored to meet specificneeds of varying regions and different disaster categories.

Case Study: REMATEC
CSR through Investment, Loan and Other Businesses

REMATEC Corporation, headquartered in the city ofCorporation, a major cement producer. As this initiative

Kishiwada, Osaka, has unique and innovative technologies

enables disaster-related waste to be used as fuel or raw

in the field of industrial waste recycling, enabling the reusematerial to make cement in Ofunato, promoting this pro-of waste oil and sludge to make such items as reclaimed

cess should contribute to the speedy reduction of waste infuel and concrete.

the region and a quick recovery from the disaster.

DBJ arranged a syndicated loan for REMATEC, drawing participation by The Senshu Ikeda Bank, Ltd., Shoko
Chukin Bank Limited and The Bank of Iwate, Ltd. (a regional
financial institution of Iwate Prefecture) and providing ¥1.5
billion in financing for the construction of a plant to remove
salt from disaster-related waste.
The tsunami generated by the Great East Japan
Earthquake created a large amount of waste, leaving
behind refuse with a high degree of salinity. REMATEC
established a plant in the city of Ofunato, Iwate Prefecture,and undertook the task of desalinizing this waste undercontracts from Iwate Prefecture and Taiheiyo Cement

Plant to remove salt from disaster-related waste (Ofunato, Iwate
Prefecture)

Case Study: Onahama Smelting and Refining
Onahama Smelting and Refining Co., Ltd., headquartered

DBJ provided financing in the form of disaster recovery

in Chiyoda-ku, Tokyo, was Japan’s first copper smelt-

funds to Onahama Smelting and Refining in support of res-ing company, created through joint investment fromtoration and reconstruction efforts.

Mitsubishi Mining Company (currently Mitsubishi Materials
Corporation), Dowa Mining Company (currently Dowa
Group/Dowa Metals & Mining Co., Ltd.) and the Furukawa
Mining Company (currently Furukawa Company/Furukawa
Metals & Resources Co., Ltd.) in 1963 during Japan’s rapid
economic growth phase in response to increasing domestic
demand for copper. At present, the company develops business involving recycling and the detoxification of scrap automobile shredder dust and other industrial waste materials.
The company’s Onahama Smelting and Refining facility, located in the city of Iwaki, Fukushima Prefecture, wassignificantly damaged in the Great East Japan Earthquake;
however, intensive reconstruction work enabled the facility
to resume operations on June 30, 2011.

100

Annual Report & CSR Report 2012

Refining furnace and casting machine

CSR Report

Environmental Management

DBJ aims to realize a more prosperous sustainable society bymental conservation and to cooperate in resolving environ-achieving harmony through the triple bottom line of society,mental problems. In addition, in November 2002, we acquired

the environment and the economy. We recognize the resolu-

ISO 14001 certification, and in November 2011, we signed thetion of environmental problems as an issue that is common

Principles for Financial Action towards a Sustainable Society

to all humankind. For this reason, DBJ has contributed to the(Principles for Financial Action for the 21st Century). Suchformation of an environmentally friendly economic society.

efforts indicate our organizational commitment to environmen-

In June 2001, DBJ became the first Japanese bank total preservation and the realization of a sustainable society.

sign the UNEP Statement by Financial Institutions on the

In line with the Basic Environmental Policy formulated

Environment and Sustainable Development, promising to strivein October 2008, DBJ is promoting efforts in the regions

for harmony between economic development and environ-

where its branches and offices are located.

DBJ’s Basic Environmental Policy
Purpose
Article 1. DBJ aims to realize a more prosperous sustainable society
by achieving harmony through the triple bottom line of society,the environment and the economy. We recognize the resolutionof environmental problems as an issue that is common to all
humankind. For this reason, DBJ has established a policy thataims to contribute to the formation of an environmentally friendly
economic society.
Promotion of Environmental Measures through Loan and
Investment Activities
Article 2.
1. Through its investment and loan activities, DBJ supports global
warming prevention measures and the promotion of a recyclingoriented society. In addition, by supporting environmentally
sustainable corporate management by its clients, DBJ contributes
to their creation of environmental measures and to the realizationof a sustainable society.
2. DBJ contributes to clients’ environmental measures throughthe risk evaluations of investment and loan activities from anenvironmental perspective.
Promotion of Environmental Awareness through Environmental
Communication
Article 3.
1. Through continuing research and advisory activities relating toEnvironmental Management

Promulgated and Put into Effect October 1, 2008

environmental issues, DBJ seeks to help resolve environmental
issues through enhanced awareness, thereby contributing to therealization of a sustainable society.
2. DBJ seeks to promote environmental awareness throughinternational cooperation, including the distribution of information
about environmental initiatives by Japan.
3. DBJ endeavors to improve its initiatives by sharing information on
its environmental activities and through communication with society.
Promotion of Environmental Awareness Activities in Offices
Article 4. DBJ complies with environmental laws and regulations,and promotes activities to reduce the environmental impact of its
operations. To these ends, DBJ seeks to contribute to the creationof environmentally friendly office environments through theactivities indicated below.
(1)	Promotion of resource and energy conservation and recycling
activities(2) Promotion of environmentally friendly sourcing of supplies(3) Prevention of environmental pollution
Promotion of Environmental Awareness Activities in
Communities
Article 5. By cooperating with community environmental
improvement initiatives, such as measures to prevent heat islands,
DBJ works to contribute to the creation of environmentally friendly
regional societies.

Putting into Practice DBJ’s Basic Environmental Policy
Promotion of Environmental Measures throughOur Investment and Loan Services

help to enhance environmental awareness, support involve-

DBJ’s investment and loan activities support projects

tion of a sustainable society.

ment in environmental issues and contribute to the realizaCommunication Focused on the Environment (See page 76.)

designed to prevent global warming and create a recycling-n 

based society. Furthermore, we promote clients’ effortsn 

toward environmentally conscious management. By con-n Communication on Community Revitalization (See page 76.)
Communication in International Cooperation (See pages 76–77.)

tributing to clients’ environmental measures, we help to
DBJ Environmentally Rated Loan Program (See pages 50,

Promotion of Environmental Awareness
Activities in Offices

84–85.)

DBJ works to reduce the environmental impact of its opera-

DBJ Green Building Certification (See pages 51 and 83.)

tions beyond what is required by environmental regulations.

achieve a sustainable society.
n 

n 

As such, we promote the measures described below in an

Promotion of Environmental Awarenessthrough Environmental Communication
DBJ addresses environmental problems by conducting

effort to make our offices environment-friendly.
• Promotion of recycling and resource and energy
conservation

ongoing environmental studies and proposals. These efforts
Annual Report & CSR Report 2012

101

CSR ReportVolunteers planting seedlings and flower bulbs

Resource- and Energy-Saving Efforts
Year Ended
March 31,2010

Year Ended
March 31,2011

Year Ended
March 31,2012

Organizations and gov-

95,992

93,189100,494

in Tokyo’s Otemachi and61,61063,530Nihonbashi areas take part

Copy and printing paper usage（kg）
Waste emissions（kg）
Energy consumption（kWh）

76,0304.82 million

Water usage（m3）24,8564.50 million 3.53 million
25,411

24,105ernment bodies locatedin the volunteer plantingof seedlings and flower
bulbs in Tokiwabashi Park,

Note: Head office building only•P
 romotion of environment-friendly sourcing of
supplies

sponsored by the Chiyodaku Adopt a Park Promotion System (CAPPS). DBJ continues to

In line with the Act on Promotion of Procurement of Eco-take part in these activities.

Friendly Goods and Services by the State and Other Entities• Kansai Branch

Environmental Management(Green Purchasing Act), which went into effect in April 2001,

Kansai Eco Office Declaration

DBJ implemented initiaves to purchase products and services

Registered since 2008, the ”Eco Office Declaration” callswith lower environmental impacts. We have continued tofor (1) a summer ”eco style,” (2) enforcing energy saving,practice green purchasing following our privatization.

(3) promoting green purchasing, (4) curbing automobile useAchievements of the Green Procurement Program
for Typical Items

and (5) engaging in waste recycling.
• Shikoku BranchForest-thinning activities

Year Ended March 31, 2012

We continue to participate inPaper

100.0%

forest-thinning activities conducted

Stationery

95.3%

in collaboration with the town ofEquipment

94.6%

Inomachi, Kochi Prefecture, andOffice equipment

98.2%

Mitsui & Co., Ltd.

Lighting

95.9%

Interior items

100.0%

Note: Excludes printing paper, media cases, labels, and other items that were purchasedon the market that do not comply with the prescriptions of the Law Concerning
the Promotion of Procurement of Eco-Friendly Goods and Services by the Stateand Other Entities but that were purchased nevertheless on the basis of certain
characteristics or functional requirements.

• Prevention of environmental pollution
DBJ complies with environmental laws and regulations.

Promotion of Environmental Awareness
Activities in Communities
By cooperating in community environmental improvement
initiatives, such as measures to prevent heat islands, DBJ
works to contribute to the creation of environment-friendly
regional societies.
• Head Office
Uchimizu Project 2011

Earth-Friendly Office
In fiscal 2009, we registered withthe “Earth-Friendly Office” program
created by the city of Takamatsu’s
environmental department. We continued these activities in fiscal 2011,
and are making efforts to (1) curb
paper consumption, (2) promote the use of recycled products, (3) raise employee awareness of resources and waste
reduction, (4) save energy and water and (5) regulate office
air at an appropriate temperature.
• Kyushu Branch
Cleanup/beautification activity—Tenjin Clean Day
We participated in the Tenjin Clean Day activity sponsoredby the We Love Tenjin conference and helped to clean up
the area and plant flower bulbs.

DBJ participates in the
Uchimizu Project 2009, acampaign hosted by the
Otemachi, Marunouchi
and Yurakucho (OMY)
Uchimizu Project District Executive Committee (OtemachiMarunouchi-Yurakucho District Redevelopment ProjectCouncil/Cooperative for the Promotion of the OMY Area
Management Association), Ministry of the Environment,
Tokyo Metropolitan Government and Chiyoda-ku. DBJ is continuing with its participation in the Uchimizu Project 2011.
102

Annual Report & CSR Report 2012

• Other Branches
We implement initiatives such as collecting used postage
stamps and PET bottle caps for donation. We also have
employees bring their own chopsticks and cups to work to
reduce waste.

CSR Report

Environmental Management Conference
DBJ has set up the Public Relations & Corporate Social

Environmental Group Promotion Officer and Environmental

Responsibility Office within the Corporate Planning &Group Promoter designate a member in each branch andCoordination Department. This office spearheads environ-department to be in charge of environmental promotion

mental management activities attended by all executives

and manage the level of achievement of annual environ-and employees.

mental targets.

Environmental Management Officer

Employees

The Environmental Management Officer is assigned to the

Employees are responsible for putting environmental man-

Public Relations & Corporate Social Responsibility Office inagement activities into action.

DBJ’s Corporate Planning & Coordination Department. The

Environmental Management Structure

officer confirms environmental education and training andEnvironmental
Management Officer

authorizes annual environmental targets.
The Environmental Management Conference deliberates
annual environmental targets and environmental manage-Vice-Environmental
Management Officer

ment reviews.

Public Relations & Corporate Social
Responsibility Office, Corporate Planning &Coordination Department(Corporate Planning &Coordination Department
Manager)

In charge of DBJ’s environmental management activities

Implementation
division
Heads of each department
and office

Office, Corporate Planning & Coordination Department.
year and confirming the degree to which established targets have been achieved, this office manages compliancewith relevant laws and regulations.

Environmental Group Promotion Officer

Public Relations &Corporate Social
Responsibility
Office,Corporate
Planning &Coordination
Department(Secretariat)

is the Public Relations & Corporate Social Responsibility
In addition to setting environmental targets for each fiscal

Environmental
Management
Conference

Environmental Management(Director in charge of Public
Relations & Corporate Social
Responsibility Office,Corporate Planning &Coordination Department)

Environmental Management Conference

EnvironmentalGroupmembers

Environmental Group
Promotion Officer
Environmental
Group Promoter
Employees

To promote environmental management activities, the

DBJ’s Primary Achievements in the Environmental Sector since Its Establishment
1999 Oct.	Designation of sustainable development as an objective by theDevelopment Bank of Japan Act (Act No. 73 of 1999)
2001 Apr. Start of green procurement and environmental training
Jun.	First Japanese bank to sign the UNEP Statement by Financial
Institutions on the Environment and Sustainable Development
Oct.	Establishment of Social Environment Committee and Social
Environment Group; hosting of discussions between UNEP
and Wa no Kuni Financial Institutions on Environmental
Considerations for Financial Institutions
2002 Mar. UNEP FI 2002 Global Roundtable in Rio de Janeiro, Brazil
Jul. Launch of the Development Bank of Japan Environmental Policy
Nov. ISO 14001 certification
2003 Oct.	Publishing of Environmental Report 2003 for a Sustainable
Society (first annual edition)
Oct.	Joint sponsorship of UNEP FI 2003 Global Roundtable in Tokyo,
an international conference on finance and the environment
2004 Apr. Start of DBJ Environmentally Rated Loan Program
Sep. Second annual Sustainability ReportNov. Japan Carbon Finance, Ltd. (JCF) establishedDec. Japan Greenhouse Gas Reduction Fund (JGRF) established2005 Jan. Assumption of chair of the UNEP FI Asia Pacific Task Force
Sep. Third annual Sustainability Report
Oct. UNEP FI 2003 Global Roundtable
Nov. Renewal of ISO 14001 certification
2006 May	Press conference to announce DBJ status as a signatory institution to the Principles for Responsible Investment
Aug. CSR Report 2006 (fourth annual Sustainability Report)

2007 Jul.	Annual Report & CSR Report (integrated annual report andCSR report)
2008 Oct.	First Board of Directors and Management Committee meetings of Development Bank of Japan Inc.; formulation of
Basic Environmental Policy and Environmental Management
Regulations
2009 Mar. First Environmental Club Syndicated Loan ECONOWA
Apr.	Commendation for DBJ Environmentally Rated Loan Program:Environmental Development Award
Sep.	Start of cooperation with regional financial institutions
to prepare a system to implement Financing Employing
Environmental Ratings
2010 Jan.	Basic cooperative agreement with the International FinanceCorporation (World Bank Group financial institution conducting the world’s largest international investment and loan
activities for developing countries)
Apr.	Business cooperation agreement to promote environmental
measures with a non-life insurance company
Dec.	Selected as a designated financial institution under the Billon the Promotion of Businesses to Develop and Manufacture
Energy and Environmentally Friendly Products (“Low Carbon
Investment Promotion Act”)
2011 Apr. Established the DBJ Green Building Certification
Nov.	Signed the Principles for Financial Action towards a Sustainable
Society (Principles for Financial Action for the 21st Century)

Annual Report & CSR Report 2012

103

CSR Report

Business Continuity Plan (BCP)

DBJ is preparing a business continuity plan (BCP) to protect

spells out necessary disaster responses in an easy-to-

the interests of its stakeholders, including its clients, its

understand manner.

shareholder, and its executives and regular employees, as

When formulating policies to ensure the continuity

well as to fulfill its social mission. The BCP aims to ensure

and recovery of core operations, we took the approach of

the continuity and rapid recovery of core operations in theconsidering responses to cases in which important man-event of emergencies, such as natural disasters (in particu-

agement resources were damaged due to a large-scalelar, large-scale earthquakes), influenza pandemics, system

disaster, affecting head office (1) buildings and facilities, (2)failures and power outages.

executives and regular employees, and (3) systems, instead

In addition to addressing the continuity of core operations and maintaining a plan to recover from disaster,the BCP specifies the initial actions that executives andof considering responses to individual events such as earthquakes and fires.
An overview of DBJ’s BCP is provided below.

regular employees should take in emergencies. The plan
Business Continuity Plan (BCP)

1. Principles of Action for Executives and Regular Employees
The BCP defines three key goals regarding the fundamental

they must give first priority to the lives and safety of ourstance that executives and regular employees are to take inclients and our executives and regular employees, paying

the event of a large-scale disaster or other emergency. They

attention to television and radio broadcasts, evacuating

are to (1) ensure personal safety, (2) grasp the situation

calmly (without panic) and determining the safety of others.

accurately and (3) remain calm and collected. Specifically,

2. Core DBJ Operations
In the event of a large-scale disaster, DBJ has identified
the following six items as essential to the continuity of its

1) Confirmation and assurance of the safety of executives
and regular employees

core operations from the standpoint of (1) items that are2) Uninterrupted continuation of settlement-related businessfundamental and prerequisite to business continuity (such3) Reliable formation of the Disaster Response Committee

as facilities, personnel and systems), (2) DBJ’s social mission4) Restoration and maintenance of IT systems

and the public nature of its financing (such as investment

5) Confirmation of the status of clients in afflicted areas

and loan activity) and (3) responsibility to financial markets6) Rapid commencement of crisis response operations(continuity of market settlements).

DBJ has formulated a BCP that prioritizes continuity of
the core operations described above.

3. BCP Operational Structure
When responding to an emergency situation, such as in
the event of a large-scale disaster, in principle, the Disaster
Response Committee will be established at head officeBCP Operational Structure Outline

President

and chaired by the head of the Corporate Planning &Coordination Department, who reports to the president.
This committee gives directions to DBJ’s branches regarding
the continuation of core operations. If maintaining operations at head office proves problematic, the Kansai Branchshall serve as the alternative location.

104

Annual Report & CSR Report 2012

Disaster Response
Committee(Head Office)Backup office(Kansai Branch)

Directions

Head office departments, branches

Directions

CSR Report

4. Measures to Ensure Business Continuity
We have prepared a variety of measures to ensure business(3) Chain of Command and Delegation of Authority
To assure that decision-making concerning the continu-

continuity. The primary measures are introduced below.

ity of core operations is prompt and certain, in the eventthat the Disaster Response Committee is established, put(1) Enhanced System Robustness
Ensure advanced security levels at the main center, andin place a chain of command and an alternative hierarchy

create a backup center to operate in the event that theby which authority can be delegated.

main center ceases to operate.
(2) Multilayered Communication Procedures(4) C larification of Initial Response and Procedures forContinuing or Restoring Core Operations

mine the whereabouts and status of executives and

For individual business units, establish in advance theregular employees even at night and on holidays. In

procedures for the initial response and the continuation

addition, distribute satellite telephones to key locations

or restoration of core operations so that relevant divi-and personnel to ensure multilayered communication

sions can respond quickly and with certainty on core

procedures.

operations.

Business Continuity Plan (BCP)

Introduce a safety-confirmation system to quickly deter-

5. Initiatives to Maintain or Improve BCP Viability
DBJ conducts various types of instruction and training ofresults and recent information, and is considered by the

executives and regular employees to maintain or improve

Management Committee regularly and additionally as nec-

the viability of its BCP.

essary, employing a PDCA cycle.

Furthermore, the BCP is revised to reflect training

Annual Report & CSR Report 2012

105

CSR Report

Fostering Human Resources and Creating a Comfortable Work Environment

DBJ considers its human resources to be its most valuable

environment to bring out the best in every employee. The

assets and thus endeavors to develop its employees’ capa-

superior employee performance resulting from such efforts

bilities. DBJ actively works to build a systematic humanis what drives DBJ ahead on a daily basis and keeps it an

resource development system and a comfortable work

innovator, blazing the trails that Japan needs to follow.

Human Resource Development Vision
DBJ has evolved significantly and developed its indepen-

specialists in many fields. Responding to society’s constantly

dence and creativity in line with the needs of the times inchanging demands requires broad experience, deep knowl-order to maintain its leadership position.

edge and the ability to see the big picture, as well as gaining

Fostering Human Resources and Creating a Comfortable Work Environment

To develop its human resources, DBJ promotes autono-

specialist knowledge. DBJ has therefore created a humanmous and pioneering behavior in its employees as financial

resource development system that incorporates job rotation,

professionals through the vision of generalists who can be

performance evaluation, formal education and training.

Deploying the Target Management System
DBJ has introduced a Target Management System toPlan-Do-Check-Act (PDCA) cycle. Particularly through its

encourage employees to work autonomously and proac-encouragement of goal-setting, DBJ emphasizes enhancing

tively to develop their abilities and accurately evaluate suchmedium- and long-term value both internally and exter-

initiatives. DBJ is working to enrich this system by having

nally. DBJ also motivates employees by offering bonuses

subordinates meet individually with superiors to set goals

and other benefits based on operating performance.

and receive feedback, autonomously running through theCreating a Comfortable Work Environment
DBJ actively strives to cultivate a comfortable workto Support Raising Next-Generation Children as a company

environment.

that provides child-rearing support. Specific grounds for thisTo maintain an environment in which all employees

approval included (1) the promotion of spousal support for

can feel secure, DBJ has notified employees of its policy

childbearing through special leave and childcare leave, (2)to prevent sexual and power harassment and has set up ameasures to ensure time for child-rearing and (3) measures

hotline to deal with such issues. Furthermore, to support

to promote the taking of annual paid vacation.

mental and physical health, DBJ provides its employees andtheir families with regular medical examinations and care
options. These systems include treatment by external specialists and access to counselors.
DBJ has also instituted childbirth, childcare and nursing
care leave programs to give motivated employees better
opportunities for long-term employment, as well as a system for continued employment options after retiring fromfull-time work.
On October 18, 2010, the Tokyo Labour Bureau recognized DBJ as having achieved the objectives of its generalbusiness operator action plan (from April 1, 2005, to March
31, 2010), based on the Act on Advancement of Measures

106

Annual Report & CSR Report 2012

DBJ has received next-generation Kurumin certification for its efforts to counter the falling birthrate,
including recognition as a company that provides
active support for child-rearing.

CSR Report

A Solid Human Resource Development System
DBJ’s financial professionals are supported by a well devel-in multiple departments, employees are additionally trained

oped education and training system. Mandatory training byfor highly specialized positions according to their skills andlevel, combined with elective training according to skills andbackgrounds. This system of strategic job rotation not only

needs, enables each employee to plan his or her career andenables employees to gain broad-based practical experience

support DBJ’s initiatives in innovative finance.

that gives clarity to their medium- to long-term career goals

In fiscal 2008, we established the DBJ Financial Academy,
which is designed to help employees acquire and maintainbasic competencies and deepen their understanding of

but also provides an environment for quickly and firmly
acquiring and improving their highly specialized skills.
In step with globalization, DBJ cultivates employees able
to perform in international as well as domestic settings. To

financial operations. We are expanding the academy, focus-

achieve this, DBJ actively assigns employees to a wide vari-ing on courses such as Corporate Finance, M&A and theety of external organizations, including overseas graduate

Financial Instruments and Exchange Act.

schools (program currently being expanded), international

Regardless of age, employees undergo on-the-job train-

institutions, domestic and overseas research institutes, com-

ing that provides hands-on exposure to work involving vari-panies and related government agencies, thereby supportingous levels of responsibility. After experiencing employment

skill development and network extension.

Fostering Human Resources and Creating a Comfortable Work Environment

finance, assuming they will become involved in advanced

DBJ’ s Human Resource Development System
Training by Level

Business-Related Training

Business-Related(Self-Training)

Careerdevelopment
plan training

Managertraining•Compliancetraining•Training in
financial
act
•Etc.

•Accounting•Basics of
Tax
•Etc.

• Valuation• Financial Modeling• M&A• Real Estate Finance• Relationship Management• Business Revitalization• Environmental Rating Seminars• Disaster Preparedness Rating Seminars•Etc.

DBJ Financial Academy—Core courses (II)• Basic IFRS Accounting• International Finance• Financial Policy• Etc.
Secondarytraining after
joining DBJ

DBJ Financial Academy—Core courses (I)• Basic Corporate Finance• Financial Instruments and Exchange Act• Basic M&A• Etc.

Introductory
training
for new
employees

Autonomous
career track

Commonskill areas•Problemsolving andcommunication•Logicalthinking•Englishconversation•Businesscomportment•Etc.

Cultivation ofmanagement andleadership skills

Planned and continuous
HR development

Rating and asset
assessment
training

Documentation

Systems related
to investments
and loans

Basic
Legal

Mastery of DBJ
procedures andbasic processes

Mastery offinance andlaw

Domestic and overseas exchange
students, trainees, etc.

Management
training•Training in
middle- andback-office
operations
involving
investments
and loans•Trainingin debt
management•Etc.

External seminars, lectures, etc.

PositionLife plan
training

Distance learning, night courses, acquiring public qualifications, etc.

Topmanagement
training

External
Assignments, etc.

Financial analysis training• Bookkeeping and Accounting• Company Analysis• Case Studies

Basic finance training• Interest Rate Basics• Basic Derivatives
Acquisition offinancialaccounting
knowledge

Mastery of knowledge andskills needed for work

Strategic and focus areas,such as financial skills
Addressing strategic and focus areas

Mastery of basic
business
execution skills

Acquisitionof businessrelated
knowledge

Mastery of knowledge andskills needed for work

Cultivation ofwork-related
knowledge,
mastery of
specialized
knowledge, HR
development

Annual Report & CSR Report 2012107

CSR Report

Seeking Higher Ethical Standards
For half a century, DBJ has led Japan’s economy as a gen-

DBJ has long desired that its employee training addresseral policy-based financial institution. As DBJ transforms

issues of human rights in addition to ensuring legal compli-

into a private-sector financial institution that still values theance and maintaining information security through training

long-term perspective, neutrality, public-mindedness andto prevent fraudulent access and information leaks. DBJ

reliability it has cultivated, each employee is being held to awill henceforth devote even more resources toward suchhigher ethical standard.

efforts.

DBJ Financial Academy
Fostering Human Resources and Creating a Comfortable Work Environment

Since May 2008, the DBJ Financial Academy typically has
held twice-weekly courses with the objective of raising thelevel of financial expertise of primarily young second-year
employees throughout the organization by strengthening
their knowledge and understanding of advanced corpo-n2011 Courses (May 2011 through February 2012)
Core courses
Introduction to Modern FinanceInternational FinanceSpecial Lecture: “Financial Policy”
Basic Corporate Finance
Basic Investment
M&A
Elective courses
Business Statistics
Financial Instruments and Exchange Act
Real Estate Finance
IFRS Accounting: Foundations and Practice
Insolvency and Corporate Reorganization
Corporate Finance PracticeSpecial course
Go forward Nippon!

nnrate financial business essential to DBJ’s business model.

nDuring fiscal 2011, courses covered Introduction to ModernnFinance, Corporate Finance, the Financial Instrumentsnand Exchange Act and Insolvency and Corporate
Reorganization.
Through the DBJ Financial Academy, each employee canseek to elevate his or her abilities in finance, whether aiming to acquire basic knowledge or striving to deepen understanding. Students from outside DBJ, such as employees ofregional financial institutions, may also participate. We lookforward to expanding the fields in which DBJ’s financial
expertise is shared.

DBJ Financial Academy Curriculum

n

n

n

n

n

n

n

n

2012 Courses (expected to run from May 2012 throughMarch 2013)
Core courses (I)Introduction to Modern Finance
Financial Instruments and Exchange Act
Business Statistics
Basic Corporate Finance
M&A
Corporate Finance PracticeCore courses (II)IFRS Accounting: Foundations and Practice
Insolvency and Corporate Reorganization
Financial System Theory
International Finance
Financial Expertise Follow-up Training
Financial Policy
Elective courses
Real Estate FinanceBehavioral FinanceSpecial Program
Special Program for Regional Financial Institutions

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

108

Annual Report & CSR Report 2012

セクションIntellectual Asset Report

DBJ’s executives and regular employees
continually take on new challenges, whileremaining firmly committed to DBJ’s four corevalues: a long-term perspective, neutrality,
public-mindedness and reliability. The
intellectual assets DBJ has built up over theyears help form the financial platform andenable DBJ to provide services that extend
beyond merely providing funds. Employing
these assets, we endeavor to address theneeds of the times and fulfill our role inenhancing socially responsible activities
among companies.

Intellectual Asset Management  . . . . . . . . . . . . . . . 110
Financial Platform That Enables DBJ to Meet the
Needs of the Times  . . . . . . . . . . . . . . . . . . . . . . . . 114

CSR・ディスクロージャー誌
Annual Report & CSR Report 2012
2012

109

CSR Report Asset ReportIntellectualIntellectual Asset Management

Corporate Value and Intellectual Asset Management
Intellectual Assets
Companies ensure ongoing prosperity and profit byIntellectual Asset Management Essential toEnhancing Corporate Value­consistently differentiating themselves from competitors.

Although intellectual assets are intangible in the sense that

Differentiating the products and services they offer is athey are not recorded on a company’s financial statements,

large part of the process. To enhance their operations, com-they are a core component of corporate value. Managing

panies must identify their important management resources

intellectual assets effectively promotes clarity in terms of theand sources of competitiveness. Specific technologies,­corporation’s key competencies and creates opportunities toexpertise, human resources and business models are someincrease ­corporate value.

Intellectual Asset Management

factors that lead to differentiation but are invisible to the

Listed companies are finding that aggressively disclos-casual observer. Determining an entity’s true corporate

ing intellectual asset information helps markets value themvalue requires the evaluation of these company-specificmore appropriately. For this reason, the introduction ofstrengths. DBJ’s ­activities ­related to intellectual assets are

regulatory frameworks to encourage or require listed com-designed to foster the application of these intangible sourc-

panies to disclose non-financial information has grown into

es of corporate value that u­ nderpin a company’s future

a global trend, beginning in Europe.

economic performance.

DBJ’s View on Intellectual Assets
Dating back to the time of our predecessor, m­ aintaining thewhen combined represent an extra­ordinary DBJ asset: ourtrust of our clients and society at large has been our mostexpertise in resolving issues through the application ofimportant objective. From this standpoint, we have created

new financial methods, the widespread use of our financial

a wide variety of networks spanning both the public andplatform and our economic and social contributions. This

private sectors.

asset has led to our development of the financial methods

Based on our core values, our executives and regulardescribed below. It enables us to respond quickly to chang-

employees have continued working to enhance their abil-ing policy requirements and plays a major role in our ­ability

ity to evaluate companies and projects. We have accumu-

to continue adding economic and social value.

lated a wealth of expertise in the screening and evaluation

Since privatization, we have aimed to maintain our eco-of long-term projects and a keen ability to identify andnomic and social contributions. We believe that our ability

address issues that are unique in terms of the times or

to clearly identify and make use of intellectual assets will be

the local communities that face them. In the process, wean increasingly important factor in achieving this goal.

have become a repository of intellectual assets, whichRelationships among Intellectual Assets, Business Models and Corporate Value

Corporate ValueBusiness Model

Financial
AssetsTangible
Fixed Assets(Created by DBJ from Ministry of Economy,
Trade and Industry materials)

110

Annual Report & CSR Report 2012

Relational
Structural
AssetsHuman
Resources

Intellectual Assets

Organizational
Structural
AssetsCSR Report Asset ReportIntellectual

DBJ’s Utilization of Intellectual Assets
One school of thought defines intellectual assets as thevarious fields—as they consider such issues. All DBJ execu-

understanding of and reporting on an entity’s networks

tives and regular employees work to maintain a long-termand client bases (related structural assets), management

and neutral perspective, approaching new business withteam and ­employees (human resources) and intellectuala spirit of innovation and challenge.

assets and business processes (organizational structural

To impart various financial skills, DBJ maintains training

assets). Below, we introduce DBJ’s intellectual assets andmenus that include a 2.5-month corporate finance train-

activities according to this segmentation.

ing program. This program, for all new employees, helps
develop screening expertise. Our menus, combined withon-the-job training, raise the level of specialist expertise

As our mission prior to privatization was to support projects

among DBJ executives and regular employees. We maintainthat had policy significance, our system of planning anda number of personnel exchange and dispatch programs

making investments and extending loans involved coopera-with domestic and overseas universities and research insti-

tion with central government agencies and regional govern-

tutions, as well as with other international institutions, thatment bodies. Now we take advantage of these networks

help form our networks. These programs help DBJ develop

to our interest rate subsidy programs for the promotion

and introduce new financial ­methods, as well as strengthenof environmental management, as well as other inter-

network ties.

est subsidy systems put in place by national and regional

Intellectual Asset Management

DBJ’s Utilization of Intellectual Assets

DBJ has also established the Research Institute of Capital

government bodies. Also, we continue to assist with crisis

Formation, which carries out financial research, as well as

response operations. DBJ also works to create and develop

research on global warming countermeasures and otherfinancial platforms. To construct these platforms, we col-efforts to create a sustainable society. The research that thelaborate with public- and private-sector financial institu-

center produces from a neutral and long-term perspective istions in Japan and overseas and maximize our networks ofhighly regarded by the community and other experts.

professionals including university professors, attorneys, andcertified public accountants. This multifaceted combination

Organizational Structural Assetsof networks consisting of professionals in a host of fields in

Unlike manufacturing companies, DBJ has no explicit intel-

industry, academia and the government constitutes DBJ’s

lectual assets, such as patent rights. However, our intro-

relational structural capital.

duction of new financial methods to Japan, our work withother financial institutions to create financial platforms andHuman Resources

our many other contributions to the Japanese economy

Appropriately judging medium- to long-term investments

and society rely on our organizational adeptness, that is,and loans requires all of DBJ’s executives and regular

our ability to quickly ascertain emerging issues and deploy­employees to maintain a long-term perspective and makeappropriate personnel. This ability, combined with the long-

financial ­decisions from a neutral standpoint. In an era

term financial data we have accumulated over 50 years ofcharacterized by increasingly complex economic and social

investment and loan operations and a corporate culture

issues and more sophisticated business skills, this long-termof always considering projects in an economically rational

perspective has a major impact on DBJ’s ability to contrib-

manner, as well as in terms of their broader economic andute to business formation and the financial structure. Oursocial significance, constitute DBJ’s organizational struc-ability to provide solutions that are appropriate for compa-

tural assets, as does the smooth and rapid communicationnies, as well as for the economy and society in a broader

process resulting from the common knowledge that has

sense, depends on the ability of our human resources—

evolved through corporate financing training and otherexecutives and regular employees who are professionals inchannels.

Annual Report & CSR Report 2012111

CSR Report Asset ReportIntellectual

Advanced Initiatives Involving New Financial Methods That Utilize Intellectual Assets
We are a leader in leveraging our intellectual assets toduring the period when the viability of their plans is being

introduce new financial methods to Japan. Our pioneering

reviewed. To meet this need, DBJ provides debtor-in-

efforts come from maximization of our intellectual assets,

possession (DIP) financing as temporary working capital tocooperation with local communities and extensive cultiva-

enable such companies to continue operating and maintaintion of in-house human resources and expertise. Operating

value in the best portions of their businesses. In addition,

within complex financial markets, DBJ will maintain these

DBJ creates business revitalization funds to help companies

activities while continuing to control and distribute risk asnormalize their operations, through a process of operation-effectively as possible.

al selection and focus, and reduce their debt levels.

Intellectual Asset Management

The United Kingdom introduced the private finance ini-

In recent years, we have become actively involved in

tiative (PFI) scheme in 1992 to encourage private companies

mezzanine financing. (”Mezzanine” literally refers to theto fund or manage projects that are typically operated bypartial story between two main stories of a building.) In thethe public sector. As a leader in absorbing and accumu-

repayment hierarchy, mezzanine financing is lower than thelating such expertise, DBJ has participated in numerous

senior financing* typically provided by financial institutions,

PFI projects in Japan. By shifting to the private sector theso it is a higher investment risk. In the United States andresponsibility for constructing, maintaining and operatingother markets with a broad range of investors, mezzanine

public facilities, the country b­ enefits from private-sector

financing plays an important role in diversifying the types

management expertise and technical capabilities. By appro-of funding that are provided. Mezzanine financing can be

priately allocating risks among the private and public sec-

used in a number of situations, such as business or capitaltors, PFI is an efficient and effective way to provide public

restructuring. Taking a long-term perspective, DBJ provides

services. With PFI, project financing is the method ­generally

mezzanine financing as one of its tailor-made financing

used to raise funds, as project roles are allocated appropri-

solutions.

ately and long-term business is assured.
DBJ provides a full range of financing options in the areaof business revitalization. After filing applications according to Civil Rehabilitation Act or Corporate Reorganization
Act procedures, companies typically require working capital

112

Annual Report & CSR Report 2012

*Senior financing involves relatively low risk. In Japan, most corporate bond issues and funds provided by financial institutions aresenior financing.

CSR Report Asset ReportIntellectual

Relationship between Intellectual Assets and CSR at DBJ
The nearby figure contrasts intellectual assets as viewed

laws and regulations, ensure safe and secure workplace andby DBJ and DBJ’s role as seen by society. Evaluated in thissurrounding environments and provide quality products andsense, intellectual assets and CSR are two sides of the same

services through fair competition. These activities reinforce

coin.

a company’s client base and raise corporate value by fulfill-

For example, the DBJ Environmentally Rated Loan
Program, the DBJ Enterprise Disaster Resilience Rated

ing social responsibilities.
By employing our intellectual assets in these ways, weLoan Program and DBJ Green Building Certification—fully

go beyond merely providing financing: we also play a rolemobilized through intellectual asset networks with central

in promoting increasingly sophisticated corporate CSR man-government bodies, regional government bodies, experts

agement.

and clients—as well as our human resources comprising

As can be seen on pages 42 to 58, “Integrated
Investment and Loan Services,” and on pages 78 to 100,experience and expertise all serve a vital CSR role. At the“CSR through Investment, Loan and Other Businesses,” DBJ

same time, these same loan programs strongly support theis taking advantage of its various accumulated intellectual

CSR activities of our business partners: these companies

assets.

Intellectual Asset Management

executives and regular employees and our accumulation ofhave cause to reconsider their conformance with various

Relationship between Intellectual Assets and CSRIntellectual Asset
Elements
Relational
Structural Assets
Networks andClient Base

Human
Resources
Management Teamand Employees

Organizational
Structural Assets
Intellectual Assets andBusiness Processes

CSR Elements
Client Satisfaction
Maintaining
Service Quality
Fair Competition

Human Resource Education
Labor Standards
Human Rights
Working Environment

Legal and Regulatory
Conformance
Corporate Ethics(Created by DBJ from Ministry of Economy, Trade and Industry materials)

Annual Report & CSR Report 2012113

CSR Report Asset ReportIntellectual

Financial Platform That Enables DBJ to Meet the Needs of the Times

Defining “Financial Platform”
In DBJ’s definition, ”financial platform” refers to thethe framework of systems and laws that support corporate

amount and quality of funds to which corporate and othereconomic activity involves the application of experienced

clients have access, the systematic formulation of bases thatand real-world expertise of financial institutions and busi-

affect the diversity of fund-raising methods, financial exper-

nesses, as well as an accumulated body of results that cantise and p­ ractices, market transparency and the degree ofbe used for future reference (transaction cases, precedents

market ­participation.

and the like). Furthermore, as financial platforms function

Financial Platform That Enables DBJ to Meet the Needs of the Times

The more complete the financial platforms, which are

inadequately if they are used by only a minority of partici-

indispensable to financial system soundness and macro

pants, a catalyst is needed to encourage participation from

economic vigor, the greater is their effectiveness at promot-

a broad range of players. Owing to our neutral position anding the revitalization of businesses and urban and local

advanced-player status, we are perfectly suited to serve as

communities and the creation of new industries. However,the catalyst for developing and maintaining financial plat-

financial platforms, which are an institutional, general-

forms in cooperation with other financial institutions.

access capital good, are not formed overnight. Creating

Activities Involving Financial Platforms

114

DBJ fulfills a broad range of information functions. In addi-

first executive director. This institute creates the foundation

tion to corporate monitoring, DBJ exchanges information

for creating intellectual assets through collaboration with

with government agencies, local government bodies andoutside experts, centered on university instructors. Taking

private financial institutions and coordinates their interests.

an academic and liberal perspective, the institute promotes

In the investment and loan department, DBJ promotes andresearch activities targeting a sustainable socioeconomic

helps develop financial platforms for structured financing,

structure. (For details, please refer to the Research Institutebusiness restructuring support, financing related to envi-of Capital Formation website, at http://www.dbj.jp/ricf/en/.)ronmental and disaster policies, M&A advisory services,

On pages 42 to 58, “Integrated Investment and Loan

safety nets and other functions. In the research depart-

Services,” and pages 78 to 100, “CSR through Investment,

ment, DBJ established the Research Institute of Capital

Loan and Other Businesses,” DBJ introduces its activities

Formation in July 1964, with Dr. Osamu Shimomura as its

involving financial platforms.

Annual Report & CSR Report 2012

セIntellectual
クシReportョン
CSR
Asset ReportManagement Structure

DBJ’s most important public social
responsibility is to instill public confidence
as a financial institution and achieve thehighest levels of management transparency.
We employ an operations management cyclethat reflects the voice of society, particularly
in terms of addressing the issues society
faces from a long-term perspective, at theappropriate time and in the appropriatemanner. We undertake projects that aremeaningful from both economic and social
perspectives and work to offer superior
investment and loan solutions.

Corporate Governance  . . . . . . . . . . . . . . . . . . . . . . 116
Compliance  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
Risk Management  . . . . . . . . . . . . . . . . . . . . . . . . . . 122
Client Protection Management System/Declaration
on Personal Information Protection/Policy forManaging Conflicts of Interest  . . . . . . . . . . . . . . . 126
Disclosure  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128

Annual Report & CSR Report 2012115

CSR Report AssetIntellectual
Management
Structure
ReportCorporate Governance

Basic Position on Corporate Governance
DBJ has formulated a corporate philosophy to encapsulate

financial technology and R&D, based on skills gathered overmanagement’s position regarding DBJ’s integrated invest-

many years of experience.

ment and loan services. We consider this philosophy the

Networks

core of our corporate activities.

Networks created with clients, local governments and otherfinancial institutions.

Corporate Philosophy

Applying financial expertise
to design the future

Corporate Governance

We apply creative financing to resolve
client issues, as we work to earn
the trust of our clients andachieve their future prosperity.

We conduct our business in accordance with the action
guidelines described below as we strive to realize our corporate philosophy.
Customers FirstDBJ will operate from our clients’ viewpoints, addressing
their challenges and sharing pleasure in their success.
Professional
With discernment and creative skill, DBJ will be a uniqueCore Competencies

financial platform providing integrated investment and

The core competencies described below support DBJ’sloans both in Japan and abroad.

efforts to realize its corporate philosophy.

Global & Local

Intention

DBJ will maintain a long-term viewpoint, considering the

The fundamental stance at the core of our corporate values:

needs of the times, the world and the region.

long-term perspective, neutrality, public-mindedness andSpeed & Teamwork

reliability.

Relying on skilled teamwork, DBJ will act rapidly and inIntellectual Assets

good faith, building strong foundations for clients’ trust.

Expertise in fields including industry research, credit analysis,

Corporate Governance Measures and Their Implementation Status
Internal Organizations

Kazuo Ueda, Professor, Faculty of Economics, theDBJ elects outside directors from the standpoint of

University of Tokyo.

ensuring management transparency and enhancing
corporate governance.
The Advisory Board has been established as a

Corporate Auditors, Auditing Committee
The Auditing Committee comprises five auditors. ThisManagement Committee advisory body. This board

committee convened 16 times during the fiscal year ended

provides advice on overall management issues, including

March 31, 2012.

DBJ’s management strategies, from a neutral standpoint.

As prescribed by the Companies Act, a majority of the five

The Compensation Committee, which includes outside

Auditing Committee members are outside corporate auditors.

directors, has been created to deliberate on director

DBJ has three full-time corporate auditors, one of whom is ancompensation and advise the Board of Directors in thisoutside corporate auditor. The Office of Corporate Auditors

regard. At the same time, DBJ has established a Personnel

has been created to assist corporate auditors (including

Evaluation Committee comprising outside experts tooutside auditors) in performing their duties. Specialized staff

evaluate personnel proposals on the selection andmembers are assigned to the Office of Corporate Auditors,

resignation of directors and corporate auditors.

which is directed by the Auditing Committee.
The three outside corporate auditors are as follows:

Board of Directors

Kazuyoshi Arakawa, former Managing Director, Sumishin

The Board of Directors comprises 10 members. To ensure

Panasonic Financial Services Co., Ltd. (Full-Timemanagement transparency, two Board members are outside

Corporate Auditor [Outside]);directors. During the fiscal year ended March 31, 2012, theMakoto Ito, Attorney and Visiting Legal Research

Board of Directors met 13 times.

116

Professor, Graduate School of Waseda University;

The following two members are outside directors:

Shinji Hatta, Professor of Graduate School of Professional

	Akio Mimura, Chairman, Nippon Steel Corporation andAccountancy, Aoyama Gakuin University.

Annual Report & CSR Report 2012

General Risk Management Committee

Independence in the Selection of Outside Directors

This committee deliberates and makes decisions on

and Outside Corporate Auditors

important items related to legal compliance, client

Not applicable.

protection management, operational risk management andCSR Report AssetIntellectual
Management
Structure
ReportContent of Standards and Policies Related tosystem risk management.
Operations Audit Committee

Committee on Investment and Loan Decisions

The Board of Directors has established the Operations

This committee handles, deliberates and makes decisions

Audit Committee, delegating to this body the authority torelated to investments and loans, as well as the investment

deliberate important matters related to internal audits. Thisand loan management.

committee met once during the fiscal year ended MarchNew Operation Screening Committee

31, 2012.

This committee deliberates and makes decisions on thecommencement of initiatives involving new businesses.
Advisory Panel on Investments and Loans

The Compensation Committee, whose members include

This panel handles the advance deliberation on andoutside directors, has been established as an advisory bodyto the Board of Directors from the standpoint of ensuringtransparency and objectivity. The committee considers themonitoring of investments and loans.
Committee on International Operations
This committee deliberates items related to the overseas

type of executive compensation structure that befits DBJ.

business strategies, operations and management conditions.

Personnel Evaluation Committee

Advisory Board

DBJ has established the Personnel Evaluation Committee,

The Advisory Board has been created as a body to advise

composed of outside directors and other outside experts, as
an advisory body to the Board of Directors. The committee’srole is to evaluate personnel proposals on the selection andresignation of directors and corporate auditors.

Corporate GovernanceCompensation Committee

the Management Committee, providing advice on DBJ’s
overall management.
The Advisory Board is composed of the following outside
experts and outside directors.
Outside Experts

Management Committee
The Board of Directors has vested in the Management
Committee decision-making authority regarding theexecution of business.
Accordingly, the Management Committee makes
important management decisions. The committee met 40
times during the fiscal year ended March 31, 2012.
Committees under the Management Committee
Various committees have been established under theManagement Committee assigned specific decision-making
tasks, excluding decisions made by the Board of Directors or
the Management Committee within each field of specialization.
ALM & Risk Management Committee

Masayuki Oku, Chairman of the Board, Sumitomo Mitsui
Financial Group, Inc.
Kiyofumi Kamijo, Director and Executive Corporate
Advisor, Tokyu Corporation
Sakie Fukushima-Tachibana, President of G&S
Global Advisors Inc., Senior Advisor of Korn/Ferry
International’s Asia PacificFujio Cho, Chairman of Toyota Motor Corporation
Katsunori Nakanishi, President & Chief Executive Officer,
The Shizuoka Bank, Ltd.
Outside Directors
Akio Mimura, Chairman, Nippon Steel Corporation
Kazuo Ueda, Professor, Faculty of Economics, theUniversity of Tokyo

This committee deliberates and makes decisions pertaining
to portfolio risk management and asset/liability management.

Annual Report & CSR Report 2012

117

CSR Report AssetIntellectual
Management
Structure
ReportMatters Requiring Approval of Competent Minister• Disposition of surplus funds

The New DBJ Act prescribes matters for which DBJ requires• Merger, corporate split and dissolution

the permission of the Minister of Finance. Major items• Basic policy on business plans, redemption plans and fundprocurement

requiring such permission are as follows:• Appointment and dismissal of representative directors and

The organization outlined below has been put in place

auditors

to execute and supervise the abovementioned activities.

• Concurrent positions as directors• Amendments to Articles of Incorporation
Operating and Supervisory Structure

General Meeting of
Shareholders

Corporate GovernanceMatters requiring authorization ofcompetent minister• Appointment and dismissal of
representative directors and auditors• Concurrent positions as directors• Amendments to Articles of Incorporation• Disposition of surplus funds• Merger, corporate split and dissolution• Basic policy on business plans,
redemption plans and fund procurement

ReportingOperations Audit
Committee

Accounting
auditorCooperation

Compensation
Committee
Personnel Evaluation
Committee

Management
Committee

Decision-making
bodies

ALM & Risk
Management
Committee

Board of Directors

Corporate Auditors,
Auditing Committee

Internal Audit
Department
Reporting
AuditsAdvisory Board
Deliberative
bodiesGeneral Risk
Management
Committee

Committee on
Investment and
Loan Decisions

New Operation
Screening
Committee

Advisory Panel on
Investments andLoansCommittee on
International
Operations

AuditsDepartments
Subsidiaries

Executive Officer System

Status of Internal Control System

DBJ has an executive officer system to clarify responsibility

To ensure operational soundness and in accordance withfor the execution of duties and accelerate decision-making.

the Companies Act, the Board of Directors has established

The Board of Directors has designated eight managing

an internal control system under the Internal Control

executive officers, excluding officers who are concurrently

System Basic Policy.

directors, and eight executive officers.

Specifically, this system is designed to determine thestatus of legal compliance, risk management and internal
audits, as well as other items of management importance.
The internal control system is designed to confirm theformulation of various regulations and the status of theirimplementation in various departments.

118

Annual Report & CSR Report 2012

CSR Report AssetIntellectual
Management
Structure
ReportInternal Control System Basic Policy
Purpose
Article 1. This basic policy has been established in accordance with Item
6, Paragraphs 4 and 5, Article 362, of the Companies Act (hereinafter, the”Act”), and Item 1 and 3, Article 100, of the Act’s Enforcement Regulations(hereinafter, ”Enforcement Regulations”) to create a system (internal control
system) to ensure Development Bank of Japan Inc. (hereinafter, ”DBJ”)
conducts operations in an appropriate manner.

System for the Storage and Management of Information Related to the
Execution of Duties by Directors
Article 3. Information pertaining to the execution of duties by directors shall be
stored and managed appropriately, and this information shall be accessible, as
necessary.
Regulations and Other Systems Related to Managing the Risk of Loss
Article 4. To ensure the soundness of management and manage risk properly,
a risk management process that defines, evaluates, monitors and controls risks
with various characteristics encountered in the course of business shall be put
in place.
2. A comprehensive risk management process shall be created. Also, acommittee for risk management shall be created, and an executive and adepartment shall be assigned to take charge of risk management.
3. Risks shall be segmented into the following categories, and risk management
policies shall be established for each:1) credit risk, 2) investment risk, 3) country risk, 4) market credit risk, 5)market risk, 6) market liquidity risk, 7) financial liquidity risk, 8) settlement
risk, 9) operational risk.
4. To the extent possible, the abovementioned risks shall be measured using aconsistent system, risk guidelines shall be established and the risks shall be
managed.
5. The necessary systems shall be put in place to minimize the effects ofeconomic loss and credit collapse in the event of disaster, to ensure business
continuity in crisis situations and to ensure a prompt return to normal
functioning.
6. The Board of Directors shall establish an Internal Audit Basic Policy todetermine the status of internal control, including risk management. The
board shall receive prompt and appropriate reports of the results of internal
audits from internal audit departments.
Systems to Ensure the Efficient Execution of Duties by Directors
Article 5. The Board of Directors shall formulate management plans andperform appropriate management control.
2. The Board of Directors shall establish a Management Committee and delegate decision-making on specific items to this council. In addition to making

System to Ensure the Adequacy of Operations of the Corporate Group,
Comprising DBJ and Its Subsidiaries and Affiliated Companies
Article 6. The Board of Directors shall ensure the adequacy of operations of the
DBJ Group in accordance with the corporate philosophy.
2. The Board of Directors shall manage operations appropriately, in accordancewith the scope and characteristics of operations of its subsidiaries andaffiliated companies. Furthermore, the Board shall introduce appropriate
measures from the perspective of legal compliance, client protection and risk
management.
3. The Board of Directors shall create reporting, guidance, management process
and other systems related to operations management between DBJ and its
subsidiaries and affiliated companies.
4. In accordance with the necessary scope of legal regulations, the Internal
Audit Department shall conduct internal audits of subsidiaries and affiliatedcompanies and report the results of these audits promptly and appropriately
to the Board of Directors.

Corporate Governance

System to Ensure Compliance with Laws and the Articles ofIncorporation in the Execution of Duties by Directors and Employees
Article 2. The directors and the Board of Directors recognize legal complianceas one of DBJ’s most important management issues. Accordingly, DBJ has
formulated a basic policy to ensure that the execution of duties by executives
complies with laws and the Articles of Incorporation and establishes thecorporate philosophy and a basic policy on legal compliance.
2. A Compliance Manual, compliance program and internal regulations shallbe created in preparation to ensure compliance by executives with laws andregulations.
3. A committee shall be formed to promote and manage legal compliance,
and an executive and a control division shall be placed in charge of legal
compliance.
4. A compliance hotline system shall be established to enable a response to actsthat contravene laws and regulations and acts of potential concern from theperspective of legal compliance.
5. Preparations shall be made to ensure that DBJ has absolutely no connection
with antisocial forces that threaten social order or safety.
6. The Board of Directors shall formulate an Internal Audit Basic Policy
pertaining to the status of internal control, including legal compliance. This
policy shall establish internal audit departments that are independent of
departments responsible for the execution of business and that report audit
results promptly and appropriately.

decisions on the items with which it has been entrusted, to contribute to
expeditious decision-making the Management Committee shall deliberate inadvance matters for resolution by the Board of Directors. Furthermore, theManagement Committee shall establish various committees as advisory institutions or as bodies to which to delegate decision-making on specific items.
3. To ensure the efficient execution of business based on decisions madeby the Board of Directors, regulations shall be established regarding theorganizational structure and the execution of tasks shall be allocatedappropriately.
4. To enable swift decision-making, an executive officer system shall beestablished. Executive Officer Regulations shall be formulated to define
executive officers’ roles and responsibilities.

System Related to Employees Assisting the Auditors in Their Duties
Article 7. As a specialized organization to assist auditors with their duties, if sorequested by the auditors, an Office of Corporate Auditors shall be establishedunder the direction of the Auditing Committee.
Matters Concerning Employees Supporting the Auditors in Their Duties
and the Independence of Such Personnel from Directors
Article 8. Personnel issues related to the employees supporting the duties ofauditors and matters related to the independence of such personnel shall beleft in the control of the Auditing Committee.
System for Reporting by Directors and Employees to Auditors andOther Systems for Reporting to Auditors
Article 9. Directors and employees shall report to auditors on the status ofexecution of DBJ’s business and other necessary information.
2. If directors or employees become aware of any major potential damage to
DBJ’s credibility or operating performance, they shall immediately report suchinformation to the auditors.
3. If auditors find that they require certain information to perform their duties,
they may request reports from directors and employees as needed, and theparty to whom the request is addressed shall report appropriately.
Other Systems to Ensure Effective Audits by the Auditors
Article 10. In addition to attending meetings of the Board of Directors, auditors
may attend meetings of the Management Committee and other important
meetings and offer their opinions as necessary.
2. The Representative Director shall exchange opinions with the auditors
regularly, or at the auditors’ request. The Representative Director shall also
cooperate in the preparation of a reporting environment.
3. The Internal Audit Department works with the auditor to establish internal
audit plans. The department reports the results of internal audits andexchanges opinions and liaises with the auditors when requested to do so.
4. Directors and employees shall cooperate with the auditors in their audit
activities and shall respect the Audit Committee Regulations, auditors’ audit
standards and other regulations.
5. To ensure the adequacy and reliability of accounting audits, directors andemployees shall cooperate in creating a system to ensure the independenceof the accounting auditors.

Annual Report & CSR Report 2012

119

CSR Report AssetIntellectual
Management
Structure
ReportStatus of Internal Audits and Audits by Auditors

inspections to ensure the appropriateness and effectivenessOverview of Personal, Equity, Transactionalor Other Special-Interest Relationships with
Outside Directors and Outside Corporate
Auditorsof internal controls, including DBJ’s overall operational

Akio Mimura, Chairman of Nippon Steel Corporation,compliance and risk management, and performs

is an outside director of DBJ. DBJ has no special-interest

evaluations and recommends improvements.

relationship with Mr. Mimura, and its business with Nippon

DBJ has established the Audit Department under the directsupervision of the DBJ president and independent fromother operating departments. The department conducts

The Operations Audit Committee deliberates and decides
audit plans, audit reports and other important mattersrelated to internal audits, and this information is reported to
the Board of Directors.
Corporate Governance

As of June 28, 2012, 21 people belonged to the Audit
Department.

Steel Corporation is conducted normally.
DBJ has no special-interest relationship with any other of
its outside directors or outside corporate auditors.
DBJ has signed liability limitation agreements with its
outside directors and outside corporate auditors, based on
Paragraph 1, Article 427, of the Companies Act.

The Auditing Committee and the auditors audit theimportant meetings. When necessary, they query the

Overview of Agreements with Outside
Directors and Outside Corporate Auditors underParagraph 1, Article 427, of the Companies Act(Liability Limitation Agreements)

execution of business by directors, peruse documents andDBJ’s Articles of Incorporation allow it to establish liability

conduct branch audits.

limitation agreements with its outside directors and outside

execution of duties by directors, based on their audit policy
and audit plans.
The auditors attend Board of Directors and othercorporate auditors, limiting their responsibility for damages

Status of Accounting Audits

under Paragraph 1, Article 425, of the Companies Act,

DBJ has in place an agreement with Deloitte Touche

provided their duties are executed with good intent andTohmatsu LLC to conduct accounting audits as its

without gross negligence, to the total amounts specified inaccounting auditor. During the fiscal year ended Marcheach item in Paragraph 1, Article 425, of the Companies

31, 2012, these operations were conducted by designatedAct.

certified public accountants (designated limited liability
partners) Yukio Ono (continuous audit period* of four

Number of Directors

years), Hayato Yoshida (same, four years) and Atsuyuki

DBJ’s Articles of Incorporation limit the number of directors

Shimada (same, one year).

to 13 or fewer.

* In accordance with the Companies Act, as designated limited
liability partners, the number of years of continuous audit must
be stated. As designated limited liability partners, the number ofcontinuing years of performing audits conducted in accordancewith the Financial Instruments and Exchange Act was four years for
Yukio Ono, four years for Hayato Yoshida and one year for Atsuyuki
Shimada. The number of business periods during which an audit
was performed is the standard used to indicate the number ofyears. Assisting in this audit were 49 people, including a systems
specialist, a licensed tax accountant, a specialist in determining fairvalue and a specialist in pension mathematics.

Requirements for Determination of Director
Appointments

DBJ’s auditors, Audit Department and accounting
auditor periodically and as necessary exchange opinions
and information, and communicate in an effort to ensure
effective and appropriate audits.

120

Annual Report & CSR Report 2012

DBJ’s Articles of Incorporation stipulate that shareholders
possessing at least one-third of the shareholder voting
rights exercisable at the General Meeting of Shareholders
shall attend the meeting and determine the appointment
of directors based on a majority vote. The Articles ofIncorporation further specify that the appointment of
directors shall not be resolved by cumulative voting.

CSR Report AssetIntellectual
Management
Structure
ReportL imiting the Responsibility of Directors andAuditors

Requirements for Special Resolutions at theGeneral Meeting of Shareholders
To ensure a smooth General Meeting of Shareholders,

To enable them to perform their duties and fulfill the roles

DBJ’s Articles of Incorporation stipulate that shareholders

that are expected of them, in accordance with Paragraphpossessing at least one-third of the voting rights exercisable

1, Article 426, of the Companies Act, DBJ has establishedshall attend the meeting and determine by a two-thirds

in its Articles of Incorporation that the liability for damages

majority vote the ”requirements for special resolutions at

incurred by directors (and former directors) and auditors

general meetings of shareholders” provided in Paragraph 2,(and former auditors) may be reduced to the legal limit by

Article 309, of the Companies Act.

resolution of the Board of Directors.

ComplianceCorporate GovernanceSpecific compliance initiatives are as follows.

conduct activities appropriately and in compliance withthe law.

DBJ recognizes compliance as one of its most important2) DBJ’s executives and employees are well aware that DBJ

management issues. As basic policies to ensure that themust conduct its businesses legally and appropriately andexecution of duties by directors complies with laws andbe responsible for explaining its actions to the generalregulations and the Articles of Incorporation, we havepublic.

formulated a corporate philosophy, a Basic Compliance
Policy and other compliance-related regulations.
In addition to its fundamental regulations on

Compliance System
DBJ has established the Legal and Compliance Departmentcompliance, DBJ has created a Compliance Manual and a

to take overall responsibility for planning, preparing

compliance program. Via activities in and around DBJ, we

and adjusting compliance activities. In addition, DBJ has

seek to thoroughly implement the compliance activities

established the General Risk Management Committee tooutlined below.

reflect on legal compliance matters, determine the extent
of compliance, and deliberate on improvements to DBJ’s

Compliance Principles

internal system.

DBJ has formulated the compliance principles indicated

DBJ also has established a Compliance Hotline. The

below as part of its creation of compliance regulations.

objective of this internal reporting system is to swiftly1) D BJ’s executives and employees are keenly aware ofidentify and resolve any legal violations.

DBJ’s social mission and responsibilities as a public-sector

DBJ, in matters relating to managing conflicts ofbank and recognize that illegal acts or improper businessinterest, formulated as a basic policy “Conflicts of Interest

operations harm the reputation of DBJ and interfere

Management Regulations” against undue infringement

significantly with DBJ’s ability to fulfill its objectives underof the interests of its clients, and is preparing a system to

the New DBJ Act. We also realize DBJ’s need to always

manage conflicts of interest.

Annual Report & CSR Report 2012

121

CSR Report AssetIntellectual
Management
Structure
ReportRisk Management

To ensure management soundness and safety, as well as

From the standpoint of comprehensive risk manage-

raise corporate value, DBJ works to manage risk appropri-

ment, DBJ has established a Risk Management Department,

ately in line with specific business and risk characteristics.

which is overseen by a director in an official capacity. DBJ

Controlling risk is an issue of utmost importance, and there-

seeks to control its total risk within a specified target range.

fore we have established risk management processes andIn addition, we have set risk guidelines for each risk cat-methods.

egory to help manage total risk.

Risk Management System
DBJ conducts risk management from the perspectives ofAsset/Liability and Risk Management System Overview

maintaining financial soundness and improving operational efficiency, which are the prerequisites to ongoing
operational viability. To ensure appropriate management of
Risk Management

individual risk categories, DBJ has developed a risk manage-

President
Management
Committee
ALM and Risk Management Committee

ment system that clarifies which department is responsible
for each type of risk. The Risk Management Department
Risk Management Department

oversees comprehensive asset/liability and risk management
activities. The ALM & Risk Management Committee, consisting of DBJ’s executives, deliberates on important matters

Credit Analysis Department

Treasury Department

concerning risks and conducts regular monitoring, in linewith the basic policy related to comprehensive risk management approved by the Board of Directors.

Investment and Loan Departments/Offices

Credit Risk Management
Credit risk refers to the risk of sustaining losses resulting

The sales and credit analysis departments hold separate

from a decline in the value of assets due to deterioration inroles in the screening and administering of credit for

the financial condition of the borrower. Credit risk manage-

individual loans and each department keeps the operations

ment requires credit management of individual loans as wellof the other in check. The Committee on Investment andas bankwide portfolio management.

Loan Decisions meets as needed to deliberate important
issues concerning the management and governance ofCredit Administration of Individual Loansindividual loans. These mutual checking functions serve toWhen making an investment or loan, DBJ examines theensure the appropriateness of the lending operation andentity’s project viability and the project’s profitability from amanagement environment.

fair and neutral standpoint, as well as its benefits. We also

Borrower Rating Systemhave an internal borrower rating system. DBJ is not subject

DBJ’s borrower rating system measures creditworthinessto the Banking Act or the Act on Emergency Measures forby combining an evaluation point rating and a borrower

the Revitalization of the Financial Functions (Act No. 132 ofcategory rating, with the result quantifying a potential

1998) but carries out independent asset assessments in line

client’s credit circumstances. The evaluation point ratingwith internal policies for self-assessment of credit quality

selects indicator/evaluation categories that are common

based on the Financial Services Agency’s Financial Inspection

across all industries, scoring the creditworthiness of theManual. The results of self-assessments are subject to an

potential borrower quantitatively and qualitatively. On theaudit by an auditing corporation and are reported to theother hand, the borrower category rating measures specificmanagement. Credit risk and amounts are monitored toitems related to the borrower, looking at the borrower’s

confirm they are within the limits established for individual

realistic financial condition, cash flows and debt repayment

borrowers.

history. By putting the ratings together, the systemgenerates a comprehensive assessment of a borrower’s
repayment capacity.

122

Annual Report & CSR Report 2012

CSR Report AssetIntellectual
Management
Structure
ReportBorrower Rating Classifications
Claims Classified
under the Financial
Revitalization Act

Borrower Category

Borrower
RatingDefinition

Normalborrowers

1-8

Borrowers with favorable business conditions and who have been confirmed
to have no particular problematic financial circumstances

Borrowers
requiring
caution

9-11

Borrowers experiencing weak business conditions, are unstable or have issues
with their finances. These borrowers are likely to require management
intervention in the future.

Substandard
borrowers

12

Either some or all of the debts of these borrowers requiring caution are
under management.

Borrowers indanger ofbankruptcy

13

Borrowers in this category are having financial difficulties but are notbankrupt. Management improvement loans and the like are progressing
poorly, and these borrowers are highly likely to fall into bankruptcy.

Effectively
bankrupt
borrowers

14

Although not legally or formally in bankruptcy, these borrowers areexperiencing severe financial difficulties and are realistically falling into
bankruptcy, as their lack of potential for restructuring has been confirmed.

Bankrupt
borrowers

15

These borrowers are in bankruptcy, legally and formally. Specifically, theseborrowers are in bankruptcy or liquidation, under corporate reorganization,
bankruptcy proceedings or civil rehabilitation, or have had transactions
suspended by a bill clearinghouse.

NormalclaimsSubstandard claims

Risk Management

Doubtful claims

Claims in bankruptcy,
reorganization claims
and similar claims

Asset Self-Assessment System

Portfolio Management

Asset self-assessments are used to define asset

DBJ performs a comprehensive analysis of data based onclassifications that will offset recoverability risk or the

borrower ratings, and calculates the loan portfolio’s overall

degree of risk of value loss, based on the borrower rating,

exposure to credit risk. Credit risk exposure can be classified

the corresponding borrower category and the collateralas (1) expected loss (EL), the average loss expected during

or guarantee status. Such assessments help DBJ establish

a specific loan period; and (2) unexpected loss (UL), thetimely and appropriate amortization schedules and reserve

maximum loss that could be incurred at a certain rate oflevels.

probability. The EL and UL calculations are reported to the
ALM & Risk Management Committee.
Monitoring the situation and consideringcountermeasures allow DBJ to control risk and devise
effective measures to improve risk return.

Market and Liquidity Risk Management
Market Risk

creating the risk of reduced profits or the risk of losses.

Market risk can be broadly classified into interest rate risk,

Interest rate risk can reduce the economic value of DBJ’s

exchange risk and stock market risk. Market risk describes

assets or interest income.

the risk of loss from fluctuations in the value of assets or

DBJ calculates and analyzes risk exposure with cash flow

liabilities (including off-balance sheet items), owing toladder analyses (gap analysis), value at risk (VaR), interestchanges in interest rates, exchange rates, stock markets andrate sensitivity analyses (basis point value), and othervarious other markets. DBJ divides these risks broadly into

methods. A portion of the interest rate risk associated withinterest rate risk and exchange risk.

lending operations is covered through interest rate swaps,

Interest Rate Risk

which are used solely for hedging purposes. DBJ does not

Interest rate fluctuations can create mismatches on rates

have any trading-related risk because it does not engage inof interest on assets and liabilities or on interest periods,

trading (specified transactions).

Annual Report & CSR Report 2012

123

CSR Report AssetIntellectual
Management
Structure
ReportExchange Risktimes, because of market complexities, entities in these

Exchange risk is the risk of loss due to unexpected shifts

circumstances may become unable to participate in market

in exchange prices, and this risk affects entities holding atransactions, compelling them to conduct transactions

net excess of assets or liabilities denominated in foreign

under substantially less favorable terms than otherwise

currencies. Exchange risk entails the possibility of a decline

would be the case. The risk of losses for these reasons isin the economic value of DBJ’s assets due to the impact ofknown as market liquidity risk.

changes in currency exchange rates. DBJ’s exchange risk

As its main methods of acquiring funds, in addition toderives from foreign currency investment and financing andissuing corporate bonds and taking out long-term loans,

issuing foreign currency bonds. DBJ uses currency swaps

DBJ relies on the stable procurement of long-term funds

and other instruments to hedge this risk.

from the government’s Fiscal Investment and Loan Program

DBJ manages counterparty risk in swap transactions, the(FILP) and government-guaranteed bonds rather than on

Risk Management

risk that the counterpart in the swap transaction will be

short-term funds such as deposits. To meet unexpected

unable to fulfill its obligations, by continually monitoring

short-term funding requirements, funds on hand are used,the creditworthiness of all parties, and by diversifying

taking security and liquidity into consideration. Overdrafttransactions among several institutions.

lines of credit have been established with multiple otherfinancial institutions.

Liquidity Risk

Additionally, DBJ maintains daytime liquidity by

Liquidity risk is the risk of a mismatch occurring inusing the Bank of Japan’s Real Time Gross Settlement

the periods when funds are used and raised, causing(RTGS), whereby settlements are made instantly for each

unexpected differences in the flow of funds (cash liquidity

transaction. Every effort is made to ensure that settlementrisk). This situation makes securing funds difficult andconditions are managed appropriately.

creates situations in which interest rates on borrowed

In addition to credit risk, the ALM & Risk Management

funds are substantially higher than usual rates. At such

Committee deliberates DBJ’s market risk and liquidity risk.

Operational Risk Management
DBJ defines operational risk as the risk of loss arising from

System Risk Management

internal processes, people or systems that are inappropriate

System risk refers to the risk of loss due to a computeror non-functioning, or from external events. DBJ works tosystem breakdown or malfunction, system defects, or

establish a risk management system to minimize risk andimproper computer usage. To properly manage systems

prevent potential risks from materializing.

risk, DBJ has implemented the following internal processes

The General Risk Management Committee has been

to optimize system risk management. The Information

established to deliberate topics concerning operational risk

Resources Department is responsible for managing DBJ’s

management.

system risk centrally, based on its system risk management

Within operational risk management, DBJ conducts

regulations. By determining security standards from a

operational risk management and systems risk management

variety of viewpoints, from information system planning

as described below.

and development to operation and use, the department

Operational Risk Management
Operational risk refers to the risk of sustaining losses
resulting from employees neglecting to perform their duties
correctly or from accidents, fraud, and the like. To reduceor prevent operational risk, DBJ prepares manuals, performs
checks on administrative procedures, provides educationand training and uses systems to reduce the burden of
administrative duties.

124

Annual Report & CSR Report 2012extends the risk management system bankwide, andaddresses appropriate system risk management operations.

CSR Report AssetIntellectual
Management
Structure
ReportBuilding a PDCA Cycle
DBJ follows the Plan, Do, Check, Act management cycle to

We also strive to manage effectively the wide range ofboost accountability for the appropriateness of its opera-

risks we face as a financial institution, and to earn the trust

tions and their results. This cycle encourages ongoingof our clients and society as a whole.

improvement.
DBJ’ s PDCA Cycle
Formulation ofmanagement plan

Competent minister

Budgetary plan
Matters requiring authorization of competent
minister

Risk Management

Plan

Appointment and dismissal of representative directors andauditors
 Concurrent positions as directors
 Amendments to Articles of Incorporation
 Disposition of surplus funds
 Merger, corporate split and dissolution
 Basic policy on business plans, redemption plans and fundprocurement
Conclusions
reflected inplanning andbudgetReview of resource
allocation

Act

Board of Directors
Management
Committee

Advisory Board

Advice(Outside experts andoutside directors)

Do
Execution of
investments andloans
Fund-raising
Other activities

Check
Evaluation ofbusiness
performance
Status & results
reportAnnual Report & CSR Report 2012125

CSR Report AssetIntellectual
Management
Structure
ReportClient Protection Management System/Declaration on Personal
Information Protection/Policy for Managing Conflicts of Interest
The establishment and maintenance of a client protection

their level of convenience. DBJ recognizes the extreme

management system is vital because it protects the people

importance of such a system from the standpoint of

who use the financial institution’s systems and raises

operational soundness and appropriateness.

Client Protection Management Policy and Declaration on Personal Information Protection
DBJ has formulated a Client Protection Management Policy3) We acquire information about clients through legal

to ensure strict compliance with laws and regulations,and appropriate means and manage such information

protect the interests of its clients and raise the level of client

safely. In transactions with clients, in the event that DBJ

convenience. We have also created internal regula­tions

outsources operations, it ensures appropriate information

based on this policy, which we employ in briefings to raisemanagement and client response.

in-house awareness.
Our Client Protection Management Policy is outlined

We have incorporated a declaration on our policies

Client Protection Management System/Declaration on Personal Information Protection/Policy for Managing Conflicts of Interest

below:

related to personal information into our Declaration on1) When transacting with clients, we endeavor to provide

Personal Information Protection.

and explain information that is accurate and appropriate
in line with laws and regulations.
2) When we receive requests for consultation, other

DBJ is a registered financial institution under the
Financial Instruments and Exchange Act. DBJ has drawn

requests or complaints, we strive to see the issue fromup policies introduced for the management of conflicts

the client’s point of view, listen sincerely and respond in

of interest under this act and provides an overview of thean operationally appropriate manner.

publicly announced policy.

Declaration on Personal Information Protection
1. Policy
DBJ considers the appropriate protection of personal information
an important social responsibility. DBJ endeavors to use personal
information appropriately in all its activities by conformingwith the requirements of the Act on the Protection of Personal
Information, as well as other related laws and regulations, aswell as its own Declaration.
2. Appropriate Obtainment of Personal Information
DBJ acquires clients’ personal information only within thescope that is required to perform its operations, and employs
appropriate procedures for obtaining such information.
3. Purpose of Using Personal Information
DBJ obtains clients’ personal information only for specificpurposes and uses such information only within the scopenecessary to satisfy such purpose of use. In the event that otherpurposes of use are limited by legal regulations concerning
specified purposes of use, such information is not used for
purposes other than so specified. DBJ discloses on its website
the purposes of use of clients’ personal information. If
information is obtained for other purposes of use, such purposes
are clearly indicated at the time such information is obtained.
4. Providing Personal Information to Third Parties
In principle, DBJ does not provide clients’ personal information
to third parties unless it has received from the client permission
to provide such information or unless it is legally required toprovide such information. However, DBJ may, without obtaining
client approval, provide clients’ personal information to parties
it has commissioned to conduct activities within the scope for

126

Annual Report & CSR Report 2012

which the information was obtained or provide such informationin the event of a corporate merger.
5. Provisions for Safe Management of Personal
Information
DBJ seeks to appropriately manage clients’ updated personal
information and prevent the leakage of such information, andaccordingly maintains rationally sound management measures.
Furthermore, DBJ appropriately supervises its directors andregular employees and subcontractors who handle clients’personal information.
6. Continuous Improvements in Handling Personal
Information
DBJ strives to ensure ongoing improvements in its handling ofclients’ personal information and to update the Declaration as
appropriate in accordance with developments in information
technology or changes in social requirements.
7. Procedures for Requesting Personal Information
DBJ endeavors to respond appropriately by notifying clientsof the purpose of use of the personal information it retains;
responding to requests to disclose such information; and in
the event that the content of such information is incorrect,
responding to clients’ requests for revisions, additions
or deletions, discontinuing use, deleting information, ordiscontinuing the provision of such information to third parties.
8. Inquiries
DBJ endeavors to respond in good faith to all opinions orrequests regarding the use of personal information.

CSR Report AssetIntellectual
Management
Structure
ReportOverview of Policy for Managing Conflicts of Interest

n

n

n

n

Furthermore, Subject Transactions do not include acts that areprohibited under the Financial Instruments and Exchange Act or otherlaws and regulations.
3. Scope of Companies Subject to Management of Conflicts ofInterest
As stated in 2 (1) above, Subject Transactions are transactions
conducted by DBJ or by DBJ’s subsidiary financial institutions, etc.
”Subsidiary financial institutions, etc.” are those DBJ subsidiaries
or affiliated companies prescribed in Article 36-5 of the Financial
Instruments and Exchange Act.
As of July 2, 2012, DBJ’s subsidiary institutions, etc., were as follows.
DBJ Asset Management Co., Ltd.
Sun Arrows Investment Co., Ltd.
Healthcare Management Partners, Inc.
Milestone Turnaround Management Co., Ltd.
DBJ Europe Limited
DBJ Investment Advisory Co., Ltd.
Asuka DBJ Investment LPS
DBJ Securities Co., Ltd.
South East Asia Growth Capital L.L.C
4. Policy for Managing Transactions That Are Likely to Involve
Conflicts of Interest
In the case of transactions prescribed as Subject Transactions, to theextent that the DBJ Group is not in violation of its legal or contractual
duties (including but not limited to the duty of confidentiality), the DBJ
Group is determined to act properly in the interest of its clients throughthe following or other measures.
(The following are only specific examples of methods. Subject
Transactions are not limited to those indicated below. )Separation of the department conducting Subject Transactions fromthe department conducting transactions for said clientAmernding the conditions or instruments of Subject Transactions or
said client transactions
Cessation of Subject Transactions or said client transactions
Disclosing to said client the risk of Subject Transactions unduly
infringing on the interests of said client
5. Management of Conflicts of Interest—Organization
To ensure the appropriate management of conflicts of interest, theduties of a Conflicts of Interest Management Control Department
are handled within its Legal Affairs & Compliance Department.
In accordance with the Policy, the Conflicts of Interest Management
Control Department appropriately manages prescribed Subject
Transactions and conflicts of interest. Furthermore, as the DBJ Groupis required to manage conflicts of interest in accordance with its status
as a registered financial institution under the Financial Instruments andExchange Act, provided that the DBJ Group does not violate its legal
duty of confidentiality or its duty of confidentiality in relation to its
clients, information pertaining to Subject Transactions, including thoseof transactions handled by DBJ’s subsidiary financial institutions, etc.,
may be managed in a centralized manner.
Records shall be prepared of measures undertaken by the Conflictsof Interest Management Control Department with regard to prescribed
Subject Transactions and their management, and such records shall be
retained for a period of five years following the creation date.
To ensure appropriate management, the Conflicts of Interest Management
Control Department shall periodically verify the content of activities by
DBJ Group executives and regular employees and the content of businessactivities at each branch to ensure the operations are being conducted inaccordance with the Policy and the operational procedures for the policy,
and shall periodically verify the management of conflicts of interest.

Client Protection Management System/Declaration on Personal Information Protection/Policy for Managing Conflicts of Interest

1. Purpose
As the services provided by financial institutions grow increasingly
diverse, the potential for multiple competing or opposing interests
within financial institutions or financial groups increases, and thelikelihood increases that conflicts of interest will arise.
Under these conditions, DBJ manages transactions that are likely to
involve conflicts of interest to ensure against undue infringement of theinterests of its clients.
DBJ is a registered financial institution under the Financial
Instruments and Exchange Act. DBJ has drawn up these ”Rules forManagement of Conflicts of Interest” (hereinafter, ”the Policy”) in
accordance with policies introduced for the management of conflicts ofinterest under this act and as prescribed by Cabinet Office Ordinances
pertaining to the financial instruments business. This document
provides an overview of the Policy.
2. Types of Transaction That Are Likely to Involve Conflicts ofInterest(1) Subject Transaction
Targets of this Policy, or ”transactions that are likely to involve conflictsof interest,” are those transactions conducted by DBJ or DBJ’s subsidiaryfinancial institutions or others (defined in 3 below; hereinafter, ”theDBJ Group”) that have a likelihood of unduly infringing on the interestsof clients as a result of conflicts of interest (hereinafter, ”Subject
Transactions”).
”Conflicts of interest” are (a) situations of opposing interests
between the DBJ Group and its clients, or (b) situations of opposinginterests between the DBJ Group’s clients and other clients (hereinafter,
together, ”Situations of Opposing Interests”) that unduly infringe on
the interests of clients.
”Clients” are, in the case of ”business operations related to financial
instruments” conducted by the DBJ Group, (a) counterparties in existingtransactional relationships, (b) parties in negotiation with the DBJ Group
with regard to transactions or otherwise having the potential to becomecounterparties in transactional relationships, or (c) parties that have beentransactional counterparties in the past and that currently are also legallycompetent with respect to past transactional relationships.
”Business operations related to financial instruments” are thosebusinesses provided for in Article 70 (2) of the Cabinet Office
Ordinance pertaining to financial instruments business, etc., that are
performed by DBJ or DBJ’s subsidiary financial institutions, etc.
(2) Types of Subject Transaction
Specific individual circumstances determine whether transactions are
judged as Subject Transactions, but below are examples of transactions
that are likely to be considered said Subject Transactions.
B ased on a contract of mandate that exists between the DBJ Groupand its clients, notwithstanding that the DBJ Group has a duty of
due care of prudent manager or duty of loyalty to said client, the DBJ
Group is in danger of being unable to fulfill such duties owing to
Situations of Opposing Interests.
B ased on a deep trust-based relationship formed between the DBJ
Group and its clients, notwithstanding the client’s expectation that
the Group would act in the client’s interests, the DBJ Group is indanger of being unable to act according to such expectation owing to
Situations of Opposing Interests.
B y utilizing undisclosed client information that the DBJ Group has
the duty to protect, the DBJ Group could rationally act in its own selfinterest or the interest of other clients in transactions that exceed thescope of that duty.
C ases in addition to the above in which the danger exists of unduly
infringing on the interests of clients owing to Situations of Opposing
Interests.

n

n

n

n

Annual Report & CSR Report 2012127

CSR Report AssetIntellectual
Management
Structure
ReportDisclosure

DBJ believes that public relations and investor relations

status and operating policies, which are an essential part

have the important function of bringing management andof being trusted in a wide range of markets and societies.

stakeholders together. In addition, these activities help

Accordingly, we seek to disclose information through our

stakeholders gain an accurate understanding of DBJ’s

public relations and investor relations activities.

Basic PR/IR Philosophy
In its PR and IR activities, DBJ aims to comply with

DBJ maintains personal and client information,

relevant laws and regulations, operate in good faith andwithout disclosing such information in a manner thatin a dignified manner with its stakeholders, and disclose

would encroach upon the rights of individuals or related

information clearly and accurately in a timely andparties. We do not disclose information that would

appropriate manner.

counter the doctrine of good faith.

Disclosure

PR/IR Structure
The Corporate Planning & Coordination Department

DBJ. Through printed materials and over the Internet,

takes overall charge of PR and IR activities and plays athe department uses numerous communication tools tocentral role in the flow of information within and outside

disclose information.

Information Disclosure Materials
DBJ offers a wide range of information, using suchmedia as newsletters and its website:(1) Materials legally required for disclosure
Securities Report (Japanese)
Stock Exchange Report (Japanese)
Business Report (Japanese)(2) Voluntarily disclosed information
Annual Report & CSR Report
End-of-Period Financial Reports(3) Others
DBJ Quarterly Journal (newsletter)
	The DBJ Quarterly Journal is also available in iPhone and iPad
formats.
http://itunes.apple.com/jp/app/id389307222 (Japanese)

DBJ News Digest (mail magazine; Japanese)
Website:128

http://www.dbj.jp/en

Annual Report & CSR Report 2012

Corporate Data

Corporate Data
Timeline  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 130
Board of Directors, Corporate Auditors andExecutive Officers .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 131
Organization Chart  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 132
Locations and Directory .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 133
Subsidiaries .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 134
Stock Information  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 135
Excerpt from the Development Bank ofJapan Inc. Act .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 136
Act for Partial Amendment of theDevelopment Bank of Japan Inc. Act .  .  .  .  .  .  . . 139
Act for Extraordinary Expenditure and Assistance toCope with the Great East Japan Earthquake  .  . . 141

Annual Report & CSR Report 2012129

Corporate Data

Timeline

The Japan Development Bank, the Hokkaido-Tohoku Development Finance Public Corporation and the Development Bank of Japan
1951 April
1952		
1956 June
1957 April

1960		
1961		
1962 April
1963		
Timeline

1964 July
1972 January
1985 June				1987 September
1989		
		
1995 February
1997 September
1997 December
1999 June
1999 October				
2002 May
2005 December
2006 May
2006 June2007 June

Japan Development Bank (JDB) establishedJDB branches opened in Osaka (now the Kansai Branch), Sapporo (now the Hokkaido Branch), Nagoya (nowthe Tokai Branch) and Fukuoka (now the Kyushu Branch)
Hokkaido Development Finance Public Corporation established
Hokkaido Development Finance Public Corporation reorganized as the Hokkaido-Tohoku Development
Finance Public Corporation (HTDFP) branches opened in Sapporo (now the Hokkaido Branch) and Sendai(now the Tohoku Branch)
JDB branch opened in Takamatsu (now the Shikoku Branch)
JDB branches opened in Hiroshima (now the Chugoku Branch) and Kanazawa (now the Hokuriku Branch)
JDB representative office opened in New YorkJDB representative offices opened in Kagoshima (renamed Minami-Kyushu Branch in October 1999) andMatsueJDB representative office opened in London
HTDFP representative office opened in Niigata (renamed Niigata Branch in July 1989)
Japan Development Bank Law revised1) A ddition of investment function (pertaining to business in such areas as research and development, urban
development and energy use stipulated by government ordinance)2) Addition of R&D fund investment function
JDB and HTDFP creation of low interest rate loan system funded partially by sale of NTT shares
JDB representative offices opened in Oita, Matsuyama, Okayama and Toyama
HTDFP representative offices opened in Hakodate and Aomori
JDB commenced loans to assist disaster recovery
Cabinet approval of bill entitled ”Pertaining to Consolidation and Rationalization of Special-Purpose
Companies, etc.” (decision to dissolve JDB and HTDFP and consolidate them as a new bank)
JDB and HTDFP commenced loans in response to the financial environment (introduction of March 31, 2001,
sunset clause)
The Development Bank of Japan Law (Law No. 73 of 1999) approved
Transfer of approval of all rights and responsibilities of JDB and HTDFP to the Development Bank of Japan (DBJ)
Transfer of financing operations from Japan Regional Development Corporation and Japan Environment
Corporation
DBJ representative offices opened in Kushiro and Singapore
The Development Bank of Japan Law revised (introduction of additional spot inspections by the Financial
Services Agency)
Cabinet approval of the Important Policy of Administrative Reform
The Act on Promotion of Administrative Reform for Realization of Small and Efficient Government (Act No.
47 of 2006) approved
Policy-Based Financing Reform Plan decided upon by the Headquarters for the Implementation of Policy Finance
ReformThe Development Bank of Japan Inc. Act (Act No. 85 of 2007) approved

Development Bank of Japan Inc.
2008
2008
2009
2009
2009
2010
2011

October
December
June
September
November
March
May

2011 December
2012 March2012 June

130

Development Bank of Japan Inc. established (Capital: ¥1 trillion)
DBJ Singapore Limited launched
Act for Partial Amendment of the Development Bank of Japan Inc. Act (New DBJ Act) (Act No. 67 of 2009)
Increase of capital to ¥1,103,232 million
DBJ Europe Limited launched
Increase of capital to ¥1,181,194 million
Partial amendment of the Development Bank of Japan Inc. Act (based on establishment of Act for
Extraordinary Expenditure and Assistance to Cope with the Great East Japan Earthquake (Act No. 40 of 2011))
Increase of capital to ¥1,187,364 million
Increase of capital to ¥1,187,788 million
Increase of capital to ¥1,198,316 million

Annual Report & CSR Report 2012

Toru Hashimoto
President & CEO

Hideto Fujii
Deputy President

Masanori Yanagi
Deputy President

Hajime Watanabe
Director and Managing Executive Officer
In charge of Corporate Planning & Coordination Department(excluding the Public Relations & Corporate Social Responsibility
Office), Information Resources Department, General Affairs
Department

Director and Managing Executive Officer
In charge of Accounting Department, Credit Analysis Department

Yo Takeuchi
Director and Managing Executive Officer
In charge of Corporate Planning & Coordination Department (Public
Relations & Corporate Social Responsibility Office), Financial Institution
Department, International Strategy & Coordination Department

Masaaki Komiya
Director and Managing Executive Officer
In charge of Business Planning & Coordination Department, Economic& Industrial Research Department

Masanao Maeda
Director and Managing Executive Officer
In charge of Environmental Initiative & Corporate Social ResponsibilitySupport Department, Business Development Department, Regional
Planning Department (Administration), Research Institute of Capital
Formation, Kyushu Branch, Minami-Kyushu Branch

Akio Mimura
Director (Outside)

Kazuo Ueda
Director (Outside)

Takahiro Suzuki

Managing Executive Officer
In charge of Risk Management Department, Legal Affairs &Compliance Department

Toshiaki Ido

Managing Executive Officer

In charge of Treasury Department

Susumu Kusano

Managing Executive Officer

In charge of Urban Development Department, Corporate Finance
Department [Division 3], Asset Finance Group

Masahiko Ichie

Managing Executive Officer
In charge of Corporate Finance Department [Division 1 and 2]

Hideyuki Kadono

Board of Directors, Corporate Auditors and Executive Officers

Tetsuhiko Shindo

Corporate Data

Board of Directors, Corporate Auditors and Executive Officers (As of September 1, 2012)Managing Executive Officer
In charge of Corporate Finance Department [Division 4]

Hisato Nagao

Managing Executive Officer

In charge of Corporate Finance Department [Division 5]

Tetsumi Hashimoto

Managing Executive Officer
In charge of Corporate Finance Group, Mid-Size & Growth, Regional
Planning Department, Hokkaido Branch, Tohoku Branch, Niigata
Branch, Hokuriku Branch, Tokai Branch

Satoshi Tomii

Managing Executive Officer
In charge of Portfolio Investment Group, Strategic Finance Group,
Growth & Cross Border Investment Group, Structured Finance Group,
Syndication Group

Osamu Koyanagi

Managing Executive Officer, Head of Kansai Branch

In charge of Kansai Branch, Chugoku Branch, Shikoku Branch

Satoshi Tomizuka

Executive Officer (In charge of Internal Audit)

Seiji Jige

Executive Officer (In charge of Special Missions)Takeshi Kobayashi
Full-Time Corporate Auditor

Yasuhito Mitani

Masafumi Aizawa

Executive Officer (In charge of Financial Institution)

Kenkichi Fukuda

Full-Time Corporate Auditor

Executive Officer, Head of Human Resources
Management Department

Kazuyoshi Arakawa

Shin Kikuchi

Full-Time Corporate Auditor (Outside)

Makoto Ito
Corporate Auditor (Outside)

Shinji Hatta
Corporate Auditor (Outside)

Executive Officer, Head of Corporate Planning &Coordination Department

Kazuyo Hachisuka

Executive Officer, Head of Risk Management
Department

Hideo Oishi

Executive Officer, Head of Business Planning &Coordination Department

Haruhisa Kawashita
Notes: 1. Akio Mimura and Kazuo Ueda are outside directors under Article
15 of Section 2 of the Companies Act.

Executive Officer, Head of International Strategy &Coordination Department

2. Kazuyoshi Arakawa, Makoto Ito and Shinji Hatta are outside
corporate auditors under Article 16 of Section 2 of the Companies
Act.

Annual Report & CSR Report 2012131

Corporate Data

Organization Chart (As of July 1, 2012)

Business Planning & Coordination Department
Urban Development Department
International Strategy & Coordination Department
Corporate Finance Department, Division 1
Corporate Finance Department, Division 2
Corporate Finance Department, Division 3
Corporate Finance Department, Division 4

Corporate Auditors/
Board of Corporate Auditors

Healthcare & Hospitality
Industry Office

Corporate Finance Department, Division 5
Corporate Finance Group, Mid-Size & Growth
Hokkaido Branch

Office ofCorporate Auditor

Tohoku Revival
Reinforcement Office

Tohoku Branch
Niigata Branch

Organization Chart

Hokuriku Branch
Tokai Branch

GeneralMeeting of
Shareholders

Board ofDirectors

Executive
Committee

Kansai Branch
Chugoku Branch
Shikoku Branch
Kyushu Branch
Minami-Kyushu Branch
Asset Finance Group
Portfolio Investment Group
Strategic Finance Group
Growth & Cross Border Investment Group
Structured Finance Group
Syndication Group
Environmental Initiative & Corporate Social Responsibility-Support Department
Business Development Department
Economic & Industrial Research Department

Economic Research Office

Regional Planning Department
Research Institute of Capital Formation

Corporate Management &Accounting Research Office

Credit Analysis Department
Legal Affairs & Compliance Department
Secretariat Office
Human Resources Management Department
Corporate Planning & Coordination Department

Public Relations & Corporate
Social Responsibility Office

Risk Management Department
Information Resources Department
General Affairs Department
Accounting Department
Treasury Department

Otemachi Redevelopment
Project Office
Settlement & Accounting
Operation OfficeFinancial Institution Department

Operations Audit
Committee

Internal Audit Department

Representative Offices: Hakodate, Kushiro, Aomori, Toyama, Matsue, Okayama, Matsuyama, Oita
Overseas Representative Office: New York132

Annual Report & CSR Report 2012

Overseas Subsidiaries: DBJ Singapore Limited, DBJ Europe Limited

Domestic Branch Offices,
Representative Offices

Head Office (Relocating November 26, 2012)
Shuto Expressway

NTT
JR LineKDDI

New Head Office

Marunouchi Line
Otemachi Sta.
(Direct from Exit
A1)
Tei-Park

To TokyoTokyo Sankei Building
Hanzomon Line Otemachi Sta.
(Exit C1)

Branch Offices:

Representative Offices:

Hokkaido

Hakodate

TohokuKushiroNiigata

Aomori

Hokuriku

ToyamaTokai

MatsueKansai

Okayama

Chugoku

Matsuyama

Shikoku

Oita

KyushuLocations and Directory

Otemachi Financial City
South Tower, 9-6,
Otemachi 1-chome,
Chiyoda-ku, Tokyo
100-8178, Japan

Chiyoda Line
Otemachi Sta.
(Exit C1)

(Since November 2012)

To Kanda

Hibiya Dori (St.)

New Head Office

Development Bank of Japan Inc.
Koko Bldg.

Japan Business
Federation(Keidanren)

9-1, Otemachi 1-chome,
Chiyoda-ku,
Tokyo 100-0004, Japan
Tel: +81-3-3270-3211
http://www.dbj.jp/en

Corporate Data

Locations and Directory (As of July 1, 2012)

Minami-Kyushu

Overseas Representative Office and Subsidiaries
DBJ Europe Limited

New York Representative Office

DBJ Singapore Limited

New York Representative Office

DBJ Singapore Limited

DBJ Europe Limited

1251 Avenue of the Americas, Suite 830,
New York, NY 10020, U.S.A.
Tel: +1-212-221-0708

9 Raffles Place, #30-03 Republic Plaza,
Singapore 048619
Tel: +65-6221-1779

Level 20, 125 Old Broad Street,
London EC2N 1AR, U.K.
Tel: +44-20-7507-6070

Golden Shoe Park

Bharat Bldg.
Ocean Bldg.

Equity Plaza

5th Ave.

6th Ave.

7th Ave.

Cecil St.

DBJ Singapore Limited

needleThreadBank

Royal
Exchange

t.
ad
S

Bro

Sixty
ThreadNeedleStreetOld.

Level 20,125
Old Broad
Streetalk
le W

Bank ofEngland

Raffles Place

St

eed
dn

ch

St.

Development Bank of Japan Inc.

49th St.

55 Market Street

ur

rea

Rockefeller Center

Ch

Lane

St.

50th St.

Prince’sth49Radio City Music Hall

lomew

51st St.
St.

Throgmorton St.

Th

52nd St.

DBJ Europe Limited
LothburyUOB Plaza

Barthoway

Sheraton New York Hotel and Towersth50

Market St.

Broad

Hilton New YorkSt.

Cornhill

Annual Report & CSR Report 2012133

Corporate Data

Subsidiaries (As of March 31, 2012)

Consolidated Subsidiaries
Company

Established

Percentage of
Capital(Millions of Total Voting
Rights (%)Yen)

Subsidiaries

Address

Principal Businesses

DBJ Business Investment Co., Ltd.

Chiyoda-ku,
Tokyo

Investment consulting

March 10,2003

40

100.00

New Business Investment Co., Ltd.

Chiyoda-ku,
Tokyo

Investment in new
business startups

June 1, 1990

99

100.00DBJ Credit Line, Ltd.

Chiyoda-ku,
Tokyo

Acquisition of beneficiaryrights, consigned trusts
operation and guidance

April 3, 200650

100.00Japan Economic Research Institute Inc.

Chiyoda-ku,
Tokyo

Research, consulting andadvisory services

December 13,
1989

479

100.00DBJ Singapore Limited

Republic ofSingapore

Investment and loan
support and advisory
services

December 16,
S$1 million
2008

100.00DBJ Europe Limited

London, United
Kingdom

Investment and loan
support and advisory
services

June 5, 2009

€7 million

100.00DBJ Real Estate Co., Ltd.

Chiyoda-ku,
TokyoReal estate leasing

February 1,
2010

80

100.00DBJ Investment Advisory Co., Ltd.

Chiyoda-ku,
Tokyo

Investment advisory andagency services

December 1,
2009

68

50.58

DBJ Corporate Mezzanine
Partners Co., Ltd.

Chiyoda-ku,
TokyoManagement ofinvestment associations

June 6, 2003

3

100.00UDS Corporate Mezzanine Limited
Partnership

Chiyoda-ku,
Tokyo

Investment associations

January 18,
2006

29,60050.00(0.00)UDS III Corporate Mezzanine Limited
Partnership

Chiyoda-ku,
Tokyo

Investment associations

February 15,
2008

34,68750.00(0.00)

Asuka DBJ Investment LPS

Chiyoda-ku,
Tokyo

Investment associations

October 28,
2005

6,680

49.40

DBL Capital Co., Ltd.

Chiyoda-ku,
TokyoManagement ofinvestment associations

October 14,
2005

99

100.00DBJ Capital Investment Fund No. 1

Chiyoda-ku,
Tokyo

Investment associations

July 9, 2010

986

100.00(0.01)DBJ New Business Investment Fund

Chuo-ku,Tokyo

Investment associations

July 9, 2010

1,786

99.99

DBJ Capital Investment Fund No. 2

Chiyoda-ku,
Tokyo

Investment associations

October 1,
2010

1,300

100.00(0.01)DBJ Securities Co., Ltd.

Minato-ku,
Tokyo

Securities business

October 22,
1998

500

66.65

Notes:
1. Amounts of less than ¥1 million have been omitted in the figures stated above.
2. DBJ’s percentage of total voting rights in subsidiaries is shown to three decimal places. Percentages less than that amount have been omitted.
3. Figures indicated within parentheses ( ) in the column showing DBJ’s percentage of total voting rights in subsidiaries indicate indirect holdings. Further, for
UDS Corporate Mezzanine Limited Partnership, UDS III Corporate Mezzanine Limited Partnership and Asuka DBJ Investment LPS, the percentage of financing
is stated.
4. The date of establishment shown for DBJ Singapore Limited indicates the date the company was incorporated.
5. DBJ’s equity ownership in Asuka DBJ Investment LPS is less than 50%, but as DBJ effectively controls the company, it is treated as a subsidiary.
6. In August 2011, DBJ Securities acquired common stock of the former Hitachi Capital Securities Co., Ltd., becoming a consolidated subsidiary. On October 1,
2011, the company’s name was changed to DBJ Securities Co., Ltd.
7. There are 17 consolidated subsidiaries and 15 affiliated companies.

134

Annual Report & CSR Report 2012

Corporate Data

Stock Information (As of March 31, 2012)

Number of Shares Issued and Paid-in Capital
Changes in
Number of shares
Changes in number ofPaid-in capital
paid-in capitalissuedshares issued(Millions of yen)(Thousands of shares) (Thousands of shares) (Millions of yen)

October 1, 2008
June 26, 2009
September 24, 2009
Note 4

March 23, 2010
Note 4

December 7, 2011
Note 5

March 23, 2012
Note 440,00040,0001,000,000

1,000,000—

40,000—1,000,000

2,064

42,064103,232

1,559

43,623—
8

Changes incapital surplus(Millions of yen)

Capital surplus(Millions of yen)

Note 2

Note 2(97,248)

1,060,466

Note 3Note 3

1,103,232—

1,060,466

77,962

1,181,194—

1,060,466

—

6,170

1,187,364—

1,060,466

43,632424

1,187,788—

1,060,466

Stock Information

Notes:
1. All shares issued on October 1, 2008, were to raise capital corresponding to incorporation.
		 In accordance with Article 9 of the Supplementary Provisions to the New DBJ Act, on October 1, 2008, all assets of the predecessor were transferred to
the new DBJ as an in-kind contribution (except those prescribed for ongoing use by the Japanese government under Paragraph 2, Article 15, of the
Supplementary Provisions to the Act), and these shares were transferred to the Japanese government, the capital investor in the predecessor, through a
gratuitous conveyance.
2. As of October 1, 2008, according to the provisions of Article 2 of the Supplementary Provisions to DBJ’s Articles of Incorporation, the value of the capitalreserve was calculated by evaluation officers as stipulated in Paragraph 1, Article 16, of the Supplementary Provisions to the New DBJ Act to be the value of
assets less the value of liabilities less the ¥1 trillion in capital.
		 At the third meeting of the Development Bank of Japan, Inc., Asset Evaluation Committee on January 28, 2009, the committee determined the value of
assets (as of October 1, 2008) for transfer authorization. The value of these assets less the value of liabilities less ¥1 trillion in capital amounted to¥1,157,715 million.
3. By resolution of the General Meeting of Shareholders on June 26, 2009, and provisions of the Companies Act (Article No. 448, Paragraph 1, and Article452), the deficit was covered by transfer from capital reserve to other capital surplus and transfer from other capital surplus to retained earnings.
4. By way of a rights offering, all shares of common stock were assigned to the Minister of Finance (for consideration). The issue price (amount paid) is ¥50,000
per share; paid-in capital is ¥50,000 per share.
5. To secure a financial base for crisis response operations, of the ¥1,350 billion in delivery bonds issued under the Act for the Partial Amendment of theDevelopment Bank of Japan Inc. Act and the supplementary budget for fiscal 2009, in accordance with the provisions of Article 2-4, Paragraph 1, of the
Appendix to the New DBJ Act, an amount equivalent to ¥6,170 million was required for redemption on November 24, 2011.
		 Based on this requirement, these delivery bonds were redeemed effective December 7, 2011. The face value of delivery bonds decreased by this amount,
and at the same time DBJ’s common stock increased by the equivalent of the required redemption amount. The number of shares was not affected byprocedures for this increase in common stock.
6. As is stated above, delivery bonds in the amount of ¥10,528 million were required for redemption on May 18, 2012. Based on this requirement, the delivery
bonds were redeemed on June 6, 2012. The face value of delivery bonds decreased by this amount, and at the same time DBJ’s common stock increased by
the equivalent of the required redemption amount. The number of shares was not affected by procedures for this increase in common stock.

Shareholder
Address

Number of shares held(Thousands of shares)

Percentage of
total equity (%)

Finance Minister

1-1, Kasumigaseki 3-chome, Chiyoda-ku, Tokyo

43,632100.00Total—

43,632100.00

Annual Report & CSR Report 2012135

Corporate Data

Excerpt from the Development Bank of Japan Inc. Act (Act No. 85 of 2007)(Unofficial translation)

Article 1
PurposeThe Development Bank of Japan Inc. (hereinafter referred to as
the ”Corporation”) shall be a joint stock company(kabushikikaisha) whose object is to maintain the foundations ofinvestment and financing functions of long-term business funds as
the Development Bank of Japan by conducting business activities
utilizing the methods of combining investments and financing andother sophisticated financial methodologies, while maintaining
the autonomy of management with the goal of realizing full-scale
privatization, thereby contributing to smooth supply of funds tothose who need long-term business funds, as well as to thesophistication of financial functions.

Excerpt from the Development Bank of Japan Inc. Act (Act No. 85 of 2007)

Article 3
Scope of Business Operations
1. The Corporation shall engage in the following business
operations to attain its objectives:(1) To accept deposits (limited to certificates of deposit (CDs)and other deposits stipulated in the Cabinet Order);(2) To lend money;(3) To make capital contributions;(4) To guarantee the due performance of debts andobligations;(5) To sell and purchase Securities (other than those that fallwithin monetary claims represented by certificates set forthin Item (7), Short-term Notes, Etc.; the same in Item (8))(other than those that fall within securities-related
derivatives transactions (which mean the securities-related
derivatives transactions set forth in Article 28, Paragraph 8,
Item (6) of the Financial Instruments and Exchange Act (ActNo. 25 of 1948, as amended); hereinafter in this Item andItem 11 the same), or enter into securities-related derivatives
transactions (limited to those made for investment
purposes), except in cases where these business operations
fall within those operations referred to in Item (3);(6) To lend Securities;(7) To acquire or transfer monetary claims (including claims
represented by certificates stipulated in the Ministry of
Finance Ordinance such as negotiable bank deposit
certificates);(8) To subscribe for Specified Debentures or Preferred
Investment Securities issued by a Specified Purpose
Company (limited to the cases where the Specified Purpose
Company acquires only designated monetary claims or
beneficial interests in trusts with which designatedmonetary claims are entrusted with cash proceeds derived
from issue of those Specified Debentures or Preferred
Investment Securities as set forth in the Asset Liquidation
Plans, and except for, in case of Specified Debentures,
Specified Short-term Notes), and other similar securities
stipulated in the Ministry of Finance Ordinance (hereinafterin this Item referred to as the ”Specified Debentures”)(except in cases where it is intended for secondary
distribution (uridashi)), or to handle primary offering(boshu) of the Specified Debentures so subscribed;(9) To acquire or transfer Short-term Notes, Etc.;(10) To act as an agent or intermediary for execution ofagreements which provides for lending money on behalf ofbanks (the banks set forth in Article 2, Paragraph 1 of the
Banking Act (Act No. 59 of 1981, as amended); hereinafter
the same) and other entities engaged in the financial
business stipulated in the Cabinet Order;(11) To enter into derivatives transactions set forth in Article 2,
Paragraph 20 of the Financial Instruments and Exchange
Act (other than those that fall within the securities-related
derivatives transactions), except in cases where these136

Annual Report & CSR Report 2012business operations fall within those operations referred toin Item (7);(12) To do the activities referred to in Article 2, Paragraph 8,
Item (7) of the Financial Instruments and Exchange Act;
(13) To do the activities referred to in Article 2, Paragraph 8,
Item (9) of the Financial Instruments and Exchange Act(limited, in the case of the handling of primary offering or
secondary distribution, to those to be conducted upon
entrustment by financial instruments business operators
engaged in the type I financial instruments trading businessset forth in Article 28, Paragraph 1 of the Financial
Instruments and Exchange Act (the financial instruments
dealers set forth in Article 2, Paragraph 9 of the Financial
Instruments and Exchange Act; hereinafter the same), andfor such financial instruments business operators);(14) To do the activities referred to in Article 2, Paragraph 8,
Item (11) of the Financial Instruments and Exchange Act;
(15) To do the activities referred to in Article 2, Paragraph 8,
Item (13) of the Financial Instruments and Exchange Act;
(16) To do the activities referred to in Article 2, Paragraph 8,
Item (15) of the Financial Instruments and Exchange Act;
(17) With respect to securities (including, if such securities are
not issued, rights to be represented by such securities) ortransactions referred to in each Item of Paragraph 2 ofArticle 33 of the Financial Instruments and Exchange Act,to do the activities set forth in each Item of said Paragraph(other than those referred to in Items 3, 5, 7 through 9, 11
and 13);(18) To provide other entities with consulting services regarding
business transfer, merger, corporate split, share-for-shareexchange (kabushiki kokan) or share transfer (kabushikiiten), or to act as a broker for these transactions;(19) To provide other entities with consulting services regarding
management, and to conduct investigations or provide
information as required for the business operations of otherentities;(20) To conduct investigations, research or training regarding
financial and other economic issues; and(21)		To do activities incidental to each of the foregoing Items.
Article 5
Issue of the Development Bank of Japan Bonds
1. The Corporation may issue the Development Bank of Japan Bonds.
Article 9Special Rules When Starting Acceptance of Deposits, Etc.
1. If the Corporation intends to start acceptance of deposits set
forth in Article 3, Paragraph 1, Item (1) or issue of theDevelopment Bank of Japan Bonds, the Corporation shallobtain the prior approval of the Minister of Finance.
2. If the Minister of Finance intends to give the approval referred
to in the preceding paragraph, the Minister of Finance shall, in
advance, have a discussion with the Prime Minister and obtain
his/her consent.
Article 12
Shares
1. If the Corporation intends to solicit those who will subscribe forshares offered for sale set forth in Article 199, Paragraph 1 of
the Companies Act (Act No. 86 of 2005, as amended)(hereinafter in Article 34, Item (4) referred to as the ”Shares
Offered for Sale”) or stock acquisition rights offered set forth in
Article 238, Paragraph 1 of the Companies Act (hereinafter in
Article 34, Item (4) referred to the ”Stock Acquisition Rights
Offered”), or to deliver shares or stock acquisition rights inconnection with a share-for-share exchange, the Corporation
shall obtain authorization of the Minister of Finance.

Article 16
Authorization of Concurrent Positions of Directors
1. Except in cases where the provision of Article 4, Paragraph 2
applies, any director (or, if the Corporation is a company
maintaining committees (iinkai secchi kaisha), any executive
officer) who performs the day-to-day business of the
Corporation shall not perform the day-to-day business of any
other corporation without authorization of the Minister ofFinance.
2. The Minister of Finance shall, upon receipt of an application for
the authorization referred to in the preceding Paragraph, grant
his/her authorization, except in cases where it is determinedthat any matter so applied may interfere with sound and proper
management of the Corporation.

Subject to Authorization”) its subsidiary (the subsidiary set forthin Article 2, Item (3) of the Companies Act), the Corporation
shall obtain authorization of the Minister of Finance in advance:(1) Banks;(2) Long-term credit banks (the long-term credit banks set forthin Article 2 of the Long-Term Credit Bank Act (Act No. 187
of 1952, as amended));(3) Financial Instruments Dealers (limited to those who engage
in type I financial instruments trading business set forth in
Article 28, Paragraph 1 of the Financial Instruments andExchange Act);(4) Money lenders (the money lenders set forth in Article 2,
Paragraph 2 of the Money Lending Business Act (Act No.
32 of 1983, as amended), and exclude those who
concurrently conduct the business referred to in thepreceding Items or fall within other requirements stipulated
in the Ministry of Finance Ordinance);(5) Trust companies (the trust companies set forth in Article 2,
Paragraph 2 of the Trust Business Act (Act No. 154 of
2004, as amended));(6) Insurance companies (the insurance companies set forthin Article 2, Paragraph 2 of the Insurance Business Act (ActNo. 105 of 1995, as amended)); and(7) Those stipulated by the Ministry of Finance Ordinance as
those who are similar to each of the foregoing.

Excerpt from the Development Bank of Japan Inc. Act (Act No. 85 of 2007)

Article 15
Resolution for Election of Representative Directors and Other
Officers
Resolutions for appointment and dismissal of the representative
directors or representative executive officers of the Corporation,
appointment and dismissal of statutory auditors, or appointment
and dismissal of audit committee members (kansaiin) shall not
become effective without authorization of the Minister of Finance.

Corporate Data

Article 13
Corporate Debentures, Development Bank of Japan Bonds andBorrowings
1. Prior to the beginning of each fiscal year, the Corporation shallprepare its basic policy regarding the issue of corporate
debentures (shasai) (other than the Development Bank of Japan
Bonds, ”Corporate Debentures;” hereinafter the same) and theDevelopment Bank of Japan Bonds (excluding the short-term
notes set forth in Article 66, Item (1) of the Act Concerning theCentral Depositary System of Corporate Debentures (Act No. 75
of 2001, as amended) from both the Corporate Debentures
and the Development Bank of Japan Bonds, respectively;
hereinafter in this Article and Article 18 the same), as well as
regarding the borrowings (limited to those with more than one
year to maturity; hereinafter in this Article and Article 18 thesame), which provides for matters relating to the issue of the
Corporate Debentures and the Development Bank of Japan
Bonds, and the borrowing of money, such as the amounts ofissue and borrowings, denominated currency of the Corporate
Debentures, the Development Bank of Japan Bonds and theborrowings, as stipulated in the Ministry of Finance Ordinance,and obtain authorization of the Minister of Finance. If the
Corporation intends to revise it, the same shall apply.

Article 20
Amendment to the Articles of Incorporation, Etc.
1. Resolutions for amendment to the Articles of Incorporation of
the Corporation, disposition of surplus funds (other thandisposition of losses) such as distribution, merger, corporate
split, and dissolution shall not become effective withoutauthorization of the Minister of Finance.
Article 22Special Exemptions from Management of Fiscal Loan Funds
Notwithstanding the provisions of Article 10, Paragraph 1 of the
Fiscal Loan Funds Act (Act 100 of 1951, as amended), the fiscal
loan funds (which means the fiscal loan funds set forth in Article 2of the Fiscal Loan Funds Act; hereinafter the same) may beappropriated for loans (hereinafter in Article 24 referred to simply
as the ”Loans”) to the Corporation when the Corporation
borrows money for appropriation for expenses required for its
operations set forth in Article 3, Paragraphs 1 and 2.

Article 17
Business Plan
Prior to the beginning of each fiscal year, the Corporation shalldraw out a business plan for the new fiscal year and obtain
authorization of the Minister of Finance, as stipulated in the
Ministry of Finance Ordinance. If the Corporation intends to revise
it, the same shall apply.

Article 23
1. Notwithstanding the provision of Article 10, Paragraph 1 of the
Fiscal Loan Funds Act, the fiscal loan funds may beappropriated for the Corporate Debentures and theDevelopment Bank of Japan Bonds (hereinafter in the following
Paragraph, immediately following Article and Article 25,
Paragraph 1 referred to as the ”Debentures, Etc.”) to be issued
by the Corporation to appropriate the resulting proceeds for
expenses required for its operations set forth in Article 3,
Paragraphs 1 and 2.

Article 18
Redemption Plan
Prior to the beginning of each fiscal year, the Corporation shalldraw out redemption plans for the Corporate Debentures, theDevelopment Bank of Japan Bonds and the borrowings and obtain
authorization of the Minister of Finance, as stipulated in the
Ministry of Finance Ordinance. If the Corporation intends to revise
it, the same shall apply.

Article 25
Guarantee of Obligations
1. Notwithstanding the provision of Article 3 of the Act on
Restrictions on Financial Assistance by the Government to
Corporations (Act No. 24 of 1946, as amended), theGovernment may enter into a guarantee agreement for the
obligations relating to the Debentures, Etc., to the extent of theamount approved by the resolutions of the Diet.

Article 19
Subsidiaries Subject to Authorization
1. If the Corporation intends to make any of the following entities(other than individuals in the cases of those referred to in Items(3), (4) and (7); hereinafter referred to as the ”Subsidiaries

Article 29
Competent Ministers
1. The competent minister under this Act shall be the Minister ofFinance provided, however, that in the case that the
Corporation obtains the approval referred to in Article 9,
Annual Report & CSR Report 2012137

Corporate Data

Paragraph 1, the competent ministers for the following mattersshall be the Minister of Finance and the Prime Minister.

Supplementary Provisions

Excerpt from the Development Bank of Japan Inc. Act (Act No. 85 of 2007)

Article 2
Disposition of the Government-Owned Shares
1. Pursuant to Article 6, Paragraph 2 of the Act on Promotion of
Administrative Reform for Realization of Small and Efficient
Government (Act No. 47 of 2006), the Government shall intend
to reduce the number of the shares held by it of the
Corporation (hereinafter in the following Paragraph and theimmediately following Article referred to as ”GovernmentOwned Shares”), taking into account the market situation, andshall dispose all of them in approximately five to seven years
from the date set forth in Item (3) of the preceding Article.
2. For a period from the effectuation of this act until theGovernment disposes of all of the Government-Owned Shares,
the Government shall from time to time review matters, such as
matters regarding the method in which the GovernmentOwned Shares should be disposed of and take the required
measures based on the result of such review, so that thefoundation of the Corporation’s investment and financing
functions for long-term business funds will be maintained.
Article 3
Abolition of this Act and Other Measures
If the Government disposes of all of the Government-Owned
Shares, the Government shall immediately take measures toabolish this act, as well as measures necessary to smoothly assign
the business operations, functions, and rights and obligations of
the Corporation to any organization to be formed as a bearer ofthe functions commensurate with the investment and financing
functions held by the Corporation.
Article 4Special Rules for Business Operations during the Preparatory
Period
1. In order for the Corporation to smoothly start the business
operations as soon as it is duly organized, The Development
Bank of Japan (hereinafter referred to as ”DBJ”) may borrow
Long-term Loans, in addition to those set forth in Article 42,
Paragraphs 1 and 2 of the Development Bank of Japan Act (ActNo. 73 of 1999, as amended; hereinafter, except for Article 26of the Supplementary Provisions, referred to as the ”DBJ Act”),
during the Preparatory Period (the period from the date on
which this act comes into force up to September 30, 2008; thesame in Paragraph 5).
Article 9
Capital Contribution
Upon the incorporation of the Corporation, DBJ shall contributeall of its properties, except assets to be assumed by Japanpursuant to Article 15, Paragraph 2 of the Supplementary
Provisions, to the Corporation.
Article 15
Dissolution of DBJ, Etc.
1. DBJ shall be dissolved at the time of establishment of the
Corporation, whereupon any and all rights and obligations of
DBJ shall be taken over by the Corporation, except for thoseassets to be assumed by the Government as set forth in thefollowing Paragraph.
2. Of the rights actually held by DBJ at the time of establishmentof the Corporation, the assets which will be considered nolonger necessary for the Corporation to smoothly perform its
future business operation shall be assumed by Japan at the timeof establishment of the Corporation.

138

Annual Report & CSR Report 2012

Article 16
Values of Properties Assumed
1. The values of assets and liabilities assumed by the Corporationfrom DBJ (in the immediately following Paragraph referred to as
the ”Assumed Properties”) shall be as evaluated by evaluation
officers (hyoka iin).
Article 18
Competent Ministers
The competent ministers under Article 26, Paragraph 2 and Article
27, Paragraph 1 for management of assets to be assumed by the
Corporation pursuant to Article 15, Paragraph 1 of the
Supplementary Provisions (hereinafter in this Article referred to as
the ”Assumed Assets”) shall, notwithstanding the provisions ofArticle 29, Paragraph 1, be as follows:(1) For management of the Assumed Assets set forth in the
Cabinet Order in the Hokkaido or the Tohoku Region (whichmeans the areas of Aomori, Iwate, Miyagi, Akita, Yamagata,
Fukushima and Niigata prefectures): Minister of Finance andMinister of Land, Infrastructure and Transport; and(2) For management of the Assumed Assets other than the
Assumed Assets set forth in the preceding Item: Minister ofFinance.
Article 66
Review
On or prior to the date set forth in Article 1, Item (3) of the
Supplementary Provisions, the Government shall review measures
to secure the equal competitive conditions with other business
entities, with respect to the systems for which the investment andfinancing functions of DBJ are utilized pursuant to the provisions of
relevant acts (including ordinances under those acts), such as the
Act on Security for Loans from the Development Bank of Japan toElectric Utility Corporations (Act No. 145 of 1950, as amended),
the Oil Stockpiling Act (Act No. 96 of 1975, as amended), the Act
on the Promotion of Development and Introduction of Alternative
Energy (Act No. 71 of 1980, as amended), the Act on Special
Measures Concerning the Promotion of Urban Development by
Private Sectors (Act No. 62 of 1987, as amended), the Act on
Temporary Measures to Promote Business Activities for the Rationaluse of Energy and the Utilization of Recycled Resources (Act No. 18
of 1993, as amended) and the Act on Promotion of Private FinanceInitiative (Act No. 117 of 1999, as amended), while considering theconvenience of users of those systems, and take the required
measures based on the results of such review.
Article 67
Utilization of the Corporation’s Investment and Financing
Functions for Long-term Business Funds
If the Government utilizes the Corporation’s investment andfinancing functions for long-term business funds on or after thedate set forth in Article 1, Item (3) of the Supplementary
Provisions, the Government shall take measures necessary tosecure the equal competition conditions, as well as othermeasures necessary for utilization of such investment andfinancing functions, paying attention to the Corporation’s
appropriate competitive relationships with other business entities.

This is an unofficial English translation. Only the original
Japanese texts of the act have legal effect and prevail over thistranslation. This translation has been prepared solely forreference purposes. The reader of this translation should
consult the original Japanese text for the purposes ofinterpreting and applying the act to any legal issues ordisputes.

(Act No. 67 of 2009)

The Development Bank of Japan Inc. Act (Act No. 85 of 2007)
shall be partially amended as described below.
In Article 2, Paragraph 1 of the Supplementary Provisions,”the following Article” shall be amended to read ”Article 3 of the
Supplementary Provisions” and ”the day stipulated in Item 3 ofthe preceding Article” to read ”April 1, 2012”. The following fivearticles shall be added after Article 2.
Capital Contribution by the Government
Article 2-2
The Government may make capital contributions to the
Corporation, to the extent of the amount approved by thebudget, whenever the Government deems necessary, until March
31, 2012.

Redemption of the Government Bonds
Article 2-4
1 The Corporation, may request the redemption of thegovernment bonds delivered as set forth in the provisions ofParagraph 2 of the preceding Article, only within the amount of
capital calculated by the Ministry of Finance Ordinance as thenecessary amount of capital in response to the increase of
assets related to its Crisis Response Operations (limited to those(Unofficial translation)

conducted by March 31, 2012).
2 The Government, when requested by the Corporation toredeem all or a part of the government bonds delivered under
the provisions of Paragraph 2 of the preceding Article, mustcomply without delay.
3 When redemption has been made under the provisions of thepreceding paragraph, the amount of the Corporation’s capitalshall be the sum of its capital immediately prior to theredemption and the amount of the money redeemed.
4 When the provisions of Article 445, Paragraph 1 are applied inapplying the provisions of the preceding paragraph, the term”case” shall be deemed to be replaced with ”case, or in cases
where Article 2-4, Paragraph 3 of the Supplementary Provisions
to the Development Bank of Japan Inc. Act (Act No. 85 of
2007) is applied.”
5 Other than the matters stipulated in each of the preceding
paragraphs, necessary matters concerning the redemption of
government bonds delivered by the Government under theprovisions of Paragraph 2 of the preceding Article shall be
determined by Finance Ministry ordinance.

Act for Partial Amendment of the Development Bank of Japan Inc. Act (Act No. 67 of 2009)

Delivery of the Government Bonds
Article 2-3
1 The Government, in implementing the crisis response
operations in Article 2, Item 5 of the Japan Finance Corporation
Act (Act No. 57 of 2007; hereinafter referred to as ”Crisis
Response Operations”) may issue the government bonds inorder to use for securement of the capital required to ensure
the financial strength of the Corporation, until March 31, 2012.
2 The Government, pursuant to the provisions of the preceding
paragraph, to the extent of the amount approved by thebudget, shall issue the government bonds and deliver them to
the Corporation.
3 Government bonds issued under the provisions of Paragraph 1
shall be noninterest-bearing.
4 Government bonds issued under the provisions of Paragraph 1
may not be transferred, attached as security rights, or otherwise
disposed of.
5 Necessary matters concerning government bonds issued under
the provisions of Paragraph 1, other than that provided in
Paragraph 3, shall be determined by Ministry of FinanceOrdinance.

Corporate Data

Act for Partial Amendment of the Development Bank of Japan Inc. Act

Return of the Government Bonds
Article 2-5
1 In the event that as of July 1, 2012, any government bondsdelivered under the provisions of Article 2-3, Paragraph 2 of the
Supplementary Provisions remain unredeemed, the Corporationmust return such unredeemed bonds to the Government.
2 The Government must immediately retire any government
bonds returned to it under the provisions of the preceding
paragraph.
3 Other than the matters stipulated in the preceding two
paragraphs, necessary matters concerning the return andretirement of government bonds delivered by the Government
under the provisions of Article 2-3, Paragraph 2 shall be
determined by Ministry of Finance Ordinance.
Exception to Imposition of Registration and License Tax
Article 2-6
When capital contributions are made under the provisions ofArticle 2-2 of the Supplementary Provisions or redemptions madeunder the provisions of Article 2-4, Paragraph 2 of the
Supplementary Provisions, a Registration and License Tax shall not
be imposed on the increase in capital received by the Corporation,
provided that registration is obtained as specified by Ministry of
Finance Ordinance.

Supplementary Provisions
Enforcement Date
Article 1
This act shall take effect on the date of its promulgation.
Review, Etc.
Article 2
1 By the end of fiscal year 2011, the Government shall review
what the appropriate implementation of the Crisis Response
Operations (referring to the Crisis Response Operationsprescribed under the provisions of Article 2, Item 5 of the Japan
Finance Corporation Act (Act No. 57 of 2007); same
hereinafter) implemented by the Development Bank of Japan
Inc. (hereinafter” the Corporation”) and the appropriateorganization of the Corporation based on that including theway of holding its shares by the Government should be, andshall take necessary measures based on these reviews, taking

into account the status of the capital contributions by theGovernment to the Corporation under the provisions of Article
2-2 of the Development Bank of Japan Inc. Act as amended bythis Act; the redemption of the Government bonds under the
Article 2-4, Paragraph 2 of the supplementary provisions of theDevelopment Bank of Japan Inc. Act as amended by this Act;the implementation of the Crisis Response Operations by the
Corporation; and the changes in socioeconomic and othercircumstances from a point of view of maintaining the
involvements with the Corporation by the State such as letting
the Government consistently hold its shares exceeding onethird of the Corporation’s issued shares in the aim of ensuring
the appropriate implementation of the Crisis Response
Operations by the Corporation.
2 Notwithstanding the provisions of Article 6, Paragraph 2 of the
Act on Promotion of Administrative Reform for Realization ofAnnual Report & CSR Report 2012139

Corporate Data

Small and Efficient Government (Act No. 47 of 2006) as
amended pursuant to the provisions of the following Article
and the provisions of Article 2, Paragraph 1 of the
Supplementary Provisions of the Development Bank of Japan
Inc. Act as amended pursuant to this Act, the Government shallnot dispose of its holding shares of the Corporation prior to themeasures described in the preceding paragraph shall be taken.

Act for Partial Amendment of the Development Bank of Japan Inc. Act (Act No. 67 of 2009)

Partial Amendment of the Act on Promotion of
Administrative Reform for Realization of Small and Efficient
Government
Article 3
The Act on Promotion of Administrative Reform for Realization of
Small and Efficient Government shall be partially amended asfollows.
”In the measures described in the preceding paragraph” in Article
6, Paragraph 2 shall be revised to ”from April 1, 2012.”
Adjusted Provisions
Article 4
1 If this Act come into effect prior to the date of enforcement of
the Act for Partial Amendment of the Shoko Chukin Bank
Limited Act and Other Act to Facilitate the Supply of Funds to
Small and Medium-sized Enterprises (Act No. 54 of 2009;
mentioned in the following paragraph as the ”Shoko Chukin

Amendment Act”), in regard to the application of the provisionsof Article 6, Paragraph 2 of the Act on Promotion of
Administrative Reform for Realization of Small and Efficient
Government as amended under the provisions of the preceding
Article up to the day before the said date, ”and” shall bedeemed to be replaced with ”taking into account the market
situation, and shall dispose of all such capital contributions inapproximately five to seven years after implementation of themeasures mentioned in the preceding paragraph, and theGovernment shall make capital contributions in.”2 If this Act come into effect after the date of enforcement of the
Shoko Chukin Amendment Act, the provisions of the preceding
Article shall not apply. In this case, ”the following Article” inArticle 2, Paragraph 2 of the Supplementary Provisions shall bedeemed to be replaced with ”Article 4 of the Supplementary
Provisions to the Act for Partial Amendment of the Shoko
Chukin Bank Limited Act and Other Act to Facilitate the Supply
of Funds to Small and Medium-sized Enterprises (Act No. 54 of2009).”
Delegation to Government Ordinance
Article 5
Transitional measures required for the enforcement of this Act
shall be determined by government ordinance.

(Unofficial translation)

Supplementary Resolutions on the Bill for Partial Amendment of the Development Bank of Japan Inc. Act
House of Councilors Committee on Financial Affairs
June 25, 2009

The following matters should receive the Government’s carefulconsideration.
• In implementing Crisis Response Operations based on the recent
measures for additional capital contribution, Development Bankof Japan Inc. shall ensure the measures result in a smoothsupply of funds on the basis of appropriate analysis by drawing
upon its accumulated knowledge and skills.
• With the global monetary crisis having serious economic andfinancial impacts, and the balance of loans to small and medium
enterprises falling steadily, efforts must be made to further
facilitate loans by the Japan Finance Corporation to small andmedium-sized businesses. In implementing Crisis Response
Operations for large and midscale enterprises, Development
Bank of Japan Inc. must be certain to expedite loans to
associated small and medium enterprises as well.

based on its findings. Any such reviews should take into
account the need to ensure that the Corporation acts for thegood of the community, that it has a stable source of the funds
required to fulfill its functions as a provider of long-term
investment and loans, and that it has systems in place to securecompetitive officers and employees. The Government shouldtake appropriate measures to prevent any damage to the
Corporation’s long-term value.
• The Government should reassess the future provision ofpolicy-based finance by Development Bank of Japan Inc. and
the Japan Finance Corporation, reaffirming the importance of
their roles and functions and paying attention to theirrelationships not only with private financial institutions but alsowith the Japanese financial sector as a whole, including
affiliated organizations and the Japan Post Bank.
Resolutions passed.

• The Government should review its holding of shares in
Development Bank of Japan Inc. and take necessary measures

140

Annual Report & CSR Report 2012

Corporate Data

Amendment of the Development Bank of Japan Inc. Act (based on establishment of the
Act for Extraordinary Expenditure and Assistance to Cope with the Great East Japan Earthquake (Act No. 40 of 2011))(Unofficial translation)

Supplementary Provisions

Capital Contribution by the Government
Article 2-2
The Government may make capital contributions to the
Corporation, to the extent of the amount approved by thebudget, whenever the Government deems necessary to facilitate
implementation of the crisis response operations, until March 31,
2015.

Partial Amendment of the Act on Promotion of
Administrative Reform for Realization of Small and Efficient
Government
Article 7
The Act on Promotion of Administrative Reform for Realization of
Small and Efficient Government (Act No. 47 of 2006) shall be
partially amended as follows.
”from April 1, 2012.” in Article 6, Paragraph 2 shall be revised to”from April 1, 2015.”
Partial Amendment of the Development Bank of Japan Inc.
Act
Article 9
The Development Bank of Japan Inc. Act shall be partiallyamended as follows.
”April 1, 2012” in Article 2, Paragraph 1 of the Supplementary
Provisions of the Development Bank of Japan Inc. Act shall berevised to “April 1, 2015”.
Partial Amendment of the Act for Partial Amendment of theDevelopment Bank of Japan Inc. Act
Article 11
The Act for Partial Amendment of the Development Bank of Japan
Inc. Act (Act No. 67 of 2009) shall be partially amended asfollows.
Within Article 2, Paragraph 1 of the Supplementary Provisions of
the Development Bank of Japan Inc. Act, “the end of fiscal year
2011” shall be revised to “the end of fiscal year 2014,” and”(including the cases where it shall be applied by replacing theterm and phrase pursuant to the provisions of Article 36 of the
Act for Extraordinary Expenditure and Assistance to Cope with theGreat East Japan Earthquake (Act No. 40 of 2011))” shall be
added next to “Article 2, Paragraph 2 of the Supplementary
Provisions of the Development Bank of Japan Inc. Act”, and”Article 2-4, Paragraph 2 of the Supplementary Provisions of theDevelopment Bank of Japan Inc. Act” shall be revised to “Article
2-4, Paragraph 2 of the Supplementary Provisions of theDevelopment Bank of Japan Inc. Act after the amendment
pursuant to this Act.”

Disposition of the Government-Owned Shares
Article 2
Pursuant to Article 6, Paragraph 2 of the Act on Promotion of
Administrative Reform for Realization of Small and Efficient
Government (Act No. 47 of 2006), the Government shall intend
to reduce the number of the shares held by it of the Corporation(hereinafter in the following Paragraph and Article 3 of the
Supplementary Provisions, referred to as “Government-Owned
Shares”), taking into account the market situation, and shalldispose all of them in approximately five to seven years from
April 1, 2015.

Delivery of the Government Bonds
Article 2-3
1 The Government, in implementing the crisis response
operations (hereinafter referred to as the “Crisis Response
Operations”) prescribed in Article 2, Item 5 of the Japan
Finance Corporation Act (Act No. 57 of 2007) may issue thegovernment bonds in order to use for securement of the capitalrequired to ensure the financial strength of the Corporation,
until March 31, 2015.
2 The Government, pursuant to the provisions of the preceding
paragraph, to the extent of the amount approved by thebudget, shall issue the government bonds and deliver them to
the Corporation.

with the Great East Japan Earthquake (Act No. 40 of 2011))(Reference 1) The Supplementary Provisions of theDevelopment Bank of Japan Inc. Act (After the amendment
pursuant to the Act for Partial Amendment of theDevelopment Bank of Japan Inc. Act and the Amendment
and Replacement reading pursuant to the Act for
Extraordinary Expenditure and Assistance to Cope with theGreat East Japan Earthquake (hereinafter, referred to as the”Act for Extraordinary Expenditure”.))

Redemption of the Government Bonds
Article 2-4
The Corporation may request the redemption of the government
bonds delivered as set forth in the provisions of Paragraph 2 ofthe preceding Article, only within the amount of capital calculatedby the Ministry of Finance Ordinance as the necessary amount of
capital in response to the increase of assets related to its Crisis
Response Operations (limited to those conducted by March 31,2015).

Annual Report & CSR Report 2012141

Amendment of the Development Bank of Japan Inc. Act (based on establishment of the Act for Extraordinary Expenditure and Assistance to Cope

Special Rules for the Development Bank of Japan Inc. Act
Article 36
With regard to the capital contribution and the issuance orredemption of Government bonds to facilitate implementation of
the crisis response operations (operations specified in Article 2,
Item (5) of the Japan Finance Corporation Act (Act No. 57 of2007), as well as in Article 133) by the Development Bank ofJapan Inc. to cope with the Great East Japan Earthquake, within
Article 2-2 of the Supplementary Provisions to the Development
Bank of Japan Inc. Act (Act No. 85 of 2007), “March 31, 2012”
shall be deemed to be replaced with “March 31, 2015,” and “asit deems necessary” shall be deemed to be replaced with “as it
deems necessary to facilitate implementation of the crisis response
operations,” and within Article 2-3, Paragraph 1 and Article 2-4,
Paragraph 1 of the same supplementary provisions, “March 31,
2012,” shall be deemed to be replaced with “March 31, 2015,”
and within Article 2-5, Paragraph 1 of the same supplementaryprovisions, “July 1, 2012” shall be deemed to be replaced with
”July 1, 2015.”

Corporate Data

(Reference 2) The Supplementary Provisions of the Act for
Partial Amendment of the Development Bank of Japan Inc.
Act (After the amendment pursuant to the Act for
Extraordinary Expenditure)

Amendment of the Development Bank of Japan Inc. Act (based on establishment of the Act for Extraordinary Expenditure and Assistance to Copewith the Great East Japan Earthquake (Act No. 40 of 2011))

142

Review, Etc.
Article 2
1 By the end of fiscal year 2014, the Government shall review
what the appropriate implementation of the Crisis Response
Operations (referring to the Crisis Response Operationsprescribed under the provisions of Article 2, Item 5 of the Japan
Finance Corporation Act (Act No. 57 of 2007); same
hereinafter) implemented by the Development Bank of Japan
Inc. (hereinafter “the Corporation”) and the appropriateorganization of the Corporation based on that including theway of holding its shares by the Government should be, andshall take necessary measures based on these reviews, taking
into account the status of the capital contributions by theGovernment to the Corporation under the provisions of Article
2-2 of the Supplementary Provisions (including the replacement
readings pursuant to the Act for Extraordinary Expenditure andAssistance to Cope with Great East Japan Earthquake (Act No.

Annual Report & CSR Report 201240 of 2011) Article 36) of the Development Bank of Japan Inc.
Act as amended by this Act; the redemption of the Government
bonds under the Article 2-4, Paragraph 2 of the supplementaryprovisions of the Development Bank of Japan Inc. Act asamended by this Act; the implementation of the Crisis
Response Operations by the Corporation; and the changes insocioeconomic and other circumstances, from a point of viewof maintaining the involvements with the Corporation by theState such as letting the Government consistently hold its
shares exceeding one-third of the Corporation’s issued shares in
the aim of ensuring the appropriate implementation of the
Crisis Response Operations by the Corporation.
2 Notwithstanding the provisions of Article 6, Paragraph 2 of the
Act on Promotion of Administrative Reform for Realization of
Small and Efficient Government (Act No. 47 of 2006) as
amended pursuant to the provisions of the following Article
and the provisions of Article 2, Paragraph 1 of the
Supplementary Provisions of the Development Bank of Japan
Inc. Act as amended pursuant to this Act, the Government shallnot dispose of its holding shares of the Corporation prior to themeasures described in the preceding paragraph shall be taken.

Financial Condition

Financial Condition

Consolidated Financial Statements .  .  . . . . . . . . 144
Non-Consolidated Financial Statements .  .  . . . . 186
Capital Adequacy Status  .  . . . . . . . . . . . . . . . . . 189

Annual Report & CSR Report 2012143

Financial Condition

Consolidated Balance Sheet

Development Bank of Japan Inc. and Consolidated Subsidiaries

Thousands of
U.S. Dollars (Note 1)

Millions of Yen

As of March 31,

2012

2011

2012

AssetsCash and due from banks (Note 28)¥

175,618

Call loans and bills bought (Note 28)

89,500

Reverse repurchase agreements (Notes 3 and 28)
Money held in trust (Notes 28 and 30)¥

233,297$

2,136,741

61,852

1,088,940

152,889—

1,860,200

24,42324,819297,154

Securities (Notes 3, 14, 28 and 30)

1,176,622

1,165,580

14,315,887

Loans (Notes 4, 5, 14 and 28)

13,645,469

13,031,480

166,023,471

Other assets (Notes 6 and 14)

132,487

122,296

1,611,971

Tangible fixed assets (Note 7)

180,962

181,486

2,201,754

7,057

5,960

85,864

Intangible fixed assets
Consolidated Financial Statements

Deferred tax assets (Note 24)

18,85436,137229,397

Customers’ liabilities for acceptances and guarantees (Note 13)

128,518

145,068

1,563,674

Allowance for loan losses (Notes 8 and 28)(151,448)(161,607)(1,842,667)(1,072)(1,158)(13,049)¥15,579,881¥14,845,213$189,559,337

Debentures (Notes 9, 14 and 28)¥ 3,130,495¥ 3,312,713$ 38,088,519

Borrowed money (Notes 10 and 28)

9,170,553

8,576,482

111,577,487

Short-term corporate bonds (Notes 9 and 28)

50,999—620,503

Corporate bonds (Notes 9 and 28)

541,327

316,675

6,586,298

Other liabilities (Notes 11 and 12)

78,631

52,981

956,702

Accrued bonuses to employees

Allowance for investment losses
		Total assets
Liabilities and equity
Liabilities:

4,694

4,581

57,121

Accrued bonuses to directors and corporate auditors

12

17

158

Reserve for employees’ retirement benefits (Note 23)

13,48425,885

164,062

55

52

677

Reserve for contingent losses

—

711

—

Deferred tax liabilities (Note 24)

43

48

525

Reserve for directors’ and corporate auditors’ retirement benefits

Acceptances and guarantees (Note 13)

128,518

145,068

1,563,674

		Total liabilities

13,118,816

12,435,218

159,615,727

Equity:Common stock authorized, 160,000 thousand shares in 2012 and2011; issued, 43,632 thousand shares in 2012 and 43,623
thousand shares in 2011 (Note 15)
Capital surplus (Note 15)

1,187,788
1,060,466

1,181,194
1,060,466

14,451,734
12,902,620

159,606

132,329

1,941,926

Unrealized gain on available-for-sale securities (Note 30)

19,313

13,169234,981Deferred gain on derivatives under hedge accounting

27,711

17,406337,160

Retained earnings (Note 15)
Accumulated other comprehensive income:

Foreign currency translation adjustments
		TotalMinority interests
		Total equity
		

Total liabilities and equity

See notes to consolidated financial statements.

144

Annual Report & CSR Report 2012

(149)

(101)

(1,817)2,454,736

2,404,464

29,866,604

6,329

5,530

77,0062,461,065

2,409,995

29,943,610¥15,579,881¥14,845,213$189,559,337

Financial Condition

Consolidated Statement of Income
Development Bank of Japan Inc. and Consolidated Subsidiaries

Thousands of
U.S. Dollars (Note 1)

Millions of Yen

For the year ended March 31,

2012

2011

2012

IncomeInterest income:¥277,360¥298,929$3,374,627

Interest on loans

253,849

271,860

3,088,567

Interest and dividends on securities

15,59019,268

189,694

Interest on call loans and bills bought

115

165

1,408

Interest on reverse repurchase agreements

287

149

3,493

Interest on due from banks

105

171

1,287

Interest on swaps

7,287

7,238

88,671Other interest income

123

75

1,506

Fees and commissions (Note 17)

9,461

9,998

115,118

5,522

12,642

67,19737,86842,275

460,747

		Total income

330,213363,846

4,017,689

155,517

172,231

1,892,168

47,66852,920579,975

Consolidated Financial Statements

Other operating income (Note 18)
Other income (Note 19)
Expenses
Interest expense:
Interest on debentures
Interest on call money and bills soldInterest on borrowed money
Interest on short-term corporate bonds
Interest on corporate bonds
Other interest expense
Fees and commissions (Note 20)
Other operating expenses (Note 21)

41

149

505

104,564

116,646

1,272,235

56

10

693

3,182

2,500

38,722

3

3

38

551

607

6,714

2,622

12,012

31,906

General and administrative expenses

37,87036,708

460,765

Other expenses (Note 22)

23,44737,903285,287

		Total expenses

220,009259,464

2,676,841

		110,204

104,3811,340,848

21,488371

261,446

Income before income taxes and minority interests

Income taxes (Note 24):
Current

10,444944

127,076

Total income taxes

Deferred

31,932

1,315

388,522

Net income before minority interests

78,271103,065

952,326

Minority interests in net income
Net income

957

1,481

11,655¥ 77,313¥101,583$ 940,671

Yen

U.S. Dollars (Note 1)

Per share of common stock (Note 16)
Basic net income
Cash dividend applicable to the year

¥1,772.27¥2,328.63$21.56

856

1,147

10.41

See notes to consolidated financial statements.

Annual Report & CSR Report 2012145

Financial Condition

Consolidated Statement of Comprehensive Income
Development Bank of Japan Inc. and Consolidated Subsidiaries

Thousands of
U.S. Dollars (Note 1)

Millions of Yen

For the year ended March 31,

2012

2011

2012

Net income before minority interests¥78,271¥103,065$ 952,326

Unrealized gain on available-for-sale securities

8,854

2,073

107,728

Deferred gain on derivatives under hedge accounting

10,2886,273

125,178

(49)

(46)

(601)

Other comprehensive income (Note 26):

Foreign currency translation adjustments
Share of other comprehensive income in affiliates accounted
for by the equity method		

Total other comprehensive income

Comprehensive income

17

(22)

209

19,1108,277

232,514¥97,382¥111,343$1,184,840¥93,714¥109,867$1,140,212

3,668

1,475

44,628

Total comprehensive income attributable to:Consolidated Financial Statements

Owners of the parent
Minority interests
See notes to consolidated financial statements.

146

Annual Report & CSR Report 2012

Financial Condition

Consolidated Statement of Change in Equity
Development Bank of Japan Inc. and Consolidated Subsidiaries

Thousands of U.S.
Dollars (Note 1)

Millions of Yen

For the year ended March 31,

2012

2011

2012

¥1,181,194¥1,181,194$14,371,505

6,170
424

—
—

75,0705,159

1,187,788

1,181,194

14,451,734

Balance at beginning of year

1,060,466

1,060,466

12,902,620

Balance at end of year

1,060,466

1,060,466

12,902,620

Balance at beginning of year

132,329

40,7791,610,047

Cash dividends(50,036)(10,033)(608,792)

Net income

77,313

101,583

940,671

Balance at end of year

159,606

132,329

1,941,926

Balance at beginning of year

13,169

11,091

160,232

Net change during the year

6,143

2,078

74,748

Balance at end of year

19,313

13,169234,981

Balance at beginning of year

17,406

11,154

211,789

Net change during the year

10,304

6,252

125,371

Balance at end of year

27,711

17,406337,160

(101)

(54)

(1,238)

Common stock:
Balance at beginning of year
Capital increase due to redemption of government
compensation bonds
Issuance of new shares of common stock
Balance at end of year
Capital surplus:

Retained earnings:
Consolidated Financial Statements

Accumulated other comprehensive income:Unrealized gain on available-for-sale securities:

Deferred gain on derivatives under hedge accounting:Foreign currency translation adjustments:
Balance at beginning of year
Net change during the year

(47)

(46)

(579)

Balance at end of year

(149)

(101)

(1,817)

5,530

22,90867,288

Minority interests:
Balance at beginning of year
Net change during the year798

(17,378)

9,718

6,329

5,530

77,0062,409,995

2,327,538

29,322,243

6,170
424

—
—

75,0705,159

Cash dividends(50,036)(10,033)(608,792)

Net income

77,313

101,583

940,671

Net change during the year

17,198(9,094)

209,259¥2,461,065¥2,409,995$29,943,610

Balance at end of year
Total equity:
Balance at beginning of year
Capital increase due to redemption of government
compensation bonds
Issuance of new shares of common stock

Balance at end of year
See notes to consolidated financial statements.

Annual Report & CSR Report 2012147

Financial Condition

Consolidated Statement of Cash Flows
Development Bank of Japan Inc. and Consolidated Subsidiaries

Thousands of U.S.
Dollars (Note 1)

Millions of Yen

For the year ended March 31,

Consolidated Financial Statements

Cash flows from operating activities:
Income before income taxes and minority interests
Adjustments for:
Depreciation
Losses on impairment of long-lived assets
Equity in gains of affiliates
Interest income
Interest expense(Gain) loss on securities—net
Gain on money held in trust—net
Foreign exchanges losses
Loss (gain) on sales of fixed assets—net
Changes in operating assets and liabilities:
		 Allowance for loan losses
		 Allowance for investment losses
		 Accrued bonuses to employees
		 Accrued bonuses to directors and corporate auditors
		 Reserve for employees’ retirement benefits		 Reserve for contingent losses
		Loans
		Debentures
		Borrowed money
		 Short-term corporate bonds
		Corporate bonds
		 Due from banks
		 Call loans and bills bought		 Reverse repurchase agreements
		 Call money and bills soldInterest received
Interest paid
Other—net
		Sub-total
		 Returns on (payments for) income taxes
Net cash (used in) provided by operating activities
Cash flows from investing activities:
Payments for purchases of securities
Proceeds from sales of securities
Proceeds from redemption of securities
Payments for increase of money held in trust
Proceeds from decrease of money held in trust
Payments for purchases of tangible fixed assets
Proceeds from sales of tangible fixed assets
Payments for purchases of intangible fixed assets
Proceeds from sales of intangible fixed assets
Proceeds from purchases of stocks of subsidiaries resulting inchange in scope of consolidation
Net cash provided by investing activities
Cash flows from financing activities:
Capital increase due to redemption of government compensation
bonds
Proceeds from issuance of stock
Payments for cash dividends
Proceeds from issuance of securities to minority shareholders ofsubsidiaries
Dividends paid to minority shareholders of subsidiaries
Net cash used in financing activities
Foreign currency translation adjustments on cash and cash
equivalents
Net change in cash and cash equivalents
Cash and cash equivalents of newly consolidated subsidiaries
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
See notes to consolidated financial statements.

148

Annual Report & CSR Report 2012

2012

2011

2012

¥110,204¥104,381$1,340,848

2,583
132
2,020
(277,360)
155,517(3,166)(1,132)
1,482
210

1,984
21
(1,837)(298,929)
172,231
7,923(623)
15,330(3)

31,428
1,614
24,587(3,374,627)
1,892,168(38,522)(13,780)
18,032
2,563(10,158)
(85)
106
(4)
(12,401)(711)(613,988)(182,217)
594,071
50,999224,652(17,871)(27,648)(152,889)—
280,304(157,633)(17,184)(52,170)
11,816(40,354)(41,815)(1,845)2,342(4)(6,727)(2,104)
483,181(191,498)(505,997)—
74,494(9,665)
63,148
179,991(153,000)
303,109(175,029)(2,107)
16,948(15,157)
1,790(123,597)(1,045)1,300(54)(150,891)(8,654)(7,470,359)(2,217,033)
7,228,025
620,5032,733,326(217,443)(336,391)(1,860,200)—
3,410,445(1,917,911)(209,084)(634,753)
143,768(490,985)(621,860)
103,706
530,838(110)
1,579(1,708)1,234(2,630)—(1,727,311)
362,248
1,469,407(1,215)8,111(26,021)17(2,020)0(7,566,130)
1,261,792
6,458,680(1,338)19,213(20,787)
15,016(32,004)—

110
11,160—83,2171,350
135,791

6,170
424(50,036)——(10,033)

75,0705,159(608,792)

540(3,517)(46,418)

2,848(22,439)(29,624)

6,582(42,794)(564,775)

61(75,550)—
199,692¥124,141(553)
54,828
106
144,756¥199,692

754(919,215)—
2,429,639$1,510,425

Financial Condition

Notes to Consolidated Financial Statements
Development Bank of Japan Inc. and Consolidated Subsidiaries

1. Basis of Presentation

Consolidated Financial Statements

The accompanying consolidated financial statements have been prepared in accordance with the provisions set forth in
the Japanese Financial Instruments and Exchange Act and its related accounting regulations and Ministerial Ordinance for
Accounting of the Development Bank of Japan Inc. (“DBJ Inc.”) and in conformity with accounting principles generally
accepted in Japan (“Japanese GAAP”), which are different in certain respects as to application and disclosure requirementsof International Financial Reporting Standards.
In preparing these consolidated financial statements, certain reclassifications and rearrangements have been madeto the consolidated financial statements issued domestically in order to present them in a form which is more familiar toreaders outside Japan. In addition, certain reclassifications have been made in the 2011 consolidated financial statements toconform to the classifications used in 2012.
The amounts indicated in millions of yen are rounded down by omitting the figures less than one million yen.
Accordingly, the sum of each amount appearing in the accompanying financial statements and the notes thereto may not
be equal to the sum of the individual account balances. Amounts in U.S. dollars are presented solely for the convenienceof readers outside Japan. The rate of ¥82.19=$1.00, the effective exchange rate prevailing as of March 31, 2012, has beenused in the conversion. The presentation of such amounts is not intended to imply that Japanese yen amounts have been or
could have been readily translated, realized or settled in U.S. dollars at that rate or any other rate.

2. Summary of Significant Accounting Policies(a) Principles of Consolidation(1) Scope of Consolidation
Under the control concept, those companies in which DBJ Inc., directly or indirectly, is able to exercise control over
operations are fully consolidated. On September 8, 2006, the Accounting Standards Board of Japan (“ASBJ”) issued
Practical Issues Task Force No. 20, “Practical Solution on Application of Control Criteria and Influence Criteria to
Investment Associations” which was effective for the period and the fiscal years ending on or after September 8,
2006. The practical solution clarifies how the control and influence concept should be practically applied to theconsolidation scope of collective investment vehicles, such as limited partnerships, Tokumei Kumiai and other entities
with similar characteristics.
(i) Consolidated Subsidiaries
The number of consolidated subsidiaries as of March 31, 2012 is 17. The consolidated subsidiaries as of March 31,
2012 are as follows:
DBJ Business Investment Co., Ltd.
DBJ Corporate Mezzanine Partners Co., Ltd.
UDS Corporate Mezzanine Limited Partnership
UDS Corporate Mezzanine No. 3 Limited Partnership
DBJ Credit Line, Ltd.
New Business Investment Co., Ltd.
DBJ Singapore Limited
Japan Economic Research Institute Inc.
Asuka DBJ Investment LPS
DBJ Europe Limited
DBJ Real Estate Co., Ltd.
DBJ Investment Advisory Co., Ltd.
DBJ Capital Co., Ltd.
DBJ Capital Investment Fund No. 1
DBJ New Business Investment FundDBJ Capital Investment Fund No. 2
DBJ Securities Co., Ltd.
In the year ended March 31, 2012, DBJ Securities Co., Ltd. was newly consolidated due to acquisition of its shares.

Annual Report & CSR Report 2012149

Financial Condition(ii) Unconsolidated Subsidiaries
The number of unconsolidated subsidiaries as of March 31, 2012 is 23. The major unconsolidated subsidiary as ofMarch 31, 2012 was UDS II Corporate Mezzanine Limited Partnership.
Unconsolidated subsidiaries are excluded from the scope of consolidation because such exclusion has no material
impact on the consolidated financial statements in terms of total assets, income, net income, retained earnings anddeferred hedge gains and losses.
(2) Application of the Equity Method
Under the influence concept, unconsolidated subsidiaries and affiliates over which DBJ Inc. has the ability to exercise
significant influence are accounted for by the equity method.

Consolidated Financial Statements(i) Unconsolidated subsidiaries not accounted for by the equity method
The number of unconsolidated subsidiaries not accounted for by the equity method as of March 31, 2012 was 23.
The major unconsolidated subsidiary not accounted for by the equity method was UDS II Corporate Mezzanine
Limited Partnership.
(ii) Affiliates accounted for by the equity method
The number of affiliates accounted for by the equity method as of March 31, 2012 was 15. The major affiliates
accounted for by the equity method as of March 31, 2012 were as follows:
Makuhari Messe, Inc.
Hokkaido International Airlines Co., Ltd.
Urban Redevelopment Private Fund
Changes in scope of affiliates accounted for by the equity method:
Since DBJ-JAIC Investment Consulting (Beijing) Co., Ltd. was newly incorporated and the materiality of Asahikawa
Airport Terminal Building Co., Ltd. increased during the year ended March 31, 2012, these two companies were
newly accounted for by the equity method as of March 31, 2012.
(iii) Affiliates not accounted for by the equity method
The number of affiliates not accounted for by the equity method as of March 31, 2012 was 93. One of the majoraffiliates as of March 31, 2012 was:
New Perspective One LLC
Unconsolidated subsidiaries and affiliates that are not accounted for by the equity method have been excluded
from the scope of the equity method because their aggregate effect in terms of net income, retained earnings anddeferred gains and losses has no material impact on the consolidated financial statements of DBJ Inc.
(iv) Entities not recognized as affiliates where DBJ Inc. owns the voting rights between 20% and 50%
The following companies of which DBJ Inc. owns the voting rights between 20% and 50% were not recognized asaffiliates accounted for by the equity method, since DBJ Inc.’s intent is to nurture the venture business and not toexercise significant influence on their operating and financing policies:
As of March 31, 2012
Narumi Corporation
Shinwa Seiko Corporation
Mediclude Co., Ltd.
Advangen, Inc.
Asahi Fiber Glass Company, Limited
Nihon Shoryoku Kikai Co., Ltd.
PRISM BioLab Corporation
Izumi Products Company
OPAL Co., Ltd.
Springsoft, Inc.
SKYROCKIT, Inc.
Teibow Co., Ltd.

150

Annual Report & CSR Report 2012

Financial Condition(3) Balance Sheet Dates of Consolidated Subsidiaries
		 Balance sheet dates of consolidated subsidiaries are as follows:
Number of subsidiaries

2012

December 31
March 317
10Consolidated subsidiaries are consolidated based on the financial statements that are prepared as of their year-end
balance sheet date.
The necessary adjustments are made in the consolidated financial statements to reflect material transactions that
occur between the year-end balance sheet date of the subsidiary and the consolidated balance sheet date.

Consolidated Financial Statements(4) Elimination of Intercompany Balances and Transactions
All significant intercompany balances and transactions have been eliminated in consolidation. All material unrealized
profit resulting from transactions between DBJ Inc. and its consolidated subsidiaries is eliminated.
(5) Amortization of Goodwill
The difference between the fair value of net assets and the cost of the acquired subsidiary is being amortized ona straight-line basis over the estimated beneficial period not exceeding 20 years. Minor differences are charged
to income in the year of acquisition. The excess of the fair value over the cost of acquired subsidiaries (negative
goodwill) is recognized as income immediately as incurred.
(b) Cash and Cash Equivalents“Cash and Cash Equivalents” in the consolidated statement of cash flows consist of cash on hand and due from banks.
The reconciliation between “Cash and cash equivalents” and “Cash and due from banks” in the consolidated balance
sheet is as follows:
Thousands of
U.S. Dollars

Millions of Yen

Cash and due from banks

2012

2011

2012

¥175,618¥233,297$2,136,741

Time deposits with banks(51,476)(33,605)(626,317)

Cash and cash equivalents¥124,141¥199,692$1,510,425(c) Securities
Held-to-maturity debt securities are stated at amortized cost with amortization computed on a straight-line basis, using
the weighted average method. Available-for-sale securities with readily available market quotations are stated at market
value (cost is calculated principally using the weighted average method). Financial instruments whose fair value cannot
be reliably determined are stated at cost using the weighted average method.
Investments in limited partnerships and other similar partnerships are accounted for at their original cost plus
DBJ Inc.’s interest in earnings since acquisition and less any dividends received, based on their most recent financial
statements.
Unrealized gains and losses on available-for-sale securities are included in equity, net of income taxes.
Securities which are held as trust assets in money held in trust accounts are valued in the same way as othersecurities.
(d) Valuation Method for Derivative Financial Instruments
All derivative financial instruments are carried at market value. Except for certain derivatives that are designated as
hedging instruments as discussed below, gains or losses on derivative transactions are recognized in the statement ofincome.
(e) Hedge Accounting(1) Hedge Accounting
DBJ Inc. applies the deferral method of hedge accounting or the accrual method (*1). The portfolio hedge isaccounted for by the method stipulated in “Accounting and Auditing Treatments on the Application of AccountingStandards for Financial Instruments in the Banking Industry,” issued by the Japanese Institute of Certified Public

Annual Report & CSR Report 2012151

Financial Condition

Accountants (the “JICPA Industry Audit Committee Report No. 24”). In addition, foreign currency swaps which
are used to hedge foreign currency fluctuations are not translated at market values but at contractual rates, as theforeign currency swap contracts meet the hedging criteria under the Accounting Standards for Financial Instruments.
(2) Hedging Instruments and Hedged Items• Hedging Instruments : Interest rate swaps
Hedged Items: Debentures, Borrowed money, Corporate bonds, Securities and Loans• Hedging Instruments : Foreign currency swaps
Hedged Items: Foreign currency denominated loans and Debentures(3) Hedging Policy
DBJ Inc. utilizes hedging instruments to hedge interest rates and foreign currency fluctuations on its assets andliabilities. Individual contracts or every constant group are drawn for each hedged item.

Consolidated Financial Statements(4) Evaluation of Hedge EffectivenessAccording to the risk management policy, DBJ Inc. evaluates the effectiveness of the hedges by testing whether thederivatives are effective in reducing the risks associated with the hedged items.
In addition, as for portfolio hedging activities to fix the cash flows, the effectiveness is assessed based on thecorrelation between the base interest rate index of the hedged cash flow and the hedging instrument.
With respect to an individual hedge, in regards to both interest rate swap contracts which meet the hedging
requirements of the accrual method (*1) and foreign currency swap contracts which meet the hedging requirementsof the assignment method (*2), under the Accounting Standards for Financial Instruments at the inception date, DBJ
Inc. is not required to periodically evaluate hedge effectiveness.
*1.	If interest rate swap contracts are used as hedges and meet certain hedging criteria, the net amount to be paid or received
under the interest rate swap contract is added to or deducted from the interest on the assets or liabilities for which the swap
contract was executed.
*2.	In cases where foreign currency swaps are used as hedges and meet certain hedging criteria, foreign exchange forward
contracts and hedged items are accounted for in the following manner;(i) If a foreign currency swap is executed to hedge existing foreign currency assets or liabilities, a) the difference, if any, between
the Japanese yen amount of the hedged foreign currency asset or liability translated using the spot rate at the inception dateof the contract and the book value of the asset or liability is recognized in the statement of income in the period which
includes the inception date, and b) the discount or premium on the contract (that is, the difference between the Japanese
yen amount of the contract translated using the contracted forward rate and that translated using the spot rate at the
inception date of the contract) is recognized over the term of the contract.
(ii) If a foreign currency swap is executed to hedge a future transaction denominated in a foreign currency, the futuretransaction will be recorded using the contracted forward rate, and no gains or losses on the foreign exchange forward
contract are recognized.

(f) Fixed Assets(1) Depreciation of Tangible Fixed Assets
Tangible Fixed Assets are stated at cost less accumulated depreciation. Tangible Fixed Assets of DBJ Inc. aredepreciated using the declining-balance method, except for buildings (excluding installed facilities) that are
depreciated on a straight-line basis, and depreciation of consolidated subsidiaries is computed principally using thestraight-line method based on the estimated durability of assets.
The estimated useful lives are principally as follows:		 Buildings: 3 years to 50 years
		 Others: 4 years to 20 years(2) Amortization of Intangible Fixed Assets
Intangible Fixed Assets are amortized using the straight-line method. Capitalized software for internal use isamortized using the straight-line method based on the estimated useful lives (mainly from 3 to 5 years).

152

Annual Report & CSR Report 2012

Financial Condition(3) Lease Assets
Depreciation for lease assets is computed by the straight-line method with zero residual value over the lease term.
(g) Long-lived Assets
DBJ Inc. reviews its long-lived assets for impairment whenever events or changes in circumstance indicate the carrying
amount of an asset or asset group may not be recoverable. Impairment losses are recognized if the carrying amount ofan asset or asset group exceeds the sum of the undiscounted future cash flows expected to result from the continued
use and eventual disposition of the asset or asset group. The impairment losses would be measured as the amount bywhich the carrying amount of the asset exceeds its recoverable amount, which is the higher of the discounted cash
flows from the continued use and eventual disposition of the asset or the net selling price at disposition.
(h) Debentures and Corporate Bonds Issuance Costs“Debentures and Corporate Bonds Issuance Costs” are charged to income as incurred.

Consolidated Financial Statements(i) Foreign Currency Translation and Revaluation Method
Assets and liabilities denominated in foreign currencies held by DBJ Inc. have been translated at the exchange rates
prevailing as of the balance sheet date. Foreign currency accounts held by consolidated foreign subsidiaries aretranslated into the currency of the subsidiaries at the respective year-end exchange rates. The foreign exchange gains
and losses from transactions are recognized in the statement of income to the extent that they are not hedged byforward exchange contracts. The balance sheet accounts of the consolidated foreign subsidiaries are translated into
Japanese yen at the current exchange rate as of the balance sheet date except for equity, which is translated at thehistorical rate. Differences arising from such translation were shown as “Foreign Currency Transaction Adjustments” ina separate component of equity. Revenue and expense accounts of consolidated foreign subsidiaries are translated into
yen at the exchange rate prevailing as of the balance sheet date.
(j) Allowance for Loan Losses
DBJ Inc. provides for “Allowance for Loan Losses” as detailed below pursuant to the internal policies for self-assessmentof credit quality and loan losses. The allowance for claims on debtors who are legally bankrupt, in special liquidation oreffectively bankrupt is provided for based on the amount of claims, after the write-off described below, net of amounts
expected to be recovered through disposal of collateral or execution of guarantees. The allowance for claims on debtors
who are not legally bankrupt at the moment, but are likely to become bankrupt, and for which future cash flows cannot
reasonably be estimated (possibly bankrupt), is provided for at the amount considered to be necessary based on an
overall solvency assessment performed on the claims, net of amounts expected to be recovered through disposal ofcollateral or execution of guarantees. With respect to the claims on debtors who are likely to become bankrupt or to beclosely monitored, and for which future cash flows can reasonably be estimated, the allowance is provided for as thedifference between the present value of expected future cash flows discounted at the contracted interest rate and thecarrying value of the claims. The allowance for claims on debtors other than those described above is provided basedon the historical default rate, which is calculated based on the actual defaults over a certain historical period. All claims
are assessed initially by the investment and lending departments and then by the Credit Analysis Department, which is
independent of the investment and lending departments based on internal policies for self-assessment of credit quality.
The allowance is provided for based on the results of the self-assessment.
With respect to the claims on debtors who are legally or substantially bankrupt with collateral or guarantees, theamount of claims exceeding the estimated market values of collateral or guarantees which are deemed uncollectible
were written-off, and totaled ¥59,113 million ($719,235 thousand) and ¥45,551 million for the years ended March 31,
2012 and 2011, respectively. The consolidated subsidiaries calculate the general reserve for “normal” categories basedon the specific actual historical loss ratio, and the specific reserve for the “possibly bankrupt,” “effectively bankrupt”
and “legally bankrupt” categories based on estimated losses, considering the recoverable value.
(k) Allowance for Investment Losses“Allowance for Investment Losses” is provided for based on the estimated losses on certain investments based on anassessment of the issuers’ financial condition.

Annual Report & CSR Report 2012153

Financial Condition(l) Accrued Bonuses to Employees, Directors and Corporate Auditors“Accrued Bonuses to Employees, Directors and Corporate Auditors” are provided for in the amount of the estimatedbonuses which are attributable to the years ended March 31, 2012 and 2011.

Consolidated Financial Statements(m) Reserve for Employees’ Retirement Benefits
DBJ Inc. has defined benefit pension plans, which consist of a defined-benefit corporate pension plan and a lumpsum severance indemnity plan. “Reserve for Employees’ Retirement Benefits” represents future payments for pension
and retirement benefits to employees. It is accrued based on the projected benefit obligations and estimated pension
plan assets at each fiscal year end. Prior service cost is amortized using the straight-line method over the period of ten
years within the employees’ average remaining service period at incurrence. Net actuarial gains and losses is amortizedusing the straight-line method over the period of ten years within the employees’ average remaining service period
commencing from the next fiscal year after incurrence.
DBJ Inc. has two types of pension plans for employees: a non-contributory and a contributory funded defined
benefit pension plan.
The contributory funded defined benefit pension plan, established under the Japanese Welfare Pension Insurance
Law, covers a substitutional portion of the governmental pension program managed by DBJ Inc. on behalf of thegovernment and a corporate portion established at the discretion of DBJ Inc. In accordance with the Defined Benefit
Pension Plan Law enacted in April 2002, DBJ Inc. applied for an exemption from obligation to pay benefits for future
employee services related to the substitutional portion which would result in the transfer of the pension obligations
and related assets to the government upon approval. DBJ Inc. obtained an approval for exemption from the future
obligation by the Ministry of Health, Labor and Welfare on July 1, 2010.
In the current year, DBJ Inc. applied for transfer of the substitutional portion of past pension obligations to thegovernment and obtained approval by the Ministry of Health, Labor and Welfare on November 1, 2011. The actual
transfer of the pension obligations and related assets to the government is to take place subsequently after thegovernment’s approval.
Based upon the above approval in November 2011, DBJ Inc. recognized a gain on transfer of the substitutional
portion of the governmental pension program in the amount of ¥ 11,036 million ($134,281 thousand) for the year
ended March 31, 2012.
(n) Reserve for Directors’ and Corporate Auditors’ Retirement Benefits“Reserve for Directors’ and Corporate Auditors’ Retirement Benefits” is accrued based on the amount that would be
required if all directors and corporate auditors retired at the balance sheet date.
(o) Asset Retirement Obligations
In March 2008, the ASBJ published the accounting standard for asset retirement obligations, ASBJ Statement No. 18“Accounting Standard for Asset Retirement Obligations” and ASBJ Guidance No. 21 “Guidance on AccountingStandard for Asset Retirement Obligations”. Under this accounting standard, an asset retirement obligation is defined asa legal obligation imposed either by law or contract that results from the acquisition, construction, development and thenormal operation of a tangible fixed asset and is associated with the retirement of such tangible fixed asset.
The asset retirement obligation is recognized as the sum of the discounted cash flows required for the future asset
retirement and is recorded in the period in which the obligation is incurred if a reasonable estimate can be made. If areasonable estimate of the asset retirement obligation cannot be made in the period the asset retirement obligation
is incurred, the liability should be recognized when a reasonable estimate of asset retirement obligation can be made.
Upon initial recognition of a liability for an asset retirement obligation, an asset retirement cost is capitalized byincreasing the carrying amount of the related fixed asset by the amount of the liability.
The asset retirement cost is subsequently allocated to expense through depreciation over the remaining useful life of
the asset. Over time, the liability is accreted to its present value each period. Any subsequent revisions to the timing or
the amount of the original estimate of undiscounted cash flows are reflected as an increase or a decrease in the carrying
amount of the liability and the capitalized amount of the related asset retirement cost.
(p) Lease Transactions
In March 2007, the ASBJ issued ASBJ Statement No. 13, “Accounting Standard for Lease Transactions,” which revised
the previous accounting standard for lease transactions issued in June 1993. The revised accounting standard for leasetransactions was effective for fiscal years beginning on or after April 1, 2008.

154

Annual Report & CSR Report 2012

Financial Condition

Under the previous accounting standard, finance leases that were deemed to transfer ownership of the leased
property to the lessee were capitalized. However, other finance leases were permitted to be accounted for as operatinglease transactions if certain “as if capitalized” information was disclosed in the note to the lessee’s financial statements.
The revised accounting standard requires that all finance lease transactions be capitalized to recognize lease assets andlease obligations in the balance sheet. In addition, the revised accounting standard permits leases which existed at thetransition date and do not transfer ownership of the leased property to the lessee to continue to be accounted for as
operating lease transactions.
DBJ Inc. applied the revised accounting standard on October 1, 2008. In addition, DBJ Inc. continues to account forleases which existed at March 31, 2008 and were transferred to DBJ Inc. on October 1, 2008, and does not transfer
ownership of the leased property to the lessee as operating lease transactions.
(q) Consumption Taxes
Income and expenses subject to consumption taxes exclude related consumption taxes paid or received.

Consolidated Financial Statements(r) Income Taxes
The provision for income taxes is computed based on the pretax income included in the consolidated statement ofincome. The asset and liability approach is used to recognize deferred tax assets and liabilities for the expected future
tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities.
Deferred taxes are measured by applying currently enacted tax laws to the temporary differences.
(s) Per Share Information
Basic net income per share is computed by dividing net income available to common stockholders by the weightedaverage number of shares of common stock outstanding for the period, retroactively adjusted for stock splits. Diluted
net income per share for the years ended March 31, 2012 and 2011 is not disclosed because there are no dilutive
securities.
Cash dividends per share presented in the accompanying consolidated statement of income are dividends applicableto the year including dividends to be paid after the end of the year.
(t) Accounting Changes and Error Corrections
In December 2009, the ASBJ issued ASBJ Statement No. 24, “Accounting Standard for Accounting Changes andError Corrections” and ASBJ Guidance No. 24, “Guidance on Accounting Standard for Accounting Changes and Error
Corrections.” Accounting treatments under this standard and guidance are as follows:(1)	Changes in Accounting Policies—When a new accounting policy is applied with revision of accounting standards,
the new policy is applied retrospectively unless the revised accounting standards include specific transitional
provisions. When the revised accounting standards include specific transitional provisions, an entity shall comply withthe specific transitional provisions.
(2)	Changes in Presentations—When the presentation of financial statements is changed, prior-period financial
statements are reclassified in accordance with the new presentation.
(3)	Changes in Accounting Estimates—A change in an accounting estimate is accounted for in the period of the change
if the change affects that period only, and is accounted for prospectively if the change affects both the period of thechange and future periods.
(4)	Corrections of Prior-Period Errors—When an error in prior-period financial statements is discovered, thosestatements are restated.
		This accounting standard and the guidance are applicable to accounting changes and corrections of prior-period
errors which are made from the beginning of the fiscal year that begins on or after April 1, 2011.

Annual Report & CSR Report 2012155

Financial Condition

3. Securities
Securities as of March 31, 2012 and 2011 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

Japanese government bonds

2012

2011

2012

¥ 247,012¥ 418,710$ 3,005,380

Corporate bonds

392,589

282,139

4,776,608

Equities

169,806

164,136

2,066,028

Other securities

367,214300,594

4,467,871¥1,176,622¥1,165,580$14,315,887

Total

Consolidated Financial Statements*1. Investments in unconsolidated subsidiaries and affiliates included in “Equities” as of March 31, 2012 and 2011, are ¥24,066 million($292,818 thousand) and ¥24,293 million. Investments in unconsolidated subsidiaries and affiliates included in “Other securities” as ofMarch 31, 2012 and 2011, are ¥44,288 million ($538,857 thousand) and ¥42,919 million.
*2. DBJ Inc. has contingent liabilities for guarantees of corporate bonds among securities which were issued by private placement (Article
2, Paragraph 3 of Financial Instruments and Exchange Act) and amount to ¥697 million as of March 31, 2011.
*3. There are no securities repledged as of March 31, 2012 and 2011. Securities accepted under repurchase agreements can be sold or
repledged. Securities neither sold nor repledged are ¥152,889 million ($1,860,200 thousand) as of March 31, 2012.
*4. Marketable securities available-for-sale are considered impaired if there is a considerable decline in the market value below theacquisition cost and such decline is not believed to be recoverable. The difference between the acquisition cost and the market value isthe impairment loss for the fiscal year.
The criterion for determining “Considerable decline in market value” is as follows:
Market value declined by 50% or more of the acquisition cost.
Market value declined by 30% or more of the acquisition cost, and such decline is not considered as recoverable.

Impairment losses on marketable securities available-for-sale for the years ended March 31, 2012 and 2011 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2012

2011

2012

Equities

¥64

¥

8

$ 784

Bonds

31

4,104

377

Other

0

6

3

Total

¥95

¥4,119$1,165

4. Non-Performing Loans
The amounts of non-performing loans included in “Loans” as of March 31, 2012 and 2011 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2012

2011

2012

Loans to bankrupt debtors¥ 10,686¥

6,811$ 130,020

Delinquent loans

136,477

111,000

1,660,513

—

259

—

Loans past due three months or more
Restructured loans
Total

52,782

49,210642,199¥199,946¥167,281$2,432,731*1. The amounts of loans indicated above are stated at gross amounts, before reduction of the allowance for loan losses.
*2. “Loans to bankrupt debtors” represent non-accrual loans to debtors who are legally bankrupt as defined in Article 96-1-3 and 4 of theJapanese Tax Law Enforcement Regulation.
*3. “Delinquent loans” represent non-accrual loans other than (i) Loans to bankrupt debtors and (ii) Loans whose interest payments aredeferred in order to assist or facilitate the restructuring efforts of borrowers in financial difficulty.
*4. “Loans past due three months or more” are loans whose principal or interest payment is three months or more past due and do not
fall under the category of “Loans to bankrupt debtors” or “Delinquent loans.”*5. “Restructured loans” are loans whose repayment terms have been modified to the advantage of debtors through means such as a
reduction or exemption of interest rates, postponement of principal and interest payments, and forgiveness of loans to support or
restructure the debtors’ businesses, and do not fall under the category of “Loans to bankrupt debtors,” “Delinquent loans,” or “Loanspast due three months or more.”

156

Annual Report & CSR Report 2012

Financial Condition

5. Commitments
Loan commitment limits are contracts under which DBJ Inc. lends to customers up to the prescribed limits in response tocustomers’ applications for loans as long as there is no violation of any condition in the contracts. As of March 31, 2012
and 2011, the amounts of unused commitments are ¥580,042 million ($7,057,341 thousand) and ¥245,482 million. As of
March 31, 2012 and 2011, the amounts of unused commitments whose remaining contract term are within one year are¥455,229 million ($5,538,740 thousand) and ¥132,978 million.
Since many of these commitments expire without being drawn down, the unused amount does not necessarily
represent a future cash requirement. Most of these contracts have conditions whereby DBJ Inc. and its subsidiaries canrefuse customers’ applications for loans or decrease the contract limits for proper reason (e.g., changes in financial
situation, deterioration in customers’ credit worthiness). At the inception of contracts, DBJ Inc. and its subsidiaries obtainreal estate, securities or other assets as collateral if considered necessary. Subsequently, DBJ Inc. and its subsidiaries performperiodic reviews of the customers’ business results based on internal rules, and take necessary measures to reconsider
conditions in contracts and/or require additional collateral and guarantees.

Consolidated Financial Statements

6. Other Assets
Other assets as of March 31, 2012 and 2011 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2012

Prepaid expenses

¥

8,597

2011

2012

¥ 11,895$ 104,609

Accrued income

44,38240,250539,995

Derivatives

62,52849,509760,784

Other

16,97920,640206,583

Total¥132,487¥122,296$1,611,971

7. Tangible Fixed Assets
Tangible fixed assets as of March 31, 2012 and 2011 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2012

Buildings
Land

¥

¥

2012

9,191

$ 105,634

45,56247,808554,353

59

74

720

Leased assets
Construction in progress

2011

8,682

124,802123,589

1,518,460

Other

1,856

822

22,587

Total¥180,962¥181,486$2,201,754

Note: Accumulated depreciation of tangible fixed assets as of March 31, 2012 and 2011, is ¥2,538 million ($30,886 thousand) and ¥1,837
million.

8. Allowance for Loan Losses
An allowance for loan losses as of March 31, 2012 and 2011 is as follows:
Thousands of
U.S. Dollars

Millions of Yen

General allowance for loan losses
Specific allowance for loan losses
Total

2012

2011

2012

¥ 58,589¥ 88,187$ 712,853

92,85973,4201,129,815¥151,448¥161,607$1,842,667

Annual Report & CSR Report 2012157

Financial Condition

9. Debentures and Corporate Bonds
Debentures and corporate bonds as of March 31, 2012 and 2011 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

Issue date

Interest rate(%)

Maturity date

2012

2011

2012

¥ 682,486$ 7,696,883

Debentures
Japanese government-

Aug. 2001–

0.8–

Aug. 2011–¥ 632,606

guaranteed bonds 5-23*1, 7

Aug. 2008

2.2

Jun. 2023[50,000]

Japanese government-

Nov. 2008–

0.4–

Jul. 2016–

528,178

348,923

6,426,313

guaranteed bonds 1-14

Mar. 2012

2.1

Feb. 2024

Japanese government-

Sep. 1998

1.81

Sep. 2028

25,06625,070304,987

Japanese government-

Nov. 1999–

1.05–

Aug. 2011–

777,920

936,3449,464,904

guaranteed foreign bonds

Nov. 2007

6.875

Nov. 2027[74,996]284,868

163,092

3,465,974

1,104,812

10,096,808[608,347]

guaranteed foreign bond 67*2
Consolidated Financial Statements[912,476]

1, 3-14*1, 7Japanese government-

Dec. 2009–

0.7175–

Dec. 2014–

guaranteed Euro MTN bonds

Mar. 2012

2.875

Mar. 2017

FILP agency domestic bonds

Oct. 2002–

0.78–

Jun. 2011–

829,856

5, 7, 9, 11, 13, 16, 17, 19,

Jul. 2008

2.74

Mar. 2047[219,990]

Jun. 2007

1.65

Jun. 2012

1-5*3[2,676,615]

20, 22, 24-51*4, 7
FILP agency foreign bond
1*4, 749,99749,982

608,316[49,997]

Euro MTN bonds 2* 4, 5

Sep. 2008

Short-term corporate bonds*7[608,316]

2.032

Sep. 2023

2,000

2,000

May 2011–

50,999—0.12499 May 2012

[50,999]

24,334

Apr. 2011–

0.104–

Mar. 2012
Corporate bonds throughDec. 2008–

0.241–

Dec. 2011–

474,000

public placement 1-23*7

Feb. 2012

1.745

Mar. 2019[60,000]

Corporate bonds throughAug. 2009–

0.48–

Sep. 2014–

20,00010,000243,339

Jun. 2015
47,32739,675575,835¥3,629,389$45,295,320

620,503[620,503]

Corporate bonds

private placement 1-2

May 2011

0.847

Corporate bonds Euro MTN

Mar. 2009–

0.61586– Mar. 2012–

6-15, 17-30*6, 7

Jul. 2011

1.47355 Jul. 2018

Total

267,000

5,767,125[730,016][9,040]¥3,722,822[110,000]*1. These bonds are government-guaranteed bonds issued by the Development Bank of Japan.
*2. This bond is a government-guaranteed bond issued by the Japan Development Bank.
*3. These bonds are non-guaranteed bonds issued based on MTN program.
*4. Fiscal Investment and Loan Program (FILP) agency bonds issued are not government-guaranteed. These bonds are issued by theDevelopment Bank of Japan.
*5. These bonds are FILP bonds issued based on MTN program.
*6. These bonds are unsecured corporate bonds issued based on MTN program.
*7. Figures indicated in brackets [ ] indicate the amounts to be redeemed within one year.

Scheduled redemptions of debentures and corporate bonds which have been assumed and repaid by DBJ Inc. forsubsequent years as of March 31, 2012 are as follows:
The fiscal year ending March 31, 2013158

Annual Report & CSR Report 2012

¥515,024 million$6,266,272 thousand

2014

296,353

3,605,707

2015

437,994

5,329,053

2016

342,311

4,164,877

2017

619,5637,538,189

Financial Condition

10. Borrowed Money
Borrowed money as of March 31, 2012 and 2011 is as follows:
Thousands of
U.S. Dollars

Millions of Yen
Average interest rate (%)

Due date of repayment

2012

2011

2012

1.13

May 2012–Jan. 2032

¥9,170,553¥8,576,482$111,577,487

Borrowings

Scheduled redemptions of borrowings for subsequent years as of March 31, 2012 are as follows:
The fiscal year ending March 31, 2013$16,326,443 thousand

2014

1,204,191

14,651,310

2015

1,194,500

14,533,405

2016

1,102,995

13,420,068

2017

965,233

11,743,934

Consolidated Financial Statements¥1,341,870 million

11. Other Liabilities
Other liabilities as of March 31, 2012 and 2011 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2012

2011

2012

Accrued expenses¥28,621¥30,908$348,240

Unearned income

562

739

6,839

Accrued income taxes

20,754

76

252,518

Derivatives

12,752

8,805

155,158

Lease obligations

87

132

1,060

Asset retirement obligations (Note 12)

1,047

1,046

12,742

Other

14,806

11,272

180,146

Total¥78,631¥52,981$956,702

12. Asset Retirement Obligations
DBJ Inc. recognizes asset retirement obligations associated with the recovery obligations provided by the real estate
rental agreements. In addition, asset retirement obligations related to the obligations of pulling down the previous head
office buildings and removing the toxic substances were recognized in connection with the head office relocation due toOtemachi redevelopment project.
The asset retirement obligation is calculated based on the sum of the discounted cash flows using discount rates from
0.4% to 1.1% with the estimated useful lives of 4 to 8 years.
The changes in asset retirement obligations for the years ended March 31, 2012 and 2011 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2012

Balance at beginning of year
Reconciliation associated with passage of time
Other
Balance at end of year

2011

2012

¥1,046¥1,043$12,728

0

1

12

0

1

2

¥1,047¥1,046$12,742Annual Report & CSR Report 2012159

Financial Condition

13. Acceptances and Guarantees
Acceptances and guarantees as of March 31, 2012 and 2011 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

Guarantees

2012

2011

2012

¥128,518¥145,068$1,563,674

14. Assets Pledged as Collateral

Consolidated Financial Statements

Loans and securities pledged as collateral in Real Time Gross Settlement for bank deposits at the Bank of Japan are¥697,263 million ($8,483,557 thousand) and ¥14,714 million ($179,026 thousand) as of March 31, 2012. In addition,
they are deposited as replacement of margin money for future trading and collateral for transactions, including exchange
settlements as of March 31, 2012. Also, in other assets, ¥937 million ($11,407 thousand) of margin deposits for futurestransactions is included and ¥42 million ($514 thousand) of guarantee deposits are included as of March 31, 2012. Under
the DBJ Inc. Act (Act No. 17 and 26), the DBJ Act (Act No. 43), obligations created by the bonds issued by DBJ Inc. aresecured by a statutory preferential right over the property of DBJ Inc. The denomination value of these debentures amounts
to ¥2,318,822 million ($28,212,946 thousand) as of March 31, 2012.
Loans and securities pledged as collateral in Real Time Gross Settlement for bank deposits at the Bank of Japan are¥700,942 million and ¥235,556 million as of March 31, 2011. In addition, they are deposited as replacement of margin
money for future trading and collateral for transactions, including exchange settlements as of March 31, 2011. ¥1,575
million of securities are pledged as collateral for loans of companies which are investees of DBJ Inc. as of March 31, 2011.
Also, in other assets, ¥937 million of margin deposits for futures transactions is included and ¥41 million of guarantee
deposits are included as of March 31, 2011. Under the DBJ Inc. Act (Act No. 17 and 26), the DBJ Act (Act No. 43),
obligations created by the bonds issued by DBJ Inc. are secured by a statutory preferential right over the property of DBJ Inc.
The denomination value of these debentures amounts to ¥2,802,443 million as of March 31, 2011.

15. Equity
Japanese companies including DBJ Inc. are regulated by the Companies Act. In addition, DBJ Inc. is regulated by the DBJ Inc.
Act. The significant provisions in the Companies Act and the DBJ Inc. Act that affect financial and accounting matters are
summarized as follows:(a) Dividends
Under the Companies Act, companies can distribute dividends at any time during the fiscal year in addition to the yearend dividend upon resolution at the shareholders meeting. For companies that meet certain criteria such as; (1) having
the Board of Directors, (2) having independent auditors, (3) having the Board of Corporate Auditors, and (4) the termof service of the directors is prescribed as one year rather than two years of normal term in its articles of incorporation,
the Board of Directors may declare dividends (except for dividends in kind) at any time during the fiscal year, prescribedthat the Board of Directors can declare dividends in its articles of incorporation. DBJ Inc., however, shall not distributesuch dividends based on resolution of the Board of Directors, since its articles of incorporation are not prescribed thatthe Board of Directors can do such an action. The Companies Act provides certain limitations on the amounts available
for dividends or the purchase of treasury stock. Article 20 of the DBJ Inc. Act provides that the timing and amounts for
dividends shall be authorized by the Finance Minister.
(b) Increases/Decreases and Transfer of Common Stock, Reserve and Surplus
The Companies Act requires that an amount equal to 10% of dividends must be set aside as a legal reserve (acomponent of retained earnings) or as additional paid-in capital (a component of capital surplus) depending on theequity account charged upon the dividends until the total aggregate amount of legal reserve and additional paid-in
capital equal 25% of Common stock. Under the Companies Act, the total amount of additional paid-in capital andlegal reserve may be reversed without limitation. The Companies Act also provides that common stock, legal reserve,
additional paid-in capital, other capital surplus and retained earnings can be reclassified among the accounts undercertain conditions upon resolution by the shareholders.

160

Annual Report & CSR Report 2012

Financial Condition(c) Treasury Stock and Treasury Stock Acquisition Rights
The Companies Act also provides for companies to purchase treasury stock and dispose of the treasury stock based on
resolution of the Board of Directors. The amount of treasury stock purchased cannot exceed the distributable amount tothe shareholders which is determined by specific formula.
Under the Companies Act, stock acquisition rights are presented as a separate component of equity.
The Companies Act also provides that companies can purchase both treasury stock acquisition rights and treasury
stock. The treasury stock acquisition rights are presented as a separate component of equity or deduction of stockacquisition rights.
(d) Solicitation and Delivery of Shares or Stock Acquisition Rights
Article 12 of the DBJ Inc. Act regulates that, if DBJ Inc. intends to solicit those who will subscribe for shares or stockacquisition rights offered, or to deliver shares or stock acquisition rights in connection with a share-for-share exchange,
DBJ Inc. shall obtain an authorization from the Finance Minister.

Consolidated Financial Statements(e) Common Stock Issued during the year ended March 31, 2012
On November 24, 2011, DBJ Inc. executed a request for redemption of government compensation bonds equivalentto ¥6,170 million ($75,070 thousand) to the Finance Minister and accordingly, capital stock of DBJ Inc. increased bythat amount. And on March 24, 2012, DBJ Inc. issued 8,480 new shares of common stock by way of allocation of new
stocks to the Finance Minister at ¥50,000 per share for ¥424 million ($5,159 thousand). As a result, ¥6,594 million($80,229 thousand) was included in Capital stock.

16. Per Share Information
Basic net income per common share (“EPS”) for the years ended March 31, 2012 and 2011 is as follows:
Millions of Yen

Thousands of Shares

Yen

U.S. Dollars

Year ended March 31, 2012

Net income

Weighted average shares

EPS

EPS

Basic EPS
Net income available to commonshareholders¥ 77,313

43,624¥1,772.27¥101,583

43,623¥2,328.63$21.56

Year ended March 31, 2011

Basic EPS
Net income available to commonshareholders

Note: Diluted net income per share for the years ended March 31, 2012 and 2011 is not disclosed because there are no dilutive securities.

17. Fees and Commissions (Income)Fees and commissions (income) for the years ended March 31, 2012 and 2011 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

Commissions

2012

2011

2012

¥9,461¥9,998$115,118

Annual Report & CSR Report 2012161

Financial Condition

18. Other Operating Income
Other operating income for the years ended March 31, 2012 and 2011 is as follows:
Thousands of
U.S. Dollars

Millions of Yen

2012

2011

2012

Gains on sales of bonds

¥ 492

¥

121

$ 5,994

Gains on redemption of bonds

5,000

77

60,836

Gains on derivative instruments—

12,301

—

Other

30

141

367

Total

¥5,522¥12,642$67,197

Consolidated Financial Statements

19. Other Income
Other income for the years ended March 31, 2012 and 2011 is as follows:
Thousands of
U.S. Dollars

Millions of Yen

2012

Reversal of allowance for investment losses

¥

—

2011

2012

¥

$

445

—

Reversal of allowance for loan losses

—

8,095

—

Reversal of reserve for contingent losses

711

2,104

8,654

Gains on sales of equities and other securities

3,634

12,471

44,215

Gains on money held in trust

1,142

1,194

13,903

—

1,837

—

Equity in net income of affiliates
Gains on sales of fixed assets

104

7

1,267

Collection of written-off claims

10,120

8,002

123,140

Gain on transfer of the substitutional portion of the governmental
pension program

11,036—134,281

Gains on investments in limited partnerships and other similar
partnerships

7,750

5,777

94,294

Other

3,369

2,339

40,993

Total¥37,868¥42,275$460,747

20. Fees and Commissions (Expenses)
Fees and commissions (expenses) for the years ended March 31, 2012 and 2011 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2012

Commissions

2011

¥551

¥607

2012

$6,714

21. Other Operating Expenses
Other operating expenses for the years ended March 31, 2012 and 2011 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

162

2012

2011

2012

Foreign exchange losses¥ 892¥ 6,939$10,859

Debentures issuance costs

686

434

8,356

Corporate bonds issuance costs

518

184

6,308

Write-off of bonds

31

4,104

380

Other

493

350

6,002

Total

¥2,622¥12,012$31,906

Annual Report & CSR Report 2012

Financial Condition

22. Other Expenses
Other expenses for the years ended March 31, 2012 and 2011 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2011

Provision for allowance for loan losses
Write-off of loans
Losses on sales of equities and other securities
Write-off of equities
Losses on money held in trust
Losses on sales of fixed assets
Impairment losses
Early redemption charges
Losses on investments in limited partnerships and other similar
partnerships¥ 1,413
5,194
1,804
6,867
10
314
132
—

¥

Other
Total

2012

—
3,104
1,311
15,188
571
3
21
8,881

$ 17,197
63,205
21,95983,557
123
3,830
1,614
—

5,000

5,754

60,843

2,708¥23,447

3,065¥37,903

32,960$285,287

Consolidated Financial Statements

2012

23. Employees’ Retirement Benefits
Employees whose service with DBJ Inc. is terminated are, under most circumstances, entitled to retirement and pension
benefits determined by reference to basic rates of pay at the time of termination, length of service and conditions underwhich the termination occurs. If the termination is involuntary, caused by retirement at the mandatory retirement age or
caused by death, the employee is entitled to greater payment than in the case of voluntary termination.
Reserve for employees’ retirement benefits as of March 31, 2012 and 2011 consisted of the following:(a) The Funded Status of the Pension Plans
Thousands of
U.S. Dollars

Millions of Yen

Projected benefit obligation
Fair value of plan assets
Unfunded pension obligation
Unrecognized net actuarial losses
Unrecognized prior service costReserve for employees’ retirement benefits

2012

2011

2012

¥(36,101)
21,466(14,635)
1,043
107¥(13,484)¥(47,110)
19,316(27,793)
2,370
(462)
¥(25,885)$(439,247)
261,176(178,071)
12,6991,311$(164,062)*1. The above projected benefit obligation as of March 31, 2011 includes a portion which the pension fund manages on behalf of theJapanese government welfare program.
*2. Certain subsidiaries apply the simplified method for the calculation of liability for employees’ retirement benefits.

(b) Components of Pension Cost
Thousands of
U.S. Dollars

Millions of Yen

2012

Service cost
Interest cost
Expected return on plan assets
Amortization of prior service cost
Amortization of net actuarial losses
Other
Net pension cost
Gain on transfer of the substitutional portion of the governmental
pension program

2011

2012

¥ 1,169
842
(96)
(23)
220
1
¥ 2,114¥1,167
923
(63)
(35)
171
1
¥2,166$ 14,234
10,251(1,178)
(286)
2,683
20
$ 25,724¥(11,036)¥$(134,281)—*1. All retirement benefit costs are classified as service cost for the subsidiaries applying the simplified method.
*2. Contribution of pension premiums to the defined contribution pension plans of certain consolidated overseas subsidiaries is included in“Other”.
Annual Report & CSR Report 2012163

Financial Condition(c) Principal Assumptions Used
Discount rate

2012

2011

2.0%

2.0%

Expected rate of return on plan assets

0.5%

0.5%

Amortization period of prior service cost

10 Years

10 Years

Amortization period of actuarial gains/losses

10 Years

10 Years

24. Income Taxes
DBJ Inc. and its domestic consolidated subsidiaries are subject to Japanese national and local income taxes which, in theaggregate, resulted in a normal effective statutory tax rate of approximately 40.69% for the years ended March 31, 2012
and 2011.
Consolidated Financial Statements

A reconciliation of the normal effective statutory tax rate with the actual effective tax rate for the years ended March 31,
2012 and 2011 is as follows:
Normal effective statutory tax rate

2012

2011

40.69%

40.69%

Increase (decrease) in taxes resulting from:
Change in valuation allowance(12.85)(37.59)Reduction of deferred tax assets due to changes of tax rate

3.16

—

Minority interests in net income of subsidiaries

0.75(0.71)

Other(2.77)(1.13)

Actual effective tax rate

28.98%

1.26%

The tax effects of significant temporary differences and loss carryforwards which resulted in deferred tax assets andliabilities as of March 31, 2012 and 2011 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2012

2011

2012

Deferred tax assets:
Allowance for loan losses¥ 57,367¥ 71,580$ 697,984

Losses from revaluation of securities

27,39437,916

333,310

Tax loss carryforwards

8,117

12,78998,761

Reserve for retirement benefits

4,916

10,49959,823

Other

6,700

5,374

81,530Sub-total

104,497

138,162

1,271,409(62,670)(85,281)(762,504)

41,82652,880508,904

Deferred gain on derivatives under hedge accounting(15,795)(11,873)(192,180)

Unrealized gain on available-for-sale securities(7,052)(4,136)(85,803)

(168)

(782)

(2,049)(23,015)(16,792)(280,032)¥ 18,810¥ 36,088$ 228,872

Less—valuation allowance
Total
Deferred tax liabilities:

Other
Total
Net deferred tax assets

On December 2, 2011, the “Act for Partial Amendment to the Income Tax Act, etc. for the purpose of Creating a Taxation
System Responding to Changes in Economic and Social Structures” (Act No. 114 of 2011) and the “Act on Special
Measures for Securing Financial Resources Necessary to Implement Measures for Reconstruction following the Great East
Japan Earthquake” (Act No. 117 of 2011) were promulgated. Consequently, the corporate tax rate will be reduced anda special recovery tax will be imposed. In accordance with this tax reform, the effective statutory tax rate, which is used

164

Annual Report & CSR Report 2012

Financial Condition

to measure deferred tax assets and deferred tax liabilities, has been reduced from 40.69% to 38.01% for temporary
differences that are expected to be eliminated during the period from April 1, 2012 through March 31, 2015 and 35.64%
for temporary differences to be eliminated on or after April 1, 2015. As a result, deferred tax assets and deferred tax
liabilities decreased by ¥698 million ($8,500 thousand) and ¥5 million ($69 thousand), respectively and deferred gain
on derivatives under hedge accounting, unrealized gain on available-for-sale securities and income taxes – deferredincreased by ¥1,862 million ($22,656 thousand), ¥930 million ($11,325 thousand) and ¥3,483 million ($42,387 thousand),
respectively.

25. Lease Transactions

Consolidated Financial Statements

DBJ Inc. and its domestic consolidated subsidiaries lease certain equipment and others. Lease payments under finance leases
for the years ended March 31, 2012 and 2011 amounted to ¥150 million ($1,833 thousand) and ¥208 million, respectively.
Pro forma information of leased property such as acquisition cost, accumulated depreciation, obligations under financeleases, depreciation expense and interest expense for finance leases that do not transfer ownership of the leased property
to the lessee on an “as if capitalized” basis for the years ended March 31, 2012 and 2011 is as follows:
Millions of Yen

2012
Tangible fixed assets

Intangible fixed assets

Total

Acquisition cost

¥81

¥204

¥286

Accumulated depreciation

(56)

(178)

(234)

Accumulated impairment losses

—

—

—

Net leased property

¥25

¥ 25

¥ 51

Millions of Yen

2011
Tangible fixed assets

Intangible fixed assets

Total

Acquisition cost

¥448

¥224

¥673

Accumulated depreciation

(328)

(144)

(473)

Accumulated impairment losses
Net leased property

(3)

—

(3)

¥115

¥ 80

¥195

Thousands of U.S. Dollars

2012
Tangible fixed assets

Intangible fixed assets

Acquisition cost$997

$2,483$3,481

Accumulated depreciation(686)(2,170)(2,855)

—

—

—

$312

$ 313

$ 625

Accumulated impairment losses
Net leased property

Total

Pro forma amounts of obligations under finance leases as of March 31, 2012 and 2011 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2012

2011

2012

Due within 1 year

¥42

¥149

$523

Due after 1 year

10

53

133

Total

¥53

¥203

$657

Annual Report & CSR Report 2012165

Financial Condition

Pro forma amounts of depreciation expense and interest expense under finance leases for the years ended March 31, 2012
and 2011 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2012

Depreciation expense

2012

¥144

¥200

$1,759

2

5

31

¥147

¥206

$1,790Interest expense
Total

2011

*1. Depreciation expense is calculated using the straight-line method, assuming that useful life is equal to the lease term and that theresidual value at the end of the lease term is zero.
*2. The difference between total lease payments and the assumed acquisition cost of leased assets is charged to assumed interest expense
and is allocated to each fiscal year using the interest method.

The minimum rental commitments under non-cancelable operating leases as of March 31, 2012 and 2011 are as follows:
Consolidated Financial Statements

Thousands of
U.S. Dollars

Millions of Yen

2012

2011

2012

Due within 1 year

¥230

¥218

$2,811

Due after 1 year

100

148

1,217

Total

¥331

¥366

$4,028

26. Other Comprehensive Income
The components of other comprehensive income for the year ended March 31, 2012 are as follows:
Millions of Yen

Thousands of U.S. Dollars

2012

2012

¥15,948$194,047(4,179)(50,848)
143,200

Unrealized gain on available-for-sale securities:
Gains arising during the year
Reclassification adjustments to profit or loss		Amount before income tax effect

11,769		

Income tax effect(2,915)(35,472)8,854

107,728

22,440273,032(8,229)(100,133)

14,210172,899

		TotalDeferred gain on derivatives under hedge accounting:
Gains arising during the year
Reclassification adjustments to profit or loss		Amount before income tax effect		

Income tax effect(3,922)(47,721)

10,288125,178

Losses arising during the year

(49)

(601)

Reclassification adjustments to profit or loss——		TotalForeign currency translation adjustments:

		Amount before income tax effect

(49)

(601)

		

Income tax effect

—

—

(49)

(601)

		TotalShare of other comprehensive income in affiliates:
Gains arising during the year

70

855

Reclassification adjustments to profit or loss

(53)

(646)

		

Amount before income tax effect

17

209

		

Income tax effect——		Total
Total other comprehensive income

166

Annual Report & CSR Report 2012

17

209

¥19,110$232,514

Financial Condition

The corresponding information for the year ended March 31, 2011 was not required under the accounting standard forpresentation of comprehensive income as an exemption for the first year of adopting that standard and not disclosed
herein.

27. Segment Information
DBJ Inc. consists of only one business segment of long-term financing and accordingly, the disclosure of the reportablesegment information is omitted.
Related information:
Segment information by service for the years ended March 31, 2012 and 2011 is following:
Millions of Yen
Loan business

Securities investment

Other

Total

Ordinary income from external customers¥263,970¥32,467¥22,337¥318,775

Year ended March 31, 2011

Loan business

Securities investment

Other

Total

Ordinary income from external customers¥271,860¥37,716¥35,612¥345,189

Year ended March 31, 2012

Loan business

Securities investment

Other

Total

Ordinary income from external customers$3,211,707$395,032$271,777$3,878,517

Consolidated Financial Statements

Year ended March 31, 2012

Millions of Yen

Thousands of U.S. Dollars

28. Financial Instruments and Related Disclosures(a) The Situation of Financial Instruments(1) Policy for Financial Instruments
DBJ Inc. provides investment and loan services that are aimed to provide long-term stable funding. As main methodsof acquiring funds, in addition to issuing corporate bonds and long-term borrowings, DBJ Inc. relies on the stableprocurement of long-term funds from the government’s Fiscal Investment and Loan Program (FILP). Since long-term,
fixed-rate makes up the majority of its assets, DBJ Inc. raises its funds mainly with long-term, fixed rate liabilities.
From both funding and investment aspects, DBJ Inc. implements comprehensive asset/liability management inorder to mitigate the risk of capital shortfall and losses from fluctuations of interest rate and exchange rate. DBJ Inc.
utilizes derivative financial instruments in order to hedge or control the risks related to interest and currency.
(2) Nature and Extent of Risks Arising from Financial Instruments
The financial assets in DBJ Inc. are mainly investments and loans in domestic clients, which are exposed to credit riskthat stems from customers’ default of contracts and decline of their creditworthiness. Main categories of industriesof debtors are transport and postal activities, manufacturing and others as of March 31, 2012. The changes of
economic circumstances surrounding these industries may cause influence on fulfillment of their obligations. DBJ
Inc. holds securities such as bonds, equities and investments in limited partnerships and other similar partnerships,
which are exposed to issuer’s credit risk, interest rate risk, price volatility risk and other risks. DBJ Inc. does not have
any trading-related risk because it does not engage in trading (specified transactions).
Although corporate bonds and borrowings are exposed to cash liquidity risk and interest rate risk, these risks arehedged or controlled by matching of financing and investing, interest-rate swap agreements and other transactions.
Foreign currency denominated loans, debentures and corporate bonds are exposed to exchange rate risk. DBJ
Inc. mitigates this risk by matching foreign currency investments and loans with foreign currency corporate bonds
and currency-related transactions.
DBJ Inc. utilizes derivative financial transactions such as interest-rate swap agreements and currency swap
agreements in order to hedge or control the risks related to interest and currency. As for hedge accounting, DBJ
Inc. applies the deferral hedge method or the accrual method to interest-rate swaps, and the assignment method
to foreign currency swaps. Hedged items of interest-rate swaps are loans, securities, borrowings, debentures andcorporate bonds. Hedged items of foreign currency swaps are foreign-currency denominated loans, debentures andcorporate bonds. According to the risk management policy, DBJ Inc. evaluates the effectiveness of the hedges by
testing whether the derivatives are effective in reducing the risks associated with the hedged items.

Annual Report & CSR Report 2012167

Financial Condition(3) Risk Management for Financial Instruments

Consolidated Financial Statements(i) Credit Risk Management
In accordance with the internal guidelines, DBJ Inc. utilizes credit exposure management and portfolio
management for investments and loans. When making an investment or loan, DBJ Inc. examines the entity’s
project viability and the project’s profitability. After that, DBJ Inc. sets ratings along with the internal borrower
rating system, grants credit amount, sets collateral and guarantee. The sales and credit analysis departments
hold separate roles in the screening and administering of credit for individual loans and each department keeps
the operations of the other in check. The Committee on Investment and Loan Decisions meets as needed todeliberate important issues concerning the management and governance of individual loans. DBJ Inc. performs acomprehensive analysis of data based on borrower ratings, and calculates the loan portfolio’s overall exposure tocredit risk, which is measured regularly to ensure that such risk remains within specified range of capital.
The credit risk of securities is managed in the same way as that of loans. In addition, DBJ Inc. regularly
examines total risk which takes into account the market value of the securities. As for counterparty risk arisingfrom derivative transactions, DBJ Inc. manages derivative transactions by continually monitoring the cost ofrestructuring its transactions and the creditworthiness of each counterparty. Additionally, DBJ Inc. diversifies
transactions among several counterparties to manage counterparty risk.
(ii) Market Risk Management
1) Interest Rate Risk Management
DBJ Inc. manages interest rate risk by asset/liability management. Details of risk management methods
and procedures are determined on internal regulations, and Management Committee and ALM & Risk
Management Committee have discussion about determination of policies on asset/liability management,
monitoring of implementation and future plans. In addition, the risk management department monitors theinterest rate and term of financial assets/debts overall. ALM & Risk Management Committee conducts regularmonitoring with cash flow ladder analyses (gap analysis), value at risk (VaR), interest rate sensitivity analyses(basis point value), and other methods. As a part of asset/liability management, interest-rate swaps are
conducted hedging interest rate risk.
2) Foreign Exchange Risk Management
Foreign currency receivable and bonds are exposed to the exchange rate risk, therefore those risks arehedged or controlled not only by setting off some foreign currency denominated investments and loans
as foreign currency denominated corporate bonds and debentures but also by making currency-relatedtransactions.
3) Price Volatility Risk Management
When DBJ Inc. acquires financial assets entailing price volatility risk such as securities with market value, itfollows in-house regulations and policies which have been developed taking into account market fluctuation
risks, and the risk management department is involved in the decisions as necessary. Through regularmonitoring, price volatility risks are reviewed on a timely basis and reported to ALM & Risk Management
Committee periodically.
4) Derivative Transactions
About derivative transactions, the front office, the back office and the risk management department are
separated from each other, and each department keeps the operations of the other in check based on
in-house regulations.
5) Quantitative Information about Market Risk
DBJ Inc. has not been engaged in trading activities, and all the assets and liabilities are financial instruments
other than for trading purposes.
Market risk volume (estimated loss) is based on VaR using the historical simulation method (holding periodof 1 year, observation period of 5 years, and confidence interval of 99.9%). The amount of market risk (risks
pertaining to the changes in interest rates, foreign exchanges and market prices) as of March 31, 2012 and2011 was ¥41,484 million ($504,744 thousand) and ¥73,672 million, respectively. Such measurements are

168

Annual Report & CSR Report 2012

Financial Condition

conducted by the risk management department on a regular basis and reported to ALM & Risk Management
Committee to utilize for establishing ALM operating policies.
DBJ Inc. conducts backtesting to compare the VaR calculated by the model with hypothetical performances
calculated based on the actual market movements and confirms that the measurement models in use
capture the market risk with sufficient accuracy. VaR measures the market risk volume under a definite
probability of incidence calculated statistically based on the historical market movements and accordingly,
and therefore there may be cases where market risk cannot be captured in such situations as when market
conditions are changing dramatically beyond what was experienced historically.

Consolidated Financial Statements(iii) Liquidity Risk Management on Financing
The risk management department monitors the possession level of cash liquidity and reports it to the ALM & Risk
Management Committee periodically in line with in-house regulations of liquidity risk management on financing.
The ALM & Risk Management Committee manages the liquidity risk by appropriate operations of financing andinvesting depending on the situations of risks.
(4) Supplementary Explanation on Fair Value of Financial Instruments
The fair value of financial instruments is measured at the quoted market price. If the quoted price is not available,
DBJ Inc. measures reasonably assessed price. Because assessed price is computed under certain conditions, it could
differ in price according to the different conditions.
(b) Fair Values Information of Financial Instruments
The following are the carrying amount, fair value and differences between them as of March 31, 2012 and 2011.
Unlisted equities and others, whose fair value cannot be reliably determined, are excluded from the table below (see (2)).
Millions of Yen

2012
Carrying amount

Cash and due from banks¥

175,618

Fair value¥

175,618

Difference¥—

Call loans and bills bought

89,50089,500—

Reverse repurchase agreements

152,889

152,889—

672,405

695,762

23,357

213,894

213,894—

13,495,540

14,113,871

618,330

Securities
Held-to-maturity debt securities
Available-for-sale securities
Loans

13,645,469(149,928)

Allowance for loan losses*1
Total assets¥14,799,848¥15,441,536¥641,687

Debentures

3,130,495

3,260,653

130,158

Borrowed money

9,170,553

9,290,125

119,571

Short-term bonds

50,99950,999—Corporate bonds

541,327

544,484

3,157¥12,893,376¥13,146,263¥252,887

12,904

12,904—

Total liabilities
Derivative transactions*2
Derivative transactions not qualifying forhedge accounting
Derivative transactions qualifying forhedge accounting
Total derivative transactions¥

36,871
49,776¥36,871
49,776¥——

Annual Report & CSR Report 2012169

Financial Condition

Millions of Yen

2011
Carrying amount

Cash and due from banks¥

Fair value

Call loans and bills bought

233,297¥

Difference

233,297¥—

61,852

61,852—

Held-to-maturity debt securities

526,637

548,939

22,301

Available-for-sale securities

360,318

360,318—

Securities

Loans

13,031,480(160,292)

Allowance for loan losses*1

Consolidated Financial Statements

12,871,187

13,449,875

578,687

Total assets¥14,053,292¥14,654,282¥600,989

Debentures

3,312,713

3,410,637

97,924

Borrowed money

8,576,482

8,692,747

116,264

Corporate bonds

316,675

318,865

2,190¥12,205,871¥12,422,250¥216,379

13,262

13,262—

Total liabilities
Derivative transactions*2
Derivative transactions not qualifying forhedge accounting
Derivative transactions qualifying forhedge accounting
Total derivative transactions¥

27,44140,703¥27,44140,703——¥Thousands of U.S. Dollars

2012
Carrying amount

Cash and due from banks$

2,136,741$

Fair value

Difference

2,136,741$—

Call loans and bills bought

1,088,940

1,088,940—

Reverse repurchase agreements

1,860,200

1,860,200—

8,181,106

8,465,289

284,183

2,602,440

2,602,440—

164,199,304

171,722,491

7,523,187

Total assets$180,068,730$187,876,101$7,807,371

Debentures

38,088,519

39,672,150

1,583,631

Borrowed money

111,577,487

113,032,308

1,454,821

Securities
Held-to-maturity debt securities
Available-for-sale securities
Loans

166,023,471(1,824,167)

Allowance for loan losses*1

Short-term bonds

620,503

620,503—

Corporate bonds

6,586,298

6,624,710

38,412$156,872,807$159,949,671$3,076,864

157,014

157,014—448,612448,612—

Total liabilities
Derivative transactions*2
Derivative transactions not qualifying forhedge accounting
Derivative transactions qualifying forhedge accounting
Total derivative transactions$

605,626$

605,626$—*1. General and specific allowances for loan losses are deducted. Allowance for loan losses is set off against the carrying amount directly
due to immateriality.
*2. Assets and liabilities arising from derivative transactions are presented on a net basis.

170

Annual Report & CSR Report 2012

Financial Condition(1) Following are the methods used to calculate the fair values of financial instruments:
Assets(i) Cash and due from banks
For deposits without maturity, the carrying amount is presented as the fair value, as the fair value approximatessuch carrying amount. For deposits with maturity, the carrying amount is presented as the fair value, as thefair value approximates such carrying amount because the remaining maturity period of the majority of suchdeposits is short (maturity within 1 year).
(ii) Call loans and bills bought and Reverse repurchase agreements
For each of these items, the majority of transactions are short contract terms (1 year or less). Thus, the carrying
amount is presented as the fair value, as the fair value approximates such carrying amount.

Consolidated Financial Statements(iii) Securities
The fair value of marketable equity securities is measured at the market price. The fair value of bonds ismeasured at the market price or the quoted price from third party. For bonds without such price, the fair value isdetermined by discounting contractual cash flows at the rates that consist of the risk free rate and the credit risk
premium that is based on types of securities, internal ratings and maturity length.
(iv) Loans
The fair value of loans is determined by discounting contractual cash flows at the rates that consist of the risk
free rate and the credit risk premium that is based on types of loans, internal ratings and maturity length.
Foreign currency swap contracts which meet the hedging requirements of the assignment method is qualified
to loans, the contractual cash flows are based on the interest rate swap and foreign currency swap. For loans
which are short contract terms (1 year or less), the carrying amount is presented as the fair value, as the fairvalue approximates such carrying amount. With respect to the claims on debtors who are likely to becomebankrupt or to be closely monitored, and for which future cash flows can reasonably be estimated, the fairvalues are determined by discounting expected cash flows that reflect expected loss at the risk free rate. For
loans to obligors “legally bankrupt,” “effectively bankrupt” and “possibly bankrupt,” the reserve is provided
based on the discounted cash flow method, or based on amounts expected to be collected through the disposalof collateral or execution of guarantees, carrying value net of the reserve as of the consolidated balance sheet
date is the reasonable estimate of the fair values of those loans.
Liabilities(i) Debentures
For floating rate debentures issued by DBJ Inc., the carrying amount is presented as the fair value, as the fairvalue approximates such carrying amount. This is on the basis that the market interest rate is reflected in the fairvalue of such debentures because the terms of these were set within a short time period and that there has beenno significant change in the creditworthiness of DBJ Inc. before and after the issuance. For fixed rate debentureswith market prices, the fair value is determined based on their market price. For fixed rate debentures withoutmarket prices, the fair value is determined by discounting contractual cash flows based on types of maturity
lengths (when interest rate swap contracts which meet the hedging requirements of the accrual method isqualified to debentures, the contractual cash flows are based on the interest rate swap) at the rates that consistof the risk free rate and the rate of certain costs applicable to DBJ Inc. Foreign currency swap contracts whichmeet the hedging requirements of the assignment method is qualified to debentures, the contractual cash flows
are based on the interest rate and foreign currency swap.
(ii) Borrowed money
For floating rate borrowed money, the carrying amount is presented as the fair value, as the fair value
approximates such carrying amount. This is on the basis that the market interest rate is reflected in the fair valueof such borrowed money because the terms of these were set within a short time period for such variable rateborrowings and that there has been no significant change in the creditworthiness of DBJ Inc. nor consolidated
subsidiaries before and after such borrowings were made. For fixed rate borrowed money, the fair values
are determined by discounting contractual cash flows based on types of maturity lengths (when interest rate
swap contracts which meet the hedging requirements of the accrual method is qualified to borrowings, theAnnual Report & CSR Report 2012171

Financial Condition

contractual cash flows are based on the interest rate swap) at the rates that consist of the risk free rate and therate of certain costs applicable to DBJ Inc. or consolidated subsidiaries.
(iii) Short-term corporate bonds
The carrying amount is presented as the fair value, as the fair value approximates such carrying amount becauseof the short contract terms (1 year or less).

Consolidated Financial Statements(iv) Corporate bonds
For floating rate corporate bonds issued by DBJ Inc., the carrying amount is presented as the fair value, as thefair value approximates such carrying amount. This is on the basis that the market interest rate is reflected in theinterest rate set within a short time period and that there has been no significant change in the creditworthinessof us before and after the issuance. For fixed rate corporate bonds with market prices, the fair value isdetermined based on their market price. For fixed rate corporate bonds without market prices, the fair value isdetermined by discounting contractual cash flows based on types of maturity lengths (when interest rate swap
contracts which meet the hedging requirements of the accrual method is qualified to corporate bonds, thecontractual cash flows are based on the interest rate swap) at the rates that consist of the risk free rate and therate of certain costs applicable to DBJ Inc.
Derivatives
The information of the fair values for derivatives is included in Note 29.
(2) 	Following are the financial instruments whose fair value cannot be reliably determined as of March 31,
2012 and 2011:		These securities are not included in the amount in the table summarizing fair values of financial
Instruments.
Carrying amountThousands of
U.S. Dollars

Millions of Yen

2012

2011

2012

Money held in trust*1¥ 24,423¥ 24,819$ 297,154

Unlisted equities*2, 3
Investments in limited partnerships and other similar
partnerships*1, 3
Unlisted other securities*2, 3

127,999

133,860

1,557,367

126,977
35,346

117,040
27,723

1,544,922
430,053

Total¥314,746¥303,444$3,829,496*1. Assets in trust and partnership assets which consist of financial instruments, whose fair value cannot be reliably determined,
such as unlisted equities and other securities, are not subject to disclosing of fair values.
*2. Financial instruments for which the quoted price is not available and fair value cannot be reliably determined, are not subject
to disclosing of fair values.
*3. Impairment loss on financial instruments whose fair value cannot be reliably determined for the year ended March 31, 2012
and 2011 was ¥6,803 million ($82,772 thousand) and ¥15,173 million, respectively. The breakdown is; unlisted equities¥6,685 million ($81,340 thousand) and ¥13,548 million, unlisted other securities ¥117 million ($1,433 thousand) and ¥1,592
million for the years ended March 31, 2012 and 2011, respectively, and investments in limited partnerships ¥32 million for theyear ended March 31, 2011.

172

Annual Report & CSR Report 2012

Financial Condition(3) 	Following are the maturity analysis for financial assets and securities with contractual maturities as ofMarch 31, 2012:
Millions of Yen

2012
Due in 1
year or lessDue from banks¥ 175,614

Due after 1
year through3 years

Due after 3
years through5 years

Due after 5
years through7 years

Due after 7
years through10 years

Due after
10 years

¥

¥

¥

¥

¥

—

—

—

—

—

Call loans and bills bought

89,500

—

—

—

—

—

Securities
Held-to-maturity debt securities
with market values
		 Japanese government bonds

44,344—85,551—

299,01436,372

148,379
67,074

43,22630,62651,88840,388

—

—

—

—

—

—

Japanese local government bonds
		 Short-term corporate bonds

—

—

—

—

—

38,20060,172

162,498

28,7002,600

11,500		Other
Available-for-sale securities with
contractual maturities*
		 Japanese government bonds

6,143

25,378100,143

52,605

10,000—52,591
49,97825,296—34,946
—

3,200
1,048

48,542
21,523

2,833
—

—

—

—

—

—

—

—

—

—

—

—

—

2,613

21,81534,9402,151

27,018

—

—

3,480

6

—

—

2,833

Japanese local government bonds
		 Short-term corporate bonds
		Corporate bonds
		Other
Loans*

1,786,870

3,884,502

3,247,912

1,835,293

1,967,851

775,873

Total¥2,148,921¥3,995,350¥3,581,874¥1,986,873¥2,059,620¥830,595

Due after
10 years

Consolidated Financial Statements—

		Corporate bonds

Thousands of U.S. Dollars

2012
Due in 1
year or lessDue from banks
Call loans and bills bought
Securities
Held-to-maturity debt securities
with market values
		 Japanese government bonds
Japanese local government bonds
		 Short-term corporate bonds$ 2,136,692

Due after 1
year through3 years

Due after 3
years through5 years

Due after 5
years through7 years

Due after 7
years through10 years

$

$

$

$

—

—

—

—

$

—

1,088,940

—

—

—

—

—

539,532—

1,040,896—

3,638,094
442,544

1,805,326
816,088525,938
372,634

631,320
491,400

—

—

—

—

—

—

—

—

—

—

—

—

		Corporate bonds

464,782

732,115

1,977,110

349,191

31,634

139,920

		Other
Available-for-sale securities with
contractual maturities*
		 Japanese government bonds

74,749308,782

1,218,440

640,047

121,669—

639,879
608,079

307,775—

425,193—

38,937
12,758590,609261,876

34,479
—

—

—

—

—

—

—

Japanese local government bonds
		 Short-term corporate bonds
		Corporate bonds
		Other

—

—

—

—

—

—

31,801

265,428

425,120

26,179328,733——

42,34773——

34,479Loans*

21,740,733

47,262,476

39,517,127

22,329,892

23,942,706

9,440,004

Total$26,145,777$48,611,148$43,580,414$24,174,155$25,059,253$10,105,802* Obligations to “Legally Bankrupt,” “Effectively Bankrupt” and “Possibly Bankrupt” amount to ¥147,541 million ($1,795,128
thousand) are not included as of March 31, 2012. The breakdown is; available-for-sale securities with contractual maturities ¥377
million ($4,596 thousand) and loans ¥147,163 million ($1,790,533 thousand).

Annual Report & CSR Report 2012173

Financial Condition(4) 	Maturity analysis for Debentures, Borrowed money and Other Liability with Interest as of March 31, 2012
are as follows:
Millions of Yen

2012

Borrowed money

Due in 1
year or lessDue after 1
year through3 years

Due after 3
years through5 years

Due after 5
years through7 years

Due after 7
years through10 years

Due after
10 years¥1,341,870¥2,398,691¥2,068,229¥1,163,007¥1,129,073¥1,069,681

Short-term corporate bonds

50,999

—

—

—

—

—

Debentures and corporate bonds

464,025734,347

961,875

452,038

408,507651,029¥1,856,895¥3,133,039¥3,030,104¥1,615,045¥1,537,581¥1,720,710

Due after 7
years through10 years

Due after
10 years

Total

Thousands of U.S. Dollars

2012

Consolidated Financial Statements

Due in 1
year or less

Borrowed money
Short-term corporate bonds
Debentures and corporate bonds
Total

Due after 1
year through3 years

Due after 3
years through5 years

Due after 5
years through7 years$16,326,443 $29,184,714 $25,164,002 $14,150,232 $13,737,359 $13,014,737
620,503

—

—

—

—

—

5,645,769

8,934,759

11,703,067

5,499,915

4,970,282

7,921,025$22,592,715 $38,119,474 $36,867,068 $19,650,148 $18,707,641 $20,935,762

29. Derivative Transactions(a) Derivative Transactions to which Hedge Accounting is not applied(1) Interest Rate-related Transactions
Millions of Yen

2012
Contract amountTotal

Due after 1 year

Fair value

Unrealized gains(losses)¥17,267¥17,267

Over-the-counter
Swaps
		

Receive fixed/ Pay float¥590,096¥507,934

		

Receive float/ Pay fixed

588,298

506,242(13,908)(13,908)——¥ 3,358¥ 3,358

Total

Millions of Yen

2011
Contract amountTotal

Due after 1 year

Fair value

Unrealized gains(losses)Over-the-counter
Swaps
		

Receive fixed/ Pay float¥603,529¥532,868¥15,372¥15,372

		

Receive float/ Pay fixed

602,607532,028(11,479)(11,479)——¥ 3,892¥ 3,892

Total

174

Annual Report & CSR Report 2012

Financial Condition

Thousands of U.S. Dollars

2012
Contract amountTotal

Due after 1 year

Fair value

Unrealized gains(losses)Over-the-counter
Swaps
		

Receive fixed/ Pay float$7,179,663$6,180,008$210,089$210,089

		

Receive float/ Pay fixed

7,157,781

6,159,422(169,225)(169,225)——$ 40,864$ 40,864

Total*1. The above transactions are marked to market and changes in unrealized gains (losses) are included in the consolidated
statement of income.
*2. Fair values for the over-the-counter transactions are based primarily on discounted present values.

Consolidated Financial Statements(2) Currency-related Transactions
Millions of Yen

2012
Contract amountTotal

Due after 1 year

Fair value

Unrealized gains(losses)Over-the-counter
Swaps¥ 97,497¥97,497¥14,030¥14,030

107,290—(3,437)(3,437)

8

—

(0)

(0)

¥10,592¥10,592

Forwards
		Sold		Bought
Total

—

—
Millions of Yen

2011
Contract amountTotal

Due after 1 year

Fair value

Unrealized gains(losses)Over-the-counter
Swaps¥ 97,497¥97,497¥12,779¥12,779

		Sold158,859—(1,620)(1,620)		Bought

38,139

—

(76)

(76)

¥11,082¥11,082

Forwards

Total

—

—

Thousands of U.S. Dollars

2012
Contract amountTotal

Due after 1 year

Fair value

Unrealized gains(losses)$1,186,245$1,186,245$170,709$170,709

1,305,391—(41,829)(41,829)

Over-the-counter
Swaps
Forwards
		Sold		Bought

102

Total

—

—
—

(1)

(1)

$128,880$128,880*1. The above transactions are marked to market and changes in unrealized gains (losses) are included in the consolidated
statement of income.
*2. Fair values are based primarily on discounted present values.

Annual Report & CSR Report 2012175

Financial Condition(3) Equity-related Transactions
		Not applicable.
(4) Bond-related Transactions
		Not applicable.
(5) Commodity-related Transactions
		Not applicable.
(6) Credit Derivatives Transactions
Millions of Yen

2012
Contract amountTotal

Due after 1 year

Fair value

Unrealized gains(losses)

Consolidated Financial Statements

Over-the-counter
Credit default options
		Sold¥85,219¥74,219¥ (895)¥ (895)

		Bought

11,000

—

(150)

(150)

¥(1,046)¥(1,046)

Total

—

—
Millions of Yen

2011
Contract amountTotal

Due after 1 year

Fair value

Unrealized gains(losses)Over-the-counter
Credit default options
		Sold¥178,660¥95,110

		Bought

36,00011,000

(439)

(439)

—

—

¥(1,712)¥(1,712)

Total¥(1,272)¥(1,272)

Thousands of U.S. Dollars

2012
Contract amount
Fair value

Unrealized gains(losses)Total

Due after 1 year

		Sold$1,036,865$903,029$(10,894)$(10,894)

		Bought

133,856—(1,836)(1,836)$(12,730)$(12,730)

Over-the-counter
Credit default options

Total

—

—

*1. The above transactions are marked to market and changes in unrealized gains (losses) are included in the consolidated
statement of income.
*2. Fair values are based on discounted present values or the counterparties’ tendered price.
*3. ‘Sold’ means the underwriting of credit risk and ‘Bought’ means the transferring of credit risk.

176

Annual Report & CSR Report 2012

Financial Condition(b) Derivative Transactions to which Hedge Accounting is applied(1) Interest Rate-related Transactions
Millions of Yen
2012
Contract amount
Hedged item

Deferral method
Swaps
		

Receive fixed/ Pay float

		

Receive float/ Pay fixed

Accrual method
Swaps
Receive fixed/ Pay float

		

Receive float/ Pay fixed

Debentures,
Borrowed money,
Corporate bonds and
Loans

Total

Fair value¥485,498¥479,741¥39,656

66,52961,028(2,784)566,400

547,724

*3

444

325

—

—

Consolidated Financial Statements

		

Debentures,
Borrowed money,
Corporate bonds, Securities
and Loans

Due after 1 year

Total

¥36,871

Millions of Yen
2011
Contract amount
Hedged item

Deferral method
Swaps
		

Receive fixed/ Pay float

		

Receive float/ Pay fixed

Accrual method
Swaps
		

Receive fixed/ Pay float

		

Receive float/ Pay fixed

Debentures,
Borrowed money,
Corporate bonds andLoans
Debentures,
Borrowed money,
Corporate bonds and
Loans

Total

Due after 1 year

Fair value¥585,389¥577,498¥29,925

50,23145,129(2,484)

405,804

394,040

*3

Total

563

444

—

—

¥27,441

Thousands of U.S. Dollars
2012
Contract amount
Hedged item

Deferral method
Swaps
		

Receive fixed/ Pay float

		

Receive float/ Pay fixed

Accrual method
Swaps
		

Receive fixed/ Pay float

		

Receive float/ Pay fixed

Total

Debentures,
Borrowed money,
Corporate bonds, Securities
and Loans
Debentures,
Borrowed money,
Corporate bonds and
Loans

Total

Due after 1 year

Fair value$5,907,024$5,836,975$482,496

809,465

742,526(33,884)

6,891,361

6,664,124

*3

5,408

3,966

—

—

$448,612*1. DBJ Inc. applies the deferral method of hedge accounting primarily stipulated in “Accounting and Auditing Treatments on the
Application of Accounting Standards for Financial Instruments in Banking Industry”(JICPA Industry Audit Committee Report
No. 24).
*2. Fair values for the over-the-counter transactions are based primarily on discounted present values.
*3. The above interest rate swap contracts which qualify for the hedging requirements of the accrual method are not remeasured
at fair value but the differential paid or received under the swap agreements are recognized and included in interest expense or
income. In addition, the fair value of such interest rate swaps in Note 28 “Financial Instruments and Related Disclosures” isincluded in that of hedged items such as debentures, borrowed money, corporate bonds and loans.

Annual Report & CSR Report 2012177

Financial Condition(2) Currency-related Transactions
Millions of Yen
2012
Contract amount
Hedged item

Translated at contractual rates

Total

Due after 1 year

Fair value

Foreign-currency loans

Swaps¥5,427

Total

¥—

—

—

*
—

Millions of Yen
2011
Contract amount
Hedged item

Consolidated Financial Statements

Translated at contractual rates

Total

Due after 1 year

¥164,228¥5,427——

Fair value

Foreign-currency ­debenturesand loans

Swaps
Total

*
—

Thousands of U.S. Dollars
2012
Contract amount
Hedged item

Translated at contractual rates

Total

Due after 1 year

Fair value

Foreign-currency loans

Swaps
Total

$66,036
—

$—
—

*
—

Note: The above foreign currency swap contracts which qualify for the hedging requirements of assignment method are notsubject to the disclosure of fair value information. In addition, the fair value of such foreign currency swaps in Note 28“Financial Instruments and Related Disclosures” is included in that of hedged items such as foreign-currency debentures andloans.

(3) Equity-related Transactions
		Not applicable.
(4) Bond-related Transactions
		Not applicable.

30. Fair Value of Securities and Money Held in Trust
Fair value of securities, money held in trust and negotiable certificate of deposit classified as “Cash and due from banks” asof March 31, 2012 and 2011 is summarized below.

178

Annual Report & CSR Report 2012

Financial Condition(a) Securities(1) Held-to-maturity Debt Securities as of March 31, 2012
Millions of Yen

2012

Fair value exceeds
carrying amountJapanese government bonds

Carrying amount

Fair value

Difference¥174,461¥182,231¥ 7,769———

Japanese local government bonds
Short-term corporate bonds

—

—

—

Corporate bonds

134,420

141,047

6,626

Other

134,405

147,887

13,482443,288471,166

27,878

—

—

—

—

—

—

Sub-total
Fair value does not
Japanese government bonds
exceed carrying amount Japanese local government bonds

—

—

—

Corporate bonds

169,250

166,282(2,968)

Other

59,86658,312(1,553)Sub-total

229,116

224,595(4,521)

Total¥672,405¥695,762¥23,357

Consolidated Financial Statements

Short-term corporate bonds

Thousands of U.S. Dollars

2012

Fair value exceeds­carrying amountJapanese government bonds

Carrying amount

Fair value

Difference$2,122,666$2,217,198$ 94,531———

Japanese local government bonds
Short-term corporate bonds
Corporate bonds
Other

Sub-total———

1,635,487

1,716,110

80,624

1,635,302

1,799,341

164,0395,393,455

5,732,649

339,194

—

—

—

—

—

—

Fair value does not
Japanese government bonds
exceed carrying amount Japanese local government bonds
Short-term corporate bonds
Corporate bonds

—

—

—

2,059,265

2,023,151(36,114)728,385

709,489(18,897)

Sub-total

Other

2,787,651

2,732,640(55,011)

Total$8,181,106$8,465,289$284,183(2) Held-to-maturity Debt Securities as of March 31, 2011
Millions of Yen

2011

Fair value exceeds­carrying amountJapanese government bonds

Carrying amount

Fair value

Difference¥175,234¥178,884¥ 3,650

Japanese local government bonds

—

—

—

Short-term corporate bonds

—

—

—

Corporate bonds

107,993

114,241

6,248

Other

109,469

123,851

14,382392,696

416,977

24,281

—

—

—

—

—

—

Sub-total
Fair value does not
Japanese government bonds
exceed carrying amount Japanese local government bonds
Short-term corporate bonds
Corporate bonds
Other

—

—

—

99,396

98,633(762)(1,216)34,54533,328Sub-total

133,941

131,961(1,979)

Total¥526,637¥548,939¥22,301

Note: Fair value is based on the closing price at the consolidated balance sheet date.
Annual Report & CSR Report 2012179

Financial Condition(3) Available-for-sale Securities as of March 31, 2012
Millions of Yen

2012

Carrying amountexceeds cost

Carrying amount(Fair value)

Acquisition cost

Difference

Equities¥ 36,467¥ 19,193¥17,273

Bonds

109,333

103,156

6,176

22,572

22,241

330

Japanese government bonds
Japanese local government bonds

—

—

—

Short-term corporate bonds

—

—

—

Corporate bonds
Other
Sub-total
Consolidated Financial Statements

Carrying amount does
not exceed cost

86,76180,914

5,846

10,376

4,716

5,659

156,177

127,067

29,109Equities

5,339

6,411

(1,071)

Bonds

52,134

52,141(7)

49,97849,980

(2)

—

—

—

—

—

—

2,156

2,160

(4)

Japanese government bonds
Japanese local government bonds
Short-term corporate bonds
Corporate bonds

50,24250,242—Sub-total

Other

107,717

108,796(1,078)

Total¥263,894¥235,863¥28,030

Thousands of U.S. Dollars

2012

Carrying amountexceeds cost

Carrying amount(Fair value)

Acquisition cost

Difference

Equities$ 443,693$ 233,531$210,161

Bonds

1,330,253

1,255,100

75,153274,634

270,615

4,020

Japanese local government bonds

—

—

—

Short-term corporate bonds

—

—

—

1,055,619

984,485

71,134

126,253

57,39068,863

Japanese government bonds

Corporate bonds
Other
Sub-total
Carrying amount does
not exceed cost

1,900,199

1,546,021

354,178

Equities

64,96878,010(13,042)

Bonds

634,316

634,403(86)

608,079

608,112

(33)

—

—

—

Japanese government bonds
Japanese local government bonds
Short-term corporate bonds
Corporate bonds
Other

180

—

—

—

26,23826,291(53)

611,303611,303—

Sub-total

1,310,587

1,323,715(13,128)

Total$3,210,786$2,869,736$341,050

Annual Report & CSR Report 2012

Financial Condition(4) Available-for-sale Securities as of March 31, 2011
Millions of Yen

2011

Carrying amountexceeds cost

Carrying amount(Fair value)

Acquisition cost

Difference

Equities¥ 22,824¥ 15,762¥ 7,062

Bonds

317,387

311,496

5,891

243,476

242,898

577

Japanese government bonds
Japanese local government bonds

—

—

—

Short-term corporate bonds

—

—

—

Corporate bonds
Other
Sub-total

68,597

5,313

6,779

7,097

354,089

334,037

20,051Equities

7,450

10,296(2,846)

Bonds

838

859

(20)

Japanese government bonds

—

—

—

Japanese local government bonds

—

—

—

Short-term corporate bonds

—

—

—

Corporate bonds

838

859

(20)

30,01430,014—38,303

41,170(2,866)¥392,392¥375,207¥17,185

Other
Sub-total
Total

Consolidated Financial Statements

Carrying amount does
not exceed cost

73,911
13,876

Note: Carrying amount above represents the fair values determined based on the closing price at the fiscal year-end.

(5) Available-for-sale Securities sold during the year ended March 31, 2012 and 2011
Millions of Yen

2012
Proceeds from sales

Total amount ofgains on sales

Total amount oflosses on sales

Equities¥ 29,932¥1,858¥1,803

Bonds

91,584492—

91,070477—

Japanese local government bonds

—

—

—

Short-term corporate bonds

—

—

—

Japanese government bonds

514

15

—

Other

Corporate bonds

1,789

995

1

Total

¥123,307¥3,346¥1,804

Millions of Yen

2011
Proceeds from sales

Total amount ofgains on sales

Total amount oflosses on sales

Equities¥ 39,944¥11,244¥1,225

Bonds

265,7681217

265,768

121

7

Japanese local government bonds

—

—

—

Short-term corporate bonds

—

—

—

Japanese government bonds

—

—

—

Other

Corporate bonds

36,547

1,205

86

Total

¥342,260¥12,571¥1,319Annual Report & CSR Report 2012181

Financial Condition

Thousands of U.S. Dollars
2012
Proceeds from sales

Total amount ofgains on sales

Total amount oflosses on sales

Equities$ 364,191$22,614$21,941

Bonds

1,114,308

5,994

—

Japanese government bonds

1,108,054

5,809

—

Japanese local government bonds

—

—

—

Short-term corporate bonds

—

—

—

6,254

185

—

Other

Corporate bonds

21,778

12,10818

Total$1,500,278$40,717$21,959

Consolidated Financial Statements(6) Change in Classification of Securities
Reclassification from held-to-maturity debt securities to available-for-sale securities due to deterioration of issuers’
creditworthiness amounted to ¥2,460 million for the year ended March 31, 2011.
(b) Money Held in Trust(1) Money Held in Trust for the Purpose of Investment
Millions of Yen

2012
Net unrealized gain on
the consolidated statementof incomeCarrying amountMoney held in trust for the purpose of investment¥43¥4
Millions of Yen

2011
Net unrealized loss on
the consolidated statementof incomeCarrying amountMoney held in trust for the purpose of investment

¥38

¥(1)

Thousands of U.S. Dollars

2012
Net unrealized gain on
the consolidated statementof incomeCarrying amountMoney held in trust for the purpose of investment

$527

$58

(2) Other (other than for the purpose of investment and held to maturity)
Millions of Yen

2012
Unrealized gains (losses)

Other money held in trust

Carrying
amountAcquisition
cost¥24,379¥21,470

Net

Carrying amountexceeds cost

(Carrying amount
does not exceed
cost)¥2,909¥2,909¥—Millions of Yen

2011
Unrealized gains (losses)

Other money held in trust

182

Annual Report & CSR Report 2012

Carrying
amountAcquisition
cost¥24,781¥21,834

Net

Carrying amountexceeds cost

(Carrying amount
does not exceed
cost)¥2,946¥2,968¥(21)

Financial Condition

Thousands of U.S. Dollars

2012
Unrealized gains (losses)

Other money held in trust

Carrying
amountAcquisitioncost$296,627$261,233

Net

Carrying amountexceeds cost

(Carrying amount
does not exceed
cost)$35,394$35,394$—(c) Unrealized Gain on Available-for-sale Securities
The breakdown of unrealized gain on available-for-sale securities is as follows:
Thousands of
U.S. Dollars

Millions of Yen

2012

2011

2012

available-for-sale securities¥26,159¥14,352$318,276

Other money held in trust

2,909

2,946

35,394

Deferred tax liabilities(7,052)(4,136)(85,803)

Unrealized gain on available-for-sale securities before interest
adjustments

22,015

13,161

267,867

Amount corresponding to minority interests

2,695

14

32,798

(7)

(6)

(88)

¥19,313¥13,169$234,981

Unrealized gain on

Unrealized gain on available-for-sale securities, net of taxes

Consolidated Financial Statements

DBJ Inc.’s interest in net unrealized gain on available-for-salesecurities held by affiliates accounted for by the equity method

Note: Unrealized gain includes foreign currency translation adjustments on non-marketable securities denominated in foreign currency.

31. Related Party Transactions
Related party transactions for the years ended March 31, 2012 and 2011 are as follows:
Amounts of the transactions
Related party

Finance
MinisterCategory

Description

Shareholder Subscriptionof capitalincrease*1
Borrowings*2
Repayments

Account item—

Borrowed
money

Thousands of
U.S. Dollars

Millions of Yen

¥

6,594

$

80,229500,000

6,083,465

789,299

9,603,350

Balance at March 31, 2012
Thousands of
U.S. Dollars

Millions of Yen

¥

—

$

—

4,577,285

55,691,512

Payment forinterest

Accruedexpenses

68,915

838,489

17,299210,486

Guarantees*3—

2,257,667

27,468,883——*1. It consists of subscription due to redemption of government compensation bonds in an amount of ¥6,170 million ($75,070 thousand)and subscription for third party allotment of capital increase (¥50,000 per share) in an amount of ¥424 million ($5,159 thousand).
*2. DBJ Inc. has borrowed from the fiscal investment and loan program funds, and applied interest rates for fiscal investment and loan. The
last redemption period is January 20, 2032 without putting up collateral.
*3. The guarantees are for debentures issued by DBJ Inc. free of guarantee charge.
*4. According to Article 2, item 5 of the Japan Finance Corporation Act, DBJ Inc. has borrowed ¥3,711,361 million ($45,155,871
thousand) from Japan Finance Corporation relating to the crisis response business.

Annual Report & CSR Report 2012183

Financial Condition

Related party

Finance
MinisterCategory

Description

Shareholder Borrowings*1
Repayments

Amounts of the transactions

Balance at March 31, 2011

Millions of Yen

Millions of Yen¥ 300,000¥4,866,584

Account item

Borrowedmoney

836,315

Payment forinterest

Accruedexpenses

78,916

18,434

Guarantees*2—

2,164,887—

Consolidated Financial Statements*1. DBJ Inc. has borrowed from the fiscal investment and loan program funds, and applied interest rates for fiscal investment and loan. The
last redemption period is November 20, 2030 without putting up collateral.
*2. The guarantees are for debentures issued by DBJ Inc. free of guarantee charge.
*3. According to Article 2, item 5 of the Japan Finance Corporation Act, DBJ Inc. has borrowed ¥3,035,757 million from Japan FinanceCorporation relating to the crisis response business. In the year ended March 31, 2011, DBJ Inc. implemented early redemption in an
amount of ¥307,520 million to Japan Finance Corporation and recognized early redemption charges in an amount of ¥8,881 million in
the consolidated statements of income for the year ended March 31, 2011.

32. Subsequent event
On June 28, 2012, the shareholders meeting resolved the following appropriations of retained earnings. After that, thetiming and amounts for dividends were authorized by the Finance Minister on the same day:Appropriations of Retained earnings as of March 31, 2012

Year-end cash dividends-Common stock (¥856-$10.41 per share)

184

Annual Report & CSR Report 2012

Millions of Yen

Thousands of
U.S. Dollars¥37,349$454,426

Financial Condition

Independent Auditor’s Report

Consolidated Financial Statements

Annual Report & CSR Report 2012185

Financial Condition

Non-Consolidated Balance Sheet (Unaudited)
Development Bank of Japan Inc.

Thousands of
U.S. Dollars (Note)

Millions of Yen

As of March 31,

2012

2011

2012

AssetsCash and due from banks¥

164,534

Call loans

89,500

Reverse repurchase agreements
Money held in trust¥

220,743$2,001,885

61,852

1,088,940

152,889—

1,860,200

20,61020,903

250,768

Securities

1,139,649

1,150,145

13,866,036

Loans

13,704,999

13,067,978

166,747,778

Other assets

133,473

123,178

1,623,966

Tangible fixed assets

154,673

156,032

1,881,904

Intangible fixed assets

7,045

5,937

85,726

Non-Consolidated Financial Statements

Deferred tax assets

18,79036,083

228,620

Customers’ liabilities for acceptances and guarantees

128,518

148,068

1,563,674

Allowance for loan losses(150,350)(158,806)(1,829,307)(1,072)(1,158)(13,049)¥15,563,263¥14,830,957$189,357,142¥ 3,130,495¥ 3,312,713$ 38,088,519

9,170,553

8,573,482

111,577,487

Short-term corporate bonds

50,999—620,503

Allowance for investment losses
Total assets
Liabilities and equity
Liabilities:
Debentures
Borrowed money
Corporate bonds

541,327

316,675

6,586,298

Other liabilities

78,22952,882

951,814

Accrued bonuses to employees

4,600

4,500

55,968

12

17

158

13,342

25,748

162,338

52

52

645

Accrued bonuses to directors and corporate auditors
Reserve for employees’ retirement benefits
Reserve for directors’ and corporate auditors’ retirement benefits
Reserve for contingent losses

—

711

—

Acceptances and guarantees

128,518

148,068

1,563,674

13,118,132

12,434,852

159,607,404

1,187,788
1,060,466

1,181,194
1,060,466

14,451,734
12,902,620

154,539

129,855

1,880,272

Total liabilities
Equity:Common stock authorized, 160,000 thousand shares in 2012 and2011; issued, 43,632 thousand shares in 2012 and
43,623 thousand shares in 2011
Capital surplus
Retained earnings
Unrealized gain on available-for-sale securities

14,8177,350

180,286

Deferred gain on derivatives under hedge accounting

27,51917,238334,826

Total equity
Total liabilities and equity

2,445,130

2,396,104

29,749,738¥15,563,263¥14,830,957$189,357,142

Note: Amounts in U.S. dollars are presented solely for the convenience of readers outside Japan. The rate of ¥82.19=$1.00, the effective
exchange rate prevailing as of March 31, 2012, has been used in the conversion.

186

Annual Report & CSR Report 2012

Financial Condition

Non-Consolidated Statement of Income (Unaudited)
Development Bank of Japan Inc.

Thousands of
U.S. Dollars (Note)

Millions of Yen

For the year ended March 31,

2012

2011

2012

IncomeInterest income:¥277,128¥295,863$3,371,802

Interest on loans

254,567

272,466

3,097,303

Interest and dividends on securities

14,65015,603

178,256

Interest on call loans

115

165

1,408

Interest on reverse repurchase agreements

287

149

3,493

Interest on due from banks

95

164

1,164

7,287

7,238

88,671

123

75

1,506

9,232

10,033112,332

Interest on swaps
Other interest income
Fees and commissions

5,522

12,642

67,19737,86238,895

460,673

329,746

357,434

4,012,003

155,488

172,186

1,891,814

47,66852,920579,975

Total income

Non-Consolidated Financial Statements

Other operating income
Other income
Expenses
Interest expense:
Interest on debentures
Interest on call money and bills soldInterest on borrowed money
Interest on short-term corporate bonds
Interest on corporate bonds
Other interest expense
Fees and commissions
Other operating expenses

41

149

505

104,535

116,601

1,271,881

56

10

693

3,182

2,500

38,722

3

3

38

505

611

6,150

2,585

11,91731,457

General and administrative expenses

36,58135,307445,079

Other expenses

28,01636,358340,875

Total expenses

223,176

256,3812,715,375

Income before income taxes

106,569

101,052

1,296,628

21,40056

260,372

Income taxes:
Current
Deferred
Total income taxes
Net income

10,449941

127,141

31,849998

387,513¥ 74,720¥100,054$ 909,115

Yen

U.S. Dollars (Note)

Per share of common stock
Basic net income¥1,712.81¥2,293.57$20.84

Note: Amounts in U.S. dollars are presented solely for the convenience of readers outside Japan. The rate of ¥82.19=$1.00, the effective
exchange rate prevailing as of March 31, 2012, has been used in the conversion.

Annual Report & CSR Report 2012187

Financial Condition

Non-Consolidated Statement of Changes in Equity (Unaudited)
Development Bank of Japan Inc.

Thousands of
U.S. Dollars (Note)

Millions of Yen

For the year ended March 31,

2012

2011

2012

¥1,181,194¥1,181,194$14,371,505

6,170

—

75,070

424

—

5,159

1,187,788

1,181,194

14,451,734

Balance at beginning of year

1,060,466

1,060,466

12,902,620

Balance at end of year

1,060,466

1,060,466

12,902,620

Common stock:
Balance at beginning of year
Capital increase due to redemption of government
compensation bonds
Issuance of new shares of common stock
Balance at end of year
Capital surplus:

Retained earnings:
Non-Consolidated Financial Statements

Balance at beginning of year

129,855

39,834

1,579,949

Cash dividends(50,036)(10,033)(608,792)

Net income

74,720100,054909,115

Balance at end of year

154,539

129,855

1,880,272

7,350

7,092

89,429Unrealized gain on available-for-sale securities:
Balance at beginning of year
Net change during the year

7,467

257

90,856

Balance at end of year

14,8177,350

180,286

Balance at beginning of year

17,238

10,982

209,738

Net change during the year

10,281

6,255

125,088

Balance at end of year

27,51917,238334,826

2,396,104

2,299,571

29,153,242

6,170

—

75,070

424

—

5,159

Deferred gain on derivatives under hedge accounting:Total equity:
Balance at beginning of year
Capital increase due to redemption of government
compensation bonds
Issuance of new shares of common stock
Cash dividends(50,036)(10,033)(608,792)

Net income

74,720100,054909,115

Net change during the year
Balance at end of year

17,7486,512

215,945¥2,445,130¥2,396,104$29,749,738

Note: Amounts in U.S. dollars are presented solely for the convenience of readers outside Japan. The rate of ¥82.19=$1.00, the effective
exchange rate prevailing as of March 31, 2012, has been used in the conversion.

188

Annual Report & CSR Report 2012

Financial Condition

Capital Adequacy Status

Capital adequacy ratios indicate eligibility of the institution’s capital under regulations on capital requirements in light of the
purposes of “Criteria for Judging Whether A Financial Institution’s Own Capital Is Sufficient in Light of the Assets Held, etc.
under the Provision of Article 14-2 of the Banking Act” (March 27, 2006, Financial Services Agency Notification No. 19,
hereinafter, the “Capital Adequacy Ratio Notification”). Capital adequacy ratios have been calculated on both aconsolidated and non-consolidated basis, and to uniform international standards.
As of this disclosure (July 2012), DBJ has not yet applied Article 14-2 of the Banking Act of Japan, but for reference thecapital adequacy ratio has been disclosed in accordance with the Capital Adequacy Ratio Notification.
With regard to the measuring the capital adequacy ratio, credit risk was calculated using the standardized approach,and operational risk was calculated using the basic indicator approach. Also, as DBJ does not conduct trading (specifictransactions) operations, and as Article 4 and Article 16 of the Capital Adequacy Ratio Notification apply, the market risk
equivalent amount was not calculated.

[1] Capital Adequacy Ratio Status (Consolidated)
Capital Adequacy Status

Quantitative Disclosure
1. Items Related to Credit Risk (Excluding Securitization Exposure)(a) Fiscal year-end credit risk exposure and breakdown by principal categories

(Millions of yen)March 31, 2012

March 31, 2011¥13,147,987¥12,483,080

Equities, funds

272,894242,864

Commitments and customers’ liabilities for acceptances and guarantees

293,406

295,370

Bonds (JGBs and corporate bonds, etc.)

769,702827,885

Repurchase agreement/call loan

242,390

61,866

Other

497,046

605,151

Total¥15,223,428¥14,516,218

Loans(b) Fiscal year-end credit risk exposure, broken down as follows:		(1) By region

(Millions of yen)March 31, 2012

March 31, 2011

Domestic total¥15,222,544¥14,515,336

Overseas total

883

882

Note: ”Overseas” refers to overseas consolidated subsidiaries. DBJ has no overseas branches.

		(2) Breakdown by industry and transaction counterpartyManufacturing(Millions of yen)March 31, 2012

March 31, 2011

¥3,774,990¥3,494,246

Forestry and fisheries

1,401

922

Mining54,71445,348Construction

68,09840,325Wholesale and retail

1,196,031

1,156,814

Finance and insurance

1,387,525

1,082,887

Real estate

1,334,769

1,383,031

Transportation and communications

3,429,722

3,735,347

Electrical, gas and water

2,475,942

1,818,276

Services

994,334

1,012,804

Other

505,898

746,214Annual Report & CSR Report 2012189

Financial Condition

		(3) Breakdown by period to maturity

(Millions of yen)March 31, 2012

March 31, 2011

Five years or less

¥6,704,444¥5,767,717

More than five years, up to 10

5,230,813

5,412,965

More than 10 years, up to 15

1,954,710

1,988,982

More than 15 years

820,874

824,102

No maturity date

512,585

522,451(c) Breakdown of exposure by risk weight (after accounting for credit risk mitigations)

(Millions of yen)

Capital Adequacy Status

March 31, 2012

March 31, 2011

Risk weight 0%¥ 485,398¥ 550,730

Risk weight 10%

86,20598,610

Risk weight 20%

2,903,066

3,817,147

Risk weight 50%

5,164,121

4,244,213

Risk weight 100%

6,377,135

5,613,238

Risk weight 150%

25,00532,081

2. Securitization Exposure(a) Securitization exposure in which the Consolidated Group is the originator		

Not applicable.

(b) Securitization exposure in which the Consolidated Group is an investor
		(1) Retained securitization exposure amount and breakdown by major underlying asset type(Millions of yen)March 31, 2012

March 31, 2011

¥715,430¥690,796

Structured finance
Of which, resecuritization exposure
Credit derivatives
Of which, resecuritization exposure
Funds*

3,499—

71,312

120,510

41,763—

182,600

175,106* Assets held by funds including the commitment to funds (calculated on ”look-through” approach basis).

(2) Balance of retained securitization exposure by risk weight and required capital amounts

(Millions of yen)March 31, 2012

March 31, 2011

¥112,263¥213,080

		Capital requirement

1,796

3,409

Risk weight

8,403

13,867336

554

Risk weight

20%
50%

Balance
Balance		Capital requirement
Risk weight

374,858

304,261		Capital requirement100%

29,98824,340

Risk weight

3,412

954

955

267

418,199444,358

—

—

350%

Balance
Balance		Capital requirement
Risk weight

Capital deductions

Balance		Capital requirement
Risk weight

Other*

Balance		Capital requirement

6,943

9,891

1,142

1,697

* Applying to exposure the transitional measures indicated in Article 15 of the Supplementary Provisions to the Capital Adequacy Ratio Notification.

190

Annual Report & CSR Report 2012

(Millions of yen)March 31, 2012

Risk weight

40%

Balance

100%

¥­—

1,336

—

618

—

Balance		Capital requirement
Risk weight

225%

March 31, 2011

¥41,763

		Capital requirement
Risk weight

Balance		Capital requirement

49

—

1,133

—

204

—

1,195

—

		Capital requirement

621—

Risk weight

551

—

—

—

Risk weight

650%
Capital deductions

Financial Condition

Resecuritization exposure

Balance
Balance		Capital requirement

Capital Adequacy Status(3)	Breakdown of securitization exposure amounts and underlying asset categories deducted from capital in accordance with
Article 247 of the Capital Adequacy Ratio Notification
(Millions of yen)March 31, 2012

March 31, 2011

Structured finance¥236,150¥269,252

Funds*

182,600

175,106* Assets held by funds including the commitment to funds (calculated on ”look-through” approach basis).

(4)	Breakdown of retained resecuritization exposure by application of techniques to mitigate credit risks and guarantors, or byrisk weighting applied to guarantors.
			Not applicable.
(5)	Amount of credit risk assets calculated with application of Article 15 of the Supplementary Provisions to the Capital
Adequacy Ratio Notification
(Millions of yen)
Credit risk assets

March 31, 2012

March 31, 2011¥14,286¥21,220

3. Interest Rate Risk in the Banking Book
Decrease in economic value resulting from interest rate shock

March 31, 2012

March 31, 2011

Decrease in economic
value resulting from aninterest rate shockmeasuring interest rate
fluctuations in the 1st
percentile and 99th
percentile, using a oneyear holding period anda five-year time horizon:¥19.5 billion

Decrease in economic
value resulting from aninterest rate shockmeasuring interest rate
fluctuations in the 1st
percentile and 99th
percentile, using a oneyear holding period anda five-year time horizon:¥56.4 billion

Annual Report & CSR Report 2012191

Financial Condition[2] Capital Adequacy Ratio Status (Non-Consolidated)
Qualitative Disclosure

Capital Adequacy Status
192

1.	Overview of FundRaising Methods

All capital contributions are from the government of Japan.

2.	Overview of Methods
for Evaluating the
Degree of Capital
Adequacy of the Bank

Regarding the degree of capital adequacy, DBJ quantifies credit risk, interest rate risk andoperational risk, compares the total risk amount with total capital and measures the capital surplus.
This surplus enables DBJ to respond to unquantifiable risks and unforeseen events, decide whether
to take new financing risks and establish the operating directions.

3.	Credit Risk(a) Overview of Risk Management Policies and Procedures
Credit risk refers to the risk of loss to DBJ resulting from the decline in or disappearance of thevalue of credit assets, owing to the worsening credit standing of clients for loans or debt
guarantees. These risks include expected losses (EL), or losses that on average can be expected
to occur within a certain measurement period; and unexpected losses (UL), which go extend
beyond the boundaries of losses that, on average, are expected within a period of time. DBJ
periodically compares UL and capital to measure the amount of capital in surplus.
(b) Rating Agencies Eligible to Weight Risks
The rating agencies that DBJ uses for weighting risk are among the four that the FSA has
named eligible to perform such weighting. Eligible rating agencies are not selected according totype of exposure.
		 The rating agencies are Rating and Investment Information, Inc. (R&I), Japan Credit Rating
Agency, Ltd. (JCR), Moody’s Investors Service, Inc. (Moody’s), and Standard & Poor’s Corp. (S&P).

4.	Overview of Risk
Management Policies
and Procedures for
Reducing Credit Risk

DBJ obtains collateral or guarantees as necessary based on changes in the borrower’s
creditworthiness. If required, the effectiveness of collateral is determined from the perspective of
the amount that could be reasonably expected to resolve the situation through liquidation or thecreditworthiness of the guarantor, respectively.
In principal, collateral valuation is performed by the Credit Analysis Department, based on therequest of investment and loan departments/offices. Investment and loan departments/offices andthe Credit Analysis Department manage credit risk based on valuation results. In principle, thevaluation of all collateral property is reviewed once or twice each year to ensure DBJ is aware of thecurrent status of its collateral property.

5.	Overview of Risk
Management Policies
and Procedures
Related to Risk
Involving Counter­parties in Derivative
Product Transactions
and Transactions withLong Settlement
Periods

DBJ regularly refers to the ratings and credit amounts of transaction counterparties to determine
the advisability of entering a transaction or to understand the risks of existing transactions.

6.	Securitization
Exposure(a) Overview of Risk Management Policies and Procedures
Excluding credit derivatives, the majority of DBJ’s securitization exposure falls into the categoryof specialised lending (Item 47, Article 1, of the Capital Adequacy Ratio Notification) employing
internal rating methods. Different from the internal ratings that are applied to standard
corporate credit, this exposure is given a rating by using a grading system applied to match thecharacteristics of specialised lending. DBJ conducts risk management in line with changes inrating level. In addition to rating its exposure when making new acquisitions, DBJ reviews theseratings periodically.
			 DBJ’s involvement in securitized and resecuritized transactions is typically that of an investor,and in principle the exposure acquired through such transactions continues until the
instrument’s maturity.
(b) Overview of status of implementation and operation of systems stipulated in Article
249, Paragraph 4, Items 3-6, of the Capital Adequacy Ratio Notification (including
application with modifications in Capital Adequacy Ratio Notification Article 254,
Paragraph 2, and Article 302-4, Item 1)
DBJ has created the systems necessary for operating within its credit risk management framework.
Specifically, as one aspect of our credit risk management, our sales department endeavors toappropriately collect information related to comprehensive risk characteristics and performance,
and DBJ monitors conditions to determine any changes in the borrower’s creditworthiness.
Related information is also provided to the credit analysis department, which may revise
borrower ratings or make other adjustments on the basis of this related information as necessary.
(c) Methods Used to Calculate Credit Risk Asset Amount of Securitization Exposure
DBJ employs the standardized approach for these calculations.

Annual Report & CSR Report 2012

Financial Condition(d) Method of Accounting for Securitized Transactions
DBJ’s involvement in securitized transactions is that of an investor. DBJ accounts for thesetransactions in accordance with the ”Accounting Standard for Financial Instruments.”(e) Rating Agencies Eligible to Weight Risks by Type of Securitization Exposure
The rating agencies that DBJ uses for weighting risk are among the four that the FSA has
named eligible to perform such weighting. Eligible rating agencies are not selected according totype of securitization exposure.
			 The rating agencies are Rating and Investment Information, Inc. (R&I), Japan Credit Rating
Agency, Ltd. (JCR), Moody’s Investors Service, Inc. (Moody’s), and Standard & Poor’s Corp. (S&P).
Based on Article 16 of the Capital Adequacy Ratio Notification, DBJ includes in its calculation
method no market risk equivalent amount.

8. Operational risk(a) Overview of Risk Management Policies and Procedures
DBJ defines operational risk as the risk of loss arising from internal processes, the activities ofofficers and employees or systems that are inappropriate or non-functioning, or from extrinsic
events.
			 DBJ establishes its management structure and basic risk management policy pertaining tomanagement methods after considering the wide range of operational risks that it potentiallyfaces, such as operational risk, systems risk, legal risk, human risk, tangible asset risk andreputational risk.
			 DBJ designates operational risk officers at each of its offices. These personnel are charged
with establishing data collection procedures, remaining aware of risks and creating risk
databases.
			 In line with the increasing level of sophistication and complexity of the financial business,
DBJ addresses various operational risks by establishing or reinforcing management methods andpreparations to appropriately identify, evaluate, measure, monitor and control these risks.
(b) Method Used to Calculate Operational Risk Equivalent AmountDBJ uses the basic indicator approach to calculate these risks.

9. Overview of Risk
Management Policies
and Procedures
Regarding Exposure
to Shares and Other
Equity Investments
and Capital Injections
into the Banking Book

DBJ defines investment risk as its risk of sustaining a partial or total loss on the economic value of
assets (including off-balance-sheet assets), owing to such factors as the worsening of an investee’s
financial conditions or to fluctuations in the market environment. For newly acquired exposure, DBJ
considers the balance between investment risk and potential return in each field of investment.
Thereafter, DBJ regularly conducts performance evaluations on its exposure.

10. Interest Rate Risk on
the Banking Book(a) Overview of Risk Management Policies and Procedures
Long-term, fixed-rate loans make up the majority of the DBJ’s lending, and DBJ seeks to reduce
its interest rate risk by raising funds featuring similarly long-term, fixed rates. DBJ also employs
the value at risk (VaR) and the Basel II standardized interest rate shock* method to compute
various risks from the standpoint of their economic value.

Capital Adequacy Status

7. Market Risk

* Measurement methods are described in (ii) and (iii) of (b).

		 DBJ regularly compares VaR and 200bpValue against capital to ensure that interest rate risk
remains within a specified range of capital.
(b) Overview of Methods for Calculating Interest Rate Risk Used by the Bank for Internal
Control of the Banking Book
DBJ calculates interest rate risk based on the following method.
(i) VaR: Use a historical method of measurement with a one-year holding period, a five-yeartime horizon and a 99.9% confidence level(ii) Measure interest rate fluctuations in the 1st percentile and 99th percentile, using a one-year
holding period and a five-year time horizon(iii) 200bpValue: Use a 2% parallel shift in a standardized interest rate shock to measure thechange in economic value((ii) and (iii) are methods for measuring the standardized interest rate shock under Basel II.)

Annual Report & CSR Report 2012193

Financial Condition

Quantitative Disclosure
1.	 Items Related to Capital Adequacy Level

(Millions of yen)(a) Capital requirement to total credit risk
(1) Exposure by portfolio to which standardized method applied

March 31, 2012

March 31, 2011

¥805,644¥714,187

769,519

684,046——		(i) Japanese government and regional municipal bodies		(ii) Exposure to financial institutions

8,867

7,527

		

(iii) Exposure to corporations

723,673

639,510		(iv) Equity exposure

21,306

18,711		(v) Other exposure

15,672

18,29536,12430,141——(2) Securitization risk exposure(b) Capital requirement to market risk

Capital Adequacy Status(c) Capital requirement to operational risk

20,80319,194(d) Non-consolidated total capital requirement ((a) + (b) + (c))

826,447

733,382(e) Non-consolidated capital ratio and non-consolidated Tier I ratio Capital ratio

18.30%

20.39%

				

22.89%

25.32%March 31, 2012

March 31, 2011¥13,192,835¥12,483,395

Tier I ratio

2. Items Related to Credit Risk (Excluding Securitization Exposure)(a) Fiscal year-end credit risk exposure and breakdown by principal categories
Loans(Millions of yen)

Equities, funds

296,948

267,120

Commitments and customers’ liabilities for acceptances and guarantees

293,406

295,370

Bonds (JGBs and corporate bonds, etc.)

769,702827,885

Repurchase agreement/call loan

242,390

61,866

Other456,927564,120

Total¥15,252,211¥14,499,758(b) Fiscal year-end credit risk exposure, broken down as follows:		 (1) By region
March 31, 2012

March 31, 2011

Domestic total¥15,252,211¥14,499,758

Overseas total——

Note: DBJ has no overseas sales locations.

194(Millions of yen)

Annual Report & CSR Report 2012

Manufacturing(Millions of yen)March 31, 2012

March 31, 2011

¥3,774,990¥3,494,246

Forestry and fisheries

1,401

922

Mining54,71445,348Construction

Financial Condition

		 (2) Breakdown by industry and transaction counterparty

40,325

1,196,031

1,156,814

Finance and insurance

1,450,669

1,099,731

Real estate

1,362,796

1,411,058

Transportation and communications

3,429,722

3,735,347

Electrical, gas and water

2,475,942

1,818,276

Services

995,400

1,013,870

Other442,443

683,817

March 31, 2012

March 31, 2011

Five years or less

¥6,704,444¥5,767,717

More than five years, up to 10

5,267,556

5,412,965

More than 10 years, up to 15

1,960,287

1,988,982

More than 15 years

820,874

824,102

No maturity date

499,049

505,991		 (3) Breakdown by period to maturity

Capital Adequacy Status

68,098Wholesale and retail(Millions of yen)(c) Breakdown of exposure by risk weight (after accounting for credit risk mitigations)

(Millions of yen)March 31, 2012

March 31, 2011

Risk weight 0%¥ 485,398¥ 550,730

Risk weight 10%

86,20598,610

Risk weight 20%

2,896,755

3,808,137

Risk weight 50%

5,164,121

4,244,213

Risk weight 100%

6,411,453

5,608,858

Risk weight 150%

25,00532,081

3. Items Related to the Effect of Credit Risk Mitigations
Exposure to Items to Which Effect of Credit Risk Mitigations Applied(Millions of yen)March 31, 2012

March 31, 2011

Eligible financial collaterals¥ 152,830¥—

Guarantees or credit derivatives

1,210,309

1,426,488

Annual Report & CSR Report 2012195

Financial Condition

4.	 Transaction Counterparties’ Risk on Derivative Product Transactions and Transactions with Long Settlement Periods
(Millions of yen)March 31, 2012

March 31, 2011

Current exposure
methodCurrent exposure
method¥133,953¥133,529

80,78998,100Interest rate transactions

49,50459,554Foreign exchange transactions

30,73436,745Equivalent credit calculation method
Gross restructuring cost
Gross add-on, by transaction type

550

1,800

Reducing credit equivalent amounts through netting

115,667

142,371

Net equivalent credit

99,07589,258

Net restructuring cost
Notional amounts of credit derivatives forcalculated credit equivalent amount by type ofCredit default swaps provisioncredit derivative, by protection purchase or provision

54,91639,18085,219178,660

Credit default swaps purchase

11,00036,000——Credit derivative transactions

Capital Adequacy Status

Notional amounts of credit derivatives taking
into account credit risk mitigations

Notes: 1. Collateral is not used to reduce credit risk on derivative product transactions.
2. Credit derivatives used to compute the credit equivalent amount are included in securitization exposure; there is some data overlap withsecuritization exposure indicated elsewhere and what are known as single-name CDS offerings include the measurement of customers’ liabilities
for acceptances and guarantees as consisting of the legal and other exposure of the company in question.

5.	 Securitization Exposure(a) Securitization exposure in which DBJ is the originator
		 Not applicable.
(b) Securitization exposure in which DBJ is an investor
		(1) Retained securitization exposure amount and breakdown by major underlying asset type(Millions of yen)March 31, 2012

March 31, 2011

¥692,945¥657,037

Structured finance
Credit derivatives
Of which, resecuritization exposure
Funds*Of which, resecuritization exposure

62,467

120,510

41,763—

223,486

210,271

2,274—* Assets held by funds including the commitment to funds (calculated on ”look-through” approach basis).

		(2) Balance of retained securitization exposure by risk weight and required capital amounts

Risk weight

20%

Balance(Millions of yen)March 31, 2012

March 31, 2011

¥112,263¥213,080

		Capital requirement

1,796

3,409

Risk weight

8,403

13,867

50%

Balance		Capital requirement

336

554

374,858

304,009

		Capital requirement

29,98824,320

Risk weight

3,412

569

Risk weight

100%
350%

Balance
Balance		Capital requirement
Risk weight

Capital deductions

Balance		Capital requirement
Risk weight

Other*

Balance		Capital requirement

955

159

428,980

446,402

—

—

6,943

9,891

1,142

1,697

* Applying to exposure the transitional measures indicated in Article 15 of the Supplementary Provision to the Capital Adequacy Ratio Notification.

196

Annual Report & CSR Report 2012

(Millions of yen)March 31, 2012

Risk weight

40%

Balance

March 31, 2011

¥41,763

¥­—

1,336

—

402

—

		Capital requirement

32—

Risk weight736—

		Capital requirement

132—

Risk weight777—

		Capital requirement404—

Risk weight

358

—

—

—

		Capital requirement
Risk weight

100%
225%
650%
Capital deductions

Financial Condition

Resecuritization exposure

Balance
Balance
Balance
Balance		Capital requirement

March 31, 2012

March 31, 2011

Structured finance¥207,768¥237,072

Funds*

221,570

209,329

Capital Adequacy Status

		(3) Breakdown of securitization exposure amounts and underlying asset categories deducted from capital in accordance with
Article 247 of the Capital Adequacy Ratio Notification
(Millions of yen)

* Assets held by funds including the commitment to funds (calculated on ”look-through” approach basis).

(4)	Breakdown of retained resecuritization exposure by application of techniques to mitigate credit risks and guarantors, or byrisk weighting applied to guarantors.
			Not applicable.
		(5) Amount of credit risk assets calculated with application of Article 15 of the Supplementary Measure (Interim Measure for
Securitization Exposure) to the Capital Adequacy Ratio Notification
(Millions of yen)

Credit risk assets

March 31, 2012

March 31, 2011¥14,286¥21,220

6.	 Items Related to Market Risk
DBJ falls into the category indicated in Article 16 of the Capital Adequacy Ratio Notification. Consequently, calculation of themarket risk equivalent amount was not performed.
7.	 Items Related to Shares and Other Equity Investments and Capital Injections into the Banking Book

(Millions of yen)March 31, 2012

March 31, 2011(a) Market value of below-listed items as included within categories in
the non-consolidated balance sheets
		 Exposure to listed shares¥ 37,900¥ 34,209		

249,942

221,289

Exposure to other equity investments and capital injections(b) Gains or losses on the sale of equity investments or shares
Gain or loss on write-off of equity exposure(c) Gains or losses from valuation recognized on the non-consolidated balance sheets
but not recognized on the non-consolidated statement of income(d) Included amount stipulated in Article 18, Paragraph 1, Item 1 of the Capital
Adequacy Ratio Notification

1,303

10,034

6,402

14,19914,817

7,350

9,841

5,168

Notes: 1. The Group has no gains or losses from valuation recognized on the non-consolidated balance sheets or the non-consolidated statement ofincome.
2. The Group has no exposure to shares to which Article 13 of the Supplementary Provisions to the Capital Adequacy Ratio Notification applies.

8.	 Exposure Applied for the Deemed Calculation of Credit Risk Assets
Not applicable.

Annual Report & CSR Report 2012197

Financial Condition

9.	 Interest Rate Risk in the Banking Book
Decrease in economic value resulting from interest rate shock

Capital Adequacy Status
198

Annual Report & CSR Report 2012

March 31, 2012

March 31, 2011

Decrease in economic
value resulting from aninterest rate shockmeasuring interest rate
fluctuations in the 1st
percentile and 99th
percentile, using a
one-year holding period
and a five-year time
horizon:¥19.5 billion

Decrease in economic
value resulting from aninterest rate shockmeasuring interest rate
fluctuations in the 1st
percentile and 99th
percentile, using a
one-year holding period
and a five-year time
horizon:¥56.4 billion

Profile (As of September 1, 2012)

Established:
October 1, 2008
	(The Japan Development Bank [1951] and the Hokkaido-Tohoku Development FinancePublic Corporation [1956] were merged to form the Development Bank of Japan in 1999)
Legal basis:

The Development Bank of Japan Inc. Act (Act No. 85 of 2007)

President:

Toru Hashimoto

Number of employees:

1,147 (As of March 31, 2012)

Capital:¥1,198,316 million (100% owned by the Japanese government)

Address:

9-1, Otemachi 1-chome, Chiyoda-ku, Tokyo 100-0004, Japan

URL:

http://www.dbj.jp/en

Number of offices:

Branch offices, 10; representative offices, 8; overseas representative office, 1; andoverseas subsidiaries, 2Subsidiaries andaffiliated companies: Consolidated subsidiaries, 17; non-consolidated subsidiaries, 23; and affiliated companies, 15(As of March 31, 2012)
Main business:

The provision of long-term funding (investment and loans)

Purpose: 	To conduct business activities utilizing the methods of combining investments and financing andother sophisticated financial methodologies, thereby contributing to the smooth supply of funds
to those who need long-term business funds, as well as to the sophistication of financial functions.
Scope of business operations: A
 s well as such basic businesses as investment, lending and guarantee of obligations, DBJ carriesout businesses in which it develops new financial techniques.
DBJ raises funds in a stable manner by borrowing from the government’s Fiscal Investment and
Loan Program (FILP) and by issuing government-guaranteed bonds, as well as corporate bonds(without government guarantees), and by taking out long-term loans from the private sector.
nnTotal assets:¥15,563.2 billion (As of March 31, 2012)

Loans:¥13,704.9 billion (As of March 31, 2012)

Capital adequacy ratio:

18.30% (As of March 31, 2012)

Issuer ratings:

Aa3 (Moody’s Investors Service, Inc.), A+ (Standard & Poor’s Corp.),
AA (Rating and Investment Information, Inc.),
AAA (Japan Credit Rating Agency, Ltd.)
Note: Information above is on a non-consolidated basis.

Development Bank of Japan Inc.
Published in September 2012 by the Public Relations & Corporate Social Responsibility Office,Corporate Planning & Coodination Department
Forward-Looking Statements
This Annual Report & CSR Report contains statements concerning management policies and future operating
results. Such statements are not guarantees. Please be aware that future performance is subject to various
changes in conditions in the operating environment.

URL: http://www.dbj.jp/en

Annual Report & CSR Report

Applying Financial Expertiseto Design the Future2012

http://www.dbj.jp/en
Development Bank of Japan Inc.

9-1, Otemachi 1-chome, Chiyoda-ku, Tokyo 100-0004, Japan

Development Bank of Japan Inc.

This report is printed on paper certified by the Forest Stewardship Council (FSC) as being made from sustainably
managed forests. The report is printed with vegetable ink. All the electricity used in printing and binding thisreport (600 kWh) was supplied by green resources.

Annual Report & CSR Report2012