Integrated Reporthttps://www.dbj.jp/en

2020

2020
Integrated Report

FSC®-certified paper using non-VOC ink.

Printed in Japan

Development Bank of Japan Inc.

In consideration of the environment, this report is printed on

1MissionDesign the Future withFinancial ExpertiseContinue to expand financial frontiers;
Provide the best solutions for customers and society;Pursue sustainable development for Japan and the world.

The realization of the DBJ Group’s mission can be traced to its four core corporate values of “long-term perspective,” “impartiality,” “public mindedness,” and “reliability,” which were created and passed down through the generations via the sharing and pursuit of DBJ’s corporate philosophy.
Moreover, the core corporate values underpin our business activities, representing a strength of DBJ.

A Long-term Perspective

Impartiality

Public-mindedness

Reliability

Due to the circumstances surrounding COVID-19 and our foremost priority of protecting the health and safety of our executives and employees, we have decided not to
conduct photo sessions for this year’s integrated report. Accordingly, the photos featured in this report were taken in the past for use in previous years’ reports.

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Contents

Editorial
PolicyEnvironmental Report for a Sustainable Society (published in fiscal 2003) was the
DBJ Group’s first report dedicated to increasing such communication with
our stakeholders. Our latest Integrated Report 2020 is intended to provide financial
and non-financial information to explain the DBJ Group’s business activities andinitiatives in sustainable value creation to its broad spectrum of stakeholders.
The report’s content is decided upon by the Executive Committee.

The DBJ Group’s
Strategy
A presentation of the DBJ Group’s various
sustainability management activities from theperspectives of its business and managementfoundation strategies

Business Strategy

The DBJ Group’s
Value Creation Story
A presentation of the DBJ Group’s corporate philosophy froma historical perspective, along with an explanation of its
management policies rooted in this philosophy

An explanation of the
DBJ Group’s sustainability
management initiatives

P 28

Area Strategy

P 38

Financial Strategy

P 32

Function Strategy

P 40

 uman Resource
H
Development

P 42

 nowledge andK
Collaboration

Corporate Data
P 64

 inancial andF
Non-Financial Highlights

P 66

Consolidated
Financial SummaryP 6

Our History of Value Creation

P 68

Timeline

P 10

Sustainability Management

P 69

Shareholder Information

P 12

Message from the President

P 69

P 18

Invigoration and Stabilization of
Financial Markets throughPartnerships and Collaboration
under the Medium-Term
Management Plan ummary of Changes to theS
DBJ Act after Conversion toa Joint-Stock Company

P 70

Organizational Structure

Period Covered and Scope

Guidelines and Entities Referenced

Disclaimer•	Period: Fiscal 2019
(April 1, 2019–March 31, 2020)(Some information from outside thisperiod is also included.)•	International Integrated Reporting
Framework of the International
Integrated Reporting Council (IIRC)

Integrated Report 2020 contains
forward-looking statements. Forwardlooking statements are based on
information available at the time ofwriting and hypotheses or judgments
regarding uncertain factors.
Accordingly, actual results may differ
materially if conditions change.

Corporate Governance
P 46

Message from the
Chairman

P 48

Corporate GovernanceP 52

 embers of the Board ofM
Directors, Audit &Supervisory Board
Members, and Executive
OfficersOur Response to COVID-19
 ey Initiatives toward Realizing
K
Sustainability

An explanation of the
DBJ Group’s key initiatives forrealizing sustainability•	Date of Publication: October 2020

Sector Strategy

 he DBJ Group’s Corporate
T
Philosophy

P 20•	Guidance for Integrated Corporate
Disclosure and Company–Investor
Dialogues for Collaborative Value
Creation

 anagement Foundation
M
Strategy

P 22

P 4

P 19

•	Scope: In principle, the report covers
DBJ and its 12 main subsidiaries.

An explanation of
the DBJ Group’s
specific initiatives
toward the growth ofthe energy sector

P 55

 essages fromM
Outside Members of theBoard of Directors

P 56

Compliance

Risk Management
P 58

Risk Management System

P 58

 omprehensive Risk
CManagement

Data Section

P 61

Stress Tests

P 72

P 61

 usiness Continuity
B
Initiatives

 he Development
T
Bank of Japan Inc. Act

P 91

Financial Condition

P 62

Initiatives Related to
the TCFD’s
Recommendations

P 159

 orporate Information /CGroup Companies

The DBJ Group’s
Corporate Governancehttps://www.dbj.jp/en/
The latest news; detailed information
on DBJ’s financial services; casestudies regarding its investments andloans; various reports; and information
for investors can be found on the
Company’s website. Details about
CSR initiatives are also posted on the
DBJ website.

A presentation of the DBJ Group’s corporate
governance and risk management efforts toward thesteady implementation of its strategies

An explanation of the
DBJ Group’s specificinitiatives and goals
in line with the Task
Force on Climaterelated Financial
Disclosures, which
has been drawing
significant attention
in recent years

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The DBJ Group’s Corporate Philosophy
Design the Future with Financial Expertise

With due consideration paid to progress it has made thus far, projected changes in the business environment, and outstanding social issues, the DBJ Group has formulated a mission to relentlessly
pursue, core values to share, and its long-term vision, Vision 2030, to follow as a guide into the future.
In connection with these elements of its corporate philosophy, the DBJ Group has identified four
core corporate values—long-term perspective, impartiality, public-mindedness, and reliability—that
also embody its strengths and long-term vision, areas of differentiation.

Vision 2030

Leveraging the DBJ Group’s
unique strengths to pursue its
mission and realize its vision

Business strategy

Capital strategy

Sector strategy
Function strategy
Area strategy

Financial capital
Human capitalIntellectual capital
Relationship andsocial capital

Values put into
practice define
our strengths

Execute strategy
based on values

Action Guideline

ValuesFurther propagating and applying our corporate philosophy will improve awareness ofour social responsibility, enhance the sense of unity in the DBJ Group, lower communication costs, andmotivate our employees to grow with intention and a sense of mission.

Our unwavering
purpose andour incessantdetermination toshape the future

MissionSustainability
management

Sharing Our Corporate Philosophy

Our vision for 2030,
embodied in
our mission andstrategies

Design the Future with Financial ExpertiseContinue to expand financial frontiers;
Provide the best solutions for customers and society;Pursue sustainable development for Japan and the world.

As industry and infrastructure professionals skilled in handling all types of risk,
we will play a unique role in the economy and society of 2030—leading new
business and market creation while responding to crises and other social needs.

Our strategy to reach our vision for 2030
Medium-Term Management Plan
The DBJ Group’s unique strengths assist with strategy execution
A long-term perspective, impartiality,
Core corporate
valuespublic-mindedness, and reliability
Our guidelines fortaking specificactions that
express our values

Our unwaveringvalues sharedby management
and employees(base component)

Responsibility to future generations• We fulfill our responsibility to the future by
pursuing both economic and social value.

The customer’s perspective• We devote unequaled thought to eachpossibility—from the customer’s point of view.

Outstanding service• We review and enhance our services while
improving productivity.

Commitment and cooperation• We work tirelessly to broaden frontiers andachieve best results.
• We respect diversity and work together for
greater shared value.

Initiative

Integrity

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Our History of Value Creation

The DBJ Group has provided solutions intune with the times, contributed to thesustainable development of society, and,while changing itself, stayed true to its
values—initiative and integrity—amiddramatic changes in the economy, thefabric of society, and social issues.

Redevelopment ofmajor industries

Expansion and reinforcement ofindustrial bases

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

Nippon Yusen Kabushiki Kaisha:Liner Sanuki Maru
Rebuilding Japan’s merchant shipping fleet withfinance under the government’s shipbuilding
programDevelopment ofdomestic technologies

Development of innovative financial products
focused on sources of corporate value

Sony Corporation:
Trinitron color television factory
Promotion of homegrown technologies through thecommercial application of new technologies

Vision 2030

Financial solutions that support communities,
the environment, and technology

Stronger response to innovation
Japan H2 Mobility, LLC (JHyM):
Financial support for realization of a hydrogen-basedsociety

PASMO Co., Ltd.:
Development of the PASMO IC card that transformed
public transport convenience
Note: PASMO is a registered trademark of PASMO Co., Ltd.

Space One Co., Ltd.
Support for development of the domestic spaceindustry by commercializing a new generation ofsmall rockets

As industry and infrastructure professionals skilled in handling
all types of risk, we will play a unique role in the economy and society of2030—leading new business and market creation while responding tocrises and other social needs.

Future Changes in the External Environment
We have identified changes in the external environment that could have a major impact on the
DBJ Group’s stakeholders in the future. These sync with the United Nations Sustainable
Development Goals (SDGs) and we aim to contribute to realizing those goals.
Photo provided by ENEOS Corporation

1951
The Japan Development Bank established1956
The Hokkaido Development FinancePublic Corporation establishedEconomic recovery

Roles played by DBJ

2008
Development Bank of Japan established

Rapid growth

Stable growth

Reconstruction and self-relianceof the economy

High-growth infrastructuredevelopment

Strengthening of international
competitivenessImprovements to quality of life

After World War II, DBJ began toprovide financing for the rationalization, modernization and growthof key industries that would become
the foundation of economic andindustrial development.

Japan Development Bank (JDB)
expanded and reinforced the energy
and transportation capabilities
underpinning its industrial infrastructure, and provided loans todevelop and modernize chemical
fiber, machine tool, automobile, andother new industries, which steered
economic growth.

Aiming to enhance international
competitiveness in accordance withthe transition to an open economic
system, JDB focused on support forindustrial system improvements
and the development of domestic
technologies.

In the 1970s, JDB engaged in
antipollution measures, regional
and urban development, and othersocial development efforts addressing quality of life and regional
inequality issues in tune witheconomic growth.

Promotion of
antipollution measures
Toyo Soda Manufacturing Co., Ltd.
(currently Tosoh Corporation):
Conversion of manufacturing method for caustic
soda (Yamaguchi Prefecture)
Promotion of conversion to non-polluting manufacturing method for chemical industry

Economic
bubblePost-bubble economy

The global financial crisis
The Great East Japan Earthquake

Structural reform

Seamless transformation ofindustrial structure

Creation of an affluent society

Regional revitalization

Business regeneration

From the mid-1980s, pressing
needs arose for increased domestic
demand and an industrial structuralshift against a background of
aggravating trade friction with othercountries. JDB focused on support
for social capital improvement,
creative technological development,
and industrial transformation andother issues.

JDB focused on ongoing improvements to social capital and environmental measures as areas ofpriority and the support of new
businesses (venture businesses).
It swiftly implemented reconstruction loans in the wake of the Great
Hanshin-Awaji Earthquake andloans to stabilize the financial
system.

Through a united effort with
regional financial institutions, JDB
focused on providing long-term
solutions to such issues as economic growth, the establishmentof social infrastructure, and development of a wide business network, toward enriching the lifestyles
of local communities.

Amid issues concerning uncollectible loans arising from an increasing number of bankruptcies andunfavorable performances among
businesses as well as the instabilityof financial systems since the late
1990s, JDB invested in a businessrestructuring fund to support therecovery of businesses toward therevitalization of the Japanese
economy.

Demonstration of safety net function(Reconstruction from the Great Hanshin-Awaji Earthquake)

Hankyu Corporation:
Earthquake reconstruction work (Hyogo Prefecture)
Recovery work on traffic infrastructure damagedby the earthquake

2015
Amendments to the Development Bank ofJapan Inc. Act

Financial crisis response,
post-earthquake reconstruction
The financial crisis in 2008 triggered a deterioration of corporate
cash flows and DBJ swiftly
addressed the situation throughFinancial Crisis Response
Operations. In regard to the Great
East Japan Earthquake in 2011,
DBJ teamed up with other financial
institutions to engage in Earthquake
Disaster Crisis Response
Operations and to provide risk
capital through its Great East Japan
Earthquake Reconstruction Fund.

Population
problems

Climate change,
natural resources,and energy

Please refer to our company website for more details on DBJ’s history
and timeline.

AI, fintech, andother technologicalinnovations

Government
budgets, finances,and regulations

Global pandemicof COVID-19

Provision of risk capital
DBJ established its Special
Investment Operations to provide
the growth capital needed topromote the competitiveness ofJapanese enterprises and regional
revitalization. Moreover, DBJ supported new businesses with theircommercialization efforts andcontributions to society by engaging
in projects with diverse players overthe long term.

Response to the2008 global financial crisis

Great East Japan Earthquake disasterand crisis response

Crisis response to impact
of COVID-19

The financial crisis in the autumn of 2008 precipitated a global financial crisis. As this situation
impaired the functioning of the bond markets,
corporate cash flows worsened. DBJ responded
promptly with financial Crisis Response Operations.

Joban Kosan Co., Ltd.:
Spa Resort Hawaiians (Fukushima Prefecture)
Support for a theme park that became a symbol ofreconstruction after the Great East Japan Earthquake

Through the designation of the COVID-19 pandemic
as a crisis by the Japanese government, DBJ, as adesignated financial institution, responded
to the issues surrounding COVID-19 by conducting
Crisis Response Operations in a timely and optimal
manner through the cooperation of private financial
institutions.

Realizing a sustainable society
Our Three Priority Areas
The DBJ Group has established infrastructure, industry, and the regions as its three priority
areas based on the roles it has played and the functions it has undertaken to date, the social
value it has realized, and future changes in the external environment. Leveraging its professional strengths, the Group is assessing long-term changes in the external environment toprovide creative solutions to issues confronting clients in infrastructure, industry, and theregions and thereby play a part in creating a sustainable society.

Rebuilding andReinforcement ofInfrastructure

Rebuilding of energy
systems, more advanced
transportation networks,
creation of attractive
communities

Rebuild energy andtransportation infrastructure,
upgrade public infrastructure

https://www.dbj.jp/en/co/info/history/

Globalization

Promote urban growth

Creation,
Conversion, and
Growth in
Industry

Self-Reliance andRevitalizationof LocalEconomies

Commercialization of
new technologies,
business restructuring to
improve productivity andhone competitiveness,business development inglobal markets

Industrial revitalization
based on regional
characteristics, overseas
business development,
response to inboundtourism, businesssuccession

New technologies andbusinesses(promote innovation)

Solve issues specific toeach region

Reorganization
Overseas expansion

Play a role connecting regions
to Tokyo, regions to regions,and regions to the world

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Sustainability Management
Value Creation Process

MissionVision 2020

Our Three Priority Areas
Creation, Conversion, and
Growth in Industry

Self-Reliance and Revitalizationof Local Economies

Commercialization of new technologies,
business restructuring to improve
productivity and hone competitiveness,business development in global markets

Rebuilding of energy systems, moreadvanced transportation networks,
creation of attractive communities

Industrial revitalization based on regional
characteristics, overseas businessdevelopment, response to inboundtourism, business succession

Sustainability Management

services. As financial professionals offering creative solutions
for the different issues faced by its customers, DBJ contributes
to the creation of a sustainable society alignedwith the SDGs.

Risk Capital Finance

Economic
Value
Creation

SocialValue
Creation

Creation of Diverse Financial
Deal Opportunities

Human Capital

Crisis Response Operations

Sustainability
Management for Both
Economic andSocial Value

Relationship andSocial Capital• Financing• Investment•C onsulting and advisory•A sset management•S pecial Investment Operations

Investment of management resources•C risis Response Operations

Communication with Stakeholders

Employees

Financial institutions

Investors

Shareholders

through Group measures to create new industries and support
while responding to crisis events, always taking the needs ofour customers and the community into consideration.
Implementing the DBJ Group’s business model requires unique
resources. While sound financial capital is a vital support, we
also strive for the integrated expansion of financial and nonfinancial capital, using clear definitions for the human capital,
intellectual capital, and relationship and social capital that
impact on our financial value creation in the long term.

Building a Foundation for Sustainability Management throughCommunication with Stakeholders

Advisory Board
Special Investment Operations
Monitoring Board

Long-running, continuous
collaboration and dialogue

The DBJ Group works to promote industries and initiatives withthe potential to serve as pillars for Japan’s economy and society. We offer up solutions for current issues affecting industries
and our customers and examine hypothetical and envisioned
changes to both groups amid the rapid changes occurring in
our society.
As mandated under the DBJ Act, we also rapidly and accurately undertake Crisis Response Operations as required byevents such as major natural disasters and financial market
instability. We contribute to the sustained growth of societyetc.

Communication with our stakeholders helps us continuously
improve our sustainability management, our unique value creation process. As part of this process, the Advisory Board, anadvisory body to the Board of Directors, and the Special
Investment Operations Monitoring Board, receive third-party
advice from outside experts and outside members of the Boardof Directors. Through communication in its daily operations
with stakeholders, including customers, regions, financial institutions, investors, and shareholders, the DBJ Group reaffirms
its functions and examines how those functions should evolvein the years to come.

Data Section

Corporate Governance and Risk Management

Balancing Economic and Social Value

Corporate Data

Business
activities in tune
with risk
appetite

Increase andconversion ofcapital valueIntellectual
CapitalProvision of Our Knowledge

The DBJ Group’s Corporate GovernanceOutcome of business activities

Financial Capital

Communities

For customers in priority areas (infrastructure, industry, and theregions, which were decided in view of DBJ’s functions to dateand opinions received from stakeholders), the DBJ Group provides integrated investments and loans commensurate with risk
appetite along with consulting and advisory services. For ourinvestor clients, we offer syndication and asset management

Integrated Investment and Loan
Services That Contribute to
Resolving Social and Client Issues

The DBJ Group’s Management
Capital Communication

Customers

Solving Challenges in Priority Areas throughSustainability Management

The DBJ Group’s Strategy

Rebuilding and Reinforcementof Infrastructure

The DBJ Group’s Value Creation Story

As a leader in sustainability management, the DBJ Group seeks to promote sustainable development inJapan and worldwide by offering solutions to issues facing clients and society as a whole.
The sustainability management targeted by the DBJ Group consists of a business model that leverages
Group capabilities in fields including integrated investments and loans and consulting and advisory services.
Our business model is designed to raise economic and social value simultaneously in the pursuit of a sustainable society. We work constantly to improve our value creation process through collaboration and dialogue with stakeholders, seeking to refine our sustainability management and enhance the value we create.

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13

Message from the President

The DBJ Group’s Value Creation Story

In tune with the changing needs of society andour customers, the DBJ Group helps realize
a sustainable society by promoting sustainability
management while balancing economic andsocial value.

President and CEO
Development Bank of Japan Inc.

As of the end of June 2020, we had already extended
130 Crisis Response Operations worth ¥1,621.2 billion
and, through the aforementioned Regional Emergency
Response Program, we had provided a total of ¥42.9
billion in financing to 20 entities. In Special Investment
Operations, meanwhile, we created the Growth Fund forCoronavirus Revival in May 2020 with the aim of backing
our customers’ initiatives to develop new businesses andcollaborate across different fields in order to grow andrecover from the impact of COVID-19. Through these andother measures, we are focusing on rapidly and properly
implementing Crisis Response Operations while collaborating and coordinating with private financial institutions toaddress the needs of customers adversely affected by
COVID-19.

Operations to cope with unprecedented events such as
earthquakes and global financial crises, and through­measures to enhance the supply of risk capital for­subsequent growth.
As we deal with the unprecedented, long-term impact
of COVID-19, the future is sure to present further changes
and challenges. In keeping with our unwavering mission,
we will take a flexible approach to issues faced by regions
and our customers as a whole, staying true to our corevalues and being mindful of our action guidelines.
Our Mission: Designing the future with financial expertise
Our Action Guidelines:		 • Responsibility to future generations		 • The customer’s perspective		 • Outstanding service		 • Commitment and cooperation
		 Our Values: Initiative and Integrity

Data Section

Since the days of its predecessors, Japan Development
Bank and Hokkaido-Tohoku Development Finance Public
Corporation, the DBJ Group has worked to promote
Japan’s sustainable development. We have achieved thisby responding flexibly to the issues of the day, through theperiods of postwar reconstruction and high, stable growth,
the bubble economy and its collapse, globalization, thedeclining birth rate and aging population, and growing
environmental and disaster awareness. The past decadealone has seen dramatic change in the wake of the global
financial crisis and such major events as the Great East
Japan Earthquake. Against this backdrop, the DBJ Grouphas developed new initiatives to address social expectations with an eye on the future, and the Group itself has
undergone major changes.
Specifically, the DBJ Group has firmly established aunique, integrated investment- and loan-based businessmodel through the development of Crisis Response

Corporate Data

The Role of the DBJ Group and Our Achievements to Date 

The DBJ Group’s Corporate GovernanceHajime Watanabe

COVID-19, having become a pandemic since its outbreakin December 2019, has had an enormous impact on economic activity in Japan, restricting the movement of people
inside Japan and around the world. In response to theunprecedented crisis, the DBJ Group is leveraging the experience it has gained responding to other crises, such as the2008 financial crisis and the Great East Japan Earthquake.
DBJ set up consulting service counters in January 2020,
established the COVID-19 Special Response Headquartersin March, and prepared a support system by marshaling allof its resources. In February, DBJ initiated a unique
Regional Emergency Response Program to flexibly respondto the crisis as it unfolded. In March 2020, the Japanese
government designated the COVID-19 pandemic a crisis.
As a designated financial institution, the DBJ Group concentrated all of its energy on rapidly and appropriately
implementing Crisis Response Operations.

The DBJ Group’s Strategy

Our Response to the COVID-19 Crisis 

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Vision 2030 and Priority Areas Medium-Term Management Plan 
Under the Fourth Medium-Term Management Plan, spanning fiscal 2017 to fiscal 2019, DBJ advanced businessstrategies that centered on expanding integrated investment
and loan services to customers in industrial fields, including
new areas, and the three infrastructure fields of energy,transportation, and urban development. In our loan business, we provided high-value-added services in structured
and mezzanine finance, while with regard to investments wepromoted long-term investments in the three infrastructure
fields and growth investments in industrial fields. In theadvisory business, DBJ expanded asset management ininfrastructure and private equity. The DBJ Group also played
a role in connecting Japan’s regions to overseas markets bydeveloping the above activities both regionally and overseas.

Under its management foundation strategy, DBJ categorized its management resources into financial capital, humancapital, intellectual capital, and relationship and social capital. We promoted the growth and transformation of these
forms of capital by investing in our management resources
and improving our business activities to realize better results.
Owing to our withdrawal from major projects, results forfiscal 2019 saw a year-on-year decline in profits on investments and advisory services, while profits on loans also
decreased as borrowers repaid Crisis Response Operations
extended in the past. However, gross ordinary income on
investments remained at a high level compared with past fiscal
years, reflecting the stable returns from infrastructure and realestate, as well as capital gains on exits from i­ndividual projects.

Business Profit and Loss (Consolidated)

Sustainability Management at the DBJ Group 
sustainable society, all while being guided by the needs ofour customers and society as a whole.
To this end, we must accurately understand the current
issues affecting industries and our customers, in addition tolonger-term trends and issues in society and the impact
they may have on our customers and specific sectors.
Leveraging our knowledge to produce future visions

Fiscal 2018

Fiscal 2019

187.7

174.4

(13.2)

Loans

80.9

76.6

(4.3)

Investment

81.5

74.1

(7.3)

Fee and commission income

25.2

23.6

(1.5)

Operating expenses(64.8)(67.3)(2.4)

Net ordinary income

122.8

107.1

(15.6)

Other extraordinary items

(1.3)

4.0

5.4

Gains on reversal of reserves, depreciation,etc., of written-off claims

5.3(28.1)(33.4)

Gross ordinary income

YoY change

6.8

4.5

(2.2)

Investment(1.5)(32.7)(31.1)

Income before income taxes and minority interests

126.7

83.0

(43.7)

Total income taxes(33.5)(31.5)

2.0

Current net income

93.2

51.5

(41.7)Net income attributable to non-controlling interests

1.2

1.0

(0.2)

Net income attributable to owners of the parent

91.9

50.4

(41.4)

Note: Business categories are those used in business management.

Data Section

Loans

Corporate Data

The DBJ Group practices sustainability management as ameans of creating value with a focus on the three priority
areas. By sustainability management, we mean working tocreate economic and social value by providing the solutions needed to create new industries and value throughinnovation, by responding during times of crisis, and by
making other contributions toward the building of a(¥ billion)

The DBJ Group’s Corporate Governancefor the DBJ Group’s initiatives. Our contributions in theseareas will be consistent with the Group’s course so far, andwe believe they will be in line with what society and stakeholders expect from us in the future.
To fulfill our mission, we will work as financial professionals to enhance the added value provided to regional communities and our customers in industry and infrastructure,steadily implementing each initiative while respecting theviews of stakeholders. We will take the lead in businessand market creation by leveraging our ability to properly
evaluate and address a broad range of risks. At the sametime, as we respond to the COVID-19 crisis and look forward to 2030, we will fulfill our unique role in the economy
and society by taking action during times of crisis andotherwise responding to social demand.

As we move ahead with these services, we are alsohoning our strengths in relationship capital (as exemplified
by robust networks in industry, government, and academia), sound financial capital, and human capital sharing
a common set of core values. We believe in the importanceof constantly improving our sustainability management
processes through dialogue with external stakeholders,
centering on the Advisory Board and the Special
Investment Operations Monitoring Board of DBJ.

The DBJ Group’s Strategy

In 2015, with the aim of shaping our business vision arounda longer-term outlook, we gave fresh thought to the role of
DBJ in the years leading up to 2030. In the course of ourdebate, we identified a number of changes in the external
environment with a significant impact on our stakeholders:Japan’s declining population and its climate and energy
issues in the context of the global effort to build a sustainable society; intensifying global competition; and innovations in digital technologies such as AI and fintech. Basedon the roles we have undertaken and the value we haverealized over this time, we identified issues to be tackled in
the future and examined the best areas in which to use ourstrengths over the longer term in the interests of a sustainable society. Vision 2030 was the result. Drawn up in 2017,
this long-term vision sets infrastructure, industry, andregional economies as the three priority areas (materialities)

through trial and error, and sharing these visions with customers and regional communities while offering financial
solutions such as risk capital to deal with related issues,
the DBJ Group will take the lead in creating industries andinitiatives that can serve as pillars of Japan’s economy andsociety in the years to come. At the same time, Crisis
Response Operations will play an important role, undertaken with flexibility and precision as required by events
such as major disasters and instability in financial markets.

The DBJ Group’s Value Creation Story

In the run-up to 2030, DBJ will continue to fulfill its uniquerole in the economy and society, enhancing the added value
we provide to customers as financial professionals throughcontributions in key areas and engaging in dialogue with
our stakeholders.

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The DBJ Group’s Value Creation Story

The DBJ Group will continue to supply risk capital throughits integrated investments and loans, with the intention oftaking a leading role in the building of a sustainable society
while helping customers take on challenges in new initiatives.

customers, while leveraging its risk capital and knowledge
and collaborating and coordinating with financial institutions
and customers. Starting with these basic policies, we are
examining how best to revise our Fifth Medium-Term
Management Plan to reflect changes in industrial structuresdue to COVID-19, the accelerating advance toward digitaltechnologies, momentum toward sustainability, and theiroverall impact on value in regions.

The DBJ Group’s Strategy

The Fifth Medium-Term Management Plan, which isslated to begin in fiscal 2020, will be unveiled when the time
is right, given we are in the midst of the COVID-19 pandemic. Amid major changes in demographics and the fabricof society, social issues have become intertwined with the
management issues faced by our customers. DBJ therefore
aims to generate both economic and social value by creating new opportunities through investments and loans toSpecial Investment Operations 

Development of Human Resources for Better Sustainability
Management 
challenges of the times. We always strive to enhance ourskills in corporate and project assessment. Our expertise inlong-term screening and assessment, based on a comprehensive view of regional and current issues, is equal toknowledge, capability, and developed networks as a DBJ
Group asset.
The employees embodying the Group’s values shouldbe able to pursue their activities creatively and in good
health, and we are promoting workstyle reforms for thispurpose. To bring more flexibility to working patterns, wehome or coming to work on staggered schedules, because
the health and safety of our executives and employees areof paramount importance. We are also making every effort
to update our systems so that Crisis Response Operations
can be smoothly implemented.

Collaboration on a Broader Scale 
The environment surrounding the world and Japan willcontinue to change drastically in the future, owing in part to
the COVID-19 pandemic, while uncertainties increase. Overthe next decade, Japan is likely to see a number of megatrends gain momentum. These include an aging anddeclining population, digital transformation affecting all
aspects of industry, and even more intense global competition. In the industrial field, we anticipate such changes as
new forms of cross-sector collaboration, an evolution inbusiness models, and the emergence of new ecosystems.
The DBJ Group will continue to supply risk capital throughintegrated investment and loan services for new initiatives
being undertaken by our customers, in an effort to lead thedevelopment of a more sustainable society.
Building a sustainable society is a global agenda, and it
is important that we continue working to make that
happen. The public and private sectors have joined forces
in a growing movement to contribute toward the SDG
global agenda for 2030. In financial markets, interest in

sustainable finance has increased. The DBJ Group has
made strides toward the realization of a sustainable society
by evaluating intangible assets through dialogue with customers in the course of our business, and especiallythrough DBJ’s various certification programs. Engaging in
dialogue with stakeholders will remain a crucial endeavor
as we continue to fulfill our mission as a front-runner insustainability management. It is our sincere hope that thisintegrated report will lead to greater dialogue with all of our
stakeholders.

President and CEO
August 2020

Data Section

Sustainability management, a key to the DBJ Group’s value
creation process, relies above all on workers who share thecore values of initiative and integrity and who display thefour elements of our core corporate values in the pursuit ofbalancing economic and social value. Officers and employees of the DBJ Group have inherited the core corporate
values of long-term perspective, impartiality, public mindedness, and reliability, which have evolved over the years in
the course of our business. Bolstered by these corporate
values, the Group has consistently risen to meet thehave introduced telecommuting and a flex-time work
system, and we aim to enhance work and paid leave programs for child-rearing and caregiving.
As part of our response to COVID-19, we are encouraging employees to take a flexible approach to working at

Corporate Data

tions willing to help create distinctive regional communities.
In accordance with the Act for Partial Amendment of theDevelopment Bank of Japan Inc. Act (Act No. 29 of 2020),
which was enacted in May 2020, Special Investment
Operations shall extend the investment decision term andgovernment financing term from March 31, 2021 until
March 31, 2026, and extend the deadline for ending­operations from March 31, 2026 until March 31, 2031.
Furthermore, the Growth Fund for Coronavirus Revival has
been established to help Japan recover from COVID-19
and return to growth. In addition, the Special Investment
Operations Monitoring Board will continue to meet twice ayear to hear the opinions of stakeholders and reflect themin the DBJ Group’s operations.

The DBJ Group’s Corporate Governance

The DBJ Group’s Special Investment Operations are conducted as mandated in revisions made in 2015 to theDevelopment Bank of Japan Inc. Act. Utilizing our experience in supplying risk capital, we decided to provide
investments and loans totaling ¥353.2 billion in fiscal 2019
for 19 projects that contribute to regional revitalization andthe strengthening of Japanese corporate competitiveness.
Since launching these operations, DBJ has used them toextend ¥717.1 billion in investments and loans to a totalof 100 projects. A total of ¥4,042 billion in private-sector
investments and loans have been triggered by DBJ's
investments and loans worth ¥590.2 billion. The DBJ Groupwill continue to supply growth capital in collaboration withprivate financial institutions. The Group also has an extensive track record in regional revitalization projects and iskeen to engage in future initiatives with local financial institu-

18

19

Our Response to COVID-19

The DBJ Group provides unique solutions through optimal partnerships, emphasizing cooperation and collaboration with other financial institutions and non-financial companies.

Implementation of Crisis Response Operations 

Infrastructure

Government
investments
and loans

DBJ

EnergyTransportation
Urban
development

Special Investment Operations

Government

Crisis Response Operations
SRI bonds
Financing

Industry

Risk capitaland knowledge

Investments

Bonds andloans

Regional financial
institutions

Asset Management

Regions
Industry promotion
Overseasdevelopment
Business succession

Creation offinancing
opportunities

Collaboration

State of Initiatives for Crisis Response Operations• January 30: Opened consulting service counters

Timeline• February 12: Added this crisis to its unique Regional Emergency Response Program

Asset
management

Group Companies

Leading financial
institutions

Cooperation

Collaborative
funds

Financial institutions andnon-financial companies

Operations as a designated financial institution. DBJ will­continue to collaborate and coordinate with private financial
institutions to meet the needs of businesses that have been
adversely affected by the COVID-19 outbreak. DBJ will
enhance collaboration with regional financial institutions andready its unique capital supply systems, including the Regional
Emergency Response Program, while considering the nature ofthis crisis in terms of securing jobs and maintaining credit.

 arch•M

16: Established Coronavirus Response Headquarters(headed by President and CEO Hajime Watanabe)•M arch19: Started Crisis Response Operations upon the Japanese government’s declarationof a state of emergency over this crisis

The DBJ Group’s Strategy

New technologies
and businesses
Restructuring
Overseas expansion

Domestic andoverseas
institutional
investors

Consulting andAdvisory Services

In response to the damage caused by the COVID-19 outbreak,the DBJ Group opened consulting service counters at the endof January 2020 and moved forward with its unique Regional
Emergency Response Program in February. On March 19, asa designated financial institution, DBJ concentrated on Crisis
Response Operations once the Japanese government designated the COVID-19 pandemic a crisis.
Led by the Coronavirus Response Headquarters, DBJ has
moved to rapidly and precisely implement Crisis Response

The DBJ Group’s Value Creation Story

Invigoration and Stabilization of Financial Markets through Partnerships
and Collaboration under the Medium-Term Management Plan

Agreements with Regional Financial Institutions • Cooperative agreements signed with 74 regional financial institutions with objective of
to Coordinate Disaster Response Operations*appropriately responding to this crisis and contributing to regional economic development
Status of Crisis Response Operations*• Crisis Response Operations (total): 130 loans, ¥1,621.2 billion• Regional Emergency Response Program loans (total): 20 loans, ¥42.9 billion

Crisis Response Operations andSpecial Investment Operations 	Crisis Response Operations and Special Investment
Operations are mandated by the DBJ Act and are properly
undertaken as operations backed by the unique strengthsof the DBJ Group.

The global crisis that is caused by the COVID-19 pandemic
may lead to sweeping social changes. It is currently having amajor impact on existing social issues, accelerating the shift todigital technology, and increasing awareness of globalization,
sustainability, and the decline in the Japanese working-age
population.
Against this backdrop, the DBJ Group will continue to focus
on supplying risk capital, including through Special Investment

Operations, and on providing knowledge while collaborating
and coordinating with private financial institutions to directly
address the aforementioned issues and new changes in society. As a part of these measures, DBJ has set up the GrowthFund for Coronavirus Revival with the intention of advancing
initiatives to foster collaboration across different fields and help
companies develop new businesses through Special
Investment Operations.

Impact from COVID-19 on Industries and Regions

Supply of Risk Capital by the DBJ Group
DBJ’s financing operations address diverse risks. These operations include investments (balance of ¥1.4 trillion) and loans(balance of approximately ¥12.3 trillion), ranging from crisis
response loans for emergencies and risk-tailored project
financing to hybrid and mezzanine financing. DBJ AssetManagement Co., Ltd. (DBJAM) has ¥1.3 trillion in capital

Recent Impacts

entrusted by investors, regional financial institutions, and othercustomers desiring expert fund management. In its work inasset management, DBJAM focuses on assets that allow the
DBJ Group to best apply its strengths. We will continue toenhance the supply of risk capital in order to better meet thediverse needs of our customers.

Industries

Business rebuilding

SupplySupply chain disruption
Stall in logistics, labor shortages

Growth acceleration

Financial

Fund outflows, share pricedeclines

EconomySharp drop in demand in tourism
industry
Suspension of plant operations
Restrictions on people’s movement
Vulnerable IT infrastructure¥0.6 trillion*
Loans¥11.7 trillion(including Crisis Response Operations, structured-financing
and asset-financing projects)

Regions
Investments¥1.4 trillion*1 Portions entrusted by DBJ are eliminated from DBJAM’s assets under management (AUM).
*2 Overlapping portions for structured financing is eliminated from hybrid and mezzanine financing.

DBJAM (AUM)¥1.3 trillion*

Deterioration of regional finances

1

Government Measures to address existing
issues halted(As of March 31, 2020)

Crisis Response Operations(Reference: Impact on economy during past crises)

Resilience

New possibilities inregional demandMore sophisticatedregional operations• Realignment of supply chains globally• Faster industry restructuring to strengthen business foundations•	Faster response to social changes, including remote and non-contact
servicesS witch to digital communications, non-contact services, laborsaving measuresand rationalization•	Strengthening of preparations for emergence of large-scale risks

E nsuring of redundancy in cash and inventories, responding to changes in capital
investment trends•	Refocus on supply chain realignment and reshoring•	Rapid spread and entrenchment of telecommuting and online
meetingsP otential for regional demand to rebound, necessity of creating
sustainable regions•	Promotion of public–private collaboration, broader regional
coordination, ties between industry, academia, government, andfinancial institutions

Supply of Risk Capital and Knowledge

Global financial
crisis

Sharp drop in overseas demand, credit crunch, drying
up of liquidity

Acceleration of structural reforms through overseas development backed by yen appreciation and rise of
emerging countries

Great East Japan
Earthquake

Supply chain disruption in Japan

Dispersion of supply chains overseas in context of revising business continuity plans

Data Section

DemandMezzanine financing
2

Possible Changes Arising from COVID-19 (during and after COVID-19)

Slump in economic activity
Sharp drop in demand

Corporate Data

Provision of Knowledge 	Backed by its experience and know-how in industrial andinfrastructure fields as well as in risk analysis and structuring, the DBJ Group creates added value through the provision of knowledge in such forms as surveys and analyses.

Impact from and Response to COVID-19 

The DBJ Group’s Corporate Governance

Procurement and Management of Funds 	DBJ receives funding in various formats, including the procurement and management of funds from institutional investors and financial institutions in Japan and abroad. We use
these funds to supply risk capital to domestic and overseas
customers in the industrial and infrastructure fields.

*As of end-June 2020

20

21

Key Initiatives toward Realizing Sustainability

The DBJ Group’s Strategy
A presentation of the DBJ Group’s various sustainability management activities from the­perspectives of its business and management foundation strategies

Policy on Sustainability
To realize its mission of pursuing sustainable development for Japan and the world, the DBJ Group strives to achieveboth economic and social value through its unique business activities by embracing sustainability management. In 2017,
we formulated our Policy on Sustainability as a part of our efforts to continue to proactively engage in dialogue with all
stakeholders and to enhance our value creation process.
The DBJ Group’s main initiatives based on this policy are outlined below.

The DBJ Group’s Strategy

https://www.dbj.jp/en/sustainability/management/regular.html
Please refer to our company website for details on our Policy on Sustainability.

Main Initiatives

Business Strategy
With the aim of promoting the use of renewable energy, DBJ has engaged in solar and wind power generation projects in Japan since their implementation and participated in advanced case studies overseas.

See page 23

Establishment of DBJ Green
Building Certification

Established in 2011, DBJ Green Building Certification system recognizes buildings with exceptional consideration for society and the environment and provides support to those who own and operate such realestate.

See page 25

Issuance of Sustainability
Bonds

DBJ became the first issuer of green bonds in Japan (2014) and has also been issuing sustainability bonds
each year since 2015.

See page 39

Establishment of DBJ
Certification Programs

Through the use of its financing products that evaluate firms’ non-financial information via a proprietarily
developed screening system, DBJ provides support for the environmental-, disaster prevention-, andhealth-related initiatives of its customers.

See page 45

Adoption of Equator Principles

In accordance with the Equator Principles, DBJ will identify the environmental and social risks associatedwith a project, assess their impact, and request that the project operator take the necessary measures tomitigate such risks and impact.

See page 62

TCFD Scenario Analysis

Upon identifying five technologies relevant to its business activities—carbon capture and storage (CCS),
electric vehicles (EVs), biomass, hydrogen, and renewable energy—from those highly correlated to climatechange, DBJ analyzed and assessed the growth opportunities for each sector through separate scenarios
based on the development and proliferation of technologies.

See page 62

P 22

Sector Strategy

		

P22

Energy Sector

		

P24

Transportation Sector

		 P25

Urban Development Sector

		

P26

Industrial Sectors

P 28

Area Strategy

		

P28

Regions		

P31

Overseas

P 32

Function Strategy

		

P32

Special Investment Operations and Crisis Response Operations

		

P36

Syndication, Advisory, and Consulting Services

		

P37

Asset Management

The DBJ Group’s Corporate Governance

Renewable Energy Measures

The DBJ Group’s Value Creation Story

At the DBJ Group, we engage in a variety of initiatives aimed at realizing a sustainable society througha business model built upon features such as integrated investments, and loans, and consulting andadvisory services.

Corporate Governance Framework
DBJ established the Sustainability Committee to identify important social issues from ESG and otherperspectives, and incorporate these matters into its financing, asset management, and other businessactivities.

See page 50

CASE STUDY

Corporate Data

Establishment of Sustainability
Committee

Management Foundation Strategy
P 38

Financial Strategy

P 40

Human Resource Development

P 42

Knowledge and Collaboration

Support for Innovation toward the Sustainable Development of Energy Infrastructure

The DBJ Group
Working in unison, the DBJ Group provides diverse, high-value-added solutions for solving various issues faced by its­customers and for solving issues throughout society.

https://www.dbj.jp/topics/dbj_
news/2020/html/20200706_202678.html
Please refer to our company website formore details (Japanese only) on theSociety 5.0 Investment Program.

Overseas locations

Investments / Securities /Asset management• DBJ Singapore Limited• DBJ Capital Co., Ltd.

• DBJ Europe Limited• DBJ Investment Advisory Co., Ltd.

• Japan Economic ResearchInstitute Inc.

• DBJ Investment Consulting(Beijing) Co., Ltd.

• DBJ Securities Co., Ltd.

• Value Management Institute, Inc.

• DBJ Americas Inc.

•D BJ Asset Management Co., Ltd.

Research / Consulting

Real estate management /IT services• DBJ Real Estate Co., Ltd.
• Consist, Inc.

Data Section

Ireland is currently facing energy supply instability due to the surging demand forrenewable energy. As a result, Exergy Power Systems, Inc. has partnered withenergy suppliers to help reduce the gap between supply and demand by supplying
its next-generation nickel-metal hydride batteries (Exergy batteries) to factories in
Ireland to serve as a backup power supply. By building a track record in Europe,
where the adoption of renewable energy is outpacing the rest of the world, androlling out services to Japan and other regions in the future, Exergy Power Systems
is expected to contribute to the creation of a resilient and sustainable society.
DBJ will support the activities of Exergy Power Systems by drawing on its
Society 5.0 Investment Program and through its collective efforts with stakeholders
to proactively promote the adoption of Exergy batteries in Japan and overseas, andhelp build a social infrastructure that facilitates sustainable energy supply.

22

23

Sector Strategy
Priority Areas

Rebuilding and Reinforcement of Infrastructure

The DBJ Group will contribute to the realization ofa decarbonized society worldwide and the globalization of Japanese energy companies by taking aleadership role in the financing of change inJapan’s energy markets.

Main Business Fields

Provision of financing and advisory
services to companies and projects inthe following sectors• Electricity
• Gas
• Oil

As of March 31, 2020

3.4 trillion

¥

241.9
200

186.9
150

100

110.2

124.2

50

0

2016

2017

2018

Power grid

MW
600

558
Onshore wind power

479

400

Hokkaido Hokubu Windpower grid project

307
200

185
Green Power Tsugaru
0

2016

2017

2018

2019 (Fiscal year)

Wind
power
Solar power
Solar power

25%

DBJ’s equity
stake as ofend-fiscal 2019558 MW

Efforts to Combat Climate Change in the Energy Field

Solar
power

75%
Participation in Leading Projects Overseas (U.K.) 
Data Section* Energy security, Economic efficiency, the Environment, and Safety, as stated inJapan’s Basic Energy Plan.

(Fiscal year)

Capacity of DBJ’s Domestic Investment
Assets in Renewable Energy Facilities(derived from its equity stake)Onshorewind power

climate change. In renewable and alternative energy, we plan toincrease the supply of risk capital for wind and solar power, newpower grid, and hydrogen projects in order to encourage theirintroduction. For new projects involving coal-fired power plants,
which emit large amounts of greenhouse gases, DBJ takes amore cautious approach. In the process for finance decisions, weevaluate each project from environmental perspectives, such aswhether generation efficiency is at or above the ultra-super-criticallevel, in order to reduce environmental burdens as much as
possible.

2019*R enewable energy: Solar power, onshore wind power, offshore wind power, biomass,hydropower, and power grids.

Key Initiatives to Spread Renewable Energy in Japan 

Aoyama Kougen Wind Farm

Sustainability management means balancing economic value withsocial value. Based on this fundamental principle, the DBJ Grouphas worked for many years to ensure a reliable supply of energy
while reducing environmental impact.
In the renewable energy field, in particular, DBJ supplies
diverse risk capital, including project financing, mezzanine loans,and equity financing, to wind and solar power generation projects
in Japan from their initial stages. DBJ also finances offshore wind
power projects in Europe, with the aim of learning from cuttingedge initiatives overseas and applying those lessons in Japan.
In view of the global debate about climate change and theOECD’s Arrangement on Officially Supported Export Credits, aswell as Japan’s energy policy based on the 3E+S* strategic plan,
DBJ works to ensure reliable energy supply while combating

250

Corporate Data

Strategy
While maintaining strong relationships with customers, DBJ will
focus on providing capital funding (risk money) and advisory
services based on its international experience and knowledge
to facilitate industry restructuring. Furthermore, DBJ will focus

on the smooth supply of capital by collaborating with a broad
range of financial institutions to meet demand for investmentsin the deregulated electric power market in Japan, in addition
to strengthening initiatives in project financing with clarified risk
allocation. DBJ will also contribute to the realization of a decarbonized society through assistance for innovations in initiatives
to develop and spread low-carbon technologies and achieve a
low-carbon socioeconomic structure.
By reinforcing its asset management business in the energy
field, the DBJ Group will nurture markets so that a broad rangeof financial institutions can participate in the domestic energy
infrastructure market.
Overseas, DBJ aims to become more involved in markets
that have taken the lead in fostering deregulation, and thenreturn any knowledge gained to the domestic market toadvance its development, while proactively supporting
Japanese companies in their efforts to develop business overseas. Through these and other efforts, we aim to contribute to
the realization of a decarbonized society on a global basis.

(¥ billion)

The DBJ Group’s Corporate GovernanceLonger-Term External Environment and Social Issues
Japan’s energy industry is at a major crossroads. With changes
in the macroeconomic structure, including the population
decline, and advances in energy conservation, DBJ must promote the reduction of CO2 emissions while dealing with deregulation in the electric power and gas markets.
Under these conditions, issues related to financial support
for the energy industry entail the supply of capital funding tospur the spread of renewable energy and other new technologies and to address growing risks. Moreover, risks in project
financing need to be clarified more clearly, and efforts should
be undertaken to allow market participation by a broader rangeof companies.

Renewable Energy* Investment and Loan Balance

To increase the use of renewable energy, DBJ proactively supplies risk capital, and as of the end of fiscal 2019, the balanceof related investments and loans stood at ¥241.9 billion.
Through project financing, DBJ has contributed to the power
grid business, addressing the major problem of growth inrenewable energy stressing power grid capacity, while also
getting involved in the initial stages of wind power and solar
power installations in Japan. To bring back to Japan the benefits from leading initiatives overseas, DBJ also provides financing to offshore wind power plants in Europe.
In light of the trend toward decarbonization around theworld, and growing interest in renewable energy, DBJ will contribute on the financial side toward the government’s goal of
22–24% renewable energy in the power generation mix by
2030, while leveraging the special characteristics of solar
power, onshore wind power, offshore wind power, biomass,and hydropower.

The DBJ Group’s Strategy

Balance of Loans in the Electricity, Gas, Oil Refinery,Heat, and Water Sectors

Initiatives in the Renewable Energy Field

The DBJ Group’s Value Creation Story

Energy Sector

Rebuilding of energy systems, more advanced transportation
networks, creation of attractive communities

SDT Solar PowerCSD Solar
Offshorewind power

https://www.dbj.jp/case/list/?field=energy

To see examples and case studies (Japanese only) in the energy sector,
please go to DBJ’s website.

Gunfleet Sands
Offshore wind power
Facility power generation
capacity: 172 MW(3.6 MW x 48 units)
COD (Commercial Operation
Date): Spring 2010

24

25

Sector Strategy
Priority Areas

Rebuilding and Reinforcement of Infrastructure

The DBJ Group aims to lead in a financial aspect
the growth of the transportation sector andadvancement of transportation networks in Japan.
DBJ will also act as a bridge between Japan’s
financial market and the global transportation
financing market.

Urban Development Sector

Main Business Fields• Land transportation• Marine transportation• Air transportation

Balance of Loans in the Transportation
Infrastructure (Transportation Industry) Sector

Balance of Loans in the Real Estate Sector

As of March 31, 2020

As of March 31, 2020¥¥

2.3 trillion

Strategy
While maintaining relations with customers in the transportation
sector, we will refine our ability to respond flexibly to changes inthe external environment and society. More specifically, DBJ
will further strengthen its optimal financial solutions for quality
projects and assets in the land, marine, and air transportation
fields, as well as supply risk capital to Japanese companies for
sharpening their international competitiveness. Additionally,
DBJ will provide financing opportunities to Japanese regionalbanks and other financial institutions and investors in the global
transportation financing market through improved syndicatedloans and various investment and loan products that utilize
investment and securities functions.

Kawasaki Kisen Kaisha, Ltd.

Longer-Term External Environment and Social Issues
Increasing the international competitiveness of cities in Japan is
key to enhancing the country’s overall competitiveness. Urban
infrastructure, built up since 1945, is coming due for an upgrade.
Seamlessly upgrading urban infrastructure without interruption is important from the standpoint of creating communities
that take into account the environment and society.
The real estate financing market, an essential part of creating communities, is prone to instability due to international
exposure. The securitization market in particular was greatly
affected by the global financial crisis, while the real estate
financing market was thrown into disarray. In the face of suchconditions, it is necessary to ensure a reliable supply of capital,
spur growth in the real estate financing market, and promoteurban development.
Amid the COVID-19 pandemic, it is essential that we consider new concepts for creating communities, while envisioning
changes in society and the economy due to COVID-19, andworking to stabilize the real estate financing market.

Strategy
DBJ will facilitate urban development through the supply of risk
capital, including financing for developers and individual development projects. We also support the growth of REITs, whichhave become increasingly important entities for the stable
management of properties.
DBJ will provide opportunities to invest in quality assets for
institutional investors around the world as well as for regional
financial institutions. By engaging in collaborative financing
through proper risk-sharing agreements, we will create stable
cash flows in the real estate financing market.
DBJ Green Building Certification was created in fiscal 2011as a system for evaluating and certifying real estate from anenvironmental and social perspective. DBJ continues to operate
this system along with the Japan
Real Estate Institute, while endeavoring to improve the evaluation ofenvironmental and social aspectsof real estate.

Corporate Data

Accomplishments and Initiatives to Date

1.8 trillion

The DBJ Group’s Corporate GovernanceLonger-Term External Environment and Social Issues
In the transportation sector, which has been heavily impacted
by the COVID-19 pandemic, markets have temporarily contracted, but over the longer term, the movement of people andcargo will continue to increase, and transportation infrastructure
will also continue to expand. In Japan, a country reliant on trade,
it is imperative to maintain the reliable transportation of goods,
address issues such as the declining and aging population,
facilitate the influx of overseas visitors, and lessen the impact
on the environment. Various issues await solutions for sustaining
growth in the transportation sector and increasing the sophistication of transportation networks.
Keen to help its customers solve these issues, the DBJ
Group will provide financial solutions tailored to diverse needs
while acting as a bridge between financial markets in Japanand the global transportation financing market.

• Urban development
business• Real estate
financing• DBJ Green Building
Certification

The DBJ Group’s Strategy

Loans and investments in urban
development projects undertaken by
developers; special-purpose companies
for owning real estate; loans andinvestments for real estate investment
trusts (REITs); and management of DBJ
Green Building Certification with theJapan Real Estate Institute

Main Business Fields

Provision of financing tocompanies and for projects
in the transportation sector

The DBJ Group’s vision is to grow alongside cities
by helping with the maintenance, renewal, andexpansion of urban functions. The DBJ Group also
aims to grow with the real estate financing market
as a market-stabilizing mechanism.

The DBJ Group’s Value Creation Story

Transportation Sector

Rebuilding of energy systems, more advanced transportation
networks, creation of attractive communities

Accomplishments and Initiatives to Date

Kanto Railway Co., Ltd.

Tokyo International Air Terminal
Corporation

Fukuoka International Airport Co., Ltd.

TOKYO SKYTREE®

Shin-Daibiru Building

Akasaka Intercity AIR

Hareza Ikebukuro

Data Section©TOKYO-SKYTREE

Third Medium-Term Management Plan (through Fiscal 2016)

Fourth Medium-Term Management Plan (Fiscal 2017–Fiscal 2019)https://www.dbj.jp/case/list/?field=transport

To see examples and case studies (Japanese only) in the urban development
sector, please go to DBJ’s website.

Third Medium-Term Management Plan (through Fiscal 2016)

https://www.dbj.jp/case/list/?field=development

To see examples and case studies (Japanese only) in the urban development sector, please go to DBJ’s website.

Fourth Medium-Term Management Plan (Fiscal 2017–Fiscal 2019)https://www.dbj.jp/en/service/program/g_building/To see more information about DBJ Green Building Certification, please
go to DBJ’s website.

26

27

Sector Strategy
Priority Areas

Creation, Conversion, and Growth in Industry

Aerospace
In industrial fields seeing changes brought about
by technological innovation, the creation of new
businesses, and restructuring, the DBJ Group willtake a direct approach to solving issues faced bycustomers and society while searching for growth
opportunities for itself. As an incubator that creates new businesses and markets, the DBJ Groupaims to play an essential role in strengthening thecompetitiveness of industries in Japan.

Main Business Fields

Healthcare
In the healthcare field, the DBJ Group has focused on medicine
and nursing care, launching new initiatives in the life sciences
field. DBJ has also invested in venture capital funds focusing
on early-stage pharmaceutical companies. Through investments in similar venture capital funds, DBJ provides companies
with growth opportunities by helping Japanese companies
build networks with companies in Europe and the U.S.

Response to Innovation
Over the past few years, there has been a sudden rise in technologies and innovations, such as in IT, new materials, newenergy, bioscience, and robotics, with the potential to substantially change the existing fabric of industry and society. For
these new technologies to help society and lead to the creationof new businesses, it is important to spread new value systems
and lay down rules for collaboration across industries andbetween the public and private sectors. Accordingly, the DBJ
Group created the Innovation Promotion Office under theBusiness Planning & Coordination Department in April 2017 tofacilitate collaboration among these diverse players and takethe long view for moving projects forward.
In addition, DBJ aims to create new industries with newvalue systems to solve social issues in Japan. With this in mind,
DBJ created the Society 5.0 Investment Program as a newframework for investing in activities that contribute to the creation of a sustainable society.

Corporate Data

Strategy
DBJ will offer solutions to the issues faced by customers—
centered on the fields of business portfolio optimization, newbusiness creation, overseas business development, financial
strategy, and capital policy—by mobilizing its financing functions, knowledge, and unique network while leveraging its
insight and expert knowledge of each industry. DBJ has createdteams of specialists for establishing a solid business foundationin the aerospace, communications, and healthcare fields since2017, and in the logistics field since 2018. While being deeply
involved in each industry, DBJ keeps an eye on socioeconomic
megatrends and changes in the landscape to facilitate innovation on various fronts of business development across industries (such as moving toward a hydrogen-based society)without being beholden to traditional frameworks.

Telecommunications
With 5G mobile communications systems poised to take off,
communications networks are responsible for handling everincreasing volumes of data and communications traffic, andtheir importance is only growing. Along with the arrival of adigital society where everything is connected together over
networks, as key social infrastructure, communications networks will have to become more resilient and sophisticated.
DBJ has advanced financing for core communications assets,such as communications towers and data centers. Looking
ahead, DBJ will use the knowledge it has acquired via financing
activities to collaborate with Japanese firms and aggressively
advance initiatives for the benefit of Japan.

The DBJ Group’s Corporate GovernanceLonger-Term External Environment and Social Issues
Amid changes in the external environment, including population
problems, globalization, and such technological innovations as
digital technologies, which are gaining momentum during the
COVID-19 pandemic, customers are dealing with a variety ofissues that include the commercialization of new technologies
and other innovations and business restructuring to enhance
productivity and competitiveness. Customers are likely to focus
on overseas business development while eyeing fresh growth
opportunities over the medium to long term.
Meanwhile, the financial environment is likely to include
diversification in capital providers, considering the ongoingsurplus capital conditions and advances in fintech and othertechnologies. As it becomes easier to access capital, providing
unique added value will become essential to helping customers
solve their problems on the financial front.

• Manufacturing• Communications,­broadcasting, media• Retail and foods• Healthcare• Hotels, Japanese-style inns,
tourism, etc.

In May 2018, DBJ newly established the Global Logistics Officein order to sharpen its focus on the logistics field, in light ofsweeping changes in the logistics industry being ushered in bytechnological innovations including AI and the Internet ofThings (IoT). In terms of financial support, the Global Logistics
Office facilitates improvements in competitiveness and productivity in the logistics field through assistance for creating new
industries with the latest technologies, in the supply of risk
capital to companies innovating on the technological front, andin investments and loans for the latest, high-function logistics
facilities. With regard to information support, DBJ holds
Logistics Innovation Workshops. In May 2019, these workshops produced reports about measures for spurring innovation, the state of collaboration and cooperation among
companies and industries, and the roles that financial institutions should play.

The DBJ Group’s Strategy

Provision of financing andadvisory services for companies and projects in industrial
sectors

Logistics

DBJ has been assisting the aviation field for about three
decades, ever since the era of Japan Development Bank. In
April 2017, DBJ established the Aerospace Office with the aimof developing the outer space field, which is expected to growas a new industry, in addition to the aircraft field, leveraging theabundant knowledge and networks it has accumulated.
Having signed a business cooperation agreement withJapan Aerospace Exploration Agency (JAXA) in both the aircraftand outer space fields, DBJ provides support for new technologies and ideas for the aircraft industry, and financial assistance to local companies keen to grow. In the outer space
field, DBJ offers financial advice for market expansion, in addition to investing in a number of projects, including the inauguration of Space One Co., Ltd., an operating company thatdevelops and launches small rockets.

The DBJ Group’s Value Creation Story

Industrial Sectors

Commercialization of new technologies, business restructuring to
improve productivity and hone competitiveness, businessdevelopment in global markets

Accomplishments and Initiatives to Date
Dexerials Corporation

Nippon Charge Service LLC

DMG MORI CO., LTD.

Yanmar Holdings Co., Ltd.

Cellnex Telecom, S.A.

Space One Co., Ltd.

Japan H2 Mobility, LLC
Data Section

Mitsubishi Heavy Industries
Aero Engines, Ltd.

Photo provided by ENEOS Corporation

Third Medium-Term Management Plan (through Fiscal 2016)

https://www.dbj.jp/case/list/?field=industry

Please go to DBJ’s website to see examples and case studies (Japanese only) in industrial sectors.

Fourth Medium-Term Management Plan (Fiscal 2017–Fiscal 2019)

28

29

Area Strategy
Priority Areas

Industrial revitalization based on regional characteristics,
overseas business development, response to inbound tourism,
business succession

Self-Reliance and Revitalization of
Local Economies

Kushiro Representative Office

Hokkaido Branch

Hakodate Representative OfficeNiigata Branch• Investments and loans•C onsulting services• P lanning and researchservices

Total Number of Business Alliances with Financial
Institutions
As of March 31, 2020106

Accomplishments and Initiatives to Date
Fiscal 2019
• Supported upgrading of exchange centers, with a focus on sports
venues, through financing provided to XSM Flat Hachinohe Co., Ltd.
(Aomori), which owns Japan’s first multi-purpose arena• Provided project financing to PPP Shinsakura K.K. (Toyama) toadvance a public–private project to create compact communities

Supply of risk capital • Formed funds with North Pacific Bank, Ltd. and The Hokkaido Bank, Ltd. in response to
the Hokkaido Eastern Iburi Earthquake
through collaboration• Created funds with The Bank of Iwate, Ltd. and The Toho Bank, Ltd. to help with reconand cooperation withstruction in regions affected by disasters in the Tohoku region
regional financial• Arranged a syndicated loan with The Hyakujushi Bank, Ltd. and reinforced the financial
institutions
positions of local infrastructure companies through Special Investment Operations• Signed cooperative agreement for disaster response operations with
regional financial institutions in response to COVID-19• Cooperated with regional financial institutions through funds

Special Investment
Operations

Others• Issued reports about solving regional issues• Promoted PPP/PFI projects and made proposals for rebuilding public infrastructure• Offered advisory services to local public organizations related to comprehensive government policies• Provided knowledge to local governments, including assistance for managing public assets

Head Office

Chugoku Branch
Tokai Branch

Kyushu Branch

Kansai Branch

Oita Representative Office

Shikoku Branch

Minami-Kyushu Branch

Collaboration and Cooperation with Regional
Financial Institutions
Support for Regional Financial Institutions with BusinessFeasibility Studies
Working with regional financial institutions, DBJ provides to theclients of regional financial institutions support for assessing thefeasibility of businesses that propose solutions to management
issues. Based on an analysis of macroeconomic conditions andindividual companies, DBJ engages in fact-finding to identify
management issues at clients, and then presents its findings inan easy-to-understand format.
DBJ subsequently comes up with various financial solutions
to the identified issues to help its clients formulate their own
growth strategies and drum up business. Employees dispatched
to DBJ from regional financial institutions are given opportunities
to gain knowledge through on-the-job training while performing
business feasibility studies of the clients of their own bank. DBJ
holds study groups to help regional financial institutions gain abetter understanding of business feasibility assessments.
Initiatives in PPP/PFI and Public Asset Management via
Collaboration with Local Governments and Regional
Financial Institutions
Public asset management refers comprehensively to the reassessment of assets held by national and local governmentsfrom a management perspective. DBJ assists numerous local
governments in this regard, helping them create plans and draw
up individual projects with group think tanks. DBJ set up PPP/PFI Promotion Centers in June 2013. While planning and holding its PPP/PFI Academy seminars, DBJ offers regional platforms for cooperating at the national level. In these and otherways, DBJ has made a concerted effort to expand the use of
PPP/PFI, putting into place a structure for promoting their use,

https://www.dbj.jp/service/finance/area/index.html

Matsuyama Representative Officeincluding broad scientific research commemorating the 20th
anniversary since the enactment of the PFI Act. In particular,
the PPP/PFI Academy encourages roundtable discussions andthe sharing of advanced case studies through a teleconference
system that connects all of DBJ’s bases. Now in its 11th year,
the PPP/PFI Academy has welcomed a cumulative total of
about 8,000 people as participants.
Regional Emergency Response Program
With a string of major natural disasters, including earthquakes
and typhoons, striking regions around Japan, DBJ has createdthe Regional Emergency Response Program to provide flexible
and rapid support to meet the demand for initial-response
emergency funds by those affected by natural disasters. This
program was created alongside the Regional Reconstruction
Headquarters, which was established with the objective ofensuring an adequate first response to regions struck by disasters, through tight-knit collaboration among our branches andrepresentative offices across Japan, as well as our head office
departments. DBJ also provides assistance for the reconstruction of disaster-struck regions through the establishment offunds with regional financial institutions.
Collaboration for M&A of Local Companies andOverseas Information Dissemination
DBJ helps local companies address various management
issues, such as business restructuring and succession as well
as expansion of business domains, including overseas expansion. As part of efforts to revitalize regions through collaboration
with regional financial institutions, DBJ creates M&A opportunities for local companies through its network of regional banks(73 banks as of March 31, 2020).

Please go to DBJ’s website to see the areas supported by each branch (Japanese only).

Data Section

Fiscal 2018
• Invigorated tourism resources in the Akan region through financing for Akan Adventure
Tourism Corp. (Hokkaido)• Contributed to measures to stimulate regional industry through financing for Niigata
Aerospace Corporation (Niigata)• Invigorated agriculture and rejuvenated deserted arable land through joint investment with
Ishida Corporation (Tottori)

Matsue Representative Office

Corporate Data

Strategy
DBJ will provide services with two objectives in mind—namely,
to create value by connecting regions throughout Japan toTokyo, domestic regions to those overseas, and regions theworld over to each other, and to solve problems through risk
capital and consulting services.
More specifically, while taking into account regional characteristics, the themes of key objectives entail improving the
productivity and growth strategies of regional companies
through business restructuring and overseas business development, respectively, and cooperating with regional financial
institutions to create opportunities in asset management. As apart of these initiatives, DBJ created the Regional Investment
Department in the Strategic Finance Department under the
Chief Investment Office in June 2020, for the purpose of facilitating the supply of risk capital in regions where DBJ collaborates with regional financial institutions.
By providing detailed solutions to regional problems, the
DBJ Group strives to increase the value of its human capital(e.g., the skills and experience of its executives and employees),and relationship capital (e.g., networks).

Tohoku Branch

Okayama Representative Office

The DBJ Group’s Corporate GovernanceLonger-Term External Environment and Social Issues
The regional economic outlook is severe with declining household spending and weaker demand for loans alongside a longterm downtrend in regional populations. Industries that dependon non-resident populations, such as tourism, a key industry inoutlying regions, have been heavily impacted by restrictions on
the movement of people during the COVID-19 pandemic. On
the other hand, regional demand may increase if people remember the value of outlying areas, amid changes in workstyles,
such as working remotely, and the realignment of supply chains.
As regional economies contract in these circumstances,
regional enterprises need growth strategies that include overseas business development, measures to improve corporate
value through business restructuring and succession, andascertainment of good opportunities in asset management.

Hokuriku Branch

The DBJ Group’s Strategy

Provision by the DBJ Group ofservices tailored to thecharacteristics of the respective regions in Japan from 10
branches and eight representative offices across thecountry

Aomori Representative OfficeToyama Representative Office

OutlineThe DBJ Group’s Value Creation Story

Regions

Head office
10 branches	Eight representative offices

The DBJ Group provides solutions for regional
issues, connecting regions throughout Japan toTokyo, domestic regions to those overseas, andregions the world over to each other.

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31

Area Strategy

Self-Reliance and Revitalization of
Local Economies

Regional Revitalization with Traditional Japanese-StyleHomes
DBJ provides information and advice about creating economic
value with traditional Japanese-style homes with the aim ofusing such homes to stimulate regions. In recent years, DBJ
has published research reports, including one titled “Regional
Revitalization Using Traditional Japanese-Style Homes toCreate Economic Value,” which discusses the potential market
for repairing and remodeling traditional Japanese-style homes
and the economic boost from overseas tourists staying atthese homes, as well as “Key Points for Businesses Using
Traditional Japanese-Style Homes,” which introduces example
business models for using such homes and reference benchmarks for business revenue.

Positioning overseas operations within its sector
strategy and function strategy, the DBJ Group
engages in global operations in sectors providing
high added value.

OutlineSubsidiaries in London, Singapore, Beijing (including a branch
office in Shanghai), and New York to coordinate operations
overseas

Longer-Term External Environment and Social Issues
Although the global economy has stalled as a result of the
COVID-19 pandemic, based on projections for continued
growth over the longer run, the DBJ Group is likely to see
robust demand for global business development from its corecustomers in domestic industries. At the same time, over the
medium to long term, demand for capital should increasestrongly from the infrastructure and transportation sectors
against a backdrop of population growth and the increasing
movement of people and physical goods. It is imperative thatJapan’s economy and industry sustain growth by effectively
tapping into these overseas growth opportunities.

Strategy
While monitoring the impact from COVID-19, DBJ will continue
to engage in overseas operations in line with its sector strategy
and function strategy.
1)	In infrastructure fields such as energy and transportation,
DBJ will provide investments and loans for the overseas
development of Japanese industry and for projects thatbring overseas knowledge to domestic markets.
2)	DBJ will provide investment and advisory services to support the overseas industrial expansion needs of its customers, including customers headquartered regionally in Japan.
3)	Group companies will manage investments in infrastructure
assets and corporate assets for the purpose of providing
Japanese investors with investment opportunities overseas.

Fiscal 2018

Collaboration withother financial
institutions

NIPPONIA Mino merchant family town

Fiscal 2019

• Launched a joint investment program with The Bank of Kyoto, Ltd. foroverseas private equity funds• Entered into a business partnership with Business Finland Oy for the purpose ofsoliciting innovation funds in Finland that advance the formation of an innovation
ecosystem through industry–academia–government collaboration

Investment
operations• Made a preferred equity investment related to J-POWER’s participation in
the Triton Knoll offshore wind power project in the U.K.
• Signed a financing contract for a venture capital fund that invests inearly-stage pharmaceutical companies in Japan and Europe• Established a fund with Sumitomo Corporation that invests in overseas
offshore wind power projects• Preferred equity financing for developing renewable energy projects overseas(offshore wind power plants in Taiwan) with JERA Co., Inc.
• Joint investment with Aica Kogyo Co., Ltd. (Aichi) to aggressively invest in Asia
• Signed financing agreement for a fund to invest in medical equipment venture firms
in Japan and the U.S.

Others• Addressed M&A needs of customers in Asia

Corporate Data

Accomplishments and Initiatives to Date

The DBJ Group’s Corporate GovernanceGreen Infrastructure
DBJ published a report about realizing a sustainable society
with impact financing, starting with green infrastructure. This
report reviews research into case studies about Environmental
Impact Bonds in the U.S. These bonds are a type of impact
investment that focuses on the impact of “green infrastructure,”
an approach to maintaining social capital that utilizes thediverse functions of nature. Environmental Impact Bonds area way of raising capital with pay-for-success (PFS) contracts,
which translates into the promotion of ESG investment withpublic–private collaboration. This research report analyzes thecase studies and dives into the possibility of using these bonds
in Japan.
DBJ promotes green infrastructure as a member of the steering committee for the Green Infrastructure Public–Private
Collaboration Platform established by the Ministry of Land,
Infrastructure, Transport and Tourism in March 2020.

Overseas

The DBJ Group’s Strategy

Smart Venues and Estimations of Economic Scale ofSports Industry
DBJ welcomes consultation requests from local governments
and business owners considering upgrades to stadiums andarenas around the nation. In May 2020, DBJ published the
Smart Venue Handbook describing in detail main points andprocesses for making concepts for stadiums and arenas areality.
In the joint research paper “Estimations of Economic Scaleof Japan’s Sports Industry: Japan’s Version of Sport Satellite
Accounts 2018” published by Japan Economic ResearchInstitute Inc. and Doshisha University in March 2019, it is estimated that the economic scale of the sports industry in Japanwas ¥7.6 trillion in 2016.

The DBJ Group’s Value Creation Story

Provision of Knowledge about Local Issues
Survey of Labor Shortage Problems in Regions
In March 2020, DBJ published a research report about
addressing labor shortages in outlying regions.
Over the past few years, labor shortages have become
severe problems across all regions and industries in Japan.
This research report presented an analysis of labor shortages
in regions, and then explained initiatives to encourage womenand senior citizens to reenter the workforce, as well as employment conditions for non-Japanese laborers. The second half ofthe report introduces case studies of actual labor shortages
based on interviews with about 40 companies and discusses
the direction of measures to solve labor shortages in specificsituations.

Data Section

https://www.dbj.jp/investigate/etc/index.html

Please click on the link above to see the Regional, Industry and Economic
Report on DBJ’s website (Japanese only).

32

33

Function Strategy

PROJECT SPOTLIGHT
The DBJ Group will provide optimal financing
solutions tailored to customer needs, from loans
to mezzanine financing and investments, while
reinforcing its ability to adequately evaluate various risks.

Provision of loans and investments after analyzing businessprospects, evaluating risks, and creating financing schemes.
Taking into consideration the traits of each project and theintentions of participants, utilization of DBJ’s expertise inintegrated investment and loan services that flexibly deploy
loans, mezzanine financing, and investments

Evaluation /verification

Special Investment
Operations
Monitoring Board

Capital funds(including preferred sharesand subordinated loans)

Political targets• Encouragement of self-reliant
development of regional
economies• Increase in competitiveness ofJapan and domestic enterprises• Development of markets for
growth capital

DBJ is using the knowledge it has gained from investing
extensively in renewable energy to provide the fund management company with know-how and personnel, thereby
facilitating smooth fund operations. DBJ contributes to theglobal low-carbon movement by financially encouraging the
spread of renewable energy across the world.
Sumitomo
Corporation

SMBC

DBJ

51%

24.5%

Fund managementcompany
(GP)

24.5%

Limitedpartners (LPs)Three companies(Sumitomo Corporation,
SMBC, DBJ)

Other domestic
investors
Overview of the Fund

https://www.dbj.jp/service/invest/special/index.html

To learn more about Special Investment Operations, please go to DBJ’s website (Japanese only).

Data Section(Managing investments andloans in special account)
Fiscal 2020: ¥600 billion

DBJ, Sumitomo Corporation, and Sumitomo Mitsui Banking
Corporation (SMBC) jointly established fund managementcompany Spring Infrastructure Capital Co., Ltd., in order toadminister the Spring Infrastructure I Investment Limited
Partnership (hereinafter, “the Fund”).
The Fund raises money from Japanese investors andfinances and invests in offshore wind power projects overseas. The Fund has already acquired and begun managing
wind power facilities in the U.K. as seed assets from
Sumitomo Corporation. In Europe, offshore wind power
has rapidly proliferated, helping with the move toward a
low-carbon society, while also providing excellent investment opportunities to investors. In Japan, a number of new
offshore wind power projects are in the planning stages,
underscoring the potential for growth in this market. Against
this backdrop, DBJ provided financing through Special
Investment Operations for the Fund, in recognition of its
highly significant role in providing opportunities for domestic
investors to invest in the renewable energy field, and helping
accelerate business development therein at Sumitomo
Corporation.

Corporate Data

Special Investment
Operations

Complement andencourage
private-sector
enterprises(including pump-priming)

Setting-Up of Overseas Renewable Energy Fund with Sumitomo Corporation and
Sumitomo Mitsui Banking Corporation

Offshore wind power
generation assets(Budget for fiscal 2020:¥300 billion)

Loans,
etc.

“Raw Cane Sugar Donut Sticks,” the main product made by
FUJIBAMBI Co., Ltd.

The Fund (first fund)Japanesegovernment(industrial
investment)

Addition(megabanks, regionalbanks, private funds, etc.)

Target company initiatives• Initiatives for effective use ofmanagement resources• Initiatives to promotemanagement innovation– Cultivate new business– Form alliances among various
sectors and groups
etc.

Enhance risk capital supporting growth

Capital account
Capital increase* According to the Japanese government’s Study Panel Concerning the Promotion of
Expanding Growth Funding, certain financial institutions, including DBJ, areexpected to serve in a pump-priming capacity for the foreseeable future to attract
private-sector investment by cultivating new capital providers, markets, andinvestors, thereby fostering the development of an investment cycle led by theprivate sector.

Other financial
institutions

DBJ(Budget for fiscal 2020:¥300 billion)

supervision of activities, an advisory body to the Board of
Directors was established—the Special Investment Operations
Monitoring Board—with participation from outside experts infinancial and capital markets, industry, and other professionalgroups (see page 49).
Based on the Act for the Partial Amendment of theDevelopment Bank of Japan Inc. Act (Act No. 29 of 2020),
which was enacted on May 22, 2020, Special Investment
Operations were extended—the investment decision term andgovernment financing term from March 31, 2021 until March
31, 2026 and the deadline for ending operations from March
31, 2026 until March 31, 2031.

Since the investment in FUJIBAMBI by the Fund and theappointment of a new president, DBJ, the Fund, and
FUJIBAMBI’s main bank have worked together to develop
new sales channels, create new products, and strengthen
the management structure.
DBJ, leveraging its extensive experience in fund operations and regional revitalization, as well as its influence inregional networks, is cooperating with experts from Nihon
M&A Center to help Japanese mid-tier firms and SMEs
expand their business.

The DBJ Group’s Corporate Governance

DBJ’s Initiatives to Supply Risk CapitalSpecial Investment Operations
Special Investment Operations, established as an intensive but
temporary scheme to supply growth capital* from the perspective of promoting the competitiveness of Japanese enterprises
along with regional revitalization, draw only a portion of theinvestment (industrial investment) from the Japanese government, enough to encourage the private sector to supply growth
capital. Since launching the aforementioned operations in June
2015, DBJ has (as of March 31, 2020) made ¥717.1 billion in
investments and loans (100 projects in total), the first ¥590.2
billion of which has spurred ¥4,042 billion in private-sector
investments and loans.
Special Investment Operations follow policy objectives, inaccordance with the law, complementing and encouraging
private-sector enterprises and ensuring appropriate competitive
relationships. To improve the structure of Special Investment
Operations and thereby maintain objective evaluation andJapan Investment Fund Inc. (J-FUN), which was jointly
established by DBJ and Nihon M&A Center Inc., created its
first Japan investment fund, a limited partnership for investment (hereinafter, the “Fund”), in February 2018. The Fund
will play a role in social infrastructure that builds a foundation
fostering mid-tier firms and small- to medium-sized enterprises (SMEs) across the nation. The Fund will also support
the growth of companies in which it has invested so they
can become star performers in their respective regions. In
this way, Special Investment Operations are being utilized
to invigorate regional economies and strengthen the competitiveness of local companies.
The Fund has invested in FUJIBAMBI Co., Ltd., a confectionery maker founded over 70 years ago in Kumamoto
Prefecture. FUJIBAMBI is a venerable company cherishedby local residents, and its main product, “Raw Cane Sugar
Donut Sticks,” is famous within Kumamoto Prefecture.
However, the management team has reached an advanced
age while facing the challenge of expanding sales nationwide. Starting with an introduction to FUJIBAMBI by its
main bank, the Fund advised the company about businesssuccession and a future growth strategy, which led to thesigning of a capital as well as a business arrangement.

The DBJ Group’s Strategy

OutlineEstablishment of Joint Fund with Nihon M&A Center Inc. to Create Star Companies Locally

The DBJ Group’s Value Creation Story

Special Investment
Operations andCrisis Response Operations

34

35

Function Strategy

Accomplishments and Initiatives to Date
2008/10

2008/12

Commenced Crisis
Response Operations
as a designatedfinancial institution

2011/3Main events that were designated a crisis:¥206,529 millionDesignatedJapan Finance Corporation(Crisis Response Facilitation Account)Two-step loans,etc.

Defines a new scope for DBJ’s responsibilities,
making Crisis Response Operations obligatory for
an indefinite period

Total Crisis Response Operations related to COVID-19
		¥1,621.2 billion (130 projects)(As of June 30, 2020)

Designated financial
institutions
Private financial institution
Private financial institution
Private financial institution

DBJ• Designated financial institutions conductbusiness in accordance with the Crisis
Response Operations Rules (based on
approval of the competent minister).
•D esignated financial institutions conductbusiness with complete double checks ofrequired compliance at their financing
departments and their departments responsible for crisis response operations.

Note: Capital increases related to Crisis Response Operations before the 2015
revisions to the DBJ Act were transferred from capital to a crisis response reserve(¥206.5 billion). Capital increases for Crisis Response Operations after therevisions are to be added directly to the crisis response reserve.

Provision offunds, etc.

Clients• Loans: ¥7,837.3 billion (1,279 projects)• Commercial paper acquisitions: ¥361.0 billion (68 projects)

PROJECT SPOTLIGHT

Great East Japan Earthquake of 2011
In the fiscal 2011 supplementary budget passed in thewake of the Great East Japan Earthquake, ¥2.5 trillion
was earmarked for Japan Finance Corporation for Crisis
Response Operations targeting medium- and large-sizedenterprises. DBJ proactively provided assistance for clientsaffected both directly and indirectly by the disaster.
Along with designated financial institutions in the disaster area, DBJ arranged the Great East Japan Earthquake
Reconstruction Fund.
In December 2014, in response to the shift of the stageof earthquake reconstruction from the restoration of production facilities (the “restoration stage”) to efforts to open
up a new enterprise-based market that resumes production, collaborates among multiple enterprises to boost

industry competitiveness, builds infrastructure, and reinforces functions (the “reconstruction and growth stage”),
we established a reconstruction and growth support fundin collaboration with the Regional Economy Vitalization
Corporation of Japan.
In fiscal 2018, with demand for reconstruction seeming
to settle, we established a new fund for medium- to longterm capital funds and other forms of money with sharedrisk, aimed at supporting the economic development of theaffected areas.
Going forward, we will continue to work with local financial institutions while promoting efforts to help stricken
areas according to their particular stage of recovery.

Corporate Data

• Extends the scope of Japanese government recapitalization securing DBJ’s
financial structure, etc.
• Establishes a new crisis response reserve account, reflecting this obligation in
the Articles of Incorporation, and indicates mandatory Japanese government
ownership of more than one-third of shares and other measures

Total loans for Crisis Response Operations, loans with loss
guarantee agreements, and commercial paper purchases

The DBJ Group’s Corporate Governance•	Prepares and announces “crisis response facilitation guidelines” (approved by
the competent minister)•	Implements complementary risk and other measures on the basis of agreements (approved by the competent minister) with designated financial
institutions• COVID-19 pandemic(As of June 30, 2020)

The DBJ Group’s Strategy• Kumamoto earthquakes in 2016

• Capital contribution• Lending of funds• Interest subsidies

COVID-19
pandemic

Total funds raised by the government in Crisis Response Operations•	Turmoil in international financial markets(Global financial crisis)•	Damage from heavy rainfall during Typhoon #18
in 2015

Japanese Government

Earthquake Disaster Crisis Response Operations(through March 31, 2011)• Great East Japan Earthquake

Crisis Response Operations Scheme

2020/3Financial Crisis Response
Operations and Earthquake Disaster
Crisis Response Operations

The DBJ Group’s Value Creation Storydamage, Japan Finance Corporation provides two-step loans
as a complementary risk measure, among other measures, togovernment-designated financial institutions that supply necessary funds to address crisis-related damage.
In March 2020, the COVID-19 pandemic was designated acrisis (see “Our Response to COVID-19” on page 19). As adesignated financial institution, DBJ collaborated and coordinated with private-sector financial institutions to rapidly andeffectively implement Crisis Response Operations.

Crisis Response Operations
DBJ’s Crisis Response Operations function as a stabilizing
force during periods of instability in the economy, society, andmarkets.
Crisis Response Operations, on the basis of the Japan
Finance Corporation Act (Act No. 57 of 2007, including later
revisions), consist of the provision of necessary funds during
such crises as disruptions in domestic or overseas financial
markets or large-scale disasters. In response to crisis-related

Kumamoto Earthquakes in 2016services in conjunction with related local governments,
national institutions, and economic groups, as well as local
financial institutions.
Data Section

In 2016, DBJ established the Kumamoto Recovery Officewithin its Kyushu Branch to better provide useful knowledge and financial expertise for the restoration and reconstruction of regions affected by the Kumamoto
earthquakes.
In July 2016, DBJ formed the Kumamoto Reconstruction
Support Fund jointly with The Higo Bank, Ltd. and The
Kagoshima Bank, Ltd., financial institutions in the disasterstricken area. The fund supplies risk capital, through such
schemes as senior loans (repayment in full on maturity,
uncollateralized, non-guaranteed loans) and subordinatedloans, to businesses affected by the disaster.
Additionally, DBJ has provided beneficial information
about restoration and reconstruction through a crossdepartmental system, and has offered survey and planning

Kumamoto Castle, damaged by the earthquakes(photo from the Ninomaru Parking Lot)

36

37

Function Strategy

Asset Management

Backed by the DBJ Group philosophy and comprehensive financial expertise, DBJ AssetManagement Co., Ltd. (DBJAM) provides investment and asset management services that meetclients’ best interests.
By stimulating the flow of funds and appropriately addressing diverse investment needs,
DBJAM aims to spur the development of capital
markets in Japan.

An investment management company
that primarily handles investments(alternative investments) in the fieldsof real estate, private equity, andinfrastructure

Research and Consulting
Utilizing its extensive network of connections to universities,
research institutions, experts, national governments, and local
governments, DBJ provides support through surveys andproblem-solving ideas related to business strategies and policy
formation for urban development, regional development, social
capital maintenance, energy, the economy, and industry.

Research and Consulting
Japan Economic Research Institute Inc. is a comprehensive
think tank that conducts research in the public, solutions, andinternational fields. In the public–private partnership and project
financing initiative fields, it has a top-class track record in Japanbacked by unparalleled experience and know-how.
Value Management Institute Inc. is also a comprehensive
think tank that excels in analysis using proprietary economic
models and insight into cutting-edge technologies. Its highly
specialized knowledge encompasses a broad range of policy
fields, including the formulation of integrated strategies for local
governments across Japan.

Strategy
DBJAM, as a fiduciary investment manager, works in the bestinterests of its institutional investor clients with the aim ofachieving longer-term growth in returns on each investment,
being aware of the profits flowing to the ultimate beneficiaries.
DBJAM also works to help its clients increase their asset management capabilities.
To achieve these aims, DBJAM develops a deep understanding of the financial condition, investment policies, andrisk-and-return preferences of its clients through active, thorough, and faithful engagement.
DBJAM believes that such an attitude allows it to provide
investment and asset management services that are truly optimized for the client. Through these services and operations,
DBJAM contributes to the development of financial markets inJapan by energizing new money flows, as well as the conversion of fund flows into the reliable formation of assets for thenation’s citizens.

Accomplishments and Initiatives to Date
DBJAM was established in November 2006 for the purpose ofenergizing the real estate financing market in Japan. Since then,
DBJAM has provided domestic real estate fund management
and asset management services. In 2016, it formed and beganasset management in DBJ Private REIT Inc., an unlisted private
real estate investment trust. In addition, since 2013, DBJAM
has been providing discretionary investment services andinvestment advisory services related to alternative investmentsin overseas and domestic private equity and infrastructure andoverseas real estate.
In its efforts to seek out and provide investment opportunities, DBJAM has set up seven co-investment programs targeted at regional financial institutions and foreign private equity
funds as of July 2020. In 2018, Japan’s Government Pension
Investment Fund appointed DBJAM as an investment manager
focusing mainly on Japanese infrastructure.
As a result of these activities, DBJAM had ¥1,760 billion in
assets under management as of March 31, 2020.

Data Section

Strategy and Initiatives to Date
Syndication
Activities have included leveraging DBJ’s strengths in syndicatedloans in the energy sector and reinforcing ties and partnerships
with regional financial institutions through such means as business cooperation agreements for syndicated loans. In this way,
DBJ is contributing to corporate fund-raising while also providing financing opportunities for financial institutions.
DBJ has provided information to other regional financial
institutions about a measure it jointly developed with The
Hiroshima Bank, Ltd. in fiscal 2017 to provide loans with

Advisory Services
As a result of its impartiality, DBJ has a wide network it canmobilize in providing its advisory services, including not only
Japanese firms but also overseas companies and private
equity funds.
In fiscal 2017, DBJ entered into an overseas M&A advisorybusiness cooperation agreement with BDA Partners (headquartered in New York), which needed to develop business in
Asia and other parts of the world. The synergies generated
between BDA’s overseas network and the DBJ Group’s M&A
advisory organization and domestic and overseas networks
produced a more effective and efficient overseas M&A advisory
service for the client.

Longer-Term External Environment and Social Issues
Japan is a nation with considerable assets, including over
¥1,800 trillion in household financial assets and ¥400 trillion in
pension assets. With the Japanese economy confronted by adeclining population and an aging society, it is imperative that
this wealth (financial assets) is steadily expanded.
In realizing sustainable asset formation for the nation, it is anextremely important policy issue for Japan to have a healthy andefficient capital market. Financial institutions, pension funds, andother institutional investors must also advance their investment
capabilities in order to maintain a vibrant capital market.
DBJAM acknowledges the importance of such policy objectives and believes that its services are well aligned with the
public interest.

Corporate Data

Advisory Services
DBJ offers expert advice related to corporate M&A—ranging
from the formulation of strategies, screening of acquisition
candidates, and assessment of corporate value to negotiations,structure policy, and post-merger integration assistance—for avariety of situations, including industry restructuring, overseas
business development, business domain expansion, businesssuccession, and fund investments and exits.

special provisions that waive the original principal in the eventof an earthquake. Moreover, DBJ put together special deals,
including a large syndicated loan, for the Fukuoka Airport concession project.

The DBJ Group’s Corporate Governance

OutlineSyndication
DBJ utilizes its impartial standpoint to call on a wide range offinancial institutions in providing high-value-added syndicatedloans that draw on such original DBJ financing products as
DBJ certification programs.

• Real estate• Private equity• Infrastructure

The DBJ Group’s Strategy

OutlineThe DBJ Group’s Value Creation Story

Syndication, Advisory, andConsulting Services

The DBJ Group mobilizes tie-ups and collaboration to provide syndicated loans and support for
M&A designed to promote Japanese companies’
growth strategies and strengthen their international competitiveness, while offering impartial
consulting services with a long-term perspective.
Along with related services, this helps clients solve
the problems they face and stimulates activity infinancial markets.

38

39

Management Foundation Strategy

Financial Strategy* The Green Bond Principles are compiledby the International Capital Market
Association (ICMA), investors, issuers,
and securities companies. These partiesare responsible for updating annually theGreen Bond Principles, which arevoluntary process guidelines thatrecommend transparency and disclosure and promote integrity in the development of the green bond market byclarifying the approach for issuance of agreen bond. These parties also constitute a platform to share the latest
information about green bonds anddisclose relevant information to society.

Issuance of SRI bonds(As of March 31, 2020)$1 billion in 2019
€700 million in 2018
$1 billion in 2017$500 million in 2016€300 million in 2015€250 million in 2014

Capital Procurement (Non-Consolidated)

We aim to maintain and strengthen our financial capital bymanaging it within the context of a risk appetite framework
based on sophisticated analysis of risks and returns, with due
consideration paid to regulatory capital (management focusedon shareholders’ equity ratios) and economic capital (management of capital using stress tests).

Fiscal 2017

Fiscal 2018

Fiscal 2019

4,012.6
1,127.7
800.0

3,153.4
922.7
580.0

3,790.8
643.3
300.0

3,951.8
1,142.9
800.0

150.4

150.2

150.2

150.2

177.3

192.5

193.0

192.7

—

100.2

100.3

100.2

497.1
861.5
1,526.1

535.8
589.5
1,005.0

549.4
446.3
2,051.4

579.3
583.1
1,546.1* Borrowings from FILP in fiscal 2016 included ¥500.0 billion in the supplementary budget for “economic stimulus measures for investments in the future.”

External
environment

Stress test

IR Activities to Spread Understanding of
DBJ’s Principles and WorkBusiness plan

Execution

Monitoring

Strategy for
financial capital

Financial Soundness Indicators
A1 (Moody’s), A (S&P), AA+ (R&I), AAA (JCR)

(As of June 30, 2020)

Common equity Tier 1 risk-weighted capital ratio

17.26%

(As of March 31, 2020)

Specific Initiatives to Improve the Value of Financial Capital
A pillar of the DBJ Group’s business strategy is to provide
long-term financing for infrastructure projects. To do so, the
DBJ Group procures long-term funds through corporate bonds
and the Fiscal Investment and Loan Program (FILP). In recent
years, DBJ has stably procured funds through FILP as well as
by issuing corporate bonds, thereby augmenting its fund procurement activities with diversified maturities and methods.
DBJ has been issuing green bonds and sustainability bonds

since fiscal 2014. The issuance of these bonds has not only
diversified our fund procurement base but also invigorated thesocially responsible investment (SRI) bond market.
DBJ Socially Responsible Investment Bonds
In 2014, DBJ became the first bond issuer in Japan to issue agreen bond. Furthermore, DBJ has issued a DBJ Sustainability
Bond each year since 2015. DBJ’s $1 billion issuance in fiscal
2019 was one of the largest-ever sustainability bonds

https://www.dbj.jp/en/ir/

For more information related to investor relations, please go to DBJ’s website.

Data Section

Issuer ratings

In addition to procuring government credit through the Fiscal Investment and Loan Program (FILP) and the issuance ofgovernment-guaranteed bonds, DBJ conducts its own fund-raising activities, such as issuing corporate bonds (FILP
bonds) to domestic and overseas investors and borrowing money from insurance companies and financial institutions,primarily regional banks. When conducting its own fund-raising activities, DBJ places emphasis on having investors
understand and support its principles and work and, to that end, dispatches representatives to conduct proactive investor relations throughface-to-face meetings in all regions of Japan and overseas.
Particularly when raising funds through loans, DBJ takes care tofurther a deeper understanding of its work by giving examples of investments and loans it has extended inside and outside Japan as well as
within domestic regions. DBJ also takes care to gain a deeper appreciation of the issues faced by the borrowing customer, viewing the interaction as an opportunity for further collaboration on investments andloans, in addition to borrowings.

Corporate Data

Scenarioplanning

MESSAGE FROM EMPLOYEESBusinessstrategy

The DBJ Group’s Corporate Governance

Basic Policy
Financial capital is a vital element of our business foundation
implementing advanced business strategies centered on our
sector strategy (see page 22) and function strategy (see page32). A robust financial foundation of funds and capital is necessary for the DBJ Group to execute its sector strategy, supply
risk capital, and engage in Crisis Response Operations.

Funds raised (flow)
Fiscal Investment and Loan Program   Of which, borrowings from FILP*  Of which, government-guaranteed bonds(domestic)  Of which, government-guaranteed bonds(overseas) Government-guaranteed bonds with maturity of lessthan five years (domestic)
Corporate bonds (FILP bonds)
Long-term debt
Of which, recovered, etc.

(¥ billion)

Fiscal 2016

The DBJ Group’s Strategy

denominated in the U.S. dollar issued by DBJ. The raised
funds are allocated toward the creation of a sustainable society
through DBJ Green Building Certification and theEnvironmentally Rated Loan Program. Information on the management and allocation of funds is evaluated by third parties toincrease transparency.
DBJ, in January 2017, became an issuer member of theGreen Bond Principles,* the first Japanese firm to attain such a
status, and in March 2020 participated on a committee createdby the Ministry of the Environment to revise the Green Bond
Guidelines, 2020. DBJ will continue to support the sustainablegrowth of this market by continuing to issue SRI bonds andproactively engaging in international and domestic initiatives.

The DBJ Group’s Value Creation Story

We target sustainable growth by constructing an
optimal risk–return portfolio while maintaining andstrengthening a robust financial base that supports our unique business activities, including
integrated investment and loan services.

40

41

Management Foundation Strategy

Number of Employees (Consolidated)
As of March 31, 2020


Number of Employees (Non-Consolidated)
As of March 31, 2020
Average Length of Service (Non-Consolidated)
As of March 31, 2020


Human Resource Development Vision
DBJ’s role has evolved and developed substantially to meet theneeds of the times. DBJ considers such innovation crucial tomaintaining its leadership position in the constantly advancing
field of finance.
To develop its all-important human resource assets, DBJ
encourages autonomous and pioneering behavior in its
employees as financial professionals in keeping with the visionof “generalists who can be specialists in many fields.” While it isimportant to acquire specialist knowledge, responding to society’s constantly changing needs also requires broad experience, deep knowledge, and the ability to see the big picture.
We continue to build a wide variety of systems based on thisphilosophy.

Training for new employees
Rank-based

Career development / management /leadershipManagement / leadership•	New employees receive thorough growth assistance withapproximately three months of DBJ’s own accounting andfinancial analysis courses and a full year of new-employee
training programs.
•	In addition to work-related training, DBJ provides not only
supplementary programs for self-improvement but also askills development program, extensive in terms of both
quality and quantity, that provides rank-based training forrequired subjects whenever necessary.
•	Opportunities to study abroad at overseas universities andtraining systems are made available for developing global
human resources. DBJ also operates its own leadershiptraining program (entirely in English) in collaboration with top
overseas universities for young employees and managementlevel employees.
•	Almost all training has been moved online due to the COVID19 pandemic, and DBJ plans to continue to proactively
enhance the flexibility and sophistication of classroom training environments.

Career development program

Strategic human resource development through job rotationand on-the-job training

Proposal ability

Front officeFinance

In-house
training

Work skills

Screening ability

Functional department
Management department

Financialaccounting

Legal

Domestic
Dispatchoutside DBJ

Strategic global human resource development
Overseas

Self-study

Knowledge
and skills

Logical thinking / facilitation / presentation, etc.

Seconding to Group companies and outside institutions
Overseas university strategic partnership programs /Short-term study in top business schools / Overseas study /Trainee programs / Seconding to overseas institutions, etc.
Language study / Finance / Law / Accounting

New-employee training program (online)

Ratio of employees returning to work after taking
childcare leave (number of employees having
completed childcare leave in fiscal 2019)32/34 (94%)

Ratio of male employees taking childcare leave(employees who had a newborn child in fiscal 2018)

71.8%

Rehiring system(number of registrants as of March 31, 2020)

33

Reduced work hours and flex time for employees
raising children and caring for elderly relatives

131“Iku-boss” training participants(cumulative total)

About 200

Seminars for finding childcare facilities(cumulative total)

About 180

Data Section

Employees’ Use of Childbirth and Child-Rearing Support
Systems, Number of Employees in Training Courses(non-consolidated)

Corporate finance, etc.

Middle / Back office
Shared skills

Motivation and Engagement
We constantly ask ourselves if we have laid the proper foundation
for genuinely motivating officers and employees to take the initiative in accordance with the DBJ Group’s corporate philosophy.
•	DBJ conducts engagement surveys for employees, evaluates the results of these surveys, and creates action plansthat enable each department to increase motivation throughimprovement activities.
•	In training about career formation, DBJ creates opportunities for furthering understanding of its corporate philosophy
and constructive dialogue about improvements and practical approaches.

Corporate Data

Career Development* DBJ dispatches employees to national government agencies, Group companies
around the world, and companies that have received investments.

The DBJ Group’s Corporate Governance

Basic Policy
To steadily implement the DBJ Group’s value creation process,which aims to create both economic and social value, and torealize Vision 2030, our long-term vision for our future, it isimperative for us to nurture excellent employees who can
implement the distinctive business models of the DBJ Group,
including its integrated investment and loan services.
To this end, we think it is important to create structures inwhich employees will be highly motivated. Improving the valueof human capital is one of our most important priorities, and
DBJ is taking concrete steps to achieve this goal.

Skills Development
The DBJ Group develops human resources through practicalon-the-job training and extensive training opportunities.
•	Employees are strategically rotated so that they steadily
develop highly specialized skills by gaining practical anddiverse experience and broad perspectives in multiple
departments and outside institutions.*

Diversity Management and Productivity Improvements
To promote workplaces where diverse human resources canwork together, DBJ encourages mutual understanding andtakes steps to improve the productivity of each employee.
•	DBJ aims to enhance its work and leave systems for childrearing and elderly care, such as telecommuting, reduced
work hours, and flex time, in addition to holding seminars
guided by experts for finding and enrolling in facilities forchildcare and elderly care.
•	DBJ creates and distributes a guide to balancing work withchild-rearing and elderly care, and holds so-called “iku-boss”
seminars for members of management to enable them tosupport employees using these systems while improving
team productivity. DBJ also holds seminars for furthering
understanding of people with disabilities and promotes thebuilding of cooperative relationships among staff, including
employees who use these systems.
•	DBJ set up the Work Shift Promotion Headquarters with theintention of increasing work efficiency from a work shift
standpoint and promoted awareness reforms and related
initiatives across the Group.
•	DBJ supports the physical and mental well-being of its officers and employees with courses about coping with stressand managing sleep, as well as by offering a counselingsystem staffed by outside professionals, in addition to periodic health checkups. DBJ greatly relaxed rules about
working from home and staggered working hours to mitigate the spread of COVID-19 and continues to place thehighest priority on the health and safety of its executives
and employees while upgrading work environments.

The DBJ Group’s Strategy

1,703
1,195
13.4 years

Specific Initiatives to Increase the Value of Human Capital
Intensification of the Hiring and Exchange of Human
Resources across the DBJ Group
DBJ will strengthen its hiring processes and practices and secure
the personnel necessary across the entire Group to implement its
sector strategy, function strategy, and area strategy.
The DBJ Group will also work to further disseminate its
long-term vision, Vision 2030, and its value creation process bystrengthening the exchange of human resources across the
DBJ Group.

The DBJ Group’s Value Creation Story

Human Resource Development

We aim to be an organization with diverse humanresources that helps employees develop skills
while raising their motivation.

42

43

Management Foundation Strategy

knowledge-based solutions to customers in various industries,
including solutions from the perspectives of environmental,social, and governance (ESG) issues and the Sustainable
Development Goals (SDGs), based on our wide-ranging knowledge of industry.

https://www.dbj.jp/en/investigate/

For details, please follow the link above to the DBJ website.

Processes 
We will improve operations, including via investments in information and communication technology (ICT), by clarifying andsimplifying business processes from the customer’s standpoint
in order to rapidly and properly address customer needs.

(1) Naturalenvironment

Forests, mountains,rivers, lakes, soil, air(2) Social
infrastructure

Energy, transportation,
urban infrastructure,industrial value chains

Stabilization and stimulation of the financial(3) System capital system, development
and invigoration offinancial markets

Example of initiatives

Environmentally Rated
Loan Program
DBJ Green Building
Certification
Loans and investments
for infrastructure andindustrial projects
BCM Rated Loan
Program
Crisis Response
Operations
Supply of risk capitalSocially responsible
investing bondissuance

Specific Initiatives to Improve the Value of Intellectual Capital
Knowledge
Industry Analysis 
The role of the Economic & Industrial Research Department is
to analyze and disseminate information on economic andindustrial trends in Japan and overseas, including macroeconomic trends and trends in key industries, and to support
investment activity. DBJ proactively works to accumulate anduse intellectual capital, including information on recent trends insuch areas as big data, AI, computer-assisted software engineering (CASE), virtual and augmented reality, and fintech.
In April 2017, DBJ established the post of chief research
officer and placed under it the Economic & Industrial Research
Department and the Sustainability Planning & Intellectual
Capital Support Department. Furthermore, we provide

Cross-sector Conference 
Cross-sector innovation is accelerating and the number ofthemes that must be analyzed by industrial surveys is increasing.
Against this background, to pursue deep industry knowledge
while maintaining a cross-sector perspective, the DBJ Group set
up the Cross-sector Conference in fiscal 2017 as a platform forsharing information among the Economic & Industrial Research
Department, business offices, and Group companies. To discover and share cross-sector knowledge through lectures andworkshop formats, as well as via other means, we convened the
Cross-sector Conference in fiscal 2019 with such themes asmobility as a service (MaaS) and logistics in China.
Research Institute of Capital Formation 
The Research Institute of Capital Formation (RICF) was established in 1964 with Dr. Osamu Shimomura, who advocated forthe principles behind Japan’s post-1940s, high economic
growth, as its first executive officer. The institute serves as avenue for creating intellectual capital through cooperation andcollaboration between DBJ and external experts at universities
and other organizations. Its research includes a focus on
the formation of a sustainable economy and society from anacademic and liberal standpoint. In recent years, the institutehas expanded the means for creating intellectual capital byestablishing new committees for researching sustainability,
publishing research papers through Springer, an international
academic publishing company, and holding international
academic conferences in conjunction with overseas academic
journals and think tanks.

Financial
institutions• Collaborated with LTIC• Coordinated operations with Bridges FundManagement Ltd. in the United Kingdom

Government• Participated in high-level panel about ESG finance• Participated in TCFD scenario analysis support
project

Research
institutions• Held DBJ Academy at RICF

Participation
and assessmentof outside initiatives

DISCLOSURE INSIGHT ACTIONADFIAPfinancing sustainable development

Data Section

Social Capital
The DBJ Group defines social capital as a resource sharedacross society that underpins the foundations of market economics. Increasing the value of social capital is a basic tenet
for realizing a sustainable society. DBJ specifically engages inunique initiatives within the context of (1) the natural environment, (2) social infrastructure, and (3) system capital.

Details• Provided certification programs• Held a business plan competition for women• Provided platforms via DBJ Connect• Supported innovation with iHub

Corporate Data

Relationship Capital
Collaboration 
The DBJ Group has built diverse networks with customers,
financial institutions, investors, and national and local government agencies for the purpose of exchanging information andavoiding conflicts of interest. The DBJ Group utilizes its unique
networks to identify issues affecting the economy and society
and to conduct investment and loan operations. We aim to
maintain our reputation and improve our brand value throughthe services we provide to customers.

Social capital

Customers

The DBJ Group’s Corporate Governance

Basic Policy
Intellectual Capital
Knowledge 
We strive to improve skills as a core element of operations
necessary to differentiate our business model through surveys,
research, analyses, and risk management centered on industry.

Concrete Measures to Increase the Value ofRelationship and Social Capital
Collaboration and Dialogue with Stakeholders 

The DBJ Group’s Strategy

Capital Investment Planning Survey With a history of more than 60 years (since 1956), DBJ’s
Capital Investment Planning Survey looks at trends in corporate capital investment in Japan as well as corporate activities
based on the “broad definition of investment,” including capital
investment overseas, and spending on R&D, M&A, and humanresources. The results of the survey are used for many purposes, such as furthering education at universities andresearch at R&D organizations, in addition to serving as areference for national economic policy and corporate planning.

Processes
Work Shift Promotion Headquarters 
The Work Shift Promotion Headquarters was created in fiscal
2018 with the deputy president as its chair and members
representing other departments. From the standpoint of
increasing the value added it provides to customers, the DBJ
Group is keen to make bold workstyle reforms, streamline work
processes, and improve productivity. Our initiatives haveincluded rationalizing investment management processes,
increasing back-office work efficiency with robotic process
automation (RPA), upgrading remote access environments,and moving away from paper.

The DBJ Group’s Value Creation Story

Knowledge and Collaboration

To improve intellectual capital and relationship andsocial capital, the management resources of the
DBJ Group, we are accumulating knowledge whileadvancing collaboration with various stakeholders.

44

45

Management Foundation Strategy

For more information, please go to DBJ’s website (Japanese only).

Environmental
RatingHealth Management
Rating(Environmental risk)(Human productivity risk)

https://www.dbj-sustainability-rating.jp/

For details on DBJ certification programs, please see the DBJ
website (Japanese only).

For more information, please go to DBJ’s website (Japanese only).

Assessment Flow of DBJ Certification Programs

Participation in and Evaluation of Outside Initiatives
DBJ and DBJ Asset Management Co., Ltd. in December 2016
became signatories of the United Nations–supported Principles
for Responsible Investment (PRI) and since February 2018
have served as members of the PRI Infrastructure Advisory
Committee. DBJ is also a member of the Long-Term Investors
Club (LTIC), an international group of investors that emphasizes
investment activities with long-term time horizons. In May 2019,with Japan Bank for International Co-operation, DBJ held anannual meeting and sponsored events to exchange opinionswith financial institutions from G20 countries. Furthermore, DBJ
proactively participates in and contributes to outside initiatives
that promote sustainability management, as an investor memberof the Global Real Estate Sustainability Benchmark, a participant in high-level panels on ESG finance at the Ministry of theEnvironment, as well as a signatory to the Principles for
Financial Action for the 21st Century and chair of its Working
Group on Savings, Lending, and Leasing Operations.
In February 2019, DBJ received an award from the
Association of Development Financing Institutions in Asia andthe Pacific recognizing its participation in outside initiatives,
specifically its efforts in health management in February 2018
and its initiatives to address natural disasters and climatechange.

1

2

3

4

5

6

Preliminary
screening

Interviews

Judgment
meeting

Evaluation
decision

Financing
implementation

Feedback

DBJ Rated Loans
Total number of rated loans:

1,275(Number)
1,500(Left axis)	

1,250(Right axis)

Environmental rating
BCM rating
Health management rating
Cumulative amount¥2,257.5 billion(¥ billion)
3,000(As of March 31, 2020)
210

2,500

378

2,000

183
137

1,000
107
750

45
17
4

500

250
33
0

2004

67

2005

11

13

100

126

2006

2007

19
162

2008

23
198

2009

28

1
55

234

470

523

315

278

190

145

103

75

346

574

1,500
655

621

687
1,000

415
369
500

308
244

2010

2011

2012

2013

2014

2015

2016

2017

2018


2019
(Fiscal year)

0

Data Section

https://www.jeri.or.jp/sctm/about/ihub.php

BCM Rating(Business continuation risk)

Corporate Data

DBJ iHub (DBJ innovation Hub)Along with The Japan Economic Research Institute, DBJ seeks
to spur innovation through iHub and “value training” activities.
By using its impartial position andbroad network, DBJ aims to resolve
social issues through logical andinnovative business solutions.

For customers using the BCM Rated Loan Program, wehold an annual event called the BCM Rated Loan Club as avenue for crisis managers to exchange opinions and information. Through its certification programs, DBJ broadly supports
the initiatives of its customers while
contributing to the formation of asustainable society.
In recognition of these initiatives,
DBJ took the Silver Award in the
Ministry of the Environment’s inaugural ESG Finance Awards in 2019.

The DBJ Group’s Corporate Governance

For more details about the DBJ Women Entrepreneurs Center,please go to DBJ’s website (Japanese only).

https://dbj-i.net/ja

DBJ Certification Programs
Using its independently developed screening system, DBJ
certification programs set the terms and conditions of loans
based on corporations’ non-financial information.
DBJ launched the Environmentally Rated Loan Program in
2004, the first such program in the world. In 2006, DBJ
launched the BCM Rated Loan Program to evaluate disaster
preparedness and measures to ensure business continuation.
Furthermore, in 2012, DBJ began to offer the Employees’
Health Management Rated Loan Program, which evaluates
measures in health management. A major defining characteristicof DBJ certification programs is the assessment process thatemphasizes face-to-face discussions, during which we directly
inquire about clients’ initiatives that are not evident in their
publicly disclosed information. Our screening sheet is reviewed
every year in deliberations by the Advisory Committee, composed of outside experts, who also take into consideration thelatest issues and trends around the world.
As follow-up services, we create venues in the form of postassessment award ceremonies at which companies’ top management can exchange their opinions with each other. We also
provide feedback and details about the assessment results anddirectly convey information about anticipated matters andexamples of outstanding efforts at other companies, with theview of supporting more sophisticated initiatives in the future.

The DBJ Group’s Strategy

https://www.jeri.or.jp/wec/

DBJ Connect
Beginning in June 2017, at the suggestion of our young
employees, we launched DBJ Connect in collaboration with
Creww, a company that operates the largest start-up community in Japan.
DBJ Connect is a program whereby DBJ facilitates all of thenecessary processes for collaboration between start-ups andmajor and mid-tier corporate customers. When major andmid-tier corporate customers launch a new initiative, start-ups
are solicited to provide ideas for business collaboration overthe internet to solve issues related to processes, know-how,ideas and human resource shortages, for example.
DBJ Connect aims to maximize potential outcomes in shortperiods of time and human resources as all parties aim to startexperimental projects.
In fiscal 2019, the CHUDEN CTI & STARTUP PROGRAM
attracted approximately 40 proposals for start-up firms, andtwo of these proposals turned into collaborations between
start-ups and Chuden CTI Co., Ltd.

The DBJ Group’s Value Creation Story

DBJ Women Entrepreneurs Center (DBJ-WEC)
In 2011, the DBJ Women Entrepreneurs Center was launchedto provide comprehensive support, including entrepreneurial
know-how and networking opportunities, to nurture growthbusinesses led by women from new vantage points that couldchange society and the economy for the better. As a part ofthese efforts, DBJ has held a business plan competition eighttimes since 2012 for women entrepreneurs.
Since eighth competition, first-place awards have beencreated in three fields: Excellent Social Design Award, Excellent
Growth Potential Award, and Excellent Regional Impact Award.
From among these categories, the DBJ Women Entrepreneurs
Prize recipient is chosen.
Excellent new business ideas are awarded business grants
of up to ¥10 million. After the competition finishes, the winners
are connected with outside experts and experienced entrepreneurs who help them turn their business plans into reality bysupporting the growth and development of their business ideas.
More than 2,500 business plans have been submitted overthe past eight competitions. Some of the winners’ and finalists’competition plans have gone on to play a role in expanding
their operations. Furthermore,
DBJ assists initiatives to support women entrepreneurs inregional locations, helping
expand the breadth of women
entrepreneurs.

46

47

Corporate GovernanceWith ongoing efforts to strengthen
governance, DBJ contributes tosustainable growth through an innovative
process of value creation.

Governance Suited to Our Unique Business Modeland Dialogue with Stakeholders 

A Value Creation Process That Balances Economic and Social Value 

times of international financial turmoil, and following the Great
East Japan Earthquake, the Kumamoto earthquakes, andother events calling for rapid influxes of capital, DBJ has been
there to provide relief.
In response to the damage caused by the COVID-19 outbreak, the DBJ Group opened consulting service counters inJanuary 2020 and moved forward with its unique Regional
Emergency Response Program in February. Then, in March,when the Japanese government designated the COVID-19
pandemic a crisis, we concentrated on Crisis Response
Operations as a designated financial institution.

ChairmanAugust 2020

Data Section

The DBJ Group practices sustainability management in accordance with the Development Bank of Japan Inc. Act, balancing
economic and social value with the aim of building a sustainable society. We supply risk capital to forward-looking initiatives
through our Special Investment Operations program and collaborate and cooperate with private financial institutions tostimulate new flows of risk capital in Japan. DBJ’s investments
and loans in new fields help strengthen Japan’s economic
competitiveness. We also address local issues through risk
capital supplied through joint funds created with regional financial institutions.
Furthermore, DBJ functions as an emergency supplier ofcapital for responses to natural disasters and other crises. In

management and maintain a balanced value creation process.
As the social significance of balancing these two types of value
increases, we will continue making every effort to engage indialogue with our diverse stakeholders and ensure robust andeffective corporate governance, based on the notion that nothing is more important than embodying best practices that willcontinue to earn us the trust of our customers and society.

Corporate Data

Creation of a Unique Business Model Given the adoption of the Sustainable Development Goals(SDGs), the Paris Agreement, and other recent developments,
the DBJ Group established the Sustainability Committee todeal with the growing need to review corporate managementfrom a sustainability standpoint. The Sustainability Committee
discusses changes in social issues and other matters important for management. In fiscal 2019, directors engaged in lively
debate on the Group’s initiatives related to energy, climatechange, and the SDGs. In fiscal 2020, deliberations havefocused on medium- to long-term issues on the global agenda,
such as ESG matters and building of a sustainable society,while monitoring the impact from COVID-19.
To realize a sustainable society while balancing economic
and social value, the DBJ Group offers solutions to issues
faced by society and the our customers. The Group has continued to create innovative business models, centered on the
supply of risk capital, in an effort to advance sustainability

The DBJ Group’s Corporate GovernanceSpecial Investment Operations Monitoring Board are debatedby the Advisory Board, an advisory body to the Board of
Directors comprising outside experts and directors in fields
including manufacturing, infrastructure, regional communities,
and finance (see page 49). The Advisory Board provides valuable ideas on matters concerning the safeguarding of propercompetition with private financial institutions and the DBJ
Group’s management plans. In my view, a distinct aspect ofcorporate governance at the DBJ Group is its continuous
reassessment of its unique value creation process while engaging in dialogue with diverse stakeholders.
Living up to the trust placed in us by society, we want tokeep our initiatives one step ahead of the times, especially inregard to the supply of risk capital, and this means ensuringthat we operate in conformity with the Companies Act. For thispurpose, the Board of Directors formulated the Basic Policy forInternal Control, which positions legal compliance, risk management, and internal audits as important issues for
management.

The DBJ Group’s Strategy

In order to continue playing this unique role, DBJ must haverobust corporate governance, ensure transparency in management, and consider the opinions of outside experts. To promote this aim, we have created the Operations Audit
Committee, the Compensation Committee, and the Personnel
Evaluation Committee as advisory bodies to the Board of
Directors. Listening to the views of our stakeholders is imperative to strengthening this framework.
It is essential that DBJ collaborate and cooperate with private financial institutions in an environment of fair competition.
We hold regular events for this purpose, usually twice a year,
involving discussions with representatives of such institutions.
We have also created the Special Investment Operations
Monitoring Board (see page 49) as an advisory body to theBoard of Directors. The board meets twice a year to discussand evaluate the status of the bank’s business performance, as
well as its complementing and encouraging of private businessand maintenance of proper competitive relationships.
The opinions we obtain through social events with private
financial institutions and the outcomes of deliberations by the

The DBJ Group’s Value Creation Story

Message from the Chairman

48

49

Corporate Governance

DBJ is governed by the Development Bank of Japan Inc. Act (the DBJ Act) in accordance with the following objective.

Article 1
Development Bank of Japan Inc. (hereinafter referred to as the “Corporation”) shall be a joint-stock company (kabushiki-kaisha)
whose objective is to contribute to the smooth supply of funds to those needing long-term business funds, as well as to thesophistication of financial functions.

management and deliberate and evaluate business results,
including consistency with the policy objectives of Special
Investment Operations, ensuring that appropriate competitive
relations are maintained with private financial institutions.
DBJ’s Corporate Governance System
A company with a board of
directors and company auditors(Audit & Supervisory Board)

Institutional design configuration

10
2
13

3
14
Yes
Deloitte Touche Tohmatsu LLC• Appointment and dismissal of representative members of the Board of Directors andAudit & Supervisory Board members• Concurrent positions as members of theBoard of Directors

Board of Directors• Amendments to Articles of Incorporation

Audit & Supervisory
Board members,
Audit & Supervisory Board

Accounting auditor

Compensation
Committee

Cooperation

Personnel Evaluation
Committee• Disposition of surplus funds• Mergers, corporate splits, and dissolutions

ReportingOperations Audit
Committee

ReportingInternal
Audit Department

Advisory Board• Basic policy on business plans, redemption
plans, and fund procurement
Executive Committee

Personnel Evaluation Committee
The Personnel Evaluation Committee, composed of outside
members of the Board of Directors and other outside experts,
evaluates personnel proposals on the selection of members of
the Board of Directors and Audit & Supervisory Board
members.

AuditsSpecial Investment Operations
Monitoring Board

Deliberative bodies

ALM & Risk
Management
Committee

Departments
Subsidiaries

General Risk
Management
Committee

Committee on
Investment and
Loan Decisions

New Operation
Screening
Committee

Advisory Panelon Investments
and Loans

Sustainability
Committee

Investment
Management
Committee

AuditsThe Boston Consulting Group K.K.
Managing Director & Senior Partner

Masayuki Oku

Honorary Advisor of Sumitomo Mitsui Financial Group, Inc.

Kazuaki Kama

Senior Advisor, IHI Corporation

Katsunori Nakanishi Chairman and CEO, The Shizuoka Bank, Ltd.
Yoshizumi Nezu

President, Tobu Railway Co., Ltd.

Akio Mimura

Honorary Chairman of Nippon Steel Corporation

Kazuo Ueda

Professor, Dean of Faculty of Business Studies at
Kyoritsu Women’s University

Special Investment Operations Monitoring Board
One of the measures of the 2015 revisions to the DBJ Act wasin regard to Special Investment Operations. The act stipulates
the establishment of a Special Investment Operations Monitoring
Board as an advisory body to the Board of Directors. This monitoring board is tasked with deliberating projects and evaluating
their performance in terms of appropriateness against policy
objectives and with emboldening private-sector enterprises andcomplementing their operations while maintaining appropriatecompetitive relations. This board, whose members include outside
experts in fields such as manufacturing, infrastructure, regional
communities, and finance, convened twice during the fiscal year
ended March 31, 2020.
Moreover, in order to examine whether appropriate competitive relations with other entities are being maintained, roundtable discussions are held regularly with the Japanese Bankers
Association, the Regional Banks Association of Japan, and theSecond Association of Regional Banks, including these entities’private financial institution members. Each group met twice infiscal 2019, for a total of six meetings. Disputes and opinions
raised in these meetings are reported to and deliberated by theAdvisory Board and the Special Investment Operations
Monitoring Board.
Outside Experts
Hideharu Iwamoto

Vice Chairman & Senior Executive Director ofJapanese Bankers Association

Masayuki Oku

Honorary Advisor of Sumitomo Mitsui Financial Group, Inc.

Katsunori Nakanishi Chairman and CEO, The Shizuoka Bank, Ltd.
Takashi Yamanouchi Advisor, Mazda Motor Corporation
Keisuke Yokoo

President, Member of the Board
Chief Executive Officer, Japan Investment Corporation

Fumiaki Watari

Honorary Executive Consultant of ENEOS Holdings, Inc.

Data Section

Decision-making
bodiesAdvisory Board
Since DBJ’s establishment as a joint-stock company in
October 2008, the Advisory Board has been in place as anadvisory body to the Executive Committee, providing advice
on overall management. Revisions in 2015 to the DBJ Act
stipulate for an indefinite period obligatory measures to beconsidered—in particular, requiring that DBJ conduct its operations in a manner that would not obstruct appropriate competitive relations with other entities. Accordingly, this board is

Reiko Akiike

Corporate Data

General Meeting of
Shareholders

Operations Audit Committee
The Board of Directors has established the Operations Audit
Committee, delegating to this body the authority to deliberate
important matters related to internal audits. This committee
met two times during the fiscal year ended March 31, 2020.
Compensation Committee
The Compensation Committee, the majority of which consistsof outside executives, considers the type of executive compensation structure that befits DBJ from the standpoint of ensuringtransparency and objectivity regarding compensation.

Overview of DBJ’s Corporate Governance System
Matters requiring authorization ofcompetent minister

Outside Members of the Board of Directors

5Adoption of executive officer system
Accounting auditor

Advisory Bodies to the Board of Directors In pursuit of sustainability management and DBJ’s corporate
objectives, the following committees have been established asadvisory bodies to the Board of Directors for the purpose ofmaintaining transparency in management and to reflect theknowledge of outside experts.

Outside Experts

The DBJ Group’s Corporate Governance

Number of members of the Board of
Directors Of whom are outside members of theBoard of Directors
Number of Board of Directors’ meetingsin fiscal 2019
Number of Audit & Supervisory Board
members Of whom are outside Audit &Supervisory Board members
Number of Audit & Supervisory Board
meetings in fiscal 2019

positioned anew as an advisory body to the Board of Directors.
As one of its roles, even more than before, the Advisory Board
is tasked with deliberating and evaluating important affairs
related to ensuring that appropriate competitive relations aremaintained with private financial institutions.
This board convened twice during the fiscal year ended
March 31, 2020. It is composed of the following outside members of the Board of Directors and outside experts in fields
including manufacturing, infrastructure, regional communities,
and finance.

The DBJ Group’s Strategy

DBJ is working to enhance its unique governance system in
addition to usual management supervision as a company
with a board of directors and company auditors (Audit &Supervisory Board), through a business model built upon features such as integrated investments and loans and proper
execution of the preceding objective, in order to raise the valueof tangible and intangible management resources to beinvested and to realize sustainable management that aims forboth economic and social value.
Specifically, the 2015 revisions to the DBJ Act establishedSpecial Investment Operations and obligatory measures to beconsidered, requiring that DBJ conduct its operations in amanner that does not obstruct appropriate competitive relations with other entities, in particular, applying these requirements to the Advisory Board, made up of outside experts andoutside members of the Board of Directors, and the Special
Investment Operations Monitoring Board, composed of outside
experts, which function as advisory bodies to the Board of
Directors. These bodies provide advice on DBJ’s overall

Audit & Supervisory Board Members,
Audit & Supervisory Board 
The Audit & Supervisory Board comprises five members.
The Companies Act prescribes that a majority of Audit &Supervisory Board members be outside members (in DBJ’scase, three of the five). DBJ offices contribute three members(two members proper to DBJ and one an outside member).
Also, DBJ has created the Audit & Supervisory Board Office,which, under the board’s direction, assists board members,
including outside members, in performing their duties. The
Audit & Supervisory Board and Audit & Supervisory Board
members audit the execution of duties by members of theBoard of Directors, based on their audit policy and audit plans.
Audit & Supervisory Board members attend Board of
Directors’ and other important meetings and may query the
execution of business by members of the Board of Directors,
peruse documents, and conduct branch audits.

The DBJ Group’s Value Creation Story

Basic Position on Corporate Governance

50

51

Committees under the Executive Committee
Name

Role
This committee deliberates and makes decisions pertaining to portfolio risk management and asset–liability management.

General Risk Management
Committee

This committee deliberates and makes decisions on important items related to operational risk management, system risk management, legal compliance, responses to antisocial forces, client protection management, and other important items.

Committee on Investment and Loan
DecisionsThis committee handles, deliberates, and makes decisions related to investments and loans, overseas business strategy, andoperations and management conditions.

New Operation Screening Committee

This committee deliberates and makes decisions on the commencement of initiatives involving new businesses.

Advisory Panel on Investments and
LoansThis panel handles the advance deliberation on and monitoring of investments and loans as well as deliberations on overseas
business strategy and operations and management conditions.

Sustainability Committee

This committee deliberates on items related to both economic and social value as well as dialogue with stakeholders.

Investment Management Committee

This committee monitors investment projects and enhances the monitoring system, and discusses planned proposals forinvestment policies.

Accounting Audits 
DBJ has in place an agreement whereby Deloitte Touche
Tohmatsu LLC conducts accounting audits as its accounting
auditor.
Three-Pronged Auditing Approach 
DBJ’s Audit & Supervisory Board members, the Internal Audit
Department, and the accounting auditor periodically and asnecessary exchange opinions and information, and communicate in an effort to ensure effective and appropriate audits.

Detailed information about DBJ’s corporate governance is presented below for reference.

Meetings of the Compensation Committee in fiscal 2019
Number of meetings held in
fiscal 2019
Compensation Committee

2

Members of the Compensation Committee
Chairman

Yasushi Kinoshita(head of the committee)

President

Hajime Watanabe

Outside member of the Board of Directors

Akio Mimura

Outside member of the Board of Directors

Kazuo Ueda

Outside Audit & Supervisory Board member Toshio YamasakiSecurities filings (state of corporate governance,etc.) (Japanese only)
https://www.dbj.jp/ir/financial/report.html

Policy on Sustainability
https://www.dbj.jp/en/sustainability/management/
regular.html

Internal Control System Basic Policy(Japanese only)

Compliance with Japan’s version of the
Stewardship Code (Japanese only)

https://www.dbj.jp/co/info/governance_policy.html

https://www.dbj.jp/co/info/stewardship.html(¥ million)

Category

Number of Compensation,
peopleetc.

Members of the Board of Directors(Excluding Outside Members of theBoard of Directors)

9

204

Audit & Supervisory Board members(Excluding Outside Audit & Supervisory
Board Members)

2

39

Outside Executives

5

63

Total

16

307

Notes: 1. C ompensation amounts include provisions to reserves for executive
retirement benefits (¥17 million for members of the Board of Directors,and ¥4 million for Audit & Supervisory Board members).
2. N umbers of persons to be paid and compensation amounts include one
member of the Board of Directors who retired during fiscal 2019.

Data Section

Below is a description of the compensation structure for members of the Board of Directors.
Compensation for full-time members of the Board of
Directors consists of fixed compensation, executive bonuses,and executive retirement benefits. To maintain their independence, part-time members of the Board of Directors receive
fixed compensation alone.
Compensation for full-time Audit & Supervisory Board members comprises fixed compensation, and executive retirement
benefits. Compensation for part-time Audit & Supervisory
Board members consists solely of fixed compensation.
The amount of compensation paid to members of theBoard of Directors is determined after deliberation by the Boardof Directors, within the maximum amount approved at theGeneral Meeting of Shareholders following discussions by the

Corporate Data

Compensation paid to DBJ’s members of the Board of Directors
and Audit & Supervisory Board members in fiscal 2019

The DBJ Group’s Corporate GovernanceInternal Audits 
DBJ has established the Internal Audit Department under the
direct supervision of the president and CEO President andCEO of DBJ and independent of other operating departments.
The department conducts inspections to ensure the appropriateness and effectiveness of internal controls, including overall
operational compliance and risk management, and performs
evaluations and recommends improvements. The Operations
Audit Committee deliberates and decides audit plans, audit
reports, and other important matters related to internal audits,and this information is reported to the Board of Directors. As ofJune 26, 2020, 21 people belonged to the Internal Audit
Department.

In accordance with this approach, DBJ provides compensation to its executives in three forms: fixed compensation,­executive bonuses, and executive retirement benefits.
(1) Fixed compensation is paid monthly in an amount basedon the executive’s position.
(2) Executive bonuses are distributed after taking into consideration the performance of each member of the Boardof Directors in carrying out their duties during the fiscal
year. Bonuses start with a standard amount based on
the position of the member of the Board of Directors.
Bonuses also include a quantitative assessment portion
determined based on a preset distribution percentagethat reflects the achievement of the consolidated net
income target, as well as a qualitative assessment portion determined based on a preset distribution percentage that comprehensively considers each executive’sachievement of performance targets in their businessdivision.
(3) Executive retirement benefits are paid out upon retirement in an amount reflecting successful service over the
longer term.

Compensation Committee. Compensation amounts are basedon the position and responsibilities of each member of theBoard of Directors, with due consideration given to social
trends, DBJ’s financial performance, and other standards balanced against employee salaries.
The General Meeting of Shareholders held on June 29,
2017, passed a resolution that sets ¥270 million as the maximum annual amount for total compensation paid to membersof the Board of Directors. The Company’s first General Meetingof Shareholders held on September 22, 2008, passed a resolution that sets ¥80 million as the maximum annual amount for
total compensation paid to Audit & Supervisory Board
members.
The Compensation Committee was established in 2008 toensure transparency and objectivity in the process for determining compensation, and a majority of members of theCompensation Committee comprises outside executives. This
composition allows independent outside executives to be
involved and give relevant advice.

The DBJ Group’s Strategy

ALM & Risk Management Committee

Executive Compensation 
DBJ’s Compensation Committee is an advisory body to theBoard of Directors. It deliberates on the compensation structure for members of the Board of Directors and evaluates the
propriety of the compensation structure for the Company. The
majority of its members are outside executives.
DBJ takes the following basic approach to executive
compensation.
• Compensation should reflect social trends in regard to executive pay.
• Compensation should provide motivation for initiatives aimed
at realizing economic and social value during each fiscal year
and in the medium to long term.

The DBJ Group’s Value Creation Story

Executive Committee
The Board of Directors has vested in the Executive Committee decision-making authority regarding the execution of business.
Accordingly, the Executive Committee makes important management decisions. The committee met 29 times during the fiscal year
ended March 31, 2020.

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53

Members of the Board of Directors, Audit & Supervisory Board Members,
and Executive Officers(as of the end of July 2020)

The DBJ Group’s Value Creation Story

Members of the Board of Directors

The DBJ Group’s Strategy

President and CEO

Member of the Board of Directors,
Deputy President

Member of the Board of Directors,
Managing Executive Officer

Member of the Board of Directors,
Managing Executive Officer

Yasushi Kinoshita

Hajime Watanabe

Seiji Jige

Kenkichi Fukuda

Makoto Anayama

1979: Joined the Ministry of Finance2013: Vice-Minister of Finance2015: Deputy President of DBJ
2018: Chairman of DBJ

1981: Joined Japan Development Bank
2008:	General Manager,
Head of Urban Development Department
2009:	Executive Officer, Head of Corporate Planning &Coordination Department
2011:	Director and Managing Executive Officer of DBJ
2015: Deputy President of DBJ
2018: President and CEO of DBJ

1986: Joined Japan Development Bank
2011:	Executive Officer in Charge of Special Missions
2013:	Executive Officer, Head of Corporate Planning &Coordination Department
2015: Managing Executive Officer of DBJ
2018:	Member of the Board of Directors,
Managing Executive Officer of DBJ
2020:	Deputy President of DBJ

In charge of Corporate Planning & Coordination
Department, Information Resources Department,
General Affairs Department

In charge of Risk Management Department,
Accounting Department, Credit Analysis Department,
Legal Affairs & Compliance Department,
Research Institute of Capital Formation

1983: Joined Japan Development Bank
2009: General Manager, Head of Chugoku Branch
2012:	Executive Officer, Head of Human Resources
Management Department
2014:	Managing Executive Officer,
Head of Kansai Branch
2016:	Member of the Board of Directors,
Managing Executive Officer of DBJ

The DBJ Group’s Corporate Governance

Chairman

1986: Joined Japan Development Bank
2011:	Head of Economic & Industrial Research
Department
2013:	Executive Officer, Head of Business Planning &Coordination Department
2015: Managing Executive Officer of DBJ
2018:	Member of the Board of Directors,
Managing Executive Officer of DBJ* Of the 15 members of the Board of Directors andAudit & Supervisory Board members, 14 are maleand one is female, leaving the female to male ratio
at 6.7%.

Corporate Data

Notes:* Standards and policies related to independence inthe selection of outside members of the Board of
Directors and outside Audit & Supervisory Board
members are not applicable.

Member of the Board of Directors,
Managing Executive Officer

Member of the Board of Directors,
Managing Executive Officer

Eiichiro Yamane

Norifumi Sugimoto

Shoichiro Kubota

In charge of Treasury Department,
Syndication & Credit Trading Department,
Sustainability Planning & Support Department

In charge of Business Planning & Coordination
Department

In charge of Strategic Finance Department,
Growth & Cross Border Investment Department,
Regional Investment Department,
Business Development Department

1988: Joined the Ministry of Finance2017:	Councillor, Secretariat of the Headquarters for
Administrative Reform, Cabinet Secretariat
2019:	Member of the Board of Directors,
Managing Executive Officer of DBJ

1988: Joined Japan Development Bank
2013: General Manager, Secretariat Office
2015:	Executive Officer, Head of Corporate Planning &Coordination Department
2018: Managing Executive Officer of DBJ
2020:	Member of the Board of Directors,
Managing Executive Officer of DBJ

1990: Joined Japan Development Bank
2014:	Head of Real Estate Finance Department
2018:	Executive Officer, Head of Growth & Cross
Border Investment Department
2020:	Member of the Board of Directors,
Managing Executive Officer of DBJ

Outside Member of the Board of Directors

Outside Member of the Board of Directors

Akio Mimura

Kazuo Ueda

Honorary Chairman of Nippon Steel & Sumitomo
Metal Corporation;
Chairman of Tokyo Chamber ofCommerce and Industry;
Chairman of Japan Chamber ofCommerce and Industry

Professor and Dean of Faculty of Business Studies;
Director of Tokyo University’s Center for
Advanced Research in Finance2008:	Outside Member of the Board of Directors
at DBJ

2008:	Outside Member of the Board of Directors
at DBJ* DBJ has signed liability limitation agreements with
its outside members of the Board of Directors andAudit & Supervisory Board, based on Paragraph 1,
Article 427, of the Companies Act.

Data Section

Member of the Board of Directors,
Managing Executive Officer* Akio Mimura, Honorary Chairman of Nippon SteelCorporation, is an outside member of the Board of
Directors of DBJ. DBJ has no special relationshipwith Mr. Mimura, and its business with Nippon SteelCorporation is conducted normally. Outside Audit &Supervisory Board member Naoko Saiki is also an
outside director of Sojitz Corporation. DBJ has noconflicts of interest with Sojitz Corporation, and its
business is conducted normally with the Company.
DBJ has no special-interest relationship with anyother of its outside members of the Board of
Directors or outside Audit & Supervisory Board
members.

54

55

Messages from Outside Members of the Board of Directors

Atsushi Kurashige

Shigeru Tamagoshi

Toshio Yamasaki

1986: Joined Japan Development Bank
2010: General Manager, Credit Analysis Department
2011: General Manager, Secretariat Office
2013:	General Manager,
Head of Urban Development Department
2017: Audit & Supervisory Board Member of DBJ

1989: Joined Japan Development Bank
2014:	Head of Corporate Finance Department,
Division 2
2016:	Head of Corporate Finance Department,
Division 5
2018:	Executive Officer, Head of Business Planning &Coordination Department
2020: Audit & Supervisory Board Member of DBJ

1982:	Joined The Sumitomo Trust and Banking
Co., Ltd.
2017:	President of Sumitomo Mitsui Trust General
Service Co., Ltd.
2018:	Advisor of Sumitomo Mitsui Trust General
Service Co., Ltd.
2018: Audit & Supervisory Board Member of DBJ

Outside Audit & Supervisory Board Member

Outside Audit & Supervisory Board Member

Masato Dogauchi

Naoko Saiki

Professor, Waseda University,
Law School Senior Counsel,
Nagashima Ohno & Tsunematsu Law Office

Visiting Professor, Graduate School of Public Policy,
The University of Tokyo
Outside Director, Sojitz Corporation

2020: Audit & Supervisory Board Member of DBJ

2020: Audit & Supervisory Board Member of DBJ

Executive Officers (excluding those who are concurrently members of the Board of Directors)
Managing Executive Officer

Managing Executive Officer

Executive Officer

Yoshinao Ikeda

Ryusei Segawa

Masashi Kumagae

Toshiyasu Takazawa

In charge of Corporate Finance
Department, Divisions 1 and 2

In charge of Economic & Industrial
Research Department, Hokkaido
Branch, Niigata Branch, Tokai Branch

Head of Corporate Planning &Coordination Department

Head of Human Resources
Management Department

Managing Executive Officer(Head of Kansai Branch)

Managing Executive Officer

In charge of Financial Institutions
Department, Regional Planning
Department, Hokuriku Branch,
Kyushu Branch, Minami-Kyushu
BranchHiroshi Shimizu

Tsutomu Murakami

Managing Executive Officer

In charge of Kansai Branch,
Chugoku Branch, Shikoku Branch

In charge of Urban Development
Department; Real Estate Finance
Department; Corporate Finance
Department, Division 3; Structured
Finance Department

Managing Executive Officer

Michihiro Kishimoto
In charge of Corporate Finance
Department, Division 5

Managing Executive Officer

Kazufusa Matsushima
In charge of Corporate Finance
Department, Division 6,
Tohoku Branch

Keita Arakaki

Executive Officer

Katsushi Kitajo

In charge of Corporate Finance
Department, Division 4

Executive Officer

Executive Officer

In charge of Internal Audit

Keisuke Takegahara

Executive Officer

Deputy Chief Research Officer,
Chief Manager of Sustainability
Management Office, Corporate
Planning & Coordination Department

Kazushige Ikeda

Masao Masuda
Head of Business Planning &Coordination Department

Outside Member of the Board of Directors

I have served as an outside member of the Board of
Directors since DBJ became a joint stock company in 2008.
I am currently a member of the Advisory Board, an independent body that facilitates corporate governance byincorporating the opinions of outside experts into the management of DBJ. In accordance with the amendment of the
DBJ Act in 2015, the Advisory Board is positioned as anadvisory body to the Board of Directors. The role of theAdvisory Board is not only to advise DBJ’s management onbalancing economic and social value but also to deliberateon the matter of ensuring suitable competitive relations withprivate financial institutions. I believe that the Advisory
Board has fulfilled the responsibility of performing checks,
from a third-party perspective, on the proper execution oflegally mandated Special Investment Operations, Crisis
Response Operations, collaboration with private financial
institutions, and sustainability management by DBJ.
With no end in sight to the COVID-19 pandemic, theoutlook is still uncertain. However, Japan’s strengths andproblems have become more apparent due to the COVID-19
crisis. As a nation, Japan needs to address its slow adoptionof digital technologies, the risk of over-concentration in theTokyo metropolitan area, and the need to increase theresilience of supply chains at companies.
Dialogue and cooperation with stakeholders is essential
for DBJ to be able to help solve the many issues that arise
in our rapidly changing society. I will continue to carry out
my corporate governance responsibilities by advising andfacilitating such dialogue.

International interest in sustainability, as seen in measures
such as ESG initiatives and the Sustainable Development
Goals, has grown rapidly since the adoption of the Paris
Agreement. The COVID-19 pandemic is likely to refocus
attention on the social aspect of ESG from an employee
health standpoint, in addition to the environmental aspect.
In step with the times and changing social issues, DBJ’s
solutions have included developing evaluation-based lending programs and providing risk capital through collaboration with private companies and financial institutions. I want
to see DBJ expand yet further its initiatives to balance
economic and social value while keeping aware of theinternational mood, especially during the COVID-19 crisis.
DBJ’s medium- to long-term goals for facilitating socialand economic development and achieving a sustainable
society require that it continue to implement these initiatives. Proper governance is therefore essential. The DBJ
Group’s Advisory and Special Investment Operations
Monitoring Boards support the attainment of these goals
and underpin DBJ’s unique business model. As a memberof the Advisory Board—in addition to my duties as an
outside member of the Board of Directors—I work closelywith outside experts to advise on overall management. I
will do my part in pursuing the sustainable social development and sustainability management goals sharedthroughout DBJ.

Career

CareerApril 1963:	Joined Fuji Iron & Steel Co., Ltd.
April 2000:	Representative Director and Executive Vice President of
Nippon Steel Corporation
April 2003:	Representative Director and President of
Nippon Steel Corporation
April 2008:	Representative Director and Chairman of
Nippon Steel Corporation
October 2008:	Outside Member of the Board of Directors at DBJ(current position)
October 2012:	Director, Member of the Board, and Senior Advisor of
Nippon Steel & Sumitomo Metal Corporation
June 2013:	Senior Advisor of Nippon Steel & Sumitomo Metal Corporation
November 2013:	Senior Advisor, Honorary Chairman of Nippon Steel &Sumitomo Metal Corporation
Chairman of the Tokyo Chamber of Commerce andIndustry (current position)
Chairman of the Japan Chamber of Commerce andIndustry (current position)
June 2018:	Honorary Chairman of Nippon Steel & Sumitomo Metal
Corporation (now Nippon Steel Corporation) (current position)

July 1980:	Assistant professor at the University of British Columbia,
School of Economics
April 1982:	Assistant professor at Osaka University,
School of Economics
April 1989:	Assistant professor at Tokyo University,
School of Economics
March 1993:	Professor at Tokyo University, School of Economics
April 1998:	Member of the Bank of Japan’s Policy Board
April 2005:	Professor at Tokyo University, School of Economics
October 2008:	Outside Member of the Board of Directors at DBJ(current position)
April 2017:	Professor, Faculty of International Studies, Head of Officefor New Department Planning, Kyoritsu Women’s University
Director of Tokyo University’s Center for Advanced
Research in Finance (current position)
April 2020:	Professor, Faculty of Business Studies at
Kyoritsu Women’s University (current position)
Dean of Faculty of Business Studies at
Kyoritsu Women’s University (current position)

Data Section

Managing Executive Officer

Kazuo Ueda

Outside Member of the Board of Directors

Corporate Data

Outside Audit & Supervisory Board Member

Akio Mimura

The DBJ Group’s Corporate Governance

Audit & Supervisory Board Member

Strengthening Corporate Governance for the
Advancement of Sustainability Management

The DBJ Group’s Strategy

Audit & Supervisory Board Member

Leveraging Corporate Governance to Help
Solve Social Issues

The DBJ Group’s Value Creation Story

Audit & Supervisory Board Members

56

57

Compliance

Compliance Practices

DBJ believes compliance is at the heart of our corporate management and also, together with our business model and strategy, form
two sides of the same coin. In addition, compliance risk must be properly managed in our organization’s overall governance and control
structure in implementing our corporate philosophy based upon societal demand and expectation. We feel that compliance is achieved
when each and every employee and executive actively engages in their work with compliance foremost on their minds.

Business Conduct and Compliance

General Risk
Management
Committee

Executive Committee

Relevant departmentsin charge of compliance

Compliance officers at all departments
and Group subsidiaries
Staff
Regular reporting channel
Internal reporting (Compliance hotline)

Audit &
Supervisory
Board Member

Elimination of Anti-Social Forces
The DBJ Group has a basic policy of not having any relationships with anti-social forces, and resolutely coping with them incooperation with the police and other external institutions. Ourrules and training programs have thus been carefully crafted toprevent relationships with anti-social forces. DBJ thoroughly
assesses and manages this risk for each project and takes
appropriate measures when necessary while communicatingwith special external institutions.
Anti-Money Laundering (AML) and Combating the Financingof Terrorism (CFT) Measures
As it develops business worldwide, the DBJ Group understands
the importance of taking measures to prevent international
money laundering and the financing of terrorism. In addition toadhering to laws and regulations, DBJ takes extra measures
to prevent global financial crimes based on the risks involved.
DBJ has systems in place to ensure that proper procedures aretaken, periodically conducts risk management operations, andthoroughly trains its employees and executives. We also strive
to continuously improve this structure by evaluating a variety
of measures.

Management of Customer Information
In addition to following legal requirements and rules aboutsharing customer information among Group companies, preventing insider trading, and managing conflicts of interest, the
DBJ Group has created management structures and systems
for handling customer information, with particular attention paid
to minutiae in order to maintain the customer’s trust.

https://www.dbj.jp/en/privacy.html

DBJ has created and disclosed the Declaration on Personal
Information Protection for protecting personal information. Please
access DBJ’s website for more details about this declaration.

Corporate Data

The DBJ Group has determined basic policies and rules forcompliance, creates and distributes compliance manuals for
employees and executives to follow, and conducts training andexplanatory sessions to spread awareness of compliance. Eachfiscal year, all DBJ Group companies design compliance programs and evaluate and implement concrete compliance actionplans tailored to their particular business characteristics.
DBJ has established relevant departments that report on
the status of compliance with laws and regulations to the
Executive Committee and Board of Directors. Complianceofficers have been assigned to each department to ensurecompliance by employees and executives at each department.

Board of Directors

Management of Conflicts of Interest
When DBJ and its Group companies provide customers withsuch financial services as financing, investment, consulting andadvisory, and asset management, the DBJ Group has systems
for identifying and managing transactions in order to prevent
conflicts of interest and act fully in the interests of customers,
based on the transaction type and degree of risk. Whenobtaining consent from customers for a transaction, we provide accurate and appropriate information to our customers.

The DBJ Group’s Corporate GovernanceCompliance Framework

Internal Reporting System

Measures to Prevent Insider Trading
For providing various financial services including investments
and loans, the DBJ Group believes that complying with insider
trading regulations is essential to maintaining trust. For example,
we have created rules for employees and executives to follow
when trading in securities. Moreover, DBJ has establishedsystems for preventing insider trading, as demonstrated by ourformulation of strict procedures for confirming and executing
transactions in our investment operations. In research operations, we manage and handle corporate information carefully.

The DBJ Group has identified “the customer's perspective” as a
key element of its Action Guidelines. By taking “the customer’s
perspective,” we endeavor to improve customer protections
and convenience. Furthermore, we have created basic policies
for customer protections from the standpoint of ensuring thesoundness and fitness of our operations. Accordingly, we havetaken a management posture for ensuring customer protections. Employees and executives provide support to customers
by explaining and providing appropriate and adequate information to them.

The DBJ Group’s Strategy

The DBJ Group is a unique financial group which provides
various financial services such as financing, investment, consulting and advisory services, and asset management, among
others. While reinforcing collaboration within the Group, DBJ
creates proactive and advanced business and core strategies.
As a financial institution, DBJ’s first duty is to address the legitimate and logical expectations of its customers. Even in its
initiatives in Crisis Response Operations and Special
Investment Operations, DBJ carries out Customer-Oriented
Business Conduct, and these initiatives are executed while
work is performed in compliance with all laws and regulations.
To achieve our corporate philosophy, all employees and executives engage in work while pursuing both economic and social
value in accordance with our Action Guidelines, the basis for
decisions and behavior by Group employees and executives.

Compliance officers are in charge of internal management asinternal managers and function as contact points for reporting
compliance matters while centralizing such matters within theirdepartments. Through compliance officers, relevant departments in charge of compliance provide advice and guidance toeach department when necessary with the aim of ensuring
compliance. In order to quickly discover and resolve any compliance matters, DBJ has set up an internal reporting channel
to relevant departments and Audit & Supervisory Board members, which circumvents the normal reporting channels in organizational structures. DBJ has also created an externalreporting channel through a law office.

The DBJ Group believes compliance with laws and regulations
is essential for maintaining the customer's trust and ensuring
the soundness and fitness of its business operations. We recognize compliance as one of our most important management
priorities. Employees and executives are keenly aware of DBJ’s
public mission and social responsibilities. We fairly engage inour business in good faith and in compliance with not only all
laws, regulations and rules but also social norms, for supplying
risk capital or pioneering initiatives.

Customer Protection Management

The DBJ Group’s Value Creation Story

Basic Stance

Data Section

58

59

Risk Management

Overview of Risk Management System
Board of Directors

Committee on Investment and Loan Decisions
New Operation Screening Committee

Executive Committee

Sustainability Committee
Investment Management Committee

ALM & Risk Management Committee

General Risk Management Committee

Credit risk

Operational risk

Investment risk

System risk

Country risk

Compliance and legal risk

Market risk

Countermeasures for anti-social forces

Liquidity risk

Countermeasures for laundering money andfunding terrorist organizations

Settlement risk

Customer protection management

1–8

Borrowers with favorable business conditions who have been confirmed to have no particular
problematic financial circumstances.

Borrowers requiringcaution

9–11

Borrowers in this category are experiencing week or unstable business conditions, or are having
issues with their finances. These borrowers need to be managed with caution.

Substandard
borrowers

12

Either some or all of the debt of these borrowers requiring caution is under management.

Substandard claims

Borrowers in danger
13of bankruptcy

Borrowers in this category are having financial difficulties but are not bankrupt.
Management improvement plans and the like are progressing poorly, and these borrowers arehighly likely to fall into bankruptcy.

Doubtful claims

Effectively bankrupt
borrowers

14

Although not legally or formally in bankruptcy, these borrowers are experiencing 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, these borrowers are inbankruptcy or liquidation, under corporate reorganization, bankruptcy proceedings or civil
rehabilitation, or have had transactions suspended by a bill clearinghouse.

Portfolio Management 
DBJ performs a statistical analysis of data based on borrower
ratings and calculates the loan portfolio’s overall exposure tocredit risk. Credit risk exposure is classified as unexpected loss
(UL), the maximum loss that could be incurred at a certain rateof probability minus the expected loss (EL), the average loss
expected during a specific loan period.
Large borrowers are identified based on standardized loanbalances defined by the borrower’s rating and monitored as
required in accordance with management policies.

Investment Risk
Investment risk refers to the risk of sustaining losses resulting
from a decline in or loss of the economic value of assets due toworsening financial conditions for entities receiving funds andto changing market environments. DBJ’s investments include
the provision of mezzanine and equity financing, particularly tounlisted entities, such as corporations, funds, infrastructure,and real estate. As a source of profits, investments represent
one of DBJ’s most significant risk categories. DBJ makes
investment decisions and manages individual investments aswell as its bank-wide portfolio accordingly.

Normal claims

Claims in bankruptcy,
reorganization claims,
and similar claims

Investment Policy 
The Executive Committee determines our investment policy
following deliberations each fiscal year by the Investment
Management Committee, based on our corporate philosophyof striking a balance between social value and economic value.
This policy takes into consideration the balance in risks andreturns in the overall portfolio, while also reflecting the externalbusiness environment, including changes in market conditions
and industrial structure, and a performance analysis of theexisting portfolio.
Credit Management of Individual Projects Investment decisions for individual projects are made after exit
strategies are determined in case a downside scenario materializes, and targets are set for returns based on the type ofinvestment, which is also examined for managing credit risk.
In project management, DBJ periodically monitors every
project and has established the Chief Investment Management
Office to enhance monitoring of key projects and improve themanagement of investment risks in the overall portfolio.

Overview of Investment Management System
Executive Committee
Decision on
investment policy

Type

Major risks

Returns

Corporate mezzanine
financing

Credit risk, etc.

Dividends, etc.

Corporate investment(including listed shares)

Business risk
Market risk

Capital gains

Real estate andinfrastructure, etc.

Risk of change
in asset value
Operating risk at
operating entities

Investment Management Committee

Project information

Income gains

Monitoring
Key projects
Debate overdirection

Deliberation on
investment policy

Monitoring data,
etc.

Chief Investment Office

Loan and Investment
Management Division

Chief Investment
Management Office

Investment
recommendation

Information gathering andhub function

Portfolio management andindividual project monitoring

Data Section

Borrower Rating System 
DBJ’s borrower rating system measures creditworthiness by
combining an evaluation point rating and a borrower category
rating, with the results quantifying a potential client’s credit
circumstances.
The evaluation point rating selects indicator and evaluation
categories that are common across all industries, scoring thecreditworthiness of the potential borrower quantitatively andqualitatively. On the other hand, the borrower category rating
measures specific items related to the borrower, looking at theborrower’s realistic financial condition, cash flows, and debt
repayment history, generating a comprehensive assessment ofa borrower’s repayment capacity.

Normal borrowers

Corporate Data

Credit Administration of Individual Loans 
When making an investment or loan, DBJ examines the entity’s
project viability and the project’s profitability from a fair andimpartial standpoint. Based on the Banking Act and the Act on
Emergency Measures for the Revitalization of the Financial
Functions (Act No. 132 of 1998), DBJ carries out independent
asset assessments in an effort to properly grasp credit risk ina timely fashion. The results of self-assessments are subject
to an audit by an auditing corporation and are reported to
management.
Credit risk and amounts are monitored to confirm that they
are within the limits established for individual borrowers.

The sales and credit analysis departments hold separate
roles in the screening and administering of credit for individual
projects, and each department keeps the operations of theother in check.
The Committee on Investment and Loan Decisions meetsas needed to deliberate important issues concerning the management and operation of individual projects.
These mutual checking functions serve to ensure the appropriateness of the finance operation and management system.

Claims classified under the
Financial Revitalization Act

Definition

The DBJ Group’s Corporate Governance

At DBJ, we measure the amount of each type of risk using uniform and logical methodologies to the greatest extent possible, whileconsidering the uniqueness of each risk category. As the sum total of this risk, comprehensive risk is managed within the context ofour risk guidelines. These risk guidelines are determined by the Executive Committee and reflect risk conditions in the existing portfolio and near-term business plans, within the framework for capital allocation based on the amount of our own capital.

Credit risk refers to the risk of sustaining losses resulting from adecline in or loss of the value of assets due to deterioration in
the financial condition of the borrower. DBJ provides corporateloans and non-recourse loans, making credit risk acquisition asource of profits. As such, it represents a significant risk category, and DBJ conducts credit management of individual
projects as well as bank-wide portfolio management,
accordingly.

Borrower
ratingBorrower category

Advisory Panel on Investments and Loans

Comprehensive Risk Management

Credit Risk

Borrower Rating Classifications

The DBJ Group’s Strategy

DBJ has a risk management system in place designed tohandle a variety of specific risks, with the aim of maintaining
the soundness and creditability of management as it pursues
business based on management plans. Specifically, risks are
identified, evaluated, monitored, and controlled in each risk
category and in comprehensive risk areas, and are managed
within the scope of our management capabilities from a comprehensive understanding of each risk.
The Board of Directors sets out basic policies for comprehensive risk management, receives reports about risk management conditions, and ensures the effectiveness of risk
management functions. The Executive Committee creates
related rules based on these basic policies and deliberates onmatters of importance that directly relate to management policies. In line with these basic policies and rules, the ALM & Risk
Management Committee discusses and makes decisions on
matters essential to the risk management system for financial
risk, such as credit risk, while the General Risk Management
Committee deliberates on non-financial risk, such as administrative risk. Both committees regularly, and whenever necessary, conduct risk monitoring.

category, and the collateral or guarantee status. Such assessments help DBJ establish timely and appropriate amortization
schedules and reserve levels.

The DBJ Group’s Value Creation Story

Asset Self-Assessment System 
Asset self-assessments are used to define asset classifications
that will offset recoverability risk or the degree of risk of value
loss based on the borrower rating, the corresponding borrower

Risk Management System

60

61

The main assets in DBJ’s investment portfolio are unlisted
stock and mezzanine financing, and risk exposure is calculated
focusing on risk characteristics in each category of investment
and on differences in recovery methods.
More specifically, assets we aim to earn returns on fromprimarily business cash flows are evaluated with a focus on
credit risk. On the other hand, assets on which we expect tosee returns by selling to a third party or the market are evaluated in the context of market risk. In this way, risk exposure is
calculated by applying evaluations of credit risk and market risk.

The primary focuses in terms of market risk are interest raterisk and exchange risk. DBJ classifies market risk as passive
risk pertaining to investment and loan activities. DBJ does nothave any trading-related risk because it does not engage in
trading (specified transactions).

DBJ defines operational risk as the risk of loss arising frominternal processes, people or systems that are inappropriate or
nonfunctioning, or from external events. DBJ works to establish a risk management system to minimize risk and prevent
potential risk from materializing. The General Risk Management
Committee has been established to deliberate topics concerning operational risk management.
Within operational risk management, DBJ conducts administrative risk management and system risk management as
described below.

In addition to managing comprehensive risks based on risk exposure, DBJ performs stress tests on its own capital adequacy inorder to ensure uninterrupted financial functions, including Crisis
Response Operations, while maintaining the soundness of management under stressful conditions. These stress tests are also
used to evaluate the degree of impact on our own capital fromthe creation of and changes to medium-term management plans
and business plans, as well as in the examination of possible
responses to various management issues.

Based on the latest forecasts for economic conditions,these stress tests involve scenarios that also take into account
DBJ’s financial position. We also verify the adequacy of our
cash liquidity risk management, through reevaluations of ourcapital adequacy by factoring in various scenarios for how risk
exposure increases as a result of erosion in our own capitaland of changes in our portfolio of loans and investments.

Business Continuity Initiatives
DBJ has prepared a business continuity plan (BCP) to protect
the interests of its stakeholders, including its clients, its shareholder, and its executives and employees, as well as to fulfill its
social mission. The BCP aims to ensure the continuity andrapid recovery of core operations in the event of emergencies,
such as natural disasters (in particular, large-scale earthquakes),
influenza and other pandemics, system failures, and power
outages.

Measures to Ensure Business Continuity
We have prepared a variety of measures to ensure business
continuity.
Enhanced System Robustness 
We have ensured advanced security levels at the main centerand created a backup center to operate in the event that themain center ceases to operate.
Multilayered Communication Procedures 
We have introduced a safety confirmation system to quickly
determine the whereabouts and status of executives andemployees even at night and on holidays. In addition, we have
distributed satellite telephones to key locations and personnel
to ensure multilayered communication procedures.
Chain of Command and Delegation of Authority 
To assure that decision-making concerning the continuity ofcore operations is prompt and certain in the event it becomes

The BCP describes in an easy-to-understand format therole of the Disaster Response Committee, work priorities, andspecific actions and procedures to be taken in the event of adisaster. When drawing up policies for business continuity andrestoration, the Company envisions specific incidents, such as
an earthquake underneath the Tokyo metropolis or a novel
virus outbreak, and methodically decides how to respond to
anticipated damage in each disaster scenario.

necessary to execute the plans of the Disaster Response
Committee, we have put in place a chain of command and analternative hierarchy by which authority can be delegated.
Clarification of Initial Response and Procedures forContinuing or Recovering Core Operations
For individual business units, we have established in advancethe procedures for the initial response and the continuation or
recovery of core operations so that relevant divisions can
respond quickly and with certainty on core operations evenwhen in a state of confusion.

Initiatives to Maintain or Improve BCP Viability
DBJ conducts various types of instruction and training of executives and regular employees to maintain or improve the viability of its BCP. Furthermore, employing a plan-do-check-act
cycle, we revise the BCP to reflect training results and recent
information, and the Executive Committee reviews it regularly
and amends it as necessary.

Data Section

Administrative Risk Management 
Administrative risk refers to the risk of sustaining losses resulting from employees neglecting to perform their duties correctlyor from accidents, fraud, and the like. To reduce or prevent
administrative risk, DBJ prepares manuals, performs checks on
administrative procedures, provides education and training, anduses systems to reduce the burden of administrative duties.

Stress Tests

Corporate Data

Exchange Risk 
Exchange risk is the risk of loss due to volatility in exchange
rates, and this risk affects entities holding a net excess of assets
or liabilities denominated in foreign currencies. Exchange risk
derives from financing in foreign currencies and issuing foreign
currency bonds. However, DBJ uses exchange swaps andother instruments to limit this risk in terms of assets and liabilities denominated in foreign currencies at a net-base position.

Operational Risk

system risk centrally, based on its system risk management
regulations. By determining security standards from a variety ofviewpoints—from information system planning and development to operation and use—the department extends the risk
management system bank-wide and addresses appropriate
system risk management operations.

The DBJ Group’s Corporate GovernanceInterest Rate Risk Interest rate fluctuations can create mismatches on rates ofinterest on assets and liabilities or on interest periods, creating
the risk of reduced profits or the risk of losses. Interest rate risk
can reduce the economic value of DBJ’s assets or interest
income.
Based on monitoring through multifaceted indices, such as
value at risk (VaR) and interest rate sensitivity analyses (duration
and basis point value), as well as ALM policies established by
the ALM & Risk Management Committee, DBJ conducts comprehensive management of current assets and liabilities tooptimize net interest expenses and economic value by adequately controlling interest rate risk and financial liquidity risk.
DBJ engages in interest rate swaps to control interest raterisk. Counterparty risk in these swap transactions is managed
within the limits of the creditworthiness of the counterparty. DBJ
also seeks to reduce risk through margin transfers by means ofa centralized exchange and mutual credit support annex.

Liquidity risk is the risk of a mismatch occurring in the periods
when funds are used and raised or of an unexpected outflow
of funds, causing differences in the flow of funds (cash liquidityrisk). Such situations make securing funds difficult and create
situations in which interest rates on borrowed funds are substantially higher than usual rates. At other times, because of
market complexities, entities in these circumstances may
become unable to participate in market transactions, compellingthem to conduct transactions under substantially less favorable
terms than otherwise would be the case. The risk of losses forthese reasons is known as market liquidity risk.
As its main methods of acquiring funds, rather than carryingout short-term funding by issuing commercial paper, DBJ relieson the stable procurement of long-term funds from theJapanese government’s Fiscal Investment and Loan Programand government-guaranteed bonds while issuing bonds andtaking out long-term loans. To prepare for unforeseen cash flow
crunches caused by shocks to financial markets, DBJ manages funds to ensure sufficient cash on hand to cover planned
capital outflows under envisioned stress conditions. DBJ has
formulated countermeasures based on contingency plans andhas created different categories for fund operation modes
based on the degree of constriction in cash flows.

System Risk Management 
System risk refers to the risk of loss due to a computer system
breakdown or malfunction, system defects, or improper computer use. DBJ has implemented the following internal processes to optimize system risk management and properly
manage risk with regard to system risk. The System Risk
Management Division is responsible for managing DBJ’s

The DBJ Group’s Strategy

Market Risk

Liquidity Risk

The DBJ Group’s Value Creation Story

Portfolio Management 

62

63

Response to the TCFD Recommendations

Environmentally Rated Loan Program (page 45) and DBJ
Green Building Certification (page 25).
DBJ will continue to enact climate change countermeasuresand, as a financial institution, we will support our customers’
efforts focusing on the transition to a low-carbon or decarbonized society.

Promotion of Climate-Related Information Disclosure Based on the TCFD’s Recommendations
analyzing climate risks and opportunities
in line with the TCFD’s recommendations,
DBJ continuously strives to identify its
own risks and opportunities associatedwith climate change and examine ways
to augment the disclosure of information
based on the TCFD’s framework.

Guidance for Utilizing
Climate-related Information to
Promote Green Investment(Green Investment Guidance)

October 8, 2019

TCFD Consortium* Announced at the TCFD Summit held on October 8,
2019, as a guide on the perspectives needed byinvestors and other stakeholders for understanding
the information disclosed based on the recommendations of the TCFD

Green Investment
Guidance

Risk Management

DBJ gauges the progress of its environmental initiatives in terms of the Greenhouse Gas Protocol’s Scope 1(direct) and Scope 2 (indirect) categories, which are concerned with the amount of greenhouse gas (GHG)
emissions associated with corporate activities. Specific targets are set for DBJ and for each department inregard to the environmental aspects of investment and loan operations and environmental protection initiatives such as educational programs that encourage dialogue on relevant issues. In these ways, DBJ works
systematically and consistently to help preserve the environment.

Analysis and Evaluation of Growth Opportunities
by Scenario in Each Sector
For each envisioned scenario, DBJ analyzes the degree of
impact from the five aforementioned types of technologies inboth qualitative and quantitative terms, and conducts a comprehensive evaluation of growth opportunities and businessresilience in each analyzed sector, with consideration madefor Japan’s strengths.
Starting with this analysis, DBJ will continue to refine andadvance analytical methods in an attempt to better its understanding of climate change and related risks in the external
environment. While engaging in deeper conversations with­customers and other stakeholders, DBJ will provide financial
assistance with the aim of moving closer to a low-carbon or
decarbonized society, in addition to taking appropriate actions toaddress climate change in terms of opportunities that may arise.

Use of Shared Socioeconomic Pathways in
Scenarios
Even assuming a uniform rise in temperatures occurs as a resultof global warming, we believe there will be varied degrees of
expectations for technological progress and social acceptanceof solutions for the issue of climate change, depending on
population and economic growth forecasts in each country,

Summary of Scenario Analysis
TCFD examples of climate-related risks and opportunities
Transitional risks• Policy and Legal• Market

Climate-related risks• Technology• Reputation• Resource Efficiency• Energy Source• Products / Services• Markets• Resilience

Reflection in strategic planning and risk management
Financial impact

Physical risks• AcuteOpportunities

Climate-related opportunities

Disclosure in financial reports, etc.

• Chronic

With a focus on transitional opportunities, analyze and evaluate growth opportunities in each scenario for covered sectors
Covered Sectors

SSP Scenarios

Relevant Technologies

Identify factors related to climatechange in covered sectors andevaluate their level of importance

Deploy SSPs in the scenarios with consideration paid to recent
government policy and the socioeconomic environment

Based on an evaluation of relevant technologies, qualitatively
and quantitatively analyze growth opportunities in each sector

Selection of Four Scenarios

Five experimental types of technologies in focus• SSP1 Global decarbonized society (1.5°C increase)• SSP3 Regionally segmented society with economic disparities (4.0°C increase)• SSP5-1 Low-carbon society with fossil fuels (2.0°C increase)• SSP5-2 Traditional, developed society based on fossil fuels (4.0°C increase)
Strong
Socio-economic
challenges for mitigation
Weak

SSP5
Fossil-fueled Development

Carbon capture and storage
Electric vehicles

Renewable energy

Biomass

Hydrogen

SSP3
Regional Rivalry

SSP2
Middle of the Road
SSP1
Sustainability
Socio-economic challenges for adaptation

SSP4
Inequality
StrongSource: O’Neill et al. (2014)

Data Section

Metrics and Targets

DBJ identifies, evaluates, monitors, and controls various risks associated with climate change. In April 2019,
in recognition of the need to consciously evaluate and monitor environmental and social risks related tolarge-scale projects, DBJ created the Environmental & Social Assessment Office within the Structured
Finance Department. Based on the Equator Principles, DBJ identifies, evaluates, and manages environmental and social risks.

* Shared Socioeconomic Pathways (SSPs): SSPs are socioeconomic scenarios
for climate change that factor in changes in the external environment, such as
population demographics and GDP, created by a consortium of five international
research institutions, including the National Institute for Environmental Studies(based in Japan). The diverse avenues for possible development in society andthe economy are put into five categories that reflect the level of difficulty in
mitigating and adapting to climate change.

Corporate Data

Strategy

When crafting its long-term vision, Vision 2030 (see page 9), DBJ identified climate change and natural
resources and energy as externalities that could have a major impact on the stakeholders of the DBJ Group.
DBJ has realized that responding to the various climate-related risks and growth opportunities is a key
aspect of its business strategies.
In fiscal 2019, with assistance from the support programs of the Ministry of the Environment, DBJ begana scenario analysis to evaluate new business opportunities and business resilience to uncertainties related toclimate change. A particular focus was placed on evaluating the transitional opportunities (Please refer to thenext page for details.). DBJ will continue to refine and upgrade its analysis and expand information disclosure
within a comprehensive framework that includes consideration of physical risks and other factors.

Financial institutions must draw up various socioeconomic forecasts while taking into account future uncertainties associatedwith climate change, and then consider changes to their portfolios and other actions accordingly. As an initial approach toscenario analysis, DBJ analyzed and evaluated the possible
impact on its operations through 2050 with a focus on transitional opportunities brought about by government policies andregulations, as well as technological innovations toward a lowcarbon or decarbonized society. More specifically, DBJ isemphasizing five types of technologies (carbon capture andstorage, electric vehicles, biomass, hydrogen, and renewableenergy) on an experimental basis from among the technologies
strongly related to climate change. For each scenario, DBJ
analyzes and evaluates growth opportunities and businessresilience in sectors covered by the analysis, with due consideration paid to technological development and proliferation.

The DBJ Group’s Corporate Governance

Governance

The DBJ Group engages in business activities while considering its impact on the environment and society.
In this light, DBJ created its Policy on Sustainability in May 2017 with the objective of contributing to therealization of a sustainable society while balancing economic value and social value. On the Sustainability
Committee (see page 50), directors and executives discuss and monitor the risks, opportunities, and actions
related to climate change. The findings of the Sustainability Committee are reflected in the Group’s businessstrategies, risk management, and decision-making process for investments and loans.

among other factors. In light of these uncertainties aboutsocioeconomic trends around the world, DBJ has adopted theShared Socioeconomic Pathway (SSP)* approach to devise its
scenarios to use as future assumptions and conduct an analysis based on projected socioeconomic trends in scenarios
where global temperatures rise 1.5°C, 2.0°C, and 4.0°C.

Analysis Conducted with Focus on Transitional
Opportunities from Development and Proliferationof Climate Change-Mitigation Technologies

The DBJ Group’s Strategy

In June 2018, stemming from an awareness of the importanceof disclosing financial information related to climate change,
DBJ declared its agreement with the recommendations of the
Task Force on Climate-related Financial Disclosures (TCFD),
established by the Financial Stability Board (FSB). In May 2019,
DBJ became a member of the TCFD Consortium of Japan, a
new platform for financial institutions and business corporations to discuss and promote the TCFD’s recommendations.
DBJ played a leading role in discussions about creating
Guidance for Utilizing Climate-related Information to Promote
Green Investment (Green Investment Guidance).* While receiving support from the Ministry of the Environment’s program for

Initiatives in Fiscal 2019: Start of Scenario Analysis

The DBJ Group’s Value Creation Story

Since the adoption of the Paris Agreement in 2015, addressing
climate change has become a major issue for Japan and therest of the world. Climate change is one of the management
issues that takes priority at DBJ as part of its sustainability
management efforts. While engaging in dialogue with its customers and other stakeholders, DBJ has endeavored to reducegreenhouse gas emissions in its business activities through its

64

65

Financial and Non-Financial Highlights

Non-Financial Highlights

Balance of Investments and Loans(Non-Consolidated)

Capital Adequacy Ratio* (Consolidated)

Balance of Investments and Loans
in Renewable Energy

Collaboration and Cooperation with Regional Financial
Institutions (No. of Collaborative Funds with Regional
Financial Institutions)(¥ billion)(%)(¥ billion)(No. of funds)

20

1,800

17.54

1,200

809.0

854.6

952.1

1,129.3

13,724.3

13,772.3

13,467.7

13,584.6

50

250

17.22

16.81

16.65

1,454.4

241.9

17.26

40

200
15

12,981.6

42

186.9

Target of Fourth Medium-Term Management Plan: about 14%

36

150

30

100

110.2

30
25

124.2
20

600
5
50

0

2015

2016

Loan balance

2017

2018

2019 (Fiscal year)

0

2015

2016

2017

2018

2019 (Fiscal year)

0

10

2016

2017

2018

2019

(Fiscal year)

0

2016

2017

2018

2019

(Fiscal year)

The DBJ Group’s Strategy

10

The DBJ Group’s Value Creation Story

Financial Highlights* Common equity Tier 1 risk-weighted capital ratio

Investment balance

The capital adequacy ratio (consolidated) was 17.26% as of the end of

The balance of investments and loans in renewable energy stood at

As of the end of fiscal 2019, the DBJ Group had created 42 collabora-

mately ¥14.4 trillion as of the end of fiscal 2019. The loan balancefiscal 2019. This ratio may decrease as we supply risk capital for pur-¥241.9 billion as of the end of fiscal 2019. With renewable energy

tive funds with regional financial institutions. The DBJ Group andtotaled or around Totaled or around ¥13.0 trillion as of the end of fiscal

poses including strengthening our investment operations, but we willdrawing more attention as the world moves away from carbon-based

regional financial institutions, each with its local customer base, supply

2019, reflecting an increase in the balance of mezzanine financing andnonetheless do our best to maintain a sound capital adequacy ratio.

energy sources, the DBJ Group will provide financial support to ven-risk capital to local companies. We draw on the respective strengths ofcertification program loans, and a decrease in general loans outstand-tures in solar power, onshore and offshore wind power, biomass, andeach financial institution with the aim of spurring initiatives to addressing, including Crisis Response Operations, as of March 31, 2020.

hydropower based on the advantages of each type of energy source,

regional issues.

As a result of focusing on investment operations, the investment

with a view toward achieving the Japanese government’s goal of abalance has increased about ¥650.0 billion over the past five fiscal

22%–24% ratio of renewable energy by 2030.

years, reaching roughly ¥1.5 trillion as of the end of fiscal 2019.

Gross Ordinary Income (Consolidated)

Human Resource Development(No. of In-House Training Sessions)No. of Engagements with Customers for
DBJ Certification Programs(¥ billion)(No. of sessions)(No. of engagements)

60

28.3

150

57.3
100

101.2

150

54

20.3
86.6

200

Corporate Data

250

85.4

23.6
65.8

84.8

25.2
81.5

80.9

48

23.6
74.1

43

40

100

113

116

2016

2017

121

119

2018

2019

The DBJ Group’s Corporate GovernanceThe balance of investments and loans (non-consolidated) was approxi-

39

76.6

50

20

50

0

Loans

2010
Investment

2011

2012

2013

2014

2015

2016

2017

2018

2019

(Fiscal year)

0

2016

2017

2018

2019

(Fiscal year)

0(Fiscal year)

Fee and commission income

In fiscal 2019, DBJ focused on high-value-added loans in loan operations, but lending yields declined owing to the low interest rate environment, and the

The DBJ Group provides abundant opportunities for training throughAt the request of our customers, the DBJ Group helps customers

average loan balance contracted, leading to a decrease in loan profits. In investment operations, profits declined, but DBJ worked to build a portfolio thatcombinations of rank-based and business-related training programs. In

participating in DBJ certification programs (see page 45) identify thegenerates stable earnings on investments in infrastructure and other areas, and recorded capital gains of ¥74.1 billion upon exiting a number of invest-

fiscal 2019, DBJ updated its training programs to foster globally mindedissues they need to address and develop more sophisticated manage-ments. Accordingly, gross ordinary income was ¥174.4 billion.

personnel, and held seminars about balancing work with child-rearing

ment by providing objective, face-to-face feedback regarding theirand elderly care, while also offering training in support of the diverse

assessment results. Through dialogue on more than 100 occasions in aworkstyle of its employees. We will continue to train our humantypical year, we help these customers make further strides in the prac-

resources while utilizing online courses and other resources.

tice of sustainability management.

Data Section

–50

66

67

Consolidated Financial Summary(¥ billion)

2008–20102011–20132014–20162017–2019

First Medium-Term Management Plan:
CHALLENGE 2010

Second Medium-Term Management Plan:
Endeavor 2013

Third Medium-Term Management Plan:
Supporting Japan’s Sustained Growth as a Global Innovator

Fourth Medium-Term Management Plan:
Initiate Change, Create the Future

Fiscal 2012

Fiscal 2013

Fiscal 2014

Fiscal 2015

Fiscal 2016

Fiscal 2017

Fiscal 2018

Fiscal 2019

(April 1, 2012 toMarch 31, 2013)(April 1, 2013 toMarch 31, 2014)(April 1, 2014 toMarch 31, 2015)(April 1, 2015 toMarch 31, 2016)(April 1, 2016 to
March 31, 2017)(April 1, 2017 toMarch 31, 2018)(April 1, 2018 toMarch 31, 2019)(April 1, 2019 toMarch 31, 2020)

Total income

347.9

345.1

318.7

340.0

361.6

339.0

358.6

285.4

291.7

301.2

289.1

Income before income taxes

51.9

95.0

99.2

115.6

165.7

153.0

185.1

122.5

127.1

128.1

78.9

(26.7)

(2.9)

(1.3)

30.0

30.3

32.1

70.8

41.1

39.7

40.5

7.2

Extraordinary profit / loss

(0.8)

9.3

10.9

0.6

0.2

0.6

1.5

(0.0)

2.2

(1.3)

4.0

Income before income taxes and minority interests

51.1

104.3

110.2

116.2

166.0

153.6

186.7

122.4

129.4

126.7

83.0

Total income taxes(10.8)(1.3)(31.9)(44.5)(40.8)(58.9)(57.6)(34.6)(35.0)(33.5)(31.5)Net income attributable to owners of the parent

39.8

101.5

77.3

71.3

124.3

92.7

128.9

87.6

91.9

91.9

50.4

Total dividend amount

10.0

50.0

37.3

35.2

30.8

22.5

29.2

19.7

22.1

21.0

9.9

Total assets

15,595.7

14,845.2

15,579.8

16,248.7

16,310.7

16,360.6

15,907.1

16,570.4

16,952.2

17,079.5

17,693.6

Loans

13,514.6

13,031.4

13,645.4

13,918.2

13,838.4

13,261.3

12,952.5

13,039.5

12,725.2

12,923.9

12,415.9

Securities

1,289.4

1,165.5

1,176.6

1,357.0

1,637.5

1,887.9

1,803.0

1,750.3

1,866.4

1,961.0

2,374.2

Total liabilities

13,268.2

12,435.2

13,118.8

13,710.1

13,682.9

13,613.3

13,022.9

13,584.2

13,842.1

13,783.2

14,259.6

Borrowed money

9,082.4

8,576.4

9,170.5

9,448.3

9,182.6

8,598.2

7,892.1

8,472.3

8,574.1

7,987.8

8,070.9

Debentures and corporate bonds

3,746.3

3,629.3

3,671.8

3,924.5

4,237.4

4,569.3

4,727.9

4,711.8

4,932.9

5,296.9

5,696.8

Total equity

2,327.5

2,409.9

2,461.0

2,538.5

2,627.7

2,747.2

2,884.2

2,986.2

3,110.1

3,296.3

3,434.0

Common stock

1,181.1

1,181.1

1,187.7

1,206.9

1,206.9

1,206.9

1,000.4

1,000.4

1,000.4

1,000.4

1,000.4

Total capital ratio (Basel II, BIS standard)

19.13%

20.50%

18.56%

—

—

—

—

—

—

—

—

Total capital ratio (Basel III, BIS standard)

—

—

—

15.52%

15.83%

16.80%

17.87%

17.47%

16.94%

16.74%

17.37%

Ratio of risk–monitored loans (Banking Act basis)

5.07%

1.28%

1.47%

1.23%

0.99%

0.77%

0.64%

0.54%

0.47%

0.40%

0.46%

Return on assets (ROA)

0.27%

0.67%

0.51%

0.45%

0.76%

0.57%

0.80%

0.54%

0.55%

0.54%

0.29%

Return on equity (ROE)

1.82%

4.31%

3.18%

2.86%

4.83%

3.47%

4.60%

2.99%

3.03%

2.88%

1.51%

Number of employees

1,181

1,203

1,270

1,315

1,391

1,407

1,435

1,546

1,631

1,650

1,703

3,793.1

2,116.6

2,927.0

2,652.4

2,943.3

2,544.2

3,027.7

4,012.6

3,153.4

3,790.8

3,951.8

3,682.0

2,034.4

2,849.0

2,524.5

2,805.1

2,262.7

2,861.3

3,805.8

2,973.6

3,490.4

3,401.5

Investments

111.1

82.2

78.0

127.8

138.2

281.4

166.3

206.7

179.7

300.4

550.3

Funds raised (flow)

3,793.1

2,116.6

2,927.0

2,652.4

2,943.3

2,544.2

3,027.7

4,012.6

3,153.4

3,790.8

3,951.8840.9

1,212.8

691.7

502.2

1,307.5

1,129.9

1,639.7

1,526.1

1,005.0

2,051.4

1,546.1

Consolidated

Of which, equity and fund–related gains / losses

Corporate Data

Fiscal 2011
(April 1, 2011 toMarch 31, 2012)

The DBJ Group’s Corporate GovernanceFiscal 2010
(April 1, 2010 toMarch 31, 2011)

The DBJ Group’s Strategy

Fiscal 2009
(April 1, 2009 to
March 31, 2010)

The DBJ Group’s Value Creation Story

Reference (Long-Term Profits / Losses, Financial Condition)

Investment and fund–raising flow (non–consolidated)

Loans

Of which, recovered, etc.

Data Section

Loans and investments (flow)

68

69

Timeline

Shareholder Information

Year

Month

Event

1951

April

Japan Development Bank (JDB) establishedJDB branches opened in Osaka (now the Kansai Branch), Sapporo (now the Hokkaido Branch),
Nagoya (now the Tokai Branch), and Fukuoka (now the Kyushu Branch)

1952
1956

June

Hokkaido Development Finance Public Corporation established

1957

April

Hokkaido Development Finance Public Corporation, reorganized as the Hokkaido-Tohoku Development
Finance Public Corporation (HTDFP) branches, opened in Sapporo (now the Hokkaido Branch) andSendai (now the Tohoku Branch)
JDB branch opened in Takamatsu (now the Shikoku Branch)

1960

JDB branches opened in Hiroshima (now the Chugoku Branch) and Kanazawa (now the Hokuriku Branch)

1961
1962

April

JDB representative office opened in New York

1964

July

1972

January

1985

June

1987

September

JDB representative office opened in London
HTDFP representative office opened in Niigata (renamed Niigata Branch in July 1989)
The Japan Development Bank Law revised1)	Investment function (pertaining to business in such areas as research and development,
urban development, and energy use stipulated by government ordinance) added
2) R&D fund investment function added
Low interest rate loan system funded partially by sale of NTT shares created by JDB and HTDFP
JDB representative offices opened in Oita, Matsuyama, Okayama, and Toyama
HTDFP representative offices opened in Hakodate and Aomori

1989

JDB loans to assist disaster recovery commenced

February

1997

SeptemberBill entitled “Pertaining to Consolidation and Rationalization of Special-Purpose Companies, etc.,” approvedby the Cabinet (decision dissolving JDB and HTDFP and consolidating them as a new bank approved)

1998

December

JDB and HTDFP loans in response to changes in the financial environment commenced(March 31, 2001, sunset clause introduced)

1999

June
October

The Development Bank of Japan Law (Law No. 73 of 1999) approved
All rights and responsibilities of JDB and HTDFP and all financing operations of Japan Regional Development Corporation andJapan Environment Corporation transferred to the Development Bank of Japan
DBJ representative offices opened in Kushiro and Singapore
The Development Bank of Japan Law revised (additional spot inspections by the Financial Services Agency introduced)

2002

May

2005

December

2006

May

The Act on Promotion of Administrative Reform for Realization of Small and Efficient Government(Act No. 47 of 2006) approved

June

Policy-Based Financing Reform Plan decided upon by DBJ head office for the Implementation of Policy Finance Reform

2007

June

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

Important Policy of Administrative Reform approved by the Cabinet

Year

Month

2008

October

2009

June

Development Bank of Japan Inc. (DBJ) established (Capital: ¥1 trillion)

Act for Partial Amendment of the Development Bank of Japan Inc. Act (Act No. 67 of 2009) approved
Capital increased to ¥1,103,232 million

November

DBJ Europe Limited launched

March

2011

May

1-1, Kasumigaseki 3-chome, Chiyoda-ku, Tokyo

43,632100.00Total—

43,632100.00

Summary of Changes to the DBJ Act after Conversion toa Joint-Stock Company
On October 1, 2008, DBJ transitioned from a special public corporation to a joint-stock company. In preparation for full-scale privatization following the disposal of all Japanese government-owned
shares, DBJ has continued working to enhance its corporate value
through integrated investment and loan services. These activities
include providing long-term loans; equity, mezzanine financing,and other types of risk capital; and M&A advisory services.
On the other hand, shortly after DBJ’s conversion to a jointstock company, the global financial crisis and the Great East Japan
Earthquake occurred. The Japanese government called on DBJ tosteadily mount large-scale Crisis Response Operations. Due tothese crises, the Development Bank of Japan Inc. Act (Act No. 85
of 2007) was amended twice, with DBJ accepting an additional
increase in Japanese government capital. Also, by the end of fiscal
2014, the Japanese government was to review DBJ’s organization, including its shareholdings, as stipulated by the revision.
Based on the deliberations by the Japanese government’s
Study Panel Concerning the Promotion of Expanding GrowthFunding, the Act for Partial Amendment of the Development Bankof Japan Inc. Act (Act No. 23 of 2015), which was enacted on
May 20, 2015, maintains the direction toward full-scale privatization. At the same time, in order to fully ensure the provision offunding in response to large-scale disasters and economic crises,
the amended act makes DBJ’s Crisis Response Operations obligatory for an indefinite period. From the perspective of promoting
the provision of growth capital to revitalize regional economies andincrease the competitiveness of enterprises, the amended act calls

for DBJ to accept a certain amount of capital from the Japanese
government (industrial investment). This investment is to be used
for a new scheme, Special Investment Operations, to strengthen
and develop the Fund for Japanese Industrial Competitiveness. In
addition, with regard to the application of DBJ’s investment andloan functions toward crisis response and the provision of growth
capital, measures were introduced obliging the Japanese government to hold at least a certain percentage of DBJ’s shares.
As part of this structural revision, deliberations by theJapanese government’s Study Panel Concerning the Promotionof Expanding Growth Funding covered such topics as DBJ’s
proper implementation of Crisis Response Operations, theimportance of initiatives for providing growth capital (equity andmezzanine financing) to address shortages in Japanese financial
and capital markets, and an evaluation of DBJ’s initiatives following its conversion to a joint-stock company.
In light of discussions in 2019 by the Japanese government’s
Study Panel Concerning the Future Vision of Special Investment
Operations at Development Bank of Japan Inc. under the Act for
Partial Amendment of the Development Bank of Japan Inc. Act(Act No. 29 of 2020), which was enacted on May 22, 2020,
Special Investment Operations shall take the following required
measures:(1) extend the investment decision term and government financing term from March 31, 2021, until March 31, 2026 and(2) extend the deadline for ending operations from March 31,
2026, until March 31, 2031.
Note: For the full text of the DBJ Act, please refer to the Data section.

Highlights of 2015 Revisions to the DBJ Act
1. Measures maintaining direction toward full-scale privatization
Beforerevision

December

Capital increased to ¥1,187,364 million

March

Capital increased to ¥1,187,788 million

June

Capital increased to ¥1,198,316 million

December

Capital increased to ¥1,206,953 million

2014

June

DBJ Investment Consulting (Beijing) Co., Ltd. (formerly Japan Asia Investment Consulting (Beijing) Co., Ltd.) converted to wholly
owned subsidiary

2015

May

Act for Partial Amendment of the Development Bank of Japan Inc. Act (Act No. 23 of 2015) approved
Special Investment Operations started
Advisory Board positioned as an advisory body to the Board of Directors
Special Investment Operations Monitoring Board established

AugustCapital reduced by ¥206,529 million, and crisis response reserve increased by the same amount2018

October

DBJ Americas Inc. launched

2020

May

Act for Partial Amendment of the Development Bank of Japan Inc. Act (Act No. 29 of 2020) approved•	No changes in the main provisions, including Article 1, which stipulates DBJ’s objectives

After•	Disposal of shares as soon as practicable (considering its effect on achieving DBJ’s objecrevision
tives as well as on the market situation)

2. Measures ensuring appropriate implementation of Crisis Response Operations

Capital increased to ¥1,181,194 million
The Development Bank of Japan Inc. Act partially amended based on establishment of the Act for Extraordinary Expenditure andAssistance to Cope with the Great East Japan Earthquake (Act No. 40 of 2011)

Full-scale privatization and disposal of all Japanese
government-held shares, targeting around five toseven years from April 1, 2015

Beforerevision•	Conducting Crisis Response Operations as adesignated financial institution•	Enabling Japanese government recapitalization incrisis response by March 31, 2015

•	Assuming responsibility for Crisis Response Operations for an indefinite period (at the sametime reflecting this obligation in the Articles of Incorporation)

After•	Extending for an indefinite period the scope of the Japanese government’s recapitalization
revisionsecuring DBJ’s financial structure, with the Japanese government having such obligations
as holding more than one-third of DBJ’s shares

3. Measures establishing new Special Investment Operations scheme to temporarily provide growth capital in a concentrated manner

Beforerevision

Provision of risk capital through the Fund for JapaneseIndustrial Competitiveness•	Reinforcement of the Fund for Japanese Industrial Competitiveness (a portion of the financial
resources for which are provided through measures for industrial investment); implementationof Special Investment Operations as a measure for a limited period of time, through fiscal
After2025 (at the same time reflecting this obligation in the Articles of Incorporation, complementrevision
ing and encouraging private-sector enterprises, etc.)•	Obligation that the Japanese government shall hold one-half or more of shares until theconclusion of Special Investment Operations

4. Provisions referencing consideration for private financial institutions through ongoing Japanese government involvement
As per the Third Medium-Term Management Plan,

Before sustainment of close communications, maintaining arevision focus on operations in collaboration with otherfinancial institutions•	The Corporation shall, for an indefinite period, pay special attention in conducting its
business so that it will not affect its appropriate competitive relationships with other busi-

ness entities
After
revision •	The Japanese government shall hear the opinions of representatives of ordinary financial

institutions and other relevant persons concerning Japanese government revisions on an
as-needed basis regarding Crisis Response Operations and Special Investment Operations

Data Section

2012

DBJ Singapore Limited launched

September
2010

Finance Minister

Event

Crisis Response Operations begun by DBJ as a designated financial institution
December

Percentage of total equity (%)

Corporate Data

Development Bank of Japan Inc.

Number of shares held (thousands of shares)

The DBJ Group’s Corporate Governance

1995

Address

The DBJ Group’s Strategy

JDB representative offices opened in Kagoshima (renamed Minami-Kyushu Branch in October 1999) and Matsue

1963

As of March 31, 2020
Name

The DBJ Group’s Value Creation Story

Japan Development Bank, the Hokkaido-Tohoku Development Finance Public Corporation,and the Development Bank of Japan

70

71

Organizational Structure (as of August 1, 2020)

Business Planning & Coordination Department

Innovation Promotion OfficeFinancial Institutions Department

International Strategy & Coordination
Department

The DBJ Group’s Value Creation Story

General Meeting of
Shareholders

Urban Development Department
Audit & Supervisory
Board Members /Audit & Supervisory
Board

Chief
Industry
Strategy
OfficeAudit & Supervisory
Board Office

Corporate Finance Department, Division 1
Corporate Finance Department, Division 2

Aerospace Office

Corporate Finance Department, Division 3

Global Logistics Office

Corporate Finance Department, Division 4
Corporate Finance Department, Division 5
Corporate Finance Department, Division 6

Healthcare Industry Office

Hokkaido Branch

Board of Directors

The DBJ Group’s Strategy

Tohoku Branch

Tohoku Recovery & Growth Support OfficeNiigata Branch

Executive Committee

Hokuriku Branch
Tokai Branch
Kansai Branch

Advisory Board

Chugoku Branch
Shikoku BranchSpecial Investment
Operations
Monitoring Board

Kyushu Branch

Kumamoto Recovery Office

Minami-Kyushu Branch

Data Section

Strategic Finance Department
Chief
Investment
OfficeGrowth & Cross Border Investment Department

Regional Investment Department
Structured Finance Department

Environmental & Social Assessment OfficeSyndication & Credit Trading Department

P 72

The Development Bank of Japan Inc. Act

P 91

Financial Condition

The DBJ Group’s Corporate GovernanceReal Estate Finance Department

Business Development Department
Sustainability Planning & Support Department
Economic & Industrial Research Department
Regional Planning Department
Research Institute of Capital Formation

Representative Offices:
Hakodate, Kushiro, Aomori,Toyama, Matsue, Okayama,
Matsuyama, Oita

Chief
Investment
Management
OfficeEconomic Research Office
Industrial Research & Customer Solutions
Planning Office
Corporate Management & Accounting
Research Office

Corporate Data

Chief
Research
OfficeSecretariat Office
Human Resources Management Department

Public Relations Office

Overseas Subsidiaries:
DBJ Singapore Limited
DBJ Europe Limited
DBJ Investment Consulting (Beijing) Co., Ltd.
DBJ Americas Inc.

Corporate Planning & Coordination Department

Sustainability Management Office

Risk Management Department

Digital Strategy Office

The Chief Investment Management Officeconsists of the Corporate Planning &Coordination Department, Business Planning& Coordination Department, Credit Analysis
Department, Risk Management Department
and Accounting Department.

Accounting Department

Operations Audit
Committee

Internal Audit Department

Information Resources Department

Credit Analysis Department
Legal Affairs & Compliance Department
Treasury Department

Settlement & Accounting Operations Office

Data Section

General Affairs Department

72

73

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

Chapter I
General Provisions (Article 1 and Article 2)
Chapter II Business Operations (Article 3 through Article 25)
Chapter III	Miscellaneous Provisions(Article 26 through Article 29)
Chapter IV	Penal Provisions (Article 30 through Article 35)
Supplementary Provisions

Chapter I General Provisions
those who need long-term business funds, as well as to thesophistication of financial functions.
Article 2 Restriction on Use of Trade Name
1. Any entity other than the Corporation shall not use the charactersof Development Bank of Japan Inc. (Kabushiki Kaisha Nippon
Seisaku Toshi Ginko), in its trade name.
2. The provision of Article 6, Paragraph 2 of the Banking Act (Act No.
59 of 1981) shall not apply to the Corporation.

Chapter II Business Operations(referred to as the“Cooperative Financial
Institutions”),
Development Bank ofJapan Inc.

Article 2, Paragraph 11;
Article 27-28, Paragraph 3;
Article 28, Paragraph 4;
Article 33, Paragraph 1;
Article 33-5, Paragraph 2;
Article 33-7; Article 58;
Article 60-14, Paragraph 1;
Article 66, and Article 202,
Paragraph 2, Items (1) and (2)Cooperative
Financial
Institutions

Cooperative Financial
Institutions,
Development Bank ofJapan Inc.

Article 33-8, Paragraph 1

are the financial
institutions

are the financial institutions, or if Development
Bank of Japan Inc.
conducts the businessactivity referred to in
Article 3, Paragraph 1,
Item (16) of The
Development Bank ofJapan Inc. Act (Act No.
85 of 2007)

2. Any directors, accounting counsel (kaikei sanyo) (including, if an
accounting counsel is a firm, its members who should perform theduties as such; hereinafter in this Paragraph the same), statutory
auditors, executive officers (shikkoyaku) or employees shall notify
the Minister of Finance without delay as set forth in the Minister ofFinance Ordinance if they take up a position of director, accounting counsel, statutory auditor or executive officer of a Financial
Instruments Firm (limited to the firms that engages in the securitiesrelated business set forth in Article 28, Paragraph 8 of the Financial
Instruments and Exchange Act; hereinafter in this Paragraph thesame) (including the cases where a director, accounting counsel,
statutory auditor or executive officer of a Financial Instruments Firmcome to concurrently hold a position of director, accounting counsel, statutory auditor or executive officer of the Corporation), or
they resign a director, accounting counsel, statutory auditor or
executive officer of a Financial Instruments Firm.
Article 5 Issue of the Development Bank of Japan Bonds
1. The Corporation may issue the Development Bank of Japan Bonds.
2. The provision of Article 702 of the Companies Act (Act No. 86 of2005) shall not apply where the Corporation issues theDevelopment Bank of Japan Bonds.
3. Only with respect to the Development Bank of Japan Bonds issued
outside of Japan, the Corporation may issue certificates representing the Development Bank of Japan Bonds (including interest
coupons appertaining thereto; hereinafter in this Paragraph, andArticle 13, Paragraphs 3 and 4, Item (1), the same), as prescribedin the Cabinet Order, in the event that it is necessary to deliver
replacement certificates to anyone who has lost those certificates.
Article 6 Method of Issue of the Development Bank ofJapan Bonds
1. If the Corporation issues certificates representing the Development
Bank of Japan Bonds, such certificates shall be in bearer form;
provided, however, that the Corporation may issue those certificates in registered form upon request of a subscriber or owner ofthe Bonds.
2. If the Corporation issues the Development Bank of Japan Bonds,
the Corporation shall not enter into a custody agreement with asubscriber of the Bonds in which matters set forth in the Ministryof Finance Ordinance and the Cabinet Office Ordinance arecontained.

Data Section

Article 4 Application by Changing the Provisions of the
Financial Instruments and Exchange Act to Read
1. For the purpose of application of the provisions of the Financial
Instruments and Exchange Act to the Corporation, the words and(referred to as the“Cooperative
Financial
Institutions”)

Corporate Data

Bonds”) (except in cases where it is intended for secondary
distribution (uridashi)), or to handle primary offering (boshu) of
the Specified Bonds so subscribed;(9) To acquire or transfer Short-term Notes, Etc.;(10) To act as an agent or intermediary for execution of agreements which provides for lending money on behalf of banks(the banks set forth in Article 2, Paragraph 1 of the Banking
Act (Act No. 59 of 1981); hereinafter the same) and otherentities 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 these business
operations fall within those operations referred to in 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, inthe case of the handling of primary offering or secondary distribution, to those to be conducted upon entrustment byfinancial instruments firms engaged in the type I financial
instruments trading business set forth in Article 28, Paragraph
1 of the Financial Instruments and Exchange Act (the financial
instruments firms set forth in Article 2, Paragraph 9 of the
Financial Instruments and Exchange Act; hereinafter thesame), and for such financial instruments firms);(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 notissued, rights to be represented by such securities) or transactions referred to in each Item of Paragraph 2 of Article 33 of
the Financial Instruments and Exchange Act, to do the activities set forth in each Item of the said Paragraph (other thanthose 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 (kabushiki iten),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

Article 2, Paragraph 8

The DBJ Group’s Corporate Governance

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 and obligations;(5) To sell and purchase Securities (other than those that fallwithin monetary claims represented by certificates set forth in
Item (7), Short-term Notes, Etc.; the same in Item (8)) (otherthan those that fall within securities-related derivatives transactions (the securities-related derivatives transactions set forthin Article 28, Paragraph 8, Item (6) of the Financial Instruments
and Exchange Act (Act No. 25 of 1948); hereinafter in this
Item and Item (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 FinanceOrdinance such as negotiable bank deposit certificates);(8) To subscribe for Specified Bonds or Preferred Investment
Securities issued by a Specified Purpose Company (limited tothe cases where the Specified Purpose Company acquires
only monetary claims (excluding negotiable instruments payable to order set forth in Part III, Chapter I, Section 7,
Subsection 1 of the Civil Code (Act No. 89 of 1896), registered negotiable instrument payable to holder set forth in
Subsection 2 of the same Section, other registered negotiable instruments set forth in Subsection 3 of the same Section
and claims regarding bearer instruments set forth in
Subsection 4 of the same Section and electronically recordedmonetary claims set forth in Article 2, Paragraph (1) of theElectronically Recorded Monetary Claims Act (Act No. 102 of
2007); hereinafter the same in this Item) or beneficial interests
in trusts with which monetary claims are entrusted with cash
proceeds derived from issue of those Specified Bonds or
Preferred Investment Securities as set forth in the Asset
Liquidation Plans, and except for, in case of Specified Bonds,
Specified Short-term Notes; hereinafter the same in this Item),and other securities similar to Specified Bonds or Preferred
Investment Securities stipulated in the Ministry of FinanceOrdinance (hereinafter in this Item referred to as the “Specified

phrases indicated in the center columns of the table below in theprovisions of that Act in the left columns shall be changed to read
the words and phrases indicated in the right column, respectively:

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Article 1 Purpose
Development Bank of Japan Inc. (hereinafter referred to as the“Corporation”) shall be a joint stock company (kabushiki-kaisha)
whose object is to maintain the foundations of investment andfinancing functions of long-term business funds as theDevelopment Bank of Japan by conducting business activities
utilizing the methods of combining investments and financing andother sophisticated financial methodologies, while maintaining theautonomy of management with the goal of realizing full-scale
privatization, thereby contributing to smooth supply of funds toi­nformation 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.
2. In addition to the business operations of the preceding Paragraph,
the Corporation may engage in such business activities as necessary to attain its object, subject to authorization of the Ministerof Finance.
3. “Securities” in Items (5) and (6) of Paragraph 1 and Paragraph 5
mean the securities set forth in Article 2, Paragraph 1 of the
Financial Instruments and Exchange Act, and the rights which are
deemed as securities as set forth in Article 2, Paragraph 2 of the
Financial Instruments and Exchange Act.
4. “Short-term Notes, Etc.” in Items (5) and (9) of Paragraph 1, andthe next following Paragraph mean:(1) Short-term notes Etc. set forth in Article 66, Item (1) of the Act
Concerning the Central Depositary System of Corporate
Debentures, Shares, Etc. (Act No. 75 of 2001);(2) Short-term investment corporation notes set forth in Article
139-12, Paragraph 1 of the Act Concerning Investment Trusts
and Investment Corporations (Act No. 198 of 1951);(3) Specified short-term notes set forth in Article 2, Paragraph 8of the Act concerning Liquidation of Assets (Act No. 105
of 1998);(4) Rights to be indicated on debt securities (other than thosehaving the nature of corporate debentures with stock acquisition rights (shinkabu-yoyaku-ken-tsuki shasai)) to be issued byforeign corporations, the ownership rights of which shall be
determined based on the entries or recordings in the central
depositary account register as prescribed by the Act
Concerning the Central Depository System of Corporate
Debentures, Shares, Etc., which satisfy all of the following
requirements:		a. The amount of each right is not less than JPY100 million;		b.	It is stipulated that the principal amount of such debt securities shall be redeemed on a definitely specified date which
occurs a year after the date on which the aggregate
amount of such rights is paid, and further that no payment
shall be made in installments; and		
c.	It is stipulated that interest shall become due and payable
on the same date as the maturity date of the principal
amount in Sub-item b.
5. The business operations referred to in Paragraph 1, Item (7) (in thecase of monetary claims represented by the certificates set forth in
the said Item which fall within Securities) and the business operations referred to in Paragraph 1, Item (9) (in the case of Short-term
Notes, Etc.) shall include the business operations to do the activities referred to in Article 2, Paragraph 8, Items (1) through (6), and(8) through (10) of the Financial Instruments and Exchange Act.
6. The terms “Specified Purpose Company,” “Asset Liquidation Plan,”“Specified Bonds,” “Specified Short-term Notes” or “Preferred
Investment Securities” referred to in Paragraph 1, Item (8) mean
the specified purpose company, asset liquidation plan, specified
bonds, specified short-term debentures or preferred investment
securities set forth in Article 2, Paragraphs 3, 4 or 7 through 9 of
the Act concerning Liquidation of Assets, respectively.
7. If the Corporation engages in the business activity referred toParagraph 1, Item (10), the provision of Article 52-36, Paragraph 1of the Banking Act and other provisions equivalent to that provisionof the said Paragraph which apply to those who engage in thefinancial business stipulated in the Cabinet Order set forth inParagraph 1, Item (10) and are prescribed in the Cabinet Order,
shall not apply.

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Promulgated: June 13, 2007 by Act No. 85 of 2007
Enforced: May 22, 2020
Last Amended : May 22, 2020 by Act No. 29 of 2020

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75

The Development Bank of Japan Inc. Act

Article 8 Mutatis Mutandis Application of the Currency andSecurities Counterfeiting Control Act
The Currency and Securities Counterfeiting Control Act (Act No.
28 of 1895) shall be applied mutatis mutandis to the counterfeitingof certificates representing the Development Bank of Japan to beissued by the Corporation.

Article 13 C orporate Debentures, Development Bank of Japan
Bonds and Borrowings
1. Prior to the beginning of each fiscal year, the Corporation shall prepare 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, Shares, Etc.
(Act No. 75 of 2001) from both the Corporate Debentures and theDevelopment Bank of Japan Bonds, respectively; hereinafter inthis 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 the same), which provides

Article 16 Authorization of Concurrent Positions of Directors
1. 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 authorizationof the Minister of Finance.
2. The Minister of Finance shall, upon receipt of an application for theauthorization referred to in the preceding Paragraph, grant his/herauthorization, except in cases where it is determined that any
matter so applied may interfere with sound and proper management of the Corporation.
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, thesame shall apply.
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 andobtain 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 19 Subsidiaries Subject to Authorization
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 Subject toAuthorization”) its subsidiary (the subsidiary set forth in 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));(3) Financial Instruments Firms (limited to those who engage in typeI financial instruments trading business set forth in Article 28,
Paragraph 1 of the Financial Instruments and Exchange 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), and exclude those who concurrently conduct thebusiness referred to in the preceding Items or fall within otherrequirements 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));(6) Insurance companies (the insurance companies set forth in
Article 2, Paragraph 2 of the Insurance Business Act (Act No.
105 of 1995)); andData Section

Article 9 Special Rules When Starting Acceptance of
Deposits, Etc.
1. If the Corporation intends to start acceptance of deposits set forthin Article 3, Paragraph 1, Item (1) or issue of the Development
Bank of Japan Bonds, the Corporation shall obtain the priorapproval 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.
3. The Prime Minister may request the Minister of Finance to provide
the Prime Minister with the required materials and explanations,whenever the Prime Minister deems necessary after the discussion referred to in the immediately preceding Paragraph.
4. The Prime Minister may request the Corporation to cooperate with
the Prime Minister such as providing materials and explanations, tothe required extent, whenever the Prime Minister deems especially

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 theCompanies Act (Act No. 86 of 2005) (hereinafter in Article 34, Item(4) referred to as the “Shares Offered for Sale”) or stock acquisitionrights offered set forth in Article 238, Paragraph 1 of theCompanies Act (hereinafter in Article 34, Item (4) referred to the“Stock Acquisition Rights Offered”), or to deliver shares or stockacquisition rights in connection with a share-for-share exchange,
the Corporation shall obtain authorization of the Minister of Finance.
2. Without delay after the delivery of shares upon exercise of stockacquisition rights, the Corporation shall submit a report thereon to
the Minister of Finance.

Article 15 R esolution 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 11 Fiscal YearThe fiscal year of the Corporation shall commence on April 1 ofeach year and end on March 31 of the following year.

Article 14 L imits on Borrowing and Limitation on Extensionof Credit
1. The aggregate amount of the items identified below shall not
exceed the amount equal to fourteen (14) times the total amountof paid-in capital and reserves (capital reserve and earned surplus
reserve; hereinafter in this Article the same); provided, however,that if it is necessary, to refinance the issued old bank debentures(the bank debentures set forth in Article 43, Paragraph 1 of theDevelopment Bank of Japan Act (Act No. 73 of 1999; hereinafterreferred to as the “Old DBJ Act”) before abolishment as set forth in
Article 26 of the Supplementary Provisions which were issued pursuant to the provision of Article 43, Paragraph 1 or Paragraph 4 of
the Old DBJ Act, the “Old Bank Debentures”; hereinafter thesame), the Corporate Debentures or the Development of Bank ofJapan Bonds, the Corporation may issue the Corporate
Debentures and the Development Bank of Japan Bonds, inexcess of such amount only within the period of time required forsuch refinancing:(1) Outstanding amount of deposits;(2) Outstanding amount of borrowings;(3) Outstanding amount of funds deposited pursuant to the provision of Article 42, Paragraph 5 of the Old DBJ Act;
(4) Outstanding amount of the obligations representing the principals of the Old Bank Debentures;(5) Outstanding amount of the obligations representing the principals of the Corporate Debentures and the Development Bankof Japan Bonds issued; and(6) Outstanding amount of those items which have the same
economic nature as those referred to in each of the foregoing, howsoever described.
2. The aggregate amount of the items identified below shall not
exceed the sum of: (i) the amount of paid-in capital and reservesand (ii) the upper limit set forth in the main sentence of the preceding Paragraph:(1) Outstanding amount of the amounts of loans made andclaims acquired (other than those relating to Securities set
forth in Item (3));(2) Outstanding amount of obligations of guarantee;(3) Outstanding amount of Securities acquired (the Securities set
forth in Article 3, Paragraph 3 and exclude the Securities
referred to in Article 2, Paragraph 1, Items (1) and (2) of the
Financial Instruments and Exchange Act (including the rights
to be represented on such securities when such Securities
are not issued), and those relating to capital contributions
under the next following Item); and(4) Outstanding amount of capital contributions.

The DBJ Group’s Corporate Governance

Article 7 Extinctive Prescription of the Development Bank ofJapan Bonds
The extinctive prescription periods of the principal of, and interest
on, the Development Bank of Japan Bonds to be issued by the
Corporation shall be fifteen (15) years and five (5) years, respectively, from the time when it has become possible to exercise therights under such Bonds.

Article 10 Mutatis Mutandis Application of the Banking Act
1. The provisions of Articles 12-2 (other than Paragraph 3), 13, 13-2,
13-4, 14, 14-2, 20, 21, 23 and 57-4 (limited to the portions relating to Item (1)) of the Banking Act shall apply mutatis mutandis
to the Corporation when the Corporation obtains the approvalreferred to in Paragraph 1 of the immediately preceding Article.
For this purpose, references to the “Prime Minister” and “Cabinet
Office Ordinance” in these provisions (other than the second sentence of Article 13-4 and Article 20, Paragraph 7 of the BankingAct) shall be changed to read the “Minister of Finance and thePrime Minister” and the “Ministry of Finance Ordinance and the
Cabinet Office Ordinance,” respectively, and reference to “Article
38, Items (1), (2), (7)” in Article 13-4 of the Banking Act shall bechanged to read “Article 38, Item (7)” and other necessary technical changes to read shall be prescribed in the Cabinet Order.
2. For the purpose of application of the provisions of the Financial
Instruments and Exchange Act which shall be applied mutatis
mutandis after changing to read in Article 13-4 of the Banking Act
which is applied mutatis mutandis after changing to read in thepreceding Paragraph, reference to the “Cabinet Office Ordinance”
in those provisions shall be changed to read the “Ministry of
Finance Ordinance and Cabinet Office Ordinance.”
3. If the Government stipulates an ordinance pursuant to the provisions of the Banking Act which shall be applied mutatis mutandis
after changing to read in Paragraph 1, the Government shall pay
attention so that interests of users of business operations of the
Corporation such as money lending, when it gives the approvalreferred to in Paragraph 1 of the immediately preceding Article may
not be unreasonably infringed.

for matters relating to the issue of the Corporate Debentures andthe Development Bank of Japan Bonds, and the borrowing ofmoney, such as the amounts of issue and borrowings, denominated currency of the Corporate Debentures, the Development
Bank of Japan Bonds and the borrowings, as stipulated in the
Ministry of Finance Ordinance, and obtain authorization of the
Minister of Finance. If the Corporation intends to revise it, thesame shall apply.
2. If the Corporation issues the Corporate Debentures or theDevelopment Bank of Japan Bonds, or borrows money, theCorporation shall submit a report thereon to the Minister of Financewithout delay, as stipulated in the Minister of Finance Ordinance.
3. Only with respect to the Corporate Debentures issued outside ofJapan, the Corporation may issue certificates representing the
Corporate Debentures, as prescribed in the Cabinet Order, inthe event that it is necessary to deliver replacement certificatesto anyone who has lost those certificates.
4. The provisions of the second sentence of Paragraph 1, andParagraph 2 shall not apply to the following cases:(1) When the Corporation issues certificates representing the
Corporate Debentures or the Development Bank of Japan
Bonds (hereinafter in the following Item and Article 25,
Paragraph 2 referred to as the “Bond Certificates, Etc.”)
upon request for reissue which will be made after a decisionof nullification set forth in Article 699, Paragraph 2 of theCompanies Act; and(2) When the Corporation issues the Bond Certificates Etc. as
set forth in Article 5, Paragraph 3 or the immediately preceding Paragraph.

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necessary after the discussion referred to in Paragraph 2.
5. The provisions of Article 4, Paragraph 1 of the Banking Act andArticle 4, Paragraph 1 of the Long-Term Credit Bank Act (Act No.
187 of 1952) shall not apply to the business operations to be conducted by the Corporation in the case that the Corporation obtains
the approval referred to in Paragraph 1.

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3. The Corporation may issue certificates representing theDevelopment Bank of Japan Bonds by way of a secondary distribution (uridashi). In that case, the Corporation shall determine the
distribution period.
4. If the Corporation issues certificates representing the Development
Bank of Japan Bonds, the Corporation shall indicate the following
matters on the face of those certificates:(1) Trade name of the Corporation;(2) Amount of the Bonds represented by the certificate;(3) Interest rates on the Development Bank of Japan Bonds represented by the certificate;(4) Method of redemption and maturity date of the Development
Bank of Japan Bonds represented by the certificate; and(5) Numbers of the certificate.
5. If the Corporation intends to issue the Development Bank of Japan
Bonds by way of a secondary distribution, the Corporation shallgive public notice of the following matters:(1) Distribution period;(2) Aggregate amount of the Development Bank of Japan Bonds;(3) If payment for the Development Bank of Japan Bonds ismade in more than one installment, the amount of, and timeschedule for, such payments;(4) Issue price or minimum price of the Development Bank ofJapan Bonds;(5) If the Corporation intends to issue the Development Bank ofJapan Bonds, the ownership rights of which shall be determined based on the entries or recordings in the central
depositary account register as prescribed by the Act
Concerning the Central Depository System of Corporate
Debentures, Shares, Etc., description to the effect that theDevelopment Bank of Japan Bonds are subject to the said
Act; and(6) Matters referred to in Items (1) through (4) of the immediately­preceding Paragraph.
6. The Corporation may issue the Development Bank of Japan
Bonds at a discount.

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77

The Development Bank of Japan Inc. Act

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 than disposition oflosses) such as distribution, merger, corporate split, and dissolution shall not become effective without authorization of the Ministerof Finance.
2. If the Minister of Finance intends to grant the authorization referred
to in the preceding Paragraph (limited to resolutions for merger,
corporate split and dissolution), the Minister of Finance shall havea discussion with the Minister of Land, Infrastructure and Transport.

Article 23
1. Notwithstanding the provision of Article 10, Paragraph 1 of the
Fiscal Loan Funds Act, the fiscal loan funds may be appropriatedfor the Corporate Debentures and the Development Bank ofJapan 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

Article 25 Guarantee of Obligations
1. Notwithstanding the provision of Article 3 of the Act Concerning
Restrictions on Fiscal Assistance by the Government to
Corporations (Act No. 24 of 1946), the Government may enter
into a guarantee agreement for the obligations relating to theDebentures, Etc., to the extent of the amount approved by the
resolutions of the Diet.
2. In addition to the provision of the preceding Paragraph, theGovernment may enter into a guarantee agreement for the­obligations relating to the Bond Certificates, Etc. to be issued
by the Corporation upon request for reissue to be made after adecision of nullification set forth in Article 699, Paragraph 2 of
the Companies Act, for delivery to those who have lost theBond Certificates, Etc., or for the obligations relating to the Bond
Certificates, Etc. to be issued by the Corporation as set forth in
Article 5, Paragraph 3 or Article 13, Paragraph 3.

Article 27 Reports and Inspections
1. If the competent minister deems necessary to secure sound andproper management of the Corporation and otherwise deems
necessary to effectuate this Act, the competent minister may
cause the Corporation to make a report, or have any of officials of
the competent ministry enter into premises of the Corporationsuch as its office to inspect the condition of business or books,
documents and other properties required.
2. If the competent minister deems especially necessary to securesound and proper management of the Corporation and otherwise
deems especially necessary to effectuate this Act, the competent
minister may, to the extent necessary, cause any of the subsidiaries or entities engaged by the Corporation for any services of the
Corporation (hereinafter in this Paragraph, Paragraph 5 and Article
33, Paragraph 2 referred to as the “Contractors”) to make reports
relevant to the condition of business of the Corporation or haveany officials of the competent ministry enter into offices or otherpremises of the subsidiaries or the Contractors of the Corporation
to inspect the condition of business or books, documents andother properties required which may serve as reference relating
to the condition of business of the Corporation.

Chapter IV Penal Provisions
Article 30
1. If any directors, executive officers (shikkoyaku), accounting counsel (kaikei sanyo) (if an accounting counsel is a firm, its members
who should perform the duties as such), statutory auditors, or
employees accept, solicit or promise to accept a bribe in connection with their duties, they shall be punished by imprisonment withwork for not exceeding three (3) years. If they conduct improper
activities or fail to conduct proper activities with the bribe, theyshall be punished by imprisonment with work for not exceeding
five (5) years.

2. In the case of the immediately preceding Paragraph, the bribe
accepted by the criminal person shall be confiscated. If the bribein whole or in part cannot be confiscated, such amount shall becollected.
Article 31
1. Any person who gives, offers or promises to give a bribe referred
to in Paragraph 1 of the immediately preceding Article shall bepunished with imprisonment for not exceeding three (3) years or afine not exceeding 1,000,000 yen.

Data Section

Article 26 Supervisory Measures
1. The competent minister shall oversee and supervise the
Corporation in accordance with the provisions of this Act.
2. Whenever the competent minister deems necessary to securesound and proper management of the Corporation in light of thecondition of the business operations or properties of the
Corporation, or the properties of the Corporation and its subsidiaries (which are limited to those subsidiaries set forth in Article 2,
Item (3) of the Companies Act, which fall within the Subsidiaries
Subject to Authorization; hereinafter in Paragraphs 2 and 5 of theimmediately following Article, and Article 33, Paragraph 2, thesame) or to otherwise effectuate this Act, the competent ministermay request the Corporation to submit an improvement plan tosecure its sound management by indicating those matters forwhich the Corporation should take measures and the deadline forsubmission or direct the Corporation to revise the improvement
plan once submitted, or direct, to the extent necessary, theCorporation to suspend its business operations in whole or in part
during the designated period of time or to deposit its properties tothe competent deposit office, or give other orders concerningbusiness necessary for supervision.

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, Paragraph 1, the competent ministers for the following matters shall be the Minister ofFinance and the Prime Minister:(1) Matters regarding the provisions of the Banking Act which areapplied mutatis mutandis after changing to read in Article 10;(2) Matters regarding the directions and orders under Article 26,
Paragraph 2 (limited to those to be given when it is deemednecessary to secure sound and proper management of the
Corporation set forth in the said Paragraph);(3) Matters regarding the direction for report and on-site inspections under Article 27, Paragraph 1 (limited to those to bemade and conducted when it is deemed necessary to securesound and proper management of the Corporation set forth in
the said Paragraph); and(4) Matters regarding the direction for report and on-site inspections under Article 27, Paragraph 2 (limited to those to bemade and conducted when it is deemed especiallyCorporate Data

Chapter III Miscellaneous Provisions

Article 28 Delegation of Authority
1. The Minister of Finance may delegate a part of the authority to
conduct on-site inspections pursuant to the provision of
Paragraphs 1 or 2 of the immediately preceding Article to thePrime Minister, as stipulated in the Cabinet Order.
2. If the Prime Minister has had the on-site inspections conductedpursuant to the provision of Paragraphs 1 or 2 of the immediately
preceding Article based on the delegation of the authority under
the preceding Paragraph, the Prime Minister shall promptly report
the Minister of Finance on results of such inspections.
3. The Prime Minister shall delegate the authority delegated pursuant
to the provision of Paragraph 1 and the authority pursuant to theprovision of the immediately preceding Paragraph to theCommissioner of the Financial Services Agency.
4. The Commissioner of the Financial Services Agency may delegate
all or a part of the authority delegated pursuant to the provision of
the immediately preceding Paragraph to the director of the competent local financial bureau or local finance branch bureau, as
stipulated in the Cabinet Order.
5. If the Corporation obtains the approval referred to in Article 9,
Paragraph 1, each provision of the preceding Paragraphs shallnot apply.

necessary to secure sound and proper management of the
Corporation set forth in the said Paragraph).
2. The Minister of Finance or the Prime Minister shall not be precluded from individually exercising the authority relating to thematters referred to in Item (3) or (4) of the preceding Paragraph as
set forth in the proviso of the preceding Paragraph.
3. If each minister referred to in each of the following Items exercises
his/her authority pursuant to the provision of the immediately
preceding Paragraph, he/she shall promptly inform the results
thereof to the minister set forth opposite to him/her in each of thefollowing Items:(1) Minister of Finance: Prime Minister(2) Prime Minister: Minister of Finance
4. In the cases stipulated in the proviso of Paragraph 1, reference tothe “Minister of Finance” in Article 3, Paragraph 2 shall be changed
to read the “Minister of Finance and the Prime Minister”; reference
to the “Minister of Finance” in Article 13, Paragraph 2 shall bechanged to read the “Minister of Finance (or, in relation to issue of
the Development Bank of Japan Bonds, the Minister of Financeand the Prime Minister)”; reference to the “Minister of Land,
Infrastructure and Transport” in Article 20, Paragraph 2 shall bechanged to read the “Minister of Land, Infrastructure and Transport
and the Prime Minister”; reference to the “, as stipulated in the
Ministry of Finance Ordinance, its balance sheet, profit and loss
statement and business report for interim fiscal year (the period
from April 1 to September 30 of the current fiscal year) of the current fiscal year” in Article 21 shall be changed to read the “, asstipulated in the Ministry of Finance Ordinance (or, in relation to thefiscal year and interim fiscal year (the period from April 1 to
September 30 of the current fiscal year; hereinafter in this Article
the same) in and after the fiscal year in which the date on which
the approval referred to in Article 9, Paragraph 1 is obtained isincluded, the Minister of Finance Ordinance and the Cabinet
Officer Ordinance), its balance sheet, profit and loss statement andbusiness report for interim fiscal year of the current fiscal year”, andreference to the “Minister of Finance” in Article 21 shall be changed
to read the “Minister of Finance (or, in relation to the fiscal year andinterim fiscal year in after the fiscal year in which the date on which
the approval referred to in the said Paragraph is obtained isincluded, the Minister of Finance and the Prime Minister).”
5. In the case of the proviso of Paragraph 1, if the Minister of Financeintends to amend the Minister of Finance Ordinance referred to in
Article 3, Paragraph 1, Item (7) or (8) he/she shall obtain the priorconsent of the Prime Minister.
6. The Prime Minister shall delegate the authorities under this Act(other than those authorities pursuant to the provisions ofParagraphs 1 through 3 of the immediately preceding Article,
and other authorities set forth in the Cabinet Order) to theCommissioner of the Financial Services Agency.
7. The Commissioner of the Financial Services Agency may delegate
a part of the authorities delegated to him/her pursuant to the provision of the immediately preceding Paragraph to the director of
local finance bureau or local finance branch bureau.

The DBJ Group’s Corporate Governance

Article 22 Special Exemptions from Management of Fiscal
Loan Funds
Notwithstanding the provision of Article 10, Paragraph 1 of the
Fiscal Loan Funds Act (Act No. 100 of 1951), the fiscal loan
funds (the fiscal loan funds set forth in Article 2 of the Fiscal Loan
Funds Act; hereinafter the same) may be appropriated 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 24
For the purpose of application of the provisions of the Act
Concerning Special Measures for Long-term Management of
Fiscal Loan Funds (Act No. 7 of 1973) to the fiscal loan funds to
be invested in making loans as set forth in Article 22 or the fiscal
loan funds to be invested in the Debentures, Etc. as set forth inParagraph 1 of the immediately preceding Article, the Corporation
shall be deemed as the corporation set forth in Article 10,
Paragraph 1, Item (7) of the Fiscal Loan Funds Act.

3. When the officials conduct on-site inspection pursuant to the provisions of the preceding two Paragraphs, those officials shall carrya certificate showing their identities and present it to the parties
concerned.
4. The authority of the officials to conduct on-site inspections pursuant to the provisions of Paragraphs 1 and 2 shall not beinterpreted as that for a criminal investigation.
5. The subsidiaries and the Contractors of the Corporation may reject
the report or on-site inspection pursuant to the provision of
Paragraph 2, if there is any reasonable cause.

The DBJ Group’s Strategy

Article 21 Submission of Balance Sheet and Other Financial
Statements
For each fiscal year, the Corporation shall submit to the Minister ofFinance, as stipulated in the Ministry of Finance Ordinance, its balance sheet, profit and loss statement and business report for theinterim fiscal year (the period from April 1 to September 30 of thecurrent fiscal year) of the current fiscal year, and its balance sheet,profit and loss statement and business report for the current fiscal
year.

the resulting proceeds for expenses required for its operations set
forth in Article 3, Paragraphs 1 and 2.
2. If the fiscal loan fund is invested in the Debentures, Etc. or the Old
Bank Debentures, the fiscal loan fund shall not be used to underwrite, subscribe for or purchase (limited, in the case of the Old
Bank Debentures, to purchase; hereinafter in this Paragraphreferred to as the “Subscribe”) the Debentures, Etc. or the Old
Bank Debentures in excess of five-tenths (5/10) of the outstanding
amount of the Debentures, Etc. and the Old Bank Debentures or
six-tenths (6/10) of the total amount of the Debentures, Etc. to beissued by the Corporation at a time. In this case, the Debentures,
Etc. or the Old Bank Debentures to be Subscribed with the fiscal
loan funds shall be the same as those otherwise Subscribed forwith respect to the terms such as interest rate, collateral, methodof redemption and maturity.

The DBJ Group’s Value Creation Story(7) Those stipulated by the Ministry of Finance Ordinance as
those who are similar to each of the foregoing.

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The Development Bank of Japan Inc. Act

Article 32
1. The crime referred to in Article 30, Paragraph 1 shall comply with
Article 4 of the Criminal Code (Act No. 45 of 1907).
2. The crime referred to in Paragraph 1 of the immediately preceding
Article shall comply with Article 2 of the Criminal Code.

Article 35
Any person who violates the provision of Article 2, Paragraph 1 shallbe punished with a non-penal fine not exceeding 100,000 yen.

Supplementary Provisions (Extract)

Article 2-2 Capital Contribution by the Government
The Government may make capital contributions to the Corporation,
to the extent of the amount approved by the budget, whenever theGovernment deems necessary, until March 31, 2012.
Article 2-3 Issue of the Government Bonds
1. The Government may issue the government bonds to use forsecurement of capital that become necessary to secure soundness of financial conditions of the Corporation in performing crisis
response business set forth in Article 2, Item (5) of the Japan
Finance Corporation Act (Act No. 57 of 2007) (hereinafter referred
to as the “crisis response business”), until March 31, 2012.

Article 2-5 Return of the Government Bonds
1. If there are any government bonds delivered as set forth in Article
2-3, Paragraph 2 of the Supplementary Provisions, those which
are not redeemed as of July 1, 2012, the Corporation shall returnthe unredeemed government bonds to the Government.
2. The Government shall immediately cancel the government bonds
when the government bonds are returned as set forth in the immediately preceding Paragraph.
3. In addition to those set forth in the preceding two Paragraphs,
other matters required for the return and the cancellation of thegovernment bonds delivered by the Government as set forth in
Article 2-3, Paragraph 2 of the Supplementary Provisions, shall be
stipulated in the Ministry of Finance Ordinance.
Article 2-6 Special Rules for Taxation of the Registration
License Tax
In case of the investment as set forth in Article 2-2 of the
Supplementary Provisions, or the redemption as set forth in Article
2-4, Paragraph 2 of the Supplementary Provisions, no registration
license tax shall be assessed on registration of the increase in theamount of the capital of the Corporation, limited to only those registered as set forth in the Minister of Finance Ordinance.

Article 2-9 C apital Contribution by the Government with
Regard to Crisis Response Business
The Government may, for an indefinite period, make capital contributions to the Corporation, to the extent of the amount approved by
the budget, whenever the Government deems necessary for proper
implementation of crisis response business by the Corporation.
Article 2-10 Implementation of Crisis Response Business1. The Corporation shall conduct crisis response business at thehead office or any other office designated by the Minister ofFinance (hereinafter in the following Paragraph and Article 2-31,
Paragraph 1, Item (1) of the Supplementary Provisions referred toas the “designated office”).
2. The Corporation shall neither suspend nor cease to conduct crisis
response business at the designated office, except in cases wherecrisis response business is temporarily suspended, in whole or inpart, at the designated office due to Acts of God or other reasons
beyond control, as stipulated in the Ministry of Finance Ordinance.
Article 2-11 Special Provisions, Etc., on Business Plan with
Regard to Crisis Response Business1. The Corporation shall include an implementation policy for its crisis
response business in its business plan provided for in Article 17,
as stipulated in the Ministry of Finance Ordinance.
2. The Corporation shall include the implementation status of its crisis
response business, based on the implementation policy set forthin the immediately preceding Paragraph, in its business report provided for in Article 21, as stipulated in the Ministry of FinanceOrdinance.
3. In addition to matters set forth in each of the Items of Article 27 of
the Companies Act, matters regarding proper implementation ofcrisis response business shall be included or recorded in the
Articles of Incorporation of the Corporation.
Article 2-12 Special Investment Operations
1. The Corporation shall, in order to attain its objectives, conduct
special investment operations, in accordance with the provisions
set forth in this Article, Articles 2-15 to 2-20, and Articles 2-23 to
2-30 of the Supplementary Provisions.
2. In this Article and up to Article 2-20 of the Supplementary
Provisions, as well as in Articles 2-23, 2-25, 2-27 and 2-31 of the
Supplementary Provisions, “special investment operations” means,among the investment businesses in special business activities,
those that are deemed to particularly contribute to the facilitation of
supply of funds by financial institutions and others, for the revitalization of business activities taking advantage of regional
characteristics that contribute to autonomous development of local
economies, or for the enhancement of competitiveness ofJapanese companies that contribute to the improvement of

Data Section

Article 2 Disposition of Government-Owned Shares
1. Pursuant to the provision of Article 6, Paragraph 2 of the Act
Concerning Promotion of Administrative Reform for Realizing the
Simple and Effective Government (Act No. 47 of 2006), theGovernment shall make efforts to reduce the number of shares
held by it in the Corporation (hereinafter in the following Paragraphand the Article 3 of the Supplementary Provisions referred to as“Government-Owned Shares”), taking into account the effect on
the attainment of the objectives of the Corporation, as well as themarket situation, and shall dispose all of them as soon aspracticable.
2. For a period from the effectuation of this Act until the Government
disposes of all of the Government-Owned Shares, theGovernment shall from time to time review matters, such as matters regarding the method in which the Government-Owned
Shares should be disposed of and take the required measures
based on the result of such review, so that the foundation of the
Corporation’s investment and financing functions for long-termbusiness funds will be maintained.

Article 2-8 G overnment’s Holding of Shares with Regard to
Crisis Response BusinessWith a view to ensure proper conduct of crisis response businessby the Corporation, the Government shall, for an indefinite period,
hold more than one-third of the total number of issued shares of
the Corporation (excluding shares in respect of which voting rights
may not be exercised for all matters that may be resolved at a
general meeting of shareholders; the same shall apply in Article
2-13 of the Supplementary Provisions).

Corporate Data

Article 1 Enforcement Date
This Act shall come into force from the date of promulgation; provided, however, that the provisions set forth in the following Items
shall take effect from the date set forth in each Item:(1) The provisions of Paragraph 1, Items (5), and (11) through(17), Paragraph 3, Paragraph 4, Item (2), Paragraph 5 of
Article 3, Article 4, Article 10, Article 14, Paragraph 2, Item (3),Article 19, Item (3), and Article 21 of the Supplementary
Provisions: Date on which the Act Concerning Amendment toParts of the Securities and Exchange Act (Act No. 65 of
2006) comes into force or the date on which this Act comes
into force, whichever is later.
(2) Provision of Article 19, Item (4): Date on which the Act
Concerning Amendment to Parts of the Act Concerning theRegulations on the Money Lending Business (Act No. 115 of2006) comes into force or the date on which this Act comes
into force, whichever is later.
(3) Provisions of Articles 26 through 60 and 62 through 65 of the
Supplementary Provisions: October 1, 2008.

Article 2-4 Redemption of the Government Bonds
1. The Corporation may request the redemption of the government
bonds delivered as set forth in Paragraph 2 of the immediately
preceding Article, only within the amount calculated as stipulatedby the Ministry of Finance Ordinance that become necessary as
the amount of the capital in response to the increase of assets
related to its crisis response business (limited to those conductedby March 31, 2012).
2. If the Government is requested by the Corporation to redeem all ora part of the government bonds delivered pursuant to the provisionof Paragraph 2 of the immediately preceding Article, theGovernment shall promptly redeem them.
3. When the redemption has been made pursuant to the provision of
the immediately preceding Paragraph, the amount of the capital of
the Corporation shall be the aggregate sum of the amount of thecapital immediately preceding such redemption and the amount ofsuch redemption.
4. As for application of the provision of Article 445, Paragraph 1 of
the Companies Act in the case where the provision of the immediately preceding Paragraph applies, “Unless it is otherwise provided
for in this Act” therein shall be deemed to be changed to read“Unless it is otherwise provided for in this Act and in cases where
the provision of Article 2-4, Paragraph 3 of the Supplementary
Provisions of the Development Bank of Japan Inc. Act (Act No. 85
of 2007) applies.”
5. In addition to those set forth in each of the preceding Paragraphs,
other matters required for the redemption of the government
bonds delivered by the Government as set forth in Paragraph 2 of
the immediately preceding Article, shall be stipulated in the Ministryof Finance Ordinance.

Article 2-7 C orporation’s Obligation to Conduct Crisis
Response Business
The Corporation shall, in order to attain its objectives, in accordance with the provisions set forth in Articles 2-10, 2-11, 2-22
and Articles 2-24 to 2-30 of the Supplementary Provisions, beobligated to conduct crisis response business, for an indefinite
period, to secure a smooth supply of funds to those who needfunds to address the damages set forth in Article 2, Item (4) of theJapan Finance Corporation Act.

The DBJ Group’s Corporate Governance

Article 34
In any of the following cases, any directors, executive officers (shikkoyaku), accounting counsel (kaikei sanyo) or its members whoshould perform the duties as such, or statutory auditors of the
Corporation shall be punished with a non-penal fine not exceeding
1,000,000 yen:
(1) When he/she has conducted business activities in violation of
the provision of Article 3, Paragraph 2;(2) When he/she has not notified of his/her concurrent position in
violation of the provision of Article 4, Paragraph 2;

2. The Government, as set forth in the immediately preceding
Paragraph, shall issue the government bonds and deliver themto the Corporation, to the extent of the amount approved by
the budget.
3. The government bonds to be issued as set forth in Paragraph 1
shall be non interest-bearing.
4. The government bonds to be issued as set forth in Paragraph 1
may not be transferred, pledged as security, or otherwise disposed.
5. In addition to those set forth in the preceding three Paragraphs,
other matters necessary for the government bonds to be issued
as set forth in Paragraph 1 shall be stipulated by the Ministry of
Finance Ordinance.

The DBJ Group’s Strategy

Article 33
1. Any directors, executive officers (shikkoyaku), accounting counsel(kaikei sanyo) (if an accounting counsel is a firm, its members whoshould perform the duties as such), statutory auditors, or employees of the Corporation who fail to make reports, or make false
reports on matters to be reported in accordance with the provisionof Article 27, Paragraph 1, or refuse, interrupt or avoid inspectionin accordance with the same paragraph, shall be punished with afine not exceeding 300,000 yen.
2. Any directors, executive officers (shikkoyaku), accounting counsel(kaikei sanyo) (if an accounting counsel is a firm, its members whoshould perform the duties as such), statutory auditors, or employees of the subsidiaries of the Corporation or the Contractors
who fail to make reports, or make false reports on matters to bereported in accordance with the provision of Article 27, Paragraph2, or refuse, interrupt or avoid inspection in accordance with thesame paragraph, shall be punished with a fine not exceeding
300,000 yen.

(3) When he/she has started acceptance of deposits or issue of
the Development Bank of Japan Bonds in violation of the provision of Article 9, Paragraph 1;(4) When he/she has solicited those who will subscribe for
Shares Offered for Sale or Stock Acquisition Rights Offered,or delivered shares or stock acquisition rights in connection
with a share-for-share exchange in violation of the provision of
Article 12, Paragraph 1;(5) When he/she has not submitted a report on the delivery ofshares in violation of the provision of Article 12, Paragraph 2;(6) When he/she has not obtained authorization for its basic
policy in violation of the provision of Article 13, Paragraph 1;(7) When he/she has not submitted a report on issue of the
Corporate Debentures or the Development Bank of Japan
Bonds, or borrowing money in violation of the provision of
Article 13, Paragraph 2;(8) When he/she has exceeded the limit or the total referred to in
Article 14, Paragraph 1 or Paragraph 2 in violation of the provision thereof;(9) When he/she has not obtained authorization for his/her concurrent position in violation of the provision of Article 16,
Paragraph 1;(10) When he/she has not obtained authorization for its businessplan in violation of the provision of Article 17;(11) When he/she has not obtained authorization for its redemption plans in violation of the provision of Article 18;(12) When he/she has made Subsidiaries Subject to Authorization
its subsidiary in violation of the provision of Article 19;(13) When he/she has not submitted its balance sheet, profit andloss statement or business report, or has submitted the one
which includes false statements or records in violation of theprovision of Article 21;(14) When he/she has violated the orders referred to in Article 26,
Paragraph 2.

The DBJ Group’s Value Creation Story

2. If the person who committed the crime referred to in the immediately preceding Paragraph surrendered to justice, his/her penalty
may be reduced or he/she may be exempted from the punishment.

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The Development Bank of Japan Inc. Act

Article 2-20 Completion of Special Investment Operations
1. The Corporation shall, taking into account economic conditions,the state of business of the business entities that will receive funds
from special investment operations, and other circumstances,transfer or otherwise dispose of all of the securities (which means
the securities listed in Article 2, Paragraph 1 of the Financial
Instruments and Exchange Act, and the rights which are deemedas securities pursuant to the provision of Article 2, Paragraph 2 of
the Financial Instruments and Exchange Act) and receivables heldby it in the special investment operations, and seek to complete

Article 2-23 S pecial Investment Reserve and Special
Investment Surplus Funds
1. The Corporation shall establish a special investment reserve andappropriate to such reserve an amount equal to the total of theamount contributed by the Government pursuant to the provisionof Article 2-14, Paragraph 1 of the Supplementary Provisions, theamount by which the amount of paid-in capital or reserves isreduced pursuant to the provision of Paragraph 3 of this Article
and the amount reduced from the amount of surplus funds pursuant to the provision of Paragraph 4 of this Article.
2. When the capital contributions have been made pursuant to theprovision of Article 2-14, Paragraph 1 of the Supplementary
Provisions, the Corporation shall, notwithstanding the provision of
Article 445, Paragraph 2 of the Companies Act, record the wholeof the amount contributed pursuant to the provision of Article
2-14, Paragraph 1 of the Supplementary Provisions as the amountof the special investment reserve. For this purpose, reference to“this Act” in Article 445, Paragraph 1 of the said Act shall bechanged to read “this Act or the Development Bank of Japan Inc.
Act (Act No. 85 of 2007).”
3. The Corporation may reduce the amount of its paid-in capital orreserves and increase the amount of its special investment
reserve, whenever the Corporation deems necessary in order toimplement the special investment operations properly. For the purpose of application of the provisions of Article 447 through Article
449 of the Companies Act in this case, reference to “is to beappropriated to reserves” in Article 447, Paragraph 1, Item (2) of
the said Act shall be changed to read “is to be appropriated toreserves or to special investment reserve under Article 2-23,
Paragraph 1 of the Supplementary Provisions of the Development
Bank of Japan Inc. Act (Act No. 85 of 2007) (hereinafter referred to

Article 2-24 S pecial Provisions on Limits on Borrowing and
Limitation on Extension of Credit
For the purpose of application of the provision of Article 14, when
the amount of the crisis response reserve, the amount of the special investment reserve or the amount of the special investment
surplus funds is recorded, the total of the amounts so recorded
shall be included in the amount of paid-in capital and reserves.
Article 2-25 Amount of Surplus Funds, Etc.
1. For the purpose of calculation of surplus funds, the Corporation
shall include the aggregate amount of the crisis response reserve,
the special investment reserve and the special investment surplus
funds as of the last day of the most recent fiscal year (the mostrecent fiscal year set forth in Article 2, Item (24) of the Companies
Act; the same in the following Paragraph) in the total amount ofpaid-in capital and reserves.
2. For the purpose of calculation of surplus funds, the Corporation
shall include the aggregate amount of the amounts set forth inItems (1) though (3) and the aggregate amount of the amounts set
forth in Items (4) through (6), in the aggregate amount of theamounts set forth in Article 446, Items (1) through (4) of theCompanies Act and the aggregate amount of the amounts set
forth in Items (5) through (7) of the said Article, respectively:(1) The amount by which the amount of the crisis response
reserve has been reduced after the last day of the mostrecent fiscal year (excluding the amount of the crisis response
reserve provided for under Article 2-27, Paragraph 4, Item (1)of the Supplementary Provisions), if any;
(2) The amount by which the amount of the special investment
reserve has been reduced after the last day of the mostrecent fiscal year (excluding the amount of the special investment reserve provided for under Article 2-27, Paragraph 4,
Item (1) of the Supplementary Provisions which has been paid
to the national treasury), if any;
(3) The amount by which the amount of the special investment
surplus funds has been reduced after the last day of the mostrecent fiscal year (excluding the amount of the special investment surplus funds provided for under Article 2-27,

Data Section

Article 2-16 Special Investment Guidelines
1. Guidelines to be followed by the Corporation in conducting special
investment operations (in the following Paragraph and Paragraph 1of the immediately following Article referred to as the “special
investment guidelines”) shall be established and issued by the
Minister of Finance.
2. The special investment guidelines shall provide for the following
matters:

Article 2-19 Status of Income and Expenditure with Regard toSpecial Investment Operations, Etc.
For each fiscal year, the Corporation shall, as stipulated in the
Ministry of Finance Ordinance, submit to the Minister of Financeand publish documents stating the status of income and expenditure of the following businesses by category for each fiscal year up
to the fiscal year including the date of completion of the special
investment operations:(1) Special investment operations; and(2) Businesses other than those listed in the preceding Item.

Article 2-22 Crisis Response Reserve
1. The Corporation shall establish a crisis response reserve andappropriate to such reserve the amount contributed by theGovernment pursuant to the provision of Article 2-9 of the
Supplementary Provisions.
2. When the capital contributions have been made by theGovernment pursuant to the provision of Article 2-9 of the
Supplementary Provisions, the Corporation shall, notwithstanding
the provisions of Article 445, Paragraph 2 of the Companies Act,
record the whole of the amount contributed pursuant to the provision of Article 2-9 of the Supplementary Provisions as the amountof the crisis response reserve. For this purpose, reference to “thisAct” in Article 445, Paragraph 1 of the said Act shall be changed
to read “this Act or the Development Bank of Japan Inc. Act (ActNo. 85 of 2007).”

Corporate Data

Article 2-15 Supplement or Encouragement of Financing
Conducted by Financial Institutions, Etc., in
Special Investment Operations
The purpose of the Corporation in conducting special investment
operations shall be to supplement or encourage financing conducted by financial institutions and investment conducted byprivate sector.

Article 2-18 Special Provisions, Etc., on Business Plan with
Regard to Special Investment Operations
1. The Corporation shall include the implementation policy for the
special investment operations in its business plans provided forunder Article 17, as stipulated in the Ministry of Finance Ordinance,
until the completion of the special investment operations.
2. The Corporation shall include the implementation status of the special investment operations based on the implementation policy
provided for under the immediately preceding Paragraph, in its business reports provided for under Article 21 for each fiscal year up to
the fiscal year including the date of completion of the special investment operations, as stipulated in the Ministry of Finance Ordinance.
3. In addition to matters set forth in each of the Items of Article 27 of
the Companies Act, matters regarding proper implementation of
special investment operations shall be included or recorded in the
Articles of Incorporation of the Corporation, until the completion of
the special investment operations.

Article 2-21 Securing of Appropriate Competitive Relationships
1. The Corporation shall, for an indefinite period, pay special attention
in conducting its business so that it will not upset its appropriatecompetitive relationships with other business entities.
2. The Corporation shall, for an indefinite period, include, in its business plans provided for under Article 17, a policy concerning
securing of appropriate competitive relationships with other business entities as stipulated in the Ministry of Finance Ordinance.
3. The Corporation shall, for an indefinite period, describe, in its business reports provided for under Article 21, the state of
implementation of its business based on the policy mentioned in
the immediately preceding Paragraph as stipulated in the Ministryof Finance Ordinance.

as the “special investment reserve” in this Item, Paragraph 1, Item(2) of the following Article and Article 449, Paragraph 1),” reference
to “the amount to be appropriated to reserves” in the same Item
shall be changed to read “the amount to be appropriated toreserves or special investment reserve,” reference to “the paid-in
capital” in Article 448, Paragraph 1, Item (2) of the said Act shallbe changed to read “the paid-in capital or special investment
reserve,” and reference to “is appropriated to paid-in capital” inArticle 449, Paragraph 1 of the said Act shall be changed to read“is appropriated to paid-in capital or special investment reserve.”
4. The Corporation may reduce the amount of surplus funds andincrease the amount of its special investment reserve, whenever
the Corporation deems this necessary in order to implement the
special investment operations properly. For this purpose, the following matters shall be determined:(1) The amount by which the amount of surplus funds will be
reduced; and(2) The date on which the increase in the amount of the special
investment reserve will become effective.
5. The determination of the matters referred to in each Item of theimmediately preceding Paragraph shall be made by resolution of ashareholders’ meeting.
6. The amount provided for under Paragraph 4, Item (1) of this Article
may not exceed the amount of surplus funds as of the date provided for under Item (2) of the said Paragraph.
7. The Corporation shall establish the special investment surplus
funds and record the amount of profit or loss resulting from thecalculation of profits and losses pertaining to the special investment operations for each fiscal year as stipulated in the Ministry of
Finance Ordinance.

The DBJ Group’s Corporate Governance

Article 2-14 Capital Contribution, Etc., by the Government
with Regard to Special Investment Operations
1. The Government may make capital contributions to the
Corporation, to the extent of the amount approved by the budget,whenever the Government deems necessary for proper implementation of special investment operations by the Corporation,
until March 31, 2026.
2. The Corporation shall not appropriate money provided throughcapital contributions provided for in the preceding Paragraph toany funds other than funds for special investment operations.

Article 2-17 Special Investment Operations Rules
1. The Corporation shall set rules regarding special investment operations (in the following Paragraph referred to as the “special
investment operations rules”) in line with the special investment
guidelines, with respect to matters concerning implementation of
special investment operations stipulated in the Ministry of FinanceOrdinance, and shall obtain authorization therefor from the Ministerof Finance. If the Corporation intends to revise such rules, thesame shall apply.
2. The Minister of Finance may order the Corporation to revise thespecial investment operations rules authorized pursuant to theprovision of the preceding Paragraph, if he/she deems that suchrules have become inappropriate for the proper implementation of
special investment operations by the Corporation.

the special investment operations, by March 31, 2031.
2. When the special investment operations are completed, theCorporation shall promptly notify the Minister of Finance tothat effect.
3. The Minister of Finance shall, when notified pursuant to the provision of the immediately preceding Paragraph, give public notice tothat effect.

The DBJ Group’s Strategy

Article 2-13 Government’s Holding of Shares with Regard toSpecial Investment Operations
With a view to ensure proper implementation of special investment
operations by the Corporation, the Government shall hold one-halfor more of the total number of issued shares of the Corporation,
until the Corporation completes the special investment operations.

(1) Standards to be followed in deciding the business entities
that will receive funds from the special investment operations
and the particulars of such supply of funds;(2) Matters regarding appropriate financial management of thespecial investment operations;(3) Matters regarding securing of appropriate competitive relationships between the Corporation and other business entities;(4) Matters regarding the system to be established to evaluate
and supervise the implementation status of special investment operations;(5) Matters regarding reporting to the Minister of Finance on theimplementation status of special investment operations; and(6) Any other matters necessary to ensure proper implementationof special investment operations.

The DBJ Group’s Value Creation Storysocioeconomic vitality and sustainable development of Japan, as
well as for special business activities, and those of which the business entities that will receive funds from the said investment
business and the particulars of such supply are decided during theperiod from the date on which the authorization specified in Article
2-17, Paragraph 1 of the Supplementary Provisions is obtained
through March 31, 2026, and any other businesses incidental
thereto (including those conducted on and after April 1, 2026).
3. “Special business activities” set forth in the immediately preceding
Paragraph means the following business activities:(1) Business activities conducted by Japanese business entities
with the aim of improving productivity and profitability by cultivating new business through effective use of insufficiently its
management resources not sufficiently used, or by promoting
management innovation mainly through co-ordinated alignment with business entities in different fields and effective
combination of management resources; and(2) Business activities that provide funds to the business activities set forth in the preceding Item.
4. “Investment business” set forth in Paragraph 2 means the following
businesses concerning supply of funds:(1) To lend money through subordinated loans (which means
loans made under loan agreements with special clause of subordinated contents with regard to the payment of principal andinterest, and stipulated in the Ministry of Finance Ordinance);(2) To make capital contributions;(3) To acquire subordinated corporate debentures (which means
corporate debentures with special clause of subordinatedcontents with regard to the payment of principal and interest,and stipulated in the Ministry of Finance Ordinance); and(4) In addition to those set forth in the preceding three Items, toprovide funds in the manner approved in advance by the
Minister of Finance.

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The Development Bank of Japan Inc. Act

Data Section

Article 2-30 M utatis Mutandis Application of theCompanies Act
1. The provisions of Article 449, Paragraph 6 (limited to the portions
relating to Item (1)) and Paragraph 7, and Article 828 (limited to the
portions relating to Paragraph 1, Item (5) and Paragraph 2, Item(5)) of the Companies Act shall apply mutatis mutandis to cases
where the amount of crisis response reserve, the amount of special investment reserve or the amount of special investment
surplus funds is reduced as set forth in Article 2-26, Paragraph 1of the Supplementary Provisions. For this purpose, references to“paid-in capital” in Article 449, Paragraph 6, Item (1) of the said Act
shall be changed to read the amount of crisis response reserve
set forth in Article 2-26, Paragraph 1 of the Supplementary
Provisions of the Development Bank of Japan Inc. Act (Act No. 85
of 2007) (crisis response reserve set forth in Article 2-22,
Paragraph 1 of the Supplementary Provisions of the said Act;

Corporate Data

Article 2-29 S pecial Rules of the Act Concerning Restrictions
on Fiscal Assistance by the Government to
Corporations
Notwithstanding the provision of Article 1 of the Act Concerning
Restrictions on Fiscal Assistance by the Government to
Corporations, the Corporation shall comply with the preceding two
Articles with respect to the dividend or distribution of profit or surplus funds to the capital contributions under Article 2-9 of the
Supplementary Provisions or the capital contributions under Article
2-14, Paragraph 1 of the Supplementary Provisions.

hereinafter in Article 828, Paragraph 1, Item (5) the same), theamount of special investment reserve (special investment reserve
set forth in Article 2-23, Paragraph 1 of the Supplementary
Provisions of the said Act; hereinafter in this Item the same), or
special investment surplus funds (special investment surplus funds
set forth in Article 2-23, Paragraph 7 of the Supplementary
Provisions of the said Act; hereinafter in this Item the same);“Article 447, Paragraph 1, Item (3)” shall be changed to read
“Article 2-26, Paragraph 1, Item (2) of the Supplementary
Provisions of the said Act”; references to “paid-in capital of” inArticle 828, Paragraph 1, Item (5) of the said Act shall be changed
to read “the amount of crisis response reserve, the amount ofspecial investment reserve, or special investment surplus funds
set forth in Article 2-26, Paragraph 1 of the Supplementary
Provisions of the Development Bank of Japan Inc. Act concerning”; “on which the reduction in the amount of paid-in capital” shallbe changed to read “on which the reduction in the amount of thesaid crisis response reserve, the amount of special investment
reserve, or the amount of special investment surplus funds”; andreferences to “, the trustee in bankruptcy or a creditor, who did notgive approval to the reduction in the amount of paid-in capital” inParagraph 2, Item (5) of the said Article shall be changed to read“or the trustee in bankruptcy.”
2. The provisions of Article 449 (other than the proviso of Paragraph 1
and Paragraph 6, Item (2)) and Article 828 (limited to the portions
relating to Paragraph 1, Item (5) and Paragraph 2, Item (5)) of theCompanies Act shall apply mutatis mutandis to cases where theamount of crisis response reserve is reduced as set forth in Article
2-27, Paragraph 1 of the Supplementary Provisions. For this purpose, references to “paid-in capital or reserves (hereinafter in this
Article referred to as “Paid-In Capital, Etc.”)” in the main clause of
Article 449, Paragraph 1 of the said Act shall be changed to read“crisis response reserve as set forth in Article 2-27, Paragraph 1 of
the Supplementary Provisions of the Development Bank of Japan
Inc. Act (Act No. 85 of 2007) (crisis response reserve set forth in
Article 2-22, Paragraph 1 of the Supplementary Provisions of thesaid Act; hereinafter in this Article and Article 828, Paragraph 1,
Item (5) and Paragraph 2, Item (5) the same)”; “In cases where...
(excluding cases where the whole of the amount by which thereserves are reduced is appropriated to the paid-in capital)” shallbe changed to read “In cases where…”; “of Paid-In Capital, Etc.”
shall be changed to read “of crisis response reserve”; references
to “Paid-In Capital, Etc.” in Paragraph 2, Item (1) of the said Article
shall be changed to read “crisis response reserve”; references to“Ordinance of the Ministry of Justice” in Item (2) of the saidParagraph shall be changed to read the “Ministry of FinanceOrdinance”; references to “Paid-In Capital, Etc.” in Paragraph 4
and the proviso of Paragraph 5 of the said Article shall be changed
to read “crisis response reserve”; references to “paid-in capital” inParagraph 6, Item (1) of the said Article shall be changed to read“crisis response reserve set forth in Article 2-27, Paragraph 1 of
the Supplementary Provisions of the Development Bank of Japan
Inc. Act”; “Article 447, Paragraph 1, Item (3)” shall be changed toread “Paragraph 4, Item (2) of the said Article”; references to “paidin capital of” in Article 828, Paragraph 1, Item (5) of the said Act
shall be changed to read “crisis response reserve set forth in
Article 2-27, Paragraph 1 of the Supplementary Provisions of theDevelopment Bank of Japan Inc. Act concerning”; “on which the
reduction in the amount of paid-in capital” shall be changed to read“on which the reduction in the amount of the said crisis response
reserve”; and references to “paid-in capital” in Paragraph 2, Item(5) of the said Article shall be changed to read “crisis response
reserve set forth in Article 2-27, Paragraph 1 of the Supplementary
Provisions of the Development Bank of Japan Inc. Act.”
3. The provisions of Article 449 (other than the proviso of Paragraph
1 and Paragraph 6, Item (2)) and Article 828 (limited to the portions
relating to Paragraph 1, Item (5) and Paragraph 2, Item (5)) of theCompanies Act shall apply mutatis mutandis to cases where theamount of special investment reserve is reduced as set forth in

The DBJ Group’s Corporate Governance

Article 2-27 Payment to National Treasury
1. If it is deemed that the financial basis necessary for proper implementation of the crisis response business has been sufficiently
secured, the Corporation shall pay to the national treasury anamount equivalent to all or a part of the amount of the crisis
response reserve. In that case, the Corporation shall reduce thecrisis response reserve by the amount equivalent to such amountto be paid to the national treasury.
2. If it is deemed unnecessary to maintain the current level of thespecial investment reserve for the proper implementation of thespecial investment operations taking into account the state of
implementation and the financial condition of the special investment operations, the Corporation may reduce the amount of thespecial investment reserve in whole or in part. In that case, theCorporation shall pay to the national treasury an amount calculated
as prescribed by the Ministry of Finance Ordinance as the amount,out of the amount of such reduction, that should belong to thenational treasury on the basis of the proportion of the amount of
the capital contributions made by the Government pursuant to theprovision of Article 2-14, Paragraph 1 of the Supplementary
Provisions to the amount of the special investment reserve.
3. If, in cases where the amount of the special investment surplus
funds exceeds zero, it is deemed unnecessary to maintain thecurrent level of the special investment surplus funds for the proper
implementation of the special investment operations taking into
account the state of implementation and the financial condition of
the special investment operations, the Corporation may reduce
the amount of the special investment surplus funds in whole or inpart. In that case, the Corporation shall pay to the national treasury
an amount calculated as prescribed by the Ministry of FinanceOrdinance as the amount, out of the amount of such reduction,that should belong to the national treasury on the basis of the proportion of the amount of the capital contributions made by theGovernment pursuant to the provision of Article 2-14, Paragraph 1of the Supplementary Provisions to the amount of the special
investment reserve.
4. In the case of the preceding three Paragraphs, the following matters shall be determined by resolution of a shareholders’ meeting:(1) The amount by which the amount of the crisis response
reserve, the amount of the special investment reserve or theamount of the special investment surplus funds is reduced;and(2) The date on which the reduction of the amount of the crisis
response reserve, the amount of the special investment
reserve or the amount of the special investment surplus funds
becomes effective.
5. The resolution provided for under the preceding Paragraph shallnot become effective without authorization of the Minister ofFinance.
6. The aggregate of the amounts to be paid pursuant to the provisionof Paragraphs 1 through 3 of this Article may not exceed theDistributable Amount as of the date provided for under Paragraph
4, Item (2) of this Article.

Article 2-28
1. If the Corporation goes into liquidation and there still remains any
residual property after performance of its obligations, theCorporation shall pay to the national treasury an amount equivalent
to the total amount (if the amount of such residual property is lessthan the aggregate of the amount of the crisis response reserveand the amount calculated as described below, an amount ofsuch residual property) calculated as prescribed by the Ministry of
Finance Ordinance as the amount, out of the aggregate of theamount of the crisis response reserve as of the date of such liquidation (if, after reductions of the amount of the crisis response
reserve pursuant to the provision of Article 2-26, Paragraph 1 of
the Supplementary Provisions, the cumulative amount of theamounts of increases in the amount of the crisis response reserve
pursuant to the provision of Paragraph 6 of the said Article is lessthan the cumulative amount of the amounts of such reductions, anamount after adding the shortfall) and the amount of the special
investment reserve and the special investment surplus funds as ofthe same date (if, after reductions of the amount of the special
investment reserve pursuant to the provision of Paragraph 1 of thesaid Article, the cumulative amount of the amounts of increases in
the amount of the special investment reserve pursuant to the provision of Paragraph 6 of the said Article is less than the cumulative
amount of such amounts of reductions, or if, after reductions of
the amount of the special investment surplus funds pursuant to
the provision of Paragraph 1 of the said Article, the cumulative
amount of the amounts of increases in the amount of the special
investment surplus funds pursuant to the provision of Paragraph 6of the said Article is less than the cumulative amount of suchamounts of reductions, an amount after adding the respective
shortfalls), that should belong to the national treasury on the basisof the proportion of the amount of the capital contributions madeby the Government pursuant to the provision of Article 2-14,
Paragraph 1 of the Supplementary Provisions to the amount of thespecial investment reserve.
2. The payment under the preceding Paragraph shall be made inadvance of the distribution of the residual property to shareholders.
3. The payment procedures or any other matters necessary in connection with the payments to be made pursuant to the provisionsof Paragraphs 1 through 3 of the immediately preceding Article andParagraph 1 of this Article shall be prescribed in the Cabinet Order.

The DBJ Group’s Strategy

Article 2-26 Reduction in Amount of Crisis Response Reserve,
Etc., When Deficit Is Covered
1. If the amount of capital reserve and the amount of earned surplus
reserve have become zero, the Corporation may reduce theamount of the crisis response reserve, the amount of the special
investment reserve or the amount of the special investment surplus funds (limited, as regards the amount of the special
investment surplus funds, to the case where such amountexceeds zero). For this purpose, the following matters shall be
determined by resolution of a shareholders’ meeting:(1) The amount by which the amount of the crisis response
reserve, the amount of the special investment reserve or theamount of the special investment surplus funds will be
reduced; and(2) The date on which the reduction of the amount of the crisis
response reserve, the amount of the special investment
reserve or the amount of the special investment surplus funds
will become effective.
2. The resolution provided for under the preceding Paragraph shall not
become effective without authorization of the Minister of Finance.
3. The amount of the crisis response reserve, the amount of the special investment reserve or the amount of the special investment
surplus funds under Paragraph 1, Item (1) of this Article may notexceed the amount of the crisis response reserve, the amount of
the special investment reserve or the amount of the special investment surplus funds, respectively, as of the date set forth in Item (2)of the said Paragraph.
4. The aggregate of the amount of the crisis response reserve, theamount of the special investment reserve and the amount of thespecial investment surplus funds as referred to in Paragraph 1,
Item (1) of this Article may not exceed the amount calculated by
the method prescribed by the Ministry of Finance Ordinance as
the amount of deficit as of the date of the shareholders’ meetingreferred to in the said Paragraph.
5. If the amount of the special investment surplus funds is notexceeding zero, the amount of the special investment reserve as
referred to in Paragraph 1, Item (1) of this Article may not exceed
the amount calculated by the method prescribed by the Ministry of
Finance Ordinance as the amount by which the amount of thespecial investment reserve may be reduced.

6. If the amount of surplus funds of the Corporation exceeds zeroafter a reduction of the amount of the crisis response reserve, theamount of the special investment reserve or the amount of thespecial investment surplus funds pursuant to the provision of
Paragraph 1 of this Article, the Corporation shall increase, in an
amount equivalent to such excess, the amount of the crisis
response reserve, the amount of the special investment reserve or
the amount of the special investment surplus funds until the time
when the cumulative amount of the amounts of the increases in
the amount of the crisis response reserve, the amount of the special investment reserve or the amount of the special investment
surplus funds pursuant to the provision of this Paragraph equals
the cumulative amount of amounts of reductions, as prescribed by
the Minister of Finance Ordinance.

The DBJ Group’s Value Creation Story

Paragraph 4, Item (1) of the Supplementary Provisions thathave been paid to the national treasury), if any;(4) The amount by which the amount of paid-in capital orreserves has been reduced after the last day of the mostrecent fiscal year to increase the amount of the special investment reserve, if any;(5) The amount by which the amount of surplus funds has been
reduced after the last day of the most recent fiscal year toincrease the amount of the special investment reserve, if any;and(6) In addition to those listed in the preceding two Items, the total
amount of the amounts recorded to each account as prescribed in the Ministry of Finance Ordinance.
3. If the Corporation calculates the distributable amount under Article
461, Paragraph 2 of the Companies Act (which shall, in Article
2-27, Paragraph 6 of the Supplementary Provisions, be referred toas the “Distributable Amount”), the Corporation shall deduct, fromthe total of the amounts set forth in Article 461, Paragraph 2, Items(1) and (2) of the said Act, the total of the amounts recorded toeach account as the amount of profit pertaining to the special
investment operations for the period set forth in Article 441,
Paragraph 1, Item (2) of the Companies Act in the case where the
Corporation obtains the approval referred to in Paragraph 4 of thesaid Article (or, in cases set forth in the proviso to the saidParagraph, the approval under Paragraph 3 of the said Article) of
the temporary financial statements referred to in Paragraph 1 ofthe said Article and any other amounts recorded to each accountas prescribed in the Ministry of Finance Ordinance.

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85

The Development Bank of Japan Inc. Act“Paragraph 4, Item (2) of the said Article”; references to “paid-in
capital of” in Article 828, Paragraph 1, Item (5) of the said Act shallbe changed to read “special investment surplus funds set forth in
Article 2-27, Paragraph 3 of the Supplementary Provisions of theDevelopment Bank of Japan Inc. Act concerning”; “on which the
reduction in the amount of paid-in capital” shall be changed toread “on which the reduction in the amount of the said special
investment surplus funds”; and references to “paid-in capital”
in Paragraph 2, Item (5) of the said Article shall be changed toread “special investment surplus funds set forth in Article 2-27,
Paragraph 3 of the Supplementary Provisions of the Development
Bank of Japan Inc. Act.”

Article 10 Organizational Meeting
For the purpose of application of the provision of Article 65,
Paragraph 1 of the Companies Act concerning the incorporation of
the Corporation, reference to the “on and after either the dateunder Article 58, Paragraph 1, Item (3) or the last day of the period
under such item, whichever comes later,” shall be changed toread “after allotment of shares set forth in Article 8, Paragraph 1 of
the Supplementary Provisions of the Development Bank of Japan
Inc. Act (Act No. 85 of 2007).”
Article 11 Establishment of the Corporation
Contributions to be made by DBJ pursuant to the provision of
Article 9 of the Supplementary Provisions shall be made when theprovision of Article 26 of the Supplementary Provisions becomes
effective, and the Corporation shall be established, notwithstanding the provision of Article 49 of the Companies Act.
Article 12 Registration of Incorporation
Notwithstanding the provision of Article 911, Paragraph 1 of theCompanies Act, the Corporation shall register its incorporation
without delay after the establishment of the Corporation.
Article 13 Transfer to the Government without Consideration
The shares to be acquired by DBJ through its capital contribution
shall be transferred to the Government without consideration at thetime of establishment of the Corporation.
Article 14 Exception from Application of the Companies Act
The provisions of Article 30 and Part II, Chapter 1, Section 3 of theCompanies Act shall not apply to the incorporation of 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

Data Section

Article 7 S hares to Be Issued upon the Incorporation of
the Corporation
1. The following matters regarding the shares to be issued upon theincorporation of the Corporation, and total number of shares which

Article 9 Capital Contribution
Upon the incorporation of the Corporation, DBJ shall contribute allof its properties, except assets to be assumed by Japan pursuant
to the provision of Article 15, Paragraph 2 of the Supplementary
Provisions, to the Corporation.

Corporate Data

Article 6 Articles of Incorporation
The founding members shall prepare the Articles of Incorporationand have them authorized by the Minister of Finance.

Article 8 Subscription for Shares
1. DBJ shall subscribe for all shares to be issued by the Corporation
upon its incorporation, and the founding members shall allocate
them to DBJ.
2. The right as the subscriber for shares allocated pursuant to theprovision of the preceding Paragraph in connection with the incorporation of the Corporation shall be exercised by the Government.

The DBJ Group’s Corporate Governance

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 to abolish 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 5 Founding Members
The Minister of Finance shall appoint the founding members toserve as promoters for incorporation of the Corporation.

the Corporation can issue shall be determined in the Articles ofIncorporation:(1) Number of shares (or, if the Corporation is to be organized as
a company issuing class shares, classes of those shares andnumber of each class of shares);(2) Amount to be paid for shares (the amount of cash to be paidor amount of non-cash property to be contributed in
exchange for each share); and(3) Matters relating to the amounts of paid-in capital and capitalreserves.
2. Notwithstanding the provision of Article 445, Paragraph 2 of theCompanies Act, with respect to the shares to be issued by the
Corporation upon its incorporation, the Corporation may elect not
to account for the amount in excess of (, as well as the amountnot exceeding,) a half of the amounts of properties contributed by
DBJ upon the incorporation of the Corporation as paid-in capital.
For this purpose, reference to “this Act” in Article 445, Paragraph 1of the Companies Act shall be changed to read “this Act or theDevelopment Bank of Japan Inc. Act (Act No. 85 of 2007).”

The DBJ Group’s Strategy

Article 2-31 Penal Provisions
1. In any of the following cases, any directors, executive officers­(shikkoyaku), accounting counsel (kaikei sanyo) or its members
who should perform duties as such, or statutory auditors of the
Corporation shall be punished with a non-penal fine not exceeding
1,000,000 yen:
(1) When he/she has suspended or abolished crisis response
business at the designated office in violation of the provisionof Article 2-10, Paragraph 2 of the Supplementary Provisions;(2) When he/she has appropriated money provided through capital contributions as set forth in Article 2-14, Paragraph 1 toany fund other than the fund for special investment operations, in violation of the provision of Article 2-14, Paragraph 2of the Supplementary Provisions;(3) When he/she has violated the order referred to in Article 2-17,
Paragraph 2 of the Supplementary Provisions;(4) When he/she has not submitted or published documents
stating the status of income and expenditures for each category of business operations in each Item of Article 2-19 of the
Supplementary Provisions, or has submitted or publishedsuch documents containing false statements, in violation of
the provision of Article 2-19 of the Supplementary Provisions;(5) When he/she has not submitted a report on the completion of
special investment operations in violation of the provision of
Article 2-20, Paragraph 2 of the Supplementary Provisions.
2. With regard to the application of the provision of Article 34, Item (8)in the case where the provision of Article 2-24 of the
Supplementary Provisions applies, references to “limit” in the said
Item shall be changed to read “limit calculated by including theaggregate amount of crisis response reserve, special investment
reserve and special investment surplus funds in the amount ofpaid-in capital and reserves as set forth in the provisions of Article
2-24 of the Supplementary Provisions.”
3. With regard to the application of the provision of Article 34, Item(10) in the case where the provision of Article 2-11, Paragraph 1,
Article 2-18, Paragraph 1 or Article 2-21, Paragraph 2 of the
Supplementary Provisions applies, references to “Article 17” in thesaid Item shall be changed to read “Article 17, or Article 2-11,
Paragraph 1, Article 2-18, Paragraph 1 or Article 2-21, Paragraph
2 of the Supplementary Provisions.”
4. With regard to the application of the provision of Article 34, Item(13) in the case where the provision of Article 2-11, Paragraph 2,
Article 2-18, Paragraph 2 or Article 2-21, Paragraph 3 of the
Supplementary Provisions applies, references to “Article 21” in thesaid Item shall be changed to read “Article 21, or Article 2-11,
Paragraph 2, Article 2-18, Paragraph 2 or Article 2-21, Paragraph
3 of the Supplementary Provisions.”

Article 4 S
 pecial 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 ofJapan (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 (Act No. 73 of 1999;
hereinafter, except for Article 26 of the Supplementary Provisions,referred to as the “DBJ Act”), during the Preparatory Period (theperiod from the date on which this Act comes into force up to
September 30, 2008; the same in Paragraph 5).
2. DBJ shall prepare its basic policy regarding the borrowing of Longterm Loans to be made pursuant to the provision of the preceding
Paragraph which provides for the matters relating to the borrowingof the Long-term Loans such as the amounts of borrowing andcurrency in which the Long-term Loans are denominated, andobtain authorization of the Minister of Finance, without delay after
the date on which this Act comes into force in the case of the
fiscal year during which such date is included, or prior to April 1,2008 in the case of the fiscal year beginning on April 1, 2008. If
the Corporation intends to revise it, the same shall apply.
3. If DBJ borrows a Long-term Loan as set forth in Paragraph 1, DBJ
shall notify the Minister of Finance thereof without delay as set
forth in the Minister of Finance Ordinance.
4. The Long-term Loans as set forth in Paragraph 1 shall be deemedas the borrowed money under Article 42, Paragraph 1 of the DBJ
Act and the provisions of Article 44 of the DBJ Act shall apply thesaid Long-term Loans.
5. If DBJ borrows a short-term borrowing during the Preparatory
Period as set forth in Article 42, Paragraph 2 of the DBJ Act, reference to “within the current fiscal year” in Paragraph 3 of the said
Article shall be changed to read “within one year.”
6. If DBJ borrows a Long-term Loans as set forth in Paragraph 1, reference to “this Act, in Article 13, Paragraph 2, Item (1) of the DBJ
Act shall be changed to read “this Act or the Development Bank ofJapan Inc. Act (Act No. 85 of 2007) or order under these Acts”,
and reference to “this Act and the Cabinet Order under this Act” inArticle 48 of the DBJ Act shall be changed to read “this Act andthe Development Bank of Japan Inc. Act, and the Cabinet Orders
under these Acts.” Reference to “this Act” in Article 49, Article 50,
Paragraph 1, and Article 52 of the DBJ Act shall be changed toread “this Act and the Development Bank of Japan Inc. Act,” andreference to “this Act” in Article 54, Items (1) and (2) of the DBJ
Act shall be changed to read “this Act or the Development Bank ofJapan Inc. Act.”
7. “Long-term Loans” set forth in Paragraphs 1 through 4 and theimmediately preceding Paragraph mean the loans from financial
institutions such as banks, other than the short-term borrowings
set forth in Article 42, Paragraph 3 of the DBJ Act which is applied
after changing to read as set forth in Paragraph 5.
8. For the purpose of application of the provision of Article 22,
Paragraph 1 of the DBJ Act to the mid-term government policy
principles set forth in the said Paragraph for the period commencing on April 1, 2008, reference to the “three-year mid-term
government policy principles” shall be changed to read the “government policy principles for the term beginning on April 1, 2005.”

The DBJ Group’s Value Creation Story

Article 2-27, Paragraph 2 of the Supplementary Provisions. For
this purpose, references to “paid-in capital or reserves (hereinafterin this Article referred to as “Paid-In Capital, Etc.”)” in the mainclause of Article 449, Paragraph 1 of the said Act shall bechanged to read “special investment reserve as set forth in Article
2-27, Paragraph 2 of the Supplementary Provisions of theDevelopment Bank of Japan Inc. Act (Act No. 85 of 2007) (special
investment reserve set forth in Article 2-23, Paragraph 1 of the
Supplementary Provisions of the said Act; hereinafter in this Article
and Article 828, Paragraph 1, Item (5) and Paragraph 2, Item (5)the same)”; “In cases where... (excluding cases where the wholeof the amount by which the reserves are reduced is appropriatedto the paid-in capital)” shall be changed to read “In cases
where…”; “of Paid-In Capital, Etc.” shall be changed to read “ofspecial investment reserve”; references to “Paid-In Capital, Etc.” inParagraph 2, Item (1) of the said Article shall be changed to read
“special investment reserve”; references to “Ordinance of the
Ministry of Justice” in Item (2) of the said Paragraph shall bechanged to read the “Ministry of Finance Ordinance”; references
to “Paid-In Capital, Etc.” in Paragraph 4 and the proviso of
Paragraph 5 of the said Article shall be changed to read “special
investment reserve”; references to “paid-in capital” in Paragraph 6,
Item (1) of the said Article shall be changed to read “special investment reserve set forth in Article 2-27, Paragraph 2 of the
Supplementary Provisions of the Development Bank of Japan Inc.
Act”; “Article 447, Paragraph 1, Item (3)” shall be changed to read
“Paragraph 4, Item (2) of the said Article”; references to “paid-in
capital of” in Article 828, Paragraph 1, Item (5) of the said Act shallbe changed to read “special investment reserve set forth in Article
2-27, Paragraph 2 of the Supplementary Provisions of theDevelopment Bank of Japan Inc. Act concerning”; “on which the
reduction in the amount of paid-in capital” shall be changed toread “on which the reduction in the amount of the said special
investment reserve”; and references to “paid-in capital” inParagraph 2, Item (5) of the said Article shall be changed to read
“special investment reserve set forth in Article 2-27, Paragraph 2of the Supplementary Provisions of the Development Bank ofJapan Inc. Act.”
4. The provisions of Article 449 (other than the proviso of Paragraph 1
and Paragraph 6, Item (2)) and Article 828 (limited to the portions
relating to Paragraph 1, Item (5) and Paragraph 2, Item (5)) of theCompanies Act shall apply mutatis mutandis to cases where theamount of special investment surplus funds is reduced as set forthin Article 2-27, Paragraph 3 of the Supplementary Provisions. For
this purpose, references to “paid-in capital or reserves (hereinafterin this Article referred to as “Paid-In Capital, Etc.”)” in the mainclause of Article 449, Paragraph 1 of the said Act shall bechanged to read “special investment surplus funds as set forth in
Article 2-27, Paragraph 3 of the Supplementary Provisions of theDevelopment Bank of Japan Inc. Act (Act No. 85 of 2007) (special
investment surplus funds set forth in Article 2-23, Paragraph 7 of
the Supplementary Provisions of the said Act; hereinafter in this
Article and Article 828, Paragraph 1, Item (5) and Paragraph 2,
Item (5) the same)”; “In cases where... (excluding cases where thewhole of the amount by which the reserves are reduced is appropriated to the paid-in capital)” shall be changed to read “In cases
where…”; “of Paid-In Capital, Etc.” shall be changed to read “ofspecial investment surplus funds”; references to “Paid-In Capital,
Etc.” in Paragraph 2, Item (1) of the said Article shall be changed toread “special investment surplus funds”; references to “Ordinanceof the Ministry of Justice” in Item (2) of the said Paragraph shall bechanged to read the “Ministry of Finance Ordinance”; references to“Paid-In Capital, Etc.” in Paragraph 4 and the proviso of Paragraph
5 of the said Article shall be changed to read “special investment
surplus funds”; references to “paid-in capital” in Paragraph 6, Item(1) of the said Article shall be changed to read “special investment
surplus funds set forth in Article 2-27, Paragraph 3 of the
Supplementary Provisions of the Development Bank of Japan Inc.
Act”; “Article 447, Paragraph 1, Item (3)” shall be changed to read

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87

The Development Bank of Japan Inc. Act

Article 20 Transitional Measures for the Basic Policy
1. For the purposes of the basic policy, business plans and redemption plans for the first fiscal year of the Corporation, reference to“prior to the beginning of each fiscal year” in Article 13, Paragraph
1, Article 17 and Article 18 shall be changed to read “without
delay after the incorporation of the Corporation.”
2. For the purposes of the balance sheet, profit and loss statement
and business report for the first fiscal year of the Corporation, references to “For each fiscal year” and “the interim business period(the period from April 1 to September 30 of the current year) of thecurrent fiscal year, and its balance sheet, profit and loss statement
and business report for the current fiscal year” in Article 21 shallbe changed to read “For the fiscal year in which the date on which
the Corporation is established is included” and “the current fiscal
year,” respectively.
3. For the purpose of application of the provision of the preceding
Paragraph when the Corporation obtains the approval under Article
9, Paragraph 1, the “Ministry of Finance Ordinance” and “Ministerof Finance” in Article 21 which are applied mutatis mutandis after
changing to read in the said Paragraph shall be changed to readthe “Ministry of Finance Ordinance and the Cabinet Office
Ordinance” and the “Minister of Finance and the Prime Minister,”respectively.

Data Section

Article 22 S
 pecial Rules for Taxation of the Registration
License Tax
1. No registration license tax shall be assessed on registration of theincorporation of the Corporation pursuant to the provision of Article
12 of the Supplementary Provisions, and registration or recordation of the Corporation in connection with provisions of properties
upon the capital contribution by DBJ pursuant to the provision of
Article 9 of the Supplementary Provisions.
2. With respect to the registration license tax for registration or recordation of origination (hozen), creation (settei) or transfer (iten) of lien(sakidori token), pledge (shichiken) or mortgage (teitoken) tosecure the claims concerning business operations set forth in
Article 20, Paragraph 1, Item (1) of the Old DBJ Act which shall beassumed by the Corporation from DBJ pursuant to the provision of
Article 15, Paragraph 1 of the Supplementary Provisions, or registration of transfer of movable properties or transfer of claims,
based on the agreements executed by DBJ before the provisionof Article 48 of the Supplementary Provisions comes into force,the provision of Schedule III-22 of the Registration Tax Act (Act No.

Corporate Data

Article 21 S
 pecial Rules for Operations ofRegistered Financial Institution
1. Within three (3) months of the date set forth in Article 1, Item (3) of
the Supplementary Provisions (or, if the registration under Article
33-5, Paragraph 1 of the Financial Instruments and Exchange Act
is rejected during such period or if abolition of the operations of
the registered financial institution (the operations of registeredfinancial institution set forth in Article 33-5, Paragraph 1, Item (3) of
the Financial Instruments and Exchange Act, including the operations referred to in Article 3, Paragraph 1, Item (16) to be
conducted pursuant to the provision of Article 33-8, Paragraph 1of the same Act which is applied after changing to read as set
forth in Article 4, Paragraph 1; the same in this Article) is orderedpursuant to the provision of Article 52-2, Paragraph 1 of the
Financial Instruments and Exchange Act which is applied after thechanging to read as set forth in the immediately following
Paragraph, the period up to the date of such rejection or the dateof order of such abolition), the Corporation may, notwithstanding
the provision of Article 33-2 of the Financial Instruments andExchange Act which is applied after changing to read as set forthin Article 4, Paragraph 1, conduct the operations of the registeredfinancial institutions. If the Corporation applies for registration under
the said Article during such period, the same shall apply until thedate of receipt of notice of registration or the date of receipt ofnotice of no registration after the elapse of such period.
2. If the Corporation conducts the operations of registered financial
institution pursuant to the provision of the preceding Paragraph,the provisions of the Financial Instruments and Exchange Act(except for Article 33-6; Article 37, Paragraph 1, Item (2); Article
37-3, Paragraph 1, Item (2); Article 50-2, Paragraph 2; Article
52-2, Paragraph 1, Item (2) and Paragraph 3; Article 54; andArticle 64, Paragraph 2) shall apply by deeming the Corporation as
the registered financial institution (the Registered Financial
Institution set forth in Article 2, Paragraph 11 of the Financial
Instruments and Exchange Act). For this purpose, reference to“rescind the registration under Article 33-2” in Article 52-2,
Paragraph 1 (except for Item (2)) of the Financial Instruments andExchange Act shall be changed to read “order the abolition ofoperations of registered financial institution,” reference to “rescind
the registration under Article 29 or 33-2 or the authorization under
Article 30, Paragraph 1 pursuant to the provision of Article 52,

Paragraph 1 or Article 52-2, Paragraph 1” in Article 54-2, Item (1)of the same Act shall be changed to read “order the abolition ofoperations of the registered financial institution pursuant to theprovision of Article 52-2, Paragraph 1 which is applied after
changing to read as set forth in Article 21, Paragraph 2 of the
Supplementary Provisions of the Development Bank of Japan Inc.
Act (Act No. 85 of 2007),” reference to “registration under Article
29 or 33-2 is rescinded pursuant to the provision of Article 52,
Paragraph 1, Article 52-2, Paragraph 1, Article 53, Paragraph 3 or
Article 54” in Article 56, Paragraph 1 of the same Act shall bechanged to read the “abolition of operations of the registeredfinancial institution is ordered pursuant to the provision of Article
52-2, Paragraph 1 which is applied after changing to read as set
forth in Article 21, Paragraph 2 of the Supplementary Provisions of
the Development Bank of Japan Inc. Act,” and reference to“rescission of registration under Article 33-2 as set forth in Article
52-2, Paragraph 1” in Article 194-3, Item (3) of the same Act andreference to “rescission of registration under Article 33-2 as set
forth in Article 52-2, Paragraph 1 or 3 or Article 54” in Article
194-4, Paragraph 1, Item (5) of the same Act shall be changed toread “order of abolition of operations of the registered financial
institution pursuant to the provision of Article 52-2, Paragraph 1
which is applied after changing to read as set forth in Article 21,
Paragraph 2 of the Supplementary Provisions of the Development
Bank of Japan Inc. Act” and other required technical changes toread shall be prescribed in the Cabinet Order.
3. For the purpose of application of the provision of Article 33-5,
Paragraph 1, Item (1) of the Financial Instruments and Exchange
Act in the event that the Corporation is ordered to abolish theoperations of the registered financial institution pursuant to theprovision of Article 52-2, Paragraph 1 of the same Act which isapplied after changing to read as set forth in the immediately preceding Paragraph, the Corporation shall be deemed as the entity
whose registration under Article 33-2 of the same Act is rescindedpursuant to the provision of Article 52-2, Paragraph 1 of the same
Act, and the date on which such abolition is ordered shall bedeemed as the date of rescission of registration under the said
Article 33-2 pursuant to the provision of Article 52-2, Paragraph 1of the same Act.
4. For one year of the date set forth in Article 1, Item (3) of the
Supplementary Provisions, the Corporation may, notwithstanding
the provision of Article 64, Paragraph 2 of the Financial
Instruments and Exchange Act, cause any persons other thanthose who are registered pursuant to the provision of Paragraph 1of the said Article to conduct the duties of sales representatives(gaimu-in). If the Corporation applies for registration under the saidParagraph during such period, the same shall apply until the dateof receipt of notice of registration with respect to such applicationor the date of receipt of notice of no registration after the elapse ofsuch period with respect to such application.

The DBJ Group’s Corporate Governance

Article 17 Transitional Measures in Connection with
Assumption of Rights and Obligations
1. With respect to the Old Bank Debentures and interest coupons
concerning the obligations to be assumed by the Corporation pursuant to the provision of Article 15, Paragraph 1 of the

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 the provision of Article 15, Paragraph 1 of
the Supplementary Provisions (hereinafter in this Article referred toas the “Assumed Assets”) shall, notwithstanding the provision of
Article 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 (theareas of Aomori, Iwate, Miyagi, Akita, Yamagata, Fukushima
and Niigata prefectures): Minister of Finance and Minister ofLand, 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 19 Transitional Measures for the Fiscal Year
Notwithstanding the provision of Article 11, the first fiscal year of
the Corporation shall commence on the date on which of the
Corporation is established and end on March 31, 2009.

The DBJ Group’s Strategy

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).
2. If evaluation officers intend to make evaluations as set forth in thepreceding Paragraph, their evaluations shall be made based on
the market prices of the Assumed Properties as of the date on
which the Corporation is established; provided, however, that if it
is deemed inappropriate to use the market prices taking into
account the matters of the Assumed Properties such as the kinds
and purpose of use, their evaluations may be made not based on
the market prices of the Assumed Properties.
3. In addition to those set forth in the preceding two Paragraphs,
evaluation officers and other matters necessary for evaluations
shall be prescribed in the Cabinet Order.

Supplementary Provisions, the provisions of Article 43, Paragraphs
5 and 6 of the Old DBJ Act shall remain effective and in force
even after the provision of Article 26 of the Supplementary
Provisions becomes effective.
2. With respect to the old Hokuto bonds (the Hokkaido-Tohoku
Development Finance Corporation Bonds issued pursuant to theprovision of Article 27, Paragraph 1 of the Hokkaido-Tohoku
Development Finance Corporation Act (Act No. 97 of 1956; hereinafter in this Paragraph referred to as the “Old HTDFC Act”) before
abolishment under Article 17, Item (2) of the Supplementary
Provisions of the Old DBJ Act) and interest coupons to be
assumed by the Corporation pursuant to the provision of Article
15, Paragraph 1 of the Supplementary Provisions, the provisionsof Article 27, Paragraphs 3 and 4 of the Old HTDFC Act shallremain effective and in force even after the provision of Article 26of the Supplementary Provisions becomes effective.
3. The guarantee agreements executed by the Government pursuant
to the provision of Article 45, Paragraph 1 or 3 of the Old DBJ Act
with respect to the obligations concerning the Old Bank
Debentures to be assumed by the Corporation pursuant to theprovision of Article 15, Paragraph 1 of the Supplementary
Provisions shall continue to be effective upon the previous terms
and conditions with respect to such obligations concerning the
Old Bank Debentures even after the assumption thereof by the
Corporation.
4. The guarantee agreements executed by the Government pursuant
to the provision of Article 37-3, Paragraph 1 or 2 of the old Japan
Development Bank Act (Act No. 108 of 1951; hereinafter in thisParagraph referred to as the “Old JDB Act”) before abolishment
under Article 17, Item (1) of the Supplementary Provisions of the
Old DBJ Act with respect to the obligations concerning the foreign
currency-denominated bonds set forth in Article 37-2, Paragraph
1 of the Old JDB Act issued pursuant to the provision of Article
37-2, Paragraph 1 or 2 of the Old JDB Act to be assumed by the
Corporation pursuant to the provision of Article 15, Paragraph 1 of
the Supplementary Provisions shall continue to be effective upon
the previous terms and conditions with respect to such obligations
concerning the foreign currency-denominated bonds even after
the assumption thereof by the Corporation.
5. The guarantee agreements executed by the Government pursuant
to the provision of Article 2, Paragraph 2 or 3 of the Act
Concerning Special Measures for Acceptance of Foreign Capitals
from the International Bank for Reconstruction and Development
and Other Organizations (Act No. 51 of 1953) with respect to the
obligations concerning the Old Bank Debentures to be assumed
by the Corporation pursuant to the provision of Article 15,
Paragraph 1 of the Supplementary Provisions shall continue to beeffective upon the previous terms and conditions with respect tosuch obligations constituting the Old Bank Debentures even after
the assumption thereof by the Corporation, and the public imposts
such as taxes on interests on and profits from redemption of the
Old Bank Debentures concerning those guarantee agreements
shall be the same as in effect under the previous arrangements.

The DBJ Group’s Value Creation Story

shall be taken over by the Corporation, except for those assets tobe assumed by the Government as set forth in the following
Paragraph.
2. Of the rights actually held by DBJ at the time of establishment of
the Corporation, the assets which will be considered no longer
necessary for the Corporation to smoothly perform its future business operation shall be assumed by Japan at the time ofestablishment of the Corporation.
3. The scope of assets to be assumed by Japan pursuant to theprovision of the immediately preceding Paragraph, and other matters required for transfer of those assets to Japan shall beprescribed in the Cabinet Order.
4. The fiscal year of DBJ commencing on April 1, 2008 shall end on
the day immediately preceding the date of dissolution of DBJ.
5. Settlement of accounts, and preparations, Etc. of list of properties,balance sheets, and profits and loss statements of DBJ for the
fiscal year commencing on April 1, 2008 shall be conducted by
the Corporation as previously conducted, except for the portions
relating to Article 38, Paragraph 1 (limited to the portions relating to
the Auditor’s opinions) and Article 40, Paragraph 1 (limited to the
portions relating to the Auditor’s opinions) of the Old DBJ Act. For
this purpose, the reference to “for each half-year from April to
September and from October to March of the following year” and“for each half-year and for each fiscal year” in Article 38, Paragraph
1 of the Old DBJ Act shall be deleted, and references to “within
two months after the end of the relevant half-year or three months
after the end of the fiscal year” in the said Paragraph shall bechanged to read “on or prior to December 31, 2008.” Reference
to “the settlement of accounts for each fiscal year not later thanMay 31 of the following fiscal year” in Article 39 of the Old DBJ Act
shall be changed to read “the settlement of accounts for the fiscal
year commencing on April 1, 2008 not later than November 30,
2008.” Reference to “November 30 of the following fiscal year” inArticle 4, Paragraph 3 of the Old DBJ Act shall be changed toread “November 30, 2009.”
6. Disposition of profits and payment into the national treasury by
DBJ under Article 41 of the Old DBJ Act for the fiscal year commencing on April 1, 2008 shall be conducted by the Corporation
as previously conducted. For this purpose, references to “eachfiscal year” and “May 31 of the following fiscal year” in Article 41,
Paragraph 3 of the Old DBJ Act shall be changed to read “thefiscal year commencing on April 1, 2008” and “November 30,
2008,” respectively.
7. The matters regarding the registration of the dissolution in the casethat DBJ is dissolved pursuant to the provision of Paragraph 1,
shall be prescribed in the Cabinet Order.

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89

Act for Partial Amendment of the Development Bank of Japan Inc.

The Development Bank of Japan Inc. Act(Act No. 29 of May 22, 2020)

Article 27 Transitional Measures for Abolition of theDevelopment Bank of Japan Act
1. Actions such as dispositions and procedures made, taken ordone pursuant to the provisions of the Old DBJ Act (except Article
10 thereof) before the provision of the immediately preceding
Article becomes effective shall be considered the actions suchdispositions and procedures made, taken, or done pursuant to thecorresponding provisions of this Act.
2. The provisions of Article 16, Paragraphs 5 and 6 of the
Supplementary Provisions of the Old DBJ Act shall still remain
effective even after the provisions of the immediately preceding

Article 67 Utilization of the Corporation’s Investment and
Financing Functions for Long-Term Business Funds
If the Government utilizes the Corporation’s investment and financing functions for long-term business funds on or after the date set
forth in Article 1, Item (3) of the Supplementary Provisions, theGovernment shall take measures necessary to secure the equal
competition conditions, as well as other measures necessary for
utilization of such investment and financing functions, paying attention to the Corporation’s appropriate competitive relationships withother business entities.

Data Section

Article 26 Abolition of the Development Bank of Japan Act
The Development Bank of Japan Act shall be abolished.

Article 66 Examinations
On or prior to the date set forth in Article 1, Item (3) of the
Supplementary Provisions, the Government shall examine measures to secure the equal competitive conditions with otherbusiness entities, with respect to the systems for which the investment and financing functions of DBJ are utilized pursuant to theprovisions of relevant laws (including ordinances under those laws),
such as the Act Concerning Collaterals for Borrowings of Electricity
Companies from The Development Bank of Japan (Act No. 145 of
1950), the Act Concerning the Securement of Oil Reserves, Etc.
(Act No. 96 of 1975), the Act Concerning Promotion of
Development and Promotion of Introduction of Alternative Energy to
Oil (Act No. 71 of 1980), the Special Measures Act Concerning
Promotion of Private Urban Development (Act No. 62 of 1987), theExtraordinary Measures Act Concerning Promotion of Business
Activities for Rationalization of Usage of Energy and Effective Useof Resources (Act No. 18 of 1993) and the Act Concerning
Facilitation of the Improvement, Etc. of Public Facilities, Etc. by
Private Fund, Etc. (Act No. 117 of 1999), while considering theconvenience of users of those systems, and take the required
measures based on the results of such examination.

3. For the examination referenced in the preceding Paragraph, theGovernment shall listen to the opinions of representatives of ordinary financial institutions and other relevant persons.

Corporate Data

Article 25 Delegation to the Cabinet Order
In addition to those set forth in Articles 2 to 24 of the
Supplementary Provisions, matters necessary for incorporation of
the Corporation and dissolution of DBJ, as well as other mattersnecessary for effectuation of these provisions shall be stipulated in
the Cabinet Order.

Article 29 to Article 65(Translation omitted)(Examination of Special Investment Business)
2. The Government shall, at the appropriate time after this Act takes
effect, examine the special investment operations (special investment operations set forth in Article 2-12, Paragraph 2 of the
Supplementary Provisions of the Development Bank of Japan Inc.
Act amended by this Act; hereinafter in this Paragraph the same)by Development Bank of Japan Inc. (hereinafter in this Paragraphreferred to as the “Corporation”) and the Government’s involvement in the Corporation based thereon, taking into consideration
the financing conducted by ordinary financial institutions andinvestment conducted by private sectors, the Corporation’s­implementation of special investment operations, the changeof social and economic affairs and others, and in the perspectiveof further promoting the long-term and other financial supply forthe sustainable growth of the Japanese economy, and whenever
the Government deems necessary, the Government shall takerequired measures based on the results of such examination.

The DBJ Group’s Corporate Governance

Article 24 Special Rules for Taxation of Local Taxes
No real estate acquisition tax or vehicle acquisition tax can be
imposed on acquisition of real estate or vehicle in connection withcapital investment to be made by DBJ pursuant to the provision of
Article 9 of the Supplementary Provisions.

Article 28 Transitional Measures for Application of Penal
Provisions
Penal provisions which were applicable to acts conducted prior to
the implementation of the provision of Article 26 of the
Supplementary Provisions or acts conducted after the implementation of the provision of the said Article as to which the provisions
then in force remain applicable pursuant to the provisions of this Act
shall remain applicable even after the implementation of this Act.

(Enforcement Date)
1. This Act shall come into force from the date of promulgation.

The DBJ Group’s Strategy

Article 23 Special Rules for Taxation of the Corporation Tax
1. Capital investment in the Corporation to be made by DBJ pursuant
to the provision of Article 9 of the Supplementary Provisions (hereinafter in this Article referred to as the “Specified In-kind Contribution”)
shall be deemed as qualified in-kind contribution set forth in Article
2, Item (12-14) of the Corporation Tax Act (Act No. 34 of 1965),
and the Corporation Tax Act and other laws and ordinances relating
to the corporation tax shall be applied on such basis.
2. With respect to assets and liabilities of DBJ to be transferred by
the Specified In-kind Contribution which shall be subject to the
Corporation Tax Act and other laws and ordinances relating to thecorporation tax pursuant to the provision of the immediately preceding Paragraph, the value evaluated by evaluation officers
pursuant to the provision of Article 16, Paragraph 1 of the
Supplementary Provisions shall be deemed as the book value;
provided, however, that with respect to allowance for loan losses,
the amount purported to be assumed by the Corporation pursuant
to the provision of the immediately following Paragraph shall bedeemed as the book value, and the book values of the amountsof allowances prescribed by the Cabinet Order such as allowance
for retirement payments shall be nil.
3. If it is determined to apply the provisions of Article 52 of the
Corporation Tax Act in the fiscal year in which the day prior to thedate of the Specified In-kind Contribution of the DBJ is included (inthe immediately following Paragraph referred to the “Final Fiscal
Year”), the amount up to the upper limit of individual allowance forloan losses set forth in Article 52, Paragraph 1 as calculated in thesaid Paragraph or the amount up to the amount calculated as prescribed by the Cabinet Order as set forth in Paragraph 2 of thesaid Article shall, notwithstanding the provisions of Paragraph 7 ofthe said Article, be assumed by the Corporation. For this purpose
with respect to calculation of the amount of income for the fiscal
year in which the date of the Specified In-kind Contribution of the
Corporation is included, the amount assumed by the Corporation
shall be included in the amount of profits.
4. The Corporation shall submit the financial statements of DBJ for
the Final Fiscal Year set forth in Article 38, Paragraph 1 of the Old
DBJ Act to the director of competent district tax office within three(3) months of the date of the Specified In-kind Contribution.

Article takes effect, with respect to the lending of funds by the
Corporation to the designated entities under Article 2, Paragraph 5of the Act Concerning Facilitation of the Improvement, Etc. of
Public Facilities, Etc. by Private Fund (Act No. 117 of 1999). For
this purpose, reference to the “Bank” and reference to, “in accordance with the provision of Item (1), Paragraph 1, Article 20
hereof, to provide funds required for businesses deemed under
Article 13 of the said Act” in Article 16, Paragraph 5 of the Old
DBJ Act shall be changed to read “Development Bank of Japan
Inc.” and “to provide funds required for business deemed under
Article 13 of the said Act”, respectively. References to “theinterest-free loans made by the Bank in accordance with the provisions of the preceding paragraph (excluding interest-free loans
using money deposited by the Private Urban Development
Promotion Organization provided in Article 3 of the Special
Measure Act concerning Promotion of Private Urban Development(Act No. 62 of 1987)” and “to the Bank” in Article 16, Paragraph 6of the Old DBJ Act shall be changed to read “the interest-freeloans made by Development Bank of Japan Inc. in accordancewith the provisions of the preceding paragraph” and “toDevelopment Bank of Japan Inc.,” respectively.
3. In addition to those set forth in the preceding two Paragraphs,
transitional measures necessary for the abolition of the DBJ Act
shall be prescribed by the Cabinet Order.

The DBJ Group’s Value Creation Story

35 of 1967) before amendment under Article 48 of the
Supplementary Provisions shall still remain effective and in force.

90

91

The DBJ Group’s Value Creation Story
The DBJ Group’s Strategy

Consolidated Financial Statements

P 141

Non-Consolidated Financial Statements

P 145

Capital Adequacy Ratio

The DBJ Group’s Corporate Governance

Financial Condition

P 92

Corporate Data
Data Section

92

93

CONSOLIDATED BALANCE SHEETCONSOLIDATED STATEMENT OF INCOME

Development Bank of Japan Inc. and Consolidated Subsidiaries

Development Bank of Japan Inc. and Consolidated Subsidiaries

As of March 31,

2020

2019

2020

For the year ended March 31,

AssetsCash and due from banks (Notes 2 (c), 11, 14 and 28)
Call loans and bills bought (Note 28)

Thousands of
U.S. Dollars (Note 1)

Millions of Yen

2020

2019

2020

Income¥ 1,298,955¥   966,903$ 11,935,641

720,000

260,000

6,615,823

Interest income:¥169,456¥182,377$1,557,073

Interest on loans

138,413151,006

1,271,832

20,082

20,182

184,532

Interest and dividends on securities

24,56923,994

225,762

Securities (Notes 3, 14, 28 and 30)

2,374,268

1,961,054

21,816,308

Interest on call loans and bills bought

31

100

291

Loans (Notes 4, 5, 14 and 28)

12,415,985

12,923,938

114,086,054

Interest on due from banks

108

28

998

Other assets (Notes 6, 11 and 14)

162,849

191,317

1,496,367

Interest on swaps

6,339

7,263

58,250

Tangible fixed assets (Notes 7, 11 and 14)

423,433

469,559

3,890,776

Other interest income

(6)

(16)

(60)

Intangible fixed assets (Notes 11 and 14)

42,28445,311

388,536

Fees and commissions

17,167

16,280157,748

Asset for retirement benefits (Note 23)

1,263

2,238

11,614

Other operating income (Note 19)

15,165

6,987

139,347

Deferred tax assets (Note 24)

2,800

1,217

25,733

Other income (Note 20)

91,68895,561

842,489

Customers’ liabilities for acceptances and guarantees (Note 13)

267,306

273,2392,456,187  Total income

293,477

301,206

2,696,657

Allowance for loan losses (Notes 8 and 28)(35,528)(35,336)(326,460)

Expenses

(36)

(46)

(336)

78,73089,504

723,422¥17,693,665¥17,079,580$162,580,775

33,95837,676

312,037

(72)

(52)

(671)

Allowance for investment losses  Total assets

Interest expense:
Interest on debentures
Interest on call money and bills soldInterest on payables under repurchase agreements

(60)

(62)

(555)

Liabilities:

Interest on borrowed money (Note 31)

38,00946,693

349,253

Interest on short-term corporate bonds

947

317

8,707

5,730

4,822

52,659

216

109

1,993

Debentures (Notes 9, 14 and 28)
Payables under repurchase agreements (Notes 14 and 28)¥ 3,314,656¥ 3,190,536$ 30,457,192—

93,761—

Borrowed money (Notes 10, 11, 14, 28 and 31)

8,070,948

7,987,860

74,161,065

Corporate bonds (Notes 9, 11, 14 and 28)

Interest on corporate bonds
Other interest expense

2,106,463

21,889,428

Fees and commissions

326

1,354

2,997

204,265

101,869

1,876,919

Other operating expenses (Note 21)

12,310

3,532

113,118

Accrued bonuses to employees

5,345

5,066

49,118General and administrative expenses

67,34664,889618,826

Accrued bonuses to directors

15

15

140

Other expenses (Note 22)

51,73915,187475,414

Liability for retirement benefits (Note 23)

8,092

7,969

74,355  Total expenses

210,452

174,469

1,933,777

Reserve for directors’ retirement benefits

146

122

1,349

   Income before income taxes

83,024

126,737

762,880

Income taxes (Note 24):Deferred tax liabilities (Note 24)
Acceptances and guarantees (Note 13)  Total liabilities

6,608

16,32860,725

267,306

273,2392,456,187

Current

31,637

34,953

290,707

14,259,611

13,783,234

131,026,478

Deferred(131)(1,443)(1,210)Equity:Total income taxes

31,50533,509289,497

Common stock authorized, 160,000 thousand shares in 2020 and
2019; issued, 43,632 thousand shares in 2020 and 2019 (Note 15)

Net income

51,51893,227473,383

1,000,424

1,000,424

9,192,539

Net income attributable to non-controlling interests

Crisis response reserve (Note 16)

206,529

206,529

1,897,721

Net income attributable to owners of the parent

Special investment reserve (Note 17)

848,000

588,000

7,791,969

Special investment surplus (Note 17)

12,436

5,412

114,273

Capital surplus (Note 15)

636,466

766,466

5,848,262

Retained earnings (Note 15)

675,842651,887

6,210,078

24,29744,652

223,260

Deferred gain on derivatives under hedge accounting

16,93423,766

155,606

Foreign currency translation adjustments(1,414)(1,202)(12,998)

(958)

(272)

(8,808)3,418,557

3,285,663

31,411,902

15,496

10,682

142,395

Accumulated adjustments for retirement benefits (Note 23)  TotalNon-controlling interests  Total equity   Total liabilities and equity
See notes to consolidated financial statements.

3,434,054

3,296,345

31,554,297¥17,693,665¥17,079,580$162,580,775

9,759$  463,624

Yen

U.S. Dollars (Note 1)

Per share of common stock (Note 18)
Basic net income
Cash dividend applicable to the year

Unrealized gain on available-for-sale securities (Note 30)

1,290¥ 91,936

See notes to consolidated financial statements.

¥1,075.90¥2,080.56

228

482

$

9.89
2.10

Data Section

Accumulated other comprehensive income:

1,062¥ 50,456

Corporate Data

2,382,226

Other liabilities (Notes 12 and 31)

The DBJ Group’s Corporate Governance

Liabilities and equity

The DBJ Group’s Strategy

Money held in trust (Notes 28 and 30)

The DBJ Group’s Value Creation Story

Thousands of
U.S. Dollars (Note 1)

Millions of Yen

94

95

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMECONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Development Bank of Japan Inc. and Consolidated Subsidiaries

Development Bank of Japan Inc. and Consolidated Subsidiaries

2020

2019

2020

Net income¥ 51,518¥ 93,227$ 473,383

Unrealized loss on available-for-sale securities(19,977)(1,834)(183,570)

Deferred loss on derivatives under hedge accounting

Other comprehensive loss (Note 26):
(4,359)(49,921)

(75)

113

(692)

Adjustments for retirement benefits

(682)

(249)

(6,267)(1,927)(3,929)(17,712)(28,095)(10,260)(258,163)¥ 23,422¥ 82,966$ 215,220

Owners of the parent¥ 22,371¥ 81,718$ 205,563

Non-controlling interests

1,050

1,248

9,656

Total other comprehensive loss
Comprehensive income

Crisis response
reserve

Special investment Special investment
reserve
surplusRetainedearnings¥1,000,424¥206,529¥588,000¥ 5,412¥ 766,466¥651,887¥1,000,424¥206,529¥588,000
130,000¥ 5,412¥ 766,466

1,553¥653,441

130,000(130,000)(21,030)
50,456
7,023¥1,000,424¥206,529¥848,000

Total comprehensive income attributable to:

See notes to consolidated financial statements.

Capitalsurplus¥12,436(7,023)¥ 636,466¥675,842

Millions of Yen
Accumulated other comprehensive income

For the year ended March 31, 2020

Noncontrollinginterests

Total equity¥(272)¥3,285,663¥10,682¥3,296,345¥(272)

1,553¥3,287,216
130,000¥10,682

1,553¥3,297,899
130,000

Deferred gain
on derivatives
under hedge
accounting

Foreignc­ urrencytranslation
adjustments

Accumulated
adjustments
for retirement
benefits¥ 44,652¥23,766¥(1,202)¥ 44,652¥23,766¥(1,202)—(21,030)
50,456(21,030)
50,456(20,355)¥ 24,297(6,831)¥16,934(212)¥(1,414)(685)¥(958)(28,084)¥3,418,557

4,814¥15,496—(23,270)¥3,434,054

Millions of Yen

For the year ended March 31, 2019

¥1,000,424

Crisis response
reserve¥206,529

Special investment Special investment
reserve
surplus¥330,000
129,000¥3,099

Capitalsurplus¥ 895,466

129,000

Retainedearnings¥584,689(129,000)(22,121)91,9362,313¥1,000,424¥206,529¥588,000¥5,412

Corporate Data

Balance at beginning of year
Investment from government Transfer from capital surplus to
special investment reserve
Cash dividends
Net income attributable to owners of the parent Transfer from retained earnings to
special investment surplus
Change in scope of consolidation
Net change during the year
Balance at end of year

Commonstock

The DBJ Group’s Corporate Governance

Balance at beginning of year
 Cumulative effects of changes inaccounting policies
Restated balance
Investment from government Transfer from capital surplus to
special investment reserve
Cash dividends
Net income attributable to owners of the parent Transfer from retained earnings to
special investment surplus
Net change during the year
Balance at end of year

Total

Unrealized gain
on available-forsale securities

The DBJ Group’s Strategy(5,432)Foreign currency translation adjustments

Balance at beginning of year
 Cumulative effects of changes inaccounting policies
Restated balance
Investment from government Transfer from capital surplus to
special investment reserve
Cash dividends
Net income attributable to owners of the parent Transfer from retained earnings to
special investment surplus
Net change during the year
Balance at end of year

Commonstock

The DBJ Group’s Value Creation Story

For the year ended March 31, 2020

For the year ended March 31, Share of other comprehensive loss in affiliates
accounted for by the equity method

Millions of Yen

Thousands of
U.S. Dollars (Note 1)

Millions of Yen(2,313)(303)¥ 766,466¥651,887

Millions of Yen
Accumulated other comprehensive income

Balance at beginning of year
Investment from government Transfer from capital surplus to
special investment reserve
Cash dividends
Net income attributable to owners of the parent Transfer from retained earnings to
special investment surplus
Change in scope of consolidation
Net change during the year
Balance at end of year

Deferred gain
on derivatives
under hedge
accounting

Foreignc­ urrencytranslation
adjustments

Accumulated
adjustments
for retirement
benefits¥50,520¥27,955¥(1,285)¥ (29)(5,867)¥44,652(4,189)¥23,76682¥(1,202)(243)¥(272)

Total¥3,097,369
129,000

Noncontrollinginterests¥12,750

Total equity¥3,110,120
129,000(22,121)91,936—(22,121)91,936(303)(10,218)¥3,285,663—(303)(12,285)¥3,296,345(2,067)¥10,682

Data Section

For the year ended March 31, 2019

Unrealized gain
on available-forsale securities

96

97

CONSOLIDATED STATEMENT OF CASH FLOWS
Development Bank of Japan Inc. and Consolidated Subsidiaries

Crisis response
reserve

Balance at beginning of year
 Cumulative effects of changes inaccounting policies$9,192,539$1,897,721

Restated balance$9,192,539

For the year ended March 31, 2020

Special investment Special investment
reserve
surplus$5,402,922$ 49,733

Capitalsurplus$ 7,042,786

Millions of Yen

Retainedearnings

For the year ended March 31,$5,989,962
14,276$1,897,721

Investment from government Transfer from capital surplus to
special investment reserve$5,402,922$ 49,733$ 7,042,786$6,004,238

1,194,524
1,194,524(1,194,524)(193,244)

Net income attributable to owners of the parent Transfer from retained earnings to
special investment surplus

463,624
64,540(64,540)

Net change during the year
Balance at end of year

$9,192,539$1,897,721$7,791,969$114,273$ 5,848,262$6,210,078

Thousands of U.S. Dollars (Note 1)
Accumulated other comprehensive income
Deferred gain
on derivatives
under hedge
accounting

Foreign­ urrencyctranslation
adjustments

Balance at beginning of year
 Cumulative effects of changes inaccounting policies$ 410,299$218,379$(11,049)$(2,508) $30,190,784

Restated balance$ 410,299$218,379$(11,049)$(2,508) $30,205,059

For the year ended March 31, 2020

Accumulated
adjustments
for retirement
benefits

Total

Noncontrollinginterests

Total equity$ 98,158$30,288,942$ 98,158$30,303,217

14,276

14,276

Investment from government Transfer from capital surplus to
special investment reserve

1,194,524

1,194,524

Cash dividends(193,244)(193,244)

Net income attributable to owners of the parent Transfer from retained earnings to
special investment surplus

463,624

463,624——

Net change during the year

(187,039)(62,773)(1,949)Balance at end of year

$ 223,260$155,606$(12,998)

See notes to consolidated financial statements.

(6,300)(258,061)

44,238(213,823)$(8,808) $31,411,902$142,395$31,554,297¥   83,024¥ 126,737$   762,880

14,677
1,838
165(4,541)(169,456)
78,730(6,983)(1,001)
9,445(4,197)

12,6682,253—(9,758)(182,377)
89,504(40,606)(805)(1,080)1,396

134,868
16,892
1,522(41,731)(1,557,073)
723,422(64,169)(9,203)86,792(38,568)

191
(9)
279
0
974
122
508,654
124,119
83,088
275,763(3,000)(460,000)(93,761)
173,450(83,035)
135,395
663,934(30,320)
633,613(9,408)
(129)
135
1
351
(87)
(198,703)
103,885(556,389)
260,130(24,206)
203,179
93,761
180,167(91,044)
18,532(21,893)(36,784)(58,677)

1,759
(91)
2,567
1
8,956
1,124
4,673,848
1,140,490
763,469
2,533,892(27,566)(4,226,776)(861,543)
1,593,773(762,986)
1,244,102
6,100,653(278,604)
5,822,049(846,286)
82,195
319,425(4,255)
5,023(3,908)42,452(3,157)0(488,408)
116,121324,288(9,090)814(9,739)322(3,122)—(7,776,222)
755,261
2,935,090(39,100)
46,158(35,914)390,077(29,011)
4—(69,758)——(408,510)

2,284(136,289)—(3,753,658)

130,000(21,030)

129,000(22,121)

1,194,524(193,244)

761(5,330)104,400

7(3,322)
103,562

6,998(48,979)
959,298(651)
328,851
903,817200¥1,232,869

194(91,209)
995,027—¥ 903,817(5,987)3,021,702
8,304,857
1,842$11,328,400

Data Section

2020

Corporate Data

See notes to consolidated financial statements.

2019

The DBJ Group’s Corporate Governance

Unrealized gain
on available-forsale securities

2020

The DBJ Group’s Strategy

Cash dividends

Cash flows from operating activities:
Income before income taxes
Adjustments for:
Depreciation
Amortization of goodwill
Losses on impairment of long-lived assets
Equity in earnings of affiliates
Interest income
Interest expense
Gain on securities – net
Gain on money held in trust – net
Foreign exchange losses (gains)(Gain) loss 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   Asset for retirement benefits   Liability for retirement benefits  Loans  Debentures  Borrowed money  Corporate bonds   Due from banks (excluding cash equivalents)   Call loans and bills bought   Payables under repurchase agreements
Interest received
Interest paid
Other – net  Sub-total   Payments for income taxes
Net cash provided by (used in) 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 Payments for purchases of stocks of subsidiaries resulting inchange in scope of consolidation Proceeds from sales of stocks of subsidiaries resulting in change inscope of consolidation
Net cash used in investing activities
Cash flows from financing activities:
Proceeds from investment from government
Payments for cash dividends Proceeds from issuance of securities to non-controllingshareholders of subsidiaries
Dividends paid to non-controlling shareholders of subsidiaries
Net cash provided by financing activities
Foreign currency translation adjustments on cash andcash equivalents
Net change in cash and cash equivalents
Cash and cash equivalents at beginning of year
Increase in cash and cash equivalents due to new consolidation
Cash and cash equivalents at end of year (Note 2(c))

The DBJ Group’s Value Creation Story

Thousands of
U.S. Dollars (Note 1)

Thousands of U.S. Dollars (Note 1)
Common
stock

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Development Bank of Japan Inc. and Consolidated Subsidiaries(ii) Unconsolidated subsidiaries
The number of unconsolidated subsidiaries as of March 31, 2020 is 54. The major unconsolidated subsidiary as ofMarch 31, 2020 was DBJ Regional Investment Co., Ltd.
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 andaccumulated other comprehensive income.
(iii) Companies not classified as subsidiaries where DBJ Inc. holds the majority of voting rights
Kinugawa Rubber Industrial Co., Ltd.
ADVANIDE HOLDINGS PTE. LTD.
ABLIC Inc.
Value Planning co., ltd.
ORENO Corporation
Maxell Izumi Co., Ltd.
Stellarworks International Co., Ltd.
These companies were not treated as subsidiaries because the capital contributions were made for the purpose of
incubating these companies, and not for the purpose of owning these investees under its control through operational,
personnel, capital or other form of transactions.

The DBJ Group’s Strategy

The accompanying consolidated financial statements have been prepared in accordance with the provisions set forth in theJapanese 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 acceptedin Japan (“Japanese GAAP”), which are different in certain respects as to application and disclosure requirements of International
Financial Reporting Standards.
In preparing these consolidated financial statements, certain reclassifications and rearrangements have been made to theconsolidated financial statements issued domestically in order to present them in a form which is more familiar to readers outside
Japan. In addition, certain reclassifications have been made in the 2019 consolidated financial statements to conform to theclassifications used in 2020.
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 sumof the individual account balances. Amounts in U.S. dollars are presented solely for the convenience of readers outside Japan.
The rate of ¥108.83 = $1.00, the effective exchange rate prevailing as of March 31, 2020, has been used in the conversion.
The presentation of such amounts is not intended to imply that Japanese yen amounts have been or could have been readilytranslated, realized or settled in U.S. dollars at that rate or any other rate.

The DBJ Group’s Value Creation Story

1. BASIS OF PRESENTATION

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(ii) Affiliates accounted for by the equity method
The number of affiliates accounted for by the equity method as of March 31, 2020 was 27. One of the major affiliates
accounted for by the equity method as of March 31, 2020 was AIRDO Co., Ltd.
Changes in the scope of affiliates accounted for by the equity method:
Asahikawa Airport Terminal Building Co., Ltd. was excluded from the scope of the equity method accounting due to saleof its shares in the year ended March 31, 2020.
(iii) Affiliates not accounted for by the equity method
The number of affiliates not accounted for by the equity method as of March 31, 2020 was 115. One of the majoraffiliates as of March 31, 2020 was New Perspective One LLC.
Unconsolidated subsidiaries and affiliates that are not accounted for by the equity method have been excluded fromthe scope of the equity method because their aggregate effect in terms of net income, retained earnings andaccumulated other comprehensive income has no material impact on the consolidated financial statements of DBJ Inc.

Data Section

In the year ended March 31, 2020, two companies including UDS IV Corporate Mezzanine Limited Partnership were
newly consolidated due to increased materiality and a silent partnership managed by Godo Kaisha Asset 6 was newly
consolidated due to new investments.

(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, 2020 was 54.
The major unconsolidated subsidiary not accounted for by the equity method was DBJ Regional Investment Co., Ltd.

Corporate Data(i) Consolidated subsidiaries
The number of consolidated subsidiaries as of March 31, 2020 is 33. The major consolidated subsidiaries as of March
31, 2020 are as follows:
DBJ Singapore Limited
Japan Economic Research Institute Inc.
DBJ Europe Limited
DBJ Real Estate Co., Ltd.
DBJ Investment Advisory Co., Ltd.
DBJ Capital Co., Ltd.
DBJ Securities Co., Ltd.
DBJ Asset Management Co., Ltd.
Value Management Institute, Inc.
DBJ Investment Consulting (Beijing) Co., Ltd.
Consist Inc.
DBJ Americas Inc.

(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.

The DBJ Group’s Corporate Governance(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 the consolidation
scope of collective investment vehicles, such as limited partnerships, Tokumei Kumiai (silent partnership) and otherentities with similar characteristics.

100

101

2020

25

February 28 or 29

1

March 317

Consolidated 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.
(4) Elimination of Intercompany Balances and Transactions
All significant intercompany balances and transactions have been eliminated in consolidation. All material unrealized profit
and loss resulting from transactions between DBJ Inc. and its consolidated subsidiaries are eliminated.

Time deposits with banks
Cash and cash equivalents

2020

2019

2020

¥1,298,955¥966,903$11,935,641(66,085)(63,086)(607,241)¥1,232,869¥903,817$11,328,400(d) Securities
Held-to-maturity debt securities are stated at amortized cost with amortization computed on a straight-line basis, using theweighted average method. Available-for-sale securities are carried at fair value with the corresponding unrealized gains andlosses, net of applicable taxes, recorded directly in a separate component of equity, after deducting the amount charged to
profit or losses by applying fair value hedge accounting. The cost of these securities upon sale 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.’sinterest in earnings since acquisition and less any dividends received, based on the investees’ most recent financial
statements.
Securities which are held as trust assets in money held in trust accounts are valued in the same way as other securities.
(e) 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 consolidated statementof income.
(f) Hedge Accounting(1) Hedge Accounting
DBJ Inc. applies the deferral method of hedge accounting or the accrual method (*1). The portfolio hedge is accounted
for by the method stipulated in “Accounting and Auditing Treatments on the Application of Accounting Standards for
Financial Instruments in the Banking Industry,” issued by the Japanese Institute of Certified Public Accountants (the“JICPA Industry Audit Committee Report No. 24” February 13, 2002). In addition, foreign currency swaps which are used
to hedge foreign currency fluctuations are not stated at market values but at contractual rates, as the foreign currency
swap contracts meet the hedging criteria under the Accounting Standards for Financial Instruments. The portfolio hedge
is accounted for by the deferral method provided in “Accounting and Auditing Treatments on Accounting for Foreign
Currency Transactions in the Banking Industry” (JICPA Industry Audit Committee Report No. 25, July 29, 2002).

Data Section(5) Amortization of Goodwill
The difference between the fair value of net assets and the cost of the acquired subsidiary is amortized on a straight-line
basis over the estimated useful lives not exceeding 20 years. Minor differences are charged to expense in the year ofacquisition. The excess of the fair value over the cost of acquired subsidiaries (bargain purchase) is recognized asincome immediately as incurred.

Cash and due from banks

Corporate Data

December 31

Thousands of
U.S. Dollars

Millions of Yen

The DBJ Group’s Corporate Governance

Number of subsidiaries(c) Cash and Cash Equivalents“Cash and Cash Equivalents” in the consolidated statement of cash flows are included in cash 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:

The DBJ Group’s Strategy(3) Balance Sheet Dates of Consolidated Subsidiaries
		 Balance sheet dates of consolidated subsidiaries are as follows:(b) Business Combinations
Business combinations are accounted for using the purchase method. Acquisition-related costs, such as advisory fees orprofessional fees, are accounted for as expenses in the periods in which the costs are incurred. If the initial accounting for abusiness combination is incomplete by the end of the reporting period in which the business combination occurs, an acquirer
shall report in its financial statements provisional amounts for the items for which the accounting is incomplete. During themeasurement period, which shall not exceed one year from the acquisition, the acquirer shall retrospectively adjust theprovisional amounts recognized at the acquisition date to reflect new information obtained about facts and circumstancesthat existed as of the acquisition date and that would have affected the measurement of the amounts recognized as of that
date. Such adjustments shall be recognized as if the accounting for the business combination had been completed at theacquisition date. A parent’s ownership interest in a subsidiary might change if the parent purchases or sells ownershipinterests in its subsidiary. The carrying amount of non-controlling interests is adjusted to reflect the change in the parent’s
ownership interest in its subsidiary while the parent retains its controlling interest in its subsidiary. Any difference between thefair value of the consideration received or paid and the amount by which the non-controlling interests are adjusted isaccounted for as capital surplus as long as the parent retains control over its subsidiary.

The DBJ Group’s Value Creation Story(iv) Entities not classified as affiliates where DBJ Inc. holds voting rights of between 20% and 50%
The following companies of which DBJ Inc. holding voting rights of between 20% and 50% are not affiliates accounted forby the equity method, because the capital contributions were made for the purpose of incubating these companies, andnot for the purpose of owning these investees under its control through operational, personnel, capital or other form oftransactions.
As of March 31, 2020
Socionext Inc.
KANTO-UNYU Co., Ltd.
Daisho-gun Co., Ltd.
PT. PETROTEKNOC&A Tool Engineering, Inc.
Medical Care Service Company Inc.
CMIC CMO Co., Ltd.
Wilsonart (Thailand) Co., Ltd.
Wilsonart (Shanghai) Co., Ltd.
Wilsonart Asia Limited
NATIONAL CAR PARKS LIMITED
Megabass Inc.
TAKUMIYA HOLDINGS Co., Ltd.
FUJIBAMBI HOLDINGS Co., Ltd.
INVOICE INC.
NIHON CM HOLDINGS Co., Ltd.
Nippon Heater Kiki Co., Ltd.
HIROFU CO., LTD.
SHIMONO CO., LTD.

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(3) Hedging Policy
DBJ Inc. utilizes hedging instruments to hedge interest rates and foreign currency fluctuations on its assets and liabilities.
Individual or certain group contracts are drawn for each hedged item.

(i) Debentures and Corporate Bonds Issuance Costs“Debentures and Corporate Bonds Issuance Costs” are charged to expense as incurred.
(j) Foreign Currency Translation and Revaluation Method
Assets and liabilities denominated in foreign currencies held by DBJ Inc., except for shares of subsidiaries and affiliates
translated at historical rates, have been translated at the exchange rates prevailing as of the balance sheet date. Foreign
currency accounts held by consolidated foreign subsidiaries are translated into the currency of the subsidiaries at therespective year-end exchange rates. The foreign exchange gains and losses from transactions are recognized in thestatement of income to the extent that they are not hedged by forward exchange contracts. The balance sheet accounts ofthe 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 the historical rate. Differences arising from such translation are shown as“Foreign Currency Transaction Adjustments” in a separate component of equity. Income and expense accounts ofconsolidated foreign subsidiaries are translated into yen at the exchange rate prevailing as of the balance sheet date.
(k) Allowance for Loan Losses
DBJ Inc. provides for “Allowance for Loan Losses” as detailed below pursuant to the internal policies for self-assessment ofcredit 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, 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 of collateral or execution of guarantees.
With respect to the claims on debtors who are likely to become bankrupt or to be closely monitored, and for which future
cash flows can reasonably be estimated, the allowance is provided for as the difference between the present value of
expected future cash flows discounted at the contracted interest rate and the carrying value of the claims. The allowance forclaims on debtors other than those described above is provided based on 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

Data Section(i)	If a foreign currency swap is executed to hedge existing foreign currency assets or liabilities, a) the difference, ifany, between the Japanese yen amount of the hedged foreign currency asset or liability translated using the spot
rate at the inception date of the contract and the book value of the asset or liability is recognized in the statementof income in the period since inception, 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 translatedusing 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 is recorded using the contracted forward rate, and no gains or losses on the foreign exchange forward
contract are recognized.

(h) 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 of anasset or asset group exceeds the sum of the undiscounted future cash flows expected to result from the continued use andeventual disposition of the asset or asset group. The impairment losses would be measured as the amount by which thecarrying amount of the asset exceeds its recoverable amount, which is the higher of the discounted cash flows from thecontinued use and eventual disposition of the asset or the net selling price at disposition.

Corporate Data

*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 forwhich 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:(3) Lease Assets
Depreciation for lease assets is computed by the straight-line method with zero residual value over the lease term.

The DBJ Group’s Corporate Governance(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, with respect to portfolio hedging activities, for interest rate swaps used to hedge market interest rate
fluctuations, hedge effectiveness is assessed on a specifically identifiable group of hedged items and a corresponding
group of hedging instruments, and for interest rate swaps used to hedge variability in cash flows, hedge effectiveness is
assessed based on the correlation between the base interest rate index of the hedged cash flows and the hedging
instrument. For currency swaps used to hedge foreign exchange risks of foreign currency denominated financial assets
and liabilities, the effectiveness is assessed by confirming that the total foreign currency denominated financial assets andliabilities of the hedged items are equal to or larger than that of hedging instruments.
With respect to hedging activities against foreign exchange risk of equity investments in overseas subsidiaries andaffiliates and foreign currency denominated available-for-sale securities (other than bonds), the effectiveness is
assessed by confirming that the total foreign currency position of the hedged items is equal to or larger than that ofhedging instruments.
With respect to an individual hedge, for both interest rate swap contracts which meet the hedging requirements of theaccrual method (*1) and foreign currency swap contracts which meet the hedging requirements of the assignment
method (*2), DBJ Inc. is not required to periodically evaluate hedge effectiveness.

(2) Amortization of Intangible Fixed Assets
Intangible Fixed Assets are amortized using the straight-line method. Capitalized software for internal use is amortizedusing the straight-line method over the estimated useful lives (mainly 5 years).

The DBJ Group’s Strategy(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 Debentures, Borrowed money, Corporate bonds, Securities and
Loans• Hedging Instruments: Forward liability denominated in foreign currency
Hedged Items:	Foreign currency denominated equity investments in overseas subsidiaries and affiliates andforeign currency denominated available-for-sale securities (other than bonds)(g) 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) and installed facilities
and structures acquired on or after April 1, 2016 that are depreciated on a straight-line basis, and depreciation of tangible
fixed assets of consolidated subsidiaries is computed principally using the straight-line method, based on the estimateduseful lives of the assets.
The estimated useful lives are principally as follows:
Buildings : 3 years to 50 years
Others: 4 years to 20 years

The DBJ Group’s Value Creation Story

In addition, DBJ Inc. applies portfolio hedges to hedge foreign currency fluctuations associated with equity
investments in overseas subsidiaries and affiliates and foreign currency denominated available-for-sale securities (otherthan bonds). The translation differences on hedging instruments are included in foreign currency translation adjustmentsin the case of equity investments in overseas subsidiaries and affiliates; fair value hedges are applied to foreign currency
denominated available-for-sale securities (other than bonds).

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(l) 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.

(n) Employees’ Retirement Benefits
DBJ Inc. has defined benefit pension plans, which consist of a defined benefit corporate pension plan and a lump-sum
severance indemnity plan, as well as a defined contribution pension plan. Some domestic consolidated subsidiaries havea lump-sum severance indemnity plan and defined contribution plans, and some overseas consolidated subsidiaries haveretirement benefit plans which are typically defined contribution plans. The projected benefit obligations are attributed toperiods on a straight-line basis. Actuarial gains and losses and service costs that are yet to be recognized in profit or loss
are recognized with in equity (accumulated other comprehensive income), after adjusting for tax effects and are recognizedin profit or loss over ten years no longer than the expected average remaining service period of the employees.

(p) Lease Transactions
Finance Lease transactions are capitalized by recognizing lease assets and lease obligations in the consolidated balance sheet.
(q) Consumption Taxes
Income and expenses subject to consumption taxes are presented net of related consumption taxes paid or received.

(s) Per Share Information
Equity per share is computed by dividing total equity less crisis response reserve, special investment reserve attributable to
the National Treasury, special investment surplus attributable to the National Treasury and non-controlling interests by theoutstanding number of shares of common stock as of March 31, 2020 and 2019.

DBJ Inc. expects to apply these standards and guidance effective April 1, 2021 and is in the process of measuring theeffects of their application.
Accounting Standard for Disclosure of Accounting Estimates“Accounting Standard for Disclosure of Accounting Estimates” (ASBJ Statement No. 31 issued on March 31, 2020)
The ASBJ developed and issued “Accounting Standard for Disclosure of Accounting Estimates” (the “Standard”) in responseto requests to disclose information similar to “sources of estimation uncertainty,” which is required under Paragraph 125 ofInternational Accounting Standard (“IAS”) 1, “Presentation of Financial Statements” (“IAS 1”) issued in 2003, in the notes to thefinancial statements under Japanese GAAP, in order to facilitate the understanding of the users of the financial statements.
As a basic policy in developing the Standard, instead of expanding each of the note items, the ASBJ presented theprinciples for disclosure (disclosure objectives) and decided to leave the decision on specific disclosure contents to each
entity based on its respective disclosure items. In developing the Standard, the provisions of Paragraph 125 of IAS 1 wereused as a reference.
DBJ Inc. expects to apply these standards effective March 31, 2021.

Data Section(r) Income Taxes
The provision for income taxes is computed based on the pretax income included in the consolidated statement of income.
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. Deferredtaxes are measured by applying currently enacted tax rates to the temporary differences.

In light of the circumstances that the IASB and the FASB provides nearly identical guidance on fair value measurement,that is, IFRS 13 “Fair Value Measurement” and FASB Accounting Standards Codification (“ASC”) Topic 820 “Fair Value
Measurement,” the ASBJ had been working to align Japanese accounting standards with international accounting standards
mainly concerning guidance and disclosures about the fair value of financial instruments, and therefore issued “AccountingStandard for Fair Value Measurement” along with other standards and guidance.
As a basic policy of the ASBJ in developing accounting standards for fair value measurement, from the viewpoint ofenhancing comparability of financial statements among the domestic and foreign companies by using unified measurement
methods, the ASBJ determined to introduce principally all the provisions of IFRS 13 and defined other treatments for specificmatters as long as they do not significantly harm the comparability among financial statements considering the practices
prevailing in Japan.

Corporate Data(o) Reserve for Directors’ Retirement Benefits“Reserve for Directors’ Retirement Benefits” is accrued based on the amount that would be required if all directors retired at
the balance sheet date.

(u) New Accounting Pronouncement
Accounting Standards for Fair Value Measurement“Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30 issued on July 4, 2019)“Accounting Standard for Financial Instruments” (ASBJ Statement No. 10 issued on July 4, 2019)“Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No. 31 issued on July 4, 2019)“Guidance on Disclosures about Fair Value of Financial Instruments” (ASBJ Guidance No. 19 issued on March 31, 2020)

The DBJ Group’s Corporate Governance(m) Accrued Bonuses to Employees and Directors“Accrued Bonuses to Employees and Directors” are provided for in the amount of the estimated bonuses which are
attributable to the years ended March 31, 2020 and 2019.

(t) Accounting Change
FASB Accounting Standards Update “Recognition and Measurement of Financial Assets and Financial Liabilities”
Foreign consolidated subsidiaries preparing financial statements in accordance with US GAAP have adopted FASB
Accounting Standards Update (“ASU”) No. 2016-01 “Recognition and Measurement of Financial Assets and Financial
Liabilities” effective the fiscal year ended March 31, 2020.
Accordingly, investments in equity interests except those accounted for under the equity method are measured at fairvalue in principle and the changes are recognized in net income.
As a result, retained earnings increased by ¥1,553 million ($14,276 thousand) at the beginning of the year ended March
31, 2020. The effects on the consolidated statement of income for the year ended March 31, 2020 were immaterial.

The DBJ Group’s Strategy

While the novel coronavirus disease (COVID-19) is expected to have an impact on counterparty credit risk, DBJ Inc. hasrecorded an allowance for loan losses by reflecting the expected impact on each category of debtors as necessary basedon information available as of the date of preparation of the consolidated financial statements.
Unexpected losses may be recognized in the consolidated financial statements for the following fiscal year since the impactof the spread of COVID-19 on the economy contains numerous uncertainties.

Basic net income per share is computed by dividing net income available to owners of the parent related to common
stock by the weighted-average number of shares of common stock outstanding for the period, retroactively adjusted forstock splits. Diluted net income per share for the years ended March 31, 2020 and 2019 is not disclosed because there are
no dilutive securities.
Cash dividends per share presented in the accompanying consolidated statement of income are dividends applicable tothe year including dividends to be paid after the end of the year.

The DBJ Group’s Value Creation Story

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 selfassessment. 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 ¥10,556 million ($97,004 thousand) and ¥17,332 million for the years ended March 31, 2020 and
2019, respectively. The consolidated subsidiaries calculate the general reserve for “normal” categories based on the specificactual 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.

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5. COMMITMENTS

Securities as of March 31, 2020 and 2019 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

Japanese government bonds*3

2020

2019

2020

¥  134,664¥   125,132$ 1,237,384

Corporate bonds*2

830,952

713,426

7,635,329

Equities*1

687,020

423,008

6,312,787

Other securities*1

721,630

699,486

6,630,809¥2,374,268¥1,961,054$21,816,308

Total

6. OTHER ASSETS
Other assets as of March 31, 2020 and 2019 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

Impairment losses were recognized on equity securities in an amount of ¥3,984 million ($36,610 thousand) for the year ended
March 31, 2020.

4. NON-PERFORMING LOANS
The amounts of non-performing loans included in “Loans” as of March 31, 2020 and 2019 are as follows:

2019

2020

¥  4,041$   32,297

Accrued income

25,18728,166

231,439

Derivatives

71,75857,475659,360

Cash collateral paid for financial instruments

17,572

23,118161,464

Margin deposits with the central clearing house

10,27334,284

94,399Other

34,54344,229317,410

Total¥162,849¥191,317$1,496,367

Thousands of
U.S. Dollars

Millions of Yen

2020

2019

Loans to bankrupt debtors*2¥     8¥     0$     74

7. TANGIBLE FIXED ASSETSDelinquent loans*3

30,34130,184

278,801

Tangible fixed assets as of March 31, 2020 and 2019 are as follows:

2020

—

—

26,914

21,315247,304

Total¥57,264¥51,499$526,179*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 the Japanese Tax Law Enforcement Regulation.
*3.	“Delinquent loans” represent non-accrual loans other than (i) Loans to bankrupt debtors and (ii) Loans whose interest payments are deferred 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 ofprincipal 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,” “Delinquentloans,” or “Loans past due three months or more.”Thousands of
U.S. Dollars

Millions of Yen

Buildings
Land
Leased assets
Construction in progress

2020

2019

2020

¥ 17,704¥ 18,306$  162,678

90,794

91,214

834,279

635

284

5,841

425

20

3,909

Other

313,873359,733

2,884,071

Total¥423,433¥469,559$3,890,776

Corporate Data—

Restructured loans*5

Loans past due three months or more*4

2020¥  3,514

The DBJ Group’s Corporate GovernanceNo impairment losses on securities were recognized for the year ended March 31, 2019.

Prepaid expenses

The DBJ Group’s Strategy*1.	Investments in unconsolidated subsidiaries and affiliates included in “Equities” as of March 31, 2020 and 2019, are ¥57,242 million ($525,980 thousand) and ¥60,473 million, respectively.
Investments in unconsolidated subsidiaries and affiliates included in “Other securities” as of March 31, 2020 and 2019, are ¥194,159 million ($1,784,060 thousand) and ¥189,520 million,
respectively.
*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 ExchangeAct), which amount to ¥4,462 million ($41,001 thousand) and ¥5,700 million as of March 31, 2020 and 2019, respectively.
*3.	Japanese government bonds include securities lent in accordance with the unsecured securities lending agreement in the amount of ¥37,689 million ($346,314 thousand) and ¥37,400
million as of March 31, 2020 and 2019, respectively.
*4.	Securities available-for-sale (excluding those securities those fair value cannot be reliably determined), whose fair value significantly declined compared with the acquisition cost, and isconsidered to be other than recoverable decline, were written down to the respective fair value which is recorded as the carrying amount on the consolidated balance sheets.
The criterion for determining whether the fair value is “significantly declined” are as follows:
Fair value declined by 50% or more of the acquisition cost.
Fair value declined by 30% or more of the acquisition cost, and such decline is not considered as recoverable.

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 terms and conditions in the contracts. As of March 31,
2020 and 2019, the amounts of unused commitments are ¥1,054,844 million ($9,692,588 thousand) and ¥1,107,549 million,
respectively. As of March 31, 2020 and 2019, the amounts of unused commitments with remaining contract term within one year
are ¥719,776 million ($6,613,768 thousand) and ¥774,442 million, respectively.
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 terms and conditions whereby DBJ Inc. and its subsidiaries can rejectcustomers’ applications for loans or decrease the contract limits with proper reason (e.g., changes in financial situation,
deterioration in customers’ credit worthiness). At the inception of contracts, DBJ Inc. and its consolidated subsidiaries obtain liens
on customers’ real estate, securities or other assets as collateral as deemed necessary. Subsequently, DBJ Inc. and its
consolidated subsidiaries perform periodic reviews of the customers’ business results based on internal rules, and takenecessary measures to reconsider the terms and conditions of contracts and/or require additional collateral and guarantees.

The DBJ Group’s Value Creation Story

3. SECURITIES

Note: Accumulated depreciation of tangible fixed assets as of March 31, 2020 and 2019, is ¥39,825 million ($365,941 thousand) and ¥31,741 million, respectively.
Data Section

8. ALLOWANCE FOR LOAN LOSSES
Allowance for loan losses as of March 31, 2020 and 2019 is as follows:
Thousands of
U.S. Dollars

Millions of Yen

2020

2019

2020

General allowance for loan losses¥19,358¥13,759$177,883

Specific allowance for loan losses

16,16921,577

148,578

Total¥35,528¥35,336$326,460

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109

Scheduled redemptions of above debentures and corporate bonds for the following 5 years subsequent to March 31, 2020 are
as follows:

Debentures and corporate bonds as of March 31, 2020 and 2019 are as follows:

Issue date

Interest rate(%)

Maturity date

2020

2019

2020

(Issuer: DBJ Inc.)
Debentures
Jun. 2006– 2.0–
Jun. 2008 2.2

Jun. 2021–
Jun. 2023¥   210,005

Japanese governmentguaranteed bonds
3–7, 9, 11, 14, 16, 19–62

Dec. 2008– 0.001–
Mar. 2020 2.1

Apr. 2019–
Dec. 2059

1,631,134[270,054]

1,580,828

14,987,910[2,481,431]

Japanese governmentguaranteed foreign bond 67*2,7Sep. 1998

Sep. 2028

25,03425,038230,031¥   210,008$ 1,929,662

Thousands of U.S. Dollars

Debentures/
corporate bonds

Non-recourse
corporate bonds

Debentures/
corporate bonds

Non-recourse
corporate bonds

The fiscal year ending March 31,2021¥557,653¥—$5,124,081

$—

2022

839,586—

7,714,662

—

2023

838,167—

7,701,625

—

2024

639,553—

5,876,628

—

2025

607,195—

5,579,307—

10. BORROWED MONEY
1.81

Dec. 2002– 1.05–
Nov. 2007 4.75

Japanese governmentguaranteed Euro MTN bonds
6, 10–20*3

Sep. 2012– 1.625–
Aug. 2019 3.25

Sep. 2019–
Aug. 2029

982,494[—]

908,675

FILP agency domestic bonds
20, 31, 34–36, 42, 49*4,7Aug. 2005– 1.7–
Jun. 2008 2.74

Jun. 2020–
Mar. 2047

94,970[19,999]

Euro MTN FILP agency bond
2*4,5,7

Sep. 2008

Sep. 2023

2,000

2.032

Sep. 2022–
Nov. 2027

369,017369,018

3,390,768

Average interest rate (%)

Due date of repayment

2020

2019

2020

Borrowings

0.415

Apr. 2020–Dec. 2039

¥7,882,672¥7,808,016$72,431,061

9,027,792[—]

Non-recourse borrowings

0.746

Sep. 2024–Dec. 2036

188,276

179,843

1,730,004

Total

0.423

¥8,070,948¥7,987,860$74,161,065

94,967

872,652[183,769]

Scheduled repayments of above borrowings and non-recourse borrowings for the following 5 years subsequent to March 31,
2020 are as follows:

2,000

18,377

Millions of Yen
Borrowings

Corporate bonds
May 2012– 0–
Jan. 2020 1.183

Jun. 2019–
Mar. 2059

1,357,601[205,600]

1,213,200

12,474,516[1,889,185]

May 2019–
Mar. 2058

433,000[62,000]

402,000

3,978,686[569,696]

Corporate bonds Euro MTN
31, 32, 34, 36, 45, 48, 49, 51,
52, 54–57, 60–83*6

Apr. 2019–
May. 2049

586,499[—]

491,012

5,389,134[—]

The fiscal year ending March 31,2021¥1,097,375

2022
2023

Thousands of U.S. Dollars

Non-recourse borrowings

Borrowings$10,083,388

1,186,167

7,011

10,899,267

64,426848,248

7,070

7,794,249

64,972

2024

715,6227,152

6,575,599

65,725667,977

15,967

6,137,809

146,715

11. NON-RECOURSE DEBTS
Non-recourse debts in consolidated special purpose companies as of March 31, 2020 and 2019 are as follows:

0.26909

Jun. 2026

5,000

—

45,943(Issuer: Hiratsuka Holding TMK)
Specified corporate bond 4, 5*8

Sep. 2014– 0.13909– Sep. 2019–
Sep. 2019 0.36727 Sep. 2026

125
[—]

250

1,149
[—]

¥5,696,882¥5,296,999$52,346,620*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 unsecured guaranteed bonds issued based on Medium Term Note program (“MTN program”).
*4.	Fiscal Investment and Loan Program (FILP) agency bonds (“FILP bonds”) are not government-guaranteed. These bonds are issued by the Development Bank of Japan.
*5.	This bond is a FILP bond issued based on MTN program.
*6.	These bonds are unsecured corporate bonds issued based on MTN program.
*7.	General mortgage under the DBJ Inc. Act (17 of the Supplementary Provisions) and the DBJ Act (Article 43).
*8.	These bonds are non-recourse debts.
*9.	Figures indicated in brackets [ ] indicate the amounts to be redeemed within one year.

2020

2019

2020

Borrowed money¥188,276¥179,843$1,730,004

Corporate bonds

5,125

250

47,092

Cash and due from banks

19,235

12,871

176,751

Other assets

4,208

4,400

38,673

Tangible fixed assets

219,630

188,151

2,018,105

Intangible fixed assets

5,130

5,414

47,146

Non-recourse debts:

Assets corresponding to non-recourse debts:

Data Section

Total

Thousands of
U.S. Dollars

Millions of Yen

Jun. 2019$ 63,935

2025(Issuer: Core Investment Japan TMK)
Specified corporate bond 3*8

Non-recourse borrowings¥ 6,958

Corporate Data

Corporate bonds through private Feb. 2015– 0–
placement 3–25, 27–37, 39–107 Jan. 2020 1.16
Apr. 2012– 0.251–
Dec. 2019 3.749

Thousands of
U.S. Dollars

Millions of Yen

The DBJ Group’s Corporate GovernanceJapanese governmentguaranteed foreign bonds
5–7, 10, 11, 14*1,7

Borrowed money as of March 31, 2020 and 2019 is as follows:

The DBJ Group’s Strategy

Japanese governmentguaranteed bonds
12, 14, 15, 17, 19, 20, 22*1,7

Corporate bonds through public
placement
26, 31, 40,44, 46, 47, 49, 50,
52, 54, 56, 57, 59, 60, 62–121

Millions of Yen

Thousands of
U.S. Dollars

Millions of Yen

The DBJ Group’s Value Creation Story

9. DEBENTURES AND CORPORATE BONDS

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15. EQUITYOther liabilities as of March 31, 2020 and 2019 are as follows:

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:

Thousands of
U.S. Dollars

Millions of Yen

2020

2019

2020

Accrued expenses¥ 13,794¥ 18,143$  126,755

Unearned income

1,072

1,055

9,857

Accrued income taxes

13,001

13,620

119,464

Derivatives

36,53030,469335,669

572

161

5,263

Lease obligations
Asset retirement obligations

5,700

52,807

133,545

32,7181,227,104

Total¥204,265¥101,869$1,876,919

13. ACCEPTANCES AND GUARANTEES
Acceptances and guarantees as of March 31, 2020 and 2019 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

Guarantees

2020

2019

2020

¥267,306¥273,239$2,456,187

14. ASSETS PLEDGED AS COLLATERAL(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 to theshareholders 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 stock acquisition 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.

Corporate Data

16. CRISIS RESPONSE RESERVEDBJ Inc. recorded the accumulated amounts of the government’s contribution to implement the crisis response operations inaccordance with the provision of Article 2-22 of the supplementary provision of the DBJ Inc. Act (hereinafter the “Act”) as “Crisis
response reserve.”
The reserve is characterized as follows:(a)	For the purpose of calculating the amount of surplus, the amount of crisis response reserve is included in the total amount ofcommon stock and capital surplus based on the provision of Article 2-25 of the supplementary provision of the Act.
(b)	In case of compensation for deficit, the amount of crisis response reserve may be decreased when the capital surplus andlegal retained earnings become nil based on the provision of Article 2-26 of the supplementary provision of the Act. When thesurplus becomes positive after the decrease in the amount of crisis response reserve, the amount of crisis response reserve
shall be increased based on the provision of Article 2-26 of the supplementary provision of the Act.

Data Section

Cash and due from banks of ¥19,235 million ($176,751 thousand), other assets of ¥4,208 million ($38,673 thousand), tangible
fixed assets of ¥219,630 million ($2,018,105 thousand) and intangible fixed assets of ¥5,130 million ($47,146 thousand) arepledged as collateral for borrowed money of ¥188,276 million ($1,730,004 thousand) and corporate bonds of ¥5,125 million($47,092 thousand) as of March 31, 2020.
Cash and due from banks of ¥12,871 million, securities of ¥87,731 million, other assets of ¥4,400 million, tangible fixed
assets of ¥188,151 million and intangible fixed assets of ¥5,414 million are pledged as collateral for payables under repurchaseagreements of ¥93,761 million, borrowed money of ¥179,843 million and corporate bonds of ¥250 million as of March 31, 2019.
Securities and loans pledged as collateral in Real Time Gross Settlement for bank deposits at the Bank of Japan are¥154,643 million ($1,420,961 thousand) and ¥923,054 million ($8,481,620 thousand), as of March 31, 2020, respectively.
Such securities and loans are pledged as collateral for transactions, including exchange settlements as of March 31, 2020.
On behalf of the investees who borrow from third parties, ¥11,782 million ($108,268 thousand) of securities are pledged ascollateral as of March 31, 2020. Additionally, ¥17,572 million ($161,464 thousand) of cash collateral paid for financial instrumentsand ¥10,273 million ($94,399 thousand) of margin deposits with the central clearing house are included in other assets as ofMarch 31, 2020. Under the DBJ Inc. Act (Article 17 of the Supplementary Provisions) and the DBJ Act (Article 43), obligations
created by the bonds issued by DBJ are secured by a statutory preferential right over the property of DBJ Inc. The face value ofthese debentures amounts to ¥701,289 million ($6,443,894 thousand) as of March 31, 2020.
Securities and loans pledged as collateral in Real Time Gross Settlement for bank deposits at the Bank of Japan are¥129,452 million and ¥1,147,624 million, as of March 31, 2019, respectively. Such securities and loans are pledged ascollateral for transactions, including exchange settlements as of March 31, 2019. On behalf of the investees who borrow fromthird parties, ¥27,030 million of securities are pledged as collateral as of March 31, 2019. Additionally, ¥23,118 million of cash
collateral paid for financial instruments and ¥34,284 million of margin deposits with the central clearing house are included inother assets as of March 31, 2019. Under the DBJ Inc. Act (Article 17 of the Supplementary Provisions) and the DBJ Act (Article43), obligations created by the bonds issued by DBJ are secured by a statutory preferential right over the property of DBJ Inc.
The face value of these debentures amounts to ¥701,289 million as of March 31, 2019.

The DBJ Group’s Corporate Governance(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 (a component ofretained earnings) or as additional paid-in capital (a component of capital surplus), depending on the equity account charged
for 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 and legal reserve may be reversed without limitation.
The Companies Act also provides that common stock, legal reserve, additional paid-in capital, other capital surplus andretained earnings can be reclassified among the accounts under certain conditions and upon resolution by the shareholders.

The DBJ Group’s Strategy

5,746

Other

(a) Dividends
Under the Companies Act, companies can distribute dividends at any time during the fiscal year, in addition to the year-end
dividend, upon resolution at the shareholders meeting. Additionally, for companies that meet certain criteria such as (1) having
a Board of Directors, (2) having independent auditors, (3) having a Board of Corporate Auditors, and (4) the term of service ofthe directors is prescribed as one year rather than two years of normal term in its articles of incorporation. With respect to thethird condition above, the Board of Directors may declare dividends (except for dividends in kind) at any time during the fiscal
year, if the Board of Directors can declare dividends as prescribed in the company’s articles of incorporation. DBJ Inc.,
however, shall not distribute such dividends based on resolution of the Board of Directors, since its articles of incorporation
do not prescribe that the Board of Directors can take such action. The Companies Act provides certain limitations on theamounts available for dividends or the purchase of treasury stock. Article 20 of the DBJ Inc. Act provides that the timing andamounts for dividends shall be authorized by the Finance Minister.

The DBJ Group’s Value Creation Story

12. OTHER LIABILITIES

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18. PER SHARE INFORMATION
Equity per share of common stock as of March 31, 2020 and 2019 and basic net income per common share (“EPS”) for theyears ended March 31, 2020 and 2019 are as follows:Year ended March 31, 2020

Thousands of Shares

Yen

U.S. Dollars

Equity related tocommon stock

Outstanding numberof shares used to
calculate equity per share

Equity per share

Equity per share

43,632¥63,755.66$585.83

43,632¥63,769.82

Equity per share

17. SPECIAL INVESTMENT RESERVE AND SPECIAL INVESTMENT SURPLUS
DBJ Inc. recorded the amounts transferred from the government’s investment and capital surplus to implement the special
investment operations in accordance with the provision of Article 2-23 of the supplementary provision of the Act as “Special
investment reserve”. In addition, profit or loss arising from special investment operations is transferred from retained earnings to“Special investment surplus.”

Items deducted from total equity¥3,434,054
652,244   (Crisis response reserve)

206,529  (Special investment reserve
attributable to the National Treasury)

424,000  (Special investment surplus
attributable to the National Treasury)

6,218

  
(Non-controlling interests)

15,496Equity related to common stock¥2,781,810

Year ended March 31, 2019

Equity per share
Total equity
Items deducted from total equity¥3,296,345
513,917   (Crisis response reserve)

206,529  (Special investment reserve
attributable to the National Treasury)

294,000  (Special investment surplus
attributable to the National Treasury)

2,706

  
(Non-controlling interests)

10,682Equity related to common stock¥2,782,427

Year ended March 31, 2020

Millions of Yen

Thousands of Shares

Yen

U.S. Dollars

Net income attributable toowners of the parent

Weighted average shares

EPS

EPS

The DBJ Group’s Corporate GovernanceSpecial Investment Reserve and Special Investment Surplus are characterized as follows:(a)	For the purpose of calculating the amount of surplus, the amounts of special investment reserve and special investment
surplus are included in the total amount of common stock and capital surplus based on the provision of Article 2-25 of the
supplementary provision of the Act.
(b)	In case of compensation for deficit, the amounts of special investment reserve or special investment surplus may bedecreased when the capital surplus and legal retained earnings become nil based on the provision of Article 2-26 of the
supplementary provision of the Act. When the surplus becomes positive after the decrease in the amounts of special
investment reserve or special investment surplus, the amounts of special investment reserve or special investment surplus
shall be increased based on the provision of Article 2-26 of the supplementary provision of the Act.
(c)	In case that DBJ Inc. determined that these amounts became unnecessary to implement special investment operations
properly, DBJ Inc. may pay the full or partial amount of special investment reserve or special investment surplus to the
National Treasury according to the resolution of the shareholders meeting and authorization of the Minister of Finance, in
accordance with the provision of Article 2-27 of the supplementary provision of the Act.
(d)	If DBJ Inc. were to be liquidated, DBJ Inc. shall pay the amounts of special investment reserve and special investment
surplus corresponding to the amount attributable to the National Treasury to the National Treasury based on the provision of
Article 2-28 of the supplementary provision of the Act when residual assets exist after discharging debts.

Total equity

The DBJ Group’s Strategy

Millions of Yen

The DBJ Group’s Value Creation Story(c)	In case DBJ Inc. determined that a sufficient financial base required for the proper implementation of crisis response
operations has been secured, DBJ Inc. shall pay the full or partial amount of crisis response reserve to the National Treasury
according to the resolution of the shareholders meeting and authorization of the Minister of Finance, in accordance with theprovision of Article 2-27 of the supplementary provision of the Act.
(d)	If DBJ Inc. were to be liquidated, DBJ Inc. shall pay the amount of crisis response reserve to the National Treasury based on
the provision of Article 2-28 of the supplementary provision of the Act when residual assets exist after discharging debts.

Basic EPS

 Net income not attributable to common shareholders (Amount attributable to
the National Treasury related to special
investment operations)
Net income attributable to owners of
the parent related to common stock

Corporate Data

 Net income attributable to ownersof the parent¥50,456

3,511¥46,944

43,632¥1,075.90

43,632¥2,080.56$9.89

Year ended March 31, 2019

Basic EPS

 Net income not attributable to common shareholders (Amount attributable to
the National Treasury related to special
investment operations)
Net income attributable to owners of
the parent related to common stock

Data Section Net income attributable to ownersof the parent¥91,936

1,156¥90,780

Note: Diluted net income per share for the years ended March 31, 2020 and 2019 is not disclosed because there are no dilutive securities.

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22. OTHER EXPENSES

Other operating income for the years ended March 31, 2020 and 2019 is as follows:

Other expenses for the years ended March 31, 2020 and 2019 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2020

Foreign exchange gains¥

Gains on sales of bonds
Gains on derivatives

2019

2020

—

¥6,094

$

—

762

283

7,006

14,065—

129,247

Other

336

609

3,094

Total

¥15,165¥6,987$ 139,347

Thousands of
U.S. Dollars

Millions of Yen

2020

¥

2019

2020

$  1,247

Impairment losses

165

—

1,522

Write-off of equities

32,7581,577

301,007

Losses on investments in limited partnerships andother similar partnerships

5,377

2,979

49,416

Depreciation

9,045

8,539

83,115

Provision of allowance for loan losses

1,734

—

15,935

—

6

—

Other

2,521

686

23,170Total¥51,739¥15,187$475,414

2020¥ 4,915

10,494

17,324$96,428—

Gains on redemption of securities

7,727

457

71,009Equity in earnings of affiliates

4,541

9,758

41,731

Gains on sales of fixed assets

4,333

1

39,815

Collection of written-off claims

6,255

1,994

57,481

Gains on investments in limited partnerships andother similar partnerships

26,57527,070244,194

Rental income on land and buildings

12,273

13,224

112,777

Sales of electric power

12,747

12,240117,133

Other

6,738

8,572

61,921

Total¥ 91,688¥95,561$ 842,489

Other operating expenses for the years ended March 31, 2020 and 2019 are as follows:

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 under which
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.
(a) Defined Benefit Pension Plan
(1) The changes in retirement benefit obligation for the years ended March 31, 2020 and 2019 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2020

2019

2020

¥35,372¥34,476$325,024

Service cost

1,574

1,560

14,470Interest cost

385

376

3,542

Balance at beginning of year

Actuarial losses

542

892

4,982

Benefits paid

(1,707)(1,933)(15,692)¥36,167¥35,372$332,326

Balance at end of year
Thousands of
U.S. Dollars

Millions of Yen

2019

2020

Losses on sales of bonds¥     5¥   16$     52

Foreign exchange losses

9,996

—

91,852

Debenture issuance costs

817

861

7,512

1,486

1,271

13,661

Losses on derivatives

—

1,381

—

Other

4

1

41

Total

¥12,310¥3,532$113,118(2) The changes in plan assets for the years ended March 31, 2020 and 2019 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2020

2019

2020

¥29,641¥29,009$272,363

Expected return on plan assets

148

145

1,362

Actuarial (losses) gains

(529)

384

(4,866)

Contributions from the employer

945

1,018

8,688

Benefits paid

(866)

(916)

(7,962)¥29,338¥29,641$269,585

Balance at beginning of year

Balance at end of year

Data Section

2020

Corporate Data

21. OTHER OPERATING EXPENSES

23. EMPLOYEES’ RETIREMENT BENEFITSThe DBJ Group’s Corporate Governance—

Gains on sales of equities and other securities

Corporate bonds issuance costs

2019¥ 1,397

The DBJ Group’s Strategy

Other income for the years ended March 31, 2020 and 2019 is as follows:

Reversal of allowance for loan losses

2020¥   135

Losses on sales of fixed assets

Provision of allowance for investment losses

20. OTHER INCOME

Thousands of
U.S. Dollars

Millions of Yen

The DBJ Group’s Value Creation Story

19. OTHER OPERATING INCOME

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117

Thousands of
U.S. Dollars

Millions of Yen

2019

Funded retirement benefit obligations¥ 28,074¥ 27,402$ 257,971

Plan assets(29,338)(29,641)(269,585)(1,263)(2,238)(11,614)

8,092

7,969

74,355Net liability for retirement benefits recorded in
the consolidated balance sheet¥   6,828¥   5,731$   62,741

Liability for retirement benefits¥   8,092¥   7,969$   74,355

Asset for retirement benefits(1,263)(2,238)(11,614)

Unfunded retirement benefit obligations

Net liability for retirement benefits recorded in the consolidatedbalance sheet

2020

2020

Debentures

89%

Equity9%

10%

Others

18%

1%

Total

100%

100%

		

(ii) Method of determining the expected rate of return on plan assets
The expected rate of return on plan assets is determined considering the long-term rates of return which are expectedcurrently and in the future from the various components of the plan assets.

(8) Assumptions used for the years ended March 31, 2020 and 2019 were set forth as follows:¥   6,828¥   5,731$   62,741

2020

Discount rate(4) The components of net periodic retirement benefit costs for the years ended March 31, 2020 and 2019 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2019

2020

Service cost

¥1,574¥1,560$14,470

Interest cost

385

376

3,542

Expected return on plan assets

(148)

(145)

(1,362)

Amortization of net actuarial losses

81

136

745

Amortization of prior service cost

7

12

70

¥1,900¥1,940$17,465(5)	Amounts recognized in other comprehensive income (before income tax effect) in respect of adjustments for retirement
benefit for the years ended March 31, 2020 and 2019 are as follows:
Millions of Yen

2020

2019

Expected rate of return on plan assets

1.7%–5.3%

0.5%

0.5%

24. INCOME TAXESDBJ 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 30.62% for the years ended March 31, 2020
and 2019.
A reconciliation of the normal effective statutory tax rate with the actual effective tax rate for the years ended March 31, 2020
and 2019 is as follows:

2020

2020

2019

30.62 %

30.62 %

Change in valuation allowance

8.96 %(1.83) %Equity in earnings of affiliates(1.67) %(2.36) %Other

0.03 %

0.01 %

37.94 %

26.44 %¥   7¥   12$    70

Normal effective statutory tax rate

Actuarial losses

(990)

(372)

(9,103)

Increase (decrease) in taxes resulting from:

Total¥(983)¥(360)$(9,033)

Actual effective tax rate

Thousands of
U.S. Dollars

Millions of Yen

2019

2020

Unrecognized prior service cost¥   (11)¥ (19)$   (110)

Unrecognized actuarial losses(1,353)(363)(12,440)

Total¥(1,365)¥(382)$(12,550)

Data Section

2020

1.7%–5.3%(b) Defined Contribution Plans
The amounts of the required contribution to the defined contribution plans of DBJ Inc. and its consolidated subsidiaries for theyears ended March 31, 2020 and 2019 are ¥243 million ($2,236 thousand) and ¥237 million, respectively.

Prior service cost(6)	Amounts recognized in accumulated other comprehensive income (before income tax effect) in respect of adjustment for
accumulated retirement benefit as of March 31, 2020 and 2019 are as follows:

1.1%

Corporate Data

Thousands of
U.S. Dollars

Expected salary increase rate

2019

1.1%

The DBJ Group’s Corporate Governance2020

Net periodic retirement benefit costs

2019

73%

The DBJ Group’s Strategy

2020(7) Plan assets
		 (i) Components of plan assets
		 Plan assets as of March 31, 2020 and 2019 consisted of the following:

The DBJ Group’s Value Creation Story(3)	Reconciliation between the liability for retirement benefits recorded in the consolidated balance sheet and the balances ofretirement benefit obligations and plan assets for the years ended March 31, 2020 and 2019 are as follows:

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119

(As lessor)
The minimum lease commitments under non-cancelable operating leases as of March 31, 2020 and 2019 are as follows:

Thousands of
U.S. Dollars

Millions of Yen

Thousands of
U.S. Dollars

Millions of Yen

2019

2020

¥ 12,589¥ 14,478$115,680

Losses from revaluation of securities

21,313

11,955

195,846

Excess of fair value over assets of consolidated subsidiaries

3,426

3,426

31,489Liability for retirement benefits

2,014

1,986

18,508

Tax goodwill

1,275

1,416

11,724

26. OTHER COMPREHENSIVE (LOSS) INCOME

Tax loss carryforwards

6,498

6,289

59,710The components of other comprehensive (loss) income for the years ended March 31, 2020 and 2019 are as follows:

Other

16,961

16,583

155,855

Sub-total

64,08056,137

588,812(46,208)(38,765)(424,596)(46,208)(38,765)(424,596)

17,871

17,371

164,216

Deferred tax assets:
Allowance for loan losses Less-valuation allowance on total of temporary differences deductible
in future periods
Sub-total*1
Total

2019

2020

Due within 1 year

¥ 6,151¥ 5,941$ 56,526

Due after 1 year

21,891

22,717201,156

Total¥28,043¥28,659$257,681(7,278)(17,085)(Loss) gain arising during the year
Reclassification adjustments to profit or loss

(66,879)   Income tax effect(8,398)(10,696)(77,170)

Other(6,002)(4,701)(55,159)

Deferred loss on derivatives under hedge accounting:(21,679)(32,483)(199,208)¥   (3,808)¥(15,111)$ (34,992)*1. Changes in valuation allowance are principally due to an increase in valuation allowance for write-off of securities.
*2. Net deferred tax assets are included in the following items in the consolidated balance sheets.

2019

2020

¥(22,805)¥ 14,139(6,035)(15,836)(55,457)(28,840)(1,697)(265,006)(Loss) gain arising during the year
Reclassification adjustments to profit or loss$(209,549)

8,862

(137)

81,436(19,977)(1,834)(183,570)

(704)

1,233

(6,473)(7,126)(7,520)(65,480)   Amount before income tax effect(7,830)(6,286)(71,953)   Income tax effect

2,397

1,927

22,032  Total(5,432)(4,359)(49,921)

Adjustments arising during the year

(75)

113

(692)

Reclassification adjustments to profit or loss

—

—

—

Foreign currency translation adjustments:
Thousands of
U.S. Dollars

Millions of Yen

2019

2020

Deferred tax assets¥ 2,800¥  1,217$ 25,733   Amount before income tax effect

(75)

113

(692)

Deferred tax liabilities(6,608)(16,328)(60,725)   Income tax effect

—

—

—

  Total

(75)

113

(692)

(1,071)(508)(9,848)

88

148

815

(983)

(360)

(9,033)Adjustments for retirement benefits:
Adjustments arising during the year

25. LEASE TRANSACTIONS

Reclassification adjustments to profit or loss(a) Finance Leases
Information about finance leases is omitted since there is no materiality.

   Amount before income tax effectThousands of
U.S. Dollars

Millions of Yen

2020

2019

2020

Due within 1 year

¥1,757¥1,700$16,153

Due after 1 year

2,255

3,824

20,722

Total¥4,013¥5,525$36,874   Income tax effect

301

110

2,766

  Total

(682)

(249)

(6,267)(1,820)(30)(16,725)(107)(3,899)(988)(1,927)(3,929)(17,712)

Share of other comprehensive loss in affiliates accounted
for by the equity method:
Loss arising during the year
Reclassification adjustments to profit or loss   Amount before income tax effect   Income tax effect  Total
Total other comprehensive loss

—

—

—

(1,927)(3,929)(17,712)¥(28,095)¥(10,260)$(258,163)

Data Section(b) Operating Leases(As lessee)
The minimum lease commitments under non-cancelable operating leases as of March 31, 2020 and 2019 are as follows:

Corporate Data

2020

The DBJ Group’s Corporate GovernanceDeferred gain on derivatives under hedge accounting

Net deferred tax assets (liabilities)*2

2020

Unrealized (loss) gain on available-for-sale securities:  Total

Total

Thousands of
U.S. Dollars

Millions of Yen   Amount before income tax effect

Deferred tax liabilities:
Unrealized gain on available-for-sale securities

2020

The DBJ Group’s Strategy

2020

The DBJ Group’s Value Creation Story

The tax effects of significant temporary differences and loss carryforwards which resulted in deferred tax assets and liabilities asof March 31, 2020 and 2019 are as follows:

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121

DBJ Inc. consists of only one business segment of long-term financing and accordingly, the disclosure of the reportable segment
information is omitted.
Related Information:
Segment information by service for the years ended March 31, 2020 and 2019 is following:
Millions of Yen

Year ended March 31, 2020

Ordinary income from external customers

Loan business¥144,669

Securities investment¥70,141

Other¥74,332

Total¥289,144

Millions of Yen

Ordinary income from external customers

Loan business¥157,916

Securities investment¥69,255

Other¥74,032

Total¥301,204

Thousands of U.S. Dollars

Year ended March 31, 2020

Loan business

Ordinary income from external customers$1,329,313

Securities investment$644,510

Other$683,019

Total$2,656,842

28. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES

4) Derivative Transactions
In conducting derivative transactions, segregation of duties is maintained in the front office, the back office and therisk management department 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 forthe purposes other than trading.
Market risk exposure (estimated loss) is based on VaR methods through interest rate sensitivity analyses(100 BPV) and variance-covariance method (holding period of 1 year, observation period of 5 years or more,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, 2020 and 2019 was ¥48,910 million ($449,422
thousand) and ¥63,410 million, respectively. Such measurements are conducted by the risk management
department on a regular basis and reported to the ALM & Risk Management Committee to utilize for establishing
ALM operating policies.

Data Section(3) Risk Management for Financial Instruments(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 viability and the entity’s3) Price Volatility Risk Management
When DBJ Inc. acquires financial assets entailing price volatility risk such as securities with readily available market
quotations, it follows in-house regulations and policies which have been developed taking into account market
fluctuation risks, and the risk management department is involved in decision-making, as necessary. Throughregular monitoring, price volatility risks are reviewed on a timely basis and reported to ALM & Risk Management
Committee periodically.

Corporate Data

(2) Nature and Extent of Risks Arising from Financial Instruments
The financial assets of DBJ Inc. are mainly investments and loans in domestic customers, which are exposed to credit
risk that stems from customers’ default of contracts or decline of their creditworthiness. Main categories of industries ofdebtors are electricity, gas, thermal supply, water supply, real estate, rental, leasing, transportation, postal service andothers as of March 31, 2020. The changes of economic circumstances surrounding these industries may influence thefulfillment 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 otherrisks. 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 activities, interest-rate swap agreements and othertransactions.
Foreign currency denominated investments, loans and others are exposed to exchange rate risk. DBJ Inc. mitigatesthis risk by matching foreign currency investments, loans and others with foreign currency corporate bonds ascorresponding foreign currency denominated liabilities and by using exchange swaps and currency swaps.
DBJ Inc. utilizes derivative financial transactions such as interest-rate swap agreements and currency swap
agreements in order to hedge or manage the risks related to interest and currency. DBJ Inc. applies hedge accounting asnecessary. Details for hedging instruments, hedged items, hedging policy and assessment of effectiveness of the hedges
are described in Note 2 (f) “Hedge Accounting.”

2) Foreign Exchange Risk Management
Foreign currency investments, loans and others are exposed to exchange rate risk, therefore those risks arehedged or managed not only by offsetting some foreign currency denominated investments, loans and otherswith foreign currency denominated corporate bonds and debentures but also by using exchange swaps andcurrency swaps.

The DBJ Group’s Corporate Governance(a) Financial Instruments(1) Policy for Financial Instruments
DBJ Inc. provides investment and loan services that are aimed to provide long-term stable funding. As the 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 the majority of
its assets are long-term with a fixed rate, 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 in orderto 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 manage the risks related to interest and currency.

(ii) Market Risk Management
1) Interest Rate Risk Management
DBJ Inc. manages interest rate risk by asset/liability management. Details of risk management methods andprocedures are determined on internal rules, and Management Committee and ALM & Risk Management
Committee determine policies related to asset/liability management, monitoring of implementation and futureplans. In addition, the risk management department monitors the interest rate and term of financial assets/liabilities
overall. ALM & Risk Management Committee conducts regular monitoring with interest rate sensitivity analyses(duration, basis point value (BPV)), value at risk (VaR), and other methods. As part of asset/liability management,interest-rate swaps are used to avoid or hedge interest rate risk.

The DBJ Group’s Strategy

Year ended March 31, 2019

project’s profitability. After that, DBJ Inc. sets ratings along with an internal rating system, grants credit amount, setscollateral and guarantee. The sales and credit analysis departments hold separate roles in the screening andadministering 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 to deliberate important issues concerning themanagement and governance of individual loans. DBJ Inc. performs a comprehensive analysis of data based onborrower ratings, and calculates the loan portfolio’s overall exposure to credit risk, which is measured regularly toensure 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 monitors
changes in the market value of securities with market value. As for counterparty risk arising from derivativetransactions, DBJ Inc. manages derivative transactions by setting a limit after continually monitoring the cost ofrestructuring its transactions and the creditworthiness of each counterparty and also manages risk by utilizing central
clearance organization and through receipt/payment of margin money based on Credit Support Annex (CSA)
between counterparties.

The DBJ Group’s Value Creation Story

27. SEGMENT INFORMATION

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123

(4) Supplementary Explanation on Fair Value of Financial Instruments
The fair value of financial instruments is measured at quoted market prices. If a quoted price is not available, DBJ Inc.
measures fair value based on a reasonably assessed price. Because an assessed price is computed using certain
assumptions, price could differ if different assumptions are used.

2019
Carrying amount¥   966,903¥   966,903

Call loans and bills bought

260,000

260,000—

Money held in trust

18,30520,052

1,747

Held-to-maturity debt securities

534,041

544,776

10,734

Available-for-sale securities

559,404

559,404

—

2,334

2,822

488

12,889,653

13,452,296

562,642

Total assets¥15,230,642¥15,806,256¥575,613

Debentures

3,190,536

3,295,915

105,379

Investments in affiliates
Loans
Allowance for loan losses*1

Borrowed money
Total liabilities

Derivative transactions qualifying for hedge accounting¥ 1,298,955¥ 1,298,955

720,000

720,000

Money held in trust

Total derivative transactions

Difference

Call loans and bills bought¥

Available-for-sale securities
Investments in affiliates
Allowance for loan losses*1

18,467

19,155688

456,324459,3433,019

1,001,977

1,001,977

—

2,612

2,272

(340)

12,415,985(35,463)
12,885,374

504,852¥16,387,078¥ 508,219

Debentures

3,314,656

3,399,500

84,844———

Borrowed money

8,070,948

8,139,492

68,544

Corporate bonds

2,382,226

2,396,272

14,045¥13,767,831¥13,935,265¥ 167,434

Derivative transactions not qualifying for hedge accounting

33,36733,367—

Derivative transactions qualifying for hedge accounting

1,859

1,859

—

¥    35,226¥    35,226

Derivative transactions*2

Total derivative transactions

2,106,463

2,118,548

12,085¥13,378,621¥13,594,754¥216,132

30,16030,160—(3,162)(3,162)—¥    26,998¥    26,998¥     —

Thousands of U.S. Dollars

¥

—

2020
Carrying amount

Fair value

Cash and due from banks$ 11,935,641$ 11,935,641

Call loans and bills bought

6,615,823

6,615,823—

169,687

176,013

6,327

Held-to-maturity debt securities

4,193,000

4,220,740

27,741

Available-for-sale securities

9,206,813

9,206,813—

24,00820,878(3,130)113,760,197

118,399,102

4,638,905

Total assets$145,905,168$150,575,011$4,669,843

Debentures

30,457,192

31,236,800

779,607

Money held in trust

Difference$—

Securities

Investments in affiliates
Loans
Allowance for loan losses*1

Payables under repurchase agreements
Borrowed money
Corporate bonds
Total liabilities

114,086,054(325,858)———

74,161,065

74,790,892

629,827

21,889,428

22,018,490

129,062$126,507,686$128,046,181$1,538,495

306,599

306,599—

Derivative transactions*2
Derivative transactions not qualifying for hedge accounting
Derivative transactions qualifying for hedge accounting
Total derivative transactions*1. General and specific allowances for loan losses are deducted.
*2. Assets and liabilities arising from derivative transactions are presented on a net basis.

17,087

17,087$    323,685$    323,685—$—

Data Section

12,380,522¥15,878,859

Total liabilities—
98,667—

Total assets
Payables under repurchase agreements

93,761
8,086,527

Corporate Data

Loans

93,761
7,987,860—

Securities
Held-to-maturity debt securities(34,285)

The DBJ Group’s Corporate GovernanceDerivative transactions not qualifying for hedge accounting

2020

Cash and due from banks

12,923,938

Derivative transactions*2

Millions of Yen
Fair value¥     —

Securities

Corporate bonds

Carrying amount

Difference

Cash and due from banks

Payables under repurchase agreements(b) Fair Value Information of Financial Instruments
	The following are the carrying amount, fair value and differences between them as of March 31, 2020 and 2019.
Unlisted equities and others, whose fair value cannot be reliably determined, are excluded from the table below (see (2)).

Fair value

The DBJ Group’s Strategy(iii) Liquidity Risk Management on Financing
The risk management department monitors the possession amount of cash liquidity and the cash flow ladder andreports 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 liquidity risk by appropriate
operations of financing and investing activities based on the risk situation.

Millions of Yen

The DBJ Group’s Value Creation Story

VaR or 100 BPV measures the market risk volume under a definite probability of incidence calculated basedon the historical market movements and therefore, it may fail to capture risks which arise under exceptional market
conditions affected by drastic change.
DBJ Inc. recognizes that rigid risk management is being conducted as risks that cannot be captured by themodel alone are identified in detail by conducting backtesting to compare the risk volume calculated by the modelwith hypothetical performances calculated based on the actual market movements as well as performing
measurement using other risk indices and stress tests.

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125

(ii) Call loans and bills bought
For each of these items, the majority of transactions have short contract terms (1 year or less). Thus, the carrying
amount is presented as the fair value, as such carrying amount approximates the fair value.

(iv) Corporate bonds
For floating rate corporate bonds issued by DBJ Inc. and its consolidated subsidiaries, the carrying amount ispresented as the fair value, as such carrying amount approximates the fair value. This is on the basis that the market
interest rate is reflected in the interest rate set within a short time period and that there has been no significant change
in the creditworthiness of DBJ Inc. or its consolidated subsidiaries before and after the issuance. For fixed rate
corporate bonds with market prices, the fair value is determined based on their market price. For fixed rate corporate
bonds without market prices, the fair value is determined by discounting contractual cash flows based on types ofmaturity lengths (when interest rate swap contracts which meet the hedging requirements of the accrual method isqualified to corporate bonds, 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. or its consolidated subsidiaries. Certain foreign
currency denominated corporate bonds are translated using the forward contract rates and the present value of thecontractual cash flows is computed regarding them as Japanese yen denominated corporate bonds.

Data Section

Derivatives
Derivatives consist of interest rate related derivatives (interest rate swaps), currency related derivatives (currency
swaps, forward foreign exchange contracts) and credit derivatives. Fair value of these derivatives is determined basedon the discounted present value, quoted prices presented by the financial institutions, etc.

Corporate Data(v) 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 tenor. Foreign currency swap
contracts which meet the hedging requirements of the assignment method is limited to loans for which the contractual
cash flows are matched with 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 such carrying amount approximates thefair value. With respect to the claims on debtors who are likely to become bankrupt or to be closely monitored, andfor which future cash flows can reasonably be estimated, the fair values are determined by discounting expectedcash flows that reflect expected loss at the risk free rate. For loans to obligors who are “legally bankrupt,” “effectively
bankrupt” and “possibly bankrupt,” the reserve is provided based on the discounted cash flow method, or based onamounts expected to be collected through the disposal of collateral or execution of guarantees. Carrying value net ofthe reserve as of the consolidated balance sheet date is a reasonable estimate of the fair value of those loans.

(iii) Borrowed money
For floating rate borrowed money, the carrying amount is presented as the fair value, as such carrying amountapproximates the fair value. This is on the basis that the market interest rate is reflected in the fair value of suchborrowed money because the terms of these were set within a short time period for such variable rate borrowings
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, the contractual cash flows are based on the interest
rate swap) at the rates that consist of the risk free rate and the rate of certain costs applicable to DBJ Inc. or
consolidated subsidiaries. Certain foreign currency denominated borrowed money is translated using the forward
contract rates and the present value of the contractual cash flows is computed regarding them as Japanese yen
denominated borrowed money.

The DBJ Group’s Corporate Governance(iv) Securities
The fair value of marketable equity securities is measured at the market price. The fair value of bonds is measured at
the market price or the quoted price from third party. For bonds without such price, the fair value is determined bydiscounting contractual cash flows at the rates that consist of the risk free rate and the credit risk premium based on
types of securities, internal ratings and tenor.
Notes on securities by holding purpose are described in Note 30.

(ii) Payables under repurchase agreements
For payables under repurchase agreements, the majority of transactions have short contract terms (1 year or less).
Thus, the carrying amount is presented as the fair value, as such carrying amount approximates the fair value.

The DBJ Group’s Strategy(iii) Money held in trust
The fair value of financial assets that are the components of money held in trust is measured in the same manner as(v) “Loans.”
Notes on money held in trust by holding purpose are described in Note 30.

Liabilities(i) Debentures
For floating rate debentures issued by DBJ Inc., the carrying amount is presented as the fair value, as such carrying
amount approximates the fair value. This is on the basis that the market interest rate is reflected in the fair value ofsuch debentures because the terms of these were set within a short time period and that there has been no
significant change in the creditworthiness of DBJ Inc. before and after the issuance. For fixed rate debentures withmarket prices, the fair value is determined based on their market price. For fixed rate debentures without market
prices, the fair value is determined by discounting contractual cash flows based on types of maturity lengths (wheninterest rate swap contracts which meet the hedging requirements of the accrual method is qualified to debentures,the 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. Certain foreign currency denominated debentures are translated using theforward contract rates and the present value of the contractual cash flows is computed regarding them as Japanese
yen denominated debentures.

The DBJ Group’s Value Creation Story(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 such carrying amountapproximates the fair value. For deposits with maturity, the carrying amount is presented as the fair value, as suchcarrying amount approximates the fair value because the remaining maturity period of the majority of such deposits isshort (maturity within 1 year).

126

127

Millions of Yen

2019

Carrying amount2020

Due from banks

Thousands of
U.S. Dollars

Millions of Yen

2019

Call loans and bills bought2020

Due in1 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¥  966,897¥       —

¥       —

¥       —

¥       —

¥     —

260,000

—

—

—

—

—

Money held in trust*1¥  1,615¥  1,877$   14,845

Securities

Unlisted equities*2,3

328,439

340,182

3,017,917 Held-to-maturity debt securities
with market values

128,787

170,576

114,088

61,84850,7178,022   Japanese government bonds

20,007

10,122

10,024

10,071

15,071

5,022

327,173

303,185

3,006,281

Unlisted other securities*2,3

286,597

253,570

2,633,443   Japanese local government bonds

—

—

—

—

—

—

$8,672,486   Short-term corporate bonds

—

—

—

—

—

—

Total

¥943,826¥898,816*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 tofair value disclosures.
*2.	Financial instruments for which the quoted price is not available and fair value cannot be reliably determined, are not subject to fair value disclosures.
*3.	Impairment loss on financial instruments whose fair value cannot be reliably determined for the years ended March 31, 2020 and 2019 was ¥28,734 million ($264,032 thousand) and ¥1,577
million, respectively, which consist of unlisted equities of ¥28,692 million ($263,646 thousand) and ¥496 million and unlisted other securities of ¥41 million ($386 thousand) and ¥1,080
million for the years ended March 31, 2020 and 2019, respectively.

(3) 	Maturity analysis for financial assets and securities with contractual maturities as of March 31, 2020 and 2019are as follows:

Due after
3 years through5 years

Due after
5 years through7 years

Due after
7 years through10 years

Due after
10 years¥1,298,950

¥

¥

¥

¥

¥

—
—

—
—

73,53834,321

25,6803,000

56,44630,525

17,456

9,964— Available-for-sale securities with
contractual maturities

32,021

98,84861,45059,23586,403

138,479   Japanese government bonds—

30,943

5,201

18,666——   Japanese local government bonds

—

—

—

—

—

—

   Short-term corporate bonds

—

—

—

—

—

—

32,021

67,90456,24937,13386,403

138,479

—

—

—

3,436

—

—

—
—

—
—

Loans*2

2,893,034

3,274,683

2,355,054

1,778,849

1,911,117

681,015

Total¥4,280,741¥3,544,107¥2,530,592¥1,899,934¥2,048,237¥827,517

Due after
10 years—Thousands of U.S. Dollars

—

2020

Securities Held-to-maturity debt securities
with market values

99,488157,180

50,30385,24061,1093,000   Japanese government bonds—

15,077

10,061

10,07045,315—

Call loans and bills bought   Japanese local government bonds

—

—

—

—

—

—

Securities

Due after
3 years through5 years

Due after
5 years through7 years

Due after
7 years through10 years$11,935,595

$

$

$

$

—

—

—

—

$

—

6,615,823

—

—

—

—

—

—

—

—

—

—

—

  Corporate bonds

59,382

102,328

28,28654,628

5,794

3,000

 Held-to-maturity debt securities
with market values

914,167

1,444,280

462,225

783,246

561,516

27,566  Other

40,10539,775

11,955

20,541

10,000—   Japanese government bonds—

138,539

92,456

92,536416,384—   Japanese local government bonds

—

—

—

—

—

—

   Short-term corporate bonds

—

—

—

—

—

—

 Available-for-sale securities with
contractual maturities

33,425133,269

163,245

78,661

67,079156,098   Japanese government bonds

5,069

25,44718,483

5,139

—

—

  Corporate bonds

545,648940,258

259,919

501,962

53,24527,566   Japanese local government bonds

—

—

—

—

—

—

  Other

368,519

365,483

109,850

188,749

91,886—   Short-term corporate bonds

—

—

—

—

—

—

28,355

107,713

144,762

73,522

67,079156,098 Available-for-sale securities with
contractual maturities

307,133

1,224,570

1,500,006

722,789

616,371

1,434,332   Japanese government bonds  Corporate bonds

108

—

—

—

—

46,582233,828

169,839

47,220——2,180,066

3,194,175

2,553,222

1,975,325

1,793,140

689,705   Japanese local government bonds

—

—

—

—

—

—

Total

¥4,331,931¥ 3,484,626¥ 2,766,772¥ 2,139,226¥ 1,921,329¥848,803   Short-term corporate bonds

—

—

—

—

—

—

260,551

989,742

1,330,167

675,568

616,371

1,434,332

—

1,000

—

—

—

—

  Other  Corporate bonds  Other
Loans*1

20,031,851

29,350,141

23,460,650

18,150,556

16,476,528

6,337,454

Total$39,804,569$ 32,018,991$25,422,880$ 19,656,591$ 17,654,415$ 7,799,351*1.	Obligations to “Legally Bankrupt,” “Effectively Bankrupt” and “Possibly Bankrupt” amounting to ¥30,349 million ($278,875 thousand) are not included as of March 31, 2020.
*2.	Obligations to “Legally Bankrupt,” “Effectively Bankrupt” and “Possibly Bankrupt” amounting to ¥30,184 million are not included as of March 31, 2019.

Data Section—

Loans*1

Corporate Data   Short-term corporate bonds

Due from banks

Due in1 year or lessDue after
1 year through3 years

The DBJ Group’s Corporate GovernanceDue in1 year or lessDue after
1 year through3 years

720,000

104,007  Other2020

Due from banks

54,68854,092  Corporate bonds

Millions of Yen

Call loans and bills bought  Corporate bonds  Other

The DBJ Group’s Strategy

Investments in limited partnerships and othersimilar partnerships*1

The DBJ Group’s Value Creation Story(2)	Following are the financial instruments whose fair value cannot be reliably determined as of March 31,
2020 and 2019:		These securities are not included in the amount in the table summarizing fair values of financial instruments.

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129

Thousands of U.S. Dollars

2020
Contract amountMillions of Yen
Total

2020
Due in1 year or less

Borrowed money
Debentures and Corporate bonds
Total

Due after
1 year through3 years

Due after
3 years through5 years

Due after
5 years through7 years

Due after
7 years through10 years

Swaps¥1,104,333¥2,048,497¥1,406,720¥1,013,993¥1,056,239¥1,441,165

557,653

1,677,754

1,246,749

912,840

988,613313,271   Receive float/ Pay fixed¥3,726,252¥2,653,469¥1,926,833¥2,044,852

Unrealized gains(losses)

Fair value

Over-the-counter
Due after
10 years   Receive fixed/ Pay float¥1,661,986

Due after 1 year

¥1,754,436$8,900,461$7,417,992

8,875,053

7,395,711(305,897)(305,897)——$ 268,028$ 268,028

Total$ 573,925$ 573,925*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.

Millions of Yen

Debentures and Corporate bonds
Total

Due in1 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¥1,173,571¥2,244,770¥1,559,927¥  911,998¥  909,583¥1,188,007

616,192

1,297,462

1,390,372

783,657

1,004,043

205,270¥1,789,764¥3,542,233¥2,950,300¥1,695,655¥1,913,627¥1,393,278

Thousands of U.S. Dollars

Total

2020
Contract amountTotal

Due after 1 year

Unrealized gains(losses)

Fair value

Over-the-counter¥  5,226¥5,226¥   71¥   71  Sold188,973

—

3,867

3,867

  Bought

234,247

—

259

259

—

—

¥4,198¥4,198Forwards

Due in1 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$10,147,323$18,822,914$12,925,848$ 9,317,221$ 9,705,407$13,242,353

Debentures and Corporate bonds

Millions of Yen

5,124,081

15,416,286

11,455,936

8,387,764

9,084,014

2,878,540$15,271,404$34,239,200$24,381,783$17,704,984$18,789,421$16,120,893

Total

Millions of Yen

2019
Contract amountTotal

29. DERIVATIVE TRANSACTIONS

Due after 1 year

Over-the-counter(a) Derivative Transactions to which Hedge Accounting is Not Applied(1) Interest rate-related transactions

Swaps

2020

¥5,226¥ 80¥ 80  Sold172,643—5

5  Bought

89,460

—

264

264

Due after 1 year

Fair value

Unrealized gains(losses)

—

—

¥350

¥350

Total

Over-the-counter

Thousands of U.S. Dollars

Swaps

2020

   Receive fixed/ Pay float¥968,637¥807,300   Receive float/ Pay fixed

965,871804,875(33,290)(33,290)——¥ 29,169¥ 29,169

Total¥ 62,460¥ 62,460

Millions of Yen

2019

Due after 1 year

Fair value

Unrealized gains(losses)Over-the-counter
Swaps$   48,027$48,027$   657$   657

Fair value

Unrealized gains(losses)  Sold1,736,410—

35,53835,538  Bought

2,152,416

—

2,387

2,387

—

—

$38,582$38,582

Total

Over-the-counter*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.

Swaps   Receive fixed/ Pay float¥992,660¥842,185¥ 55,996¥ 55,996   Receive float/ Pay fixed

987,611

839,729(26,188)(26,188)——¥ 29,807¥ 29,807

Data Section

Due after 1 year

Total

Forwards

Contract amount
Total

Contract amountCorporate Data

Contract amountTotal¥  5,226

Forwards
Millions of Yen

Total

Unrealized gains(losses)

Fair value

The DBJ Group’s Corporate Governance

Borrowed money(2) Currency-related transactions

Swaps

2020

The DBJ Group’s Strategy

2019

Borrowed money

The DBJ Group’s Value Creation Story(4) 	Maturity analysis for debentures, borrowed money and other interest-bearing liability as of March 31,
2020 and 2019 are as follows:

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131

(b) Derivative Transactions to which Hedge Accounting is Applied(1) Interest rate-related transactions
Millions of Yen(4) Bond-related transactions
Not applicable.

2020
Contract amount
Hedged item

Deferral method(5) Commodity-related transactions
Not applicable.

Swaps
		

(6) Credit derivative transactions

Receive float/ Pay fixed

Accrual method
Swaps

Millions of Yen
Contract amountTotal

Due after 1 year

Unrealized gains(losses)

Fair value		

Receive fixed/ Pay float

		

Receive float/ Pay fixed

Debentures, Borrowed money,
Corporate bonds and Loans

Due after 1 year¥   73,200¥   65,246¥(3,977)

2,059,552

2,038,302

*3

9,111

9,111

—

—

Total

Over-the-counter
Credit default options

Fair value¥(3,977)

Millions of Yen  Sold¥1,500¥—¥6¥6  Bought

1,500

—

(7)

(7)

—

—

¥(1)

¥(1)

Total

2019

Deferral method

Fair value

Credit default options  Sold¥7,500¥4,000¥ 96¥ 96  Bought

7,500

4,000

(94)

(94)

—

—

¥   2

¥   2

Receive float/ Pay fixed

Accrual method
Swaps
		

Receive fixed/ Pay float

		

Receive float/ Pay fixed

Borrowed money and Loans

Debentures, Borrowed money,
Corporate bonds and Loans

Total

Due after 1 year¥   73,150¥   65,765¥(1,592)

1,849,613

1,725,556

*3

8,948

8,592

—

—

Total

Fair value¥(1,592)

Thousands of U.S. Dollars

2020
Thousands of U.S. Dollars

Contract amount

2020

Hedged item

Contract amountDue after 1 year

Fair value

Over-the-counter

Swaps
		

Credit default options  Sold$13,783

$—

$ 61

$ 61

  Bought

13,783

—

(73)

(73)

—

—

$(12)

$(12)

Total

Deferral method*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.

Receive float/ Pay fixed

Accrual method
Swaps
		

Receive fixed/ Pay float

		

Receive float/ Pay fixed

Total

Borrowed money and Loans

Debentures, Borrowed money,
Corporate bonds and Loans

Total

Due after 1 year

Fair value$   672,612$   599,531$(36,545)

18,924,491

18,729,232*3

83,726

83,726——

Corporate Data

Total

Unrealized gains(losses)

The DBJ Group’s Corporate Governance

Unrealized gains(losses)Over-the-counter

Total

Hedged item		Contract amountDue after 1 year

Contract amount

Swaps

Millions of Yen

Total

2019

The DBJ Group’s Strategy

2020

Borrowed money and Loans

Total

The DBJ Group’s Value Creation Story(3) Equity-related transactions
Not applicable.

$(36,545)

Data Section*1. The deferral method or the accrual method is applied as a hedge accounting method.
*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, securities and loans.

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133

Fair value of securities, money held in trust and negotiable certificate of deposit classified as “Cash and due from banks” as ofMarch 31, 2020 and 2019 is summarized below.

Millions of Yen

2020
Contract amount
Hedged item

Deferral method
Swaps

Foreign currency
denominated loans

Total

Due after 1 year¥  5,503¥  5,503

Fair value(a) Securities(1) Held-to-maturity debt securities as of March 31, 2020 and 2019 are as follows:¥  142

267,332

267,332*3

Forwards

Foreign-currency
available-for-sale securities

66,320

—

5,694

—

¥5,836

Millions of Yen

2020
Carrying amount

Total

—

Fair value exceeds
carrying amountMillions of Yen

2019

Sub-total
Fair value does notexceed carrying amountContract amount
Hedged item

Deferral method

Total

Due after 1 year

Fair value¥  5,503¥  5,503¥   (25)

Swaps

Foreign-currency debentures, Borrowed money, andCorporate bonds

320,813

267,332*3

Forwards

Foreign-currency
available-for-sale securities

86,494—(1,544)——¥(1,570)

Translated at contractual rates

Total

Sub-total
Total

2020

Deferral method
Swaps

Foreign currency
denominated loans

Total

Due after 1 year$   50,570$   50,570

Fair value$ 1,3092,456,425

2,456,425

Forwards

Foreign-currency
available-for-sale securities

609,393—

52,323——$53,632

Total*3*1.	These derivatives are primarily accounted for by the deferral method of hedge accounting provided in “Accounting and Auditing Treatments on Accounting for Foreign Currency Transactionsin the Banking Industry” (JICPA Industry Audit Committee Report No. 25, July 29, 2002).
*2.	Fair values are based primarily on discounted present values.
*3.	The above currency swaps which qualify for the hedging requirements of assignment method are not subject to the disclosure of fair value information. In addition, the fair value ofsuch foreign currency swaps in Note 28 “Financial Instruments and Related Disclosures” is included in that of hedged items such as foreign-currency debentures, borrowed money andcorporate bonds.

(4) Bond-related transactions
Not applicable.

Japanese government bonds
Japanese local government bonds
Short-term corporate bonds
Corporate bonds
Other

Sub-total
Total¥ 70,321——
265,195
134,328
469,845———
30,04034,15664,196¥534,041¥ 77,085——
269,052
135,691
481,829———
28,92634,01962,946¥544,776

Difference¥ 6,763
—
—
3,857
1,363
11,984———(1,113)(136)(1,249)¥10,734

Thousands of U.S. Dollars

2020

Fair value exceeds
carrying amountSub-total
Fair value does notexceed carrying amountJapanese government bonds
Japanese local government bonds
Short-term corporate bonds
Corporate bonds
Other
Japanese government bonds
Japanese local government bonds
Short-term corporate bonds
Corporate bonds
Other

Sub-total
Total
Note: Fair value is based on the closing price at the consolidated balance sheet date.

Carrying amount

Fair value$  461,655——
1,580,277
613,247
2,655,179
278,259——748,320
511,240
1,537,820$4,193,000$  511,536——
1,598,923
617,024
2,727,483
278,058——
721,620
493,580
1,493,257$4,220,740

Difference$ 49,882——
18,646
3,776
72,304(202)——(26,701)(17,660)(44,563)$ 27,741

Data Section(3) Equity-related transactions
Not applicable.

Sub-total
Fair value does notexceed carrying amountJapanese government bonds
Japanese local government bonds
Short-term corporate bonds
Corporate bonds
Other

Fair value

Corporate Data

Swaps

Foreign-currency debentures, Borrowed money, andCorporate bonds

Translated at contractual rates¥ 5,428
—
—
2,029
410
7,868
(21)
—
—
(2,905)(1,921)(4,849)¥ 3,0192019
Carrying amountContract amount
Hedged item

¥ 55,670——
174,010
67,150296,831
30,261——78,53353,716
162,511¥459,343
Millions of Yen

Fair value exceeds
carrying amountThousands of U.S. Dollars

Japanese government bonds
Japanese local government bonds
Short-term corporate bonds
Corporate bonds
Other¥ 50,241——
171,981
66,739288,963
30,282——81,43955,638167,360¥456,324

Difference

The DBJ Group’s Corporate GovernanceForeign currency
denominated loans

Swaps

Japanese government bonds
Japanese local government bonds
Short-term corporate bonds
Corporate bonds
Other

Fair value

The DBJ Group’s Strategy

Swaps

Foreign-currency debentures, Borrowed money, andCorporate bonds

Translated at contractual rates

The DBJ Group’s Value Creation Story

30. FAIR VALUE OF SECURITIES AND MONEY HELD IN TRUST(2) Currency-related transactions

134

135

Thousands of U.S. Dollars

2020

Millions of Yen
Carrying amount(Fair value)

Acquisition cost

Difference

Equities$3,201,794$2,949,185$252,610

Bonds

2,294,645

2,265,538

29,107497,469

489,261

8,209

2020

Carrying amountexceeds cost

Carrying amount(Fair value)

Acquisition cost

Equities¥  348,451¥  320,959¥27,491

Bonds

249,726

246,558

3,167

54,13953,246893

Japanese local government bonds

—

—

—

—

—

—

Short-term corporate bonds

—

—

—

1,797,176

1,776,278

20,898116,264

75,34240,921

Japanese government bonds
Japanese local government bonds
Short-term corporate bonds
Corporate bonds

Carrying amount does
not exceed cost

—

—

—

195,586

193,3122,274

Corporate bonds
Other

12,652

8,199

4,453

Sub-total

610,830

575,717

35,112Carrying amount does
not exceed cost

5,612,703

5,290,065

322,638

Equities

69,06881,905(12,838)

Bonds

3,509,555

3,548,270(38,714)

7,516

8,913

(1,397)

Bonds

381,944386,158(4,213)

Japanese government bonds

—

—

—

Japanese government bonds

—

—

—

Japanese local government bonds

—

—

—

Japanese local government bonds

—

—

—

Short-term corporate bonds

Short-term corporate bonds

—

—

—

Corporate bonds

381,944386,158(4,213)

61,68561,754

(69)

Other
Total

451,146456,826(5,679)¥1,061,977¥1,032,544¥29,433

Millions of Yen

Equities¥ 72,595¥ 25,172¥47,423

Bonds

433,969

428,458

5,511

54,81153,452

1,358

Japanese local government bonds

—

—

—

Short-term corporate bonds

—

—

—

379,158

375,005

4,152

5,910

3,581

2,329

512,475

457,21155,263Equities

7,896

10,005(2,109)Bonds

Sub-total

566,805

567,441(636)

Sub-total

Other

4,145,428

4,197,616(52,188)

Total$9,758,131$9,487,682$270,450

Note: Carrying amount above represents the fair values determined based on the closing price at the fiscal year-end.

Difference

2020
Proceeds from sales

Total amount ofgains on sales

Equities¥16,148¥ 9,634

¥92

Bonds

55,303299

5Japanese government bonds

—

—

—

Japanese local government bonds

—

—

—

—

—

—

55,303299

5Short-term corporate bonds
Corporate bonds
Other

10,584

1,321

—

Total

¥82,035¥11,256¥98

39,032

39,165(133)

Japanese government bonds

—

—

—

Japanese local government bonds

—

—

—

2019
Total amount ofgains on sales

Short-term corporate bonds

Total amount oflosses on sales

Millions of Yen

Total amount oflosses on sales——

39,032

39,165(133)

Equities¥ 37,643¥16,514¥—60,00060,000—

Bonds

Sub-total

106,929

109,171(2,242)

Total¥619,404¥566,383¥53,021

Corporate bonds

Proceeds from sales

78,390283

16Japanese government bonds

—

—

—

Japanese local government bonds

—

—

—

Short-term corporate bonds

—

—

—

78,390283

16Corporate bonds
Other

4,428

810

80

Total

¥120,462¥17,608¥96

Data Section

—

Other

Corporate Data

Acquisition cost

Other

—
(38,714)

Millions of Yen

Carrying amount(Fair value)

Corporate bonds—
3,548,270(3) Available-for-sale securities sold during the years ended March 31, 2020 and 2019 are as follows:

2019

Japanese government bonds—
3,509,555

The DBJ Group’s Corporate GovernanceSub-total

Carrying amount does
not exceed cost

Japanese government bonds

Equities

Corporate bonds

Carrying amountexceeds cost

Carrying amountexceeds cost

The DBJ Group’s Strategy

Other
Sub-total

Difference

The DBJ Group’s Value Creation Story(2) Available-for-sale securities as of March 31, 2020 and 2019 are as follows:

136

137

2020
Total amount oflosses on sales

Total amount ofgains on sales

Proceeds from sales

Equities$148,379$ 88,532

$849

Bonds

508,1632,755

52

31. RELATED PARTY TRANSACTIONSJapanese government bonds

—

—

—

Related party transactions for the years ended March 31, 2020 and 2019 are as follows:

Japanese local government bonds

—

—

—

Short-term corporate bonds
Corporate bonds

—

—

—

508,1632,755

52

97,255

12,147—$753,798$103,434$901

Related party

Finance
MinisterCategory

Shareholder Receipt ofcontribution*1(2) Other (other than for the purpose of investment and held to maturity)
2020
Unrealized gains (losses)¥20,082

Carrying amountexceeds costNet

¥19,693¥388

Other money held in trust¥20,182

¥986

¥597

Related party

Finance
Minister$180,960$3,572

215,798

6,277

57,684—3,226,516

29,647,310——

Category

Description

Shareholder Receipt ofcontribution*1

Account item—

Transaction Amount

Balance at March 31, 2019

Millions of Yen

Millions of Yen¥   129,000—

Guarantees*3—

3,102,852—

Carrying amountexceeds cost

$9,060300,000¥4,379,934

444,524	According to Article 2, item 5 of the Japan Finance Corporation Act, DBJ Inc. has borrowed ¥1,793,756 million ($16,161,420 thousand) from Japan Finance Corporation relating to the crisis
response operations.
*1. Receipt of contribution is related to the special investment operations.
*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 February 20, 2039
without posting collateral.
*3. The guarantees are for debentures issued by DBJ Inc. free of guarantee charge.

(Carrying amount does
not exceed cost)$5,48832. SUBSEQUENT EVENT
Thousands of
U.S. Dollars

2019

2020

¥27,727¥ 56,686$254,777

986

867

9,060

(17,250)(77,073)

Unrealized gain on available-for-sale securities before interest
adjustments

20,32540,303

186,764

—

—

—

3,971

4,349

36,496¥24,297¥ 44,652$223,260(a)	On June 5, 2020, Nordic Aviation Capital Designated Activity Company, a customer of DBJ Inc., filed a scheme ofarrangements based on the Companies Act of Ireland, which was accepted. The total amount of the claims associated withthe said customer was ¥14,652 million ($134,639 thousand) as of March 31, 2020. The total amount of the claims
collateralized is ¥4,516 million ($41,497 thousand) and the total amount of the claims which are planned to be collateralizedis ¥10,136 million ($93,142 thousand). The estimated amount to be recovered is under discussion and examination. With
respect to the amount estimated to be uncollectible out of the total amount of the claims, DBJ Inc. will record an allowance
for loan losses for the year ending March 31, 2021, or will deduct it directly from the claims.
(b)	On June 26, 2020, the shareholders approved the following appropriations of retained earnings. On the same day, theFinance Minister authorized becoming effective of the timing and amounts for dividends as of June 29, 2020:
Appropriations of retained earnings as of March 31, 2020
Millions of Yen

Year-end cash dividends-Common stock (¥228–$2.10 per share)¥9,948

Thousands of
U.S. Dollars$91,410

Data Section

2020(8,387)

Unrealized gain on available-for-sale securities, net of taxes

23,485

Guarantees*3

9,677

Deferred tax liabilities

DBJ Inc.’s interest in net unrealized gain on available-for-sale securities
held by affiliates accounted for by the equity method

Accruedexpenses

28,376

Unrealized gain on

Amount corresponding to non-controlling interests

Payment forinterest

Accruedexpenses¥239

Millions of Yen

Other money held in trust$44,254,300

Payment forinterest¥867(c) Unrealized Gain on Available-for-Sale Securities
The breakdown of unrealized gain on available-for-sale securities is as follows:

Available-for-sale securities¥4,816,195

Corporate Data

$184,532

3,342,271

Borrowed
money

Unrealized gains (losses)

Other money held in trust

363,739

Repayments(Carrying amount does
not exceed cost)

2020

Net

—

Carrying amountexceeds costThousands of U.S. Dollars

Acquisition
cost—

7,350,914

Borrowings*2¥628

Carrying
amount$ 1,194,524

800,000

Unrealized gains (losses)
Net¥19,554¥  130,000

2019

2019
Acquisition
cost

Thousands of
U.S. Dollars(Carrying amount does
not exceed cost)

Millions of Yen

Carrying
amountMillions of Yen

The DBJ Group’s Corporate Governance

Other money held in trust—

Millions of Yen	According to Article 2, item 5 of the Japan Finance Corporation Act, DBJ Inc. has borrowed ¥1,433,843 million ($13,175,071 thousand) from Japan Finance Corporation relating to the crisis
response operations.
*1. Receipt of contribution is related to the special investment operations.
*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 December 20, 2039
without posting collateral.
*3. The guarantees are for debentures issued by DBJ Inc. free of guarantee charge.

Millions of Yen

Acquisition
cost

Account item

Borrowings*2 Borrowed
money
Repayments(b) Money Held in Trust(1) Money held in trust for the purpose of investment and held to maturity
Not applicable.

Carrying
amountDescription

Balance at March 31, 2020

Thousands of
U.S. Dollars

The DBJ Group’s Strategy

Other
Total

2020
Transaction AmountThe DBJ Group’s Value Creation Story*1.	The loss of ¥5,565 million ($51,141 thousand) and the profit of ¥684 million recognized by applying the fair value hedge accounting, which were reflected in profit or loss, are deductedfrom the above unrealized gains and losses, net of taxes, as of March 31, 2020 and 2019, respectively.
*2.	Unrealized gain includes foreign currency translation adjustments on available-for-sale securities and other money held in trust denominated in foreign currency whose fair value cannot be
reliably determined as of March 31, 2020 and 2019.

Thousands of U.S. Dollars

139
138

Independent Auditor’s Report

The DBJ Group’s Value Creation Story

The DBJ Group’s Strategy

The DBJ Group’s Corporate GovernanceCorporate Data
Data Section

140

141

NON-CONSOLIDATED BALANCE SHEET (UNAUDITED)Development Bank of Japan Inc.

As of March 31,

2020

2019

2020

¥ 1,252,106¥   959,585$ 11,505,158

720,000

260,000

6,615,823

AssetsCash and due from banks
Call loans
Money held in trust

18,305

169,688

2,400,948

1,984,876

22,061,459

Loans

12,521,358

13,063,197

115,054,292

Other assets

151,158

177,711

1,388,937

Tangible fixed assets

110,442

110,833

1,014,818

Intangible fixed assets

12,03813,883

110,614

Prepaid pension costs

1,191

1,215

10,946

Customers’ liabilities for acceptances and guarantees

267,306

273,2392,456,187

Allowance for loan losses(35,578)(35,412)(326,921)

Allowance for investment losses

(36)

(46)

(336)

¥17,419,402¥16,827,388$160,060,665¥ 3,314,656¥ 3,190,536$ 30,457,192—

93,761—

Borrowed money

7,882,447

7,807,941

72,428,994

Corporate bonds

2,377,101

2,106,213

21,842,336

Other liabilities

187,896

85,544

1,726,513

4,831

4,688

44,392

Total assets

The DBJ Group’s Strategy

18,467

Securities

The DBJ Group’s Value Creation Story

Thousands of
U.S. Dollars (Note)

Millions of Yen

Liabilities and equity
Liabilities:
Payables under repurchase agreements

Accrued bonuses to employees
Accrued bonuses to directors
Reserve for employees’ retirement benefits
Reserve for directors’ retirement benefits
Deferred tax liabilities

15

140

6,355

58,989

136

115

1,258

5,047

15,882

46,384

267,306

273,2392,456,187

14,045,859

13,584,295

129,062,385

1,000,424

1,000,424

9,192,539

Crisis response reserve

206,529

206,529

1,897,721

Special investment reserve

848,000

588,000

7,791,969

Special investment surplus

12,436

5,412

114,273

Capital surplus

636,466

766,466

5,848,262

Retained earnings

629,290

610,436

5,782,323

Total liabilities
Equity:Common stock authorized, 160,000 thousand shares in 2020 and
2019; issued, 43,632 thousand shares in 2020 and 2019

20,70942,079190,289

Deferred gain on derivatives under hedge accounting

19,687

23,745

180,903

Total equity
Total liabilities and equity

3,373,542

3,243,093

30,998,280¥17,419,402¥16,827,388$160,060,665

Note: Amounts in U.S. dollars are presented solely for the convenience of readers outside Japan. The rate of ¥108.83 = $1.00, the effective exchange rate prevailing as of March 31, 2020, hasbeen used in the conversion.

Data Section

Unrealized gain on available-for-sale securities

Corporate Data

Acceptances and guarantees

15
6,419

The DBJ Group’s Corporate GovernanceDebentures

142

143

NON-CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)NON-CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)Development Bank of Japan Inc.

Development Bank of Japan Inc.

For the year ended March 31,

2020

2019

2020

IncomeInterest income:Millions of Yen

For the year ended March 31, 2020

Common stock

Crisis response
reserve

Balance at beginning of year

¥1,000,424¥206,529

Special investment Special investment
reserve
surplus¥588,000¥174,958¥188,051$1,607,627

Investment from government

130,000

Interest on loans

139,508

152,860

1,281,896 Transfer from capital surplus to special investment reserve

130,000

Interest and dividends on securities

28,976

27,814

266,255

Interest on call loans

31

100

291

Net income

Interest on due from banks

108

27

995

 Transfer from retained earnings to special investment surplus

Interest on swaps¥ 5,412

Capital surplus¥ 766,466(130,000)

Cash dividends
7,023

6,339

7,263

58,250

Other interest income

(6)

(16)

(60)

Fees and commissions

11,561

12,854106,237

Other operating income

15,172

7,274

139,411

Other income

58,47560,816537,311For the year ended March 31, 2020

260,167

268,996

2,390,586

Balance at beginning of year

77,08687,896708,318 Transfer from capital surplus to special investment reserve

Interest on debentures

33,95837,676

312,037

Cash dividends(21,030)(21,030)

Interest on call money

(72)

(52)

(671)

Net income

46,90846,908Interest on payables under repurchase agreements

(60)

(62)

(555)

 Transfer from retained earnings to special investment surplus(7,023)36,60545,257336,353

947

317

8,707

5,723

4,766

52,594

(15)

(7)

(147)

Fees and commissions

130

105

1,199

Other operating expenses

12,316

3,523

113,171

Balance at beginning of year
Investment from government

129,000

Transfer from capital surplus to special investment reserve

129,000

Expenses
Interest expense:

Interest on short-term corporate bonds
Interest on corporate bonds
Other interest expense

53,64450,912492,918

Other expenses

39,856

9,708

366,228¥848,000¥12,436

183,033

152,147

1,681,833

Income before income taxes

77,133116,849

708,753

Current

29,81732,068273,980

Millions of Yen

Retained earnings

Unrealized gain on
available-for-salesecurities

Deferred gain on derivatives under hedge
accounting¥610,436¥ 42,079¥23,745

Deferred408(1,719)3,751

30,22530,348

277,732¥ 46,908¥ 86,500$  431,021

Note: Amounts in U.S. dollars are presented solely for the convenience of readers outside Japan. The rate of ¥108.83 = $1.00, the effective exchange rate prevailing as of March 31, 2020,
has been used in the conversion.

¥3,243,093——

Net change during the year
Balance at end of year

Total equity

130,000¥629,290(21,369)(4,057)(25,427)¥ 20,709¥19,687¥3,373,542

Millions of Yen

For the year ended March 31, 2019

Commonstock

Crisis response
reserve¥1,000,424¥206,529

Special investment Special investment
reserve
surplus¥330,000¥3,099

Capitalsurplus¥895,466(129,000)

Cash dividends
Net income
Transfer from retained earnings to special investment surplus

Income taxes:¥ 636,466

2,313

Net change during the year
Balance at end of year

¥1,000,424¥206,529¥588,000¥5,412¥766,466

Corporate Data

Total expenses

Net income¥206,529

Investment from government

General and administrative expenses

Total income taxes¥1,000,424

The DBJ Group’s Corporate GovernanceInterest on borrowed money

Net change during the year
Balance at end of year

The DBJ Group’s Strategy

Total income

The DBJ Group’s Value Creation Story

Thousands of
U.S. Dollars (Note)

Millions of Yen

Millions of Yen

For the year ended March 31, 2019

Balance at beginning of year

Retained earnings

Unrealized gain on
available-for-salesecurities¥548,371¥47,773

Deferred gain onderivatives underhedge accounting¥28,018

Investment from government

Total equity¥3,059,681
129,000

Transfer from capital surplus to special investment reserve—(22,121)(22,121)

Net income

86,50086,500Transfer from retained earnings to special investment surplus(2,313)—

Net change during the year
Balance at end of year

¥610,436(5,693)(4,273)(9,967)¥42,079¥23,745¥3,243,093

Data Section

Cash dividends

144

145

Capital Adequacy Ratio

For the year ended March 31, 2020

Balance at beginning of year

Crisis response
reserve$9,192,539$1,897,721

Special investment Special investment
reserve
surplus$5,402,922

Investment from government

1,194,524 Transfer from capital surplus to special investment reserve

1,194,524$ 49,733

Capitalsurplus$ 7,042,786(1,194,524)

Cash dividends
Net income Transfer from retained earnings to special investment surplus

64,540Net change during the year
Balance at end of year

$9,192,539$1,897,721$7,791,969$114,273$ 5,848,262

For the year ended March 31, 2020

Balance at beginning of year

Retained earnings$5,609,087$ 386,650

Deferred gain onderivatives underhedge accounting$218,189

Investment from government

Total equity$29,799,627
1,194,524 Transfer from capital surplus to special investment reserve

Capital Structure Information (Consolidated)—Cash dividends(193,244)(193,244)

Net income

431,021431,021 Transfer from retained earnings to special investment surplus(64,540)$5,782,323—(196,361)(37,286)(233,647)$ 190,289$180,903$30,998,280

Note: Amounts in U.S. dollars are presented solely for the convenience of readers outside Japan. The rate of ¥108.83=$1.00, the effective exchange rate prevailing as of March 31, 2020,
has been used in the conversion.

(Units: Millions of yen, %)Items

March 31, 2019

Common Equity Tier 1 capital: instruments and reserves (1)Directly issued qualifying common share capital plus related capital surplus
and retained earningsof which: common stock and capital surplusof which: retained earningsof which: treasury stockof which: planned distribution of incomeof which: other than the above
Rights to acquire new common shares
Accumulated other comprehensive income and other disclosed reserves
Adjusted non-controlling interests, etc. (amount allowed to be included in group Common Equity Tier 1)
Common Equity Tier 1 capital: instruments and reserves

March 31, 2020

Basel III
Template No.

2,397,747

2,302,784

1a+2–1c–26

1,766,890

1,636,890

1a651,887

675,842

2

—

—

1c

21,030

9,948

26

—

—

—

—

1b

866,884

1,105,824

3

—

—

5

3,264,631

3,408,609

6

Total intangible assets (excluding those relating to mortgage servicing rights)

40,01437,5098+9of which: goodwill (including those equivalent) of which: other intangible assets other than goodwill and mortgage servicing rights
Deferred tax assets that rely on future profitability excluding those arising from temporary differences (net of related tax liability)
Deferred gains or losses on derivatives under hedge accounting

25,66824,4948

14,346

13,015910(A)The DBJ Group’s Corporate GovernanceNet change during the year
Balance at end of year

[1] Capital Structure Information

The DBJ Group’s Strategy

Thousands of U.S. Dollars (Note)
Unrealized gain on
available-for-salesecurities

Although DBJ is not subject to Article 14-2 of the Banking Act, the capital adequacy ratio has been calculated in accordancewith “Standards for Bank to Examine the Adequacy of Its Capital Based on Assets, etc., under the Provision of Article 14-2 of the
Banking Act” (2006, Financial Services Agency Notification No. 19, hereinafter, the “Capital Adequacy Ratio Notification”), andtherefore effectively conforms to this act.
(Reference)
In addition to the application of uniform international standards, credit risk assets were calculated using the standardized
approach, and the operational risk equivalent amount was calculated using the basic indicator approach. DBJ Group has not
introduced procedures in line with market risk regulations.
As a complementary indicator to the capital adequacy ratio, the leverage ratio is calculated on a consolidated basis inaccordance with “Standards for Determining the Soundness of Leverage, Defined as a Complementary Indicator for the Standard
to Determine the Capital Adequacy of a Bank in Light of the Assets Owned by the Bank and Other Factors, Based on Article
14-2 of the Banking Act.”The DBJ Group’s Value Creation Story

Thousands of U.S. Dollars (Note)
Commonstock

Common Equity Tier 1 capital: regulatory adjustments (2)1,455
16,93411

Shortfall of eligible reserves to expected losses

—

—

12

Capital increase due to securitization transactions

72

36

13

Gains and losses due to changes in own credit risk on fair valued liabilities

—

—

14

Assets for retirement benefits

876

15

—

—

16

Reciprocal cross-holdings in common equity
Investments in the capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation (“Other Financial Institutions”),
net of eligible short positions, where the bank does not own more than 10%of the issued share capital (amount above the 10% threshold)Amount exceeding the 10% threshold on specified items of which: significant investments in the common stock of Other Financial Institutions, net of eligible short positionsof which: mortgage servicing rights of which: deferred tax assets arising from temporary differences (net of related tax liability)
Amount exceeding the 15% threshold on specified items

—

—

17

—

—

18

—

—

19+20+21

—

—

19

—

—

20

—

—

21

—

—

22

Data Section

1,553

Investments in own shares (excluding those reported in the Equity section)

Corporate Data

67
23,766

146

147(Units: Millions of yen, %)Items

March 31, 2019 of which: significant investments in the common stock of Other Financial Institutions, net of eligible short positionsof which: mortgage servicing rights of which: deferred tax assets arising from temporary differences (net of related tax liability)
Regulatory adjustments applied to Common Equity Tier 1 due to insufficient Additional Tier 1 and Tier 2 to cover deductions
Common Equity Tier 1 capital: regulatory adjustments
(B)

March 31, 2020

—

23

—

—

24

—

25

—

27

56,81228(C)

3,199,157

3,351,796

29

—

—

—

—

—

—

—

30

—

49

19,35850

13,75919,358

50a

—

—

50b

14,12019,77551

Investments in own Tier 2 instruments

—

—

52

Reciprocal cross-holdings in Tier 2 instruments and other TLAC liabilities
Non-significant investments in the Tier 2 capital and other TLAC liabilities of Other Financial Institutions, net of eligible short positions (amount above the
10% threshold)
Significant investments in the Tier 2 capital and other TLAC liabilities of Other Financial Institutions, net of eligible short positions(I)
Tier 2 capital: regulatory adjustments

—

—

53

—

—

54

Tier 2 capital: instruments and reserves

(H)

Tier 2 capital: regulatory adjustments (5)31bTier 2 capital (T2) ((H)-(I))

—

—

55

—

—

57

(J)

14,12019,77558(K)

3,214,802

3,373,441

59

19,203,324

19,418,634

60

Total capital (TC = T1 + T2)

1,887

34–35

—

—

33+35

Risk weighted assets (6)

—

—

33

Risk weighted assets

—

—

35

Common Equity Tier 1 risk-weighted capital ratio (consolidated) ((C)/(L))

1,534

1,887

36

16.65%

17.26%

61

Tier 1 risk-weighted capital ratio (consolidated) ((G)/(L))

16.66%

17.27%

62

Total risk-weighted capital ratio (consolidated) ((K)/(L))

16.74%

17.37%

63

108,587

102,567

72

3,382

3,830

73

—

—

74

6,447

6,377

75

Total capital (TC = T1 + T2) ((G) + (J))

Capital ratio (consolidated) (7)—37

Reciprocal cross-holdings in Additional Tier 1 instruments
Investments in the capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions,where the bank does not own more than 10% of the issued common sharecapital of the entity (amount above the 10% threshold)
Significant investments in the Additional Tier 1 capital of Other Financial Institutions (net of eligible short positions)
Regulatory adjustments applied to Common Equity Tier 1 due to sufficient Additional Tier 2 to cover deductions
Additional Tier 1 capital: regulatory adjustments
(E)

—

—

38

—

—

39

9

17

40

—

—

42

9

17

43

Additional Tier 1 capital (AT1)
(F)

1,525

1,870

44

(G)

3,200,682

3,353,665

45

Tier 1 capital (T1 = CET1 + AT1)

Regulatory adjustments (8)Non-significant Investments in the capital of Other Financial Institutions that are below the thresholds for deduction (before risk weighting)Significant investments in the common stock of Other Financial Institutions that are below the thresholds for deduction (before risk weighting)Mortgage servicing rights that are below the thresholds for deduction (before risk weighting)Deferred tax assets arising from temporary differences that are below the thresholds for deduction (before risk weighting)Reserves included in Tier 2 capital: instruments and reserves (9)General allowance for loan losses

13,75919,35876

Cap on inclusion of general allowance for loan losses
Eligible reserves for inclusion in Tier 2 in respect of exposures subject to internal ratings-based approach (prior to application of cap)
Cap for inclusion of reserves in Tier 2 under internal ratings-based approach

237,437

240,116

77

—

—

78

—

—

79

—

—

82

—

—

83

—

—

84

—

—

85

Corporate Data

1,534

—

Capital instruments subject to transitional arrangements (10)
—

—

—

—
46

—

—

—

—

361

416

48–49

—

—

47+49

Current cap on Additional Tier 1 instruments subject to transitional arrangements
Amount excluded from Additional Tier 1 due to cap (excess over cap after redemptions and maturities)
Current cap on Tier 2 instruments subject to transitional arrangements
Amount excluded from Tier 2 due to cap (excess over cap after redemptions and maturities)

Data Section

Tier 2 capital: instruments and reserves (4)Directly issued qualifying Tier 2 instruments plus related capital surplus of which:classified as equity under applicable accounting standards and its breakdown
Rights to acquire new shares in relation to Tier 2 instruments
Directly issued qualifying Tier 2 instruments plus related capital surplus of which: classified as liabilities under applicable accounting standards
Tier 2 instruments plus related capital surplus issued by special purpose vehicles and other equivalent entities
Adjusted non-controlling interests, etc. (amount allowed to be included in group Tier 2)
Eligible Tier 2 capital instruments subject to transitional arrangements included in Tier 2: instruments and reserves

47

Tier 2 capital (T2)

Investments in own Additional Tier 1 instruments

Tier 1 capital (T1 = CET1 + AT1) ((C)+(F))

——of which: eligible reserves

32

Additional Tier 1 capital: regulatory adjustments

Additional Tier 1 capital ((D)-(E))

Basel III
Template No.

13,759of which: general allowance for loan losses

31a
—

—

March 31, 2020

The DBJ Group’s Corporate Governance

Additional Tier 1 capital: instruments (3)Directly issued qualifying Additional Tier 1 instruments plus related capital surplus of which: classified as equity under applicable accounting standards
and the breakdown
Rights to acquire new shares in relation to Additional Tier 1 instruments
Directly issued qualifying Additional Tier 1 instruments plus related capital surplus of which: classified as liabilities under applicable accounting standards
Qualifying Additional Tier 1 instruments plus related capital surplus issued by special purpose vehicles and other equivalent entities
Adjusted non-controlling interests, etc. (amount allowed to be included in group Additional Tier 1)
Eligible Tier 1 capital instruments subject to transitional arrangements included in Additional Tier 1 capital: instrumentsof which: instruments issued by banks and their special purpose vehicles of which: instruments issued by subsidiaries (excluding banks’ special purpose vehicles)
Additional Tier 1 capital: instruments
(D)

March 31, 2019

The DBJ Group’s Strategy—
65,474Items

of which: instruments issued by banks and their special purpose vehicles of which: instruments issued by subsidiaries (excluding banks’ special
purpose vehicles)
Total of general allowance for loan losses and eligible reserves included in Tier 2

Common Equity Tier 1 capital (CET1)
Common Equity Tier 1 capital (CET1) ((A)-(B))

(Units: Millions of yen, %)Basel III
Template No.

—

—



The DBJ Group’s Value Creation Story



148

149


1. Scope of Consolidation

Please refer to page 58 to 61, Section Four: “Risk Management”.

4. Credit Risk(a) Overview of Risk Management Policies and Procedure	Please refer to page 58 to 59, “Credit Risk in Comprehensive Risk” in Section Four:“Risk Management”.
(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 to type 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).

5. 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 theamount certain to be recovered based on a reasonable evaluation of the collateral.
In principle, collateral valuation is performed by the Credit Analysis Department, based on therequest of investment and loan departments/offices. Investment and loan departments/offices and theCredit Analysis Department manage credit risk based on valuation results. In principle, the valuation of
all collateral property is reviewed once or twice each year to ensure DBJ is aware of the current statusof its collateral property.

(a) Overview of Risk Management Policies and Risk Characteristics
	Excluding credit derivatives, the majority of DBJ’s securitization exposure falls into the category of
specialized 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 specialized 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 248,
Paragraph 1, Items 1–4, of the Capital Adequacy Ratio Notification
	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)	Name of Special Purpose Entity and its securitization exposure status in case DBJ
securitizes third party’s assets through Special Purpose Entity and, of subsidiaries andaffiliated companies of the Consolidated Group, name of those which hold securitization
exposure implemented by the Consolidated Group and whose management are involved oradvised by the Consolidated GroupNot applicable.
(d)	Name of Special Purpose Entity providing credit enhancement other than an agreement,
and effect of the credit enhancement other than the agreement on Capital Adequacy bySpecial Purpose Entity
Not applicable.
(e) Method of Accounting for Securitized Transactions
	DBJ’s involvement in securitized transactions is that of an investor. DBJ adequately accounts forthese transactions in accordance with the “Accounting Standard for Financial Instruments.”(f) 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 to type 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).

8. Market Risk

DBJ includes in its calculation method no market risk equivalent amount.

9. Operational Risk(a) Overview of Risk Management Policies and Procedures
	Please refer to page 60, “Operational Risk” in Comprehensive Risk in Section Four:“Risk Management”.
(b) Method Used to Calculate Operational Risk Equivalent AmountDBJ uses the basic indicator approach to calculate this risk.

Data Section

3. Overview of Risk
Characteristics andRisk Management
Policies, Procedures
and Structure of theConsolidated Group

7. Securitization Exposure

Corporate Data

Please refer to page 58 to 61, “Comprehensive Risk Management” in Section Four: “RiskManagement”.

DBJ regularly refers to the ratings and credit amounts of transaction counterparties to determine theadvisability of entering a transaction or to understand the risks of existing transactions.

The DBJ Group’s Corporate Governance2. Overview of Methods
for Evaluating the
Degree of Capital
Adequacy

6. Overview of Risk
Management Policies
and Procedures
Related to Risk
InvolvingCounterparties in
Derivative ProductTransactions andTransactions with Long
Settlement Periods

The DBJ Group’s Strategy(1)	Differences and the reasons for those differences at companies included in the scope of
consolidation based on the regulation (Ministry of Finance Regulation No. 28, 1976) related tothe companies belonging to the group of companies included in the scope of calculation of theconsolidated capital adequacy ratio as provided in Article 3 of the Notification (hereinafter, the“Consolidated Group”), and the language, format and preparation method of their consolidated
financial statements (hereinafter, the “Scope of Accounting Consolidation”)
No differences.
(2)	Within the Consolidated Group, the number of consolidated subsidiaries and the names and main
businesses of principal consolidated subsidiaries
The number of consolidated subsidiaries as of March 31, 2019 is 33.
	Please refer to page 167, “Group Companies” in “Corporate Information” for major consolidated
subsidiaries.
(3)	Number of affiliated companies that conduct financial business to which Article 9 of the Notification
applies, the names of affiliated companies conducting such related financial business and theirprimary businesses
Not applicable.
(4)	Companies that belong to the Consolidated Group but are not included in the Scope of
Accounting Consolidation and companies that do not belong to the Consolidated Group but areincluded in the Scope of Accounting Consolidation, as well as the amount of total assets and net
assets on their balance sheets, and their primary businesses
Not applicable.
(5) Overview of limitations related to the transfer of funds or capital within the Consolidated GroupNot applicable.

The DBJ Group’s Value Creation Story[2] Qualitative Disclosure

150

151

11. Interest Rate Risk(a) Overview of Risk Management Policies and Procedures
	Please refer to page 60, “Comprehensive Risk: Market Risk, Interest Rate	Risk” in “Risk Management.”(b) Overview of Methods for Calculating Interest Rate Risk
	The quantitative disclosure items, ΔEVE (changes in Economic Value of Equity) and ΔNII
(changes in Net Interest Income), are calculated as stated below.
	  First, as stipulated in the FSA Notification No. 7 in 2014, the changes in economic value ofequity and annual net interest income caused by interest rate shocks are measured for eachcurrency. Then, ΔEVE is calculated by adding up the amounts of such changes only if the changes
for the currency result in loss, and ΔNII is calculated by adding up the amounts of such changes.
	  In addition, DBJ measures interest rate risks using the following methods.
(1) VaR: Holding period of one year, Observation period of 10 years, Confidence interval of 99.9%,
using Delta method,(2) 100BPV: changes in economic value when interest rates are shifted by 1% (parallel)[3] Quantitative Disclosure
Quantitative Disclosure (Consolidated)
1. Overview of Risk Weighted Assets
(Unit: Millions of yen)
Risk Weighted Assets

March 31, 2019

Capital Requirement

March 31, 2020

March 31, 2019

March 31, 2020

Credit Risk

10,819,578

10,446,939

865,566

835,754 Of which, exposure to which standardized approach applied

10,307,602

9,988,828

824,608

799,106

511,976

458,11140,95836,648Counterparty Credit Risk

Other

119,675

227,502

9,573

18,198 Of which, exposure to which current exposure method applied

25,80545,797

2,064

3,663

93,576

181,396

7,486

14,511

294

309

23

24

Of which, CVA risk
 Of which, exposure for central counterparty clearing house
Other

—

—

1,379,774

1,354,133

110,381

108,330

Equity investments in funds (mandate-based approach)

2,270,585

2,200,381

181,646

176,030

Equity investments in funds (simple approach (subject to 250% risk weight))

—

—

—

—

Equity investments in funds (simple approach (subject to 400% risk weight))

—

—

—

—

987,777

1,356,243

79,022

108,499

—

—

—

—

Securitization exposure subject to calculation of credit risk assets

3,393,053

3,598,594

271,443

287,886 Of which: securitisation external ratings-based
approach (SEC-ERBA)

118,433

32,248

9,474

2,579

 Of which: securitisation standardised approach(SEC-SA)

1,100,618

1,176,328

88,04994,106

Of which, exposure with a risk weight of 1,250%

2,174,002

2,390,018

173,920

191,201

Operational risk

208,302

209,315

16,664

16,745 Of which, exposure to which basic indicator approach applied

208,302

209,315

16,664

16,745

Exposure with related to specified items not included in adjustments

24,57325,521

1,965

2,041

Equity investments in funds (fall-back approach; 1.250% risk weight)
Unsettled transactions

Amount of items included in risk weighted assets subject to transitional arrangements

—

—

—

—

19,203,324

19,418,634

1,536,261

1,553,483

Data Section

Total

Corporate Data—

The DBJ Group’s Corporate Governance—

Equity investments in funds (look-through approach)

The DBJ Group’s Strategy

Please refer to page 59 “Comprehensive Risk: Investment Risk” in “Risk Management.”

The DBJ Group’s Value Creation Story

10. Overview of Risk
Management Policies
and Procedures
Regarding Exposure
to Shares and Other
Equity Investments
and Capital Injections

152

153

(c) Standardized Approach - Credit risk exposure by asset class and risk weight(a) Fiscal year-end credit risk exposure, broken down as follows:		 (1) By region

Asset Class / Risk Weight

Domestic

16,480,139

Cash

Overseas

55,286
16,535,426

Note: “Overseas” refers to overseas consolidated subsidiaries. DBJ has no overseas branches.

(2) By industry and transaction counterparty

(Unit: Millions of yen)March 31, 2020

3,205,128

Agriculture and forestry

205

Fisheries

35

0%

10%

20%

50%

100%

150%

250%

1250%

Total

2

—

—

—

—

—

—

—

2

Japanese government and Bank of Japan

984,887

—

—

—

—

—

—

—

984,887

Foreign central governments and central banks

—

—

—

—

—

—

—

—

—

Bank for International Settlements and other

—

—

—

—

—

—

—

—

—

Municipal governments in Japan

14,109

—

—

—

—

—

—

—

14,109Foreign public bodies other than central banks

—

—

500

—

—

—

—

—

500

Multilateral Development Bank

—

—

—

—

—

—

—

—

—

Mining, quarrying and gravel extraction

45,042

Construction

49,816

Japan Finance Organization for Municipalities

—

—

—

—

—

—

—

—

—

3,287,891

Japanese government agencies

—

—

—

—

—

—

—

—

—

339,804

Three local public corporations

—

—

—

—

—

—

—

—

—

2,339,294

Financial institutions and Type I Financial Instruments Business
Operators

1,217,972

Electrical, gas, heat supply and water
Information and communications
Transportation and postal

801,571

Finance and insurance

2,747,728

Real estate and leasing of goods

2,615,288——

1,189,580

19,254

9,138

—

—

—

35,623

4,238

771,935

6,782,272

4,499,124

6,961

—

— 12,100,153

Small and medium-sized enterprises and individuals

—

—

—

—

—

—

—

—

Corporations

299,851

Municipal government

14,109

Other789,659

Mortgage loans (loans secured by residential properties)

—

—

—

—

—

—

—

—

—

Total

16,535,426

Real estate investment business

—

—

—

—

830,128———

830,128

Delinquent for 3 months or more (excluding mortgage loans)

—

—

—

—

—

—

—

—

—

Mortgage loans that are delinquent for 3 months or
more

—

—

—

—

—

—

—

—

—

Bills and checks in process of collection

—

—

—

—

—

—

—

—

—

Guaranteed by Credit Guarantee Association and
other

—

—

—

—

—

—

—

—

—

Guaranteed by Regional Economy Vitalization
Corporation of Japan and other

—

—

—

—

—

—

—

—

—
846,403(3) By period to maturity

(Unit: Millions of yen)March 31, 2020

Five years or less

8,154,125

More than five years, up to 10

4,983,808

More than 10 years, up to 15

1,030,434

More than 15 years

996,147

No maturity date

1,370,910

Total

16,535,426(b) Credit Risk Mitigation Techniques(Unit: Millions of yen)March 31, 2020
Exposure notsecured

Exposure secured
by collateral

Exposure secured
by guarantee

Exposure secured
by credit derivatives

10,695,771

866,965—

792,701—

Securities (debt securities)

958,930

12,634—

12,634—

Other on-balance sheet assets(debt instruments)

720,002

—

—

—

—

12,374,703

879,599—805,335

—

—

—

—

—

—

Total
Of which, default items

Total

—

—

—

—

846,403———

1,034,621

4,238

1,962,015

6,801,526

6,184,793

6,961

—

— 15,994,154
Data Section

Loans

Exposure
securedInvestments (excluding significant investments)—

Corporate Data

Services

The DBJ Group’s Corporate Governance

Wholesale and retail

The DBJ Group’s Strategy

Manufacturing		

Amounts of credit risk exposure (after applying CCF and credit risk mitigation techniques)(Unit: Millions of yen)March 31, 2020

Total

		

(Unit: Millions of yen)March 31, 2020

The DBJ Group’s Value Creation Story

2. Items Related to Credit Risk

154

155

(a) Counterparty credit risk		 (1) Counterparty credit risk exposure by technique(c) Composition of collateral for counterparty credit risk exposure
Collateral used in derivative transactions(Unit: Millions of yen)

Exposure after applying acredit risk mitigation
technique

Current exposure method

Amount ofrisk weighted assets

170,275

45,797(2) Counterparty credit risk exposure by industry and risk weight

(Unit: Millions of yen)March 31, 2020
Credit equivalent amount (after taking credit risk mitigations into account)

Fair value of posted collateral

SegregatedUnsegregatedSegregatedUnsegregatedCash (domestic currency)

—

—

—

—

—

—

Cash (foreign currency)

—

—

—

—

—

—

Domestic sovereign bonds

—

—

—

—

—

—

Other sovereign bonds

—

—

—

—

—

—

Government-related agency bonds

—

—

—

—

—

—

0%

10%

20%

50%

75%

100%

150%

Other

Total

Corporate bonds

—

—

—

—

—

—

Equity

—

—

—

—

—

—

Other collateral

—

—

—

—

—

—

Total

—

—

—

—

—

—

Fair value ofFair value ofcollateral received posted collateralJapanese government and Bank of Japan

—

—

—

—

—

—

—

—

—

Foreign central governments and central banks

—

—

—

—

—

—

—

—

—

Bank for International Settlements and others

—

—

—

—

—

—

—

—

—

Municipal governments in Japan

28

—

—

—

—

—

—

—

28

Foreign public bodies other than central banks

—

—

—

—

—

—

—

—

—

Single-name credit default swaps

1,500

—

Index credit default swaps

—

1,500

Total return swaps——

Credit options

—

—

—

—

—

—

—

—

—

—

—

Japan Finance Organization for Municipalities

—

—

—

—

—

—

—

—

—

Japanese government agencies

—

—

—

—

—

—

—

—

—

Three local public corporations

—

—

—

—

—

—

—

—

—

—

—

154,273

—

—

—

—

—

154,273

Corporations

—

—

915

597

—

14,386——

15,898Small and medium-sized enterprises and individuals

—

—

—

—

—

—

—

—

—

Other

—

—

—

—

—

74

—

—

74

Total

Protection purchased

Protection provided

Notional amount

Other credit derivatives

—

3,000

1,500

4,500

Positive fair value (Assets)—

6

Negative fair value (Liabilities)

7—

Total notional amount
Fair value

28—

155,188597—

14,460——(b) Capital requirement for CVA risk

(Unit: Millions of yen)

Total portfolio subject to the standardized risk measurement approach

168,483

Amount of risk weighted
assets (Amount calculatedby dividing CVA risk
equivalent by 8%)

181,396(Unit: Millions of yen)March 31, 2020
Exposure for central
clearing house(after applying a credit risk
mitigation technique)170,273

March 31, 2020
Exposure after applying acredit risk mitigation
technique(e) Exposure for central counterparty clearing houseExposure for Qualified Central Counterparty Clearing House (Total)

Amount ofrisk weighted assets/309 Trade exposure for Qualified Central Counterparty Clearing House(excluding initial margin)

15,498309   (i) Derivative product transactions (other than listed transactions)

15,498309   (ii) Derivative product transactions (listed transactions)——   (iii) Repurchase / reverse repurchase transactions——   (iv) Netting set in case where cross-product netting is approved——

20,000/Initial margin not maintained in segregated accounts——

Pre-contributed Clearing Fund——

Uncontributed Clearing Fund——

Data Section

Initial margin maintained in segregated accounts

Corporate Data

Financial institutions and Type I Financial Instruments Business
Operators(Unit: Millions of yen)March 31, 2020

The DBJ Group’s Corporate Governance

Multilateral Development Bank(d) Exposure for central counterparty clearing house

The DBJ Group’s Strategy

Asset Class / Risk Weight

Collateral used in repo transactions

Fair value of collateral received

March 31, 2020		

(Unit: Millions of yen)March 31, 2020

The DBJ Group’s Value Creation Story

3. Transaction Counterparties’ Risk on Derivative Product Transactions and Transactions with Long Settlement Periods

156

157

Composition of Leverage Ratio Disclosure (Consolidated)

(Unit: Millions of yen)(1)	Securitization exposure by underlying asset type (limited to the securitization exposure subject to calculation of credit risk assets)
March 31, 2019

(Unit: Millions of yen)March 31, 2020

Corresponding Line No.
on Basel III Disclosure Template
Table 2

March 31, 2020

On-balance sheet exposures (1)DBJ as an investor
DBJ as theoriginator

DBJ as thesponsor

Traditional
securitization

Synthetic
securitization

Subtotal

Retail (Total)

—

—

—

—

—

Wholesale (Total)—

1,465,487—

1,465,487

0—

1,465,487—

1,465,487

Other

—

—

—

—

—

Resecuritization

—

—

—

—

—

(2) Securitization exposure subject to calculation of credit risk assets and required capital amounts

(Unit: Millions of yen)March 31, 2020

On-balance sheet exposures before deducting adjustments items

16,725,746

17,337,028

Total assets reported in the consolidated balance sheet

17,079,580

17,693,665

1a1 The amount of assets of subsidiaries that are not included in the scope of the leverage ratio on a consolidated basis (–)

—

—

1b

2

 The amount of assets of subsidiaries that are included in the scope of the leverage ratio on a consolidated basis (except those includedin the total assets reported in the consolidated balance sheet)

—

—

1c

7

 The amount of assets that are deducted from the total assets reported in the consolidated balance sheet (except adjustment
items) (–)

353,834

356,636

The amount of adjustment items pertaining to Tier 1 capital (–)

41,64439,8592

16,684,101

17,297,169

3

—

—

4

Add-on amount associated with derivatives transactions, etc.

53,794

147,336

PFE associated with derivatives transactions, multiplied by 1.4—— The amount of receivables arising from providing cash margin in relation to derivatives transactions, etc.

57,25670,174 The amount of receivables arising from providing cash margin in relation to with derivatives transactions

23,11817,572 The amount of collateral paid for derivative transactions deducted from the consolidated balance sheet—— The amount of receivables arising from providing cash margin, provided where deducted from the consolidated balance sheet
pursuant to the operative accounting framework—— The amount of deductions of receivables (out of those arising from providing cash variation margin) (–)——

Total on-balance sheet exposures

Amount of exposure (by risk weight)
Securitization exposure by risk weight of 20% or less

83,018

Exposures related to derivatives transactions (2)Securitization exposure by risk weight of over 20% and 50% or less

4,772

Securitization exposure by risk weight of over 50% and 100% or less

1,177,955 Replacement cost associated with derivatives transactions, multiplied by 1.4

Securitization exposure by risk weight of over 100% and below 1.250%

8,540

Securitization exposure by risk weight of 1.250%

191,201

Required capital amounts for securitization exposure to which SEC-ERBA is applied

2,579

Required capital amounts for securitization exposure to which SEC-SA is applied

94,106

Required capital amounts for securitization exposure to which 1.250% risk weight is applied

191,201

5. Interest Rate Risk (Non-consolidated)(Unit: Hundred Millions of yen)March 31, 2019
ΔEVE

March 31, 2020
ΔNII

ΔEVE

ΔNII

569

39

1

82

Parallel down

11

(97)

458

(141)

Steepener

303

/

15

/

Flattener

1

/

492

/

Short rate up

154

/

185

/

Short rate down

21

/

26

/

Maximum

569

39

492

82

Tier 1 capital

March 31, 2019

March 31, 2020

31,87733,346 The amount of client-cleared trade exposures for which a bank or bank holding company acting as clearing member is not obliged tomake any indemnification (–)
Adjusted effective notional amount of written credit derivatives The amount of deductions from effective notional amount of written credit derivatives (–)
Total exposures related to derivative transactions

(b)

3
7

5

6

7

—

—

8

7,500

1,500

9

—

—

10

141,669

236,582

11

—

—

12

Corporate Data

Parallel up

(a)

1d

The DBJ Group’s Corporate GovernanceRequired capital amounts (by calculation method)

1

The DBJ Group’s Strategy0Structured Finance

Table 1

The DBJ Group’s Value Creation Story

4. Securitization Exposure

4

Exposures related to repo transactions (3)The amount of assets related to repo transactions, etc.
The amount of deductions from the assets above (line 12) (–)

—

—

13

The exposures for counterparty credit risk for repo transactions, etc.

—

—

14

(c)

—

—

15

—

—

16

1,876,615

1,797,519

17

692,441

666,30618

1,184,173

1,131,213

19

5

Exposures related to off-balance sheet transactions (4)Notional amount of off-balance sheet transactions The amount of adjustments for conversion in relation to off-balance sheet transactions (–)
Total exposures related to off-balance sheet transactions(d)6

Leverage ratio on a consolidated basis (5)The amount of capital (Tier 1 capital)

(e)

3,200,682

3,353,665

20

Total exposures ((a)+(b)+(c)+(d))

(f)18,009,944

18,664,965

21

17.77%

17.96%

22

Leverage ratio on a consolidated basis ((e)/(f))

8Data Section

The exposures for agent repo transactions
Total exposures related to repo transactions, etc.

158

159

Corporate Information(Unit: Millions of yen, %)March 31, 2019

September 30, 2019

March 31, 2020

Common Equity Tier 1 capital

3,199,157

3,222,794

3,351,796

Tier 1 capital

3,200,682

3,225,179

3,353,665

Total capital

3,214,802

3,245,545

3,373,441

19,203,324

18,905,045

19,418,634

CapitalName

Development Bank of Japan Inc.

Established

October 1, 2008

Head office

Otemachi Financial City South Tower, 9-6, Otemachi 1-chome, Chiyoda-ku, Tokyo 100-8178, Japan
Tel: +81-3-3270-3211

Capital¥1,000,424 million (All capital is funded by the government of Japan.)Number of employees

1,703 (non-consolidated 1,195)

Risk weighted assets
Risk weighted assets
Capital ratio
16.65%

17.04%

17.26%

Tier 1 risk-weighted capital ratio (consolidated)

16.66%

17.05%

17.27%

Total risk-weighted capital ratio (consolidated)

16.74%

17.16%

17.37%

18,009,944

17,738,487

18,664,965

17.77%

18.18%

17.96%

Leverage ratio (consolidated)
Total exposures
Leverage ratio (consolidated)(As of March 31, 2020)

Group Companies
The DBJ Group provides diverse services that satisfy the needs of its customers.

The DBJ Group’s Strategy Common Equity Tier 1 risk-weighted capital ratio(consolidated)

The DBJ Group’s Value Creation Story

Key Indicators (Consolidated)

Overseas locations
DBJ Europe Limited

DBJ Investment Consulting (Beijing) Co., Ltd.

DBJ Americas Inc.

DBJ Europe Limited is a Londonbased subsidiary established in
November 2009. It mainly provides
support for investment and loan services in Europe, and also collects anddisseminates information locally.

DBJ Investment Consulting (Beijing)Co., Ltd. became a wholly owned
subsidiary in June 2014 and is basedin Beijing and Shanghai. It mainlyoffers support for investment and loan
services in China, and also collects
and disseminates information locally.

Launched in October 2018, DBJ
Americas Inc. is a local subsidiary
based in New York, U.S.A. It mainly
provides support for investment andloan services in the Americas, andalso collects and disseminates information locally.

Investments / Securities / Asset Management
DBJ Investment Advisory Co., Ltd.

DBJ Securities Co., Ltd.

DBJ Asset Management Co., Ltd.

DBJ Investment Advisory Co., Ltd.
provides advice related to DBJ’s VG(Value for Growth) Investment
Program.*

DBJ Securities Co., Ltd. is a securities
subsidiary that assists the DBJ Group
with investment and loan services. It
supports optimal capital procurement,
centered on alternative product fields,
provides asset management opportunities, and flexibly fulfills diverse needs.

DBJ Asset Management Co., Ltd. is
an asset management company
focused on real estate, private equity,and infrastructure investments. It provides quality investment opportunities
to investors with the comprehensive
financial backing of the DBJ Group.

* Value-added equity investment that supports growth strategies

Research / Consulting

Corporate Data

DBJ Capital Co., Ltd.
DBJ Capital Co., Ltd. is the venture
capital arm of the DBJ Group. It mainly
makes early-stage equity investments
in venture firms, and supports their
growth through hands-on
management.

The DBJ Group’s Corporate Governance

DBJ Singapore Limited
DBJ Singapore Limited is a Singaporebased subsidiary established in
December 2008. It mainly provides
support for investments and loans aswell as advisory services in the AsiaPacific region, and also collects anddisseminates information locally.

Real estate management / IT services
Value Management Institute, Inc.

DBJ Real Estate Co., Ltd.

Consist, Inc.

Value Management Institute, Inc. is acomprehensive think tank withstrengths derived from its insight into
advanced technologies and analysis
using proprietary economic models. It
provides tailor-made solutions to abroad range of government policy
issues.

DBJ Real Estate Co., Ltd. handles
administrative functions for the DBJ
Group for office building leasing, rental
conference rooms, and businesslibraries.

Consist, Inc. provides one-stop consulting services for developing, maintaining, and operating IT, using
technology to help solve social issues.

Data Section

Japan Economic Research Institute Inc.
Japan Economic Research InstituteInc. is a comprehensive think tank thatprimarily conducts surveys and consulting. It meets customer needs froma comprehensive viewpoint, leveraging
synergies in its three survey fields:
public, solutions, and international.