Applying Financial Expertiseto Design the Future

Annual Report & CSR Report2015Profile (As of July 1, 2015)

Established:

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

Legal basis:

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

President:

Masanori Yanagi

Number of employees:

1,184 (As of March 31, 2015)

Capital:¥1,206,953 million (100% owned by the Japanese government)

Address:

South Tower, Otemachi Financial City, 9-6, Otemachi 1-chome, Chiyoda-ku, Tokyo
100-8178, Japan

URL:

http://www.dbj.jp/en

Number of offices:

Branch offices, 10; representative offices, 8; overseas representative office, 1; andoverseas subsidiaries, 3

Subsidiaries andaffiliated companies: Consolidated subsidiaries, 25; non-consolidated subsidiaries, 30; and affiliated companies, 20(As of March 31, 2015)
Main business:

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

Purpose:To conduct business activities utilizing the methods of integrated investment and loan services andother sophisticated financial methodologies, thereby contributing to the smooth supply of funds
to those who need long-term business funds, as well as to the sophistication of financial functions.

Scope of business operations: As well as such basic businesses as investment, lending and guarantee of obligations, DBJ carriesout businesses in which it develops new financial techniques.
DBJ raises funds in a stable manner by borrowing from the government’s Fiscal Investment and
Loan Program (FILP) and by issuing government-guaranteed bonds, as well as corporate bonds(without government guarantees), and by taking out long-term loans from the private sector.
Q

Q

Total assets:¥16,283.3 billion (As of March 31, 2015)

Loans:¥13,409.0 billion (As of March 31, 2015)

Capital adequacy ratio:

16.38% (Basel 3, BIS standard) (As of March 31, 2015)

Issuer ratings:

A1 (Moody’s Investors Service, Inc.), A+ (Standard & Poor’s Corp.),
AA (Rating and Investment Information, Inc.),
AAA (Japan Credit Rating Agency, Ltd.)
Note: Information above is on a non-consolidated basis.

Forward-Looking Statements
This Annual Report & CSR Report contains statements concerning management policies and future operating
results. Such statements are not guarantees. Please be aware that future performance is subject to various
changes in conditions in the operating environment.

Contents

Message from the President and CEO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2

Toward the Future Prosperity of Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4Corporate Philosophy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Logo and Corporate Color . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
DBJ’s Target Business Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Overview of DBJ’s Third Medium-term Management Plan . . . . . . . . . . . . . . . . . . . . . . . . 18
History of DBJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Background for Revisions to the DBJ Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Overview of Operations in Fiscal 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Operating Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Overview of Consolidated Operating Performance . . . . . . . . . . . . . . . . . . . . . . . . . 26
Overseas Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Group Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Topics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
DBJ’s Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Integrated Investment and Loan Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Investments and Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Consulting/Advisory Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Crisis Response Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Initiatives Related to the Great East Japan Earthquake . . . . . . . . . . . . . . . . . . . . . . 53
Regional Revitalization Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Making Use of Information Functions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
CSR Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Implementing CSR Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
CSR through Investment, Loan and Other Businesses . . . . . . . . . . . . . . . . . . . . . . . 70
Environmental Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Business Continuity Plan (BCP) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
Fostering Human Resources and Creating a Comfortable Work Environment . . . . 96
Intellectual Asset Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
Intellectual Asset Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
Financial Platform That Enables DBJ to Meet the Needs of the Times . . . . . . . . . . 104
Management Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
Responding to Japan’s Stewardship Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
Risk Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
Client Protection Management Basic Policy/Declaration on Personal Information
Protection/Policy for Managing Conflicts of Interest . . . . . . . . . . . . . . . . . . . . . . . . 116
Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
Corporate Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137

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

Annual Report & CSR Report 20151

Message from the President and CEO

2

Annual Report & CSR Report 2015

Issues Japan Faces and DBJ’s Role in
Resolving Them
These are challenging times for the Japanese economy.
In addition to intense global competition and the renewalof aging public infrastructure, the economy faces energy
problems and the need for regional revitalization. The country also continues to experience a shortage of risk capital,
among numerous other issues.
Against this backdrop, in 2015 the Act for Partial
Amendment of the Development Bank of Japan Inc. Act was
passed in a regular Diet session and came into force. Whilemaintaining the direction toward DBJ’s full-scale privatization,
this act puts various measures in place. These measures
include those for ensuring Crisis Response Operations in
preparation for any large-scale disaster or economic crisis andmeasures to make use of DBJ’s investment and loan functions
for new Special Investment Operations, which provide intensive growth capital designed to revitalize regional economies
and increase the competitiveness of enterprises.
Accordingly, while maintaining DBJ’s fundamental role as
described in its three-year Third Medium-term Management
Plan that commenced in fiscal 2014, the aim of the act is
to reinforce initiatives such as providing risk capital. At thesame time, to contribute to Japan’s sustained growth, as aprovider of both risk capital anchored in the real economy(capital funding such as mezzanine financing and investment,
long-term funding for infrastructure and other projects, andthe stable provision of funds that will drive the growth ofJapanese enterprises) and original knowledge (knowledge
services that leverage “experiential knowledge”), DBJ works
with diverse financial players to create a smoothly functioning market and strives to resolve Japan’s problems from along-term perspective.

Specific DBJ Initiatives
DBJ’s Third Medium-term Management Plan calls for a
proactive response in supporting Japan’s sustained growth
as an advanced country tackling issues as a global innovatorin four primary areas: “growth support,” “infrastructure andenergy,” “regional revitalization tailored to regional needs”
and “strengthening the safety net.”
Of these, in the area of “growth support,” by making
use of the Fund for Japanese Industrial Competitivenessestablished in March 2013 for new business creation
and restructuring, DBJ supported efforts to promote thecompetitiveness of Japanese enterprises by providing risk
capital. Going forward, DBJ will employ some of the funds
provided by the Japanese government as risk capital in Special
Investment Operations to support efforts for reinforcing corporate competitiveness. DBJ is also expected to create markets
for growth capital. As an independent initiative to further

strengthen our efforts in this area, we have set up a “Growth
Co-creation Facility” to create future markets for growth
capital. This facility promotes the broad sharing of risk-taking
among enterprises, financial institutions and investors.
In the “infrastructure and energy” area, in response to
the energy issues that have arisen since the Great East Japan
Earthquake we are supplying funds for reconstructing theenergy supply system.
Regarding “regional revitalization tailored to regional
needs,” in September 2014 we established the Initiative forCreating Regional Futures. This initiative is tasked with building systems throughout DBJ to support regional revitalization.
As a first step, we elicited input from the managers of morethan 170 medium-sized regional enterprises. Based on this
input, we announced our “Recommendations on Regional
Revitalization.” We are also working with regional financial
institutions to establish funds targeting revitalization throughthe tourism industry and business succession, putting in placedetailed support networks.
In the area of “strengthening the safety net,” we areencouraging the restoration and reconstruction of thedisaster-stricken regions by collaborating with regional
financial institutions to establish new funds as successors to
the Great East Japan Earthquake Reconstruction Fund.
In the field of aviation finance, we are stimulating themarket through such measures as transferring obligations
and syndicated loans to private financial institutions.

Meeting Our Corporate Social Responsibilities
I believe the revised act that has recently been enacted willcontribute greatly to DBJ’s progress on the Third Mediumterm Management Plan. At the same time, I am keenly awareof the heavy responsibility that accompanies the Japanese
government’s ongoing involvement for an indefinite period.
I am also highly conscious of the importance of ensuring
appropriate competitive relationships and forming collaborative connections with private financial institutions to encourage even higher levels of dialogue than in the past.
Based on this awareness, DBJ will continue striving tocultivate human resources to provide sophisticated financial
services. We will listen carefully to clients’ needs as we deploy
our three major products—loans, investments and advisory
services. In this manner, we aim to fulfill the roles outlined
above and support Japan in achieving sustained growth.
July 2015

Masanori Yanagi
President and CEO
Development Bank of Japan Inc.

Annual Report & CSR Report 20153

Toward the Future Prosperity of Japan

EnergyTransportation

Infrastructure

4

Urban
Development

Resilience

GrowthOverseas

Healthcare

Environment

Network

Frontier

Annual Report & CSR Report 2015

Initiatives in the Energy Sector
Going forward, large-scale funding in the energy
sector is expected, for example, for replacing aging
thermal power plants and constructing new facilities. Meanwhile, the electric power system is providing opportunities for the retail sale of electric
power and allowing new entrants into the field ofelectric power generation, calling for finance toplay an increasingly diverse role. DBJ will continue
providing optimal financial solutions to meet theseneeds.
As of March 31, 2015, our balance of loans in theelectric power, gas, heat and water sector totaled¥3,135.3 billion, accounting for 23.7% of total loans,by industry.

¥ 3.1
trillion

BalanceBl
off loans
l
in
i the
h
electric power, gas, heat
and water sectors(As of March 31, 2015)

See page78

gy
Annual Report & CSR Report 20155

Toward the Future Prosperity of Japan

Initiatives in the Transportation Sector
DBJ is involved in a wide range of initiatives in thedevelopment and improvement of transportation
infrastructure (including railroads, airports, airlines,
buses and roads). We also take part in the formation of a wide range of projects from a long-term
perspective, to support collaboration among mul-

tiple enterprises from a position of neutrality.
As of March 31, 2015, our balance of loans in thetransportation infrastructure sector (to transportation providers) totaled ¥2,467.1 billion, accountingfor 18.7% of total loans, by industry.

¥ 2.4
trillion

Balance of loans in thetransportation infrastructure sector(As of March 31, 2015)

See page

6

Annual Report & CSR Report 2015

79

Initiatives in the Urban Development (Real Estate) Sector
DBJ’s long-term financing of real estate projects
began in the 1960s. We have participated in Japan’s
real estate securitization market from its early
beginnings and continue striving to invigorate thismarket by leveraging our accumulated expertiseand networks. In fiscal 2011, we introduced the DBJ

Green Building Certification, which is designed toprovide financial support for environmental andsocially considerate initiatives.
As of March 31, 2015, our balance of loans in thereal estate sector totaled ¥1,553.0 billion, accounting for 11.7% of total loans, by industry.

¥ 1.5
trillion

Balance of loans in
the real estate sector(As of March 31, 2015)

See pages

38, 43, 80-81tAnnual Report & CSR Report 20157

Toward the Future Prosperity of Japan

Social Infrastructure Initiatives
Since the era of reconstruction following WorldWar II, DBJ has supported the development andadvancement of Japan’s economy as well as
improved quality of life. DBJ applies its experienceand expertise to support the efforts of its clients tobuild and improve the social infrastructure.
As of March 31, 2015, our balance of loans inthe social infrastructure sector (electric power, gas,
heating, water, telecommunications, transport andreal estate) totaled ¥7,577.2 billion.

¥ 7.5
trillion

Balance of loans in the electric
power, gas, heating, water,
telecommunications, transportand real estate sector(As of March 31, 2015)

See page

82

as uc
ast
uctuu e8

Annual Report & CSR Report 2015

Initiatives Targeting Crisis Response Operations
DBJ began Crisis Response Operations as a designated financial institution on October 1, 2008.
Since March 2011, when the Great East Japan
Earthquake struck, we have poured all our energy
into initiatives to support the restoration andreconstruction of the disaster-stricken region. DBJ

smoothly implements Crisis Response Operations
targeting people who were affected directly andindirectly by the disaster.
As of March 31, 2015, our cumulative amount ofloans as crisis countermeasures related to the Great
East Japan Earthquake was ¥2,110.0 billion.

¥ 2.1
trillion

CumulativeCl ti amountt off loanslascrisis countermeasures related to
the Great East Japan Earthquake(As of March 31, 2015)

See pages

50-55, 87-88

es e ceAnnual Report & CSR Report 20159

Toward the Future Prosperity of Japan

Initiatives to Promote Competitiveness
DBJ supports efforts to promote the competitiveness ofJapanese enterprises by providing risk capital throughmezzanine financing and equity such as the Fund forJapanese Industrial Competitiveness. As of March 31,
2015, our cumulative amount of investment and lending determined by the Fund for Japanese Industrial
Competitiveness amounted to ¥121.3 billion. Based on

this performance record in investment and loans, wewill continue to focus on Special Investment Operations
that reinforce and extend the Fund for JapaneseIndustrial Competitiveness, employing some funds fromthe Japanese government to provide growth capitalintensively. As a new voluntary initiative, we have alsoestablished a Growth Co-creation Facility.

¥121.3billionCumulative amount ofinvestment and lending determinedby the Fund for Japanese Industrial
Competitiveness(As of March 31, 2015)

See pages

36, 71-72

Go t
10Annual Report & CSR Report 2015

Overseas Business Initiatives
Since its privatization (conversion to a joint-stockcompany) in October 2008, DBJ has embraced international business.
We are moving forward with core infrastructure,such as building an overseas risk management structure for investments and loans, preparing operatingbases and training personnel. At the same time, we
are working to expand our network with trustworthy partners and domestic and overseas financial
institutions.
As of March 31, 2015, more than 40 countries
were targeted for investments and loans.

More than

40 countries

Number of countries targeted forinvestments and loans(As of March 31, 2015)

See pages

28, 74O e seas
Annual Report & CSR Report 201511

Toward the Future Prosperity of Japan

Initiatives in the Healthcare and Welfare Sectors
DBJ is engaged in maintaining and improving
the quality, including access, cost and technological standards, of each area of healthcare in Japanthrough finance, consulting and the disseminationof information. As well as providing consulting services that include the development of business plans

to support improvements in hospital management,
DBJ studies and conducts research into a variety of
medical issues.
As of March 31, 2015, our balance of loans in thehealthcare and welfare sector stood at ¥66.6 billion.

¥ 66.6billionBalance of loans in thehealthcare and welfare sector(As of March 31, 2015)

See pages

1275, 77

Annual Report & CSR Report 2015

Healthcare

Initiatives in the Environmental Business Sector
Beginning with antipollution measures implemented in the late 1960s and early 1970s, DBJ has provided more than ¥3 trillion in investments and loans
for environmental projects over the past 40 years.
In fiscal 2004, DBJ began employing environmental ratings in its financing based on knowledge wehave cultivated. This environmental rating system,

developed using DBJ’s unique methodology, is theworld’s first such financing menu.
As of March 31, 2015, we had provided financing
under the DBJ Environmentally Rated Loan Program
to 472 enterprises, with the cumulative total
amounting to ¥807.5 billion.

¥ 807.5billionC
Cumulative
l ti ttotalt l amountt off
DBJ Environmentally Rated
Loan Program(As of March 31, 2015)

See pages

41, 76, 90-93

Environment
Annual Report & CSR Report 201513

Toward the Future Prosperity of Japan

Regional Revitalization Initiatives
Stepping up its voluntary initiatives to address thevariety of issues faced by regional communities, in
September 2014 DBJ set up the Initiative for Creating
Regional Futures. Through this initiative, we are
putting all our energies into building systems forregional revitalization. By applying these systems, we

are working to resolve regional issues through broadbased cooperation among industry, government,
academia and financial institutions.
As of March 31, 2015, a cumulative total of 101
financial institutions had entered into business alliances with DBJ.

101

institutions
Cumulative total of allied financial institutions(As of March 31, 2015)

See pages

56-57, 83-86

Network
14

Annual Report & CSR Report 2015

Initiatives for Invigorating Japan’s Financial and Capital Markets
DBJ’s risk capital provision and other activities, suchas asset management and arrangement of syndicated loans, create excellent opportunities. Taking
advantage of collaborative fund management
opportunities with regional financial institutions,
the Government Pension Investment Fund (GPIF)

and other organizations, we invigorate markets bycreating new money flows. We also participate as aprincipal investor in the TOKYO PRO-BOND Market,
stimulating it as part of our efforts to develop Japan’s
financial and capital markets.

Syndicated loan arrangement
Co-investment with GPIF in the infrastructure sector
Stimulation of the TOKYO PRO-BOND Market

See pages

39, 74

Frontierr
Annual Report & CSR Report 201515

Corporate Philosophy

Corporate Philosophy

Applying financial expertise
to design the future

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

Commitment to Stakeholders

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

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

Networks

Commitment to Stakeholders, Action Guidelines and Core Competencies
Commitment to Stakeholders
n Commitment to Clients

Action Guidelines
n Customers First	
Using creative finance, DBJ will resolve its clients’challenges and help them enhance their economic andsocial value.

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

n Commitment to Investors
DBJ will maintain transparency while raising corporate
value over the long term.

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

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

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

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

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

Core Competencies

16

Annual Report & CSR Report 2015

Intention

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

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

Networks

Networks created with clients, regional
municipal bodies and other financial institutions.

Logo and Corporate Color

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

Each Color Represents Two Aspects of DBJ
Corporate Values:

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

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

DBJ’s Target Business Model

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

Investment

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

Provision of mezzanine andequity financing

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

Annual Report & CSR Report 201517

Overview of DBJ’s Third Medium-term Management Plan (Announced May 16, 2014)

DBJ has formulated the Third Medium-term Management

to long-term perspective, and initiatives put in place toPlan for the fiscal years from April 1, 2014, to March

resolve them. The Third Medium-term Management Plan

31, 2017. We believe that many of the issues facing therepresents a first step in this direction, charting DBJ’s course

Japanese economy need to be addressed from a medium-for the next three years.

Challenges for the Japanese economy
Issues in the macroeconomy
OO

Declining global competitivenessO

Decline in economic growth rateO

Globalization of the economy

O

Aging infrastructure

O

Issues for firms (“semi-macroeconomic”)

Contracting, aging population; fallingbirthrateO

OO

Decline in regional vitality

O

Earthquake reconstruction; response tonatural disasters
Global spread of crisesO

Creation of strategic markets

O

Innovation and technological development

O

Issues for financial and capital markets

Energy problems arising fromthe Great East Japan EarthquakeO

Short supply of risk capitalO

Shortage of fund management opportunities

Elimination of excessive competition in similar
goods and services

Fostering crisis-resistance in industry, thegovernment, and the population

OthersIdentification of issues(Survey of Capital Investment, etc.)
DBJ actions

Role of DBJ
Growth support●●●

Promotion ofcompetitivenessSupport for growing
fields such as theenvironment,
healthcare, women’s
participation in theworkplace

A neutral source of industrial finance
Infrastructure & energy●●●

Renewal & strengtheningof infrastructure

Regional revitalization tailored
to regional needs●

Stronger, moredisaster-resilienttransportation networks
and other infrastructure●

Reconstruction of theenergy supply system●

Response to globalization

Growth support(promotion of
innovation; discovery ofcorporate value in thevalue chain)

Risk-sharing with banks
and other organizations●

Risk-sharing finance→ Effective use ofstagnant funds

Infrastructure-building
through PPP/PFI
Support for community
development initiatives

Strengthening the safety net
Provision of necessary funds for crises (natural disaster or financial markets disruption, etc.)
Use of analytical skills developed during normal times● Coordination with the Japanese government●

Opportunities for fundmanagement byinvestors●

Providing risk capital and knowledge(intellectual services) from a long-term
perspective

O

Specialized financial functions: Long-term perspective, large accounts, integrated investments and loans

O

Catalytic function: Platform for new value creation based on neutrality●→ Creation of newmoney flow

Knowledge extending
beyond the financial
sphere●18

O

Customer baseOIntegrated application of managerial resources (neutrality, analytical and research capacity, R&D skills, networks)

O

Wealth of experience O Capital

Annual Report & CSR Report 2015

Market-stimulating
finance

Knowledge bank

→ New value creation

DBJ has defined three functions for fulfilling its roles. By pursuing proactive initiatives in four primary areas in line with thesefunctions, DBJ will work toward enhancing Japan’s sustainable growth.
About DBJ

Three Functions to Leverage(1) Risk-sharing finance• DBJ will promote the appropriate sharing of risk through many of the approaches it has pursued in the past, by
supplying high-risk capital through long-term, large-volume, mezzanine financing and in collaboration with general
financial institutions, enterprises and other entities, as well as through other forms of cofinancing and coinvestment.
<Case Studies> See pages 71-72, 75, 78-79, 82–83, 86–88.

(2) Market-stimulating finance• DBJ arranges excellent opportunities for managing this capital through means including syndicated loans andasset management. Working with regional banks, pension funds and other entities, DBJ shares fund management
opportunities with them and helps stimulate the financial market.
<Case Studies> See pages 72, 74, 76, 78–79, 83, 87.

(3) Knowledge bank
• Utilizing not only high-quality knowledge* provided from a long-term perspective but also its neutral networks andindustrial research skills, DBJ will work on creating new business concepts.
* Knowledge services that leverage structured “experiential knowledge.”<Case Studies> See pages 73, 75–77, 80–82, 84-85, 88-89.

Four Primary Areas(1) Growth support• To strengthen Japan’s competitiveness in the global market, DBJ will provide support for the effective use of exploitable
operating resources, business creation, corporate restructuring, mergers and acquisitions or the challenges ofglobalization.
• DBJ will also support growth fields that will play key roles in Japan’s development as a sustainable society, such asenvironmental business, healthcare and opportunities for women.
<Case Studies> See pages 71-77.

(2) Infrastructure & energy• In addition to the safety of the nation’s transportation networks and community development, initiatives will concentrateon the renewal of aging public infrastructure.
• The Great East Japan Earthquake left Japan with serious energy issues. DBJ will address this problem by providing
comprehensive support for the restructuring of the energy system.
<Case Studies> See pages 78–82.

(3) Regional revitalization tailored to regional needs• Regional firms make up approximately half of DBJ’s clients. To ensure that regional revitalization is both sustainable andsuited to regional conditions, DBJ works with regional clients and banks in supporting innovative business development,
community building, infrastructure renewal and other initiatives by which firms create vigorous and healthy communities.
<Case Studies> See pages 83–86.

(4) Strengthening the safety net• DBJ will respond quickly and effectively to crises, whether natural or financial. It will conduct both Japanese governmentmandated Crisis Response Operations and its independent initiatives based on information, expertise and evaluation
skills developed through day-to-day business.
<Case Studies> See pages 87–89.

Annual Report & CSR Report 201519

History of DBJ

Here, we introduce DBJ’s history of supporting the reconstruction of post-war Japan.
Economic recovery

1951–1955
Reconstruction and independence of the economy
In 1951, the Japan Development Bank was established and commenced
accommodation loans to facilitate the development of the power
supply, which forms the basis of the economy and industry, and therationalization, modernization and cultivation of coal, steel, marinetransportation and other major industries.

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

1956–1965
High-growth infrastructure development

Rapid growth

To expand and reinforce the energy and transportation activities that
underpin the industrial infrastructure, the Japan Development Bank served
as the driving force that powered new economic expansion. In addition, it
provided loans for local development to correct regional disparities.
Established in 1956, the Hokkaido Development Finance Public
Corporation was restructured in 1957 to form the Hokkaido-Tohoku
Development Finance Public Corporation and began providing investments
and loans to promote industry in these two regions of northern Japan.

Kawasaki Kisen Kaisha, Ltd.:The Tonegawa Maru tanker
Built tanker that was indispensable for theimport of energy and raw materials

1966–1971
Development of international competitiveness and social
development loans
Aiming to hone international competitiveness in accordance with thetransition to an open economic system, the Japan Development Bank
focused on support for industrial system improvements and independent
technological development.
It also emphasized social development through regional development,
urban redevelopment, logistics modernization, pollution prevention andother measures in a bid to relieve the problems of high-level growth.

Stable growth
Economic bubble

20

Sony Corporation: Trinitron color television
factory
Promotion of home-grown technologies
through commercial application of newtechnologies

1972–1984
Improvements to quality of life and stable supply of energy
As corrections to the imbalance of economic growth and standards ofliving, the Japan Development Bank began to focus on antipollution
measures, regional and urban development and other social elements
in addition to industrial development. Against the backdrop of thefirst oil crisis, it provided investment and loans for energy alternatives
to fossil fuels, as well as efforts to conserve energy, to ensure stableenergy supplies. It also supported efforts to develop land into large-scalecommercial sites.

Shinjuku new urban center: Shinjuku Mitsui
Building and others (Tokyo)
New urban center formation throughredevelopment of purification plant site

1985–1995
Development of lifestyle and social infrastructure and a smoothindustrial transformation
Pressing needs arose for increased domestic demand and an industrial
structural shift, against a background of aggravating trade friction withother countries. The Japan Development Bank focused on support forsocial capital improvement, creative technological development, an
industrial transformation and other issues. In the 1990s, it stressed environmental and energy measures and regional economic stimulation with theaim of making Japan a lifestyle superpower.

Annual Report & CSR Report 2015

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

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

1996–2000

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

About DBJ

The Japan Development Bank focused on such important areas as ongoing
improvements to social capital, environmental and other measures,and support for venture businesses. In addition, it swiftly implemented
reconstruction loans in the wake of the Great Hanshin-Awaji Earthquake
and loans in response to the financial environment to stabilize the financial
system by functioning as a safety net.

Post-bubble

Creation of a vibrant and affluent society and stable economy

2001–2007
Financial solutions that support communities, the environment
and technology

The Former Niigata Tekkosho Co., Ltd.
Through such methods as DIP financing, mergers
and acquisitions, and business revitalization
funds, DBJ supports local enterprises, helping
communities maintain excellent supplies oftechnical expertise and employment opportunities.

2008 onward
Development Bank of Japan Inc. established

Structural reform

In 1999, the Japan Development Bank and the Hokkaido-Tohoku
Development Finance Public Corporation were dissolved and theDevelopment Bank of Japan (DBJ) was established. DBJ focuses its
operations in three areas: community development, environmental
conservation and sustainable societies and the creation of newtechnologies and industries. In these ways, DBJ contributes to thesustainable development of Japan’s economy.

Development Bank of Japan Inc. was established on October 1, 2008, as a
special stock company by means of conversion to a joint-stock company.
As a neutral source of industrial finance, long-term funds and risk capitalprovided through integrated investments and loans, DBJ addresses thevarious issues that clients face.
V-Lease Corporation

Global financial crisis precipitated by the Lehman shock

Disaster and crisis response to the Great East Japan Earthquake
As a disaster and crisis response to the Great East Japan Earthquake, which
struck on March 11, 2011, DBJ worked with other financial institutions toprovide appropriate financing, particularly to electric power companies.
Through the Great East Japan Earthquake Reconstruction Fund, establishedjointly with banks in the disaster-stricken region, DBJ is providing risk
capital through such methods as subordinated loans and preferred shares.
Joban Kosan, Ltd.: Spa Resort Hawaiians

Reinforcing the function of supplying growth capital
The Act for Partial Amendment of the Development Bank of Japan Inc.
Act, which was enacted on May 20, 2015, created Special Investment
Operations. This new investment scheme, a portion of the funding forwhich is provided by the Japanese government, is a temporary measure
to intensively provide the growth capital needed to promote thecompetitiveness of Japanese enterprises and regional revitalization.

By providing risk capital through the Great
East Japan Earthquake Reconstruction Fund,DBJ supports restoration and reconstruction
initiatives by stricken enterprises.

The Lehman shock / The Great East Japan Earthquake

The Lehman shock in the autumn of 2008 precipitated a global
financial crisis. As this situation impaired the functioning of the bondmarkets, corporate cashflow worsened. DBJ responded promptly withFinancial Crisis Response Operations. Furthermore, in response to falling
functionality in the market for commercial paper DBJ commenced
purchases of commercial paper in January 2009 as part of its Financial
Crisis Response Operations.

By applying the expertise it has cultivated todate, DBJ entered the business of operatingleases for aircraft engines, of which core parts
are produced by Japanese companies involved
in heavy industry. Through this business, we
aim to promote the further development of theJapanese airline industry.

Annual Report & CSR Report 201521

Background for Revisions to the DBJ Act

DBJ’s Activities Since Its Privatization (Conversion to a 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 governmentowned 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 Lehman Shock and the Great East Japan
Earthquake occurred. The Japanese government called on
DBJ to steadily mount large-scale Crisis Response Operations.
Due to these crises, the Development Bank of Japan Inc. Act(Act No. 85 of 2007: “DBJ Act”) was revised 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.
As part of this structural revision, deliberations at
the Japanese government’s Study Panel Concerning thePromotion of Expanding Growth Funding covered such topics
as DBJ’s proper implementation of Crisis Response Operations,the importance of initiatives for providing growth capital(equity and mezzanine financing) to address shortages inJapanese financial and capital markets, and an evaluation of
DBJ’s initiatives following its conversion to a joint-stock company. The revised content of the act reflects these evaluations.

About the 2015 Revisions to the DBJ Act
Based on the deliberations of the Japanese government’s
Study Panel Concerning the Promotion of Expanding GrowthFunding, the Act for Partial Amendment of the Development
Bank of Japan Inc. Act, which was enacted on May 20, 2015,
maintains the direction toward full-scale privatization. At thesame time, in order to fully ensure the provision of funding
in response to large-scale disasters and economic crises, therevised 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 and increase the competitiveness of enterprises,
the revised 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 Fundfor Japanese Industrial Competitiveness. In addition, withregard to the application of DBJ’s investment and loan 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.

Highlights of 2015 Revisions to the DBJ Act

Before revision
After revision
1. Maintaining direction toward full-scale privatization
Full-scale privatization and disposal of
all Japanese government-heldshares, targeting around five toseven years from April 1, 2015●●

No changes in the main provisions, including Article 1 which stipulates DBJ's objectives
Disposal of shares as soon as practicable (considering its effect on achieving DBJ’s
objectives, as well as market situation)

2. Measures to ensure appropriate implementation of the Crisis Response Operations
Conducting Crisis Response Operations
as a designated financial institution● Enabling Japanese government
recapitalization in crisis response by
March 31, 2015●

Assuming responsibility for Crisis Response Operations for an indefinite period (atthe same time reflecting this obligation in the Articles of Incorporation)● Extending for an indefinite period the scope of Japanese government
recapitalization securing DBJ’s financial structure, with the Japanese government
having such obligations as holding more than one-third of DBJ’s shares●

3. Establishment of a new Special Investment Operations scheme to provide growth capital in concentrated manner as temporary measure
Reinforcement of the Fund for Japanese Industrial Competitiveness (a portion of thefinancial resources for which are provided through measures for industrial investment);
implementation of Special Investment Operations as a measure for a limited period oftime, through fiscal 2025 (at the same time reflecting this obligation in the Articles ofIncorporation, complementing and encouraging private-sector enterprises, etc.)● Obligation that the Japanese government shall hold one-half or more of shares
until the conclusion of the Special Investment Operations●

Provision of risk capital through theFund for Japanese Industrial
Competitiveness4. Provisions referencing consideration for private financial institutions through ongoing Japanese government involvement
As stated in the Third Medium-termManagement Plan, sustain close
communications, maintaining a
focus on operations in collaboration
with other financial institutions

The Corporation shall, for an indefinite period, pay special attention in
conducting its business so that it will not upset its appropriate competitive
relationships with other business entities● 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 to Crisis Response Operations and Special Investment Operations●

Note: Please refer to pages 126–136 for sections of the DBJ Act.

22

Annual Report & CSR Report 2015

Establishment of Special Investment Operations as a New Investment Scheme
Industrial Competitiveness, established in March 2013, thefor growth capital, such as equity and mezzanine financing,

Japanese government has provided a portion of this invest-

are not yet mature, Special Investment Operations, as a newment (industrial investment). In addition to our corporate

investment scheme, were established to provide growth

activities such as ongoing support to Japanese enterprises

capital in a concentrated manner as a temporary measure

cultivate new business and promoting new collaborationfrom the perspective of promoting the competitivenesswith other sectors, DBJ will continue to support efforts to its

of Japanese enterprises and regional revitalization. As afunding initiatives contributing to regional revitalization.

About DBJ

Based on an awareness that Japan’s providers of and markets

measure to strengthen and enhance the Fund for Japanese
Overview of Special Investment Operations (Enhancement of Functions for Providing Growth Capital)

Loans, etc.
Provision(Fiscal 2015:¥65.0 billion)
Investment(Fiscal 2015:¥65.0 billion)

SpecialInvestment
Operations(Fiscal 2015:¥130.0 billion)

Japanesegovernment(industrial
investment)

Complement andencourage
private-sector
enterprises(pump-priming effects,
etc.)

Capital funds(preferred shares andsubordinated loans)

Measures tostrengthen
corporatecompetitivenessand contribute toincreased
profitability−Cultivate new
business−Forge links withother sectors−Utilize dormant
technologies
etc.
● Initiatives that
contribute toregional
revitalization●

Enhance risk capital supporting growth

Equity capital

Cultivate providers of new private-sector funds and theinvestors and markets to support themSelf-funding

Initiatives to Meet
Target Enterprises’
Requirements

Transfer and dispose of held loans, securities and other
instruments, with the end of fiscal 2025 as the target date

Other financial
institutions (megabanks,regional banks, private
funds, etc.)

Shares Held by the Japanese Government(It is assumed in the chart below that the obligation to conduct Crisis Response Operations will continue beyond fiscal 2025.)

Japanesegovernment
shareholding
obligation

Taking the following items into consideration, reduction in the amount of shareholdings anddisposal of all shares at the earliest possible date
Taking into consideration(1) Effect on DBJ’s objectives(including appropriate implementation of Special
Investment Operations and Crisis Response Operations)(2) Market situation

Taking into consideration(1) Effect on DBJ’s objectives(including appropriate implementationof Crisis Response Operations)(2) Market situation

Japanese government shareholding obligation
to enable the appropriate implementation ofSpecial Investment Operations(1) Revisions on an as-needed basis to both
operations; and(2) Hearing the opinions of representativesof ordinary financial institutions andother relevant persons

1/2 or more

Taking into
consideration(1) Effect on DBJ’ sobjectives(2) Market
situation

More than 1/3

Japanese government shareholding obligation to enable theappropriate implementation of Crisis Response Operations
Revised act enforced(May 2015)

End of fiscal 2020
(Investment period)

End of fiscal 2025
(Conclusion of Special
Investment Operations)Indefinite period

Full-scale
privatization

The Corporation shall, for an indefinite period, pay special attention in conducting its business sothat it will not upset its appropriate competitive relationships with other business entities.

Annual Report & CSR Report 201523

Overview of Operations in Fiscal 2014

Operating Results
Financial and Economic Environment

against the U.S. dollar, reaching a level of approximately

During fiscal 2014, overall the global economy was limited¥120 to the dollar by March 31, 2015. The yen also depreci-

to modest growth. The U.S. economy continued to recover

ated temporarily against the euro as a result of the BOJ’son the back of improved employment conditions, which

additional monetary easing. However, the European Central

prompted an upturn in personal consumption. In China,

Bank also commenced additional quantitative easing mea-

however, economic growth leveled off amid structuralsures in March 2015, causing the euro to depreciate back toreforms in what is being termed the “new normal.” Europe

the ¥129 range as of March 31, 2015.

was also marked by economic deceleration across a broad

The Nikkei stock average, in the ¥14,800 range on

range of countries that included Germany, which has been

March 31, 2014, had risen to the ¥19,200 range as ofa driver of growth in the region, and deflationary concerns

March 31, 2015, as yen depreciation and other factors

mounted.

prompted expectations of improved corporate perfor-

Against this backdrop, the Japanese economy continued
to post gradual year-on-year growth. After the April 2014

mance.
Looking at commodity prices, ongoing yen depreciation

consumption tax hike, demand fell off in reaction to a surge

year on year caused the price of imports to rise, leading toin personal consumption and housing investment, but

a 1 percent increase in consumer prices (excluding perish-

turned upward thereafter to expand at a slower pace.

able goods and the effect of the consumption tax rise) in

For households, against the background of improved

the first half of fiscal 2014. These price rises dropped off

corporate earnings and labor demand indicators, such as a

substantially in the second half of the year, however, as theresumption of wage rises, there were steady improvements

fall in crude oil prices picked up steam.

in employment and income. However, the consumption
tax hike sapped purchasing power. For the corporate sec-

Progress and Results of DBJ Group Operations

tor, despite some post–tax hike recovery in consumption,

Review of the Year Ended March 31, 2015

domestic demand proceeded at a slower pace. Ongoing

Since its establishment on October 1, 2008, the core ofyen depreciation pushed up corporate performance in

DBJ’s business has remained the same as that conducted byexport sectors, and dividend receipts from overseas subsid-

its predecessor. As a highly specialized financial institution,iaries increased. As a result, profits continued to rise year

we have sought to resolve clients’ issues by providing inte-

on year. Thanks to improved corporate earnings, capitalgrated investment and loan services.

investment increased modestly in the manufacturing sector,

Below is an overview of these activities during the fis-while the non-manufacturing sector maintained spending

cal year ended March 31, 2015. The figures provided forin line with the previous year’s level. Owing to the global

the loans, investment and consulting/advisory services

economy’s gradual recovery and yen depreciation, exports

described below are on a non-consolidated basis.

continued to improve, particularly to other parts of Asia andthe United States. In addition, lower crude oil prices alsoLoanshelped to stem the increase in imports, causing the trade

In addition to senior loans through traditional corporate

deficit to shrink.

loans, we have offered loans that employ advanced finan-On the financial front, the Bank of Japan (BOJ) con-cial methods, such as non-recourse loans and other types

tinued to purchase Japanese government bonds as partof structured financing, meeting increasingly varying needsof its quantitative monetary easing measures, embarking

for funding. During the year ended March 31, 2015, weon additional monetary easing on October 31, 2014. Inprovided ¥2,262.7 billion in loans, including loans for Crisis

response, long-term interest rates fell from around the

Response Operations.

low 0.6% range in April 2014 to the mid 0.3% range as ofMarch 31, 2015.
Impacting currency exchange rates, whereas the BOJ

For details regarding loans in Crisis Response Operations,please refer to the section on page 51 entitled “Results of
Crisis Response Operations.”

moved forward with additional monetary easing, in

24

October 2014 the U.S. central bank concluded its third

Investment

round of quantitative easing (QE 3) and began looking toWith regard to client issues involving business expan-

the possibility of raising interest rates. Caused by this dis-sion, and the formation of growth strategies and financialparity in financial policies, the yen continued to depreciate

infrastructure, we have provided appropriate risk capital

Annual Report & CSR Report 2015

Subsidiaries

such as mezzanine and equity financing based on a long-

In June 2014, we accepted a transfer of shares held byterm perspective. Above all, in recent years we have taken

Japan Asia Investment Co., Ltd. (JAIC) in its merger withthe approach of temporarily acquiring corporate shares to

DBJ-JAIC Investment Consulting (Beijing) Co., Ltd., convert-

increase their value. Owing to these activities, ¥281.4 billion

ing the company to a wholly owned subsidiary, and thewas allocated to investing activities during the year.

company’s name changed to DBJ Investment Consulting

About DBJ

through provision of funds and other financing methods(Beijing) Co., Ltd.
We expect the company, as a consolidated subsidiary,

Consulting/Advisory Services
Consulting and advisory services utilize the networks cre-

to enhance its structure for providing support to Japanese

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

enterprises doing business in China. At the same time, weclients of all sizes grow more competitive in a host of indus-

expect the company to respond to clients’ broad-ranging

tries. We provide consulting on projects that help revitalize

needs by providing investment and loan support and advi-

regional communities and assign advisors to support thesesory services.

activities. During the year, investment and loan commissions
and fees from M&A and other advisory services amounted
to ¥7.6 billion.

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

For the Year Ended
March 31, 2014

(Billions of yen)

For the Year Ended
March 31, 2015

Loan and investment balance

2,943.3

2,544.2Loans

2,805.1

2,262.7

Investment*2

138.2

281.4

Funds raised

2,943.3

2,544.2

Fiscal Investment and Loans

510.7

661.6

Of which, borrowings of FILP

300.0

300.0

Of which, government-guaranteed bonds (domestic)

110.0

200.0

Of which, government-guaranteed bonds (overseas)

100.7

161.6

Corporate bonds (FILP bonds)

372.0

3,74.8Long-term debt

753.1

377.7

Recovery, etc.

1,307.5

1,129.9

*1

*3

*3, 4

*5

Notes: 1. Figures, including those for corporate bonds, are on a management accounting basis.
2. Figures, including those for securities, money held in trust and other assets (funds), are on a management accounting basis.
3. Of government-guaranteed bonds and corporate bonds denominated in foreign currencies, appropriated government-guaranteed bonds and corporate bonds areconverted to yen at market rates at the time conditions are determined.
4. The figure does not include short-term corporate bonds.
5. Long-term debt borrowed from Japan Finance Corporation in conjunction with Crisis Response Operations amounted to ¥500.0 billion in fiscal 2013 and ¥113.0
billion in fiscal 2014.

Annual Report & CSR Report 201525

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

For the Year Ended
March 31, 2014

For the Year Ended
March 31, 2015

Total income

362.1

339.9

Net income

124.3

92.7

Total assets

16,310.7

16,360.6

Loans

13,838.4

13,261.3

Securities

1,637.5

1,887.9

Total liabilities

13,682.9

13,613.3

Borrowed money

9,182.6

8,598.2

Debentures and corporate bonds

4,237.4

4,569.3

Total equity

2,627.7

2,747.2

Common stock

1,206.9

1,206.9

Total capital ratio (Basel 3, BIS standard)

15.83%

16.80%

Ratio of risk-monitored loans (Banking Act base)

0.99%

0.77%

Return on equity

4.83%

3.47%

Return on assets

0.76%

0.57%

Number of employees

1,391

1,407

Consolidated operating performance during the year underyear. Moreover, DBJ recorded net other income of ¥68.4

review is described below.

billion, increasing ¥0.5 billion, owing to the reversal of
allowances for loan losses.

Consolidated Income and Expenses

Consequently, income before income taxes and minority

During the period, DBJ posted total income of ¥339.9 bil-interests came to ¥153.6 billion, down ¥12.3 billion fromlion, down ¥22.2 billion from the previous fiscal year. Of

the previous fiscal year.

this amount, interest income was ¥235.6 billion, downAfter posting current income taxes of ¥51.5 billion,¥19.6 billion, and fees and commissions fell ¥5.2 billion,¥26.4 billion more than in the preceding fiscal year,to ¥8.6 billion. Other operating income fell ¥2.6 billion, todeferred income taxes amounted to ¥7.3 billion, down ¥8.3

¥13.0 billion, while other income increased ¥4.9 billion, tobillion, and minority interests in net income increased ¥1.0

¥81.5 billion.

billion, to ¥1.9 billion. As a result, consolidated net income

Total expenses were ¥186.0 billion, down ¥9.8 billion.
This amount included interest expenses of ¥117.8 billion,

came to ¥92.7 billion, ¥31.5 billion less than in the previous
term.

down ¥14.3 billion, expenses on fees and commissionsof ¥0.7 billion, increasing ¥0.4 billion, other operating

Consolidated Assets, Liabilities and Equity

expenses of ¥10.7 billion, rising ¥3.5 billion, and general

As of March 31, 2015, total assets amounted to ¥16,360.6

and administrative expenses of ¥43.5 billion, which fell ¥3.8

billion, up ¥49.8 billion from one year earlier. Of thatbillion, as well as other expenses of ¥13.1 billion, whichamount, loans were ¥13,261.3 billion, down ¥577.0 billion.

increased ¥4.3 billion.

The main reason for the decrease in loans was the collec-

Net interest income fell ¥5.3 billion, to ¥117.8 billion,
whereas net fees and commissions decreased ¥5.6 billion,

26

tion of crisis countermeasure loans that DBJ had extended
in the past.

to ¥7.9 billion. We posted net other operating income of

Due to ongoing investment operations, securities¥2.3 billion, down ¥6.1 billion from the preceding fiscal

expanded ¥250.3 billion from the preceding fiscal year, toAnnual Report & CSR Report 2015

¥1,887.9 billion. Call loans and bills bought amounted to31, 2014, and a total amount of ¥30.8 billion, for dividends¥335.0 billion at the end of the term, an increase of ¥248.0

per share of ¥706, resulting in a payout ratio of 25.00%.
The unrealized gain on available-for-sale and othershort-term investments to fill the gap between fund-raising

securities that DBJ holds independently, as well as sharesand investments.

in listed companies that DBJ owns through funds, came toTotal liabilities as of March 31, 2015, stood at ¥13,613.3¥85.8 billion, up ¥48.0 billion compared with the preced-

billion, ¥69.6 billion less than a year earlier. Of this amount,ing term. This amount includes valuation gains on shares indebentures and corporate bonds came to ¥4,569.3 bil-

listed companies.

About DBJ

billion from the previous year. DBJ conducted expeditious

lion, an increase of ¥331.8 billion, and borrowed money
was ¥8,598.2 billion, down ¥584.3 billion. The decrease

Status of Risk-Monitored Loansin borrowed money mainly reflects the collection of crisis

DBJ is not subject to the provisions of the Banking Act

countermeasure loans and, accordingly, lower borrowings

or the Act on Emergency Measures for the Revitalization(two-step loans) from Japan Finance Corporation.

of Financial Functions (Act No. 132 of 1998), but it car-Also, acceptances and guarantees came to ¥167.4 billion,

ries out independent assessments of liability classes andup ¥60.3 billion.

asset categories based on the Financial Services Agency’s

Total equity at the end of the period was ¥2,747.2 billion,

Financial Inspection Manual. According to these results, on

up ¥119.5 billion from one year earlier. The primary reason

a consolidated basis, DBJ’s holdings of disclosed debt (risk-

for this rise was higher net income.

monitored loans) as prescribed by the Banking Act totaled

Also, in June 2014, at DBJ’s General Meeting of¥102.2 billion (down ¥35.0 billion from one year earlier),

Shareholders a resolution was passed to award dividends on

accounting for 0.77% of total loans, 0.22 percentage

common stock. This dividend had a record date of March

points less than at the end of the preceding fiscal year.

Profit and Loss for Past Five Years (Consolidated)(Billions of yen)

For the Year
Ended
March 31,2011

For the Year
Ended
March 31,2012

For the Year
Ended
March 31,2013

For the Year
Ended
March 31,2014

For the Year
Ended
March 31,2015

Gross operating profit

136.7

133.6

128.5

145.3

128.1

Net operating profit (after
addition to the generalprovision for loan losses)

100.0

95.7

74.7

97.8

84.5

Income before income
taxes and minority
interests

104.3

110.2

116.2

166.0

153.6

Total income taxes(1.3)(31.9)(44.5)(40.8)(58.9)Net income

101.5

77.3

71.3

124.3

92.7

Total dividend amount*

50.0

37.3

35.2

30.8

22.5

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

Annual Report & CSR Report 201527

Overseas Business
Since its privatization (conversion to a joint-stock company) in
October 2008, DBJ has worked to make entry into international business, creating an overseas risk management structure for investment and loans, preparing operating bases,
training personnel and moving forward with core infrastructure. At the same time, it is working to expand its networkwith trustworthy partners. Through these efforts DBJ is promoting domestic and overseas financial institutions.
As one aspect of its efforts to build bases overseas, DBJ
established DBJ Singapore Limited in December 2008, andDBJ Europe Limited commenced operations in November
2009. Furthermore, DBJ converted DBJ Investment Consulting(Beijing) Co., Ltd. (formerly DBJ-JAIC Investment Consulting(Beijing) Co., Ltd.) to a wholly owned subsidiary in June 2014.
By maintaining intensive collaboration with its overseas
offices, DBJ is able to provide global financial services thatmeet broad-ranging client needs, as well as support for clients’ overseas operations.

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

December 2008
S$1,000,000
Investment and loan support andadvisory services
Address:
138 Market Street, #15-02 CapitaGreen,
Singapore 048946
Chairman:Kazunari Sasaki
CEO & Managing Director: Katsushi Kitajo

DBJ Europe Limited
Established:
Capital:Business:
Address:
Executive Chairman:
CEO:

November 2009
€7,500,000
Investment and loan support andadvisory services
Level 20, 125 Old Broad Street, London
EC2N 1AR, U.K.
Haruhisa Kawashita
Hiroyuki Kato

DBJ Investment Consulting (Beijing) Co., Ltd.
Established:
Capital:Business:

28

September 2011
¥60 million
Investment and loan support andadvisory services

Annual Report & CSR Report 2015

Address:

Chairman & General
Manager:

Beijing Fortune Building, Suite 814-815,
No. 5, Dong San Huan Bei Lu, Chaoyang
District, Beijing, 100004, P.R.C
Yoshihisa Tsuruoka

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

Initiatives toward the Establishment ofInternational Long-term Financial Markets
In line with the increased globalization of economies andfinance, DBJ considers the establishment of efficient and stable international long-term financial markets to be important.
Based on this conviction, DBJ joined the Long-Term Investors
Club (LTIC), an international platform for financial institutions
that conduct long-term financing in various countries, andthe Long-Term Infrastructure Investors Association (LTIIA).
Established in 2009, LTIC is a global platform for cooperation among financial institutions in charge of long-term
investment in various countries, reflecting change in thefinancial environment after the Global Financial Crisis. The
LTIC promotes functions such as information sharing in
long-term financing, academic study and research, and coinvestment. Since 2014, DBJ has actively supported joint projects between the LTIC and the Organisation for Economic
Co-operation and Development.
The LTIIA is a platform established in 2014 as an institution for offering recommendations on practical issues in relation to promoting infrastructure investment. DBJ participatesin this organization as a founding member. A number ofglobally noteworthy infrastructure investors are also taking
part, thereby encouraging practical measures for the promotion of infrastructure investment.

Group Companies

Japan Economic Research Institute Inc.
The Japan Economic Research Institute primarily conducts
surveys and provides consulting services.
Operating with a long-term perspective and from astandpoint of fairness and neutrality, the institute generates
synergies from its three fields of research—the public, solutions and international arenas—and targets both the public
and the private sectors. The company meets clients’ researchand consulting needs from a comprehensive viewpoint.

DBJ Securities Co., Ltd.

About DBJ

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

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

Outline of Japan Economic Research Institute Inc.

Established:

Established:

December 1989

Capital:¥500 million

Capital:¥480 million

Business:

Securities businessBusiness:

Research, consulting and advisory services

Address:

Chiyoda-ku, Tokyo

Address:

Chiyoda-ku, Tokyo

President & CEO:

Hiroshi Sakamaki

President:

Takashi Ando

October 1998

DBJ Asset Management Co., Ltd.
DBJ Capital Co., Ltd.
DBJ Capital Co., Ltd. has invested in venture enterprisesthat can be expected to achieve high rates of growth, in aneffort to support corporate growth and the creation of new
industries in Japan. In addition to investing, DBJ Capital
employs DBJ’s and various other networks to provide support on the financing front and arrange solutions to meetthe needs of investee enterprises.
Outline of DBJ Capital Co., Ltd.

Established as a real estate fund investment company inNovember 2006, in July 2012 DBJ Asset Management Co.,
Ltd., made a new start as an asset management company
wholly owned by DBJ.
Going forward, the company will operate as a quality
and highly trusted asset management company serving theneeds of long-term investors. In addition to the real estatebusiness, the company will respond to diverse risk capitalrequirements as it contributes to the development andincreasing sophistication of Japan’s financing functions.

Established:

October 2005
(Commenced operations on June 30, 2010)

Capital:¥99 million

Established:

November 2006

Business:

Investment in venture enterprises

Capital:¥100 million

Address:

Chiyoda-ku, Tokyo

Business:

Real estate fund investments, etc.

President & CEO:Fumiyuki Kashima

Address:

Chiyoda-ku, Tokyo

President & CEO:

Suguru Takahashi

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

December 2009

Capital:¥68 million

Business:

Operations related to DBJ’s value-added
equity investment

Address:

Chiyoda-ku, Tokyo

President & CEO:

Hiroshi Murakami

Outline of DBJ Asset Management Co., Ltd.

Value Management Institute, Inc.
In April 2013, DBJ converted Value Management Institute,Inc., to a wholly owned subsidiary. This company plays
research and consulting roles that target both the private
and public sectors in the DBJ Group. The company provides
the solutions to resolve the problems clients face throughindependent knowledge concerning specialization andcompetitiveness.
Outline of Value Management Institute, Inc.
Established:

June 1993

Capital:¥75 million

Business:

Research, consulting and advisory
services

Address:

Chiyoda-ku, Tokyo

President:

Tsuyoshi Inoue

Annual Report & CSR Report 201529

Topics

2014
Apr.
May

Jun.

Aug.
Sep.

Oct.

Dec.

 Expansion of the Regional Areas Genki Program (See page 44.)

 Formulation of DBJ’s Third Medium-term Management Plan (See pages 18–19.)
 Receipt of one of the ADFIAP Awards 2014, for the DBJ Enterprise Disaster Resilience Rated Loan Program, at the
ADFIAP annual meeting Holding of the third DBJ Women Entrepreneurs New Business Plan Competition award ceremony
 Conversion of DBJ Investment Consulting (Beijing) Co., Ltd. (formerly DBJ-JAIC Investment Consulting (Beijing) Co.,
Ltd.) to a wholly owned subsidiary (See pages 25 and 28.)

 Announcement of Capital Investment Planning Survey (nationwide and by region) results (See page 59.)

 Establishment of the Initiative for Creating Regional Futures (See page 56.)
 Establishment of the Regional Revitalization Program (See page 56.)
 Symposium held to commemorate the 50th anniversary of establishment of the Research Institute of Capital
Formation

 Opening of PPP/PFI Academy (See pages 56 and 82.)
 Issuance of DBJ Green Bonds
 Announcement of Recommendations on Regional Revitalization (See pages 56-57.)

 Formation of the Funding to Support Reconstruction and Growth Following the Great East Japan Earthquake(See pages 53 and 87.)
 Participation in and presentation at Japan’s largest environmental exhibition, Eco-Products 2014 (14th consecutiveyear) (See page 68.)

2015
Mar.
May

Jun.

30

 Holding of the Third UN World Conference on Disaster Risk Reduction Public Forum (See page 54.)

 Enactment of the Act for Partial Amendment of the Development Bank of Japan
Inc. Act (See pages 22-23.)
 Establishment of Special Investment Operations (See pages 22-23, 36 and 71.)
 Establishment of the Social Value and Capital Formation M&A Awards
 Receipt of one of the ADFIAP Awards 2015, for DBJ Green Bonds at the ADFIAP
annual meeting (See page 69.)

 Holding of the fourth DBJ Women Entrepreneurs New Business Plan Competition
award ceremony (See page 48.)
 Establishment of the Growth Co-creation Facility (See page 36.)

Annual Report & CSR Report 2015

DBJ’s Businesses

To resolve the various issues that society faces
and become its clients’ most supportive financial
institution, DBJ supplies long-term funds andprovides risk capital, supports the formation ofbusiness and provision of information and takesa host of other approaches to ensure that usefulprojects operate smoothly. We are committed tocreating financial markets that allow funds to beraised more efficiently and, in recent years, we havedeveloped and introduced new financing methods
to expand the functions of financial markets.
Integrated Investment and Loan Services  .  .  . 32
Investments and Loans  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 34
Consulting/Advisory Services  .  .  .  .  .  .  .  .  .  .  .  .  .  . 46
Crisis Response Operations  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 50
Initiatives Related to theGreat East Japan Earthquake  .  .  .  .  .  .  .  .  .  .  .  .  . 53
Regional Revitalization Initiatives  .  .  .  .  .  .  .  .  . 56
Making Use of Information Functions  .  .  .  .  .  . 58

Annual Report & CSR Report 201531

Integrated Investment and Loan Services

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

DBJ
DBJ Green
Environmentally Building
Debtor-inRated Loan Certification
Possession(DIP)
ProgramFinancing
Structured
DBJ Enterprise
Financing
Disaster
Resilience Rated
Loan Program
Syndicated
Loans
Loans
DBJ Visionary
Provision of medium- andHospital
long-term financing, as well as
Programstructured financing and otherMezzanine Financing
forms of structured subordinated
DBJ Employee’s
Health Management
Rated Loan Program

Equityfinancing

Investment

Hybrid Financing

Provision of mezzanineand equity financing

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

LBOs/MBOs

Integrated Investment and Loan Services
M&A Advisory
Services

Consulting/Advisory
Services
Arrangement of structured

Publicfinancing, provision of M&A
Assetadvisory services, applying DBJ’s
Management industry research function andexpertise in environmental andtechnology evaluations

DBJ Asia
Financial
Support The DBJ Women
CenterEntrepreneurs
Center(DBJ-WEC)The Otemachi
Innovation Hub(iHub)

Support Center
for Technology
Management

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

32

Annual Report & CSR Report 2015

Consulting/
Advisory Services

Investment

DBJ provides financing tomeet the diverse
needs of its clients.

DBJ provides investment
funding, based ona long-term perspective, tomeet specific needs
and address a host of issues
that clients face.

Through its advisory support
services, DBJ helps clients
become more competitiveand invigorate regional
economies.

 Provides medium- and long-term

 We provide investment to assist

 Provides M&A advisory services

loans

businesses in terms of growthstrategies, business restructuring,international competitiveness andinfrastructure operations. We provide such funding through mezzanine financing, as well as throughequity and other funding.

 Makes proposals that apply its

Loan Amounts Provided(Non-consolidated) (Flow base)

Investment Amounts Provided(Non-consolidated) (Flow base)

M&A Advisory and Consulting Agreements(Non-consolidated) (Cumulative)(Billions of yen)
4,000(Billions of yen)
320

(Agreements)
400

 Offers unique high-value-added

financial services (DBJ Environmentally Rated Loan Program andother loans based on evaluations
and certifications)

DBJ’s Businesses

Loansexpertise in industry research andability to develop new financial
technologies
 Arranges structured and othertypes of financing

 Responds to diverse needs by offer-

ing non-recourse loans and develops and provides financing offeringcollateral and structural flexibility(debtor-in-possession financing,
inventory collateral, intellectual
property rights as collateral, etc.)

281.4

347
318

3,000

300

240

2,805.1292

2,524.5
2,262.7
2,000

160
127.8

1,000

138.2

100

80

0

0

0
Year ended
Year ended
Year ended
March 31, 2013 March 31, 2014 March 31, 2015

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

200

Year ended
Year ended
Year ended
March 31, 2013 March 31, 2014 March 31, 2015

March 31,2013

March 31,2014

March 31,2015

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

Annual Report & CSR Report 201533

Investments and Loans
DBJ provides medium- and long-term loans, meeting a host of client needs. In addition to senior loans—traditional corporate loans—we offer a range of other loans that employ advanced financial methods, such as project
financing, non-recourse loans and other types of structured financing, meeting diversified needs for funding.
We also work to resolve client issues involving business expansion and support strategies and the formationof financial infrastructure. We achieve these goals by supporting the creation of funds, as well as mezzanine,
equity and other financing methods, providing appropriate risk capital based on a long-term perspective.
The case study section on pages 70 through 89 introduces DBJ’s “CSR through Investment, Loan and Other
Businesses.”

Loan Procedures
DBJ is ready at all times to discuss with its clients optimal

Financing terms are discussed after DBJ has conductedfinancial solutions, as well as the specific terms and conditions

comprehensive due diligence of the businesses of its client

DBJ can offer, including interest rates and loan maturities.

enterprises, including assessment of their present businessstatus, project plans and profitabilities.

Financing Conditions• Loan Amounts• Interest Rates

Loan amounts are determined through consultation

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

risk. Fixed- and floating-rate loans are both available.
DBJ also considers the application of various interest• Loan Terms
Appropriate loan terms are set in consultation with

rate subsidy programs.

our client enterprises according to factors such as• Collateral/Guarantees

repayment plans, business profitability and theLoans may require collateral and/or guarantees,

expected life of equipment and/or facilities. Gracedepending on due diligence results.

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

Medium- to Long-Term Loans
By leveraging the long-term financing expertise it cultivatedbased on the profitability of the business that requires fund-as a policy-based financial institution, DBJ provides loans

ing. DBJ also works to meet the varied needs of our clients,

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

such as by introducing grace periods.

needs. Medium- to long-term repayment may be proposed

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

34

Annual Report & CSR Report 2015

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

We provide information generated
through our various studies andresearch activities, as well as information from overseas, throughour reports and other publications.

Mezzanine Financing
Mezzanine financing is an intermediate financing method

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

in terms of risk.

Such financing also prevents dilution of the voting rights ofexisting shareholders. Redemption and exit methods can be

Although mezzanine financing is comparatively risky

set to be flexible.

because its payment is subordinated to senior loans, it

From a long-term perspective, DBJ helps clients resolve

plays an important role in markets such as the United

their balance sheets issues through total financing solutions

investment appetites. One of a diverse range of fundingthat range from structuring and arrangement to providing

methods, mezzanine financing helps to ensure economicrisk capital.

DBJ’s Businesses

States which have a broad range of investors with diverse

rationality by setting adequate interest rate and dividendlevels to correspond to the investment risk. Depending on
clients’ financing plans and capital policies, flexible mezzanine financing can be set. In recent years, demand formezzanine financing has grown in association with business

Types of Mezzanine Financing• Subordinated loans, subordinated bonds• Preferred shares, classified shares• Hybrid financing, etc.

acquisitions, spinoffs of subsidiaries and business units,business succession and listed companies that are delisting.

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

After capital expansion

Objective
Debt

Debt
AssetsAssetsPreferred shares

CapitalCapital

A company in a state of undercapitalization,
resulting from posting extraordinary losses
caused by past restructuring, could resolve
the issue by issuing preferred stock.

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

Recipient company

Debt

CapitalTargetbusiness

Acquisition of
non-core business
(MBO)

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

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

New company (recipient)Objective
Debt

Note: Successor acquiresNcommon stock

AssetsCapitalDebt

Business succession

AssetsPreferred shares

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

CapitalAnnual Report & CSR Report 201535

Equity
The needs for growth through such initiatives as new busi-

research and financing technologies, helping clients maximize

ness creation, business restructuring, M&A activity andtheir long-term corporate value. In fiscal 2010, DBJ enhanced

adaptation to globalization are on the increase. Against thisits “added-value creative equity financing to support corporate

backdrop, the necessity of corporate governance is propor-

growth strategies (“Value for Growth” Investment Program).”tionately rising. In turn, holding equity has become more

This approach aims to realize the corporate growth strategies

important than ever before in corporate management.

(M&A, capital and overseas) of the Japanese entities receiving
the equity investment. Its aim is to support corporate value

Through equity investment, DBJ helps clients address theenhancement over the medium to long term.

issues they face and supports their long-term development.
After making equity investments, DBJ provides total solutions
involving its networks and strengths in information, industry
Client Needs• Initiatives targeting new
business creation, businessrestructuring and M&A
activity• Response to globalization• Meeting corporate
governance requests

Through equity investment, DBJ shares in its clients’ growthand successes, contributing to a more prosperous future.

DBJ’s Solutions

Results• Injection of growth capital
Inject capital into individual enterprises, specialpurpose companies, various funds, etc.
• Globalization measures
Support Japanese enterprises’ efforts to expand
overseas; help non-Japanese enterprises toexpand in Japan’s markets• Post-investment provision of solutions
Provide total solutions involving DBJ’s networks
and strengths in information, industry research
and financing technologies• Resolve clients’ issues• Help clients grow over thelong term and maximize
corporate value

Providing Growth Capital
As DBJ is expected to cultivate providers of growth capi-

businesses, financial institutions and investors.

tal for Japan and accelerate the creation of markets for
growth capital*, in addition to focusing on such statutory
operations as Special Investment Operations, we havetaken the independent initiative of establishing the Growth
Co-creation Facility. This facility promotes shared risk-taking
in a wide range of growth investments among Japanese* According to the Japanese government’s Study Panel Concerning
the Promotion of Expanding Growth Funding, for the foreseeable
future DBJ is expected to serve a pump-priming function to attract
private-sector investment by cultivating new capital providers,markets and investors, fostering the development of an investment
cycle led by the private sector.

DBJ’s Provision of Risk Capital
Promoting shared risk-taking among Japanese businesses, financial institutions and investors

Statutory operations◆ Special Investment Operations▶ Effective use of management resources tocultivate new business▶ New business development by forging links

with other sectors
Also, with regard to growth investment:● Initiatives that help to reinforce corporate
competitiveness● Initiatives that contribute to regional
revitalization● Initiatives that contribute to the supply of
capital by financial and other institutions
Provision of risk capital for growthinvestment initiatives that arecommencing

Independent initiatives◆ Growth Co-creation Facility▶ Forward-looking initiatives to prepare for

future growth capital
Capitalization strategy▶ Initiatives for accumulating investor
capital● Formation of collaborative funds withfinancial institutions● Asset liquidation●

Provision of risk capital as part ofinitiatives for future growth capital

Cultivation of providers of Japanese growth capital,creation of markets for growth capital

36

Annual Report & CSR Report 2015

Further acceleration

DBJ provisioning of
seamlessly integrated
investment and loan
services, focused inparticular on the provisionof risk capital■ Support for efforts that
resolve issues from along-term perspective■Structured Financing, Financial Technologies
Structured Financing
In 1998, DBJ pioneered project financing in Japan. From

 Object Financing

these beginnings, our accumulated expertise in this area,

DBJ helps clients determine optimal financing methods

centering on energy and infrastructure projects, has pro-that take advantage of the cash flow-generating char-pelled us to our current position as one of Japan’s leaders inacteristics of assets with special features, such as ships,

project financing, including private finance initiatives (PFIs).

airplanes and railcars, as well as supporting their efforts
to control risks.

DBJ’s Businesses

Since its privatization (conversion to a joint-stock company) in October 2008, DBJ has maximized its uniquecharacteristics to meet Japanese enterprises’ increasingly

 Securitization

diverse and global needs. We provide all-around support by

Through finance methods such as liquidation and secu-

offering project finance, PFIs, object finance, securitization

ritization of receivables focusing on their future cash

and various other financial products and optimal financing

flows, and through whole business securitization inmethods (senior loans, mezzanine loans, equity, etc.) to ourwhich debts are repaid through future cash flows gener-

clients both in Japan and overseas.

ated by a particular business, DBJ supports its clients’finance strategies and helps optimize their funding.

 Project Financing
We have a wealth of expertise in helping enterprises in PPPs and PFIs

the energy and infrastructure sectors—primarily withSince the Japanese government’s enactment of the PFI

regard to large-scale projects—find project financing that

Act* in 1999, DBJ has taken advantage of its strong rela-they can repay through project cash flow, without relying

tions with public-sector entities to accumulate expertiseon specific corporate creditworthiness or collateral value.

and become an industry leader in such schemes, provid-

Such finance solutions we provide help them raise funds

ing PFI support to numerous clients. Expectations forand support their efforts to control risks. In recent years,

PFIs are growing, and amendment to the PFI Act in 2011in addition to arranging project financing and providing

marked the introduction of concession-type PFIs. In thisfinancing for domestic solar and wind power generation

environment, we provide numerous types of support toprojects, DBJ has been proactive in its financing of energy

help clients in Japan and overseas to resolve the issues

and infrastructure projects overseas.

they face.
* Act on Promotion of Private Finance Initiative

Project Financing Example: Electric Power Generation Project
Electric power supply
contract (15 years)

Sponsor A

FundingSponsor B
Banking Syndicate

Electric powercompanies andpower producers
and suppliersElectric Power
Generation Company
Special-Purpose
Company (SPC)

Financing

Trading companies
Fuel (coal, gas)
supply contract

Construction contract

Operational repair and maintenance contract

Joint ventures (construction companies,
electrical equipment manufacturers)

Operations and maintenance service
providersAnnual Report & CSR Report 201537

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

Our track record, expertise and networks in this arena

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

solutions.

beginnings and continue striving to invigorate this market.
Liquidization Financing

Development Financing

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

Example: Use investor financing to develop idle owned
real estate into income property

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

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

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

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

parties realize profits

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

require that funds be raised to acquire an operation. For

businesses using borrowed money. If the enterprise or busi-

this reason, an MBO may take the form of an LBO. In theness that is being acquired generates fixed cash flows, theevent that borrowed funds alone are insufficient, the man-acquirer (typically, the sponsor providing equity) can pur-agement team may look to and partner up with a buyoutchase the business or enterprise for relatively little cash. For

fund for equity as a joint sponsor. In recent years, MBOs

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

have been used more frequently by listed companies thatthat multiplies the return on the purchaser’s funds. As LBOs

are delisting and by owner-operated enterprises.

typically involve large amounts of borrowings, the underlying business needs to generate steady cash flows.
Management buyouts (MBOs) involve the acquisition bydetails, arranges investment and mezzanine financing, andworks out joint equity financing with sponsors. The ability

the existing corporate management of a company’s shares

to handle this range of activities allows DBJ to offer

or operations. As the existing management team typically

LBO/MBO solutions.

has a limited amount of cash available, MBOs generally38

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

Annual Report & CSR Report 2015

Syndicated Loans
This type of loan involves multiple financial institutions

expeditiously. The number of financial institutions involvedthat are combined into a syndicate under a lead-managing

in the transaction can be increased by the arranger’s

financial institution (an arranger). The agreement withappointment, and clarity of borrowing terms is ensured.

the client is based on a single contractual document, andAs part of its services, DBJ actively structures loans,financing is provided cooperatively according to a single set

centering on term loans. DBJ invites a wide range of finan-of terms. There are a number of clear advantages on the cli-cial institutions to participate, making use of its neutral

ent side in this type of loan. Having a single arranger in thestandpoint. Structuring loans to include some items frompoint negotiating position with financial institutions reduces

its own lending menu, such as the DBJ Environmentally
Rated Loan Program, helps raise the value-added level oftions through that agent. Large amounts can be raised

the services it provides.

Arranger

Financial
Institution

Financial
Institution

Financial
Institution

Financial
Institution

Financial
Institution

MarketArrangement

Appointment

ClientFinancial
Institution

DBJ’s Businesses

the burden for client, as does conducting settlement opera-

Asset-Based Lending
Asset-based lending (ABL) is a method of financing thatAs a front-runner, DBJ has gained abundant experi-

uses as collateral an enterprise’s liquid assets, such asence in corporate revitalization financing. In order to bothaggregate movable property, inventory collateral andachieve the goals of supporting enterprises and secureaccounts receivable. Customers can take advantage oflender’s claims, DBJ has developed and put into use ABL

this method to diversify financing methods and carry out

schemes. Going forward, we plan to apply this expertise

expeditious fund-raising, debt restructuring and the sale of

to develop ABL schemes that provide enterprises withsurplus inventories, as well as to enhance the robustness ofgrowth capital.

internal control systems.

ABL

ClientInventory
Sale

Accounts Receivable

Cash and Equivalents

Collateral Transfer(Buyer)Third-Party
Borrower

Liquidate Inventory
Sell inventories, primarily throughexisting wholesale routes

Collateral Transfer
PledgeDBJ
Valuation(Inventory) Provisional valuation of
inventory, taking into account suchfactors as the gross margin calculated
according to past sales performance(Accounts Receivable) Valuation basedon the diversity and reliability of
individual receivables
Management
Monthly valuation of inventories andaccounts receivable

Annual Report & CSR Report 201539

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

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

needed to implement restructuring plans. By providing

Against this backdrop, DBJ has developed a host of tools to

medium- to long-term financing to fund capital investment

help underperforming enterprises sustain or develop profit-

under different conditions than those for revitalization plansable areas of operations. One method of which DBJ is a pro-that are being implemented, an organization that is underponent is early-stage debtor-in-possession (DIP) financing.

rehabilitation can refinance its debt, providing exit financing

This temporary financing method provides working capital

more quickly than is possible via the legal liquidation process.

that allows a company in bankruptcy to continue operations

In 2001, DBJ provided the first DIP financing in Japan.

during the period between a request for the application ofSince that time, DBJ has worked to broaden the range

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

employing it in response to varied needs.

Capital requirements

Bankruptcy( priority obligation)
Common debts

Working
capitalFunding for
restructuring

Bankruptcy( priority obligation)

Funding forequipment andother items

Exitfinancing

DIP financing
Proceduralapplication

Decision to start

Early stage

40

Annual Report & CSR Report 2015

Approval of plan

Conclusion of plan

Later stage

Certification and Unique Programs
DBJ Environmentally Rated Loan Program

Program logo

we substantially revised the evaluation items based on our
10-year track record in these evaluations and a growinginterest in incorporating non-financial information as elements of corporate value.
Also, employing the experience we gained through the
DBJ Environmentally Rated Loan Program, in fiscal 2009 webegan offering a service to help regional banks develop evaluation tools to use in performing their own environmental
ratings. Through such initiatives, we aim to augment environmental financing and encourage its proliferation in Japan.

DBJ’s Businesses

Beginning with the antipollution measures implemented in
the late 1960s and early 1970s, DBJ has provided more than
¥3 trillion in investments and loans for environmental measures over the past 40 years.
In fiscal 2004, DBJ began its DBJ Environmentally Rated
Loan Program based on knowledge cultivated for nearlyfour decades. DBJ developed a screening (rating) systemthat scores enterprises on the level of their environmental
management and then sets financial conditions based onthese evaluations. This was the world’s first incorporationof environmental ratings in financing menus. In fiscal 2014,

Features• Varying interest rate levels based on environmental ratings• Fair and neutral evaluation based on global environmental trends
Based on information exchanges with the United Nations
Environment Programme Finance Initiative (UNEP FI) andthe Ministry of the Environment, DBJ developed a screening
sheet containing approximately 120 questions.
DBJ convenes an Environmental Ratings Advisory
Committee after seeking advice from outside experts;
screening questions are renewed annually.
• Ratings determined through interviews with clients• Applicability to a wide range of clients

DBJ Enterprise Disaster Resilience Rated Loan Program
DBJ’s financing track record includes schemes supporting
disaster-resilient city planning and the recovery of disasterstricken areas through anti-disaster measures and financing
related to disaster recovery. In addition, from the standpointof business continuity management (BCM) DBJ assists clients’total enterprise risk management efforts, including the formulation of business continuity plans, the earthquake-proofing of facilities and the preparation of IT backup systems.
At the same time, DBJ offers financing methods to provide
restoration funds needed in time of disaster. DBJ Enterprise
Disaster Resilience Rated Loan Program is employed in evaluations to identify enterprises engaged in high-level initiatives
and anti-disaster and business continuity measures and provide them with preferential interest rate financing as a reward
for their excellent disaster preparedness. Financing conditions
are set on the basis of the evaluations. In this manner, we

Program logo

introduced the world’s first BCM-based financing method.
We revised our evaluation contents substantially in 2011as a result of the Great East Japan Earthquake. Enterprisebusiness continuity activities are assessed comprehensively,
including in terms of strategies for resiliency and systems forrecovering in the event a crisis materializes.
The DBJ Disaster Preparedness Ratings both (1) are expressions of evaluation results and (2) promote broad awareness of the concept of BCM. Aiming to realize the goal of a“resilient Japanese society through BCM ratings,” in 2012 wechanged the name of these ratings to the “DBJ Enterprise
Disaster Resilience Rated Loan Program.”
We will continue to promote enterprise risk management
and business continuity through the DBJ Enterprise Disaster
Resilience Rated Loan Program.
Features• Varying interest rate levels based on BCM ratings• Fair and neutral evaluation based on global crisis management trends
Based on information exchanges with the Japanese
government’s Cabinet Office, the World Economic Forum, theUN World Conference on Disaster Risk Reduction, NPOs andother experts, DBJ developed a screening sheet containing
approximately 100 questions.
DBJ convenes a BCM Rating Advisory Committee after seeking advice
from outside experts; screening questions are renewed annually.
• Ratings determined through interviews with clients• Applicability to a wide range of clients
Annual Report & CSR Report 201541

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

social conditions as a backdrop, the DBJ Employee’s Healthintroduced a special health checkup system, and in December

Management Rated Loan Program aims to popularize and pro-2015 it will become obligatory for businesses to evaluate

mote the concept of health management. DBJ has applied to

employee stress levels. This is one example of the growing

take on Ministry of Economy, Trade and Industry (METI) survey

importance being placed on maintaining the health of corpo-

operations. As part of this effort, we use an evaluation system

rate employees. As Japan’s working population is expectedthat we have developed to assess enterprises and select thoseto shrink, achieving higher levels of human productivity

that are superior in terms of their consideration for employee

has become an issue of growing importance. With these

health and offer them financing terms in line with their assessment levels. DBJ is the first institution in the world to offer afinancing menu incorporating employee health management
ratings.

Program logo

Features• Varying interest rate levels based on Employee HealthManagement Ratings• Formation of the Health Management Consortium,
consisting of institutions focused on preventive healthcare
and development of screening sheets to promote the HealthManagement Project as an ancillary activity for METI
• Ratings determined through interviews with clients• Applicability to a wide range of clients

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

consciousness, disaster prevention and business continuity

ing attention for the role they play as bases for safetymeasures), offering them a financing menu with financ-and security in regional societies. In May 2012, we intro-

ing terms set according to their assessments. Through thisduced the DBJ Visionary Hospital Program to support themeasure, DBJ supports hospitals’ efforts to continue pro-advancement of medical functions, as well as to encour-viding good healthcare in regional societies.

age proactive environmental consciousness, disasterprevention and business continuity measures. For institutions that have had their hospital functions certified by
the Japan Council for Quality Health Care, DBJ uses theenvironmental assessment and BCM evaluation system it
developed to certify hospitals as DBJ Visionary Hospitals(namely, those that have in place superior environmental

Evaluation of a
Medical Institution’s
Hospital Functions

Features• Interest rate levels that vary based on the DBJ
Environmentally Rated Loan Program and DBJ Enterprise
Disaster Resilience Rated Loan Program•C ertified hospital’s environmentally conscious initiatives anddisaster-preparedness measures that are expected to create
broad appeal for regional societies

Hospital functions certified by
the Japan Council for Quality
Health Care (JCQHC)

Certified as a

DBJ
DBJ Visionary Hospital
Environmental
Ratings
DBJ Enterprise

Evaluation of medical
institution’s CSR
responses

42

Annual Report & CSR Report 2015

Disaster
Resilience
Ratings

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

DBJ Green Building Certification
Applying the expertise and networks accumulated overand logistics, in November 2014 we added an edition formany years of real estate financing, DBJ inaugurated DBJ

commercial facilities, followed by the January 2015 addition

Green Building Certification in fiscal 2011. This certifica-of a residence edition. These changes increased to four thetion program provides investment and loan support for realtype of properties eligible for certification. Going forward,

estate development, refurbishment and other activities of

we aim to foster a correlation between a building’s certifi-clients that own or manage real estate that evinces envi-

cation ratings and its economic value, creating a market inronmental and societal considerations (green buildings).

which green buildings are valued appropriately.

Through this program for evaluating and certifying theranging IR, PR and CSR aspects of our clients’ real estatebusinesses.
In March 2013, we commenced the joint operation ofthis certification system with Japan Real Estate InstituteFeatures• Takes into account initiatives requested by a variety of
stakeholders in addition to environmental performance• Provides five levels of certification based on scoring results• Allows a lineup based on facility upgrades, operational
improvements and various other proactive client measures

DBJ’s Businesses

sustainability of real estate, we contribute to the broad-(JREI). In addition to existing editions for office buildings

Overview of the DBJ Green Building Certification
Evaluation
Items

Real estate evincing environmental and societal considerations, evaluated in terms of the following three characteristics

Amenity, Diversity &Risk Management

Ecology
Reducing the burden buildings place on
the environmenttBuilding’s energy-saving performance
initiatives toward the conservation of
resourcestProduction and use of renewableenergy, etc.

+

Diversity in supply of comfort/Safety
and securitytComfortable facility specifications;equipment that is convenient forpeople who use the buildingtBuilding disaster performance,
security, etc.

Community & Partnership+

Relationships with stakeholders andsurrounding communitytRelationships with the surrounding
environment and regiontCommunication between owners,
stakeholders, etc.

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

Properties with thehighest level
environmental & social
awareness

Properties withexceptionally highenvironmental & social
awareness

Properties withexcellent environmental& social awareness

Properties with highenvironmental & social
awareness

Properties with
sufficientenvironmental & social
awareness

Annual Report & CSR Report 201543

Regional Areas Genki Program
Facing the challenges of population constraints, financial

To further promote these initiatives, DBJ has partiallylimitations, environmental restrictions and global competi-

revised the content of programs set by each of its branchtion, Japan’s regions must coordinate with one another andoffices and has adopted as a nationwide theme the concept

implement diverse regional development schemes that capi-of “enterprises that contribute to the region.”*2 By further

talize on their respective strengths, competitive advantages

bolstering activities on the financial and information fronts

and latent potential.

for enterprises that contribute to their regions, DBJ is help-

In 2010, DBJ arranged a unique initiative, the Regional
Areas Genki*1 Program, to support regional growth thating to foster a virtuous circle of genki between regions andenterprises.

capitalizes on each region’s respective strengths and potential from information and funding aspects. In addition,
each DBJ branch office focuses on its region’s distinctive
fields and businesses, based on its industrial structure, andpartners with regional financial institutions to offer financial
support.

*1 The Japanese word genki implies a positive spirit and good health.
*2 Enterprises that contribute to the region: Enterprises that create
employment opportunities and utilize the region’s personnel
and resources, effectively employing people, physical goods andmoney for the good of the region, including increasing its productivity.

 Regional Areas Genki Program
Niigata Area
Promotion of value-added
strategies in food andmanufacturing
Promotion of safety andsecurity in regional
development

Q

Hokkaido Area
Strengthening of the foodvalue chain to drive growth
Development of the tourism
industry by communicating
the area’s attractions
Creation of an environment
and the infrastructure to
support ongoing growth

Tohoku Area

Q

Q

Q

Q

“Creation of new industry in
Tohoku” programQ

Hokuriku Area

Kanto-Koshin Area
Q

Hospitable, technological andphysical support for the
Hokuriku areaQQ

Chugoku AreaQ

“Three arrows” to invigorate
the Chugoku areaQ

Kyushu Area

New market-creation
businesses that fully leverage
population/industry
concentrations
Construction and renovationof infrastructure in responseto regional conditions
Businesses in manufacturing
regions that boost
competitiveness in response
to globalization

Tokai Area

Enhancing the regional
competitiveness of the
Kyushu region as the doorto Asia
Creating a new growthengine for the Kyushu region
Increasing the competitivenessof enterprises in the area withunique growth strategies

Q

Q

Q

Q

Q

Q

Program to support thecreation of next-generationindustries
Program to support thegrowth of core value chain
enterprises
Program to support measures
to prepare for a massive
earthquake in the Nankai
TroughKansai Area
Shikoku Area
QMinami-Kyushu Area
Project to promote
Minami-Kyushu as anadvanced region in food,health and environment/energyQ44

Annual Report & CSR Report 2015

QQProgram for evolving Shikoku
enterprises at the top of theirnichesProgram to help strengthen
the shipbuilding cluster
Program to support measures
to prepare for a massive
earthquake in the Nankai
TroughQ

Q

Leading-edge manufacturingindustries
Program to support theinvigoration of commerceand distribution

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

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

promote specific industries. Alternatively, they may target

thereby reducing the interest burden on the borrower.

operators of specific businesses. Under these programs, theInterest Rate Subsidy Program Menu
DBJ’s Businesses• Interest rate subsidy programs that support therevitalization of regional communities
These interest rate subsidy programs are provided tobusinesses endorsed by the Japanese government in linewith the regional revitalization plans of regional municipal bodies certified by the Japanese government.
• Interest rate subsidy programs for the development ofregional telecommunications and broadcasting businesses
These interest rate subsidy programs can be used by clients
pursuing regional telecommunications or broadcasting businesses in accordance with legally prescribed guidelines.
• Interest rate subsidy system for internationallystrategic comprehensive special zones; interest rate
subsidy system for comprehensive special zones
targeting regional revitalization
These interest subsidy systems target operations endorsedby the Japanese government in line with plans for comprehensive special zones of regional municipal bodies certified
by the Japanese government.
• Interest rate subsidy system for special zones for reconstruction
This interest rate subsidy system targets operations
endorsed by the Japanese government in accordance withthe reconstruction plans of regional municipal bodies certified by the Japanese government in the areas identified in
the Law for Special Zones for Reconstruction (227 towns
and cities).
• Interest rate subsidy programs for Crisis Response Operations
These interest rate subsidy programs can be used by clients
who have sustained damage during a crisis certified assuch by the Japanese government and who meet program
requirements. At present, such subsidies are being provided to clients affected by the Great East Japan Earthquake.

• Interest rate subsidy programs for the promotion ofenvironmentally conscious management ratings
These interest rate subsidies are for fixed investment
and the promotion of research and development toprevent global warming, and target enterprises involvedin businesses working toward the reduction of energyderived CO2 emissions, thus qualifying for the DBJ
Environmentally Rated Loan Program, and that havepledged to improve unit CO2 emissions or reduce overall
CO2 emissions within a certain period of time.
• Interest rate subsidy programs to fund domestic
oil and natural gas development (continental shelfinterest rate subsidy)
These interest rate subsidy programs can be used by enterprises
involved in oil or natural gas development businesses in Japan.
• Interest rate subsidy programs to fund fixed investment for using natural gas and other resources (natural gas and other resources interest rate subsidy)
These interest rate subsidy programs can be used byenterprises that are making fixed investment involving
the use of natural gas and other resources.
• Interest rate subsidy programs to fund specific andother facilities related to the rationalization of energy
use and to promote the introduction of special equipment (energy conservation interest rate subsidy)
These interest rate subsidy programs can be used by enterprises that are promoting the conservation of energy by acertain amount.
• Interest rate subsidy programs to fund effective
resource use and other activities
These interest rate subsidy programs can be used by enterprises that are using resources at highly effective levels.

Crisis Response Operations
Crisis Response Operations, on the basis of the Japan Finance

Thereafter, the Lehman Shock and the Great East

Corporation Act (Act No. 57 of 2007, including later revisions)Japan Earthquake occurred, and the Japanese government

consist of the provision of necessary funds during such crises

called on DBJ to steadily mount large-scale Crisis Response

as disruptions in domestic or overseas financial markets or

Operations. Due to these crises, the DBJ Act was revised

large-scale disasters. In response to crisis-related damage,

twice. By accepting an additional capital increase from theJapan Finance Corporation provides two-step loans as com-

Japanese government, DBJ was able to create sufficient prep-

plementary risk and other measures to government-designat-

arations and smoothly conduct Crisis Response Operations.

ed financial institutions (designated financial institutions) that

The 2015 revisions to the DBJ Act evaluated the role

supply necessary funds to address crisis damage.

DBJ has played through its Crisis Response Operations andAt the time of its establishment, DBJ was designated asabsence of private-sector financial institutions following thesuch a financial institution, as was Shoko Chukin Bank Ltd.

Lehman Shock and the Great East Japan Earthquake. DBJ

In accordance with this designation, DBJ commenced its

became obliged to implement Crisis Response Operations

Crisis Response Operations in October 2008.

for an indefinite period. (See pages 50–55.)
Annual Report & CSR Report 201545

Consulting/Advisory Services
We offer consulting and advisory services and make use of networks with allied financial institutions. Throughour consulting and advisory support services, we help clients in various industries and of various sizes become
more competitive and contribute to the vigor of regional economies.
Our consulting and advisory services are backed by the know-how we have built up through our structured
and other types of financing, our M&A advisory services and our provision of expertise on industry researchand environmental and technical evaluations. We apply this accumulated expertise to help clients resolve theissues they face.
The advisory services case studies on page 73 introduce DBJ’s “CSR through Investment, Loan and Other
Businesses” approach.

M&A Advisory Services
As corporate development options diversify, M&A activity

better employment stability and a stronger competitive posi-

is growing more prevalent amid the expansion of businesstion. Amid growing interest in M&A activities in Japan andoverseas, both for businesses restructuring operationally andoverseas, DBJ provides advisory services through its own

for industry restructuring overall. Mergers and acquisitions

networks. We offer comprehensive M&A solutions thatcan be a method for achieving higher business efficiency,

match clients’ varied needs and management strategies.

M&A Advisory Service Characteristics• Partners
DBJ is thoroughly client-focused and takes a long-term
perspective, working with clients to help them realize
the visions they have set for themselves.
• Brand
DBJ is a unique and trusted financial institution thathas built up its brand over many years of financing andexperience in providing project support and maintaining relations over the long term.

• Knowledge
DBJ has developed deep insights into a broad range
of industries by virtue of its provision of financing overmany years, as well as analytical capabilities and theability to maintain strategy that is unaffected by shortterm movements.
• Network
DBJ maintains close relationships with overseas financial institutions, domestic regional financial institutions,accounting and legal firms, and government institutions both in Japan and overseas. Such relationships
enable us to build networks to accumulate accurate
information.

M&A Advisory Services
Consulting
Formulation of
acquisition andselling strategies

Buy Side

Buy Side

Select and analyze
acquisition
candidateContact andnegotiate withacquisition
candidateMarket analysis

Sell Side

Sell Side

Select and analyze
potential acquirer

Contact andnegotiate withpotential acquirer

Data gathering46

Annual Report & CSR Report 2015

Execution

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

Advise oncontract
negotiations
Process
management

CLOSING

Performance
analysis

Matchmaking

The Otemachi Innovation Hub (iHub)
In April 2013, we opened the Otemachi Innovation Hubawareness of issues and conditions within individual regions(iHub) within DBJ’s headquarters building. This organiza-with open innovation activities involving diverse partners, suchtion is designed to set the foundations for resolving societal

as enterprises, government offices and regional municipal bod-

issues by leveraging DBJ’s neutrality and extensive network

ies. Key activities include a healthcare-related symposium inand combining this with dormant corporate expertise,

Kansai, an activity in Hiroshima aimed at creating “constructive

thereby serving as a new “opportunity” for value creation.

new ideas,” and “iHub Creating Regional Prospects,” a video-

To contribute to regional revitalization, in fiscal 2014 iHub

conference linking DBJ’s head office with five other locations

pursued regional developments that sought to combine anthroughout Japan in a workshop aimed at co-creation.

RegionDate
May 2014

Kanto/Tokyo
Hokuriku
ToyamaHamamatsu
Tokai
Kansai
Hiroshima
Kochi
KyushuDecember 2014
From December 2013
November 2014, May 2015
February 2014
June–October 2015
From December 2013
February 2014
June–October 2014,
June–September 2015
May–September 2015
From December 2013

DBJ’s Businesses

Typical Examples of iHub Regional Developments
Theme
Workshop for employees of regional municipal bodies
iHub Creating Regional Prospects (held via a videoconferencing
system connecting five locations across Japan)
Participation in the Hokuriku regional alliances platform
Workshop entitled “Eliciting Dormant Expertise in Toyama”
Opportunity to introduce new businesses generated by the region
Opportunity for new value creation by Tokai B2B enterprises
Healthcare
Workshop on creating new businesses
Opportunity to jointly consider new business ideas
Opportunity to create new businesses by leveraging regional resources
Participation in “Future of Kyushu 2030”

Support Center for Technology Management
DBJ established the Support Center for Technology
Management in February 2004 to help manufacturers realize their potential for the commercialization of successfully
developed technologies. The role of this center is to planand operate iHub, as well as to diagnose whether enterprises have the management strength (technology management expertise) to create value in technology. Aiming tocreate value from a new perspective, the center will engage
in survey analysis and the proposal of future business models from the perspective of technology management, recommendations and technology management training.

For clients and other enterprises across a broad spectrum in the manufacturing sector, we support ecosystems(relations between enterprises) and the creation of businessmodels from the viewpoint of innovations (new combinations) that include deliberation on technology management
strategies to resolve social issues. We provide additional
evaluations based on our expertise in business screening
and, through consultations on business and financial strategies, help clients consider their optimal growth strategies
and business plans.

Changes in the Manufacturing Business Environment
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47

The DBJ Women Entrepreneurs Center (DBJ-WEC)
To lead the Japanese economy which has entered gradual
recovery to sustained growth since the end of 2012, theJapanese government has identified “strengthening the utilization of human resources” as a key growth strategy. To enable
women to play an increasing role, businesses created from a
new female perspective are considered likely to provide a driving
force for new creation of markets and social transformation.
Anticipating such developments, DBJ launched the DBJ
Women Entrepreneurs Center (DBJ-WEC). Through thiscenter, we aim to provide comprehensive support, including funding and business startup expertise, to new businessgrowth led by women.
As part of its initiative to cultivate and foster new businesses, DBJ-WEC annually holds a business plan competition targeting female entrepreneurs. The winner of thecompetition (i.e., a new business plan with a superlatively
innovative and operational idea) is awarded an incentive
payment of up to ¥10 million. Additionally, DBJ-WEC offers
all participants a variety of support on the planning front,such as by connecting them with experienced entrepreneurs
and experts in various fields, providing startup expertise andadvice and introducing them to networks after the competi-tion. Notably, in the Fourth DBJ Women Entrepreneurs New
Business Plan Competition, we established the Regional
Future Award, for business plans that effectively utilize
human and other resources within a region, as well as
evaluate other initiatives that contribute to regional growth,such as community and industrial development that draws
human resources to a region.
In the future, the center will continue to work with
regions and specialists to help female managers turn theirideas into developing businesses.

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

Grand prize winner of the fourth annual competition: Ms. Rika
Yajima (Representative Director, aeru K.K.)

The woman'ss eye:bringing a fresh
e toperspective
market creation
attionDeveloping
ping
nues
new venues
men
for womennessin businessEncouraging
femalestartups

DBJ Asia Financial Support Center
DBJ opened the DBJ Asia Financial Support Center in June
2011 to reinforce its ability to provide local information andconsulting services to regional banks supporting efforts bysmall and medium-sized enterprises and other entities intheir regions to promote business in other parts of Asia.
The center’s role is as a liaison to help small and medium-sized enterprises with their various needs in developing
business operations in Asia from the information aspect
in cooperation with regional banks throughout Japan. In
addition to leveraging DBJ Group resources, such as its
overseas representative office, its overseas subsidiaries andJapan Economic Research Institute Inc., this center provides
consulting services that take advantage of a comprehensive
agreement on collaboration with Hitotsubashi University
48

Annual Report & CSR Report 2015(entered into in June 2011) and of networks of overseas
development finance organizations, private financial institutions and legal and accounting firms.
As of May 31, 2015, the center has a membership of 67
regional banks and has fielded a total of 1,632 inquiries.
Breaking down inquiries by country, the majority werein relation to China, Thailand, Vietnam or Indonesia, andinquiries concentrated on such topics as market researchand business matching. In 2014, we began playing a partin the “fast-pass” system to provide consistent support foroverseas development, in keeping with the Japanese government’s growth strategy. DBJ will continue augmenting
its ability to disseminate information related to Asia.

Public Asset Management
municipal bodies will face major changes in the amount andtypes of public assets that are necessary.
However, the combination of long-term economic malaise and a decrease in the percentage of the population in
their productive years is likely to cause tax revenues to fall
and welfare budgets to increase. Owing to factors such asthese, it may become difficult to secure the budgets necessary to renovate or reallocate public assets that have deteriorated or become underutilized.
For this reason, regional municipal bodies must quickly
embark on the management of public assets and conductsustainable urban management.
DBJ is working with Japan Economic Research InstituteInc. in this regard. We help in perceiving the status of facilities, such as by formulating white papers for public facilities.
And we assist in optimizing initiatives by drawing up overallmanagement plans for public facilities and encouraging the
introduction of PPP/PFI for individual model businesses.

Issues Faced by Regional Municipal Bodies

Determine owned assets[Buildings]t&MFNFOUBSZBOEKVOJPSIJHITDIPPMT%FDMJOJOHCJSUISBUF FMJNJOBUJPODPOTPMJEBUJPOt8FMGBSFGBDJMJUJFT "HJOHPGTPDJFUZ SJTJOHEFNBOEt)FBMUIDBSFGBDJMJUJFT .BOBHFNFOUJTTVFT SJTJOHEFNBOEt(PWFSONFOUPGåDFCVJMEJOHT
DPNNVOJUZDFOUFST %FDSFBTJOHQPQVMBUJPO FYDFTTGBDJMJUJFTt1VCMJDIPVTJOH  %FDSFBTJOHQPQVMBUJPO FYDFTTGBDJMJUJFT[Infrastructure]t8BUFSTVQQMZ 1SPåUBCMF CVUEFNBOEGBMMJOHt4FXFSBHF  .BTTJWFSFHJPOBMCPOETt3PBETBOECSJEHFT  .BTTJWFWPMVNFtGas1SJWBUJ[BUJPOCFDPNJOHTUBOEBSE "MTPQPSUT XBUFSXBZT QBSLT FUD

t%FUFSNJOFUPUBMWPMVNFBOEEFUFSJPSBUJPO$BMDVMBUFDPTUPGSFOPWBUJPOt.BLFBTTFUBMMPDBUJPOGVMMZWJTJCMF
t%FUFSNJOFFYUFOUPGBTTFUVTFBOEDPTUT
t%JTDMPTFJOGPSNBUJPOTVDIBTiGBDJMJUZXIJUFQBQFSTwBOE
PUIFSEPDVNFOUTUPSFTJEFOUTt8IBUJTUIFPWFSBMMWPMVNFt)PXTFSJPVTJTUIFEFUFSJPSBUJPOt8IBUJTUIFBDUVBMDPTUPGSFOPWBUJPOt8IBUJTUIFBWBJMBCMFåOBODJBMDBQBDJUZt8IBUJTUIFVTBHFTUBUVTPG
JOEJWJEVBMGBDJMJUJFT

1VCMJD"TTFU.BOBHFNFOU"MMEFUFSJPSBUJOHBUTBNFUJNF
.BTTJWFCVSEFOPGGVOEJOHUPSFOPWBUF

DBJ’s Businesses

Public asset management describes the method of looking
at the public assets owned by regional municipal bodies
from a management perspective for the purposes of overallplanning, control, use and disposal.
The public assets owned by regional municipal bodies aremany and varied. They include buildings, such as schools,
public offices and community centers, as well as waterworks,
sewerage, roads and other infrastructure. Two major issues
have come to the fore in this category in recent years.
The first is that public assets that were built in a concentrated period during Japan’s era of high economic growth
are now deteriorating rapidly. Because many public assets
were built at around the same time, their deterioration is
also simultaneous. The second issue is a mismatch between
the population—which is shrinking and changing in its
makeup—and the supply of facilities and contents needed
to serve the needs of residents. Going forward, as the overall population shrinks and the average age rises, regional

Determine population trendst'PSFDBTUQPQVMBUJPOTPGTFOJPSTBOEQFPQMFJOUIFJSQSPEVDUJWFZFBSTt.BLFGVMMZWJTJCMFQPQVMBUJPOTPGTFOJPSTBOEQFPQMFJOUIFJSQSPEVDUJWFZFBST%FUFSNJOFNJTNBUDIFTJOSFHJPOBMBMMPDBUJPOTPGGBDJMJUJFT

Determine financial conditions
t$POåSNQBDFPGEFUFSJPSBUJPOJOUBYSFWFOVFt$POåSNFTUJNBUFEGPSTVTUFOUJPOBOETPDJBMTFDVSJUZ
t$POåSNDBQJUBMFYQFOEJUVSFTJOSFQBJSTBOESFOPWBUJPOT

%FUFSNJOFQPMJDZNFBTVSFTGSPNBNBOBHFNFOUQFSTQFDUJWF FRVBMJ[FBOEQSJPSJUJ[FUIFSFOPWBUJPOJOWFTUNFOU
4IJGUUPTQFDJåDNBOBHFNFOUPGJOEJWJEVBMBTTFUT'JSTU QFSGPSNNBJOUFOBODFUPFYUFOEUIFMJGFPGBHJOHBTTFUT1111'*BSFJNQPSUBOUSFOPWBUJPODPOTPMJEBUJPOBOEEJTQPTBMBOEEFQMPZVOEFSVUJMJ[FEBTTFUTAnnual Report & CSR Report 201549

Crisis Response Operations

Crisis Response Operations
crisis damage.

Crisis Response Operations, on the basis of the Japan
Finance Corporation Act (Act No. 57 of 2007, including

During the Lehman Shock and the Great East Japan

later revisions) consist of the provision of necessary funds

Earthquake, DBJ was involved in large-scale Crisis Response

during such crises as disruptions in domestic or overseas

Operations. The 2015 revisions to the DBJ Act evaluated thefinancial markets or large-scale disasters. In response torole DBJ has played through its Crisis Response Operations

crisis-related damage, Japan Finance Corporation provides

and absence of private-sector financial institutions. DBJ

two-step loans as complementary risk and other measures

became obliged to implement Crisis Response Operations

to government-designated financial institutions (designatedfor an indefinite period.

financial institutions) that supply necessary funds to address

Crisis Response Operations Scheme

Japanese Governmentt$BQJUBMDPOUSJCVUJPOt-FOEJOHPGGVOETt*OUFSFTUTVCTJEJFT

t%FTJHOBUFEDesignated financial institutions

Japan Finance Corporation

Private financial institution(Crisis Response Facilitation Account)tPrepares and announces “crisis
response facilitation guidelines”(approved by the competent minister)Private financial institution
Two-step loans, etc.

Private financial institutiontImplements complementary risk and othermeasures on the basis of agreements(approved by the competent minister)with designated financial institutions

Shoko Chukin Bank
Defines a new scope for DBJ’s responsibilities, making Crisis
Response Operations obligatory for an indefinite periodtExtending the scope of Japanese government recapitalization
securing DBJ’s financial structure, etc.
tEstablish a new crisis response reserve account, reflecting thisobligation in the Articles of Incorporation, and indicate
mandatory Japanese government ownership of more than
one-third of shares and other measures

A designated financial institution
conducts its business inaccordance with the Crisis
Response Operations Rules(based on approval of thecompetent ministers)

Note: Past capital increases related to crisis response are scheduled to be transferredfrom capital to a crisis response reserve (¥206.5 billion). Future capital increases for
Crisis Response Operations are to be added directly to the crisis response reserve.

Provision offunds, etc.

Clients

The Great East Japan Earthquake
In response to the March 11, 2011, Great East Japan
Earthquake, DBJ, as a designated financial institution forstruction and growth stage,” we are working with regional

Crisis Response Operations, set up a full-fledged structure

financial institutions and others to provide risk capital

to facilitate the all-around operation of Crisis Response
Operations for clients affected both directly and indirectly by
the disaster.

50

Given the shift from the “restoration stage” to the “recon-

Annual Report & CSR Report 2015

Please see pages 53–55 for “Initiatives Related to theGreat East Japan Earthquake.”Results of Crisis Response Operations
On October 30, 2008, the Japanese government estab-involving “incidents related to confusion in the international

lished “lifestyle measures,” providing financing to set Crisis

financial order,” concluded on March 31, 2011.)

Response Operations by Shoko Chukin Bank and DBJ in

As of March 31, 2015, DBJ’s cumulative loan perfor-

motion in response to the worsening corporate cash flow

mance and commercial paper acquisitions of crisis counter-conditions resulting from the global financial and economic

measure loans were as follows.

crisis that began in the autumn of 2008. On December 11,• Loans: ¥5,500.7 billion (1,129 projects)

these measures were granted crisis designation under the• Loans executed with loss guarantee agreements:¥268.3 billion (47 projects, including those slated fortional financial order.” On December 19, these measuresapplication to JFC)

were augmented by economic measures, or “emergency

DBJ’s Businesses

category of “incidents related to confusion in the interna-• Commercial paper acquisitions: ¥361.0 billion (68 projects)

lifestyle defense measures,” funded through budget
expansion and the commencement of acquisition of commercial paper, and labeled Cash flow Countermeasures for
Medium-Sized and Large Enterprises Employing the Crisis
Response Operations of the Japan Finance Corporation. On
January 27, 2009, the Japanese government regulations
were amended, and other measures were taken, incorporating these items into the second supplementary budget
for fiscal 2008, augmented with funds generated by DBJ’scommercial paper acquisition business on January 30.
Additional economic crisis countermeasures wereannounced on April 10, 2009, outlining specific measuresfor large-scale Crisis Response Operations and earmarking a
total of ¥15 trillion for crisis response for medium-sized and*1 Of the ¥67.0 billion in loans executed with loss guarantee agreements to Japan Airlines in relation to Crisis Response Operations,¥47.0 billion (amount confirmed in April 2011 owing to DBJ’s
completion of corporate rehabilitation procedures) in compensation was ultimately provided by Japan Finance Corporation on thebasis of the agreements.
*2 A portion of the loans provided by DBJ to Micron Memory Japan
Inc. (formerly Elpida Memory Inc.), was covered by a Japan
Finance Corporation guarantee on losses. DBJ requested, andhas already received, a total of ¥27.7 billion in loss guarantee
compensation on the loans. In the event that in the future DBJ
is able to collect on the principal of the loans for which it hasreceived compensatory payment, DBJ will return to Japan FinanceCorporation a portion of the compensation received that corresponds to the percentage of the loans recovered.

large enterprises. In line with these measures, authorizationof a supplementary budget for fiscal 2009 was announced
on May 29, 2009. This budget received Diet authorization on June 26, and the amendment to the New DBJ Act
went into force and was promulgated on July 3, 2009.

Loans as Crisis Countermeasures (Cumulative)(Billions of yen)
6,000

(Number of projects)
1,600
5,500.7
5,387.7
4,887.7

These measures paved the way to reinforce DBJ’s financial
structure and enable the smooth implementation of Crisis

3,338.5

Response Operations.
On March 12, 2011, Minister of Finance decided to

4,297.0

4,500

3,000

1,090

1,200
1,115

1,123

1,129

944

800

implement Crisis Response Operations related to the Great
East Japan Earthquake one day earlier. Upon notification

1,500

400

of such certifications, the implementation period for Crisis
Response Operations was re-extended. (Meanwhile, theimplementation period for certain projects, such as those00Mar. 31,2011

Mar. 31,2012

Mar. 31,2013

Mar. 31,2014

Mar. 31,2015

Annual Report & CSR Report 2015

51

Providing a Safety Net
DBJ acts as a social safety net by providing investments andlopathy (BSE) and other illnesses, as well as terrorist attacks

loans to support the restoration and rebuilding of areas

and other emergency situations that cause widespread

affected by earthquakes, typhoons or other large-scale nat-anxiety about the financial system. In this way, we act as anural disasters and to address the outbreak of severe acuteemergency response unit to fill the gap that emerges when

respiratory syndrome (SARS), bovine spongiform encepha-conventional financial platforms fail to function.

Disaster Recovery
Societal Concerns

the Great Hanshin-Awaji Earthquake in January 1995 andRequired responses to a natural disaster are to (1) ensure

the Chuetsu Offshore Earthquake in October 2004. Thisthat people who provide information to local communities

assistance has been not only to the electricity, gas, rail, com-beset by a natural disaster have sufficient knowledge aboutmunications, broadcasting, urban development and other

those communities and take that knowledge into consider-infrastructure industries, but also to providers of everyday

ation and (2) provide rapid responses to help rebuild impor-necessities, such as foodstuffs and other retail items, as welltant infrastructure that was destroyed. What is required is

as to manufacturers who played major roles in revitalizing

an entity that through its everyday business relationships

the employment and economic situations of local communi-

has accumulated know-how on the industries and business-ties, prompting a revival in many fields.

es that provide this core infrastructure. This entity also musthave a wealth of expertise in supplying long-term funds.
DBJ Initiatives
DBJ has provided assistance in response to such disasters as

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

Emergency Financing
Societal Concerns

emergency response support system that provided financ-Society requires institutions whose day-to-day operations

ing to the Japanese airline industry (to maintain transporta-

provide a solid foundation for financing in response totion and logistics systems), which had been immediately

terrorist attacks and other emergency situations. These

affected by downturns in business following both theinstitutions must also have the working capital and funding

September 11, 2001, terrorist attacks on the United States

expertise to respond quickly to these situations.

and the outbreak of SARS.

DBJ Initiatives

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

In the year ended March 31, 2002, DBJ established an

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

52

Annual Report & CSR Report 2015

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

Initiatives Related to the Great East Japan Earthquake

Crisis Response Operations
In the fiscal 2011 supplementary budget (passed on May 2,2011), ¥2.5 trillion was earmarked for Japan Finance Corporation(JFC) for Great East Japan Earthquake Crisis Response Operations
targeting medium-sized and large enterprises.
This supplementary budget having been passed, asa designated financial institution for the Crisis Response
Operations DBJ set up a full-fledged structure to facilitate
implementation of Crisis Response Operations for clientsaffected both directly and indirectly by the disaster. The
2015 revisions to the DBJ Act evaluated the role DBJ has
played through its Crisis Response Operations and absenceof private-sector financial institutions following the Lehman
Shock and the Great East Japan Earthquake. DBJ became
obliged to implement Crisis Response Operations for anindefinite period. Accordingly, DBJ will continue with its
earthquake reconstruction initiatives.

Since the Great East Japan Earthquake, the stable supply ofelectricity has become an important issue from the standpoint of maintaining or strengthening Japan’s economic
and industrial competitiveness. The need to secure alternate
forms of fuel caused an increase in electric utilities’ costs,
including those related to requirements to introduce newsafety measures, and these costs were expected to deterio-

DBJ’s Businesses

Response to Electrical Power Supply Problems
rate their balance of revenues and expenses. Because of the
difficulty the utilities would have had in issuing corporate
bonds, DBJ responded quickly in collaboration with private
financial institutions to secure the funding needed to ensurea stable supply of electricity.
As of March 31, 2015, DBJ’s balance of loans in the energy(electric power, gas, heat and water) sector totaled ¥3.1 trillion.

Tohoku Revival Reinforcement Office
On April 21, 2011, DBJ established the Tohoku Revival
Reinforcement Office within the Tohoku Branch to consolidate and better provide companywide knowledge andfinancial expertise toward the restoration and reconstruction of the Tohoku and other disaster-stricken regions.
The Tohoku Revival Reinforcement Office has a crossdepartmental structure that spans the Regional Planning

Department, Financial Institution Department, and otherdepartments and branches. The office provides information
related to estimating damage amounts in stricken areasand communicates with regional municipal bodies, national
institutions, economic organizations and regional financial
and other institutions to conduct surveys. It also introduces
plans used in “creative reconstruction.”

Funding to Support Reconstruction and Growth Following the Great East Japan Earthquake
DBJ and financial institutions in areas affected by theearthquake formed the Great East Japan Earthquake
Reconstruction Fund to support the restoration andreconstruction of enterprises that sustained damage inthe earthquake. So far, we have provided investment andloans on 46 projects.
In December 2014, in response to the shift of the stageof earthquake reconstruction from the restoration of
production facilities (the “restoration stage”) to efforts toopen up a new enterprise-based market that resumes production, collaborates among multiple enterprises to boost

industry competitiveness, builds infrastructure and reinforce functions (the “reconstruction and growth stage”),
we have established a new reconstruction and support
growth fund in collaboration with the Regional Economy
Vitalization Corporation of Japan (REVIC).
The new funds are aimed at providing subordinatedloans and preferred shares to enterprises whose businesses are contributing to the reconstruction and growthof the disaster-stricken region. We are promoting forwardlooking initiatives with a nationwide business model, aiming to support regional growth and revitalization.

Overview of the new funds

Name
Established
Scale of fundIwate Reconstruction
Growth Support Investment
L.P.

PeriodFukushima Reconstruction
Growth Support Fund
Investment L.P.

December 8, 2014
Each fund has ¥5.0 billion (which can be increased to ¥10.0 billion withagreement by the fund’s members).

General partnership(GP)
Limited partnerships(LPs)

Miyagi Reconstruction
Regional Vitalization
Support Investment L.P.

Tohoku Fukko Partners Co., Ltd.
DBJ, The Bank of Iwate and
REVIC

DBJ ,The 77 Bank and REVIC

DBJ, The Toho Bank and
REVIC

Investment period of five years, duration of seven years and four months(If necessary, however, it is possible to extend the investment period by up to two years
and the duration by up to one year.)
Annual Report & CSR Report 201553

Examples of Matching to Enhance Corporate Value Conducted for Investment and Loan
Recipients through the Great East Japan Earthquake Reconstruction Fund
• Aizu Sake Plan Student Contest
Suehiro Sake Co., Ltd., headquartered in the city of
Aizuwakamatsu, Fukushima Prefecture, received a loan
through the Fukushima Investment Limited Partnership
Support Fund for Reconstruction and Growth. Following an
exchange of opinions with them, in February 2014 DBJ andthe Aizuwakamatsu Distillery Cooperative Association held
the Aizu Sake Plan Student Contest with the aim of cultivating
new markets. One of the examples of DBJ’s active involvement
is in providing crisis reconstruction support through eventsand the dissemination of information.

• Collaboration between Kesennuma and Akiu Onsen
DBJ conducted business matching for the Shark Town
Kesennuma Design Promotion Council and the Akiu Onsen
Ryokan Association. The Council comprises eight enterprisesin the city of Kesennuma that are involved in the processing ofshark fin and shark meat, which also includes Murata Co., Ltd.,
headquartered in the city of Kesennuma, Miyagi Prefecture,a loan recipient through the Miyagi Reconstruction Bridge
Investment Limited Partnership. By leveraging the networks that
DBJ has created with its clients, collaboration led to the cultivation of sales routes and regional industry support initiatives.

Tohoku Future Creation Initiative
The Tohoku Future Creation Initiative (founders: Seiichi Ohtaki,
Manager of Graduate School of Economics and Management& Dean of Faculty of Economics, Tohoku University; andKentaro Ohyama, Representative Director of Iris Ohyama,Inc.) commenced in April 2012. Centering on private-sector
volunteers, the initiative aims to support the affected region’s
efforts toward reconstruction, autonomy and future value
creation. The initiative operates a center for personnel training
and cultivates managers and entrepreneurs. To promote urban

development and industry creation, the initiative dispatches
volunteers from among local chief executives to private-sector
support teams. These teams work with regional municipal
bodies to put reconstruction plans into action and in otherways help to lay the foundations for autonomous development in the affected region. At the center for personnel training, DBJ takes charge of a session themed on “management
and finance,” providing instructors, conducting training programs and cooperating with the project in other ways.

Collaboration Agreement on Industrial Reconstruction with Fukushima Prefecture
In March 2013, DBJ signed a collaboration agreement on
industrial reconstruction with Fukushima Prefecture. Under
this agreement, Fukushima Prefecture and DBJ cooperate ongathering information, conducting strategic reviews and cultivating personnel, taking an overall approach to invigorating
the local economy by promoting local industry and tourism
and communicating the region’s attractions.
• Study Council on Fukushima Medical-Related
Industrial Cluster
DBJ and the DBJ Group’s Value Management Institute, Inc.,
served as the secretariat for the June 2013 Study Council on
the Fukushima Medical-Related Industrial Cluster, chaired by
Makoto Kikuchi, President of the Japan Association for the
Advancement of Medical Equipment.

This council advocates a “Fukushima-driven Japanesemodel” of creating a new base for the medical instrumentbusiness in Fukushima Prefecture and supports businesscollaboration to that end.
• Fukushima Reconstruction Symposium
In May 2014, DBJ held the Fukushima Reconstruction
Symposium in the city of Koriyama, Fukushima Prefecture. The
symposium was jointly hosted by Xebio Co., Ltd., and sponsored by the Reconstruction Agency, Fukushima Prefecture, and
The Toho Bank, Ltd. The symposium provided an opportunity
for related organizations, enterprises and public-sector entities
to discuss businesses aimed at creating a society in which thechildren of Fukushima Prefecture can come into contact withnature and enjoy sporting and cultural events as they grow up.

The New Tohoku Partnership Promotion Committee
The Reconstruction Agency is working toward the Creation ofa “New Tohoku.” To further promote initiatives by diverse bodies that are active in the stricken region, including enterprises,
universities and NPOs, in December 2013 the agency estab-lished the New Tohoku Partnership Promotion Committee to
conduct ongoing activities in Tohoku. Being in agreement withthe tenor of these activities, DBJ served as a founding memberof the committee and serves as its deputy chair.

The UN World Conference on Disaster Risk Reduction Public ForumThe UN World Conference on Disaster Risk Reduction is aconference sponsored by the United Nations that formulatesinternational strategies on disaster risk mitigation. March 2015
marked the third meeting of this conference, which adopted
the “Sendai Framework for Disaster Risk Reduction” as its
new international disaster risk reduction roadmap for the next
15 years. Side events included more than 350 symposiums,
seminars and exhibits related to restoration and reconstruction, disaster response, and disaster risk prevention and reduc54

Annual Report & CSR Report 2015tion. DBJ held two symposiums, entitled “Financial Initiatives
for Building the Resilient Society: Financial Sector’s Roles forPre- and Post-Disaster Response and Revival of Tohoku” and“Building Disaster Resilience through Alliances and Mutual
Cooperation of Multi-stakeholders in Tohoku and Beyond:Region-wide Initiatives by the Tohoku Alliance.” Through these
symposiums, we sent information about our experience andthe lessons learned from the Great East Japan Earthquake tothe world.

Restoration and Reconstruction Issues and Responses
The Great East Japan Earthquake was a complex major disaster, an infrequent type even on a global scale. We believethat restoration and reconstruction measures must be implemented on a step-by-step basis, in chronological order. Also,

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

Restoration and Reconstruction Support through Investment and Loan Activities

Phase A

Phase C

Phase B

(Reconstruction andgrowth stage)(Restoration stage)t First supplementary budget (May 2011)

Crisis Response
Operations

X Amount: Scale increase of ¥2.5 trillion
X Interest rate subsidy programs establishedt Secondt Third supplementaryt Budget compiled forbudget (November
2011)

the fiscal year ended
March 31, 2013supplementarybudget (July 2011)

X Increase in amountJune 30, 2011
Approximately ¥57.1 billion(15 projects)

Performance Recordin Investments andLoans

O Establishment of Great East Japan

Earthquake Reconstruction Fundfactors asrepayment
moratoriumstJoint funds with regional banks in Iwate, Miyagi,
Fukushima and Ibaraki prefecturestProvision of equity-type funding to support therevitalization of affected enterprises

O Support for formulation of community and other plans
O Surveys and advisory activities, other

O Establishment of Supply Chain

Support FundtJoint fund with Japan Auto Parts
Industries AssociationtProviding long-term, stable funding forrevitalization and restructuring support

O Business Continuity Plan

(BCP) Support for
Proliferation and Increasing
SophisticationtEnhancement throughrenewal of disaster
preparedness system

Initiatives Addressing
Energy Issues

O Support targeting primary damage, in response

to bond market confusion
Loans to electric
power companies

Responding to funding needs
since the disaster

X Amount: ¥2.0 trillion
measurePerformance as ofMarch 31, 2015
¥2,110.0 billion (166 projects)

Dec.
12,
2011
Opening of the Special Zone for Reconstruction
Support and Counseling CenterIndustry Initiatives

Establishment of Tohoku Revival
Reinforcement Office

Regional Initiatives

Apr. Emergency
21, measures2011 owing to such

DBJ’s Businesses(Emergency responses)

Strengthening theindustrial base througha system of special
zones for reconstruction(interest subsidies, etc.)

Provision of risk capitalthrough the Funding toSupport Reconstruction
and Growth Following
the Great East Japan
Earthquake

Proactive involvement
in reconstruction
projects (PFIs, urban
revitalization,
renewable energy, etc.)

Liaison with theReconstruction Agency
Office for the Promotionof Business Collaboration

Power Generation in the United States Using
Renewable Energy, an investigative research report

Annual Report & CSR Report 201555

Regional Revitalization Initiatives

DBJ’s Third Medium-term Management Plan prioritizes operations through which it contributes to revitalization in each region as a partner. To further encourage autonomous initiatives by regions to address the various
issues they face, in September 2014 we established the Initiative for Creating Regional Futures. In addition, we
launched the Regional Revitalization Program to support regional initiatives and offer solutions to their problems. In October 2014, we elicited input from managers of more than 170 medium-sized regional enterprises.
Based on this input, we announced our Recommendations on Regional Revitalization, which summarizes measures necessary for regional revitalization and the role that financial institutions are called upon to perform.

Regional Revitalization Program
As a specific Regional Revitalization Program initiative, we

addition, we are pursuing initiatives such as providing DBJ’s

deployed the Innovation Hub across regions to support

expertise and networks with regard to human resources

the launch of cross-industrial creative businesses. Throughto play a large role as part of the region. Furthermore, we

working to expand PPP/PFI activities centered on the Private

set up the Regional Contribution M&A Program to support

Finance Initiative Promotion Corporation of Japan (PFIPCJ),

M&A projects that contribute to regional growth, such as

DBJ also has begun offering programs to members of

to strengthen regional enterprises’ management founda-

regional municipal bodies through its PPP/PFI Academy. In

tions and assist in building infrastructure.

Providing Regions with Risk Capital
To support regional revitalization via the tourism indus-

regional enterprises. In addition, with The Tokyo Tomintry, in April 2014 DBJ formed the Mother Fund Corporate

Bank, Limited and RISA, we formed the Tokyo Revitalization

Mezzanine Limited Partnership for Tourism Vitalization

Fund Limited Investment Partnership and have provided

in collaboration with the Regional Economy Vitalization

risk capital. This partnership aims to supply funds to small

Corporation of Japan (REVIC) and RISA Partners, Inc. (RISA)

and medium-sized enterprises that can help revitalize theand has provided risk capital. Also, in September 2014 we

economy of the Tokyo metropolitan area, supporting themset up the Musubu Setouchi Business Succession Fund within efforts ranging from improving and strengthening busi-

The Hiroshima Bank, Ltd., and two other regional financial

ness foundations to achieving expansion and growth.

institutions to facilitate the smooth business succession of

Setouchi Brand Promotion Initiatives
In May 2015, DBJ collaborated with the Setouchi Brand

Through tie-ups and cooperation among the seven

Promotion Association* to create a Setouchi Brandbanks that signed the agreement, we intend to combine

Promotion Structure*2. Along with six Setouchi regional

the regional banks’ knowledge and networks with DBJ’s

banks (The Chugoku Bank, The Hiroshima Bank, The

extensive financial track record to support tourism-related

Yamaguchi Bank, The Awa Bank, 114Bank and The Iyoenterprises and promote regional revitalization throughBank), we signed an Agreement on the Revitalization ofadvancement of the tourism industry.

1

the Tourism Industry in the Setouchi Region. This agreement covers (1) tie-ups with the Setouchi Brand Promotion
Association, (2) the establishment of a business support
organization promotion office, (3) consideration of diverse
types of funding support for tourism-related enterprisesand (4) the study of management support for providing
expertise to tourism-related enterprises.

56

Annual Report & CSR Report 2015

*1 Setouchi Brand Promotion Association: Extended association ofseven prefectures—Hyogo, Okayama, Hiroshima, Yamaguchi,
Tokushima, Kagawa and Ehime—formed in April 2013 to establish
the “Setouchi” brand*2 Setouchi Brand Promotion Structure: A collaborative structure
comprising the Setouchi Brand Promotion Association, tourismrelated enterprises and financial institutions to enhance value in the
Setouchi area

Recommendations on Regional Revitalization (Announced in October 2014)
Recommendations on Regional Revitalization, distilled from the results of asurvey of 170 managers of small and medium-sized regional enterprises
Formulating an Action Plan for a Regional Future

The Concept ofCommunity Development

The Concept of
Building People(1) Utilize a framework for community
development in response topopulation decline and aging.
tFormulate a Regional Life
Contingency Plan. Based on
this plan, encourage themanagement of public assets
at an early stage through
PPP/PFI promotion, such as byleveraging the PFIPCJ.
(2) Promote the distinctive
community development andbroad-based area management.
t1MBZPOVOJRVFDIBSBDUFSJTUJDT
rather than aiming for a “miniTokyo.”(1) Create and increase thesophistication of (higher-level)
educational systems that matchregional human resource needs.
(2) Encourage labor market reform,
utilizing women, seniors andforeign workers.
t1SPNPUFSFHJPOBMFNQMPZNFOU
of women, seniors, etc., andformulate and continuously
follow a “regional labormarket reform plan” that
supports stable industrial
activity.

DBJ’s Businesses

In the area of regional revitalization, to supplement the Japanese government’s long-term vision we have drawn up a reasonable andspecific medium- to long-term action plan for the management of enterprises within the region to serve as an urban planning guideline.
Rather than as the problems of dividing a limited economic pie and addressing distribution among regions and in regional and majorurban areas, this plan goes beyond conventional administrative districts to address the reality of regional economic transactions.

The Concept of Work
(1) Mount a regional industry siting initiative that encourages
enterprises that support communities to remain(including the regional bases of large enterprises as well
as regional enterprises).
(2) Support efforts to grow core regional enterprises (such ascore value chain enterprises), including throughoperational advancement and new business launches.
(3) Create systems that facilitate the smooth businesssuccession of small and medium-sized regional
enterprises, and support those that are relaunching andrestructuring.
(4) Promote research and development and open innovation.
(5) Encourage regional investments by overseas enterprises, aswell as efforts by regional enterprises to develop overseas.
(6) Build new frameworks to cultivate and support industries
that utilize regional resources.

Addressing Issues through Tie-ups and Collaboration among Related Parties ofRegional Alliance Platforms
Form platforms that encourage meetings of people from regional municipal bodies, enterprises, financial institutions,educational research institutions and other bodies, coordinating according to their various strengths and weaknesses, topromote decisions on autonomous regional strategies. Create and effectively operate schemes that foster cooperation andcollaboration on these strategies.
Strive to move along a path of visualizing—sharing common perceptions among the related parties—tapping theexperiences of those past successes to get past deliberation impediments—rather than seeking the impossible, putting inplace measures aimed at maximizing what exists.

Calling on Financial Institutions to Serve as Regional Coordinators(1) Making use of nationwide data and models of regional economic cycles, financial institutions can assist in the process
of visualizing existing conditions by objectively identifying and analyzing information about a region’s status.
(2) Based on the above-mentioned analysis, financial institutions can then help create realistic future forecasts, collectinput from regional parties and provide related parties with information about individual regions’ strengths andweaknesses. After dispassionately identifying these characteristics, they can then assist with unique regional efforts
to grow and address the issues they face.

Annual Report & CSR Report 201557

Making Use of Information Functions

Through its varied activities, centered on investments and loans, DBJ comes into contact with many aspectsof society. In addition to enterprises, DBJ’s information channels and human networks include the Japaneseand overseas governments, governmental institutions, international institutions, regional municipal bodies
and universities. Through these contacts, DBJ extracts a variety of information on economic and societal
issues, boosting its ability to supply neutral information of high quality.

Economic and Industrial Research
In a broad range of industrial circles, DBJ conducts surveys andperforms research not only on such topics as conditions in various sectors and among different types of businesses but also
on international competitiveness. DBJ also prepares reports
on conditions in individual industries, technical development
trends and new industries and innovation, and provides thesereports to its clients and other parties.
Survey Examples
DBJ Monthly Overview
This report provides a brief commentary on domestic andoverseas economic and industrial trends and monthly business indicators.
The report explains domestic and overseas economic
trends through an analysis of economic and financial indicespublished each month. In recent years, theglobal economic and financial markets havegrown more closely linked. With regard
to these global markets, the report aims
to further that integration by introducing
overseas fiscal and monetary policies andcommenting on current topics.
In addition, the report addresses topics
that are timely from the perspective of industrial trends.
“Long-Term Perspectives and Human Resource
Management at Core Value Chain Enterprises: The
Importance of Core Value Chain Enterprises as the“Core” of Regional Revitalization”(DBJ Monthly Overview, No. 215-1, August 2014)
DBJ sometimes introduces its research and provides support
to “core value chain enterprises” (a term DBJ coined) thatare the source of added value creation.
This report looks at how core value chain enterprises steadily increase their numbers of employees froma long-term, future-oriented perspective andclarifies the relationships that strengthen
their human resources. In addition, thereport considers core value chain enterprises’
importance in regional revitalization andother related issues.
“Strengths of the Japanese Electronic Components
Industry and Policies for Enhancing Competitiveness”(DBJ Monthly Overview, No. 217-1, September 2014)
Japan’s balance of trade fell into deficit in 2011 for the first58

Annual Report & CSR Report 2015

time in 31 years, and the gap has continued to widen. Rising
imports of LNG and crude oil are one reason for the situation, but another is the shrinking of industries that have long
been pillars of trade surplus, such as transport machinery andgeneral as well as electrical equipment.
Addressing this situation, this report shows that theshrinking balance of trade in electronic components anddevices stems primarily from increasing imports of solar
cells and integrated circuits and that when these areas are
excluded, Japan retains a relatively large trade surplus in general electronic components. After providing
an overview of Japan’s strength in generalelectronic components, the paper goeson to recommend policies for reinforcing
competitiveness in growth areas, including
smartphones, automobiles and medical/
healthcare-related markets.
DBJ Long-Term Interest Rate Weekly Outlook
DBJ provides its clients with weekly long-term interest rate
movement information on the first business day of each week.
Focused on Japan and the United States, we offer a brief summary of market trends during the previous week and introduce
key economic indicators, treasury auctions and other events
scheduled in the current week. DBJ economists comment on theeffects of important economic indicators and monetary policies
to be announced during the week, providing an outlook formarket trends based on the analysis of economic fundamentals.
Collection of Academic Papers Commemorating the50th Anniversary of Establishment of the ResearchInstitute of Capital Formation
This two-volume collection commemorates the ResearchInstitute of Capital Formation’s 50th anniversary of establishment, in 2014. The collection follows two of the institute’s
long-standing research themes: “finance and corporate activity” and “shared social capital.” Carrying forward the spirit of
the institute’s first executive director, Dr. Osamu Shimomura,and advising Professor
Hirofumi Uzawa, the collection takes an academic
approach to the sustained
development of theJapanese economy at thistransformative time.

Providing Information Internationally—Cooperation with Columbia University in New York City

DBJ’s Businesses

The Center on Japanese Economy and Business (CJEB)(founder and director: Professor Hugh Patrick), a
research institution of Columbia Business School in the
United States, invited intellectuals from a host of fields
to attend a May 2015 conference entitled “Japan’s
Changing Corporate Governance.” CJEB and DBJ dispatched visiting researchers to the conference, making
use of DBJ’s networks for their research, holding study
sessions and taking advantage of a cooperative relationship spanning many years. DBJ maintains relationships
with some of the world’s most prominent academic
institutions and takes a proactive role in studying andresearching the issues that enterprises are facing.

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

Survey Example“Report on June 2014 Survey ofCapital Investment Plans for Years
to March 31, 2014, 2015 and 2016”(Surveys, No. 107, September 2014)
After completing our questionnairebased survey on corporate capital
investment activity, the Survey ofCapital Investment Plans, we publicized
the results, as well as our analysis.

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

Environmental
DBJ conducts survey reports on various environmental activities in Japan and overseas, under such themes as global warming prevention measures, promotion of a recycling-oriented
society and sustainable corporate management. DBJ also
conducts and contributes to speaking engagements, specialty
journals, newspapers and magazines. In the year ended March
31, 2005, these activities culminated in the introduction of DBJ
Environmentally Rated Loan Program, which is used by many
enterprises.

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

Technology
DBJ’s activities in technology-related fields include conducting trend surveys (for example, on bioethanol). DBJ’s Support
Center for Technology Management provides technical evaluations and conducts other activities to help enterprises realize
their potential for technological commercialization.

Annual Report & CSR Report 2015

59

Providing Information to Regional Communities
Supplying Information to Help Regional
Community
Development
Local communities areexperiencing increasingly
difficult environmental
circumstances, such asa declining birthrate, anaging population, the amalgamation of towns, cities and villages, and financial crises. Addressing these issues requires
a greater degree of expertise and more ingenuity than ever.
DBJ assists regional community development using its analysis of the information it accumulates through its network
comprising its own offices (19 domestic locations—head
office, branches and representative offices—and four overseas locations [three subsidiaries and a representative office]as of July 1, 2015), economic agencies of regional municipal bodies and regional communities, and enterprises inJapan and abroad. The scope of this analysis extends frompublic–private partnerships (PPPs) to tourism promotion,
region and community development and local government
finance. DBJ disseminates this information through reports,
publications, lectures and other formats.
“Fiscal 2015 Regional Handbook: Regional Data andPolicy Information”
This handbook is a collection of data that include fundamental
economic, industrial, lifestyle and policy indicators for regional
blocks, administrative regions and principal cities, as well as acompilation of individual regional policies andprojects to facilitate an overall understandingof regional policies, economies and societies
and the current status of regional projects.
In the Topics section, Yoshio Higuchi, professor of Keio University, contributed a special
section entitled “Prescriptions for a Rapidly
Shrinking Society.”“Initiatives for Maintaining Vigor and Growth in Local
Communities and the Creation of Cooperative Platforms”
As Japanese society enters an era when the population is truly
shrinking, initiatives are undertaken to address low rates ofchildbirth and halt the decline in other ways. This report lays out
measures that enterprises, regional municipal
bodies, financial institutions, educational
institutions and other organizations can taketo help resolve important issues. The report
recommends maximizing the power of theprivate sector and building “broad-ranging
platforms for regional economic cooperation”
that promote efficiency centered on regional
economic organizations.
“Cultivating the New Market for Wooden Buildings andPromoting the Use of Domestic Timber: The Importanceof Regional Cooperation in Building a Supply Chain for
Wood-Based Structural Materials”
The Japanese forestry and wood products industry is pushing
forward with technical developments in wood-based structural
materials such as cross-laminated timber, prompting regulatory reform. Based on an interim reportannounced in November 2014, this report
looks at the creation of supply chains forwood-based structural materials from five
perspectives: issues, technologies, demand,
supply and regions. The report then explores
the movement to create “wooden cities” builtof large-scale multistory wooden structuresand considers the potential for each region.
“Developing Sports Tourism: An Example Using Regional
Resources to Create Tourist Destinations”
With the upcoming Tokyo 2020 Olympics and Paralympic Games
as its backdrop, this report looks at anecdotal research in making
suggestions for regional municipal bodies tomake use of their sports-related resources tocultivate sports tourism, considering sports as
one way to create regional tourist destinations.
The report studies public organizations’ sports
tourism efforts and makes general recommendations on how to leverage regional resources
to create regional tourist destinations.

Branch Reports
Hokkaido Branch“The Economic Ripple Effect from the Opening of the
Hokkaido Shinkansen Route: An Estimated Annual
Effect of Around ¥13.6 Billion”(Report, October 2014)
The Hokkaido Shinkansen route isscheduled to open at the end of fiscal
2015, linking Shin-Aomori and ShinHakodate-Hokuto stations. This launchis expected to have an economic
ripple effect throughout Hokkaido as

60

Annual Report & CSR Report 2015it brings in people from the greater Tokyo and Yokohama
metropolitan areas and, in northeastern Japan, Miyagi
Prefecture. If by shortening travel time the new line substantially increases the number of people traveling between
Kanto, Tohoku and other regions, the tourism industry
should be directly affected. In addition, the development
is expected to encourage production within Hokkaido andincrease employment compensation, creating an economic
ripple effect that is expected to be huge.

Tohoku Branch

Niigata Branch“Initiatives for Boosting Growth and Competitivenessfor Enterprises in Niigata Prefecture”(Report, September 2014)
In June 2014, DBJ conducted a special corporate questionnaire, theCorporate Behavior Awareness Survey,
in tandem with its Capital Investment
Planning Survey, and the DBJ Niigata
Branch summarized results pertaining to initiatives for augmenting the
growth and competitiveness of enterprises in Niigata Prefecture.
These results point to (1) focus areas for increasing thecompetitiveness of key businesses among enterprises in
Niigata Prefecture, (2) important efforts toward growth andcompetitiveness, and (3) key fields of business for mediumterm market cultivation. The report provides a highly interesting perspective on the awareness and management orientation of enterprises in Niigata Prefecture.

Hokuriku Branch“Industrial Tourism Possibilities for the
Hokuriku Region” (Report, March 2015)
In March 2013, DBJ published reports entitled “Ishikawa
Prefecture to Feel the Economic Ripples from the Extensionof the Hokuriku Shinkansen to Kanazawa” and “Toyama
Prefecture to Feel the Economic Ripples from the Extensionof the Hokuriku Shinkansen,” estimating the economic ripple
effect on Ishikawa and Toyama prefectures from the service

start of the Hokuriku Shinkansen. This
report looks at sustaining this economic ripple effect, looking at regional
community development throughthe lens of “industrial tourism.” Froma hearing-based survey of forwardlooking cases, the report considers the
key points of such an initiative and its
potential for the Hokuriku region.

Tokai Branch

DBJ’s Businesses“Tohoku Inbound (Eight Asian Regions) Intention
Survey (2014 Edition): The Need for Tohoku to Use
Its Tourism Potential as a Tool for Further Strategic
Promotion” (Report, December 2014)
This report is a sequel to “Tourists’Sentiments about Visiting Japan after
the Great East Japan Earthquake (2013
Edition),” published in December 2013.
Based on Internet surveys of potential
tourists to Japan from eight Asian
regions (South Korea, China, Taiwan,
Hong Kong, Thailand, Singapore,
Malaysia and Indonesia), this survey
concentrates on responses from people
who have visited Tohoku and the effect of the Great East
Japan Earthquake. Although awareness of Tohoku is low, theregion has many attractive tourism offerings, providing thepotential to increase inbound tourism from other countries.
This report recommends strategic promotion from the viewpoints of broad-based cooperation and differentiation.

“The Issues of Aichi and Nagoya from a Working
Woman’s Perspective: The Urban Vitality Effect of a
Lack of ‘Nadeshikos’” (Report, June 2014)
The Japanese government is emphasizing the promotion of opportunities for
women as one of its growth strategies,
and this move has garnered increasing
attention. Against this backdrop, thepercentage of women in employment
and management positions in Aichi
Prefecture is below the national average, and the active participation by
women in work is limited.
This report assesses such issues as a lack of nursery staff
in Aichi Prefecture and the city of Nagoya and outlines avision for enterprises and regional municipal bodies in the
coming era when the Linear Chuo Shinkansen Line opens.

Kansai Branch“The Business Potential of Sensors and Big Data: The
Future of Sensors, Learning from the Smartphone
Business Model” (Report, May 2014)
We are on the cusp of a future involving machine-to-machine (M2M)
technologies, the Internet of things(IoT) and big data. Recently, attention
has focused on business possibilities
leveraging networks and data. There is
growing interest in “sensor networks”
that collect data from the sensors allaround us in society, and this businessis expected to experience major growth going forward.
As Japan has a competitive advantage in the sensor network business, this report reviews the dramatic changes thisbusiness model has undergone in recent years by looking at
the smartphone business. The report then considers the construction of sensor data distribution platforms in the sensor
network business.

Annual Report & CSR Report 2015

61

Chugoku Branch“Directions for Resolving Issues Related toManagement of Sake Breweries: Current Conditionsand Growth Strategies for the Small and Medium-Sized
Sake Breweries of Hiroshima” (Report, February 2015)
With Hiroshima Prefecture’s local consumption of sake falling, to remain in
business the region’s breweries needto expand their sales routes into othermajor consumer areas, but many small
and medium-sized breweries are shorton management resources, making
it difficult to achieve such a feat on
their own. This report explores ways
to enable the prefecture’s small and medium-sized breweries
that produce multivaried and high-quality local sake varieties
to remain in operation. Taking “cooperation” and “separating brewing from sales” as key themes, the report looks
into resolving breweries’ issues by making their offerings
universally available throughout Japan. Introducing positive
examples of the process for delivering sake from breweries to
consumers, this report considers full-scale measures for small
and medium-sized breweries.

Shikoku Branch“A Survey of Anti-Disaster Measures at Regional
Municipal Bodies in Shikoku: Augmenting Regional
Preparedness” (Report, May 2014)
In December 2013, DBJ announced
the results of a survey on anti-disastermeasures targeting prefectures, aswell as population centers with morethan 50,000 inhabitants. This reportsummarizes the results into a Shikokuspecific edition. Suggestions for
future regional anti-disaster measures
include (1) making practical use ofhazard maps to indicate evacuation routes and other important information, (2) formulating BCPs that place the headsof regional municipal bodies in leadership positions, and(3) making use of a high level of disaster awareness to createa leading-edge model for Japan.

Kyushu Branch“Community Development Possibilities Viewed throughSpatial Structure Analyses of London and Fukuoka”(Report, October 2014)
Starting from the premise that London
and Fukuoka are located at similar latitudes, after looking at the two cities’
historical backgrounds this report goeson to employ an objective method forevaluating the community development. The report uses the “Space
Syntax” method, developed in London,
to analyze the spatial structures of thetwo cities. The report also makes recommendations on how
Fukuoka can develop further as an international tourism destination and on its potential, and some issues to address, tobecome a more suitable location for startup enterprises.

Minami-Kyushu Branch“Livestock Industry Survey Report: Growth Strategies for
Minami-Kyushu, the ‘Livestock Kingdom’” (Report, May 2014)
Minami-Kyushu is a leading hub for theJapanese livestock industry. However,
the industry’s operating environmentis undergoing significant change, withthe domestic market shrinking asJapan’s demographic structure changes and due to the effect of the TransPacific Partnership and other factors
having the potential to boost competition from overseas producers.
This report outlines recent livestock industry trends andexamines its current conditions in Minami-Kyushu. Focusing inparticular on wagyu (“Japanese beef”), the report estimates
the future scale of the domestic market, analyzes the industrial
structure for breeding and feedlot management, identifies
issues related to expanding exports and makes recommendations for growth in both the domestic and overseas markets.

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

62

Annual Report & CSR Report 2015

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

CSR Report

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

Implementing CSR Management . . . . . . . . . . . . . . . . . .65
CSR through Investment, Loan andOther Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .70
Environmental Management . . . . . . . . . . . . . . . . . . . . .90
Business Continuity Plan (BCP) . . . . . . . . . . . . . . . . . . . .94
Fostering Human Resources and Creating a
Comfortable Work Environment . . . . . . . . . . . . . . . . . .96

Annualal Report
R& CSR Report 2015

63

Editorial Policy
To expand communication with all stakeholders, in 2003, DBJ first issued Environmental Report 2003 for a Sustainable
Society. This was followed by annual sustainability reports in 2004 and 2005. In 2006, DBJ published the CSR Report. Since
the fiscal year ended March 31, 2008, DBJ has combined its annual report and CSR report under the concept of ”disclosure
from a CSR perspective.” DBJ will continue publishing CSR information introducing its initiatives to help realize a sustainable
society.
As in previous years, this report explains how DBJ came into being, as well as the services DBJ provides. The report aims
to show that DBJ fulfills its corporate social responsibility through the careful attention it accords to each of its activities,
incorporating this discussion of the status of its recent activities. Furthermore, we have employed the following guidelines inour effort to enhance the report’s readability.


We explain DBJ’s stance on CSR as a way of addressing the problems society faces.
To give the reader a clear sense of how DBJ’s services relate to society, the report provides case studies of DBJ’s
ongoing emphasis on CSR through the investment, loan and other businesses it conducts.

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

Head office, 10 branch offices and eight representative offices

Overseas: One overseas representative office
Period covered:

The fiscal year from April 1, 2014, to March 31, 2015
As this report is designed to illustrate ongoing initiatives, some of the case studies for investment,
loan and other business contained herein are the same as in past issues. Furthermore, some of
the information indicated herein will have been updated by the time this report is published.

Publishing Details
Published:

September 2015

Next publication:

September 2016 (previous publication: September 2014; frequency: annual)

Reference Guidelines
The Sustainability Reporting Guidelines (Fourth Edition), issued by the Global Reporting Initiative (GRI), were used as
reference guidelines.

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Annual Report & CSR Report 2015

Implementing CSR Management

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

Fields of CSR Implementation at DBJ

DBJ’s Two Fields of CSR
CSR through Investment, Loan and Other Businesses
Investments and loans in response to the Japanese
economy, financial markets, and corporate issues

Challenges for the Japanese economy
Issues for firms(“semi-macroeconomic”)

Issues for financial
and capital markets

Voluntarycontributions by companies
and employees tothe environment, society andthe community
CSR Report

Issues in themacroeconomy

Environmental and Social
Contribution Activities

Environment
Providing risk capital and knowledge from along-term perspective
Four Primary Areas
Growth support

Infrastructure &energyRegional revitalization
tailored to regional
needs

Regional
Revitalization

Strengthening the safety net

Three Functions to Leverage
Risk-sharing
finance

Market-stimulating
Knowledge bankfinanceCommunication inInternational Cooperation

Environmental
Management

Corporate Governance and Other Activities (Sincere Pursuit)
Measures Essential for Forming Sustainable Corporate Foundations

t Corporate Governancet Risk Managementt Compliancet Information Disclosuret Client Protection, Protectionof Personal Informationt Fostering of Human Resources

Annual Report & CSR Report 2015

65

DBJ and Its Stakeholders
DBJ comes into contact with a wide variety of organiza-

DBJ strives to increase its dialogue with stakeholders in its

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

effort to realize a sustainable society.

DBJ secures financing through the issuance of Fiscal

DBJ’ s investment and loan services involve clients in

Investment and Loan Program (FILP) agency bonds

numerous regions and across a variety of industries.

and government-guaranteed bonds, through direct

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

corporate bonds and through loans
from private-sector
financial institutions.

Investors

Clients

Japan
Gove esernme
nt

As of March 31,
2015, DBJ’ s

increasingly prosperous
and sustainable society.
aJapanese Government:
Ja
Cur
Currently, 100% of DBJ’s

employees
numbered 1,184.
g
DBJ employee training

Employees

Society

is designed to enable its
employees to act
ake fullautonomously and makeuse of their abilities.

s/
NPO s
NGO

DBJ seeks to contributeto the realization of anlesca nitioshares are held by the
L umJapanese government.
mCo
Communities: DBJ supports the
Local Comm

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

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

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

66

Annual Report & CSR Report 2015

Creation ofSocial Sustainability

Environment

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

Even after privatization (conversion to a joint-stock

institution, evaluations of DBJ’s annual operations raised

company), DBJ aims to continue contributing to building

DBJ’s business effectiveness and results, thereby improving

an affluent future by solving problems through creative

its responses to socioeconomic changes and policy issues

financial activities. We determine from our own perspective

facing Japan. These measures were a way to evaluate CSR

those businesses that are truly useful to society and workthrough Investment, Loan and Other Businesses.

to promote the realization of a sustainable society.

CSR through Investment, Loan and Other Businesses
Due consideration of compliance issues is a prerequisite for

Accordingly, DBJ considers the application of its intellec-

the sustainable development of enterprises. Accordingly,

tual assets and service platforms for investments and loans

it is important that a corporation’s business activity brings

to be of vital importance, as well as its business of working

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

with clients in a variety of fields.
Specifically, DBJ will apply the distinctive features andthe trust of society.

financial services that it has realized in the past to provide

harmonious society over the long term by identifying truly

to clients various solutions that address expected changes

meaningful projects for the economy and society, con-and other issues that are forecast for the economic andducting appropriate risk assessment and providing quality

social environments. In this way, DBJ will proactively lever-financing and other financial solutions.

age its three functions—risk-sharing finance, market-stim-

We believe that DBJ can gain the trust of society withulating finance and knowledge bank—to take part in four

CSR through investment, loan and other businesses, such as

primary areas: growth support, infrastructure & energy,

the provision of services that lead to client satisfaction andregional revitalization tailored to regional needs, andincreases in corporate value.

strengthening the safety net.

CSR Report

Financial institutions can play a specific role in building a

Corporate Philosophy

CSR through Investment, Loan
and Other Businesses

Providing risk capital and knowledge from a long-term perspective
Four Primary Areas
Growth support

Infrastructure & energy

Regional revitalization
tailored to regional needs
Seepage 70.

Strengthening the safety net

Three Functions to Leverage
Risk-sharing financeMarket-stimulating finance

Knowledge bank

Annual Report & CSR Report 201567

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

Communication on Regional Revitalization

problems can best be resolved by communication and the

DBJ considers working with local citizens to build com-exchange of opinions across industries. Accordingly, DBJ

munities that suit their unique environments an important

strives to communicate with as many people as possible

part of supporting independent regional development.

through seminars, symposiums and lectures.

To this end, DBJ sponsors such events as seminars andsymposiums in collaboration with local authorities andCommunication Focused on the Environment

regional branches of the Japan Chambers of Commerce

Environmental problems such as global warming must be

and Industry and other economic organizations.

resolved, starting with individual awareness of the severity

Tokai Branchof the issues.
DBJ promotes understanding of the relationship

Messe Nagoya

between the environment and financial and business activi-

DBJ exhibited at Messe Nagoya 2014, one of the largest

ties by participating in the Eco-Products Exhibition, Japan’s

cross-industrial trade fairs in Japan. Under the theme oflargest environmental event, and holding seminars and“Environment, Safety and Manufacturing,” DBJ’s specific ini-

symposiums in conjunction with relevant organizations.

tiatives were introduced at this exposition, including finan-

DBJ has had a booth at the Eco-Products Exhibition every
year since fiscal 2001. Through display panels, we introduce

cial services such as the DBJ Enterprise Disaster Resilience
Rated Loan Program and reconstruction support initiatives.

various DBJ activities, such as the DBJ Environmentally Rated
Loan Program, the DBJ Enterprise Disaster Resilience Rated
Loan Program, the DBJ Employee’s Health Management
Rated Loan Program and DBJ Green Bonds.

Messe Nagoya 2014 boothCommunication in International Cooperation
In cooperation with Japan Economic Research Institute Inc.,
its Group think tank, DBJ holds seminars for governmental
Eco-Products 2014 boothand developmental financial institutions in developing countries, primarily in Asia, describing our experience in applying policy-based financing to support the reconstruction
and growth of the industrial economy of postwar Japan.
Participants also benefit from our accumulated expertise inpolicy issues such as energy conservation, environmental
measures and private infrastructure.
The Development Finance Course, for example, is aseminar that has attracted 346 people from more than
30 countries since it was inaugurated by DBJ in 1967. In

Eco-Products 2014 boothrecent years, we have responded to requests from thegovernments of Japan and other countries. Such projects
include one to support credit risk management at Vietnam
Development Bank, a detailed design project for theDevelopment Bank of Mongolia and a development banksupport project in southern Africa.
DBJ is a member of the Association of Development

68

Annual Report & CSR Report 2015

since 1976 we have been networking with financial institu-

Participating in Activities That
Contribute to Society

tions in China, South Korea, ASEAN countries, India and

TABLE FOR TWO

other areas. In 2015, ADFIAP’s annual meeting was held

DBJ began participating in the TABLE FOR TWO* program on

in Nha Trang, Vietnam. DBJ received one of the ADFIAP

March 29, 2010. Under this program, one of the meals in ourAwards 2015 for its efforts through DBJ Green Bonds, as ancompany cafeteria each day is designated as a “healthy menu”

initiative that supports environmentally and societally con-option. Through proactive employee participation in this pro-siderate business and socially responsible investment.

gram, as of the end of May 2015, DBJ’s contributions totaled

Financing Institutions in Asia and the Pacific (ADFIAP), and¥1,785,240—enough to provide 89,262 meals.
*TABLE FOR TWO is a program run by the non-profit organization
TABLE FOR TWO International. Under this program, each time a
specific food item is purchased, a ¥20 donation (enough money topurchase one school lunch in a developing country) is donated topurchase a school lunch for one child.
ADFIAP annual meeting in Nha
Trang, Vietnam

CSR Report

Other Communication Efforts
Providing Information

A healthy menu

Video Introduction to CSR Initiatives
Campaign

To make DBJ’s CSR activities more easily understandable, on
our website we have included video content entitled DBJ’s
CSR: Strengthening Society through Financial Expertise. We
also showed this video at the Eco-Products 2014 exhibition.
http://www.dbj.jp/co/csr/index.html (Japanese only)

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

Issuing CSR Reports
To expand communication with all stakeholders, in 2003,
DBJ issued Environmental Report 2003 for a Sustainable
Society. This was followed by similar reports in 2004 and2005. In 2006, DBJ published CSR Report.

Marunouchi shuttle bus

DBJ has combined its annual report and CSR reportunder the concept of “disclosure from a CSR perspective.”
DBJ will continue publishing CSR information introducing
DBJ’s initiatives to help realize a sustainable society.

Annual Report & CSR Report 2015

69

CSR through Investment, Loan and Other Businesses

DBJ promotes CSR through investment, loan and other businesses to solve social problems.
Specifically, DBJ will apply the distinctive features and financial services that it has realized in the past to provide to clients various solutions that address expected changes and other issues that are forecast for the economic
and social environments. In this way, DBJ will proactively leverage its three functions—risk-sharing finance,
market-stimulating finance and knowledge bank—to take part in four primary areas: growth support, infrastructure & energy, regional revitalization tailored to regional needs, and strengthening the safety net.

CSR through Investment, Loan and Other Businesses
Investments and loans in response to the Japanese economy,
financial markets, and corporate issues

Challenges for the Japanese economy
Issues in the macroeconomy

Issues for financial and capital
markets

Issues for firms(“semi-macroeconomic”)

Providing risk capital and knowledge from a long-term perspective
Four Primary Areas
Growth support

Infrastructure & energy

Regional revitalization
tailored to regional needs

Strengthening the safety net

Three Functions to Leverage
Risk-sharing financeMarket-stimulating finance

Knowledge bankCase Studies
Growth Support

Overseas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

DBJ Green Building Certification . . . . . . . . . . . . . 81
Public–Private Partnerships/Private FinanceInitiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

Healthcare and Welfare . . . . . . . . . . . . . . . . . . . . 75

Regional Revitalization Tailored to Regional Needs

DBJ Environmentally Rated Loan Program . . . . . . 76



DBJ Employee’s Health Management Rated
Loan Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77

Strengthening the Safety Net

Promotion of Competitiveness . . . . . . . . . . . . . . . 71



M&A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73















Infrastructure & Energy
Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

Transportation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79

70

Urban Development . . . . . . . . . . . . . . . . . . . . . . . 80

Annual Report & CSR Report 2015

Regional Revitalization . . . . . . . . . . . . . . . . . . . . . 83
Reconstruction Response . . . . . . . . . . . . . . . . . . . . 87



DBJ Enterprise Disaster Resilience Rated
Loan Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89

Growth Support
Promotion of CompetitivenessThe current state of the Japanese economy is characterized by a sense of gradual recovery. At thesame time, however, the competitiveness of the country’s industries needs to be reinforced to ensure
the realization of a variety of strategies and measures to buttress this growth.
Particularly important are efforts to maintain core competitiveness (by ensuring human resources, supply chains, R&D site functions and other domestic production infrastructure, as well as
appropriately updating capital stock) and to strategically enhance competitiveness (by creating newvalue through links between different industry sectors and promoting initiatives that span the value
chain from the upstream to the downstream ends).
Case Study

Shizuoka Gas

Since its establishment in 1910,

in the independent power producer

Shizuoka Gas Company, Ltd., headquar-(IPP) business in Thailand. Shizuoka Gas

Ltd., from the perspective of support-

tered in the city of Shizuoka, Shizuoka

joined this project by acquiring froming the overseas operations of regional

Prefecture, has operated as a city gas

a Marubeni Corporation subsidiary aenterprises, developing the electriccompany centered in central-eastern

certain number of shares in Eastern

power business and contributing to

Shizuoka. In response to the chang-Power and Electric Co., Ltd. (EPEC), a

regional economic vitalization, DBJ pro-ing business environment, marked

project-based company involved in thevided risk capital to support the partici-

by such factors as electricity and gas

gas-fired thermal power IPP business inpation of Shizuoka Gas in this project.

policy liberalization in recent years, theThailand. This project is the first over-company is taking part in the regionalseas investment for Shizuoka Gas. By

power generation business as a com-

participating in this investment projectmunity power producer and supplier

as a successful existing IPP business,(PPS) that utilizes renewable energy and

Shizuoka Gas hopes to gain experience

non-utility surplus power generation. In

in overseas management and businessthese ways, the company is promoting

promotion. The company also aims to

the creation of a structure for propos-

cultivate the specialized personnel needing optimal energy, including electricity,

to expand the regional electricity busi-

to local homes and businesses.

ness in the future. Going forward, in

Working with The Shizuoka Bank,

As its first Special Investment

addition to proposing energy solutions

Operations* project, DBJ has invested

to enterprises that are pursuing opera-

in the preferred shares of SG・Bang
Bo Power Holding Co., Ltd., whichtions overseas, Shizuoka Gas aims to

Shizuoka Gas established to participate

regional electricity business.

EPEC’s gas-fired thermal power generation facility

Socionext Inc., headquartered ina wholly owned subsidiary of Fujitsu

the city of Yokohama, Kanagawa

headquartered in the city of Yokohama,Prefecture, established through joint

Kanagawa Prefecture, and Panasonic.

capital contributions from Fujitsu

The company brings together the two

Limited, headquartered in Minato-ku,

companies’ core technologies in video,* System LSIs: Integrated circuits mounted
on single or multiple semiconductor chips
to provide the large-scale integration (LSI)
functions needed to operate systems, certain equipment and machinery.

Tokyo; Panasonic Corporation, head-

imaging and optical networking, consoli-

quartered in the city of Kadoma, Osaka;dating their customer bases and otherand DBJ, is a newly integrated fablessmanagement resources in the aim ofcompany for the design, development

creating a globally competitive company.

Case StudyCSR Report* Special Investment Operations: These operations are part of an effort to concentrateon supplying growth capital to contributeto regional economic vitalization and corporate competitiveness based on the Partial
Amendment of the Development Bank ofJapan Inc. Act, which was promulgatedand went into effect on May 20, 2015. (Seepage 22-23 for details.)

regional revitalization by expanding theSocionext

and sales of system LSIs*. This company

DBJ provided risk capital foralso aims to extend the Japanese sys-

Socionext’s new initiative in the fieldtem LSI business on the global stage.

of system LSIs using the Fund forSocionext integrates the system

Japanese Industrial Competitiveness,

LSI design and development func-

thereby supporting efforts to bolster

tions of Fujitsu Semiconductor Limited,Japan’s competitiveness in this field.

System on a chip (SoC) to amass multi-codec
functionality
Annual Report & CSR Report 2015

71

Promotion of Competitiveness
Case Study

Mitsubishi Heavy Industries Aero Engines

Mitsubishi Heavy Industries Aeroness partners to form an integratedof the Japanese aircraft industry. We

Engines, Ltd. (MHIAEL), headquar-production system for engine parts

provided investments and loans fortered in the city of Komaki, Aichi

and aims to boost competitivenessthis project because of this coopera-

Prefecture, commenced operations inand their presence in the internationaltion between the two companies, as

October 2014, taking over the civilian

marketplace.

we believe it will contribute to further

aircraft engine business spun off fromIn September 2014, this project

Mitsubishi Heavy Industries, Ltd. (MHI).

received approval from the Ministry of

In addition to its capital participation

Economy, Trade and Industry (METI)

using the Fund for Japanese Industrial

as a specified business restructuring

Competitiveness, DBJ provided invest-

plan. On this basis, DBJ aims to lever-ment and loan support throughage its extensive expertise in business

two-step loans (promoting businessrestructuring as well as know-how

restructuring*) based on the Industrial

accumulated through ongoing support

industry competitiveness.
*In this business, designated financial institutions provide enterprises acknowledged
to have in place a specified businessrestructuring plan based on the Industrial
Competitiveness Enhancement Act withnecessary funding as two-step loans.

Competitiveness Enhancement Act.
IHI Corporation is also a capital
participant in MHIAEL, forging a longterm cooperative relationship in production. IHI is one of the world’s foremost manufacturers of low-pressure
turbine blades, for which production
volumes are expected to rise, and
MHIAEL will cooperate with IHI in thisarea. With MHI’s support, the new

A view of the plantcompany will forge a cluster with busi-

Case Study

Nippon Charge Service

Nippon Charge Service, LLC, head-industries, as well as to foster the cre-quartered in Minato-ku, Tokyo, wasation of new businesses. Recognizing

established to help build a charging

the highly public nature and social sig-

network that offers more conveniencenificance of this business, in June 2014

to drivers of electric-powered vehicles

DBJ provided funding via the Fund for(PHVs*1, PHEVs*2, EVs*3) (Investors:

Japanese Industrial Competitiveness*4.

Toyota Motor Corporation, Nissan

In addition, DBJ employed project

Motor Co., Ltd., Honda Motor Co.,finance methods to arrange syndicat-

Ltd., Mitsubishi Motors Corporation,

ed loans with The Bank of Yokohama,Tokyo Electric Power Company,

Ltd., The Bank of Kyoto, Ltd., The

Incorporated, Chubu Electric Power

77 Bank, Ltd., The Chugoku Bank,

Co., Inc., and DBJ).

Limited, and The Hyakugo Bank, Ltd.,

Nippon Charge Service’s businessstruction of a nationwide charging

the environment by encouraging theinfrastructure network.

effects that are expected to ripple
outward regionally and into related

72

to fund Nippon Charge Service’s con-aims to help reduce the effect on
proliferation of electric vehicles, with

Annual Report & CSR Report 2015

*4 Fund for Japanese Industrial
Competitiveness: Aiming to support initiatives that create new value andenhance corporate value, DBJ establishedthis fund in the interest of boosting
Japanese industrial competitiveness by
unearthing individual enterprises’ potential toward commercialization and linking
the initiatives to growth by cultivating
new business frontiers and promoting
strategic alliances.

*1 PHV: Plug-in hybrid vehicle*2 PHEV: Plug-in hybrid electric vehicle*3 EV: Electric vehicle

A quick electric charger

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

Case Study

Sankyo Tateyama

Sankyo Tateyama, Inc., headquar-tures billets and conducts extrusion

ranging from billet production within

tered in the city of Takaoka, Toyama

and processing within Thailand. DBJ

Thailand to the sale of products. By

Prefecture, conducts businesses

proposed this acquisition and provided

acquiring this company as a subsidiary,in three categories: Construction

M&A advisory services.

Sankyo Tateyama expects to makeThai Metal Aluminium has taken

major inroads into the expansion of

construction materials for residences

over all the businesses formerly han-its business domains in the ASEAN

and larger buildings; Materials, which

dled by Thai Metal Co., Ltd., which isregion, including construction andfocuses on the casting, extruding andan aluminum extrusion manufacturer,

non-construction materials.

Materials, centered on aluminum

processing of aluminum and magnesium; and Commercial Facilities, involvCSR Reporting store fixtures and signage.
Under its VISION-2020 in July 2011
and Medium-Term Management
Plan in July 2012, Sankyo Tateyama
announced that its core strategies
involve strengthening operationsin the non-construction materials
business and developing businessoverseas. To this end, the company
acquired majority control of Thai Metal

Thai Metal’s works

Aluminium Co., Ltd., which manufac-

Case Study

Maruetsu

Since its establishment in 1952, The

petition from convenience stores andThrough the complementary

Maruetsu, Inc., headquartered in

online retailers. In response to thesestrengths of its constituent compa-

Toshima-ku, Tokyo, has operated achanges in the external environment,

nies, USMH aims to become the sales

supermarket chain centered on the

Maruetsu decided to enter into man-leader for its industry in the Tokyo

Tokyo metropolitan area. The com-agement integration with Kasumi Co.,

metropolitan area.

pany currently operates stores of threeLtd., which has a leading market sharetypes: “Maruetsu” supermarkets,

in Ibaraki Prefecture, and MaxValu

urban “Maruetsu petit” stores andKanto Co., Ltd., whose operations“Lincos” high-end supermarkets. One

center on the Tokyo metropolitan areaof Maruetsu’s strengths is its ability to

and who is a subsidiary of Aeon Co.,

offer flexible shop formats tailored toLtd. United Super Market Holdings Inc.

specific regions.

(USMH) was established as the holding

Maruetsu’s market has been shrink-company for these operations, becom-ing as a result of a dwindling anding one of Japan’s largest food super-graying population, as well as the con-market operators. DBJ provided com-

sumption tax hike. Furthermore, theprehensive advisory services related tocompany faces increasingly fierce com-this management integration scheme.

Ceremony to commemorate USMH’s listingon the Tokyo Stock Exchange

Annual Report & CSR Report 201573

Overseas
Efforts at expansion overseas have become an important factor in Japan’s continued growth.
Emerging markets in particular, with their notable growth in middle income groups, represent
a major business opportunity for Japan, because the region is running up against environmental
issues, urbanization-related difficulties and other developmental constraints and growth challenges
that Japan has already faced and overcome.
Case Study

PPP Concession in European High-Speed Rail Sector

DBJ has built up an investment

as a significant policy element by theconcession-type and other advanced

interest in the European transporta-

French government and the European

infrastructure projects overseas. At thetion sector’s largest high-speed rail

Union—–both of which, along withsame time, DBJ intends to share withproject implemented under the PPP-

their public institutions, have provided

Japanese pension funds, institutional

concession method (the “Project”).

it with strong support. The Project

investors and others the asset man-This investment has been achieved

is expected to generate long-term

agement and investment opportunities

through the existing partnership withincome gains after its scheduled com-

we discover at home and overseas,

Meridiam Infrastructure, a specialized

pletion in 2017.

thereby meeting investors’ diversifying

long-term investor focused primarily
on investing in greenfield infrastruc-sidered and used as a popular andture projects globally, with strategic

effective measure of asset manage-

focus on PPP assets in Europe andment and investment among overseas

North America.

pension funds, and pension funds and

The Project involves the construc-institutional investors in Japan are also

tion of a new rail line between theshowing growing interest in this class

French cities of Tours and Bordeauxof assets.

(approximately 300 kilometers). The

Taking advantage of skills, risk eval-line will be an important link in theuation techniques and other resources

Trans-European Transport Networks

it has gained through its involvement(TEN-T) scheme for connective trans-

in infrastructure finance, DBJ will

port service across Europe, and is seencontinue investing and financing inCase Studyneeds for access to high-quality investment outlets.

European High-Speed RailTOKYO PRO-BOND Market

The TOKYO PRO-BOND Market is a

issued by Banco Santander-Chile, a

DBJ plans to invest a total of ¥100

new bond market for professional

leading Chilean bank, in April 2014.

billion in bonds issued in the TOKYO

investors that was established in 201174

Investment in infrastructure is con-

In this way, DBJ is working to vital-

and is currently operated by the Tokyoize the new market in the interest

Stock Exchange. The TOKYO PRO-of promoting the development of

BOND Market was set up with thefinancial markets in Japan. By being aaim of creating a global bond market

principal investor in bonds issued on

in Japan which would be equal to

the TOKYO PRO-BOND Market, DBJ isthe euro market as a core market inencouraging participation from promi-Asia. The TOKYO PRO-BOND Market

nent investors and prompting leading

accepts English-only disclosure, mak-enterprises from around the world to

ing it convenient for non-Japaneseissue bonds in the financial markets ofenterprises to issue bonds in Japan. In

Tokyo. Raising the global profile of thethe preceding fiscal year, DBJ invested

financial markets of Tokyo should also

in five yen-denominated bonds issued

provide more investment opportuni-in this market, starting with bonds

ties for Japan’s professional investors.

Annual Report & CSR Report 2015

PRO-BOND Market.

TOKYO PRO-BOND Market logo

Healthcare and Welfare
Society faces a wide range of issues on the healthcare front, including an increasing elderly population, medical system reforms, mergers and acquisitions by medical corporations and a need torebuild aging facilities. Offering uninterrupted healthcare services involves solving fiscal and administrative problems, as well as improving the skills of medical and other personnel and the quality ofrelated facilities and medical equipment.
Case Study

Regional Healthcare FundAs Japan transitions fully toward a

Healthcare Fund), with a total invest-

collaboration with regional finan-“super-aged” society, cultivation ofment of ¥10.0 billion, to invest in

cial institutions. By leveraging its

the healthcare and medical industries

medical institutions’ subordinatedfinancial solutions and wealth ofis taking on a growing importance, as

loans and loan claims.

knowledge, through the Regional

is the cultivation of business founda-

Through this cooperation with

Healthcare Fund, DBJ is providing

tions in these fields. In relation to this,Mitsubishi UFJ Lease & Finance,risk capital for subordinated loans

the Japanese government is promot-

DBJ aims to promote initiatives by

and other investments.

ing a “Japan Revitalization Strategy.”

medical institutions and encourage

As medical facilities are core components of the healthcare and medical

Regional Healthcare Fund Scheme

need to rebuild dilapidated hospitals
order to augment medical functionality. Japan will also need to undertake
initiatives to build healthcare systems
suited to regional environments.
Against this backdrop, DBJ andthe Mitsubishi UFJ Lease & Finance

Mitsubishi UFJ
Lease & Finance

DBJ

and upgrade medical equipment in

Investment(General partnership)
Healthcare Finance, Inc.
GP investment

Healthcare Management
Partners, Inc.
Operational outsourcing(sourcing, monitoring, etc.)

Case Study

DBJ
Subordinatedloans, etc.

Chiyoda-ku, Tokyo, formed theLimited Partnership (Regional(Limited partnerships)

LP investment(New fund) Regional
Healthcare Investment
Limited Partnership

Company, Ltd., headquartered in
Regional Healthcare Investment

CSR Report

sectors, the country faces a growing

Medicalinstitution

Medicalinstitution

Mitsubishi UFJ
Lease & Finance

Medicalinstitution

Kawakita Medical Foundation

Kawakita Medical Foundation’s

advanced environmental consideration

remains in place even in ordinary times

Kawakita General Hospital, located ininitiatives and excellent disaster preven-and its initial-response system for

Suginami-ku, Tokyo, provides 24-hourtion and business continuity efforts.

emergencies that includes conducting

emergency medical care, serving as

In its environmental assessment

the main emergency and acute medi-

for the current round of financing,

cal care facility in the area. In recent

DBJ gave high marks for the hospital’s

years, the company has been aggres-achievement of 100 percent recycling

sively upgrading its medical supportof hard-to-recycle medical waste due

services with the expansion of theto such efforts as raising its target

Kawakita Rehabilitation Hospital,

waste recycling ratio, carefully select-health examination center, family

ing its outsourced waste processing

medicine center and geriatric health-partners and conducting periodic

care facilities.

checks of their operations. DBJ also

Continuing on from fiscal 2012,

triage drills*.
*Triage drills are designed to optimize rescue
effectiveness in cases involving numerous casualties where medical personnel and resources arelimited by prioritizing the level of care according
to the level of seriousness and urgency.

gave the hospital a high business

DBJ recertified the Kawakita Medical

continuity management (disaster pre-Foundation as a DBJ Visionary Hospitalparedness) rating for its configurationand provided financing based on theirof a disaster response structure that

Kawakita General Hospital
Annual Report & CSR Report 201575

DBJ Environmentally Rated Loan Program
The environment is a perpetual matter of global concern, and corporations are responsible for conducting businessin an environmentally responsible manner. Financial institutions are no exception, being tasked with the missionof contributing to a sustainable society through environmentally considerate investment and financing activities.
Case Study

Suzuki Motor

Suzuki Motor Corporation, headquar-arranged syndicated loans for thegies for enhancing fuel performance. (3)tered in the city of Hamamatsu, Shizuoka

company based on that system.

The company conducts monthly envi-

Prefecture, has “Small Cars for a Big

We accorded Suzuki Motor Corpora-ronmental effect analyses of each of its

Future” as its slogan. In line with thistion a high rating for four reasons. (1) The

production lines and processes, and uses

mantra, the company has become ancompany has placed a strong emphasis onenergy cost conversions to measure annu-

industry leader conducting business on

the environmental effect of its products

al results of introducing equipment. Thesethe world stage in the production andin use. Applying some of the strictest

measures help to ensure the thoroughsale of mini-vehicles, which are light-

standards such as Top Runner Standards,

visualization of environmental effects andweight, offer good fuel performancethe company promotes Suzuki Green

lead to thorough environmental measuresand are low in CO2 and other emissions.

Technology, a next-generation environ-at every plant. (4) In addition to having in

Since the time of its establishment,

mental technology aimed at reducing

place a system to centrally manage theSuzuki Motor Corporation has made aweight and fuel consumption. As a result,environmental risk of its procurement

full-fledged effort to manufacture “valu-

the company provides products thatpartners, the company has introduced

able products,” working at the same

create new demand, while at the same

Suzuki’s Environmental Management

time to promote environmental initiatives

time addressing an issue facing society.

System for sales distributors to promotethroughout the company. Underscoring(2) To reach increasing numerical targets

environmental awareness throughout thethis emphasis, the company formulated

for higher global average fuel economy,

supply chain.

the Suzuki Global Environment Charterthe company has set key performancein 2002, and has cultivated a particularly

indicators (KPIs) for the development ofhigh level of environmental management.

environmental technologies based on a

DBJ gave Suzuki Motor Corporation

medium-term roadmap. These KPIs leadthe highest rank for the DBJ Environ-to the development of next-generation

mentally Rated Loan Program andvehicles and improvements in technolo-

Case Study

Santen PharmaceuticalSanten Pharmaceutical Co., Ltd., head-

three reasons. (1) To reflect the stance ofprocess controls to reduce its percentage

quartered in the city of Osaka, has a

ISO 26000, Santen’s Values define theof non-conforming products and working

history reaching back more than 120“7 Core Subjects of CSR” as importantto reduce waste, Santen Pharmaceutical

years and is Japan’s leading manufac-

social issues to address in its corporate

has set targets for its final disposal rateturer of ophthalmic pharmaceuticals.

activities. In line with these subjects, thethat surpass industry levels. The company

The company name harks back tocompany engages in dialogue with its

is also committed to promoting further 3R

a Confucian passage expressed instakeholders and considers specific initia-(reduce, reuse and recycle) activities.

Japanese as “Tenki ni sanyo suru*,”tives to address in each of these areas.

which serves as the basis for “Santen’s(2) In terms of product quality, Santen

Values.” Based on these values, by

Pharmaceutical has established its own

concentrating on the specialized oph-

standards that exceed statutory require-thalmic market, the company strives toments. The company has adopted waterprovide superior products and services

resource measures as an important theme

that help to improve the quality of lifeof its environmental activities, as theseof patients around the world.

resources can significantly affect its quality

DBJ provided financing to Santen

proactive stance toward conserving water

Environmentally Rated Loan Program.

resources through forest preservation

Annual Report & CSR Report 2015

*Santen Pharmaceutical’s original interpretation of a passage from Zhongyong(“Doctrine of the Mean”) by Confucius,meaning “exploring the secrets and mechanisms of nature in order to contribute topeople’s health.”

control. Accordingly, the company takes a

Pharmaceutical under the DBJ
DBJ rated the company highly for76

New ALTO

activities. (3) In addition to imposing strict

Production line for ophthalmic pharmaceuticals

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

Autobacs Seven

Autobacs Seven Co., Ltd., headquar-

activities, liaising with health insurance

tered in Koto-ku, Tokyo, operates aorganizations, industrial physicians andchain of franchise stores that sell car

the labor union to provide a systemproducts, perform inspections andthat promotes health measures.

repairs, and buy and sell automobiles.

(2) The company quantitatively analyz-

The company is a leader in this field.

es health checkup and receipt data*1

DBJ provided financing to Autobacs

to thoroughly visualize health risks,

Seven based on the DBJ Employee’s

and then establishes key risk response

Health Management Rated Loan

issues. The company then sets

Program.

medium-term numerical targets
through a three-year data healthrating for three reasons. (1) The com-

program. (3) Targeting all employees,

pany’s top management proclaims awhen they are recognized to have a“health declaration” as a fundamental

health risk, they are provided with

policy it makes known to all employ-

health guidance using a method

ees. Companywide, Autobacs Sevencalled a “high-risk approach*2.” In

has in place a Health Improvement

these ways, the company endeavors

Promotion Council and a Healthto respond to lifestyle-related disease

Management Office to spearhead its

early on.

Case StudyCSR Report

We accorded the company a high

*1 Receipt data: When a patient undergoes
a medical examination, the medical institution invoices the insured party (healthinsurance organization or similar) for
medical treatment fees. This receipt contains detailed data.
*2 High-risk approach: A treatment methodthat concentrates on people at high riskof contracting a specific disease.

Certification presentation ceremony

FrestaFresta Co., Ltd., headquartered inhealth declaration that sets targets forif an employee is ill or experiencing

the city of Hiroshima, Hiroshima

all employees on managing their own

a difficult work situation. ThroughPrefecture, operates a food supermar-

health. (2) The company has launchedsystems such as these, Fresta strives toket chain throughout the Chugoku

the FreSmart Project* and an activity

create an environment where employ-region and centered on Hiroshimapromoting brain checkups, establish-

ees can work healthily and with peace

Prefecture. Fresta aims to be theing its own internal standards. Frestaof mind.

“healthiest supermarket,” promoting

identifies employees whose healthhealth not just for its employees but

checkup results indicate a high degree

throughout the region, and seeks toof health risk, and requires these peo-

invigorate the region by supportingple to receive guidance on improving

the health of its customers.

their situation, including from special-

Fresta is the first company in

ist advisors, and undergo brain scans.

Hiroshima Prefecture to receive DBJ(3) Fresta’s standards for managing

financing through the DBJ Employee’s

working hours are stricter than legally

Health Management Rated Loanrequired, and the company has inProgram.

place an employee consultation room

DBJ rated Fresta highly for threewhere employees can undergo con-reasons. (1) In line with its key man-sultations with industrial counselors.

agement theme of being the “healthi-

Fresta has also introduced a long-term

est supermarket,” Fresta has issued adisability system that can be utilized*FreSmart Project: This project sets conditions based on internal standards forhealth related to metabolic syndrome.
Specialists cooperate to support employee
health on the exercise and dietary fronts.

Certification presentation ceremony

Annual Report & CSR Report 201577

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

Case Study

Green Energy Tsu

Green Energy Tsu Corporation, head-expertise in engineering, procure-the company is in accordance withquartered in the city of Tsu, Miement and construction, as well as

the city of Tsu’s Biomass Industry

Prefecture, was established by JFE

operation and maintenance. Green

City Framework. The company is also

Engineering Corporation (JFEE), head-

Energy Tsu has built and operates anhelping in regional revitalization by

quartered in Chiyoda-ku, Tokyo, toapproximately 20-megawatt power

augmenting the competitiveness ofgenerate electricity using biomass fuel.

plant fueled by timber from forest

local industry and contributing to theThrough the Fund for Japanesethinning that was previously unused.

quality and quantity of employment

Industrial Competitiveness, DBJ has

By making effective use of this timber,available in the area.

provided funding to Green Energy
Tsu in collaboration with JFEE andother organizations. Also via this fund,under the agreement on supplying
mezzanine loans, DBJ arranged all of
this project via project finance methods, separating the roles of the banks
providing senior loans, The Hyakugo
Bank, Ltd. and Sumitomo Mitsui Trust
Bank, Limited.
This business operates on the siteof JFEE’s Tsu Works, leveraging JFEE’s
Biomass power plantleading-edge technologies and ample

Case Study

Miyako Solar Energy Project

The Miyako Solar Energy Project ismaking effective use of the land hit byfinancing and providing funds. We

one aspect of the Miyako City Smartthe disaster, this project aims to help

arranged a syndicated loan with

Community Promotion Project beingstabilize power supplies in times of

The Bank of Iwate, Ltd., the only

undertaken as an effort at reconstruc-disaster.

financial institution to be involved intion following the Great East Japan
Earthquake.

DBJ promoted the Miyako Solar

the Miyako City Smart Community

Energy Project by helping to arrange

Promotion Project from its inception.

Megasolar power plant in Tsugaruishi district

Megasolar power plant in Taro district

Specifically, the project involves theconstruction of a megasolar (largescale solar generation) facility providing approximately 4 megawatts (basedon direct current) in the Tsugaruishi
and Taro districts of the city of Miyako,
Iwate Prefecture, which was hit by thetsunami that accompanied the Great
East Japan Earthquake. In addition to78

Annual Report & CSR Report 2015

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

Case Study

Skynet Asia Airways

Skynet Asia Airways Co., Ltd. (Solaseed

enhance its corporate value. To help

to other companies headquartered inAir), headquartered in the city of

the company source equipment, weMiyazaki Prefecture. As a shareholder,

Miyazaki, Miyazaki Prefecture, aims

arranged a syndicated loan in cooper-

DBJ helps Solaseed Air utilize its man-to provide service that delivers highation with major financial institutions

agement resources to enhance thecustomer satisfaction under the brandin the company’s service area, thereby

airline’s corporate value and hopes toconcept of “Seed Smiles in the Sky.”aiding Solaseed Air’s efforts to rein-

support its further growth and see theWhile aiming to be one of the mostforce its business foundations.

company create new economic value

Recently, DBJ converted all of thelines, Solaseed Air is expanding its

preferred shares (shares with no vot-route network in Kyushu and Okinawa.

ing rights), which it had acquired as

DBJ began working with Solaseed

an investment in the company’s revi-

Air in February 2007 with support

talization, to common stock, thereby

from the then-Industrial Revitalization

becoming Solaseed Air’s largest

Corporation of Japan. Since that time,shareholder. DBJ transferred some of

we have continued to help Solaseed

its shareholdings to major financial

Air grow by providing assistance frominstitutions in Solaseed Air’s service

a medium- to long-term perspective

area (The Miyazaki Bank, Ltd., The

on the financing and business fronts.

Miyazaki Taiyo Bank, Ltd., Oita Bank

We have provided active support in aCo., Ltd., The Kagoshima Bank, Ltd.,

number of areas to help the company

The Eighteenth Bank, Ltd.), as well as

Case Study

for its region.
CSR Reportcost-competitive of Japan’s new air-Solaseed Air airliner

Keio

Keio Corporation, headquartered incompleted work on a “construction

the city of Tama, Tokyo, operates rail-

project of multi-level crossing near

DBJ provides financing to Keio

way lines with a total length of 84.7

Chōfu Station.” In this project, led by

Corporation, which offers transporta-

km. Its Keio Line connects Shinjuku

the city of Tokyo, Keio Corporation

tion services that support the lives of

Station and Keiō-hachiōji Station,sought to prevent traffic congestion

residents along its railway lines andand the company also operates theand accidents at railroad crossings,

contribute to development along

Inokashira, Takao and Sagamihara

integrate the region through elevatedthese lines.

lines. The Keio Group, of which Keiourban planning routes and improve

Corporation is a mainstay, is involved

user convenience. As of the conclusion

in a broad range of businesses, fromof this project, rail sections between

merchandise sales (including Keio

Shibasaki and Nishi-chōfu stations

Department Store Co., Ltd. and Keioon the Keio Line and between ChōfuStore Co., Ltd.) to leisure (including

and Keiō-tamagawa stations on the

Keio Plaza Hotel Co., Ltd., and Keio

Sagamihara Line are all underground.

Presso Inn Co., Ltd.).

This construction elevated urban plan-In fiscal 2014, Keio Corporationning routes in eight locations andeliminated 18 railway crossings.

Chōfu Station underground platform

Annual Report & CSR Report 201579

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

Case Study

Daibiru

Daibiru Corporation, headquartered

Kita-ku, in 1963. To address the build-in the city of Osaka, was establisheding’s ongoing deterioration, Daibiru

in 1923 with the foresight to con-embarked on its reconstruction. Marchcentrate business in the city. The

2015 saw the rebirth of a cutting-company started operations in 1925edge new building that is highlywith the Daibiru-Honkan Building

energy efficient, has in place a busi-(Nakanoshima, Kita-ku, Osaka). In

ness continuity plan and incorporates

1927, the company expanded its busi-

safety-conscious technologies. For

ness by constructing the Hibiya Daibiru

these reasons, we accorded the new

Building (Uchisaiwaicho, Chiyoda-ku,

building the “2014 five stars” rating

Tokyo), which employed state-of-the-in DBJ Green Building Certification.

art technologies at the time.

The plants from the former building’s

DBJ currently accords the com-rooftop garden and stately histori-pany’s Shin-Daibiru Building with DBJ

cal objects have been left in place soGreen Building Certification, given to

people using the facility can enjoy its

properties in the best class of environ-unique design. The building is thereby

mental and social awareness. The orig-

expected to contribute to the regional

inal building was completed in Osaka’s

community.

Shin-Daibiru Building

business center of Dojimahama,Case Study

80

IshiyaIshiya Co., Ltd., headquartered in

the company is contributing to region-

the city of Sapporo, Hokkaido, wasal revitalization.

founded in 1947 and operates under

DBJ has provided DBJ Greena management philosophy of “sweets

Building Certification to the Sapporo

that make people happy.” In keeping

Odori Nishi 4 Building, for “properties

with this theme, the company manu-

with exceptionally high environmental

factures and sells some of Hokkaido’s

and social awareness.” DBJ gave thehallmark confectioneries, such asbuilding a high rating for various rea-

Shiroi Koibito.

sons: the building embodies environ-

To encourage customers to feel amental consciousness, being equipped

sense of closeness with its products,

with LED lighting in common areas,

Ishiya opened the Ishiya Shop, Ishiya

water-saving toilets and other equip-

Café and Candy Labo at its Sapporo

ment that deliver high energy savings,

Odori Nishi 4 Building, a center of theand the outer walls of the building are

Sapporo tourism trade. These three

decorated with a Hokkaido flora-and-shops opened in June 2013. In addi-

fauna motif, with carvings and stainedtion to tourists, the stores are popular

glass that take regional culture intowith Sapporo residents. In this way,consideration.

Annual Report & CSR Report 2015

Sapporo Odori Nishi 4 Building

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

Case Study

Sekisui House Reit/Sekisui House SI Residential Investment Corporation
Investment Corporation, headquar-

vided certification for office buildings

tered in Minato-ku, Tokyo (Prime

2011 we have been providing the DBJ

owned by Sekisui House Reit, Inc.,

Maison Shinagawa, Prime Maison

Green Building Certification to real

headquartered in Minato-ku, Tokyo.

Gotenyama East), giving high marks toestate owners for advanced initiatives

The certification of these buildings

their proactive energy-saving and gen-in the “customer support services”(Garden City Shinagawa Gotenyama,

eration efforts. DBJ, through its recog-

category. In January 2015, we set up a

Hommachi Minami Garden City andnition of the “residence edition” asset

new “residence edition” of this certifi-

Hommachi Garden City) supported IR

type, supports the overall initiatives

cation for apartment buildings. Alongactivities that enabled the companyof the Sekisui House Group, the firstwith editions for office buildings, forto raise financing at the time of its

companies to have properties receive

logistics and for commercial facilities,

new stock market listing. We havethis category of DBJ Green Building

this makes four main asset categories

also certified apartment buildings

Certification.

eligible for certification.

owned by Sekisui House SI Residential

Garden City Shinagawa Gotenyama

CSR Report

In this new category, we pro-societal considerations,” since March

Concerning “environmental andPrime Maison Shinagawa

Annual Report & CSR Report 201581

Public–Private Partnerships/Private Finance Initiatives
Public–private partnerships (PPPs) describe a variety of schemes for the provision of public services
through partnerships between government and private-sector companies. They involve harnessing private
capital and expertise for use in the delivery of public facilities traditionally provided by the Japanese government or regional municipal bodies, with private finance initiatives (PFIs) being representative of such
schemes for the provision or management, supervision and support of public facilities. At a time when
Japanese government and regional municipal bodies are in difficult financial straits, the use of PPPs, andparticularly PFIs, in restoring aging public infrastructure and similar projects represents a promising field.
Case Study

Various Initiatives to Expand the Use of PPP/PFIIn June 2013, DBJ set up PPP/PFI

head office, branches and other offic-

and regional financial institutions as

Promotion Centers at the Regional

es. The academy’s primary targets areit conducts PPP/PFI-related studies,

Planning Department of its headmembers of regional municipal bodies,disseminates information and advice,office, branches and offices to expand

and it has attracted the participation

cultivates and supports the formation

the use of PPP/PFI projects. Throughof more than 300 people from loca-

of diverse PPP/PFI businesses, provides

these organizations, we aim to con-tions around Japan.

risk capital and works aggressively to

Going forward, DBJ will continue

tribute to a broad range of initiatives
from the upstream stages.
As one example, we have held 30
PPP/PFI Promotion Seminars in various

help regional revitalization by expand-fostering appropriate relations withing the application of the PPP/PFI

the Japanese government, PFIPCJ,

approaches.

regional municipal bodies, enterprises

regions in collaboration with regional
financial institutions, the JapaneseCabinet Office and the Private FinanceInitiative Promotion Corporation ofJapan (PFIPCJ), as of the end of fiscal
2014. These seminars provide information about rebuilding public infrastructure in the face of such challenges
as fiscal constraints and a dwindling
population. Since October 2014, wehave held “PPP/PFI Academy,” using
PPP/PFI Academy underway

the videoconferencing system at DBJ’s

Case Study

Investing in PFIPCJ

DBJ was one of the founding inves-

Initiatives (revised) (concluded in Junealso dispatches specialists to regional

tors in the Private Finance Initiative

2013) as a key measure of the Japan

municipal bodies and provides advice

Promotion Corporation of Japan

Revitalization Strategy (Cabinet deci-

to cultivate the market for infrastruc-(PFIPCJ), headquartered in Chiyoda-ku,

sion on June 2013). PFIPCJ currently

ture investment, thereby reducing theTokyo.

invests in and provides loans for PFI

fiscal burden and creating private-

projects under a concession format,

sector business opportunities.

PFIPCJ was established based on the
Act on Promotion of Private Finance82

Annual Report & CSR Report 2015

among other ways. The organization

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

Case Study

Mt.HAKODATE ROPEWAY

Mt.HAKODATE ROPEWAY Co,ltd,

convenient and attractive as a tourist

that making the company’s facilities

headquartered in the city of Hakodate,destination. Plans include a large-scale

more convenient to the passengers

Hokkaido, operates a ropeway busi-

refurbishment to alleviate crowding

will strengthen the tourism base ofness on Mt. Hakodate. This moun-during peak evening hours and makethe Hakodate area and Hokkaido intain, which boasts three stars in theits facility barrier-free.

general. On this basis, DBJ provided

Michelin Green Guide Japan (2nd

DBJ provided funding in supportof this plan, which it believes is an

dramatic night views, is an integral

extremely important project in terms

part of the Hakodate tourism industry.

for tourism in the Hakodate area.

At the end of fiscal 2015, theAccordingly, we provided risk capital

Hokkaido Shinkansen is scheduled

through mezzanine financing to rein-

to open, linking Shin-Aomori Station

force the Mt.HAKODATE ROPEWAY’s

and Shin-Hakodate-Hokuto Station.

financial base. At the same time,

To coincide with this timing, thewe structured a syndicated loan in

Mt.HAKODATE ROPEWAY has drawn

cooperation with regional and otherup plans to make the mountain morefinancial institutions. We believe

Case Study

Program.
CSR Report

Revised Edition) and is known for its

financing via the Regional Areas Genki

Large 125-person capacity gondola

Setouchi Musubu Investment Limited PartnershipTo facilitate the smooth succession ofner, the fund aims to help maintaininitiative by The Hiroshima Bank andregional enterprises to heirs as Japan’s

regional businesses and employment,

other regional financial institutions

population ages, DBJ set up theas well as contribute to regional eco-

to facilitate business inheritance, DBJ

Setouchi Musubu Investment Limited

nomic invigoration.

leverages its characteristically neutral

Partnership (below, the “Musubu
Setouchi Business Inheritance Fund”)

In addition to participating in andstandpoint to provide advice on fundproviding funding support for thismanagement.

in collaboration with three regional
financial institutions, including The

Overview of the Musubu Fund Scheme

Hiroshima Bank, Ltd., headquarteredin the city of Hiroshima, Hiroshima(GP) Hiroshima Venture
Capital Co., Ltd.

Prefecture.
The Musubu Setouchi BusinessLP
investment

Inheritance Fund meets the inheri-

GP investment

institutions participating in the fund by

Musubu Setouchi Business
Inheritance Fund (Total
commitment: ¥1.0 billion)acquiring shares in their enterprises for

Investmenta certain period of time and returning

Superior regional
enterprises facing businessinheritance issues

tance needs of clients of the financial

these shares after the next generation

DBJ

L
LP
investment(Regional Financial
Institutions)
The Hiroshima Bank
Tomato Bank
(Okayama Pref.)
The Saikyo Bank
(Yamaguchi Pref.)of management is in place and thebusinesses are passed on. In this man-

Annual Report & CSR Report 201583

Regional Revitalization
Case Study

Twinbird Corporation, headquar-a development-oriented company in the

carefully. Twinbird is also aiming to growtered in the city of Tsubame, Niigata

city of Tsubame, a “town of artisans.”

by expanding its global operations. To

Prefecture, was founded in 1951. This

Twinbird manufactures and sells a

support these initiatives and in the inter-company, which manufactures andhost of products, with a lineup that

est of invigorating regional industry, DBJ

sells household electrical products,

currently includes appliances for foodprovided financing through the Regionalcelebrates its 64th anniversary of

preparation; LED lighting; cleaners;

Areas Genki Program.

founding in 2015.

home electronics; equipment for

Initially established as a metal plat-

beauty, barbering and health; water-

ing company, Twinbird has developed

resistant audiovisual equipment andits operations mainly in the markets forindustrial refrigerators.

gifts and sales through mass-market

Operating in the household electron-shops for household electrical products.

ics sector, which is susceptible to chang-

To realize a management philosophy

es in the business climate, the company

of “providing products that inspire andstrives to develop and manufactureoffer comfort,” Twinbird has grown as

products by identifying customer needs

Headquarters exterior

Daikyo Corporation, headquartered

new factory should make constructionin the city of Komatsu, Ishikawa

equipment manufacturing and otherPrefecture, applies the technologicalcore industries in Ishikawa Prefecture

foundation in paints it has cultivatedmore competitive, the project issince the time of its founding in 1976

eligible for interest rate subsidy pro-to enter new technology domains andgrams that support the revitalization*Interest rate subsidy programs that support
the revitalization of regional communities
are part of a system supported by theJapanese government toward the realization of various regional community revitalization plans the Japanese government hascertified.

markets. Currently, the company hasof regional communities* based ona presence as a prominent supplier

the prefecture’s industrial innovationof cabins and driver’s seat units tostrategy.

Case Study

DaikyoKomatsu Ltd., a world-leading manu-

Evaluating Daikyo highly for its

facturer of construction equipment.

move to encourage the centralization

To offer new products and augmentof construction equipment manu-

production efficiency, Daikyo plans tofacturing in Ishikawa Prefecture, DBJ

consolidate its four domestic factories

provided financing under the Regional

into a new and larger plant. As theAreas Genki Program.

Case Study84

Twinbird

New plant

Enshu Railway

Enshu Railway Co., Ltd., headquarteredtransport operator based in the city ofthe store, which also boosts the num-in the city of Hamamatsu, Shizuoka

Hamamatsu, the company has begun

ber of inbound tourists, thanks to its

Prefecture, is a railway and bus opera-

offering HAMAMATSU FREE Wi-Fi, alocation just in front of the station in

tor. Enshu Railway is a core member offree public wireless LAN service. Also,

the city center.

the Entetsu Group, which is involved

by providing notice signs in five lan-in the transport, product sales, leisureguages on its direct bus to Nagoya’s

service and real estate businesses, cen-

Chubu Centrair International Airport,

tered in western Shizuoka Prefecture.

the company increases convenience

DBJ has provided Enshu Railway

for tourists visiting Japan. (2) The

with financing via the Regional Areas

Entetsu Department Store has a “tax-Genki Program for two reasons.

free counter” (for duty-free purchases)(1) As an operator of Hamanako

and is newly equipped with an auto-

Palpal and other tourism and nearby

matic foreign exchange machine. Wi-Fi

lodging facilities, as well as a public

services are available on all floors ofAnnual Report & CSR Report 2015

Tax-free counter in the
Entetsu Department Store

Regional Revitalization
Case Study

Kansai Super Market

Kansai Super Market Ltd., head-long working hours from recurring.”

specialists. (3) The company is also

quartered in the city of Itami, Hyogo

This manual clearly spells out the roles

taking part in activities to promote thePrefecture, is a supermarket chainof related divisions and requires these

health of local residents. These include

that operates 65 stores (as of April

divisions to notify store departments“Look, Touch, Enjoy!” dietary experi-30, 2015) in Hyogo, Osaka and Nara

about overtime hours worked. The

ence tours and courses in a proactive

prefectures. Its supermarkets, which

company also encourages employees

effort to provide information about

are particularly well known for freshto take paid leave and has introduced

healthful diets.

foods, enjoy strong support from cus-

leave systems for seven, five and three

tomers in the local community.

consecutive days for this reason.
(2) Based on its “mental health plan,”Kansai Super Market has established

Employee’s Health Management Rated

medium- and long-term targets for its

Loan Program. We accorded highmental health measures. As specificmarks to the company for three rea-measures, newly hired and existingsons. (1) As one measure to address

employees undergo self-care train-

excessive work, the company has pre-ing, and the company has set up an

pared a “manual to prevent excessively

outside consultation desk staffed with

Case Study

Nakagawa Water Power

Nakagawa Water Power Co., Ltd., head-agricultural water, generation tends toquartered in the city of Fukushima,

be stable throughout the year, and the

Fukushima Prefecture, boasts sometechnology provides an eco-friendlyof the most advanced technologicalway to generate electricity.

capabilities in Japan in the design,

DBJ has provided financing via the

manufacture, sale and maintenance ofRegional Areas Genki Program forsmall hydropower generation equip-

Nakagawa Water Power’s construction

ment. Such equipment has a highand operation of the Inawashiro Small

capacity factor and is highly economi-

Hydropower Plant, highly evaluatingcal. As it can be installed along generalits contribution to renewable energy inwaterways and drainage flows for

the Tohoku region.

Case Study

The Kushiro store in the city of Kawanishi,
Hyogo Prefecture

CSR Report

DBJ provided the company
with financing based on the DBJ

Inawashiro Small Hydropower Plant

Anabuki Kosan

Anabuki Kosan Inc., headquarteredness continuity plan in 2012 against

a private placement note issued byin the city of Takamatsu, Kagawa

possible massive earthquakes in the

Anabuki Kosan.

Prefecture, was established in 1964.

Nankai Trough. As well as construct-

Its mission is “to promote culture anding its headquarters and management

history in regional communities byfacility to be seismically isolated, thebuilding homes and create real estatecompany is developing condominiums

value.” The company is engaged in thethat have disaster-prepared containers

development of “Alpha” brand con-in the area.

dominiums, chiefly in the regions of

In DBJ’s evaluation, Anabuki

Shikoku, Chugoku, Kinki and Kyushu.

Kosan’s initiatives against massive

In addition, the company operates andearthquakes in the Nankai Troughmanages senior housing, and is devel-

contribute to disaster-preparedness

oping its real estate business broadly

and business continuity measures.

in the regions in which it operates.

Accordingly, via the Regional Areas

Anabuki Kosan formulated a busi-

Genki Program, DBJ has acquired

Alpha Park Nade Takamatsu The Tower

Annual Report & CSR Report 201585

Regional Revitalization
Case Study

NCB Kyushu Revitalization Investment Limited Partnership

Many regional enterprises in thetal measures addressing business

Revitalization Investment Limited

Kyushu area face the likelihood ofand corporate restructuring, asPartnership, to be managed by NCB

shrinking markets as the Japanesewell as smoothly handing over the

Capital, DBJ is combining diverse

population shrinks and ages. These

reins of management. Under thesefinancing services, including preferred

enterprises are also experiencing

conditions, DBJ is responding tostock and subordinated loans, to pro-fiercer competition, as larger enter-diverse needs for growth capital byvide staged and mixed growth capital.

prises move into their territories, andenterprises in the Kyushu region by

Along with NCB, REVIC and DGN,

are seeing a shortage of people toestablishing NCB Capital Co., Ltd in

DBJ aims to make use of the organiza-take over their management. Given

cooperation with The Nishi-Nippon

tions’ networks. At the same time,these threats, these enterprises

City Bank, Ltd. (NCB), the Regional

through the fund we will provide

need to strengthen their financial

Economy Vitalization Corporation

broad-ranging support for the growthbases and reconstruct their capitalof Japan (REVIC) and Dogan, Inc.

initiatives of enterprises in the Kyushu

policies, among other fundamen-(DGN). By arranging the NCB Kyushu

region.

NCB Kyushu Revitalization Investment Limited Partnership Scheme

DBJ

NCB
Investment

REVIC
Investment

Investment

DGN
Investment

Operatingcompany
NCB Capital
LP investment

LP investment

GP investment

LP investment

NCB Kyushu Revitalization Investment Limited Partnership

Case Study

Investments and loans

Investments and loans

Investments and loans

Targetcompany

Targetcompany

Targetcompany

Azuma-Cho Fishery Cooperative

The Azuma-Cho Fishery Cooperative

integrated production spanning young(ACFC), headquartered in the district

fry to shipment, and has establishedof Izumi, Kagoshima Prefecture, begana traceability system. Thanks to qual-a yellowtail-breeding operation in

ity control initiatives such as these, its

1968. The ACFC can now boast of“Buri-Oh” brand (literally, “The King

being the largest fishery cooperativeof Yellowtail”) has earned a follow-

in Japan producing farmed yellowtail.

ing in Japan as well as overseas for its

The cooperative obtained the first haz-steady supply of safe and high-quality

ard analysis and critical control point

yellowtail.

(HACCP*) certification (processing

DBJ provided ACFC with financ-facilities) in the fish farming industry

ing under the Regional Areas Genkiand has developed an original feed

Program based on its advanced man-to keep production costs down. Itsagement strategy and a production

management program ensures uni-

system that sets an excellent example

form quality. The cooperative leads

for the industry.

*HACCP: A continuous monitoring, recording
and sanitation management method that
focuses on preventing the outbreak of danger during all processes involving foodstuffs,
from production to shipment (excerpted
from the Ministry of Health, Labour andWelfare website)

Fish farms

86

・・・・・

Annual Report & CSR Report 2015

Strengthening the Safety Net
Reconstruction Response
Earthquake, tsunami, nuclear power plant crisis—the Great East Japan Earthquake unleashedunprecedented damage, a major compound disaster the likes of which the world has never seen, seriously impacting the economy of Japan. It is essential that disaster recovery measures be implemented
on a step-by-step basis according to each stage towards recovery and tailored to meet specific needs ofvarying regions and different disaster categories.
Case Study

Funding to Support Reconstruction and Growth Following theGreat East Japan Earthquake

Since the Great East Japan Earthquake,stage is where enterprises that haveand loan activities progress, this amount

DBJ has supported the restoration andrestarted their production cultivate sales

may be increased to as much as ¥30.0

reconstruction of enterprises affectedroutes, collaborate with other enter-billion.

by the disaster by providing risk capitalprises to reinforce industrial competitive-

through collaboration with The Bank

ness, build infrastructure and reinforce

ducting business that contributes to theof Iwate, Ltd., The 77 Bank, Ltd., andtheir functions. In response to this situ-

reconstruction and growth of the affect-

The Toho Bank, Ltd., to structure eachation, DBJ, the three above-mentioned

ed region (including enterprises enteringof the Great East Japan Earthquakebanks and the Regional Economy

the area from other regions and newly

Reconstruction Funds. As of December

Vitalization Corporation of Japanestablished enterprises). The fund sup-2014, the region was moving from the(REVIC), set up new reconstruction andplies risk capital using such measures as

restoration stage of disaster recovery—

growth support funds. Initially, the total

subordinated loans and preferred shares,

recovering production facilities—to thevalue of the three new funds was set atadvancing a nationwide model that sup-reconstruction and growth stage. This

¥15.0 billion. However, as investment

ports regional growth and invigoration.

The new funds target enterprises con-

CSR Report Overview of the New Funds

Iwate Reconstruction
Growth Support Investment
L.P.

Name

Miyagi Reconstruction
Regional Vitalization
Support Investment L.P.

Fukushima Reconstruction
Growth Support Fund
Investment L.P.

Established

December 8, 2014
Each fund has ¥5.0 billion (which can be increased to ¥10.0 billion with
Scale of fundagreement by the fund's members).
General partnership (GP)Tohoku Fukko Partners Co., Ltd.
Limited partnerships (LPs) DBJ, The Bank of Iwate and REVIC DBJ ,The 77 Bank and REVIC DBJ, The Toho Bank and REVIC
Investment period of five years, duration of seven years and four months
Period(If necessary, however, it is possible to extend the investment period by up to two years
and the duration by up to one year.)
Case Study

Showa Shell Sekiyu

Showa Shell Sekiyu K.K., headquar-

region for Showa Shell Sekiyu’s con-tered in Minato-ku, Tokyo, is a major

struction of a fourth facility for Solar

Japanese oil refiner and distributor.

Frontier, the Tohoku Plant in the vil-

While maintaining a strong founda-lage of Ohira, the district of Kurokawa,tion in the oil business, the company is

Miyagi Prefecture, which commenced

enterprisingly developing a next-gen-operations in April 2015. DBJ supported

eration CIS photovoltaic cell project via

this project because of its objective ofwholly owned subsidiary Solar Frontier

furthering the village’s reconstruction

K.K., aiming to turn it into an energy

and promotion plan, boosting the com-business to help realize a future low-

petitiveness of nearby enterprises andcarbon society.

providing employment opportunities in

DBJ arranged a syndicated loan based*The Interest Rate Subsidy System for Special
Zones for Reconstruction: Under this businessfacilitation and support system, to reconstruct thearea affected by the Great East Japan Earthquake,
the Japanese government provides an interest
rate subsidy for the financing necessary to businesses central to the promotion of reconstructionplans created by regional municipal bodies andcertified by the Japanese government.

the region, including Ohira and coastalon the Interest Rate Subsidy System

areas. DBJ also believes the project will

for Special Zones for Reconstruction*

contribute toward the revitalization ofwith three regional banks in the Tohoku

the village’s local economy.

Tohoku Plant
Annual Report & CSR Report 201587

Reconstruction Response
Case Study

Shoji Construction

Shoji Construction Co., Ltd., headquarteredtook over the management of Shoji

Economy Vitalization Corporation ofin the city of Minamisoma, Fukushima

Construction in May 2014, conducting a

Japan (REVIC), financing was provided

Prefecture, is a general construction firmmanagement buyout involving the estab-to support the business inheritance ofthat engages in a wide range of projects,

lishment of Shoji Holdings, Inc. and taking

Shoji Holdings through an MBO.

including ports, roads and civil construction

over the company’s equity (shares). The

on agricultural land, as well as residences,company looks forward to developing its

factories and medical facilities. The com-

operations in anticipation of future growth.

pany sustained major damage in the Great

Reconstruction Regional Vitalization

importance to regional infrastructure, theSupport Investment L.P., a fund to sup-company is taking part in restoration andport reconstruction and community

reconstruction.

revitalization in Miyagi jointly funded by

The current president, Takahiro Shoji,
Case Study

DBJ, The 77 Bank, Ltd. and the Regional

Quay wall construction

Iwaki Diecast

Iwaki Diecast Co., Ltd., headquartered in

To supplement its core business invided financing to Iwaki Diecast under

the district of Watari, Miyagi Prefecture,

the automobile industry, Iwaki Diecast

the Interest Rate Subsidy System forwas established in 1969. With its busi-

intends to expand into the medical

Special Zones for Reconstruction*2 andness centered on automotive parts, theequipment parts. To this end, the compa-

the Regional Areas Genki Program.

company is an integrated manufacturer

ny is building a metal injection moldingof die-cast*1 parts used in a broad range(MIM) plant in the town of Yamamoto,of fields, including electrical and medical

the district of Watari, Miyagi Prefecture,equipment. Iwaki Diecast has advanced

aiming to expand its sales routes, and intechnologies spanning the mold design

the process boosting local employment

through parts processing stages. Its

and invigorating the regional economy.

number of business partners is expand-Rating the company highly for its

ing steadily. The company currently has

sophistication as a regional industry inbusiness relationships with nearly 200

its field of business, its contribution toenterprises, including leading automak-

invigorating the region and providing

ers and other top-tier firms.

employment opportunities, DBJ pro-Case Study88

As the first project under the Miyagi

East Japan Earthquake, but given its central*1 Die casting: This process, which is compatible with high-cycle mass production,
uses pressure to force molten metal into
precision molds, resulting in a cast partwith a highly precise cast surface.
*2 See page 87.

Headquarters plant

Maiya

Maiya Co., Ltd., headquartered in the city

Program for Maiya to put up a temporaryments. As a result, the company hasof Ofunato, Iwate Prefecture, is a super-

shop in the city of Rikuzentakata, which

created a functional supply chain that ismarket operating at 15 locations, centered

was devastated by the tsunami, and tohighly resistant to disasters. (3) To ensure

on the southern coastal area of Iwate

rebuild the Takekoma store from a tem-a food lifeline to the affected region andPrefecture. Six of its stores were complete-porary shop into a permanent store.

contribute to reconstruction, manage-

ly destroyed by the tsunami accompany-

We ranked the company highly

ment took a leadership role in erecting

ing the Great East Japan Earthquake, but

for three reasons. (1) The company

temporary shops and rebuilding stores,

the company quickly erected temporary

periodically provides ongoing tsunami

thereby quickly returning to business andshops, helping to provide infrastructure forpreparedness drills in which employees

setting up new stores.

the devastated region and earning strong

help protect customers’ lives by guiding

support from local customers.

them to safety. (2) To maintain distribu-

DBJ provided financing under thetion functions and ensure procurement

Interest Rate Subsidy System for Special

in emergency situations, the company

Zones for Reconstruction*, the DBJ

shares information related to its businessEnterprise Disaster Resilience Rated Loan

continuity plan with its business partners

Program and the Regional Areas Genkiand signs emergency response agree-

Annual Report & CSR Report 2015

*See page 87.

Takekoma store in the city of Rikuzentakata,
Iwate Prefecture

DBJ Enterprise Disaster Resilience Rated Loan Program
Such recent disasters as the Great Hanshin-Awaji Earthquake, the Chuetsu Offshore Earthquake,the Iwate-Miyagi Inland Earthquake and the 2011 Great East Japan Earthquake caused tremendous
damage to the economy, with many organizations forced to suspend operations for extended periods.
In addition to measures for protecting personnel and property, enterprises face the need to draft
business continuity plans to protect themselves against lost revenue and retain their clients in theevent of disaster, thereby reinforcing their managerial foundation.

Case Study

Mitsubishi UFJ Lease & Finance

DBJ and Mitsubishi UFJ Lease &measures, forming business continu-

Rated Loan Program. Mitsubishi UFJ

Finance Company Limited, headquar-

ity plans (BCPs) and making efforts

Lease & Finance will operate the newtered in Chiyoda-ku, Tokyo, haveto ensure BCM. Against this back-product, which it developed in col-entered into an operating agreement

drop, DBJ and Mitsubishi UFJ Lease &laboration with DBJ. (Note that thisto provide a new product: a program

Finance have developed the new prod-

new product is different from DBJ’sof products and services supporting

uct described above to raise the over-own DBJ Enterprise Disaster Resiliencedisaster preparedness and business

all level of disaster preparedness and

Rated Loan Program.)

continuity management (BCM) that

BCM among all Japanese enterprises

Mitsubishi UFJ Lease & Finance isby further contributing on the financial

Finance, which was rated in 2013beginning to operate.

front.

under the DBJ Enterprise DisasterIn recent years, natural disasters

Under the current accord, DBJ will

Resilience Rated Loan Program, will

and other risks that threaten corpo-

provide Mitsubishi UFJ Lease & Financecomplement each other by leveraging

rate business continuity have grownwith expertise it has gained by evalu-

their respective client bases. Together,more diverse and complex. To respondating enterprises’ disaster prepared-

we believe we can further raise theeffectively to these risks, enterprises

ness and business continuity throughlevel of disaster preparedness andare introducing disaster preparedness

the DBJ Enterprise Disaster Resilience

BCM for Japanese enterprises.

Case StudyCSR Report

DBJ and Mitsubishi UFJ Lease &Shiraken Kamaboko

Shiraken Kamaboko Co., Ltd., headquartered in the city of Ishinomaki,

strong business continuity capabilities.

tives. (3) The company regularly shares

DBJ provided Shiraken Kamabokorisk information among upstream andMiyagi Prefecture, is a seafood

with financing under the DBJ

downstream enterprises in its supply

processing company with a special

Enterprise Disaster Resilience Rated

chain, is ensuring its business partners

emphasis on the production of sasa-

Loan Program and the Regional Areas

are geographically distributed and has

kamaboko (bamboo leaf–shaped fish

Genki Program, evaluating the com-in place risk-reduction measures, suchcake), a specialty of Miyagi Prefecture.

pany highly for three reasons.

as strategic inventory management.

Thorough attention to the quality of(1) With management taking a leader-

its ingredients has earned Shiraken

ship role, the company has prepared

Kamaboko a strong following bothmeasures to ensure the safety ofwithin and outside Miyagi Prefecture

human lives based on the coopera-

and a reputation for high-quality prod-tion of all its employees. The company

ucts. All the company’s plants werealso conducts drills and other effective

damaged by the tsunami accompany-

disaster-preparedness initiatives.

ing the Great East Japan Earthquake,(2) Shiraken Kamaboko is moving for-causing the temporary suspension

ward with the creation of a risk-basedof its operations. However, Shiraken

integrated management system that

Kamaboko resumed production theleverages ISO 22301 certification forfollowing month, demonstratingorganized and sustained BCM initia-

Kamaboko products

Annual Report & CSR Report 201589

Environmental Management

DBJ aims to realize a more prosperous sustainable society byenvironmental problems. In addition, in November 2002,

achieving harmony through the triple bottom line of society,we acquired ISO 14001 certification, and in November 2011,

the environment and the economy. We recognize the resolu-

we signed the Principles for Financial Action towards ation of environmental problems as an issue that is common

Sustainable Society (Principles for Financial Action for the 21stto all humankind. For this reason, DBJ has contributed to theCentury). Such efforts indicate our organizational commit-

formation of an environmentally friendly economic society.

ment to environmental preservation and the realization of a

In June 2001, DBJ became the first Japanese bank tosustainable society.

sign the UNEP Statement by Financial Institutions on the

In line with the Basic Environmental Policy formulated

Environment and Sustainable Development, promising toin October 2008, DBJ is promoting efforts in the regions

strive for harmony between economic development andwhere its branches and offices are located.

environmental conservation and to cooperate in resolving

DBJ’s Basic Environmental Policy
Promulgated and Put into Effect October 1, 2008

Purpose
Article 1. DBJ aims to realize a more prosperous sustainable society
by achieving harmony through the triple bottom line of society,the environment and the economy. We recognize the resolutionof environmental problems as an issue that is common to all
humankind. For this reason, DBJ has established a policy thataims to contribute to the formation of an environmentally friendly
economic society.
Promotion of Environmental Measures through Investment and
Loan Activities
Article 2.
1. Through its investment and loan activities, DBJ supports global
warming prevention measures and the promotion of a recyclingoriented society. In addition, by supporting environmentally
sustainable corporate management by its clients, DBJ contributes
to their creation of environmental measures and to the realizationof a sustainable society.
2. DBJ contributes to clients’ environmental measures throughthe risk evaluations of investment and loan activities from anenvironmental perspective.
Promotion of Environmental Awareness throughEnvironmental Communication
Article 3.
1. Through continuing research and advisory activities relating toenvironmental issues, DBJ seeks to help resolve environmental
issues through enhanced awareness, thereby contributing to therealization of a sustainable society.
2. DBJ seeks to promote environmental awareness throughinternational cooperation, including the distribution of information
about environmental initiatives by Japan.
3. DBJ endeavors to improve its initiatives by sharing information on
its environmental activities and through communication with society.
Promotion of Environmental Awareness Activities in Offices
Article 4. DBJ complies with environmental laws and regulations,and promotes activities to reduce the environmental effect of its
operations. To these ends, DBJ seeks to contribute to the creationof environmentally friendly office environments through theactivities indicated below.
(1) Promotion of resource and energy conservation and recycling
activities(2) Promotion of environmentally friendly sourcing of supplies(3) Prevention of environmental pollution
Promotion of Environmental Awareness
Activities in Communities
Article 5. By cooperating with community environmental
improvement initiatives, such as measures to prevent heat islands,
DBJ works to contribute to the creation of environmentally friendly
regional societies.

Putting into Practice DBJ’s Basic Environmental Policy
Promotion of Environmental Measures throughInvestment and Loan Activities

Promotion of Environmental Awarenessthrough Environmental Communication

DBJ’s investment and loan activities support projects

DBJ addresses environmental problems by conducting

designed to prevent global warming and create a recycling-

ongoing environmental studies and proposals. These efforts

based society. Furthermore, we promote clients’ efforts

help to enhance environmental awareness, support involve-

toward environmentally conscious management. By con-ment in environmental issues and contribute to the realiza-

tributing to clients’ environmental measures, we help totion of a sustainable society.

achieve a sustainable society.





and 76.)

DBJ Green Building Certification (See pages 43 and 81.)



90

Communication Focused on the Environment (See page 68.)

DBJ Environmentally Rated Loan Program (See pages 41Annual Report & CSR Report 2015

Communication on Regional Revitalization (See page 68.)

Communication in International Cooperation (See pages
68–69.)

Promotion of Environmental Awareness
Activities in Offices

Promotion of Environmental Awareness
Activities in Communities

DBJ works to reduce the environmental effect of its opera-

By cooperating in community environmental improvement

tions beyond what is required by environmental regulations.

initiatives, such as measures to prevent heat islands, DBJ

As such, we promote the measures described below in anworks to contribute to the creation of environment-friendly

effort to make our offices environment-friendly.

regional societies.

• Promotion of recycling and resource andenergy conservation• Head Office
Uchimizu Project 2014

Resource- and Energy-Saving Efforts
Year Ended
March 31,2013

Year Ended
March 31,2014

Year Ended
March 31,2015

Copy and printing paper usage（kg）

85,01160,13960,393

Waste emissions（kg）

55,68833,97633,3664.01 million

4.05 million

4.02 million

22,667

10,083

9,633

Energy consumption（kWh）
Water usage（m3）Note: Head office building only

DBJ participated in the Uchimizu Project 2014, a campaign
hosted by the Uchimizu Project District Executive Committee(the Council for Area Development and Managementof Otemachi, Marunouchi, Yurakucho/the Ecozzeria
Association/the OMY Area Management Association/
Yuraku-cho Shuhen Machizukuri Kyo-gikai, Ministry of theEnvironment, Tokyo Metropolitan Government and Chiyoda
City). DBJ has been participating in the Uchimizu Project• Promotion of environmentally friendly sourcing of
supplies

since 2008.
CSR Report

In line with the Law Concerning the Promotion of
Procurement of Eco-Friendly Goods and Services by the Stateand Other Entities (Law on Promoting Green Purchasing),
which went into effect in April 2001, DBJ implemented initiatives to purchase products and services with lower environmental effects. We have continued to practice green purchasing following our privatization.
Achievements of the Green Procurement Program
for Typical Items
Year Ended March 31, 2015

• Hokuriku Branch

Paper

100%

Kanazawa Eco Suishin Jigyousya Network

Stationery

95.8%

Since fiscal 2004, the branch has participated in the

Equipment

90.7%

Kanazawa Eco Suishin Jigyousya Network, undertaking

Office equipment

98.2%

initiatives to (1) reduce waste, (2) conserve energy andLighting

100%

Note: Excludes printing paper, media cases, labels, and other items that were purchasedon the market that do not comply with the prescriptions of the Law Concerning
the Promotion of Procurement of Eco-Friendly Goods and Services by the Stateand Other Entities but that were purchased nevertheless on the basis of certain
characteristics or functional requirements.

• Prevention of environmental pollution
DBJ complies with environmental laws and regulations.

(3) promote green purchasing.
• Kansai Branch
Kansai Eco Office Declaration
Registered since 2008, the ”Eco Office Declaration” callsfor (1) a summer ”eco style,” (2) enforcing energy saving,(3) promoting green purchasing, (4) curbing automobile useand (5) engaging in waste recycling.
• Shikoku Branch
Forest-thinning activities
We continue to participate in forest-thinning activities conducted in collaboration with the town of Inomachi, Kochi
Prefecture, and Mitsui & Co., Ltd.

Annual Report & CSR Report 201591

• Kyushu Branch

Earth-Friendly Office
In fiscal 2009, we registered with the “Earth-Friendly

Cleanup/beautification activity—Tenjin Clean Day

Office” program created by the city of Takamatsu’s environ-

We participated in themental department. We continued these activities in fiscal

Tenjin Clean Day activity

2014, and made efforts to (1) curb paper consumption, (2)sponsored by the We Love

promote the use of recycled products, (3) raise employee

Tenjin conference andawareness of waste reduction and recycling activities,

helped to clean up the area(4) save energy and water and (5)and plant flower bulbs.

regulate office air at an appropriate
temperature.

• Other Branches
We implement initiatives such as collecting used postage
stamps. We also have employees bring their own chopsticks
and cups to work to reduce waste.

Environmental Management Structure
DBJ has set up the Public Relations & Corporate Social

Environmental Management Officer

Responsibility Office within the Corporate Planning &The Environmental Management Officer is assigned to the

Coordination Department. This office spearheads environ-

Public Relations & Corporate Social Responsibility Office inmental management activities attended by all executives

DBJ’s Corporate Planning & Coordination Department. The

and employees.

officer confirms environmental education and training andauthorizes annual environmental targets.

Environmental Management Conference

Environmental Management Structure

The Environmental Management Conference deliberates

Environmental
Management Officer(Director in charge of Public
Relations & Corporate Social
Responsibility Office,Corporate Planning &Coordination Department)

Vice-Environmental
Management Officer(Corporate Planning &Coordination Department
Manager)

Environmental
Management
Conference
Public Relations &Corporate Social
Responsibility
Office,Corporate
Planning &Coordination
Department(Secretariat)

Implementation
division
Heads of each department
and officeEnvironmentalGroupmembers

Environmental Group
Promotion Officer
Environmental
Group Promoter
Employees

annual environmental targets and environmental management reviews.

Public Relations & Corporate Social
Responsibility Office, Corporate Planning &Coordination Department
In charge of DBJ’s environmental management activities
is the Public Relations & Corporate Social Responsibility
Office, Corporate Planning & Coordination Department.
In addition to setting environmental targets for each fiscal
year and confirming the degree to which established targets have been achieved, this office manages compliancewith relevant laws and regulations.

Environmental Group Promotion Officer
To promote environmental management activities, an
Environmental Group Promotion Officer and Environmental
Group Promoter are designated in each branch and department. The Environmental Group Promotion Officer appoints
an Environmental Group Promoter and manages the level ofachievement of annual environmental targets.

Employees
Employees are responsible for putting environmental management activities into action.
92

Annual Report & CSR Report 2015

DBJ’s Primary Achievements in the Environmental Sector since Its Establishment
1999 October

Annual Report & CSR Report 2015

CSR Report

Designation of sustainable development as an objective by the Development Bank of Japan Act(Act No. 73 of 1999)
2001 April
Start of green procurement and environmental training
JuneFirst Japanese bank to sign the UNEP Statement by Financial Institutions on the Environment andSustainable Development
October
Establishment of Social Environment Committee and Social Environment Group; hosting of discussions between
UNEP and Wa no Kuni Financial Institutions on Environmental Considerations for Financial Institutions
2002 March
UNEP FI 2002 Global Roundtable in Rio de Janeiro, Brazil: keynote speech
July
Launch of the Development Bank of Japan Environmental Policy (partially modified in April 2005)
November ISO 14001 certification
2003 October
Publishing of Environmental Report 2003 for a Sustainable Society (first annual edition)
October
Joint sponsorship of UNEP FI 2003 Global Roundtable in Tokyo, an international conference on finance andthe environment
2004 April
Start of DBJ Environmentally Rated Loan Program
September Second annual Sustainability Report
November Japan Carbon Finance, Ltd. (JCF) established
December Japan Greenhouse Gas Reduction Fund (JGRF) established2005 January
Assumption of chair of the UNEP FI Asia Pacific Task Force
September Third annual Sustainability Report
October
UNEP FI 2003 Global Roundtable
November Renewal of ISO 14001 certification
2006 May
Press conference to announce DBJ status as a signatory institution to the Principles for Responsible Investment
AugustCSR Report 2006 (fourth annual Sustainability Report)
2007 July
Annual Report & CSR Report (integrated annual report and CSR report)
2008 OctoberFirst Board of Directors and Executive Committee meetings of Development Bank of Japan Inc.; formulation of
Basic Environmental Policy and Environmental Management Regulations
2009 MarchFirst Environmental Club Syndicated Loan ECONOWA
April
Commendation for DBJ Environmentally Rated Loan Program: Environmental Development Award by ADFIAP
September Start of cooperation with regional financial institutions to prepare a system to implement Financing Employing
Environmental Ratings
2010 January
Basic cooperative agreement with the International Finance Corporation (World Bank Group financial institution
conducting the world’s largest international investment and loan activities for developing countries)
April
Business cooperation agreement to promote environmental measures with a non-life insurance company
December Selected as a designated financial institution under the Bill on the Promotion of Businesses to Develop andManufacture Energy and Environmentally Friendly Products (“Low Carbon Investment Promotion Act”)
2011 April
Established the DBJ Green Building Certification
November Signed the Principles for Financial Action towards a Sustainable Society (Principles for Financial Action for the
21st Century)
2013 October“Environment/Reconstruction Support Syndicated Loans” win the Grand Prize and Minister of the Environment
Prize in the Green Purchasing Awards
2015 May
Commendation for DBJ Green Bond: ADFIAP Awards 201593

Business Continuity Plan (BCP)

DBJ is preparing a business continuity plan (BCP) to protect

spells out necessary disaster responses in an easy-to-

the interests of its stakeholders, including its clients, its

understand manner.

shareholder, and its executives and regular employees, as

When formulating policies to ensure the continuity

well as to fulfill its social mission. The BCP aims to ensure

and recovery of core operations, we took the approach of

the continuity and rapid recovery of core operations in theconsidering responses to cases in which important manage-

event of emergencies, such as natural disasters (in particu-

ment resources were damaged due to a large-scale disaster,lar, large-scale earthquakes), influenza and other pandem-

affecting head office (1) buildings and facilities,

ics, system failures and power outages.

(2) executives and regular employees, and (3) systems,

In addition to addressing the continuity of core operations and maintaining a plan to recover from disaster,the BCP specifies the initial actions that executives andinstead of considering responses to individual events suchas earthquakes and fires.
An overview of DBJ’s BCP is provided below.

regular employees should take in emergencies. The plan

1. Principles of Action for Executives and Regular Employees
The BCP defines three key goals regarding the fundamental

they must give first priority to the lives and safety of ourstance that executives and regular employees are to take inclients and our executives and regular employees, paying

the event of a large-scale disaster or other emergency. They

attention to television and radio broadcasts, evacuating

are to (1) ensure personal safety, (2) grasp the situation

calmly (without panic) and determining the safety of others.

accurately and (3) remain calm and collected. Specifically,

2. Core DBJ Operations
In the event of a large-scale disaster, DBJ has identified
the following six items as essential to the continuity of its

1) Confirmation and assurance of the safety of executives,
regular employees and visitors

core operations from the standpoint of (1) items that are2) Uninterrupted continuation of settlement-related businessfundamental and prerequisite to business continuity (such3) Reliable formation of the Disaster Response Committee

as facilities, personnel and systems), (2) DBJ’s social mission4) Restoration and maintenance of IT systems

and the public nature of its financing (such as investment

5) Confirmation of the status of clients in afflicted areas

and loan activity) and (3) responsibility to financial markets6) Rapid commencement of Crisis Response Operations(continuity of market settlements).

DBJ has formulated a BCP that prioritizes continuity of
the core operations described above.

3. BCP Operational Structure
When responding to an emergency situation, such as in

BCP Operational Structure Outline

the event of a large-scale disaster, in principle, the Disaster
Response Committee will be established at head office

President

and chaired by the head of the Corporate Planning &Coordination Department, who reports to the president.
This committee gives directions to DBJ’s head office andbranches regarding the continuation of core operations. If
maintaining operations at head office proves problematic,
the Kansai Branch shall serve as the alternative location.

94

Annual Report & CSR Report 2015

Disaster Response
Committee(Head Office)Backup office(Kansai Branch)

Directions

Head office departments, branches

Directions

4. Measures to Ensure Business Continuity
We have prepared a variety of measures to ensure business(3) Chain of Command and Delegation of Authority
To assure that decision-making concerning the continu-

continuity. The primary measures are introduced below.

ity of core operations is prompt and certain, in the eventthat the Disaster Response Committee is established, we(1) Enhanced System Robustness

have put in place a chain of command and an alternative

Ensured advanced security levels at the main center, andhierarchy by which authority can be delegated.

created a backup center to operate in the event that themain center ceases to operate.

(4) Clarification of Initial Response and Procedures forContinuing or Restoring Core Operations(2) Multilayered Communication Procedures
Introduced a safety-confirmation system to quickly

For individual business units, we have established indetermine the whereabouts and status of executives

advance the procedures for the initial response and theand regular employees even at night and on holidays. In

continuation or restoration of core operations so that

addition, distributed satellite telephones to key locations

relevant divisions can respond quickly and with certainty

and personnel to ensure multilayered communicationon core operations even when in a state of confusion.

procedures.

5. Initiatives to Maintain or Improve BCP Viability
DBJ conducts various types of instruction and training ofFurthermore, the BCP is revised to reflect training results
and recent information, and is reviewed by the Executive

the viability of its BCP.

Committee regularly and additionally as necessary, employ-

CSR Report

executives and regular employees to maintain or improveing a Plan-Do-Check-Act (PDCA) cycle.

Annual Report & CSR Report 201595

Fostering Human Resources and Creating a Comfortable Work Environment

DBJ considers its human resources to be its most valuable

environment to bring out the best in every employee. The

assets and thus endeavors to develop its employees’ capa-

superior employee performance resulting from such efforts

bilities. DBJ actively works to build a systematic humanis what drives DBJ ahead on a daily basis and keeps it an

resource development system and a comfortable work

innovator, blazing the trails that Japan needs to follow.

Human Resource Development Vision
DBJ has evolved significantly and developed its indepen-

specialists in many fields. Responding to society’s constantly

dence and creativity in line with the needs of the times inchanging demands requires broad experience, deep knowl-order to maintain its leadership position.

edge and the ability to see the big picture, as well as gaining

To develop its human resources, DBJ promotes autono-

specialist knowledge. DBJ has therefore created a humanmous and pioneering behavior in its employees as financial

resource development system that incorporates job rotation,

professionals through the vision of generalists who can be

performance evaluation, formal education and training.

Deploying the Target Management System
DBJ has introduced a Target Management System toPlan-Do-Check-Act (PDCA) cycle. Particularly regarding

encourage employees to work autonomously and proac-goal-setting, DBJ encourages its employees to work hard.

tively to develop their abilities and accurately evaluate such

DBJ does so by offering bonuses and other benefits based

initiatives. DBJ is working to enrich this system by havingon operating performance, with an emphasis on each ofsubordinates meet individually with superiors to set goals

them enhancing their medium- and long-term value bothand receive feedback, autonomously running through theinside and outside the company.

Creating a Comfortable Work Environment and Promoting Opportunities for Women
DBJ actively strives to cultivate a comfortable work environ-

Raising Next-Generation Children, and certified as a compa-

ment.

ny that provides child-rearing support. Specific grounds for

To maintain an environment in which all employees canthis approval included (1) the promotion of spousal support

feel secure, DBJ has made all employees aware of its policy

for childbearing through special leave and childcare leave,

to prevent sexual and power harassment and has set up a(2) measures to ensure time for child-rearing and (3) mea-

hotline to deal with such issues. Furthermore, to support

sures to promote the taking of annual paid vacation.

mental and physical health, DBJ provides its employees andAs part of its efforts to promote opportunities fortheir families with regular medical examinations and carewomen, DBJ plans to increase its percentage of female

options. These systems include treatment by external spe-managers by around 50% by the end of fiscal 2018, com-cialists and access to counselors.

pared with the level at the start of fiscal 2014.

DBJ also has in place leave programs to give motivatedemployees better opportunities for long-term employment.
We have enhanced our working and leave systems related tochildcare and nursing care, through the introduction of flextime and a system of leave for participating in childcare, as
well as a program under which employees who have left DBJ
are eligible for re-employment and a system for continued
employment options after retiring from full-time work.
On October 18, 2010, the Tokyo Labor Bureau recognized
DBJ as having achieved the objectives of its general business
operator action plan (from April 1, 2005, to March 31, 2010),
based on the Act on Advancement of Measures to Support

96

Annual Report & CSR Report 2015

DBJ has received next-generation Kurumin certification for its efforts to counter the falling birthrate,
including recognition as a company that provides
active support for child-rearing.

A Solid Human Resource Development System
DBJ's financial professionals are supported by a well-multiple departments, employees are strategically assigned

developed education and training system. Mandatory train-

to a certain department to acquire highly specialized abilities

ing by level, combined with a host of elective training cours-

according to their skills and backgrounds. This system of stra-es according to skills and needs and designed to respondtegic job rotation not only enables employees to gain broad-to financial innovations and advancement, enables eachbased practical experience that gives clarity to their medium-

employee to plan his or her career.

to long-term career goals but also provides an environment

For young employees, we established the DBJ Financial

for quickly and firmly acquiring and improving their highly

Academy, which is designed to help employees acquire

specialized skills. In step with globalization, DBJ cultivatesand maintain basic competencies and deepen their under-

employees able to perform in international as well as domes-

standing of finance, assuming they will become involved intic settings. To achieve this, DBJ actively assigns employees toadvanced financial operations. We are expanding the acad-a wide variety of external organizations, including overseas

emy, focusing on courses such as Corporate Finance, thegraduate schools, international institutions, domestic andFinancial Instruments and Exchange Act, and M&A.

overseas research institutes, enterprises and related govern-

Regardless of age, employees undergo on-the-job trainingthat provides hands-on exposure to work involving various

ment agencies, thereby supporting skill development andnetwork extension.

levels of responsibility. After experiencing employment inTraining by Level

Business-Related Training

Business-Related(Self-Training)

Careerdevelopment
plan training

Managertraining

tCompliancetraining
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courses and special courses)t&UD
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joining DBJ%#+'JOBODJBM"DBEFNZ$PSFDPVSTFT *t#BTJD$PSQPSBUF'JOBODF
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Introductory
training
for new
employees

Autonomous
career track

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t1SPCMFN
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Cultivation ofmanagement andleadership skills

Planned and continuous
HR development

Rating and asset
assessment
training

Documentation

Systems related
to investments
and loans

Basic
Legal

Mastery of DBJ
procedures andbasic processes

Mastery offinance andlaw

Domestic and overseas exchange
students, trainees, etc.

Management
training

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operations
involving
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and loans
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t&UD

External
Assignments, etc.

External seminars, lectures, etc.

PositionLife plan
training

Distance learning, night courses, acquiring public qualifications, etc.

Topmanagement
training

CSR Report

DBJ’ s Human Resource Development System'JOBODJBMBOBMZTJTUSBJOJOHtBookkeeping and AccountingtCompany AnalysistCase Studies

Basic finance trainingtInterest Rate BasicstBasic Derivatives
Acquisition offinancialaccounting
knowledge

Mastery of knowledge andskills needed for work

Strategic and focus areas,such as financial skills
Addressing strategic and focus areas

Mastery of basic
business
execution skills

Acquisitionof businessrelated
knowledge

Mastery of knowledge andskills needed for work

Cultivation ofwork-related
knowledge,
mastery of
specialized
knowledge, HR
development

Annual Report & CSR Report 201597

Seeking Higher Ethical Standards
For half a century, DBJ has led Japan’s economy as a

DBJ has long required its employee to take training courses

comprehensive policy-based financial institution. As DBJ

that address issues of human rights in addition to ensuringtransforms into a private-sector financial institution that stilllegal compliance and maintaining information security throughvalues the long-term perspective, neutrality, public-minded-training to prevent fraudulent access and information leaks.

ness and reliability it has cultivated, each employee is being
held to a higher ethical standard.

DBJ will henceforth devote even more resources toward
such efforts.

DBJ Financial Academy
Since May 2008, the DBJ Financial Academy typically has

addition to basic knowledge, such as fundamental cor-held several courses that meet two or three times a week

porate finance topics and corporate valuation methods

with the medium- to long-term objective of raising thethat can be applied, the academy provides a broad

level of financial expertise of primarily young second-year

range of core training on finance from an academic andemployees throughout the organization by strengthening

scientific perspective. Students from outside DBJ, suchtheir knowledge and understanding of advanced corporate

as employees of regional financial institutions, regional

financial business essential to DBJ’s business model. Duringmunicipal bodies and business partners, have also par-fiscal 2014, courses numbered 22 and covered Introduction

ticipated. Through theseto Modern Finance, Corporate Finance, the Financial

courses, we look forward

Instruments and Exchange Act, and IFRS Accounting:to opportunities forFoundations and Practice.

mutual exchange and theThrough the DBJ Financial Academy, each employee

creation of networks.

can seek to elevate his or her abilities in finance. In
DBJ Financial Academy Curriculum2014 Courses (May 2014 through February 2015)
Core courses (I)Introduction to Modern Finance
Financial Instruments and Exchange Act
Business Statistics
Basic Corporate Finance
M&A
Corporate Finance PracticeCore courses (II)Insolvency and Corporate Reorganization
IFRS Accounting: Foundations and PracticeFinancial System Theory
International Finance
Financial Policy
Financial Expertise Follow-up PracticeElective courses
Real Options
Real Estate Finance
Investment
Macroeconomics and the Modern Japanese Economy
Behavioral FinanceRisk Management
Special courses
Introduction to Integrated Reporting
Securitization: Comparison of Japanese and U.S.
Securitization Markets
Hedge Fund Industry and Financial Regulation
Special Program for Regional Financial Institutions

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2015 Courses (expected to run from May 2015 throughFebruary 2016)
Core courses (I)Introduction to Modern Finance
Financial Instruments and Exchange Act
Business Statistics
Basic Corporate Finance
M&A
Corporate Finance PracticeCore courses (II)Insolvency and Corporate Reorganization
IFRS Accounting: Foundations and PracticeFinancial System Theory
Financial Policy
Financial Expertise Follow-up PracticeInternational FinanceElective courses
Behavioral FinanceReal Estate Finance
Macroeconomics and the Modern Japanese Economy
Real Options
Introduction to Integrated Reporting
Investment
Risk Management
Issues and Expectations for Japanese Public FinanceSpecial courses
Securitization
Hedge Fund Industry and Financial Regulation
Family BusinessSpecial Program for Regional Financial Institutions
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98

Annual Report & CSR Report 2015

Intellectual Asset Report

DBJ’s executives and regular employees continuallytake on new challenges, while remaining firmly
committed to DBJ’s four core values: a long-term
perspective, neutrality, public-mindedness andreliability. The intellectual assets DBJ has built up
over the years help form a financial platform thatcan meet the needs of the times and enable DBJ
to provide services that extend beyond merely
providing funds. Employing these assets, we
endeavor to fulfill our role in enhancing socially
responsible activities among enterprises.

Intellectual Asset Management  .  .  .  .  .  .  .  .  . 100
Financial Platform That Enables DBJ to
Meet the Needs of the Times  .  .  .  .  .  .  .  .  .  . 104

Annual Report & CSR Report 201599

Intellectual Asset Management

Corporate Value and Intellectual Asset Management
Intellectual Assets
Enterprises ensure ongoing prosperity and profit byIntellectual Asset Management Essential toEnhancing Corporate Valueconsistently differentiating themselves from competitors.

Although intellectual assets are intangible in the sense that

Differentiating the products and services they offer is athey are not recorded on a company’s financial statements,

large part of the process. To enhance their operations,they are a core component of corporate value. Clearly recog-

enterprises must identify their important management

nizing and thereby managing intellectual assets effectively is

resources and sources of competitiveness. Specific tech-considered vital to increasing corporate value.

nologies, expertise, human resources and business models

Listed companies are finding that proactively disclosing

are some factors that lead to differentiation but are invisible

intellectual asset information helps markets value them moreto the casual observer. Determining an entity’s true corpo-

appropriately. For this reason, the introduction of regulatory

rate value requires the evaluation of these company-specificframeworks to encourage or require listed companies tostrengths. DBJ’s activities related to intellectual assets aredisclose non-financial information has grown into a global

designed to foster the application of these intangible

trend, centering on Europe.

sources of corporate value that underpin a company’s
future economic performance.

DBJ’s View on Intellectual Assets
Dating back to the time of our predecessor, maintaining the

In the process, we have become a repository of intellec-

trust of our clients and society at large has been our mosttual assets, which when combined represent an extraordi-

important objective. From this standpoint, we have creatednary DBJ asset: our expertise in resolving issues through thea wide variety of networks spanning both the public andapplication of new financial methods, the widespread use ofprivate sectors.

our financial platform and our economic and social contribu-

Based on our core values, our executives and regulartions. This asset has led to our development of the financial

employees have continued working to enhance their ability

methods described below. It enables us to respond quickly toto evaluate enterprises and projects.

changing policy requirements and plays a major role in our

We have accumulated a wealth of expertise in theability to continue adding economic and social value.

screening and evaluation of projects and enterprises from

Since privatization, we have aimed to maintain our eco-

a long-term and objective perspective and a keen ability tonomic and social contributions. We believe that our ability

identify and address issues that are unique in terms of theto clearly identify and make use of intellectual assets will betimes or the local communities that face them.

an increasingly important factor in achieving this goal.

Relationships among Intellectual Assets, Business Model and Corporate Value
Corporate ValueBusiness Model

Financial
AssetsTangible
Fixed Assets(Created by DBJ from Ministry of Economy,
Trade and Industry materials)

100

Annual Report & CSR Report 2015

Relational
AssetsHuman
Resources

Intellectual Assets

Structural
Assets

DBJ’s Utilization of Intellectual Assets
One school of thought defines intellectual assets as theemployees who are professionals in various fields—as they

understanding of and reporting on an entity’s networks

address such issues. All DBJ executives and regular employ-and client bases (relational assets), management team andees work to maintain a long-term and neutral perspective,

employees (human resources) and intellectual assets andapproaching new business with a spirit of innovation andbusiness processes (structural assets). Below, we introduce

challenge.

DBJ’s intellectual assets and activities according to thissegmentation.

To impart various financial skills, DBJ maintains training
menus that include a 2.5-month financial analysis training
course. This program, for all new employees, helps develop

Relational Assets

screening expertise. Our menus, combined with on-the-job

As our mission prior to privatization was to support projects

training, raise the level of specialist expertise among DBJ

that had policy significance, our system of planning andexecutives and regular employees. We maintain a number ofmaking investments and extending loans involved coopera-

personnel exchange and dispatch programs with domestic

tion with central government agencies and regional munici-

and overseas universities and research institutions, as well as

pal bodies. Now we take advantage of these networks inwith other international institutions, that help form our net-

our loan and Crisis Response Operations, making use ofworks. These programs help DBJ develop and introduce newinterest rate subsidy programs for the promotion of envi-

financial methods, as well as strengthen network ties.

ronmental management, as well as other interest subsidy

DBJ has also established the Research Institute of Capitalsystems put in place by national and regional municipal

Formation, which carries out financial research, as well as

bodies. DBJ also works to create and develop financial

research on global warming countermeasures and otherplatforms. To construct these platforms, we collaborate

efforts to create a sustainable society. The research that thewith public- and private-sector financial institutions in Japan

center produces from a neutral and long-term perspective

and overseas and maximize our networks of professionals,

is highly regarded by the academic community and otherincluding university professors, attorneys, and certified pub-

experts.

lic accountants. This multifaceted combination of networks

Structural Assets

academia and the government constitutes DBJ’s relational

Our introduction of new financial methods to Japan, ourassets.

work with other financial institutions to create finan-Intellectual Asset Reportconsisting of professionals in a host of fields in industry,

cial platforms and our many other contributions to the

Human Resources

Japanese economy and society rely on our organizational

Appropriately executing medium- to long-term invest-

adeptness, that is, our ability to quickly ascertain emerg-

ments and loans requires all of DBJ‘s executives and regular

ing issues and deploy appropriate personnel. This ability,

employees to maintain a long-term perspective and makecombined with the long-term financial data we have accu-

financial decisions from a neutral standpoint. In an era

mulated over 50 years of investment and loan operations

characterized by increasingly complex economic and social

and a corporate culture of always considering projects in anissues and more sophisticated business skills, businesseconomically rational manner, as well as in terms of theirresults are significantly affected by DBJ’s ability to form

broader economic and social significance, constitute DBJ’s

its business and financial structure. Our ability to provide

structural assets, as does the smooth and rapid communi-

solutions that are appropriate for enterprises, as well as forcation process resulting from the common knowledge thatthe economy and society in a broader sense, depends on

has evolved through financial analysis training and otherthe ability of our human resources—executives and regularchannels.

Annual Report & CSR Report 2015101

Advanced Initiatives Involving New Financial Methods That Utilize Intellectual Assets
We are a leader in leveraging our intellectual assets toduring the period when the viability of their plans is being

introduce new financial methods to Japan. Our pioneering

reviewed. To meet this need, DBJ provides debtor-in-

efforts come from maximization of our intellectual assets,

possession (DIP) financing as temporary working capital tocooperation with local communities and extensive cultiva-

enable such enterprises to continue operating and maintaintion of in-house human resources and expertise. Operating

value in the best portions of their businesses. In addition,

within complex financial markets, DBJ has maintained these

DBJ creates business revitalization funds to help enterprises

activities while continuing to control and hedge risk asnormalize their operations, through a process of operation-effectively as possible.

al selection and focus, and reduce their debt levels.

The United Kingdom introduced the private finance ini-

In recent years, we have become actively involved in

tiative (PFI) scheme in 1992 to encourage private enterprises

mezzanine financing. (”Mezzanine” literally refers to theto fund or manage projects that are typically operated bypartial story between two main stories of a building.) In thethe public sector. As a leader in absorbing and accumu-

repayment hierarchy, mezzanine financing is lower than thelating such expertise, DBJ has participated in numerous

senior financing* typically provided by financial institutions,

PFI projects in Japan. By shifting to the private sector theso it is a higher investment risk. In the United States andresponsibility for constructing, maintaining and operatingother markets with a broad range of investors, mezzanine

public facilities, the country benefits from private-sector

financing plays an important role in diversifying the types

management expertise and technical capabilities. By appro-of funding that are provided. Mezzanine financing can be

priately allocating risks among the private and public sec-

used in a number of situations, such as business or capitaltors, PFI is an efficient and effective way to provide public

restructuring. Taking a long-term perspective, DBJ provides

services. With PFI, project financing is the method generally

mezzanine financing as one of its tailor-made financing

used to raise funds, as project roles are allocated appropri-

solutions.

ately and long-term business is assured.
DBJ provides a full range of financing options in the areaof business revitalization. After filing applications according
to Civil Rehabilitation Act or Corporate Reorganization Act
procedures, enterprises typically require working capital

102

Annual Report & CSR Report 2015

*Senior financing involves relatively low risk. In Japan, most corporate bond issues and funds provided by financial institutions aresenior financing.

Relationship between Intellectual Assets and CSR at DBJ
The figure below contrasts intellectual assets as viewed

enterprises have cause to reconsider their conformanceby DBJ and DBJ’s role as seen by society. Evaluated in thiswith various laws and regulations, ensure safe and secure

sense, intellectual assets and CSR are two sides of the same

workplace and surrounding environments and provide qual-coin.

ity products and services through fair competition. These

For example, the DBJ Environmentally Rated Loan
Program, the DBJ Enterprise Disaster Resilience Rated

activities reinforce a company’s client base and raise corporate value by fulfilling social responsibilities.

Loan Program, DBJ Employee’s Health Management Rated

By employing our intellectual assets in these ways, weLoan Program and DBJ Green Building Certification—fully

go beyond merely providing financing: we also play a rolemobilized through intellectual asset networks with central

in promoting increasingly sophisticated corporate CSR man-government bodies, regional municipal bodies, experts andagement.

clients—as well as our human resources, comprising execu-

As can be seen on pages 32 to 49, “Integrated

tives and regular employees, and our accumulation of expe-

Investment and Loan Services,” and on pages 70 to 89,

rience and expertise all serve not only DBJ’s vital CSR role

“CSR through Investment, Loan and Other Businesses,” DBJ

but also as a loan menu that buttresses our clients’ CSR.

is taking advantage of its various accumulated intellectual

At the same time, these same loan programs strongly

assets.

support the CSR activities of our business partners: these
Relationship between Intellectual Assets and CSRIntellectual Asset
Elements
Relational
AssetsNetworks andClient BaseManagement Teamand Employees

Structural
AssetsIntellectual Assets andBusiness Processes

Client Satisfaction
Maintaining
Service Quality
Fair Competition

Intellectual Asset Report

Human
Resources

CSR Elements

Human Resource Education
Labor Standards
Human Rights
Working Environment

Legal and Regulatory
Conformance
Corporate Ethics(Created by DBJ from Ministry of Economy, Trade and Industry materials)

Annual Report & CSR Report 2015103

Financial Platform That Enables DBJ to Meet the Needs of the Times

Defining “Financial Platform”
In DBJ’s definition, ”financial platform” refers to thecorporate economic activity involves the application ofamount and quality of funds to which corporate and otherexperienced and real-world expertise of financial institu-

clients have access, the systematic formulation of bases thattions and businesses, as well as an accumulated body ofaffect the diversity of fund-raising methods, financial exper-

results that can be used for future reference (transaction

tise and practices, market transparency and the degreecases, precedents and the like).

of market participation. The more complete the financial

Furthermore, as financial platforms function inade-platforms, which are indispensable to financial system

quately if they are used by only a minority of participants, asoundness and macroeconomic vigor, the greater is theircatalyst is needed to encourage participation from a broad

effectiveness at promoting the revitalization of businesses

range of players.

and urban and local communities and the creation of new
industries.
However, financial platforms, which are an institutional,
general-access capital good, are not formed overnight.

Owing to our neutral position and advanced-player
status, we are perfectly suited to serve as the catalyst fordeveloping and maintaining financial platforms in cooperation with other financial institutions.

Creating the framework of systems and laws that support

Activities Involving Financial Platforms

104

DBJ fulfills a broad range of information functions. In addi-

first executive director. This institute creates the foundation

tion to corporate monitoring, DBJ exchanges information

for creating intellectual assets through collaboration with

with government agencies, regional municipal bodies andoutside experts, centered on university instructors. Taking

private financial institutions and coordinates their interests.

an academic and liberal perspective, the institute promotes

In the investment and loan department, DBJ promotes andresearch activities targeting a sustainable socioeconomic

helps develop financial platforms for structured financing,

structure. (For details, please refer to the Research Institutebusiness restructuring support, financing related to envi-of Capital Formation website, at http://www.dbj.jp/ricf/en/.)ronmental and disaster policies, M&A advisory services,

On pages 32 to 49, “Integrated Investment and Loan

safety nets and other functions. In the research depart-

Services,” and pages 70 to 89, “CSR through Investment,

ment, DBJ established the Research Institute of Capital

Loan and Other Businesses,” DBJ introduces its activities

Formation in July 1964, with Dr. Osamu Shimomura as its

involving financial platforms.

Annual Report & CSR Report 2015

Management Structure

DBJ’s most important public social responsibility is
to instill public confidence as a financial institution
and achieve the highest levels of managementtransparency. We employ an operations
management cycle that reflects the voice of society,particularly in terms of addressing the issues
society faces from a long-term perspective, at theappropriate time and in the appropriate manner.
We undertake projects that are not only profitable
but truly meaningful from both economic and social
perspectives, conduct appropriate risk evaluation
and work to offer superior investment and financial
solutions.

Corporate Governance  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 106
Compliance  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 111
Responding to Japan’s Stewardship Code  .  . 111
Risk Management  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 112
Client Protection Management Basic Policy/
Declaration on Personal Information
Protection/Policy for Managing
Conflicts of Interest  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 116
Disclosure  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 118

Annual Report & CSR Report 2015105

Corporate Governance

Basic Position on Corporate Governance
DBJ has formulated a corporate philosophy to encapsulate

financial technology and R&D, based on skills gathered overmanagement’s position regarding DBJ’s integrated invest-

many years of experience.

ment and loan services. We consider this philosophy the

Networks

core of our corporate activities.

Networks created with clients, regional municipal bodies
and other financial institutions.

Corporate Philosophy

Applying financial expertise
to design the future
We apply creative financing to resolve
client issues, as we work to earn
the trust of our clients andachieve their future prosperity.

We conduct our business in accordance with the action
guidelines described below as we strive to realize our corporate philosophy.
Customers First
DBJ will operate from our clients’ viewpoints, addressing
their challenges and sharing pleasure in their success.
Professional
With discernment and creative skill, DBJ will be a uniqueCore Competencies

financial platform providing integrated investment and

The core competencies described below support DBJ’sloans both in Japan and abroad.

efforts to realize its corporate philosophy.

Global & Local

Intention

DBJ will maintain a long-term viewpoint, considering the

The fundamental stance at the core of our corporate values:

needs of the times, the world and the region.

long-term perspective, neutrality, public-mindedness andSpeed & Teamwork

reliability.

Relying on skilled teamwork, DBJ will act rapidly and inIntellectual Assets

good faith, building strong foundations for clients’ trust.

Expertise in fields including industry research, credit analysis,

Corporate Governance Measures and Their Implementation Status
Internal Organizations

Kazuo Ueda, Professor, Faculty of Economics, theDBJ elects outside directors from the standpoint of ensuring

University of Tokyo.

management transparency and enhancing corporate
governance.
The Compensation Committee, which includes outside

Audit & Supervisory Board Members, Audit &Supervisory Board

directors, has been created to deliberate on director

The Audit & Supervisory Board comprises five members.

compensation and advise the Board of Directors in thisThis board convened 17 times during the fiscal year ended

regard. At the same time, DBJ has established a Personnel

March 31, 2015.

Evaluation Committee comprising outside experts to

The Companies Act prescribes that a majority of Audit

evaluate personnel proposals on the selection and& Supervisory Board members be outside members (inresignations, dismissals and term expiries of directors andDBJ’s case, three of the five). DBJ offices contribute three

Audit & Supervisory Board members.

members (two members proper to DBJ and one an outside

In addition, the following committees have been
established.

member). Also, DBJ has created the Audit & Supervisory
Board Office, which under the Board’s direction, assists theBoard members, including outside members, in performing

Board of Directors
The Board of Directors comprises 10 members. To ensure
management transparency, two Board members are outside

their duties.
The three outside Audit & Supervisory Board members
are as follows:

directors. During the fiscal year ended March 31, 2015, theTatsuya Tsuboi, former President, Sumitomo Mitsui Trust

Board of Directors met 15 times.

Research Institute Co., Ltd.

The following two members are outside directors:

Makoto Ito, Attorney and Visiting Professor, Nihon

Akio Mimura, Senior Advisor, Honorary Chairman ofUniversity Law School

Nippon Steel & Sumitomo Metal Corporation andShinji Hatta, Professor of Graduate School of Professional
Accountancy, Aoyama Gakuin University

106

Annual Report & CSR Report 2015

Content of Standards and Policies Related toCommittee on Investment and Loan Decisions

Independence in the Selection of Outside Directors

This committee handles, deliberates and makes decisions

and Outside Audit & Supervisory Board Members

related to investments and loans, as well as the investment

Not applicable.

and loan management.
New Operation Screening Committee

Operations Audit Committee

This committee deliberates and makes decisions on the

The Board of Directors has established the Operationscommencement of initiatives involving new businesses.

Audit Committee, delegating to this body the authority

Advisory Panel on Investments and Loansto deliberate important matters related to internal audits.

This panel handles the advance deliberation on andThis committee met two times during the fiscal year ended

monitoring of investments and loans.

March 31, 2015.

Committee on International Operations
This committee deliberates items related to the overseas

Compensation Committee

business strategies, operations and management

The Compensation Committee, whose members include

conditions.

outside directors, has been established as an advisory bodyto the Board of Directors from the standpoint of ensuringtransparency and objectivity regarding compensation. The
committee considers the type of executive compensation
structure that befits DBJ.

Core Business System Restructuring Committee
This committee deliberates items related to policies for
restructuring core business systems.
Advisory Board
Since DBJ’s establishment as a joint-stock company in

Personnel Evaluation Committee

October 2008, the Advisory Board has been in place as

DBJ has established the Personnel Evaluation Committee,

an advisory body to advise the Executive Committee,

composed of outside directors and other outside experts, as
an advisory body to the Board of Directors. The committee’srole is to evaluate personnel proposals on the selection ofproviding advice on DBJ’s overall management. However,the 2015 revisions to the DBJ Act that went into effecton May 20, 2015, stipulated for an indefinite period

directors and Audit & Supervisory Board members.

obligatory measures to be considered requiring that DBJ

Executive Committee

appropriate competitive relations with other entities in

The Board of Directors has vested in the Executive
Committee decision-making authority regarding theexecution of business.
Accordingly, the Executive Committee makes importantmanagement decisions. The committee met 33 times during
the fiscal year ended March 31, 2015.

Various committees have been established under the
Executive Committee and assigned specific decision-making
and deliberation tasks within each field of specialization,
excluding decisions made by the Board of Directors or the
Executive Committee.
ALM & Risk Management Committee
This committee deliberates and makes decisions pertaining
to DBJ’s portfolio risk management and asset/liability
management.
General Risk Management Committee
This committee deliberates and makes decisions onimportant items related to operational risk management,
system risk management, legal compliance, responses toantisocial forces and client protection management andother important items.

particular. Accordingly, this board is positioned anew as anadvisory body to the Board of Directors. As one of its roles,
even more than before the Advisory Board is tasked withdeliberating and evaluating important affairs related toensuring appropriate competitive relations are maintainedwith private financial institutions. This board is composed of
the following outside experts and outside directors.

Management Structure

Committees under the Executive Committee

conduct its operations in a manner that would not obstruct

Outside Experts
Masayuki Oku, Chairman of the Board, Sumitomo Mitsui
Financial Group, Inc.
Kiyofumi Kamijo, Executive Corporate Advisor, Tokyu
Corporation
Sakie Fukushima-Tachibana, President of G&S Global
Advisors Inc.
Fujio Cho, Honorary Chairman of Toyota Motor
Corporation
Katsunori Nakanishi, President & Chief Executive Officer(Representative Director), The Shizuoka Bank Ltd.
Outside Directors
Akio Mimura, Senior Advisor, Honorary Chairman of
Nippon Steel & Sumitomo Metal Corporation
Kazuo Ueda, Professor, Faculty of Economics, theUniversity of Tokyo
Annual Report & CSR Report 2015107

Special Investment Operations Monitoring Board

Keisuke Yokoo, Vice Chairman & President of JapanOne of the measures of the 2015 revisions to the DBJ Act that

Association of Corporate Executives

went into effect on May 20, 2015, was in regard to Special

Fumiaki Watari, Honorary Executive Consultant of JX

Investment Operations. The act stipulates the establishment of a

Holdings, Inc.

Special Investment Operations Monitoring Board as an advisory
body to the Board of Directors. This monitoring board is tasked

Matters Requiring Authorization ofwith deliberating projects and evaluating their performance

Competent Ministerin terms of appropriateness against policy objectives and withThe DBJ Act prescribes matters for which Minister ofemboldening private-sector enterprises and complementing their

Finance authorization is required. Major items requiring

operations while maintaining appropriate competitive relations.

such authorization are as follows:This board is composed of the following outside experts.

• Appointment and dismissal of representative directors andAudit & Supervisory Board members

Outside Experts
Masayuki Oku, Chairman of the Board, Sumitomo Mitsui• Concurrent positions as directors

Financial Group Inc.

• Amendments to Articles of Incorporation

Norio Sueyoshi, Representative Director & Chairman of• Disposition of surplus funds

Coca-Cola West Co., Ltd., and Chairman of Fukuoka• Merger, corporate split and dissolution

Chamber of Commerce and Industry• Basic policy on business plans, redemption plans andShin Takagi, Vice Chairman & Senior Executive Director

fund procurementof Japanese Bankers Association
Katsunori Nakanishi, President & Chief Executive Officer,

The organization outlined below has been put in place
to execute and supervise the abovementioned activities.

The Shizuoka Bank, Ltd.
Executional and Supervisory Structure

General Meeting of
Shareholders
Matters requiring authorization ofcompetent ministert Appointment and dismissal of
representative directors and Audit &Supervisory Board memberst Concurrent positions as directors
t Amendments to Articles of Incorporationt Disposition of surplus fundst Merger, corporate split and dissolutiont Basic policy on business plans,
redemption plans and fund procurement

Board of Directors

Audit & Supervisory
Board Members,
Audit & Supervisory
Board

ReportingOperations Audit
Committee

Accounting
auditorCompensation
Committee

Cooperation

Personnel Evaluation
Committee

Internal Audit
Department
Reporting

Advisory Board

Executive Committee
Decision-making
bodies

ALM & Risk
Management
Committee

AuditsSpecial Investment Operations
Monitoring Board
Deliberative
bodiesGeneral Risk
Management
Committee

Committee on
Investment and
Loan Decisions

New Operation
Screening
Committee

Advisory Panel on
Investments andLoansCommittee on
International
Operations

Core Business
System Restructuring
Committee

AuditsDepartments
Subsidiaries

Executive Officer Systemwith the Companies Act, the Board of Directors has

DBJ has an executive officer system to clarify responsibility

established an internal control system under the Internal

for the execution of duties and accelerate decision-making.

Control System Basic Policy.

The Board of Directors has designated eight managing

Specifically, this system is designed to determine theexecutive officers, excluding officers who are concurrently

status of legal compliance, risk management and internal

directors, and eight executive officers.

audits, as well as other items of managerial importance. Theinternal control system is designed to confirm applicable108

Status of Internal Control Systemregulations and the status of their implementation in

To ensure DBJ’s operational soundness, and in accordance

various departments.

Annual Report & CSR Report 2015

Internal Control System Basic Policy
Purpose
Article 1. This basic policy has been established in accordance with Item 6,
Paragraphs 4 and 5, Article 362, of the Companies Act (hereinafter, the “Act”),
and Paragraphs 1 and 3, Article 100, of the Act’s Enforcement Regulations(hereinafter, “Enforcement Regulations”) to create a system (internal control
system) to ensure Development Bank of Japan Inc. (hereinafter, “DBJ”), andthe corporate group comprising DBJ and its subsidiaries (hereinafter, the “DBJGroup” or the “Group”), conducts operations in an appropriate manner.
System to Ensure Compliance with Laws and the Articles ofIncorporation in the Execution of Duties by Directors and Employees
Article 2. The directors and the Board of Directors recognize legal complianceas one of the DBJ Group’s most important management issues. Accordingly,
DBJ has formulated a basic policy to ensure that the execution of duties bydirectors and employees (for companies that are not joint-stock companies,
people in equivalent positions, with the same applying below) complies
with laws and the Articles of Incorporation and establishes the corporate
philosophy and a basic policy on legal compliance.
2. A Compliance Manual, compliance program and internal regulations shall be createdin preparation to ensure compliance by executives with laws and regulations.
3. A committee shall be formed to promote and manage legal compliance, and an
executive and a control division shall be placed in charge of legal compliance.
4. A compliance hotline system shall be established to enable the swift detectionof acts that contravene laws and regulations and acts of potential concern fromthe perspective of legal compliance. In the event the department in chargeof this system receives an internal report, a report containing the content
of the notification shall be sent to an Audit & Supervisory Board member.
Furthermore, assurance shall be provided that the person making an internalreport shall not experience any disadvantage by having made such a report.
5. Preparations shall be made to ensure that DBJ has absolutely no connection
with antisocial forces that threaten social order or safety.
6. The Board of Directors shall formulate an Internal Audit Basic Policy
pertaining to the status of internal control, including legal compliance. This
policy shall establish internal audit departments that are independent of
departments responsible for the execution of business and that report audit
results promptly and appropriately.
System for the Storage and Management of Information Related to the
Execution of Duties by Directors
Article 3. Information pertaining to the execution of duties by directors shall be stored
and managed appropriately, and this information shall be accessible, as necessary.

Systems to Ensure the Efficient Execution of Duties by Directors
Article 5. The Board of Directors shall formulate management plans for the DBJ
Group and perform appropriate Group management control.
2. The Board of Directors shall establish an Executive Committee and delegate
decision-making on specific items to this council. In addition to making
decisions on the items with which it has been entrusted, to contribute to
expeditious decision-making the Executive Committee shall deliberate inadvance matters for resolution by the Board of Directors. Furthermore, theExecutive Committee shall establish various committees as advisory institutions
or as bodies to which to delegate decision-making on specific items.
3. To ensure the efficient execution of business based on decisions made by the
Board of Directors, regulations shall be established regarding the organizational
structure and the execution of tasks shall be allocated appropriately.
4. To enable swift decision-making, an executive officer system shall be

System to Ensure the Adequacy of Operations of the Group, Comprising
DBJ and Its Subsidiaries and Affiliated Companies
Article 6. The Board of Directors shall ensure the adequacy of operations of the
DBJ Group in accordance with the corporate philosophy.
2. The Board of Directors shall manage operations appropriately, in accordancewith the scope and characteristics of operations of its subsidiaries and affiliatedcompanies. Furthermore, the Board shall introduce appropriate measures fromthe perspective of legal compliance, client protection and risk management.
3. The Board of Directors shall create management systems for advance consultation,
reporting requests, guidance and other activities related to operations
management between DBJ and its subsidiaries and affiliated companies.
4. In addition to Paragraph 3 above, the Board of Directors shall establish thefollowing systems as appropriate and introduce necessary measures with regard
to subsidiaries whose operations require particular management based on thescale and characteristics of their activities (hereinafter, “Important Subsidiaries”).
(1) Systems for reporting to DBJ items related to the execution of operations bydirectors and other executives of Important Subsidiaries(2) Regulations and other systems related to managing the risk of loss of Important Subsidiaries(3) Systems for ensuring the efficiency of operations executed by directors andother executives of Important Subsidiaries(4) Systems for ensuring that the execution of operations by directors, otherexecutives and employees of Important Subsidiaries and other entities are inaccordance with the Act and the Articles of Incorporation
5. In accordance with the necessary scope of legal regulations, the Internal Audit
Department shall conduct internal audits of subsidiaries and affiliated companies andreport the results of these audits promptly and appropriately to the Board of Directors.
System Related to Employees Assisting the Audit & Supervisory Board
Members in Their Duties
Article 7. As a specialized organization to assist Audit & Supervisory Board memberswith their duties, if so requested by the members, an Audit & Supervisory Board
Office shall be established under the direction of the Audit & Supervisory Board.
Matters Concerning Employees Supporting the Audit & Supervisory
Board Members in Their Duties and the Independence of Such Personnel
from Directors and Ensuring Effective Instruction of Those Employees
Article 8. Employees supporting the duties of Audit & Supervisory Board
members shall perform their duties by working full-time and in accordancewith not only the directions and commands of the Audit & Supervisory Board
members but also personnel issues related to the employees and matters related
to the independence of such employees. Ensuring the effectiveness of directions
to such employees shall be left in the control of the Audit & Supervisory Board.
System for Reporting by DBJ Group Directors and Employees to DBJ’s Audit& Supervisory Board Members and Other Systems for Reporting to Them
Article 9. DBJ Group directors and employees shall report either directly or
indirectly to Audit & Supervisory Board members on the status of execution of
DBJ’s business and other necessary information.
2. If DBJ Group directors and employees become aware of any major potential damage to
the DBJ Group’s credibility or operating performance, they shall immediately report suchinformation, either directly or indirectly, to the Audit & Supervisory Board members.
3. If DBJ’s Audit & Supervisory Board members find that they require certain
information to perform their duties, they may request reports from DBJ
Group directors and employees as needed, and the party to whom therequest is addressed shall report appropriately.
4. Parties reporting to DBJ’s Audit & Supervisory Board members in accordance with Paragraph
3 above shall be ensured against facing any disadvantage as a result of such reporting.

Management Structure

Regulations and Other Systems Related to Managing the Risk of Loss
Article 4. To ensure the DBJ Group’s soundness of management and manage
risk properly, a risk management process that defines, evaluates, monitorsand controls risks with various characteristics encountered in the course ofthat business shall be put in place.
2. Management systems for integrated risk management shall be created. Also,
a committee for risk management shall be formed, and an executive and adepartment shall be assigned to take charge of risk management.
3. Risks shall be segmented into the following categories, and risk management
policies shall be established for each:(1) credit risk, (2) investment risk, (3) country risk, (4) market credit risk, (5)market risk, (6) market liquidity risk, (7) financial liquidity risk, (8) settlement
risk, (9) operational risk.
4. To the extent possible, the abovementioned risks shall be measured using aconsistent system, risk guidelines shall be established and the risks shall be managed.
5. The necessary systems shall be put in place to minimize the effects of economic
loss and credit collapse in the event of disaster, to ensure business continuity incrisis situations and to ensure a prompt return to normal functioning.
6. The Board of Directors shall establish an Internal Audit Basic Policy todetermine the status of internal control, including risk management. The
board shall receive prompt and appropriate reports of the results of internal
audits from internal audit departments.

established. Executive Officer Regulations shall be formulated to define
executive officers’ roles and responsibilities.

Other Systems to Ensure Effective Audits by the Audit & Supervisory
Board Members
Article 10. In addition to attending meetings of the Board of Directors, Audit &Supervisory Board members may attend meetings of the Executive Committee
and other important meetings and offer their opinions as necessary.
2. The Representative Director shall exchange opinions with the Audit &Supervisory Board members regularly, or at their request. The Representative
Director shall also cooperate in the preparation of a reporting environment.
3. The Internal Audit Department works with the Audit & Supervisory Board
members to establish internal audit plans. The department reports theresults of internal audits and exchanges opinions and liaises with the Audit &Supervisory Board members when requested to do so.
4. Directors and employees shall cooperate with the Audit & Supervisory Board membersin their audit activities and shall respect the Audit & Supervisory Board Regulations,Audit & Supervisory Board members’ audit standards and other regulations.
5. To ensure the adequacy and reliability of accounting audits, directors and employees shallcooperate in creating a system to ensure the independence of the accounting auditors.
6. In the event of a request by Audit & Supervisory Board members for expenses
to execute their duties, these requests shall be handled in a smooth manner.

Annual Report & CSR Report 2015

109

Status of Internal Audits and Audits by Audit &Supervisory Board Members
DBJ has established the Internal Audit Department under
the direct supervision of the DBJ president and independent
from other operating departments. The department
conducts inspections to ensure the appropriateness andeffectiveness of internal controls, including DBJ’s overall
operational compliance and risk management, andperforms evaluations and recommends improvements.
The Operations Audit Committee deliberates and decides
audit plans, audit reports and other important mattersrelated to internal audits, and this information is reported to
the Board of Directors.
As of June 29, 2015, 21 people belonged to the Internal
Audit Department.
The Audit & Supervisory Board and the Audit &Supervisory Board members audit the execution of duties bydirectors, based on their audit policy and audit plans.
The Audit & Supervisory Board members attend Board of
Directors and other important meetings. When necessary,
they query the execution of business by directors, peruse
documents and conduct branch audits.

Overview of Agreements with Outside Directors
and Outside Audit & Supervisory Board
Members under Paragraph 1, Article 427, of theCompanies Act (Liability Limitation Agreements)
DBJ’s Articles of Incorporation allow it to establish liability
limitation agreements with its outside directors andoutside Audit & Supervisory Board members, limiting their
responsibility for damages under Paragraph 1, Article 423,of the Companies Act, provided their duties are executedwith good intent and without gross negligence, to the total
amounts specified in each item in Paragraph 1, Article 425,of the Companies Act.

Status of Accounting Audits

Number of Directors

DBJ has in place an agreement whereby Deloitte Touche
Tohmatsu LLC conducts accounting audits as its accounting
auditor. During the fiscal year ended March 31, 2015, these
operations were conducted by designated certified public
accountants (designated limited liability partners) Tomomitsu
Umezu (continuous audit period* of two years), Hayato Yoshida(same, one year) and Atsuyuki Shimada (same, four years).

DBJ’s Articles of Incorporation limit the number of directors
to 13 or fewer.

* The number of years of continuous audit as designated limited
liability partners is stated in accordance with the Companies Act. As
designated limited liability partners, the number of continuing yearsof audits conducted in accordance with the Financial Instruments
and Exchange Act was two years for Tomomitsu Umezu, one year
for Hayato Yoshida and four years for Atsuyuki Shimada. The
number of business periods during which an audit was performedis the standard used to indicate the number of years. Assisting inthis audit were 71 people, including a systems specialist, a licensed
tax accountant, a specialist in determining fair value, a specialist in
pension mathematics and a real estate appraiser.

Requirements for Determination of Director
Appointments
DBJ’s Articles of Incorporation stipulate that shareholders
possessing at least one-third of the shareholder voting
rights exercisable shall attend the meeting and determine
the appointment of directors based on a majority
vote. The Articles of Incorporation further specify thatthe appointment of directors shall not be resolved bycumulative voting.

Limiting the Responsibility of Directors andAudit & Supervisory Board Members

DBJ’s Audit & Supervisory Board members, Internal
Audit Department and accounting auditor periodicallyand as necessary exchange opinions and information,and communicate in an effort to ensure effective andappropriate audits.

To enable them to perform their duties and fulfill the roles
that are expected of them, in accordance with Paragraph
1, Article 426, of the Companies Act, DBJ has establishedin its Articles of Incorporation that the liability for damages
incurred by directors (and former directors) and Audit &Supervisory Board members (and former members) for theirnegligence of tasks may be reduced within the legal limit byresolution of the Board of Directors.

Overview of Personal, Equity, Transactionalor Other Special-Interest Relationships
with Outside Directors and Outside Audit &Supervisory Board Members

Requirements for Special Resolutions at theGeneral Meeting of Shareholders

Akio Mimura, Senior Advisor, Honorary Chairman of Nippon
Steel & Sumitomo Metal Corporation, is an outside director
110of DBJ. DBJ has no special-interest relationship with Mr.
Mimura, and its business with Nippon Steel & Sumitomo
Metal Corporation is conducted normally.
DBJ has no special-interest relationship with any other of its
outside directors or outside Audit & Supervisory Board members.
DBJ has signed liability limitation agreements with its
outside directors and outside Audit & Supervisory Board
members, based on Paragraph 1, Article 427, of theCompanies Act.

Annual Report & CSR Report 2015

To ensure a smooth General Meeting of Shareholders,
DBJ’s Articles of Incorporation stipulate that shareholders
possessing at least one-third of the voting rights exercisableshall attend the meeting and determine by a two-thirds
majority vote the ”requirements for special resolutions at

general meetings of shareholders” provided in Paragraph 2,
Article 309, of the Companies Act.

Compliance
Specific compliance initiatives are as follows.
DBJ recognizes compliance as one of its most importantmanagement issues. As basic policies to ensure that theexecution of duties by directors and regular employees complies
with laws and regulations and the Articles of Incorporation, we
have formulated a corporate philosophy, a Basic Compliance
Policy and other compliance-related regulations.
In addition to its basic regulations on compliance, DBJ has
created and provided thorough notice throughout the organizationof a Compliance Manual and a compliance program. We seek tothoroughly implement the compliance activities outlined below.

Compliance Principles
DBJ has formulated the compliance principles indicatedbelow as part of its creation of compliance regulations.
1) DBJ’s executives and employees are keenly aware of DBJ’s
social mission and responsibilities as a public-sector bank andrecognize that illegal acts or improper business operations
harm the reputation of DBJ and interfere significantly with
DBJ’s ability to fulfill its objectives under the New DBJ Act.
We also realize DBJ’s need to always conduct activities
appropriately and in compliance with the law.

2) DBJ’s executives and employees are well aware that DBJ
must conduct its businesses legally and appropriately and be
responsible for explaining its actions to the general public.
3) DBJ refuses all advances from anti-social forces andcooperates with police and other related institutions toprevent any sort of relationship with such elements.

Compliance System
DBJ has established the Legal and Compliance Department
to take overall responsibility for planning, preparing andadjusting compliance activities. In addition, DBJ has establishedthe General Risk Management Committee to reflect on legal
compliance matters, determine the extent of compliance, anddeliberate on improvements to DBJ’s internal system.
DBJ also has established a Compliance Hotline. The
objective of this internal reporting system is to swiftly
identify and resolve any legal violations.
DBJ, in matters relating to managing conflicts ofinterest, formulated as a basic policy “Conflicts of Interest
Management Regulations” against undue infringementof the interests of its clients, and is preparing a system tomanage conflicts of interest.

Responding to Japan’s Stewardship Codeunderstanding of investee enterprises, their businessenvironments and their management teams’ intention
and to share with investee enterprises in their long-term
strategies. After investing, we leverage DBJ’s networks andstrengths in information, industry research and financing
technologies to provide total financing solutions that
address the issues they face. Through dialog with investee
enterprises, we work to realize their long-term development
and maximize their corporate value over the long term.
DBJ believes that its investment operations have been
conducted in close affinity with the spirit of the Code. In
providing risk capital and knowledge, we consider theappropriate fulfillment of stewardship responsibilities byinstitutional investors to be of service from the perspectiveof working with diverse financial players to ensure thesmooth formulation of financial and capital markets.
Accordingly, we are in agreement with the meaning of theprinciples provided in the Code.

Annual Report & CSR Report 2015

Management Structure

In August 2014, DBJ stated its acceptance of the “Principles
for Responsible Institutional Investors (Japan’s StewardshipCode)” (the “Code”).
Under the Code, stewardship responsibilities refers to
the responsibilities to enhance the medium- to long-term
investment return for clients and beneficiaries by improving
and fostering investee enterprises’ corporate value andsustainable growth through constructive “purposeful
dialogue” (engagement), based on an in-depth understandingof the investee enterprises and their business environment.
DBJ recognizes that, in addition to operational selection
and focus and the realization of growth strategies, calls
for corporate governance are growing. Recognizing
the importance of the meaning of equity, in our equity
investments we support the long-term advancementof the investee enterprises that are our clients, taking
particular note of their social responsibilities. Whenmaking investments, we endeavor to gain an in-depth

111

Risk Management

To ensure management soundness and safety, as well as

From the standpoint of comprehensive risk manage-

raise corporate value, DBJ works to manage risk appropri-

ment, DBJ has established a Risk Management Department,

ately in line with specific business and risk characteristics.

which is overseen by a director in an official capacity. DBJ

Controlling risk is an issue of utmost importance, andseeks to control its total risk within a specified target range.

therefore we have established risk management processes

In addition, we have set risk guidelines for each risk cat-and methods.

egory to help manage total risk.

Risk Management System
DBJ conducts risk management from the perspectives ofAsset/Liability and Risk Management System Overview

ensuring management soundness. To ensure appropriate management of individual risk categories, DBJ has
developed a risk management system that clarifies which
department is responsible for each type of risk. The Risk

President
Executive
Committee
ALM & Risk Management Committee

Management Department oversees comprehensive risk
management activities.
The ALM & Risk Management Committee deliber-

Risk Management Department

ates on important matters concerning risks and conducts
regular monitoring, in line with the basic policy related to

Credit Analysis Department

Treasury Department

comprehensive risk management approved by the Board of
Directors.
Investment and Loan Departments/Offices

Credit Risk Management
Credit risk refers to the risk of sustaining losses resulting

roles in the screening and administering of credit forfrom a decline in or loss of the value of assets due to dete-

individual loans, and each department keeps the operations

rioration in the financial condition of the borrower. Creditof the other in check. The Committee on Investment andrisk management requires credit management of individual

Loan Decisions meets as needed to deliberate importantloans as well as bankwide portfolio management.

issues concerning the management and operation ofindividual loans. These mutual checking functions serve to

Credit Administration of Individual Loansensure the appropriateness of the lending operation andWhen making an investment or loan, DBJ examines the

management environment.

entity’s project viability and the project’s profitability from

Borrower Rating Systema fair and neutral standpoint. DBJ is not subject to the

DBJ’s borrower rating system measures creditworthinessBanking Act or the Act on Emergency Measures for theby combining an evaluation point rating and a borrower

Revitalization of the Financial Functions (Act No. 132 ofcategory rating, with the result quantifying a potential

1998) but carries out independent asset assessments in line

client’s credit circumstances. The evaluation point ratingwith internal policies for self-assessment of credit quality

selects indicator/evaluation categories that are common

based on the Financial Services Agency’s Financial Inspection

across all industries, scoring the creditworthiness of theManual. The results of self-assessments are subject to an

potential borrower quantitatively and qualitatively. On theaudit by an auditing corporation and are reported to theother hand, the borrower category rating measures specificmanagement. Credit risk and amounts are monitored toitems related to the borrower, looking at the borrower’s

confirm they are within the limits established for individual

realistic financial condition, cash flows and debt repayment

borrowers.

history, generating a comprehensive assessment of a

The sales and credit analysis departments hold separate

112

Annual Report & CSR Report 2015

borrower’s repayment capacity.

Borrower Rating Classifications
Claims Classified
under the Financial
Revitalization Act

Borrower Category

Borrower
RatingDefinition

Normalborrowers

1-8

Borrowers with favorable business conditions, who have been confirmed tohave no particular problematic financial circumstances

Borrowers
requiring
caution

9-11

Borrowers experiencing weak business conditions, are unstable or have issues
with their finances. These borrowers need to be managed with caution.

Substandard
borrowers

12

Either some or all of the debts of these borrowers requiring caution are
under management.

Borrowers indanger ofbankruptcy

13

Borrowers in this category are having financial difficulties but are notbankrupt. Management improvement plans and the like are progressing
poorly, and these borrowers are highly likely to fall into bankruptcy.

Effectively
bankrupt
borrowers

14

Although not legally or formally in bankruptcy, these borrowers areexperiencing severe financial difficulties and are realistically falling into
bankruptcy, as their lack of potential for restructuring has been confirmed.

Bankrupt
borrowers

15

These borrowers are in bankruptcy, legally and formally. Specifically, theseborrowers are in bankruptcy or liquidation, under corporate reorganization,
bankruptcy proceedings or civil rehabilitation, or have had transactions
suspended by a bill clearinghouse.

NormalclaimsSubstandard claims

Doubtful claims

Claims in bankruptcy,
reorganization claims
and similar claims

Asset Self-Assessment System

Portfolio Management

Asset self-assessments are used to define asset

DBJ performs a comprehensive analysis of data based onclassifications that will offset recoverability risk or the

borrower ratings, and calculates the loan portfolio’s overall

degree of risk of value loss, based on the borrower rating,

exposure to credit risk. Credit risk exposure can be classified

the corresponding borrower category and the collateralas (1) expected loss (EL), the average loss expected during

or guarantee status. Such assessments help DBJ establish

a specific loan period; and (2) unexpected loss (UL), thetimely and appropriate amortization schedules and reserve

maximum loss that could be incurred at a certain rate oflevels.

probability minus the EL. The EL and UL calculations arereported to the ALM & Risk Management Committee.
Through such monitoring and consideringcountermeasures, DBJ is committed to controlling risk anddevising effective measures to improve risk return.
Management StructureMarket and Liquidity Risk Management
Market Risk

creating the risk of reduced profits or the risk of losses.

Market risk can be broadly classified into interest rate risk,

Interest rate risk can reduce the economic value of DBJ’s

exchange risk and stock market risk. Market risk describes

assets or interest income.

the risk of loss from fluctuations in the value of assets or

DBJ calculates and analyzes risk exposure with cash flow

liabilities (including off-balance sheet items) or the risk ofladder analyses (gap analysis), value at risk (VaR), interest

loss of revenues generated from assets or liabilities, owing

rate sensitivity analyses (basis point value), and otherto changes in interest rates, exchange rates, stock markets

methods. A portion of the interest rate risk associated withand various other risk factors in the markets. DBJ divides

lending operations is covered through interest rate swaps,

these risks broadly into interest rate risk and exchange risk.

which are used solely for hedging purposes. DBJ does not

Interest Rate Risk

have any trading-related risk because it does not engage inInterest rate fluctuations can create mismatches on rates

trading (specified transactions).

of interest on assets and liabilities or on interest periods,

Annual Report & CSR Report 2015

113

Exchange Risk

At other times, because of market complexities, entities

Exchange risk is the risk of loss due to unexpected shifts

in these circumstances may become unable to participate

in exchange prices, and this risk affects entities holding a

in market transactions, compelling them to conduct

net excess of assets or liabilities denominated in foreigntransactions under substantially less favorable terms thancurrencies. DBJ’s exchange risk derives from foreign currency

otherwise would be the case. The risk of losses for theseinvestment and financing and issuing foreign currency

reasons is known as market liquidity risk.

bonds. DBJ uses exchange swaps and other instruments tohedge this risk.
DBJ uses swap transactions to manage counterparty risk,

As its main methods of acquiring funds, in addition toissuing corporate bonds and taking out long-term loans,
DBJ relies on the stable procurement of long-term funds

the risk that the counterparty in the swap transaction willfrom the Japanese government’s Fiscal Investment and Loanbe unable to fulfill its obligations, by continually monitoring

Program and government-guaranteed bonds rather than on

the creditworthiness of all parties, and by setting a limit toshort-term funds such as deposits. Contingency plans arefinancing for each counterparty.

established as appropriate to meet unexpected short-term
funding requirements and cash flow shortfalls.

Liquidity Risk

Additionally, DBJ maintains daytime liquidity by

Liquidity risk is the risk of a mismatch occurring in theusing the Bank of Japan’s Real Time Gross Settlement

periods when funds are used and raised or an unexpected(RTGS), whereby settlements are made instantly for each

outflow of funds occurs, causing differences in the flow oftransaction. Every effort is made to ensure that settlement

funds (cash liquidity risk). Such situations make securingconditions are managed appropriately.

funds difficult and create situations in which interest rates

In addition to credit risk, the ALM & Risk Management

on borrowed funds are substantially higher than usual rates.

Committee deliberates DBJ’s market risk and liquidity risk.

Operational Risk Management
DBJ defines operational risk as the risk of loss arising from

System Risk Management

internal processes, people or systems that are inappropriate

System risk refers to the risk of loss due to a computeror non-functioning, or from external events. DBJ works tosystem breakdown or malfunction, system defects, or

establish a risk management system to minimize risk andimproper computer usage. DBJ has implemented theprevent potential risks from materializing.

following internal processes to optimize systems risk

The General Risk Management Committee has been

management and properly manage systems risk. The

established to deliberate topics concerning operational risk

Systems Risk Management Division is responsible formanagement.

managing DBJ’s systems risk centrally, based on its systems

Within operational risk management, DBJ conducts

risk management regulations. By determining security

administrative risk management and systems risk

standards from a variety of viewpoints—from information

management as described below.

system planning and development to operation anduse—the department extends the risk management

Administrative Risk Management

system bankwide, and addresses appropriate systems risk

Administrative risk refers to the risk of sustaining losses

management operations.

resulting from employees neglecting to perform their duties
correctly or from accidents, fraud, and the like. To reduce or
prevent administrative risk, DBJ prepares manuals, performs
checks on administrative procedures, provides educationand training and uses systems to reduce the burden of
administrative duties.

114

Annual Report & CSR Report 2015

Building a PDCA Cycle
DBJ follows the Plan, Do, Check, Act management cycle to

We also strive to manage effectively the wide range ofboost accountability for the appropriateness of its opera-

risks we face as a financial institution, and to earn the trust

tions and their results. This cycle encourages ongoingof our clients and society as a whole.

improvement.

DBJ’ s PDCA Cycle
Formulation ofmanagement plan

Competent minister

Budgetary plan
Matters requiring authorization ofcompetent minister

Plan

Appointment and dismissal of representative directors andAudit & Supervisory Board members
Q Concurrent positions as directors
Q Amendments to Articles of Incorporation
Q Disposition of surplus funds
Q Merger, corporate split and dissolution
Q Basic policy on business plans, redemption plans and fundprocurement
Q

Conclusions
reflected inplanning andbudgetReview of resource
allocation

Act

Board of Directors
Deliberate/
Evaluate

Deliberate/
Evaluate

Do

Advisory Board

SpecialInvestment
Operations
Monitoring
Board

Execution of
investments andloans(Outside experts
andoutside directors)(Outside expert)

Fund-raising
Other activities

Check
Evaluation ofbusiness
performance
Status & results
reportManagement Structure

Advisory Board:

The Advisory Board is positioned as an advisory body to
the Board of Directors. Its role is to deliberate and evaluate
important matters to ensure even more than in the past thatappropriate competitive relations are maintained with private
financial institutions.

Special Investment
Operations Monitoring Board: The Special Investment Operations Monitoring Board
deliberates and evaluates the status of Special Investment
Operations to ensure that each project and its results are inaccordance with policy objectives and to ensure that these
operations embolden private-sector enterprises, complement
their operations and foster appropriate competitive relations.

Annual Report & CSR Report 2015

115

Client Protection Management Basic Policy/Declaration on Personal
Information Protection/Policy for Managing Conflicts of Interest

The establishment and maintenance of a client protection

their level of convenience. DBJ recognizes the extreme

management system is vital because it protects the people

importance of such a system from the standpoint of

who use the financial institution’s systems and raises

operational soundness and appropriateness.

Client Protection Management Basic Policy, Declaration on Personal Information Protection
and Policy for Managing Conflicts of Interest
DBJ has formulated a Client Protection Management Policy

and appropriate means and manage such information

to ensure strict compliance with laws and regulations,safely. In transactions with clients, in the event that DBJ

protect the interests of its clients and raise the level of client

outsources operations, it ensures appropriate information

convenience. We have also created internal regulations

management and client response.

based on this policy, which we employ in briefings to raise
in-house awareness.

We have incorporated a declaration on our policies

Key content of our Client Protection Management Basic
Policy is outlined below:

related to personal information into our Declaration on
Personal Information Protection.

1) When transacting with clients, we endeavor to provide
and explain information that is accurate and appropriate
in line with laws and regulations.
2) When we receive requests for consultation, other

DBJ is a registered financial institution under the Financial
Instruments and Exchange Act. In accordance with this act
and the Cabinet Office Ordinance on Financial Instruments

requests or complaints, we strive to see the issue from

Business, etc., DBJ has drawn up the following policies

the client’s point of view, listen sincerely and respond in

introduced for the management of conflicts of interest andan operationally appropriate manner.

provides an overview of the publicly announced policy.

3) We acquire information about clients through legal

Declaration on Personal Information Protection
1. Policy
DBJ considers the appropriate protection of personal information
an important social responsibility. DBJ endeavors to use personal
information appropriately in all its activities by conformingwith the requirements of the Act on the Protection of Personal
Information, as well as other related laws and regulations, aswell as its own Declaration.
2. Appropriate Obtainment of Personal Information
DBJ acquires clients’ personal information only within thescope that is required to perform its operations, and employs
appropriate procedures for obtaining such information.
3. Purpose of Using Personal Information
DBJ obtains clients’ personal information only for specificpurposes and uses such information only within the scopenecessary to satisfy such purpose of use. In the event that otherpurposes of use are limited by legal regulations concerning
specified purposes of use, such information is not used for
purposes other than so specified. DBJ discloses on its website
the purposes of use of clients’ personal information. If
information is obtained for other purposes of use, such purposes
are clearly indicated at the time such information is obtained.
4. Providing Personal Information to Third Parties
In principle, DBJ does not provide clients’ personal information
to third parties unless it has received from the client permission
to provide such information or unless it is legally required toprovide such information. However, DBJ may, without obtaining
client approval, provide clients’ personal information to parties
it has commissioned to conduct activities within the scope for

116

Annual Report & CSR Report 2015

which the information was obtained or provide such informationin the event of a corporate merger.
5. Provisions for Safe Management of Personal
Information
DBJ seeks to appropriately manage clients’ updated personal
information and prevent the leakage of such information, andaccordingly maintains rationally sound management measures.
Furthermore, DBJ appropriately supervises its directors andregular employees and subcontractors who handle clients’personal information.
6. Continuous Improvements in Handling
Personal Information
DBJ strives to ensure ongoing improvements in its handling ofclients’ personal information and to update the Declaration as
appropriate in accordance with developments in information
technology or changes in social requirements.
7. Procedures for Requesting Personal Information
DBJ endeavors to respond appropriately by notifying clientsof the purpose of use of the personal information it retains;
responding to requests to disclose such information; and in
the event that the content of such information is incorrect,
responding to clients’ requests for revisions, additions
or deletions, discontinuing use, deleting information, ordiscontinuing the provision of such information to third parties.
8. Inquiries
DBJ endeavors to respond in good faith to all opinions orrequests regarding the use of personal information.

Overview of Policy for Managing Conflicts of Interest









Furthermore, Subject Transactions do not include acts that are prohibited
under the Financial Instruments and Exchange Act or other laws and regulations.
3. Scope of Companies Subject to Management ofConflicts of Interest
As stated in 2 (1) above, Subject Transactions are transactions
conducted by DBJ or by DBJ’s subsidiary financial institutions, etc.
”Subsidiary financial institutions, etc.” are those DBJ subsidiaries
or affiliated companies prescribed in Article 36-5 of the Financial
Instruments and Exchange Act.
As of May 29, 2015, DBJ’s subsidiary institutions, etc., were as follows.
DBJ Asset Management Co., Ltd.
Sun Arrows Investment Co., Ltd.
Healthcare Management Partners, Inc.
Milestone Turnaround Management Co., Ltd.
DBJ Europe Limited
DBJ Investment Advisory Co., Ltd.
AD Capital Co., Ltd.
DBJ Securities Co., Ltd.
South East Asia Growth Capital L.L.C
En Capital Co., Ltd.
En Investment Advisory Co., Ltd.
4. Policy for Managing Transactions That Are Likely to Involve
Conflicts of Interest
In the case of transactions prescribed as Subject Transactions, to theextent that the DBJ Group is not in violation of its legal or contractual
duties (including but not limited to the duty of confidentiality), the DBJ
Group is determined to act properly in the interest of its clients throughthe following or other measures.
(The following are only specific examples of methods. Subject
Transactions are not limited to those indicated below. )Separation of the department conducting Subject Transactions fromthe department conducting transactions for said client
Amending the conditions or instruments of Subject Transactions or
said client transactions
Cessation of Subject Transactions or said client transactions
Disclosing to said client the risk of Subject Transactions unduly
infringing on the interests of said client
5. Management of Conflicts of Interest—Organization
To ensure the appropriate management of conflicts of interest, theduties of a Conflicts of Interest Management Control Department
are handled within its Legal Affairs & Compliance Department.
In accordance with the Policy, the Conflicts of Interest Management
Control Department appropriately manages prescribed Subject
Transactions and conflicts of interest. Furthermore, as the DBJ Groupis required to manage conflicts of interest in accordance with its status
as a registered financial institution under the Financial Instruments andExchange Act, provided that the DBJ Group does not violate its legal
duty of confidentiality or its duty of confidentiality in relation to its
clients, information pertaining to Subject Transactions, including thoseof transactions handled by DBJ’s subsidiary financial institutions, etc.,
may be managed in a centralized manner.
Records shall be prepared of measures undertaken by the Conflictsof Interest Management Control Department with regard to prescribed
Subject Transactions and their management, and such records shall be
retained for a period of five years following the creation date.
To ensure appropriate management, the Conflicts of Interest Management
Control Department shall periodically verify the content of activities by
DBJ Group executives and regular employees and the content of businessactivities at each branch to ensure the operations are being conducted inaccordance with the Policy and the operational procedures for the policy, andshall periodically verify the management of conflicts of interest.








Annual Report & CSR Report 2015

Management Structure

1. Purpose
As the services provided by financial institutions grow increasingly
diverse, the potential for multiple competing or opposing interests
within financial institutions or financial groups increases, and thelikelihood increases that conflicts of interest will arise.
Under these conditions, DBJ manages transactions that are likely to
involve conflicts of interest to ensure against undue infringement of theinterests of its clients.
DBJ is a registered financial institution under the Financial
Instruments and Exchange Act. DBJ has drawn up these ”Rules forManagement of Conflicts of Interest” (hereinafter, ”the Policy”) in
accordance with policies introduced for the management of conflicts ofinterest under this act and as prescribed by Cabinet Office Ordinanceon Financial Instruments Business, etc. This document provides an
overview of the Policy.
2. Types of Transaction That Are Likely to Involve
Conflicts of Interest(1) Subject Transaction
Targets of this Policy, or ”transactions that are likely to involve conflictsof interest,” are those transactions conducted by DBJ or DBJ’s subsidiaryfinancial institutions or others (defined in 3 below; hereinafter, ”theDBJ Group”) that have a likelihood of unduly infringing on the interestsof clients as a result of conflicts of interest (hereinafter, ”Subject
Transactions”).
”Conflicts of interest” are (a) situations of opposing interests
between the DBJ Group and its clients, or (b) situations of opposinginterests between the DBJ Group’s clients and other clients (hereinafter,
together, ”Situations of Opposing Interests”) that unduly infringe on
the interests of clients.
”Clients” are, in the case of ”business operations related to financial
instruments” conducted by the DBJ Group, (a) counterparties in existingtransactional relationships, (b) parties in negotiation with the DBJ Group
with regard to transactions or otherwise having the potential to becomecounterparties in transactional relationships, or (c) parties that have beentransactional counterparties in the past and that currently are also legallycompetent with respect to past transactional relationships.
”Business operations related to financial instruments” are thosebusinesses provided for in Article 70 (2) of the Cabinet Office
Ordinance pertaining to financial instruments business, etc., that are
performed by DBJ or DBJ’s subsidiary financial institutions, etc.
(2) Types of Subject Transaction
Specific individual circumstances determine whether transactions are
judged as Subject Transactions, but below are examples of transactions
that are likely to be considered said Subject Transactions.
Based on a contract of mandate that exists between the DBJ Groupand its clients, notwithstanding that the DBJ Group has a duty of
due care of prudent manager or duty of loyalty to said client, the DBJ
Group is in danger of being unable to fulfill such duties owing to
Situations of Opposing Interests.
Based on a deep trust-based relationship formed between the DBJ
Group and its clients, notwithstanding the client’s expectation that
the Group would act in the client’s interests, the DBJ Group is indanger of being unable to act according to such expectation owing to
Situations of Opposing Interests.
By utilizing undisclosed client information that the DBJ Group has
the duty to protect, the DBJ Group could rationally act in its own selfinterest or the interest of other clients in transactions that exceed thescope of that duty.
Cases in addition to the above in which the danger exists of unduly
infringing on the interests of clients owing to Situations of Opposing
Interests.

117

Disclosure

DBJ believes that public relations and investor relations

status and operating policies, which are an essential part

have the important function of bringing management andof being trusted in a wide range of markets and societies.

stakeholders together. In addition, these activities help

Accordingly, we seek to disclose information through our

stakeholders gain an accurate understanding of DBJ’s

public relations and investor relations activities.

Basic PR/IR Philosophy
In its PR and IR activities, DBJ aims to comply with

DBJ maintains personal and client information,

relevant laws and regulations, operate in good faith andwithout disclosing such information in a manner thatin a dignified manner with its stakeholders, and disclose

would encroach upon the rights of individuals or related

information clearly and accurately in a timely andparties. We do not disclose information that would

appropriate manner.

counter the doctrine of good faith.

PR/IR Structure
The Corporate Planning & Coordination Department

DBJ. Through printed materials and over the Internet,

takes overall charge of PR and IR activities and plays athe department uses numerous communication tools tocentral role in the flow of information within and outside

disclose information.

Information Disclosure Materials
DBJ offers a wide range of information, using suchmedia as newsletters and its website:(1) Materials legally required for disclosure
Securities Report (Japanese)
Stock Exchange Report (Japanese)
Business Report (Japanese)(2) Voluntarily disclosed information
Annual Report & CSR Report
End-of-Period Financial Reports(3) Others
DBJ Quarterly Journal (newsletter)
The DBJ Quarterly Journal is also available in iPhone and iPad
formats.
http://itunes.apple.com/jp/app/id389307222 (Japanese)

DBJ News Digest (mail magazine; Japanese)
Website:118

http://www.dbj.jp/en

Annual Report & CSR Report 2015

Corporate Data
Timeline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .120
Board of Directors, Audit & Supervisory Board
Members and Executive Officers . . . . . . . . . . . . . .121
Organization Chart . . . . . . . . . . . . . . . . . . . . . . . . . .122
Locations and Directory . . . . . . . . . . . . . . . . . . . . . .123
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .124
Stock Information . . . . . . . . . . . . . . . . . . . . . . . . . . .125
Excerpt from the Development Bank ofJapan Inc. Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . .126
Act for Partial Amendment of theDevelopment Bank of Japan Inc. Act. . . . . . . . . 129
Amendment of the Development Bank ofJapan Inc. Act (based on establishment of
the Act for Extraordinary Expenditure andAssistance to Cope with the Great East

Japan Earthquake) . . . . . . . . . . . . . . . . . . . . . . . 131
Excerpts from the Act for Partial
Amendment of the Development Bankof Japan Inc. Act . . . . . . . . . . . . . . . . . . . . . . . . . . 132

Corporate Data

Annual Report & CSR Report 2015

119Timeline

The Japan Development Bank, the Hokkaido-Tohoku Development Finance Public Corporation and the Development Bank of Japan
1951 April
1952
1956 June
1957 April

1960
1961
1962
1963
1964
1972
1985

April
July
January
June

1987 September
1989
1995 February
1997 September
1997 December
1999 June
1999 October

2002 May
2005 December
2006 May
2006 June2007 June

Japan Development Bank (JDB) establishedJDB branches opened in Osaka (now the Kansai Branch), Sapporo (now the Hokkaido Branch), Nagoya (nowthe Tokai Branch) and Fukuoka (now the Kyushu Branch)
Hokkaido Development Finance Public Corporation established
Hokkaido Development Finance Public Corporation reorganized as the Hokkaido-Tohoku Development
Finance Public Corporation (HTDFP) branches opened in Sapporo (now the Hokkaido Branch) and Sendai(now the Tohoku Branch)
JDB branch opened in Takamatsu (now the Shikoku Branch)
JDB branches opened in Hiroshima (now the Chugoku Branch) and Kanazawa (now the Hokuriku Branch)
JDB representative office opened in New YorkJDB representative offices opened in Kagoshima (renamed Minami-Kyushu Branch in October 1999) and Matsue
JDB representative office opened in London
HTDFP representative office opened in Niigata (renamed Niigata Branch in July 1989)
Japan Development Bank Law revised
1) Addition of investment function (pertaining to business in such areas as research and development, urban
development and energy use stipulated by government ordinance)2) Addition of R&D fund investment function
JDB and HTDFP creation of low interest rate loan system funded partially by sale of NTT shares
JDB representative offices opened in Oita, Matsuyama, Okayama and Toyama
HTDFP representative offices opened in Hakodate and Aomori
JDB commenced loans to assist disaster recovery
Cabinet approval of bill entitled ”Pertaining to Consolidation and Rationalization of Special-Purpose
Companies, etc.” (decision to dissolve JDB and HTDFP and consolidate them as a new bank)
JDB and HTDFP commenced loans in response to the financial environment (introduction of March 31, 2001,
sunset clause)
The Development Bank of Japan Law (Law No. 73 of 1999) approved
Transfer of approval of all rights and responsibilities of JDB and HTDFP to the Development Bank of Japan (DBJ)
Transfer of financing operations from Japan Regional Development Corporation andJapan Environment Corporation
DBJ representative offices opened in Kushiro and Singapore
The Development Bank of Japan Law revised (introduction of additional spot inspections by the Financial
Services Agency)
Cabinet approval of the Important Policy of Administrative Reform
The Act on Promotion of Administrative Reform for Realization of Small and Efficient Government (Act No.
47 of 2006) approved
Policy-Based Financing Reform Plan decided upon by the Headquarters for the Implementation of Policy Finance Reform
The Development Bank of Japan Inc. Act (Act No. 85 of 2007) approved

Development Bank of Japan Inc.
2008
2008
2009
2009
2009
2010
2011

October
December
June
September
November
March
May

2011
2012
2012
2012
2014

December
March
June
DecemberJune2015 May
2015 August

120

Development Bank of Japan Inc. established (Capital: ¥1 trillion)
DBJ Singapore Limited launched
Act for Partial Amendment of the Development Bank of Japan Inc. Act (Act No. 67 of 2009)
Increase of capital to ¥1,103,232 million
DBJ Europe Limited launched
Increase of capital to ¥1,181,194 million
Partial amendment of the Development Bank of Japan Inc. Act (based on establishment of Act for
Extraordinary Expenditure and Assistance to Cope with the Great East Japan Earthquake (Act No. 40 of 2011))
Increase of capital to ¥1,187,364 million
Increase of capital to ¥1,187,788 million
Increase of capital to ¥1,198,316 million
Increase of capital to ¥1,206,953 million
DBJ Investment Consulting (Beijing) Co., Ltd. (formerly Japan Asia Investment Consulting (Beijing) Co., Ltd.)
converted to wholly owned subsidiary
Act for Partial Amendment of the Development Bank of Japan Inc. Act (Act No. 23 of 2015)
Capital was reduced by ¥206,529 million, with the crisis response reserve increased by this entire amount

Annual Report & CSR Report 2015

Board of Directors, Audit & Supervisory Board Members and Executive Officers(As of July 1, 2015)

Masanori Yanagi
President & CEO

Yasushi Kinoshita
Deputy President

Masaaki Kai
Managing Executive Officer
In charge of Corporate Finance Department [Division 4]

Kenkichi Fukuda
Managing Executive Officer, Head of Kansai Branch

Hajime Watanabe

In charge of Kansai Branch, Chugoku Branch, Shikoku Branch

Deputy President

Ikuro Hirozane

Shin Kikuchi
Director and Managing Executive Officer
In charge of Corporate Planning & Coordination Department,
Information Resources Department, General Affairs Department

Tetsumi Hashimoto
Director and Managing Executive Officer
In charge of Credit Analysis Department, Accounting Department,
Economic & Industrial Research Department (excluding Economic
Research Office)Hideo Oishi
Director and Managing Executive Officer

Managing Executive Officer
In charge of Corporate Finance Department [Division 5]

Kosuke Takahashi
Managing Executive Officer
In charge of Urban Development Department, Real Estate Finance
Department, Corporate Finance Department [Division 3]

Hisanobu Sekine
Managing Executive Officer
In charge of Corporate Finance Department [Division 6], Hokkaido
Branch, Tohoku Branch, Niigata Branch

Takao Kaizu
Managing Executive Officer

In charge of Business Planning & Coordination Department,
Financial Institutions Department, International Strategy &Coordination Department

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

Naoki Enomoto

Managing Executive Officer

Director and Managing Executive Officer
In charge of Treasury Department, Syndication & Credit Trading
Department, Environmental Initiative & Corporate Social ResponsibilitySupport Department

Satoshi Tomii
Director and Managing Executive Officer
In charge of Strategic Finance Department, Growth & Cross Border
Investment Department

Akio Mimura

Makoto Anayama
In charge of Corporate Finance Department [Division 1 and 2],
Economic & Industrial Research Department (Economic Research
Office)Seiji Jige
Managing Executive Officer
In charge of Regional Planning Department, Structured Finance
Department, Hokuriku Branch, Tokai Branch, Kyushu Branch, MinamiKyushu Branch

Director (Outside)

Masafumi Aizawa

Kazuo Ueda

Tomoki Matsuda

Director (Outside)

Executive Officer (in charge of Financial Institution)
Executive Officer, Head of Treasury Department

Takayuki Yamamoto
Osamu Koyanagi
Audit & Supervisory Board Member

Mitsue Kurihara

Executive Officer, Head of Business Development
Department

Masayuki Tsuda

Audit & Supervisory Board Member

Executive Officer, Head of Human Resources
Management Department

Tatsuya Tsuboi

Takeshi Kiriyama

Audit & Supervisory Board Member (Outside)

Executive Officer, Head of Growth & Cross Border
Investment Department

Makoto Ito

Yoshinao Ikeda

Audit & Supervisory Board Member (Outside)

Shinji Hatta
Audit & Supervisory Board Member (Outside)

Executive Officer, Head of Business Planning &Coordination Department

Kazushi Minakawa
Executive Officer (in charge of Internal Audit)
Corporate Data

Norifumi Sugimoto
Executive Officer, Head of Corporate Planning &Coordination Department
Notes: 1. Akio Mimura and Kazuo Ueda are outside directors under Article
15 of Section 2 of the Companies Act.
2. Tatsuya Tsuboi, Makoto Ito and Shinji Hatta are outside Audit &Supervisory Board members under Article 16 of Section 2 of theCompanies Act.

Annual Report & CSR Report 2015121

Organization Chart (As of July 1, 2015)

Business Planning & Coordination Department
Financial Institutions Department
Urban Development Department
International Strategy & Coordination Department
Corporate Finance Department, Division 1
Corporate Finance Department, Division 2
Corporate Finance Department, Division 3

Audit & Supervisory Board
Members/
Audit & Supervisory Board

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

Audit & Supervisory
Board Office

Healthcare Industry Office

Hokkaido Branch
Tohoku Revival
Reinforcement Office

Tohoku Branch
Niigata Branch
Hokuriku Branch

GeneralMeeting of
Shareholders

Tokai Branch

Board ofDirectors

Executive
Committee

Kansai Branch
Chugoku Branch
Shikoku Branch
Kyushu Branch

Advisory Board

Minami-Kyushu Branch
Real Estate Finance Department

Special Investment
Operations
Monitoring Board

Chief
Investment
Officer

Strategic Finance Department
Growth & Cross Border Investment Department
Structured Finance Department
Syndication & Credit Trading Department

Environmental Initiative & Corporate Social Responsibility-Support Department
Business Development Department
Economic & Industrial Research Department
Regional Planning Department
Research Institute of Capital Formation

Economic Research Office
Customer Solution
Planning Office
Corporate Management &Accounting Research Office

Credit Analysis Department
Legal Affairs & Compliance Department
Secretariat Office
Human Resources Management Department
Corporate Planning & Coordination Department

Public Relations & Corporate
Social Responsibility Office

Risk Management Department
Information Resources Department
General Affairs Department
Accounting Department

Settlement & Accounting
Operation OfficeTreasury Department

Operations Audit
Committee

Internal Audit Department

Representative Offices: Hakodate, Kushiro, Aomori, Toyama, Matsue, Okayama, Matsuyama, Oita
Overseas Representative Office: New York
Overseas Subsidiaries: DBJ Singapore Limited, DBJ Europe Limited, DBJ Investment Consulting (Beijing) Co., Ltd.

122

Annual Report & CSR Report 2015

Locations and Directory (As of July 1, 2015)

Domestic Branch Offices,
Representative Offices

Head OfficeSouth Tower, Otemachi
Financial City,
9-6, Otemachi 1-chome,
Chiyoda-ku, Tokyo
100-8178, Japan
Tel: +81-3-3270-3211
http://www.dbj.jp/en

Metropolitan Expressway

To Kanda

Development Bank of Japan (DBJ)
South Tower, Otemachi Financial City

NTT
KDDI

Entrance

Otemachi
Station,Marunouchi Line
(direct passage
from Exit A1)

To TokyoTokyo Sankei Building

JR Lines

Otemachi
Station,ChiyodaLine(Exit C1)

Hibiya DoriKeidanren

North Tower,
Otemachi Financial City

Area Closed

Otemachi Station,
Hanzomon Line (Exit E1)

Otemachi Building

Branch Offices:

Representative Offices:

Hokkaido

Hakodate

TohokuKushiroNiigata

Aomori

Hokuriku

ToyamaTokai

MatsueKansai

Okayama

Chugoku

Matsuyama

Shikoku

Oita

KyushuMinami-Kyushu

Overseas Representative Office and Subsidiaries
DBJ Europe Limited

New York Representative Office

New York Representative Office1251 Avenue of the Americas, Suite 830,
New York, NY 10020, U.S.A.
Tel: +1-212-221-0708

Broad

DBJ Investment Consulting(Beijing) Co., Ltd.

Hilton New Yorkway

Sheraton New York Hotel and Towers

52nd St.
51st St.

St.

th

50

th

49

DBJ Singapore Limited

Radio City Music Hall
St.

Rockefeller Center

50th St.
49th St.

1251 Avenue of the Americas (8th floor, Suite 830)
5th Ave.

6th Ave.

7th Ave.

DBJ Singapore Limited

DBJ Europe Limited

DBJ Investment Consulting (Beijing) Co., Ltd.

138 Market Street, #15-02 CapitaGreen,

Level 20, 125 Old Broad Street,

Beijing Fortune Building, Suite 814-815, No. 5,

Singapore 048946

London EC2N 1AR, U.K.

Dong San Huan Bei Lu, Chaoyang District,(Relocated on September 14, 2015.)
Tel: +65-6221-1779

Tel: +44-20-7507-6070

Beijing, 100004, P.R.C
Tel: +86-10-6590-9770

125 Old Broad Street (Level 20)

.
St
er
St

.

Ay

cil

k

You Yi Shopping City
The Great Wall Sheraton
Hotel Beijing

St.
ad
ro

Annual Report & CSR Report 2015

Corporate Data

CeloHotel Kunlun

Agricultural Exhibition Center Sta.

Cornhill

Yansha Bridge

.
Sta

St.

Beijing Fortune Building(8th floor, Suite 814-815)

aoTeHilton Beijing Hotel

aqi
gm

Royal
Exchange

Sanyuan East Bridge

Be

Lian

Bank

ta.
oS

needleThreadS
ijing

Beijing Capital International Airport
Beijing Silver Tower

qia

lk

R

CapitaGreen (15th floor)

Wa

t.

le
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Building

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123

Subsidiaries (As of March 31, 2015)

Company

Address

Principal Businesses

Established

Percentage of
Capital(Millions of Total Voting
Rights (%)Yen)

Consolidated Subsidiaries
Japan Economic Research Institute Inc.

Chiyoda-ku,
Tokyo

Research, consulting andadvisory services

December 13,
1989

479

100.0

Value Management Institute, Inc.

Chiyoda-ku,
Tokyo

Research, consulting andadvisory services

June 25, 1993

75

100.0
(8.0)

DBJ Securities Co., Ltd.

Chiyoda-ku,
Tokyo

Securities business

October 22,
1998

500

100.0

DBJ Business Investment Co., Ltd.

Chiyoda-ku,
Tokyo

Investment consulting

March 10,
2003

40

100.0

DBJ Capital Co., Ltd.

Chiyoda-ku,
TokyoManagement ofinvestment associations

October 14,
2005

99

100.0

DBJ Asset Management Co., Ltd.

Chiyoda-ku,
Tokyo

Investment management,
investment advisory andagency services

November 22,
2006

100

100.0

DBJ Singapore Limited

Republic ofSingapore

Investment and loan
support and advisory
services

September
15, 2008

S$1 million

100.0

DBJ Europe Limited

London, United
Kingdom

Investment and loan
support and advisory
services

June 5, 2009

€7 million

100.0

DBJ Investment Advisory Co., Ltd.

Chiyoda-ku,
Tokyo

Investment advisory andagency services

December 1,
2009

68

50.6

DBJ Real Estate Co., Ltd.

Chiyoda-ku,
TokyoReal estate leasing

February 1,
2010

80

100.0

Investment and loan
support and advisory
services

September
30, 2011

CNY 4
million

100.0

Beijing,
DBJ Investment Consulting (Beijing) Co.,
People’sLtd.
Republic of(Note 5)China
14 other companies(Note 1)

—

—

—

—

—

—

—

—

—

—

Affiliated Companies
20 other companies(Notes 1, 6)

Notes:
1. Only principal consolidated subsidiaries and affiliated companies are listed in order of their date of establishment; only the numbers of other consolidated
subsidiaries and affiliated companies are indicated.
2. Amounts of less than ¥1 million have been omitted in the figures stated above.
3. DBJ’s percentage of total voting rights in subsidiaries is shown rounded to one decimal place.
4. In the column showing DBJ’s percentage of total voting rights in subsidiaries, figures within parentheses indicate indirect holdings.
5. In June 2014, DBJ acquired an additional share in the former Japan Asia Investment Consulting (Beijing) Co., Ltd. As a result, this company moved frombeing an affiliated company of DBJ to a consolidated subsidiary. In June 2014, the company adopted its present name.
6. Of affiliated companies, Air Do Co., Ltd., submits a Securities Report (Japanese).

124

Annual Report & CSR Report 2015

Stock Information (As of March 31, 2015)

Number of Shares Issued and Paid-in Capital
Changes in
Number of shares
Changes in number ofPaid-in capital
paid-in capitalissuedshares issued(Millions of yen)(Thousands of shares) (Thousands of shares) (Millions of yen)

October 1, 2008
June 26, 2009
September 24, 2009
(Note 4)

March 23, 2010
(Note 4)

December 7, 2011
(Note 5)

March 23, 2012
(Note 4)

June 6, 2012
(Note 6)

December 6, 2012
(Note 7)

Changes incapital surplus(Millions of yen)

Capital surplus(Millions of yen)

(Note 2)

(Note 2)

(97,248)

1,060,466(Note 3)(Note 3)40,00040,0001,000,000

1,000,000—

40,000—1,000,000

2,064

42,064103,232

1,103,232—

1,060,466

1,559

43,623

77,962

1,181,194—

1,060,466—

43,6236,170

1,187,364—

1,060,466

8

43,632424

1,187,788—

1,060,466—

43,632

10,528

1,198,316—

1,060,466—

43,632

8,637

1,206,953—

1,060,466

Notes:
1. All shares issued on October 1, 2008, were to raise capital corresponding to incorporation.
In accordance with Article 9 of the Supplementary Provisions to the New DBJ Act, on October 1, 2008, all assets of the predecessor were transferred to
the new DBJ as an in-kind contribution (except those prescribed for ongoing use by the Japanese government under Paragraph 2, Article 15, of the
Supplementary Provisions to the Act), and these shares were transferred to the Japanese government, the capital investor in the predecessor, through a
gratuitous conveyance.
2. As of October 1, 2008, according to the provisions of Article 2 of the Supplementary Provisions to DBJ’s Articles of Incorporation, the value of the capitalreserve was calculated by evaluation officers as stipulated in Paragraph 1, Article 16, of the Supplementary Provisions to the New DBJ Act to be the value of
assets less the value of liabilities less the ¥1 trillion in capital.
At the third meeting of the Development Bank of Japan, Inc., Asset Evaluation Committee on January 28, 2009, the committee determined the value of
assets (as of October 1, 2008) for transfer authorization. The value of these assets less the value of liabilities less ¥1 trillion in capital amounted to¥1,157,715 million.
3. By resolution of the General Meeting of Shareholders on June 26, 2009, and provisions of the Companies Act (Article No. 448, Paragraph 1, and Article452), the deficit was covered by transfer from capital reserve to other capital surplus and transfer from other capital surplus to retained earnings.
4. By way of a rights offering, all shares of common stock were assigned to the Minister of Finance (for consideration). The issue price (amount paid) is ¥50,000
per share; paid-in capital is ¥50,000 per share.
5. To secure a financial base for Crisis Response Operations, of the ¥1,350 billion in delivery bonds issued under the Act for the Partial Amendment of theDevelopment Bank of Japan Inc. Act and the supplementary budget for fiscal 2009, in accordance with the provisions of Article 2-4, Paragraph 1, of the
Appendix to the DBJ Act, an amount equivalent to ¥6,170 million was required for redemption on November 24, 2011.
Based on this requirement, these delivery bonds were redeemed effective December 7, 2011. The face value of delivery bonds decreased by this amount,
and at the same time DBJ’s common stock increased by the equivalent of the required redemption amount. The number of shares was not affected byprocedures for this increase in common stock.
6. As is stated above, as of May 18, 2012, delivery bonds in the amount of ¥10,528 million required redemption. Based on this requirement, the delivery bonds
were redeemed on June 6, 2012. The face value of delivery bonds decreased by this amount, and at the same time DBJ’s common stock increased by theequivalent of the required redemption amount. The number of shares was not affected by procedures for this increase in common stock.
7. As is stated above, as of November 20, 2012, delivery bonds in the amount of ¥8,637 million required redemption. Based on this requirement, the delivery
bonds were redeemed on December 6, 2012. The face value of delivery bonds decreased by this amount, and at the same time DBJ’s common stockincreased by the equivalent of the required redemption amount. (The amount of delivery bonds that remained unredeemed following this redemption was¥1,324,665 million.) The number of shares was not affected by procedures for this increase in common stock.

Shareholder
Address

Number of shares held(Thousands of shares)

Percentage of
total equity (%)

Finance Minister

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

43,632100.00Total—

43,632100.00

Corporate Data

Annual Report & CSR Report 2015125

Excerpt from the Development Bank of Japan Inc. Act (Act No. 85 of 2007)(Unofficial translation)

Article 1
PurposeDevelopment Bank of Japan Inc. (hereinafter referred to as the“Corporation”) shall be a joint stock company (kabushiki-kaisha)
whose objective is to maintain the foundations of investment
and financing functions of long-term business funds as theDevelopment Bank of Japan by conducting business activities
utilizing the methods of integrated investment and loan
services and other sophisticated financial methodologies, while
maintaining the autonomy of management with the goal of
realizing full-scale privatization, thereby contributing to smoothsupply of funds to those who need long-term business funds, aswell as to the sophistication of financial functions.
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)) (other than those that fall within securities-related
derivatives transactions (which means the securities-related
derivatives transactions set forth in Article 28, Paragraph
8, item (6) of the Financial Instruments and Exchange
Act (Act No. 25 of 1948, as amended); hereinafter inthis item and item 11 the same)), or enter into securitiesrelated derivatives transactions (limited to those made forinvestment 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 Debentures or Preferred
Investment Securities issued by a Specified Purpose
Company (limited to the cases where the Specified Purpose
Company acquires only designated monetary claims
or beneficial interests in trusts with which designatedmonetary claims are entrusted with cash proceeds derived
from issue of those Specified Debentures or Preferred
Investment Securities as set forth in the Asset Liquidation
Plans, and except for, in case of Specified Debentures,
Specified Short-term Notes), and other similar securities
stipulated in the Ministry of Finance Ordinance (hereinafterin this item referred to as the “Specified Debentures”)(except in cases where it is intended for secondary
distribution (uridashi)), or to handle primary offering(boshu) of the Specified Debentures so subscribed(9) To acquire or transfer Short-term Notes, Etc.
(10) To act as an agent or intermediary for execution ofagreements which provides for lending money on behalf ofbanks (the banks set forth in Article 2, Paragraph 1 of the
Banking Act (Act No. 59 of 1981, as amended); hereinafter
the same) and other entities engaged in the financial
business stipulated in the Cabinet Order(11) To enter into derivatives transactions set forth in Article 2,
Paragraph 20 of the Financial Instruments and Exchange
Act (other than those that fall within the securities-related
derivatives transactions), except in cases where these126

Annual Report & CSR Report 2015

business operations fall within those operations referred toin item (7)(12) To do the activities referred to in Article 2, Paragraph 8,
item (7) of the Financial Instruments and Exchange Act(13) To do the activities referred to in Article 2, Paragraph 8,
item (9) of the Financial Instruments and Exchange Act(limited, in the case of the handling of primary offeringor secondary distribution, to those to be conducted upon
entrustment by financial instruments business operators
engaged in the type I financial instruments trading businessset forth in Article 28, Paragraph 1 of the Financial
Instruments and Exchange Act [the financial instruments
dealers set forth in Article 2, Paragraph 9 of the Financial
Instruments and Exchange Act; hereinafter the same], andfor such financial instruments business operators)(14) To do the activities referred to in Article 2, Paragraph 8,
item (11) of the Financial Instruments and Exchange Act(15) To do the activities referred to in Article 2, Paragraph 8,
item (13) of the Financial Instruments and Exchange Act;
(16) To do the activities referred to in Article 2, Paragraph 8,
item (15) of the Financial Instruments and Exchange Act(17) With respect to securities (including, if such securities are
not issued, rights to be represented by such securities) ortransactions referred to in each item of Paragraph 2 ofArticle 33 of the Financial Instruments and Exchange Act,to do the activities set forth in each item of said Paragraph(other than those referred to in items 3, 5, 7 through 9, 11
and 13)(18) To provide other entities with consulting services regarding
business transfer, merger, corporate split, share-for-shareexchange (kabushiki kokan) or share transfer (kabushikiiten), or to act as a broker for these transactions(19) To provide other entities with consulting services regarding
management, and to conduct investigations or provide
information as required for the business operations ofother entities(20) To conduct investigations, research or training regarding
financial and other economic issues(21) To do activities incidental to each of the foregoing items.
Article 4
Application by Changing the Provisions of the Financial
Instruments and Exchange Act to Read
1. The table below is provided for the purpose of applying to the
Corporation the provisions of the Financial Instruments andExchange Act. The words and phrases indicated in the center
column, from the relevant provisions of that act listed in theleft column, shall be changed to read as the words and phrases
indicated in the right column, respectively.

(referred to (referred to as theas the“Cooperative Financial
Article 2, Paragraph 8 “Cooperative Institutions”),
Financial
Development Bank of
Institutions”) Japan Inc.
Article 2, Paragraph
11; Article 27-28,
Paragraph 3; Article
28, Paragraph 4;
Cooperative Financial
Article 33, Paragraph Cooperative
Institutions,
1; Article 33-5,
Financial
Development Bank of
Paragraph 2; Article Institutions
Japan Inc.
33-7; Article 58;
Article 66, and Article
202, Paragraph 2,
Items (1) and (2)are the financial institutions, or if
Development Bank ofJapan Inc. conducts
are the finan- the business activity
Article 33-8,
cial institureferred to in Article
Paragraph 1
tions
3, Paragraph 1, item
(16) of theDevelopment 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 performthe duties 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 forthin the Minister of Finance Ordinance if they take up a positionof director, accounting counsel, statutory auditor or executive
officer of a financial instruments firm (limited to the firms thatengage in the securities-related business set forth in Article
28, Paragraph 8 of the Financial Instruments and ExchangeAct; hereinafter in this Paragraph the same) (including thecases where a director, accounting counsel, statutory auditor
or executive officer of a financial instruments firm comes toconcurrently hold a position of director, accounting counsel,
statutory auditor or executive officer of the Corporation), or
they resign a position of 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 Development Bank of Japan Bonds.
Article 9Special Rules When Starting Acceptance of Deposits, Etc.
1. If the Corporation intends to start the acceptance of deposits
set forth in Article 3, Paragraph 1, item (1) or the issue ofDevelopment Bank of Japan Bonds, the Corporation shallobtain the prior approval of the Minister of Finance.
2. If the Minister of Finance intends to give the approval referred
to in the preceding paragraph, the Minister of Finance shall, in
advance, have a discussion with the Prime Minister and obtain
his/her consent.

Article 13
Corporate 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 Development Bank of Japan
Bonds, “Corporate Debentures;” hereinafter the same) and
Development Bank of Japan Bonds (excluding the short-term
notes set forth in Article 66, item (1) of the Act Concerning
the Central Depositary System of Corporate Debentures[Act No. 75 of 2001, as amended] from both the Corporate
Debentures and the Development Bank of Japan Bonds,
respectively; hereinafter in this Article and Article 18 thesame), as well as regarding its borrowings (limited to thosewith more than one year to maturity; hereinafter in this Article
and Article 18 the same), which provides for matters relating
to the issue of the Corporate Debentures and Development
Bank of Japan Bonds, and the borrowing of money (such as
the amounts of issue and borrowings, currency denominationof the Corporate Debentures, Development Bank of Japan
Bonds and the borrowings), as stipulated in the Ministry of
Finance Ordinance, and obtain authorization of the Minister ofFinance. If the Corporation intends to revise its basic policy, thesame shall apply.
2. If the Corporation issues the Corporate Debentures orDevelopment Bank of Japan Bonds, or borrows money, theCorporation shall submit a report thereon to the Ministerof Finance without delay, as stipulated in the Minister ofFinance ordinance.
Article 15
Resolution for Election of Representative Directors andOther 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.
Article 16
Authorization of Concurrent Positions of Directors
1. Except in cases where the provisions of Article 4, Paragraph
2 apply, 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 othercorporation without authorization of the Minister of Finance.
2. The Minister of Finance shall, upon receipt of an application for
the authorization referred to in the preceding Paragraph, grant
his/her authorization, except in cases where it is determinedthat any matter so applied may interfere with sound and proper
management of the Corporation.
Article 17
Business Plan
Prior to the beginning of each fiscal year, the Corporation shalldraw out a business plan for the new fiscal year and obtain
authorization of the Minister of Finance, as stipulated in the
Ministry of Finance Ordinance. If the Corporation intends to revise
it, the same shall apply.

Corporate Data

Article 12
Shares
1. If the Corporation intends to solicit those who will subscribe
for shares offered for sale set forth in Article 199, Paragraph
1 of the Companies Act (Act No. 86 of 2005, as amended)(hereinafter in Article 34, item (4) referred to as the “Shares
Offered for Sale”) or stock acquisition rights offered set forthin Article 238, Paragraph 1 of the Companies Act (hereinafterin Article 34, item (4) referred to the “Stock Acquisition Rights
Offered”), or to deliver shares or stock acquisition rights inconnection with a share-for-share exchange, the Corporation
shall obtain authorization of the Minister of Finance.

Article 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

Annual Report & CSR Report 2015127

the Ministry of Finance Ordinance. If the Corporation intends torevise it, the same shall apply.
Article 19
Subsidiaries Subject to Authorization
1. If the Corporation intends to make any of the following entities(other than individuals in the cases of those referred to in items(3), (4) and (7); hereinafter referred to as the “Subsidiaries
Subject to Authorization”) its subsidiary (the subsidiary set forthin Article 2, item (3) of the Companies Act), the Corporation
shall obtain authorization of the Minister of Finance in advance:(1) Banks(2) Long-term credit banks (the long-term credit banks set
forth in Article 2 of the Long-Term Credit Bank Act [Act No.
187 of 1952, as amended])(3) Financial Instruments Dealers (limited to those who engage
in type I financial instruments trading business set forth in
Article 28, Paragraph 1 of the Financial Instruments andExchange Act)
(4) Money lenders (the money lenders set forth in Article 2,
Paragraph 2 of the Money Lending Business Act [Act No.
32 of 1983, as amended] excluding those who concurrently
conduct the business referred to in the preceding items orfall within other requirements stipulated in the Ministry of
Finance Ordinance);(5) Trust companies (the trust companies set forth in Article 2,
Paragraph 2 of the Trust Business Act [Act No. 154 of 2004,
as amended])(6) Insurance companies (the insurance companies set forth in
Article 2, Paragraph 2 of the Insurance Business Act [ActNo. 105 of 1995, as amended])(7) Entities stipulated by the Ministry of Finance Ordinance as
those who are similar to each of the foregoing
Article 20
Amendment to the Articles of Incorporation, Etc.
1. Resolutions for amendment to the Articles of Incorporationof the Corporation, disposition of surplus funds (other thandisposition of losses) such as through distribution, merger,
corporate split, and dissolution shall not become effective
without authorization of the Minister of Finance.
Article 22Special Exemptions from Management of Fiscal Loan Funds
Notwithstanding the provision of Article 10, Paragraph 1 of
the Fiscal Loan Funds Act (Act 100 of 1951, as amended), thefiscal loan funds (which means 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 tosimply 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 23
1. Notwithstanding the provisions of Article 10, Paragraph
1 of the Fiscal Loan Funds Act, the fiscal loan funds may
be appropriated for the Corporate Debentures and theDevelopment Bank of Japan Bonds (hereinafter in the following
Paragraph, immediately following Article and Article 25,
Paragraph 1 referred to as the “Debentures, Etc.”) to be issued
by the Corporation to appropriate the resulting proceeds for
expenses required for its operations set forth in Article 3,
Paragraphs 1 and 2.
Article 25
Guarantee of Obligations
1. Notwithstanding the provisions of Article 3 of the Act on
Restrictions on Financial Assistance by the Government
to Corporations (Act No. 24 of 1946, as amended), the128

Annual Report & CSR Report 2015

Government may enter into a guarantee agreement for the
obligations relating to the Debentures, Etc., to the extent of theamount approved by the resolutions of the Diet.
Article 29
Competent Ministers
1. The competent minister under this Act shall be the Ministerof Finance 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 mattersshall be the Minister of Finance and the Prime Minister.

Supplementary Provisions
Article 2
Disposition of the Government-Owned Shares
1. Pursuant to Article 6, Paragraph 2 of the Act on Promotion of
Administrative Reform for Realization of Small and Efficient
Government (Act No. 47 of 2006), the Government shallintend to reduce the number of the shares held by it of the
Corporation (hereinafter in the following Paragraph and theimmediately following Article referred to as “GovernmentOwned Shares”), taking into account the market situation, andshall dispose of all of them in approximately five to seven years
from the date set forth in item (3) of the preceding Article.
2. For a period from the effectuation of this act until theGovernment disposes of all Government-Owned Shares, theGovernment shall from time to time review matters, such as
matters regarding the method in which 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 longterm business funds will be maintained.
Article 3
Abolition of This Act and Other Measures
If the Government disposes of all Government-Owned Shares,
the Government shall immediately take measures to nullify
this act, as well as measures necessary to smoothly assign thebusiness operations, functions, and rights and obligations of the
Corporation to any organization to be formed as a bearer ofthe functions commensurate with the investment and financing
functions held by the Corporation.
Article 4Special Rules for Business Operations during the
Preparatory Period
1. In order for the Corporation to smoothly start the business
operations as soon as it is duly organized, Development Bankof Japan Inc. (hereinafter referred to as “DBJ”) may borrow
long-term loans, in addition to those set forth in Article 42,
Paragraphs 1 and 2 of the Development Bank of Japan Act (ActNo. 73 of 1999, as amended; hereinafter, except for Article 26of the Supplementary Provisions, referred to as the “DBJ Act”),
during the Preparatory Period (the period from the date on
which this act comes into force up to September 30, 2008; thesame in Paragraph 5).
Article 9
Capital Contribution
Upon the incorporation of the Corporation, DBJ shall contributeall of its properties, except assets to be assumed by Japanpursuant to Article 15, Paragraph 2 of the Supplementary
Provisions, to the Corporation.
Article 15
Dissolution of DBJ, Etc.
1. DBJ shall be dissolved at the time of establishment of theCorporation, whereupon any and all rights and obligations of
DBJ shall be taken over by the Corporation, except for thoseassets to be assumed by the Government as set forth in thefollowing Paragraph.
2. Of the rights actually held by DBJ at the time of establishmentof the Corporation, the assets which will be considered nolonger necessary for the Corporation to smoothly perform its
future business operation shall be assumed by Japan at the timeof establishment of the Corporation.
Article 16
Values of Properties Assumed
The values of assets and liabilities assumed by the Corporationfrom DBJ (in the immediately following Paragraph referred to as
the “Assumed Properties”) shall be as evaluated by evaluation
officers (hyoka iin).
Article 18
Competent Ministers
The competent ministers under Article 26, Paragraph 2 andArticle 27, Paragraph 1 for management of assets to be assumed
by the Corporation pursuant to Article 15, Paragraph 1 of the
Supplementary Provisions (hereinafter in this Article referred to as
the “Assumed Assets”) shall, notwithstanding the provisions ofArticle 29, Paragraph 1, be as follows:(1) For management of the Assumed Assets set forth in the
Cabinet Order in the Hokkaido or the Tohoku Region (whichmeans the areas of Aomori, Iwate, Miyagi, Akita, Yamagata,
Fukushima and Niigata prefectures): Minister of Finance andMinister of Land, Infrastructure and Transport; and(2) For management of the Assumed Assets other than the
Assumed Assets set forth in the preceding item: Ministerof Finance.
Article 66
Review
On or prior to the date set forth in Article 1, item (3) of the
Supplementary Provisions, the Government shall review measures

to secure the equal competitive conditions with other business
entities, with respect to the systems for which the investment andfinancing functions of DBJ are utilized pursuant to the provisions of
relevant acts (including ordinances under those acts), such as the
Act on Security for Loans from the Development Bank of Japan toElectric Utility Corporations (Act No. 145 of 1950, as amended),
the Oil Stockpiling Act (Act No. 96 of 1975, as amended), the Act
on the Promotion of Development and Introduction of Alternative
Energy (Act No. 71 of 1980, as amended), the Act on Special
Measures Concerning the Promotion of Urban Development by
Private Sectors (Act No. 62 of 1987, as amended), the Act on
Temporary Measures to Promote Business Activities for the Rationaluse of Energy and the Utilization of Recycled Resources (Act No. 18
of 1993, as amended) and the Act on Promotion of Private FinanceInitiatives (Act No. 117 of 1999, as amended), while considering
the convenience of users of those systems, and take the required
measures based on the results of such review.
Article 67
Utilization of the Corporation’s Investment and Financing
Functions for Long-term Business Funds
If the Government utilizes the Corporation’s investment andfinancing functions for long-term business funds on or after
the date set forth in Article 1, item (3) of the Supplementary
Provisions, the Government shall take measures necessary tosecure equal competition conditions, as well as other measuresnecessary for utilization of such investment and financing
functions, paying attention to the Corporation’s appropriatecompetitive relationships with other business entities.

This is an unofficial English translation. Only the original
Japanese texts of the act have legal effect and prevail overthis translation. This translation has been prepared solely
for reference purposes. The reader of this translation should
consult the original Japanese text for the purposes ofinterpreting and applying the act to any legal issues or disputes.

Act for Partial Amendment of the Development Bank of Japan Inc. Act (Act No. 67 of 2009)(Unofficial translation)

Delivery of the Government Bonds
Article 2-3
1 The Government, in implementing the Crisis Response
Operations in Article 2, item 5 of the Japan Finance Corporation
Act (Act No. 57 of 2007; hereinafter referred to as “Crisis
Response Operations”) may issue government bonds in order toRedemption of the Government Bonds
Article 2-4
1 The Corporation may request the redemption of government
bonds delivered, as set forth in the provisions of Paragraph 2 ofthe preceding Article, only within the amount of capital
calculated by the Ministry of Finance Ordinance as theAnnual Report & CSR Report 2015

Corporate Data

Capital Contribution by the Government
Article 2-2
The Government may make capital contributions to the
Corporation, to the extent of the amount approved by thebudget, whenever the Government deems necessary, until March
31, 2012.

secure the capital required to ensure the financial strength of
the Corporation, until March 31, 2012.
2 The Government, pursuant to the provisions of the preceding
paragraph, to the extent of the amount approved by thebudget, shall issue government bonds and deliver them to the
Corporation.
3 Government bonds issued under the provisions of Paragraph 1
shall be noninterest-bearing.
4 Government bonds issued under the provisions of Paragraph 1
may not be transferred, attached as security rights, or otherwise
disposed of.
5 Necessary matters concerning government bonds issued under theprovisions of Paragraph 1, other than that provided in Paragraph
3, shall be determined by Ministry of Finance Ordinance.

The Development Bank of Japan Inc. Act (Act No. 85 of 2007)
shall be partially amended as described below.
In Article 2, Paragraph 1 of the Supplementary Provisions,“the following Article” shall be amended to read “Article 3 of the
Supplementary Provisions” and “the day stipulated in item 3 ofthe preceding Article” to read “April 1, 2012”. The following fivearticles shall be added after Article 2.

129necessary amount of capital in response to the increase of
assets related to its Crisis Response Operations (limited to those
conducted by March 31, 2012).
2 The Government, when requested by the Corporation toredeem all or a part of the government bonds delivered under
the provisions of Paragraph 2 of the preceding Article, mustcomply without delay.
3 When redemption has been made under the provisions of thepreceding paragraph, the amount of the Corporation’s capitalshall be the sum of its capital immediately prior to theredemption and the amount of the money redeemed.
4 When the provisions of Article 445, Paragraph 1 are applied inapplying the provisions of the preceding paragraph, the term“case” shall be deemed to be replaced with “case, or in cases
where Article 2-4, Paragraph 3 of the Supplementary Provisions
to the Development Bank of Japan Inc. Act (Act No. 85 of
2007) is applied.”
5 Other than the matters stipulated in each of the preceding
paragraphs, necessary matters concerning the redemption of
government bonds delivered by the Government under theprovisions of Paragraph 2 of the preceding Article shall be
determined by Finance Ministry Ordinance.

Return of the Government Bonds
Article 2-5
1 In the event that as of July 1, 2012, any government bondsdelivered under the provisions of Article 2-3, Paragraph 2 of the
Supplementary Provisions remain unredeemed, the Corporationmust return such unredeemed bonds to the Government.
2 The Government must immediately retire any government bonds
returned to it under the provisions of the preceding paragraph.
3 Other than the matters stipulated in the preceding two
paragraphs, necessary matters concerning the return andretirement of government bonds delivered by the Government
under the provisions of Article 2-3, Paragraph 2 shall be
determined by Ministry of Finance Ordinance.
Exception to Imposition of Registration and License Tax
Article 2-6
When capital contributions are made under the provisions ofArticle 2-2 of the Supplementary Provisions or redemptions madeunder the provisions of Article 2-4, Paragraph 2 of the
Supplementary Provisions, a Registration and License Tax shall not
be imposed on the increase in capital received by the Corporation,
provided that registration is obtained as specified by Ministry of
Finance Ordinance.

(Unofficial translation)

Supplementary Provisions
Review, Etc.
Article 2
1 By the end of fiscal year 2011, the Government shall review
what the appropriate implementation of the Crisis Response
Operations (referring to the Crisis Response Operationsprescribed under the provisions of Article 2, item 5 of the Japan
Finance Corporation Act [Act No. 57 of 2007]; same
hereinafter) implemented by Development Bank of Japan Inc.
(hereinafter “the Corporation”) and the appropriateorganization of the Corporation based on that, including theway of holding its shares by the Government, should be, andshall take necessary measures based on these reviews, taking
into account the status of the capital contributions by theGovernment to the Corporation under the provisions of Article
2-2 of the Development Bank of Japan Inc. Act as amended bythis Act; the redemption of government bonds under Article
2-4, Paragraph 2 of the Supplementary Provisions of theDevelopment Bank of Japan Inc. Act as amended by this Act;the implementation of the Crisis Response Operations by the
Corporation; and the changes in socioeconomic and othercircumstances from a point of view of maintaining the
involvements with the Corporation by the State, such as letting
the Government consistently hold its shares exceeding onethird of the Corporation’s issued shares in the aim of ensuring
the appropriate implementation of the Crisis Response
Operations by the Corporation.
2 Notwithstanding the provisions of Article 6, Paragraph 2 of the
Act on Promotion of Administrative Reform for Realization of
Small and Efficient Government (Act No. 47 of 2006) as
amended pursuant to the provisions of the following Article
and the provisions of Article 2, Paragraph 1 of the
Supplementary Provisions of the Development Bank of Japan
Inc. Act as amended pursuant to this Act, the Government shallnot dispose of its held shares of the Corporation prior to themeasures described in the preceding paragraph being taken.

Partial Amendment of the Act on Promotion of
Administrative Reform for Realization of Small andEfficient Government
Article 3
The Act on Promotion of Administrative Reform for Realizationof Small and Efficient Government shall be partially amended
as follows.
The phrase “in the measures described in the preceding
paragraph” in Article 6, Paragraph 2 shall be revised to “fromApril 1, 2012.”
Adjusted Provisions
Article 4
1 If this Act comes into effect prior to the date of enforcement of
the Act for Partial Amendment of the Shoko Chukin Bank
Limited Act and Other Acts to Facilitate the Supply of Funds to
Small and Medium-sized Enterprises (Act No. 54 of 2009;
mentioned in the following paragraph as the “Shoko Chukin
Amendment Act”), in regard to the application of theprovisions of Article 6, Paragraph 2 of the Act on Promotion of
Administrative Reform for Realization of Small and Efficient
Government as amended under the provisions of the preceding
Article up to the day before the said date, “and” shall bedeemed to be replaced with “taking into account the market
situation, and shall dispose of all such capital contributions inapproximately five to seven years after implementation of themeasures mentioned in the preceding paragraph, and theGovernment shall make capital contributions in.”2 If this Act comes into effect after the date of enforcement of
the Shoko Chukin Amendment Act, the provisions of thepreceding Article shall not apply. In this case, “the following
Article” in Article 2, Paragraph 2 of the Supplementary
Provisions shall be deemed to be replaced with “Article 4 of the
Supplementary Provisions to the Act for Partial Amendment of
the Shoko Chukin Bank Limited Act and Other Acts to Facilitate
the Supply of Funds to Small and Medium-sized Enterprises (ActNo. 54 of 2009).”
Delegation to Government Ordinance
Article 5
Transitional measures required for the enforcement of this Act
shall be determined by government ordinance.

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(Unofficial translation)

Supplementary Resolutions on the Bill for Partial Amendment of the Development Bank of Japan Inc. Act
Committee on Financial Affairs of the House of Councillors
June 25, 2009

The following matters should receive the Government’s carefulconsideration.
• In implementing Crisis Response Operations based on the
recent measures for additional capital contribution,
Development Bank of Japan Inc. shall ensure the measuresresult in a smooth supply of funds on the basis of appropriate
analysis by drawing upon its accumulated knowledge and skills.
• With the global monetary crisis having serious economic andfinancial effects, and the balance of loans to small and medium
enterprises falling steadily, efforts must be made to further
facilitate loans by Japan Finance Corporation to small andmedium-sized businesses. In implementing Crisis Response
Operations for large and midscale enterprises, Development
Bank of Japan Inc. must be certain to expedite loans to
associated small and medium enterprises as well.

based on its findings. Any such reviews should take into
account the need to ensure that the Corporation acts for thegood of the community, that it has a stable source of the funds
required to fulfill its functions as a provider of long-term
investment and loans, and that it has systems in place to securecompetitive officers and employees. The Government shouldtake appropriate measures to prevent any damage to the
Corporation’s long-term value.
• The Government should reassess the future provision ofpolicy-based finance by Development Bank of Japan Inc. andJapan Finance Corporation, reaffirming the importance of theirroles and functions and paying attention to their relationships
not only with private financial institutions but also with theJapanese financial sector as a whole, including affiliatedorganizations and Japan Post Bank.
Resolutions passed.

• The Government should review its holding of shares in
Development Bank of Japan Inc. and take necessary measures

Amendment of the Development Bank of Japan Inc. Act (based on establishment of the Act for
Extraordinary Expenditure and Assistance to Cope with the Great East Japan Earthquake [Act No. 40 of 2011])(Unofficial translation)
Special Rules for the Development Bank of Japan Inc. Act
Article 36
With regard to the capital contribution and the issuance orredemption of government bonds to facilitate implementation of
the Crisis Response Operations (operations specified in Article 2,
item (5) of the Japan Finance Corporation Act [Act No. 57 of2007], as well as in Article 133) by Development Bank of Japan
Inc. to cope with the Great East Japan Earthquake, within Article
2-2 of the Supplementary Provisions to the Development Bank ofJapan Inc. Act (Act No. 85 of 2007), “March 31, 2012” shall bedeemed to be replaced with “March 31, 2015,” and “as it deems
necessary” shall be deemed to be replaced with “as it deems
necessary to facilitate implementation of the Crisis Response
Operations,” and within Article 2-3, Paragraph 1 and Article 2-4,
Paragraph 1 of the same supplementary provisions, “March 31,
2012,” shall be deemed to be replaced with “March 31, 2015,”
and within Article 2-5, Paragraph 1 of the same supplementaryprovisions, “July 1, 2012” shall be deemed to be replaced with
”July 1, 2015.”

Supplementary Provisions

Partial Amendment of the Act for Partial Amendment of theDevelopment Bank of Japan Inc. Act
Article 11
The Act for Partial Amendment of the Development Bank of Japan
Inc. Act (Act No. 67 of 2009) shall be partially amended as follows.
Within Article 2, Paragraph 1 of the Supplementary Provisions of
the Development Bank of Japan Inc. Act, “the end of fiscal year
2011” shall be revised to “the end of fiscal year 2014,” and then“(including the cases where it shall be applied by replacing theterm and phrase pursuant to the provisions of Article 36 of the
Act for Extraordinary Expenditure and Assistance to Cope with theGreat East Japan Earthquake [Act No. 40 of 2011])” shall be
added to “Article 2, Paragraph 2 of the Supplementary Provisionsof the Development Bank of Japan Inc. Act”, and “Article 2-4,
Paragraph 2 of the Supplementary Provisions of the Development
Bank of Japan Inc. Act” shall be revised to “Article 2-4, Paragraph
2 of the Supplementary Provisions of the Development Bank ofJapan Inc. Act after the amendment pursuant to this Act.”

Annual Report & CSR Report 2015

Corporate Data

Partial Amendment of the Act on Promotion of
Administrative Reform for Realization of Small andEfficient Government
Article 7
The Act on Promotion of Administrative Reform for Realization of
Small and Efficient Government (Act No. 47 of 2006) shall be
partially amended as follows.
The phrase “from April 1, 2012.” in Article 6, Paragraph 2
shall be revised to “from April 1, 2015.”

Partial Amendment of the Development Bank of Japan Inc. Act
Article 9
The Development Bank of Japan Inc. Act shall be partiallyamended as follows.
“April 1, 2012” in Article 2, Paragraph 1 of the
Supplementary Provisions of the Development Bank of Japan Inc.
Act shall be revised to “April 1, 2015”.

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(Reference 1) The Supplementary Provisions of theDevelopment Bank of Japan Inc. Act (after the amendment
pursuant to the Act for Partial Amendment of theDevelopment Bank of Japan Inc. Act and the Amendment
and Replacement reading pursuant to the Act for
Extraordinary Expenditure and Assistance to Cope with theGreat East Japan Earthquake [hereinafter, referred to as the“Act for Extraordinary Expenditure”])

Ministry of Finance Ordinance as the necessary amount of capital in
response to the increase of assets related to its Crisis Response
Operations (limited to those conducted by March 31, 2015).

Disposition of the Government-Owned Shares
Article 2
Pursuant to Article 6, Paragraph 2 of the Act on Promotion of
Administrative Reform for Realization of Small and Efficient
Government (Act No. 47 of 2006), the Government shall intend
to reduce the number of the shares held by it of the Corporation(hereinafter in the following Paragraph and Article 3 of the
Supplementary Provisions, referred to as “Government-Owned
Shares”), taking into account the market situation, and shalldispose of all of them in approximately five to seven years from
April 1, 2015.

Review, Etc.
Article 2
1 By the end of fiscal year 2014, the Government shall review
what the appropriate implementation of the Crisis Response
Operations (referring to the Crisis Response Operationsprescribed under the provisions of Article 2, item 5 of the Japan
Finance Corporation Act [Act No. 57 of 2007]; same
hereinafter) implemented by Development Bank of Japan Inc.
(hereinafter “the Corporation”) and the appropriateorganization of the Corporation based on that, including theway of holding its shares by the Government, should be, andshall take necessary measures based on these reviews, taking
into account the status of the capital contributions by theGovernment to the Corporation under the provisions of Article
2-2 of the Supplementary Provisions (including the replacement
readings pursuant to the Act for Extraordinary Expenditure andAssistance to Cope with the Great East Japan Earthquake [ActNo. 40 of 2011] Article 36) of the Development Bank of Japan
Inc. Act as amended by this Act; the redemption of government
bonds under Article 2-4, Paragraph 2 of the supplementaryprovisions of the Development Bank of Japan Inc. Act asamended by this Act; the implementation of the Crisis
Response Operations by the Corporation; and the changes insocioeconomic and other circumstances, from a point of viewof maintaining the involvements with the Corporation by theState such as letting the Government consistently hold its
shares exceeding one-third of the Corporation’s issued shares in
the aim of ensuring the appropriate implementation of the
Crisis Response Operations by the Corporation.
2 Notwithstanding the provisions of Article 6, Paragraph 2 of the
Act on Promotion of Administrative Reform for Realization of
Small and Efficient Government (Act No. 47 of 2006) as
amended pursuant to the provisions of the following Article
and the provisions of Article 2, Paragraph 1 of the
Supplementary Provisions of the Development Bank of Japan
Inc. Act as amended pursuant to this Act, the Government shallnot dispose of its held shares of the Corporation prior to themeasures described in the preceding paragraph shall be taken.

Capital Contribution by the Government
Article 2-2
The Government may make capital contributions to the Corporation,
to the extent of the amount approved by the budget, whenever theGovernment deems necessary to facilitate implementation of the
Crisis Response Operations, until March 31, 2015.
Delivery of the Government Bonds
Article 2-3
1 The Government, in implementing the Crisis Response
Operations (hereinafter referred to as the “Crisis Response
Operations”) prescribed in Article 2, item 5 of the Japan
Finance Corporation Act (Act No. 57 of 2007) may issue
government bonds in order to use for securement of the capitalrequired to ensure the financial strength of the Corporation,
until March 31, 2015.
2 The Government, pursuant to the provisions of the preceding
paragraph, to the extent of the amount approved by thebudget, shall issue government bonds and deliver them to
the Corporation.
Redemption of the Government Bonds
Article 2-4
The Corporation may request the redemption of government bondsdelivered as set forth in the provisions of Paragraph 2 of thepreceding Article, only within the amount of capital calculated by the(Reference 2) The Supplementary Provisions of the Act for
Partial Amendment of the Development Bank of Japan Inc.
Act (after the amendment pursuant to the Act for
Extraordinary Expenditure)

Excerpts from the Act for Partial Amendment of the Development Bank of Japan Inc. Act (Act No. 23 of 2015)(Unofficial translation)

The Development Bank of Japan Inc. Act (Act No. 85 of 2007)
shall be partially amended as follows.
After “taking into account” in Article 2, Paragraph 1 ofSupplementary Provisions “the effect on the Corporation’sachievement of objectives and,” shall be added and “inapproximately five to seven years from April 1, 2015,” shall berevised to “as soon as practicable.”
The following 25 articles shall be added after Article 2-6 ofthe Supplementary Provisions.
The Corporation’s Obligation to Conduct Crisis
Response Operations
Article 2-7
The Corporation shall, in order to attain its objectives, in132

Annual Report & CSR Report 2015

accordance with the provisions set forth in Articles 2-10, 2-11,
2-22 and 2-24 to 2-30 of the Supplementary Provisions, beobligated to conduct Crisis Response Operations, 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.
Government’s Holding of Shares with Regard to Crisis
Response Operations
Article 2-8
With a view to ensure proper conduct of Crisis Response
Operations by the Corporation, the Government shall, for anindefinite 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 shallapply in Article 2-13 of the Supplementary Provisions).
Capital Contribution by the Government with Regard to
Crisis Response Operations
Article 2-9
The Government may, for an indefinite period, make capital
contributions to the Corporation, to the extent of the amountapproved by the budget, whenever the Government deems
necessary for proper implementation of Crisis Response
Operations by the Corporation.
Special Provisions, Etc. on Business Plan with Regard to Crisis
Response Operations
Article 2-11
1. The Corporation shall include an implementation policy for its
Crisis Response Operations 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 Operations, based on the implementation policy
set forth in the immediately preceding Paragraph, in its business
report provided for in Article 21, 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 Crisis Response Operations shall be included
or recorded in the Articles of Incorporation of the Corporation.

Government’s Holding of Shares with Regard to Special
Investment Operations
Article 2-13
With a view to ensure proper implementation of Special
Investment Operations by the Corporation, the Government
shall hold one-half or more of the total number of issued sharesof the Corporation, until the Corporation completes the Special
Investment Operations.
Capital Contribution, Etc. by the Government with Regard
to Special Investment Operations
Article 2-14
1. The Government may make capital contributions to the
Corporation, to the extent of the amount approved by thebudget, whenever the Government deems necessary forproper implementation of Special Investment Operations by the
Corporation, until March 31, 2021.
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.
Supplement or Encouragement of Financing Conducted by
Financial Institutions, Etc. in Special Investment Operations
Article 2-15
The purpose of the Corporation in conducting Special Investment
Operations shall be to supplement or encourage financing
conducted by financial institutions and investment conducted by
the private sector.
Special Investment Guidelines
Article 2-16
1. Guidelines to be followed by the Corporation in conducting
Special Investment Operations (in the following Paragraph andParagraph 1 of the immediately following Article referred to as
the “special investment guidelines”) shall be established andissued by the Minister of Finance.
2. The special investment guidelines shall cover the following matters:(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
the implementation status of Special Investment Operations(6) Any other matters necessary to ensure proper
implementation of Special Investment Operations

Corporate Data

Special Investment Operations
Article 2-12
1. The Corporation shall, in order to attain its objectives, conduct
Special Investment Operations, in accordance with theprovisions set forth in this Article, Articles 2-15 to 2-20, and2-23 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 businessactivities, those that are deemed to particularly contributeto the facilitation of supply of funds by financial institutions
and others, for the revitalization of business activities taking
advantage of regional characteristics that contribute toautonomous development of local economies, or for theenhancement of competitiveness of Japanese companies
that contribute to the improvement of socioeconomic 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 andthe particulars of such supply are decided during the period
from the date on which the authorization specified in Article
2-17, Paragraph 1 of the Supplementary Provisions is obtained
through March 31, 2021, and any other businesses incidental
thereto (including those conducted on and after April 1, 2021).
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 effectively using
previously insufficiently used management resources, orby promoting management innovation mainly throughcoordinated alignment with business entities in different
fields and effective combination of management resources(2) Business activities that provide funds to the businessactivities set forth in the preceding item
4. “Investment business” set forth in Paragraph 2 means thefollowing businesses concerning supply of funds:(1) To lend money through subordinated loans (which means
loans made under loan agreements with special clausesof subordinated contents with regard to the payment ofprincipal and interest, and stipulated in the Ministry of
Finance Ordinance)(2) To make capital contributions(3) To acquire subordinated corporate debentures (whichmeans corporate debentures with special clauses ofsubordinated contents with regard to the payment ofprincipal and interest, and stipulated in the Ministry of
Finance Ordinance)(4) In addition to those set forth in the preceding three items,
to provide funds in the manner approved in advance by the
Minister of FinanceSpecial Investment Operations Rules
Article 2-17
1. The Corporation shall set rules regarding Special Investment

Annual Report & CSR Report 2015133

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 Finance Ordinance, and shall obtain
authorization therefor from the Minister of Finance. If the
Corporation intends to revise such rules, the same shall apply.
2. The Minister of Finance may order the Corporation to revise
the Special Investment Operations Rules authorized pursuant to
the preceding Paragraph, if he/she deems that such rules havebecome inappropriate for the proper implementation of Special
Investment Operations by the Corporation.
Special Provisions, Etc. on Business Plans with Regard toSpecial Investment Operations
Article 2-18
1. The Corporation shall include the implementation policy for theSpecial Investment Operations in its business plans provided forin 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 theSpecial Investment Operations based on the implementation
policy provided for in the immediately preceding Paragraph, in
its business reports provided for in Article 21 for each fiscal year
up to the fiscal year including the date of completion of theSpecial Investment Operations, as stipulated in the Ministry of
Finance Ordinance.
3. In addition to matters set forth in each of the items of Article 27of the Companies Act, matters regarding proper implementationof Special Investment Operations shall be included or recordedin the Articles of Incorporation of the Corporation, until thecompletion of the Special Investment Operations.
Status of Income and Expenditure with Regard to Special
Investment Operations, Etc.
Article 2-19
For each fiscal year, the Corporation shall, as stipulated in
the Ministry of Finance Ordinance, submit to the Minister ofFinance and publish documents stating the status of income andexpenditure of the following businesses by category for each fiscal
year up to the fiscal year including the date of completion of theSpecial Investment Operations:(1) Special Investment Operations(2) Businesses other than those listed in the preceding item
Completion of Special Investment Operations
Article 2-20
1. The Corporation shall, taking into account economic
conditions, the state of business of the business entities thatwill receive funds from Special Investment Operations, andother 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, andthe rights which are deemed as securities pursuant to Article
2, Paragraph 2 of the Financial Instruments and Exchange Act)and receivables held by it in the Special Investment Operations,and seek to complete the Special Investment Operations, byMarch 31, 2026.
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 theimmediately preceding Paragraph, give public notice to that effect.
Securing of Appropriate Competitive Relationships
Article 2-21
1. The Corporation shall, for an indefinite period, pay special
attention in conducting its business so that it will not upset

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Annual Report & CSR Report 2015its appropriate competitive relationships with other business
entities.
2. The Corporation shall, for an indefinite period, include, in its
business plans provided for in Article 17, a policy concerning
the securing of appropriate competitive relationships withother business entities as stipulated in the Ministry of FinanceOrdinance.
3. The Corporation shall, for an indefinite period, describe, in
its business reports provided for in Article 21, the state of
implementation of its business based on the policy mentioned
in the immediately preceding Paragraph as stipulated in the
Ministry of Finance Ordinance.

Excerpt from the Supplementary Provisions
Transitional Measures for Return of Government Bonds
Article 3
Notwithstanding the provision of Article 2-5, Paragraph 1 of
the Supplementary Provisions of the New Act applied under theprovision of Article 36 of the Act for Extraordinary Expenditure
and Assistance to Cope with the Great East Japan Earthquake,the return of government bonds delivered in accordance withthe provision of Article 2-3, Paragraph 2 of the Supplementary
Provisions of the Former Act shall be set forth separately inanother law.
Transitional Measures for Redemption of Government Bonds
and Others
Article 4
1. Notwithstanding the provision of Article 2-4, Paragraph 1 of
the Supplementary Provisions of the New Act (including theapplication thereof under Article 36 of the Act for Extraordinary
Expenditure and Assistance to Cope with the Great East Japan
Earthquake), the Corporation may demand, for an indefinite
period, the redemption of government bonds delivered inaccordance with Article 2-3, Paragraph 2 of the Supplementary
Provisions of the Former Act up to the amount calculated
pursuant to the provisions prescribed by the Minister of FinanceOrdinance as the necessary capital according to the increase in
the asset pertaining to the Crisis Response Operations (in caseof operation whose implementation date is on or after April 1,
2015, including the operation implemented from April 1, 2015
up to the previous day of such an implementation date).
2. Notwithstanding the provision of Article 2-4, Paragraph 3 of
the Supplementary Provisions of the New Act, the Corporation
shall record the value redeemed in accordance with Article 2-4,
Paragraph 2 thereof on or after the above implementation dateas the amount of the crisis response reserve. In this case, forthe application of Article 2-22, Paragraph 1 and Article 2-29 of
the Supplementary Provisions of the New Act, “Article 2-9 of
the Supplementary Provisions” in the above Paragraph shall beinterpreted as “the value redeemed in accordance with Article
2-4, Paragraph 2 of the Supplementary Provisions, and Article
2-9 of the Supplementary Provisions”, and “Article 2-9 of the
Supplementary Provisions” in the above Article as “the capital
contribution by the redemption of the government bonds inaccordance with Article 2-4, Paragraph 2 of the Supplementary
Provisions, and Article 2-9 of the Supplementary Provisions”.
3. For the application of Article 2-4, Paragraph 5 of the
Supplementary Provisions of the New Act when the preceding
paragraph is applied, “each preceding Paragraph” in the
Paragraph 5 shall be interpreted as “Paragraph 2 and Article
4, Paragraphs 1 and 2 of the Act for Partial Amendment of theDevelopment Bank of Japan Inc. Act (Act No.23 of 2015)”.

Transitional Measures for Rules Regarding Special
Investment Operations and Others
Article 5
1. The Corporation shall, without delay after this Act takes effect,
set rules regarding Special Investment Operations provided in
Article 2-17, Paragraph 1 of the Supplementary Provisions of the
New Act, and obtain authorization from the Minister of Finance.
2. The Corporation shall, without delay after this Act takes effect,
revise the business plan provided in Article 17 of the New
Act to comply with the provisions of Article 2-11, Paragraph
1, Article 2-18, Paragraph 1 and Article 2-21, Paragraph 2of the Supplementary Provisions of the New Act, and obtain
authorization from the Minister of Finance.
3. The Corporation shall, without delay after this Act takes effect,
revise the Articles of Incorporation thereof to comply withthe provisions of Article 2-11, Paragraph 3 and Article 2-18,
Paragraph 3 of the Supplementary Provisions of the New Act,and obtain authorization from the Minister of Finance.
Revision of Part of the Act Concerning Promotion of
Administrative Reform for Realizing the Simplified andEffective Government
Article 7
The Act Concerning Promotion of Administrative Reform forRealizing the Simplified and Effective Government (Act No. 47 of2006) shall be partly amended as follows.
In Article 6, Paragraph 2, “the effect in achieving purposes of
the agencies which will take over the business of such institutions
and” shall be added after “With respect to capital contributions
to The Shoko Chukin Bank, Ltd., and Development Bank of Japan
Inc. by the Government, taking into consideration”, and “for five(5) to seven (7) years commencing from April 1, 2015,” shall be
replaced with “as soon as practicable”.
Examination of Crisis Response Operations
Article 9
1. The Government shall, at the appropriate time after thisAct takes effect, examine the Corporation’s Crisis Response
Operations and the Government’s involvement in the
Corporation based thereon, taking into consideration theimplementation of systems pertaining to the designatedfinancial institution (designated financial institution as provided
in Article 11, Paragraph 2 of the Japan Finance Corporation
Act), the Corporation’s implementation of Crisis Response
Operations, the change of social and economic affairs andothers, and in the prospective of a smooth financial supply
to those who need funds to respond to such related damage
stipulated in Article 2, Item(4) of the Japan Finance Corporation
Act, and whenever the Government deems necessary, theGovernment shall take the required measures based on the
results of such examination.
2. For the examination referenced in the preceding Paragraph,
the Government shall hear the opinions of representatives ofordinary financial institutions and other relevant persons.
3. When, as a result of the examination referenced in the above
Paragraph 1, the Government concludes that it does not needto continue measures related to the Government’s obligations
to hold shares of the Corporation nor to take other measuresnecessary to ensure appropriate implementation of Crisis
Response Operations of the Corporation, the Government shallpromptly take the required measures.
Examination of Special Investment Operations
Article 10
1. The Government shall, at the appropriate time after this Act
takes effect, examine the Corporation’s Special Investment
Operations (Special Investment Operations as provided in
Article 2-12, Paragraph 2 of the Supplementary Provisions of
the New Act, hereinafter in this Paragraph the same), and theGovernment’s involvement in the Corporation based thereon,taking into consideration the investment in financial and private
sectors by ordinary financial institutions, the Corporation’s
implementation of Special Investment Operations the change ofsocial and economic affairs and others, and in the perspectiveof further promoting the long-term and other financial supply
for the sustainable growth of the Japanese economy, andwhenever the Government deems necessary, the Government
shall take required measures based on the results of suchexamination.
2. For the examination referenced in the preceding Paragraph,
the Government shall hear the opinions of representatives ofordinary financial institutions and other relevant persons.

(Unofficial translation)

Supplementary Resolution on the Bill for Partial Amendment of the Development Bank of Japan Inc. Act
Committee on Financial Affairs of the House of Representatives
April 10, 2015

The Government shall take into full consideration thefollowing matters:

Corporate Data

1. The Government shall, in conducting additional examination
regarding the involvement of Japan in Development Bank ofJapan Inc., take into account the public nature of the business
operations and the importance of Crisis Response Operations

and make considerations with a view to ensure appropriate
implementation of Crisis Response Operations by Development
Bank of Japan Inc. and other organizations. The Government
shall also take appropriate measures such as training personnel
with a view to enhance the long-term corporate value ofDevelopment Bank of Japan Inc.

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135

(Unofficial translation)

Supplementary Resolution on the Bill for Partial Amendment of the Development Bank of Japan Inc. Act
Committee on Financial Affairs of the House of Councillors
May 12, 2015

The Government shall take into full consideration thefollowing matters:
1. The Government shall, in accordance with the purport of
the recent amendments to the Act, take every possible
measure for each of the following: the proper conduct ofCrisis Response Operations by Development Bank of Japan
Inc., local revitalization, and supply fund for growth tocontribute to reinforcing competitiveness and other aspects ofJapanese companies. In doing so, the Government shall givedue consideration when cooperating with private financial
institutions and care to avoid inviting unnecessary criticism ofpressuring the private sector.
2. Taking into account the importance of enhancing theinternational competitiveness of Japanese enterprises, theGovernment shall take appropriate measures for Development
Bank of Japan and Japan Bank for International Cooperation
so that the improvement of systems, including training andsecuring of competitive personnel, is implemented.
3. In conducting Special Investment Operations, the Government
shall actively contribute to local revitalization throughdevelopment of local companies, and endeavor to conduct

136

Annual Report & CSR Report 2015

appropriate operations to encourage the supply of private
funding for growth. In doing so, as such operations are onlytransitory measures until the supply of private funding issufficient, the Government shall take appropriate measures toprevent the operations from becoming fixed and permanent.
4. In considering the method of disposal, etc. of shares ofDevelopment Bank of Japan, the Government shall, by
taking into account the business operation, status of assets
and other aspects, act while trying to preserve the public
nature and neutrality of Development Bank of Japan and thestability of shareholder composition necessary to conduct
the objectives of Development Bank of Japan, and shall takeappropriate measures so that the long-term corporate value ofDevelopment Bank of Japan is not harmed.
5. In preparing for full privatization of Development Bank of Japanand in order to encourage private financial institutions to enter
into the Crisis Response Operations, the Government shallencourage Development Bank of Japan to disclose the status
and other details of loan claims incurred in connection withprevious Crisis Response Operations transactions.
The above has been resolved.

Financial Condition
Financial Condition

Consolidated Financial Statements . . . . . . . . . . 138
Non-Consolidated Financial Statements . . . . . . 181
Capital Adequacy Ratio . . . . . . . . . . . . . . . . . . . 184

Annual Report & CSR Report 2015137

Consolidated Balance Sheet
Development Bank of Japan Inc. and Consolidated Subsidiaries

Thousands of
U.S. Dollars (Note 1)

Millions of Yen

As of March 31,

2015

2014

2015

AssetsCash and due from banks (Notes 11, 15 and 27)
Call loans and bills bought (Note 27)¥

317,772
335,000¥

260,185
87,000$2,644,359
2,787,717

Reverse repurchase agreements (Notes 3 and 27)

5,299

—

44,103

Money held in trust (Notes 27 and 29)

54,853

134,215456,467

Securities (Notes 3, 15, 27 and 29)

1,887,906

1,637,587

15,710,298

Loans (Notes 4, 5, 15 and 27)

13,261,343

13,838,410

110,354,861

Other assets (Notes 6 and 15)

140,943

115,423

1,172,872

Tangible fixed assets (Notes 7, 11 and 15)

266,196

237,6102,215,163

Intangible fixed assets

6,180

6,409

51,428Asset for retirement benefits (Note 22)

2,508

—

20,873

363

153

3,027

Deferred tax assets (Note 23)
Customers’ liabilities for acceptances and guarantees (Note 14)

167,482

107,174

1,393,713

Allowance for loan losses (Notes 8 and 27)(84,717)(112,997)(704,979)

Allowance for investment losses

(525)

(459)

(4,369)¥16,360,608¥16,310,711$136,145,534¥ 3,220,206¥ 3,085,674$ 26,797,089

Borrowed money (Notes 10, 11, 15 and 27)

8,598,219

9,182,603

71,550,470

Corporate bonds (Notes 9, 11 and 27)

Total assets
Liabilities and equity
Liabilities:
Debentures (Notes 9, 15 and 27)

1,349,102

1,151,746

11,226,614

Other liabilities (Notes 12 and 13)

225,816

131,094

1,879,138

Accrued bonuses to employees

4,658

4,682

38,763

Accrued bonuses to directors

11

11

97

Liability for retirement benefits (Note 22)

7,959

8,727

66,233

Reserve for directors’ retirement benefits

72

73

600

Reserve for contingent losses
Deferred tax liabilities (Note 23)
Acceptances and guarantees (Note 14)

12

7

104

39,793

11,202

331,146

167,482

107,174

1,393,713

13,613,334

13,682,997

113,283,968

Common stock authorized, 160,000 thousand shares in 2015 and2014; issued, 43,632 thousand shares in 2015 and 2014 (Note 16)

1,206,953

1,206,953

10,043,713

Capital surplus (Note 16)

1,060,466

1,060,466

8,824,718

Retained earnings (Note 16)344,728

282,733

2,868,674

Unrealized gain on available-for-sale securities (Note 29)

85,86537,767

714,533

Deferred gain on derivatives under hedge accounting

33,311

30,006277,205

Foreign currency translation adjustments

1,617

709

13,461

(12)

(944)

(107)

Total

2,732,929

2,617,691

22,742,198

Minority interests

14,344

10,022

119,368

2,747,274

2,627,714

22,861,566¥16,360,608¥16,310,711$136,145,534

Total liabilities
Equity:Accumulated other comprehensive income:Accumulated adjustments for retirement benefits (Note 22)

Total equity
Total liabilities and equity
See notes to consolidated financial statements.

138

Annual Report & CSR Report 2015

Consolidated Statement of Income
Development Bank of Japan Inc. and Consolidated Subsidiaries

For the year ended March 31,

2015

2014

2015

Financial Condition

Thousands of
U.S. Dollars (Note 1)

Millions of Yen

IncomeInterest income:¥235,689¥255,329$1,961,297

Interest on loans

204,905

228,301

1,705,127Interest and dividends on securities

22,463

18,813

186,932

Interest on call loans and bills bought

149

98

1,245

Interest on reverse repurchase agreements

231

282

1,928

Interest on due from banks

51

41

425

7,720

7,680

64,246

167

110

1,394

Fees and commissions

8,696

13,95272,368Other operating income (Note 18)

13,084

15,687

108,879

Other income (Note 19)

82,44577,228686,077

339,915362,197

2,828,621

117,849

132,167

980,691

36,48839,773

303,641

Interest on swaps
Other interest income

Total income
Expenses
Interest expense:
Interest on debentures
Interest on call money and bills soldInterest on borrowed money
Interest on short-term corporate bonds
Interest on corporate bonds
Other interest expense
Fees and commissions

0

7

2

76,78887,844

638,998

12

32

103

4,497

4,488

37,429

62

20

518

713

276

5,941

10,751

7,224

89,466

General and administrative expenses

43,56247,436

362,503

Other expenses (Note 21)

13,376

9,077

111,311

Total expenses

186,252

196,182

1,549,912

Income before income taxes and minority interests

153,662

166,014

1,278,710

51,59325,102

429,340

Other operating expenses (Note 20)

Income taxes (Note 23):
Current

7,381

15,76561,422

Total income taxes

Deferred

58,97440,868490,762

Net income before minority interests

94,687125,146787,947

Minority interests in net income
Net income

1,928

843

16,050¥ 92,758¥124,303$ 771,897

Yen

U.S. Dollars (Note 1)

Per share of common stock (Note 17)
Basic net income
Cash dividend applicable to the year

¥2,125.91¥2,848.87

516

706

$

17.69
4.29

See notes to consolidated financial statements.

Annual Report & CSR Report 2015139

Consolidated Statement of Comprehensive Income
Development Bank of Japan Inc. and Consolidated Subsidiaries

Thousands of
U.S. Dollars (Note 1)

Millions of Yen

For the year ended March 31,

2015

2014

2015

¥ 94,687¥125,146$ 787,947

Unrealized gain on available-for-sale securities

51,094

4,355

425,183

Deferred gain on derivatives under hedge accounting

Net income before minority interests
Other comprehensive income (Note 25):

3,538

(3,944)29,450Foreign currency translation adjustments

692

389

5,764

Adjustments for retirement benefits

922

—

7,680

Share of other comprehensive income in affiliates accounted
for by the equity method

(93)

385

(774)

Total other comprehensive income
Comprehensive income

56,1551,185

467,303¥150,843¥126,332$1,255,250¥146,002¥121,983$1,214,962

4,841

4,348

40,288

Total comprehensive income attributable to:
Owners of the parent
Minority interests
See notes to consolidated financial statements.

140

Annual Report & CSR Report 2015

Consolidated Statement of Change in Equity
Development Bank of Japan Inc. and Consolidated Subsidiaries

For the year ended March 31,

Common stock:
Balance at beginning of year
Cumulative effects of changes in accounting policies
Restated balance
Balance at end of year
Capital surplus:
Balance at beginning of year
Cumulative effects of changes in accounting policies
Restated balance
Balance at end of year
Retained earnings:
Balance at beginning of year
Cumulative effects of changes in accounting policies
Restated balance
Cash dividends
Net income
Change in scope of consolidation
Balance at end of year
Accumulated other comprehensive income:Unrealized gain on available-for-sale securities:
Balance at beginning of year
Cumulative effects of changes in accounting policies
Restated balance
Net change during the year
Balance at end of year
Deferred gain on derivatives under hedge accounting:
Balance at beginning of year
Cumulative effects of changes in accounting policies
Restated balance
Net change during the year
Balance at end of year
Foreign currency translation adjustments:
Balance at beginning of year
Cumulative effects of changes in accounting policies
Restated balance
Net change during the year
Balance at end of year
Accumulated adjustments for retirement benefits:
Balance at beginning of year
Cumulative effects of changes in accounting policies
Restated balance
Net change during the year
Balance at end of year
Minority interests:
Balance at beginning of year
Cumulative effects of changes in accounting policies
Restated balance
Net change during the year
Balance at end of year
Total equity:
Balance at beginning of year
Cumulative effects of changes in accounting policies
Restated balance
Cash dividends
Net income
Change in scope of consolidation
Net change during the year
Balance at end of year

2015

2014

2015

¥1,206,953—
1,206,953
1,206,953¥1,206,953—
1,206,953
1,206,953$10,043,713—
10,043,713
10,043,713

1,060,466—
1,060,466
1,060,466

1,060,466—
1,060,466
1,060,466

8,824,718—
8,824,718
8,824,718

282,73341
282,774(30,804)
92,758—344,728

193,595—
193,595(35,254)
124,303
89282,733

2,352,777
342
2,353,118(256,341)
771,897—2,868,674

37,767—37,76748,09885,86536,873—36,873894
37,767314,284—
314,284
400,250
714,533

30,006—30,0063,305
33,311

33,987—33,987(3,980)30,006249,699—249,699
27,506277,205

709
—
709
907
1,617

(57)
—
(57)
767
709

5,908
—
5,908
7,553
13,461

(944)
—
(944)
932
(12)

—
—
—
(944)
(944)

(7,863)—(7,863)
7,756
(107)

10,022—
10,022
4,321
14,344

6,759
—
6,759
3,263
10,022

83,406—
83,40635,962
119,368

2,627,714
41
2,627,755(30,804)
92,758—57,564¥2,747,274

2,538,576—
2,538,576(35,254)
124,30389(0)¥2,627,714

21,866,641
342
21,866,982(256,341)
771,897—
479,028$22,861,566

Financial Condition

Thousands of
U.S. Dollars (Note 1)

Millions of Yen

See notes to consolidated financial statements.

Annual Report & CSR Report 2015141

Consolidated Statement of Cash Flows
Development Bank of Japan Inc. and Consolidated Subsidiaries

Thousands of
U.S. Dollars (Note 1)

Millions of Yen

For the year ended March 31,

Cash flows from operating activities:
Income before income taxes and minority interests
Adjustments for:
Depreciation
Amortization of goodwill
Gain on negative goodwill
Losses on impairment of long-lived assets
Equity in gains of affiliates
Interest income
Interest expense
Gain on securities—net
Gain on money held in trust—net
Foreign exchanges 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
Reserve for contingent losses
Loans
Debentures
Borrowed money
Short-term corporate bonds
Corporate bonds
Due from banks
Call loans and bills bought
Reverse repurchase agreements
Interest received
Interest paid
Other—net
Sub-total
Payments for income taxes
Net cash provided by operating activities
Cash flows from investing activities:
Payments for purchases of securities
Proceeds from sales of securities
Proceeds from redemption of securities
Payments for increase of money held in trust
Proceeds from decrease of money held in trust
Payments for purchases of tangible fixed assets
Proceeds from sales of tangible fixed assets, etc.
Payments for purchases of intangible fixed assets
Proceeds from purchases of stocks of subsidiaries resulting inchange in scope of consolidation
Net cash used in investing activities
Cash flows from financing activities:
Payments for cash dividends
Proceeds from issuance of securities to minority shareholders ofsubsidiaries
Dividends paid to minority shareholders of subsidiaries
Net cash used in financing activities
Foreign currency translation adjustments on cash and cash
equivalents
Net change in cash and cash equivalents
Cash and cash equivalents at beginning of year
Increase in cash and cash equivalents due to new consolidation
Cash and cash equivalents at end of year
See notes to consolidated financial statements.

142

Annual Report & CSR Report 20152015

¥ 153,662

2014

¥

2015

166,014$ 1,278,710

5,012
111
(223)
120
(2,299)(235,689)
117,849(37,324)(36)(21,006)
(519)

5,707
107
(559)
103
(2,252)(255,329)
132,167(33,626)(5,396)(18,385)219

41,713929(1,857)
1,005(19,134)(1,961,297)
980,691(310,599)(302)(174,805)(4,319)(28,279)
65
(23)
(0)
(2,808)(426)
5577,066
134,532(584,383)—
197,355(38,120)(248,000)(5,299)247,410(118,959)
35,399145,191(23,112)122,078(34,419)
(42)
105
(0)
—
(3,045)(128)
79,81432,396(265,823)(43,997)
280,490(9,717)(3,000)165,975
264,234(133,370)
68,208386,449(41,463)
344,986(235,331)
546
(193)
(2)
(23,374)(3,546)42
4,802,087
1,119,515(4,862,976)—
1,642,300(317,222)(2,063,743)(44,103)
2,058,834(989,926)
294,575
1,208,215(192,335)
1,015,880(755,432)
64,716575,039(1)
79,580(33,682)
1,793(1,715)(1,317,120)
196,229860,725(140)
42,498(786)
5,443(1,057)(6,286,365)
538,545
4,785,220(8)662,235(280,287)
14,922(14,274)23(69,676)

203(214,004)

199(579,814)(30,804)(35,254)(256,341)

1,034(3,632)(33,402)33(1,118)(36,339)8,606(30,227)(277,962)

467
19,466
219,805—¥ 239,272

687
95,330124,017457
219,805

3,890
161,994
1,829,120—$ 1,991,113¥

Notes to Consolidated Financial Statements
Development Bank of Japan Inc. and Consolidated Subsidiaries

1. Basis of Presentation
Financial Condition

The accompanying consolidated financial statements have been prepared in accordance with the provisions set forth in
the Japanese Financial Instruments and Exchange Act and its related accounting regulations and Ministerial Ordinance for
Accounting of the Development Bank of Japan Inc. (“DBJ Inc.”) and in conformity with accounting principles generally
accepted in Japan (“Japanese GAAP”), which are different in certain respects as to application and disclosure requirementsof International Financial Reporting Standards.
In preparing these consolidated financial statements, certain reclassifications and rearrangements have been madeto the consolidated financial statements issued domestically in order to present them in a form which is more familiar toreaders outside Japan. In addition, certain reclassifications have been made in the 2014 consolidated financial statements toconform to the classifications used in 2015.
The amounts indicated in millions of yen are rounded down by omitting the figures less than one million yen.
Accordingly, the sum of each amount appearing in the accompanying financial statements and the notes thereto may not
be equal to the sum of the individual account balances. Amounts in U.S. dollars are presented solely for the convenience ofreaders outside Japan. The rate of ¥120.17=$1.00, the effective exchange rate prevailing as of March 31, 2015, has beenused in the conversion. The presentation of such amounts is not intended to imply that Japanese yen amounts have been or
could have been readily translated, realized or settled in U.S. dollars at that rate or any other rate.

2. Summary of Significant Accounting Policies(a) Principles of Consolidation(1) Scope of Consolidation
Under the control concept, those companies in which DBJ Inc., directly or indirectly, is able to exercise control over
operations are fully consolidated. On September 8, 2006, the Accounting Standards Board of Japan (“ASBJ”) issued
Practical Issues Task Force No. 20, “Practical Solution on Application of Control Criteria and Influence Criteria to
Investment Associations” which was effective for the period and the fiscal years ending on or after September 8,
2006. The practical solution clarifies how the control and influence concept should be practically applied to theconsolidation scope of collective investment vehicles, such as limited partnerships, Tokumei Kumiai and other entities
with similar characteristics.
(i) Consolidated Subsidiaries
The number of consolidated subsidiaries as of March 31, 2015 is 25. The major consolidated subsidiaries as ofMarch 31, 2015 are as follows:
DBJ Business Investment Co., Ltd.
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.
In the year ended March 31, 2015, DBJ Investment Consulting (Beijing) Co., Ltd. (renamed from the former name,
DBJ-JAIC Investment Consulting (Beijing) Co., Ltd.) was newly consolidated due to additional acquisition of its
shares and Venture Fund Investment Co., Ltd. and other three companies were newly consolidated due to new
establishment, while DBJ Capital Investment Fund No. 1 was excluded from the scope of consolidation due toliquidation.
(ii) Unconsolidated Subsidiaries
The number of unconsolidated subsidiaries as of March 31, 2015 is 30. The major unconsolidated subsidiary as ofMarch 31, 2015 was UDS II Corporate Mezzanine Limited Partnership.
Unconsolidated subsidiaries are excluded from the scope of consolidation because such exclusion has no material
impact on the consolidated financial statements in terms of total assets, income, net income, retained earnings andaccumulated other comprehensive income.
Annual Report & CSR Report 2015

143

(iii) The majority of voting rights of Dexerials Corporation is owned by DBJ Inc. but it is not treated as a subsidiary, as
the investment in this company was made for the purpose of its development and not for the purpose of obtaining
control over the investee.
(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.
(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, 2015 was 30.
The major unconsolidated subsidiary not accounted for by the equity method was UDS II Corporate Mezzanine
Limited Partnership.
(ii) Affiliates accounted for by the equity method
The number of affiliates accounted for by the equity method as of March 31, 2015 was 20. One of the majoraffiliates accounted for by the equity method as of March 31, 2015 was:AIRDO Co., Ltd.
Changes in scope of affiliates accounted for by the equity method:
SANKO INC. and two companies including En Fund L.P. were newly accounted for by the equity method due to anincrease in its materiality and new incorporation, respectively, as of March 31, 2015.
Tohoku Electric Power Co., Inc. was excluded from the scope of affiliates accounted for by the equity method
due to sales of shares. DBJ-JAIC Investment Consulting (Beijing) Co., Ltd. was excluded from the scope of affiliates
accounted for by the equity method, since it was included in the scope of consolidation due to additional acquisitionof shares in the year ended March 31, 2015.
(iii) Affiliates not accounted for by the equity method
The number of affiliates not accounted for by the equity method as of March 31, 2015 was 93. One of the majoraffiliates as of March 31, 2015 was:
New Perspective One LLC
Unconsolidated subsidiaries and affiliates that are not accounted for by the equity method have been excluded
from the scope of the equity method because their aggregate effect in terms of net income, retained earnings andaccumulated other comprehensive income has no material impact on the consolidated financial statements of DBJ Inc.
(iv) Entities not recognized as affiliates where DBJ Inc. owns the voting rights between 20% and 50%
The following companies of which DBJ Inc. owns the voting rights between 20% and 50% were not recognized asaffiliates accounted for by the equity method, since DBJ Inc.’s intent is to nurture the venture business and not toexercise significant influence on their operating and financing policies:
As of March 31, 2015
Shinwa Seiko Corporation
Mediclude Co., Ltd.
Nihon Shoryoku Kikai Co., Ltd.
PRISM Pharma Corporation
Izumi Products Company
OPAL Co., Ltd.
TES HOLDINGS LIMITEDTHUNIP HOLDINGS
Grace A Co., Ltd.
Socionext Inc.
NAM HOA TRADING & PRODUCTION CORPORATION
Sartorius Mechatronics T&H GmbH

144

Annual Report & CSR Report 2015

Financial Condition(3) Balance Sheet Dates of Consolidated Subsidiaries
Balance sheet dates of consolidated subsidiaries are as follows:
Number of subsidiaries

2015

December 31
February 28 or 29
March 3116
18

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 resulting from transactions between DBJ Inc. and its consolidated subsidiaries is eliminated.
(5) Amortization of Goodwill
The difference between the fair value of net assets and the cost of the acquired subsidiary is being amortized ona straight-line basis over the estimated beneficial period not exceeding 20 years. Minor differences are charged
to income in the year of acquisition. The excess of the fair value over the cost of acquired subsidiaries (negative
goodwill) is recognized as income immediately as incurred.
(b) Cash and Cash Equivalents“Cash and Cash Equivalents” in the consolidated statement of cash flows consist of cash on hand and due from banks.
The reconciliation between “Cash and cash equivalents” and “Cash and due from banks” in the consolidated balance
sheet is as follows:
Thousands of
U.S. Dollars

Millions of Yen

2015

2014

2015

Cash and due from banks¥317,772¥260,185$2,644,359

Time deposits with banks(78,500)(40,380)(653,246)

Cash and cash equivalents¥239,272¥219,805$1,991,113(c) Securities
Held-to-maturity debt securities are stated at amortized cost with amortization computed on a straight-line basis, using
the weighted average method. Available-for-sale securities with readily available market quotations are stated at market
value (cost is calculated principally using the weighted average method). Financial instruments whose fair value cannot
be reliably determined are stated at cost using the weighted average method.
Investments in limited partnerships and other similar partnerships are accounted for at their original cost plus
DBJ Inc.’s interest in earnings since acquisition and less any dividends received, based on their most recent financial
statements.
Unrealized gains and losses on available-for-sale securities are included in equity, net of income taxes, except for theamounts reflected in profit or loss by application of fair value hedges.
Securities which are held as trust assets in money held in trust accounts are valued in the same way as othersecurities.
(d) Valuation Method for Derivative Financial Instruments
All derivative financial instruments are carried at market value. Except for certain derivatives that are designated as
hedging instruments as discussed below, gains or losses on derivative transactions are recognized in the statement ofincome.

Annual Report & CSR Report 2015145

(e) Hedge Accounting(1) Hedge Accounting
DBJ Inc. applies the deferral method of hedge accounting or the accrual method (*1). The portfolio hedge isaccounted for by the method stipulated in “Accounting and Auditing Treatments on the Application of AccountingStandards for Financial Instruments in the Banking Industry,” issued by the Japanese Institute of Certified Public
Accountants (the “JICPA Industry Audit Committee Report No. 24”). In addition, foreign currency swaps which
are used to hedge foreign currency fluctuations are not translated at market values but at contractual rates, as theforeign currency swap contracts meet the hedging criteria under the Accounting Standards for Financial Instruments.
In addition, DBJ Inc. applies deferral hedge accounting and fair value hedge accounting as portfolio hedges ofthe foreign currency fluctuations associated with foreign currency denominated investments in subsidiaries andaffiliates and foreign currency denominated available-for-sale securities (other than foreign currency denominatedbonds).
(2) Hedging Instruments and Hedged Items• Hedging Instruments : Interest rate swaps
Hedged Items: Debentures, Borrowed money, Corporate bonds, Securities and Loans• Hedging Instruments : Foreign currency swaps
Hedged Items: Foreign currency denominated loans, Debentures and Corporate bonds• Hedging Instruments : Forward liability denominated in foreign currency
Hedged Items: Foreign currency denominated investments in subsidiaries and affiliates and foreign
currency denominated available-or-sale securities (other than foreign currency
denominated bonds)(3) Hedging Policy
DBJ Inc. utilizes hedging instruments to hedge interest rates and foreign currency fluctuations on its assets andliabilities. Individual contracts or every constant group are drawn for each hedged item.
(4) Evaluation of Hedge EffectivenessAccording to the risk management policy, DBJ Inc. evaluates the effectiveness of the hedges by testing whether thederivatives are effective in reducing the risks associated with the hedged items.
In addition, as for portfolio hedging activities to fix the cash flows, the effectiveness is assessed based on thecorrelation between the base interest rate index of the hedged cash flow and the hedging instrument.
With respect to hedging activities against foreign exchange risk of foreign currency denominated investments in
subsidiaries and affiliates and foreign currency denominated available-for-sale securities (other than foreign currency
denominated bonds), the effectiveness of the hedge is assessed by confirming the amount of foreign currency
payables of spot and forward foreign exchange contracts exceeding the amount of acquisition cost of the hedged
foreign securities in foreign currency.
With respect to an individual hedge, in regards to both interest rate swap contracts which meet the hedging
requirements of the accrual method (*1) and foreign currency swap contracts which meet the hedging requirementsof the assignment method (*2), DBJ Inc. is not required to periodically evaluate hedge effectiveness.
*1. If interest rate swap contracts are used as hedges and meet certain hedging criteria, the net amount to be paid or received
under the interest rate swap contract is added to or deducted from the interest on the assets or liabilities for which the swap
contract was executed.
*2. In cases where foreign currency swaps are used as hedges and meet certain hedging criteria, foreign exchange forward
contracts and hedged items are accounted for in the following manner;(i) If a foreign currency swap is executed to hedge existing foreign currency assets or liabilities, a) the difference, if any, between
the Japanese yen amount of the hedged foreign currency asset or liability translated using the spot rate at the inception dateof the contract and the book value of the asset or liability is recognized in the statement of income in the period which
includes the inception date, and b) the discount or premium on the contract (that is, the difference between the Japanese
yen amount of the contract translated using the contracted forward rate and that translated using the spot rate at the
inception date of the contract) is recognized over the term of the contract.
(ii) If a foreign currency swap is executed to hedge a future transaction denominated in a foreign currency, the futuretransaction will be recorded using the contracted forward rate, and no gains or losses on the foreign exchange forward
contract are recognized.

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Financial Condition(f) Fixed Assets(1) Depreciation of Tangible Fixed Assets
Tangible Fixed Assets are stated at cost less accumulated depreciation. Tangible Fixed Assets of DBJ Inc. aredepreciated using the declining-balance method, except for buildings (excluding installed facilities) that are
depreciated on a straight-line basis, and depreciation of tangible fixed assets of consolidated subsidiaries iscomputed principally using the straight-line method based on the estimated durability of assets.
The estimated useful lives are principally as follows:
Buildings: 3 years to 50 years
Others: 4 years to 20 years(2) Amortization of Intangible Fixed Assets
Intangible Fixed Assets are amortized using the straight-line method. Capitalized software for internal use isamortized using the straight-line method based on the estimated useful lives (mainly from 3 to 5 years).
(3) Lease Assets
Depreciation for lease assets is computed by the straight-line method with zero residual value over the lease term.
(g) Long-lived Assets
DBJ Inc. reviews its long-lived assets for impairment whenever events or changes in circumstance indicate the carrying
amount of an asset or asset group may not be recoverable. Impairment losses are recognized if the carrying amount ofan asset or asset group exceeds the sum of the undiscounted future cash flows expected to result from the continued
use and eventual disposition of the asset or asset group. The impairment losses would be measured as the amount bywhich the carrying amount of the asset exceeds its recoverable amount, which is the higher of the discounted cash
flows from the continued use and eventual disposition of the asset or the net selling price at disposition.
(h) Debentures and Corporate Bonds Issuance Costs“Debentures and Corporate Bonds Issuance Costs” are charged to income as incurred.
(i) Foreign Currency Translation and Revaluation Method
Assets and liabilities denominated in foreign currencies held by DBJ Inc. have been translated at the exchange rates
prevailing as of the balance sheet date. Foreign currency accounts held by consolidated foreign subsidiaries aretranslated into the currency of the subsidiaries at the respective year-end exchange rates. The foreign exchange gains
and losses from transactions are recognized in the statement of income to the extent that they are not hedged byforward exchange contracts. The balance sheet accounts of the consolidated foreign subsidiaries are translated into
Japanese yen at the current exchange rate as of the balance sheet date except for equity, which is translated at thehistorical rate. Differences arising from such translation were shown as “Foreign Currency Transaction Adjustments” ina separate component of equity. Revenue and expense accounts of consolidated foreign subsidiaries are translated into
yen at the exchange rate prevailing as of the balance sheet date.
(j) Allowance for Loan Losses
DBJ Inc. provides for “Allowance for Loan Losses” as detailed below pursuant to the internal policies for self-assessmentof credit quality and loan losses. The allowance for claims on debtors who are legally bankrupt, in special liquidation
or effectively bankrupt is provided for based on the amount of claims, after the write-off described below, net ofamounts 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 ofcollateral or execution of guarantees. With respect to the claims on debtors who are likely to become bankrupt or to beclosely monitored, and for which future cash flows can reasonably be estimated, the allowance is provided for as thedifference between the present value of expected future cash flows discounted at the contracted interest rate and thecarrying value of the claims. The allowance for claims on debtors other than those described above is provided basedon the historical default rate, which is calculated based on the actual defaults over a certain historical period. All claims
are assessed initially by the investment and lending departments and then by the Credit Analysis Department, which is
independent of the investment and lending departments based on internal policies for self-assessment of credit quality.
The allowance is provided for based on the results of the self-assessment.
Annual Report & CSR Report 2015147

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 ¥34,371 million ($286,022 thousand) and ¥39,715 million for the years ended March 31,
2015 and 2014, respectively. The consolidated subsidiaries calculate the general reserve for “normal” categories basedon the specific actual historical loss ratio, and the specific reserve for the “possibly bankrupt,” “effectively bankrupt”
and “legally bankrupt” categories based on estimated losses, considering the recoverable value.
(k) Allowance for Investment Losses“Allowance for Investment Losses” is provided for based on the estimated losses on certain investments based on anassessment of the issuers’ financial condition.
(l) 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, 2015 and 2014.
(m) 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
to periods on a straight-line basis. Net actuarial gains and losses are amortized using the straight-line method over theperiod of ten years within the employees’ average remaining service period commencing from the following fiscal year
after incurrence. Prior service cost is amortized using the straight-line method over the period of ten years within theemployees’ average remaining service period at incurrence.
On May 17, 2012, the ASBJ issued ASBJ Statement No. 26, “Accounting Standard for Retirement Benefits” andASBJ Guidance No. 25, “Guidance on Accounting Standard for Retirement Benefits,” which replaced the accounting
standard for retirement benefits that had been issued by the Business Accounting Council in 1998 with an effective dateof April 1, 2000, and the other related practical guidance, and were followed by partial amendments from time to timethrough 2009.
(1) Under the revised accounting standard, actuarial gains and losses and prior service costs that are yet to berecognized in profit or loss are recognized within equity (accumulated other comprehensive income), after adjustingfor tax effects, and any resulting deficit or surplus is recognized as a liability (liability for retirement benefits) or asset(asset for retirement benefits).
(2) The revised accounting standard does not change how to recognize actuarial gains and losses and prior service costs
in profit or loss. Those amounts are recognized in profit or loss over a certain period no longer than the expected
average remaining service period of the employees. However, actuarial gains and losses and prior service costs that
arose in the current period and have not yet been recognized in profit or loss are included in other comprehensive
income and actuarial gains and losses and prior service costs that were recognized in other comprehensive income
in prior periods and then recognized in profit or loss in the current period, are treated as reclassification adjustments(see Note 2 (u)).
(3) The revised accounting standard also made certain amendments relating to the method of attributing expected
benefit to periods, the discount rate, and expected future salary increases.
This accounting standard and the guidance for (1) and (2) above are effective for the end of fiscal years beginning on orafter April 1, 2013, and for (3) above are effective for the beginning of fiscal years beginning on or after April 1, 2014,
or for the beginning of fiscal years beginning on or after April 1, 2015, subject to certain disclosure in March 2015, allwith earlier application being permitted from the beginning of fiscal years beginning on or after April 1, 2013. However,no retrospective application of this accounting standard to consolidated financial statements in prior periods is required.
DBJ Inc. applied the revised accounting standard and guidance for retirement benefits for (1) and (2) above, effective
March 31, 2014, and for (3) above, effective April 1, 2014.

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Financial Condition

With respect to (3) above, DBJ Inc. changed the method of attributing the expected benefit to periods from a straightline basis to a benefit formula basis, the method of determining the discount rate from using the period whichapproximates the expected average remaining service period to using a single weighted average discount rate reflecting
the estimated timing and amount of benefit payment, and recorded the effect of (3) above as of April 1, 2014, inretained earnings. As a result, liability for retirement benefits decreased by ¥41 million ($343 thousand) and retained
earnings increased by ¥41 million ($342 thousand) at the beginning of the year ended March 31, 2015. In addition,
income before income taxes and minority interests decreased by ¥27 million ($232 thousand).
The effect on per share information is described in Note 17.
(n) 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.
(o) Reserve for Contingent Losses
Reserve for contingent losses is provided for possible contingent losses on loan commitment limits based on individuallyestimated losses.
(p) Asset Retirement Obligations
In March 2008, the ASBJ published the accounting standard for asset retirement obligations, ASBJ Statement No. 18“Accounting Standard for Asset Retirement Obligations” and ASBJ Guidance No. 21 “Guidance on Accounting Standard
for Asset Retirement Obligations.” Under this accounting standard, an asset retirement obligation is defined as a legal
obligation imposed either by law or contract that results from the acquisition, construction, development and thenormal operation of a tangible fixed asset and is associated with the retirement of such tangible fixed asset.
The asset retirement obligation is recognized as the sum of the discounted cash flows required for the future asset
retirement and is recorded in the period in which the obligation is incurred if a reasonable estimate can be made. If areasonable estimate of the asset retirement obligation cannot be made in the period the asset retirement obligation
is incurred, the liability should be recognized when a reasonable estimate of asset retirement obligation can be made.
Upon initial recognition of a liability for an asset retirement obligation, an asset retirement cost is capitalized byincreasing the carrying amount of the related fixed asset by the amount of the liability.
The asset retirement cost is subsequently allocated to expense through depreciation over the remaining useful life of
the asset. Over time, the liability is accreted to its present value each period. Any subsequent revisions to the timing or
the amount of the original estimate of undiscounted cash flows are reflected as an increase or a decrease in the carrying
amount of the liability and the capitalized amount of the related asset retirement cost.
(q) Consumption Taxes
Income and expenses subject to consumption taxes exclude related consumption taxes paid or received.
(r) Income Taxes
The provision for income taxes is computed based on the pretax income included in the consolidated statement ofincome. The asset and liability approach is used to recognize deferred tax assets and liabilities for the expected future
tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities.
Deferred taxes are measured by applying currently enacted tax laws to the temporary differences.
(s) Capitalization of Interest Costs on Real Estate Development Business
Interest costs arising in the normal course of development related to real estate development business of certain
domestic consolidated subsidiaries are capitalized and included in the acquisition cost of assets.
(t) Per Share Information
Basic net income per share is computed by dividing net income available to common stockholders by the weightedaverage number of shares of common stock outstanding for the period, retroactively adjusted for stock splits. Diluted
net income per share for the years ended March 31, 2015 and 2014 is not disclosed because there are no dilutive
securities.
Cash dividends per share presented in the accompanying consolidated statement of income are dividends applicableto the year including dividends to be paid after the end of the year.

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(u) New Accounting Pronouncements
Accounting Standards for Business Combinations and Consolidated Financial Statements
In September 2013, the ASBJ issued revised ASBJ Statement No. 21, “Accounting Standard for Business Combinations,“
revised ASBJ Guidance No. 10, “Guidance on Accounting Standards for Business Combinations and Business
Divestitures,“ and revised ASBJ Statement No. 22, “Accounting Standard for Consolidated Financial Statements.“ Major
accounting changes are as follows:(1) Transactions with noncontrolling interest—A parent’s ownership interest in a subsidiary might change if the parent
purchases or sells ownership interests in its subsidiary. The carrying amount of minority interest 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. Under the current accounting standard, any difference between the fair value of the consideration
received or paid and the amount by which the minority interest is adjusted is accounted for as an adjustment of
goodwill or as profit or loss in the consolidated statement of income. Under the revised accounting standard, suchdifference shall be accounted for as capital surplus as long as the parent retains control over its subsidiary.
(2) Presentation of the consolidated balance sheet—In the consolidated balance sheet, “minority interest“ under thecurrent accounting standard will be changed to “noncontrolling interest“ under the revised accounting standard.
(3) Presentation of the consolidated statement of income—In the consolidated statement of income, “income before
minority interest“ under the current accounting standard will be changed to “net income“ under the revised
accounting standard, and “net income“ under the current accounting standard will be changed to “net income
attributable to owners of the parent“ under the revised accounting standard.
(4) Provisional accounting treatments for a business combination—If the initial accounting for a business combination
is incomplete by the end of the reporting period in which the business combination occurs, an acquirer shall reportin its financial statements provisional amounts for the items for which the accounting is incomplete. Under thecurrent accounting standard guidance, the impact of adjustments to provisional amounts recorded in a businesscombination on profit or loss is recognized as profit or loss in the year in which the measurement is completed.
Under the revised accounting standard guidance, during the measurement period, which shall not exceed one year
from the acquisition, the acquirer shall retrospectively adjust the provisional amounts recognized at the acquisition
date to reflect new information obtained about facts and circumstances that existed as of the acquisition date andthat would have affected the measurement of the amounts recognized as of that date. Such adjustments shall berecognized as if the accounting for the business combination had been completed at the acquisition date.
(5) Acquisition-related costs—Acquisition-related costs are costs, such as advisory fees or professional fees, which anacquirer incurs to effect a business combination. Under the current accounting standard, the acquirer accounts foracquisition-related costs by including them in the acquisition costs of the investment. Under the revised accounting
standard, acquisition-related costs shall be accounted for as expenses in the periods in which the costs are incurred.
The above accounting standards and guidance for (1) transactions with noncontrolling interest, (2) presentation of theconsolidated balance sheet, (3) presentation of the consolidated statement of income, and (5) acquisition-related costs
are effective for the beginning of fiscal years beginning on or after April 1, 2015. Earlier application is permitted fromthe beginning of fiscal years beginning on or after April 1, 2014, except for (2) presentation of the consolidated balance
sheet and (3) presentation of the consolidated statement of income. In the case of earlier application, all accounting
standards and guidance above, except for (2) presentation of the consolidated balance sheet and (3) presentation of theconsolidated statement of income, should be applied simultaneously.
Either retrospective or prospective application of the revised accounting standards and guidance for (1) transactions with
noncontrolling interest and (5) acquisition-related costs is permitted. In retrospective application of the revised standards
and guidance, the accumulated effects of retrospective adjustments for all (1) transactions with noncontrolling interestand (5) acquisition-related costs which occurred in the past shall be reflected as adjustments to the beginning balanceof capital surplus and retained earnings for the year of the first-time application. In prospective application, the newstandards and guidance shall be applied prospectively from the beginning of the year of the first-time application.
The revised accounting standards and guidance for (2) presentation of the consolidated balance sheet and (3)presentation of the consolidated statement of income shall be applied to all periods presented in financial statements
containing the first-time application of the revised standards and guidance.
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Financial Condition

The revised standards and guidance for (4) provisional accounting treatments for a business combination are effective
for a business combination which occurs on or after the beginning of fiscal years beginning on or after April 1, 2015.
Earlier application is permitted for a business combination which occurs on or after the beginning of fiscal years
beginning on or after April 1, 2014.
DBJ Inc. expects to apply the revised accounting standards and guidance for (1), (2), (3) and (5) above from April 1,
2015, and for (4) above for a business combination which will occur on or after April 1, 2015, and is in the process ofmeasuring the effects of applying the revised accounting standards and guidance in future applicable periods.

3. Securities
Securities as of March 31, 2015 and 2014 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2015

2014

2015

¥ 253,498¥ 349,039$ 2,109,503

Corporate bonds

592,797

505,9934,932,994

Equities

436,112

227,0363,629,133

Japanese government bonds

Other securities
Total

605,496555,516

5,038,667¥1,887,906¥1,637,587$15,710,298*1. Investments in unconsolidated subsidiaries and affiliates included in “Equities” as of March 31, 2015 and 2014, are ¥30,307 million($252,203 thousand) and ¥27,630 million, respectively. Investments in unconsolidated subsidiaries and affiliates included in “Other
securities” as of March 31, 2015 and 2014, are ¥44,846 million ($373,188 thousand) and ¥40,248 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 Exchange Act) and amount to ¥2,616 million ($21,769 thousand) and ¥1,800 million as ofMarch 31, 2015 and 2014, respectively.
*3. There are no securities repledged as of March 31, 2015 and 2014. Securities accepted under repurchase agreements can be sold or
repledged. Securities neither sold nor repledged are ¥5,299 million ($44,103 thousand) and zero as of March 31, 2015 and 2014,
respectively.
*4. Marketable securities available-for-sale are considered impaired if there is a considerable decline in the market value below theacquisition cost and such decline is not believed to be recoverable. The difference between the acquisition cost and the market value isthe impairment loss for the fiscal year.
The criterion for determining “Considerable decline in market value” is as follows:
Market value declined by 50% or more of the acquisition cost.
Market value declined by 30% or more of the acquisition cost, and such decline is not considered as recoverable.

Impairment losses on marketable securities available-for-sale for the years ended March 31, 2015 and 2014 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2015

Equities

2014

¥ —

2015

¥ 45

$ —

Bonds

—

—

—

Other

108

355

900

Total

¥108

¥401

$900

4. Non-Performing Loans
The amounts of non-performing loans included in “Loans” as of March 31, 2015 and 2014 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2015

Loans to bankrupt debtors
Delinquent loans
Loans past due three months or more
Restructured loans
Total

¥

2014

—
80,537

¥

2015

2,710

$

—

95,269670,196———

21,74139,362

180,922¥102,278¥137,343$851,119

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*1. The amounts of loans indicated above are stated at gross amounts, before reduction of the allowance for loan losses.
*2. “Loans to bankrupt debtors” represent non-accrual loans to debtors who are legally bankrupt as defined in Article 96-1-3 and 4 of theJapanese Tax Law Enforcement Regulation.
*3. “Delinquent loans” represent non-accrual loans other than (i) Loans to bankrupt debtors and (ii) Loans whose interest payments aredeferred in order to assist or facilitate the restructuring efforts of borrowers in financial difficulty.
*4. “Loans past due three months or more” are loans whose principal or interest payment is three months or more past due and do not
fall under the category of “Loans to bankrupt debtors” or “Delinquent loans.”*5. “Restructured loans” are loans whose repayment terms have been modified to the advantage of debtors through means such as a
reduction or exemption of interest rates, postponement of principal and interest payments, and forgiveness of loans to support or
restructure the debtors’ businesses, and do not fall under the category of “Loans to bankrupt debtors,” “Delinquent loans,” or “Loanspast due three months or more.”

5. Commitments
Loan commitment limits are contracts under which DBJ Inc. lends to customers up to the prescribed limits in response tocustomers’ applications for loans as long as there is no violation of any condition in the contracts. As of March 31, 2015
and 2014, the amounts of unused commitments are ¥598,519 million ($4,980,610 thousand) and ¥496,222 million. As of
March 31, 2015 and 2014, the amounts of unused commitments whose remaining contract term are within one year are¥157,423 million ($1,310,003 thousand) and ¥159,850 million.
Since many of these commitments expire without being drawn down, the unused amount does not necessarily
represent a future cash requirement. Most of these contracts have conditions whereby DBJ Inc. and its subsidiaries canrefuse customers’ applications for loans or decrease the contract limits for proper reason (e.g., changes in financial situation,
deterioration in customers’ credit worthiness). At the inception of contracts, DBJ Inc. and its consolidated subsidiaries
obtain real estate, securities or other assets as collateral if considered necessary. Subsequently, DBJ Inc. and its consolidated
subsidiaries perform periodic reviews of the customers’ business results based on internal rules, and take necessary
measures to reconsider conditions in contracts and/or require additional collateral and guarantees.

6. Other Assets
Other assets as of March 31, 2015 and 2014 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2015

Prepaid expenses

¥

2014

4,199

¥

2015

4,930

$

34,945

Accrued income

31,64735,683

263,354

Derivatives

60,84054,854506,286

Other

44,257

19,955368,287

Total¥140,943¥115,423$1,172,872

7. Tangible Fixed Assets
Tangible fixed assets as of March 31, 2015 and 2014 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

Buildings
Land
Leased assets
Construction in progress

2015

2014

2015

¥ 20,362¥ 21,088$ 169,450

91,78892,617

763,824

9

12

83

2,353

2,257

19,586Other

151,681

121,634

1,262,221

Total¥266,196¥237,610$2,215,163

Note: Accumulated depreciation of tangible fixed assets as of March 31, 2015 and 2014, is ¥10,513 million ($87,488 thousand) and¥7,433 million, respectively.

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8. Allowance for Loan Losses
Thousands of
U.S. Dollars

Millions of Yen

2015

Financial Condition

Allowance for loan losses as of March 31, 2015 and 2014 is as follows:

2014

2015

General allowance for loan losses¥46,580¥ 59,129$387,618

Specific allowance for loan losses

38,13753,867317,361

Total¥84,717¥112,997$704,979

9. Debentures and Corporate Bonds
Debentures and corporate bonds as of March 31, 2015 and 2014 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

Issue date

Interest rate(%)

Maturity date

2015

2014

2015

(Issuer: DBJ Inc.)
Debentures
Japanese governmentguaranteed bonds 8-23*1, 7

Aug. 2004–
Aug. 2008

1.3–
2.2

Aug. 2014–
Jun. 2023¥ 502,901[42,998]¥ 552,827[49,981]$ 4,184,921[357,810]

Japanese governmentguaranteed bonds 1-28

Nov. 2008–
Mar. 2015

0.11–
2.1

Jul. 2016–
Mar. 2025

998,847

798,624

8,311,957

Japanese governmentSep. 1998
guaranteed foreign bond 67*2, 7

1.81

Sep. 2028

25,05425,058208,494

Japanese governmentguaranteed foreign bonds
5-14*1, 7

Dec. 2002– 1.05–
Nov. 2007 5.125

Jun. 2014–
Nov. 2027

628,362[75,763]

703,230[74,995]

5,228,949[630,469]

Japanese governmentguaranteed Euro MTN bonds
1-11*3

Dec. 2009–
Jan. 2015

Dec. 2014–
Sep. 2024

733,109[153,058]

564,020[36,022]

6,100,601[1,273,682]

FILP agency domestic bonds
11, 16, 19, 20, 24, 27, 29-31,

Dec. 2003– 1.4–
Jul. 2008 2.74

Jun. 2014–
Mar. 2047

329,929[39,999]

439,912[109,997]

2,745,525[332,856]

Sep. 2008

2.032

Sep. 2023

2,000

2,000

16,6430.4636–2.875

33-37, 39, 41, 42, 44, 46, 49,
51*4, 7
Euro MTN FILP agency bonds
2*4, 5, 7
Corporate bonds
Corporate bonds throughApr. 2009– 0.101–

Jun. 2014–

1,095,000

980,000

9,112,091

public placement 4, 5, 7, 9,
11-13, 15-21, 23-52

Jan. 2015

1.745

Sep. 2029[185,000][150,000][1,539,486]

Corporate bonds throughprivate placement 1-4

Aug. 2009–
Feb. 2015

0.253–
0.847

Sep. 2014–
Feb. 2024

25,000[10,000]

20,000[10,000]

208,039[83,215]

Corporate bonds Euro MTN
17, 20-53*6

Jan. 2010–
Oct. 2014

0.235–
2.868

May. 2014–
Oct. 2023

221,602[33,601]

144,246[24,006]

1,844,072[279,615]

5.53

Nov. 2017(Issuer: Green Asset Investment TMK)
Specified corporate bonds 1
Dec. 2012
Total

7,500

7,500

62,412¥4,569,308¥4,237,421$38,023,703*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 MTN program.
*4. Fiscal Investment and Loan Program (FILP) agency bonds are not government-guaranteed. These bonds are issued by the Development
Bank of Japan.
*5. These bonds are FILP bonds issued based on MTN program.
*6. These bonds are unsecured corporate bonds issued based on MTN program.
*7. General mortgage under the DBJ Inc. Act (17 of the Supplementary Provisions) and the DBJ Act (Article 43)*8. Figures indicated in brackets [ ] indicate the amounts to be redeemed within one year.
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153

Scheduled redemptions of above debentures and corporate bonds for the following 5 years subsequent to March 31, 2015
are as follows:
The fiscal year ending March 31, 2016

¥540,420 million$4,497,133 thousand

2017

845,396

7,035,003

2018717,998

5,974,853

2019554,678

4,615,781

2020

463,4313,856,468

10. Borrowed Money
Borrowed money as of March 31, 2015 and 2014 is as follows:
Thousands of
U.S. Dollars

Millions of Yen
Average interest rate (%)

Due date of repayment

2015

2014

2015

0.84

Apr. 2015–Oct. 2034

¥8,598,219¥9,182,603$71,550,470

Borrowings

Scheduled redemptions of borrowings for the following 5 years subsequent to March 31, 2015 are as follows:
The fiscal year ending March 31, 2016

¥1,412,658 million$11,755,502 thousand

2017

1,192,335

9,922,076

2018

1,103,933

9,186,431

2019

999,698

8,319,039

2020

812,2216,758,936

11. Non-Recourse Debts
Non-recourse debts in consolidated special purpose companies as of March 31, 2015 and 2014 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2015

2014

2015

Borrowed money¥32,000¥32,000$266,289

Corporate bonds

7,500

7,500

62,412

Non-recourse debts:

Assets corresponding to non-recourse debts:
Cash and due from banks

6,586

8,117

54,806

Tangible fixed assets

48,64047,475

404,760

12. Other Liabilities
Other liabilities as of March 31, 2015 and 2014 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2015

2014

2015

Accrued expenses¥ 24,164¥ 25,198$ 201,082

Unearned income

635

614

5,285

Accrued income taxes

39,444

12,620328,237

Derivatives

31,93917,328

265,786

Lease obligations
Asset retirement obligations (Note 13)

154

11

14

98

1,470

1,722

12,237

Other

128,150

73,596

1,066,413

Total¥225,816¥131,094$1,879,138

Annual Report & CSR Report 2015

13. Asset Retirement Obligations
Financial Condition

DBJ Inc. recognizes asset retirement obligations associated with the recovery obligations provided by the real estate
rental agreements. In addition, asset retirement obligations related to the obligations of pulling down the previous head
office buildings and removing the toxic substances were recognized in connection with the head office relocation due toOtemachi redevelopment project.
The asset retirement obligation is calculated based on the sum of the discounted cash flows using discount rates from
0.1% to 1.1% with the estimated useful lives of 4 to 8 years.
The changes in asset retirement obligations for the years ended March 31, 2015 and 2014 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

Balance at beginning of year

2015

2014

2015

¥1,722¥ 2,821$14,334

1—

13

Increase due to acquisition of tangible fixed assets

Reconciliation associated with passage of time

0

0

6

(347)

(1,902)(2,894)

Increase due to a change in estimates

94

799

783

Other

(0)

3

(3)

¥1,470¥ 1,722$12,237

Decrease due to settlement of asset retirement obligations

Balance at end of year

14. Acceptances and Guarantees
Acceptances and guarantees as of March 31, 2015 and 2014 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

Guarantees

2015

2014

2015

¥167,482¥107,174$1,393,713

15. Assets Pledged as Collateral
Cash and due from banks of ¥3,110 million ($25,888 thousand) and ¥3,614 million and tangible fixed assets of ¥48,640
million ($404,760 thousand) and ¥47,475 million are pledged as collateral for borrowed money of ¥32,000 million($266,289 thousand) and ¥32,000 million as of March 31, 2015 and 2014, respectively.
Loans and securities pledged as collateral in Real Time Gross Settlement for bank deposits at the Bank of Japan are¥562,189 million ($4,678,284 thousand) and ¥113,580 million ($945,164 thousand) as of March 31, 2015. In addition,
they are deposited as replacement of margin money for future trading and collateral for transactions, including exchange
settlements as of March 31, 2015. Additionally, ¥937 million ($7,802 thousand) of margin deposits for futures transactions,¥10,255 million ($85,340 thousand) of margin deposits with the central clearing house and ¥63 million ($528 thousand)of guarantee deposits are included in other assets as of March 31, 2015. 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 astatutory preferential right over the property of DBJ Inc. The denomination value of these debentures amounts to¥1,488,822 million ($12,389,298 thousand) as of March 31, 2015.
Loans and securities pledged as collateral in Real Time Gross Settlement for bank deposits at the Bank of Japan are¥497,275 million and ¥153,863 million as of March 31, 2014. In addition, they are deposited as replacement of margin
money for future trading and collateral for transactions, including exchange settlements as of March 31, 2014. ¥18,909
million of securities are pledged as collateral for loans of companies which are investees of DBJ Inc. as of March 31, 2014.
Additionally, ¥937 million of margin deposits for futures transactions and ¥60 million of guarantee deposits are included
in other assets as of March 31, 2014. 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 denomination value of these debentures amounts to ¥1,723,822 million as of March 31, 2014.

Annual Report & CSR Report 2015155

16. Equity
Japanese companies including DBJ Inc. are regulated by the Companies Act. In addition, DBJ Inc. is regulated by the DBJ Inc.
Act. The significant provisions in the Companies Act and the DBJ Inc. Act that affect financial and accounting matters are
summarized as follows:(a) Dividends
Under the Companies Act, companies can distribute dividends at any time during the fiscal year in addition to the yearend dividend upon resolution at the shareholders meeting. For companies that meet certain criteria such as; (1) having
the Board of Directors, (2) having independent auditors, (3) having the Board of Corporate Auditors, and (4) the termof service of the directors is prescribed as one year rather than two years of normal term in its articles of incorporation,
the Board of Directors may declare dividends (except for dividends in kind) at any time during the fiscal year, prescribedthat the Board of Directors can declare dividends in its articles of incorporation. DBJ Inc., however, shall not distributesuch dividends based on resolution of the Board of Directors, since its articles of incorporation are not prescribed thatthe Board of Directors can do such an action. The Companies Act provides certain limitations on the amounts available
for dividends or the purchase of treasury stock. Article 20 of the DBJ Inc. Act provides that the timing and amounts for
dividends shall be authorized by the Finance Minister.
(b) Increases/Decreases and Transfer of Common Stock, Reserve and Surplus
The Companies Act requires that an amount equal to 10% of dividends must be set aside as a legal reserve (acomponent of retained earnings) or as additional paid-in capital (a component of capital surplus) depending on theequity account charged upon the dividends until the total aggregate amount of legal reserve and additional paid-in
capital equal 25% of Common stock. Under the Companies Act, the total amount of additional paid-in capital andlegal reserve may be reversed without limitation. The Companies Act also provides that common stock, legal reserve,
additional paid-in capital, other capital surplus and retained earnings can be reclassified among the accounts undercertain conditions upon resolution by the shareholders.
(c) Treasury Stock and Treasury Stock Acquisition Rights
The Companies Act also provides for companies to purchase treasury stock and dispose of the treasury stock based on
resolution of the Board of Directors. The amount of treasury stock purchased cannot exceed the distributable amount tothe shareholders which is determined by specific formula.
Under the Companies Act, stock acquisition rights are presented as a separate component of equity.
The Companies Act also provides that companies can purchase both treasury stock acquisition rights and treasury
stock. The treasury stock acquisition rights are presented as a separate component of equity or deduction of stockacquisition rights.
(d) Solicitation and Delivery of Shares or Stock Acquisition Rights
Article 12 of the DBJ Inc. Act regulates that, if DBJ Inc. intends to solicit those who will subscribe for shares or stockacquisition rights offered, or to deliver shares or stock acquisition rights in connection with a share-for-share exchange,
DBJ Inc. shall obtain an authorization from the Finance Minister.

17. Per Share Information
Basic net income per common share (“EPS”) for the years ended March 31, 2015 and 2014 is as follows:
Millions of Yen

Thousands of Shares

Yen

U.S. Dollars

Year ended March 31, 2015

Net income

Weighted average shares

EPS

EPS

Basic EPS
Net income available to commonshareholders¥92,758

43,632¥2,125.91¥124,303

43,632¥2,848.87$17.69Year ended March 31, 2014

Basic EPS
Net income available to commonshareholders

Note: Diluted net income per share for the years ended March 31, 2015 and 2014 is not disclosed because there are no dilutive securities.

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Financial Condition

As noted in Note 2 (m), DBJ Inc. applied the main clause of Paragraph 35 of “Accounting Standard for Retirement Benefits”(ASBJ Statement No. 26, revised on May 17, 2012) and Paragraph 67 of “Guidance on Accounting Standard for Retirement
Benefits” (ASBJ Guidance No. 25, revised on March 26, 2015) and followed the transitional treatments prescribed in
Paragraph 37 of ASBJ Statement No. 26.
As a result, total equity per share as of April 1, 2014 increased by ¥0.94 ($0.01) and net income per share for the year
ended March 31, 2015 decreased by ¥0.42 ($0.00).

18. Other Operating Income
Other operating income for the years ended March 31, 2015 and 2014 is as follows:
Thousands of
U.S. Dollars

Millions of Yen

2015

2014

2015

Foreign exchange gain

¥ 6,930¥ 4,716$ 57,671

Gains on sales of bonds

94

2,373

789

Gains on redemption of bonds

5,047

7,385

41,999

Other

1,011

1,211

8,421

Total

¥13,084¥15,687$108,879

19. Other Income
Other income for the years ended March 31, 2015 and 2014 is as follows:
Thousands of
U.S. Dollars

Millions of Yen

2015

2014

—

¥

Reversal of allowance for loan losses

25,601

26,168213,046—

128—

Reversal of reserve for contingent losses
Gains on sales of equities and other securities

¥

2015

Reversal of allowance for investment losses

42

$

—

21,1895,363

176,326

Gains on money held in trust

36

5,408

302

Equity in net income of affiliates

2,299

2,252

19,134

Gains on sales of fixed assets

649

25

5,402

Collection of written-off claims

3,009

4,636

25,045

Gains on investments in limited partnerships and other similar
partnerships

22,301

26,218

185,580

Gain on negative goodwill
Rental income on land and buildings

223

559

1,857

3,468

2,523

28,860

Other

3,668

3,900

30,525

Total¥82,445¥77,228$686,077

20. Other Operating Expenses
Other operating expenses for the years ended March 31, 2015 and 2014 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2015

Losses on sales of bonds
Debentures issuance costs
Corporate bonds issuance costs
Derivatives

¥

2014

2015

1

¥1,036

$

708

469

12
5,897

758

655

6,314

9,280

5,062

77,229

Other

1

0

13

Total

¥10,751¥7,224$89,466

Annual Report & CSR Report 2015157

21. Other Expenses
Other expenses for the years ended March 31, 2015 and 2014 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

Write-off of loans
Losses on sales of equities and other securities
Write-off of equities
Losses on money held in trust
Losses on sales of fixed assets
Impairment losses
Losses on investments in limited partnerships and other similar
partnerships
Other
Total

2015

2014

¥

¥ 321
661
2,135
12
245
103

327
1
4,871
—
130
120

2015

$

2,724
11
40,539
—
1,083
1,005

6,432

3,881

53,531

1,492¥13,376

1,717¥9,077

12,417$111,311

22. Employees’ Retirement Benefits
Employees whose service with DBJ Inc. is terminated are, under most circumstances, entitled to retirement and pension
benefits determined by reference to basic rates of pay at the time of termination, length of service and conditions underwhich the termination occurs. If the termination is involuntary, caused by retirement at the mandatory retirement age or
caused by death, the employee is entitled to greater payment than in the case of voluntary termination.
(a) Defined Benefit Pension Plan
(1) The changes in retirement benefit obligation for the years ended March 31, 2015 and 2014, are as follows:
Thousands of
U.S. Dollars

Millions of Yen

Balance at beginning of year
Cumulative effects of changes in accounting policies
Restated balance
Service cost
Interest cost
Actuarial losses
Benefits paid
Extinction of retirement benefit obligation due to thereturn of substitutional portion of welfare pension fund
Balance at end of year

2015

2014

¥31,888(41)
31,847
1,524
347
282
(1,759)¥39,036—
39,036
1,381
581
310
(1,911)$265,365(343)
265,022
12,687
2,891
2,354(14,639)2015—¥32,243(7,509)¥31,888—$268,316(2) The changes in plan assets for the years ended March 31, 2015 and 2014, are as follows:
Thousands of
U.S. Dollars

Millions of Yen

Balance at beginning of year
Expected return on plan assets
Actuarial gains
Contributions from the employer
Benefits paid
Extinction of plan assets due to the return of
substitutional portion of welfare pension fund
Balance at end of year

158

Annual Report & CSR Report 2015

2015

2014

¥23,161
115
1,493
2,795
(773)

¥26,465
132
831
4,134
(918)

$192,742
964
12,42523,262(6,436)

2015—¥26,792(7,483)¥23,161—$222,956

Thousands of
U.S. Dollars

Millions of Yen

Funded retirement benefit obligations
Plan assets
Unfunded retirement benefit obligations
Net liability for retirement benefits recorded in
the consolidated balance sheet
Liability for retirement benefits
Asset for retirement benefits
Net liability for retirement benefits recorded in
the consolidated balance sheet

Financial Condition(3) Reconciliation between the liability for retirement benefits recorded in the consolidated balance sheet and the balancesof retirement benefit obligations and plan assets for the years ended March 31, 2015 and 2014, are as follows:

2015

2014

2015

¥ 24,284(26,792)(2,508)
7,959¥ 23,535(23,161)373
8,353$ 202,083(222,956)(20,873)
66,233¥ 5,450¥ 8,727$ 45,360¥ 7,959(2,508)¥ 8,727—$ 66,233(20,873)¥ 5,450¥ 8,727$ 45,360(4) The components of net periodic benefit costs for the years ended March 31, 2015 and 2014, are as follows:
Thousands of
U.S. Dollars

Millions of Yen

Service cost
Interest cost
Expected return on plan assets
Amortization of net actuarial losses
Amortization of prior service cost
Net periodic benefit costs

2015

2014

2015

¥1,524
347
(115)
212
12
¥1,981¥1,381
581
(132)
264
12
¥2,107$12,687
2,891
(964)
1,767
105
$16,488(5) Amounts recognized in other comprehensive income (before income tax effect) in respect of adjustments for
retirement benefit for the years ended March 31, 2015 and 2014, are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2015

Prior service cost
Actuarial (gains) losses
Total

2014

¥

12
1,422
¥1,435

2015

¥—
—
¥—

$

105
11,838$11,943(6) Amounts recognized in accumulated other comprehensive income (before income tax effect) in respect ofadjustment for accumulated retirement benefit as of March 31, 2015 and 2014, are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2015

Unrecognized prior service cost
Unrecognized actuarial (gains) losses
Total

¥(69)
45
¥(24)

2014

¥ (82)(1,377)¥(1,459)2015$(580)
376$(204)

Annual Report & CSR Report 2015159

(7) Plan assets(i) Components of plan assets
Plan assets as of March 31, 2015 and 2014, consisted of the following:
2015

2014

Debentures

85%

86%

Equity12%11%Cash and due from banks——

Others

3%

3%

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
expected currently and in the future from the various components of the plan assets.
(8) Assumptions used for the year ended March 31, 2015 and 2014, were set forth as follows:
2015

Discount rate
Expected salary increase rate
Expected rate of return on plan assets

2014

1.1%

1.5%

2.0%-5.5%

2.2%-6.2%

0.5%

0.5%

(b) Defined Contribution Plans
The amounts of the required contribution to the defined contribution plans of DBJ Inc. and its consolidated subsidiaries forthe years ended March 31, 2015 and 2014 are ¥206 million ($1,714 thousand) and ¥203 million, respectively.

23. Income Taxes
DBJ Inc. and its domestic consolidated subsidiaries are subject to Japanese national and local income taxes which, in theaggregate, resulted in a normal effective statutory tax rate of approximately 35.64% and 38.01% for the years ended
March 31, 2015 and 2014, respectively.
A reconciliation of the normal effective statutory tax rate with the actual effective tax rate for the years ended March 31,
2015 and 2014 is as follows:
Normal effective statutory tax rate

2015

2014

35.64%

38.01%

4.09(12.70)

Increase (decrease) in taxes resulting from:
Change in valuation allowance

160

Other

(1.35)(0.69)

Actual effective tax rate

38.38%

24.62%

Annual Report & CSR Report 2015

Financial Condition

The tax effects of significant temporary differences and loss carryforwards which resulted in deferred tax assets and liabilities
as of March 31, 2015 and 2014 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2015

2014

2015

¥ 35,282¥ 40,428$ 293,606

Losses from revaluation of securities

14,511

14,747

120,756

Excess of fair value over assets of consolidated subsidiaries

4,200

4,397

34,953

Deferred tax assets:
Allowance for loan losses

Liability for retirement benefits

2,166

2,563

18,029Tax loss carryforwards

1,367

1,503

11,384

Other

9,055

6,892

75,357

Sub-total

66,58470,532554,086(46,834)(44,978)(389,739)

19,74925,553

164,347

Unrealized gain on available-for-sale securities(39,093)(18,103)(325,316)

Deferred gain on derivatives under hedge accounting(16,068)(16,562)(133,714)

Other(4,018)(1,936)(33,436)

Less-valuation allowance

Total
Deferred tax liabilities:

Total(59,179)(36,602)(492,466)

Net deferred tax assets¥(39,430)¥(11,048)$(328,119)

New tax reform laws enacted in 2015 in Japan changed the normal effective statutory tax rate for the fiscal year beginningon or after April 1, 2015. Due to this change, the normal effective statutory tax rate to be used to calculate deferred tax
assets and deferred tax liabilities has been changed from 35.64% to 33.10% for the temporary differences expected to besettled in the fiscal year beginning on April 1, 2015 and to 32.34% for the temporary differences expected to be settled
in the fiscal years beginning on and after April 1, 2016. The effect of this change was to decrease deferred tax assets anddeferred tax liabilities in the consolidated balance sheet as of March 31, 2015 by ¥5 million ($42 thousand) and ¥4,192
million ($34,886 thousand), respectively and to increase unrealized gain on available-for-sale securities, deferred gain onderivatives under hedge accounting, accumulated adjustments for retirement benefits and deferred income taxes increasedby ¥3,926 million ($32,673 thousand), ¥1,519 million ($12,643 thousand), ¥0 million ($7 thousand) and ¥1,259 million($10,479 thousand), respectively.
In addition, as the tax loss carryforwards which are available to be offset against taxable income will be limited to 65%
of the taxable income before deducting tax losses from the fiscal year beginning on or after April 1, 2015, deferred tax
assets decreased by ¥46 million ($386 thousand) and deferred income taxes increased by ¥46 million ($386 thousand).

24. Lease Transactions(a) Finance leases
DBJ Inc. and its domestic consolidated subsidiaries lease certain equipment and others.
(b) Operating leases(As lessee)
The minimum lease commitments under non-cancelable operating leases as of March 31, 2015 and 2014 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2015

2014

2015

Due within 1 year

¥365

¥378

$3,044Due after 1 year

176

482

1,471

Total

¥542

¥860

$4,514

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161

(As lessor)
The minimum lease commitments under non-cancelable operating leases as of March 31, 2015 and 2014 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2015

2014

2015

Due within 1 year

¥ 3,811¥ 2,863$ 31,717

Due after 1 year

13,16910,397

109,587

Total¥16,980¥13,261$141,304

25. Other Comprehensive Income
The components of other comprehensive income for the years ended March 31, 2015 and 2014 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2015

2014

2015

Gains arising during the year

¥ 90,884¥ 33,531$ 756,303

Reclassification adjustments to profit or loss

(18,751)(24,025)(156,044)

Unrealized gain on available-for-sale securities:

Amount before income tax effect72,133

9,506

600,258

Income tax effect(21,038)(5,151)(175,076)

Total

51,094

4,355

425,183

Deferred gain on derivatives under hedge accounting:
Gains arising during the year

11,336

1,499

94,336

Reclassification adjustments to profit or loss

(8,291)(8,077)(68,999)

Amount before income tax effect

3,044(6,578)25,337

494

2,633

4,113

3,538

(3,944)29,450

692

389

5,764

Income tax effectTotal
Foreign currency translation adjustments:
Adjustments arising during the year
Reclassification adjustments to profit or loss

—

—

—

Amount before income tax effect

692

389

5,764

Income tax effect

—

—

—

Total

692

389

5,764

1,210

—

10,071

Adjustments for retirement benefits
Adjustments arising during the year
Reclassification adjustments to profit or loss

225

—

1,873

Amount before income tax effect

1,435

—

11,943

Income tax effect

(512)

—

(4,263)

Total

922

—

7,680

Share of other comprehensive income in affiliates:
(146)

631

(1,217)

Reclassification adjustments to profit or loss

Gains arising during the year

53

(246)

443

Amount before income tax effect

(93)

385

(774)

Income tax effect

—

—

—

Total
Total other comprehensive income

(93)

385

(774)

¥ 56,155¥ 1,185$ 467,303

26. Segment Information
DBJ Inc. consists of only one business segment of long-term financing and accordingly, the disclosure of the reportablesegment information is omitted.
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Financial Condition

Related information:
Segment information by service for the years ended March 31, 2015 and 2014 is following:
Millions of Yen
Year ended March 31, 2015

Loan business

Securities investment

Other

Total

Ordinary income from external customers¥233,516¥71,095¥34,430¥339,043

Year ended March 31, 2014

Loan business

Securities investment

Other

Total

Ordinary income from external customers¥259,107¥60,196¥42,307¥361,610

Millions of Yen

Thousands of U.S. Dollars
Year ended March 31, 2015

Loan business

Securities investment

Other

Total

Ordinary income from external customers$1,943,218$591,625$286,518$2,821,362

27. Financial Instruments and Related Disclosures(a) The Situation of Financial Instruments(1) Policy for Financial Instruments
DBJ Inc. provides investment and loan services that are aimed to provide long-term stable funding. As main methodsof acquiring funds, in addition to issuing corporate bonds and long-term borrowings, DBJ Inc. relies on the stableprocurement of long-term funds from the government’s Fiscal Investment and Loan Program (FILP). Since long-term,
fixed-rate makes up the majority of its assets, DBJ Inc. raises its funds mainly with long-term, fixed rate liabilities.
From both funding and investment aspects, DBJ Inc. implements comprehensive asset/liability management inorder to mitigate the risk of capital shortfall and losses from fluctuations of interest rate and exchange rate. DBJ Inc.
utilizes derivative financial instruments in order to hedge or control the risks related to interest and currency.
(2) Nature and Extent of Risks Arising from Financial Instruments
The financial assets of DBJ Inc. are mainly investments and loans in domestic customers, which are exposed tocredit risk that stems from customers’ default of contracts and decline of their creditworthiness. Main categories ofindustries of debtors are electricity, gas, thermal supply, water supply, manufacturing and others as of March 31,
2015. The changes of economic circumstances surrounding these industries may influence on the fulfillment of their
obligations. DBJ Inc. holds securities such as bonds, equities and investments in limited partnerships and other similar
partnerships, which are exposed to issuer’s credit risk, interest rate risk, price volatility risk and other risks. DBJ Inc.
does not have any trading-related risk because it does not engage in trading (specified transactions).
Although corporate bonds and borrowings are exposed to cash liquidity risk and interest rate risk, these risks arehedged or controlled by matching of financing and investing, interest-rate swap agreements and other transactions.
Foreign currency denominated loans, debentures and corporate bonds are exposed to exchange rate risk. DBJ
Inc. mitigates this risk by matching foreign currency investments and loans with foreign currency corporate bonds
and currency-related transactions.
DBJ Inc. utilizes derivative financial transactions such as interest-rate swap agreements and currency swap
agreements in order to hedge or control the risks related to interest and currency. DBJ applies hedge accounting asnecessary. As for hedging instruments, hedged items, hedging policy and assessment of effectiveness of the hedges,
the details are described in Note 2 (e) “Hedge Accounting.”(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’s project’s profitability. After that, DBJ Inc. sets ratings along with an internal rating
system, grants credit amount, sets collateral and guarantee. The sales and credit analysis departments holdseparate roles in the screening and administering of credit for individual loans and each department keeps
the operations of the other in check. The Committee on Investment and Loan Decisions meets as needed todeliberate important issues concerning the management and governance of individual loans. DBJ Inc. performs acomprehensive analysis of data based on borrower ratings, and calculates the loan portfolio’s overall exposure tocredit risk, which is measured regularly to ensure that such risk remains within specified range of capital.

Annual Report & CSR Report 2015

163

The credit risk of securities is managed in the same way as that of loans. In addition, DBJ Inc. regularly
examines total risk which takes into account the market value of the securities. As for counterparty risk arisingfrom derivative transactions, DBJ Inc. manages derivative transactions by continually monitoring the cost ofrestructuring its transactions and the creditworthiness of each counterparty. Additionally, DBJ Inc. diversifies
transactions among several counterparties to manage counterparty risk.
(ii) Market Risk Management
1) Interest Rate Risk Management
DBJ Inc. manages interest rate risk by asset/liability management. Details of risk management methods andprocedures are determined on internal rules, and Management Committee and ALM & Risk Management
Committee determine policies related to asset/liability management, monitoring of implementation andfuture plans. 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 cash flow
ladder analyses (gap analysis), value at risk (VaR), interest rate sensitivity analyses (basis point value), andother methods. As a part of asset/liability management, interest-rate swaps are executed to hedge interest
rate risk.
2) Foreign Exchange Risk Management
Foreign currency investments, loans and bonds are exposed to the exchange rate risk, therefore those risks
are hedged or controlled not only by offsetting some foreign currency denominated investments and loans
as foreign currency denominated corporate bonds and debentures but also by making currency-relatedtransactions.
3) Price Volatility Risk Management
When DBJ Inc. acquires financial assets entailing price volatility risk such as securities with 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 decisions, as necessary.
Through regular monitoring, price volatility risks are reviewed on a timely basis and reported to ALM & Risk
Management Committee periodically.
4) Derivative Transactions
About derivative transactions, the front office, the back office and the risk management department are
separated from each other, and each department keeps the operations of the other in check based on
in-house regulations.
5) Quantitative Information about Market Risk
DBJ Inc. has not been engaged in trading activities, and all the assets and liabilities are financial instruments
other than for trading purposes.
Market risk volume (estimated loss) is based on VaR using the historical simulation method (holding
period of 1 year, observation period of 5 years, and confidence interval of 99.9%). The amount of market
risk (risks pertaining to the changes in interest rates, foreign exchanges and market prices) as of March
31, 2015 and 2014 was ¥25,415 million ($211,493 thousand) and ¥19,212 million, respectively. Suchmeasurements are conducted by the risk management department on a regular basis and reported to ALM &Risk Management Committee to utilize for establishing ALM operating policies.
DBJ Inc. conducts backtesting to compare the VaR calculated by the model with hypothetical
performances calculated based on the actual market movements and confirms that the measurement models
in use capture the market risk with sufficient accuracy. VaR measures the market risk volume under a definite
probability of incidence calculated statistically based on the historical market movements and accordingly,
and therefore there may be cases where market risk cannot be captured in such situations as when market
conditions are changing dramatically beyond what was experienced historically.
(iii) Liquidity Risk Management on Financing
The risk management department monitors the possession level of cash liquidity and reports it to the ALM & Risk
Management Committee periodically in line with in-house regulations of liquidity risk management on financing.
The ALM & Risk Management Committee manages the liquidity risk by appropriate operations of financing andinvesting depending on the situations of risks.
164

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Financial Condition(4) Supplementary Explanation on Fair Value of Financial Instruments
The fair value of financial instruments is measured at the quoted market price. If the quoted price is not available,
DBJ Inc. measures reasonably assessed price. Because assessed price is computed using certain assumptions, pricecould differ if different assumptions are used.
(b) Fair Values Information of Financial Instruments
The following are the carrying amount, fair value and differences between them as of March 31, 2015 and 2014.
Unlisted equities and others, whose fair value cannot be reliably determined, are excluded from the table below (see (2)).
Millions of Yen

2015
Carrying amount

Cash and due from banks¥

Call loans and bills bought

317,772

Fair value¥

Difference

317,776¥3

335,000

335,000

—

5,299

5,299

—

Held-to-maturity debt securities

915,689

937,274

21,584

Available-for-sale securities

418,171

418,171—

13,177,578

13,743,661

566,083

Reverse repurchase agreements
Securities

Loans

13,261,343(83,765)

Allowance for loan losses*1
Total assets¥15,169,511¥15,757,183¥587,671

Debentures

3,220,206

3,358,048

137,841

Borrowed money

8,498,219

8,606,481

108,261

Corporate bonds

1,349,102

1,353,954

4,852

Total liabilities¥13,067,528¥13,318,484¥250,956(10,929)(10,929)—

Derivative transactions*2
Derivative transactions not qualifying forhedge accounting
Derivative transactions qualifying forhedge accounting
Total derivative transactions

39,83028,900¥39,83028,900¥——¥Millions of Yen

2014
Carrying amount

Cash and due from banks¥

Call loans and bills bought

260,185

Fair value¥

Difference

260,185¥—

87,00087,000————

Held-to-maturity debt securities

879,576

901,570

21,993Available-for-sale securities

391,479

391,479—

Reverse repurchase agreements
Securities

Loans

13,838,410(111,623)

Allowance for loan losses*1

13,726,786

14,294,225

567,438

Total assets¥15,345,028¥15,934,461¥589,432

Debentures

3,085,674

3,216,736

131,062

Borrowed money

9,082,603

9,164,024

81,421

Corporate bonds

1,151,746

1,155,979

4,232

Total liabilities¥13,320,024¥13,536,740¥216,715(2,480)(2,480)—40,00637,52640,00637,526——

Derivative transactions*2
Derivative transactions not qualifying forhedge accounting
Derivative transactions qualifying forhedge accounting
Total derivative transactions

¥

¥

¥

Annual Report & CSR Report 2015165

Thousands of U.S. Dollars

2015
Carrying amount

Cash and due from banks$

Call loans and bills bought

2,644,359$

Fair value

Difference

2,644,389$

30

2,787,717

2,787,717—

44,103

44,103—7,619,949

7,799,569

179,620

3,479,833

3,479,833—

109,657,806

114,368,491

4,710,685

Total assets$126,233,768$131,124,103$4,890,335

Debentures

26,797,089

27,944,147

1,147,058

Borrowed money

70,718,316

71,619,221

900,905

Reverse repurchase agreements
Securities
Held-to-maturity debt securities
Available-for-sale securities
Loans

110,354,861(697,055)

Allowance for loan losses*1

Corporate bonds

11,226,614

11,266,995

40,381

Total liabilities$108,742,018$110,830,363$2,088,345(90,953)(90,953)—

331,453
240,500

331,453
240,500——

Derivative transactions*2
Derivative transactions not qualifying forhedge accounting
Derivative transactions qualifying forhedge 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.

(1) Following are the methods used to calculate the fair values of financial instruments:
Assets(i) Cash and due from banks
For deposits without maturity, the carrying amount is presented as the fair value, as the fair value approximatessuch carrying amount. For deposits with maturity, the carrying amount is presented as the fair value, as thefair value approximates such carrying amount because the remaining maturity period of the majority of suchdeposits is short (maturity within 1 year).
(ii) Call loans and bills bought and Reverse repurchase agreements
For each of these items, the majority of transactions are short contract terms (1 year or less). Thus, the carrying
amount is presented as the fair value, as the fair value approximates such carrying amount.
(iii) Securities
The fair value of marketable equity securities is measured at the market price. The fair value of bonds ismeasured at the market price or the quoted price from third party. For bonds without such price, the fair value isdetermined by discounting contractual cash flows at the rates that consist of the risk free rate and the credit risk
premium that is based on types of securities, internal ratings and maturity length.
(iv) Loans
The fair value of loans is determined by discounting contractual cash flows at the rates that consist of the risk
free rate and the credit risk premium that is based on types of loans, internal ratings and maturity length.
Foreign currency swap contracts which meet the hedging requirements of the assignment method is qualified
to loans, the contractual cash flows are based on the interest rate swap and foreign currency swap. For loans
which are short contract terms (1 year or less), the carrying amount is presented as the fair value, as the fair value
approximates such carrying amount. With respect to the claims on debtors who are likely to become bankrupt

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Financial Condition

or to be closely monitored, and for which future cash flows can reasonably be estimated, the fair values are
determined by discounting expected cash flows that reflect expected loss at the risk free rate. For loans to
obligors “legally bankrupt,” “effectively bankrupt” and “possibly bankrupt,” the reserve is provided basedon the discounted cash flow method, or based on amounts expected to be collected through the disposal ofcollateral or execution of guarantees, carrying value net of the reserve as of the consolidated balance sheet dateis the reasonable estimate of the fair values of those loans.
Liabilities(i) Debentures
For floating rate debentures issued by DBJ Inc., the carrying amount is presented as the fair value, as the fairvalue approximates such carrying amount. This is on the basis that the market interest rate is reflected in the fairvalue of such debentures because the terms of these were set within a short time period and that there has beenno significant change in the creditworthiness of DBJ Inc. before and after the issuance. For fixed rate debentureswith market prices, the fair value is determined based on their market price. For fixed rate debentures withoutmarket prices, the fair value is determined by discounting contractual cash flows based on types of maturity
lengths (when interest rate swap contracts which meet the hedging requirements of the accrual method isqualified to debentures, the contractual cash flows are based on the interest rate swap) at the rates that consistof the risk free rate and the rate of certain costs applicable to DBJ Inc. Certain foreign currency denominateddebentures are translated using the forward contract rates and the present value of the contractual cash flows is
computed regarding them as Japanese yen denominated debentures.
(ii) Borrowed money
For floating rate borrowed money, the carrying amount is presented as the fair value, as the fair value
approximates such carrying amount. This is on the basis that the market interest rate is reflected in the fair valueof such borrowed money because the terms of these were set within a short time period for such variable rateborrowings and that there has been no significant change in the creditworthiness of DBJ Inc. nor consolidated
subsidiaries before and after such borrowings were made. For fixed rate borrowed money, the fair values
are determined by discounting contractual cash flows based on types of maturity lengths (when interest rate
swap contracts which meet the hedging requirements of the accrual method is qualified to borrowings, thecontractual cash flows are based on the interest rate swap) at the rates that consist of the risk free rate and therate of certain costs applicable to DBJ Inc. or consolidated subsidiaries.
(iii) Corporate bonds
For floating rate corporate bonds issued by DBJ Inc., the carrying amount is presented as the fair value, as thefair value approximates such carrying amount. This is on the basis that the market interest rate is reflected in theinterest rate set within a short time period and that there has been no significant change in the creditworthinessof us before and after the issuance. For fixed rate corporate bonds with market prices, the fair value isdetermined based on their market price. For fixed rate corporate bonds without market prices, the fair value isdetermined by discounting contractual cash flows based on types of maturity lengths (when interest rate swap
contracts which meet the hedging requirements of the accrual method is qualified to corporate bonds, thecontractual cash flows are based on the interest rate swap) at the rates that consist of the risk free rate and therate of certain costs applicable to DBJ Inc. Certain foreign currency denominated corporate bonds are translatedusing the forward contract rates and the present value of the contractual cash flows is computed regarding themas Japanese yen denominated corporate bonds.
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.

Annual Report & CSR Report 2015167

(2) Following are the financial instruments whose fair value cannot be reliably determined as of March 31,
2015 and 2014:
These securities are not included in the amount in the table summarizing fair values of financial
instruments.
Carrying amountThousands of
U.S. Dollars

Millions of Yen

2015

2014

2015

Money held in trust*1¥ 54,853¥134,215$ 456,467

Unlisted equities*2, 3
Investments in limited partnerships and other similar
partnerships*1
Unlisted other securities*2, 3Industrial investment borrowed money (Special Account for
FILP)*4
Total

326,875

176,406

2,720,109

169,296
57,873

135,578
54,545

1,408,811
481,595

100,000¥708,899

100,000¥600,745

832,154$5,899,137*1. Assets in trust and partnership assets which consist of financial instruments, whose fair value cannot be reliably determined,
such as unlisted equities and other securities, are not subject to disclosing of fair values.
*2. Financial instruments for which the quoted price is not available and fair value cannot be reliably determined, are not subject
to disclosing of fair values.
*3. Impairment loss on financial instruments whose fair value cannot be reliably determined for the year ended March 31, 2015
and 2014 was ¥4,763 million ($39,639 thousand) and ¥1,731 million, respectively. The breakdown is: unlisted equities ¥984
million ($8,194 thousand) and ¥1,269 million, unlisted other securities ¥3,778 million ($31,445 thousand) and ¥462 million forthe years ended March 31, 2015 and 2014, respectively.
*4. For the industrial investment borrowed money (Special Account for FILP), the interest rate is not determined at the time ofborrowing, but total amount of interest expense will be determined at the time of final repayment. Accordingly, since thefuture cash flows cannot be reasonably estimated and the fair value is extremely difficult to identify, it is not subject to the fairvalue disclosure requirement.

(3) Maturity analysis for financial assets and securities with contractual maturities as of March 31, 2015 and2014 are as follows:
Millions of Yen

2015
Due in 1
year or lessDue from banks

Due after 3
years through5 years

Due after 5
years through7 years

Due after 7
years through10 years

Due after
10 years

¥

¥

¥

¥

¥

—

—

—

—

—

Call loans and bills bought

335,000

—

—

—

—

—

Securities
Held-to-maturity debt securities
with market values
Japanese government bonds

276,551—

276,137
81,224

224,772
40,32866,324
10,29536,724
15,12435,17925,179

—

—

—

—

—

—

106,934

119,189

100,205

23,796

11,60010,000169,61775,723

84,23932,232

10,000—6,477—

67,641—

93,412—

90,13542,48839,99130,743

8,116
8,116

—

—

—

—

—

—

6,477

67,641

93,41247,647

5,894

—

—

—

—

—

3,354

—

Japanese local government bonds
Corporate bonds
Other
Available-for-sale securities with
contractual maturities
Japanese government bonds
Japanese local government bonds
Corporate bonds
Other

168

¥ 317,765

Due after 1
year through3 years

Loans*1

2,132,424

4,076,764

3,010,127

1,840,382

1,419,033

702,074

Total¥3,068,218¥4,420,542¥3,328,312¥1,996,842¥1,495,749¥745,369

Annual Report & CSR Report 2015

Millions of Yen

Due in 1
year or lessDue from banks¥ 260,179

Due after 3
years through5 years

Due after 5
years through7 years

Due after 7
years through10 years

Due after
10 years

¥

¥

¥

¥

¥

—

—

—

—

—

Call loans and bills bought

87,000

—

—

—

—

—

Securities
Held-to-maturity debt securities
with market values
Japanese government bonds

72,579406,911

198,855

120,976

49,97030,283—35,783

66,321

20,145

20,38730,283

Japanese local government bonds
Corporate bonds
Other
Available-for-sale securities with
contractual maturities
Japanese government bonds

—

—

—

—

—

—

29,784

199,205

81,97629,98012,500—42,795

171,923

50,55770,851

17,082—

179,074

39,99349,29543,567

21,6993,062

149,994

—

—

5,323

20,801

—

—

—

—

—

—

—

Corporate bonds

24,11539,99349,29538,244

898

—

Other

4,965

—

—

—

—

3,062

Loans*1

2,173,896

4,203,074

2,901,652

2,209,503

1,512,472

739,830

Total¥2,772,730¥4,649,980¥3,149,803¥2,374,048¥1,584,141¥773,175

Due after
10 years

Japanese local government bonds

Financial Condition

2014
Due after 1
year through3 years

Thousands of U.S. Dollars

2015
Due in 1
year or lessDue from banks$ 2,644,302

Due after 1
year through3 years

Due after 3
years through5 years

Due after 5
years through7 years

Due after 7
years through10 years

$

$

$

$

—

—

—

—

$

—

Call loans and bills bought

2,787,717

—

—

—

—

—

Securities
Held-to-maturity debt securities
with market values
Japanese government bonds

2,301,338—

2,297,888
675,9131,870,454
335,592

551,92085,677

305,601
125,856

292,748
209,533

—

—

—

—

—

—

Japanese local government bonds
Corporate bonds
Other
Available-for-sale securities with
contractual maturities
Japanese government bonds
Japanese local government bonds
Corporate bonds
Other889,856

991,840

833,864

198,019

96,53083,215

1,411,482

630,135

700,999

268,223

83,215—53,902—562,878—

777,338—750,065
353,566

332,792
255,829

67,53867,538

—

—

—

—

—

—

53,902562,878

777,338

396,499

49,052

—

—

—

—

—

27,910—Loans*1

17,745,061

33,924,976

25,048,906

15,314,828

11,808,552

5,842,342

Total$25,532,320$36,785,742$27,696,698$16,616,812$12,446,946$6,202,627*1. Obligations to “Legally Bankrupt,” “Effectively Bankrupt” and “Possibly Bankrupt” amount to ¥80,537 million ($670,196
thousand) are not included as of March 31, 2015.
*2. Obligations to “Legally Bankrupt,” “Effectively Bankrupt” and “Possibly Bankrupt” amount to ¥97,980 million are notincluded as of March 31, 2014.

Annual Report & CSR Report 2015169

(4) Maturity analysis for Debentures, Borrowed money and Other Liability with Interest as of March 31, 2015
and 2014 are as follows:
Millions of Yen

2015

Borrowed money
Debentures and Corporate bonds
Total

Due in 1
year or lessDue after 1
year through3 years

Due after 3
years through5 years

Due after 5
years through7 years

Due after 7
years through10 years

Due after
10 years¥1,412,658¥2,296,269¥1,811,920¥1,042,815¥1,110,694¥ 923,862

540,420

1,563,394

1,018,110

428,803

719,934

298,645¥1,953,079¥3,859,663¥2,830,030¥1,471,619¥1,830,628¥1,222,507

Millions of Yen

2014

Borrowed money
Debentures and Corporate bonds
Total

Due in 1
year or lessDue after 1
year through3 years

Due after 3
years through5 years

Due after 5
years through7 years

Due after 7
years through10 years

Due after
10 years¥1,409,305¥2,452,745¥2,010,249¥1,086,772¥1,237,236¥ 986,294

455,003

1,343,913

1,097,112

348,951

703,846

288,592¥1,864,309¥3,796,658¥3,107,362¥1,435,724¥1,941,082¥1,274,887

Due after 7
years through10 years

Due after
10 yearsThousands of U.S. Dollars

2015
Due in 1
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$11,755,502 $19,108,507 $15,077,975 $ 8,677,835 $ 9,242,690 $ 7,687,961
4,497,133

13,009,856

8,472,249

3,568,309

5,990,966

2,485,189$16,252,635 $32,118,363 $23,550,225 $12,246,145 $15,233,656 $10,173,150

28. Derivative Transactions(a) Derivative Transactions to which Hedge Accounting is not applied(1) Interest Rate-related Transactions
Millions of Yen

2015
Contract amountTotal

Due after 1 year

Fair value

Unrealized gains(losses)

Receive fixed/ Pay float¥852,007¥787,406¥ 22,068¥ 22,068

Receive float/ Pay fixed

845,243782,892(16,259)(16,259)——¥ 5,808¥ 5,808

Over-the-counter
Swaps

Total

Millions of Yen

2014
Contract amountTotal

Due after 1 year

Fair value

Unrealized gains(losses)

Receive fixed/ Pay float¥774,581¥666,807¥ 18,074¥ 18,074

Receive float/ Pay fixed

771,825

664,035(12,971)(12,971)——¥ 5,102¥ 5,102

Over-the-counter
Swaps

Total

170

Annual Report & CSR Report 2015

Thousands of U.S. Dollars

Total

Due after 1 year

Fair value

Unrealized gains(losses)

Receive fixed/ Pay float$7,090,021$6,552,440$ 183,643$ 183,643

Receive float/ Pay fixed

7,033,735

6,514,877(135,303)(135,303)——$ 48,340$ 48,340

Financial Condition

2015
Contract amount

Over-the-counter
Swaps

Total

*1. The above transactions are marked to market and changes in unrealized gains (losses) are included in the consolidated
statement of income.
*2. Fair values for the over-the-counter transactions are based primarily on discounted present values.

(2) Currency-related Transactions
Millions of Yen

2015
Contract amount
Total

Over-the-counter
Swaps
Forwards
Sold
BoughtTotal

Due after 1 year

Fair value

Unrealized gains(losses)¥ 73,147¥73,147¥(17,921)¥(17,921)

256,929
1,256
—

—
—

1,297
(1)
¥(16,626)

1,297
(1)
¥(16,626)—
Millions of Yen

2014
Contract amount
Total

Over-the-counter
Swaps
Forwards
Sold
BoughtTotal

Due after 1 year

Fair value

Unrealized gains(losses)¥ 97,497¥97,497¥(7,331)¥(7,331)

263,016
2,223
—

—
—

(141)
41
¥(7,431)(141)
41¥(7,431)—

Thousands of U.S. Dollars

2015
Contract amountTotal

Due after 1 year

Fair value

Unrealized gains(losses)$ 608,700$608,700$(149,136)$(149,136)

Over-the-counter
Swaps
Forwards
Sold2,138,051—

10,794

10,794

Bought10,452

—

(12)

(12)

$(138,355)$(138,355)

Total

—

—

*1. The above transactions are marked to market and changes in unrealized gains (losses) are included in the consolidated
statement of income.
*2. Fair values are based primarily on discounted present values.

(3) Equity-related Transactions
Not applicable.
(4) Bond-related Transactions
Not applicable.
(5) Commodity-related Transactions
Not applicable.
Annual Report & CSR Report 2015171

(6) Credit Derivatives Transactions
Millions of Yen

2015
Contract amountTotal

Due after 1 year

Unrealized gains(losses)

Fair value

Over-the-counter
Credit default options
Sold¥20,404¥20,404

Bought

3,500

3,500

(113)

(113)

—

—

¥(112)¥(112)

Total

¥

0

¥

0

Millions of Yen

2014
Contract amountTotal

Due after 1 year

Unrealized gains(losses)

Fair value

Over-the-counter
Credit default options
Sold¥31,035¥31,035¥(152)¥(152)————¥(152)¥(152)

BoughtTotal——

Thousands of U.S. Dollars

2015
Contract amount

Unrealized gains(losses)Total

Due after 1 year

Fair valueSold$169,795$169,795$

Bought29,12529,125

(940)

(940)

—

—

$(938)$(938)

Over-the-counter
Credit default options

Total

2

$

2

*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.

(b) Derivative Transactions to which Hedge Accounting is applied(1) Interest Rate-related Transactions
Millions of Yen
2015
Contract amount
Hedged item

Deferral method
Swaps
Receive fixed/ Pay float
Receive float/ Pay fixed
Accrual method
Swaps
Receive fixed/ Pay float
Receive float/ Pay fixed
Total

172

Annual Report & CSR Report 2015

Debentures,
Borrowed money,
Securities and Loans
Debentures,
Borrowed money,
Corporate bonds andLoans

Due after 1 year

Fair value¥ 309,247¥308,664¥39,60335,19530,347(1,560)1,011,685

843,262*3

57,31132,355

—

—

Total

¥38,043

Millions of Yen

Financial Condition

2014
Contract amount
Hedged item

Deferral method
Swaps
Receive fixed/ Pay float
Receive float/ Pay fixed
Accrual method
Swaps
Receive fixed/ Pay float
Receive float/ Pay fixed

Debentures,
Borrowed money andLoans
Debentures,
Borrowed money,
Corporate bonds and
Loans

Total

Due after 1 year

Fair value¥404,830¥389,247¥42,239

32,60027,195(1,861)

798,819753,295*3

57,07456,956

—

—

Total

¥40,377

Thousands of U.S. Dollars
2015
Contract amount
Hedged item

Deferral method
Swaps
Receive fixed/ Pay float
Receive float/ Pay fixed
Accrual method
Swaps
Receive fixed/ Pay float
Receive float/ Pay fixed

Debentures,
Borrowed money,
Securities and Loans
Debentures,
Borrowed money,
Corporate bonds and
Loans

Total

Total

Due after 1 year

Fair value$2,573,415$2,568,561$329,563

292,881

252,535(12,984)

8,418,788

7,017,248*3

476,923

269,247——$316,579*1. DBJ Inc. applies the deferral method of hedge accounting primarily stipulated in “Accounting and Auditing Treatments on the
Application of Accounting Standards for Financial Instruments in Banking Industry”(JICPA Industry Audit Committee Report
No. 24).
*2. Fair values for the over-the-counter transactions are based primarily on discounted present values.
*3. The above interest rate swap contracts which qualify for the hedging requirements of the accrual method are not remeasured
at fair value but the differential paid or received under the swap agreements are recognized and included in interest expense or
income. In addition, the fair value of such interest rate swaps in Note 27 “Financial Instruments and Related Disclosures” isincluded in that of hedged items such as debentures, borrowed money, corporate bonds and loans.

(2) Currency-related Transactions
Millions of Yen
2015
Contract amountTranslated at contractual rates
Currency swaps
Forward foreign exchange
contracts
Sold

Hedged item

Total

Due after 1 year

Foreign-currency debentures
and Corporate bonds¥155,782¥151,855*2

51,065—¥1,787———Available-for-salesecurities

BoughtTotal——

Fair value¥1,787

Annual Report & CSR Report 2015

173

Millions of Yen
2014
Contract amountTranslated at contractual rates
Currency swaps
Forward foreign exchange
contracts
Sold

Hedged item

Total

Due after 1 year

Foreign-currency debentures
and Corporate bonds¥102,302¥102,302*2

39,368—¥(370)———

Available-for-salesecurities

BoughtTotal——

Fair value¥(370)

Thousands of U.S. Dollars
2015
Contract amountTranslated at contractual rates
Currency swaps
Forward foreign exchange
contracts
Sold

Hedged item

Total

Due after 1 year

Fair value

Foreign-currency debentures
and Corporate bonds$1,296,354$1,263,676*2

424,948—$14,875———

Available-for-salesecurities

BoughtTotal——$14,875*1. Fair values are based primarily on discounted present values.
*2. The above currency swaps which qualify for the hedging requirements of assignment method are not subject to the disclosureof fair value information. In addition, the fair value of such foreign currency swaps in Note 27 “Financial Instruments andRelated Disclosures” is included in that of hedged items such as foreign-currency debentures and corporate bonds.

(3) Equity-related Transactions
Not applicable.
(4) Bond-related Transactions
Not applicable.

29. Fair Value of Securities and Money Held in Trust
Fair value of securities, money held in trust and negotiable certificate of deposit classified as “Cash and due from banks” asof March 31, 2015 and 2014 is summarized below.

174

Annual Report & CSR Report 2015

Financial Condition(a) Securities(1) Held-to-maturity Debt Securities as of March 31, 2015 and 2014, are as follows:
Millions of Yen

2015

Fair value exceeds
carrying amount

Carrying amount

Fair value

Difference¥172,151¥182,880¥10,728———

Corporate bonds

308,070

313,567

5,496

Other

306,557

312,569

6,012

786,779

809,017

22,237———

Japanese government bonds
Japanese local government bonds

Sub-total
Fair value does not
Japanese government bonds
exceed carrying amount Japanese local government bonds
Corporate bonds
Other

—

—

—

63,65463,350(303)

65,25564,906(349)

Sub-total

128,909

128,256

(652)

Total

¥915,689¥937,274¥21,584

Millions of Yen

2014

Fair value exceeds
carrying amountJapanese government bonds
Japanese local government bonds
Corporate bonds
Other

Sub-total
Fair value does not
Japanese government bonds
exceed carrying amount Japanese local government bonds
Corporate bonds
Other
Sub-total
Total

Carrying amount

Fair value

Difference¥172,921—
293,495
234,667
701,085——
59,950118,541
178,491¥879,576¥183,241—
299,025
242,233
724,500——
59,657
117,412
177,070¥901,570¥10,319
—
5,529
7,565
23,414——(292)(1,128)(1,420)¥21,993

Thousands of U.S. Dollars

2015

Fair value exceeds
carrying amountJapanese government bonds
Japanese local government bonds
Corporate bonds
Other

Sub-total
Fair value does not
Japanese government bonds
exceed carrying amount Japanese local government bonds
Corporate bonds
Other
Sub-total
Total

Carrying amount

Fair value

Difference$1,432,570—
2,563,626
2,551,029
6,547,225——
529,700
543,025
1,072,724$7,619,949$1,521,848—
2,609,366
2,601,064
6,732,279——
527,172
540,119
1,067,291$7,799,569$ 89,278—
45,74050,035
185,054——(2,528)(2,906)(5,434)$179,620

Note: Fair value is based on the closing price at the consolidated balance sheet date.

Annual Report & CSR Report 2015175

(2) Available-for-sale Securities as of March 31, 2015 and 2014, are as follows:
Millions of Yen

2015

Carrying amountexceeds cost

Sub-total
Carrying amount does
not exceed cost

Equities
Bonds
Japanese government bonds
Japanese local government bonds
Corporate bonds
Other
Equities
Bonds
Japanese government bonds
Japanese local government bonds
Corporate bonds
Other

Sub-total
Total

Carrying amount(Fair value)

Acquisition cost

Difference¥106,846
271,942
81,347—
190,595
6,485
385,2732,390
30,477——30,47772,028104,897¥490,171¥ 33,475
238,259
80,160—
158,099
3,810
275,5452,419
30,755——30,75572,028105,204¥380,750¥ 73,371
33,682
1,186—
32,496
2,674
109,728
(29)
(278)
—
—
(278)
—
(307)
¥109,421

Millions of Yen

2014

Carrying amountexceeds cost

Carrying amount(Fair value)

Acquisition cost

Difference

Equities¥ 50,573¥ 25,305¥25,267

Bonds

251,628

238,910

12,717

121,142

121,067

74

—

—

—

130,486

117,842

12,643

11,911

3,804

8,106

314,113

268,02146,092

Japanese government bonds
Japanese local government bonds
Corporate bonds
Other
Sub-total
Carrying amount does
not exceed cost

Equities

56

75

(18)

Bonds

77,03877,081(43)

54,97654,996

(20)

—

—

—

22,06222,085(23)

40,27140,280(9)Japanese government bonds
Japanese local government bonds
Corporate bonds
Other

176

Sub-total

117,366

117,437

(71)

Total

¥431,479¥385,458¥46,021

Annual Report & CSR Report 2015

Thousands of U.S. Dollars

Carrying amountexceeds cost

Acquisition cost

Difference

Equities$ 889,130$ 278,565$610,565

Bonds

2,262,9781,982,689

280,289

676,933

667,060

9,872

—

—

—

1,586,045

1,315,628

270,41753,966

31,71022,256

3,206,074

2,292,963

913,111

Japanese government bonds
Japanese local government bonds
Corporate bonds
Other
Sub-total
Carrying amount does
not exceed cost

Equities

19,895

20,137

(243)

Bonds

253,624

255,937(2,313)

Japanese government bonds

—

—

—

Japanese local government bonds

—

—

—

253,624

255,937(2,313)599,392

599,392—

Corporate bonds
Other
Sub-total
Total

872,911875,467(2,556)$4,078,985$3,168,430$910,555

Financial Condition

2015
Carrying amount(Fair value)

Note: Carrying amount above represents the fair values determined based on the closing price at the fiscal year-end.

(3) Available-for-sale Securities sold during the year ended March 31, 2015 and 2014, are as follows:
Millions of Yen

2015
Proceeds from sales

Total amount ofgains on sales

Equities¥36,599¥18,226

¥ 1

Bonds

20,203

94

1

Japanese government bonds

—

—

—

Japanese local government bonds

—

—

—

Corporate bonds

Total amount oflosses on sales

20,203

94

1

Other

2,579

1,354

—

Total

¥59,382¥19,675¥ 2

Millions of Yen

2014
Proceeds from sales

Total amount ofgains on sales

Total amount oflosses on sales

Equities¥ 17,965¥1,439

¥ 77

Bonds

172,111

1,543

85

161,843

1,389

81

—

—

—

10,267

153

4

Japanese government bonds
Japanese local government bonds
Corporate bonds
Other

6,162

2,022

530

Total

¥196,238¥5,005¥692

Annual Report & CSR Report 2015

177

Thousands of U.S. Dollars
2015
Proceeds from sales

Total amount ofgains on sales

Equities$304,566$151,674

$11

Bonds

168,122

789

12

—

—

—

Japanese government bonds
Japanese local government bonds
Corporate bonds

Total amount oflosses on sales

—

—

—

168,122

789

12

Other

21,462

11,271—

Total$494,150$163,734$23(b) Money Held in Trust(1) Money Held in Trust for the Purpose of Investment
Not applicable.
(2) Other (other than for the purpose of investment and held to maturity)
Millions of Yen

2015
Unrealized gains (losses)

Other money held in trust

Carrying
amountAcquisition
cost¥54,853¥54,451

Net

Carrying amountexceeds cost

(Carrying amount
does not exceed
cost)

¥401

¥401

¥—

Millions of Yen

2014
Unrealized gains (losses)

Other money held in trust

Carrying
amountAcquisition
cost¥134,215¥133,957

Net

Carrying amountexceeds cost

(Carrying amount
does not exceed
cost)

¥258

¥258

¥—

Thousands of U.S. Dollars

2015
Unrealized gains (losses)

Other money held in trust

Carrying
amountAcquisition
cost$456,467$453,125

Net

Carrying amountexceeds cost

(Carrying amount
does not exceed
cost)$3,343$3,343$—(c) Unrealized Gain on Available-for-sale Securities
The breakdown of unrealized gain on available-for-sale securities is as follows:
Thousands of
U.S. Dollars

Millions of Yen

2015

2014

2015

¥132,657¥ 60,668$1,103,917

Unrealized gain on
Available-for-sale securities

401

258

3,343

Deferred tax liabilities

Other money held in trust(39,142)(18,103)(325,725)

Unrealized gain on available-for-sale securities before interest
adjustments

93,91742,822

781,535

Amount corresponding to minority interests(8,023)(5,110)(66,768)

(28)

55

(233)

¥ 85,865¥ 37,767$ 714,533

DBJ Inc.’s interest in net unrealized gain on available-for-salesecurities held by affiliates accounted for by the equity method
Unrealized gain on available-for-sale securities, net of taxes

178

Annual Report & CSR Report 2015

Financial Condition*1. The profit of ¥5,170 million ($43,023 thousand) and ¥4,496 million recognized by applying the fair value hedge accounting, which wasreflected in profit or loss, is deducted from above unrealized gain on available-for-sale securities, net of taxes, as of March 31, 2015
and 2014, respectively.
*2. Unrealized gain includes foreign currency translation adjustments on available-for-sale securities denominated in foreign currency
whose fair value cannot be reliably determined as of March 31, 2015 and 2014.

30. Related Party Transactions
Related party transactions for the years ended March 31, 2015 and 2014 are as follows:
2015
Amounts of the transactions
Related party

Finance
MinisterCategory

Balance at March 31, 2015

Account item

Millions of Yen

Thousands of
U.S. Dollars¥ 300,000$ 2,496,463

Repayments

Borrowedmoney

447,275

3,722,021

Payment forinterest

Accruedexpenses

44,822

Guarantees*2—

2,895,482

Description

Shareholder Borrowings*1

Millions of Yen

Thousands of
U.S. Dollars¥4,066,419$33,838,891

372,995

13,687

113,897

24,094,889——

According to Article 2, item 5 of the Japan Finance Corporation Act, DBJ Inc. has borrowed ¥3,286,500 million ($27,348,756
thousand) from Japan Finance Corporation relating to the crisis response business.
*1. DBJ Inc. has borrowed from the fiscal investment and loan program funds, and applied interest rates for fiscal investment and loan. The
last redemption period is October 20, 2034 without putting up collateral.
*2. The guarantees are for debentures issued by DBJ Inc. free of guarantee charge.

2014
Related party

Finance
MinisterCategory

Amounts of the transactions

Balance at March 31, 2014

Account item

Millions of Yen

Millions of Yen¥ 300,000

Repayments

Borrowed
money

Payment forinterest

Accruedexpenses

51,734

14,456

Guarantees*2—

2,652,005—

Description

Shareholder Borrowings*1¥4,213,694

552,313

According to Article 2, item 5 of the Japan Finance Corporation Act, DBJ Inc. has borrowed ¥3,764,887 million from Japan FinanceCorporation relating to the crisis response business.
*1. DBJ Inc. has borrowed from the fiscal investment and loan program funds, and applied interest rates for fiscal investment and loan. The
last redemption period is October 20, 2033 without putting up collateral.
*2. The guarantees are for debentures issued by DBJ Inc. free of guarantee charge.

31. SUBSEQUENT EVENTOn June 26, 2015, the shareholders meeting resolved the following appropriations of retained earnings. After that, thetiming and amounts for dividends were authorized by the Finance Minister on June 29, 2015:
Appropriations of Retained earnings as of March 31, 2015

Year-end cash dividends-Common stock (¥516-$4.29 per share)

Millions of Yen

Thousands of
U.S. Dollars¥22,514$187,354

Annual Report & CSR Report 2015179

Independent Auditor’s Report

180

Annual Report & CSR Report 2015

Non-Consolidated Balance Sheet (Unaudited)
Development Bank of Japan Inc.

As of March 31,

2015

2014

Financial Condition

Thousands of
U.S. Dollars (Note)

Millions of Yen

2015

AssetsCash and due from banks
Call loans¥

287,698
335,000¥

240,52287,000$2,394,092
2,787,717

Reverse repurchase agreements

5,299

—

44,103

Money held in trust

53,742

134,215447,225

Securities

1,848,890

1,592,461

15,385,627

Loans

13,409,078

13,963,046

111,584,243

Other assets

138,722

113,707

1,154,388

Tangible fixed assets

114,863

116,585

955,841

Intangible fixed assets

5,279

5,424

43,936

Prepaid pension costs

1,326

—

11,035

Customers’ liabilities for acceptances and guarantees

167,482

107,174

1,393,713

Allowance for loan losses(83,460)(111,716)(694,519)

(525)

(459)

(4,369)¥16,283,399¥16,247,962$135,503,033

Allowance for investment losses
Total assets
Liabilities and equity
Liabilities:
Debentures¥ 3,220,206¥ 3,085,674$ 26,797,089

Borrowed money

8,566,219

9,150,398

71,284,181

Corporate bonds

1,341,602

1,144,246

11,164,202

Other liabilities

218,200

127,069

1,815,767

4,415

4,415

36,740Accrued bonuses to employees
Accrued bonuses to directors

11

11

97

6,601

7,118

54,938Reserve for directors’ retirement benefits

66

69

552

Reserve for contingent losses

12

7

104

Reserve for employees’ retirement benefits

Deferred tax liabilities

39,175

11,695

326,002

Acceptances and guarantees

167,482

107,174

1,393,713

13,563,994

13,637,880

112,873,384

Total liabilities
Equity:Common stock authorized, 160,000 thousand shares in 2015 and2014; issued, 43,632 thousand shares in 2015 and 2014

1,206,953

1,206,953

10,043,713

Capital surplus

1,060,466

1,060,466

8,824,718

Retained earnings

335,018

275,716

2,787,874

Unrealized gain on available-for-sale securities

84,74937,703705,247

Deferred gain on derivatives under hedge accounting

32,217

29,243

268,096

Total equity
Total liabilities and equity

2,719,404

2,610,081

22,629,649¥16,283,399¥16,247,962$135,503,033

Note: Amounts in U.S. dollars are presented solely for the convenience of readers outside Japan. The rate of ¥120.17=$1.00, the effective
exchange rate prevailing as of March 31, 2015, has been used in the conversion.

Annual Report & CSR Report 2015181

Non-Consolidated Statement of Income (Unaudited)
Development Bank of Japan Inc.

Thousands of
U.S. Dollars (Note)

Millions of Yen

For the year ended March 31,

2015

2014

2015

IncomeInterest income:¥236,107¥255,448$1,964,776

Interest on loans

207,042

229,860

1,722,913

Interest and dividends on securities

20,74817,378

172,661Interest on call loans

149

98

1,245

Interest on reverse repurchase agreements

231

282

1,928

Interest on due from banks

46

36

390

7,720

7,680

64,246

167

110

1,394

Fees and commissions

8,091

13,087

67,337

Other operating income

14,015

10,899116,633

Other income

70,57570,957587,296328,790

350,392

2,736,042

117,846

132,090980,667

36,48839,773

303,641

Interest on swaps
Other interest income

Total income
Expenses
Interest expense:
Interest on debentures
Interest on call money and bills soldInterest on borrowed money
Interest on short-term corporate bonds
Interest on corporate bonds
Other interest expense
Fees and commissions

0

7

2

76,78587,766

638,975

12

32

103

4,497

4,488

37,429

62

20

518

662

235

5,514

10,751

7,224

89,466

General and administrative expenses

40,35240,323335,799

Other expenses

10,974

6,536

91,327

Total expenses

180,588

186,410

1,502,772

Income before income taxes

148,202

163,982

1,233,270

50,322

24,588418,762

Other operating expenses

Income taxes:
Current
Deferred
Total income taxes
Net income

7,798

16,15364,89858,12140,741

483,660¥ 90,080¥123,240$ 749,610

Note: Amounts in U.S. dollars are presented solely for the convenience of readers outside Japan. The rate of ¥120.17=$1.00, the effective
exchange rate prevailing as of March 31, 2015, has been used in the conversion.

182

Annual Report & CSR Report 2015

Non-Consolidated Statement of Changes in Equity (Unaudited)
Development Bank of Japan Inc.

For the year ended March 31,

2015

2014

Financial Condition

Thousands of
U.S. Dollars (Note)

Millions of Yen

2015

Common stock:
Balance at beginning of year
Cumulative effects of changes in accounting policies¥1,206,953¥1,206,953$10,043,713

—

—

—

Restated balance

1,206,953

1,206,953

10,043,713

Balance at end of year

1,206,953

1,206,953

10,043,713

1,060,466

1,060,466

8,824,718

Capital surplus:
Balance at beginning of year

Cumulative effects of changes in accounting policies

—

—

—

Restated balance

1,060,466

1,060,466

8,824,718

Balance at end of year

1,060,466

1,060,466

8,824,718

275,716

187,730

2,294,384

Retained earnings:
Balance at beginning of year

Cumulative effects of changes in accounting policies

26

—

221

Restated balance

275,742

187,730

2,294,605

Cash dividends(30,804)(35,254)(256,341)

Net income

90,080123,240

749,610

Balance at end of year

335,018

275,716

2,787,874

37,70327,707313,747———

Restated balance

37,70327,707313,747

Net change during the year

47,046

9,995

391,500

Balance at end of year

84,74937,703705,247

29,24333,803

243,351

Unrealized gain on available-for-sale securities:
Balance at beginning of year

Cumulative effects of changes in accounting policies

Deferred gain on derivatives under hedge accounting:
Balance at beginning of year

Cumulative effects of changes in accounting policies
Restated balance

—

—

—

29,24333,803

243,351

Net change during the year

2,973

(4,560)24,745

Balance at end of year

32,217

29,243

268,096

2,610,081

2,516,661

21,719,913

26

—

221

Total equity:
Balance at beginning of year
Cumulative effects of changes in accounting policies

2,610,108

2,516,661

21,720,134

Cash dividends

Restated balance(30,804)(35,254)(256,341)

Net income

90,080123,240

749,610

Net change during the year

50,0205,435

416,245¥2,719,404¥2,610,081$22,629,649

Balance at end of year

Note: Amounts in U.S. dollars are presented solely for the convenience of readers outside Japan. The rate of ¥120.17=$1.00, the effective
exchange rate prevailing as of March 31, 2015, has been used in the conversion.

Annual Report & CSR Report 2015

183

Capital Adequacy Ratio

Although DBJ is not yet subject to Article 14-2 of the Banking Act of Japan, capital adequacy ratios have been calculated inaccordance with “Criteria for Judging Whether a Financial Institution’s Own Capital Is Sufficient in Light of the Assets Held,etc. under the Provision of Article 14-2 of the Banking Act” (2006, Financial Services Agency Notification No. 19,
hereinafter, the “Capital Adequacy Ratio Notification”), and therefore effectively conform to this act.
(Reference)
In addition to the application of uniform international standards, credit risk assets were calculated using the standardized
approach, and equivalent operational risk was calculated using the basic indicator approach. The DBJ Group has not
introduced procedures in line with market risk regulations.

[1] Capital Structure Information
Capital Structure Information (Consolidated)(Millions of yen)March 31, 2015
Items

Common Equity Tier 1 capital: instruments andreserves
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 andother disclosed reserves
Adjusted minority interests, etc. (amount allowed to be
included in group Common Equity Tier 1)
Total of items included in Common Equity Tier 1
capital: instruments and reserves subject totransitional arrangementsof which: items included in minority interests, etc.
subject to transitional arrangements
Common Equity Tier 1 capital: instruments andreserves (A)Common Equity Tier 1 capital: regulatory
adjustments
Total intangible assets (excluding those relating tomortgage servicing rights)
of 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
Shortfall of eligible reserves to expected losses
Capital increase due to securitization transactions
Gains and losses due to changes in own credit risk onfair valued liabilities
Assets for retirement benefits
Investments in own shares (excluding those reported in
the Equity section)
Reciprocal cross-holdings in common equity

184

Annual Report & CSR Report 2015

March 31, 2014

Amounts
excluded undertransitionalarrangements

2,589,627
2,267,419
344,728—
22,520——48,312

Amounts
excluded undertransitionalarrangements

2,519,342
2,267,419
282,733—
30,810——72,46913,507

24

19

1,838

1,150

1,838

1,150

2,639,803

2,534,020

Basel III
Template No.

1a+2-1c-26
1a
2
1c
26
1b
54,031

3
5

6

1,781

2,671

893

3,574

8+9

333

500

188

753

1,447

2,171

705

2,820 9

80

120

—

—

13,324——

19,987
—
—

6,001
—
—

—
676

—
1,014

—
—

—
—

—
—

—
—

—
—

— 16
— 17

8

10

24,005 11
— 12
— 13
14
15

(Millions of yen)

Items

Investments in the capital of banking, financial andinsurance 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 rightsof which: deferred tax assets arising from temporary
differences (net of related tax liability)
Amount exceeding the 15% threshold on specified
items
of which: significant investments in the common
stock of Other Financial Institutions, net of eligible
short positionsof which: mortgage servicing rightsof 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 andTier 2 to cover deductions
Common Equity Tier 1 capital: regulatory adjustments(B)
Common Equity Tier 1 capital (CET1)
Common Equity Tier 1 capital (CET1) ((A)-(B)) (C)Additional Tier 1 capital: instruments
Directly issued qualifying Additional Tier 1 instruments
plus related capital surplus of which: classified as
equity under applicable accounting standards andthe 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 asliabilities under applicable accounting standards
Qualifying Additional Tier 1 instruments plus related
capital surplus issued by special purpose vehicles andother equivalent entities
Adjusted minority interests, etc. (amount allowed to be
included in group Additional Tier 1)
Eligible Tier 1 capital instruments subject to transitionalarrangements included in Additional Tier 1 capital:
instrumentsof which: instruments issued by banks and their
special purpose vehiclesof which: instruments issued by subsidiaries(excluding banks’ special purpose vehicles)

March 31, 2014

Amounts
excluded undertransitionalarrangements

Amounts
excluded undertransitionalarrangements

Financial Condition

March 31, 2015

Basel III
Template No.

—

—

—

—

18

—

—

—

—

19+20+21

—
—

—
—

—
—

— 19
— 20

—

—

—

—

21

—

—

—

—

22

—
—

—
—

—
—

— 23
— 24

—

—

—

—

25

—

—

27

15,8626,894

28

2,623,941

2,527,125

29

—

—

31a

—

—

31b

—

—

32

—

—

10,599

7,495

34-35

—

—

33+35

—

—

33

—

—

35

30

Annual Report & CSR Report 2015

185

(Millions of yen)March 31, 2015
Items

Total of items included in Additional Tier 1 capital:
items subject to transitional arrangementsof which: foreign currency translation adjustmentsof which: items included in minority interests, etc.
subject to transitional arrangements
Additional Tier 1 capital: instruments (D)Additional Tier 1 capital: regulatory adjustments
Investments in own Additional Tier 1 instruments
Reciprocal cross-holdings in Additional Tier 1
instruments
Investments in the capital of banking, financial andinsurance entities that are outside the scope of
regulatory consolidation, net of eligible shortpositions, where the bank does not own more than
10% of the issued common share capital of the entity(amount above the 10% threshold)
Significant investments in the Additional Tier 1 capitalof Other Financial Institutions (net of eligible shortpositions)
Total of items included in Additional Tier 1 capital:
regulatory adjustments subject to transitionalarrangementsof which: goodwill
Regulatory adjustments applied to Additional Tier 1
due to insufficient Tier 2 to cover deductions
Additional Tier 1 capital: regulatory adjustments (E)Additional Tier 1 capital (AT1)
Additional Tier 1 capital ((D)-(E)) (F)Tier 1 capital (T1 = CET1 + AT1)
Tier 1 capital (T1 = CET1 + AT1) ((C)+(F)) (G)Tier 2 capital: instruments and reserves
Directly issued qualifying Tier 2 instruments plus related
capital surplus of which: classified as equity underapplicable 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 underapplicable accounting standards
Tier 2 instruments plus related capital surplus issued by
special purpose vehicles and other equivalent entities
Adjusted minority interests, etc. (amount allowed to be
included in group Tier 2)
Eligible Tier 2 capital instruments subject to transitionalarrangements included in Tier 2: instruments andreservesof which: instruments issued by banks and their
special purpose vehiclesof which: instruments issued by subsidiaries(excluding banks’ special purpose vehicles)
Total of general allowance for loan losses and eligible
reserves included in Tier 2of which: general allowance for loan lossesof which: eligible reserves

186

Annual Report & CSR Report 2015

March 31, 2014

Amounts
excluded undertransitionalarrangements

Amounts
excluded undertransitionalarrangements

1,269
970

567
567

299
11,869—8,063

Basel III
Template No.

36

—

—

—

—

37

—

—

—

—

38

—

—

—

—

39

24

37

204

816

40

500
500

753
753

—
525

—
957

42
43

11,3437,105

44

2,635,285

2,534,231

45

—

—

—

—

—

—

—

—

157

133

48-49

—

—

47+49

—

—

47

—

—

49

46,58046,580—59,12959,129
—

50
50a
50b

46

(Millions of yen)

Items

Total of items included in Tier 2 capital: instruments
and reserves subject to transitional arrangementsof which: items included in accumulated othercomprehensive income, etc. subject to transitionalarrangements
Tier 2 capital: instruments and reserves (H)Tier 2 capital: regulatory adjustments
Investments in own Tier 2 instruments
Reciprocal cross-holdings in Tier 2 instruments
Non-significant Investments in the Tier 2 capital of
Other Financial Institutions, net of eligible shortpositions (amount above the 10% threshold)
Significant investments in the Tier 2 capital of Other
Financial Institutions (net of eligible short positions)
Total of items included in Tier 2 capital: regulatory
adjustments subject to transitional arrangements
Tier 2 capital: regulatory adjustments (I)Tier 2 capital (T2)
Tier 2 capital (T2) ((H)-(I)) (J)Total capital (TC = T1 + T2)
Total capital (TC = T1 + T2) ((G) + (J)) (K)Risk weighted assets
Total of items included in risk weighted assets subject
to transitional arrangementsof which: other intangible fixed assets other than
goodwill and mortgage servicing rightsof which, significant investments in the Additional
Tier 1 capital of Other Financial Institutions (net of
eligible short positions)of which: deferred tax assets that rely on future
profitability excluding those arising from temporary
differences (net of related tax liability)of which: net defined benefit assets
Risk weighted assets (L)Capital ratio (consolidated)
Common Equity Tier 1 risk-weighted capital ratio(consolidated) ((C)/(L))
Tier 1 risk-weighted capital ratio (consolidated) ((G)/(L))
Total risk-weighted capital ratio (consolidated) ((K)/(L))
Regulatory adjustments
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 fordeduction (before risk weighting)Mortgage servicing rights that are below the thresholds
for deduction (before risk weighting)Deferred tax assets arising from temporary differencesthat are below the thresholds for deduction (before
risk weighting)March 31, 2014

Amounts
excluded undertransitionalarrangements

Amounts
excluded undertransitionalarrangements

35,905

21,95335,90582,642

21,953
81,216

Financial Condition

March 31, 2015

Basel III
Template No.

51

—
—

—
—

—
—

—
—

52
53

—

—

—

—

54

—

—

—

—

55

—
—

—
—

57

82,642

81,21658

2,717,927

2,615,448

59

3,343

3,637

2,171

2,820

37

816

120
1,014
16,173,097——
16,516,658

60

16.22%
16.29%
16.80%

15.30%
15.34%
15.83%

61
62
63

82,005

136,764

72

966

1,059

73

—

—

74

1,890

2,075

75

Annual Report & CSR Report 2015

187

(Millions of yen)March 31, 2015
Items

Reserves included in Tier 2 capital: instruments
and reserves
General allowance for loan losses
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 internalratings-based approach
Capital instruments subject to transitionalarrangements
Current cap on Additional Tier 1 instruments subject totransitional arrangements
Amount excluded from Additional Tier 1 due to cap(excess over cap after redemptions and maturities)
Current cap on Tier 2 instruments subject totransitional arrangements
Amount excluded from Tier 2 due to cap (excess overcap after redemptions and maturities)

188

Annual Report & CSR Report 2015

March 31, 2014

Amounts
excluded undertransitionalarrangements

Amounts
excluded undertransitionalarrangements

Basel III
Template No.

46,580199,133

59,129202,584

76
77

—

—

78

—

—

79

—

—

82

—

—

83

—

—

84

—

—

85

Capital Structure Information (Non-Consolidated)(Millions of yen)March 31, 2014

Amounts
excluded undertransitionalarrangements

Items

Amounts
excluded undertransitionalarrangements

Financial Condition

March 31, 2015

Basel III
Template No.

Common Equity Tier 1 capital: instruments andreserves
Directly issued qualifying common share capital plus
related capital surplus and retained earnings

2,579,918

2,512,325

of which: common stock and capital surplus

2,267,419

2,267,419

1a335,018

275,7162of which: retained earningsof which: treasury stock

1a+2-1c-26

—

—

1c

22,52030,81026

of which: other than the above——

Rights to acquire new common shares——of which: planned distribution of income

Valuation and translation adjustment and otherdisclosed reserves

46,786

Total of items included in Common Equity Tier 1
capital: instruments and reserves subject totransitional arrangements——

Common Equity Tier 1 capital: instruments andreserves (A)2,626,704

2,525,714

70,17913,3891b53,557

3

6

Common Equity Tier 1 capital: regulatory
adjustments
Total intangible assets (excluding those relating tomortgage servicing rights)

1,428

2,143

698

2,793

of which: goodwill (including those equivalent)

—

—

—

—

8

1,428

2,143

698

2,793

9

Deferred tax assets that rely on future profitability
excluding those arising from temporary differences(net of related tax liability)

—

—

—

—

10

Deferred gains or losses on derivatives under hedge
accountingof which: other intangible assets other than goodwill
and mortgage servicing rights

8+9

12,886

19,3305,848

23,39411

Shortfall of eligible reserves to expected losses

—

—

—

—

12

Capital increase due to securitization transactions

—

—

—

—

13

Gains and losses due to changes in own credit risk onfair valued liabilities

—

—

—

—

14

Prepaid pension cost

356

534

—

—

15

Investments in own shares (excluding those reported in
the Equity section)

—

—

—

—

16

Reciprocal cross-holdings in common equity

—

—

—

—

17

Investments in the capital of banking, financial andinsurance 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 (“Non-significant Investment”) (amountabove the 10% threshold)

—

—

—

—

18

—

—

—

—

19+20+21

of which: mortgage servicing rights

—
—

—
—

—
—

— 19
— 20

of which: deferred tax assets arising from temporary
differences (net of related tax liability)

—

—

—

—

Amount exceeding the 10% threshold on specified
items
of which: significant investments in the common
stock of Other Financial Institutions, net of eligible
short positions

21

Annual Report & CSR Report 2015189

(Millions of yen)March 31, 2015

March 31, 2014

Amounts
excluded undertransitionalarrangements

Items

Amounts
excluded undertransitionalarrangements

Basel III
Template No.

Amount exceeding the 15% 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

—

—

—

—

—
—

—
—

—
—

— 23
— 24

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

24

10

27

Common Equity Tier 1 capital: regulatory adjustments(B)

14,6976,557

282,612,007

2,519,15629

Directly issued qualifying Additional Tier 1 instruments
plus related capital surplus of which: classified as
equity under applicable accounting standards andthe breakdown

—

—

31a

Rights to acquire new shares in relation to Additional
Tier 1 instruments

—

—

31b

Directly issued qualifying Additional Tier 1 instruments
plus related capital surplus of which: classified asliabilities under applicable accounting standards

—

—

32

—

—

Eligible Tier 1 capital instruments subject to transitionalarrangements included in Additional Tier 1 capital:
instruments——

Total of items included in Additional Tier 1 capital:
items subject to transitional arrangements——

Additional Tier 1 capital: instruments (D)

—

—

36

Investments in own Additional Tier 1 instruments

—

—

37

Reciprocal cross-holdings in Additional Tier 1
instruments

—

—

38

Investments in the capital of banking, financial andinsurance entities that are outside the scope of
regulatory consolidation, net of eligible shortpositions, where the bank does not own more than
10% of the issued common share capital of the entity(amount above the 10% threshold)

—

—

39

Significant investments in the Additional Tier 1 capitalof Other Financial Institutions (net of eligible shortpositions)24

Total of items included in Additional Tier 1 capital:
regulatory adjustments subject to transitionalarrangements——

Regulatory adjustments applied to Additional Tier 1
due to insufficient Tier 2 to cover deductions

—

—

42

Additional Tier 1 capital: regulatory adjustments (E)

24

10

43

22

25

Common Equity Tier 1 capital (CET1)
Common Equity Tier 1 capital (CET1) ((A)-(B)) (C)Additional Tier 1 capital: instruments

Qualifying Additional Tier 1 instruments plus related
capital surplus issued by special purpose vehicles andother equivalent entities

33+35

Additional Tier 1 capital: regulatory adjustments

190

Annual Report & CSR Report 2015

37

10

43

40

30

(Millions of yen)March 31, 2014

Amounts
excluded undertransitionalarrangements

Items

Amounts
excluded undertransitionalarrangements

Financial Condition

March 31, 2015

Basel III
Template No.

Additional Tier 1 capital (AT1)
Additional Tier 1 capital ((D)-(E)) (F)

—

—

44

2,612,007

2,519,15645

Directly issued qualifying Tier 2 instruments plus related
capital surplus of which: classified as equity underapplicable 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 underapplicable accounting standards——

Tier 2 instruments plus related capital surplus issued by
special purpose vehicles and other equivalent entities——

Eligible Tier 2 capital instruments subject to transitionalarrangements included in Tier 2: instruments andreserves——

46,92359,44950

46,92359,44950a
50b

Tier 1 capital (T1 = CET1 + AT1)
Tier 1 capital (T1 = CET1 + AT1) ((C)+(F)) (G)Tier 2 capital: instruments and reserves

Total of general allowance for loan losses and eligible
reserves included in Tier 2of which: general allowance for loan losses——

Total of items included in Tier 2 capital: instruments
and reserves subject to transitional arrangementsof which: eligible reserves

33,271

20,088of which: items included valuation and translation
adjustments, etc. subject to transitionalarrangements

33,271

20,08880,19479,537

Tier 2 capital: instruments and reserves (H)

46

47+49

51

Tier 2 capital: regulatory adjustments
Investments in own Tier 2 instruments

—

—

—

—

52

Reciprocal cross-holdings in Tier 2 instruments

—

—

—

—

53

Non-significant Investments in the Tier 2 capital of
Other Financial Institutions, net of eligible shortpositions (amount above the 10% threshold)

—

—

—

—

54

Significant investments in the Tier 2 capital of Other
Financial Institutions (net of eligible short positions)

—

—

—

—

55

Total of items included in Tier 2 capital: regulatory
adjustments subject to transitional arrangements——

Tier 2 capital: regulatory adjustments (I)

—

—

57

80,19479,53758

2,692,202

2,598,694

59

Tier 2 capital (T2)
Tier 2 capital (T2) ((H)-(I)) (J)Total capital (TC = T1 + T2)
Total capital (TC = T1 + T2) ((G) + (J)) (K)Annual Report & CSR Report 2015

191

(Millions of yen)March 31, 2015

March 31, 2014

Amounts
excluded undertransitionalarrangements

Items

Amounts
excluded undertransitionalarrangements

Basel III
Template No.

Risk weighted assets
Total of items included in risk weighted assets subject
to transitional arrangements

2,715

2,836

of which: other intangible fixed assets other than
goodwill and mortgage servicing rights

2,143

2,793

of which: significant investments in the Additional
Tier 1 capital of Other Financial Institutions (net of
eligible short positions)37

43

of which: prepaid pension cost

534—

16,431,381

17,060,23060

Common Equity Tier 1 risk-weighted capital ratio(consolidated) ((C)/(L))

15.89%

14.76%

61

Tier 1 risk-weighted capital ratio (non-consolidated)((G)/(L))

15.89%

14.76%

62

Total risk-weighted capital ratio (non-consolidated)((K)/(L))

16.38%

15.23%

63

Non-significant Investments in the capital of Other
Financial Institutions that are below the thresholds
for deduction (before risk weighting)

79,434131,476

72

Significant investments in the common stock of Other
Financial Institutions that are below the thresholds
for deduction (before risk weighting)348

131,47673

Mortgage servicing rights that are below the thresholds
for deduction (before risk weighting)

—

—

74

Deferred tax assets arising from temporary differencesthat are below the thresholds for deduction (before
risk weighting)

1,707

1,933

75

General allowance for loan losses

46,92359,44976

Cap on inclusion of general allowance for loan losses

202,355

211,043

77

Eligible reserves for inclusion in Tier 2 in respect of
exposures subject to internal ratings-based approach(prior to application of cap)

—

—

78

Cap for inclusion of reserves in Tier 2 under internalratings-based approach

—

—

79

Current cap on Additional Tier 1 instruments subject
to transitional arrangements

—

—

82

Amount excluded from Additional Tier 1 due to cap(excess over cap after redemptions and maturities)

—

—

83

Current cap on Tier 2 instruments subject totransitional arrangements

—

—

84

Amount excluded from Tier 2 due to cap (excess overcap after redemptions and maturities)

—

—

85

Risk weighted assets (L)Capital ratio (non-consolidated)

Regulatory adjustments

Reserves included in Tier 2 capital: instruments
and reserves

Capital instruments subject to transitionalarrangements

192

Annual Report & CSR Report 2015

[2] Qualitative Disclosure
Financial Condition

1. Scope ofConsolidation(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 to the companies belonging to the group of companies included in the scope of
calculation of the consolidated capital adequacy ratio as provided in Article 3 of the
Notification (hereinafter, the “Consolidated Group”), and the language, format andpreparation 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, 2015 is 25.
Principal consolidated subsidiaries
Company

Principal Businesses

Japan Economic Research Institute Inc. Research, consulting and advisory services
Value Management Institute, Inc.

Research, consulting and advisory services

DBJ Securities Co., Ltd.

Securities business

DBJ Business Investment Co., Ltd.

Investment consulting

DBJ Capital Co., Ltd.

Management of investment associations

DBJ Asset Management Co., Ltd.

Investment management, investment advisory
and agency services

DBJ Singapore Limited

Investment and loan support and advisory services

DBJ Europe Limited

Investment and loan support and advisory services

DBJ Investment Advisory Co., Ltd.

Investment advisory and agency services

DBJ Real Estate Co., Ltd.

Real estate leasing

DBJ Investment Consulting (Beijing)Co., Ltd.

Investment and loan support and advisory services(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 their primary 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 Groupbut are included 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 ConsolidatedGroup
Not applicable.
2. Overview of Methods
for Evaluating the
Degree of Capital
Adequacy

Regarding the degree of capital adequacy, DBJ quantifies credit risk, investment risk, interest raterisk and operational risk, compares the total risk amount with total capital and measures the capitalsurplus. This surplus enables DBJ to respond to unquantifiable risks and unforeseen events, decide
whether to take new financing risks and establish the operating directions.

3. Credit Risk(a) Overview of Risk Management Policies and Procedures
Credit risk refers to the risk of loss to DBJ resulting from the decline in or disappearance of thevalue of credit assets, owing to the worsening credit standing of clients for loans or debt
guarantees. These risks include expected losses (EL), or losses that on average can be expected
to occur within a certain measurement period; and unexpected losses (UL), which go extend
beyond the boundaries of losses that, on average, are expected within a period of time. DBJ
periodically compares UL and capital to measure the amount of capital in surplus.
(b) Rating Agencies Eligible to Weight Risks
The rating agencies that DBJ uses for weighting risk are among the four that the FSA has
named eligible to perform such weighting. Eligible rating agencies are not selected according totype of exposure.
The rating agencies are Rating and Investment Information, Inc. (R&I), Japan Credit Rating
Agency, Ltd. (JCR), Moody’s Investors Service, Inc. (Moody’s), and Standard & Poor’s Corp. (S&P).
Annual Report & CSR Report 2015

193

194

4. Overview of Risk
Management Policies
and Procedures for
Reducing Credit Risk

DBJ obtains collateral or guarantees as necessary based on changes in the borrower’s
creditworthiness. If required, the effectiveness of collateral is determined from the perspective of
the amount certain to be recovered based on a reasonable evaluation of the collateral.
In principal, collateral valuation is performed by the Credit Analysis Department, based on therequest of investment and loan departments/offices. Investment and loan departments/offices andthe Credit Analysis Department manage credit risk based on valuation results. In principle, thevaluation of all collateral property is reviewed once or twice each year to ensure DBJ is aware of thecurrent status of its collateral property.

5. Overview of Risk
Management Policies
and Procedures
Related to Risk
Involving Counterparties in Derivative
Product Transactions
and Transactions withLong Settlement
Periods

DBJ regularly refers to the ratings and credit amounts of transaction counterparties to determine
the advisability of entering a transaction or to understand the risks of existing transactions.

6. Securitization
Exposure(a) Overview of Risk Management Policies and Risk Characteristics
Excluding credit derivatives, the majority of DBJ’s securitization exposure falls into the categoryof specialised lending (Item 47, Article 1, of the Capital Adequacy Ratio Notification) employing
internal rating methods. Different from the internal ratings that are applied to standard
corporate credit, this exposure is given a rating by using a grading system applied to match thecharacteristics of specialised lending. DBJ conducts risk management in line with changes inrating level. In addition to rating its exposure when making new acquisitions, DBJ reviews theseratings periodically.
DBJ’s involvement in securitized and resecuritized transactions is typically that of an investor,and in principle the exposure acquired through such transactions continues until the
instrument’s maturity.
(b) Overview of status of implementation and operation of systems stipulated in Article
249, Paragraph 4, Items 3-6, of the Capital Adequacy Ratio Notification (including
application with modifications in Capital Adequacy Ratio Notification Article 254,
Paragraph 2, and Article 302-4, Item 1)
DBJ has created the systems necessary for operating within its credit risk management framework.
Specifically, as one aspect of our credit risk management, our sales department endeavors toappropriately collect information related to comprehensive risk characteristics and performance,
and DBJ monitors conditions to determine any changes in the borrower’s creditworthiness.
Related information is also provided to the credit analysis department, which may revise
borrower ratings or make other adjustments on the basis of this related information as necessary.
(c) Methods Used to Calculate Credit Risk Asset Amount of Securitization Exposure
DBJ employs the standardized approach for these calculations.
(d) 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.”(e) Rating Agencies Eligible to Weight Risks by Type of Securitization Exposure
The rating agencies that DBJ uses for weighting risk are among the four that the FSA has
named eligible to perform such weighting. Eligible rating agencies are not selected according totype of securitization exposure.
The rating agencies are Rating and Investment Information, Inc. (R&I), Japan Credit Rating
Agency, Ltd. (JCR), Moody’s Investors Service, Inc. (Moody’s), and Standard & Poor’s Corp. (S&P).

Annual Report & CSR Report 2015

DBJ includes in its calculation method no market risk equivalent amount.

8. Operational risk(a) Overview of Risk Management Policies and Procedures
DBJ defines operational risk as the risk of loss arising from internal processes, the activities ofofficers and employees or systems that are inappropriate or non-functioning, or from extrinsic
events.
DBJ establishes its management structure and basic risk management policy pertaining tomanagement methods after considering the wide range of operational risks that it potentiallyfaces, such as operational risk, systems risk, legal risk, human risk, tangible asset risk andreputational risk.
DBJ designates operational risk officers at each of its offices. These personnel are charged
with establishing data collection procedures, understanding risks and creating risk databases.
In line with the increasing advancement and diversity of the financial business, DBJ
addresses various operational risks by establishing or improving management methods andpreparations to appropriately identify, evaluate, measure, monitor and control these risks.
(b) Method Used to Calculate Operational Risk Equivalent AmountDBJ uses the basic indicator approach to calculate this risk.

9. Overview of Risk
Management Policies
and Procedures
Regarding Exposure
to Shares and Other
Equity Investments
and Capital Injections
into the Banking Book

DBJ defines investment risk as its risk of sustaining a partial or total loss on the economic value of
assets (including off-balance-sheet assets), owing to such factors as the worsening of an investee’s
financial conditions or to fluctuations in the market environment. For newly acquired exposure, DBJ
considers the balance between investment risk and potential return in each field of investment.
Thereafter, DBJ regularly conducts performance evaluations on its exposure.

10. Interest Rate Risk on
the Banking Book(a) Overview of Risk Management Policies and Procedures
Long-term, fixed-rate loans make up the majority of the DBJ’s lending, and DBJ seeks to reduce
its interest rate risk by raising funds featuring similarly long-term, fixed rates. DBJ also employs
the value at risk (VaR) and Basis Point Value (BPV) to compute various risks from the standpointof their economic value.
DBJ regularly compares VaR and 200 BPV against capital to ensure that interest rate risk
remains within a specified range of capital.
(b) Overview of Methods for Calculating Interest Rate Risk Used by the Bank for Internal
Control of the Banking Book
DBJ calculates interest rate risk based on the following method.
(i) VaR: Use a historical method of measurement with a one-year holding period, a five-yeartime horizon and a 99.9% confidence level(ii) Measure interest rate fluctuations in the 1st percentile and 99th percentile, using a one-year
holding period and a five-year time horizon(iii) 200 BPV: Use a 2% parallel shift in a standardized interest rate shock to measure thechange in economic value

Annual Report & CSR Report 2015

Financial Condition

7. Market Risk

195

[3] Quantitative Disclosure
Quantitative Disclosure (Consolidated)
1. Items Related to Credit Risk (Excluding Securitization Exposure)(a) Fiscal year-end credit risk exposure and breakdown by principal categories
Loans
Equities, funds(Millions of yen)March 31, 2015

March 31, 2014¥12,513,935¥13,224,168

584,878

347,112Central counterparty clearing house

12,808—Commitments and customers’ liabilities for acceptances and guarantees

518,192

303,815

Bonds (JGBs and corporate bonds, etc.)

1,071,870

1,069,281

Reverse repurchase agreement/call loan

394,043

220,287

Other

935,649

670,388

Total¥16,031,378¥15,835,053(b) Fiscal year-end credit risk exposure, broken down as follows:(1) By region(Millions of yen)March 31, 2015

March 31, 2014

Domestic total¥16,024,252¥15,833,710

Overseas total

7,126

1,342

March 31, 2015

March 31, 2014

¥ 3,414,170¥ 3,548,818

Note: ”Overseas” refers to overseas consolidated subsidiaries. DBJ has no overseas branches.

(2) Breakdown by industry and transaction counterparty
Manufacturing
Agriculture and forestry
Fisheries

1,014

996

500

500

Mining, quarrying and gravel extraction

68,71061,874

Construction

60,52756,4103,507,215

3,291,787

468,917531,016

Transportation and postal

2,589,470

2,688,940

Wholesale and retail1,048,632

1,073,824

Finance and insurance

2,024,675

1,683,748

Real estate and leasing of goods

1,892,500

1,846,720

322,315

378,905

Electrical, gas, heat supply and water
Information and communications

Services

196(Millions of yen)

Municipal government

16,405

15,256

Other616,320656,252

Total¥16,031,378¥15,835,053

Annual Report & CSR Report 2015

(3) Breakdown by period to maturity(Millions of yen)March 31, 2014

Five years or less

¥7,972,828¥7,584,076

More than five years, up to 10

4,536,950

4,956,140

More than 10 years, up to 15

1,751,721

1,887,631

More than 15 years

855,797866,787

No maturity date

914,080

540,417(c) Breakdown of exposure by risk weight (after accounting for credit risk mitigations)
Risk weight 0%

Financial Condition

March 31, 2015

(Millions of yen)March 31, 2015

March 31, 2014

¥ 532,466¥ 578,089

Risk weight 10%

11,411

19,038Risk weight 20%

1,845,956

1,627,250

Risk weight 50%

6,569,284

6,800,392

Risk weight 100%

6,946,420

6,708,949

Risk weight 150%

13,836

1,760

Risk weight 250%

6,439

3,135

Risk weight 1,250%

1,888

3,145

Other

68,29444,917

2. Securitization Exposure(a) Securitization exposure in which the Consolidated Group is the originator
Not applicable.
(b) Securitization exposure in which the Consolidated Group is an investor(1) Retained securitization exposure amount and breakdown by major underlying asset type(Millions of yen)March 31, 2015

March 31, 2014

¥957,747¥896,371——

16,904

37,10010,514

20,035

223,706

222,706——

Structured finance
Of which, resecuritization exposure
Credit derivatives
Of which, resecuritization exposure
Funds*Of which, resecuritization exposure* Assets held by funds including the commitment to funds (calculated on ”look-through” approach basis).

(2) Balance of retained securitization exposure by risk weight and required capital amounts(Millions of yen)March 31, 2015

March 31, 2014

¥ 70,576¥ 51,369

Risk weight0%

Balance

Risk weight

20%

Balance
Capital requirement

1,118

1,351

Risk weight

50%

Balance

29,243

14,454

Capital requirement

1,169

578

Balance

670,599583,202

Capital requirement

53,64746,656

Capital requirement

Risk weight
Risk weight
Risk weight100%
1,250%
Other*

0069,87584,487

Balance

347,169

396,278

Capital requirement347,169

396,278

Balance

378

6,348

Capital requirement

63

4,333

* Applying to exposure the transitional arrangements indicated in Article 15 of the Supplementary Provisions to the Capital Adequacy Ratio Notification.

Annual Report & CSR Report 2015197

Resecuritization exposure
Risk weight

40%(Millions of yen)

Balance

March 31, 2015

March 31, 2014

¥10,514¥20,035336

641

Capital requirement(3) A 1,250% risk weight is applied to the breakdown of securitization exposure amounts in accordance with Article 247 of
the Capital Adequacy Ratio Notification(Millions of yen)March 31, 2015

March 31, 2014

Structured finance¥123,850¥177,889

Funds*

223,328

218,388* Assets held by funds including the commitment to funds (calculated on ”look-through” approach basis).

(4) Breakdown of retained resecuritization exposure by application of techniques to mitigate credit risks and guarantors, or byrisk weighting applied to guarantors.
Not applicable.
(5) Amount of credit risk assets calculated with application of Article 15 of the Supplementary Provisions to the Capital
Adequacy Ratio Notification(Millions of yen)March 31, 2015

Credit risk assets¥—

March 31, 2014

¥9,8693. Interest Rate Risk in the Banking Book
Decrease in economic value resulting from interest rate shock

198

Annual Report & CSR Report 2015

March 31, 2015

March 31, 2014

Decrease in economic
value resulting from aninterest rate shockmeasuring interest rate
fluctuations in the 1st
percentile and 99th
percentile, using a oneyear holding period anda five-year time horizon:¥13.9 billion

Decrease in economic
value resulting from aninterest rate shockmeasuring interest rate
fluctuations in the 1st
percentile and 99th
percentile, using a oneyear holding period anda five-year time horizon:¥7.3 billion

Composition of Leverage Ratio Disclosure (Consolidated)
March 31, 2015

March 31, 2014

Table 2On-balance sheet exposures (1)On-balance sheet exposures before deducting adjustments items
Total assets reported in the consolidated balance sheet
The amount of assets of subsidiaries that are not included in thescope of the leverage ratio on a consolidated basis (-)
The amount of assets of subsidiaries that are included in thescope of the leverage ratio on a consolidated basis (except
those included in the total assets reported in the consolidatedbalance sheet)
The amount of assets that are deducted from the total assets
reported in the consolidated balance sheet (except adjustment
items) (-)
The amount of adjustment items pertaining to Tier1 capital (-)
Total on-balance sheet exposures(a)
Exposures related to derivatives transactions (2)Replacement cost associated with derivatives transactions, etc.
Add-on amount associated with derivatives transactions, etc.
The amount of receivables arising from providing cash margin in
relation to derivatives transactions, etc.
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 arisingfrom providing cash variation margin) (-)
The amount of client-cleared trade exposures for which a bankor bank holding company acting as clearing member is not
obliged to make 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)
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) (-)
The exposures for counterparty credit risk for repo transactions, etc.
The exposures for agent repo transactions
Total exposures related to repo transactions, etc.
(c)
Exposures related to off-balance sheet transactions (4)Notional amount of off-balance sheet transactions
The amount of adjustments for conversion in relation to offbalance sheet transactions (-)
Total exposures related to off-balance sheet transactions(d)Leverage ratio on a consolidated basis (5)The amount of capital (Tier1 capital)(e)
Total exposures ((a)+(b)+(c)+(d))(f)
Leverage ratio on a consolidated basis ((e)/(f))

16,126,048

Financial Condition

Item(Millions of yen)

Corresponding Line No.
on Basel III Disclosure Template
Table 1

1

16,360,608

1a

1

—

1b

2

—

1c

7

1d

3

234,560
3,063

2

16,122,985

3

181,079

4

60,645

5

7

937

—

6

—

7

—

8

20,4049—

10263,067

11

5,299

12

—

13

0

14

—

15

5,300

16

1,041,229

17

290,87418

750,354192,635,285

20

17,141,706

21

15.37%

22

4

5

6

8

Annual Report & CSR Report 2015199

Quantitative Disclosure (Non-Consolidated)
1. Items Related to Capital Adequacy Level(a) Capital requirement to total credit risk
(1) Exposure by portfolio to which standardized method applied(i) Japanese government and regional municipal bodies(Millions of yen)March 31, 2015

March 31, 2014

¥1,295,076¥1,345,190

868,388852,374——(ii) Exposure to financial institutions

21,19813,000(iii) Exposure to corporations

778,030

791,333(iv) Equity exposure

57,44537,305(v) Other exposure

11,713

10,735416,047

485,351(2) Securitization risk exposure(3) Central counterparty clearing house(4) Capital requirement to credit valuation adjustment (CVA) risk(b) Capital requirement to market risk(c) Capital requirement to operational risk(d) Non-consolidated total capital requirement ((a) + (b) + (c))

20—

10,620

7,463

—

—

19,434

19,627

1,314,510

1,364,818

Note: Figures as of the previous fiscal year-end have been revised retroactively to reflect a revision in the disclosure classification.

2. Items Related to Credit Risk (Excluding Securitization Exposure)(a) Fiscal year-end credit risk exposure and breakdown by principal categories
Loans
Equities, funds(Millions of yen)March 31, 2015

March 31, 2014¥12,715,642¥13,400,382

654,084

394,773

Central counterparty clearing house

12,808—Commitments and customers’ liabilities for acceptances and guarantees

521,833

307,273

1,071,828

1,069,240

Bonds (JGBs and corporate bonds, etc.)
Reverse repurchase agreement/call loan

394,043

220,287

Other

747,151525,792

Total¥16,117,392¥15,917,750(b) Fiscal year-end credit risk exposure, broken down as follows:(1) By region(Millions of yen)March 31, 2015

March 31, 2014

Domestic total¥16,117,392¥15,917,750

Overseas total——

Note: DBJ has no overseas branches.

(2) Breakdown by industry and transaction counterparty
March 31, 2015

March 31, 2014

¥ 3,414,170¥ 3,548,818

1,014

996

500

500

Mining, quarrying and gravel extraction

68,71061,874

Construction

60,52756,4103,507,215

3,291,787

Manufacturing
Agriculture and forestry
Fisheries

Electrical, gas, heat supply and water
Information and communications

468,917531,016

Transportation and postal

2,589,470

2,688,940

Wholesale and retail1,048,632

1,073,824

Finance and insurance

2,242,843

1,857,527

Real estate and leasing of goods

1,969,613

1,923,384

323,428

379,951

Services

200(Millions of yen)

Municipal government

16,405

15,256

Other405,940

487,459

Total¥16,117,392¥15,917,750

Annual Report & CSR Report 2015

(3) Breakdown by period to maturity(Millions of yen)March 31, 2014

Five years or less

¥8,066,411¥7,633,674

More than five years, up to 10

4,614,243

5,056,175

More than 10 years, up to 15

1,751,721

1,887,631

More than 15 years

864,197873,243

No maturity date

820,817467,025(c) Breakdown of exposure by risk weight (after accounting for credit risk mitigations)

Financial Condition

March 31, 2015

(Millions of yen)March 31, 2015

March 31, 2014

Risk weight 0%¥ 532,466¥ 578,089

Risk weight 10%

11,411

19,038Risk weight 20%

1,815,834

1,607,912

Risk weight 50%

6,569,284

6,800,392

Risk weight 100%

7,051,069

6,806,919

Risk weight 150%

13,836

1,760

Risk weight 250%

5,638

2,423

Risk weight 1,250%

1,888

3,145

Other

69,42950,844

3. Items Related to the Effect of Credit Risk Mitigations
Exposure to Items to Which Effect of Credit Risk Mitigations Applied(Millions of yen)March 31, 2015

Eligible financial collaterals¥

Guarantees or credit derivatives

1,016,328

5,299

March 31, 2014¥—

1,071,025

4. Transaction Counterparties’ Risk on Derivative Product Transactions and Transactions with Long Settlement Periods(Millions of yen)

Equivalent credit calculation method
Gross restructuring cost

March 31, 2015

March 31, 2014

Current exposure
methodCurrent exposure
method¥246,921¥160,219

72,79080,850Interest rate transactions

35,496

39,628Foreign exchange transactions

37,071

41,174Credit derivative transactions

175—

Gross add-on, by transaction type48

48

Reducing credit equivalent amounts through netting

80,322

86,204Net equivalent credit

239,389

154,865

Net restructuring cost
Notional amounts of credit derivatives forcalculated credit equivalent amount by type ofCredit default swaps provisioncredit derivative, by protection purchase or provision

180,678

96,976

20,40431,035Credit default swaps purchase

3,500

—

—

—

Other commodity transactions

Notional amounts of credit derivatives taking
into account credit risk mitigations

Notes: 1. Collateral is not used to reduce credit risk on derivative product transactions.
2. Credit derivatives used to compute the credit equivalent amount are included in securitization exposure; there is some data overlap withsecuritization exposure indicated elsewhere and what are known as single-name CDS offerings include the measurement of customers’ liabilities
for acceptances and guarantees as consisting of the legal and other exposure of the company in question.

Annual Report & CSR Report 2015201

5. Securitization Exposure(a) Securitization exposure in which DBJ is the originator
Not applicable.
(b) Securitization exposure in which DBJ is an investor(1) Retained securitization exposure amount and breakdown by major underlying asset type
Structured finance(Millions of yen)March 31, 2015

March 31, 2014

¥1,011,991¥898,818——

16,90431,035

Of which, resecuritization exposure
Credit derivatives
Of which, resecuritization exposure
Funds*Of which, resecuritization exposure

10,514

20,035201,028

267,445——* Assets held by funds including the commitment to funds (calculated on ”look-through” approach basis).

(2) Balance of retained securitization exposure by risk weight and required capital amounts(Millions of yen)March 31, 2015

March 31, 2014

¥ 70,576¥ 51,369

Risk weight0%

Balance

Risk weight

20%

Balance
Capital requirement

1,118

1,351

Risk weight

50%

Balance

29,243

14,454

1,169

578

Risk weight

100%

Balance

694,066

592,212

Capital requirement

55,52547,376

Capital requirement

Capital requirement

Risk weight
Risk weight

1,250%
Other*——

69,87584,487

Balance

341,992

418,545

Capital requirement341,992

418,545

Balance

13,654

16,193

Capital requirement

15,905

16,858* Applying to exposure the transitional measures indicated in Article 15 of the Supplementary Provision to the Capital Adequacy Ratio Notification.

Resecuritization exposure
Risk weight

40%(Millions of yen)

Balance
Capital requirement

March 31, 2015

March 31, 2014

¥10,514¥20,035336

641(3) A 1,250% risk weight is applied to the breakdown of securitization exposure amounts in accordance with Article 247 of
the Capital Adequacy Ratio Notification(Millions of yen)March 31, 2015

March 31, 2014

Structured finance¥154,641¥165,262

Funds*

187,373

253,282* Assets held by funds including the commitment to funds (calculated on ”look-through” approach basis).

(4) Breakdown of retained resecuritization exposure by application of techniques to mitigate credit risks and guarantors, or byrisk weighting applied to guarantors.
Not applicable.
(5) Amount of credit risk assets calculated with application of Article 15 of the Supplementary Measure (Interim Measure for
Securitization Exposure) to the Capital Adequacy Ratio Notification(Millions of yen)March 31, 2015

Credit risk assets

202

Annual Report & CSR Report 2015¥—

March 31, 2014

¥9,869

7. Items Related to Shares and Other Equity Investments and Capital Injections into the Banking Book(a) Market value of below-listed items as included within categories in
the non-consolidated balance sheets
Exposure to listed shares
Exposure to other equity investments and capital injections(Millions of yen)March 31, 2015

March 31, 2014

¥109,519¥ 52,109

547,155

353,764(b) Gains or losses on the sale of equity investments or shares
Gain or loss on write-off of equity exposure(c) Gains or losses from valuation recognized on the non-consolidated balance sheets
but not recognized on the non-consolidated statement of income

Financial Condition

6. Items Related to Market Risk
DBJ falls into the category indicated in Article 16 of the Capital Adequacy Ratio Notification. Consequently, calculation of themarket risk equivalent amount was not performed.

12,353

2,353

4,776

1,868

84,74937,703

Notes: 1. DBJ has no gains or losses from valuation unrecognized on the non-consolidated balance sheets or the non-consolidated statement of income.
2. DBJ has no exposure to shares to which Article 13 of the Supplementary Provisions to the Capital Adequacy Ratio Notification applies.

8. Exposure Applied for the Deemed Calculation of Credit Risk Assets
Not applicable.
9. Interest Rate Risk in the Banking Book
Decrease in economic value resulting from interest rate shock

March 31, 2015

March 31, 2014

Decrease in economic
value resulting from aninterest rate shockmeasuring interest rate
fluctuations in the 1st
percentile and 99th
percentile, using a
one-year holding period
and a five-year time
horizon:¥13.9 billion

Decrease in economic
value resulting from aninterest rate shockmeasuring interest rate
fluctuations in the 1st
percentile and 99th
percentile, using a
one-year holding period
and a five-year time
horizon:¥7.3 billion

Annual Report & CSR Report 2015

203

204

Annual Report & CSR Report 2015

Development Bank of Japan Inc.
Published in September 2015 by the Public Relations & Corporate Social Responsibility Office,Corporate Planning & Coodination Department
URL: http://www.dbj.jp/enhttp://www.dbj.jp/en
Development Bank of Japan Inc.
South Tower, Otemachi Financial City,
9-6, Otemachi 1-chome, Chiyoda-ku, Tokyo 100-8178, Japan

This report is printed on paper certified by the Forest Stewardship Council TM (FSC) as being made from managed forests.
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