(2,1) -1- e̲DBJ̲Covers̲2013.indd 13/09/17 13:12

Annual Report & CSR Report2013

Applying Financial Expertiseto Design the Future

Development Bank of Japan Inc.

Annual Report & CSR Report2013
13/09/17 13:12

(1,1) -2- e̲DBJ̲Covers̲2013.indd 13/09/17 13:12

Profile (As of July 1, 2013)

Established:

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

Legal basis:

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

President:

Toru Hashimoto

Number of employees:

1,168 (As of March 31, 2013)

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, 2Subsidiaries andaffiliated companies: Consolidated subsidiaries, 21; non-consolidated subsidiaries, 26; and affiliated companies, 17(As of March 31, 2013)
Main business:

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

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

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







Total assets:¥16,183.8 billion (As of March 31, 2013)

Loans:¥14,015.4 billion (As of March 31, 2013)

Capital adequacy ratio:

15.02% (Basel 3, BIS standard) (As of March 31, 2013)

Issuer ratings:

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

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.

e̲DBJ̲Covers̲2013.indd 2

Contents

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

2

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

4

Corporate Philosophy .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 14

Privatizing DBJ .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 22

Logo and Corporate Color .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 14

Overview of Operations in Fiscal 2012 .  .  .  .  .  .  .  .  .  .  . 24
Operating Results .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 24

DBJ's Roles . .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 16

Overview of Consolidated Operating Performance . 26

Overview of DBJ’s Second Medium-term Management Plan . 17

Overseas Business .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 28

Recent New Initiatives .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 18

Group Companies .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 29

History of DBJ .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 20

Topics .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 30

About DBJ

DBJ’s Target Business Model .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 16

DBJ’s Businesses .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 31
DBJ’s Businesses

Integrated Investment and Loan Services .  .  .  .  .  .  .  . 32
Investments and Loans .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 34
Consulting/Advisory Services .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 45
Crisis Response Operations .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 49
Initiatives Related to the Great East Japan Earthquake . . 52
Making Use of Information Functions .  .  .  .  .  .  .  .  .  .  . 56
CSR Report . .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 61
Implementing CSR Management .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 63

CSR Report

CSR through Investment, Loan and Other Businesses. .  . 68
Environmental Management .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .

90

Business Continuity Plan (BCP) .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .

94

Fostering Human Resources andCreating a Comfortable Work Environment .  .  .  .

96
Intellectual Asset ReportIntellectual Asset Report .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 99
Intellectual Asset Management .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 100
Financial Platform That Enables DBJ to Meet the
Needs of the Times .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 104

Disclosure . .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 118

Management StructureManagement Structure .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 105
Corporate Governance .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 106
Compliance .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 111
Risk Management .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 112
Client Protection Management System/Declaration
on Personal Information Protection/Policy forManaging Conflicts of Interest. .  .  .  .  .  .  .  .  .  .  .  .  .  . 116
Corporate Data .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 119

Annual Report & CSR Report 2013

Corporate Data/
Financial Condition

Financial Condition .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 133

Note:
Figures contained herein are rounded down.
Accordingly, the total of each column offigures may not equal the total of theindividual figures.
In this report, a “0” indicates figures of lessthan the indicated unit. A “—” indicates theabsence of an amount.

1

Message from the President

Issues Japan Faces and DBJ’s Role in
Resolving Them

restoration and reconstruction response and such key

The current state of the Japanese economy is characterized

have proactively undertaken initiatives involving Japan’s

by a sense of gradual recovery, led by resurgent consumer

strategies for future growth.

spending and a recovery in corporate earnings, particularly

fields as energy, infrastructure and urban development, weOf these, in the category of post-disaster restoration andamong large corporations. Nevertheless, a mountain ofreconstruction response, we had provided approximately

issues remains to be addressed. These include the need¥1.5 trillion in financing for disaster and crisis response

for restoration and reconstruction following the Great East

activities as of March 31, 2013. We are working with finan-

Japan Earthquake, as well as electrical power supply prob-

cial institutions in the disaster-stricken areas to arrange Greatlems, enhancing the competitiveness of Japanese industry,

East Japan Earthquake restoration funds, providing funds forreinforcing national infrastructure, environmental response

this purpose to companies in the area. Based on our BCM

and disaster preparedness.

(disaster preparedness) ratings, we also support corporate

DBJ approaches these problems, as it has in the past,disaster preparedness and business continuity efforts, inby leveraging its characteristics: a long-term perspective,

carefully tailored initiatives targeting early reconstruction.

large size, integrated investment and loans, and a neutral

Additionally, DBJ is pursuing its own activities toward

standpoint. In these ways, we strive to contribute toJapan’s strategies for future growth. We have continued

Japan’s socioeconomic development.

implementing the DBJ Smart Japan Program for providing
financing to boost global competitiveness and target

2

Specific DBJ Initiatives

community development and the environment and energy

The fiscal year ended March 31, 2013, was the final year

fields, among others. In this category, we have introducedof our three-year second medium-term management plan.

new programs to support infrastructure reinforcement andUnder this plan, in addition to focusing on post-disasterthe siting of growth industries.

Annual Report & CSR Report 2013

Furthermore, in November 2012 we launched theensure our quick response to issues faced by the JapaneseStudy Council on Strengthening Competitiveness,

economy and financial and capital markets. Accordingly,

attended by numerous experts with knowledge in a wide

we aim to contribute to the increased competitiveness ofrange of fields, to deliberate ways to bolster Japan’s com-

Japanese industry and ongoing socioeconomic growth

petitiveness. Based on an interim report received from thisand development.

council in January 2013, within our headquarters building
a place to exchange wide-ranging input and expertise in

Meeting Our Corporate Social
Responsibilities

an open and equal manner. We also launched the FundWe meet these responsibilities through business activities

for Japanese Industrial Competitiveness to provide fundingthat realize societal values in a variety of ways, and via

to companies aiming to create new value and enhance

our financial services. Accordingly, our business endeavors

corporate value. Through these initiatives, we intend tothemselves form the basis of our CSR activities. We plan

promote open innovation and support efforts to augment

to continue increasing our CSR efforts by increasing our

the competitiveness of Japanese industry.

sensitivity to societal needs and raising the level of the

we set up the Otemachi Innovation Hub (iHub) to serve as

From the perspective of bolstering economic activity,

solutions that we provide.

in June 2013 we held our second business competition
targeting female entrepreneurs to encourage their efforts

July 2013

in society.
Our third medium-term management plan, which
commences in the fiscal year ending March 31, 2014,

Toru Hashimoto

reinforces the initiatives begun under the second medium-

President & CEO

term management plan. The new plan is also designed to

Development Bank of Japan Inc.

Annual Report & CSR Report 20133

Toward the Future Prosperity of Japan

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

Energy¥2.8 trillion
Balance of loans in the electric power, gas, heat andwater sector(As of March 31, 2013)

See pages

4

71–72

Annual Report & CSR Report 2013

Resilience
Reconstruction
SupportConsolidating usefulknowledge and financial
expertiseSee pages

49–55, 69–70

Initiatives in the Energy Sector
DBJ supports the growth of Japanese industry through its investments and loans forresource development, oil storage and otherinitiatives. Against the backdrop of global
warming, we also support clients’ efforts toencourage and promote renewable energy

from solar power, wind, biomass and othersources.
As of March 31, 2013, our balance of loans
in the electric power, gas, heat and watersector totaled ¥2,831.9 billion, accountingfor 20.2% of total loans, by industry.

Annual Report & CSR Report 20135

Toward the Future Prosperity of Japan

Initiatives in the Transportation
Sector
DBJ is involved in a wide range of initiatives in the development and improvementof transportation infrastructure (including
railroads, airports, airlines, buses and roads).
We also take part in the formation of a wide
range of projects from a long-term perspective, to support collaboration among multiple companies from a position of neutrality.
As of March 31, 2013, our balance ofloans in the transportation infrastructure
sector (to transportation providers) totaled¥2,810.2 billion, accounting for 20.1% of
total loans, by industry.

See page73¥1.6 trillion
Balance of loans to
the real estate sector(As of March 31, 2013)

See pages

6

74–75

Annual Report & CSR Report 2013

¥2.8 trillion
Balance of loans in thetransportation infrastructur
infrastructureesector(As of March 31, 2013)

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 this market byleveraging our accumulated expertise andnetworks.
In fiscal 2011, we introduced the DBJ
Green Building Certification, which isdesigned to provide financial support forenvironmental and socially considerate initiatives.
As of March 31, 2013, our balance ofloans in the real estate sector totaled¥1,663.2 billion, accounting for 11.9% of
total loans, by industry.

Annual Report & CSR Report 20137

Toward the Future Prosperity of Japan

Restructuring
ProvidedJapan’sfirst
DIP financing in 2001

Overseas Business Initiatives
Since its conversion to a joint-stock company
in October 2008, DBJ has enthusiasticallyembraced international business.
We are building an overseas risk management structure, preparing operating bases,
training personnel and moving forward withcore infrastructure. At the same time, we areworking to expand our network with trust-

8

Annual Report & CSR Report 2013

worthy partners and domestic and overseas
financial institutions.
As of March 31, 2013, more than 40 countries were targeted for investments and loans.

Restructuring and Revitalization
Initiatives
In an environment marked by sluggish
domestic demand and shifts in the demand
structure, increasingly stringent competition
and accelerating change in the corporate
business climate, needs are growing for business and industry restructuring and corporate revitalization that enhances corporate
value by bolstering competitiveness.

Through debtor-in-possession financing,
DBJ helps supply the short-term cash flowthat is essential to revitalization. We also
provide buyout financing and mezzanine
financing to assist corporate acquisitions andcapital restructuring. Through total solutions such as these, DBJ supports businessrestructuring and revitalization.

76–79

See pages

Overseas
More than

40 countries

Number of countries targeted
for investments and loans(As of March 31, 2013)

See pages

28, 80
Annual Report & CSR Report 20139

Toward the Future Prosperity of Japan

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 we have cultivated for over four
decades.

As of March 31, 2013, we had provided suchfinancing to more than 371 companies, with the
cumulative total amounting to ¥643.1 billion.

Environment
Initiatives in the Healthcare andWelfare Sectors
DBJ is engaged in maintaining and improving the quality including access, cost andtechnological standards of each area of
healthcare in Japan through finance, consulting and the dissemination of information. As well as providing consulting services
that include the development of businessplans to support improvements in hospitalmanagement, DBJ studies and conducts
research into a variety of medical issues.
As of March 31, 2013, our balance of loans
in the healthcare and welfare sector stoodat ¥67.3 billion, up 36.3% from the preceding fiscal year.
See pages

10

82–83

Annual Report & CSR Report 2013

¥643.1
billionCumulative amount of
DBJ Environmentally Rated
Loan Program(As of March 31, 2013)

See pages

81, 90–93

Up

36.3

%

Year-on-year increase in loans in
the healthcare and welfare sector(As of March 31, 2013)

Healthcare
Annual Report & CSR Report 201311

Toward the Future Prosperity of Japan101

institutions
CumulativeCumulative number of alliedfinancial institutions(As of March 31, 2013)

Social Infrastructure Initiatives
Since the era of reconstruction following
World War II, DBJ has supported the development and advancement of Japanese
economy and society. For the development
and further sophistication of Japan’s economy and improvements to quality of life,
DBJ applies its experience and expertise tosupport the efforts of its clients to build andimprove the social infrastructure.
As of March 31, 2013, DBJ’s balanceof loans for social infrastructure (electric
power, gas, heating, water, telecommunications, transport and real estate) totaled¥7,760.9 billion.
See pages

12

88–89

Annual Report & CSR Report 2013

Community Revitalization Initiatives
DBJ provides optimal solutions from a longterm perspective that are designed to realize a prosperous lifestyle. To this end, we
stimulate regional economies, build local
infrastructures and construct wide-ranging
networks as we strive to tackle the variety ofissues facing the regions. Furthermore, DBJ
maintains close relationships with regional
financial institutions, which have excellent
insights into the companies that operate intheir regions. We have created a regionalbanking M&A network that links regional
financial institutions with information on
corporate M&A activities, thereby enhancing trust-based relationships and helping toachieve community revitalization.
As of March 31, 2013, a cumulative totalof 101 financial institutions had entered intobusiness alliances with DBJ.

See pages

84–87

¥7.7
trillion

Balance off loans
l
in
i the
h elect
electric
l tricpower, gas, heating, wate
water,
er,
telecommunications, transp
transport
port
and real estate sector(As of March 31, 2013)

Annual Report & CSR Report 201313

Corporate Philosophy

Corporate Philosophy

Applying financial expertise
to design the future

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

Commitment to Stakeholders

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

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

Networks

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

Each Color Represents Two Aspects of DBJ

14

Corporate Values:

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

Annual Report & CSR Report 2013

Commitment to Stakeholders, Action Guidelines and Core Competencies
Action Guidelines

Commitment to Stakeholders

 Customers First Commitment to Clients

 Commitment to Society
All business will be based on harmony among the threefactors of society, the environment and the economy inorder to contribute to a sustainable, affluent society.

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

 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.

About DBJ

Using creative finance, DBJ will resolve its clients’challenges and help them enhance their economic andsocial value.

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

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

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

Core Competencies
Intention

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

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

Networks

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

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

Annual Report & CSR Report 201315

DBJ’s Target Business Model

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

Investment

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

Provision of mezzanine andequity financing

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

DBJ’s Roles

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

DBJ
Provision of risk capital, partnerships: (1) Reinforcing the functions of financial and capital markets(long-term perspective, large amounts, integrated investments and loans, neutrality)(4) Providing a safety net
for financial markets
Asset Managementt$SJTJTSFTQPOTFGJOBODJOHt1VSDIBTFPG$1
t*OWFTUNFOUQVSTVBOUUP
Act on Special Measure
for Industrial Revitalization

FundRaising

Clients,
Expertise,
Human Resources,
Information(2) Supporting industrial
restructuringtIndustry restructuring andrevitalization, other activitiestRegional restructuringtCommunity infrastructureenhancement, other(3) Providing financial support in growth fieldstSupport for growth industries (environment-related, healthcare, others)tSupport for overseas development, promotion of financing for
inbound business to JapantTechnical sophistication, otherTimes of crisis

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

Capital16

Business domains managed byautonomous corporate decisions

Annual Report & CSR Report 2013

Normal times

Expansion of autonomous fund-raising infrastructure

Integrated capital management

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

Based on the achievements made and the challenges

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

confronted under our First Medium-term Management

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

31, 2011, we focused on establishing integrated invest-

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

Second Medium-term Management Plan “Endeavor 2013”

strengths with the aim to further solidify our business base.

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

About DBJ

After embarking on a new stage as Development Bank

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

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

Human Resources andBusiness ProcessImplementing integrated investment and loan services• Provide optimal financing products and services that best suitcustomer needs• Primary focus on medium risk investments and loans
Focusing on strategic priority industries and segments• Concentrate on restoration and reconstruction efforts in response to
the Great East Japan Earthquake in the near term
• Focus on following areas to promote Japan’s long-term growthStrengthening existing business: energy, logistics andtransportation, urban developmentSupporting industries with growth potential: environment,
healthcareIndustry reorganization and revival
Infrastructure, regional development
Accelerating expansion in global markets• Facilitate our customers’ growth strategies in overseas markets• Focus primarily on Asia, strengthen structured financeDiversifying sources of funds• Strengthen capabilities to raise funds relying on its own credit
standing• Utilize securitization etc.
Strengthening non-asset business• Diversify fee-based revenue streams

Strengthening investment in
human resources• Strategic allocation ofhuman resources (strategic
priorities and new businessdevelopment)• Training professionals
equipped with skills requiredin strategic business• Fostering young professionals

Business process
management and risk
management• Enhancing business process
and risk management systemthat properly helps drive
strategic business decisions

Annual Report & CSR Report 201317

Recent New Initiatives

Study Council on Strengthening CompetitivenessAmid the Japanese economy’s protracted stagnation,

nizations to overcome internal and external barriers to

in November 2012 we launched the Study Council on

resolve issues themselves. To achieve this goal, the report

Strengthening Competitiveness to raise consciousness

expressed the importance of strengthening the power ofabout and address the question of why Japanese industry

imagination to generate value and achieve value-linked

is unable to find an innovative growth model, despite thepromotion. In addition, the interim report suggested theadvanced technologies it possesses.

creation of locations that could introduce and realize these

Following exhaustive deliberation of sector-specificbusiness concepts. The interim report also touched on thegrowth themes, council members—who include people

importance of enhancing government measures to promotewith extensive business experience in the industrial sector

the autonomous resolution of issues and boosting financ-

and academics with wide-ranging expertise—began bying, such as through the provision of risk capital.

verifying hypotheses regarding the need to realize growthUpon receiving an interim report from the council, DBJ

by driving a change of mindset through new methodolo-

undertook the following two initiatives.

gies and specific project implementation and deliberating• Provision of risk capital to form the Fund for Japanese

specific measures to resolve issues.
In January 2013, the council produced an interim reportthat emphasized the need for companies and other orga-

Industrial Competitiveness• Establishment of the Otemachi Innovation Hub (iHub) as aplace to create new value

Establishing the Fund for Japanese Industrial CompetitivenessConsumer needs in Japan and overseas are undergoing afund could be expanded to around ¥300.0 billion. Casetransition from quantity to quality, and in the process thestudies on pages 72 and 76 in the CSR report describe thethings consumers’ require from companies are growing

results of two projects for which we provided investments

more complicated and complex. As a result, in a growing

and loans through this fund.

number of fields it has become impossible for a single com-

In establishing and operating this fund, to make use of apany to meet all these demands on its own. At the samebroad range of expertise we have elicited the cooperation

time, however, being unable to respond appropriately toof the outside experts described below.

such demands appears to be one reason for a decline in<Advisors>industry competitiveness. Furthermore, international com-

• Atsushi Ogasawara, Director, National Institute of Science

petitiveness necessitates swift action. Accordingly, “openand Technology Policy (NISTEP), Ministry of Education,

innovation” that is extensive and rapid is needed to create
new combinations of the advanced technologies and expertise that already exist internally and externally.
DBJ has established the Fund for Japanese Industrial
Competitiveness, providing risk capital to convert companies’ potential capabilities into businesses and link these initiatives to growth by exploring new frontiers and promoting
strategic cooperation and open innovation. We have established the scale of the fund at ¥150.0 billion, but depending

Culture, Sports, Science and Technology• Noboru Konno, Professor of Tama Graduate School ofBusiness, President of Knowledge Innovation Research
Office (KIRO)• Hideyuki Horii, Department of Civil Engineering at the
University of Tokyo• Takashi Maeno, Dean and Professor, Graduate School of
System Design and Management, Keio University• Yoichi Mori, certified public accountant

on how investment and loans progress, the scale of theOpening the Otemachi Innovation Hub (iHub)
In addition to providing funding, in April 2013 we opened

forge links between the determination and resolution of

the Otemachi Innovation Hub (iHub) within DBJ’s headquar-societal issues, encourage movements to break down aters building. This organization is designed to leverage DBJ’s

range of barriers that are

neutrality and extensive network to serve as a place to cre-holding companies backate new value through open innovation.

and aim to provide a place

Through open innovation, iHub will seek to foster broad-to conceptualize new col-based corporate–government office–societal (including

laboratively creative busi-

universities, citizens and government bodies) cooperation,ness concepts.
Workshop underway

18

Annual Report & CSR Report 2013

DBJ’ s Initiatives to Enhance Industry CompetitivenessInitiatives to Enhance Competitiveness through Open Innovation

Proposals to drive a change of mindset through new
methodologies and specific project implementationt Importance of strengthening the power ofimagination to generate value and achieve
value-linked promotion, as well as creating locations
to introduce and realize these business concepts
t Importance of enhancing government measures
to promote the autonomous resolution of issues
and boosting financing, such as through theprovision of risk capital

Summer 2013
Final Report Summary
Continuation of initiatives such as the Fund forJapanese Industrial Competitiveness and the
Otemachi Innovation Hub (iHub) to further
individual themes and foster human resources

Provide risk capital toward the creation of new value.
(Around ¥150.0 billion Could be expanded to around ¥300.0 billion)
Provide risk capital to convert companies’ potential capabilities intobusinesses and link these initiatives to growth by exploring new
frontiers and promoting strategic cooperation and open innovation.
t Also strengthen ties with iHub going forward.

About DBJ

January 2013
Interim Report Announcement

Fund for Japanese Industrial Competitiveness

DBJ’s Independent Initiatives upon
Receipt of the Interim Report

November 2012
Study Council on Strengthening CompetitivenessOtemachi Innovation Hub (iHub)
Establish a place to create new value.
To enable businesses to resolve societal issues
t Foster broad-based corporate–government office–societal (including
universities, citizens and government bodies) cooperation.
t Forge links between the determination and resolution of issues.
t Encourage movements to break down a range of barriers that areholding companies back.
t Aim to provide a place to conceptualize new collaboratively
creative business concepts.
First, provide a base from which to initiate movement.
Going forward, also consider long-term themes targeting lifestyle innovations.

Open Innovation:
Enhancing value through new combinations of advanced
technologies and expertise that already exist in Japan

Collaboration with Regional Financial Institutions
Since its time as a policy-based financial institution, DBJ has

institutions’ financing opportunities in various ways, includ-sought to provide financial support for initiatives in various

ing by raising funds and transferring obligations.

regions by liaising and collaborating with regional financial
institutions. We have commenced new initiatives aimed at• Rolling out Financing Employing DBJ Environmental
Ratings Program to Local Banks

the further development and invigoration of local compa-

In the fiscal year ended March 31, 2010, we began offer-nies and regional economies.

ing a service to support local banks’ efforts to develop• Raising Funds through Syndicated Loans with

their own environmental ratings tools. To promote thisCooperative Financial Institutions

collaborative effort further, we established the Eco-

In addition to issuing corporate bonds, one of DBJ’s fund-Finance Club with financial institutions that are encourag-raising policies is to take out long-term borrowings froming the spread of environmental financing.

local banks and other institutions. The low loan-to-deposit

In addition, with regional financial institutions we haveratios of regional financial institutions have come underestablished the Great East Japan Earthquake Reconstruction

scrutiny in recent years, but finding investment opportunities

Fund to provide restoration and reconstruction support tohas been an issue for shinkin banks and other cooperative

companies that sustained damage in the Great East Japanfinancial institutions whose operating regions are limited.

Earthquake. With the Act Concerning Temporary Measures to

To address this issue, DBJ has begun raising funds throughFacilitate Financing for Small and Medium-Sized Enterprises,

syndicated loans targeting cooperative financial institutions.

etc., coming to an end, we are setting up business redevelop-

Going forward, DBJ aims to help increase regional financial

ment funds and other exit strategy mechanisms.

Strengthening the Promotion of PPP/PFI
Since the Act on the Promotion of Private Finance Initiative (PFI

has been revised to allow for the establishment ofAct) was promulgated in 1999, DBJ has done its utmost to

public–private infrastructure funds. The national govern-

expand the PFI market, starting with the provision of financ-ment has also taken major steps to promote PPP/PFI ining for the first PFI project in Japan. In recent years, we haveother ways, such as formulating action plans that dramati-cooperated with the planning and promotion of government

cally reform PPP/PFI measures and positioning them as apolicies in line with PFI Act revisions and held seminars in con-new growth strategy. Against this backdrop, DBJ estab-junction with regional financial institutions, thereby proactively

lished the PPP/PFI Promotion Center in June 2013. By apply-

taking part in these initiatives from their upstream phases.

ing the experience and expertise that DBJ has accumulated

Adopting PPP/PFI approaches is essential to address-

to date, the center will facilitate cooperation among theing the question of how to improve aging public facilities

national government, government bodies, companies anddespite policy constraints. Given this situation, the PFI Act

local banks to promote PPP/PFI activities more robustly.
Annual Report & CSR Report 201319

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

Economic recovery

1951–1955

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

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

Rapid growth

1956–1965

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

Stable growth

1966–1971

1972–1984

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

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

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

20

Annual Report & CSR Report 2013

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

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

New urban center formation
through redevelopment of
purification plant site

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

Development of lifestyleand social infrastructure
and a smooth industrial
transformation

Economic
bubble1985–1995

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

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

Post-bubble

1996–2000

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

Financial solutions that
support communities,
the environment andtechnology

Providing integrated investment and loan services andconducting crisis response
operations

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

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

Structural reform

From 2001

October 1, 2008:
Development Bank ofJapan Inc. established

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

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

About DBJ

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

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

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

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

Annual Report & CSR Report 201321

Privatizing DBJ

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

establishment, took over all assets of the Development

October 1, 2008, under the terms of the Development

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

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

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

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

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

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

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

the Appendix to the New DBJ Act.

Highlights of the New DBJ Act
Provision of Credit

Predecessor

New DBJ

Loans

Yes

Yes

Equityinvestments

Yes

Yes

Debt guarantees

Yes

Yes

Foreign exchange;
money exchange

No

No

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

Bond issuanceYes(including bankdebenture bonds)

Transitional Measures

Borrowings

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

Fund-raising

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

Yes

Fiscal Loan Fund bonds +private-sector
borrowings

Yes

Deposits

No

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

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

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

response operations as a designated financial institution.

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

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

privatization within five to seven years after its establish-

ernment capital contribution and enable DBJ to introduce

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

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

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

become fully privatized within approximately five to seven

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

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

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

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

Note: Please refer to pages 126–132 for details of the New DBJ Act, the revision to the New DBJ Act and the Act for Extraordinary Expenditure
and Assistance to Cope with the Great East Japan Earthquake.

22

Annual Report & CSR Report 2013

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

tribution in order to facilitate DBJ’s implementation of crisis

Expenditure and Assistance to Cope with Great East Japan

response operations. Furthermore, the target date has been

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

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

Expenditure), which included the partial revision to the New

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

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

which will include the future of government-held shares,

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

About DBJ

On May 2, 2011, in response to the damage caused by theby the end of fiscal 2014. The government will continue tohold its shares until then.

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

Legal Basis for Revision to the New DBJ Act
FY2006

FY2007

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

Preparation Period

Transition Period(Government-affiliatedfinancial institution)

June 2007
New DBJ Act
goes into effect(Special stock company with shares
held by the government)

October 2008
Privatization(conversion toa joint-stockcompany)

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

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

Shareholder

100% government

100% government

Company form

Government-affiliated financial institution(special public corporation)

Joint-stock company (special stock company)

Business

Based on former DBJ Act

Based on New DBJ Act

Fund-raising

Government-guaranteed bonds, FILP agency bonds,
independent financing

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

Annual Report & CSR Report 201323

Overview of Operations in Fiscal 2012

Operating Results
Financial-Economic Environment

dropping to around 0.5%, as a result of monetary easing

During fiscal 2012, ended March 31, 2013, the European

policies, including the Bank of Japan’s establishment ofdebt crisis, although rampant in the first half, abated some-commodity price stability targets.

what in the second half as a result of response measures

Impacting currency exchange rates, U.S. interest rates

such as the program of Outright Monetary Transactions

decreased due to the effects of economic deceleration and(OMT), under which the European Central Bank makes pur-monetary easing. This factor, plus concerns of a rekindledchases in secondary sovereign bond markets. In the United

European debt crisis, caused investors to buy yen as aStates, the pace of recovery began to slow as contributions

hedge against risk. As a result, at one point the yen rosefrom government spending waned, but the rate of recovery

into the neighborhood of ¥77 against the U.S. dollar andturned upward again in the second half with the introduc-¥94 to the euro. Following this level of appreciation againsttion of large-scale monetary easing measures (QE3). In

the dollar and the euro in the first half, the yen depreciatedChina, the government addressed a falling rate of economic

against these currencies in the second half as investors soft-

growth with monetary easing and financial stimulus mea-

ened their risk-hedge positions. As of March 31, 2013, thesures, which prompted a gradual recovery.

yen was trading at around ¥94 to the U.S. dollar and ¥120

In Japan, during the first half of the fiscal year, protract-against the euro.

ed yen appreciation and the global economic deceleration

The Nikkei stock average dropped from the ¥10,000

sapped the strength of exporters, and the demand-promot-

level on March 31, 2012 to the lower half of the ¥8,000

ing impact of eco-car subsidies abated, causing businesslevel at one point during the year. However, the Nikkei thenconditions to worsen. During the second half, however,turned back upward in the second half as risk concerns

consumption bottomed out, and reconstruction-related

abated, rising to the ¥12,000 level as of March 31, 2013.

demand fueled a recovery in manufacturing. As a result,

Looking at commodity prices, the rate of increase in

the economy began to show signs of recovery.

energy prices flattened, but consumer prices (excluding per-In the corporate sector, exports were weak in the first

ishable goods) generally fell year on year, due to downward

half due to yen appreciation and global economic decelera-pressure stemming from gaps between demand and supply.

tion. Also, the phasing out of eco-car subsidies led to adrop-off in automobile demand. Conditions in the manu-

Progress and Results of DBJ Group Operations

facturing sector rebounded in the second half, however.

Review of the Year Ended March 31, 2013For households, a resurgence in the number of people

Since its establishment on October 1, 2008, the core ofin employment and other factors that point to an improved

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

employment situation slackened, and conditions remained

its predecessor. As a highly specialized financial institution,

at a standstill. Household-sector consumption was brisk,

we sought to resolve clients’ issues by providing integrated

and housing starts were favorable due to factors such as

investment and loan services.

the introduction of tax breaks on residential mortgages andBelow is an overview of these activities during the fis-moves to acquire property prior to an upcoming rise in thecal year ended March 31, 2013. The figures provided for

consumption tax rate.

the loans, investment and consulting/advisory services

On the financial front, in the first half the ongoing

described below are on a non-consolidated basis.

European debt crisis and the temporary deceleration in U.S.
economic recovery prompted investors to strengthen theirLoansrisk hedges. In the second half, however, the European debt

We provided senior loans through traditional corporate

crisis abated somewhat, and the U.S. economy returned toloans, non-recourse loans and other types of structured

a path of stable recovery, ameliorating concerns of exces-

financing as well as a variety of other loans that employ

sive risk.

advanced financial methods. During the year ended March

In Japan, the fund-raising environment was generallyaccommodating, owing in part to the impact of monetaryeasing.
Long-term interest rates (yields on 10-year Japanese
government bonds) continued to fall throughout the year,

24

Annual Report & CSR Report 201331, 2013, we provided ¥2,524.5 billion in loans, includingloans for crisis response operations.
For details regarding business loans in response to thefinancial crisis, please refer to the section on page 50 entitled “Results of Crisis Response Operations.”Investment

regional communities and assign advisors to support these

We work to resolve client issues involving business expan-

activities. During the year, investment and loan commissions

sion and support strategies and the formation of financial

and fees from M&A and other advisory services amounted

infrastructures. We achieve these goals by supporting theto ¥8.5 billion.

creation of funds, as well as mezzanine, equity and otherSubsidiaries

on a long-term perspective. Above all, in recent years we

In June 2012, we completed the transition of DBJ Nomura

have taken the approach of temporarily acquiring corporate

Investment Co., Ltd., a real estate asset management com-

shares and promoting measures to increase their value.

pany that we had established jointly with Nomura Holdings,

Owing to these activities, ¥127.8 billion was allocated toInc., to a wholly owned subsidiary and in July 2012,

investing activities during the year.

changed its name to DBJ Asset Management Co., Ltd.

About DBJ

financing methods, providing appropriate financing based

As a quality, highly trusted asset management comConsulting/Advisory Services

pany with long-term investors, we expect DBJ Asset

Consulting and advisory services utilize the networks cre-Management to continue responding to diverse capital

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

requirements, centering on the field of real estate, thereby

clients of all sizes grow more competitive in a host of indus-

contributing to the development and increasing sophistica-

tries. We provide consulting on projects that help invigoratetion of Japan’s financing functions.

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

For the Year Ended
March 31, 2012

For the Year Ended
March 31, 2013

Loan and investment balance

2,927.0

2,652.4

Loans

2,849.0

2,524.5

Investment*2

78.0

127.8

Funds raised

2,927.0

2,652.4

801.4

895.1

Of which, FILP agency bonds

500.0

600.0

Of which, government-guaranteed bonds (domestic)

179.0

160.0

Of which, government-guaranteed bonds (overseas)*4

122.4

135.1

Corporate bonds (FILP bonds)

263.1

386.6

Long-term debt

1,170.7

868.3

Recovery, etc.

691.7

502.2

*1

Fiscal Investment and Loans
*3

*4, 5

*6

Notes: 1. Figures, including those for corporate bonds, are on a management accounting basis.
2. Figures, including those for securities, money held in trust and other assets (funds), are on a management accounting basis.
3. This figure includes industrial investment and borrowings (special accounting for fiscal investment and loans).
4. Of government-guaranteed bonds and corporate bonds denominated in foreign currencies, appropriated government-guaranteed bonds and corporate bonds areconverted to yen at market rates according to the conditions at the time of settlement.
5. The figure does not include short-term corporate bonds.
6. Long-term debt borrowed from Japan Finance Corporation in conjunction with crisis response operations during the fiscal year ended March 31, 2013, amounted
to ¥590.7 billion.

Annual Report & CSR Report 201325

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

For the Year Ended
March 31, 2012

For the Year Ended
March 31, 2013

Total income

330.2

341.1

Net income

77.3

71.3

Total assets

15,579.8

16,248.7

Loans

13,645.4

13,918.2

Securities

1,176.6

1,357.0

Total liabilities

13,118.8

13,710.1

Borrowed money

9,170.5

9,448.3

Debentures and corporate bonds

3,671.8

3,924.5

Total equity

2,461.0

2,538.5

Common stock

1,187.7

1,206.9

Capital ratio (Basel 2, BIS standard)

18.56%——

15.52%

Ratio of risk-monitored loans (Banking Act base)

1.47%

1.23%

Return on equity

3.18%

2.86%

Return on assets

0.51%

0.45%

Number of employees

1,270

1,315

Total capital ratio (Basel 3, BIS standard)

Consolidated operating performance during the year under

ing loss of ¥4.2 billion, compared with net other operating

review is described below.

income of ¥2.9 billion in the preceding fiscal year. However,
DBJ recorded net other income of ¥32.5 billion, expanding

Consolidated Income and Expenses¥18.1 billion, owing mainly to the posting of gains on the

During the period, DBJ posted total income of ¥341.1 bil-sale of shares as the result of multiple exits.

lion, up ¥10.8 billion from the previous fiscal year. Of thisConsequently, income before income taxes and minority

amount, interest income was ¥267.8 billion, down ¥9.4

interests came to ¥116.2 billion, up ¥6.0 billion from thebillion, and fees and commissions rose ¥0.8 billion, to ¥10.2

previous fiscal year.

billion. Other operating income expanded ¥2.3 billion, to

After posting current income taxes of ¥41.7 billion, ¥20.2¥7.8 billion, while other income increased ¥17.1 billion, tobillion more than in the preceding fiscal year, deferred¥55.0 billion.

income taxes amounted to ¥2.8 billion, down ¥7.6 billion,

Total expenses were ¥224.8 billion, rising ¥4.8 billion.

and minority interests in net income dropped ¥0.6 billion,

This amount included interest expenses of ¥144.2 billion,

to ¥0.2 billion. As a result, consolidated net income came todown ¥11.2 billion, expenses on fees and commissions of¥71.3 billion, ¥5.9 billion less than in the previous term.

¥1.0 billion, rising ¥0.5 billion, other operating expenses of26¥12.1 billion, rising ¥9.5 billion, and general and administra-

Consolidated Assets, Liabilities and Equity

tive expenses of ¥44.8 billion, which rose ¥7.0 billion, as

As of March 31, 2013, total assets amounted to ¥16,248.7

well as other expenses of ¥22.4 billion, which decreased

billion, up ¥668.8 billion from one year earlier. Of that

¥0.9 billion.

amount, loans were ¥13,918.2 billion, improving ¥272.7 bil-

Net interest income rose ¥1.7 billion, to ¥123.6 billion,

lion, and securities rose ¥180.4 billion, to ¥1,357.0 billion.

whereas net fees and commissions increased ¥0.3 billion, to

In addition to a response to the financial crisis, the increase¥9.2 billion, up year on year. We posted a net other operat-

in loans reflects higher provision of loans to electric power

Annual Report & CSR Report 2013

companies, given the subdued market reception to the issu-

reason for this rise was higher net income. This increase

ance of electric utility bonds.

stemmed from a ¥19,165 million redemption of delivery

Call loans and bills bought amounted to ¥84.0 billion at
the end of the term, a decrease of ¥5.5 billion, and reverse
repurchase agreements were ¥165.9 billion, up 13.0 billion

bonds, the total amount redeemed in June and December
2012.
Also, in June 2012, at DBJ’s General Meeting of
Shareholders a resolution was passed to award dividends onrary investment of excess cash on hand.

common stock. This dividend had a record date of March

Owing to the November 2012 completion of our new

31, 2012, and a total amount of ¥37.3 billion, for dividends

head office building, amounts previously recorded underper share of ¥856, resulting in a payout ratio of 49.98%.

construction in process have been transferred to business-

The unrealized gain on available-for-sale securities that

About DBJ

from the previous year. These figures represent the tempo-

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

use land and structures.
Total liabilities as of March 31, 2013, stood at ¥13,710.1

nies that DBJ owns through funds, came to ¥36.8 billion, up

billion, ¥591.3 billion more than a year earlier. Of this¥17.5 billion compared with the preceding term. This amountamount, debentures and corporate bonds came to ¥3,924.5

includes valuation gains on shares in listed companies.

billion, an increase of ¥252.7 billion, and borrowed money

Status of Risk-Monitored Loanswas ¥9,448.3 billion, rising ¥277.8 billion.
The increase in borrowed money mainly reflects borrow-

DBJ is not subject to the provisions of the Banking Act orings (two-step loans) from the Japan Finance Corporation

the Act on Emergency Measures for the Revitalization of

to fund crisis response operations related to the Great East

the Financial Functions (Act No. 132 of 1998), but it car-Japan Earthquake, as well as borrowings from commercial

ries out independent assessments of liability classes andfinancial institutions.

asset categories based on the Financial Services Agency’s

Also, acceptances and guarantees came to ¥155.7 billion,up ¥27.2 billion.

Financial Inspection Manual. According to these results, on
a consolidated basis, DBJ’s holdings of disclosed debt (risk-

Total equity at the end of the period was ¥2,538.5 billion, up ¥77.5 billion from one year earlier. The primarymonitored loans) as prescribed by the Banking Act total¥171.4 billion, accounting for 1.23% of total loans.

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

For the SixMonth Period
Ended March
31, 2009

For the Year
Ended
March 31,2010

For the Year
Ended
March 31,2011

For the Year
Ended
March 31,2012

For the Year
Ended
March 31,2013

Gross operating profit

45.8

121.8

136.7

133.6

128.5

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

86.7

100.0

95.7

74.7

Income before income taxes andminority interests(118.1)

51.1

104.3

110.2

116.2

Total income taxes(13.5)(10.8)(1.3)(31.9)(44.5)Net income(128.3)

39.8

101.5

77.3

71.3

—

10.0

50.0

37.3

35.2

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

Annual Report & CSR Report 201327

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

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

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

December 2008

Capital:

S$1,000,000

Business:

Investments and loan support and advisory services

Address:

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

CEO & Managing Director: Takashi Sugiyama

DBJ Europe Limited
Established:

November 2009

Capital:€7,500,000

Business:

Investments and loan support and advisory services

Address:

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

Executive Chairman:

Haruhisa Kawashita

CEO:

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

28

Annual Report & CSR Report 2013

DBJ Asia Financial Support Center
In June 2011, DBJ opened the DBJ Asia Financial Support
Center to provide local information and offer consulting
services to regional banks supporting efforts by mediumsized companies and other entities in their regions to promote business in other parts of Asia.
The center’s roles are to liaise with regional banks
throughout Japan and help meet the various needs of local
medium-sized companies and other entities to develop theiroperations in Asia. We achieve this by leveraging the DBJ
Group’s information network, which includes public financial institutions in Asian countries.
As of June 30, 2013, 66 regional banks were members.
By country, 70% of inquiries were related to four countries:
China, Thailand, Vietnam and Indonesia. Inquiries included
such topics as how to move into Japan, industry trends andfund-raising. DBJ will continue working to strengthen thetransmission of information related to Asia.

Membership in the Long-Term Investors Club
Established in 2009, the Long-Term Investors Club (LTIC) is a
global platform for cooperation among financial institutions(including DBJ) in charge of long-term investment in various
countries, reflecting change in the financial environment
after the Global Financial Crisis. With members numbering
19 institutions (from 16 countries and one region) from allover the world, LTIC promotes in areas such as information sharing in long-term financing, academic studies andresearch and co-investments. In July 2012, DBJ joined LTIC
as the first financial institution from Japan. Going forward,
we will deepen relations with other member institutions,employing global financial networks to invigorate long-term
financial markets.

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

Japan Economic Research Institute Inc.

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.

About DBJ

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.

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 companies
that 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 companies.
Outline of DBJ Capital Co., Ltd.
Established:

October 2005
(Commenced operations on June 30, 2010)

Capital:¥99 million

Business:

Investment in venture companies

Address:

Chiyoda-ku, Tokyo

President & CEO:Fumiyuki Kashima

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

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.
Outline of DBJ Asset Management Co., Ltd.
Established:

November 2006

Capital:¥100 million

Business:

Real estate fund investments, etc.

Address:

Chiyoda-ku, Tokyo

President & CEO:

Masataka Ito

Value Management Institute, Inc.
In April 2013, DBJ converted Value Management Institute,Inc., to a subsidiary. This research and consulting company,
which has maintained a business alliance with DBJ, provides high-quality, reliable services to resolve the problems
customers face. Going forward, the company will continue
to disseminate information and address diverse customer
needs.
Outline of Value Management Institute, Inc.
Established:

June 1993

Capital:¥75 million

Business:

Research, consulting and advisory
services

Address:

Chiyoda-ku, Tokyo

President:

Kazuyuki Mori

Annual Report & CSR Report 201329

Topics

May

Jun.
2012

Jul.

Aug.

Nov.

Dec.

 Creation of the DBJ Visionary Hospital Program to support initiatives by excellent hospitals (See page 42.)
 Receipt of two awards, for Great East Japan Earthquake Reconstruction Fund Formation and Openingof the DBJ Asia Financial Support Center, in the Regional Economic Promotion Division at the
Association of Development Financing Institutions in Asia and the Pacific (ADFIAP) annual meeting Opening of the Comprehensive Special Zone Support and Counseling Center to promote industry’s
increased international competitiveness and support community revitalization from a financial perspective

 Establishment of DBJ Asset Management Co., Ltd. (See page 29.)
 Membership in the Long-Term Investors Club (the first Japanese bank to become a member) (See page 28.)

 Announcement of Capital Investment Planning Survey (nationwide and by region) results (See page 57.)
 Establishment of DBJ Green Building Certification, logistics edition (See page 41.)

 Relocation of head office to South Tower, Otemachi Financial City
 Launch of the Study Council on Strengthening Competitiveness (See page 18.)
 Signing of a CSR accord with the Tokyo headquarters of The Yomiuri Shimbun Co., Ltd.

 Exhibited and conducted presentation at Japan’s largest environmental exhibition, Eco-Products 2012
(12th consecutive year) (See page 66.)Jan.
 Announcement of interim report by the Study Council on Strengthening Competitiveness (See page 19.)

Mar.
2013
Apr.

May

Jun.

30

 Expansion of investment and loan programs (See page 42.)
DBJ Smart Japan Program continuation: ¥400.0 billion,
DBJ Infrastructure Reinforcement Support Program: ¥150.0 billion,
DBJ Growth Industry Siting Support Program: ¥100.0 billion
 Establishment of Fund for Japanese Industrial Competitiveness (See page 18.)

 Opening of the Otemachi Innovation Hub (iHub) (See page 18.)
 Conversion of Value Management Institute, Inc., to a subsidiary (See page 29.)

 Receipt of the CSR division award for operation of the Women
Entrepreneurs Center at the ADFIAP annual meeting (See page 67.)

 Holding of Second DBJ Women Entrepreneurs New Business Plan
Competition award ceremony (See page 47.)
 Establishment of the PPP/PFI Promotion Center (See page 19.)

Annual Report & CSR Report 2013

DBJ’s Businesses

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

Integrated Investment and Loan Services  . . . 32
Investments and Loans  . . . . . . . . . . . . . . . . . . . 34
Consulting/Advisory Services  . . . . . . . . . . . . . . 45
Crisis Response Operations  . . . . . . . . . . . . . . . 49
Initiatives Related to the Great East Japan
Earthquake  . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Making Use of Information Functions  . . . . . . 56

Annual Report & CSR Report 201331

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.
 We offer integrated investment and loan solutions that range from senior loans to mezzanine and equity financing.
 DBJ also provides a host of services (e.g., M&A advisory and CSR support services) that help raise corporate value.
 In collaboration with its Group companies, DBJ provides finely tuned services to meet individual clients’ needs.

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

Debtor-inPossession
Financing

Syndicated
Loans

Loans
DBJ Visionary
Hospital

Structured
Financing

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

DBJ Employee’s
Health Management
Rated Loan Program

EquityMezzanine Financing

Investment

Hybrid Financing

Provision of mezzanineand equity financing

Interest Rate
Subsidy
Programs Asset-Based
Lending
LBOs/MBOs

Integrated Investment and Loan Services
M&A Advisory
Services

Consulting/Advisory
Services
Arrangement of structured
financing, provision of M&A
Publicadvisory services, applying DBJ’s
Asset
Management industry research function andexpertise in environmental andtechnology evaluations

DBJ Asia
Financial
SupportCenterPractical Application
Support Center
for Technology

Women
Entrepreneurs
Center(DBJ-WEC)

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

32

Annual Report & CSR Report 2013

Consulting/
Advisory Services

Loans

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 competitive and invigorate regional economies.

 Provides medium- and long-term

 We provide investment to assist

 Provides M&A advisory services

businesses in terms of their revi-

 Makes proposals that apply its

loans

talization, restructuring, growthexpertise in industry

financial services (environmentally

strategies, international competi-

research and ability to develop new

and socially responsible invest-

tiveness and infrastructure opera-

ment, disaster countermeasures

tions. We provide such funding

and safety measures and rating-through mezzanine financing, as

linked financing for technology

well as through equity and othercommercialization)

funding.

DBJ’s Businesses Offers unique high-value-added

financial technologies
 Arranges structured and othertypes of financing

 Responds to diverse needs by offering non-recourse loans and develops and provides financing offeringcollateral and structural flexibility(debtor-in-possession financing,
inventory collateral, intellectual
property rights as collateral, etc.)

Loan Amounts Provided(Non-consolidated)

Investment Amount Provided(Non-consolidated)

M&A Advisory and Consulting
Agreements (Cumulative)(Billions of yen)
4,000(Billions of yen)160

(Agreements)
400

127.8
3,000

269

2,524.5239

2,034.4
2,000

80

1,000

40

0

292

300

120

2,849.0

82.2

78.0

200

100

0

0
Year ended
Year ended
Year ended
March 31, 2011 March 31, 2012 March 31, 2013

Year ended
Year ended
Year ended
March 31, 2011 March 31, 2012 March 31, 2013

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

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

As of March 31, As of March 31, As of March 31,
2011
2012
2013

Annual Report & CSR Report 201333

Investments and Loans
DBJ provides medium- and long-term loans, meeting a range of funding requirements. In addition to seniorfinancing through traditional corporate loans, we offer project financing, non-recourse loans and other types ofstructured financing, as well as a variety of other loans that employ advanced financial methods.
We provide investment funding to meet specific needs, based on a long-term perspective, to resolve the myriad issues that clients face. For example, DBJ provides investment to help clients expand their operational bases,
meet long-term growth strategies and shore up their financial structures. We offer funding support, mezzanine
financing and financing that employs equity and other methods.
The case study section on pages 68 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 optimalcomprehensive due diligence of the businesses of its client

financial solutions, as well as the specific terms and conditions

companies, including assessment of their present business

DBJ can offer, including interest rates and loan maturities.

status, project plans and profitabilities.

Financing terms are discussed after DBJ has conducted

Financing Conditions• Loan Amounts• Interest Rates

Loan amounts are determined through consultation

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

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

• Loan Terms

DBJ also considers the application of various interest

Appropriate loan maturities are set in consultation

rate subsidy programs.

with our client companies according to factors such

• Collateral/Guarantees

as repayment plans, business profitability and theLoans may require collateral and guarantees, depend-

expected life of equipment or facilities.

ing on due diligence results.

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

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

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

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

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

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

When providing funds, clients first look at the profitability

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

34

Annual Report & CSR Report 2013

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

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

Mezzanine Financing
Mezzanine financing is an intermediate financing method

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

in terms of risk.

Such financing also prevents dilution of the voting rights of

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

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

their balance sheets issues through total financing solutions

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

investment by setting adequate interest rate and dividend

risk capital.

levels to correspond to the intermediate risk. Depending on
zanine financing can be set. In recent years, demand formezzanine financing has grown in association with businessacquisitions, spinoffs of subsidiaries and business units,

DBJ’s Businesses

Types of mezzanine financing• Subordinated loans, subordinate bonds

clients’ financing plans and capital policies, flexible mez-

• Preferred shares, classified shares• Hybrid securities, hybrid loans, etc.

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

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

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

Recipient company

Debt

CapitalTargetbusiness

Acquisition of
non-core business
(MBO)

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

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

New company (recipient)Objective
Debt

Business succession
Note: Successor acquiresNcommon stock

AssetsCapitalDebt
AssetsPreferred shares

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

CapitalAnnual Report & CSR Report 201335

Medium- to Long-Term Loans
In an environment characterized by growing needs for the

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

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

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

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

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

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

ment over the medium to long term.

ment. After making equity investments, DBJ provides total

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

growth and successes, contributing to a more prosperous

tion, industry research and financing technologies, help-

future.

ing clients maximize their long-term corporate value. In
Client Needs

DBJ’s Solutions

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

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

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

based on a single contractual document, and financing is

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

provided cooperatively according to a single set of terms.

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

Having a single arranger in the point negotiating posi-

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

point. Structuring loans to include some items from its own

ment operations through an agent reduces the administra-

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

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

Appointing an arranger allows the number of financial

vides.

Annual Report & CSR Report 2013

Arrangers

Financial
Institutions

Financial
Institutions

Financial
Institutions

Financial
Institutions

Financial
Institutions

Market36

Arrangement

Appointment

Clients

Financial
Institutions

Structured Financing
In 1998, DBJ pioneered project financing in Japan. From Securitizationthese beginnings, our accumulated expertise in this area,

Through finance methods such as liquidation and secu-

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

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

which debts are repaid through future cash flows gener-

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

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

finance strategies and helps optimize their funding. A

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

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

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

backed by future cash flows. We help clients raise funds

finance, securitization and various other financial products

in optimal ways that match their financing strategies.
DBJ’s Businesses

and optimal financing methods (senior loans, mezzanine
 PFIs and PPPsloans, equity, etc.).

Since the facilitation of the PFI Act* in 1999, DBJ has
 Project Financing

accumulated expertise by taking advantage of its strong

We have a wealth of expertise in helping companies inrelations with public-sector entities. The support we havethe energy and infrastructure sectors—primarily with

provided to numerous clients in this category has turned

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

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

support to help clients who are considering PFI/PPP

Such finance solutions we provide help them raise funds

initiatives in Japan and overseas to resolve the issues

and support their efforts to control risks.

they face.

 Object Financing* Act on Promotion of Private Finance Initiative

DBJ helps clients determine optimal financing methods
that take advantage of the cashflow-generating characteristics of assets with special features, such as ships,
airplanes and railcars, as well as supporting their efforts
to control risks.
Project Financing Example: Electric Power Generation ProjectSponsor A

FundingSponsor B
Banking Syndicate

Electric Power
Generation Company
Special-Purpose
Company (SPC)

FinancingConstruction contract

Plant CElectric power supply
contract (15 years)

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

Operational repair and maintenance contract

Factory E

Plant D
Plant delivery contract

Technical guidance contract

Annual Report & CSR Report 201337

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 picture by reducing interest-bearing debt
• Eliminates risk of variations in real estate values

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

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

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

parties realize profits

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

require that funds be raised to acquire an operation. For

businesses using borrowed money. If the company or busi-

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

chase the business or company for relatively little cash. For

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

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

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

are delisting and by owner-operated companies.

are constrained.

38

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

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

works out joint equity financing with sponsors. The ability

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

has a limited amount of cash available, MBOs generally

LBO/MBO solutions.

Annual Report & CSR Report 2013

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

DBJ has gained abundant experience in the area of devel-

gate movable property, inventory collateral and receivables.

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

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

tories also enhance the robustness of internal control systems.

companies with growth capital.

ABL

ClientDBJ

Collateral Transfer

Inventory

Accounts Receivable

Liquidate Inventory
Sell inventories, primarily throughexisting wholesale routes

Collateral Transfer
PledgeCash and Equivalents

DBJ’s Businesses(Buyer)Third-Party
Borrower

Sale

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

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

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

needed to implement restructuring plans. By providing

Against this backdrop, DBJ has developed a host of tools

medium- to long-term financing to fund capital investment

to help underperforming companies sustain or develop

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

rehabilitation can refinance its debt, providing exit financing

This temporary financing method provides working capital

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

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

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

employing it in response to varied needs.

Capital requirements

Bankruptcy( priority obligation)
Common debts

Working
capitalRestructured
assetsBankruptcy( priority obligation)

Funding forequipment andother items

Exitfinancing

DIP financing
Proceduralapplication

Decision to start

Early stage

Approval of plan

Conclusion of plan

Later stage

Annual Report & CSR Report 201339

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

Program logo

incorporation of environmental ratings in financing menus.
In fiscal 2007, we launched an interest rate subsidy program
based on environmental ratings to advance global warming
countermeasures.
Employing the experience we gained through the DBJ
Environmentally Rated Loan Program, in fiscal 2009 we beganoffering a service to help regional banks develop evaluation
tools to use in performing their own environmental ratings.
Through such initiatives, we aim to augment environmental
financing and encourage its proliferation in Japan.
Features• Varying interest rate levels based on environmental ratings• Screening sheet containing approximately 120 questions
derived from the United Nations Environment Programme
Finance Initiative (UNEP FI) evaluation of fair and neutral
global environmental trends and an exchange of information
with the Ministry of the Environment
Convening of the Environmental Ratings Advisory
Committee, seeking advice from outside experts andrenewing annual visits• Ratings determined through interviews with clients• Applicability to a wide range of clients

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

Program logo

40

Annual Report & CSR Report 2013

basis of the assessment. In this manner, we introduced theworld’s first disaster preparedness-based financing method.
We revised our financing menus substantially in 2011 as aresult of the Great East Japan Earthquake. Enterprise business
continuity activities are assessed comprehensively, including
resilient strategies and systems for recovering in the event acrisis materializes.
The DBJ Disaster Preparedness Rating (1) is an expressionof the evaluation results and (2) promotes broad awarenessof the concept of BCM. Aiming to realize the goal of a “resilient Japanese society through disaster preparedness ratings,”
in 2012 we changed the name of these ratings to the “DBJEnterprise Disaster Resilience Rated Loan Program.”
We will promote enterprise risk management andbusiness continuity through the DBJ Enterprise Disaster
Resilience Rated Loan Program.
Features• Varying interest rate levels based on BCM Ratings• Fair and neutral assessment of global crisis management
trendsBased on information exchanges with the Japanese Cabinet
Office, World Economic Forum, NPOs and other experts,
developed a screening sheet containing approximately 100
questions. We convene an Advisory Committee to elicit
advice from outside experts and renew visits each year.
• Ratings determined through interviews with clients• Applicability to a wide range of clientsDBJ Employee’s Health Management Rated Loan Program
In April 2008, the Ministry of Health, Labour and Welfare

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

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

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

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

tivity has become an issue of growing importance. With these

health and offer them financing terms in line with their assessment levels. We have used a specialized method for introducing an “employee’s health management rating,” making DBJ
the first in the world to offer such a financing menu.
DBJ’s Businesses

Program logo

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

DBJ Green Building Certification
Applying the expertise and networks accumulated overdevelopment, refurbishment and other activities of clientsmany years of real estate financing, the DBJ Environmentallythat own or manage real estate that evinces environmental

Rated Loan Program and expertise in other environment-

and societal considerations (green buildings). The certifica-

related areas, DBJ inaugurated DBJ Green Buildingtion also benefits DBJ clients in aspects such as IR, PR andCertification in fiscal 2011.

CSR. In addition, in August 2012 we introduced a logistics

This certification program is an advanced and uniqueinitiative in that it is implemented by a financial institu-

edition of DBJ Green Building Certification for distribution
facilities.

tion to provide investment and loan support for real estate
Overview of the DBJ Green Building Certification
Evaluation
Items

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

Ecology

Amenity & Risk Management

Community & Partnership

Reducing the burden buildings place on
the environmenttBuilding’s environmental
performancetEnergy savings, conservation of
resources, renewable energy

Comfort, safety and securitytSafety and security of people who
use buildingstComfort and convenience for people
who use buildings

Consideration for and communication
with stakeholderst3FMBUJPOTIJQTXJUIUIFTVSSPVOEJOH
environment and regiont$PNNVOJDBUJPOTCFUXFFOPXOFSTBOE
stakeholders++

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

Properties with the bestclass environmental & social
awareness

Properties withexceptionally highenvironmental & social
awareness

Properties with excellent
environmental & social
awareness

Properties with highenvironmental & social
awareness

Properties with enoughenvironmental & social
awareness

Annual Report & CSR Report 201341

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

hospitals’ efforts to continue providing good healthcare ining attention for the role they play as bases for safety andregional societies.

security in regional societies. In May 2012, we introduced
the DBJ Visionary Hospital program to support the advancement of medical functions, as well as to encourage proactive environmental consciousness, disaster prevention andAssessment of a
Medical Institution’s
Hospital Functions

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

business continuity measures. For institutions that have had
DBJ
Certified as a
Environmentally DBJ Visionary Hospital
Rated Loan
Program
DBJ Enterprise
DisasterFinancial screening
Resilience Rated
by DBJ
Loan Program

their hospital functions certified by the Japan Council for
Quality Health Care, DBJ uses the environmental assessment and BCM evaluation system it developed to certify
hospitals as DBJ Visionary Hospitals (namely, those thathave in place superior environmental consciousness, disaster prevention and business continuity measures), offering

Evaluation of medical
institution’s CSR
responses

them a financing menu with financing terms set according
to their assessments. Through this measure, DBJ supports

Assessment of medical
institution’s finances andmanagement

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

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

petitiveness to global levels,” “community development,”

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

European financial crisis and the disruption of supply chainsmately ¥400 billion for this purpose.

that include overseas elements, DBJ has created a support
Raising Competitiveness to Global Levels

Community Development

Technology, overseas development andalliance, corporate revitalization andrestructuring, sightseeing, medical andhealthcare, etc.

DBJ Smart
Japan
ProgramSpecial zone for reconstruction, comprehensive
special zones, BCPs, investment inearthquake-proofing and other disasterprevention measures, etc.

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

DBJ Infrastructure Reinforcement Support Program
Given the growing need to maintain the socioeconomic

infrastructure disaster preparedness. By leveraging PFI andinfrastructure, DBJ has established a fund with a total

other methods, this fund provides ultralong-term invest-

investment and loan limit of ¥150.0 billion to promote thement and loans to support social infrastructure projects.

reconstruction of aging infrastructure and investment in

DBJ Growth Industry Siting Support Program

42

DBJ has established this program to overcome the challeng-

by encouraging the introduction of leading-edge equip-

es posed by yen appreciation and energy limitations. Withment and other efforts to enhance efficiency and boost

an investment and loan limit of ¥100.0 billion, the program

added value. Through this approach, DBJ is supporting ini-

is designed to increase Japanese industrial competitivenesstiatives that should lead to job creation and maintenance.

Annual Report & CSR Report 2013

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

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

information support service through advice and sugges-

competition, Japan’s regions must coordinate with one

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

another and implement diverse regional development

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

schemes that capitalize on their respective strengths, com-

trial structure and partners with regional financial institu-

petitive advantages and latent potential.

tions to offer financial support, including the execution of

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

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

Niigata Area
Promotion of value-added
strategies in food andmanufacturingQ

DBJ’s Businesses

 Regional Areas Genki Program
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

Hokuriku Area

Q“Creation of new industry in
Tohoku” programQ

Emotional, technological andphysical support for the
Hokuriku areaQ

Kanto-Koshin Area
Q

Chugoku Area
“Three arrows” to invigorate
the Chugoku area

Q

Q

Q

Kyushu Area
Enhancing the regional
competitiveness of the
Kyushu region as the door to
Asia
Creating a new growthengine for the Kyushu region
Increasing the competitivenessof companies in the area withunique growth strategies

Q

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

Tokai Area

Q

Q

Q

Q

Q

Program to support thecreation of next-generationindustries
Program to support thegrowth of core value chain
companies
Program to support measures
to prepare for a massive
earthquake in the Nankai
TroughKansai Area
Q

Shikoku Area
Q

Program for evolving Shikoku
companies at the top of theirnichesProgram to help strengthen
the shipbuilding cluster
Materials island Shikoku
support programQ

Minami-Kyushu Area
Project to promote
Minami-Kyushu as anadvanced region in food,health and environment/energyQ

Leading-edge manufacturingindustries
Program to support theinvigoration of commerceand distributionQ

Q

Annual Report & CSR Report 201343

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
• Interest rate subsidy programs that support therevitalization of regional communities
These interest rate subsidy programs are provided tobusinesses recommended by the national government
in line with the regional revitalization plans of regional
municipal bodies certified by the national government.
• 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 community revitalization
These interest subsidy systems target operations endorsed by
the national government in line with government plans forcomprehensive special zones of regional municipal bodies.
• Interest rate subsidy system for special zone for reconstruction
This interest subsidy system targets operations endorsedby the national government in accordance with the reconstruction plans of regional municipal bodies designated by
the national government in the areas identified in the Law
for Special Zone for Reconstruction (227 towns and cities).
• 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 government and who meet program requirements. At present, such subsidies are being provided toclients affected by the Great East Japan Earthquake and toa special desk for consulting on measures to counter yen
appreciation.

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

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

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

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

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

medium-sized and large companies.

large-scale natural disasters. The Japan Finance Corporation

44

This supplementary budget having been passed, as a des-

(JFC) provides risk and other support from the Japanese

ignated financial institution for the crisis response operations

government via designated financial institutions as funds for

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

responding to crisis-related damage.

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

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

aftermath of the recent disaster. (See pages 49–55.)

Annual Report & CSR Report 2013

Consulting/Advisory Services
We offer consulting and advisory services and make use of networks with allied financial institutions. Throughour consulting and advisory support services, we help clients become more competitive and contribute to thevigor of regional economies.
Our consulting and advisory services are backed by the know-how we have built up through our structured
and other types of financing, our M&A advisory services and our provision of expertise on industry researchand environmental and technical evaluations. We apply this accumulated expertise to help clients resolve theissues they face.
The advisory services case studies on page 79 introduce DBJ’s “CSR through Investment, Loan and Other
Businesses” approach.

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

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

seas—centered on Asia, both for businesses restructuring

through its own networks. We offer comprehensive M&A

operationally and for industry restructuring overall. Mergers

solutions that match clients’ varied needs and management

and acquisitions can be a method for achieving higher busi-

strategies.

DBJ’s Businesses

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

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

M&A Advisory Services
Consulting
Analysis ofmanagement
issuesPerformance
analysis

Buy Side

Buy Side

Select and analyze
acquisition
candidateConnect withpotential acquirer

Execution

Analyze finances, businessrisks and other factors
Assess corporate value
Consider optimal structure

Sell Side

Sell Side

Select and analyze
potential acquirer

Connect withacquisition
candidate

Arrange for due diligence
Support preparation ofcontractual and othernecessary documents

Advise oncontract
negotiations
Process
management

CLOSING

Formulation of
acquisition andselling strategies

Matchmaking

Data gathering

Annual Report & CSR Report 201345

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

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

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Past

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t/BUJPOBM SFHJPOBMBOESFTFBSDIJOTUJUVUFOFUXPSLTDBJ Asia Financial Support Center
DBJ opened the DBJ Asia Financial Support Center in June
2011 to provide local information and consulting services toregional banks supporting efforts by medium-sized companies and other entities in their regions to promote businessin other parts of Asia.
The center’s roles are to liaise with regional banks
throughout Japan and help meet the various needs of local
medium-sized companies and other entities to develop
their operations in Asia. In addition to leveraging such DBJ
Group resources as its overseas representative office andoverseas subsidiaries, as well as Japan Economic ResearchInstitute Inc., this center provides consulting services that46

Annual Report & CSR Report 2013

take advantage of the comprehensive agreement on collaboration with Hitotsubashi University (entered into in June2011), and of networks of overseas public and private financial institutions and legal and accounting firms.
As of June 30, 2013, 66 regional banks were membersof the center. Breaking down inquiries by country, 70%
were in relation to China, Thailand, Vietnam or Indonesia.
Inquiries included such topics as procedures for entering
into business in Japan, industry trends and funding. DBJ willcontinue augmenting its ability to disseminate information
related to Asia.

Women Entrepreneurs Center (DBJ-WEC)
Japan faces a number of issues, including protracted economic sluggishness, a decrease in the population, an aging
society and reconstruction following the Great East Japan
Earthquake. Amid these conditions, women are expected toplay an increasing role in business. Businesses created froma new female perspective are considered likely to provide adriving force for new economic growth and social transformation.
Anticipating such developments, DBJ launched the
Women Entrepreneurs Center (DBJ-WEC) in November
2011. Through this center, we aim to provide comprehensive support, including funding and business startup expertise, to new business growth led by women.
As part of its initiative to cultivate and foster new businesses, DBJ-WEC annually holds a business plan competition targeting women entrepreneurs. The winner of thecompetition is awarded an incentive payment of up to¥10 million. Additionally, DBJ-WEC offers all participantsa variety of support on the planning front, such as by connecting them with experienced entrepreneurs and experts
in various fields, providing startup expertise and advice andintroducing them to networks after the competition.

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

Grand prize winner of the second annual competition: Ms. Keiko
Yoshimoto

Renewed growth,
led by women

Renewedbusinesscreation

DBJ’s Businesses

Fostering ofgrowth indisaster-affected
areas

DBJ
WEC

DBJ Women Entrepreneurs Center

Annual Report & CSR Report 201347

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

Issues Faced by Government Bodies

Determine owned assets[Buildings]t&MFNFOUBSZBOEKVOJPSIJHITDIPPMT%FDMJOJOHCJSUISBUF FMJNJOBUJPODPOTPMJEBUJPOt8FMGBSFGBDJMJUJFT "HJOHPGTPDJFUZ SJTJOHEFNBOEt)FBMUIDBSFGBDJMJUJFT .BOBHFNFOUJTTVFT SJTJOHEFNBOEt(PWFSONFOUPGåDFCVJMEJOHT
DPNNVOJUZDFOUFST %FDSFBTJOHQPQVMBUJPO FYDFTTGBDJMJUJFT[Infrastructure]t8BUFSTVQQMZ 1SPåUBCMF CVUEFNBOEGBMMJOHt4FXFSBHF  .BTTJWFSFHJPOBMCPOETt3PBETBOECSJEHFT  .BTTJWFWPMVNF
t1VCMJDIPVTJOH  .BTTJWFWPMVNFtGas1SJWBUJ[BUJPOCFDPNJOHTUBOEBSE "MTPQPSUT XBUFSXBZT QBSLT FUD

t%FUFSNJOFUPUBMWPMVNFBOEEFUFSJPSBUJPO$BMDVMBUFDPTUPGVQHSBEJOHt.BLFBTTFUBMMPDBUJPOGVMMZWJTJCMF
t%FUFSNJOFFYUFOUPGBTTFUVTFBOEDPTUT
t%JTDMPTFJOGPSNBUJPOTVDIBTiGBDJMJUZXIJUFQBQFSTwBOE
PUIFSEPDVNFOUTUPSFTJEFOUT"MMEFUFSJPSBUJOHBUTBNFUJNF
.BTTJWFCVSEFOPGGVOEJOHUPSFOPWBUFt8IBUJTUIFPWFSBMMWPMVNFt)PXTFSJPVTJTUIFEFUFSJPSBUJPOt8IBUJTUIFBDUVBMDPTUPGSFOPWBUJPOt8IBUJTUIFBWBJMBCMFåOBODJBMDBQBDJUZt8IBUJTUIFVTBHFTUBUVTPG
JOEJWJEVBMGBDJMJUJFT

1VCMJD"TTFU.BOBHFNFOU

Determine population trendst'PSFDBTUQPQVMBUJPOTPGTFOJPSTBOEQFPQMFJOUIFJSQSPEVDUJWFZFBSTt.BLFGVMMZWJTJCMFQPQVMBUJPOTPGTFOJPSTBOEQFPQMFJOUIFJSQSPEVDUJWFZFBST%FUFSNJOFNJTNBUDIFTJOSFHJPOBMBMMPDBUJPOTPGGBDJMJUJFT

Determine financial conditions
t$POåSNQBDFPGEFUFSJPSBUJPOJOUBYSFWFOVFt$POåSNFTUJNBUFEDPTUTUPTVTUBJOBOEGPSTPDJFUBMQSPUFDUJPOt$POåSNDBQJUBMFYQFOEJUVSFTJOSFQBJSTBOESFOPWBUJPOT

%FUFSNJOFQPMJDZNFBTVSFTGSPNBNBOBHFNFOUQFSTQFDUJWF FRVBMJ[FBOEQSJPSJUJ[FUIFSFOPWBUJPOJOWFTUNFOU
4IJGUUPTQFDJåDNBOBHFNFOUPGJOEJWJEVBMBTTFUT'JSTU QFSGPSNNBJOUFOBODFUPFYUFOEMJGFPGBHJOHBTTFUT1'*BOE111BSFJNQPSUBOUUPUIJTQSPDFTT BTUIFZFODPVSBHFDPOTPMJEBUJPOBOEEJTQPTBMBOEEFQMPZVOEFSVUJMJ[FEBTTFUT

48

Annual Report & CSR Report 2013

Crisis Response Operations

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

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

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

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

quickly and flexibly.

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

responding to crisis-related damage.

Limited. In accordance with this designation, DBJ com-

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

crises as disruptions in the domestic or overseas financial
DBJ’s Businesses

Crisis Response Operations Scheme$PNQFUFOUNJOJTUFSTUIF.JOJTUFSPG'JOBODF UIF.JOJTUFSPG&DPOPNZ 5SBEFBOE

(PWFSONFOU *OEVTUSZBOEUIF.JOJTUFSPG"HSJDVMUVSF 'PSFTUSZBOE'JTIFSJFTt%FTJHOBUFEt$BQJUBMDPOUSJCVUJPOt-FOEJOHPGGVOETt*OUFSFTUTVCTJEJFT%FTJHOBUFEGJOBODJBMJOTUJUVUJPOT+BQBO'JOBODF$PSQPSBUJPO1SJWBUFGJOBODJBMJOTUJUVUJPO$SJTJT3FTQPOTF'BDJMJUBUJPO"DDPVOU1SJWBUFGJOBODJBMJOTUJUVUJPOttt

1SFQBSFTBOEBOOPVODFTiDSJTJTSFTQPOTFGBDJMJUBUJPOHVJEFMJOFTw*NQMFNFOUTSJTLTVQQPSUBOE
PUIFSNFBTVSFTPOUIFCBTJTPG
BHSFFNFOUTXJUIEFTJHOBUFEGJOBODJBMJOTUJUVUJPOT5XPTUFQMPBOT
'JOBODJBMJOEFNJOJUJFT*OUFSFTUTVCTJEJFT

4IPLP$IVLJO#BOL

DBJ#VTJOFTTDPOEVDUFECBTFEPO
UIFBQQSPWBMPGUIFDPNQFUFOUNJOJTUFST-FOEJOHPGTQFDJGJDGVOET PUIFSTFSWJDFT$MJFOUTThe Great East Japan Earthquake
In response to the Great East Japan Earthquake, whichcrisis response operations for clients affected both directly

occurred on March 11, 2011, as a designated financial

and indirectly by the disaster.

institution for crisis response operations DBJ set up a fullfledged structure to facilitate the all-around operation ofPlease see pages 52–55 for “Initiatives Related to theGreat East Japan Earthquake.”

Annual Report & CSR Report 201349

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

On October 30, 2008, Shoko Chukin and DBJ established

As of March 31, 2013, DBJ’s loan performance and com-“lifestyle measures” in response to the worsening corporate
cashflow conditions resulting from the global financial andmercial paper acquisitions of crisis countermeasure loans

economic crisis that commenced in the autumn of 2008.

were as follows.

On December 11, these measures were granted crisis des-• Cumulative loans: ¥4,887.7 billion (1,115 projects)

ignation under the category of “incidents related to confu-• Cumulative loans executed with loss guarantee agree-sion in the international financial order.” On December 19,

ments: ¥268.3 billion (47 projects, including those slated

these measures were augmented by economic measures, orfor application to JFC)

“emergency lifestyle defense measures,” funded through• Cumulative commercial paper acquisitions: ¥361.0 billion

an expanded budget and the commencement of the com-

(68 projects)

mercial paper acquisition business, and labeled Cashflow
Countermeasures for Medium-Sized and Large Companies*1 Of the ¥67.0 billion in loans executed with loss guarantee agreements to Japan Airlines in relation to crisis response operations,¥47.0 billion (amount confirmed in April 2011 owing to DBJ’s
completion of corporate rehabilitation procedures) in compensation was ultimately provided by the Japan Finance Corporation on
the basis of this agreement.
*2 A portion of the loans provided by DBJ to Elpida Memory, Inc.,
were covered by a Japan Finance Corporation guarantee on losses.
The agreement between DBJ and Japan Finance Corporation
involves loss guarantees on loans of ¥10.0 billion, executed ascrisis response operations, as well as investment of ¥28.4 billion,
as a designated operator set forth in the Law on Special Measuresfor Industrial Revitalization and Innovation. DBJ requested loss
guarantee compensation on the loans and has already received
payment of ¥5.0 billion. Based on the agreement, the maximum
amount that DBJ may receive as compensation payment fromJapan Finance Corporation is ¥27.7 billion: ¥5.0 billion for theloans (50% compensation) and ¥22.7 billion for the investment(80% compensation). In the event that in the future DBJ is able tocollect on the principal of the loans for which it has received compensatory payment, DBJ will return to Japan Finance Corporationa portion of the compensation received that corresponds to thepercentage of the loans recovered.

Employing the Crisis Response Operations of the Japan
Finance Corporation. On January 27, 2009, government
regulations were amended, incorporating these items into
the second supplementary budget for fiscal 2008, augmented with funds generated by DBJ’s commercial paper
acquisition business on January 30.
Additional economic crisis countermeasures wereannounced on April 10, 2009, outlining specific measuresfor large-scale crisis response operations and earmarking a
total of ¥15 trillion for crisis response for medium-sized andlarge companies. In line with these measures, authorizationof a supplementary budget for fiscal 2009 was announced
on May 29, 2009. This budget received Diet authorization
on June 26, and the Revision to the New DBJ Act went into
force and was promulgated on July 3, 2009. These measures paved the way to reinforce DBJ’s financial structureand facilitate crisis response operations.
For projects following the Great East Japan Earthquake,
which occurred on March 11, 2011, the Japanese government began conducting crisis certifications on March 12,
2011. Upon notification of such certifications, the implementation period for crisis response operations was re-extended.
(Meanwhile, the implementation period for certain projects,
such as those involving “incidents related to confusion in the
Loans as Crisis Countermeasures
(Cumulative)(Billions of yen)
6,000

Commercial Paper Acquisition as Crisis Countermeasures (Cumulative)
1,090(Number of projects) (Billions of yen)
400
1,200
1,115

944
4,500

3,111.0

3,000

900

300

600

200

300

100

0

0

3,338.5

0

50

68

68

68

60

40
36

1,060.3

Mar. 31,
2009

68
215.0

301
1,500

361.0

4,887.7
4,297.0

817

361.0

(Number of projects)
80
361.0
361.0

Mar. 31,2010

Annual Report & CSR Report 2013

Mar. 31,2011

Mar. 31,2012

Mar. 31,2013

20

Mar. 31,2009

Mar. 31,2010

Mar. 31,2011

Mar. 31,2012

Mar. 31,2013

0

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

emergency situations that cause widespread anxiety about

affected by earthquakes, typhoons or other large-scale

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

natural disasters, the outbreak of severe acute respiratory

response unit to fill the gap that emerges when peacetime

syndrome (SARS), bovine spongiform encephalopathy (BSE)

financial platforms fail to function.

Disaster Recovery
DBJ Initiatives

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

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

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

Chuetsu Offshore Earthquake in October 2004. In addition

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

tant infrastructure that was destroyed. What is required is

assisted providers of everyday necessities such as foodstuffs

an entity that through its everyday business relationships

and other retail items. These efforts played a major role inhas accumulated know-how on the industries and business-

revitalizing the employment and economic situations of local

es that provide this core infrastructure. This entity also must

communities, prompting a revival in many fields.

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

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

DBJ’s Businesses

Societal Concerns

Emergency Financing
Societal Concerns

DBJ Initiatives

Society requires institutions whose day-to-day operations

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

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

ing to the Japanese airline industry, which was immedi-

situations. These institutions must also have the working

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

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

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

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

Annual Report & CSR Report 2013

51

Initiatives Related to the Great East Japan Earthquake

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

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

Responding to Electrical Power Supply Problems
Following the Great East Japan Earthquake, the stable supply of electricity has become an important issue from thestandpoint of maintaining or strengthening Japan’s economic
and industrial competitiveness. The need to secure alternate
forms of fuel has caused electric utilities’ costs to increase
and required them to introduce new safety measures, both ofwhich were expected to deteriorate their balance of revenues
and expenses. Because of the difficulty the utilities would havein issuing corporate bonds, DBJ responded quickly in collaboration with private financial institutions to secure the funding

needed to ensure a stable supply of electricity.
Going forward, DBJ will forge stronger ties with otherfinancial institutions and related parties with which each of thepower companies conducts transactions, taking into accountthe companies’ funding environments and electric power system reform trends. We will also concentrate on encouraging
the spread of renewable energy through megasolar and smallhydroelectric generation projects. As of March 31, 2013, DBJ’sbalance of loans in the energy (electric power, gas, heat andwater) sector totaled ¥2.8 trillion.

Response to TEPCO Needs
Recognizing that the most important issue for Tokyo ElectricPower Company, Incorporated (TEPCO) lies in balancing
appropriate compensation payments to victims with providing a stable supply of electricity, immediately after the nuclear
power plant accident DBJ collaborated with major banks toprovide financing. We have continued to provide support
through a backup commitment line for compensation payments established on the basis of an emergency special business plan approved by the minister of finance in November
2011.
In May 2012, the minister of finance approved a compre-

hensive special business plan supporting the utility’s efforts
to become a “new TEPCO.” Under this comprehensive plan,in addition to maintaining a credit balance DBJ is to provide
loans of approximately ¥500.0 billion of the some ¥1 trillion incooperative funding requested under the plan, partly by making use of DBJ’s loans for crisis response operations.
To ensure the comprehensive plan proceeds smoothly, DBJ
regularly discusses its progress with TEPCO and the Nuclear
Damage Liability Facilitation Fund. Accordingly, we continue tosupport both a stable supply of electricity and the payment ofappropriate compensation to victims.

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

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

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

52

Annual Report & CSR Report 2013

Regional
Financial
Institutions

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

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

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

Restoration and Reconstruction Support through Investment and Loan Activities

Phase B

Phase A

Phase C

(Early phase ofrestoration works)(Emergency responses)

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 Investment 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 companies

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

X Amount: ¥2.0 trillion
measurePerformance as ofMarch 31, 2013
¥1,497.0 billion (152 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 Businessest First supplementary budget (May 2011)(Full-scale reconstruction)

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

Provision of risk capitalthrough regional jointreconstruction funds

Independent support
through the DBJ Smart
Japan Program

Proactive involvement
in reconstruction
projects (PFI, urban
regeneration,
renewable energy, etc.)

Initiatives addressing
energy problems

O Support targeting primary damage, in response

to bond market confusion
Loans to nine electric
power companies

Responding to funding needs
since the disaster
Power Generation in the United States Using
Renewable Energy, an investigative research report

Liaison with theReconstruction Agency
Office for the Promotionof Business Collaboration

Annual Report & CSR Report 201353

Great East Japan Earthquake Reconstruction FundDBJ and financial institutions in areas affected by theearthquake formed the Great East Japan Earthquake
Reconstruction Fund to support the restoration and reconstruction of companies that sustained damage in the earthquake.
The fund is aimed at providing support for the reconstruction of prominent regional companies that were temporarily affected by the disaster. The fund provides suchcompanies with risk capital that makes uses of such instruments as subordinated loans and preferred shares, with theaim of supporting the early reconstruction of the disasterIwate Genki Ippai
Investment Limited
PartnershipNamestricken region.
As of March 31, 2013, DBJ had provided investments
and loans for 37 projects as indicated below.
• Iwate Genki Ippai Investment Limited Partnership(15 projects)• Fukushima Booster Fund Investment Limited Partnership(10 projects)• Miyagi Reconstruction Bridge Investment Limited
Partnership(6 projects)• Ibaraki Kizuna Investment Limited Partnership (6 projects)

Fukushima Booster
Fund Investment
Limited Partnership

MiyagiReconstruction
Bridge Investment
Limited Partnership¥5.0 billion (initially)
August 2011

Ibaraki Kizuna
Investment Limited
Partnership

Scale of fund¥5.0 billion (initially) ¥5.0 billion (initially)¥5.0 billion (initially)
Established
August 2011
August 2011
September 2011
General partnerships
SFG Partners Inc.
Tohoku Fukko Partners Co., Ltd.
(GPs)
DBJ and
Limited partnerships
DBJ and
DBJ and
DBJ and
The Bank of Iwate,(LPs)
The Toho Bank, Ltd.
The 77 Bank, Ltd.
The Joyo Bank, Ltd.
Ltd.
Investment period of three years, duration of 10 years
Period(If necessary, however, it is possible to extend the investment period by up to two years and theduration by up to five years.)

Great East Japan Earthquake Reconstruction Fund Scheme
Wholly capitalized

Local Banks

LP financing(Operating company)
Tohoku Reconstruction Partners(Operating company)
SFG Partners Inc.

GP financing

DBJ

LP financing

GP financing

Investment Limited Partnership
Subordinated loans / Preferred stock financing, etc.

Company

Company

Company

Supply Chain Support Fund
In June 2011, DBJ joined the Japan Auto Parts Industries
Association (JAPIA) to form the Supply Chain Support Limited
Partnership. The partnership was formed to support the reconstruction of automotive supply chains (parts procurement networks) that were affected by the Great East Japan Earthquake.
The Great East Japan Earthquake disrupted the automotive industry’s supply chains. This fact, compounded byelectric power supply problems created uncertainties about
when the automotive industry production would resume.
Through the establishment of this fund, DBJ aimed to54

Annual Report & CSR Report 2013provide long-term stable funding through equity-type funds
for companies supporting the supply chains employed by
Japan’s automotive industry. By assisting the industry insuch aspects as reconstruction following the earthquake,and supporting business and industry restructuring, we aim
to recover the confidence in the industry as a responsible
global supplier and toughen the supply chain. As a result,
we aim to respond to the mandate of helping to rebuild
one of Japan’s backbone industries and contribute to its
redevelopment and management stability.

Providing Information“Issues and Outlook for Tourism, Centering on Overnight
Tourism—Based on an Impact Study of the Great East
Japan Earthquake on the Tohoku Region” (February 2012)
This report looks at the domestic overnight tourism industry, which was significantly affected by the Great East
Japan Earthquake, summarizing the industry’s issues andprospects. Leveraging the expertise that DBJ has accumulated involving the ryokan (Japanese-style inn) tourism andrelated industry business, this study involves interviews withexperts and managers and takes an approach combining awritten survey with field research.

“A Year after the Great East Japan Earthquake—
Verification, Area-Specific Data on Restoration andReconstruction and Future Issues” (April 2012)
A year after the Great East Japan Earthquake, the characteristics of different areas had grown more distinct. Therefore,
in order to analyze the data and produce future strategies,
we summarized area-specific data according to (1) the thencurrent status of the disaster-stricken region, (2) the statusof formulation of reconstruction plans by government bodies, (3) key related legislation and budget measures, and (4)economic, corporate and regional financial trends.
“Reconstruction Directions by a United Tohoku—Fromthe Perspective of Leveraging the Experience of andLessons from Disaster to Counter Disaster Risks andPromote Industry Reconstruction” (April 2013)
Having suffered devastation across its multiple prefectures,
the Tohoku region experienced broad-based support fromwithin Japan and overseas. This report considers the importance of Tohoku’s unification in the face of disaster and initiatives that combine the knowledge of Japanese and overseas institutions, conducting surveys and offering advice
on future directions for reconstruction and implementation
mechanisms.

DBJ’s Businesses“Status of Damage from the Great East Japan
Earthquake and Reconstruction Issues—An Analysis byField and Region” (May 2011)
Taking into account the Estimated Damage to Capital Stock
Resulting from the Great East Japan Earthquake, publishedby DBJ on April 28, 2011, as well as local surveys, this material examines the state of damage by area in six categories—lifestyle/social infrastructure, housing, healthcare/welfare, manufacturing, non-manufacturing and agriculture/
forestry/fisheries. This analysis serves as a key documentfor ordering the approach to the respective reconstruction issues of affected prefectures, both inland and on the
coast.

Study Group on Regional Reconstruction
To encourage the creative reconstruction of the entire areaafflicted by the Great East Japan Earthquake, particularly
the Tohoku region, DBJ established the Study Group on
Regional Reconstruction (chaired by Takashi Onishi, thenprofessor of the University of Tokyo), comprising experts insuch fields as community development, disaster preparedness and regional public finance. The study group consid-

ers specific measures, such as a strategic project aiming
for a “Calamity-Proof Nation (Strong in the Face of Major
Disaster),” from three perspectives: (1) safety and security,(2) regional entities and (3) looking to the future. In March
2012, the group produced a report recommending theleveraging of private-sector expertise through stronger ties
with the public sector.

Collaboration Agreement on Industrial Reconstruction with Fukushima Prefecture
In March 2013, DBJ signed a collaboration agreement
on industrial reconstruction with Fukushima Prefecture.
Fukushima Prefecture is promoting both its post-quake
industry reconstruction and its ongoing industry concentration. Under this agreement, Fukushima Prefecture and DBJ
will cooperate on gathering 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. Under the accord, Fukushima Prefecture and
DBJ will effectually combine their respective networks
and knowhow to encourage industry reconstruction in
Fukushima Prefecture. (See page 69.)

Ishinomaki Urban Revitalization Lecture
To promote the reconstruction of the area centered on thecity of Ishinomaki, which sustained severe damage in the
Great East Japan Earthquake, DBJ joined companies, universities and government institutions to form the Compact
City Ishinomaki Machinaka Sosei Council for urban development by local residents. In March 2013, this council held the

Ishinomaki Urban Revitalization Lecture. The lecture washeld to elicit the agreement of related parties prior to a fullfledged launch of the city reconstruction and urban revitalization project that the council is considering, ensuring thatthe project would be pursued with a shared awareness. DBJ
provided support for planning and holding the lecture.

Annual Report & CSR Report 201355

Making Use of Information Functions

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

Economic and Industrial Research
In a broad range of industrial circles, DBJ researches conditions
in various sectors and among different types of businesses,
conducting surveys and performing research on such topics
as international competitiveness. DBJ also prepares reports
on conditions in individual industries, technical development
trends and new industries and innovation. We provide feedback on these reports to our clients, as well as other parties.
Survey Examples
DBJ Monthly Overview
This report provides a brief commentary on domestic 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 policy andcommenting on current topics.
In addition, the report addresses topics
that are timely from the perspective of industrial trends.
“Perspectives on the Shale Gas Revolution (Industry
Impact and Pointers for Japan)”(DBJ Monthly Overview, No. 186, February 2013)
The so-called shale gas revolution that began in the UnitedStates goes beyond a simple increase in that country’s ability to supply natural gas. This discovery is transforming the
global energy balance, and Japan anticipates LNG imports
from the United States. In addition to trade, shale gas is
beginning to impact all manner of industries related to
upstream and downstream aspects of natural gas.
This report analyzes the shale gas
revolution from three perspectives: (1) the
effects of the U.S. natural gas trade, (2) the
impact of Japan’s LNG procurement and(3) the implications for Japan of natural gas
production, distribution and consumption(as a fuel and a feedstock).

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Annual Report & CSR Report 2013

“Lackluster Department Stores—Background andFuture Directions”(DBJ Monthly Overview, No. 180, August 2012)
Personal income and retail industry sales moved essentially inlockstep in the past, but their paths began to diverge aroundfiscal 2005: even while personal income increased, retailindustry sales remained flat. Services have accounted for an
increasing percentage as consumption has become increasingly diverse, even within the sector: while supermarket sales
have tended to track overall retail industry sales trends, sales
at department stores have been on a downward path since
their peak in fiscal 1991. Clearly, consumers’ propensity to shop at department
stores is falling, and this downturn in sales
has accelerated since the Lehman Shock.
This report examines the background forthe lackluster department store performance and discusses response measures.
DBJ Long-Term Interest Rate Weekly Outlook
DBJ provides its clients with weekly long-term interest rate
movement information on the first business day of each week.
Focused on Japan and the United States, we offer a brief summary of market trends during the previous week and introduce
key economic indicators, treasury auctions and other events
scheduled in the current week. DBJ economists comment on
the effects of important economic indicators and monetary
policy announced during the week, providing an outlook formarket trends based on the analysis of economic fundamentals.
“Reasons Behind Banks’ Decisions on Loan Share
Structures—Implications from Data on Corporation–
Bank Pairings”(Economics Today, Vol. 33 No. 1, March 2013)This report looks at the reasons behind Japanese companies’
decisions on their shares of bank lending (the share of suchloans at individual banks), using company-level data to conduct
a positive analysis. Based on a panel’s inferences about recurring attributes of cooperation between companies, banks, andcompanies and banks, this report explores
what percentage of companies’ loans comefrom the largest lenders. The report confirmsthat lending has become shared more evenly
among banks as they have grown increasingly concerned about corporate reticencetoward borrowing.

“New Developments in International Finance and Japanese Corporate Dynamics—Excerpts from the Fiscal
2012 Joint Symposium by the University of Tokyo andthe Research Institute of Capital Formation”(Economics Today, Vol. 34 No. 1, May 2013)

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

DBJ’s Businesses

In February 2013, the Center for Advanced Research in Finance (CARF) and the Research Institute of Capital Formation
held a joint symposium entitled “New Developments in International Finance and Japanese Corporate Dynamics.” Thereporting sessions, themed on Japanese corporate dynamics
and internationalization, economic growth in East Asia andcompetitiveness, involved multifaceted
debates from scholars and businesspeople
familiar with these fields. The panel discussions featured a spirited exchange of views
about measures for responding to futureinternational currency structures and international financial market risks.

“The Great East Japan Earthquake—Recommenda-

economy and society.
This report summarizes disaster reconstruction recommendations by 50 academics who are at the forefront of suchfields as economics, urban theory and industry theory. The
report is divided into three sections, Part I: Regional Revitalization; Part II: Challenges for the Japanese Economy; and Part III:
Reconstruction and Japanese Society.

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

Survey Example“Report on June 2012 Survey ofCapital Investment Plans for Years
to March 31, 2012, 2013 and 2014”(Surveys, No. 105, September 2012)
After completing our questionnairebased survey on corporate capital
investment activity, the Survey ofCapital Investment Plans, we publicized
the results, as well as our analysis.

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

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

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

Technology
DBJ’s activities in technology-related fields include conducting trend surveys (for example, on bioethanol). DBJ’s Practical
Application Support Center for Technology provides technicalevaluations and conducts other activities to help companies
realize their potential for technological commercialization.
Annual Report & CSR Report 2013

57

Providing Information to Local Communities
Supplying Information to Help Local Community
Development
Local communities areexperiencing increasingly
difficult environmental
circumstances, such asa declining birthrate, anaging population, theamalgamation of towns, cities and villages, and financial
crises. Addressing these issues requires a greater degree ofexpertise and more ingenuity than ever. DBJ assists by analyzing the information it accumulates through its network ofoffices (19 domestic locations—head office, branches andrepresentative offices—and three overseas locations—subsidiaries and a representative office), economic agencies ofregional governments and local communities, and companies in Japan and abroad. DBJ disseminates this information
through reports, publications, lectures and other formats
to encourage public-private partnerships (PPPs), promote
tourism, build up local communities, and contribute to local
government financing.

“Fiscal 2013 Regional Handbook: Regional Data and Policy
Information”
This handbook is a collection of data that include fundamental
economic, industrial, lifestyle and policy indicators for regional
blocks, administrative regions and principal cities, as well as acompilation of individual regional policies and projects to facilitate an overall understanding of regional
policies, economies and societies and the current status of regional projects. In the Topics
section, Hiroyuki Yasujima, professor of theCollege of Tourism, Rikkyo University, contributed a special section entitled “Managementof Sustainable Tourism Regions from the
Perspective of Tourism Value.”“The Potential of PFI for Large-Scale Upgrades to Aging
Infrastructure and Relevant Considerations from anInternational Comparison of Public Debt”
As Japan struggles with public finances, PFI
is being considered as an essential way to
upgrade aging infrastructure while reducing
government spending.
This report conducts a comparative
analysis of Japan, the United Kingdom andAustralia, drawing lessons for Japan’s use of
PFI going forward.

“Developing Regional Business through InboundTourism—Using Japan-Style DMOs for Marketing and
Enhancing Tourism Quality”
Inbound tourism to Japan is being positioned as an important
industry both regionally and nationally, as it has the potential tooffset an expected drop in internal tourist demand, provide asource of foreign-currency earnings and contribute to the creationof local job opportunities.
After positioning Japan as a tourism
market amid increasing global competitionand examining trends among foreign visitors
to Japan and forecasts of future demand fromleading Asian countries, this report looks at
issues and summarizes specific activities toleverage inbound tourism for local businessdevelopment.
“A Year after the Great East Japan Earthquake—
Verification, Area-Specific Data on Restoration andReconstruction and Future Issues”
A year after the Great East Japan Earthquake,the characteristics of different areas had
grown more distinct. Therefore, in order toanalyze the data and produce future strategies,
we summarized area-specific data according
to (1) the then current status of the disasterstricken region, (2) the status of formulation ofreconstruction plans by government bodies,(3) key related legislation and budget measuresand (4) economic, corporate and regional financial trends.

Branch Reports
Hokkaido Branch“Increasing Overnight Tourism to Hokkaido—Looking
at Current Conditions and Issues Based on LongTerm Trend Data since the Peak”(Report, July 2012)
The tourism industry plays an important role in Hokkaido’s economic
trends and employment. However, thenumber of tourists staying in Hokkaido
overnight has been on a downward
trend since the peak in fiscal 1999.
This situation has had a major impact

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Annual Report & CSR Report 2013

on the local economy in general, and the lodging industry inparticular.
This report looks at long-term trend data on the numberof overnight tourists in Hokkaido, examining the current
state of tourism in the prefecture and summarizing futureissues that need to be faced.
To increase the number of overnight tourists, this reportsuggests the need to (1) increase the overall number of tourists to Hokkaido and (2) take initiatives for increasing thenumber of days each tourist spends there, particularly among
Japanese travelers from outside the prefecture—the figurethat has dropped off most precipitously.

Tohoku Branch

Niigata Branch“Making the Shift to Profitable Agriculture—
Innovative Vegetable Providers Born at the Nexus of
People and IT” (Lecture, November 2012)
In Niigata, one of Japan’s mostprominent food-producing
regions, the agriculture industry is important to social andeconomic invigoration.
In this lecture, Ms. Yuriko
Kato of M2 Labo. Co. (grandprize winner of the first DBJ Women Entrepreneurs New
Business Plan Competition) outlined initiatives for adding
value to agriculture by using IT to link markets and producers. Ms. Kato, who has high expectations for the ability ofagriculture to simultaneously address three of Japan’s mostpressing issues—employment, health and education—
described efforts that could lead to such innovation.

Hokuriku Branch“Ishikawa Prefecture to Feel the Economic Ripples
from the Extension of the Hokuriku Shinkansen to
Kanazawa”“Toyama Prefecture to Feelthe Economic Ripples fromthe Extension of the Hokuriku
Shinkansen” (Reports, March 2013)
These two research reports estimate the economic ripple effect that
Ishikawa and Toyama prefectures arelikely to experience when the Hokuriku
Shinkansen is extended to their regions

toward the end of fiscal 2014. The reports look at ways tomaximize and sustain these beneficial effects for the regions
the shinkansen will pass through, such as introducing tourism-related case studies.

Tokai Branch“Nagoya’s Prospects for 2015—Building the Nagoya
Brand to Encompass Work, Home, Play and Study”(Report, December 2012)
Even though the number of jobs isfalling and urban populations are
peaking, a redevelopment plan tomake effective use of the land in frontof Nagoya Station is invigorating thisarea. By the time reconstruction on the
Nagoya Central Post Office, Nagoya
Terminal Building and Dainagoya
Building is complete in 2015, 5%
more office space than in 2010 will beavailable in Nagoya’s business district (the Meieki, Fushimi,
Marunouchi and Sakae areas). In the Meieki area, theincrease will be around 15%, leading to some concern about
the potential “Year 2015 problem” stemming from an oversupply of office space.
Looking at 2015 as an expected watershed year for thebalance between the supply of and demand for office spacein Nagoya’s business district, this report explores regional
strategies for enhancing Nagoya’s metropolitan brand.

DBJ’s Businesses“Reconstruction Directions by a United Tohoku—
From the Perspective of Leveraging the Experience ofand Lessons from Disaster to Counter Disaster Risks
and Promote Industry Reconstruction”(Report, April 2013)
Having suffered devastation acrossits multiple prefectures, the Tohoku
region experienced broad-based
support from throughout Japan andoverseas. This report considers theimportance of Tohoku’s unification in
the face of disaster and initiatives thatcombine the knowledge of Japaneseand overseas institutions. This reportoffers advice on future directions for reconstruction andimplementation mechanisms after arranging and analyzing
data about the state of damage two years after the disaster,and conducting literature research and on-site hearings in
the affected region.

Kansai Branch“Kansai Battery Report Series” (Reports, October 2012
to March 2013)
In recent years, the battery industry
has enjoyed robust expansion in
global markets, but in Japan thisindustry is facing increasingly fierce
competition due to the encroachment of new market entrants fromoverseas as their technologicallevel rises. Against this backdrop,
the “Kansai Battery Report Series”
explores the changes underway
in the industry, looking at current
conditions and issues in the Kansai region and for Japan asa whole. The series is replete with industry reports, analysis,
observations and suggestions.

Chugoku Branch“Human Resource Strategy Lecture in Hiroshima”(Lecture, October 2012)
For this lecture, themed on promoting business opportunities
for women setting out as entrepreneurs or embarking on asecond career, DBJ invited Ms. Chizuru Gorai of SO@R (runAnnual Report & CSR Report 201359

ner-up prize winner of the first DBJ Women Entrepreneurs
New Business Plan Competition) to share her compelling
message on entrepreneurship to aspiring women and young
people in this region.
Panel discussions following Ms. Gorai’s keynote speechdeliberated measures for
invigorating the regional
economy through government and corporate support measures and initiatives and by deploying thepower of women.

Shikoku Branch“DBJ Shikoku Seminar, ‘Manufacturers Winning Out
in Asia’” (Seminar, November 2012)
This business seminar was held for company managers in
the city of Shikokuchuo, Ehime Prefecture, which is home
to many manufacturers of paper and processed paper products. After opening with a greeting by then-mayor Takumi
Ihara, Aichi Shukutoku University Professor Yukimitsu Sanadadelivered a lecture entitled “Regional Businesses Making
Money in Asia.” Following this speech was a talk by Yoshinari
Furuta, chief delegate, Shanghai Representative Office,
DBJ Business Investment Co., Ltd., on “Radically Changing
Business Conditions in Shanghai, China.” In his talk, Mr.
Furuta touched on important points related to overseas development basedon current local information in China and provided
detailed explanations
about the current risks inthis market.

Kyushu Branch“The Changing Demographic Structure of Fukuoka’s
Metropolitan Areas—The Future as Seen from
Regional Mesh Statistics” (Report, March 2013)

A May 2010 Kyushu Branch report
entitled “The Urban Shift to Fukuoka’s
Urban Areas among the Youth
Population” described a marked
urban shift in the population, centeredon women in their 20s, due to theincreasing attractiveness of Fukuoka’smunicipal functions.
This report, whose scope has been
expanded beyond the city of Fukuoka, looks at demographical changes that are underway in Fukuoka’s urban areas
by organizing and analyzing the most recent mesh statistics from Japan’s 2010 census. Concentrating specificallyon seniors, the report distills down the characteristics of
Fukuoka’s urban areas from the increasing age of the population and the changing family structure, before studying
issues for future focus.

Minami-Kyushu Branch“Status and Issues Related to the Aging of Public
Facilities in the Minami-Kyushu Region—Introducing
Public Facility Management” (Report, March 2013)This report focuses on an issue being
faced by the Minami-Kyushu region,
namely the aging public facilities of
its core municipal governments. By
analyzing various types of data andconducting hearings, this report showsthat the aging facilities in MinamiKyushu are more serious than otherissues that the region is addressing,such as ongoing urbanization and thefact that its population is aging more rapidly than the national average. The report also points out the limitations of measures that municipal governments are considering to makepublic facilities sustainable. The report recommends addressing this situation by introducing public facility management
and explains specific points toward achieving this objective.

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

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Annual Report & CSR Report 2013

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

CSR Report

DBJ provides integrated investment and loan services 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 other business, but also seriously taking into accountsocietal needs and living up to responsibilities as a memberof society. This requires all DBJ executives and regular
employees to conduct their daily activities with constantconsideration of 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 . . . . . . . . . 63
CSR through Investment, Loan and Other
Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Environmental Management . . . . . . . . . . . . 90
Business Continuity Plan (BCP) . . . . . . . . . . . 94
Fostering Human Resources and Creating a
Comfortable Work Environment . . . . . . . . . 96

Annual Report & CSR Report 2013

61

Editorial Policy
To expand communication with all stakeholders, in 2003, DBJ first issued Environmental Report 2003 for a Sustainable
Society. This was followed by annual sustainability reports in 2004 and 2005. In 2006, DBJ published the CSR Report. Since
the fiscal year ended March 31, 2007, DBJ has combined its annual report and CSR report under the concept of ”disclosure
from a CSR perspective.” DBJ will continue publishing CSR information introducing its initiatives to help realize a sustainable
society.
As in previous years, this report explains how DBJ came into being, as well as the services DBJ provides. The report aims
to show that DBJ fulfills its corporate social responsibility through the careful attention it accords to each of its activities,
incorporating this discussion of the status of its recent activities. Furthermore, we have employed the following guidelines inour effort to enhance the report’s readability.


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 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, 2012, to March 31, 2013
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 2013

Next publication:

September 2014 (previous publication: September 2012; frequency: annual)

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

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Annual Report & CSR Report 2013

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

Environmental and Social
Contribution Activities

Investment, Loan and Other Services
in Response to Client Issues

Industry

Building Social
Infrastructure

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

Regions

Environment
Crisis Response Operations (Disaster Response, etc.)

Supporting industrial
restructuring

CSR Report

Community
Revitalization

Reinforcing the functions offinancial and capital markets
Providing financial
support in growth fields

Communication inInternational Cooperation

Providing a safety net for financial markets

Environmental
Management

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

Annual Report & CSR Report 201363

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

DBJ strives to increase its dialogue with stakeholders in its

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

effort to realize a sustainable society.

DBJ secures financing through the issuance of Fiscal

DBJ’ s investment and loan services involve clients in

Investment and Loan Program (FILP) agency bonds

numerous regions and across a variety of industries.

and government-guaranteed bonds, through direct

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

corporate bonds and through loans
from private-sectorbanks.

Investors

Clientsrnme

nt

As of March 31,
2013, DBJ’ snumbered 1,168.
DBJ employee training

Employees

Society

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

Gove

employees

s/
NPO s
NGO

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

communities through its affiliations with

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

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

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

64

Annual Report & CSR Report 2013

Creation ofSocial Sustainability

Environment

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

Even after privatization, DBJ aims to continue contrib-

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

DBJ’s business effectiveness and results, thereby improving

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

society and work to promote the realization of a sustain-

Loan and Other Businesses.

able society.

CSR through Investment, Loan and Other Businesses
Due consideration of compliance issues is a prerequisite forsocieties and the creation of employee-friendly workplaces.

the sustainable development of enterprises. Accordingly,

Accordingly, DBJ considers the application of its intellectual

it is important that a corporation’s business activity brings

assets and service platforms for investments and loans to

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

be of vital importance.
Specifically, DBJ will apply the distinctive features andthe trust of society.
Financial institutions can play a specific role in building afinancial services that it has realized in the past to provide

harmonious society over the long term by identifying truly

various solutions to clients that cover expected changes

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

social environments. In this way, DBJ will fulfill its fourroles: reinforcing the functions of financial and capital mar-

CSR through investment, loan and other businesses, such

kets, supporting industrial restructuring, providing financial

as the provision of services that lead to client satisfaction,

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

financial markets.

CSR Report

We believe that DBJ can gain the trust of society with

Corporate Philosophy

CSR through Investment, Loan
and Other Businesses

Building Social
Infrastructure

Industry

Regions

Crisis Response Operations (Disaster Response, etc.)
See
page 68.
Reinforcing the functions offinancial and capital markets

Supporting industrial
restructuring

Providing financial support
in growth fields

Providing a safety net for financial markets

Annual Report & CSR Report 201365

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

Tokai Branch

problems can best be resolved by communication and theMesse Nagoya

exchange of opinions. Accordingly, DBJ strives to commu-

Messe Nagoya 2012 was held to carry forth the philosophies

nicate with as many people as possible through seminars,of the 2005 World Exposition, Aichi, Japan (in the areas ofsymposiums, lectures and the Internet.

the environment, science and technology, and international
cooperation).

Communication Focused on the Environment

DBJ’s initiatives were introduced at this exposition,

Environmental problems such as global warming must be

including the environmentally related DBJ Environmentallyresolved, starting with individual awareness of the severity

Rated Loan Program and disaster preparedness related DBJof the issues.

Enterprise Disaster Resilience Rated Loan Program.

DBJ promotes understanding of the relationshipbetween the environment and financial and business activities by participating in the Eco-Products Exhibition, Japan’slargest environmental event, and holding seminars andsymposiums in conjunction with relevant organizations.
DBJ has had a booth at the Eco-Products Exhibition
every year since fiscal 2001. Through display panels,
we introduce various DBJ activities, such as the DBJ
Environmentally Rated Loan Program and the DBJ Enterprise
Disaster Resilience Rated Loan Program. In fiscal 2012, we

Messe Nagoya 2012

also lectured on the theme of Q&A on Financing Employing
DBJ Environmental Ratings, attracting numerous visitors toour booth.

Communication in International Cooperation
DBJ holds seminars for developing countries’ governmental
and developmental financial institutions, primarily those in
Asia, describing the Bank’s experience in applying policybased financing to support the reconstruction and growthof the industrial economy of postwar Japan. Participantsalso benefit from our accumulated expertise in policy issues
such as energy conservation, environmental measures andprivate infrastructure. The Development Finance Course,

Eco Presentation Stage (Eco-Products 2012)

for example, is a seminar that has attracted 346 people
from more than 30 countries since it was inaugurated by
DBJ in 1967. Furthermore, through collaboration with suchinstitutions as the World Bank and Japan International
Cooperation Agency, we provide comprehensive technological cooperation to such banks as China Development
Bank and the Infrastructure Development Bank of Malaysia.
In recent years, we have responded to requests from thegovernments of Japan and other countries. Such projects

Eco-Products 2012 boothCommunication on Community Revitalization

Development Bank, a detailed design project for the

DBJ considers working with local citizens to build communi-

Development Bank of Mongolia and a development bankties that suit their unique environments an important partof supporting independent community development. To
this end, DBJ sponsors such events as seminars and symposiums in collaboration with local authorities and regional
branches of the Japan Chambers of Commerce and Industry
and other economic organizations.

66

include one to support credit risk management at Vietnam

Annual Report & CSR Report 2013

support project in southern Africa.
DBJ is a member of the Association of Development
Financing Institutions in Asia and the Pacific (ADFIAP, basedin Manila, the Philippines), and since 1976 we have been
networking with financial institutions from China, South
Korea, ASEAN countries, India and other areas. In 2013,

DBJ received an ADFIAP Award in the CSR division for its

Participating in Activities That Contribute toSociety

Women Entrepreneurs Center initiatives.

TABLE FOR TWO

ADFIAP’s annual meeting was held in Ulan Bator, Mongolia.

DBJ began participating in the TABLE FOR TWO* program on
March 29, 2010. Under this program, one of the meals in ourcompany cafeteria each day is designated as a ”healthy menu”
option. Through proactive employee participation in this program, as of the end of May 2013, DBJ’s contributions totaled¥1,091,900—enough to provide 54,595 meals.

ADFIAP annual meeting in
Ulan Bator, Mongolia
ADFIAP Awards ceremony

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

Video Introduction to CSR Initiatives
To make DBJ’s CSR activities more easily understandable, on
our website we have included video content entitled ”DBJ’s
CSR: Strengthening Society through Financial Expertise.” Wealso showed this video at the Eco-Products 2012 exhibition.
http://www.dbj.jp/co/csr/index.html (Japanese only)

A healthy menu

CSR ReportCampaign

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

design, ensuring easy access for disabled users.

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 the CSR Report.
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.

Marunouchi shuttle bus

Annual Report & CSR Report 201367

CSR through Investment, Loan and Other Businesses

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

CSR through Investment, Loan and Other Businesses
Building Social
Infrastructure

Industry

Regions

Crisis Response Operations (Disaster Response, etc.)

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

Providing financial support
in growth fields

Supporting industrial
restructuring
We provide financial support for thereconstruction of the Japanese industrial
structure that supports social and economic
activities.

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

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

Case Studies
Overseas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

Reconstruction Response . . . . . . . . . . . . . . . . 69

Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

Transportation. . . . . . . . . . . . . . . . . . . . . . . . . 73

Urban Development . . . . . . . . . . . . . . . . . . . 74











DBJ Green Building Certification . . . . . . . . . 75

DBJ Environmentally Rated Loan Program . . 81
Healthcare and Welfare . . . . . . . . . . . . . . . . 82
DBJ Employee’s Health Management Rated
Loan Program . . . . . . . . . . . . . . . . . . . . . . . . 83

Community Revitalization . . . . . . . . . . . . . . . 84

Supporting Growth . . . . . . . . . . . . . . . . . . . . 76

Private Finance Initiatives . . . . . . . . . . . . . . . 88

Restructuring and Revitalization . . . . . . . . . . 78



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

M&A and Business Alliances . . . . . . . . . . . . . 79

68

Annual Report & CSR Report 2013

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

Collaboration Agreement with Fukushima Prefecture

Fukushima Prefecture, which suffered extensive damage incultivation of industries involved in renewable energy and

the Great East Japan Earthquake, is pursuing full-fledged

healthcare, (3) supporting the redevelopment of companies

reconstruction initiatives, including efforts to revitalize local

within the prefecture, (4) rebuilding tourism and expanding

industry and attract new industries to the area. In March

the number of people who interact with the prefecture,

2013, DBJ signed a “collaboration agreement on industrial(5) promoting the sale of the prefecture’s products, (6) nur-

reconstruction” with Fukushima Prefecture, aimed at pro-turing industrial human resources and (7) supporting com-

moting the prefecture’s industry reconstruction following

munity development.

the earthquake, as well as its ongoing development. Under
this agreement, Fukushima Prefecture and DBJ will cooperate on gathering information, conducting strategic reviews
and cultivating personnel, taking an overall approach toinvigorating the local economy by promoting local industry
CSR Report

and tourism and communicating the region’s attractions.
Under the accord, Fukushima Prefecture and DBJ will
make effective use of the information and networks they
possess to encourage industry reconstruction in Fukushima
Prefecture by cooperating in numerous ways, such as(1) attracting companies, (2) promoting the grouping andCase Study

Collaboration agreement signing ceremony

Marusan Paper

Marusan Paper Mfg. Co., Ltd., headquartered in the city of
Minamisoma, Fukushima Prefecture, is a containerboard
manufacturing subsidiary of Rengo Co., Ltd. A supplier tocardboard manufacturers, chiefly in the Tohoku region,
Marusan Paper produces around 1,000 tons of containerboard per day. Accordingly, the company plays a major rolein the Tohoku region’s supply of cardboard. With forest
resources becoming an ever more pressing issue, Marusan
Paper has been an early proponent of paper recycling.

* The Interest Rate Subsidy System for Special Zone for
Reconstruction is a support measure designed to enable reconstruction to proceed smoothly and quickly in the region affectedby the Great East Japan Earthquake. Under this measure, regional
municipal bodies draft their own reconstruction plans, given theregional state of affairs and characteristics, which are endorsed by
the national government. Businesses cited as core regional entities
in reconstruction plans that receive approval are eligible for interest
rate subsidies from the national government when they raise funds
through a government-designated financial institution.

Proactive on the environmental front, Marusan Paper was
the first company in Japan to develop kraft liner—a type ofcontainerboard with a high recycled paper content.
The city of Minamisoma received approval from theJapanese government of its application for the funding ofMarusan Paper as a core business in its plan to promotereconstruction, aimed at maintaining or providing new
employment opportunities, stabilizing life in the city andUsed paper

reinvigorating the local economy. Accordingly, DBJ provided
Marusan Paper with financing to upgrade and augment its
containerboard manufacturing facilities through its Interest
Rate Subsidy System for Special Zone for Reconstruction*.

No. 7 paper machine

Annual Report & CSR Report 201369

Reconstruction Response
Case Study

Sendai Coca-Cola Bottling

Sendai Coca-Cola Bottling Co., Ltd., headquartered in thedisaster preparedness and reinforce the abilities of thecity of Sendai, Miyagi Prefecture, produces and sells Coca-region’s distribution and operational functions to withstandCola and a range of other soft drinks throughout Miyagi,

major earthquakes.

Fukushima and Yamagata prefectures. The company’s
headquarters and distribution warehouse, as well as its coreZao Plant, sustained major damage in the Great East Japan
Earthquake. However, recognizing that it would be unable
to grow unless the region in which it operates also thrived,
the company resumed production at its Zao Plant in late
April 2011, and recommenced the provision of products.
DBJ provided financing to Sendai Coca-Cola Bottlingfor the reconstruction of production facilities that weredestroyed in the earthquake. This funding was provided
under the Interest Rate Subsidy System for Special Zone for
Reconstruction, in response to a reconstruction plan draftedby the city of Sendai that cited Sendai Coca-Cola Bottling

Conceptual illustration of Ougimachi distribution centeras a core business. The plan’s objective was to strengthen

Case Study

Taiyo Sangyo

To support the restoration and reconstruction of companies

the company completed construction of a plant to pro-damaged in the Great East Japan Earthquake, DBJ is form-

duce nitrogen ice (deoxidized ice). This type of ice is highly

ing Great East Japan Earthquake Reconstruction Funds ineffective in maintaining the freshness of the saury catches

collaboration with financial institutions in disaster-stricken

brought in through the port of Ofunato. Thereafter, theregions. Targeting leading companies that have experienced

company also recommenced operations at its efficiently

a temporary downturn in business conditions as a result ofequipped salmon flake plant, helping to provide some ofthe disaster but that are essential to regional reconstruc-the infrastructure essential for seafood processing—a key

tion, the fund provides risk capital in the form of subordi-

industry for the Ofunato region.

nated loans and preferred stock to support the rapid reconstruction of the affected region.
One such Great East Japan Earthquake Reconstruction
Fund, the “Iwate Genki Ippai Investment Limited
Partnership” provided jointly by DBJ and The Bank of Iwate,
Ltd., provided financing for Taiyo Sangyo K.K., headquartered in Chuo-ku, Tokyo.
Taiyo Sangyo is a producer of processed seafood under
the Taisan brand, which is popular throughout Japan. Taiyo
Sangyo suffered extensive damage from the tsunami following the Great East Japan Earthquake, including the complete destruction of its Ofunato Plant. As part of its efforts
to revive business in the city of Ofunato, in September 201270

Annual Report & CSR Report 2013

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

Case Study

Wakayama Kyodo Power

Wakayama Kyodo Power Company, Inc., headquartered in
the city of Wakayama, Wakayama Prefecture, was estab-

carbon dioxide and nitrogen oxide emissions.
As the sole arranger on this project, DBJ collaborated

lished in 1961 by Kansai Electric Power Co., Inc., in coop-with 10 local financial institutions to arrange a total oferation with Sumitomo Metal Industries, Ltd. (now Nippon¥24.0 billion in syndicated loans for Wakayama Kyodo

Steel & Sumitomo Metal Corporation) and other compa-

Power.

nies. The first company in Japan to be jointly founded byan electric power supplier and a large-scale customer, thecompany conducts thermal power generation fueled primarily by the blast furnace gas and coke oven gas emitted
by Sumitomo Metal Industries’ Wakayama Steel Works.
The company’s generators also use heavy oil as an effecCSR Reporttive complementary fuel, providing high-quality, reasonably
priced electricity to the two companies.
Plans are underway to replace Wakayama Kyodo Power’s
aging No. 1 generator, which commenced operation in
1963, with a new combined cycle gas turbine generator.
The use of this generation technology is expected to substantially improve thermal efficiency, as well as to reduce

Case Study

Conceptual illustration of the new No. 1 generator

Aoyama-Kogen Wind Farm

Aoyama-Kogen Wind Farm Co., Ltd., headquartered inpany aims to help prevent global warming through the pro-the city of Tsu, Mie Prefecture, is a so-called third-sector

motion of renewable energy. The project is also expected(public–private) corporation, established by the cities of Tsu

to stimulate the local economy by providing local jobs toand Iga and a subsidiary of Chubu Electric Power Co., Inc.,

oversee construction and maintenance, as well as driving

C-tech Corporation. This company supplies electricity fromtourism as people come to tour the installation.

wind power generators in the Aoyama highlands, which
extend from the western part of Tsu to eastern Iga.
DBJ, in cooperation with six local financial institutions,arranged a total of ¥18.0 billion in syndicated loans for the
Aoyama-Kogen Wind Farm’s project to expand its wind
power generation facilities.
Through this project, Aoyama-Kogen Wind Farm plans
to erect 40 wind power generators capable of producing
2,000 kW each (total output of 80,000 kW) and related
equipment across the Aoyama highlands. This addition
to its existing 20 generators (total output of 15,000 kW)
should make this the largest wind farm in Japan. By aug-Wind power generation facility

menting its wind power generation equipment, the com-

Annual Report & CSR Report 201371

Energy
Case Study

Solar Frontier

Solar Frontier K.K., headquartered in Minato-ku, Tokyo,
and a wholly owned subsidiary of Showa Shell Sekiyu K.K.,

As the first phase of its megasolar project, Solar Frontier

manufactures and sells copper-indium-selenium (CIS) thin-is operating a solar power plant in Kansai Internationalfilm solar panels. Employing Solar Frontier’s proprietary

Airport. Going forward, the project plans to commencetechnology, these next-generation solar cells offer high eco-full-scale operations by making use of idle land throughout

nomic efficiency and are environmentally friendly.

Japan.

DBJ aims to support renewable energy businesses

DBJ is providing funding for this project to support Solar

spanning upstream to downstream operations. We have

Frontier’s new business development that leverages its pro-arranged three syndicated loans for Solar Frontier sinceprietary technologies. DBJ’s investment and loans for this2010 for its Kunitomi Plant (the Third Miyazaki Plant), which

project represent the first application of its newly estab-

produces the solar panels. DBJ has also continued to sup-lished Fund for Japanese Industrial Competitiveness. DBJ

port Solar Frontier in other ways, such as in the joint estab-

will provide mezzanine loans, preferred shares and otherlishment of an investment company to provide financing

forms of risk money through the fund to firms taking initia-

for megasolar projects it is engaging in as part of its new

tives to promote innovation or enhance corporate value.

Kunitomi Plant of Solar Frontier

72

power generation business.

Annual Report & CSR Report 2013

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 StudyTES Holdings

TES Holdings Limited, headquartered in the United

shares from DVB Bank SE. DBJ expects to leverage TES’s

Kingdom, is a leader in the business of commercial air-expertise to support initiatives to develop the engine main-

craft engine management, leasing and parts sales, withtenance, repair and overhaul (MRO) business in Japan.

operations in the United Kingdom, the United States andSingapore. The used aircraft engine market is expected togrow, as existing aircraft and engines will soon be replacedby more efficient engines, and DBJ believes that TES is
uniquely placed to capitalize on this growth.
Convinced of the aircraft engine market’s growth
CSR Reportpotential, as well as TES’s extensive expertise in commercial
aircraft engines, and believing that new shareholders could
contribute to the expansion of its core business, DBJ and
Mitsubishi Corporation together acquired 60% of TES’s

Case StudyEngine being repaired

KeikyuKeikyu Corporation, headquartered in Minato-ku, Tokyo, is

DBJ provides financing to Keikyu Corporation, whicha railway operator whose routes center on the 87-kilometer

offers transportation services that support the lives of resi-

Keikyu Main Line, which runs from central Tokyo throughdents along its railway lines and contribute to development

Kawasaki, Yokohama and Yokosuka to Miura Peninsula. In

along these lines.

addition, Keikyu Group companies are involved in bus transportation, real estate, leisure services and retailing.
Since 2001, Keikyu has been working on continuous
grade separation projects in the vicinity of Keikyu Kamata
Station, in an effort to reduce traffic congestion andaccidents at railway crossings. As of October 2012, thecompany had completed the elevation of outbound tracks
on the Keikyu Main Line between Heiwajima Station andRokugodote Station, and all inbound and outbound tracks
on the airport line between Keikyu Kamata Station andOtorii Station. This project has improved access to Haneda
Airport, where the opening of an international passenger
terminal is leading to increased air traffic demand.

Continuous grade separation project

Annual Report & CSR Report 201373

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

Surugadai Development Special-Purpose Company/Yasuda Real Estate

In April 2013, two large-scale, mixed-use facilities opened

commercial facilities and student rental housing. This com-their doors in Tokyo’s Ochanomizu area.

plex is designed to foster a sense of community among

The first of these is Ochanomizu Sola City, located in
Chiyoda-ku, Tokyo, development of which was undertaken

local residents, students and companies.
DBJ provided financing to Surugadai Development

by Surugadai Development Special-Purpose Company

Special-Purpose Company and Yasuda Real Estate, the mainthrough joint investment by Taisei Corporation, Hulic Co.,

entities involved in these Ochanomizu area redevelopment

Ltd., Yasuda Real Estate Co., Ltd., and Taisei-Yuraku Realprojects.

Estate Co., Ltd. Located on the site of the former Hitachi,Ltd., headquarters in front of JR Ochanomizu Station,
Ochanomizu Sola City serves as a highly functional officespace that gives due consideration to environmental andemergency preparedness concerns. The complex also
reflects the area’s history and culture and is expected toserve as an oasis for visitors and local residents alike.
The second facility is WATERRAS, in Chiyoda-ku,
Tokyo. Located on the site of the former Chiyoda-ku Awaji
Elementary School, and built by a redevelopment consortium that includes Yasuda Real Estate Co., Ltd., headquartered in Chiyoda-ku, Tokyo, WATERRAS comprises a tower
and an annex. The tower houses office, residential andOchanomizu Sola City

community facilities, while the annex has space for offices,
WATERRAS

Case Study

Tokyo Prime Stage

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

74

Annual Report & CSR Report 2013

Conceptual rendering

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

Tokyu

Tokyu Corporation, headquartered in Shibuya-ku, Tokyo,

for Shibuya-ku and (3) major contribution to increasing theis a leading railway operator that conducts business mainly

attractiveness of the Shibuya area through community revi-in the southwestern part of Tokyo and the eastern side oftalization initiatives.

Kanagawa Prefecture. In addition to transportation, companies in the Tokyu Group take part in wide-ranging business,
including real estate, lifestyle services, hotels and resorts,
and business support.
DBJ has accorded Tokyu’s multipurpose high-rise tower,
Shibuya Hikarie, its “DBJ Green Building Certification” andawarded it Platinum 2012 certification for being in the topclass in Japan in terms of consideration for the environmentand society.
CSR ReportCompleted in April 2012, Shibuya Hikarie is a landmark
tower near the east exit of Shibuya Station. DBJ awarded
the tower high marks for its (1) advanced environmental
performance, (2) serving as a disaster preparedness center

Case Study

Shibuya Hikarie

HohsuiHohsui Corporation, headquartered in Chuo-ku, Tokyo, par-tion measures and (3) emergency preparedness measures,ticipates in the seafood wholesaling and fresh and preparedsuch as employing a seismically isolated structure and theseafood retailing business and operates refrigerated andinstallation of emergency power generation equipment.

frozen warehouses in eight locations in the Tokyo metro-

Accordingly, we awarded the distribution center a Gold

politan area, centered around Tsukiji and Toyomi.

2012 (plan) certification for being extremely superior in its

DBJ has provided plan certification* as part of DBJ Green
Building Certification for the new Ichikawa Distribution

consideration for the environment and society as a logistics
facility.

Center that Hohsui is building. We also arranged a total of¥5.0 billion in syndicated loans for the project.
Until now, DBJ Green Building Certification had beenused exclusively for office buildings, but in August 2012 weintroduced a new version of this certification for logistics* “Plan certification” is a mechanism used on properties under construction for confirming development plans using the DBJ Green
Building Certification model for scoring plans between other owners and property-related individuals in terms of environmental features and convenience to tenants based on development plans.

facilities. This certification allows DBJ to support sustainability increases throughout the economic value chain, ranging
from physical logistics facility structures to advanced ownerinitiatives and relations with transport companies and thesurrounding community.
The facility earned DBJ’s certification for (1) the useof dock shelters, air shutters and exterior walls to boost
refrigeration efficiency, (2) measures to conserve energy
and resources, such as the introduction of LED illuminationand sensor-activated lighting, as well as water conserva-

Ichikawa Distribution Center

Annual Report & CSR Report 201375

Supporting Growth
The current state of the Japanese economy is characterized by a sense of gradual recovery, led byresurgent consumer spending and a recovery in corporate earnings, particularly among large companies. At the same time, however, the government needs to steadily introduce a variety of strategies and measures to ensure this growth, as well as to reinforce the competitiveness of the country’s
industries. Particularly important are efforts to maintain core competitiveness (by ensuring humanresources, 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
new value through links between different industry sectors and promoting initiatives that span thevalue chain from the upstream to the downstream ends).

Case Study

NEC

NEC, headquartered in Minato-ku, Tokyo, is one of Japan’s

a bid to build an even more robust management infrastruc-leading providers of electrical/electronic equipment and IT

ture.

solution services. NEC is undertaking ongoing structural

Working with its own financial institutions, DBJ has

reform in a business transition toward a solution/service-entered into a hybrid financing agreement with NEC. We

based model (social solutions business) centered on its

are providing equity-type funding via the Fund for Japanesecharacteristic strengths in network-related technologies

Industrial Competitiveness we established in March 2013.

and services. NEC is positioning itself in such growth fields
as solution services, including technologically advanced
SDN*, and the smart energy field, which includes electricity storage systems. NEC is making strategic investments inthese growth fields, as well as concentrating management* Software-defined networking (SDN): A technological framework
and product grouping that allows a controller (software) to handle
the management of network equipment functions remotely and in
an integrated fashion.

resources and actively promoting global developments, inSoftware-Defined Networking (SDN)
Past

FutureStatic network control, where network
control and communication processing
were handled together

Separated network control and communication
processing

Network systems using specialized
equipment to meet individual needs

Software residing on the server conducts
communication processing only by controllingdevices dynamically

Network control
softwareSeparate anddynamic
control
Device dedicated to network control
functions76

Annual Report & CSR Report 2013

ServerCommunication
processing

Device handling only
communication processing

Supporting Growth
Case Study

Asahi Fiber Glass

Asahi Fiber Glass Co., Ltd. (AFGC), headquartered inJapan and overseas, AFGC should be able to heighten its

Chiyoda-ku, Tokyo, was established in 1956 through jointcompetitiveness in the domestic market, as well as acceler-

investment by Asahi Glass Co., Ltd., and Owens Corning

ate its business development overseas, particularly in otherCo., Ltd. Initially a manufacturer of glass fiber, the com-

parts of Asia.

pany now has a leading share of the Japanese market forthe production and sales of glass wool, used as insulationmaterial in residential housing.
After acquiring AFGC shares in November 2007, DBJ
participated in its management and was instrumental inestablishing its independence from the Asahi Glass Group.
We also continued to proactively support the company’sefforts to grow in a host of fields. In March 2013, DBJ
transferred its holdings in AFGC to ORIX Corporation,
believing that this move would lead to further growth andincreased competitiveness. By taking advantage of the
networks and management resources of the ORIX Group,
which is developing businesses in a broad range of areas in

CSR Report

Case Study

Aclear next: highly functional glass wool

Dexerials

Dexerials Corporation, headquartered in Shinagawa-ku,

provide added-value creative equity financing to support

Tokyo, manufactures and sells functional materials, chiefly

corporate growth strategies.

for the electronics industry. The company’s capabilities lie
in developing its cutting-edge materials and manufacturing
process technology.
Dexerials’ key products include anisotropic conductive
film and optical elasticity resin. These materials are widelyused in smartphones and tablet PCs as peripheral materials
for displays, in which growth is expected.
DBJ has acquired a stake in Dexerials because it believes
that fully deploying Dexerials’ superior development andtechnological capabilities and leveraging the funding andcomplementary management resources that DBJ can
provide will enable Dexerials to further expand its business. This investment is part of the “Value for Growth”
Investment Program that DBJ began in earnest in 2010 toFunctional materials products

Annual Report & CSR Report 201377

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

Setomirai Fund

DBJ, in cooperation with 10 prefectural financial institu-

through debt reduction and business restructuring efforts.

tions in Hiroshima including The Hiroshima Bank, Ltd., has

In these ways, the fund aims to help invigorate the regional

set up the Setomirai Fund, a business revitalization fund, in

economy.

order to support the business revitalization of regional com-

As one aspect of its exit strategy under the Act con-panies. To administer the fund, DBJ, with the Renaissancecerning Temporary Measures to Facilitate Financing for

Capital Group, Inc., has also established Setomirai Capital

Small and Medium-Sized Enterprises, etc., DBJ will approve

K.K., in the city of Hiroshima.

expeditious business revitalization support initiatives driven

The Setomirai Fund is designed to enable regional com-through collaboration with The Hiroshima Bank and otherpanies such as customers of prefectural financial institutions

regional financial institutions. DBJ will also apply the exper-that are participating in this fund as limited partners totise we have accumulated in business revitalization to coop-reinvigorate themselves by acquiring their loan claims anderate on the financing end, as well as offering advice onundertaking other measures to revitalize their businesses

overall fund management activities.

Overview of the Setomirai Fund
Prefectural Financial Institutions
Hiroshima Bank O Momiji BankO Hiroshima Shinkin BankO Kure Shinkin Bank O Shimanami Shinkin BankO Hiroshima Midori Shinkin BankO Hiroshimashi Credit Cooperative
O Hiroshimaken Credit Cooperative
O Ryoubi Shinkumi O Bingo Shinyo Kumiai
O(GP) Setomirai Capital(Renaissance 80%, DBJ 20%)
Directors: Two from Renaissance, one from Hiroshima
Bank, one from DBJ

Investment Committee:
LP
investment

GP
investment

Two members from Renaissance,
one from DBJ

Setomirai Limited Partnership for Investment
Sale of receivables(Total commitment: ¥3.2 billion)

Shimanami Servicer
Co., Ltd.
(Wholly owned subsidiaryof The Hiroshima Bank)

Case Study

Investment

Renaissance CapitalGroup, Inc.

Investment

LP investment

Acquisition
Servicing, etc.

Existing loan receivables

Japan Marine United

Japan Marine United Corporation is one of Japan’s largest
shipbuilders, born through a merger between Universal
Shipbuilding Corporation and IHI Marine United Inc. Japan
Marine specializes in building and maintaining large bulk
carriers, tankers and container ships, and is strong in the* “Business restructuring promotion operations” are those underwhich DBJ acts as the designated financial institution to provide
necessary financing to an entity undergoing industry restructuring
to enhance international competitiveness whose business restructuring plans have been certified in accordance with the Law on
Special Measures for Industrial Revitalization and Innovation.

area of naval escort and minesweeper vessels.
Taking advantage of the expertise it has gained throughits long years of involvement in corporate restructuring andthe expertise gleaned from providing ongoing support to
the Japanese shipbuilding industry, DBJ provided Japan
Marine United with ¥20.0 billion in financing for “businessrestructuring promotion operations*” based on its evalua-

Ariake Shipyardtion that the integration would be meaningful and effectivein enhancing the company’s international competitiveness.
Kure Shipyard

78

DBJ

Annual Report & CSR Report 2013

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

Case Study

Kuroda Precision Industries

Kuroda Precision Industries Ltd., headquartered in the city

manufacturer of parts for precision equipment, and provid-of Kawasaki, Kanagawa Prefecture, manufactures and sells

ed advisory services. At the same time, we provided acquisi-such products as ball screws, precision press molds, tooling,tion financing jointly with Mizuho Bank, Ltd.

gauges, surface grinding machines and precision measuring

Precision ball screws and precision
gears

systems. Recognized as a “precision leader” for its expertisein precision processing and measurement technologies,
Kuroda Precision Industries’ products are used in mobile
phones, hybrid cars, semiconductor fabrication equipment,
industrial robots and a host of other items that are hallmarks of the times and support industrial development.
When Kuroda Precision Industries contemplated the

CSR Reportacquisition of companies overseas toward its next stageof global development, DBJ proposed the acquisition ofLinear guides

Avingtrans Industrial Products, Ltd., a medium-sized U.K.

Case Study

SECOM

SECOM Co., Ltd., headquartered in Shibuya-ku, Tokyo, anda leading security company, believes that data centers will
become an increasingly important strategic business. Given
the growing emphasis on information and security, SECOM
believes that data centers serve as a vital part of the social
infrastructure.
DBJ proposed that SECOM acquire shares in AT TOKYO
Corporation and advised SECOM on the acquisition.
Headquartered in Koto-ku, Tokyo, this company is one ofJapan’s leading data center operators in terms of scale,electric power supply stability and security management.
We believe that SECOM’s acquisition of a stake in AT
TOKYO enables both companies to leverage their strengths,
managing information safely and functioning as a service
center that uses its core functionality to provide a host ofservices. Through its data centers, the company also fulfills
an essential social role and has the ability to create new ser-

Data center

vices that are safe and offer high added value.

Annual Report & CSR Report 201379

Overseas
Efforts at expansion overseas have become an important factor in Japan’s continued growth.
The rapid economic development of Asia in particular, with its notable growth in middle income
groups, represents a major business opportunity for Japan, because the region is running up against
environmental issues, urbanization-related difficulties and other developmental constraints andgrowth challenges that Japan has already faced and overcome.
In order for Asia’s growth to translate into definite gains for Japan, the country must underpin
Asia’s rise by sharing with each country the wealth of experience it has gleaned from its own processof economic development. Japan must also mobilize its unique profile of strengths in the fields of theenvironment and infrastructure to deploy business operations in the rest of Asia in a comprehensive
and strategic fashion.
Case Study

Vietnam Airlines

Vietnam Airlines Company Limited (VNA), headquarteredin debt and equity to companies in the country in recent

in Hanoi, Vietnam, is the flagship carrier of the Social

years. DBJ’s arranging of a syndicated loan for VNA’s A321

Republic of Vietnam. Boasting a young and well educatedaircraft is a natural extension to these prior activities.

workforce, Vietnam is expected to continue on a trend ofhigh economic growth. VNA, with its developing network,
is seen to play a critical role in stimulating tourism demandand supporting the increasing economic and trade relationships. The airline plans to expand its aircraft fleet to service
more cities in the long-haul routes to Europe and the growing intra-Asia routes.
DBJ has a long-standing relationship with Vietnam, firstthrough providing research to the Vietnamese government
for its development of the automobile industry and financial industry in the 1990s and in providing financing both
Case Study

Airbus A321 aircraftLong Beach Judicial Partners

Long Beach Judicial Partners LLC (LBJP, headquartered in

DBJ, along with Western financial institutions, is pro-the city of Long Beach, California, U.S.A.), is a special-pur-viding financing to LBJP via project finance methods. In

pose company (SPC) established by Meridiam Infrastructure,addition, as a trial effort to support regional financial insti-

a fund focused on infrastructure development in the United

tutions’ initiatives to build up experience and know-how

States and Europe through public–private partnerships

in financing to the overseas infrastructure sector, while(PPPs), to enable the California state government to carryenabling them to take advantage of attractive financing

out the Long Beach Courthouse Project.

opportunities, we transferred part of our LBJP claims to The

The Long Beach Courthouse Project is the first social
infrastructure project in the state of California procured

Chiba Bank, Ltd., headquartered in the city of Chiba, Chiba
Prefecture, enabling joint participation.

under the principles of performance-based infrastructure(PBI), contracting to utilize a PPP scheme* to reconstruct,
operate and maintain California’s most socially and politically important courthouse with the largest capacity andhighest number of projects in the state through private
financing.
Approximately 90 percent of revenue from this projectwill come from the California state government in the formof stable payments of annual, performance-based service
purchasing fees. Using advanced risk management to adequately reduce risk, an appropriate return compared to risk
is expected.
80

Annual Report & CSR Report 2013

* Similar to a private finance initiative (PFI) purchase of services via
a build–operate–transfer (BOT) contract in Japan, cost, schedules,
quality and other performance indicators must be clearly definedwhen the contract is
executed. This kind of
scheme aims to encourage competition andhigh-quality bids, approving flexible proposals
from bidders by focusing
on results rather thanprocess details.
Front entrance of the courthouse (as ofApril 2013)

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

Case Study

Kirishima Shuzo

Kirishima Shuzo Co., Ltd., headquartered in the city ofpany not only used the biogas recovered by its methane

Miyakonojo, Miyazaki Prefecture, produces “true shochu”

fermentation facility for distillation lee recycling in the drying(shochu being a clear distilled liquor, and “true shochu” refer-process for producing dehydrated cake (the solid portion ofring to a pure distillation rather than a blended liquor) fromthe distillation lees after separation from the liquid) but also

Kogane Sengan (a kind of sweet potato) cultivated at theincreased its use in the production process itself. (3) Whilebase of Mount Kirishima. The company is known in particularincreasing production capacity, through unflagging manage-

for its Kirishima and Kuro Kirishima brands. Kirishima Shuzo

ment efforts the company succeeded in reducing its overall

has begun to recycle the lees from distillation and is alsoenergy inputs, as well as its CO2 emissions. This was the first

introducing a variety of other environment-friendly initiatives.

project in Japan in the true shochu industry to acquire an

We accorded Kirishima Shuzo a high rating and provided

environmental rating.

the company with financing for three reasons. (1) Throughjoint development with a general contractor, the company
used methane fermentation processing to increase separaCSR Reporttion of the liquid portion of the distillation lees from thepotato remnants, resulting in zero waste emissions andachieving a sustained recycling rate of 100%. (2) The comKirishima Shuzo’s headquarters plant

Case Study

NEC Capital Solutions

NEC Capital Solutions Limited, headquartered in Minato-ku,

financing. (3) By proposing solutions to improve the energy

Tokyo, is a comprehensive leasing company that has beenuse of customers’ information and communications tech-working aggressively to support the expansion of eco-busi-

nology (ICT) assets, the company is working to reduce theness by offering eco-leases and eco-financing.

environmental impact of customers throughout the entire

DBJ accorded NEC Capital Solutions a high rating evaluation, for a number of reasons. (1) The company has thor-

life cycle, including the procurement, operations and disposal stages.

oughly revised its eco-lease and eco-financing certification

DBJ arranged a syndicated loan for NEC Capital

standards from the standpoint of environmental impact

Solutions based on its DBJ Environmental Ratings. By tar-evaluation and life cycle assessment (LCA) and is making

geting eco-leases and eco-financing transactions in thesophisticated efforts to contribute to biodiversity preserva-

Tohoku region, we expect the company to encouragetion. (2) By advancing an eco-fund system, the company

reconstruction activities in the area affected by the Greatis endeavoring to further popularize eco-leases and eco-

East Japan Earthquake.

Syndicated Loan Scheme
Provision ofParticipating bankenvironmental andreconstruction financing
Participating bank

Local company
Local company
Local company
Local company
Local company
Local company

NEC
Capital Solutions

Participating bankParticipating bankSyndicated loan to support
the environment andreconstruction

DBJ
Arranger and lender

Participating bank

Annual Report & CSR Report 201381

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

Saiseikai Niigata Daini Hospital

An affiliate of Social Welfare Organization Saiseikai Imperial

their excellent disaster prevention and business continuity

Gift Foundation, Inc., Niigata Saiseikai operates the Saiseikai

efforts. In addition to its registration with the Emergency

Niigata Daini Hospital, located in the city of Niigata, Niigata

Medical Information System (EMIS) and robust information

Prefecture. This hospital’s predecessor, the Niigata Clinic,

dissemination procedures, the hospital has signed an accord

was established in 1927 with a mission of offering a help-

with Niigata Prefecture and cooperates in training for large-

ing hand without prejudice to provide healthcare and social

scale disaster response. We give the hospital high marks

welfare to a wide range of people. The facility opened its

for these moves, which show that it is working closely withdoors as a general hospital in its current location in 1991.

government bodies on a regular basis and striving to ensure

Operating as a regional medical support hospital and acontinued medical care in the event of disaster.

regional affiliated base hospital for cancer diagnosis, thehospital handles acute medical care for the region and liaises with regional medical facilities to deliver medical servicesof consistently high quality. At the same time, the facility
serves as a hospital designated for clinical training, providing training for resident clinicians. Serving also as a disaster
response hospital for Niigata Prefecture, the hospital promotes disaster preparedness and operational continuity
measures.
DBJ certified the Saiseikai Niigata Daini Hospital as a

Saiseikai Niigata Daini Hospital

DBJ Visionary Hospital and provided financing based on
Case Study

Musashinosha (Ageo Medical Group)Musashinosha K.K., headquartered in Chuo-ku, Tokyo, andIncluded in the plans to construct a new facility toa member of the Ageo Medical Group (AMG), holds andreplace the aging Byobugaura Hospital was Yokohama

rents hospital real estate and operates as a medical prod-

Namiki Rehabilitation Hospital’s effective use of the site

ucts wholesaler. With the Ageo Central General Hospitalformerly occupied by the Yokohama municipal Namiki

at its core, AMG operates 27 hospitals and 20 geriatricDaisan Primary School. This hospital, which concentrates on

healthcare facilities in six prefectures: Saitama, Tokyo,

convalescence and rehabilitation, liaises with local medical

Chiba, Kanagawa, Ibaraki and Yamanashi. AMG also pro-facilities to provide seamless local healthcare support fromvides advanced “total care” (meaning health maintenance,

admission to hospital through to home care.

healthcare and welfare) under a philosophy of “being ahospital appreciated for advanced medical care.” In theseways, the group has built up relationships based on trustand supports the health of the local population.
DBJ provided Musashinosha with financing for new construction on the Yokohama Namiki Rehabilitation Hospital(having 224 beds and located in the city of Yokohama,
Kanagawa Prefecture). This hospital is operated by the
Kyoyukai Medical Corporation, a central medical entity for
AMG.

82

Annual Report & CSR Report 2013

Yokohama Namiki Rehabilitation Hospital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

Mitsui Chemicals

Mitsui Chemicals, Inc., headquartered in Minato-ku, Tokyo,

considers improvement plans and draws up proposals foris an integrated chemicals manufacturer whose innovative

workplace management. (3) The company employs industrial

products are used in a host of industries, including automo-

physicians as organizational line managers, ensuring employ-

tive, electronics/information materials, packaging materials

ees’ health rights and responsibilities. (4) Various analyses

and lifestyle/environment/energy. The company aims toare conducted to determine the state of employee health.

achieve further growth by reinforcing its strengths in highly

The company uses the content of these analyses to visuallyfunctional products, which include high-value-added poly-

present the results of health evaluations against its targets.

mers and other polypropylene compounds for the automotive industry, eyeglass lens monomers and dentistry materials, and non-woven fabric and other healthcare materials.
DBJ arranged syndicated loans totaling ¥17.0 billion
CSR Reportfor Mitsui Chemicals through its DBJ Employee’s HealthManagement Rated Loan Program.
We gave the company a high rating evaluation for four
reasons. (1) The company conducts health training to instillawareness among its employees and takes a proactive

Ichihara Plant

approach to other health-related activities, providing ample
educational opportunities. (2) Mitsui Chemicals conducts
multiple stress tests, through which it keeps its finger on thepulse of the workplace environment, and when necessary

Case Study

Certification conferral ceremony

KagomeKagome Co., Ltd., headquartered in the city of Nagoya,legal requirements, including the thorough implementation

Aichi Prefecture, is a leader in products such as vegetableof health and safety checklists and the use of a mutual

juices and processed tomato foods. In keeping with its

auditing system between each of its business locations.

brand statement, “True to nature, the flavor of Kagome,”(2) As part of its product development and employee healththe company strives to be a “food company that contrib-

initiatives, Kagome’s central research laboratories promote

utes to the health and long life of people, society andresearch that contributes to human health and long life.

local environments.” Kagome has in place an occupational
health and safety management system, through which it
works to provide a working environment that is both safeand enjoyable.
DBJ provided financing to Kagome based on the DBJ
Employee’s Health Management Rated Loan Program, making Kagome the first company in the food industry and thefirst in the Tokai region to take advantage of this program.
There were two major factors behind our strong rating
evaluation. (1) The company’s occupational health and safety management includes proactive initiatives that exceed

Popular Kagome products

Annual Report & CSR Report 201383

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

Case Study

Noguchi Kanko

Noguchi Kanko Co., Ltd., headquartered in the city of

DBJ provided financing for Noguchi Kanko’s initiatives inNoboribetsu, Hokkaido, was founded in 1963. Since that

the Toyako Onsen region and to bolster its infrastructure fortime, the Noguchi Kanko Group has operated onsen

attracting tourism within Hokkaido, following certification(hot springs) resorts at key sites in Hokkaido, including

by DBJ’s Hokkaido Branch under the Regional Areas Genki

Noboribetsu, Toyako, Sounkyo, Kitayuzawa and Hakodate-

Program (Tourism).

Yunokawa, as well as in the city of Muroran. In addition,from 2011 to 2012, the group has expanded its offerings into Kanagawa Prefecture, including Hakone andOkuyugawara. The group currently operates a total of 16
resorts.
While expanding its activities outside the confines of
Hokkaido, the Noguchi Kanko Group is also responding tochanging customer needs within the prefecture. To enhance
the appeal of the Toyako Onsen region to individual andoverseas tourists, the group has acquired and is investing in
the refurbishment of an existing hotel, which it reopened in

The Lake View Toya Nonokaze Resort

the autumn of 2012.

Case Study

Ouchi Shinko Chemical Industrial

Ouchi Shinko Chemical Industrial Co., Ltd., headquartered

DBJ provided financing to Ouchi Shinko Chemical

in Chuo-ku, Tokyo, in 1931 became the first company toIndustrial, certifying the company under its DBJ Smart

manufacture organic rubber chemicals in Japan. Since thatJapan Program and rating it highly for its technical capabili-

early success, the company has been a pioneer in this sec-ties in the field of organic rubber chemicals.

tor, evolving into the leading Japanese producer of organic
rubber chemicals. During its 80 years in business, the company has leveraged the technological capabilities cultivatedin the field of organic sulfur compounds to develop business in various fields involving fine chemicals, including fruit
fungicides, bulk pharmaceuticals and environmental chemicals. The company’s organic rubber chemicals enhancerubber’s natural elasticity and prevent degradation, and its
additives help improve vibration damping. Its products andmaterials are widely used in tires and vibration-reducing
automotive rubber parts.

84

Annual Report & CSR Report 2013

Rubber chemicals

Community Revitalization
Case Study

Snow PeakSnow Peak Inc., headquartered in the city of Sanjo, Niigata

manufactures. Passionate fans of these initiatives, called

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

“SnowPeakers,” are increasing around the world.

known locally as a hardware manufacturing town. The

DBJ provided financing to Snow Peak, certifying it undercompany is engaged in the manufacture and sales of natu-

the DBJ Development Support Program (Nihon Genki

ral lifestyle products for nature-oriented lifestyles. As theProgram).

industry’s leading company, Snow Peak designs, develops
and manufactures tents, sleeping bags, compact stoves,lanterns and various kinds of apparel created with advanced
metalworking technologies by local companies sold inJapan and 23 countries around the world.
In accordance with its mission statement of adopting theuser’s point of view as their own and delivering products
and services that enable mutual inspiration, Snow Peakthoroughly incorporates the user’s input in everything it
Case Study

Headquarters and factory exterior

Daito Pharmaceutical
States, and pursuing initiatives involving highly regulated

Toyama, Toyama Prefecture, making use of the ample expe-

substances such as anticancer agents.

rience it has accumulated since the time of its establish-

DBJ provided financing to Daito Pharmaceutical, whichment, has developed an integrated system to manufacture

aims to aggressively expand its facilities and R&D activities,

and sell a comprehensive range of pharmaceutical prod-

helping to ensure growth of the pharmaceutical industry inucts—from drug substances (used as basic medical ingredi-

Toyama Prefecture.

CSR Report

Daito Pharmaceutical Co., Ltd., headquartered in the city ofents) to drug formulations. Daito Pharmaceutical conducts
multifaceted business with pharmaceutical manufacturers
in Japan and overseas. Also aggressive in contract manufacturing for Japan’s leading drug companies, the company
has developed business to meet diverse needs in the pharmaceutical industry, ranging from non-prescription drugs to
generic drugs and original ethical drugs.
In recent years, Daito Pharmaceutical has begun stepping up its activities in new areas of business, advancing
into overseas markets, particularly China and the United

Case Study

Headquarters in Yoka-machi, Toyama

Futamura Chemical

Futamura Chemical Co., Ltd., headquartered in the city ofcarbon for pharmaceuticals. DBJ provided financing for thisNagoya, Aichi Prefecture, manufactures and sells products

purpose through the Regional Areas Genki Program (Tokai

that employ activated carbon for water and air purification

area strategic next-generation industry).

and cellophane, centering on packaging films made fromplastics and cellulose. In the area of activated carbon, thecompany’s products are used in pharmaceuticals that help
extend the time until patients with chronic renal failureneed to begin dialysis treatment. As populations growolder, demand continues to increase in the medical field for
products that improve patients’ quality of life.
Within the activated carbon business, Futamura
Chemical is enhancing its facilities to produce activated

Spherical activated carbon

Annual Report & CSR Report 201385

Community Revitalization
Case Study

Kintetsu

Kintetsu Corporation, headquartered in Osaka, operates

built an emergency earthquake reporting system, put inthe largest private railway network in five prefectures in theplace emergency evacuation guidance standards and con-

Kinki/Chubu region. The Kintetsu Group is also involved inducts emergency training several times a year.

real estate, distribution, the hotel and leisure business and adiverse range of other businesses.
DBJ provided financing to Kintetsu Corporation under

We have conducted DBJ Green Building Certification for
Kintetsu Corporation, awarding it a Platinum 2012 (plan)
rating for ABENO HARUKAS, located in Abeno-ku, Osaka.

its DBJ Environmental Ratings and DBJ Enterprise Disaster

Kintetsu Corporation is pursuing con-

Resilience Rated Loan Program. Kintetsu earned a high rat-

struction of this multifunctional sky-ing evaluation for two main reasons. (1) The company isscraper complex, which will become

proactively introducing equipment with strong environmen-

the tallest such building in Japan.

tal functionality, such as the new-model tourism express,
the Shimakaze, which began service in March 2013.
(2) Kintetsu Corporation is working to ensure customer
safety in a number of ways. For example, the company has
Case Study

ABENO HARUKAS, whose grand opening is scheduled for spring of 2014

Nitto Seimo

Nitto Seimo Co., Ltd., headquartered in Minato-ku, Tokyo,

aftermath of the Great East Japan Earthquake, as recon-

is a top manufacturer of knotless nets and has a history

struction activities in the fishery industry moved forward.

dating back more than 100 years. The company’s world-

To allow Nitto Seimo to provide these products swiftly toleading development of the knotless net in 1925 served as

the stricken region, DBJ provided financing to the company

a springboard for the company’s development and produc-under the DBJ Smart Japan Program.

tion of a wide range of fish nets and related products forvarious types of fishing locations and to comply with a hostof fishing regulations. In addition to providing products,
Nitto Seimo contributes to the Japanese fishery industry by
applying the wide range of fishing-related expertise it has
cultivated over its long history.
Demand for fish nets and related products surged in the
Knotless net

Case Study

Marusan Industry

Marusan Industry Co., Ltd., headquartered in the city of

bleaching technologies. As a result, its bleached cotton is aOzu, Ehime Prefecture, was established in 1948 and devel-

highly pure natural material.

ops, manufactures and sells sanitary materials and products

DBJ provided financing under the DBJ Smart Japan

made from cotton and organic cotton. Marusan Industry

Program to Marusan Industry to fund its creative businessprovides bleached cotton, which is the raw material fordevelopment employing advanced technological capabilities.

many types of cotton products, and a range of generalpurpose cotton products, including its well-known Selenabrand cosmetic puffs, as well as cleansing cotton and wet
tissues. The company also produces sterile and absorbent
cotton and other medical sanitation products as well as
non-woven fabric, boasting a leading share of the Japanesemarket for bleached and cosmetic cotton.
The bleached cotton that Marusan Industry produces
employs some of the world’s most advanced technologies
for removing foreign objects, as well as grease removal and86

Annual Report & CSR Report 2013

Cosmetic puffs

Community Revitalization
Case Study

Fukuokaunyu Holdings

Fukuokaunyu Holdings, headquartered in Fukuoka, isparticular, the funding is to be used by Sapporo Teionunyu

the holding company for Fukuokaunyu Co., Ltd., andCorporation, a subsidiary of Fukuokaunyu Holdings, to build

Fukuokaunyu Systemnet Co., Ltd. The company, which con-the new Obihiro Delivery Center.

centrates on chilled and refrigerated transport to maintainthe quality of fresh foods and other products, has in place anationwide network to meet a host of logistics needs.
DBJ provided Fukuokaunyu Holdings with financing thatmade use of an interest rate subsidy system for comprehensive special zones, based on the Hokkaido Food Complex
International Strategic Comprehensive Special Zone. Thisfinancing was earmarked for the construction of logistics
facilities, which are essential to the shipping throughout
Japan and overseas of meat and other refrigerated and frozen foods produced in Hokkaido, serving as support infrastructure in the plan for a comprehensive special zone. In

AiseikaiAiseikai’s Shonan Hospital, located in the city of Soo,

CSR Report

Case Study

Sapporo Teionunyu’s Obihiro Delivery Center

To assist Aiseikai in its efforts to enhance and invigorate

Kagoshima Prefecture, and established in 1946, offers

regional medicine, DBJ’s Minami-Kyushu Branch certified

broad-ranging medical and nursing care to support the

Aiseikai under the Regional Areas Genki Program (Food,

health of the Soo region, where the ratio of aged persons

Health and Environment Industry) and provided the organi-in the total population is higher than for Japan as a whole.

zation with funding to enhance its clinical abilities by intro-

This medical corporation’s philosophy is to “ensure peace ofducing leading-edge magnetic resonance imaging (MRI)

mind among patients and other visitors by providing reliableequipment.

medical and nursing care.”Shonan Hospital

MRI equipment

Annual Report & CSR Report 201387

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

Case Study

Artificial Satellite PFI Business

DSN Corporation, headquartered in Minato-ku, Tokyo, is amaintain and manage these facilities and equipment.

special-purpose company (SPC) established through invest-

DBJ was the lead arranger, working with Mizuho

ment by three companies: SKY Perfect JSAT Corporation,

Corporate Bank, Ltd. (now Mizuho Bank, Ltd.), Bank of

NEC Corporation and NTT Communications Corporation.

Tokyo-Mitsubishi UFJ, Ltd., and Sumitomo Mitsui Banking

DSN has received a contract from the Ministry of Defense

Corporation to provide a total of ¥77.5 billion in syndicatedfor a “Program to Upgrade and Operate X-Band Satellite

loans. This is the first artificial satellite project in Japan

Communications Functions, etc.” Based on the program

based on the Act on Promotion of Private Finance Initiative

contract, DSN will manufacture and launch two commu-(revised), which went into effect in November 2011. The

nications satellites and upgrade ground facilities, including

program contract is also one of the largest on record for asatellite control equipment. The company is to operate,

PFI project in Japan, at ¥122.1 billion.

Scheme for Execution of a Program to Upgrade and Operate X-Band Satellite Communications Functions, etc.
Ministry of Defense
Program Contract
DSN (Special-Purpose Company)
Commission Contract

Consortium
65% of shares
SKY Perfect JSAT

17.5% of shares
NEC(Representative Company)

Case Study

88

17.5% of shares
NTT Communications

Shareholders

Maeda Corporation
Partner Company (No Investment)

PFI Promotion Seminars

Given the difficult financial conditions under which Japan’s

disaster reconstruction using private-sector know-how andnational and regional governments are operating, the aging

capital.

of public facilities has become an increasingly serious issue

Regional hosts of the seminars—The Bank of Iwate, Ltd.,in recent years. Furthermore, since the Great East JapanThe 77 Bank, Ltd., The Toho Bank, Ltd., The Ashikaga Bank,

Earthquake, demand has increased for the restoration andLtd., The Chiba Bank, Ltd., and DBJ—also gathered to delib-

reconstruction of various types of public infrastructure,erate ways to expand

bringing to the fore the importance of introducing private-

the PFI market going

sector expertise through PPP/PFI schemes.

forward, in particular,

The DBJ Group, in cooperation with Japan’s Cabinet

collaborative mea-

Office and regional banks, conducted seminars to promotesures that financial

PFI initiatives in six disaster-affected regions. These seminars

institutions can takehighlighted the importance of managing public assets andto promote effective

introduced various PPP/PFI methods, providing useful infor-

policies and publicmation on rebuilding public facilities and promoting post-

measures.

Annual Report & CSR Report 2013

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

Toyo Gosei

Toyo Gosei Co., Ltd., headquartered in Taito-ku, Tokyo, ishealth and safety management system, taking into accounta chemical manufacturer founded in 1954. The company

characteristics unique to a chemical product manufacturer.

produces photosensitive materials that are essential formaking semiconductors and LCD panels. Toyo Gosei also
produces solvents for electronic materials and is one of the
few companies in the world involved in the manufacture of* Business impact analysis: An analysis method employed to determine the degree to which overall business would be affected in theevent that specific business processes stop or are interrupted.

fragrances.
DBJ accorded Toyo Gosei a high rating evaluation forthree main reasons. (1) The company has acquired certifications that are still relatively uncommon in Japan. (2) Toyo
CSR Report

Gosei has developed advanced disaster countermeasures
to ensure business continuity, and business impact analysis* was used in the formulation of its business continuity
plan, indicating its careful attention to fundamental procedures. (3) During the formulation of its plan, the company
employed a risk assessment method in its occupational

Case Study

Analysis at a research institute for photosensitive materials

Showa Denko

Showa Denko K.K., headquartered in Minato-ku, Tokyo,

pal business sites and through the geographic dispersion of

conducts business on a global stage, producing chemi-

manufacturing sites throughout Japan and in overseas loca-

cals for use in a range of fields. Its products range fromtions. (2) By conducting continuous reviews and introducing

petrochemicals and basic chemicals to hard disks and themeasures to resolve bottlenecks in each business division,graphite electrodes for electric steelmaking. In line with its

the company was endeavoring to reduce target restorationgroup slogan, “Shaping ideas,” Showa Denko is a uniquetimes. (3) Showa Denko was striving to understand its busi-

company that generates new concepts and has strong

ness partners and share information with them regarding

technological capabilities. In a host of ways, the company

its disaster preparedness and business continuity structure,endeavors to use the power of chemistry to make people’s

as part of its efforts to build a robust supply chain.

lives more bountiful.
DBJ provided Showa Denko with financing under the
DBJ Enterprise Disaster Resilience Rated Loan Program,established as a restoration fund provision for times ofdisaster. This disaster restoration fund provision stipulates
that in the event of a major earthquake that meets a varietyof conditions, DBJ will provide a specific amount of financing as restoration funds. We developed this product incooperation with Sompo Japan Insurance, Inc.
We accorded Showa Denko a high rating evaluation fora number of reasons. (1) The company was increasing its

Kawasaki Plant, which produces basic chemical products

resilience by earthquake-proofing headquarters and princi-

Annual Report & CSR Report 201389

Environmental Management

DBJ aims to realize a more prosperous sustainable society bymental conservation and to cooperate in resolving environ-achieving harmony through the triple bottom line of society,mental problems. In addition, in November 2002, we acquired

the environment and the economy. We recognize the resolu-

ISO 14001 certification, and in November 2011, we signed thetion of environmental problems as an issue that is common

Principles for Financial Action towards a Sustainable Society

to all humankind. For this reason, DBJ has contributed to the(Principles for Financial Action for the 21st Century). Suchformation of an environmentally friendly economic society.

efforts indicate our organizational commitment to environmen-

In June 2001, DBJ became the first Japanese bank total preservation and the realization of a sustainable society.

sign the UNEP Statement by Financial Institutions on the

In line with the Basic Environmental Policy formulated

Environment and Sustainable Development, promising to strivein October 2008, DBJ is promoting efforts in the regions

for harmony between economic development and environ-

where its branches and offices are located.

DBJ’s Basic Environmental Policy
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 Loan and
Investment Activities
Article 2.
1. Through its investment and loan activities, DBJ supports global
warming prevention measures and the promotion of a recyclingoriented society. In addition, by supporting environmentally
sustainable corporate management by its clients, DBJ contributes
to their creation of environmental measures and to the realizationof a sustainable society.
2. DBJ contributes to clients’ environmental measures throughthe risk evaluations of investment and loan activities from anenvironmental perspective.
Promotion of Environmental Awareness through Environmental
Communication
Article 3.
1. Through continuing research and advisory activities relating toenvironmental issues, DBJ seeks to help resolve environmental
issues through enhanced awareness, thereby contributing to therealization of a sustainable society.
2. DBJ seeks to promote environmental awareness throughinternational cooperation, including the distribution of information
about environmental initiatives by Japan.
3. DBJ endeavors to improve its initiatives by sharing information on
its environmental activities and through communication with society.
Promotion of Environmental Awareness Activities in Offices
Article 4. DBJ complies with environmental laws and regulations,and promotes activities to reduce the environmental impact of its
operations. To these ends, DBJ seeks to contribute to the creationof environmentally friendly office environments through theactivities indicated below.
(1) Promotion of resource and energy conservation and recycling
activities(2) Promotion of environmentally friendly sourcing of supplies(3) Prevention of environmental pollution
Promotion of Environmental Awareness Activities in
Communities
Article 5. By cooperating with community environmental
improvement initiatives, such as measures to prevent heat islands,
DBJ works to contribute to the creation of environmentally friendly
regional societies.

Putting into Practice DBJ’s Basic Environmental Policy
Promotion of Environmental Measures throughOur Investment and Loan Services

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.

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DBJ Environmentally Rated Loan Program (See pages 40
and 81.)

DBJ Green Building Certification (See pages 41 and 75.)



90

Communication Focused on the Environment (See page 66.)

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Annual Report & CSR Report 2013

Communication on Community Revitalization (See page 66.)

Communication in International Cooperation (See pages
66–67.)

Promotion of Environmental Awareness
Activities in Offices

Promotion of Environmental Awareness
Activities in Communities

DBJ works to reduce the environmental impact 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 and energy• Head Officeconservation

Uchimizu Project 2012

Resource- and Energy-Saving Efforts
Year Ended
March 31,2011

Year Ended
March 31,2012

Year Ended
March 31,2013

Copy and printing paper usage（kg）

93,189100,494

85,011

Waste emissions（kg）

61,61063,53055,688Energy consumption（kWh）
Water usage（m3）4.50 million
25,411

3.53 million 4.01 million
24,10522,667

Note: Head office building only

DBJ participates in the Uchimizu Project 2012, a campaign
hosted by the Otemachi, Marunouchi and Yurakucho (OMY)
Uchimizu Project District Executive Committee (OtemachiMarunouchi-Yurakucho District Redevelopment ProjectCouncil/Cooperative for the Promotion of the OMY Area
Management Association), Ministry of the Environment,
Tokyo Metropolitan Government and Chiyoda-ku. DBJ iscontinuing with its participation in the Uchimizu Project since• Promotion of environment-friendly sourcing of2008.

supplies
In line with the Act on Promotion of Procurement of EcoFriendly Goods and Services by the State and Other Entities
CSR Report(Green Purchasing Act), which went into effect in April 2001,
DBJ implemented initiaves to purchase products and services
with lower environmental impacts. We have continued topractice green purchasing following our privatization.
Achievements of the Green Procurement Program
for Typical Items
Year Ended March 31, 2013

Paper

98.5%

Stationery

98.2%

Equipment

87.6%

Office equipment

99.9%

Lighting

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.

• 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.

• Prevention of environmental pollution
DBJ complies with environmental laws and regulations.

• Shikoku Branch
Forest-thinning activities
We continue toparticipate in forestthinning activities
conducted in collaboration with thetown of Inomachi,
Kochi Prefecture, andMitsui & Co., Ltd.

Annual Report & CSR Report 201391

• 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 the Tenjin Clean Day activity sponsoredmental department. We continued these activities in fiscal

by the We Love Tenjin

2012, and are making efforts to (1) curb paper consump-conference and helpedtion, (2) promote the use of recycled products, (3) raise

to clean up the area andemployee awareness of resources and waste reduction,

plant flower bulbs.

(4) save energy and water and (5)regulate office air at an appropriate
temperature.
• Other Branches
We implement initiatives such as collecting used postage
stamps and PET bottle caps for donation. We also have
employees bring their own chopsticks and cups to work to
reduce waste.

Environmental Management Conference
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, theEnvironmental Group Promotion Officer and Environmental
Group Promoter designate a member in each branch anddepartment to be in charge of environmental promotion
and manage the level of achievement of annual environmental targets.

Employees
Employees are responsible for putting environmental management activities into action.
92

Annual Report & CSR Report 2013

DBJ’s Primary Achievements in the Environmental Sector since Its Establishment
1999 October

Annual Report & CSR Report 2013

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 and Sustainable
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
July
Launch of the Development Bank of Japan Environmental Policy
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 and theenvironment
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 Management Committee meetings of Development Bank of Japan Inc.; formulationof 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
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 21stCentury)

93

Business Continuity Plan (BCP)

DBJ is preparing a business continuity plan (BCP) to protect

spells out necessary disaster responses in an easy-to-

the interests of its stakeholders, including its clients, its

understand manner.

shareholder, and its executives and regular employees, as

When formulating policies to ensure the continuity

well as to fulfill its social mission. The BCP aims to ensure

and recovery of core operations, we took the approach of

the continuity and rapid recovery of core operations in theconsidering responses to cases in which important man-event of emergencies, such as natural disasters (in particu-

agement resources were damaged due to a large-scalelar, large-scale earthquakes), influenza pandemics, system

disaster, affecting head office (1) buildings and facilities, (2)failures and power outages.

executives and regular employees, and (3) systems, instead

In addition to addressing the continuity of core operations and maintaining a plan to recover from disaster,the BCP specifies the initial actions that executives andof considering responses to individual events such as earthquakes and fires.
An overview of DBJ’s BCP is provided below.

regular employees should take in emergencies. The plan

1. Principles of Action for Executives and Regular Employees
The BCP defines three key goals regarding the fundamental

they must give first priority to the lives and safety of ourstance that executives and regular employees are to take inclients and our executives and regular employees, paying

the event of a large-scale disaster or other emergency. They

attention to television and radio broadcasts, evacuating

are to (1) ensure personal safety, (2) grasp the situation

calmly (without panic) and determining the safety of others.

accurately and (3) remain calm and collected. Specifically,

2. Core DBJ Operations
In the event of a large-scale disaster, DBJ has identified
the following six items as essential to the continuity of its

1) Confirmation and assurance of the safety of executives
and regular employees

core operations from the standpoint of (1) items that are2) Uninterrupted continuation of settlement-related businessfundamental and prerequisite to business continuity (such3) Reliable formation of the Disaster Response Committee

as facilities, personnel and systems), (2) DBJ’s social mission4) Restoration and maintenance of IT systems

and the public nature of its financing (such as investment

5) Confirmation of the status of clients in afflicted areas

and loan activity) and (3) responsibility to financial markets6) Rapid commencement of crisis response operations(continuity of market settlements).

DBJ has formulated a BCP that prioritizes continuity of
the core operations described above.

3. BCP Operational Structure
When responding to an emergency situation, such as in

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 branches regarding
the continuation of core operations. If maintaining operations at head office proves problematic, the Kansai Branchshall serve as the alternative location.

94

Annual Report & CSR Report 2013

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, put(1) Enhanced System Robustness
Ensure advanced security levels at the main center, andin place a chain of command and an alternative hierarchy

create a backup center to operate in the event that theby which authority can be delegated.

main center ceases to operate.
(2) Multilayered Communication Procedures(4) Clarification of Initial Response and Procedures for

Introduce a safety-confirmation system to quickly deter-

Continuing or Restoring Core Operations

mine the whereabouts and status of executives and

For individual business units, establish in advance theregular employees even at night and on holidays. In

procedures for the initial response and the continuation

addition, distribute satellite telephones to key locations

or restoration of core operations so that relevant divi-and personnel to ensure multilayered communication

sions can respond quickly and with certainty on core

procedures.

operations.

5. Initiatives to Maintain or Improve BCP Viability
results and recent information, and is considered by the

executives and regular employees to maintain or improve

Management Committee regularly and additionally as nec-

the viability of its BCP.

essary, employing a PDCA cycle.

CSR Report

DBJ conducts various types of instruction and training ofFurthermore, the BCP is revised to reflect training

Annual Report & CSR Report 201395

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 through its

encourage employees to work autonomously and proac-encouragement of goal-setting, DBJ emphasizes enhancing

tively to develop their abilities and accurately evaluate suchmedium- and long-term value both internally and exter-

initiatives. DBJ is working to enrich this system by having

nally. DBJ also motivates employees by offering bonuses

subordinates meet individually with superiors to set goals

and other benefits based on operating performance.

and receive feedback, autonomously running through theCreating a Comfortable Work Environment
DBJ actively strives to cultivate a comfortable workto Support Raising Next-Generation Children as a company

environment.

that provides child-rearing support. Specific grounds for thisTo maintain an environment in which all employees

approval included (1) the promotion of spousal support for

can feel secure, DBJ has notified employees of its policy

childbearing through special leave and childcare leave, (2)to prevent sexual and power harassment and has set up ameasures to ensure time for child-rearing and (3) measures

hotline to deal with such issues. Furthermore, to support

to promote the taking of annual paid vacation.

mental and physical health, DBJ provides its employees andtheir families with regular medical examinations and care
options. These systems include treatment by external specialists and access to counselors.
DBJ has also instituted childbirth, childcare and nursing
care leave programs to give motivated employees better
opportunities for long-term employment, as well as a system for continued employment options after retiring fromfull-time work.
On October 18, 2010, the Tokyo Labour Bureau recognized DBJ as having achieved the objectives of its generalbusiness operator action plan (from April 1, 2005, to March
31, 2010), based on the Act on Advancement of Measures

96

Annual Report & CSR Report 2013

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-devel-in multiple departments, employees are additionally trained

oped education and training system. Mandatory training byfor highly specialized positions according to their skills andlevel, combined with elective training according to skills andbackgrounds. This system of strategic job rotation not only

needs, enables each employee to plan his or her career andenables employees to gain broad-based practical experience

support DBJ’s initiatives in innovative finance.

that gives clarity to their medium- to long-term career goals

For young employees, we established the DBJ Financial
Academy, which is designed to help employees acquire

but also provides an environment for quickly and firmly
acquiring and improving their highly specialized skills.

and maintain basic competencies and deepen their under-

In step with globalization, DBJ cultivates employees able

standing of finance, assuming they will become involved into perform in international as well as domestic settings. To

advanced financial operations. We are expanding the acad-achieve this, DBJ actively assigns employees to a wide vari-emy, focusing on courses such as Corporate Finance, M&A

ety of external organizations, including overseas graduate

and the Financial Instruments and Exchange Act.

schools (program currently being expanded), international

Regardless of age, employees undergo on-the-job train-

institutions, domestic and overseas research institutes, com-

ing that provides hands-on exposure to work involving vari-panies and related government agencies, thereby supportingous levels of responsibility. After experiencing employment

skill development and network extension.

DBJ’ s Human Resource Development System
Training by Level

Business-Related Training

Business-Related(Self-Training)

ManagertrainingtAccounting
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t'JOBODJBM*OTUSVNFOUTBOE&YDIBOHF"DUtEtc.

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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

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Careerdevelopment
plan training

tCompliancetraining
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students, trainees, etc.

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External seminars, lectures, etc.

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Distance learning, night courses, acquiring public qualifications, etc.

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training

External
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'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 201397

Seeking Higher Ethical Standards
For half a century, DBJ has led Japan’s economy as a gen-

DBJ has long desired that its employee training addresseral policy-based financial institution. As DBJ transforms

issues of human rights in addition to ensuring legal compli-

into a private-sector financial institution that still values theance and maintaining information security through training

long-term perspective, neutrality, public-mindedness andto prevent fraudulent access and information leaks. DBJ

reliability it has cultivated, each employee is being held to awill henceforth devote even more resources toward suchhigher ethical standard.

efforts.

DBJ Financial Academy
Since May 2008, the DBJ Financial Academy typically has

finance topics and corporate valuation methods that can beheld twice- or thrice-weekly courses with the objective of

applied, the academy provides a broad range of core train-

raising the level of financial expertise of primarily young

ing on finance from an academic and scientific perspective.

second-year employees throughout the organization byStudents from outside DBJ, such as employees of regional

strengthening their knowledge and understanding fromfinancial institutions, government bodies and businessa medium- to long-term perspective of advanced corpo-

partners, have also participated. Through these courses, werate financial business essential to DBJ’s business model.

look forward to opportunities for mutual exchange and theDuring fiscal 2012, courses numbered 16 and covered

creation of networks.

Introduction to Modern Finance, Corporate Finance, theFinancial Instruments and Exchange Act, and Insolvency
and Corporate Reorganization.
Through the DBJ Financial Academy, each employee
can seek to elevate his or her abilities in finance. In addition to basic knowledge, such as fundamental corporate
DBJ Financial Academy Curriculum2012 Courses (May 2012 through March 2013)
Core courses (I)Introduction to Modern Finance
Financial Instruments and Exchange Act
Business Statistics
Basic Corporate Finance
M&A
Corporate Finance PracticeCore courses (II)IFRS Accounting: Foundations and Practice
Insolvency and Corporate Reorganization
Financial System Theory
International Finance
Financial Expertise Follow-up Training
Financial Policy
Elective courses
Real Estate FinanceBehavioral FinanceSpecial Program
Special Program for Regional Financial Institutions

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2013 Courses (expected to run from May 2013 throughFebruary 2014)
Core courses (I)Introduction to Modern Finance
Financial Instruments and Exchange Act
Business Statistics
Basic Corporate Finance
M&A
Corporate Finance PracticeCore courses (II)IFRS Accounting: Foundations and Practice
Insolvency and Corporate Reorganization
Financial System Theory
International Finance
Financial Expertise Follow-up PracticeFinancial Policy
Elective courses
Real Estate FinanceBehavioral Finance
Investment
Game Theory Approach to Asset Pricing Structure
Concepts
Risk Management and Real Options
Special courses
M&A and Competition Policy
Special Program for Regional Financial Institutions
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98

Annual Report & CSR Report 2013

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 the financial platform andenable DBJ to provide services that extend beyond
merely providing funds. Employing these assets,
we endeavor to address the needs of the times andfulfill our role in enhancing socially responsible
activities among companies.

Intellectual Asset Management  . . . . . . . . . . 100
Financial Platform That Enables DBJ to Meetthe Needs of the Times  . . . . . . . . . . . . . . . . 104

Annual Report & CSR Report 201399

Intellectual Asset Management

Corporate Value and Intellectual Asset Management
Intellectual Assets
Companies ensure ongoing prosperity and profit byIntellectual Asset Management Essential toEnhancing Corporate Valueconsistently differentiating themselves from competitors.

Although intellectual assets are intangible in the sense that

Differentiating the products and services they offer is athey are not recorded on a company’s financial statements,

large part of the process. To enhance their operations, com-they are a core component of corporate value. Managing

panies must identify their important management resources

intellectual assets effectively promotes clarity in terms of theand sources of competitiveness. Specific technologies,

corporation’s key competencies and creates opportunities toexpertise, human resources and business models are someincrease corporate value.

factors that lead to differentiation but are invisible to the

Listed companies are finding that aggressively disclos-casual observer. Determining an entity’s true corporate

ing intellectual asset information helps markets value themvalue requires the evaluation of these company-specificmore appropriately. For this reason, the introduction ofstrengths. DBJ’s activities related to intellectual assets are

regulatory frameworks to encourage or require listed com-designed to foster the application of these intangible sourc-

panies to disclose non-financial information has grown into

es of corporate value that underpin a company’s future

a global trend, beginning in Europe.

economic performance.

DBJ’s View on Intellectual Assets
Dating back to the time of our predecessor, maintaining thewhen combined represent an extraordinary DBJ asset: ourtrust of our clients and society at large has been our mostexpertise in resolving issues through the application ofimportant objective. From this standpoint, we have created

new financial methods, the widespread use of our financial

a wide variety of networks spanning both the public andplatform and our economic and social contributions. This

private sectors.

asset has led to our development of the financial methods

Based on our core values, our executives and regulardescribed below. It enables us to respond quickly to chang-

employees have continued working to enhance their abil-ing policy requirements and plays a major role in our ability

ity to evaluate companies and projects. We have accumu-

to continue adding economic and social value.

lated a wealth of expertise in the screening and evaluation

Since privatization, we have aimed to maintain our eco-of long-term projects and a keen ability to identify andnomic and social contributions. We believe that our ability

address issues that are unique in terms of the times or

to clearly identify and make use of intellectual assets will be

the local communities that face them. In the process, wean increasingly important factor in achieving this goal.

have become a repository of intellectual assets, which
Relationships among Intellectual Assets, Business Models and Corporate Value
Corporate ValueBusiness Model

Financial
AssetsTangible
Fixed Assets(Created by DBJ from Ministry of Economy,
Trade and Industry materials)

100

Annual Report & CSR Report 2013

Relational
Structural
AssetsHuman
Resources

Intellectual Assets

Organizational
Structural
Assets

DBJ’s Utilization of Intellectual Assets
One school of thought defines intellectual assets as thevarious fields—as they consider such issues. All DBJ execu-

understanding of and reporting on an entity’s networks

tives and regular employees work to maintain a long-termand client bases (related structural assets), management

and neutral perspective, approaching new business withteam and employees (human resources) and intellectuala spirit of innovation and challenge.

assets and business processes (organizational structural

To impart various financial skills, DBJ maintains training

assets). Below, we introduce DBJ’s intellectual assets andmenus that include a 2.5-month corporate finance train-

activities according to this segmentation.

ing program. This program, for all new employees, helps
develop screening expertise. Our menus, combined with

DBJ’s Utilization of Intellectual Assets

on-the-job training, raise the level of specialist expertise

As our mission prior to privatization was to support projects

among DBJ executives and regular employees. We maintainthat had policy significance, our system of planning anda number of personnel exchange and dispatch programs

making investments and extending loans involved coopera-with domestic and overseas universities and research insti-

tion with central government agencies and regional govern-

tutions, as well as with other international institutions, thatment bodies. Now we take advantage of these networks

help form our networks. These programs help DBJ develop

to our interest rate subsidy programs for the promotion

and introduce new financial methods, as well as strengthenof environmental management, as well as other inter-

network ties.

est subsidy systems put in place by national and regional

DBJ has also established the Research Institute of Capital

government bodies. Also, we continue to assist with crisis

Formation, which carries out financial research, as well as

response operations. DBJ also works to create and develop

research on global warming countermeasures and otherfinancial platforms. To construct these platforms, we col-efforts to create a sustainable society. The research that thelaborate with public- and private-sector financial institu-

center produces from a neutral and long-term perspective istions in Japan and overseas and maximize our networks ofhighly regarded by the community and other experts.

professionals including university professors, attorneys, andOrganizational Structural Assetsof networks consisting of professionals in a host of fields in

Unlike manufacturing companies, DBJ has no explicit intel-

industry, academia and the government constitutes DBJ’s

lectual assets, such as patent rights. However, our intro-

relational structural capital.

duction of new financial methods to Japan, our work withIntellectual Asset Reportcertified public accountants. This multifaceted combination

other financial institutions to create financial platforms andHuman Resources

our many other contributions to the Japanese economy

Appropriately judging medium- to long-term investments

and society rely on our organizational adeptness, that is,and loans requires all of DBJ’s executives and regular

our ability to quickly ascertain emerging issues and deploy

employees to maintain a long-term perspective and makeappropriate personnel. This ability, combined with the long-

financial decisions from a neutral standpoint. In an era

term financial data we have accumulated over 50 years ofcharacterized by increasingly complex economic and social

investment and loan operations and a corporate culture

issues and more sophisticated business skills, this long-termof always considering projects in an economically rational

perspective has a major impact on DBJ’s ability to contrib-

manner, as well as in terms of their broader economic andute to business formation and the financial structure. Oursocial significance, constitute DBJ’s organizational struc-ability to provide solutions that are appropriate for compa-

tural assets, as does the smooth and rapid communicationnies, as well as for the economy and society in a broader

process resulting from the common knowledge that has

sense, depends on the ability of our human resources—

evolved through corporate financing training and otherexecutives and regular employees who are professionals inchannels.

Annual Report & CSR Report 2013101

Advanced Initiatives Involving New Financial Methods That Utilize Intellectual Assets
We are a leader in leveraging our intellectual assets toduring the period when the viability of their plans is being

introduce new financial methods to Japan. Our pioneering

reviewed. To meet this need, DBJ provides debtor-in-

efforts come from maximization of our intellectual assets,

possession (DIP) financing as temporary working capital tocooperation with local communities and extensive cultiva-

enable such companies to continue operating and maintaintion of in-house human resources and expertise. Operating

value in the best portions of their businesses. In addition,

within complex financial markets, DBJ will maintain these

DBJ creates business revitalization funds to help companies

activities while continuing to control and distribute risk asnormalize their operations, through a process of operation-effectively as possible.

al selection and focus, and reduce their debt levels.

The United Kingdom introduced the private finance ini-

In recent years, we have become actively involved in

tiative (PFI) scheme in 1992 to encourage private companies

mezzanine financing. (”Mezzanine” literally refers to theto fund or manage projects that are typically operated bypartial story between two main stories of a building.) In thethe public sector. As a leader in absorbing and accumu-

repayment hierarchy, mezzanine financing is lower than thelating such expertise, DBJ has participated in numerous

senior financing* typically provided by financial institutions,

PFI projects in Japan. By shifting to the private sector theso it is a higher investment risk. In the United States andresponsibility for constructing, maintaining and operatingother markets with a broad range of investors, mezzanine

public facilities, the country 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, companies typically require working capital

102

Annual Report & CSR Report 2013

*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 nearby figure contrasts intellectual assets as viewed

have cause to reconsider their conformance with various

by DBJ and DBJ’s role as seen by society. Evaluated in thislaws and regulations, ensure safe and secure workplace andsense, intellectual assets and CSR are two sides of the same

surrounding environments and provide quality products andcoin.

services through fair competition. These activities reinforce

For example, the DBJ Environmentally Rated Loan
Program, the DBJ Enterprise Disaster Resilience Rated

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 government bodies, experts

agement.

and clients—as well as our human resources comprising

As can be seen on pages 32 to 48, “Integrated

executives and regular employees and our accumulation of

Investment and Loan Services,” and on pages 68 to 89,

experience and expertise all serve a vital CSR role. At the“CSR through Investment, Loan and Other Businesses,” DBJ

same time, these same loan programs strongly support theis taking advantage of its various accumulated intellectual

CSR activities of our business partners: these companies

assets.

Relationship between Intellectual Assets and CSRIntellectual Asset
Elements
Relational
Structural Assets
Networks andClient BaseManagement Teamand Employees

Organizational
Structural Assets
Intellectual Assets andBusiness Processes

Client Satisfaction
Maintaining
Service Quality
Fair Competition

Human Resource Education
Labor Standards
Human Rights
Working EnvironmentIntellectual Asset Report

Human
Resources

CSR Elements

Legal and Regulatory
Conformance
Corporate Ethics(Created by DBJ from Ministry of Economy, Trade and Industry materials)

Annual Report & CSR Report 2013103

Financial Platform That Enables DBJ to Meet the Needs of the Times

Defining “Financial Platform”
In DBJ’s definition, ”financial platform” refers to thethe framework of systems and laws that support corporate

amount and quality of funds to which corporate and othereconomic activity involves the application of experienced

clients have access, the systematic formulation of bases thatand real-world expertise of financial institutions and busi-

affect the diversity of fund-raising methods, financial exper-

nesses, as well as an accumulated body of results that cantise and practices, market transparency and the degree ofbe used for future reference (transaction cases, precedents

market participation.

and the like). Furthermore, as financial platforms function

The more complete the financial platforms, which are

inadequately if they are used by only a minority of partici-

indispensable to financial system soundness and macro

pants, a catalyst is needed to encourage participation from

economic vigor, the greater is their effectiveness at promot-

a broad range of players. Owing to our neutral position anding the revitalization of businesses and urban and local

advanced-player status, we are perfectly suited to serve as

communities and the creation of new industries. However,the catalyst for developing and maintaining financial plat-

financial platforms, which are an institutional, general-

forms in cooperation with other financial institutions.

access capital good, are not formed overnight. Creating

Activities Involving Financial Platforms

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, local government bodies andoutside experts, centered on university instructors. Taking

private financial institutions and coordinates their interests.

an academic and liberal perspective, the institute promotes

In the investment and loan department, DBJ promotes andresearch activities targeting a sustainable socioeconomic

helps develop financial platforms for structured financing,

structure. (For details, please refer to the Research Institutebusiness restructuring support, financing related to envi-of Capital Formation website, at http://www.dbj.jp/ricf/en/.)ronmental and disaster policies, M&A advisory services,

On pages 32 to 48, “Integrated Investment and Loan

safety nets and other functions. In the research depart-

Services,” and pages 68 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 2013

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 meaningful fromboth economic and social perspectives and work tooffer superior investment and loan solutions.

Corporate Governance  . . . . . . . . . . . . . . . . . 106
Compliance  . . . . . . . . . . . . . . . . . . . . . . . . . . 111
Risk Management  . . . . . . . . . . . . . . . . . . . . . 112
Client Protection Management System/
Declaration on Personal Information
Protection/Policy for Managing Conflicts ofInterest  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
Disclosure  . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118

Annual Report & CSR Report 2013105

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, local governments and otherfinancial 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

Akio Mimura, Senior Advisor, Nippon Steel & Sumitomo

DBJ elects outside directors from the standpoint ofMetal Corporation andensuring management transparency and enhancing

Kazuo Ueda, Professor, Faculty of Economics, thecorporate governance.

University of Tokyo.

The Advisory Board has been established as aManagement Committee advisory body. This board

Audit & Supervisory Board Members, Audit &provides advice on overall management issues, includingSupervisory Board

DBJ’s management strategies, from a neutral standpoint.

The Audit & Supervisory Board comprises five members.

The Compensation Committee, which includes outside
directors, has been created to deliberate on director
compensation and advise the Board of Directors in thisThis board convened 14 times during the fiscal year ended
March 31, 2013.
As prescribed by the Companies Act, a majority of the five

regard. At the same time, DBJ has established a Personnel

Audit & Supervisory Board members are outside members.

Evaluation Committee comprising outside experts to

DBJ has three Audit & Supervisory Board members, one ofevaluate personnel proposals on the selection andwhom is an outside member. The Audit & Supervisory Board

resignation of directors and Audit & Supervisory Board

Office has been created to assist Audit & Supervisory Board

members.

members (including outside members) in performing their

Board of Directors& Supervisory Board Office, which is directed by the Audit &The Board of Directors comprises 10 members. To ensure

Supervisory Board.

duties. Specialized staff members are assigned to the Audit

management transparency, two Board members are outside
directors. During the fiscal year ended March 31, 2013, theBoard of Directors met 14 times.
The following two members are outside directors:

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Annual Report & CSR Report 2013

The three outside Audit & Supervisory Board members
are as follows:
Kazuyoshi Arakawa, former Managing Director, Sumishin
Panasonic Financial Services Co., Ltd.;Makoto Ito, Attorney and Visiting Legal Research

ALM & Risk Management Committee

Professor, Graduate School of Waseda University;

This committee deliberates and makes decisions pertaining

Shinji Hatta, Professor of Graduate School of Professional

to portfolio risk management and asset/liability management.

Accountancy, Aoyama Gakuin University.

General Risk Management Committee
This committee deliberates and makes decisions on

Content of Standards and Policies Related toimportant items related to legal compliance, client

Independence in the Selection of Outside Directors

protection management, operational risk management andand Outside Audit & Supervisory Board Members

system risk management.

Not applicable.

Committee on Investment and Loan Decisions
This committee handles, deliberates and makes decisions

Operations Audit Committee

related to investments and loans, as well as the investment

The Board of Directors has established the Operations

and loan management.

Audit Committee, delegating to this body the authority to

New Operation Screening Committee

deliberate important matters related to internal audits. This

This committee deliberates and makes decisions on thecommittee met three times during the fiscal year ended

commencement of initiatives involving new businesses.

March 31, 2013.

Advisory Panel on Investments and Loans
This panel handles the advance deliberation on andCompensation Committeemonitoring of investments and loans.

The Compensation Committee, whose members include

Committee on International Operations

outside directors, has been established as an advisory bodyto the Board of Directors from the standpoint of ensuringtransparency and objectivity. The committee considers thetype of executive compensation structure that befits DBJ.

This committee deliberates items related to the overseas
business strategies, operations and management conditions.
Advisory Board
The Advisory Board has been created as a body to advise

Personnel Evaluation Committee

the Management Committee, providing advice on DBJ’s

DBJ has established the Personnel Evaluation Committee,

overall management.

composed of outside directors and other outside experts, as

The Advisory Board is composed of the following outside

an advisory body to the Board of Directors. The committee’s

experts and outside directors.

role is to evaluate personnel proposals on the selection

Outside Experts

and resignation of directors and Audit & Supervisory Board

Masayuki Oku, Chairman of the Board, Sumitomo Mitsui

members.

Financial Group, Inc.
Kiyofumi Kamijo, Executive Corporate Advisor, Tokyu

Management Committee

Corporation

The Board of Directors has vested in the Management

Sakie Fukushima-Tachibana, President of G&S

Committee decision-making authority regarding theAccordingly, the Management Committee makes
important management decisions. The committee met 39
times during the fiscal year ended March 31, 2013.
Committees under the Management Committee
Various committees have been established under theManagement Committee assigned specific decision-making
tasks, excluding decisions made by the Board of Directors or
the Management Committee within each field of specialization.

International’s Asia PacificManagement Structure

execution of business.

Global Advisors Inc., Senior Advisor of Korn/Ferry
Fujio Cho, Honorary Chairman of Toyota Motor
Corporation
Katsunori Nakanishi, President & Chief Executive Officer,
The Shizuoka Bank, Ltd.
Outside Directors
Akio Mimura, Senior Advisor, Nippon Steel & Sumitomo
Metal Corporation
Kazuo Ueda, Professor, Faculty of Economics, theUniversity of Tokyo

Annual Report & CSR Report 2013107

Matters Requiring Approval of Competent Minister• Disposition of surplus funds

The New DBJ Act prescribes matters for which DBJ requires• Merger, corporate split and dissolution

the permission of the Minister of Finance. Major items• Basic policy on business plans, redemption plans and fundprocurement

requiring such permission are as follows:• Appointment and dismissal of representative directors and

The organization outlined below has been put in place

Audit & Supervisory Board members

to execute and supervise the abovementioned activities.

• Concurrent positions as directors• Amendments to Articles of Incorporation
Operating 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

ALM & Risk
Management
Committee

ReportingAccounting
auditorOperations Audit
Committee

Board of Directors

Cooperation

Compensation
Committee
Personnel Evaluation
Committee

Management
Committee

Decision-making
bodiesAudit & Supervisory
Board Members,
Audit & Supervisory
Board

Internal Audit
Department
Reporting
AuditsAdvisory Board
Deliberative
bodiesGeneral Risk
Management
Committee

Committee on
Investment and
Loan Decisions

New Operation
Screening
Committee

Advisory Panel on
Investments andLoansCommittee on
International
Operations

AuditsDepartments
Subsidiaries

Executive Officer System

Status of Internal Control System

DBJ has an executive officer system to clarify responsibility

To ensure operational soundness and in accordance withfor the execution of duties and accelerate decision-making.

the Companies Act, the Board of Directors has established

The Board of Directors has designated eight managing

an internal control system under the Internal Control

executive officers, excluding officers who are concurrently

System Basic Policy.

directors, and seven executive officers.

Specifically, this system is designed to determine thestatus of legal compliance, risk management and internal
audits, as well as other items of management importance.
The internal control system is designed to confirm theformulation of various regulations and the status of theirimplementation in various departments.

108

Annual Report & CSR Report 2013

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 Item 1 and 3, Article 100, of the Act’s Enforcement Regulations(hereinafter, ”Enforcement Regulations”) to create a system (internal control
system) to ensure Development Bank of Japan Inc. (hereinafter, ”DBJ”)
conducts operations in an appropriate manner.
System to Ensure Compliance with Laws and the Articles ofIncorporation in the Execution of Duties by Directors and Employees
Article 2. The directors and the Board of Directors recognize legal complianceas one of DBJ’s most important management issues. Accordingly, DBJ has
formulated a basic policy to ensure that the execution of duties by executives
complies with laws and the Articles of Incorporation and establishes thecorporate philosophy and a basic policy on legal compliance.
2. A Compliance Manual, compliance program and internal regulations shallbe created in preparation to ensure compliance by executives with laws andregulations.
3. A committee shall be formed to promote and manage legal compliance,
and an executive and a control division shall be placed in charge of legal
compliance.
4. A compliance hotline system shall be established to enable a response to actsthat contravene laws and regulations and acts of potential concern from theperspective of legal compliance.
5. Preparations shall be made to ensure that DBJ has absolutely no connection
with antisocial forces that threaten social order or safety.
6. The Board of Directors shall formulate an Internal Audit Basic Policy
pertaining to the status of internal control, including legal compliance. This
policy shall establish internal audit departments that are independent of
departments responsible for the execution of business and that report audit
results promptly and appropriately.
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 andperform appropriate management control.
2. The Board of Directors shall establish a Management Committee and delegate decision-making on specific items to this council. In addition to making
decisions on the items with which it has been entrusted, to contribute to
expeditious decision-making the Management Committee shall deliberate inadvance matters for resolution by the Board of Directors. Furthermore, theManagement Committee shall establish various committees as advisory insti-

System to Ensure the Adequacy of Operations of the Corporate Group,
Comprising DBJ and Its Subsidiaries and Affiliated Companies
Article 6. The Board of Directors shall ensure the adequacy of operations of the
DBJ Group in accordance with the corporate philosophy.
2. The Board of Directors shall manage operations appropriately, in accordancewith the scope and characteristics of operations of its subsidiaries andaffiliated companies. Furthermore, the Board shall introduce appropriate
measures from the perspective of legal compliance, client protection and risk
management.
3. The Board of Directors shall create reporting, guidance, management process
and other systems related to operations management between DBJ and its
subsidiaries and affiliated companies.
4. In accordance with the necessary scope of legal regulations, the Internal
Audit Department shall conduct internal audits of subsidiaries and affiliatedcompanies and report the results of these audits promptly and appropriately
to the Board of Directors.
System Related to Employees Assisting the Audit & Supervisory Board
Members in Their Duties
Article 7. As a specialized organization to assist Audit & Supervisory Board
members with 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
Article 8. Personnel issues related to the employees supporting the duties of
Audit & Supervisory Board members and matters related to the independenceof such personnel shall be left in the control of the Audit & Supervisory Board.
System for Reporting by Directors and Employees to Audit &Supervisory Board Members and Other Systems for Reporting to Them
Article 9. Directors and employees shall report to Audit & Supervisory Board
members on the status of execution of DBJ’s business and other necessary
information.
2. If directors or employees become aware of any major potential damage to
DBJ’s credibility or operating performance, they shall immediately report suchinformation to the Audit & Supervisory Board members.
3. If Audit & Supervisory Board members find that they require certain
information to perform their duties, they may request reports from directors
and employees as needed, and the party to whom the request is addressedshall report appropriately.

Management Structure

Regulations and Other Systems Related to Managing the Risk of Loss
Article 4. To ensure the soundness of management and manage risk properly,
a risk management process that defines, evaluates, monitors and controls risks
with various characteristics encountered in the course of business shall be put
in place.
2. A comprehensive risk management process shall be created. Also, acommittee for risk management shall be created, and an executive and adepartment shall be assigned to take charge of risk management.
3. Risks shall be segmented into the following categories, and risk management
policies shall be established for each:1) credit risk, 2) investment risk, 3) country risk, 4) market credit risk, 5)market risk, 6) market liquidity risk, 7) financial liquidity risk, 8) settlement
risk, 9) operational risk.
4. To the extent possible, the abovementioned risks shall be measured using aconsistent system, risk guidelines shall be established and the risks shall be
managed.
5. The necessary systems shall be put in place to minimize the effects ofeconomic loss and credit collapse in the event of disaster, to ensure business
continuity in crisis situations and to ensure a prompt return to normal
functioning.
6. The Board of Directors shall establish an Internal Audit Basic Policy todetermine the status of internal control, including risk management. The
board shall receive prompt and appropriate reports of the results of internal
audits from internal audit departments.

tutions or as bodies to which to delegate decision-making on specific items.
3. To ensure the efficient execution of business based on decisions madeby the Board of Directors, regulations shall be established regarding theorganizational structure and the execution of tasks shall be allocatedappropriately.
4. To enable swift decision-making, an executive officer system shall beestablished. Executive Officer Regulations shall be formulated to define
executive officers’ roles and responsibilities.

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 Management
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
members in their audit activities and shall respect the Audit & Supervisory
Board Regulations, Audit & Supervisory Board members’ audit standards andother regulations.
5. To ensure the adequacy and reliability of accounting audits, directors andemployees shall cooperate in creating a system to ensure the independenceof the accounting auditors.

Annual Report & CSR Report 2013

109

Status of Internal Audits and Audits by Audit &Supervisory Board Members
the direct supervision of the DBJ president and independent

Overview of Personal, Equity, Transactionalor Other Special-Interest Relationships
with Outside Directors and Outside Audit &Supervisory Board Members

from other operating departments. The department

Akio Mimura, Senior Advisor of Nippon Steel & Sumitomo

conducts inspections to ensure the appropriateness andMetal Corporation, is an outside director of DBJ. DBJ has

effectiveness of internal controls, including DBJ’s overall

no special-interest relationship with Mr. Mimura, and its

operational compliance and risk management, andbusiness with Nippon Steel & Sumitomo Metal Corporation

performs evaluations and recommends improvements.

is conducted normally.

DBJ has established the Internal Audit Department under

The Operations Audit Committee deliberates and decides

DBJ has no special-interest relationship with any otheraudit plans, audit reports and other important mattersof its outside directors or outside Audit & Supervisory Board

related to internal audits, and this information is reported tomembers.

the Board of Directors.
As of June 27, 2013, 21 people belonged to the Internal
Audit Department.
The Audit & Supervisory Board and the Audit &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.

Supervisory Board members audit the execution of duties by

they query the execution of business by directors, peruse

Overview of Agreements with Outside Directors
and Outside Audit & Supervisory Board
Members under Paragraph 1, Article 427, of theCompanies Act (Liability Limitation Agreements)

documents and conduct branch audits.

DBJ’s Articles of Incorporation allow it to establish liability

directors, based on their audit policy and audit plans.
The Audit & Supervisory Board members attend Board of
Directors and other important meetings. When necessary,

limitation agreements with its outside directors andStatus of Accounting Audits

outside Audit & Supervisory Board members, limiting their

DBJ has in place an agreement with Deloitte Touche

responsibility for damages under Paragraph 1, Article 425,

Tohmatsu LLC to conduct accounting audits as itsof the Companies Act, provided their duties are executed

accounting auditor. During the fiscal year ended Marchwith good intent and without gross negligence, to the total

31, 2013, these operations were conducted by designatedamounts specified in each item in Paragraph 1, Article 425,

certified public accountants (designated limited liabilityof the Companies Act.

partners) Yukio Ono (continuous audit period* of five
years), Atsuyuki Shimada (same, two years) and Hitoshi Torii

Number of Directors(same, one year).

DBJ’s Articles of Incorporation limit the number of directors
to 13 or fewer.

* In accordance with the Companies Act, as designated limited
liability partners, the number of years of continuous audit must
be stated. As designated limited liability partners, the number ofcontinuing years of performing audits conducted in accordancewith the Financial Instruments and Exchange Act was five years
for Yukio Ono, two years for Atsuyuki Shimada and one year for
Hitoshi Torii. The number of business periods during which an audit
was performed is the standard used to indicate the number ofyears. Assisting in this audit were 77 people, including a systems
specialist, a licensed tax accountant, a specialist in determining fairvalue, a specialist in pension mathematics, real estate appraiser anda specialist in credit risk.

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.

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Annual Report & CSR Report 2013

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 at the General Meeting of Shareholders
shall attend the meeting and determine the appointment
of directors based on a majority vote. The Articles ofIncorporation further specify that the appointment of
directors shall not be resolved by cumulative voting.

Limiting the Responsibility of Directors andAudit & Supervisory Board Members

Requirements for Special Resolutions at theGeneral Meeting of Shareholders

To enable them to perform their duties and fulfill the roles

To ensure a smooth General Meeting of Shareholders,that are expected of them, in accordance with Paragraph

DBJ’s Articles of Incorporation stipulate that shareholders

1, Article 426, of the Companies Act, DBJ has establishedpossessing at least one-third of the voting rights exercisable

in its Articles of Incorporation that the liability for damages

shall attend the meeting and determine by a two-thirds

incurred by directors (and former directors) and Audit &majority vote the ”requirements for special resolutions at

Supervisory Board members (and former members) may

general meetings of shareholders” provided in Paragraph 2,

be reduced to the legal limit by resolution of the Board of

Article 309, of the Companies Act.

Directors.

Compliance

Specific compliance initiatives are as follows.

conduct activities appropriately and in compliance withthe law.

DBJ recognizes compliance as one of its most important2) DBJ’s executives and employees are well aware that DBJ

management issues. As basic policies to ensure that themust conduct its businesses legally and appropriately andexecution of duties by directors complies with laws andbe responsible for explaining its actions to the generalregulations and the Articles of Incorporation, we havepublic.

formulated a corporate philosophy, a Basic Compliance
Policy and other compliance-related regulations.
In addition to its fundamental regulations on

Compliance System
DBJ has established the Legal and Compliance Departmentcompliance, DBJ has created a Compliance Manual and a

to take overall responsibility for planning, preparing

compliance program. Via activities in and around DBJ, we

and adjusting compliance activities. In addition, DBJ has

seek to thoroughly implement the compliance activities

established the General Risk Management Committee tooutlined below.

reflect on legal compliance matters, determine the extent
internal system.

DBJ has formulated the compliance principles indicated

DBJ also has established a Compliance Hotline. The

below as part of its creation of compliance regulations.

objective of this internal reporting system is to swiftly

1) DBJ’s executives and employees are keenly aware ofidentify and resolve any legal violations.

DBJ’s social mission and responsibilities as a public-sector

Management Structureof compliance, and deliberate on improvements to DBJ’s

Compliance Principles

DBJ, in matters relating to managing conflicts ofbank and recognize that illegal acts or improper businessinterest, formulated as a basic policy “Conflicts of Interest

operations harm the reputation of DBJ and interfere

Management Regulations” against undue infringement

significantly with DBJ’s ability to fulfill its objectives underof the interests of its clients, and is preparing a system to

the New DBJ Act. We also realize DBJ’s need to always

manage conflicts of interest.

Annual Report & CSR Report 2013

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, and there-

seeks to control its total risk within a specified target range.

fore we have established risk management processes andIn addition, we have set risk guidelines for each risk cat-methods.

egory to help manage total risk.

Risk Management System
DBJ conducts risk management from the perspectives ofAsset/Liability and Risk Management System Overview

maintaining financial soundness and improving operational efficiency, which are the prerequisites to ongoing
operational viability. To ensure appropriate management of
individual risk categories, DBJ has developed a risk manage-

President
Management
Committee
ALM and Risk Management Committee

ment system that clarifies which department is responsible
for each type of risk. The Risk Management Department
Risk Management Department

oversees comprehensive asset/liability and risk management
activities. The ALM & Risk Management Committee, consisting of DBJ’s executives, deliberates on important matters

Credit Analysis Department

Treasury Department

concerning risks and conducts regular monitoring, in linewith the basic policy related to comprehensive risk management approved by the Board of Directors.

Investment and Loan Departments/Offices

Credit Risk Management
Credit risk refers to the risk of sustaining losses resulting

The sales and credit analysis departments hold separate

from a decline in the value of assets due to deterioration inroles in the screening and administering of credit for

the financial condition of the borrower. Credit risk manage-

individual loans and each department keeps the operations

ment requires credit management of individual loans as wellof the other in check. The Committee on Investment andas bankwide portfolio management.

Loan Decisions meets as needed to deliberate important
issues concerning the management and governance ofCredit Administration of Individual Loansindividual loans. These mutual checking functions serve toWhen making an investment or loan, DBJ examines theensure the appropriateness of the lending operation andentity’s project viability and the project’s profitability from amanagement environment.

fair and neutral standpoint, as well as its benefits. We also

Borrower Rating Systemhave an internal borrower rating system. DBJ is not subject

DBJ’s borrower rating system measures creditworthinessto the Banking Act or the Act on Emergency Measures forby combining an evaluation point rating and a borrower

the Revitalization of the Financial Functions (Act No. 132 ofcategory rating, with the result quantifying a potential

1998) but carries out independent asset assessments in line

client’s credit circumstances. The evaluation point ratingwith internal policies for self-assessment of credit quality

selects indicator/evaluation categories that are common

based on the Financial Services Agency’s Financial Inspection

across all industries, scoring the creditworthiness of theManual. The results of self-assessments are subject to an

potential borrower quantitatively and qualitatively. On theaudit by an auditing corporation and are reported to theother hand, the borrower category rating measures specificmanagement. Credit risk and amounts are monitored toitems related to the borrower, looking at the borrower’s

confirm they are within the limits established for individual

realistic financial condition, cash flows and debt repayment

borrowers.

history. By putting the ratings together, the systemgenerates a comprehensive assessment of a borrower’s
repayment capacity.

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Annual Report & CSR Report 2013

Borrower Rating Classifications
Claims Classified
under the Financial
Revitalization Act

Borrower Category

Borrower
RatingDefinition

Normalborrowers

1-8

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

Borrowers
requiring
caution

9-11

Borrowers experiencing weak business conditions, are unstable or have issues
with their finances. These borrowers are likely to require management
intervention in the future.

Substandard
borrowers

12

Either some or all of the debts of these borrowers requiring caution are
under management.

Borrowers indanger ofbankruptcy

13

Borrowers in this category are having financial difficulties but are notbankrupt. Management improvement loans and the like are progressing
poorly, and these borrowers are highly likely to fall into bankruptcy.

Effectively
bankrupt
borrowers

14

Although not legally or formally in bankruptcy, these borrowers areexperiencing severe financial difficulties and are realistically falling into
bankruptcy, as their lack of potential for restructuring has been confirmed.

Bankrupt
borrowers

15

These borrowers are in bankruptcy, legally and formally. Specifically, theseborrowers are in bankruptcy or liquidation, under corporate reorganization,
bankruptcy proceedings or civil rehabilitation, or have had transactions
suspended by a bill clearinghouse.

NormalclaimsSubstandard claims

Doubtful claims

Claims in bankruptcy,
reorganization claims
and similar claims

Asset Self-Assessment System

Portfolio Management

Asset self-assessments are used to define asset

DBJ performs a comprehensive analysis of data based onclassifications that will offset recoverability risk or the

borrower ratings, and calculates the loan portfolio’s overall

degree of risk of value loss, based on the borrower rating,

exposure to credit risk. Credit risk exposure can be classified

the corresponding borrower category and the collateralas (1) expected loss (EL), the average loss expected during

or guarantee status. Such assessments help DBJ establish

a specific loan period; and (2) unexpected loss (UL), thetimely and appropriate amortization schedules and reserve

maximum loss that could be incurred at a certain rate oflevels.

probability. The EL and UL calculations are reported to the
ALM & Risk Management Committee.
Monitoring the situation and consideringcountermeasures allow DBJ to control risk and devise
effective measures to improve risk return.

Market 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 orManagement StructureMarket and Liquidity Risk Management

DBJ calculates and analyzes risk exposure with cash flow

liabilities (including off-balance sheet items), owing toladder analyses (gap analysis), value at risk (VaR), interestchanges in interest rates, exchange rates, stock markets andrate sensitivity analyses (basis point value), and othervarious other markets. DBJ divides these risks broadly into

methods. A portion of the interest rate risk associated withinterest rate risk and exchange risk.

lending operations is covered through interest rate swaps,

Interest Rate Risk

which are used solely for hedging purposes. DBJ does not

Interest rate fluctuations can create mismatches on rates

have any trading-related risk because it does not engage inof interest on assets and liabilities or on interest periods,

trading (specified transactions).

Annual Report & CSR Report 2013

113

Exchange Risktimes, because of market complexities, entities in these

Exchange risk is the risk of loss due to unexpected shifts

circumstances may become unable to participate in market

in exchange prices, and this risk affects entities holding atransactions, compelling them to conduct transactions

net excess of assets or liabilities denominated in foreign

under substantially less favorable terms than otherwise

currencies. Exchange risk entails the possibility of a decline

would be the case. The risk of losses for these reasons isin the economic value of DBJ’s assets due to the impact ofknown as market liquidity risk.

changes in currency exchange rates. DBJ’s exchange risk

As its main methods of acquiring funds, in addition toderives from foreign currency investment and financing andissuing corporate bonds and taking out long-term loans,

issuing foreign currency bonds. DBJ uses currency swaps

DBJ relies on the stable procurement of long-term funds

and other instruments to hedge this risk.

from the government’s Fiscal Investment and Loan Program

DBJ manages counterparty risk in swap transactions, the(FILP) and government-guaranteed bonds rather than on

risk that the counterpart in the swap transaction will be

short-term funds such as deposits. To meet unexpected

unable to fulfill its obligations, by continually monitoring

short-term funding requirements, funds on hand are used,the creditworthiness of all parties, and by diversifying

taking security and liquidity into consideration. Overdrafttransactions among several institutions.

lines of credit have been established with multiple otherfinancial institutions.

Liquidity Risk

Additionally, DBJ maintains daytime liquidity by

Liquidity risk is the risk of a mismatch occurring inusing the Bank of Japan’s Real Time Gross Settlement

the periods when funds are used and raised, causing(RTGS), whereby settlements are made instantly for each

unexpected differences in the flow of funds (cash liquidity

transaction. Every effort is made to ensure that settlementrisk). This situation makes securing funds difficult andconditions are managed appropriately.

creates situations in which interest rates on borrowed

In addition to credit risk, the ALM & Risk Management

funds are substantially higher than usual rates. At such

Committee deliberates DBJ’s market risk and liquidity risk.

Operational Risk Management
DBJ defines operational risk as the risk of loss arising from

System Risk Management

internal processes, people or systems that are inappropriate

System risk refers to the risk of loss due to a computeror non-functioning, or from external events. DBJ works tosystem breakdown or malfunction, system defects, or

establish a risk management system to minimize risk andimproper computer usage. To properly manage systems

prevent potential risks from materializing.

risk, DBJ has implemented the following internal processes

The General Risk Management Committee has been

to optimize system risk management. The Information

established to deliberate topics concerning operational risk

Resources Department is responsible for managing DBJ’s

management.

system risk centrally, based on its system risk management

Within operational risk management, DBJ conducts

regulations. By determining security standards from a

operational risk management and systems risk management

variety of viewpoints, from information system planning

as described below.

and development to operation and use, the department
extends the risk management system bankwide, andOperational Risk Management
Operational risk refers to the risk of sustaining losses
resulting from employees neglecting to perform their duties
correctly or from accidents, fraud, and the like. To reduceor prevent operational risk, DBJ prepares manuals, performs
checks on administrative procedures, provides educationand training and uses systems to reduce the burden of
administrative duties.

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Annual Report & CSR Report 2013

addresses appropriate system risk management operations.

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

Plan

Matters requiring authorization of competent
ministerAppointment and dismissal of representative directors andauditors
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
Management
Committee

Advisory Board

Advice(Outside experts andoutside directors)

Do
Execution of
investments andloans
Fund-raising
Other activities

Check
Evaluation ofbusiness
performance
Status & results
reportManagement Structure

Annual Report & CSR Report 2013

115

Client Protection Management System/Declaration on Personal Information
Protection/Policy for Managing Conflicts of Interest
The establishment and maintenance of a client protection

their level of convenience. DBJ recognizes the extreme

management system is vital because it protects the people

importance of such a system from the standpoint of

who use the financial institution’s systems and raises

operational soundness and appropriateness.

Client Protection Management Policy and Declaration on Personal Information Protection
DBJ has formulated a Client Protection Management Policy3) We acquire information about clients through legal

to ensure strict compliance with laws and regulations,and appropriate means and manage such information

protect the interests of its clients and raise the level of client

safely. In transactions with clients, in the event that DBJ

convenience. We have also created internal regulations

outsources operations, it ensures appropriate information

based on this policy, which we employ in briefings to raisemanagement and client response.

in-house awareness.
Our Client Protection Management Policy is outlined

We have incorporated a declaration on our policies

below:

related to personal information into our Declaration on

1) When transacting with clients, we endeavor to provide

Personal Information Protection.

and explain information that is accurate and appropriate
in line with laws and regulations.
2) When we receive requests for consultation, other

DBJ is a registered financial institution under the
Financial Instruments and Exchange Act. DBJ has drawn

requests or complaints, we strive to see the issue fromup policies introduced for the management of conflicts

the client’s point of view, listen sincerely and respond in

of interest under this act and provides an overview of thean operationally appropriate manner.

publicly announced policy.

Declaration on Personal Information Protection
1. Policy
DBJ considers the appropriate protection of personal information
an important social responsibility. DBJ endeavors to use personal
information appropriately in all its activities by conformingwith the requirements of the Act on the Protection of Personal
Information, as well as other related laws and regulations, aswell as its own Declaration.
2. Appropriate Obtainment of Personal Information
DBJ acquires clients’ personal information only within thescope that is required to perform its operations, and employs
appropriate procedures for obtaining such information.
3. Purpose of Using Personal Information
DBJ obtains clients’ personal information only for specificpurposes and uses such information only within the scopenecessary to satisfy such purpose of use. In the event that otherpurposes of use are limited by legal regulations concerning
specified purposes of use, such information is not used for
purposes other than so specified. DBJ discloses on its website
the purposes of use of clients’ personal information. If
information is obtained for other purposes of use, such purposes
are clearly indicated at the time such information is obtained.
4. Providing Personal Information to Third Parties
In principle, DBJ does not provide clients’ personal information
to third parties unless it has received from the client permission
to provide such information or unless it is legally required toprovide such information. However, DBJ may, without obtaining
client approval, provide clients’ personal information to parties
it has commissioned to conduct activities within the scope for

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Annual Report & CSR Report 2013

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 areprohibited under the Financial Instruments and Exchange Act or otherlaws and regulations.
3. Scope of Companies Subject to Management of Conflicts ofInterest
As stated in 2 (1) above, Subject Transactions are transactions
conducted by DBJ or by DBJ’s subsidiary financial institutions, etc.
”Subsidiary financial institutions, etc.” are those DBJ subsidiaries
or affiliated companies prescribed in Article 36-5 of the Financial
Instruments and Exchange Act.
As of May 24, 2013, 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
4. Policy for Managing Transactions That Are Likely to Involve
Conflicts of Interest
In the case of transactions prescribed as Subject Transactions, to theextent that the DBJ Group is not in violation of its legal or contractual
duties (including but not limited to the duty of confidentiality), the DBJ
Group is determined to act properly in the interest of its clients throughthe following or other measures.
(The following are only specific examples of methods. Subject
Transactions are not limited to those indicated below. )Separation of the department conducting Subject Transactions fromthe department conducting transactions for said client
Amernding the conditions or instruments of Subject Transactions or
said client transactions
Cessation of Subject Transactions or said client transactions
Disclosing to said client the risk of Subject Transactions unduly
infringing on the interests of said client
5. Management of Conflicts of Interest—Organization
To ensure the appropriate management of conflicts of interest, theduties of a Conflicts of Interest Management Control Department
are handled within its Legal Affairs & Compliance Department.
In accordance with the Policy, the Conflicts of Interest Management
Control Department appropriately manages prescribed Subject
Transactions and conflicts of interest. Furthermore, as the DBJ Groupis required to manage conflicts of interest in accordance with its status
as a registered financial institution under the Financial Instruments andExchange Act, provided that the DBJ Group does not violate its legal
duty of confidentiality or its duty of confidentiality in relation to its
clients, information pertaining to Subject Transactions, including thoseof transactions handled by DBJ’s subsidiary financial institutions, etc.,
may be managed in a centralized manner.
Records shall be prepared of measures undertaken by the Conflictsof Interest Management Control Department with regard to prescribed
Subject Transactions and their management, and such records shall be
retained for a period of five years following the creation date.
To ensure appropriate management, the Conflicts of Interest Management
Control Department shall periodically verify the content of activities by
DBJ Group executives and regular employees and the content of businessactivities at each branch to ensure the operations are being conducted inaccordance with the Policy and the operational procedures for the policy,
and shall periodically verify the management of conflicts of interest.








Annual Report & CSR Report 2013

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 Ordinances
pertaining to the financial instruments business. This document
provides an overview of the Policy.
2. Types of Transaction That Are Likely to Involve Conflicts ofInterest(1) Subject Transaction
Targets of this Policy, or ”transactions that are likely to involve conflictsof interest,” are those transactions conducted by DBJ or DBJ’s subsidiaryfinancial institutions or others (defined in 3 below; hereinafter, ”theDBJ Group”) that have a likelihood of unduly infringing on the interestsof clients as a result of conflicts of interest (hereinafter, ”Subject
Transactions”).
”Conflicts of interest” are (a) situations of opposing interests
between the DBJ Group and its clients, or (b) situations of opposinginterests between the DBJ Group’s clients and other clients (hereinafter,
together, ”Situations of Opposing Interests”) that unduly infringe on
the interests of clients.
”Clients” are, in the case of ”business operations related to financial
instruments” conducted by the DBJ Group, (a) counterparties in existingtransactional relationships, (b) parties in negotiation with the DBJ Group
with regard to transactions or otherwise having the potential to becomecounterparties in transactional relationships, or (c) parties that have beentransactional counterparties in the past and that currently are also legallycompetent with respect to past transactional relationships.
”Business operations related to financial instruments” are thosebusinesses provided for in Article 70 (2) of the Cabinet Office
Ordinance pertaining to financial instruments business, etc., that are
performed by DBJ or DBJ’s subsidiary financial institutions, etc.
(2) Types of Subject Transaction
Specific individual circumstances determine whether transactions are
judged as Subject Transactions, but below are examples of transactions
that are likely to be considered said Subject Transactions.
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.

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 2013

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
Act for Extraordinary Expenditure and Assistance toCope with the Great East Japan Earthquake . . . . 131

Corporate Data

Annual Report & CSR Report 2013119Timeline

The Japan Development Bank, the Hokkaido-Tohoku Development Finance Public Corporation and the Development Bank of Japan
1951 April
1952
1956 June
1957 April

1960
1961
1962 April
1963
1964 July
1972 January
1985 June

1987 September
1989
1995 February
1997 September
1997 December
1999 June
1999 October

2002 May
2005 December
2006 May
2006 June2007 June

Japan Development Bank (JDB) establishedJDB branches opened in Osaka (now the Kansai Branch), Sapporo (now the Hokkaido Branch), Nagoya (nowthe Tokai Branch) and Fukuoka (now the Kyushu Branch)
Hokkaido Development Finance Public Corporation established
Hokkaido Development Finance Public Corporation reorganized as the Hokkaido-Tohoku Development
Finance Public Corporation (HTDFP) branches opened in Sapporo (now the Hokkaido Branch) and Sendai(now the Tohoku Branch)
JDB branch opened in Takamatsu (now the Shikoku Branch)
JDB branches opened in Hiroshima (now the Chugoku Branch) and Kanazawa (now the Hokuriku Branch)
JDB representative office opened in New YorkJDB representative offices opened in Kagoshima (renamed Minami-Kyushu Branch in October 1999) andMatsueJDB representative office opened in London
HTDFP representative office opened in Niigata (renamed Niigata Branch in July 1989)
Japan Development Bank Law 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 and Japan Environment
Corporation
DBJ representative offices opened in Kushiro and Singapore
The Development Bank of Japan Law revised (introduction of additional spot inspections by the Financial
Services Agency)
Cabinet approval of the Important Policy of Administrative Reform
The Act on Promotion of Administrative Reform for Realization of Small and Efficient Government (Act No.
47 of 2006) approved
Policy-Based Financing Reform Plan decided upon by the Headquarters for the Implementation of Policy Finance
ReformThe Development Bank of Japan Inc. Act (Act No. 85 of 2007) approved

Development Bank of Japan Inc.

120

2008
2008
2009
2009
2009
2010
2011

October
December
June
September
November
March
May

2011
2012
2012
2012

December
March
June
DecemberDevelopment Bank of Japan Inc. established (Capital: ¥1 trillion)
DBJ Singapore Limited launched
Act for Partial Amendment of the Development Bank of Japan Inc. Act (New DBJ Act) (Act No. 67 of 2009)
Increase of capital to ¥1,103,232 million
DBJ Europe Limited launched
Increase of capital to ¥1,181,194 million
Partial amendment of the Development Bank of Japan Inc. Act (based on establishment of Act for
Extraordinary Expenditure and Assistance to Cope with the Great East Japan Earthquake (Act No. 40 of 2011))
Increase of capital to ¥1,187,364 million
Increase of capital to ¥1,187,788 million
Increase of capital to ¥1,198,316 million
Increase of capital to ¥1,206,953 million

Annual Report & CSR Report 2013

Board of Directors, Audit & Supervisory Board Members and Executive Officers(As of July 1, 2013)

Toru Hashimoto
President & CEO

Hideto Fujii
Deputy President

Hisato Nagao
Managing Executive Officer
In charge of Corporate Finance Department [Division 5]

Tetsumi Hashimoto
Managing Executive Officer

Deputy President

In charge of Regional Planning Department, Corporate Finance
Department [Division 6], Hokkaido Branch, Tohoku Branch, Niigata
Branch, Hokuriku Branch, Tokai Branch

Hajime Watanabe

Satoshi Tomii

Masanori Yanagi

Director and Managing Executive Officer

Managing Executive Officer

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

In charge of Strategic Finance Group, Growth & Cross Border
Investment Group, Portfolio Investment Group

Masanao Maeda

Hideyuki Kadono

Director and Managing Executive Officer
In charge of Regional Planning Department (Administration), ResearchInstitute of Capital Formation, Environmental Initiative & Corporate
Social Responsibility-Support Department, Business Development
Department, Kyushu Branch, Minami-Kyushu Branch

Masaaki Komiya
Director and Managing Executive Officer

Managing Executive Officer
In charge of Corporate Finance Department [Division 4]

Osamu Koyanagi
Managing Executive Officer, Head of Kansai Branch
In charge of Kansai Branch, Chugoku Branch, Shikoku Branch

Takahiro Suzuki
Managing Executive Officer

In charge of Business Planning & Coordination Department,International Strategy & Coordination Department, Economic &Industrial Research Department

In charge of Risk Management Department, Legal Affairs &Compliance Department, General Affairs Department

Toshiaki Ido

Managing Executive Officer

Masahiko Ichie

Director and Managing Executive Officer

In charge of Corporate Finance Department [Division 1 and 2]

In charge of Treasury Department, Financial Institution Department,
Syndication Group

Shin Kikuchi

Susumu Kusano

In charge of Urban Development Department, Asset Finance Group,
Structured Finance Group, Corporate Finance Department [Division 3

Director and Managing Executive Officer

Managing Executive Officer

In charge of Credit Analysis Department, Accounting Department

Akio Mimura
Director (Outside)

Kazuo Ueda
Director (Outside)

Masafumi Aizawa
Executive Officer (In charge of Financial Institution)

Seiji Jige
Executive Officer, Head of Corporate Planning
Coordination Department

Hideo Oishi
Takeshi Kobayashi
Audit & Supervisory Board Member

Kosuke Takahashi

Executive Officer, Head of Business Planning &Coordination Department

Satoshi Tomizuka
Executive Officer (In charge of Internal Audit)

Audit & Supervisory Board Member

Kenkichi Fukuda

Kazuyoshi Arakawa

Executive Officer, Head of Human Resources
Management Department

Audit & Supervisory Board Member (Outside)

Makoto Ito

Junichiro Kitamura

Audit & Supervisory Board Member (Outside)

Executive Officer, Head of International Strategy &Coordination Department

Shinji Hatta

Tomoki Matsuda

Audit & Supervisory Board Member (Outside)

Executive Officer, Head of Treasury Department

Corporate Data

Notes: 1. Akio Mimura and Kazuo Ueda are outside directors under Article
15 of Section 2 of the Companies Act.
2. Kazuyoshi Arakawa, Makoto Ito and Shinji Hatta are outside Audit& Supervisory Board members under Article 16 of Section 2 of theCompanies Act.

Annual Report & CSR Report 2013121

Organization Chart (As of July 1, 2013)

Business Planning & Coordination Department
Urban Development Department
International Strategy & Coordination Department
Corporate Finance Department, Division 1
Corporate Finance Department, Division 2
Corporate Finance Department, Division 3
Corporate Finance Department, Division 4

Audit & Supervisory Board
Members/
Audit & Supervisory Board

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

Healthcare Industry Office

Hokkaido Branch

Audit & Supervisory
Board Office

Tohoku Revival
Reinforcement Office

Tohoku Branch
Niigata Branch
Hokuriku Branch
Tokai Branch

GeneralMeeting of
Shareholders

Kansai Branch

Board ofDirectors

Executive
Committee

Chugoku Branch
Shikoku Branch
Kyushu Branch
Minami-Kyushu Branch
Asset Finance Group
Portfolio Investment Group
Strategic Finance Group
Growth & Cross Border Investment Group
Structured Finance Group
Syndication Group
Environmental Initiative & Corporate Social Responsibility-Support Department
Business Development Department
Economic & Industrial Research Department
Regional Planning Department
Research Institute of Capital Formation

Economic Research Office
Customer Solution Planning
OfficeCorporate 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
Financial Institution Department

Operations Audit
Committee

Internal Audit Department

Representative Offices: Hakodate, Kushiro, Aomori, Toyama, Matsue, Okayama, Matsuyama, Oita
Overseas Representative Office: New York122

Annual Report & CSR Report 2013

Overseas Subsidiaries: DBJ Singapore Limited, DBJ Europe Limited

Locations and Directory (As of July 1, 2013)

Domestic Branch Offices,
Representative Offices

Head Office
Metropolitan Expressway

To Kanda

Development Bank of Japan (DBJ)
South Tower, Otemachi Financial City

Keidanren

Hibiya Dori

Otemachi
Station,ChiyodaLine(Exit C1)

North Tower,
Otemachi Financial City

Area Closed

NTT
KDDI

JR Lines

South 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

Otemachi
Station,Marunouchi Line
(direct passage
from Exit A1)

Entrance

To TokyoTokyo Sankei Building

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

DBJ Singapore Limited

New York Representative Office

DBJ Singapore Limited

DBJ Europe Limited

1251 Avenue of the Americas, Suite 830,

9 Raffles Place, #30-03 Republic Plaza,
Singapore 048619
Tel: +65-6221-1779

Level 20, 125 Old Broad Street,
London EC2N 1AR, U.K.
Tel: +44-20-7507-6070

Golden Shoe Park

Bharat Bldg.
Ocean Bldg.

Equity Plaza

needleThreadBank

Royal
Exchange

t.
dS

roa

St.

Corporate Data

5th Ave.

6th Ave.

7th Ave.

Cecil St.

DBJ Singapore Limited

Sixty
ThreadNeedleStreetdB.

Level 20,125
Old Broad
Streetalk
le W

Bank ofEngland

Raffles Place

St

eed
dn

ch

St.

Development Bank of Japan Inc.

49th St.

55 Market Street

ur

rea

Rockefeller Center

Ch

Lane

St.

50th St.

Prince’sth49Radio City Music HallTh

51st St.
St.

Throgmorton St.

lomew

52nd St.

DBJ Europe Limited
LothburyUOB Plaza

Barthoway

Sheraton New York Hotel and Towersth50

Market St.

Broad

Hilton New YorkOl

New York, NY 10020, U.S.A.
Tel: +1-212-221-0708

Cornhill

Annual Report & CSR Report 2013123

Subsidiaries (As of March 31, 2013)

Consolidated Subsidiaries
Company

Established

Percentage of
Capital(Millions of Total Voting
Rights (%)Yen)

Address

Principal Businesses

DBJ Business Investment Co., Ltd.

Chiyoda-ku,
Tokyo

Investment consulting

March 10,2003

40

100.00

New Business Investment Co., Ltd.

Chiyoda-ku,
Tokyo

Investment in new
business startups

June 1, 1990

99

100.00DBJ Credit Line, Ltd.

Chiyoda-ku,
Tokyo

Acquisition of beneficiaryrights, consigned trusts
operation and guidance

April 3, 200650

100.00Japan Economic Research Institute Inc.

Chiyoda-ku,
Tokyo

Research, consulting andadvisory services

December 13,
1989

479

100.00DBJ Singapore Limited

Republic ofSingapore

Investment and loan
support and advisory
services

December 16,
S$1 million
2008

100.00DBJ Europe Limited

London, United
Kingdom

Investment and loan
support and advisory
services

June 5, 2009

€7 million

100.00DBJ Real Estate Co., Ltd.

Chiyoda-ku,
TokyoReal estate leasing

February 1,
2010

80

100.00DBJ Investment Advisory Co., Ltd.

Chiyoda-ku,
Tokyo

Investment advisory andagency services

December 1,
2009

68

50.58

DBJ Corporate Mezzanine
Partners Co., Ltd.

Chiyoda-ku,
TokyoManagement ofinvestment associations

June 6, 2003

3

100.00UDS Corporate Mezzanine Limited
Partnership

Chiyoda-ku,
Tokyo

Investment associations

January 18,
2006

29,61450.00(0.00)UDS Corporate Mezzanine No. 3 Limited Chiyoda-ku,
PartnershipTokyo

Investment associations

February 15,
2008

35,24050.00(0.00)

Asuka DBJ Investment LPS

Chiyoda-ku,
Tokyo

Investment associations

October 28,
2005

6,680

49.40

DBL Capital Co., Ltd.

Chiyoda-ku,
TokyoManagement ofinvestment associations

October 14,
2005

99

100.00DBJ Capital Investment Fund No. 1

Chiyoda-ku,
Tokyo

Investment associations

July 9, 2010

1,032

100.00(0.01)DBJ New Business Investment Fund

Minato-ku,
Tokyo

Investment associations

July 9, 2010

1,786

99.99

DBJ Capital Investment Fund No. 2

Chiyoda-ku,
Tokyo

Investment associations

October 1,
2010

1,600

100.00(0.01)DBJ Securities Co., Ltd.

Chiyoda-ku,
Tokyo

Securities business

October 22,
1998

500

66.65

DBJ Asset Management Co., Ltd.

Chiyoda-ku,
Tokyo

Investment management,
investment advisory andagency services

November 22,
2006

100

100.00Urban Redevelopment Private Fund

Chiyoda-ku,
Tokyo

Investment associations

January 19,
2007

30,86950.50(1.00)

Green Asset Investment TMK

Minato-ku,
TokyoReal estate leasing

November 14,
2012

20,000—

GREIS Corporation

Delaware, USA

Investment in investment
associations

February 27,
2013

US$7
million100.00Notes:
1. Amounts of less than ¥1 million have been omitted in the figures stated above.
2. DBJ’s percentage of total voting rights in subsidiaries is shown to three decimal places. Percentages less than that amount have been omitted.
3. Figures indicated within parentheses ( ) in the column showing DBJ’s percentage of total voting rights in subsidiaries indicate indirect holdings. Further, for
UDS Corporate Mezzanine Limited Partnership, UDS Corporate Mezzanine No. 3 Limited Partnership and Asuka DBJ Investment LPS, DBJ Capital Investment
Fund No. 1, DBJ New Business Investment Fund, DBJ Capital Investment Fund No. 2 and GREIS Corporation, the percentage of financing is stated.
4. The date of establishment shown for DBJ Singapore Limited indicates the date the company was incorporated.
5. DBJ’s equity ownership in Asuka DBJ Investment LPS is less than 50%, but as DBJ effectively controls the company, it is treated as a subsidiary.
6. In June 2012, DBJ acquired all the shares it did not already own in the former DBJ Nomura Investment Co., Ltd., and converted this company to a
consolidated subsidiary. The company’s name was changed to DBJ Asset Management Co., Ltd., in July 2012.
7. As is indicated in Note 6, the Urban Redevelopment Private Fund, which was formerly an affiliated company, became a consolidated subsidiary.
8. Although DBJ does not hold voting rights in Green Asset Investment TMK, DBJ effectively controls this company and so considers it a consolidated subsidiary.
9. There are 21 consolidated subsidiaries and 17 affiliated companies.

124

Annual Report & CSR Report 2013

Stock Information (As of March 31, 2013)

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 740,00040,0001,000,000

1,000,000—

40,000—1,000,000

2,064

42,064103,232

1,559

43,623—

Changes incapital surplus(Millions of yen)

Capital surplus(Millions of yen)

Note 2

Note 2(97,248)

1,060,466

Note 3Note 3

1,103,232—

1,060,466

77,962

1,181,194—

1,060,466

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 New DBJ Act, an amount equivalent to ¥6,170 million was required for redemption on November 24, 2011.
Based on this requirement, these delivery bonds were redeemed effective December 7, 2011. The face value of delivery bonds decreased by this amount,
and at the same time DBJ’s common stock increased by the equivalent of the required redemption amount. The number of shares was not affected byprocedures for this increase in common stock.
6. As is stated above, 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 2013125

Excerpt from the Development Bank of Japan Inc. Act (Act No. 85 of 2007)(Unofficial translation)

Article 1
PurposeThe Development Bank of Japan Inc. (hereinafter referred to as
the ”Corporation”) shall be a joint stock company(kabushikikaisha) whose object is to maintain the foundations ofinvestment and financing functions of long-term business funds as
the Development Bank of Japan by conducting business activities
utilizing the methods of combining investments and financing andother sophisticated financial methodologies, while maintaining
the autonomy of management with the goal of realizing full-scale
privatization, thereby contributing to smooth supply of funds tothose who need long-term business funds, as well as to thesophistication of financial functions.
Article 3
Scope of Business Operations
1. The Corporation shall engage in the following business
operations to attain its objectives:(1) To accept deposits (limited to certificates of deposit (CDs)and other deposits stipulated in the Cabinet Order);(2) To lend money;(3) To make capital contributions;(4) To guarantee the due performance of debts andobligations;(5) To sell and purchase Securities (other than those that fallwithin monetary claims represented by certificates set forthin Item (7), Short-term Notes, Etc.; the same in Item (8))(other than those that fall within securities-related
derivatives transactions (which mean the securities-related
derivatives transactions set forth in Article 28, Paragraph 8,
Item (6) of the Financial Instruments and Exchange Act (ActNo. 25 of 1948, as amended); hereinafter in this Item andItem 11 the same), or enter into securities-related derivatives
transactions (limited to those made for investment
purposes), except in cases where these business operations
fall within those operations referred to in Item (3);(6) To lend Securities;(7) To acquire or transfer monetary claims (including claims
represented by certificates stipulated in the Ministry of
Finance Ordinance such as negotiable bank deposit
certificates);(8) To subscribe for Specified Debentures or Preferred
Investment Securities issued by a Specified Purpose
Company (limited to the cases where the Specified Purpose
Company acquires only designated monetary claims or
beneficial interests in trusts with which designatedmonetary claims are entrusted with cash proceeds derived
from issue of those Specified Debentures or Preferred
Investment Securities as set forth in the Asset Liquidation
Plans, and except for, in case of Specified Debentures,
Specified Short-term Notes), and other similar securities
stipulated in the Ministry of Finance Ordinance (hereinafterin this Item referred to as the ”Specified Debentures”)(except in cases where it is intended for secondary
distribution (uridashi)), or to handle primary offering(boshu) of the Specified Debentures so subscribed;(9) To acquire or transfer Short-term Notes, Etc.;(10) To act as an agent or intermediary for execution ofagreements which provides for lending money on behalf ofbanks (the banks set forth in Article 2, Paragraph 1 of the
Banking Act (Act No. 59 of 1981, as amended); hereinafter
the same) and other entities engaged in the financial
business stipulated in the Cabinet Order;(11) To enter into derivatives transactions set forth in Article 2,
Paragraph 20 of the Financial Instruments and Exchange
Act (other than those that fall within the securities-related
derivatives transactions), except in cases where these126

Annual Report & CSR Report 2013business operations fall within those operations referred toin Item (7);(12) To do the activities referred to in Article 2, Paragraph 8,
Item (7) of the Financial Instruments and Exchange Act;
(13) To do the activities referred to in Article 2, Paragraph 8,
Item (9) of the Financial Instruments and Exchange Act(limited, in the case of the handling of primary offering or
secondary distribution, to those to be conducted upon
entrustment by financial instruments business operators
engaged in the type I financial instruments trading businessset forth in Article 28, Paragraph 1 of the Financial
Instruments and Exchange Act (the financial instruments
dealers set forth in Article 2, Paragraph 9 of the Financial
Instruments and Exchange Act; hereinafter the same), andfor such financial instruments business operators);(14) To do the activities referred to in Article 2, Paragraph 8,
Item (11) of the Financial Instruments and Exchange Act;
(15) To do the activities referred to in Article 2, Paragraph 8,
Item (13) of the Financial Instruments and Exchange Act;
(16) To do the activities referred to in Article 2, Paragraph 8,
Item (15) of the Financial Instruments and Exchange Act;
(17) With respect to securities (including, if such securities are
not issued, rights to be represented by such securities) ortransactions referred to in each Item of Paragraph 2 ofArticle 33 of the Financial Instruments and Exchange Act,to do the activities set forth in each Item of said Paragraph(other than those referred to in Items 3, 5, 7 through 9, 11
and 13);(18) To provide other entities with consulting services regarding
business transfer, merger, corporate split, share-for-shareexchange (kabushiki kokan) or share transfer (kabushikiiten), or to act as a broker for these transactions;(19) To provide other entities with consulting services regarding
management, and to conduct investigations or provide
information as required for the business operations of otherentities;(20) To conduct investigations, research or training regarding
financial and other economic issues; and(21) To do activities incidental to each of the foregoing Items.
Article 5
Issue of the Development Bank of Japan Bonds
1. The Corporation may issue the Development Bank of Japan Bonds.
Article 9Special Rules When Starting Acceptance of Deposits, Etc.
1. If the Corporation intends to start acceptance of deposits set
forth in Article 3, Paragraph 1, Item (1) or issue of theDevelopment Bank of Japan Bonds, the Corporation shallobtain the prior approval of the Minister of Finance.
2. If the Minister of Finance intends to give the approval referred
to in the preceding paragraph, the Minister of Finance shall, in
advance, have a discussion with the Prime Minister and obtain
his/her consent.
Article 12
Shares
1. If the Corporation intends to solicit those who will subscribe forshares offered for sale set forth in Article 199, Paragraph 1 of
the Companies Act (Act No. 86 of 2005, as amended)(hereinafter in Article 34, Item (4) referred to as the ”Shares
Offered for Sale”) or stock acquisition rights offered set forth in
Article 238, Paragraph 1 of the Companies Act (hereinafter in
Article 34, Item (4) referred to the ”Stock Acquisition Rights
Offered”), or to deliver shares or stock acquisition rights inconnection with a share-for-share exchange, the Corporation
shall obtain authorization of the Minister of Finance.

Article 13
Corporate Debentures, Development Bank of Japan Bonds andBorrowings
1. Prior to the beginning of each fiscal year, the Corporation shallprepare its basic policy regarding the issue of corporate
debentures (shasai) (other than the Development Bank of Japan
Bonds, ”Corporate Debentures;” hereinafter the same) and theDevelopment Bank of Japan Bonds (excluding the short-term
notes set forth in Article 66, Item (1) of the Act Concerning theCentral Depositary System of Corporate Debentures (Act No. 75
of 2001, as amended) from both the Corporate Debentures
and the Development Bank of Japan Bonds, respectively;
hereinafter in this Article and Article 18 the same), as well as
regarding the borrowings (limited to those with more than one
year to maturity; hereinafter in this Article and Article 18 thesame), which provides for matters relating to the issue of the
Corporate Debentures and the Development Bank of Japan
Bonds, and the borrowing of money, such as the amounts ofissue and borrowings, denominated currency of the Corporate
Debentures, the Development Bank of Japan Bonds and theborrowings, as stipulated in the Ministry of Finance Ordinance,and obtain authorization of the Minister of Finance. If the
Corporation intends to revise it, the same shall apply.
Article 15
Resolution for Election of Representative Directors and Other
Officers
Resolutions for appointment and dismissal of the representative
directors or representative executive officers of the Corporation,
appointment and dismissal of statutory auditors, or appointment
and dismissal of audit committee members (kansaiin) shall not
become effective without authorization of the Minister of Finance.
Article 16
Authorization of Concurrent Positions of Directors
1. Except in cases where the provision of Article 4, Paragraph 2
applies, any director (or, if the Corporation is a company
maintaining committees (iinkai secchi kaisha), any executive
officer) who performs the day-to-day business of the
Corporation shall not perform the day-to-day business of any
other corporation without authorization of the Minister ofFinance.
2. The Minister of Finance shall, upon receipt of an application for
the authorization referred to in the preceding Paragraph, grant
his/her authorization, except in cases where it is determinedthat any matter so applied may interfere with sound and proper
management of the Corporation.

Subject to Authorization”) its subsidiary (the subsidiary set forthin Article 2, Item (3) of the Companies Act), the Corporation
shall obtain authorization of the Minister of Finance in advance:(1) Banks;(2) Long-term credit banks (the long-term credit banks set forthin Article 2 of the Long-Term Credit Bank Act (Act No. 187
of 1952, as amended));(3) Financial Instruments Dealers (limited to those who engage
in type I financial instruments trading business set forth in
Article 28, Paragraph 1 of the Financial Instruments andExchange Act);(4) Money lenders (the money lenders set forth in Article 2,
Paragraph 2 of the Money Lending Business Act (Act No.
32 of 1983, as amended), and exclude those who
concurrently conduct the business referred to in thepreceding Items or fall within other requirements stipulated
in the Ministry of Finance Ordinance);(5) Trust companies (the trust companies set forth in Article 2,
Paragraph 2 of the Trust Business Act (Act No. 154 of
2004, as amended));(6) Insurance companies (the insurance companies set forthin Article 2, Paragraph 2 of the Insurance Business Act (ActNo. 105 of 1995, as amended)); and(7) Those stipulated by the Ministry of Finance Ordinance as
those who are similar to each of the foregoing.
Article 20
Amendment to the Articles of Incorporation, Etc.
1. Resolutions for amendment to the Articles of Incorporation of
the Corporation, disposition of surplus funds (other thandisposition of losses) such as distribution, merger, corporate
split, and dissolution shall not become effective withoutauthorization of the Minister of Finance.
Article 22Special Exemptions from Management of Fiscal Loan Funds
Notwithstanding the provisions of Article 10, Paragraph 1 of the
Fiscal Loan Funds Act (Act 100 of 1951, as amended), the fiscal
loan funds (which means the fiscal loan funds set forth in Article 2of the Fiscal Loan Funds Act; hereinafter the same) may beappropriated for loans (hereinafter in Article 24 referred to simply
as the ”Loans”) to the Corporation when the Corporation
borrows money for appropriation for expenses required for its
operations set forth in Article 3, Paragraphs 1 and 2.

Article 18
Redemption Plan
Prior to the beginning of each fiscal year, the Corporation shalldraw out redemption plans for the Corporate Debentures, theDevelopment Bank of Japan Bonds and the borrowings and obtain
authorization of the Minister of Finance, as stipulated in the
Ministry of Finance Ordinance. If the Corporation intends to revise
it, the same shall apply.

Article 25
Guarantee of Obligations
1. Notwithstanding the provision of Article 3 of the Act on
Restrictions on Financial Assistance by the Government to
Corporations (Act No. 24 of 1946, as amended), theGovernment may enter into a guarantee agreement for the
obligations relating to the Debentures, Etc., to the extent of theamount approved by the resolutions of the Diet.

Article 19
Subsidiaries Subject to Authorization
1. If the Corporation intends to make any of the following entities(other than individuals in the cases of those referred to in Items(3), (4) and (7); hereinafter referred to as the ”Subsidiaries

Article 29
Competent Ministers
1. The competent minister under this Act shall be the Minister ofFinance provided, however, that in the case that the
Corporation obtains the approval referred to in Article 9,
Annual Report & CSR Report 2013

Corporate Data

Article 17
Business Plan
Prior to the beginning of each fiscal year, the Corporation shalldraw out a business plan for the new fiscal year and obtain
authorization of the Minister of Finance, as stipulated in the
Ministry of Finance Ordinance. If the Corporation intends to revise
it, the same shall apply.

Article 23
1. Notwithstanding the provision of Article 10, Paragraph 1 of the
Fiscal Loan Funds Act, the fiscal loan funds may beappropriated for the Corporate Debentures and theDevelopment Bank of Japan Bonds (hereinafter in the following
Paragraph, immediately following Article and Article 25,
Paragraph 1 referred to as the ”Debentures, Etc.”) to be issued
by the Corporation to appropriate the resulting proceeds for
expenses required for its operations set forth in Article 3,
Paragraphs 1 and 2.

127

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 shall intend
to reduce the number of the shares held by it of the
Corporation (hereinafter in the following Paragraph and theimmediately following Article referred to as ”GovernmentOwned Shares”), taking into account the market situation, andshall dispose all of them in approximately five to seven years
from the date set forth in Item (3) of the preceding Article.
2. For a period from the effectuation of this act until theGovernment disposes of all of the Government-Owned Shares,
the Government shall from time to time review matters, such as
matters regarding the method in which the GovernmentOwned Shares should be disposed of and take the required
measures based on the result of such review, so that thefoundation of the Corporation’s investment and financing
functions for long-term business funds will be maintained.
Article 3
Abolition of this Act and Other Measures
If the Government disposes of all of the Government-Owned
Shares, the Government shall immediately take measures toabolish this act, as well as measures necessary to smoothly assign
the business operations, functions, and rights and obligations of
the Corporation to any organization to be formed as a bearer ofthe functions commensurate with the investment and financing
functions held by the Corporation.
Article 4Special Rules for Business Operations during the Preparatory
Period
1. In order for the Corporation to smoothly start the business
operations as soon as it is duly organized, The Development
Bank of Japan (hereinafter referred to as ”DBJ”) may borrow
Long-term Loans, in addition to those set forth in Article 42,
Paragraphs 1 and 2 of the Development Bank of Japan Act (ActNo. 73 of 1999, as amended; hereinafter, except for Article 26of the Supplementary Provisions, referred to as the ”DBJ Act”),
during the Preparatory Period (the period from the date on
which this act comes into force up to September 30, 2008; thesame in Paragraph 5).
Article 9
Capital Contribution
Upon the incorporation of the Corporation, DBJ shall contributeall of its properties, except assets to be assumed by Japanpursuant to Article 15, Paragraph 2 of the Supplementary
Provisions, to the Corporation.
Article 15
Dissolution of DBJ, Etc.
1. DBJ shall be dissolved at the time of establishment of the
Corporation, whereupon any and all rights and obligations of
DBJ shall be taken over by the Corporation, except for thoseassets to be assumed by the Government as set forth in thefollowing Paragraph.
2. Of the rights actually held by DBJ at the time of establishmentof the Corporation, the assets which will be considered nolonger necessary for the Corporation to smoothly perform its
future business operation shall be assumed by Japan at the timeof establishment of the Corporation.

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Article 16
Values of Properties Assumed
1. The values of assets and liabilities assumed by the Corporationfrom DBJ (in the immediately following Paragraph referred to as
the ”Assumed Properties”) shall be as evaluated by evaluation
officers (hyoka iin).
Article 18
Competent Ministers
The competent ministers under Article 26, Paragraph 2 and Article
27, Paragraph 1 for management of assets to be assumed by the
Corporation pursuant to Article 15, Paragraph 1 of the
Supplementary Provisions (hereinafter in this Article referred to as
the ”Assumed Assets”) shall, notwithstanding the provisions ofArticle 29, Paragraph 1, be as follows:(1) For management of the Assumed Assets set forth in the
Cabinet Order in the Hokkaido or the Tohoku Region (whichmeans the areas of Aomori, Iwate, Miyagi, Akita, Yamagata,
Fukushima and Niigata prefectures): Minister of Finance andMinister of Land, Infrastructure and Transport; and(2) For management of the Assumed Assets other than the
Assumed Assets set forth in the preceding Item: Minister ofFinance.
Article 66
Review
On or prior to the date set forth in Article 1, Item (3) of the
Supplementary Provisions, the Government shall review measures
to secure the equal competitive conditions with other business
entities, with respect to the systems for which the investment andfinancing functions of DBJ are utilized pursuant to the provisions of
relevant acts (including ordinances under those acts), such as the
Act on Security for Loans from the Development Bank of Japan toElectric Utility Corporations (Act No. 145 of 1950, as amended),
the Oil Stockpiling Act (Act No. 96 of 1975, as amended), the Act
on the Promotion of Development and Introduction of Alternative
Energy (Act No. 71 of 1980, as amended), the Act on Special
Measures Concerning the Promotion of Urban Development by
Private Sectors (Act No. 62 of 1987, as amended), the Act on
Temporary Measures to Promote Business Activities for the Rationaluse of Energy and the Utilization of Recycled Resources (Act No. 18
of 1993, as amended) and the Act on Promotion of Private FinanceInitiative (Act No. 117 of 1999, as amended), while considering theconvenience of users of those systems, and take the required
measures based on the results of such review.
Article 67
Utilization of the Corporation’s Investment and Financing
Functions for Long-term Business Funds
If the Government utilizes the Corporation’s investment andfinancing functions for long-term business funds on or after thedate set forth in Article 1, Item (3) of the Supplementary
Provisions, the Government shall take measures necessary tosecure the equal competition conditions, as well as othermeasures necessary for utilization of such investment andfinancing functions, paying attention to the Corporation’s
appropriate competitive relationships with other business entities.

This is an unofficial English translation. Only the original
Japanese texts of the act have legal effect and prevail over thistranslation. This translation has been prepared solely forreference purposes. The reader of this translation should
consult the original Japanese text for the purposes ofinterpreting and applying the act to any legal issues ordisputes.

Act for Partial Amendment of the Development Bank of Japan Inc. Act (Act No. 67 of 2009)(Unofficial translation)

The Development Bank of Japan Inc. Act (Act No. 85 of 2007)
shall be partially amended as described below.
In Article 2, Paragraph 1 of the Supplementary Provisions,”the following Article” shall be amended to read ”Article 3 of the
Supplementary Provisions” and ”the day stipulated in Item 3 ofthe preceding Article” to read ”April 1, 2012”. The following fivearticles shall be added after Article 2.
Capital Contribution by the Government
Article 2-2
The Government may make capital contributions to the
Corporation, to the extent of the amount approved by thebudget, whenever the Government deems necessary, until March
31, 2012.
Delivery of the Government Bonds
Article 2-3
1 The Government, in implementing the crisis response
operations in Article 2, Item 5 of the Japan Finance Corporation
Act (Act No. 57 of 2007; hereinafter referred to as ”Crisis
Response Operations”) may issue the government bonds inorder to use for securement of the capital required to ensure
the financial strength of the Corporation, until March 31, 2012.
2 The Government, pursuant to the provisions of the preceding
paragraph, to the extent of the amount approved by thebudget, shall issue the government bonds and deliver them to
the Corporation.
3 Government bonds issued under the provisions of Paragraph 1
shall be noninterest-bearing.
4 Government bonds issued under the provisions of Paragraph 1
may not be transferred, attached as security rights, or otherwise
disposed of.
5 Necessary matters concerning government bonds issued under
the provisions of Paragraph 1, other than that provided in
Paragraph 3, shall be determined by Ministry of FinanceOrdinance.
Redemption of the Government Bonds
Article 2-4
1 The Corporation, may request the redemption of thegovernment bonds delivered as set forth in the provisions ofParagraph 2 of the preceding Article, only within the amount of
capital calculated by the Ministry of Finance Ordinance as thenecessary amount of capital in response to the increase of
assets related to its Crisis Response Operations (limited to those

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.

Supplementary Provisions
Enforcement Date
Article 1
This act shall take effect on the date of its promulgation.

Annual Report & CSR Report 2013

Corporate Data

Review, Etc.
Article 2
1 By the end of fiscal year 2011, the Government shall review
what the appropriate implementation of the Crisis Response
Operations (referring to the Crisis Response Operationsprescribed under the provisions of Article 2, Item 5 of the Japan
Finance Corporation Act (Act No. 57 of 2007); same
hereinafter) implemented by the Development Bank of Japan
Inc. (hereinafter” the Corporation”) and the appropriateorganization of the Corporation based on that including theway of holding its shares by the Government should be, andshall take necessary measures based on these reviews, taking

into account the status of the capital contributions by theGovernment to the Corporation under the provisions of Article
2-2 of the Development Bank of Japan Inc. Act as amended bythis Act; the redemption of the Government bonds under the
Article 2-4, Paragraph 2 of the supplementary provisions of theDevelopment Bank of Japan Inc. Act as amended by this Act;the implementation of the Crisis Response Operations by the
Corporation; and the changes in socioeconomic and othercircumstances from a point of view of maintaining the
involvements with the Corporation by the State such as letting
the Government consistently hold its shares exceeding onethird of the Corporation’s issued shares in the aim of ensuring
the appropriate implementation of the Crisis Response
Operations by the Corporation.
2 Notwithstanding the provisions of Article 6, Paragraph 2 of the
Act on Promotion of Administrative Reform for Realization of129

Small and Efficient Government (Act No. 47 of 2006) as
amended pursuant to the provisions of the following Article
and the provisions of Article 2, Paragraph 1 of the
Supplementary Provisions of the Development Bank of Japan
Inc. Act as amended pursuant to this Act, the Government shallnot dispose of its holding shares of the Corporation prior to themeasures described in the preceding paragraph shall be taken.
Partial Amendment of the Act on Promotion of
Administrative Reform for Realization of Small and Efficient
Government
Article 3
The Act on Promotion of Administrative Reform for Realization of
Small and Efficient Government shall be partially amended asfollows.
”In the measures described in the preceding paragraph” in Article
6, Paragraph 2 shall be revised to ”from April 1, 2012.”
Adjusted Provisions
Article 4
1 If this Act come into effect prior to the date of enforcement of
the Act for Partial Amendment of the Shoko Chukin Bank
Limited Act and Other Act to Facilitate the Supply of Funds to
Small and Medium-sized Enterprises (Act No. 54 of 2009;
mentioned in the following paragraph as the ”Shoko Chukin

Amendment Act”), in regard to the application of 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 come into effect after the date of enforcement of the
Shoko Chukin Amendment Act, the provisions of the preceding
Article shall not apply. In this case, ”the following Article” inArticle 2, Paragraph 2 of the Supplementary Provisions shall bedeemed to be replaced with ”Article 4 of the Supplementary
Provisions to the Act for Partial Amendment of the Shoko
Chukin Bank Limited Act and Other Act to Facilitate the Supply
of Funds to Small and Medium-sized Enterprises (Act No. 54 of2009).”
Delegation to Government Ordinance
Article 5
Transitional measures required for the enforcement of this Act
shall be determined by government ordinance.

(Unofficial translation)

Supplementary Resolutions on the Bill for Partial Amendment of the Development Bank of Japan Inc. Act
House of Councilors Committee on Financial Affairs
June 25, 2009

The following matters should receive the Government’s carefulconsideration.
• In implementing Crisis Response Operations based on the recent
measures for additional capital contribution, Development Bankof Japan Inc. shall ensure the measures result in a smoothsupply of funds on the basis of appropriate analysis by drawing
upon its accumulated knowledge and skills.
• With the global monetary crisis having serious economic andfinancial impacts, and the balance of loans to small and medium
enterprises falling steadily, efforts must be made to further
facilitate loans by the Japan Finance Corporation to small andmedium-sized businesses. In implementing Crisis Response
Operations for large and midscale enterprises, Development
Bank of Japan Inc. must be certain to expedite loans to
associated small and medium enterprises as well.

based on its findings. Any such reviews should take into
account the need to ensure that the Corporation acts for thegood of the community, that it has a stable source of the funds
required to fulfill its functions as a provider of long-term
investment and loans, and that it has systems in place to securecompetitive officers and employees. The Government shouldtake appropriate measures to prevent any damage to the
Corporation’s long-term value.
• The Government should reassess the future provision ofpolicy-based finance by Development Bank of Japan Inc. and
the Japan Finance Corporation, reaffirming the importance of
their roles and functions and paying attention to theirrelationships not only with private financial institutions but alsowith the Japanese financial sector as a whole, including
affiliated organizations and the Japan Post Bank.
Resolutions passed.

• The Government should review its holding of shares in
Development Bank of Japan Inc. and take necessary measures

130

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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 the Development Bank ofJapan Inc. to cope with the Great East Japan Earthquake, within
Article 2-2 of the Supplementary Provisions to the Development
Bank of Japan Inc. Act (Act No. 85 of 2007), “March 31, 2012”
shall be deemed to be replaced with “March 31, 2015,” and “asit deems necessary” shall be deemed to be replaced with “as it
deems necessary to facilitate implementation of the crisis response
operations,” and within Article 2-3, Paragraph 1 and Article 2-4,
Paragraph 1 of the same supplementary provisions, “March 31,
2012,” shall be deemed to be replaced with “March 31, 2015,”
and within Article 2-5, Paragraph 1 of the same supplementaryprovisions, “July 1, 2012” shall be deemed to be replaced with
”July 1, 2015.”(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”.))

Supplementary Provisions

Capital Contribution by the Government
Article 2-2
The Government may make capital contributions to the
Corporation, to the extent of the amount approved by thebudget, whenever the Government deems necessary to facilitate
implementation of the crisis response operations, until March 31,
2015.

Partial Amendment of the Act on Promotion of
Administrative Reform for Realization of Small and Efficient
Government
Article 7
The Act on Promotion of Administrative Reform for Realization of
Small and Efficient Government (Act No. 47 of 2006) shall be
partially amended as follows.
”from April 1, 2012.” in Article 6, Paragraph 2 shall be revised to”from April 1, 2015.”
Partial Amendment of the Development Bank of Japan Inc.
Act
Article 9
The Development Bank of Japan Inc. Act shall be partiallyamended as follows.
”April 1, 2012” in Article 2, Paragraph 1 of the Supplementary
Provisions of the Development Bank of Japan Inc. Act shall berevised to “April 1, 2015”.

Delivery of the Government Bonds
Article 2-3
1 The Government, in implementing the crisis response
operations (hereinafter referred to as the “Crisis Response
Operations”) prescribed in Article 2, Item 5 of the Japan
Finance Corporation Act (Act No. 57 of 2007) may issue thegovernment bonds in order to use for securement of the capitalrequired to ensure the financial strength of the Corporation,
until March 31, 2015.
2 The Government, pursuant to the provisions of the preceding
paragraph, to the extent of the amount approved by thebudget, shall issue the government bonds and deliver them to
the Corporation.
Redemption of the Government Bonds
Article 2-4
The Corporation may request the redemption of the government
bonds delivered as set forth in the provisions of Paragraph 2 ofthe preceding Article, only within the amount of capital calculatedby the Ministry of Finance Ordinance as the necessary amount of
capital in response to the increase of assets related to its Crisis
Response Operations (limited to those conducted by March 31,2015).

Corporate Data

Partial Amendment of the Act for Partial Amendment of theDevelopment Bank of Japan Inc. Act
Article 11
The Act for Partial Amendment of the Development Bank of Japan
Inc. Act (Act No. 67 of 2009) shall be partially amended asfollows.
Within Article 2, Paragraph 1 of the Supplementary Provisions of
the Development Bank of Japan Inc. Act, “the end of fiscal year
2011” shall be revised to “the end of fiscal year 2014,” and”(including the cases where it shall be applied by replacing theterm and phrase pursuant to the provisions of Article 36 of the
Act for Extraordinary Expenditure and Assistance to Cope with theGreat East Japan Earthquake (Act No. 40 of 2011))” shall be
added next to “Article 2, Paragraph 2 of the Supplementary
Provisions of the Development Bank of Japan Inc. Act”, and”Article 2-4, Paragraph 2 of the Supplementary Provisions of theDevelopment Bank of Japan Inc. Act” shall be revised to “Article
2-4, Paragraph 2 of the Supplementary Provisions of theDevelopment Bank of Japan Inc. Act after the amendment
pursuant to this Act.”

Disposition of the Government-Owned Shares
Article 2
Pursuant to Article 6, Paragraph 2 of the Act on Promotion of
Administrative Reform for Realization of Small and Efficient
Government (Act No. 47 of 2006), the Government shall intend
to reduce the number of the shares held by it of the Corporation(hereinafter in the following Paragraph and Article 3 of the
Supplementary Provisions, referred to as “Government-Owned
Shares”), taking into account the market situation, and shalldispose all of them in approximately five to seven years from
April 1, 2015.

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131

(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)
Review, Etc.
Article 2
1 By the end of fiscal year 2014, the Government shall review
what the appropriate implementation of the Crisis Response
Operations (referring to the Crisis Response Operationsprescribed under the provisions of Article 2, Item 5 of the Japan
Finance Corporation Act (Act No. 57 of 2007); same
hereinafter) implemented by the Development Bank of Japan
Inc. (hereinafter “the Corporation”) and the appropriateorganization of the Corporation based on that including theway of holding its shares by the Government should be, andshall take necessary measures based on these reviews, taking
into account the status of the capital contributions by theGovernment to the Corporation under the provisions of Article
2-2 of the Supplementary Provisions (including the replacement
readings pursuant to the Act for Extraordinary Expenditure andAssistance to Cope with Great East Japan Earthquake (Act No.

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40 of 2011) Article 36) of the Development Bank of Japan Inc.
Act as amended by this Act; the redemption of the Government
bonds under the Article 2-4, Paragraph 2 of the supplementaryprovisions of the Development Bank of Japan Inc. Act asamended by this Act; the implementation of the Crisis
Response Operations by the Corporation; and the changes insocioeconomic and other circumstances, from a point of viewof maintaining the involvements with the Corporation by theState such as letting the Government consistently hold its
shares exceeding one-third of the Corporation’s issued shares in
the aim of ensuring the appropriate implementation of the
Crisis Response Operations by the Corporation.
2 Notwithstanding the provisions of Article 6, Paragraph 2 of the
Act on Promotion of Administrative Reform for Realization of
Small and Efficient Government (Act No. 47 of 2006) as
amended pursuant to the provisions of the following Article
and the provisions of Article 2, Paragraph 1 of the
Supplementary Provisions of the Development Bank of Japan
Inc. Act as amended pursuant to this Act, the Government shallnot dispose of its holding shares of the Corporation prior to themeasures described in the preceding paragraph shall be taken.

Financial Condition

Consolidated Financial Statements . . . . . . . . . . 134
Non-Consolidated Financial Statements . . . . . . 176
Capital Adequacy Ratio . . . . . . . . . . . . . . . . . . . 179
Capital Adequacy Status . . . . . . . . . . . . . . . . . . . 187

Financial Condition

Annual Report & CSR Report 2013133

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,

2013

2012

2013

AssetsCash and due from banks (Notes 14 and 28)¥

154,564¥

175,618$

1,643,432

Call loans and bills bought (Note 28)

84,00089,500893,142

Reverse repurchase agreements (Notes 3 and 28)

165,975

152,889

1,764,761

Money held in trust (Notes 28 and 30)

175,335

24,423

1,864,282

Securities (Notes 3, 14, 28 and 30)

1,357,058

1,176,622

14,429,115

Loans (Notes 4, 5, 14 and 28)

13,918,224

13,645,469

147,987,505

Other assets (Notes 6 and 14)

133,065

132,487

1,414,835

Tangible fixed assets (Notes 7 and 14)

237,988

180,9622,530,445

7,927

7,057

84,294

Intangible fixed assets
Deferred tax assets (Note 24)

6,734

18,85471,607

Customers’ liabilities for acceptances and guarantees (Note 13)

155,753

128,518

1,656,068

Allowance for loan losses (Notes 8 and 28)(147,414)(151,448)(1,567,401)(501)(1,072)(5,335)¥16,248,712¥15,579,881$172,766,749¥ 3,053,277¥ 3,130,495$ 32,464,404

9,448,398

9,170,553

100,461,439

43,99750,999467,815

Corporate bonds (Notes 9 and 28)

871,256

541,327

9,263,756

Other liabilities (Notes 11 and 12)

122,416

78,631

1,301,609

Accrued bonuses to employees

Allowance for investment losses
Total assets
Liabilities and equity
Liabilities:
Debentures (Notes 9, 14 and 28)
Borrowed money (Notes 10, 14 and 28)
Short-term corporate bonds (Notes 9 and 28)

4,437

4,694

47,185

Accrued bonuses to directors and corporate auditors

12

12

129

Reserve for employees’ retirement benefits (Note 23)

10,30813,484

109,603

Reserve for directors’ and corporate auditors’ retirement benefits

64

55

687

Reserve for contingent losses

135

—

1,445

Deferred tax liabilities (Note 24)

78

43

832

Acceptances and guarantees (Note 13)

155,753

128,518

1,656,068

13,710,136

13,118,816

145,774,972

Common stock authorized, 160,000 thousand shares in 2013 and2012; issued, 43,632 thousand shares in 2013 and 2012 (Note 15)

1,206,953

1,187,788

12,833,099

Capital surplus (Note 15)

1,060,466

1,060,466

11,275,559

Retained earnings (Note 15)

193,595

159,606

2,058,428

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

36,873

19,313392,060

Deferred gain on derivatives under hedge accounting

33,987

27,711

361,373

Total liabilities
Equity:Accumulated other comprehensive income:

Foreign currency translation adjustments
Total
Minority interests
Total equity
Total liabilities and equity
See notes to consolidated financial statements.

134

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(57)

(149)

(610)

2,531,817

2,454,736

26,919,910

6,759

6,329

71,8682,538,576

2,461,065

26,991,777¥16,248,712¥15,579,881$172,766,749

Consolidated Statement of Income
Development Bank of Japan Inc. and Consolidated Subsidiaries

Thousands of
U.S. Dollars (Note 1)

Millions of Yen

For the year ended March 31,

2013

2012

2013

IncomeInterest income:¥267,895¥277,360$2,848,440

Interest on loans

242,088

253,849

2,574,043

Interest and dividends on securities

18,023

15,590191,636

Interest on call loans and bills bought

44

115

473

Interest on reverse repurchase agreements

351

287

3,735

Interest on due from banks

56

105

597

Interest on swaps

7,053

7,287

74,997

Other interest income

278

123

2,959

Fees and commissions (Note 17)

10,293

9,461

109,450

Other operating income (Note 18)

7,880

5,522

83,794

Other income (Note 19)

55,03937,868585,211

341,109330,2133,626,896

144,274

155,517

1,534,018

43,10047,668458,273

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

19

41

211

97,263

104,564

1,034,166

57

56

611

3,827

3,182

40,694

5

3

62

Fees and commissions (Note 20)

1,082

551

11,512Other operating expenses (Note 21)

12,1692,622

129,398

General and administrative expenses

44,87737,870477,167

Other expenses (Note 22)

22,48023,447

239,023

Total expenses

224,884

220,0092,391,118

Income before income taxes and minority interests

116,224

110,204

1,235,778

41,753

21,488443,947

Income taxes (Note 24):
Current

2,838

10,44430,186

Total income taxes

Deferred

44,592

31,932474,133

Net income before minority interests

71,632

78,271

761,645

Minority interests in net income
Net income

295

957

3,138

¥ 71,337¥ 77,313$ 758,506

Yen

U.S. Dollars (Note 1)

Per share of common stock (Note 16)
Basic net income
Cash dividend applicable to the year

¥1,634.96¥1,772.27

808

856

$

17.38
8.59

See notes to consolidated financial statements.

Financial Condition

Annual Report & CSR Report 2013135

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,

2013

2012

Net income before minority interests¥71,632¥78,271$ 761,645

Unrealized gain on available-for-sale securities

16,451

8,854

174,923

Deferred gain on derivatives under hedge accounting

6,260

10,28866,563

86

(49)

923

2013

Other comprehensive income (Note 26):

Foreign currency translation adjustments
Share of other comprehensive income in affiliates accounted
for by the equity method
Total other comprehensive income
Comprehensive income

39

17

423

22,838

19,110242,833¥94,471¥97,382$1,004,477¥95,265¥93,714$1,012,925

(794)

3,668

(8,448)

Total comprehensive income attributable to:
Owners of the parent
Minority interests
See notes to consolidated financial statements.

136

Annual Report & CSR Report 2013

Consolidated Statement of Change in Equity
Development Bank of Japan Inc. and Consolidated Subsidiaries

Thousands of
U.S. Dollars (Note 1)

Millions of Yen

For the year ended March 31,

Common stock:
Balance at beginning of year
Capital increase due to redemption of government
compensation bonds
Issuance of new shares of common stock
Balance at end of year

2013

2012

2013

¥1,187,788¥1,181,194$12,629,325

19,165
—

6,170
424

203,775—

1,206,953

1,187,788

12,833,099

Capital surplus:
Balance at beginning of year

1,060,466

1,060,466

11,275,559

Balance at end of year

1,060,466

1,060,466

11,275,559

Balance at beginning of year

159,606

132,329

1,697,043

Cash dividends(37,349)(50,036)(397,122)

Retained earnings:

Net income

71,33777,313

758,506

Balance at end of year

193,595

159,606

2,058,428

Balance at beginning of year

19,313

13,169205,349

Net change during the year

17,5606,143

186,711

Balance at end of year

36,873

19,313392,060

Balance at beginning of year

27,711

17,406294,643

Net change during the year

6,276

10,304

66,731

Balance at end of year

33,987

27,711

361,373

(149)

(101)

(1,588)

Accumulated other comprehensive income:Unrealized gain on available-for-sale securities:

Deferred gain on derivatives under hedge accounting:Foreign currency translation adjustments:
Balance at beginning of year
Net change during the year

91

(47)

977

Balance at end of year

(57)

(149)

(610)

6,329

5,530

67,295

Minority interests:
Balance at beginning of year
Net change during the year

430

798

4,572

6,759

6,329

71,8682,461,065

2,409,995

26,167,627

19,165
—

6,170
424

203,775—

Cash dividends(37,349)(50,036)(397,122)

Net income

71,33777,313

758,506

Net change during the year

24,35817,198258,991¥2,538,576¥2,461,065$26,991,777

Balance at end of year
Total equity:
Balance at beginning of year
Capital increase due to redemption of government
compensation bonds
Issuance of new shares of common stock

Balance at end of year
See notes to consolidated financial statements.

Financial Condition

Annual Report & CSR Report 2013137

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) losses of affiliates
Interest income
Interest expense
Gain on securities—net
Gain on money held in trust—net
Foreign exchanges (gains) losses(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 and corporate auditors
Reserve for employees’ retirement benefits
Reserve for contingent losses
Loans
Debentures
Borrowed money
Short-term corporate bonds
Corporate bonds
Due from banks
Call loans and bills bought
Reverse repurchase agreements
Interest received
Interest paid
Other—net
Sub-total(Payments for) returns on income taxes
Net cash provided by (used in) operating activities
Cash flows from investing activities:
Payments for purchases of securities
Proceeds from sales of securities
Proceeds from redemption of securities
Payments for increase of money held in trust
Proceeds from decrease of money held in trust
Payments for purchases of tangible fixed assets
Proceeds from sales of tangible fixed assets
Payments for purchases of intangible fixed assets
Proceeds from purchases of stocks of subsidiaries resulting inchange in scope of consolidation
Net cash (used in) provided by investing activities
Cash flows from financing activities:
Capital increase due to redemption of government compensation
bonds
Proceeds from issuance of stock
Payments for cash dividends
Proceeds from issuance of securities to minority shareholders ofsubsidiaries
Dividends paid to minority shareholders of subsidiaries
Net cash used in financing activities
Foreign currency translation adjustments on cash and cash
equivalents
Net change in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
See notes to consolidated financial statements.

138

Annual Report & CSR Report 2013

2013

2012

2013

¥116,224¥110,204$1,235,778

4,140
203
(151)
236
(2,870)(267,895)
144,274(31,529)(906)(21,898)
(547)

2,583
—
(4)
132
2,020
(277,360)
155,517(3,166)(1,132)
1,482
210

44,0192,159(1,613)2,512(30,525)(2,848,440)
1,534,018(335,238)(9,634)(232,843)(5,817)(1,566)
(570)
(257)
(0)
(3,176)135(279,867)(77,218)
242,844(7,001)
322,428
20,9305,500(13,085)
273,810(146,684)
32,397
307,897(31,511)276,385(10,158)
(85)
106
(4)
(12,401)(711)(613,988)(182,217)
594,071
50,999224,652(17,871)(27,648)(152,889)
280,304(157,633)(17,179)(52,170)
11,816(40,354)(16,658)(6,069)(2,734)(8)(33,769)
1,445(2,975,728)(821,034)
2,582,080(74,441)3,428,266
222,541
58,480(139,138)
2,911,330(1,559,642)
344,469
3,273,766(335,056)
2,938,710(512,262)
58,995358,806(150,115)
1,434(14,169)
1,840(2,410)(621,860)
103,706
530,838(110)
1,579(1,708)1,234(2,630)(5,446,709)
627,2813,815,063(1,596,119)
15,250(150,657)
19,567(25,628)

1,569(256,310)

110
11,16016,692(2,725,261)

19,165—(37,349)

6,170
424(50,036)

203,775—(397,122)283(2,511)(20,412)540(3,517)(46,418)

3,010(26,704)(217,041)

213
(124)
124,141¥124,017

61(75,550)
199,692¥124,141

2,274(1,318)1,319,955$1,318,637

Notes to Consolidated Financial Statements
Development Bank of Japan Inc. and Consolidated Subsidiaries

1. Basis of Presentation
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 2012 consolidated financial statements toconform to the classifications used in 2013.
The amounts indicated in millions of yen are rounded down by omitting the figures less than one million yen.
Accordingly, the sum of each amount appearing in the accompanying financial statements and the notes thereto may not
be equal to the sum of the individual account balances. Amounts in U.S. dollars are presented solely for the convenienceof readers outside Japan. The rate of ¥94.05=$1.00, the effective exchange rate prevailing as of March 31, 2013, 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.

Annual Report & CSR Report 2013

Financial Condition(i) Consolidated Subsidiaries
The number of consolidated subsidiaries as of March 31, 2013 is 21. The consolidated subsidiaries as of March 31,
2013 are as follows:
DBJ Business Investment Co., Ltd.
DBJ Corporate Mezzanine Partners Co., Ltd.
UDS Corporate Mezzanine Limited Partnership
UDS Corporate Mezzanine No. 3 Limited Partnership
DBJ Credit Line, Ltd.
New Business Investment Co., Ltd.
DBJ Singapore Limited
Japan Economic Research Institute Inc.
Asuka DBJ Investment LPS
DBJ Europe Limited
DBJ Real Estate Co., Ltd.
DBJ Investment Advisory Co., Ltd.
DBJ Capital Co., Ltd.
DBJ Capital Investment Fund No. 1
DBJ New Business Investment FundDBJ Capital Investment Fund No. 2
DBJ Securities Co., Ltd.
DBJ Asset Management Co., Ltd.
Urban Redevelopment Private FundGreen Asset Investment TMKGREIS Corporation139

In the year ended March 31, 2013, DBJ Asset Management Co., Ltd. was newly consolidated due to additional
acquisition of its shares and Urban Redevelopment Private Fund was newly consolidated due to obtaining control
over the investee. In addition, Green Asset Investment TMK and GREIS Corporation were newly consolidated due toincorporation.
(ii) Unconsolidated Subsidiaries
The number of unconsolidated subsidiaries as of March 31, 2013 is 26. The major unconsolidated subsidiary as ofMarch 31, 2013 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.
(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, 2013 was 26.
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, 2013 was 17. The major affiliates
accounted for by the equity method as of March 31, 2013 were as follows:
Makuhari Messe, Inc.
AIRDO Co., Ltd.
Changes in scope of affiliates accounted for by the equity method:
Since Mezzanine Solution II Limited Partnership was newly incorporated and the materiality of AD Capital Co., Ltd.
and NIHONKAI EISEN Co., Ltd. increased during the year ended March 31, 2013, these companies were newly
accounted for by the equity method as of March 31, 2013.
Urban Redevelopment Private Fund was excluded from the scope of affiliates accounted for by the equity
method, since it has been consolidated due to obtaining control over the entity.
(iii) Affiliates not accounted for by the equity method
The number of affiliates not accounted for by the equity method as of March 31, 2013 was 88. One of the majoraffiliates as of March 31, 2013 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, 2013
Narumi Corporation
Shinwa Seiko Corporation
Mediclude Co., Ltd.
Advangen, Inc.
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Nihon Shoryoku Kikai Co., Ltd.
PRISM BioLab Corporation
Izumi Products Company
OPAL Co., Ltd.
SKYROCKIT, Inc.
Teibow Co., Ltd.
TES HOLDINGS LIMITED(3) Balance Sheet Dates of Consolidated Subsidiaries
Balance sheet dates of consolidated subsidiaries are as follows:
Number of subsidiaries

2013

December 31
March 3111
10Consolidated subsidiaries are consolidated based on the financial statements that are prepared as of their year-end
balance sheet date.
The necessary adjustments are made in the consolidated financial statements to reflect material transactions that
occur between the year-end balance sheet date of the subsidiary and the consolidated balance sheet date.
(4) Elimination of Intercompany Balances and Transactions
All significant intercompany balances and transactions have been eliminated in consolidation. All material unrealized
profit resulting from transactions between DBJ Inc. and its consolidated subsidiaries is eliminated.
(5) Amortization of Goodwill
The difference between the fair value of net assets and the cost of the acquired subsidiary is being amortized ona straight-line basis over the estimated beneficial period not exceeding 20 years. Minor differences are charged
to income in the year of acquisition. The excess of the fair value over the cost of acquired subsidiaries (negative
goodwill) is recognized as income immediately as incurred.
(b) Cash and Cash Equivalents“Cash and Cash Equivalents” in the consolidated statement of cash flows consist of cash on hand and due from banks.
The reconciliation between “Cash and cash equivalents” and “Cash and due from banks” in the consolidated balance
sheet is as follows:
Thousands of
U.S. Dollars

Millions of Yen

Cash and due from banks

2013

2012

2013

¥154,564¥175,618$1,643,432

Time deposits with banks(30,546)(51,476)(324,795)

Cash and cash equivalents¥124,017¥124,141$1,318,637

Financial Condition(c) Securities
Held-to-maturity debt securities are stated at amortized cost with amortization computed on a straight-line basis, using
the weighted average method. Available-for-sale securities with readily available market quotations are stated at market
value (cost is calculated principally using the weighted average method). Financial instruments whose fair value cannot
be reliably determined are stated at cost using the weighted average method.
Investments in limited partnerships and other similar partnerships are accounted for at their original cost plus
DBJ Inc.’s interest in earnings since acquisition and less any dividends received, based on their most recent financial
statements.
Unrealized gains and losses on available-for-sale securities are included in equity, net of income taxes.
Securities which are held as trust assets in money held in trust accounts are valued in the same way as othersecurities.
(d) Valuation Method for Derivative Financial Instruments
All derivative financial instruments are carried at market value. Except for certain derivatives that are designated as hedging
instruments as discussed below, gains or losses on derivative transactions are recognized in the statement of income.

Annual Report & CSR Report 2013141

(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.
(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(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 an individual hedge, in regards to both interest rate swap contracts which meet the hedging
requirements of the accrual method (*1) and foreign currency swap contracts which meet the hedging requirementsof the assignment method (*2), under the Accounting Standards for Financial Instruments at the inception date, DBJ
Inc. is not required to periodically evaluate hedge effectiveness.
*1. If interest rate swap contracts are used as hedges and meet certain hedging criteria, the net amount to be paid or received
under the interest rate swap contract is added to or deducted from the interest on the assets or liabilities for which the swap
contract was executed.
*2. In cases where foreign currency swaps are used as hedges and meet certain hedging criteria, foreign exchange forward
contracts and hedged items are accounted for in the following manner;(i) If a foreign currency swap is executed to hedge existing foreign currency assets or liabilities, a) the difference, if any, between
the Japanese yen amount of the hedged foreign currency asset or liability translated using the spot rate at the inception dateof the contract and the book value of the asset or liability is recognized in the statement of income in the period which
includes the inception date, and b) the discount or premium on the contract (that is, the difference between the Japanese
yen amount of the contract translated using the contracted forward rate and that translated using the spot rate at the
inception date of the contract) is recognized over the term of the contract.
(ii) If a foreign currency swap is executed to hedge a future transaction denominated in a foreign currency, the futuretransaction will be recorded using the contracted forward rate, and no gains or losses on the foreign exchange forward
contract are recognized.

(f) Fixed Assets(1) Depreciation of Tangible Fixed Assets
Tangible Fixed Assets are stated at cost less accumulated depreciation. Tangible Fixed Assets of DBJ Inc. aredepreciated using the declining-balance method, except for buildings (excluding installed facilities) that are
depreciated on a straight-line basis, and depreciation of 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

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Annual Report & CSR Report 2013

Pursuant to the amendments to the Corporate Income Tax Act, DBJ Inc. and its domestic consolidated
subsidiaries changed the depreciation method for tangible fixed assets acquired on or after April 1, 2012 to thedepreciation method provided by the amended Corporate Income Tax Act from the fiscal year ended March 31,
2013. As a result, income before income taxes and minority interests for the year ended March 31, 2013 increasedby ¥239 million ($2,543 thousand) compared to the previous method.
(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.

Annual Report & CSR Report 2013

Financial Condition(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.
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 ¥50,187 million ($533,622 thousand) and ¥59,113 million for the years ended March 31,

143

2013 and 2012, 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, Directors and Corporate Auditors“Accrued Bonuses to Employees, Directors and Corporate Auditors” are provided for in the amount of the estimatedbonuses which are attributable to the years ended March 31, 2013 and 2012.
(m) Reserve for Employees’ Retirement Benefits
DBJ Inc. has defined benefit pension plans, which consist of a defined-benefit corporate pension plan, which wastransferred from the contributory funded defined benefit pension plan on November 1, 2011, and a lump-sum
severance indemnity plan. “Reserve for Employees’ Retirement Benefits” represents future payments for pension andretirement benefits to employees. It is accrued based on the projected benefit obligations and estimated pension plan
assets at each fiscal year end. Prior service cost is amortized using the straight-line method over the period of ten
years within the employees’ average remaining service period at incurrence. Net actuarial gains and losses is amortizedusing the straight-line method over the period of ten years within the employees’ average remaining service period
commencing from the next fiscal year after incurrence.
DBJ Inc. has two types of pension plans for employees: a non-contributory and a contributory funded defined
benefit pension plan.
DBJ Inc. applied for transfer of the substitutional portion of past pension obligations to the government andobtained approval by the Ministry of Health, Labor and Welfare on November 1, 2011. The actual transfer of thepension obligations and related assets to the government is to take place subsequently after the government’s approval.
Based upon the above approval in November 2011, DBJ Inc. recognized a gain on transfer of the substitutional
portion of the governmental pension program in the amount of ¥ 11,036 million for the year ended March 31, 2012.
(n) Reserve for Directors’ and Corporate Auditors’ Retirement Benefits“Reserve for Directors’ and Corporate Auditors’ Retirement Benefits” is accrued based on the amount that would be
required if all directors and corporate auditors retired at the balance sheet date.
(o) 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.

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(q) Lease Transactions
In March 2007, the ASBJ issued ASBJ Statement No. 13, “Accounting Standard for Lease Transactions,” which revised
the previous accounting standard for lease transactions issued in June 1993. The revised accounting standard for leasetransactions was effective for fiscal years beginning on or after April 1, 2008.
Under the previous accounting standard, finance leases that were deemed to transfer ownership of the leased
property to the lessee were capitalized. However, other finance leases were permitted to be accounted for as operatinglease transactions if certain “as if capitalized” information was disclosed in the note to the lessee’s financial statements.
The revised accounting standard requires that all finance lease transactions be capitalized to recognize lease assets andlease obligations in the balance sheet. In addition, the revised accounting standard permits leases which existed at thetransition date and do not transfer ownership of the leased property to the lessee to continue to be accounted for as
operating lease transactions.
DBJ Inc. applied the revised accounting standard on October 1, 2008. In addition, DBJ Inc. continues to account forleases which existed at March 31, 2008 and were transferred to DBJ Inc. on October 1, 2008, and does not transfer
ownership of the leased property to the lessee as operating lease transactions.
(r) Consumption Taxes
Income and expenses subject to consumption taxes exclude related consumption taxes paid or received.
(s) 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.
(t) 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.
(u) 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, 2013 and 2012 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.

Annual Report & CSR Report 2013

Financial Condition(v) New Accounting Pronouncements
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 AccountingStandard for Retirement Benefits that had been issued by the Business Accounting Council in 1998 with effective dateof April 1, 2000, and the other related practical guidances, being followed by partial amendments from time to timethrough 2009.
Under the revised accounting standard, taking into the accounts the viewpoints of improvement of financial
reporting and international trends, accounting treatment for actuarial gains and losses and past service costs that are
yet to be recognized in profit or loss, the calculation method for retirement benefit obligations and service costs andexpansion of the related disclosure requirements have been revised.
DBJ Inc. expects to apply the revised accounting standard from the end of the fiscal year ending March 31, 2014,
and the revision of the calculation method for retirement benefit obligations and service costs will be adopted from April 1,
2014.
DBJ Inc. is currently in the process of measuring the effects of applying the revised accounting standard.

145

3. Securities
Securities as of March 31, 2013 and 2012 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

Japanese government bonds

2013

2012

2013

¥ 321,543¥ 247,012$ 3,418,858

Corporate bonds

386,409392,589

4,108,558

Equities

175,770

169,806

1,868,900

Other securities

473,334

367,214

5,032,799¥1,357,058¥1,176,622$14,429,115

Total*1. Investments in unconsolidated subsidiaries and affiliates included in “Equities” as of March 31, 2013 and 2012, are ¥27,245 million($289,689 thousand) and ¥24,066 million. Investments in unconsolidated subsidiaries and affiliates included in “Other securities” as ofMarch 31, 2013 and 2012, are ¥38,404 million ($408,344 thousand) and ¥44,288 million.
*2. DBJ Inc. has contingent liabilities for guarantees of corporate bonds among securities which were issued by private placement (Article 2,
Paragraph 3 of Financial Instruments and Exchange Act) and amount to ¥1,200 million ($12,759 thousand) as of March 31, 2013.
*3. There are no securities repledged as of March 31, 2013 and 2012. Securities accepted under repurchase agreements can be sold or
repledged. Securities neither sold nor repledged are ¥165,975 million ($1,764,761 thousand) and ¥152,889 million as of March 31,
2013 and 2012, 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, 2013 and 2012 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2013

2012

2013

Equities

¥130

¥64

$1,385

Bonds

302

31

3,219

Other

—

0

—

Total

¥433

¥95

$4,604

4. Non-Performing Loans
The amounts of non-performing loans included in “Loans” as of March 31, 2013 and 2012 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2013

Loans to bankrupt debtors
Delinquent loans
Loans past due three months or more
Restructured loans
Total

¥

2012

2013

4,927

¥ 10,686$

52,396

118,360

136,477

1,258,485

271

—

2,888

47,87052,782508,993¥171,430¥199,946$1,822,762*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.”

146

Annual Report & CSR Report 2013

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, 2013
and 2012, the amounts of unused commitments are ¥786,777 million ($8,365,523 thousand) and ¥580,042 million. As of
March 31, 2013 and 2012, the amounts of unused commitments whose remaining contract term are within one year are¥134,389 million ($1,428,910 thousand) and ¥455,229 million.
Since many of these commitments expire without being drawn down, the unused amount does not necessarily
represent a future cash requirement. Most of these contracts have conditions whereby DBJ Inc. and its subsidiaries canrefuse customers’ applications for loans or decrease the contract limits for proper reason (e.g., changes in financial situation,
deterioration in customers’ credit worthiness). At the inception of contracts, DBJ Inc. and its subsidiaries obtain real estate,securities or other assets as collateral if considered necessary. Subsequently, DBJ Inc. and its subsidiaries perform periodic
reviews of the customers’ business results based on internal rules, and take necessary measures to reconsider conditions incontracts and/or require additional collateral and guarantees.

6. Other Assets
Other assets as of March 31, 2013 and 2012 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2013

Prepaid expenses

¥

2012

6,137

¥

2013

8,597

$

65,257

Accrued income

41,65244,382442,872

Derivatives

64,71862,528688,132

Other

20,556

16,979218,575

Total¥133,065¥132,487$1,414,835

7. Tangible Fixed Assets
Tangible fixed assets as of March 31, 2013 and 2012 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2013

Buildings
Land¥ 21,947¥

92,904

Leased assets
Construction in progress

2012

2013

8,682

$ 233,358

45,562

987,821

23

59

251

10,368124,802110,244

Other

112,744

1,856

1,198,771

Total¥237,988¥180,962$2,530,445

Note: Accumulated depreciation of tangible fixed assets as of March 31, 2013 and 2012, is ¥4,238 million ($45,064 thousand) and ¥2,538
million, respectively.

8. Allowance for Loan Losses
Allowance for loan losses as of March 31, 2013 and 2012 is as follows:
Thousands of
U.S. Dollars

Millions of Yen

2012

2013

¥ 67,478¥ 58,589$ 717,477

Specific allowance for loan losses

79,93592,859849,924¥147,414¥151,448$1,567,401

Total

Annual Report & CSR Report 2013

Financial Condition

2013

General allowance for loan losses

147

9. Debentures and Corporate Bonds
Debentures and corporate bonds as of March 31, 2013 and 2012 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

Issue date

Interest rate(%)

Maturity date

2013

2012

2013

¥ 582,718¥ 632,606$ 6,195,841(Issuer: DBJ Inc.)
Debentures
Japanese government-

Mar. 2003–

0.8–

Mar. 2013–

guaranteed bonds 6-23*1

Aug. 2008

2.2

Jun. 2023[29,983]

Japanese government-

Nov. 2008–

0.24–

Jul. 2016–

688,401

528,178

7,319,529[318,806]

guaranteed bonds 1-19

Mar. 2013

2.1

Feb. 2024

Japanese government-

Sep. 1998

1.81

Sep. 2028

25,06225,066

266,484

703,077

777,920

7,475,567

442,126

284,868

4,700,975

829,856

guaranteed foreign bond 67*2
Japanese government-

Jun. 2002–

1.05–

Jun. 2012–

guaranteed foreign bonds

Nov. 2007

5.125

Nov. 2027

Japanese government-

Dec. 2009–

0.5171–

Dec. 2014–

guaranteed Euro MTN bonds

Jan. 2013

2.875

Sep. 2019

FILP agency domestic bonds

Oct. 2002–

0.78–

Sep. 2012–

609,890

5, 7, 9, 11, 13, 16, 19, 20,

Jul. 2008

2.74

Mar. 2047[169,996]

FILP agency foreign bond 1*4

Jun. 2007

1.65

Jun. 2012—

49,997—

Euro MTN bonds 2*4, 5

Sep. 2008

2.032

Sep. 2023

2,000

2,000

21,265

Short-term corporate bonds

Feb. 2012–

0.1005–

Apr. 2012–

43,99750,999Mar. 2013

0.124

May 2013[43,997]

Dec. 2008–

0.166–

Jun. 2012–

754,000

4-14*1

1-7*3
6,484,743[1,807,517]

24, 27, 29-31, 33-51*4

467,815[467,815]

Corporate bonds
Corporate bonds through474,000

8,017,012

public placement 2-33

Jan. 2013

1.745

Sep. 2022[84,000]

Corporate bonds throughAug. 2009–

0.48–

Sep. 2014–

20,00020,000[893,142]
212,653

private placement 1-2

May 2011

0.847

Jun. 2015

Corporate bonds Euro MTN

Mar. 2009–

0.53857– Apr. 2012–

89,75647,327954,346

6-9, 13-15, 17-40*6

Feb. 2013

1.736

Apr. 2019[13,464]

5.53

Nov. 2017[143,163](Issuer: Green Asset Investment TMK)
Specified corporate bonds 1

Dec. 2012

Total

7,500

—

79,745¥3,968,531¥3,722,822$42,195,974*1. These bonds are government-guaranteed bonds issued by the Development Bank of Japan.
*2. This bond is a government-guaranteed bond issued by the Japan Development Bank.
*3. These bonds are non-guaranteed bonds issued based on MTN program.
*4. Fiscal Investment and Loan Program (FILP) agency bonds 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. Figures indicated in brackets [ ] indicate the amounts to be redeemed within one year.

Scheduled redemptions of debentures and corporate bonds which have been assumed and repaid by DBJ Inc. forsubsequent years as of March 31, 2013 are as follows:
The fiscal year ending March 31, 2014148

Annual Report & CSR Report 2013

¥341,443 million$3,630,443 thousand

2015

444,286

4,723,937

2016

501,091

5,327,922

2017

632,920

6,729,617

2018552,246

5,871,836

10. Borrowed Money
Borrowed money as of March 31, 2013 and 2012 is as follows:
Thousands of
U.S. Dollars

Millions of Yen
Average interest rate (%)

Due date of repayment

2013

2012

2013

0.99

May 2013–Jan. 2033

¥9,448,398¥9,170,553$100,461,439

Borrowings

Scheduled redemptions of borrowings for subsequent years as of March 31, 2013 are as follows:
The fiscal year ending March 31, 2014

¥1,356,147 million$14,419,429 thousand

2015

1,255,468

13,348,951

2016

1,211,948

12,886,214

2017

1,098,898

11,684,190

2018952,287

10,125,333

11. Other Liabilities
Other liabilities as of March 31, 2013 and 2012 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2013

2012

2013

Accrued expenses¥ 26,037¥28,621$ 276,848

Unearned income

940

562

10,005

Accrued income taxes

30,11420,754

320,194

Derivatives

15,65512,752

166,458

Lease obligations

25

87

276

Asset retirement obligations (Note 12)

2,821

1,047

30,002

Other

46,82014,806497,828

Total¥122,416¥78,631$1,301,609

12. Asset Retirement Obligations
DBJ Inc. recognizes asset retirement obligations associated with the recovery obligations provided by the real estate
rental agreements. In addition, asset retirement obligations related to the obligations of pulling down the previous head
office buildings and removing the toxic substances were recognized in connection with the head office relocation due toOtemachi redevelopment project.
The asset retirement obligation is calculated based on the sum of the discounted cash flows using discount rates from
0.1% 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, 2013 and 2012 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2013

Balance at beginning of year
Increase due to acquisition of tangible fixed assets

2013¥1,047¥1,046$11,135

43

—

465

0

0

7

Decrease due to settlement of asset retirement obligations

(131)

—

(1,401)

Increase due to a change in estimates

1,859

—

19,767

Other
Balance at end of year

2

0

28

¥2,821¥1,047$30,002

Annual Report & CSR Report 2013

Financial Condition

Reconciliation associated with passage of time

2012

149

Change in estimates on asset retirement obligations and its effect:
DBJ Inc. has changed the estimates on asset retirement obligations in the fiscal year ended March 31, 2013, since it has
become certain that the removal cost arising from contractual obligations on removal of the toxic substances related
to pulling down the previous head office buildings due to the chain model redevelopment of Otemachi is expected to
exceed the previously estimated amount along with the development of the related demolition works. Accordingly, DBJ
Inc. has recorded an increase of ¥1,859 million ($19,767 thousand) due to the estimation change under “General andadministrative expenses” and added the same amount to “Asset retirement obligations” before the change.
As a result, income before income taxes and minority interests for the year ended March 31, 2013 decreased by ¥1,859
million ($19,767 thousand).

13. Acceptances and Guarantees
Acceptances and guarantees as of March 31, 2013 and 2012 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

Guarantees

2013

2012

2013

¥155,753¥128,518$1,656,068

14. Assets Pledged as Collateral
Cash and due from banks of ¥4,553 million ($48,414 thousand) and tangible fixed assets of ¥46,657 million ($496,088
thousand) are pledged as collateral for borrowed money of ¥32,000 million ($340,245 thousand) as of March 31, 2013.
Loans and securities pledged as collateral in Real Time Gross Settlement for bank deposits at the Bank of Japan are¥611,175 million ($6,498,415 thousand) and ¥5,539 million ($58,899 thousand) as of March 31, 2013. In addition, they
are deposited as replacement of margin money for future trading and collateral for transactions, including exchange
settlements as of March 31, 2013. ¥18,909 million ($201,053 thousand) of securities are pledged as collateral for loans ofcompanies which are investees of DBJ Inc. as of March 31, 2013. Additionally, ¥937 million ($9,969 thousand) of margindeposits for futures transactions, ¥1,574 million ($16,736 thousand) of cash collateral paid for financial instruments and¥48 million ($519 thousand) of guarantee deposits are included in other assets as of March 31, 2013. 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
Inc. are secured by a statutory preferential right over the property of DBJ Inc. The denomination value of these debentures
amounts to ¥1,923,822 million ($20,455,311 thousand) as of March 31, 2013.
Loans and securities pledged as collateral in Real Time Gross Settlement for bank deposits at the Bank of Japan are¥697,263 million and ¥14,714 million as of March 31, 2012. In addition, they are deposited as replacement of margin
money for future trading and collateral for transactions, including exchange settlements as of March 31, 2012. Also, in
other assets, ¥937 million of margin deposits for futures transactions is included and ¥42 million of guarantee deposits areincluded as of March 31, 2012. Under the DBJ Inc. Act (Article 17 of the Supplementary Provisions) and the DBJ Act (Article43), obligations created by the bonds issued by DBJ Inc. are secured by a statutory preferential right over the property of
DBJ Inc. The denomination value of these debentures amounts to ¥2,318,822 million as of March 31, 2012.

15. Equity
Japanese companies including DBJ Inc. are regulated by the Companies Act. In addition, DBJ Inc. is regulated by the DBJ Inc.
Act. The significant provisions in the Companies Act and the DBJ Inc. Act that affect financial and accounting matters are
summarized as follows:(a) Dividends
Under the Companies Act, companies can distribute dividends at any time during the fiscal year in addition to the yearend dividend upon resolution at the shareholders meeting. For companies that meet certain criteria such as; (1) having
the Board of Directors, (2) having independent auditors, (3) having the Board of Corporate Auditors, and (4) the termof service of the directors is prescribed as one year rather than two years of normal term in its articles of incorporation,
the Board of Directors may declare dividends (except for dividends in kind) at any time during the fiscal year, prescribedthat the Board of Directors can declare dividends in its articles of incorporation. DBJ Inc., however, shall not distributesuch dividends based on resolution of the Board of Directors, since its articles of incorporation are not prescribed that

150

Annual Report & CSR Report 2013

the 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.
(e) Common Stock Issued during the Year Ended March 31, 2012
DBJ Inc. executed a request for redemption of government compensation bonds equivalent to ¥6,170 million, ¥10,528
million ($111,940 thousand) and ¥8,637 million ($91,834 thousand) to the Finance Minister and accordingly, capitalstock of DBJ Inc. increased by that amount on December 7, 2011, June 6, 2012 and December 6, 2012, respectively.
And on March 23, 2012, DBJ Inc. issued 8,480 new shares of common stock by way of allocation of new stocks to the
Finance Minister at ¥50,000 per share for ¥424 million. As a result, ¥25,759 million was included in Capital stock.
Furthermore, new shares of common stock have not been issued for the year ended March 31, 2013.

16. Per Share Information
Basic net income per common share (“EPS”) for the years ended March 31, 2013 and 2012 is as follows:
Millions of Yen

Thousands of Shares

Yen

U.S. Dollars

Year ended March 31, 2013

Net income

Weighted average shares

EPS

EPS

Basic EPS
Net income available to commonshareholders¥71,337

43,632¥1,634.96¥77,31343,624¥1,772.27$17.38Year ended March 31, 2012

Basic EPS
Net income available to commonshareholders

Financial Condition

Note: Diluted net income per share for the years ended March 31, 2013 and 2012 is not disclosed because there are no dilutive securities.

Annual Report & CSR Report 2013151

17. Fees and Commissions (Income)Fees and commissions (income) for the years ended March 31, 2013 and 2012 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

Commissions

2013

2012

2013

¥10,293¥9,461$109,450

18. Other Operating Income
Other operating income for the years ended March 31, 2013 and 2012 is as follows:
Thousands of
U.S. Dollars

Millions of Yen

Foreign exchange gain

2013

2012

¥3,548¥

Gains on sales of bonds
Gains on redemption of bonds

2013

—

$37,731

525

492

5,592

2,130

5,000

22,655

Other

1,675

30

17,816

Total¥7,880¥5,522$83,794

19. Other Income
Other income for the years ended March 31, 2013 and 2012 is as follows:
Thousands of
U.S. Dollars

Millions of Yen

2013

—

2012

2013

¥

$

Reversal of reserve for contingent losses¥

Gains on sales of equities and other securities

19,428

3,634

711

—

Gains on money held in trust

928

1,142

9,876

Equity in net income of affiliates

2,870

—

30,525

206,574

Gains on sales of fixed assets

719

104

7,648

Collection of written-off claims

7,129

10,12075,807—

11,036—

20,5207,750

218,190

151

4

1,613

Gain on transfer of the substitutional portion of the governmental
pension program
Gains on investments in limited partnerships and other similar
partnerships
Gain on negative goodwill
Other

3,289

3,364

34,978

Total¥55,039¥37,868$585,211

20. Fees and Commissions (Expenses)
Fees and commissions (expenses) for the years ended March 31, 2013 and 2012 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2013

Commissions

152

Annual Report & CSR Report 2013

¥1,082

2012

¥551

2013

$11,512

21. Other Operating Expenses
Other operating expenses for the years ended March 31, 2013 and 2012 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2013

Foreign exchange losses

¥

2012

2013

$

—

¥ 892

Debentures issuance costs

642

686

Corporate bonds issuance costs

723

518

7,697

Write-off of bonds

302

31

3,219

Derivatives

—
6,834

10,495486

111,599

Other

4

6

49

Total

¥12,169¥2,622$129,398

22. Other Expenses
Other expenses for the years ended March 31, 2013 and 2012 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2013

2012

Provision for allowance for loan losses
Write-off of loans
Losses on sales of equities and other securities
Write-off of equities
Losses on money held in trust
Losses on sales of fixed assets
Impairment losses
Losses on investments in limited partnerships and other similar
partnerships¥10,412
50
188
1,996
22
172
236

¥ 1,413
5,194
1,804
6,867
10
314
132

$110,711
535
2,008
21,233
242
1,830
2,512

2013

8,583

5,000

91,263

Other
Total

817
¥22,480

2,708¥23,447

8,688$239,023

23. Employees’ Retirement Benefits
Employees whose service with DBJ Inc. is terminated are, under most circumstances, entitled to retirement and pension
benefits determined by reference to basic rates of pay at the time of termination, length of service and conditions underwhich the termination occurs. If the termination is involuntary, caused by retirement at the mandatory retirement age or
caused by death, the employee is entitled to greater payment than in the case of voluntary termination.
Reserve for employees’ retirement benefits as of March 31, 2013 and 2012 consisted of the following:(a) The Funded Status of the Pension Plans
Thousands of
U.S. Dollars

Millions of Yen

2013

2012

¥(39,031)
26,465(12,566)
2,163
95¥(10,308)¥(36,101)
21,466(14,635)
1,043
107¥(13,484)

2013$(415,011)
281,396(133,616)
23,002
1,011$(109,603)

Financial Condition

Projected benefit obligation
Fair value of plan assets
Unfunded pension obligation
Unrecognized net actuarial losses
Unrecognized prior service costReserve for employees’ retirement benefits*1. Certain subsidiaries apply the simplified method for the calculation of liability for employees’ retirement benefits.

Annual Report & CSR Report 2013153

(b) Components of Pension Cost
Thousands of
U.S. Dollars

Millions of Yen

2013

Service cost
Interest cost
Expected return on plan assets
Amortization of prior service cost
Amortization of net actuarial losses
Other
Net pension cost
Gain on transfer of the substitutional portion of the governmental
pension program

2012

2013

¥1,265
719
(107)
12
138
1
¥2,030¥ 1,169
842
(96)
(23)
220
1
¥ 2,114$13,455
7,647(1,141)
135
1,475
20
$21,590¥¥(11,036)$——*1. All retirement benefit costs are classified as service cost for the subsidiaries applying the simplified method.
*2. Contribution of pension premiums to the defined contribution pension plans of certain consolidated overseas subsidiaries is included in“Other”.

(c) Principal Assumptions Used
Discount rate

2013

2012

1.5%

2.0%

Expected rate of return on plan assets

0.5%

0.5%

Amortization period of prior service cost

10 Years

10 Years

Amortization period of actuarial gains/losses

10 Years

10 Years

24. Income Taxes
DBJ Inc. and its domestic consolidated subsidiaries are subject to Japanese national and local income taxes which, in theaggregate, resulted in a normal effective statutory tax rate of approximately 38.01% and 40.69% for the years ended
March 31, 2013 and 2012, respectively.
A reconciliation of the normal effective statutory tax rate with the actual effective tax rate for the year ended March 31,
2012 is as follows:2012

Normal effective statutory tax rate

40.69%

Increase (decrease) in taxes resulting from:
Change in valuation allowance
Reduction of deferred tax assets due to changes of tax rate

(12.85)
3.16

Minority interests in net income of subsidiaries

0.75

Other

(2.77)

Actual effective tax rate

28.98%A reconciliation of the statutory tax rate to DBJ Inc.’s effective tax rate for the year ended March 31, 2013 has been omitted
as the effective tax rate in the accompanying consolidated statement of income for the year ended March 31, 2013 differsfrom the normal effective statutory tax rate by less than 5%.

154

Annual Report & CSR Report 2013

The tax effects of significant temporary differences and loss carryforwards which resulted in deferred tax assets and liabilities
as of March 31, 2013 and 2012 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2013

2012

2013

¥ 52,638¥ 57,367$ 559,689

Losses from revaluation of securities

25,94527,394

275,865

Tax loss carryforwards

8,534

8,117

90,749

Excess of fair value over assets of consolidated subsidiaries

5,035

—

53,538Reserve for retirement benefits

3,762

4,916

40,002

Other

9,339

6,700

99,308Sub-total

105,256

104,497

1,119,151(66,250)(62,670)(704,423)

39,00541,826

414,728

Deferred gain on derivatives under hedge accounting(19,195)(15,795)(204,103)

Unrealized gain on available-for-sale securities(12,951)(7,052)(137,705)

(201)

(168)

(2,144)

Deferred tax assets:
Allowance for loan losses

Less—valuation allowance

Total
Deferred tax liabilities:

Other
Total

Net deferred tax assets¥(32,348)(23,015)

6,656¥ 18,810(343,953)$

70,77525. Lease Transactions(a) Finance leases
DBJ Inc. and its domestic consolidated subsidiaries lease certain equipment and others. Lease payments under finance leases
for the years ended March 31, 2013 and 2012 amounted to ¥47 million ($505 thousand) and ¥150 million, respectively.
Pro forma information of leased property such as acquisition cost, accumulated depreciation, obligations under financeleases, depreciation expense and interest expense for finance leases that do not transfer ownership of the leased property
to the lessee on an “as if capitalized” basis for the years ended March 31, 2013 and 2012 is as follows:
Millions of Yen

2013

Acquisition cost
Accumulated depreciation
Accumulated impairment losses
Net leased property

Tangible fixed assets

Intangible fixed assets

¥ 21
(18)
—
¥ 3

¥—
—
—
¥—

Total

¥ 21
(18)
—
¥ 3

Millions of Yen

2012
Intangible fixed assets

¥ 81
(56)
—
¥ 25

¥ 204
(178)
—
¥ 25

Total

¥ 286
(234)
—
¥ 51

Financial Condition

Acquisition cost
Accumulated depreciation
Accumulated impairment losses
Net leased property

Tangible fixed assets

Thousands of U.S. Dollars

2013

Acquisition cost
Accumulated depreciation
Accumulated impairment losses
Net leased property

Tangible fixed assets

Intangible fixed assets

$ 228
(193)
—
$ 35

$—
—
—
$—

Total

$ 228
(193)
—
$ 35
Annual Report & CSR Report 2013155

Pro forma amounts of obligations under finance leases as of March 31, 2013 and 2012 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2013

Due within 1 year

2012

¥ 3

2013

¥42

$37

Due after 1 year

—

10

—

Total

¥ 3

¥53

$37

Pro forma amounts of depreciation expense and interest expense under finance leases for the years ended March 31, 2013
and 2012 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2013

Depreciation expense

2013

¥37

¥144

$401

0

2

8

¥38

¥147

$408

Interest expense
Total

2012

*1. Depreciation expense is calculated using the straight-line method, assuming that useful life is equal to the lease term and that theresidual value at the end of the lease term is zero.
*2. The difference between total lease payments and the assumed acquisition cost of leased assets is charged to assumed interest expense
and is allocated to each fiscal year using the interest method.

(b) Operating leases(As lessee)
The minimum lease commitments under non-cancelable operating leases as of March 31, 2013 and 2012 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2013

Due within 1 year

2012

¥310

2013

¥230

$3,296

Due after 1 year

534

100

5,688

Total

¥844

¥331

$8,984(As lessor)
The minimum lease commitments under non-cancelable operating leases as of March 31, 2013 and 2012 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2013

Due within 1 year

156

¥ 875

2012

2013

¥—

$ 9,307

Due after 1 year

4,860

—

51,675Total¥5,735¥—$60,982

Annual Report & CSR Report 201326. Other Comprehensive Income
The components of other comprehensive income for the years ended March 31, 2013 and 2012 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2013

2012

2013

¥30,439¥15,948$323,656

Unrealized gain on available-for-sale securities:
Gains arising during the year
Reclassification adjustments to profit or loss

(8,088)(4,179)(85,999)

Amount before income tax effect

22,351

11,769237,656

Income tax effect(5,900)(2,915)(62,734)

Total

16,451

8,854

174,923

Gains arising during the year

17,09722,440181,796

Reclassification adjustments to profit or loss

(7,436)(8,229)(79,074)

Deferred gain on derivatives under hedge accounting:Amount before income tax effect

9,660

14,210102,721

Income tax effect(3,400)(3,922)(36,158)

Total

6,260

10,28866,563Foreign currency translation adjustments:
Losses arising during the year

86

(49)

923

Reclassification adjustments to profit or loss

—

—

—

Amount before income tax effect

86

(49)

923

Income tax effect

—

—

—

Total

86

(49)

923

Gains arising during the year

98

70

1,052

Reclassification adjustments to profit or loss

(59)

(53)

(629)

Amount before income tax effect

39

17

423

Share of other comprehensive income in affiliates:

Income tax effect

—

—

—

Total

39

17

423

¥22,838¥19,110$242,833

Total other comprehensive income

27. Segment Information
DBJ Inc. consists of only one business segment of long-term financing and accordingly, the disclosure of the reportablesegment information is omitted.
Related information:
Segment information by service for the years ended March 31, 2013 and 2012 is following:
Millions of Yen
Year ended March 31, 2013

Loan business

Securities investment

Other

Total

Ordinary income from external customers¥249,218¥60,629¥30,250¥340,098

Millions of Yen
Loan business

Securities investment

Other

Total

Ordinary income from external customers¥263,970¥32,467¥22,337¥318,775

Year ended March 31, 2013

Loan business

Securities investment

Other

Total

Ordinary income from external customers$2,649,851$644,647$321,643$3,616,141

Financial Condition

Year ended March 31, 2012

Thousands of U.S. Dollars

Annual Report & CSR Report 2013157

28. Financial Instruments and Related Disclosures(a) The Situation of Financial Instruments(1) Policy for Financial Instruments
DBJ Inc. provides investment and loan services that are aimed to provide long-term stable funding. As main methodsof acquiring funds, in addition to issuing corporate bonds and long-term borrowings, DBJ Inc. relies on the stableprocurement of long-term funds from the government’s Fiscal Investment and Loan Program (FILP). Since long-term,
fixed-rate makes up the majority of its assets, DBJ Inc. raises its funds mainly with long-term, fixed rate liabilities.
From both funding and investment aspects, DBJ Inc. implements comprehensive asset/liability management inorder to mitigate the risk of capital shortfall and losses from fluctuations of interest rate and exchange rate. DBJ Inc.
utilizes derivative financial instruments in order to hedge or control the risks related to interest and currency.
(2) Nature and Extent of Risks Arising from Financial Instruments
The financial assets 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 manufacturing, electricity, gas, thermal supply, water supply and others as of March 31,
2013. 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. As for hedge accounting, DBJ
Inc. applies the deferral hedge method or the accrual method to interest-rate swaps, and the assignment method
to foreign currency swaps. Hedged items of interest-rate swaps are loans, securities, borrowings, debentures andcorporate bonds. Hedged items of foreign currency swaps are foreign-currency denominated loans, debentures andcorporate bonds. According to the risk management policy, DBJ Inc. evaluates the effectiveness of the hedges by
testing whether the derivatives are effective in reducing the risks associated with the hedged items.
(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.
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

158

Annual Report & CSR Report 2013

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 periodof 1 year, observation period of 5 years, and confidence interval of 99.9%). The amount of market risk (risks
pertaining to the changes in interest rates, foreign exchanges and market prices) as of March 31, 2013 and2012 was ¥20,710 million ($220,211 thousand) and ¥41,484 million, respectively. Such measurements 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.

Annual Report & CSR Report 2013

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.

159

(b) Fair Values Information of Financial Instruments
The following are the carrying amount, fair value and differences between them as of March 31, 2013 and 2012.
Unlisted equities and others, whose fair value cannot be reliably determined, are excluded from the table below (see (2)).
Millions of Yen

2013
Carrying amount

Cash and due from banks¥

154,564

Fair value¥

154,564

Difference¥—

Call loans and bills bought

84,00084,000—

Reverse repurchase agreements

165,975

165,975—

761,172

787,816

26,644292,950

292,950—

13,772,462

14,468,156

695,694

Total assets¥15,231,125¥15,953,464¥722,338

Debentures

3,053,277

3,216,468

163,191

Borrowed money

9,348,398

9,515,836

167,438

Short-term bonds

43,99743,997—

Corporate bonds

871,256

876,726

5,470¥13,316,929¥13,653,030¥336,100

2,610

2,610

—

Securities
Held-to-maturity debt securities
Available-for-sale securities
Loans

13,918,224(145,762)

Allowance for loan losses*1

Total liabilities
Derivative transactions*2
Derivative transactions not qualifying forhedge accounting
Derivative transactions qualifying forhedge accounting
Total derivative transactions

46,45249,063¥46,45249,063¥——¥

Millions of Yen

2012
Carrying amount

Cash and due from banks¥

175,618

Fair value¥

175,618

Difference¥—

Call loans and bills bought

89,50089,500—

Reverse repurchase agreements

152,889

152,889—

672,405

695,762

23,357

213,894

213,894—

13,495,540

14,113,871

618,330

Total assets¥14,799,848¥15,441,536¥641,687

Debentures

3,130,495

3,260,653

130,158

Borrowed money

9,170,553

9,290,125

119,571

Short-term bonds

50,99950,999—Securities
Held-to-maturity debt securities
Available-for-sale securities
Loans

13,645,469(149,928)

Allowance for loan losses*1

Corporate bonds
Total liabilities
Derivative transactions*2
Derivative transactions not qualifying forhedge accounting
Derivative transactions qualifying forhedge accounting
Total derivative transactions

160

Annual Report & CSR Report 2013

541,327

544,484

3,157¥12,893,376¥13,146,263¥252,887

12,904

12,904—¥36,871
49,776¥36,871
49,776¥——

Thousands of U.S. Dollars

2013
Carrying amount

Cash and due from banks$

Call loans and bills bought

1,643,432$

Fair value

Difference

1,643,432$—

893,142

893,142—

1,764,761

1,764,761—

8,093,274

8,376,574

283,300

3,114,835

3,114,835—

146,437,664

153,834,731

7,397,067

Total assets$161,947,108$169,627,475$7,680,367

Debentures

32,464,404

34,199,559

1,735,155

Borrowed money

99,398,174

101,178,489

1,780,315

Reverse repurchase agreements
Securities
Held-to-maturity debt securities
Available-for-sale securities
Loans

147,987,505(1,549,841)

Allowance for loan losses*1

Short-term bonds

467,815

467,815—

Corporate bonds

9,263,756

9,321,921

58,165$141,594,149$145,167,783$3,573,635

27,76027,760—Total liabilities
Derivative transactions*2
Derivative transactions not qualifying forhedge accounting
Derivative transactions qualifying forhedge accounting
Total derivative transactions$

493,914521,674$

493,914521,674$——*1. General and specific allowances for loan losses are deducted. Allowance for loan losses is set off against the carrying amount directly
due to immateriality.
*2. Assets and liabilities arising from derivative transactions are presented on a net basis.

(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.

Annual Report & CSR Report 2013

Financial Condition(iv) Loans
The fair value of loans is determined by discounting contractual cash flows at the rates that consist of therisk 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

161

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) Short-term corporate bonds
The carrying amount is presented as the fair value, as the fair value approximates such carrying amount becauseof the short contract terms (1 year or less).
(iv) Corporate bonds
For floating rate corporate bonds issued by DBJ Inc., the carrying amount is presented as the fair value, as thefair value approximates such carrying amount. This is on the basis that the market interest rate is reflected in theinterest rate set within a short time period and that there has been no significant change in the creditworthinessof us before and after the issuance. For fixed rate corporate bonds with market prices, the fair value isdetermined based on their market price. For fixed rate corporate bonds without market prices, the fair value isdetermined by discounting contractual cash flows based on types of maturity lengths (when interest rate swap
contracts which meet the hedging requirements of the accrual method is qualified to corporate bonds, thecontractual cash flows are based on the interest rate swap) at the rates that consist of the risk free rate and therate of certain costs applicable to DBJ Inc. Certain foreign currency denominated corporate bonds are translatedusing the forward contract rates and the present value of the contractual cash flows is computed regarding
them as Japanese yen denominated corporate bonds.
Derivatives
The information of the fair values for derivatives is included in Note 29.

162

Annual Report & CSR Report 2013

(2) Following are the financial instruments whose fair value cannot be reliably determined as of March 31,
2013 and 2012:
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

2013

2012

2013

Money held in trust*1¥175,335¥ 24,423$1,864,282

Unlisted equities*2, 3
Investments in limited partnerships and other similar
partnerships*1, 3
Unlisted other securities*2, 3Industrial investment borrowed money (Special Account for
FILP)*4
Total

127,873

127,999

1,359,634

124,053
51,008

126,977
35,346

1,319,018
542,355

100,000¥578,271—¥314,746

1,063,264$6,148,553*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, 2013
and 2012 was ¥1,866 million ($19,848 thousand) and ¥6,803 million, respectively. The breakdown is: unlisted equities ¥272
million ($2,898 thousand) and ¥6,685 million, unlisted other securities ¥1,594 million ($16,950 thousand) and ¥117 million forthe years ended March 31, 2013 and 2012, 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, 2013 are as
follows:
Millions of Yen

2013

Due from banks

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¥154,560

¥

¥

¥

¥

¥

—

—

—

—

—

Call loans and bills bought

84,000

—

—

—

—

—

Securities
Held-to-maturity debt securities
with market values
Japanese government bonds

33,777—

269,897—

217,029
82,447

166,526
40,502

38,575
15,37535,36735,367

—

—

—

—

—

—

Japanese local government bonds
Short-term corporate bonds

—

—

—

—

—

127,000

100,275

39,683

13,200—5,265

142,897

34,306

86,34010,000—85,532
79,992

33,042—25,644—24,4892,143

65,71565,715

2,838—Japanese local government bonds

—

—

—

—

—

—

Short-term corporate bonds

—

—

—

—

—

—

Corporate bonds

1,005

28,74925,63922,345

—

—

Other

4,535

4,293

5

—

—

2,838

Other
Available-for-sale securities with
contractual maturities*
Japanese government bonds

Loans*

2,136,526

3,993,141

3,070,054

2,148,952

1,670,645

775,614

Total¥2,494,397¥4,296,081¥3,312,728¥2,339,968¥1,774,936¥813,820

Annual Report & CSR Report 2013

Financial Condition—
28,511

Corporate bonds

163

Thousands of U.S. Dollars

2013
Due after 1
year through3 years

Due in 1
year or lessDue from banks$ 1,643,388$—

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

893,142

—

—

—

—

—

Securities
Held-to-maturity debt securities
with market values
Japanese government bonds

359,143—2,869,722—

2,307,595
876,635

1,770,613
430,644

410,155
163,477

376,048
376,048

—

—

—

—

—

—

Japanese local government bonds
Short-term corporate bonds

—

—

—

—

—

—

303,156

1,350,346

1,066,188421,940

140,351—

55,986

1,519,376

364,771918,028

106,326—

909,434
850,526

351,327—

272,673—

260,387
22,794

698,733
698,733

30,179—Japanese local government bonds

—

—

—

—

—

—

Short-term corporate bonds

—

—

—

—

—

—

Corporate bonds

10,689305,681272,615

237,592

—

—

Other

48,21945,64658——

30,179Corporate bonds
Other
Available-for-sale securities with
contractual maturities*
Japanese government bonds

Loans*

22,716,927

42,457,647

32,642,792

22,849,045

17,763,377

8,246,836

Total$26,522,033$45,678,696$35,223,060$24,880,044$18,872,264$8,653,062* Obligations to “Legally Bankrupt,” “Effectively Bankrupt” and “Possibly Bankrupt” amount to ¥123,288 million ($1,310,881
thousand) are not included as of March 31, 2013. The breakdown is: available-for-sale securities with contractual maturities ¥0million ($0 thousand) and loans ¥123,288 million ($1,310,881 thousand).

(4) Maturity analysis for Debentures, Borrowed money and Other Liability with Interest as of March 31, 2013
are as follows:
Millions of Yen

2013

Borrowed money
Short-term corporate bonds
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¥1,356,147¥2,467,417¥2,051,185¥1,191,488¥1,202,029¥1,180,129

43,997

—

—

—

—

—

297,445945,377

1,185,166

516,516

524,809455,217¥1,697,590¥3,412,794¥3,236,352¥1,708,005¥1,726,839¥1,635,347

Due after 7
years through10 years

Due after
10 yearsThousands of U.S. Dollars

2013
Due in 1
year or less

Borrowed money
Short-term corporate bonds
Debentures and corporate bonds
Total

164

Annual Report & CSR Report 2013

Due after 1
year through3 years

Due after 3
years through5 years

Due after 5
years through7 years$14,419,429 $26,235,165 $21,809,524 $12,668,671 $12,780,751 $12,547,899
467,815

—

—

—

—

—

3,162,628

10,051,859

12,601,453

5,491,940

5,580,114

4,840,165$18,049,872 $36,287,024 $34,410,977 $18,160,610 $18,360,866 $17,388,064

29. Derivative Transactions(a) Derivative Transactions to which Hedge Accounting is not applied(1) Interest Rate-related Transactions
Millions of Yen

2013
Contract amount

Over-the-counter
Swaps
Receive fixed/ Pay float
Receive float/ Pay fixed
Total

Total

Due after 1 year

Fair value

Unrealized gains(losses)¥744,028
742,336—¥671,665
670,821—¥ 21,658(16,863)¥ 4,795¥ 21,658(16,863)¥ 4,795

Millions of Yen

2012
Contract amount

Over-the-counter
Swaps
Receive fixed/ Pay float
Receive float/ Pay fixed
Total

Total

Due after 1 year

Fair value

Unrealized gains(losses)¥590,096
588,298—¥507,934
506,242—¥ 17,267(13,908)¥ 3,358¥ 17,267(13,908)¥ 3,358

Thousands of U.S. Dollars

2013
Contract amount

Over-the-counter
Swaps
Receive fixed/ Pay float
Receive float/ Pay fixed
Total

Total

Due after 1 year

Fair value

Unrealized gains(losses)$7,910,993
7,893,003—$7,141,578
7,132,610—$ 230,286(179,300)$ 50,986$ 230,286(179,300)$ 50,986*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

2013
Contract amount
Total

Over-the-counter
Swaps
Forwards
Sold
BoughtTotal

Due after 1 year

Fair value

Unrealized gains(losses)¥ 97,497¥97,497¥ 1,972¥ 1,972

187,018
5,597
—

—
—

(3,654)(39)¥(1,721)(3,654)(39)¥(1,721)—
Millions of Yen

2012
Contract amount

Over-the-counter
Swaps
Forwards
Sold
BoughtTotal

Due after 1 year

Fair value

Unrealized gains(losses)¥ 97,497¥97,497¥14,030¥14,030

107,2908———(3,437)(0)¥10,592(3,437)(0)¥10,592—

Annual Report & CSR Report 2013

Financial Condition

Total

165

Thousands of U.S. Dollars

2013
Contract amountTotal

Due after 1 year

Fair value

Unrealized gains(losses)$1,036,656$1,036,656$ 20,971$ 20,971

Sold

1,988,505—(38,853)(38,853)

Bought59,511

—

(422)

(422)

$(18,304)$(18,304)

Over-the-counter
Swaps
Forwards

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.
(6) Credit Derivatives Transactions
Millions of Yen

2013
Contract amountTotal

Due after 1 year

Fair value

Unrealized gains(losses)Over-the-counter
Credit default options
Sold¥61,673

BoughtTotal¥56,673—¥(462)———¥(462)——¥(462)¥(462)

Millions of Yen

2012
Contract amountTotal

Due after 1 year

Fair value

Unrealized gains(losses)Over-the-counter
Credit default options
Sold¥85,219¥74,219¥ (895)¥ (895)

Bought11,000

—

(150)

(150)

¥(1,046)¥(1,046)

Total

—

—

Thousands of U.S. Dollars

2013
Contract amountTotal

Due after 1 year

$655,755$602,592

Fair value

Unrealized gains(losses)Over-the-counter
Credit default options
Sold
Bought
Total

—
—

—
—

$(4,921)$(4,921)——$(4,921)$(4,921)*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.

166

Annual Report & CSR Report 2013

(b) Derivative Transactions to which Hedge Accounting is applied(1) Interest Rate-related Transactions
Millions of Yen
2013
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 andLoans
Debentures,
Borrowed money,
Corporate bonds and
Loans

Total

Due after 1 year

Fair value¥459,741¥453,983¥50,582

104,028

98,125(4,129)654,397

638,047*3

32,32532,207

—

—

Total

¥46,452

Millions of Yen
2012
Contract amount
Hedged item

Deferral method
Swaps
Receive fixed/ Pay float
Receive float/ Pay fixed
Accrual method
Swaps
Receive fixed/ Pay float
Receive float/ Pay fixed

Debentures,
Borrowed money,
Securities andLoans
Debentures,
Borrowed money,
Corporate bonds and
Loans

Total

Due after 1 year

Fair value¥485,498¥479,741¥39,656

66,52961,028(2,784)566,400

547,724

*3

Total

444

325

—

—

¥36,871

Thousands of U.S. Dollars
2013
Contract amount
Hedged item

Deferral method
Swaps
Receive fixed/ Pay float
Receive float/ Pay fixed
Accrual method
Swaps
Receive fixed/ Pay float
Receive float/ Pay fixed
Total

Debentures,
Borrowed money,
Securities andLoans
Debentures,
Borrowed money,
Corporate bonds and
Loans

Total

Due after 1 year

Fair value$4,888,262$4,827,046$537,824

1,106,094

1,043,336(43,909)

6,957,971

6,784,134*3

343,710

342,450——$493,914

Annual Report & CSR Report 2013

Financial Condition*1. DBJ Inc. applies the deferral method of hedge accounting primarily stipulated in “Accounting and Auditing Treatments on the
Application of Accounting Standards for Financial Instruments in Banking Industry”(JICPA Industry Audit Committee Report
No. 24).
*2. Fair values for the over-the-counter transactions are based primarily on discounted present values.
*3. The above interest rate swap contracts which qualify for the hedging requirements of the accrual method are not remeasured
at fair value but the differential paid or received under the swap agreements are recognized and included in interest expense or
income. In addition, the fair value of such interest rate swaps in Note 28 “Financial Instruments and Related Disclosures” isincluded in that of hedged items such as debentures, borrowed money, corporate bonds and loans.

167

(2) Currency-related Transactions
Millions of Yen
2013
Contract amountTranslated at contractual rates
Swaps

Hedged item

Total

Due after 1 year

Foreign-currency debentures
and Corporate bonds¥102,302¥102,302

—

—

Total

Fair value*—

Millions of Yen
2012
Contract amount
Hedged item

Translated at contractual rates

Total

Due after 1 year

Fair value

Foreign-currency loans

Swaps¥5,427

Total

¥—

—

—

*
—

Thousands of U.S. Dollars
2013
Contract amountTranslated at contractual rates
Swaps

Hedged item

Total

Due after 1 year

Fair value

Foreign-currency debentures
and Corporate bonds$1,087,743$1,087,743

*

—

—

Total

—

Note: The above foreign currency swap contracts which qualify for the hedging requirements of assignment method are notsubject to the disclosure of fair value information. In addition, the fair value of such foreign currency swaps in Note 28“Financial Instruments and Related Disclosures” is included in that of hedged items such as foreign-currency debentures,
corporate bonds and loans.

(3) Equity-related Transactions
Not applicable.
(4) Bond-related Transactions
Not applicable.

30. Fair Value of Securities and Money Held in Trust
Fair value of securities, money held in trust and negotiable certificate of deposit classified as “Cash and due from banks” asof March 31, 2013 and 2012 is summarized below.

168

Annual Report & CSR Report 2013

(a) Securities(1) Held-to-maturity Debt Securities as of March 31, 2013
Millions of Yen

2013

Fair value exceeds
carrying amountJapanese government bonds

Carrying amount

Fair value

Difference¥173,691¥185,432¥11,740———

Japanese local government bonds
Short-term corporate bonds

—

—

—

Corporate bonds

261,070

265,930

4,860

Other

187,756

200,643

12,886

622,519652,006

29,487

—

—

—

—

—

—

Sub-total
Fair value does not
Japanese government bonds
exceed carrying amount Japanese local government bonds
Short-term corporate bonds

—

—

—

Corporate bonds

47,60047,332

(267)

Other

91,05388,477(2,576)Sub-total

138,653

135,809(2,843)

Total¥761,172¥787,816¥26,644

Thousands of U.S. Dollars

2013

Fair value exceeds
carrying amountJapanese government bonds

Carrying amount

Fair value

Difference$1,846,804$1,971,637$124,833———

Japanese local government bonds
Short-term corporate bonds

—

—

—

Corporate bonds

2,775,867

2,827,548

51,681Other

1,996,352

2,133,371

137,019

6,619,023

6,932,556

313,533

—

—

—

—

—

—

Sub-total
Fair value does not
Japanese government bonds
exceed carrying amount Japanese local government bonds
Short-term corporate bonds

—

—

—

Corporate bonds

506,114503,272(2,842)

Other968,137

940,745(27,391)

Sub-total

1,474,250

1,444,018(30,233)

Total$8,093,274$8,376,574$283,300(2) Held-to-maturity Debt Securities as of March 31, 2012
Millions of Yen

2012

Fair value exceeds
carrying amountJapanese government bonds

Carrying amount

Fair value

Difference¥182,231¥ 7,769———

Short-term corporate bonds

—

—

—

Corporate bonds

134,420

141,047

6,626

Other

134,405

147,887

13,482443,288471,166

27,878

—

—

—

—

—

—

Sub-total
Fair value does not
Japanese government bonds
exceed carrying amount Japanese local government bonds
Short-term corporate bonds
Corporate bonds
Other

—

—

—

169,250

166,282(2,968)59,86658,312(1,553)Sub-total

229,116

224,595(4,521)

Total¥672,405¥695,762¥23,357

Financial Condition¥174,461

Japanese local government bonds

Note: Fair value is based on the closing price at the consolidated balance sheet date.
Annual Report & CSR Report 2013169

(3) Available-for-sale Securities as of March 31, 2013
Millions of Yen

2013

Carrying amountexceeds cost

Carrying amount(Fair value)

Acquisition cost

Difference

Equities¥ 45,197¥ 23,334¥21,862

Bonds

173,702

168,756

4,946

97,85695,556

2,299

Japanese local government bonds

—

—

—

Short-term corporate bonds

—

—

—

75,846

73,1992,646

19,185

4,640

14,544

Japanese government bonds

Corporate bonds
Other
Sub-total
Carrying amount does
not exceed cost

238,085

196,731

41,353Equities

2,699

2,873

(174)

Bonds

51,88851,943(54)

49,99549,996

(1)

—

—

—

Japanese government bonds
Japanese local government bonds
Short-term corporate bonds
Corporate bonds
Other
Sub-total
Total

—

—

—

1,893

1,946

(53)

30,27730,492(215)

84,86585,309(444)¥322,950¥282,040¥40,909

Thousands of U.S. Dollars

2013

Carrying amountexceeds cost

Carrying amount(Fair value)

Acquisition cost

Difference

Equities$ 480,564$ 248,110$232,454

Bonds

1,846,920

1,794,324

52,596

1,040,474

1,016,022

24,453

Japanese local government bonds

—

—

—

Short-term corporate bonds

—

—

—

806,446778,303

28,143203,989

49,338

154,651

Japanese government bonds

Corporate bonds
Other
Sub-total
Carrying amount does
not exceed cost

2,531,473

2,091,772

439,700

Equities

28,70230,554(1,852)

Bonds

551,711552,292(581)

531,579

531,592

(13)

—

—

—

Japanese government bonds
Japanese local government bonds
Short-term corporate bonds
Corporate bonds
Other
Sub-total
Total

170

Annual Report & CSR Report 2013

—

—

—

20,132

20,700(568)

321,928

324,221(2,292)

902,342907,067(4,725)$3,433,815$2,998,839$434,976

(4) Available-for-sale Securities as of March 31, 2012
Millions of Yen

2012

Carrying amountexceeds cost

Carrying amount(Fair value)

Acquisition cost

Difference

Equities¥ 36,467¥ 19,193¥17,273

Bonds

109,333

103,156

6,176

22,572

22,241

330

Japanese local government bonds

—

—

—

Short-term corporate bonds

—

—

—

86,76180,914

5,846

10,376

4,716

5,659

Japanese government bonds

Corporate bonds
Other
Sub-total
Carrying amount does
not exceed cost

156,177

127,067

29,109Equities

5,339

6,411

(1,071)

Bonds

52,134

52,141(7)

49,97849,980

(2)

—

—

—

—

—

—

2,156

2,160

(4)

Japanese government bonds
Japanese local government bonds
Short-term corporate bonds
Corporate bonds

50,24250,242—Sub-total

Other

107,717

108,796(1,078)

Total¥263,894¥235,863¥28,030

Note: Carrying amount above represents the fair values determined based on the closing price at the fiscal year-end.

(5) Available-for-sale Securities sold during the year ended March 31, 2013 and 2012
Millions of Yen

2013
Proceeds from sales

Total amount ofgains on sales

Total amount oflosses on sales

Equities¥43,523¥18,006

¥ 91

Bonds

9,862

525

4

Japanese government bonds

—

—

—

Japanese local government bonds

—

—

—

Short-term corporate bonds

—

—

—

9,862

525

4

Other

Corporate bonds

6,024

1,409

96

Total

¥59,411¥19,942¥193

Millions of Yen

2012
Total amount oflosses on sales

Equities¥ 29,932¥1,858¥1,803

Bonds

91,584492—

91,070477—

Japanese local government bonds

—

—

—

Short-term corporate bonds

—

—

—

Corporate bonds

514

15

—

Japanese government bonds

Other

1,789

995

1

Total

¥123,307¥3,346¥1,804

Annual Report & CSR Report 2013

Financial Condition

Proceeds from sales

Total amount ofgains on sales

171

Thousands of U.S. Dollars
2013
Proceeds from sales

Total amount ofgains on sales

Total amount oflosses on sales

Equities$462,772$191,459

$ 978

Bonds

104,864

5,592

49Japanese government bonds

—

—

—

Japanese local government bonds

—

—

—

Short-term corporate bonds

—

—

—

104,864

5,592

49

Other

Corporate bonds

64,061

14,987

1,030

Total

$631,697$212,038$2,057(b) Money Held in Trust(1) Money Held in Trust for the Purpose of Investment
Millions of Yen

2013
Net unrealized gain on
the consolidated statementof incomeCarrying amountMoney held in trust for the purpose of investment

¥70

¥12
Millions of Yen

2012
Net unrealized loss on
the consolidated statementof incomeCarrying amountMoney held in trust for the purpose of investment

¥43

¥4

Thousands of U.S. Dollars

2013

Carrying amountMoney held in trust for the purpose of investment

Net unrealized gain on
the consolidated statementof income

$750

$130

(2) Other (other than for the purpose of investment and held to maturity)
Millions of Yen

2013
Unrealized gains (losses)

Other money held in trust

Carrying
amountAcquisition
cost¥175,265¥170,969

Net

Carrying amountexceeds cost

(Carrying amount
does not exceed
cost)¥4,295¥4,295¥—

Millions of Yen

2012
Unrealized gains (losses)

Other money held in trust

172

Annual Report & CSR Report 2013

Carrying
amountAcquisition
cost¥24,379¥21,470

Net

Carrying amountexceeds cost

(Carrying amount
does not exceed
cost)¥2,909¥2,909¥—

Thousands of U.S. Dollars

2013
Unrealized gains (losses)

Other money held in trust

Carrying
amountAcquisition
cost$1,863,533$1,817,861

Net

Carrying amountexceeds cost

(Carrying amount
does not exceed
cost)$45,672$45,672$—(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

2013

2012

2013

¥ 47,124¥26,159$ 501,055

Unrealized gain on
available-for-sale securities

4,295

2,909

45,672

Deferred tax liabilities

Other money held in trust(12,952)(7,052)(137,717)

Unrealized gain on available-for-sale securities before interest
adjustments

38,46722,015409,011Amount corresponding to minority interests(1,606)(2,695)(17,076)

11

(7)

125

¥ 36,873¥19,313$ 392,060

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

Note: Unrealized gain includes foreign currency translation adjustments on non-marketable securities denominated in foreign currency.

31. Related Party Transactions
Related party transactions for the years ended March 31, 2013 and 2012 are as follows:
Amounts of the transactions
Related party

Finance
MinisterCategory

Description

Shareholder Subscriptionof capitalincrease*1
Borrowings*2

Account item—

Thousands of
U.S. Dollars

Millions of Yen¥

19,165$

203,775

600,000

6,379,585

711,277

7,562,755

Repayments

Borrowed
money

Payment forinterest

Accruedexpenses

59,235

Guarantees*3—2,450,189

Balance at March 31, 2013
Thousands of
U.S. Dollars

Millions of Yen

¥

—

$

—

4,466,008

47,485,468

629,829

15,633

166,227

26,051,990——*1. It consists of subscription due to redemption of government compensation bonds.
*2. DBJ Inc. has borrowed from the fiscal investment and loan program funds, and applied interest rates for fiscal investment and loan. The
last redemption period is January 20, 2033 without putting up collateral.
*3. The guarantees are for debentures issued by DBJ Inc. free of guarantee charge.
*4. According to Article 2, item 5 of the Japan Finance Corporation Act, DBJ Inc. has borrowed ¥3,907,329 million ($41,545,231
thousand) from Japan Finance Corporation relating to the crisis response business.

Financial Condition

Annual Report & CSR Report 2013173

Related party

Finance
MinisterCategory

Description

Shareholder Subscriptionof capitalincrease*1
Borrowings*2

Amounts of the transactions

Balance at March 31, 2012

Millions of Yen

Millions of Yen¥¥

Account item

—

6,594
500,000—

Repayments

Borrowed
money

Payment forinterest

Accruedexpenses

68,915

17,299

Guarantees*3—

2,257,667—

4,577,285

789,299*1. It consists of subscription due to redemption of government compensation bonds in an amount of ¥6,170 million and subscription for
third party allotment of capital increase (¥50,000 per share) in an amount of ¥424 million.
*2. DBJ Inc. has borrowed from the fiscal investment and loan program funds, and applied interest rates for fiscal investment and loan. The
last redemption period is January 20, 2032 without putting up collateral.
*3. The guarantees are for debentures issued by DBJ Inc. free of guarantee charge.
*4. According to Article 2, item 5 of the Japan Finance Corporation Act, DBJ Inc. has borrowed ¥3,711,361 million from Japan FinanceCorporation relating to the crisis response business.

32. Subsequent Event
On June 27, 2013, the shareholders meeting resolved the following appropriations of retained earnings. After that, thetiming and amounts for dividends were authorized by the Finance Minister on the same day:Appropriations of Retained earnings as of March 31, 2013

Year-end cash dividends-Common stock (¥808-$8.59 per share)

174

Annual Report & CSR Report 2013

Millions of Yen

Thousands of
U.S. Dollars¥35,254$374,853

Independent Auditor’s Report

Financial Condition

Annual Report & CSR Report 2013175

Non-Consolidated Balance Sheet (Unaudited)
Development Bank of Japan Inc.

Thousands of
U.S. Dollars (Note)

Millions of Yen

As of March 31,

2013

2012

2013

AssetsCash and due from banks¥

128,839¥

164,534$

1,369,899

Call loans

84,00089,500893,142

Reverse repurchase agreements

165,975

152,889

1,764,761

Money held in trust

170,236

20,6101,810,065

Securities

1,337,971

1,139,649

14,226,172

Loans

14,015,453

13,704,999

149,021,301

Other assets

134,469

133,473

1,429,768

Tangible fixed assets

122,363

154,673

1,301,044

Intangible fixed assets

6,848

7,045

72,817

Deferred tax assets

6,659

18,79070,808Customers’ liabilities for acceptances and guarantees

155,753

128,518

1,656,068

Allowance for loan losses(144,225)(150,350)(1,533,496)(501)(1,072)(5,335)¥16,183,843¥15,563,263$172,077,015¥ 3,053,277¥ 3,130,495$ 32,464,404

9,416,398

9,170,553

100,121,194

Short-term corporate bonds

43,99750,999467,815

Corporate bonds

863,756

541,327

9,184,011

Other liabilities

119,273

78,2291,268,193

4,340

4,600

46,148

12

12

129

10,177

13,342

108,214

59

52

633

Allowance for investment losses
Total assets
Liabilities and equity
Liabilities:
Debentures
Borrowed money

Accrued bonuses to employees
Accrued bonuses to directors and corporate auditors
Reserve for employees’ retirement benefits
Reserve for directors’ and corporate auditors’ retirement benefits
Reserve for contingent losses

135

—

1,445

Acceptances and guarantees

155,753

128,518

1,656,068

13,667,181

13,118,132

145,318,254

Total liabilities
Equity:Common stock authorized, 160,000 thousand shares in 2013 and2012; issued, 43,632 thousand shares in 2013 and 2012

1,206,953

1,187,788

12,833,099

Capital surplus

1,060,466

1,060,466

11,275,559

Retained earnings

187,730

154,539

1,996,073

Unrealized gain on available-for-sale securities

27,707

14,817

294,608

Deferred gain on derivatives under hedge accounting

33,80327,519359,422

Total equity
Total liabilities and equity

2,516,661

2,445,130

26,758,761¥16,183,843¥15,563,263$172,077,015

Note: Amounts in U.S. dollars are presented solely for the convenience of readers outside Japan. The rate of ¥94.05=$1.00, the effective
exchange rate prevailing as of March 31, 2013, has been used in the conversion.

176

Annual Report & CSR Report 2013

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,

2013

2012

2013

IncomeInterest income:¥268,638¥277,128$2,856,339

Interest on loans

243,076

254,567

2,584,544

Interest and dividends on securities

17,782

14,650

189,074

Interest on call loans

44

115

473

Interest on reverse repurchase agreements

351

287

3,735

Interest on due from banks

52

95

558

7,053

7,287

74,997

278

123

2,959

9,669

9,232

102,816

Interest on swaps
Other interest income
Fees and commissions
Other operating income

7,857

5,522

83,542Other income

48,67337,862

517,525

334,838

329,746

3,560,222

144,287

155,488

1,534,155

43,10047,668458,273

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

19

41

211

97,276

104,535

1,034,303

57

56

611

3,827

3,182

40,694

5

3

62

265

505

2,821

12,163

2,585

129,325

General and administrative expenses

42,431

36,581

451,164

Other expenses

20,72828,016

220,404

Total expenses

219,876

223,176

2,337,869

Income before income taxes

114,962

106,569

1,222,353

41,577

21,400442,076

Other operating expenses

Income taxes:
Current
Deferred
Total income taxes
Net income

2,844

10,44930,24744,421

31,849472,323¥ 70,540¥ 74,720$ 750,031

Yen

U.S. Dollars (Note)

Per share of common stock
Basic net income¥1,616.69¥1,712.81

$

17.19

Note: Amounts in U.S. dollars are presented solely for the convenience of readers outside Japan. The rate of ¥94.05=$1.00, the effective
exchange rate prevailing as of March 31, 2013, has been used in the conversion.

Financial Condition

Annual Report & CSR Report 2013177

Non-Consolidated Statement of Changes in Equity (Unaudited)
Development Bank of Japan Inc.

Thousands of
U.S. Dollars (Note)

Millions of Yen

For the year ended March 31,

2013

2012

2013

¥1,187,788¥1,181,194$12,629,325

19,165

6,170

203,775—424—

1,206,953

1,187,788

12,833,099

Balance at beginning of year

1,060,466

1,060,466

11,275,559

Balance at end of year

1,060,466

1,060,466

11,275,559

Balance at beginning of year

154,539

129,855

1,643,164

Cash dividends(37,349)(50,036)(397,122)

Common stock:
Balance at beginning of year
Capital increase due to redemption of government
compensation bonds
Issuance of new shares of common stock
Balance at end of year
Capital surplus:

Retained earnings:

Net income

70,54074,720750,031

Balance at end of year

187,730

154,539

1,996,073

14,817

7,350

157,551

Unrealized gain on available-for-sale securities:
Balance at beginning of year
Net change during the year

12,8907,467

137,057

Balance at end of year

27,707

14,817

294,608

Balance at beginning of year

27,51917,238292,604

Net change during the year

6,284

10,281

66,818

Balance at end of year

33,80327,519359,4222,445,130

2,396,104

25,998,203

19,165

6,170

203,775—424—

Cash dividends(37,349)(50,036)(397,122)

Net income

70,54074,720750,031

Deferred gain on derivatives under hedge accounting:Total equity:
Balance at beginning of year
Capital increase due to redemption of government
compensation bonds
Issuance of new shares of common stock

Net change during the year
Balance at end of year

19,174

17,748203,875¥2,516,661¥2,445,130$26,758,761

Note: Amounts in U.S. dollars are presented solely for the convenience of readers outside Japan. The rate of ¥94.05=$1.00, the effective
exchange rate prevailing as of March 31, 2013, has been used in the conversion.

178

Annual Report & CSR Report 2013

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)Basel III uniform international standards became applicable from March 31, 2013. DBJ has applied Basel III, and capital
adequacy ratios in this Capital Adequacy Ratio Notification have been calculated to these standards, on both a consolidated
and non-consolidated basis.
In addition to the application of uniform international standards, credit risk assets were calculated using thestandardized approach, and equivalent operational risk was calculated using the basic indicator approach. DBJ has not
introduced procedures in line with market risk regulations.

Consolidated Capital Ratio (Basel 2, BIS standard)(Millions of yen)March 31, 2012

Tier 1
capitalTier 2
capitalCommon stock
Non-cumulative perpetual preferred stock
Advance payment for new shares
Capital surplus
Retained earnings
Less: Treasury stock
Advance payment for treasury stock
Less: Planned distribution of income
Less: Unrealized loss on available-for-sale securities
Foreign currency translation adjustments
Rights to acquire new shares
Minority interests in consolidated subsidiaries
Preferred securities issued by overseas SPCs
Less: Business rightLess: Goodwill
Less: Intangible fixed assets recognized as a result of a merger
Less: Capital increase due to securitization transactions
Less: 50% of excess of expected losses relative to eligible reserves
Total of Tier 1 capital before deduction of deferred tax assets
Less: Deduction of deferred tax assets(A)
SubtotalPreferred securities with a step-up interest rate reserve
45% of deduction of book value from available-for-sale securities on
consolidated balance sheet
45% of revaluation reserve for land
General reserve for possible loan losses
Excess of eligible reserves relative to expected losses
Hybrid debt capital instruments
Perpetual subordinated debt
Subordinated debt with maturity dates and preferred stocks with maturity dates
Subtotal(B)
Tier 2 capital included as qualifying capital
Short-term subordinated debt
Tier 3 capital included as qualifying capital(C)
Deductions for total risk-based capital*(D)* Includes equivalent amounts of capital-raising instruments of other financial institutions.

13,077—58,589————71,666
71,666——
532,526(E)

1,913,285

(F)
(G)
(H)
(I)
(J)
(K)
(L)
(M)

9,740,240
301,084
10,041,324——
263,296
21,063——
10,304,620
18.56
23.03
Annual Report & CSR Report 2013

Financial Condition

Tier 3
capitalDeductions
Total qualifying (A)+(B)+(C)–(D)capitalOn-balance-sheet items
Off-balance-sheet items
Credit risk assets
Market risk equivalent assets (H)/8%
Risk-weighted (For reference: Amount equivalent to market risk)
Operational risk equivalent assets (J)/8%
assets(For reference: Amount equivalent to operational risk)
Credit risk asset adjustments
Amount equivalent to operational risk adjustments
Total (F)+(G)+( I )+(K)+(L)Consolidated capital ratio (Basel 2, BIS standard) (E)/(M) x 100 (%)
Consolidated Tier 1 capital ratio (A)/(M) x 100 (%)

1,187,788——
1,060,466
159,606——
37,349
—
—
—
3,633
—
—
—
—
—
—
—
—
2,374,145—

179

Capital Structure Information (Consolidated)(Millions of yen)March 31, 2013
Amounts
excluded undertransitionalarrangements

Items

Basel III
Template No.

Common Equity Tier 1 capital: instruments and reserves
Directly issued qualifying common share capital plus related capital surplus andretained earningsof which: common stock and capital surplusof which: retained earningsof which: treasury stockof which: planned distribution of income

2,425,759

1a+2-1c-26

2,267,419

1a

193,5952—

1c

35,25426

of which: other than the above—

Rights to acquire new common shares—

Accumulated other comprehensive income and other disclosed reserves—

Adjusted minority interests, etc. (amount allowed to be included in group Common
Equity Tier 1)

7

Total of items included in Common Equity Tier 1 capital: instruments and reserves
subject to transitional arrangements
Common Equity Tier 1 capital: instruments and reserves (A)1b70,8033
5

1,260
2,427,026

6

Common Equity Tier 1 capital: regulatory adjustments
Total intangible assets (excluding those relating to mortgage servicing rights)

4,287

8+9

of which: goodwill (including those equivalent)

—

—

8

of which: other intangible assets other than goodwill and mortgage servicing rights

—

4,287

9

Deferred tax assets that rely on future profitability excluding those arising from
temporary differences (net of related tax liability)

—

—

10

Net deferred losses on hedges

—

274

11

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 on fair valued liabilities

—

—

14

Prepaid pension cost

—

—

15

Investments in own shares (excluding those reported in the Net assets section)

—

—

16

Reciprocal cross-holdings in common equity

—

—

17

Investments in the capital of banking, financial and insurance entities that areoutside 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”) (amount above the 10% threshold)

—

—

18

Amount exceeding the 10% threshold on specified items——

19+20+21

of which: significant investments in the common stock of Other Financial
Institutions, net of eligible short positions

—

—

19

of which: mortgage servicing rights

—

—

20

of which: deferred tax assets arising from temporary differences (net of related tax
liability)

—

—

21

—

—

22

of which: significant investments in the common stock of Other Financial
Institutions, net of eligible short positions

—

—

23

of which: mortgage servicing rights

—

—

24

of which: deferred tax assets arising from temporary differences (net of related tax
liability)

—

—

25

Amount exceeding the 15% threshold on specified items

180—

Regulatory adjustments applied to Common Equity Tier 1 due to insufficient
Additional Tier 1 and Tier 2 to cover deductions—

27

Common Equity Tier 1 capital: regulatory adjustments (B)—28Annual Report & CSR Report 2013

(Millions of yen)March 31, 2013
Amounts
excluded undertransitionalarrangements

Items

Basel III
Template No.

Common Equity Tier 1 capital (CET1)
Common Equity Tier 1 capital (CET1) ((A)-(B)) (C)2,427,026

29

Directly issued qualifying Additional Tier 1 instruments plus related capital surplus ofwhich: classified as equity under applicable accounting standards and the breakdown—

31aRights to acquire new shares in relation to Additional Tier 1 instruments—

31b

Directly issued qualifying Additional Tier 1 instruments plus related capital surplus ofwhich: classified as liabilities under applicable accounting standards—

32

Qualifying Additional Tier 1 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 Additional
Tier 1)

5,426

34-35

—

33+35

of which: instrument issued by banks and their special purpose vehicles—

33of which: instruments issued by subsidiaries (excluding banks’ special purpose
vehicles)—35

Additional Tier 1 capital: instruments

Eligible Tier 1 capital instruments subject to transitional arrangements included in
Additional Tier 1 capital: instruments

Total of items included in Additional Tier 1 capital: items subject to transitionalarrangements
Additional Tier 1 capital: instruments (D)

30

(57)
5,368

36

Additional Tier 1 capital: regulatory adjustments
Investments in own Additional Tier 1 instruments

—

—

37

Reciprocal cross-holdings in Additional Tier 1 instruments

—

—

38

Non-significant Investments in the Additional Tier 1 capital of Other Financial
Institutions, net of eligible short positions (amount above 10% threshold)

—

—

39

Significant investments in the Additional Tier 1 capital of Other Financial Institutions(net of eligible short positions)

—

1,059

40

Total of items included in Additional Tier 1 capital: regulatory adjustments subject totransitional arrangements—

Regulatory adjustments applied to Additional Tier 1 due to insufficient Tier 2 tocover deductions—

42

Additional Tier 1 capital: regulatory adjustments (E)

—

43

5,368

44

2,432,395

45

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 under applicable accounting standards and its breakdown—

Rights to acquire new shares in relation to Tier 2 instruments—

Directly issued qualifying Tier 2 instruments plus related capital surplus of which:classified as liabilities under applicable accounting standards—

Tier 2 instruments plus related capital surplus issued by special purpose vehicles andother equivalent entities—

Adjusted minority interests, etc. (amount allowed to be included in group Tier 2)

65

48-49

Eligible Tier 2 capital instruments subject to transitional arrangements included inTier 2: instruments and reserves

—

47+49

of which: instruments issued by banks and their special purpose vehicles—

47of which: instruments issued by subsidiaries (excluding banks’ special purpose
vehicles)

—

49

46

Financial Condition

Annual Report & CSR Report 2013

181

(Millions of yen)March 31, 2013
Amounts
excluded undertransitionalarrangements

Items

Total of general reserve for possible loan losses and eligible reserves included in Tier 2of which: general reserve for possible loan lossesof which: eligible reserves

Basel III
Template No.

67,47850

67,478

50a

—

50b

Total of items included in Tier 2 capital: instruments and reserves subject totransitional arrangements

23,144Tier 2 capital: instruments and reserves (H)90,68851

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 short positions (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 transitionalarrangements—

Tier 2 capital: regulatory adjustments (I)—57

90,68858

2,523,084

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)Risk weighted assets
Total of items included in risk weighted assets subject to transitional arrangements
Risk weighted assets (L)5,346
16,255,349

60

Common Equity Tier 1 risk-weighted capital ratio (consolidated) ((C)/(L))

14.93%

61

Tier 1 risk-weighted capital ratio (consolidated) ((G)/(L))

14.96%

62

Total risk-weighted capital ratio (consolidated) ((K)/(L))

15.52%

63

Capital ratio (consolidated)

Regulatory adjustments
Non-significant Investments in the capital of Other Financial Institutions that are
below the thresholds for deduction (before risk weighting)

202,916

72

Significant investments in the common stock of Other Financial Institutions that are
below the thresholds for deduction (before risk weighting)

6,592

73

Mortgage servicing rights that are below the thresholds for deduction (before risk
weighting)

—

74

9,325

75

General reserve for possible loan losses

67,47876

Cap on inclusion of general reserve for possible loan losses

200,088

77

Eligible reserves for inclusion in Tier 2 in respect of exposures subject to internalratings-based approach (prior to application of cap)—78

Cap for inclusion of reserves in Tier 2 under internal ratings-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 to transitional arrangements—

84

Amount excluded from Tier 2 due to cap (excess over cap after redemptions andmaturities)—

85

Deferred tax assets arising from temporary differences that are below the thresholds
for deduction (before risk weighting)Reserves included in Tier 2 capital: instruments and reserves

Capital instruments subject to transitional arrangements

182

Annual Report & CSR Report 2013

Non-Consolidated Capital Ratio (Basel 2, BIS standard)(Millions of yen)March 31, 2012

Tier 1
capitalCommonl stock
Non-cumulative perpetual preferred stock
Advance payment for new shares
Capital surplus
Other capital surplus
Retained earnings
Other retained earnings
OthersLess: Treasury stock
Advance payment for treasury stock
Less: Planned distribution of income
Less: Unrealized loss on available-for-sale securities
Rights to acquire new shares
Less: Business rightLess: Goodwill
Less: Intangible fixed assets recognized as a result of a merger
Less: Capital increase due to securitization transactions
Less: 50% of excess of expected losses relative to eligible reserves
Total of Tier 1 capital before deduction of deferred tax assets
Less: Deduction of deferred tax assets
SubtotalPreferred securities with a step-up interest rate reserve
Preferred securities issued by overseas SPCs

1,187,788——
1,060,466——
154,539———
37,349
—
—
—
—
—
—
—
—
—
2,365,444——(A)

45% of deduction of book value from available-for-sale securities on
consolidated balance sheet

Tier 2
capital

9,841

45% of revaluation reserve for land
General reserve for possible loan losses
Excess of eligible reserves relative to expected losses
Hybrid debt capital instruments
Perpetual subordinated debt
Subordinated debt with maturity dates and preferred stocks with maturity dates
SubtotalTier 2 capital included as qualifying capital(B)
Short-term subordinated debt
Tier 3 capital included as qualifying capital(C)(D)
Deductions for total risk-based capital*

Non-consolidated capital ratio (Basel 2, BIS standard) (E)/(M) x 100 (%)
Non-consolidated Tier 1 capital ratio (A)/(M) x 100 (%)(E)

1,891,162

(F)
(G)
(H)
(I)
(J)
(K)
(L)
(M)

9,769,468
301,084
10,070,553——
260,041
20,803——
10,330,594
18.30
22.89

Financial Condition

Tier 3
capitalDeductions
Total qualifying (A)+(B)+(C)–(D)capitalOn-balance-sheet items
Off-balance-sheet items
Credit risk assets
Market risk equivalent assets (H)/8%
Risk-weighted (For reference: Amount equivalent to market risk)
assetsOperational risk equivalent assets (J)/8%(For reference: Amount equivalent to operational risk)
Credit risk asset adjustments
Amount equivalent to operational risk adjustments
Total (F)+(G)+( I )+(K)+(L)—58,991————
68,832
68,832——
543,113* Includes equivalent amounts of capital-raising instruments of other financial institutions.

Annual Report & CSR Report 2013183

Capital Structure Information (Non-Consolidated)(Millions of yen)March 31, 2013
Amounts
excluded undertransitionalarrangements

Items

Basel III
Template No.

Common Equity Tier 1 capital: instruments and reserves
Directly issued qualifying common share capital plus related capital surplus andretained earningsof which: common stock and capital surplusof which: retained earningsof which: treasury stockof which: planned distribution of income

2,419,895

1a+2-1c-26

2,267,419

1a

187,7302—

1c35,25426

of which: other than the above—

Rights to acquire new common shares—

Valuation and translation adjustment and other disclosed reserves—

Total of items included in Common Equity Tier 1 capital: instruments and reserves
subject to transitional arrangements—

Common Equity Tier 1 capital: instruments and reserves (A)1b61,511

2,419,895

3

6

Common Equity Tier 1 capital: regulatory adjustments
Total intangible assets (excluding those relating to mortgage servicing rights)

—

4,257

of which: goodwill (including those equivalent)

—

—

8

8+9

of which: other intangible assets other than goodwill and mortgage servicing
rights

—

4,257

9

Deferred tax assets that rely on future profitability excluding those arising from
temporary differences (net of related tax liability)

—

—

10

Net deferred gains on hedges

—

90

11

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 on fair valued liabilities

—

—

14

Prepaid pension cost

—

—

15

Investments in own shares (excluding those reported in the Net assets section)

—

—

16

Reciprocal cross-holdings in common equity

—

—

17

Investments in the capital of banking, financial and insurance entities that areoutside 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”) (amount above the 10% threshold)

—

—

18

Amount exceeding the 10% threshold on specified items——

19+20+21

of which: significant investments in the common stock of Other Financial
Institutions, net of eligible short positions

—

—

19

of which: mortgage servicing rights

—

—

20

of which: deferred tax assets arising from temporary differences (net of related tax
liability)

—

—

21

Amount exceeding the 15% threshold on specified items

—

—

22

of which: significant investments in the common stock of Other Financial
Institutions, net of eligible short positions

—

—

23

of which: mortgage servicing rights

—

—

24

of which: deferred tax assets arising from temporary differences (net of related tax
liability)

—

—

25

Regulatory adjustments applied to Common Equity Tier 1 due to insufficient
Additional Tier 1 and Tier 2 to cover deductions—

27

Common Equity Tier 1 capital: regulatory adjustments (B)—28

2,419,895

29

Common Equity Tier 1 capital (CET1)
Common Equity Tier 1 capital (CET1) ((A)-(B)) (C)184

Annual Report & CSR Report 2013

(Millions of yen)March 31, 2013
Amounts
excluded undertransitionalarrangements

Items

Basel III
Template No.

Additional Tier 1 capital: instruments
Directly issued qualifying Additional Tier 1 instruments plus related capital surplus ofwhich: classified as equity under applicable accounting standards and the breakdown—

31aRights to acquire new shares in relation to Additional Tier 1 instruments—

31b

Directly issued qualifying Additional Tier 1 instruments plus related capital surplus ofwhich: classified as liabilities under applicable accounting standards—

32

Qualifying Additional Tier 1 instruments plus related capital surplus issued by special
purpose vehicles and other equivalent entities—

Eligible Tier 1 capital instruments subject to transitional arrangements included in
Additional Tier 1 capital: instruments—

Total of items included in Additional Tier 1 capital: items subject to transitionalarrangements—

Additional Tier 1 capital: instruments (D)—36

Investments in own Additional Tier 1 instruments—

37

Reciprocal cross-holdings in Additional Tier 1 instruments—

38

Non-significant Investments in the Additional Tier 1 capital of Other Financial
Institutions, net of eligible short positions (amount above 10% threshold)—

39

Significant investments in the Additional Tier 1 capital of Other Financial Institutions(net of eligible short positions)—40

Total of items included in Additional Tier 1 capital: regulatory adjustments subject totransitional arrangements—

Regulatory adjustments applied to Additional Tier 1 due to insufficient Tier 2 tocover deductions—

42

Additional Tier 1 capital: regulatory adjustments (E)

—

43

—

44

2,419,895

45

30

33+35

Additional Tier 1 capital: regulatory adjustments

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 under applicable accounting standards and its breakdown—

Rights to acquire new shares in relation to Tier 2 instruments—
46

Directly issued qualifying Tier 2 instruments plus related capital surplus of which:classified as liabilities under applicable accounting standards—

Tier 2 instruments plus related capital surplus issued by special purpose vehicles andother equivalent entities—

Eligible Tier 2 capital instruments subject to transitional arrangements included inTier 2: instruments and reserves—

Total of general reserve for possible loan losses and eligible reserves included inTier 2of which: eligible reserves

68,07450

68,074

50a

—

50b

Total of items included in Tier 2 capital: instruments and reserves subject totransitional arrangements

12,468Tier 2 capital: instruments and reserves (H)80,543Financial Conditionof which: general reserve for possible loan losses

47+49

51

Annual Report & CSR Report 2013

185

(Millions of yen)March 31, 2013
Amounts
excluded undertransitionalarrangements

Items

Basel III
Template No.

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 short positions (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 transitionalarrangements—

Tier 2 capital: regulatory adjustments (I)—57

80,54358

2,500,438

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)Risk weighted assets
Total of items included in risk weighted assets subject to transitional arrangements
Risk weighted assets (L)4,257
16,645,774

60

14.53%

61

Capital ratio (consolidated)
Common Equity Tier 1 risk-weighted capital ratio (consolidated) ((C)/(L))
Tier 1 risk-weighted capital ratio (consolidated) ((G)/(L))

14.53%

62

Total risk-weighted capital ratio (consolidated) ((K)/(L))

15.02%

63

193,026

72

Significant investments in the common stock of Other Financial Institutions that are
below the thresholds for deduction (before risk weighting)

6,592

73

Mortgage servicing rights that are below the thresholds for deduction (before risk
weighting)

—

74

9,250

75

General reserve for possible loan losses

68,07476

Cap on inclusion of general reserve for possible loan losses

Regulatory adjustments
Non-significant Investments in the capital of Other Financial Institutions that are
below the thresholds for deduction (before risk weighting)Deferred tax assets arising from temporary differences that are below the thresholds
for deduction (before risk weighting)Reserves included in Tier 2 capital: instruments and reserves

204,993

77

Eligible reserves for inclusion in Tier 2 in respect of exposures subject to internalratings-based approach (prior to application of cap)—78

Cap for inclusion of reserves in Tier 2 under internal ratings-based approach

—

79

—

82

Capital instruments subject to transitional arrangements
Current cap on Additional Tier 1 instruments subject to transitional arrangements

186

Amount excluded from Additional Tier 1 due to cap (excess over cap after
redemptions and maturities)—

83

Current cap on Tier 2 instruments subject to transitional arrangements—

84

Amount excluded from Tier 2 due to cap (excess over cap after redemptions andmaturities)—

85

Annual Report & CSR Report 2013

Capital Adequacy Status

Capital adequacy ratios have been calculated in accordance with uniform international standards on both a consolidated
and non-consolidated basis, based on the calculation methods prescribed in the Capital Adequacy Ratio Notification.
In accordance with Basel III standards, from March 31, 2013, calculations are based on a partially revised Capital
Adequacy Ratio Notification.
As of this disclosure (as of July 2013), DBJ is not yet subject to Article 14-2 of the Banking Act of Japan, but forreference the capital adequacy ratio has been disclosed in accordance with the Capital Adequacy Ratio Notification.
With regard to measuring the capital adequacy ratio, credit risk was calculated using the standardized approach, andoperational risk was calculated using the basic indicator approach. Also, as DBJ does not engage in trading (specified
transactions), and as Article 4 and Article 16 of the Capital Adequacy Ratio Notification apply, the market risk equivalentamount was not calculated.

[1] Capital Adequacy Ratio Status (Consolidated)
Quantitative Disclosure
1. Items Related to Credit Risk (Excluding Securitization Exposure)(a) Fiscal year-end credit risk exposure and breakdown by principal categories(Millions of yen)March 31, 2013

March 31, 2012

¥13,469,872¥13,147,987

Equities, funds

289,337

272,894

Commitments and customers’ liabilities for acceptances and guarantees

502,229

293,406

Bonds (JGBs and corporate bonds, etc.)

882,912769,702

Repurchase agreement/call loan

399,978

242,390

Other492,361

497,046

Total¥16,036,692¥15,223,428

Loans(b) Fiscal year-end credit risk exposure, broken down as follows:(1) By region(Millions of yen)March 31, 2013

March 31, 2012

Domestic total¥16,035,626¥15,222,544

Overseas total

1,065

883

Note: ”Overseas” refers to overseas consolidated subsidiaries. DBJ has no overseas branches.

(2) (i) Breakdown by industry and transaction counterparty (former industry breakdown)(Millions of yen)March 31, 2013

March 31, 2012

Manufacturing¥—¥3,774,990

Forestry and fisheries

—

1,401

Mining—54,714

Construction—

68,098Wholesale and retail—

1,196,031

Finance and insurance—

1,387,525

Real estate—

1,334,769

Transportation and communications—

3,429,722

Electrical, gas and water—

2,475,942

Services—

994,334

Other—

505,898

Financial Condition

Annual Report & CSR Report 2013187

(2) (ii) Breakdown by industry and transaction counterparty (new industry breakdown)
Manufacturing(Millions of yen)March 31, 2013

March 31, 2012

¥3,697,647

¥—

1,238

—

—

—

Agriculture and forestry
Fisheries
Mining, quarrying and gravel extraction

57,637—

Construction

105,982—

3,151,595—

512,762—2,882,884—

Electrical, gas, heat supply and water
Information and communications
Transportation and postal
Wholesale and retail

1,123,637—

Finance and insurance

1,622,001—

Real estate and leasing of goods

1,918,664—

345,623—

Services
Municipal government

13,220—Other603,797—

Total¥16,036,692¥—(Note) DBJ revised the breakdown of its corporate borrowers and status of borrowing in the fiscal year ended March 31, 2013.

(3) Breakdown by period to maturity(Millions of yen)March 31, 2013

March 31, 2012

Five years or less

¥7,344,522¥6,704,444

More than five years, up to 10

5,459,439

5,230,813

More than 10 years, up to 15

1,807,426

1,954,710

More than 15 years

797,721820,874

No maturity date

627,582

512,585(c) Breakdown of exposure by risk weight (after accounting for credit risk mitigations)(Millions of yen)March 31, 2013

March 31, 2012

Risk weight 0%¥ 577,732¥ 485,398

Risk weight 10%

56,37886,205

Risk weight 20%

2,190,604

2,903,066

Risk weight 50%

6,340,198

5,164,121

Risk weight 100%

6,740,301

6,377,135

Risk weight 150%

20,31325,005

Risk weight 250%

15,918—Risk weight 1,250%

388—

31,824—Other
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
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).

188

Annual Report & CSR Report 2013

(Millions of yen)March 31, 2013

March 31, 2012

¥754,856¥715,430——

56,67371,31233,507

41,763200,342

182,600

4,876

3,499

(2) Balance of retained securitization exposure by risk weight and required capital amounts(Millions of yen)March 31, 2013

March 31, 2012

¥127,726¥112,263

Risk weight

20%

Balance
Capital requirement

2,043

1,796

Risk weight

50%

Balance

9,335

8,403

373

336

Risk weight

100%

Balance

435,358

374,858

Capital requirement

34,82829,988Risk weight

350%

Balance

3,411

3,412

955

955

Capital requirement

Capital requirement
Risk weight
Risk weight

1,250%
Other*

Balance

387,342—

Capital requirement

387,342—

Balance

10,313

6,943

Capital requirement

5,955

1,142

* Applying to exposure the transitional measures indicated in Article 15 of the Supplementary Provisions to the Capital Adequacy Ratio Notification.

Resecuritization exposure
Risk weight

40%(Millions of yen)March 31, 2013

March 31, 2012

¥33,507¥41,763

1,072

1,336

Balance831

618

Capital requirement

66

49

1,602

1,133

Balance
Capital requirement

Risk weight

100%

Risk weight

225%

Balance288

204

Risk weight

650%

Balance

2,034

1,195

Capital requirement
Risk weight

1,250%

Capital requirement

1,058

621

Balance

407—

Capital requirement

407—(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, 2013

March 31, 2012

Structured finance¥195,161¥—

Funds*

192,589—* Assets held by funds including the commitment to funds (calculated on ”look-through” approach basis).

(4) Breakdown of retained resecuritization exposure by application of techniques to mitigate credit risks and guarantors, or byrisk weighting applied to guarantors.
Not applicable.
(5) Amount of credit risk assets calculated with application of Article 15 of the Supplementary Provisions to the Capital
Adequacy Ratio Notification(Millions of yen)
Credit risk assets

March 31, 2013

March 31, 2012

¥12,497¥14,286

3. Interest Rate Risk in the Banking Book
March 31, 2012

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:¥7.1 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:¥19.5 billion

Annual Report & CSR Report 2013

Financial Condition

Decrease in economic value resulting from interest rate shock

March 31, 2013189

[2] Capital Adequacy Ratio Status (Non-Consolidated)
Qualitative Disclosure

190

1. Overview of Methods
for Evaluating the
Degree of Capital
Adequacy of the Bank

Regarding the degree of capital adequacy, DBJ quantifies credit risk, interest rate risk andoperational risk, compares the total risk amount with total capital and measures the capital surplus.
This surplus enables DBJ to respond to unquantifiable risks and unforeseen events, decide whether
to take new financing risks and establish the operating directions.

2. 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).

3. 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.

4. 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.

5. 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.

Annual Report & CSR Report 2013

(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).
6. Market Risk

Based on Article 16 of the Capital Adequacy Ratio Notification, DBJ includes in its calculation
method no market risk equivalent amount.

7. 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.

8. 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.

9. Interest Rate Risk on
the Banking Book(a) Overview of Risk Management Policies and Procedures
Long-term, fixed-rate loans make up the majority of the DBJ’s lending, and DBJ seeks to reduce
its interest rate risk by raising funds featuring similarly long-term, fixed rates. DBJ also employs
the value at risk (VaR) and the Basel Accord standardized interest rate shock* method tocompute various risks from the standpoint of their economic value.
* Measurement methods are described in (ii) and (iii) of (b).

DBJ regularly compares VaR and 200bpValue against capital to ensure that interest rate risk
remains within a specified range of capital.
(b) Overview of Methods for Calculating Interest Rate Risk Used by the Bank for Internal
Control of the Banking Book
DBJ calculates interest rate risk based on the following method.
(i) VaR: Use a historical method of measurement with a one-year holding period, a five-yeartime horizon and a 99.9% confidence level(ii) Measure interest rate fluctuations in the 1st percentile and 99th percentile, using a one-year
holding period and a five-year time horizon(iii) 200bpValue: Use a 2% parallel shift in a standardized interest rate shock to measure thechange in economic value((ii) and (iii) are methods for measuring the standardized interest rate shock under the Basel
Accord.)Financial Condition

Annual Report & CSR Report 2013191

Quantitative Disclosure
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, 2013

March 31, 2012

¥1,303,870¥805,644

842,275

769,519——(ii) Exposure to financial institutions

12,375

8,867(iii) Exposure to corporations

789,191

723,673(iv) Equity exposure

27,647

21,306(v) Other exposure

13,06015,672

461,595

36,124——

19,70320,803

1,323,573

826,447

March 31, 2013

March 31, 2012¥13,532,021¥13,192,835

Equities, funds

350,949

296,948

Commitments and customers’ liabilities for acceptances and guarantees

502,229

293,406

Bonds (JGBs and corporate bonds, etc.)

882,870769,702

Repurchase agreement/call loan

399,978

242,390(2) Securitization risk exposure(b) Capital requirement to market risk(c) Capital requirement to operational risk(d) Non-consolidated total capital requirement ((a) + (b) + (c))
2. Items Related to Credit Risk (Excluding Securitization Exposure)(a) Fiscal year-end credit risk exposure and breakdown by principal categories
Loans(Millions of yen)Other404,489

456,927

Total¥16,072,539¥15,252,211(b) Fiscal year-end credit risk exposure, broken down as follows:(1) By region(Millions of yen)March 31, 2013

March 31, 2012

Domestic total¥16,072,539¥15,252,211

Overseas total——

Note: DBJ has no overseas sales locations.

(2) (i) Breakdown by industry and transaction counterparty (former industry breakdown)(Millions of yen)March 31, 2013

192

March 31, 2012

Manufacturing¥—

Forestry and fisheries

—

1,401

Mining—54,714

Construction—

68,098Wholesale and retail—

1,196,031

Finance and insurance—

1,450,669

Real estate—

1,362,796

Transportation and communications—

3,429,722

Electrical, gas and water—

2,475,942

Services—

995,400

Other—

442,443

Annual Report & CSR Report 2013

¥3,774,990

(2) (ii) Breakdown by industry and transaction counterparty (new industry breakdown)(Millions of yen)March 31, 2013

Manufacturing

March 31, 2012

¥3,697,647

¥—

1,238

—

—

—

Mining, quarrying and gravel extraction

57,637—

Construction

105,982—

Agriculture and forestry
Fisheries

Electrical, gas, heat supply and water

3,151,595—

512,762—

Transportation and postal

2,882,884—

Wholesale and retail

1,123,637—

Finance and insurance

1,748,163—

Real estate and leasing of goods

1,989,172—

Services

346,596—

Municipal government

13,220—

Other442,001—

Total¥16,072,539¥—

Information and communications

Note: DBJ revised the breakdown of its corporate borrowers and status of borrowing in the fiscal year ended March 31, 2013.

(3) Breakdown by period to maturity(Millions of yen)March 31, 2013

March 31, 2012

Five years or less

¥7,398,217¥6,704,444

More than five years, up to 10

5,513,091

5,267,556

More than 10 years, up to 15

1,807,426

1,960,287

More than 15 years

797,721820,874

No maturity date

556,083

499,049(c) Breakdown of exposure by risk weight (after accounting for credit risk mitigations)(Millions of yen)March 31, 2013

March 31, 2012

Risk weight 0%¥ 577,732¥ 485,398

Risk weight 10%

56,37886,205

Risk weight 20%

2,168,875

2,896,755

Risk weight 50%

6,340,198

5,164,121

Risk weight 100%

6,797,228

6,411,453

Risk weight 150%

20,31325,005

Risk weight 250%

15,843—

Risk weight 1,250%

388—

31,824—Other
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, 2013

March 31, 2012

Eligible financial collaterals¥ 165,868¥ 152,830

Guarantees or credit derivatives

1,210,719

1,210,309

Financial Condition

Annual Report & CSR Report 2013193

4. Transaction Counterparties’ Risk on Derivative Product Transactions and Transactions with Long Settlement Periods(Millions of yen)

Equivalent credit calculation method

March 31, 2013

March 31, 2012

Current exposure
methodCurrent exposure
method¥153,842¥133,953

85,60480,789Gross restructuring cost
Gross add-on, by transaction typeInterest rate transactions

48,64749,504Foreign exchange transactions

36,93630,734Credit derivative transactions

—

550

20

—

113,462

115,667

125,984

99,07574,32554,916

Notional amounts of credit derivatives forcalculated credit equivalent amount by type ofCredit default swaps provisioncredit derivative, by protection purchase or provision

61,673

85,219Credit default swaps purchase—

11,000——

Other commodity transactions
Reducing credit equivalent amounts through netting
Net equivalent credit
Net restructuring cost

Notional amounts of credit derivatives taking
into account credit risk mitigations

Notes: 1. Collateral is not used to reduce credit risk on derivative product transactions.
2. Credit derivatives used to compute the credit equivalent amount are included in securitization exposure; there is some data overlap withsecuritization exposure indicated elsewhere and what are known as single-name CDS offerings include the measurement of customers’ liabilities
for acceptances and guarantees as consisting of the legal and other exposure of the company in question.

5. Securitization Exposure(a) Securitization exposure in which DBJ is the originator
Not applicable.
(b) Securitization exposure in which DBJ is an investor(1) Retained securitization exposure amount and breakdown by major underlying asset type(Millions of yen)March 31, 2013

March 31, 2012

¥733,263¥692,945——

56,67362,46733,507

41,763

255,724

223,486

2,158

2,274

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, 2013

March 31, 2012

¥127,726¥112,263

Risk weight

20%

Balance
Capital requirement

2,043

1,796

Risk weight

50%

Balance

9,335

8,403

373

336

Risk weight

100%

Balance444,368

374,858

Capital requirement

35,54929,988Risk weight

350%

Balance

3,411

3,412

955

955

Risk weight

1,250%

Balance414,839—

Capital requirement

414,839—

Balance

10,313

6,943

Capital requirement

5,955

1,142

Capital requirement

Capital requirement

Risk weight

Other** Applying to exposure the transitional measures indicated in Article 15 of the Supplementary Provision to the Capital Adequacy Ratio Notification.

194

Annual Report & CSR Report 2013

Resecuritization exposure
Risk weight

40%(Millions of yen)

Balance
Capital requirement

March 31, 2013

March 31, 2012

¥33,507¥41,763

1,072

1,336

368

402

Risk weight

100%

Balance
Capital requirement

29

32

Risk weight

225%

Balance709

736

Capital requirement

127

132

Risk weight

650%

Balance

900

777

Capital requirement

468

404

Risk weight

1,250%

Balance

180—

Capital requirement

180—(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, 2013

March 31, 2012

Structured finance¥169,027¥—

Funds*

245,992—* Assets held by funds including the commitment to funds (calculated on ”look-through” approach basis).

(4) Breakdown of retained resecuritization exposure by application of techniques to mitigate credit risks and guarantors, or byrisk weighting applied to guarantors.
Not applicable.
(5) Amount of credit risk assets calculated with application of Article 15 of the Supplementary Measure (Interim Measure for
Securitization Exposure) to the Capital Adequacy Ratio Notification(Millions of yen)
Credit risk assets

March 31, 2013

March 31, 2012

¥12,497¥14,286

6. Items Related to Market Risk
DBJ falls into the category indicated in Article 16 of the Capital Adequacy Ratio Notification. Consequently, calculation of themarket risk equivalent amount was not performed.
7. Items Related to Shares and Other Equity Investments and Capital Injections into the Banking Book(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(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(Millions of yen)March 31, 2013

March 31, 2012

¥ 50,115¥ 37,900

287,131249,942

18,336

1,303

1,688

6,402

27,707

14,817

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.

Financial Condition

Annual Report & CSR Report 2013195

9. Interest Rate Risk in the Banking Book
Decrease in economic value resulting from interest rate shock

196

Annual Report & CSR Report 2013

March 31, 2013

March 31, 2012

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:¥7.1 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:¥19.5 billion

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Published in September 2013 by the Public Relations & Corporate Social Responsibility Office,Corporate Planning & Coodination Department
URL: http://www.dbj.jp/en

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Annual Report & CSR Report

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Development Bank of Japan Inc.
South Tower, Otemachi Financial City,
9-6, Otemachi 1-chome, Chiyoda-ku, Tokyo 100-8178, Japan2013
Development Bank of Japan Inc.

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