Initiative & Integrity

Integrated Report 2022

A long-term perspective / Impartiality / Public-mindedness / Reliability

Design the Futurewith Financial Expertise

MissionResponsibility tofuture generations
The customer’s perspective
Outstanding service
Commitment and cooperation

Continue to expand financial frontiers;
Provide the best solutions for customers
and society; Pursue sustainable
development for Japan and the world.
As industry and infrastructure professionals skilled in handling all typesof risk, we will play a unique role in the economy and society of 2030—
leading new business and market creation while responding to crises
and other social needs.

Green
Resilience & Recovery
Innovation
Transition / Transformation

Initiative & Integrity

Development Bank of Japan Inc.
Integrated Report 2022

Value Creation Story

Corporate GovernanceP

1 Contents and Editorial Policy

Corporate GovernanceP

2 Our History of Value Creation

P 56 Message from the Chairman

P

4 Corporate Philosophy

P 58	Basic Position on Corporate GovernanceP

6 Value Creation ProcessP

8 Strengths that Back Value Creation

P 62	Members of the Board of Directors,
Audit & Supervisory Board Members,
and Executive Officers

P 10 Message from the President
P 16 Fifth Medium-Term Management Plan

P 65	Messages from Outside Members of theBoard of Directors

P 18	Key Initiatives toward Realizing
Sustainability

P 66 Compliance

P 23	Invigoration and Stabilization of
Financial Markets through Partnerships
and Collaboration

Risk Management
P 68 Risk Management System
P 68 Comprehensive Risk Management
P 73 Business Continuity Initiatives

Strategy

P 72 Stress Tests

Strategy

Value Creation Story

Cover design:
Gazing into the futurefrom a window in 2022

1

Business Strategy

Corporate Data

P 24 Energy Sector

P 74 Financial and Non-Financial Highlights

P 26 Transportation Sector

P 76 Consolidated Financial Summary

P 28 Urban Development Sector

P 78 Timeline

P 30 Industrial Sectors

P 79 Shareholder Information

Area Strategy

P 79	Summary of Changes to the DBJ Act afterConversion to a Joint-Stock Company

P 32 Regions

P 80 Organizational Structure

P 34 Overseas
Function Strategy

Data Section

P 36	Special Investment Operations andCrisis Response Operations

Corporate Governance

Sector Strategy

P 82 The Development Bank of Japan Inc. Act

P 40	Syndicated Loans, M&A Advisory, andConsulting Services
P 42	Asset Management

P 101 Financial Condition
P 173	Corporate Information /Group Companies

Management Foundation Strategy
Corporate Data

P 44 Financial Strategy
P 46 Human Resource Development
P 50 Knowledge and Collaboration
P 52 Response to the TCFD Recommendations

Period Covered and Scope• Period: Fiscal 2021 (April 1, 2021–March 31, 2022) (Some information fromoutside this period is also included.)• Scope: In principle, the report covers DBJ and its 12 main subsidiaries• Date of publication: September 2022
Guidelines and Entities Referenced• International Integrated Reporting Framework of theInternational Integrated Reporting Council (IIRC)(now part of the IFRS Foundation)• Guidance for Integrated Corporate Disclosure andCompany–Investor Dialogues for Collaborative Value
Creation
Disclaimer
Integrated Report 2022 contains forward-looking statements. Forward-looking
statements are based on information available at the time of writing andhypotheses or judgments regarding uncertain factors. Accordingly, actual results
may differ materially if conditions change.

Data Section

Editorial Policy
Environmental Report for a Sustainable Society (published in fiscal 2003) was the
DBJ Group’s first report dedicated to increasing such communication with our
stakeholders. Our integrated report, published since fiscal 2017, is intended toprovide financial and non-financial information to explain the DBJ Group’s businessactivities and initiatives in sustainable value creation to its broad spectrum of
stakeholders.
In our Integrated Report 2022, we have refined the Value Creation Process
section to clarify our approach to sustainability management, enhanced the­disclosure of information about our response to climate change and the Task
Force on Climate-related Financial Disclosures (TCFD) recommendations, andupdated other non-financial information.
The report’s content is decided upon by the Executive Committee.

Development Bank of Japan Inc.
Integrated Report 2022

Our History of Value Creation

The DBJ Group has provided solutions in tune with the times, contributed to the sustainable development of society, and, whilechanging itself, stayed true to its values—initiative and integrity—amid dramatic changes in the economy, the fabric of society, andsocial issues.

Rebuilding Japan’s merchant shipping fleet with financeunder the government’s shipbuilding program

Promotion of homegrown technologies through thecommercial application of new technologies

Development of new financial products that shine a
spotlight on sources of value

1

4

5

Nippon Yusen Kabushiki Kaisha: Liner Sanuki MaruSony Corporation: (now Sony Group Corporation)
Trinitron color television factorySocial changes
and issues

1951–

1972–

1985–

Rebuilding of economy andadvanced economic growth

Improvement in quality of life
for Japanese citizens

Smooth transformation ofindustrial structure

Upgrading of railway
network

Enhancement of energy

DBJ’s history and roles

2

Reinforcement oftransportation
capacity

Infrastructure
Rebuilding of vital industry 1 ​Nurturing of
new industry

Redevelopment ofmajor cities

Strengthening of international
competitiveness ​ 4
Support for capital
investment

Transformation ofindustrial structure
Support for locallydeveloped technology

Regional
development
Regional
equalization

Maintenance of regionalsocial infrastructure
Prevention ofpollution​ 2

Reconstruction after
Great Hanshin-Awaji
Earthquake 3

Regions

Changes at DBJ

Updates toinformation andcommunications
infrastructure

Modernization of
distribution

Industrialization of
new technologies

Industry

Stable supplyof energy

1951

1956

Establishment of Japan
Development Bank

Establishment of Hokkaido Development
Finance Public Corporation

2

3

6

Toyo Soda Manufacturing Co., Ltd. (currently Tosoh
Corporation): Conversion of manufacturing method for
caustic soda (Yamaguchi Prefecture)

Hankyu Corporation: Earthquake reconstruction work
(Hyogo Prefecture)

Wall Street, where the New York
Stock Exchange is locatedPromotion of conversion to non-polluting manufacturingmethod for chemical industry

Recovery work on traffic infrastructure damaged by
the earthquake

In the wake of the 2008 global financial crisis, DBJ
rapidly responded through its Financial Crisis Response
Operations to shore up the worsening cash flow ofcorporations caused by dysfunction in bond markets.

Development Bank of Japan Inc.
Integrated Report 2022

3

Our History of Value Creation

Value Provided by DBJ

8Value Creation Story

Financial support for realization of ahydrogen-based society

Development of financing methods

Japan H2 Mobility, LLC (JHyM)
Photo provided by ENEOS Corporation

1999–

2008–

Sustained development of
economy and society

Crisis response

Restoration of
infrastructure

Supply of risk capital 6

Renewable energy
M&A advisory services

Environmental
ratings 5

Strengthening of response toinnovation 8 ​Business revitalization
financing

Sharpening ofcompetitivenessBCM ratings
Reconstruction after
earthquakes 7

Establishment of Development
Bank of Japan

Regional
revitalization

Specialinvestments

2008

2015

Establishment ofDevelopment Bankof Japan Inc.

Revisions to The
Development Bankof Japan Inc. Act

7

Support for a theme park that became a symbolof reconstruction after the Great East Japan
Earthquake

DBJ has accumulated knowledge through constant analysis ofand research into trends in the economy and industry, including
the Survey on Planned Capital Spending, which it has conducted
for more than 60 years. The DBJ Group has provided uniquesolutions that leverage its wide-ranging network of stakeholders,from customers and financial institutions to national and local
government entities.

2020

Crisis response / Safety net
The DBJ Group acts as a safety net in times of large-scale
natural disasters and instability on financial markets by nimbly
engaging in appropriate Crisis Response Operations as a stabilizing force. During the COVID-19 pandemic, DBJ has rapidly
and effectively provided support for the cash flows of companies
in a broad spectrum of industries and regions.

Data Section

Joban Kosan Co., Ltd.: Spa Resort Hawaiians(Fukushima Prefecture)

Knowledge / Collaboration

Corporate Data

Advancing PPP
and PFI projects

1999

DBJ’s Environmentally Rated Loan Program, BCM Rated Loan
Program, and Employees’ Health Management Rated Loan
Program with a focus on non-financial information were the firstof their kind. Approximately 1,400 loans in these programs havebeen extended to companies. As a front-runner, DBJ has also
led the creation of the sustainable financing market. We havebeen a consistent supporter of corporate initiatives to strengthen
competitiveness and transform structures with the objective ofsustaining the development of industrial fields.

Employees’ healthmanagement ratings

Support for venture businesses

Solutions forregional issues

Sustainability

Corporate Governance

Project financing

Strategy

DBJ has solved various social issues in Japan while pioneering
the use of novel financing methods, such as project financing,debtor-in-possession (DIP) financing, public–private partnership(PPP) and private finance initiative (PFI) projects, and asset
financing. DBJ has also invigorated financial markets by creating
growth capital markets through the supply of risk capital andencouraging new money flows through the creation of diverse
investment and loan opportunities.

4

Development Bank of Japan Inc.
Integrated Report 2022

Corporate Philosophy

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

MISSION

VISION 2030
Leveraging the DBJ Group’s
unique strengths to pursue
its mission and realize its vision

BUSINESSSTRATEGY
Sector strategy
Function strategy
Area strategy

CAPITALSTRATEGY
Financial capital
Human capitalIntellectual capital
Relationship andsocial capital

Sustainability
management

Execute strategy
based on values

Values put into practicedefine our strengths

ACTION GUIDELINESVALUESDevelopment Bank of Japan Inc.
Integrated Report 2022

5Corporate Philosophy

Sharing Our Corporate Philosophy
Value Creation Story

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

Our unwavering purpose and our unceasing determination to shape the future

Design the Future with Financial Expertise
Strategy

Continue to expand financial frontiers; Provide the best solutions for customers and society;Pursue sustainable development for Japan and the world.
Our vision for 2030, embodied in our mission and strategies

Corporate Governance

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

Medium-Term Management Plan—Our strategy for reaching our vision for 2030
The DBJ Group’s unique strengths assist with strategy execution
Core corporate values

A long-term perspective, impartiality, public-mindedness, and reliability

Responsibility to future generations

We fulfill our responsibility to the future by pursuing both economic and social value.

The customer’s perspective

We devote unequaled thought to each possibility—from the customer’s point of view.

Outstanding service

We review and enhance our services while improving productivity.

Corporate Data

Our guidelines for taking specific actions that express our values

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

Initiative

Integrity

Data Section

Our unwavering values shared by management and employees (base component)Development Bank of Japan Inc.
Integrated Report 2022

Value Creation Process

As a front-runner, the DBJ Group engages in sustainability management with the aim of solving issues for customers and society
and realizing sustainable development in Japan and the world.
While aiming to refine our sustainability management, we work to continuously improve the value creation process outlined
below, through collaboration and dialogue with our stakeholders, in order to further expand value creation.

Acceleration of initiatives in theFifth Medium-Term Management Plan

P 16–17

External conditions and social issues
INPUT

D.A.I.S:

BUSINESS MODELThree

P 44–45

Industrial revitalization
based on regional
characteristics,
overseas businessdevelopment, foreign
tourism in Japan,
business succession

Own credit-raising activities
Government credit-raising activities

Self-Reliance andRevitalization of
Local Economies
P 32–35

P8

Fin
a

Financial Capital

e
Op

ons
rati

es p

on
se

Human Capitalingnc

CrisisR

6

Values: initiative and integrity
Four core corporate values: a long-term
perspective, impartiality, publicmindedness, and reliability

P 38–39

Functions

P 50–51

d
wle
Kno

P8

Intellectual Capital leader for sustainable finance andAsolutionsP9

 ollaboration and cooperation with diverseC
stakeholders
P 50–51

Social CapitalNatural environment
Social infrastructure

Rebuilding andReinforcement ofInfrastructure
P 24–29

Relationship Capital ustomer base centered on industry
C
leadersge

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

Leading-edge financial expertiseFoundation for Value Creation
Human Capital

P 46–49

Values: initiative and integrityF our core corporate values:
a long-term perspective, impartiality,
public-mindedness, and reliability
Engagement

IntellectualSurveys andScreeningRiskmanagement

System capital

Corporate Governance

P 23

Collaborationand cooperation

Collaborationand cooperation

Stakeholder communications

P 58–67

Development Bank of Japan Inc.
Integrated Report 2022

7

Value Creation Process

Value Creation Story

Realizing DBJ’s Long-Term Vision 2030

Digital, Aging, International, Sustainability
OUTPUT / OUTCOME
P 16–17

Results of Operations

Strategy

Priority Areas
Fiscal 2025 Targets

200 billion
Net income ¥85 billion
Cost ratio 
32%
Total assets ¥21 trillion
ROA 
1%
ROE 
3%
Risk-weighted capital ratio 
14%Gross ordinary income 

ts
ns
en
atio
per )
stm
t O ent
tesn tm ns
en nveseratiop)t O ent
en estmnv

stm

Spec Spec In
I nv
ia
ia v
e
(ind l In(ivned l Ineve
ust sut st st
ria m ria mliliCreation, Conversion,and Growth inIndustry

s

vice

S er

s

vice

S er

or y

or y
Asset Aesnst et ent
ema n age mManagM

dv
is

dv
is

A

Commercialization of newtechnologies, restructuringof businesses to improve
productivity and sharpen
competitiveness, development of business in global
marketsA

	(Notes: C ommon equity Tier 1 capital ratio, estimates ona finalized Basel III basis.)	GRIT investments and loans(five-year total) ¥

5.5 trillion

P 40–41
P 40–41

Relationship Capitalresearch

P 50–51

Customer baseNetworks
Combined strengths as a Group/ Risk Management

Customers

Employees Financial institutions

Building a sustainable society 

G T(including achieving carbon neutrality by 2050)

	More-resilient infrastructure andsupply chains 	Support for creation of new­technologies, Co-creation andinnovation 
Improved engagementRI

P 68–73

Communities

Value Created

Investors

Shareholders

Collaborationand cooperation

Corporate Data

P 50–51

Backcasting from created value

P 42–43
P 42–43

CapitalCorporate Governance

P 30–31

P 36–37
P 36–37¥

8

Development Bank of Japan Inc.
Integrated Report 2022

Strengths that Back Value Creation

In the 70 years since its establishment as Japan Development Bank, the DBJ Group has accumulated particular strengths throughsolving various social issues. DBJ draws on these strengths in its efforts to sustain growth by resolving the issues of its customers
through the provision of risk capital and knowledge, and is undertaking measures to expand its strengths (see Management
Foundation Strategy on pages 44–51).
Our four core corporate values, shared by all employees, are what drive value creation at DBJ, facilitating our responses tochange while maintaining our strengths in a changing business environment amid evolving social issues.

Human Capital

Four Core
Corporate Values

The source of our passion to achieve our mission is our four core corporate values: a long-term perspective, impartiality, public-mindedness,and reliability. These values have originated from the pursuit of our sharedcorporate philosophy and values of initiative and integrity, and have been
passed down the generations. These values embody the strengths of the
DBJ Group and support our unique business activities. We are able toleverage other strengths thanks to these values.

Intellectual Capital

Leading-Edge
Financial
Expertise

A Leader in Japanfor Sustainable
Finance andSolutions

Since DBJ’s founding as Japan Development Bank, it has provided longterm financing for the capital needs of corporations, while refining its
ability to analyze companies and assess business viability. Moreover, DBJ
has gained extensive experience in leading-edge financing techniques,introducing Japan to such investment vehicles as project finance, debtorin-possession (DIP) finance, public–private partnerships/private financeinitiatives (PPPs/PFIs) and asset finance, using commitment andcooperation as action guidelines. DBJ has supplied risk capital via various
methods, such as mezzanine financing and equity investments, taking along-term perspective to addressing issues faced by its customers.

After being the first financial institution in the world to develop an
environmentally rated loan program (the DBJ Environmentally Rated Loan
Program) in 2004, DBJ expanded its menu of financing options that factor
in the level of sustainability management at a corporation to include
the DBJ BCM Rated Loan Program* and the DBJ Employees’ HealthManagement Rated Loan Program. We emphasize dialogue withcustomers in the provision of these loan programs, DBJ Sustainability
Linked Loans with Engagement Dialogue and consulting services, andassist our customers with sustainability management, with loans totaling¥2,621.9 billion. In 2011, we created DBJ Green Building Certification andbegan to participate in sustainability assessments of real estate properties.
* BCM: business continuity management

Development Bank of Japan Inc.
Integrated Report 20229Strengths that Back Value Creation

Relationship Capital

Strategy

Collaboration andCooperation with
DiverseStakeholders

With origins as a government-affiliated financial institution, DBJ has
built strong collaborative and cooperative relationships with diverse
stake­holders from the standpoint of public-mindedness and impartiality.
When Japan encounters a crisis, such as a major earthquake or turmoil
in financial markets, DBJ, designated by the government as a financial
institution to engage in Crisis Response Operations, does so expeditiously and appropriately. Furthermore, DBJ form funds with regional
financial institutions to supply risk capital to address regional issues.
The DBJ Group will continue to collaborate with diverse stakeholdersof its own accord.

Value Creation Story

Customer Base
Centered on
Industry Leaders

DBJ has supported numerous customers, including leading companies
in their respective industries, with the aim of spurring growth in Japanthrough policy-based financing since the reconstruction period after theend of World War II. The findings of DBJ's annual Survey on Planned
Capital Spending, which has been conducted for more than 60 years,
informs corporations’ top management discussions, strengthening our
relationship capital. Having grown alongside Japan for decades, the DBJ
Group will continue to work closely with its customers from a long-term
perspective.

Corporate GovernanceCorporate Data
Data Section

10

Development Bank of Japan Inc.
Integrated Report 2022

Message from the President

The DBJ Group helps realize a sustainable society
by promoting sustainability management thatbalances economic and social value in order to meetthe changing needs of society and our customers.

CEO MESSAMy name is Seiji Jige, and it is my great pleasure

support such breakthroughs, we must take on theto address you as the new president and chief

challenge of boosting innovation in our communi-

executive officer of Development Bank of Japan Inc.

ties, including through the supply of funds.

(DBJ) as of June 2022. With the publication of ourSince its establishment, the DBJ Group has flexibly

Integrated Report 2022, I would like to extend myevolved its operations as a distinctively unique finan-

greetings to all of our stakeholders as thecial institution while working closely with customers

representative of DBJ.

to resolve their issues, as well as issues affecting

To begin, I would like to express our deepest

society and regions. The basis of our activities is the

sympathies to everyone who has been affected

DBJ Group’s sustainability management approachby the COVID-19 pandemic. Through our Crisisof meticulously striking a balance between economic

Response Operations, the DBJ Group is committed

value and social value. In this integrated report, weto supporting affected businesses and working

discuss our corporate philosophy in the context of

toward the rapid economic recovery that is essential

the unwavering mission of the DBJ Group, its vision

to maintaining a sound foundation for economic andfor the future, and the values we share. We alsosocial activity. In fiscal 2021 in particular, the DBJ

touch upon the value creation process and ourGroup marshaled all of its capabilities in Crisis

medium-term business plan that represents the

Response Operations to assist in an unprecedented

road map to achieving our Vision 2030. Furthermore,

way restaurant and hotel businesses that had been

we specifically explain to our stakeholders how weseverely impacted by the ongoing pandemic.

balance economic and social value.

Looking ahead to the future, we must find ways
to address the rapid progress of digital technology
and the movement toward carbon neutrality, while
being aware of the need for economic security in a

History, Role, and Corporate
Philosophy of the DBJ Groupchanging world, and how the COVID-19 pandemic

Since the days of its predecessors, Japan

has changed the economy and society, including

Development Bank and Hokkaido–Tohoku

workstyles. These fundamental, tectonic shifts in

Development Finance Public Corporation, the DBJ

the economy and society are likely to alter industrial

Group has worked to promote Japan’s sustainablestructures, including the financial sector. While wedevelopment. We have achieved this by responding

simultaneously prepare for any attendant risks, we

flexibly to the issues of the day, through the periods

should realize that changes can also provideof postwar reconstruction, high and stable growth,

opportunities for great breakthroughs. In order toand the bubble economy and its collapse. In more

Development Bank of Japan Inc.
Integrated Report 2022

11

Message from the President

Value Creation Story
StrategyGErecent years, we have addressed the declining birthrate and aging population, and become a leader in
the areas of globalization and growing environmental
and disaster awareness. Since our transformation
into a joint stock company, there has been dramaticchange in the wake of the global financial crisis
Corporate Governanceand major events including the Great East Japan
Earthquake and, more recently, the COVID-19
pandemic. While constantly tackling issues faced byour customers and regions with integrity, we havetaken on the challenge of entering new financial
frontiers. The DBJ Group itself has undergone majorchanges by working to resolve issues faced by its
customers and regions.
With major changes in store for society, in keepingwith our unwavering mission to design the future with

Corporate Datafinancial expertise, we will take a flexible approach
to issues faced by regions and our customers asa whole, while staying true to our core values andbeing mindful of our Code of Conduct (Action
Guidelines).
	Our Mission: Design the future with financial
expertise
Our Code of Conduct (Action Guidelines):		 • Responsibility to future generations

Seiji Jige
Development Bank of Japan Inc.
President and CEO		 • The customer’s perspective		 • Commitment and cooperation
Our Values: Initiative and integrity
The DBJ Group has created Vision 2030 as a
guide for fulfilling its unique role in the economy andData Section		 • Outstanding service

12

Development Bank of Japan Inc.
Integrated Report 2022

Message from the President

society through 2030, with the aim of increasing theadded value it provides to customers as financial
professionals, in light of its corporate philosophy,
shared values, and dialogue with stakeholders.

Sustainability Management at the
DBJ Group
In May 2017, the DBJ Group set out its Policy on
Sustainability as a fundamental approach to

Vision 2030 and Priority Areas

contributing to the realization of a sustainable

CEO MESSAG
society that balances economic and social value.

In 2015, with the aim of shaping our business

The sustainability management that we practice isvision around a longer-term outlook, we gave fresha framework for value creation through businessthought to our roles in the years leading up to 2030.

activities centered on the aforementioned three

In the course of our debate, we identified a number

priority areas. While being guided by the needs ofof changes in the external environment with aour customers and society as a whole, we are

significant impact on our stakeholders: Japan’s

working to create economic and social value.

declining population and its climate and energy

Aiming to refine our sustainability management, weissues in the context of the global effort to build awork constantly to improve the value creation

sustainable society; intensifying global competition;

process through collaboration and dialogue

and innovations in digital technologies such as artifi-

with stakeholders, advancing initiatives to further

cial intelligence (AI) and fintech. Based on the roles

enhance the value we create. We believe in the

we have undertaken and the value we have realized

importance of accelerating our progress toward

over time, we determined the most appropriate

sustainability through dialogue with externalareas in which to use our strengths over the longer

stakeholders, centering around DBJ’s Advisory

term in the interests of a sustainable society.

Board and Special Investment Operations

Vision 2030 was the result. Drawn up in 2017,
this long-term vision sets infrastructure, industry,

Monitoring Board.
Climate change is an important issue for almost

and regional economies as the three priority areas

every company. Our Policy on Sustainability posi-(materialities) for the DBJ Group’s initiatives. Our

tions responding to it as one of the most compelling

contributions in these areas will be consistent withpriorities for the DBJ Group, and as a key element

the Group’s course so far, and we believe they will

for realizing a sustainable society.

be in line with what society and stakeholders expectfrom us in the future.

The DBJ Group itself aims to achieve carbon
neutrality by 2050 by addressing management

To fulfill our mission, we will work as financial

issues and assisting its customers’ efforts to decar-

professionals to enhance the added value provided

bonize. Through this process, we will contribute toto regional communities and our customers in

the growth of our customers while encouraging

industry and infrastructure, steadily implementing

an equitable and responsible decarbonization ofeach initiative while respecting the views ofindustries and regions while maintaining and sharp-

stakeholders. We will take the lead in business andening the competitiveness of Japan.

market creation by leveraging our capability to

In June 2018, DBJ endorsed the recommenda-

properly evaluate and address a broad range oftions of the Task Force on Climate-related Financial

risks. At the same time, as we look forward to 2030,

Disclosures (TCFD), and began to enhance its

we will fulfill our unique roles in the economy anddisclosure related to the risks and opportunities

society by taking actions during times of crisis andassociated with climate change based on the TCFD

otherwise responding to social demand.

framework. (Please refer to pages 52–55 for detailsof our response to climate change.)Development Bank of Japan Inc.
Integrated Report 2022

13

Message from the President

Value Creation Story

Resilience & Recovery, Innovation, and Transition /Issues faced by society as a whole and theTransformation (GRIT) Strategy as a name for thesemanagement issues faced by our customers haveinitiatives and policies. While collaborating andbecome inseparable from one another, amid rapid

cooperating with our stakeholders, we will advancechanges in conditions around the world andthese GRIT initiatives with the aim of realizing a

growing uncertainties in the economy and society.

sustainable society.

StrategyEMedium-Term Management Plan

The DBJ Group has identified trends that could
and summarized these megatrends as Digitalization,
Aging, Internationalization and Sustainability(D.A.I.S.) (see page 23). Our Fifth Medium-Term

Progress on Medium-Term
Management Plan and Fiscal 2021
Results

Management Plan (see pages 16–17) commenced

In fiscal 2021, gross ordinary income totaled ¥218.0

in fiscal 2021 with initiatives and policies tobillion, a new record high that reflected strong

contribute to a sustainable society by helping our

growth in investment operations from gains on

customers resolve their issues. In the Fifth Medium-

divestitures and dividend income from entities that

Term Management Plan, we came up with Green,

have received funds. Despite being impacted by the(Billions of yen)

FY 2021

YoY change

164.1

218.0

53.9

Loans

91.7

95.3

3.5

Investment

47.0

106.0

59.0

Fee and commission income

25.3

16.6

(8.7)

Operating expenses(56.7)(58.0)(1.3)

Net ordinary income

107.3

159.9

52.6

0.7

2.3

1.6

Gains on reversal of reserves, depreciation, etc., ofwritten-off claims(34.2)(73.8)(39.5)

Income before income taxes and minority interests

73.8

88.5

14.7

Net income attributable to owners of the parent

45.2

57.6

12.3

Other extraordinary items

Note: Business categories are those used in our internal business management

Data Section

FY2020Gross ordinary income

Corporate Data

Business Profit and Loss (Consolidated)

Corporate Governancehave a major impact on the economy and society

14

Development Bank of Japan Inc.
Integrated Report 2022

Message from the President

COVID-19 pandemic, the DBJ Group secured a

While continuing to focus on strengthening our risk

profit of ¥57.6 billion (up 27% year on year) throughcapital supply functions, we will concentrate on

the booking of dividends and other income.

supporting our customers to take on new

Regarding progress on the Fifth Medium-Termchallenges and rebuild their finances as they

Management Plan, DBJ has provided concentrated

recover and grow back from the pandemic.

assistance to customers through the supply of risk

As a part of its GRIT Strategy, DBJ aims tocapital, a priority area, starting with restaurant andextend a total of ¥5.5 trillion in investments andhotel businesses that have been affected by theloans over a five-year period, which is around 40%

pandemic. By providing risk capital in fields ofof the total for investments and loans during theinnovation and helping customers reinforce theirmedium-term management plan. In fiscal 2021, DBJ

financial foundations and securitize their real estate

made ¥754.4 billion in investments and loans related

holdings, we have assisted customers as they

to its GRIT Strategy, roughly 40% of therecover from the pandemic and begin to grow again.

approximately ¥2 trillion in investments and loans itCEOoriginated, excluding crisis countermeasure loans. I
believe this represents significant progress in theinitial fiscal year of the medium-term management
plan. We have positioned fiscal 2022 as a year for

producing results under the GRIT Strategy, and we
intend to engage in more dialogue with customers
than in fiscal 2021.

In May 2023, DBJ plans to unveil revised financial
targets that take into consideration the lingering
impact of the COVID-19 pandemic and significant
changes in the external environment, such as international affairs and monetary conditions.

Special Investment Operations
The DBJ Group’s Special Investment Operations are
conducted as mandated in revisions made in 2015
to the Development Bank of Japan Inc. Act. Utilizing
our experience in supplying risk capital throughthese operations, as of March 31, 2022, we haveextended ¥998.2 billion in investments and loans to
a total of 152 projects for revitalizing regions andstrengthening the competitiveness of Japanesecompanies. In addition to supplying growth capitalthrough collaboration with financing, the Groupalso has an extensive track record in regional
revitalization projects and is keen to engage infuture initiatives with local financial institutions willingto help create distinctive regional communities.

Development Bank of Japan Inc.
Integrated Report 2022



15

Message from the President

for Coronavirus Revival to help customers recover

fostering an organization where people from diverse
backgrounds can work with inspiration.

and grow back from the COVID-19 pandemic. In
February 2021, DBJ created the Green Investment
Fund to strongly support initiatives that help realize
a greener society. In March of the same year, we

Improving Collaboration with
Stakeholders
Lastly, amid rapid changes in the external

Fund to support innovation and sharpen competi-

environment, the DBJ Group aims to be an organi-

tiveness in the life sciences industry. At meetings ofzation that constantly monitors the issues faced by

the Special Investment Operations Monitoring

its customers and regions and tackles them with

Board which convenes twice a year, the opinions ofintegrity, and that takes the initiative on the frontiers

stakeholders are taken into consideration.

of finance. As a distinctly unique financial institution,
DBJ is in position to contribute to the sustainable

Development of Human Resources
Focused on Best Practices in
Sustainability Management

growth of Japan through growth among its customers and across regions.

Engaging in dialogue with stakeholders willremain a crucial endeavor as we continue to fulfill
our mission as a front-runner in sustainabilityGroup’s value creation process, relies above all on

management. It is our sincere hope that thispersonnel who share the core values of initiative andintegrated report will lead to greater dialogue withintegrity in the pursuit of balancing economic andall of our stakeholders.

social value, and who display our four core corpoOfficers and employees of the DBJ Group have

September 2022

Corporate Governance

Sustainability management, a key aspect of the DBJ

rate values inherited from DBJ’s earliest days.

Strategy

MESSAGEalso set up the DBJ Innovation and Life Sciences

Value Creation Story

In May 2020, DBJ established the Growth Fundobtained the core corporate values of a long-term
perspective, impartiality, public-mindedness, andreliability, which have evolved over the years in thecourse of our business. Bolstered by these corporate values, the Group has consistently risen tomeet the challenges of the times.



place that allow employees embodying the Group’sSeiji Jige

values to be highly motivated to perform their duties.



President and CEO

Corporate Data

We believe it is important to have systems inWith many opportunities for study, the entire Groupendeavors to train human resources who are able
to take the initiative and engage in cutting-edge
activities as financial professionals. To bring more
flexibility to working patterns, we have introduced
telecommuting and a flex-time work system, and we
intend to enhance our paid childcare and caregiving
and inclusion across the DBJ Group, we are

Data Section

leave programs. With an eye on improving diversity

16

Development Bank of Japan Inc.
Integrated Report 2022

Fifth Medium-Term Management Plan

Since becoming a joint-stock company in 2008, the DBJ Group has implemented medium-term management plans with theobjectives of increasing the supply of risk capital for integrated investments and loans and of advancing risk management
functions.
Recently, sweeping changes have occurred in demographic and social structures, and social issues have become inseparablefrom the business challenges faced by our customers. While collaborating and cooperating with private financial institutions, the
DBJ Group utilizes risk capital and its knowledge to help customers solve their issues and thereby contribute to sustainablegrowth. Against this backdrop, we formulated as an action plan our Fifth Medium-Term Management Plan*. Due to the still unpredictable impact the COVID-19 pandemic will have on the economy and society, the plan spans five years, longer than the threeyear periods of previous plans.
* Fifth Medium-Term Management plan Connect and Value Creation—Innovation for Sustainability—

Response to Drastic Changes in the Economy and Society
Achievement of Goals with Customers
Changes for the Future

Balance with Social Value

Crisis Preparation

Management
Foundation Strategy

Business Strategy
GRIT Strategy

Industrial fields

Infrastructure fields
EnergyInput of management
resources

SectorTransportation

Urban
development

G

New fields

Green

Connect industries

Financial capitalImprove the managementof risks and returns
Increase sophisticationof capital procurement
methods

Draw out the potential of industries

R

Connect generations

Non-financial capital
Human capital
Train personnel for growth

Resilience &Recovery

Pass on a strong, resilient society to future
generations
Areas

Growth of employees
supports growth oforganizations

I

Connect regions
Support new regional development

Intellectual capital
Reform approaches
to workInnovation
Outcomes ofbusiness activities

Functions
Collaboration and cooperation

Create value

T

Reinforce platforms for supplying risk capital

Transition /Transformation

Knowledge

Create knowledge hift to workstyles
Sadapted to changes inbusiness environment
Relationship capital
Deepen collaborationand cooperation
Public–private
collaboration andpartnerships

Monitor industries and regions and provide information

Financial Targets
Financialsoundness

Profitability
Fiscal 2025
targets(consolidated)

Gross ordinary
income*1¥200 billion

Net income
attributable toowners of theparent¥85 billion

Cost ratio*2

Total assets

ROA*2

ROE*2

Risk-weighted
capital ratio*3

32%¥21 trillion

1%

3%

14%

DBJ plans to disclose financial targets for fiscal 2025 after revising them in May 2023.
*1 Excludes credit costs*2 Cost ratio and ROA versus gross ordinary income. ROE versus net income*3 Common equity Tier 1 capital ratio (estimates on a finalized Basel III basis)

Development Bank of Japan Inc.
Integrated Report 2022

17Fifth Medium-Term Management Plan

Progress on Fifth Medium-Term Management Plan	Supported customers affected by the ongoing COVID-19 pandemic such as restaurants and hotels

Supplying Risk Capital	Assisted customers recovering and growing back from the pandemic through the supply of risk capital for innovative fields, suchas the securitization of real estate, as well as the reinforcement of the financial foundations of companies receiving risk capital

Value Creation Story

Crisis Response Operations

GRIT Strategy
	Extended ¥754.4 billion in investments and loans related to the GRIT Strategy from April 2021 to March 2022 (comprising
approximately 40% of total investments and loans, excluding Crisis Response Operations)	Advanced initiatives in regions, such as the operation of and participation in regional councils for decarbonization, and thecreation of sustainability financing, such as transition loans, in investment and loan services
Strategy	Reinforced intellectual capital, human capital and relationship capital via 2050 Growth Strategy Headquarters, raising thelevels of knowledge across the Group and identifying issues from the customer’s perspective in the initial fiscal year of theFifth Medium-Term Management Plan

G R I T Strategy

Vision 2030

Supportwith integrated
investments
and loans

Priority areas (materialities)
Industry

GRIT
Strategy

Regions

2050

Green
Initiatives to become carbon neutral
with established technologies

Resilience & Recovery
Building of flexible yet strong
industrial foundations as well as safe
and secure regions and society

Corporate Data

Infrastructure

Realization ofsustainability

Corporate GovernanceIn line with its long-term vision, the DBJ Group devised the GRIT Strategy as a core action for 2030, with the aim ofcontributing to the realization of a sustainable society by 2050 through the advancement of initiatives to marshal resources.
While starting with the specific needs of customers, the GRIT Strategy aims to build industry foundations as well as resilient,safe, and worry-free regions and communities, along with the realization of a green society. Toward this goal, the DBJ Groupis engaged in initiatives for innovations that can be commercialized and objectively assessed, as well as strategic initiatives forthe transition to a sustainable society on the basis of its current business base. To advance the GRIT Strategy, DBJ set up the2050 Growth Strategy Headquarters, directly led by the president.

Innovation
Innovation

Initiatives for innovations that arecommercially feasible from along-term perspective

2030
Green

(Promotion of
GRIT Strategy)

Resilience &Recovery

2020

Transition /Transformation

Transition / Transformation
Strategic initiatives to steadily leadtransition toward carbon neutrality
and other goals, based on current
business foundation

Data Section

2050 Growth
Strategy
Headquarters

18

Development Bank of Japan Inc.
Integrated Report 2022

Key Initiatives toward Realizing Sustainability

We have tackled sustainability-related issues since the Japan Development Bank era, and engage in a variety of initiatives to realize
a sustainable society through a business model built around integrated investments and loans, and consulting and advisory services.

History of Sustainability at DBJ
In tune with the changing times, the DBJ Group has assisted businesses with sustainability, including environmental stewardship,
ever since the time when Japan began to seriously address the problem of industrial pollution.
1950–

1990–

Events inside and outside Japan

DBJ initiatives

1953

Minamata disease

Creation of pollution prevention loan programs

1958

Act on Regulation of Factory Effluent

1960

Wastewater treatment loan program

1963

Soot prevention loan program

Events inside and outside Japan
1993

Basic Environment Law

2000	Basic Law for Establishinga Recycling-Based Society

1967	Basic Law for Environmental

1970

Flue gas desulfurization loan program

2002

Air Pollution Control Act

1973

Oil crisis

1975	Resource recycling and energy
conservation loan programs

1985	Vienna Convention for the Protection

1988

Ozone layer protection loan program

1993	
Established Research Center on
Global Warming

2004	
Environmentally Rated Loan
Program launched

Kyoto Protocol

Pollution Control

1968

DBJ initiatives
Creation of comprehensive loan programsfor environmental measures

2003

UNEP FI Global Roundtable, Tokyo

2008

Global Financial Crisis

2011

Great East Japan Earthquake

2015

Paris Agreement

2006E nterprise Disaster Resilience Loan
Program launched

2011

BCM Rated Loan Program launched2011 BJ Green Building Certification
D
Program launched2012E mployees’ Health Management
Rated Loan Program launched2020	
DBJ Sustainability Linked Loansof the Ozone Layerwith Engagement Dialogue created

Policy on Sustainability
To realize its mission of pursuing sustainable development for Japanand the world, the DBJ Group strives to achieve both economic andsocial value through its unique business activities by embracing
sustainability management. In 2017, we formulated our Policy on
Sustainability as a part of our efforts to continue to proactively
engage in dialogue with all stakeholders and to enhance our value
creation process.

Policies
Sustainability management
Financial capital and non-financial capital
Contribution to a sustainable society
Sustained growth of customers
Self-reliant development of regions
Cooperation with employees
Invigoration and stabilization of f­ inancial markets
Engagement with investors

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

Environmental and Social Management Policy for Financing and Investment Activity
DBJ has formulated the Environmental and Social Management
Policy for Financing and Investment Activity for businesses and sectors with a strong likelihood of having significant risks related to or
negative impacts on the environment and society, in the interest ofproviding environmentally and socially sound investments and loans.
This policy was put into practice in October 2021 and will be revised
as deemed necessary in fiscal 2022.

Businesses subject to this policy
Businesses prohibited from receiving investments andloans regardless of sector
Businesses that require additional due diligence forinvestments and loans regardless of sector
Policies for specific sectors (weapons, coal-fired thermal
power generation, palm oil, lumber, coal mining, oil andgas, large-scale hydroelectric power)

https://www.dbj.jp/en/sustainability/effort/resolution/investment.html
Please refer to the DBJ website for more information about the Environmental and Social Management
Policy for Financing and Investment Activity.

Development Bank of Japan Inc.
Integrated Report 2022

19

Key Initiatives toward Realizing Sustainability

Sustainability Committee

Key Initiatives

Value Creation Story

Reporting to the Executive Committee, the Sustainability Committee deliberates on items related to both economic and social
value as well as dialogue with stakeholders, in addition to policy responses and initiatives for various sustainability-related issues,
including climate change.

DBJ is implementing the following initiatives in accordance with Vision 2030 and the Fifth Medium-Term Management Plan.
DBJ will advance initiatives from the customer’s perspective based on its
GRIT Strategy under the Fifth Medium-Term Management Plan to realize
a sustainable society.

GRIT Strategy: Realization of a sustainable society
Strategy

G reen:Initiatives to become carbon neutral with established technologies
Promotion of the GRIT
Strategy

R esilience & Recovery:

Building of flexible yet strong industrial foundations as well as safe and secure
regions and society

P 17

I nnovation:

Initiatives for innovations that are commercially feasible from a long-term
perspective
Strategic initiatives to steadily lead the transition toward carbon neutrality andother goals, based on the current business foundation

P 24

Initiatives in DBJ Green
Building Certification

Established in 2011, DBJ Green Building Certification recognizes buildings withexceptional consideration for society and the environment and provides support
to those who own and operate such real estate.

P 28

Issuance of DBJ
Sustainability Bonds

DBJ became the first issuer of green bonds in Japan in 2014, and has beenissuing sustainability bonds each year since 2015.

P 45

Endorsement of the
Poseidon Principles

DBJ has become a signatory to the Poseidon Principles, a commitment to help
address climate change in the marine transportation industry from a financial
perspective.

P 22

Initiatives in evaluation­certification programs

DBJ supports the efforts of its customers on issues related to the environment,
disaster prevention, and health management, through a menu of investments
and loans that take into account a company’s non-financial information, using
DBJ’s proprietary screening system. It has also created DBJ Sustainability
Linked Loans with Engagement Dialogue as a way to improve the visibilityof customer initiatives on sustainability through dialogue.

P 20

Adoption of the Equator
Principles

In accordance with the Equator Principles, DBJ will identify the environmental
and social risks associated with a project, assess their impact, and request thatthe project operator take the necessary measures to mitigate these risks andtheir impacts.

P 54

Initiatives based on the TCFD
recommendations

DBJ aims to become carbon neutral by 2050 and is advancing initiatives basedon the results of analysis of the scenario where average global temperaturesrise more than 2°C. It is also considering scenarios for achieving a carbon-freesociety (i.e., the scenario where average global temperatures rise less than 2°C),
identifying risks and opportunities along the way.

P 52

Data Section

With the aim of promoting the use of renewable energy, DBJ has engaged in theimplementation of solar and wind power generation projects in Japan andparticipated in advanced case studies overseas.

Corporate Data

Initiatives in renewableenergyCorporate Governance

T ransition / Transformation:

20

Development Bank of Japan Inc.
Integrated Report 2022

Key Initiatives toward Realizing Sustainability

Dialogue with Customers
The DBJ Group has honed its ability to engage in dialogue with its customers on non-financial matters to help them attainsustained growth while working to solve social issues.
DBJ Sustainability Evaluation Certification Program
The DBJ Sustainability Evaluation Certification Program is amenu of financing options based on the non-financial
information of companies screened with DBJ’s proprietarysystems.
Having launched the world’s first environmentally rated
loan program in 2004, DBJ introduced the BCM Rated Loan
Program in 2006 and the Employees’ Health Management
Rated Loan Program in 2012.
The most important feature of these programs is theevaluation process, which emphasizes direct dialogue withcustomers. We engage in conversations with clients about
their initiatives in order to fill in gaps around publicly available
information. Once the evaluations are complete, DBJ provides
clients with feedback on the results, using this as an opportunity to point out issues that need to be addressed and help
management step up their practices.
Transition Loans
Transition loans are a form of financing designed to help
companies reduce greenhouse gas (GHG) emissions basedon their long-term strategies. By helping customers address
climate change, we are moving toward the realization of acarbon-free society.
Sustainability Management Consulting Services
DBJ provides its customers with tailor-made consulting
services in addition to a diagnosis of their overall sustainability
management. Through these services, we help our customers
maintain and update the foundations of their sustainability
management, from formulating long-term visions andidentifying materiality, to adopting the recommendations of
the Task Force on Climate-related Financial Disclosures(TCFD).

DBJ Sustainability Linked Loans withEngagement Dialogue
Sustainability linked loans are financing that encourages thesustainable growth of borrowers and society by linking loan
terms and conditions to the achievement of sustainability
performance targets (SPTs) that align with the sustainability
strategies of borrowers.
DBJ Sustainability Linked Loans with Engagement
Dialogue support customers’ achievement of SPTs,
determining through dialogue the optimal motivational targets
for increasing the sophistication of their sustainability
management. Through the dialogue process, customers gain
a visual map of their sustainability initiatives, which has theadded benefit of providing them with a publicity boost.
Transition Business Promotion Office
DBJ established the Transition Business Promotion Officeunder the Business Planning & Coordination Department inApril 2022 as an organization tasked with promoting
investments and loans to help with the transition to carbon
neutrality, based on our belief in the importance of providing
consistent support for an open and responsible transition tocarbon neutrality while engaging in dialogue with customers.
We will encourage the use of hydrogen and ammonia, newsources of energy that will be important in this transition,
along with storage batteries. We will go beyond efforts to help
individual companies as, while we believe that it is important
to collaborate and move forward with them, we must also
factor in the unique characteristics of regional areas and adiverse range of related industries and parties. The Transition
Business Promotion Office aims to advance cross-regionaland cross-sector efforts to transition to a carbon-free society
while consolidating knowledge of each sector.
In addition, DBJ is strengthening the development of its
sustainability management consulting services (described on
the left) and offering tailor-made consulting services anddiagnosis of sustainability management for its customers.
Working in tandem with our investments and loans functions,through consultancy and deeper conversations with customers, we aim to assist them with business transitions.

Track Record in Sustainability Finance
Environmentally
Rated Loan Program

No. of deals in fiscal 2021
(cumulative)
Total amount of loans

BCM Rated
Loan Program

Employees’ HealthManagement Rated
Loan Program

DBJ Sustainability
Linked Loans
with Engagement
Dialogue andtransition loans

Total

29
(748)

25
(421)

18
(252)

7
(9)

79
(1,430)¥1,668.4 billion¥536.0 billion¥332.0 billion¥85.5 billion¥2,621.9 billion

Development Bank of Japan Inc.
Integrated Report 2022

21

Key Initiatives toward Realizing Sustainability

Improvement in Corporate Value through Visualization of Social Value
Value Creation Story

DBJ contributes to the creation of a sustainable society aligned with the Sustainable Development Goals (SDGs) by providing
professional, innovative approaches to resolving various issues faced by its customers in important domains (infrastructure, industry, and regions) that it has defined through dialogue with stakeholders and its experience to date.
While helping customers resolve the issues they face, the DBJ Group has identified nine SDGs that it can contribute to as aGroup, as well as other challenges unique to Japan, an advanced country with issues that do not fit neatly into the categoriesof the SDGs.
Challenges uniqueto Japan

GR I T

Green

Resilience &RecoveryInnovation

Strategy

In fiscal 2020, we joined the UNDP’s SDG Flag Campaign with the objective of visualizing social issues and improving sustainability
literacy within the Group. Through SDG Flag, we will continue moving ahead with initiatives to advance the visualization of social
value in line with our strategy of realizing a sustainable society, outlined in our Fifth Medium-Term Management Plan, which started
in fiscal 2021.
Through the advancement of our GRIT Strategy based on these categories, we are contributing to the attainment of SDGs.

Transition /Transformation

Scope:	Fiscal 2021 investments and loans

Corporate GovernanceAchievements in Fiscal 2021
Total amount:	¥3,222.6 trillion
Calculation method:	The following process was used by
all DBJ employees.
STEP 1 Select up to two SDGs categories for each

person in charge to contribute to
STEP 2 Check fairness of mapping (reviewed by aspecial department)
five stages

More than ¥1.0 trillion ¥0.5–¥1.0 trillion ¥0.1–¥0.5 trillion Less than ¥0.1 trillion 

Corporate Data

STEP 3 Express monetary amounts (verified twice) in(Note: Crisis countermeasure loans in fiscal 2021 are counted
as initiatives that contribute to SDG 9: Build resilient
infrastructure, promote inclusive and sustainableindustrialization and foster innovation.)
Data Section

22

Development Bank of Japan Inc.
Integrated Report 2022

Key Initiatives toward Realizing Sustainability

Participation in Initiatives

ADFIAPDISCLOSURE INSIGHT ACTION

financing sustainable development

Initiatives to Address Climate Change: Endorsement of Poseidon Principles
While collaborating with global financial institutions, DBJ has endorsed
the Poseidon Principles, a framework for the marine transportation
sector to address climate change. Every year, we disclose our level ofcontribution to the reduction of GHG emissions through our portfolio ofinvestments in and loans for ships.


Poseidon Principles Annual Disclosure Report 2021

Initiatives in Natural Capital and Biodiversity: Participation in TNFD Forum
DBJ proactively participates in the Taskforce on Nature-related Financial Disclosures (TNFD)
Forum with the awareness that protecting natural capital and biodiversity and addressing climatechange are equally important in realizing a sustainable society.

Initiatives in Decarbonization: Endorsement of GX League Basic Concept
DBJ has endorsed the Ministry of Economy, Trade and Industry’s green transformation initiative,
GX League, to facilitate collaboration between industry, government and academia as companies
strive to grow whilst attempting to implement green transformation, keep pace with changes insociety, and move toward carbon neutrality by 2050.

Training Human Resources to Support Sustainability Management
Creating Educational Textbooks and E-Learning Classes
In order to accelerate its GRIT Strategy and promote sustainability management, DBJ has created
textbooks about GRIT and sustainability, with a glossary of terminology and facts compiled fromrelevant organizations within the Group. Group employees take e-learning classes, taking note of pastsustainability trends and sharpening their understanding of terminology. These educational programs
increase shared awareness of sustainability throughout the Group and inform more engaging
dialogue with customers and related parties.


GRIT and sustainability textbooks

Updates to Information Aggregation Systems
DBJ has set up a GRIT and sustainability portal on its intranet as a central place for gathering
information about domestic government policy, overseas trends, and DBJ Group initiatives. We areworking to improve sustainability literacy across the entire organization using the latest information.


GRIT / sustainability portal

Implementation of Training within DBJ
In fiscal 2021, DBJ held 12 training sessions for executives and employees at the 2050 Growth
Strategy Headquarters Meeting, examining important matters and sharing knowledge within theGroup. We invited attorneys to lead study sessions about business and human rights as a part ofefforts to spread the latest specialized knowledge to all employees.


Seminar on business and human rights

Development Bank of Japan Inc.
Integrated Report 2022

23

Invigoration and Stabilization of Financial Markets throughPartnerships and Collaboration
The DBJ Group provides unique solutions through optimal partnerships, emphasizing cooperation andcollaboration with other financial institutions and non-financial companies.

Sweeping structural changes

Fin
a

sR

esp

on

Governmentt

Government
investments and loans
Regional financial
institutions
Major financial
institutions
SRI bonds

ser

iso

ry

Joint funds
Investors

Strategy

vices

Bonds and loans

A

Asset management

Risingawareness ofsocial valueAsset

ma na gemen t

 risis Response Operations andCSpecial Investment Operations

Provision of Knowledge	Backed by its experience and knowhow in industrial and infrastructure
fields as well as in risk analysis andstructuring, the DBJ Group creates
added value through the provision ofknowledge in such forms as surveys
and analyses.

	Crisis Response Operations andSpecial Investment Operations aremandated by the DBJ Act and areproperly undertaken as operations
backed by the unique strengths of
the DBJ Group.

Corporate Governance	DBJ receives funding in various
formats, including the procurement
and management of funds frominstitutional investors and financial
institutions in Japan and abroad. We
use these funds to supply risk capitalto domestic and overseas customers
in the industrial and infrastructure fields.

es

IT andfoundationse	Procurement and Managementof Funds

Surveys andconsulting
services

dg

S

Addressing
sustainability

Addressing sustainability

In v

Investments
and loans,asset
management

Overseas
bases

wle

Sustainability

i al(i n d I nv e
u st s t mri alGroup Companies

KnoI

Developing businessoverseas

O

Spec

ons

dv

International

se

a ti
p er

C ri simovements
accelerated during
pandemicResponse to decline inworking-age population

D and S

A

in g

in

Aging

nc

s
ts
a tio nenmper )t O e nt
e n v e st m

Utilization and development for
digital transformation business

Customers’
point of view

Social issues same as management
issues faced by customers

Recovery fromCOVID-19
pandemic,
growthDigitalD

Financial
institutions andoperatingcompanies

Collaboration andcooperation

Value Creation Story

D.A.I.S.

Supply of Risk Capital by the DBJ GroupDBJ Asset Management Co., Ltd. (DBJAM) has ¥2.1 trillion
in capital entrusted by investors, regional financial institutions,and other clients desiring expert fund management. In its workin asset management, DBJAM focuses on assets that allow the
DBJ Group to best apply its strengths. Combined with theentrusted assets at DBJAM, the entire DBJ Group handles
approximately ¥4.6 trillion in risk capital. We will continue toenhance the supply of risk capital in order to better meet thediverse needs of our customers.

Mezzanine financing

Investments¥0.8 trillion*2¥1.7 trillion
DBJAM (AUM)¥14.5 trillion¥2.1 trillion*1(including Crisis Response Operations, structured-financing and asset-financing projects)(As of March 31, 2022)¥17.0 trillion¥2.5 trillion¥4.6 trillion*1 Portions entrusted by DBJ are eliminated from DBJAM’s assets under management (AUM).
*2 Overlapping portions for crisis response projects and structured financing projects are eliminated from mezzanine financing.

Data Section

Loans

Corporate Data

DBJ’s financing operations address diverse risks, including loan
and investment operations such as crisis response loans for
emergencies (see pages 38-39), and risk-tailored project
financing (¥14.5 trillion balance), as well as Special Investment
Operations (see pages 36-37), such as operations to supply
risk capital, like investments and mezzanine financing (about¥2.5 trillion), out of the DBJ Group’s balance of investments
and loans (about ¥17.0 trillion).

24

Development Bank of Japan Inc.
Integrated Report 2022

Business Strategy

Sector Strategy

Rebuilding and Reinforcement of Infrastructure

Energy Sector
The DBJ Group will contribute to therealization of a decarbonized society worldwide
and to the growth of Japanese energy companies by taking a leadership role in the financingof transformation in Japan’s energy markets.

Main Business Fields
The DBJ Group provides financing and advisory services tocompanies and projects in the following sectors.
Electricity

Gas

Oil

Balance of Loans in the Electricity, Gas, Oil Refinery,Heat, and Water Sectors
As of March 31, 2022

¥3.2 trillion

Social Issues
	Changes in macro structure, such as population
	Response to climate change-related issues:		Declaration of 2050 carbon neutrality, reduction ofgreenhouse gas (GHG) emissions by 46% by fiscal 2030
		Growing importance of transition financing road maps toachieve targets	Impact from rising resource prices worldwide, higher
energy costs
	Tight supply–demand balance for electricity, stable supplyof electricity
	Trends in decarbonization technologies and innovations
	Progress in digitalization

Risks and Opportunities
	Delays in the transformation of industry structures and the
supply–demand structure for energy to address changes in
the global environment, decarbonization, and the acceleration of digitalization	Possibility that initiatives to transform industry structuresand energy supply–demand structures will lead to stronger
industrial competitiveness and further development of Japan	Opportunities arising from innovation on software andhardware fronts

https://www.dbj.jp/case/list/?field=energy
Please refer to the DBJ website to see examples and case studies (Japanese only)in the energy sector.

Development Bank of Japan Inc.
Integrated Report 2022

25

Energy Sector

Strategy

Corporate Governance

Project Spotlight

Strategy

G R I T Strategy­ ialogue. While maintaining relationships built up withdcustomers in the energy sector, the Group is concentrating on
smoothly providing financing, including risk capital, with theproactive inclusion of new financing methods that are highly
compatible with environmental, social, and governance (ESG)
criteria. In particular, we are coordinating with other financial
institutions to meet demand for capital for renewable energy
projects based on the transition financing road maps ofindividual companies. Through these initiatives, the DBJ
Group supports industry-wide innovation and efforts toward
carbon neutrality.
Overseas, the DBJ Group is involved in investments andloans for renewable energy projects in a bid to help realize
decarbonization at a global level. Utilizing the experience andknowledge it has gained through transactions in leading
markets, the Group assists with the transformation of theindustry structure in Japan and helps companies strengthen
their competitiveness.
Moreover, through asset management operations in theenergy sector, the DBJ Group endeavors to nurture markets
that bring together the capital of institutional investors and tocreate investment opportunities that move Japan and the restof the world closer to carbon neutrality.

Value Creation Story

In recent years, the movement toward decarbonization
across Japanese society has accelerated. In October 2020,
the Japanese government declared its target of achievingcarbon neutrality by 2050. In April 2021, it unveiled its target
for reducing GHG emissions by 46% by fiscal 2030, before
aiming for an even higher reduction of 50%. In February 2022,
the Ministry of Economy, Trade and Industry announced atransition financing road map for the electricity, gas, andoil sectors, and Japanese companies began to examine
concrete transition pathways to a decarbonized society.
However, there are still many challenges in Japan’s energy
supply–demand structure. With nuclear power plants stilloffline, energy facilities built during Japan’s period of rapid
growth have deteriorated with age, raising concerns about
the tightness of supply–demand conditions for electric power.
Moreover, rising resource prices around the world, due in partto Russia’s invasion of Ukraine, are also a problem. There aremany issues that need to be directly addressed from multiple
angles, such as ensuring energy security, curbing energy
costs, and securing a stable supply of energy.
With such issues accumulating in the energy sector,
the DBJ Group is working together with customers directly
affected by these issues to find solutions through deeper

Contributing to the Realization of a Carbon-Neutral Society throughStrategic Joint Investments in Renewable Energy
Corporate Data

In June and July 2021, the DBJ Group, along with The Kansai Electric Power Co., Inc., and Osaka Gas Co., Ltd., acquired
four renewable energy plants in Japan from Etrion Corporation, a Canadian renewable energy company.
The Kansai Electric Power Group and the Daigas Group are promoting efforts that contribute to the environment, withthe aim of achieving carbon neutrality by 2050 throughinitiatives to own, spread, and expand solar power andother renewable energy resources.
Beginning with joint investments with these twocompanies, the DBJ Group is assisting customers’
efforts toward carbon neutrality by 2050 through the
supply of risk capital for renewable energy projects,
such as solar and wind power generation projects, both
domestically and internationally.

Data Section

Shizukuishi Solar Power Plant

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Development Bank of Japan Inc.
Integrated Report 2022

Business Strategy

Sector Strategy

Rebuilding and Reinforcement of Infrastructure

Transportation Sector
The DBJ Group aims to provide financial
leadership for the growth of the transportation
sector and advancement of transportation
networks in Japan. DBJ will also act as abridge between Japan’s financial market andthe global transportation financing market.

Main Business Fields
The DBJ Group provides financing to companies and for­projects in the transportation sector.
Land transportation

Marine transportation

Air transportation

Balance of Loans in the Transportation Infrastructure(Transportation Industry) Sector
As of March 31, 2022

¥3.2 trillion

Social Issues
	Impact of the COVID-19 pandemic	Shrinking population, declining birth rate, and aging
population
	Maintenance of safe, secure, and sustainable transportation
infrastructure	Increase in movement of people and goods, creation of
new services, and reduction of environmental burdens onpath to upgrade transportation infrastructure

Risks and Opportunities	Sustainable growth in transportation sector, solutions toproblems for making networks more advanced	Proactive contributions to global frameworks for
decarbonization

https://www.dbj.jp/case/list/?field=transport
Please refer to the DBJ website to see case studies (Japanese only) in the transportation sector.

Development Bank of Japan Inc.
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27

Transportation Sector

Strategy

Strategy

Project Spotlight

Corporate GovernanceG R I T Strategy

Proactively contributing to global-scale frameworks for
decarbonization will be essential for facilitating the borderless
movement of people and goods. The DBJ Group became asignatory to the Poseidon Principles to contribute financial
resources for addressing climate change in the marinetransportation sector, which will be key to achieving theInternational Maritime Organization’s targets for reducing GHG
emissions over the medium and long term. To truly
understand the issues faced by its customers, the DBJ Groupwill continue to offer financial solutions tailored to diverse
needs and act as a bridge between the global transportation
financing market and Japan’s financial market.

Value Creation Story

While maintaining relations with customers in thetransportation sector, we will refine our ability to respondflexibly to changes in the external environment and society.
More specifically, the DBJ Group will further strengthen its
optimal financing solutions for quality projects and assets inthe land, marine, and air transportation fields, as well as
supply risk capital to Japanese companies for sharpening
their international competitiveness.
Additionally, the Company will provide financing
opportunities to Japanese regional banks and other financial
institutions and investors in the global transportation financing
market through improved syndicated loans. Additionally, the
DBJ Group will focus on providing a range of investment
products based on transition financing and investment.

Arrangement of Syndicated Transition Loan for Mitsui O.S.K. Lines to
Acquire Two LNG-Fueled Ferries

Data Section

MOL’s Sunflower Kurenai

Corporate Data

Mitsui O.S.K. Lines, Ltd. (MOL), a leading shipping company in Japan, unveiled in June 2021 the MOL Group
Environmental Vision 2.1, setting an industry-leading goal of achieving net-zero emissions for the entire MOL Group by
2050 by introducing 90 LNG-fueled vessels by 2030 and around 110 net-zero emissions vessels by 2035. As a part of thisstrategy, the MOL Group was the first company in Japan to introduce two LNG-fueled ferries (the Sunflower Kurenai and
the Sunflower Murasaki) for service on the Osaka–Beppu
route. The DBJ Group arranged a syndicated transitionloan with 11 banks centered on regional financial
institutions located in western Japan, near the plannedroutes for the ferries and the shipyards where the vessels
will be constructed. This is the first transition loan
selected by the Ministry of Economy, Trade and Industry
as a Climate Transition Finance Model Project. By
arranging this loan, the DBJ Group provided financial
support for the decarbonization of the maritime
transportation sector and the MOL Group.

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Development Bank of Japan Inc.
Integrated Report 2022

Business Strategy

Sector Strategy

Rebuilding and Reinforcement of Infrastructure

Urban Development Sector
Identifying and taking social issues into
account, the DBJ Group contributes to thedevelopment of the real estate financemarket, growing alongside cities by offering
appropriate support with the maintenance,
upgrading, and expansion of urban functions.

Main Business Fields
The DBJ Group provides loans and investments in urban development projects undertaken by developers, special-purpose
companies for owning real estate, loans and investments forreal estate investment trusts (REITs), and management of DBJ
Green Building Certification with the Japan Real Estate Institute.
Urban development business

Real estate financing

DBJ Green Building Certification

Balance of Loans in the Real Estate Sector
As of March 31, 2022

¥1.9 trillion

Social Issues
	Changes in social values due to decline in working-age
population, workstyle reforms	Changes in lifestyle environments amid declining birth rate
and aging population
	Social and economic changes due to COVID-19 pandemic	Response to globalization and sharpening international
competitiveness of cities
	Response to climate change, energy conservation andcreation in real estate, decarbonization	Addressing of environmental, social, and governance (ESG)
issues, including strengthening resilience of cities
	Response to technological innovation (smart cities, etc.)

Risks and Opportunities	Need to redefine value proposition and meaning of realestate (offices, etc.) amid declining working-age populationand changes in social values	State of new community creation envisioning changes insociety and the economy (housing, retail, logistics, tourism, etc.)
	Acceleration of ESG and digitalization initiatives and new
business creation in real estate sector

https://www.dbj.jp/en/case/list/?field=development
Please refer to the DBJ website to see examples and case studies in the urban development sector.

https://www.dbj.jp/en/service/program/g_building/Please refer to the DBJ website to see more information about DBJ Green Building Certification.

Development Bank of Japan Inc.
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29

Urban Development Sector

Strategy

Strategy
Corporate GovernanceG R I T Strategy

important role of connecting real estate, a local asset, toglobal financial markets through its locally based ability togather information, forge relationships, and respond to issues.
In the ESG field, since 2014, DBJ and Japan Real Estate
Institute (JREI) have continued to jointly operate DBJ Green
Building Certification, which was created in 2011 as a system
to evaluate and certify real estate from an environmental andsocial perspective. We will reflect real estate value in thecertification system while continuing to promote the spread of
DBJ Green Building Certification in partnership with JREI.
Arc Japan Inc. (Arc Japan) was established in 2021 as acompany engaged in the data platform business foradvancing the decarbonization of society through the monitoring of environmental impact in real estate. The DBJ Groupand Arc Japan provide frameworks that improve the visibilityof the environmental performance of real estate and efforts toimprove lead to financing, in a bid to improve the sustainabilityof domestic real estate and support the decarbonization ofsociety.

Value Creation Story

The DBJ Group will facilitate urban development through the
supply of risk capital, including financing for developers,
REITs, and individual development projects. The field of urban
development is large in business scale, and it has a major
impact on society through investments, loans, and real estate
management because of its broad reach that affects the
livelihoods of people in Japan. Companies, society, people’s
lifestyles and the entire urban development field are being
affected by declining birth rates, an aging population, thedeclining working-age population, and climate change. The
business models of our customers may also have to change
rapidly. In an environment with such growing uncertainties, for
the urban development sector seeing cyclical, long-termchanges in value alongside changes in the social landscape,the DBJ Group believes it is essential to take a long-term,
public perspective in projects and nurture the social trust it
has gained through public-mindedness over many years.
While considering these value systems, we provide
multifaceted and comprehensive financial solutions for ourcustomers.
With diverse investors becoming involved in global realestate investment, the DBJ Group will play the increasingly

Project Spotlight

Investment in SPC to Develop a Wooden Office Building in Sendai City
Corporate Data
Data Section

In conjunction with regional financial institutions, the DBJ Group invested ina special purpose company (SPC) created to develop an environmentallyfriendly office building with a mixed wood and steel structure in Sendai City.
To realize a sustainable society, in the real estate sector, expectations aremounting for companies to reduce CO2 emissions throughout the life cycleof a building, including construction, usage, and the manufacture anddisposal of materials. Using wood for building construction has less impact
on the environment than fabricated materials, and the carbon storage effectof wood itself is a promising way to reduce CO2 levels. The forestry
industry, however, also needs support with improving its supply chain.
The SPC was set up to advance innovative efforts by concentrating themanagement resources of project participants. In addition to sharpening
competitiveness, this project aims to strengthen supply chains by improving
systems for supplying wood materials and to help revitalize regional
economies. The DBJ Group provides assistance for this project through its
Green Investment Fund, a funding framework in the Special Investment
Operations scheme.

Perspective diagram for the project in Kokubuncho,
Sendai City

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Development Bank of Japan Inc.
Integrated Report 2022

Business Strategy

Sector Strategy

Creation, Conversion, and Growth in Industry

Industrial Sectors
In industrial fields with accelerating initiatives
across existing sector boundaries, such as
restructuring and tie-ups across sectors, the
DBJ Group contributes to the reinforcementof Japan’s industrial competitiveness as an
incubator that creates new businesses andmarkets.

Main Business Fields
The DBJ Group provides financing and advisory services forcompanies and projects in industrial sectors.
Manufacturing

Communications, broadcasting, media

Retail and foods

Healthcare

Hotels, Japanese-style inns, tourism, etc.

Social Issues
	Response to changes in industrial structure on pathway
toward carbon neutrality
	Securing of a strategic domestic industrial foundation
	Promotion of innovation with scientific technologies toensure Japan’s technological edge	Inadequate support for start-ups

Risks and Opportunities
	Innovating in financial technologies, such as fintech
	Providing unique added value to solve issues for customers
	Reinforcing business foundations through measures such asindustry restructuring	Promoting innovation for commercializing new technologies
	Creating new industries through industry-wide initiatives
	Supporting start-ups and other venture firms

https://www.dbj.jp/case/list/?field=industry
Please refer to the DBJ website to see examples and case studies (Japanese only)
in industrial sectors.

Development Bank of Japan Inc.
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31

Industrial Sectors

Strategy

Corporate Governance

Project Spotlight

Contributing to Realization of­Plastic-Recycling Society through
Capital Participation in R Plus Japan• Society 5.0 calls for a human-centric society that balances economic development with solvingsocial issues, using advanced systems that combine cyberspace and physical space.

Exergy Power
Systems, Inc.
SkyDrive Inc.
CROSS SYNC INC.
FLOSFIA Inc.

Business domain(new sector classifications)
Next-generation nickel–hydrogen storage batteries(batteries × services)
Flying cars and drones(automobiles × aircraft)
Remote ICU and medical
digital transformation(healthcare × digital)
Next-generation power
semiconductors(materials × energy)

Data Section

The Society 5.0 Investment Program is a framework for investing in
activities that contribute to the creation of a more sustainable society, whileaiming to create new industries with new value systems to solve social
issues in Japan. It has invested in four companies since its creation in 2020.

Company name

Corporate Data

The DBJ Group invested in R Plus Japan, a company working to develop
and commercialize technologies for recycling used plastic.
In recent years, attention has increasingly focused on the impact ofplastic on marine life and on the large amounts of CO2 that are emitted
when plastic is produced and discarded. More attention is being paid to the
Dialogue with R Plus Japan
recycling of used plastic and other methods for solving this social problem.
Using the technologies being developed by R Plus Japan, it may be possible to recycle plastic efficiently with low
environmental impact, by using a streamlined recycling process to limit CO2 emissions and energy consumption comparedwith conventional recycling technologies.
By investing in R Plus Japan, the DBJ Group is helping to strengthen the competitiveness of industry while moving
another step toward a plastic-recycling society.

Society 5.0 Investment Program

Strategy

G R I T Strategy

carbon recycling and resource recycling, while providing risk
capital and advisory services to customers reforming theirbusiness portfolios with the aim of accelerating the movement
toward carbon neutrality. We also provide financing andknowledge for initiatives to develop technologies related tohydrogen, ammonia, and other carbon-free fuels, as well as
to advance next-generation air mobility. Moreover, we offer
support from both financing and knowledge angles for digitaltransformation initiatives in each industry and projects
to update information and communications technology
infrastructure, the needs for which are increasing due to
5G, the Internet of Things, and similar technologies.
To realize this, the DBJ Group will strengthen teamcapabilities by deepening internal collaboration and improving
the skills of individual employees, with a focus on their ability
to make proposals.

Value Creation Story

Backed by our deep specialist knowledge of the industrial
sectors we cover and of individual customers, we fully
leverage our unique network rooted in various financing
functions, knowledge, utility, and neutrality to support ourcustomers and resolve issues in diverse fields. Such customer
support encompasses assisting with growth, sharpening
competitiveness, rebuilding business portfolios, developing
new businesses, generating business overseas, collaboratingwith other companies and sectors, optimizing capital policies,and cooperating with government industrial policy.
In 2020, DBJ established the Chief Industry Strategy Office
to oversee the Corporate Finance Department, Division 1, andCorporate Finance Department, Division 2, with the aim ofcreating new industries across sector boundaries. This officewill tackle issues that are common among industries in order
to connect disparate industries across existing boundaries
related to innovation, sustainability, and business transition.
In response to efforts toward carbon neutrality, the DBJ
Group offers sustainability financing that assists activities in32

Development Bank of Japan Inc.
Integrated Report 2022

Business Strategy

Area Strategy

Self-Reliance and Revitalization of Local Economies

Regions
The DBJ Group provides solutions forregional issues, connecting regions throughout Japan to Tokyo, domestic regions tothose overseas, and regions the world overto each other.

OutlineThe DBJ Group provides services tailored to thecharacteristics of the respective regions in Japan from 10
branches and eight representative offices across the country.
Investments and loans

Consulting services

Planning and research services

Total No. of Business Alliances with Financial Institutions
As of March 31, 2022

111

Social Issues
	Medium- to long-term decline in population
	Impact of COVID-19 pandemic on industries that dependon non-resident populations, such as tourism
	Shortages of people in charge of promoting sustainability
in regions

Risks and Opportunities
	Possibility of stronger regional demand as a result of workstyle reforms and changes in supply chains	Growth strategies, including overseas business development,of regional companies
	Maintaining of regional companies and increases in value
thereof through business rebuilding and business succession
	Providing assistance for initiatives for decarbonization in­collaboration with regional financial institutions
Head Office
10 branches	Eight representative
offices
Niigata Branch
Toyama Representative Office
Hokuriku Branch
Okayama Representative Office
Matsue Representative Office

KushiroRepresentative Office
Hokkaido Branch

Hakodate
Representative Office
Aomori
Representative Office
Tohoku Branch
Head Office

Chugoku Branch
Kyushu Branch
Oita Representative
OfficeMinami-Kyushu
Branch

https://www.dbj.jp/case/
Please go to the DBJ website to see the areas supported by each branch (Japanese only).

Tokai Branch
Kansai Branch
Shikoku Branch
Matsuyama
Representative OfficeDevelopment Bank of Japan Inc.
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33

Regions

Strategy
Collaboration with Regional Financial Institutions
Recently, we held three series of DBJ Sustainability Seminars for regional financial institutions across Japan, covering a wide rangeof topics specific to their fields, amid increasing expectations for regional financial institutions to act as drivers of sustainability intheir regions. We also offer consulting services that help the customers of regional financial institutions introduce sustainability
management. In addition to finance, the DBJ Group disseminates information and provides consulting to support the resolution ofregional issues in collaboration with regional financial institutions.

Value Creation Story

We provide the following services to support new regional developments.

Provision of Overseas Information on M&A Deals, etc.

Strategy

As a part of our efforts to revitalize regions through regional financial institutions, we create merger and acquisition (M&A)
opportunities for regional companies through our M&A network of regional banks to address various management issues, such ascarbon neutrality, business restructuring, and succession at regional companies, as well as the expansion of business domains,
including overseas.

Provision of Knowledge

G R I T Strategy

Project Spotlight

Corporate Governance

The DBJ Group conducts research and creates plans for the benefit of industry and regions, such as assisting the effortsof regional carbon-neutral promotion councils. We also support the formation of public–private collaboration projects, such as
pay-for-success (PFS) contracts and social impact bonds (SIBs), with the Social Impact Assessment Team of the Japan Economic
Research Institute Inc. The DBJ Group researches and reports on the strategies of tourism cities in light of the impact of the
COVID-19 pandemic. We also examine social value provided by events that stimulate interactions among people, such as sports,
music, cultural, and artistic events. Through these and other efforts, the Group provides knowledge aimed at sustaining uniqueregional resources and discovering new ones to attract people.

Launch of Japan’s First Nationwide Search Fund:
Providing New Solutions for Business Succession

Data Section

Manager meeting

Corporate Data

Along with Nihon M&A Center Inc. and Career Incubation Inc., the DBJ Group established Search Fund Japan, Inc. for the
purpose of solving issues affecting domestic small and medium-sized enterprises (SMEs), such as the lack of successors
to take over control of businesses, and launched an investment business based on the search fund model for the entire
nation, a first in Japan. A search fund is a type of private equity fund that was conceived in the U.S. to help SMEs findsuccessors—in other words, people interested in becoming managers—with the support of investors in the searchfund. It is designed to reignite the growth of a company
with successors becoming managers of that company.
Through the greater use of search funds, the DBJ Groupaims to sharpen the competitiveness of Japanesecompanies by matching SMEs with young people whoare interested in becoming managers, thereby rekindling
growth of SMEs as talented personnel take control ofoperations, while training personnel for management
positions and solving the regional problem of businesssuccession at SMEs.

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Development Bank of Japan Inc.
Integrated Report 2022

Business Strategy

Area Strategy

Self-Reliance and Revitalization of Local Economies

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

OutlineThe DBJ Group’s subsidiaries in London, Singapore,
Beijing (including a branch office in Shanghai), and New York
coordinate its operations overseas.

Social Issues
	Recovery of global economy from the impacts of the
COVID-19 pandemic	Technological advances and innovations to achieve global
aim of carbon neutrality
	Rising geopolitical risks caused by Russia’s invasion of
Ukraine, changes in global supply chains due to the invasion,and countries strengthening their economic and energy
security

Risks and Opportunities
	Rising geopolitical risks caused by Russia’s invasion of
Ukraine, global inflation concerns	Reemergence of needs for global business development
among Japanese companies as stalled economy recovers
from the impacts of the COVID-19 pandemic	Increase in demand for sustainability and transition financein fields of energy, industry, and infrastructure amid
movement toward carbon neutrality

DBJ Europe Limited

Overseas Bases

DBJ Americas Inc.
DBJ Investment Consulting(Beijing) Co., Ltd.
(Branch office: Shanghai Branch)

DBJ Singapore Limited

https://www.dbj.jp/case/
Please refer to the DBJ website to see the Regional, Industry,and Economic Report (Japanese only).

Development Bank of Japan Inc.
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35

Overseas

Strategy

Corporate Governance

Project Spotlight

Strategy

G R I T Strategy(2)	The DBJ Group helps solve issues associated withentering overseas markets by leveraging its research
and advisory functions and by utilizing investment
functions when needed in line with the overseas
business development needs of its customers inindustrial fields, including in each region of Japan.
Leveraging the functions of our overseas bases, we arebuilding systems able to offer support not only in Japanbut also locally from overseas locations.
(3)	DBJ Group companies provide investors in Japan with
opportunities to invest overseas through the asset
management business of investing in infrastructure
assets and companies. By utilizing the activities
mentioned in (1) and (2), we aim to generate synergies
with the asset management business by working toobtain investment opportunities overseas.
To achieve the above, the DBJ Group is strengthening
fields where it can leverage its abilities to the utmost at eachoverseas base, while concentrating resources on functions
such as networking, sourcing, negotiation support,monitoring, and research at overseas bases. Additionally, we
are upgrading each type of operating base with the aim ofadvancing overseas business and base strategies centeredon these sector strategies.

Value Creation Story

The DBJ Group engages in overseas operations and bringsback the knowledge it gains overseas to Japan, based on
sector strategies that encompass overseas service andlocation strategies. To achieve this, the DBJ Group will take
into account its GRIT Strategy, a key measure in the Group’s
Fifth Medium-Term Management Plan, as well as trends insustainability finance for carbon neutrality, a topic being
discussed in each overseas region. At the same time, the DBJ
Group is monitoring both the recovery of overseas economies
affected by the global COVID-19 pandemic and the impact of
the increasing geopolitical risks in each area from the Russia–
Ukraine conflict.
(1)	In infrastructure fields such as energy andtransportation, as well as in industrial sectors such as
food and agriculture, based on integrated strategies forJapan and the world, the DBJ Group provides assistance to domestic industries for overseas development,
as well as investments and loans, including from thestandpoint of bringing advanced knowledge toJapanese markets from overseas. To achieve this, the
DBJ Group works through the department in charge ofsector strategies, and the department in charge ofinvestment and loan functions, such as investments andstructured finance, together with its overseas bases.

Participation in Brookfield Global Transition Fund,an Infrastructure Fund for Transition Issues
Corporate Data
Data Section

Transition finance supports industries with the transition to carbon neutrality. Although a central part of the DBJ Group’s
GRIT Strategy, application of transition finance to specific projects has not been established in Japan. The DBJ Group
believes Japanese companies need to better understand overseas trends and specific projects in order to further theirtransitions to carbon neutrality. For this reason, DBJ decided to participate in Brookfield Global Transition Fund (BGTF) in
December 2021, which leverages Brookfield Asset Management’s
experience in renewable energy investment projects and is­co-headed by global transitions expert, Mark Carney. After
executing this investment, our investment team have worked
to deepen their understanding of transition finance operations
through studying BGTF’s investment projects. DBJ is pleased
to be working with Mr. Carney, who is Brookfield’s Vice Chairand head of transition investing, BGTF’s Investment Committee
member, and the United Nations Special Envoy on Climate
Action and Finance, and our management team has taken partin discussions with him about global trends in the transition tocarbon neutrality and the current state of Japan’s transition.
Dialogue with Mark Carney

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Development Bank of Japan Inc.
Integrated Report 2022

Business Strategy

Function Strategy

Special Investment Operations
and Crisis Response Operations
The DBJ Group will provide optimal financing
solutions tailored to customer needs, fromloans to mezzanine financing andinvestments, while reinforcing its ability toadequately evaluate various risks.

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

DBJ’s Initiatives to Supply
Risk CapitalSpecial Investment Operations
Special Investment Operations, established as an intensive
but temporary scheme to supply growth capital from theperspective of promoting the competitiveness of Japaneseenterprises along with regional revitalization, draws only aportion of the investment (industrial investment) from theJapanese government—enough to encourage the private
sector to supply growth capital. Since launching the
aforementioned operations in June 2015, DBJ has made¥998.2 billion (as of March 31, 2022) in investments andloans (152 projects in total), the first ¥962.1 billion of which
has spurred ¥6,231.3 billion in private-sector investments
and loans.

DBJ
Capital increase

Addition(Budget for
fiscal 2022:¥50 billion)(Budget for
fiscal 2022:¥50 billion)

Japanese­government(industrial
investment)

Special Investment
Operations(Managing investments andloans in special account)
Fiscal 2022: ¥100 billion

Complement andencourage private-sector
enterprises(including pump-priming)
Capital funds(including preferred sharesand subordinated loans)

Evaluation /verification

Special Investment
Operations Monitoring Board

https://www.dbj.jp/en/service/invest/special/
Please refer to the DBJ website for examples of initiatives related to Special
Investment Operations.

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

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

Enhance risk capital supporting growth

Capital account

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

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Special Investment Operations and Crisis Response Operations

Overview of Special Investment Operations
DBJ Innovation and Life Sciences FundValue Creation Story

In light of the Cabinet’s July 2020 announcement of its Follow-up on the Growth Strategy, in March 2021 we renamed the DBJ
Innovation Ecosystem Invigoration Fund, launched in March 2020, as the DBJ Innovation and Life Sciences Fund, to clarify our
support for strengthening the competitiveness of the life sciences industry. This fund is for supporting startup firms.

Growth Fund for Coronavirus Revival
In May 2020, this fund was established to help businesses affected by the COVID-19 pandemic rapidly and steadily recover andgrow, in reflection of the April 7, 2020, Cabinet decision Emergency Economic Measures to Cope with COVID-19.

Green Investment Fund

StrategyThis fund was created in February 2021, to support businesses that aim to improve the sustainability of natural resources and theenvironment, such as renewable energy businesses, in consideration of the December 8, 2020, Cabinet decision Comprehensive
Economic Measures to Secure People’s Lives and Livelihoods toward Relief and Hope.

Special Investment Operations
Growth Fund forCoronavirus Revival

Green Investment FundThis fund supports initiatives topromote innovation in Japaneseindustry and strengthen thecompetitiveness of the life
sciences industry.

This fund helps companies impacted
by the COVID-19 pandemic
recover and grow.

This fund invests in renewableenergy projects toward therealization of carbon neutrality
by 2050.

G R I T Strategy

Corporate Governance

DBJ Innovation andLife Sciences Fund

Project Spotlight

Data Section

CROSS SYNC Co., Ltd. was established as a “Yokohama City University venture capital firm” by doctors working in theintensive care units of hospitals affiliated with Yokohama City University. With the intention of reducing the numberof deaths and patients who rapidly decline in health, CROSS SYNC is developing and operating
the iBSEN application for constantly analyzing medical data and enabling the remotesimultaneous monitoring of multiple patients based on their vital signs and diagnostic
images. Through its Special Investment Operations, DBJ invested in CROSS SYNC alongwith Konica Minolta, Inc., Toyota Tsusho Corporation, and FINDEX Inc. based on its
innovative concept of supporting acute-stage healthcare, through the combination of theexpert knowledge of practicing physicians with artificial intelligence and other information
technology to identify and display relevant data for the patient’s healthcare needs,
and quickly determining and sharing the healthcare priorities of patients.
The DBJ Group will dispatch its own employees and connect the many relevant parties
to facilitate the development of this product and encourage its use. By solving various social
issues caused by healthcare worker shortages, we aim for a society where anyone canreceive the best medical treatment wherever they are.
iBSEN smartphone app

Corporate Data

Support for Start-Ups Aiming to Create a Future Healthcare Provision
System that Realizes ICU AnywhereDevelopment Bank of Japan Inc.
Integrated Report 2022

Business Strategy

Function Strategy

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

two-step loans as a complementary risk measure, among
other measures, to government-designated financial
institutions that supply necessary funds to address such damage.
In March 2020, the COVID-19 pandemic was designated acrisis (see Our Response to the COVID-19 pandemic on page39). As a designated financial institution, DBJ collaborated
and coordinated with private-sector financial institutions torapidly and effectively implement Crisis Response Operations.

Crisis Response Operations Scheme

DBJ

Private financial institution

DesignatedPrivate financial institution

Private financial institution

Designated financial institutions• Designated financial institutions conduct business inaccordance with the Crisis Response Operations Rules(based on approval of the competent minister).
• Designated financial institutions conduct business withcomplete double checks of required compliance in theirfinancing departments and their departments
responsible for crisis response operations.

Provision offunds, etc.

Clients

Japanese Government38

Two-step loans, etc.

Japan Finance Corporation(Crisis Response
Facilitation Account)•	Prepares and announces
crisis response facilitation
guidelines (approved by thecompetent minister)• Capital
contribution• Lending of funds• Interest subsidies•	Implements complementaryrisk and other measures on
the basis of agreements(approved by the competent
minister) with designatedfinancial institutions

Defines a new scope for DBJ’s ­responsibilities, making Crisis
Response Operations obligatory for an indefinite period•	Extends the scope of Japanese government recapitalization
securing DBJ’s financial ­structure, etc.
•	Establishes a new crisis response reserve account, reflecting
this obligation in the Articles of Incorporation, and indicatesmandatory Japanese government ownership of more than
one-third of shares and other measures
Note: Capital increases related to Crisis Response Operations before
the 2015 revisions to the DBJ Act were transferred from capital
to a crisis response reserve (¥206.5 billion). Capital increases for
Crisis Response Operations after the revisions are to be added
directly to the crisis response reserve.

Accomplishments and Initiatives to Date
2008/10

2008/12

Commenced Crisis
Response Operations as
a designated financial
institution

2011/3Financial Crisis Response Operations
and Earthquake Disaster Crisis
Response Operations(through March 31, 2011)

Main events that were designated as a crisis:2021/3

COVID-19
pandemic

Earthquake Disaster Crisis Response Operations

Total funds raised by the government in Crisis Response Operations•	Turmoil in international financial markets(Global financial crisis)¥206.529 billion(As of March 31, 2022)•	Great East Japan Earthquake•	Damage from heavy rainfall during Typhoon No.18
in 2015

Total loans for Crisis Response Operations, loans with loss guarantee agreements,
and commercial paper purchases•	Kumamoto earthquakes in 2016

• Loans:•	COVID-19 pandemic• Commercial paper acquisitions: ¥361.0 billion¥8,715.2 billion (1,652 projects)(68 projects)

Total Crisis Response Operations related to the COVID-19 pandemic
				¥2,495.7 billion(492 projects)

Total for mid-tier companies and large companies in restaurants and hotels sector
since March 29, 2021
¥249.6 billion (100 projects)(As of March 31, 2022)

https://www.dbj.jp/en/service/finance/crisis/?sc=1
Please refer to the DBJ website for examples of initiatives related to Crisis Response Operations.

Development Bank of Japan Inc.
Integrated Report 2022

39

Special Investment Operations and Crisis Response Operations

Project Spotlight
Great East Japan Earthquake of 2011
boost industry competitiveness, builds infrastructure, andreinforces functions (the “reconstruction and growth stage”),
we established a reconstruction and growth support fund incollaboration with the Regional Economy Vitalization
Corporation of Japan.
In fiscal 2018, with demand for reconstruction seeming
to settle, we established a new fund for medium- to longterm capital funds and other forms of money with sharedrisk, aimed at supporting the economic development of theaffected areas.
Going forward, we will continue to work with local
financial institutions while promoting efforts to help stricken
areas according to their particular stage of recovery.

Value Creation Story
Strategy

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

Our Response to the COVID-19 Pandemic

Breakdown of Financing by Sector*

Breakdown of Financing by Office Type*

Amount (%)

Number (%)
5%

15%

20%

27%

23%

33%
6%

* As of March 31, 2022

Othermanufacturing
Wholesale
TourismOthernon-manufacturing

Number¥470.9 billion

Transportation

18%

11%
4%

20%

Amount280¥2,024.7 billion

212

Head Office
Branches

Data Section

20%

Transportationequipment

Corporate Data

Increase in Support for Restaurants and Hotels
The business environment has become even more difficult
for companies operating restaurants and hotels, which havebeen major employers. At their request, the government
stepped in to provide further assistance to these companies
in March 2021. Under the direction of the Coronavirus
Response Headquarters, DBJ set up the Crisis Response
Operations Special Response Office and the Restaurants
and Hotels Team therein in order to speed up the screeningof companies operating restaurants and hotels.
Since March 29, 2021, DBJ has reduced the interest rateburdens of subordinated capital loans provided to large
enterprises in the restaurants and hotels sector and to midtier companies as an intensive but temporary scheme.
Other measures DBJ has taken include the creation of apreferred stock underwriting fund targeting mid-tier andlarge companies operating restaurants and hotels (DBJ
Food & Beverage/Hotel Support Fund Investment Limited
Partnership).

Corporate Governance

Implementation of Crisis Response Operations
In response to the damage caused by the COVID-19
pandemic, the DBJ Group opened consulting service
counters at the end of January 2020 and moved forwardwith its unique Regional Emergency Response Programfrom February 2020 onwards. As a designated financial
institution, DBJ has concentrated on Crisis Response
Operations since March 19, 2020, after the Japanese
government declared the pandemic a crisis.
Led by the Coronavirus Response Headquarters, which
is chaired by the representative director and president,
DBJ has moved to rapidly and precisely implement Crisis
Response Operations. DBJ will continue to collaborate andcoordinate with private financial institutions to meet theneeds of businesses that have been adversely affected by
the pandemic. DBJ will enhance collaboration with regional
financial institutions and ready its unique capital supply
systems, including the Regional Emergency Response
Program, while considering the efficacy of Crisis Response
Operations in terms of securing jobs and maintaining credit.

40

Development Bank of Japan Inc.
Integrated Report 2022

Business Strategy

Function Strategy

Syndicated Loans, M&A Advisory,
and Consulting Services
The DBJ Group mobilizes tie-ups andcollaboration to provide syndicated loans andsupport for M&A designed to promote
Japanese companies’ growth strategies andstrengthen their international competitiveness,while offering impartial consulting services
with a long-term perspective. Along withrelated services, this helps clients solve theproblems they face and stimulates activity
in financial markets.

Outline
DBJ provides integrated investment and loan services tocustomers through a complex arrangement of functions,
including the supply of long-term capital. From senior loans
to mezzanine loans and equity financing, DBJ seamlessly
addresses customer needs while also offering syndicatedloans, mergers and acquisitions (M&A) advisory, and consulting services among others.

Syndicated Loans
A syndicated loan is a method for extending a loan withidentical terms and conditions in a uniform contract to acustomer through a syndicated group of multiple financial
institutions brought together by an arranger—a managing
financial institution. Syndicated loans offer many benefits.
Customers are able to flexibly raise a large amount of funds,
with the arranger handling all of the negotiations with multiple
financial institutions. The arranger is able to invite a larger
number of participating financial institutions. Finally, the agent
handles all the administrative procedures, lightening theadministrative burden on other parties.
When DBJ arranges a syndicated loan, DBJ utilizes its
impartial position when reaching out to a wide range offinancial institutions. In the case of a regular corporate loan,
DBJ aims to increase value added with DBJ’s unique offeringof loan programs—such as the DBJ Sustainability Evaluation
Certification Program—and sustainability-linked loans.
Furthermore, our structured finance offerings may containsyndicated loans in the loan package. We have put together
large syndicated loans with many participating financial
institutions for the energy and infrastructure fields.
Through cooperative agreements with regional financial
institutions to provide syndicated loans, DBJ is strengthening
collaboration and cooperation while helping customers raise
funds, and offering investment and loan opportunities toregional financial institutions.

https://www.dbj.jp/en/service/finance/shi_loan/?sc=1
Please refer to the DBJ website for more information about and examples of our syndicated loans.

https://www.dbj.jp/en/service/advisory/m_and_a/?sc=1
Please refer to the DBJ website for more information about and examples of our advisory services.

Development Bank of Japan Inc.
Integrated Report 2022



41

Syndicated Loans, M&A Advisory, and Consulting Services

M&A Advisory Services(headquartered in New York), which wished to develop
business in Asia and other parts of the world. The synergies
generated between BDA’s overseas network and the DBJ
Group’s M&A advisory organization and domestic andoverseas networks have produced a more effective andefficient overseas M&A advisory service for our clients.

Value Creation Story

As a result of its impartiality, DBJ has a wide network it canmobilize in providing its M&A advisory services, including not
only Japanese firms but also overseas companies and private
equity funds.
In fiscal 2017, DBJ entered into an overseas M&A advisorybusiness cooperation agreement with BDA Partners

Consulting

Project Spotlight

Corporate GovernanceG R I T Strategy

Value Management Institute, Inc., another comprehensive
think tank, excels in analysis using proprietary economic
models and insight into cutting-edge technologies. Its highly
specialized knowledge encompasses a broad range of policy
fields, including the formulation of integrated strategies for
local governments across Japan.

Strategy

Japan Economic Research Institute Inc. (JERI) is acomprehensive think tank that conducts research in the
public, solutions, and international fields. In the public–private
partnership and project financing initiative fields, it has a
top-class track record in Japan backed by unparalleledexperience and know-how.

Providing Support to Japanese Companies for the Development ofRenewable Energy-Related Business Overseas through M&A Advisory
Services

Data Section

Formosa I Wind Power Co., Ltd.

Corporate Data

As the global movement toward carbon neutrality gains momentum, Japanese companies increasingly require investments
and M&A in renewable energy projects, including those overseas. DBJ’s overseas subsidiary DBJ Singapore Limited has
an investment banking team, comprising international staff
from Asia, that excels at gathering information related toinvestments and M&A deals in the region. This teamcollaborates with DBJ’s Business Development Department,
Relationship Management Department, and subsidiary JERI
to constantly introduce potential projects to customers andunderstand the latest needs of customers. These efforts
encourage customers to evaluate renewable energy projects
in Asia, and occasionally result in customers requesting
M&A advisory services. DBJ will continue to help customers
develop renewable energy operations in Asia through its
M&A advisory services.

42

Development Bank of Japan Inc.
Integrated Report 2022

Business Strategy

Function Strategy

Asset Management
DBJ Asset Management Co., Ltd. (DBJAM)
contributes to the activation of new money
flows and the development offinancial and capital markets through theprovision of quality investment opportunities
and management services to institutional
investors in the alternative investments field,
while leveraging the knowledge and networks
built up over the years by the DBJ Group.

Asset Management
Established in 2006, DBJAM is an asset management firm of
the DBJ Group that specializes in alternative investments inthe fields of real estate, private equity, and infrastructure
domestically and internationally.

Social Issues
	Diversification of investment opportunities
	Climate change	Declining and aging population
	Maintenance and upgrading of aging infrastructure	Improvement of labor productivity
The DBJ Group believes that the most effective way toaddress these issues is to increase the sophistication offinancial and capital markets in Japan. To this end, we think it
is necessary to enhance the sophistication of asset
management by institutional investors, such as pension funds
and financial institutions.

Risks and Opportunities
	Creating opportunities to invest in a sustainable society	Appropriately responding to climate change and othersustainability issues
	Promoting investment in renewable energy; maintaining andupgrading social infrastructure	Promoting engagement in sustainability and ESG initiatives
with General Partners
	Expanding and improving human capital	Training professionals, creating work environments thatfacilitate work, and improving engagement with employees

https://www.dbj-am.jp/en/
Please refer to the DBJ Asset Management Co., Ltd.’s website for more information about asset management.

Development Bank of Japan Inc.
Integrated Report 2022



43

Asset Management

Strategy

Strategy
Corporate GovernanceG R I T Strategy

and performs ESG integration, imbuing ESG elements
into operational processes in the three fields of real estate,
private equity, and infrastructure. DBJAM is also stepping up
engagement with investors and relevant stakeholders throughproactive dialogue and activities. By further strengthening andimproving these initiatives, DBJAM aims to optimize risks andreturns on investments in a broader range of fields and overlonger periods of time, while advancing its investment
services and securing the best returns for investors.
DBJAM recognizes that people are its most important
asset for continuing to fulfill its responsibilities and duties as
an investment management company. DBJAM is keen toprovide training in investment management for professionals,
proactively offering training opportunities that help improvetheir skills and know-how, as well providing training on its
corporate philosophy for all its executives and employees.

Value Creation Story

Established in 2006, DBJAM has expanded its management
services and fields of investment while responding to growing
investor demand for alternative investments. As a result,
DBJAM’s operations have evolved to encompass gatekeeper
and fund-of-funds services for investments in privately offeredreal estate funds, privately placed funds, and private equity,
infrastructure, and real estate funds in Japan and overseas.
Assets under management totaled ¥2,819.8 billion as ofMarch 31, 2022.
Above all else, DBJAM aims to expand long-term earnings
on the assets it manages while properly fulfilling its fiduciary
duty and stewardship responsibility as an investment
management firm. To this end, DBJAM engages in andadvances sustainability management principles and ESG
investment. More specifically, the Responsible Investment
Committee, which is chaired by the president and consistsof directors involved in business execution, decides policies

Project Spotlight

Stepping Up Initiatives in Sustainability and ESG

気候変動への対応

Environment：環境への取組み
再生可能エネルギーの導入移行リスクに関するシナリオ分析
 使用電力の再生可能エネルギーへの切り替え

 概要「Carbon Risk Real Estate Monitor（以下、「CRREM」）」というツールを用いて、移行リスクに関する定量的なシナリオ分析を実施しました。
本ツールを用いることにより、1.5℃シナリオ及び2℃シナリオに整合するための2050年までの温室効果ガス（以下、GHG）の排出削減経路を国別・物件用途別に可視化し、個別物件及びポートフォリオ全体で求められるGHG削減量等を分析することができます。
Average Portfolio
GHG Intensity vs. Paris Targets
ポートフォリオ平均の排出削減経路（G
G H G 排出原単位、kk g - CO2/㎡）

80

1.5℃シナリオ、2℃シナリオいずれの場合も、排出削減経路としては2050年に向けて大幅な排出削減が必要になります。

 本投資法人における対応

なお、現在、保有物件の使用電力における再生可能エネルギーの導入を進めておりますが、こういった取組みによりGHG排出量の削減を進める
ことにより、移行リスクの低減につなげていきたいと考えております（右図
参照）。

1%

2%

再エネ
導入済又は
導入予定

8%

品川グランドセントラルタワー
25%

DPスクエア錦11%

DPスクエア東桜
アークヒルズサウスタワー
DPロジスティクスセンター岩槻

 リーシングへの波及効果
XXXXXXXXにおいて、再生可能エネルギー電力を使用可能としたことについて、リーシング仲介会社にアンケート調査を行ったところ、「現在または今後リー
シング上プラスに働く」という回答はXX.X%（回答数N=XX社）でした。
テナント企業におけるカーボンニュートラルへの取組みが加速する中で、オフィスビルにおける使用電力の脱炭素化に取り組んでいく重要性は高まっていると認識しております。

60
50
40
30
20

 屋上部での太陽光発電
XXXXXXXXでは、屋上部分を太陽光発電事業者に賃貸し、太陽光パネルを設置しています。
これにより、当該物件のNOIの向上を図ると共に、社会全体での再生可能エネルギーによる発電の促進とGHG排出量の削減に貢献しています。

10
0

現在

Portfolio
GHG intensity without retrofits
排出削減経路（1.5℃シナリオ）
2°C-target
排出削減経路（2℃シナリオ）

Copyright (C) DBJ Private REIT Inc. All Rights Reserved

DBJ Private REIT Co., Ltd.’s ESG Report (excerpt)

1.5°C-target
GHG排出原単位（2020年データ）
Portfolio
GHG intensity with retrofits
GHG排出原単位（P.18記載の5物件での再エネ導入後の試算）

0

Copyright (C) DBJ Private REIT Inc. All Rights Reserved

白井ロジスティクスセンター

約78%

神宮前店舗タケオキクチ

19%

（注
3）

レジ物件（共用部）
17%

発電量

CO2削減効果2019年度

1,012 MWh446 トン

2020年度

963 MWh

425 トン

本事例に関係すると考えられるSDGs項目⑦エネルギーをみんなにそしてクリーンに⑬気候変動に具体的な対策を

1

Data Section

本分析により認識されたリスクに対し、ポートフォリオ全体として対策を検討して参ります。具体的には、個別物件の事情に即して、省エネ化の推進と再エネの導入を検討して参ります。

保有物件別電気使用量割合（2020年度）

17%

70

GHG Intensity [kgCO2e/m²/yr]

このため、現状のポートフォリオ全体のGHG排出原単位基にした場合、
1.5℃シナリオの場合は2030年前に、2℃シナリオの場合でも2030年
代前半には、求められる排出削減経路を超過した排出量になるという分
析結果になります。

気候変動への対応として、保有物件への再生可能エネルギーの導入を進めています。足元では、XXXXXXX、XXXXXXX・XXXXXXXの3物件、XXXXXXXXX、XXXXXXXXXの2物件を再生可能エネルギー電力へ切り替える予定です。
これにより、ポートフォリオ全体の使用電力における再エネ化率はXX・X%に達する見込みです。

オフィス計

2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047
2048
2049
2050

 分析結果Corporate Data

In recent years, we have been working to enhance the dissemination of information, such as ESG reports, to investors,
strengthening engagement through proactive dialogue with stakeholders while putting ESG integration into practice. In thereal estate field, we analyze scenarios based on Task Force on Climate-related Financial Disclosures (TCFD)
recommendations for the portfolios of privately listed real estate investment trusts (REITs), performing quantitative analysisof transition risks and physical risks related to climate change.

44

Development Bank of Japan Inc.
Integrated Report 2022

Management Foundation Strategy

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

External
environment
Scenarioplanning

Basic Policy
Financial capital is a vital element of our business foundationin the implementation of advanced business strategies centered on our sector strategy (see page 24–31) and our function strategy (see page 36–43). A robust financial foundationof funds and capital is necessary for the DBJ Group to execute its sector strategy, supply risk capital, and engage in
Crisis Response Operations.
We aim to maintain and strengthen our financial capital bymanaging it within the context of a risk appetite framework
based on sophisticated analysis of risks and returns, with due
consideration paid to regulatory capital (management focusedon shareholders’ equity ratios) and economic capital (management of capital using stress tests).

BusinessstrategyStress test

Business plan

Execution

Monitoring

Strategy for
financial capital

Financial Soundness Indicators
Issuer ratings

A1 (Moody’s), A (S&P), AA+ (R&I), AAA (JCR) (As of June 30, 2022)

Common equity Tier 1 capital ratio(consolidated)

16.97% https://www.dbj.jp/en/ir/
Please refer to the DBJ website for more information related to investor relations.

(As of March 31, 2022)

Development Bank of Japan Inc.
Integrated Report 2022

45

Financial Strategy

Specific Initiatives to Improve Value of Financial Capital
Value Creation Story

A pillar of the DBJ Group’s business strategy is to provide long-term financing for infrastructure projects. To do so, the DBJ Groupprocures long-term funds through corporate bonds and the Fiscal Investment and Loan Program (FILP).
In recent years, DBJ has stably procured funds through FILP as well as by issuing corporate bonds, thereby augmenting its
fund procurement activities with diversified maturities and methods. DBJ has been issuing green bonds and sustainability bonds
since fiscal 2014. The issuance of these bonds has not only diversified our fund procurement base but also invigorated thesustainable financing market.

DBJ Sustainability Bonds
Sustainability Bond Issuance(As of March 31, 2022)

Fiscal 2014€250 million

Fiscal 2015

€300 million

Fiscal 2016

$500 million

Fiscal 2017

$1 billion

Fiscal 2018

€700 million

Fiscal 2019
Fiscal 2020

Fiscal 2021

Strategy$1 billion€700 million$520 million€600 million$700 million*1 BCM: business continuity management*2	Green Bond Principles: The Green Bond Principles are compiled by theInternational Capital Market Association (ICMA), investors, issuers, andsecurities companies. These parties are responsible for updating annually theGreen Bond Principles, which are voluntary process guidelines that recommend
transparency and disclosure and promote integrity in the development of thegreen bond market by clarifying the approach for the issuance of a green bond.
These parties also constitute a platform for sharing the latest information about

Corporate GovernanceIn fiscal 2014, DBJ became the first bond issuer in Japan toissue a green bond. Furthermore, DBJ has issued a DBJ
Sustainability Bond each year since 2015. In fiscal 2021, DBJ
was the only Japanese issuer to do so for eight consecutive
fiscal years, having issued its first domestic bond in addition
to foreign bonds. The funds raised are allocated toward thecreation of a sustainable society via financing for real estate
properties eligible for DBJ Green Building Certification, theEnvironmentally Rated Loan Program, financing for renewableenergy projects, financing for green innovation and industries,
the BCM*1 Rated Loan Program, and the Regional Emergency
Response Program. Information on the management andallocation of funds is evaluated by third parties to increasetransparency. In January 2017, DBJ became an issuer
member of the Green Bond Principles,*2 the first Japanese
firm to attain such a status, and it participates on a committee
created by the Ministry of the Environment to revise the Green
Bond Guidelines, thereby contributing to the development ofa sustainable finance market around the world. DBJ willcontinue to support the sustainable growth of this market bycontinuing to issue sustainability bonds and proactively
engaging in international and domestic initiatives.

green bonds and disclosing relevant information to the public.

IR Activities to Spread Understanding of DBJ’s Principles and Work
Corporate Data
Data Section

In addition to procuring government credit through FILP and the issuance of government-guaranteed bonds, DBJ­conducts its own fundraising activities, such as issuing corporate bonds (FILP bonds) to domestic and overseas investors
and borrowing money from insurance companies and financial institutions— primarily regional banks. When conducting its
own fundraising activities, DBJ Group places emphasison having investors understand and support its principles and work and, to this end, conducts proactive
investor relations through face-to-face meetings.
Particularly when raising funds through loans, DBJ
takes care to further a deeper understanding of its workby giving examples of investments and loans it has madeinside and outside Japan as well as within domestic
regions. DBJ also takes care to gain a deeper
appreciation of the issues faced by borrowing
customers, viewing interactions as an opportunity forfurther collaboration on investments and loans, inaddition to borrowings.
IR activities

46

Development Bank of Japan Inc.
Integrated Report 2022

Management Foundation Strategy

Human Resource Development
We aim to be an organization with diverse
human resources that helps employees
develop skills while raising their motivation.

Basic Policy
Acquiring and training skilled employees is key to our uniquebusiness model and the pursuit of the DBJ Group’s four core
corporate values (a long-term perspective, impartiality,
public-mindedness, and reliability), in order to realize
Vision 2030 and execute the DBJ Group’s value creation
process while aiming to balance and enhance economic
and social value.
To this end, we believe it is important to create aframework that motivates our experienced employees toengage in their work with enthusiasm. We are advancing
various measures to improve the value of our human capital,
one of our foremost priorities.
Our employees are the wellspring of the value provided by
the DBJ Group. We intend to improve our human resource
and organizational capabilities with the aim of implementing
our constantly changing business model, and our mission,
Vision 2030, and values (see page 4, Corporate Philosophy).

Outline of Our Human Capital(As of March 31, 2022, on a Non-Consolidated Basis, except Where Noted Otherwise)
No. of employees (consolidated)
No. of employees (non-consolidated)
Global human resource training program participants(cumulative total)
Women’s empowerment and leadership program(see LEAD on page 49) participants (cumulative total)
Ratio of women in management positions
Ratio of employees returning to work after taking childcare
leave (number of employees having completed childcare
leave in fiscal 2021)
Ratio of employees taking childcare leave and­childcare-related time off by women/men
(employees with newborn children during fiscal 2021)
Rehiring system registrants
Employees who use reduced working hours for childcare
and nursing care
Seminars for finding childcare facilities (cumulative total)

1,809
1,257
70
32
7.90% (Reference: 15% target by March 31, 2026)
100% (22/22 people)
Women 90.3%
Men 20.8%(108.3% when including special time off for childcare)

26
53
236

https://www.dbj.jp/en/sustainability/effort/foundation/human_resources.html
Please refer to the DBJ website for more information about human resources.

https://www.dbj.jp/co/recruit/
Please refer to the DBJ website for more information (Japanese only) about our hiring process.

Development Bank of Japan Inc.
Integrated Report 2022

47

Human Resource Development

Value Creation Story

Human Resourcesthat Relentlessly Takeon New Challenges
Shingo Kobayashi
Executive Officer,
Head of Human Resources Management Department

why the DBJ Group exists. Accordingly, DBJ Group’s people
must always be willing to take on new issues and boldly
redefine themselves with an eye to the future.

Corporate GovernanceVision for Human Resource Development
The DBJ Group encourages autonomous and pioneering
behavior in its employees as financial professionals in keeping with its vision for human resource development, which
can be summarized as “cultivation of generalists who canbe specialists in many fields.”
While it is important to acquire specialist knowledge,
responding to society’s constantly changing needs also
requires broad experience, deep knowledge, and the ability
to see the big picture.
The DBJ Group has created a variety of personnel
systems and human resource training programs with theintention of nurturing employees with advanced specializations
but also broad perspectives, who are able to grow of theirown accord without fearing change, and contribute to thediscovery and resolution of issues faced by customers andsociety.

Strategy

Our Values
Our value creation process would not be possible without
the executives and employees who share our values of initiative and integrity and who display our four core corporate
values handed down from DBJ’s earliest days: a long-term
perspective, impartiality, public-mindedness, and reliability.
Having provided long-term funding since the postwar
reconstruction period, the DBJ Group has carried on the tradition of serving its customers, industry and society from a longterm perspective. The DBJ Group is also unique in terms ofimpartiality by always working toward what is best for Japan’s
economy and society, without being affiliated with any specificcorporate group. Our public-mindedness is what motivates our
employees to engage in work for the creation of both economic
and social value. The combination of these traits has earned
us a reputation for reliability from customers and society.
With these four core values as a starting point, the DBJ
Group tackles with integrity the management issues faced
by its customers and the issues faced by society as a whole,taking a long-term perspective and tirelessly pursuing measures to resolve these issues. This is our unique mission. It iswhat sets us apart from other financial institutions, and it isTraining for new
employees
FinanceFinancial Law
accounting

Short-term study on external programs

Global humanresources training
program for young
employees

Selfstudy

Foreign languages, finance, law, financial skills, etc.

Career development program• P roposal and screening
capabilities• F inancial modeling• F inancial products• S ustainability etc.

Global leadershipprogram for
managers

Domestic

Secondments to external institutions (national g­ overnment
agencies, Group companies, etc.)

Career development program

Financial ­skills-related
training

Short-term study at foreignbusiness schools

Pre-management training

Compliance training / information security training

Newly appointed manager training

Dispatch outside DBJ
GlobalStudy at foreign graduate schools

Life/career plan seminar
Coaching program
Strategic human resource development throughjob rotation and on-the-job training

Mid-level
employees
Mid-level
employeesNew
employees

In-house training (required/optional)

Data Section

Rank-based training

Corporate DataManagers

On-the-job
training

Diversity training(Women’s empowerment, “iku-boss,” understanding people with disabilities, etc.)

Outline of Human Resource Training System

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Development Bank of Japan Inc.
Integrated Report 2022

Management Foundation Strategy

Initiatives to Increase Value of Human Capital
The DBJ Group undertakes various measures to further
increase the value of its human capital in line with its valuesof initiative and integrity and its four core corporate values.
Strengthening Hiring and Strategic Allocation of Human
Resources Across the GroupThe DBJ Group will strengthen its hiring processes andpractices for both new college graduates and mid-careerhires, in order to secure personnel with diverse backgrounds
and thinking who are needed across the Group to implement
its sector, function, and area strategies.
The DBJ Group will also work to further disseminate its
vision and value creation process by increasing the transfer
of employees across the DBJ Group.
Training Personnel and Improving Engagement
Through practical on-the-job training and extensive training
opportunities, the DBJ Group develops employees withdiverse experiences, skills, and the ability to work togetherorganically as a team. We constantly assess whether we havelaid the proper foundation for genuinely motivating officers
and employees to take the initiative in accordance with the
DBJ Group’s corporate philosophy.
•	Developing global human resources: Opportunities tostudy abroad at overseas universities and training systems
are made available to employees. DBJ also operates its own
leadership training program (entirely in English) for young
employees and management-level employees, incollaboration with top overseas universities.
•	Training women for leadership positions: DBJ offers
leadership training programs with links to top domestic
universities.
•	Offering in-house training and supplementary programs:
The DBJ Group offers employees supplementary programsfor self-study as well as rank-based training to learn therequirements of their roles as needed, including extensive
work- and management-related training. DBJ offers a wide
range of high-quality skills development programs.
•	Providing training for new employees: Newly hired
employees undergo a one-year series of training programs to
support their professional growth, starting with DBJ’s threemonth in-house accounting and financial analysis course.
•	Offering more advanced and flexible training programs:
Through an appropriate balance of in-person and online
training, we seek to maximize the impact of training and put
in place environments that facilitate employee learning.
•	Spreading awareness of corporate philosophy andmanagement plan: During training on career development,
DBJ facilitates constructive discussions with employees
so they can better understand, improve on, and put into
practice our corporate philosophy. We also train employees
to become proficient in investment and loan operations,based on our GRIT Strategy for realizing a sustainable society.

•	Making strategic personnel rotations: Employees are
strategically rotated so that they steadily develop highly
specialized skills by gaining practical and diverse experienceand broad perspectives in multiple departments and outside
institutions.** DBJ dispatches employees to national government agencies, Group companies
around the world, and companies that have received investments.

•	Interviewing employees: All willing employees are interviewed
by the Human Resources Management Department aboutchanges in internal positions and their longer-term career paths.
• Improving engagement: Every fiscal year, DBJ conducts
engagement surveys of personnel, evaluates the results ofthese surveys, and creates action plans that enable eachdepartment to increase employee motivation throughimprovement activities.
Diversity Management and Productivity Improvements
In order to create workplaces where employees feel motivatedby their work, DBJ takes steps to foster mutual understanding
and improve the productivity of each employee.
•	DBJ is improving productivity and resilience with systems
that allow for flexible workstyles, such as working from
home, and flexible hours with core work times. During the
COVID-19 pandemic, employees worked flexibly from homeand staggered their office work hours as we prioritized thehealth and safety of our executives and employees while
ensuring that our work could be carried out.
•	DBJ holds seminars with specialists as guest speakers on
topics that include finding daycare, childcare, and nursing
care with the aim of improving its employment and vacation
systems, such as maternity leave, shortened work hours,
time off for childcare, and other programs for raisingchildren and caring for elderly family members.
•	DBJ encourages employees to build relationships based on
mutual trust and cooperation through various seminars—
including on building understanding of people withdisabilities—and through the creation and distribution of aguide about balancing work with childcare and nursing care.
•	DBJ continues to hold training and networking events on
career development aimed at empowering women in theworkplace.
•	In addition to periodic health checkups, DBJ supports thephysical and mental health of all its executives andemployees by providing them with personal resilience
training, and maintaining a counseling system staffed byexternal specialists.

Training program for new employees

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Human Resource Development

Global Human Resource Training Collaboration Program

Value Creation Story

Designed to foster a management mindset among DBJ’s young, management-track
employees, this three- to four-month customizable training program is based on Groupprojects and facilitated by a team of instructors from an international business school,with one week of the program taking place on-site at the school.
Purpose of Program• Train global management personnel to solve diverse management issues faced by customers
around the world• Imbue trainees with the ability to handle overseas assignments independently by sharpening self-analysis with diverse, cutting-edgeknowledge• Encourage trainees to consider their own careers and the vision for DBJ by understanding their work and the organization from a top-down
perspective
Oxford: Global Strategic Alignment
Leadership Programme (GSALP)

15–20 people

15–20 people
Start of July to end of November(Oxford for one week in late November)
Said Business School, University of Oxford, Oxford,
United Kingdom
Professor Jonathan Trevor, and others

No. of applicants
Dates

End of May to end of August (Lausanne for one week in late June)
International Institute for Management Development (IMD),
Lausanne, Switzerland
Professor Salvatore Cantale, and others

Partner
Instructors

Strategy

IMD: Orchestrating Winning Performance(OWP)

LEAD Program—In Affiliation with Waseda Business School

Purpose of Program• Provide a space for participants to deepen their understanding of the DBJ Group’s management strategies and philosophy, analyze theircurrent roles and responsibilities in the context of their affiliated departments and the DBJ Group as a whole in light of changes in society
and the environment, and think about the future• Provide a space for participants to think more about their career paths in terms of personal development and contributions to theorganization

Corporate Governance

Called Leadership Education and Ability Development (LEAD), this original DBJ training
program invites outside lecturers from Waseda University’s Graduate School of Businessand Finance and other universities to lead seminars on career development based onparticipants’ own strengths, learning soft skills for leadership and management positions,and understanding global macro trends as well as organizational and strategic theory.

Waseda Business School-Affiliated Program: Leadership Education and Ability Development (LEAD)
No. of applicants
About 15 people

November to December

Module1

Instructors

Waseda Business School,
and other institutions

Professor Jusuke Ikegami,
Professor Masakazu Sugiura,and others

Module2

2 daysPartner3

3 days1 day

Organizational theory

Global trends

Management strategy theory

Leadership, careers(taught by Waseda Business
School)Career development(taught by BRICOLEUR)

Ability development theory(taught by GLOBIS University)• Learn about ability development
theory while understanding one’s
own strengths• Learn about changes in theenvironment, such as the latest trends
in the economy, society, and industry,and rethink the future of DBJ• Learn soft skills related to one’s
career, such as leadership, management, and motivation• Rethink value systems and career
perspectives by interviewing seniorcolleagues about their careers• Integrate learning from Modules 1
and 2

Presentation

Data Section• Learn about frameworks oforganizational theory and management strategy theory, deepen understanding of DBJ’s medium-term
management plan, and understand
one’s own role

Corporate Data

ModuleDates

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Development Bank of Japan Inc.
Integrated Report 2022

Management Foundation Strategy

Knowledge and Collaboration
To improve intellectual, relationship, andsocial capital using the management
resources of the DBJ Group, we are
accumulating knowledge while advancing
collaboration with various stakeholders.

Intellectual Capital
Knowledge
Industry Analysis
DBJ analyzes and disseminates information on economic andindustrial trends in Japan and overseas, including
macroeconomic trends and trends in key industries.
Capital Investment Planning Survey
With a history of more than 60 years, and first conducted in
1956, DBJ’s Capital Investment Planning Survey examines
trends in corporate capital investment in Japan, capital
investment overseas, and spending on research anddevelopment (R&D), mergers and acquisitions, and humanresources through interviews with senior managers.
Research Institute of Capital Formation
The Research Institute of Capital Formation (RICF) wasestablished in 1964 with Dr. Osamu Shimomura as its first
executive officer. The institute serves as a venue for creating
intellectual capital through cooperation and collaboration withexternal experts. Its research includes a focus on building asustainable economy and society, from an academic andliberal standpoint.
2050 Growth Strategy Headquarters Meeting
This cross-divisional assembly, including members of senior
management, is held for the purpose of advancing the GRIT
Strategy in the Fifth Medium-Term Management Plan.

Processes
Digital Strategy Office
Based on the DBJ–DX Vision, the Digital Strategy Officeconsists of members across departments, and is in charge ofdigitalizing in-house business processes and solving customer
issues related to digital transformation (DX).

https://www.dbj.jp/en/investigate/
Please refer to the DBJ website for more information about our research reports.

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Knowledge and Collaboration

Relationship Capital

Stakeholder Engagement and Collaboration
Customers• Provided DBJ Sustainability Certification Loan programs • Held a business plan competition for women• Provided platforms for collaboration via DBJ Connect• Supported innovation with iHub

Financial
institutions• Collaborated with Long-Term Investors Club (LTIC)• Coordinated operations with Bridges Fund Management Ltd. in the United Kingdom

Government•P articipated in Task Force on Climaterelated Financial Disclosures (TCFD) scenario
analysis support project• Held DBJ Financial Academy at RICF

Strategy

Research
institutions• Participated in high-level panel about ESG finance		

Value Creation Story

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

Social Capital

G R I T Strategy

Social Capital

Details

Examples of Initiatives
Environmentally Rated Loan Program,
DBJ Green Building Certification(1) Naturalenvironment

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

Loans and investments for infrastructure
Energy, transportation, urban infrastructure,and industrial projects, BCM Rated Loan
industrial value chains
Program(3) System capital

Stabilization of the financial system,
development and invigoration of financial
markets

Crisis Response Operations, supply of risk
capital, sustainability bond issuance

Corporate Governance

The DBJ Group defines social
capital as a resource sharedacross society that underpins thefoundations of market
economics. Increasing the valueof social capital is a basic tenet
for realizing a sustainable society.

Project Spotlight

Data Section

DBJ has entered into a mutual cooperation agreement with New Energy and Industrial Technology Development
Organization (NEDO) with the objective of accelerating innovation to help build a sustainable society and realize theJapanese government’s goal of achieving carbon neutrality by 2050.
Based on this agreement, both parties will strive to create
innovations while embedding in society the outcomes of groundbreaking R&D, by organically combining NEDO’s technologicalstrategies in diverse technical fields and its management’s insightand know-how with DBJ’s broad industrial network ofconnections and expertise in finance.
Through this agreement, DBJ will support the commercializationof NEDO’s projects by helping to maintain business foundations,advance R&D and explore opportunities for coordination withprivate companies. We aim to realize a sustainable society
through our GRIT Strategy in the Fifth Medium-Term
Management Plan.
Mutual cooperation agreement signing ceremony

Corporate Data

Mutual Cooperation Agreement with NEDO:
Accelerating Innovation Toward Carbon Neutrality in 2050

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Development Bank of Japan Inc.
Integrated Report 2022

Response to the TCFD Recommendations

Basic Approach
Since the adoption of the Paris Agreement in 2015,
governments, industrial groups and companies around theworld have declared commitments to move towards a
decarbonized society, and activities are gaining momentum tomitigate and adapt to climate change. In October 2020, theJapanese government declared a goal of carbon neutrality by
2050, and various government policies are advancing theachievement of net zero greenhouse gas (GHG) emissions.
In May 2017, the DBJ Group set out its Policy on
Sustainability to represent its basic approach to contributing
to the realization of a sustainable society that balances
economic value with social value. Based on this policy, the
DBJ Group contributes to the realization of decarbonizedsociety by solving issues faced by regions and its customers
while collaborating with stakeholders. The DBJ Group has
positioned addressing climate change, a problem affecting
the entire world, as a priority of the utmost importance on thepath to creating a sustainable society while also ensuring astable supply of energy.
Under the Fifth Medium-Term Management Plan (seepage 16), which commenced in fiscal 2021, the DBJ Groupis advancing its GRIT Strategy* with the aim of building an
industrial foundation as well as flexible, strong, safe, andsecure regions and communities in a green society. At thesame time, through dialogue (engagement) with customers,
the DBJ Group supports their efforts in the transition to
decarbonized society.
The DBJ Group intends to pursue net zero GHG emissions
for its investment and loan portfolio by 2050 while solving
management issues and assisting its customers’ efforts todecarbonize. Through this process, we are helping Japan
maintain and strengthen its competitiveness and spurring
growth in our customers’ businesses.
* GRIT: Green, Resilience & Recovery, Innovation, and Transition / Transformation

Governance
Under the Executive Committee, the Sustainability Committee
deliberates on policy responses to various sustainability-related
issues, such as climate change, and monitors progress oncorresponding initiatives. With regard to the content of
stakeholder communications and important initiatives inmanagement strategy, the Sustainability Committee
deliberates and reports these matters to the Board of
Directors after the Executive Committee reviews and decides
such matters. The Sustainability Management Office has
been created as an administrative body within the Corporate

Planning & Coordination Department to advance various
measures and act as a hub for information inside and outside
the DBJ Group.
The Advisory Board, an advisory body to the Board of
Directors consisting of outside experts and outside directors,
reports on the progress of initiatives, such as the GRIT
Strategy and other business plans, and the content of its
deliberations is reflected in business plans and measures toenhance risk management.

Organizational Chart
Board of Directors

Advisory Board

Executive Committee• TCFD recommendation trends and policy for
response

Sustainability
Committee

Discusses and monitors policies and initiatives
to address issues related to sustainability,
such as climate change

ALM* &
Risk Management
Committee

Deliberates and reports the state of initiatives
related to risk management, including climatechange risks* ALM: asset liability management

List of Key Matters Discussed
by the Sustainability Committee• Environmental and social management policy forinvestments and loans• Policy for response to coal-fired power generation• Adoption of the Equator Principles• Editorial policy for the annual integrated report

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Response to the TCFD Recommendations

Strategy
Basic Approach to Climate-Related Risks and Opportunities
Value Creation Story

When formulating its Vision 2030 (see page 4), the DBJ Group identified climate change, natural resources, and energy as areas ofchange in the external environment that are having a major impact on the stakeholders of the DBJ Group. Properly understanding therisks and opportunities related to climate change is essential when establishing business strategies. The DBJ Group intends topursue net zero GHG emissions for its investment and loan portfolio by 2050. Based on a scenario where the world moves toward
decarbonized society (with an average rise in global temperatures below 2.0°C), we are advancing initiatives that take into account theresults of our analysis of risks and opportunities, including those in scenarios where average temperatures increase more than 2.0°C.

Analysis of Climate-Related Opportunities
Summary of Analysis
Sectors covered

Energy, transportation, urban development

Scenario

Use SSP scenarios to analyze scenarios where
the average temperature increases by 1.5°C, 2°C,
and 4°C

Relevant
technologies

Carbon capture and storage, electric vehicles,
biomass, hydrogen, renewable energy

Period covered

2030–2050

Summary of Analysis
Transition risk

Physical risk

Risk event

Sudden change
in policy toward
net zero GHG emissions

Water damage(flooding)

Scenario

NGFS*1 Delayed
Transition scenario

IPCC*2 RCP*3 8.5(4ºC scenario)

Present analysis
targets

Electric power sector

Damage to collateralvalue as a result offlooding

Assets covered

Balance of investments
and loans

Balance of loans

Analysis period

By 2050

By 2050

About ¥40.0 billion(cumulative)

About ¥6.0 billion(cumulative)

Analysis results(level of increase incredit costs)

Corporate Data

The DBJ Group is aware of climate-related financial risks interms of transition risks and physical risks. Transition risks
could impact the business strategy of the DBJ Group by
increasing credit costs if the creditworthiness of the recipientsof its investments and loans declines due to lower sales andhigher costs, mainly from the introduction of a carbon tax andupgrades to low-carbon technologies. Physical costs mightalso impact our business strategy by increasing credit costs if
the creditworthiness of the recipients of our investments andloans declines due to damages to collateral value as a result ofabnormal weather or supply chain disruptions.
In fiscal 2021, DBJ analyzed scenarios for the electric power
sector, including structured finance projects for energy projects
in Japan and around the world (for transition risks), and damage
to collateral value due to water disaster (for physical risks). The
results of this analysis indicate that even if DBJ’s current portfolio
balance were to stay the same, the financial impact would be
limited to an acceptable level from a long-term perspective.
The DBJ Group is aware that the methodologies and data
used to analyze financial risks related to climate change
continue to evolve. While monitoring trends in this field, we will
adopt more advanced methods of analysis if necessary.

Corporate GovernanceAnalysis of Climate-Related Risks

Strategy

In fiscal 2019, DBJ began to analyze scenarios for 2030–2050
from medium- and long-term standpoints. In light of future
uncertainties associated with climate change, financial
institutions must envision a variety of scenarios for the economy
and society in the future, and consider changes in their portfolios and countermeasures based on these scenarios. As an
initial approach, we utilized Shared Socioeconomic Pathways(SSPs), which are GHG emissions scenarios under various
climate policies, to analyze and assess the impact on
businesses. Our focus was on transition opportunities in thecontext of government policies and regulations and technologicalinnovation for attaining low-carbon or zero-carbon society inthe framework of four visions for the world in the future.

*1 NGFS: Network for Greening the Financial System*2 IPCC: Intergovernmental Panel on Climate Change*3 RCP: Representative Concentration Pathway

Data Section

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Development Bank of Japan Inc.
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Response to the TCFD Recommendations

Strategy Based on Analysis of Climate-Related Risks and Opportunities
In addition to analyzing climate-related risks and opportunities, The DBJ Group is advancing green, transition, and innovation
initiatives through its GRIT Strategy, and intends to make investments and loans totaling ¥5.5 trillion over the five years of the strategy.
Under this policy, the Group is providing sustainable financing and consulting and advisory services (see page 20) to support
the initiatives of its customers to decarbonize. The DBJ Group is also supplying risk capital to climate technology firms.

Constructive Dialogue (Engagement) with Customers
Through constructive dialogue (engagement) with customers, we enhance mutual understanding of management issues andawareness of problems, deepen our understanding of each customer’s needs and issues, and propose solutions. In this way,
we offer support through investments and loans and consulting and advisory services backed by the strengths of the entire
DBJ Group.
Example (1)Example (2)Kawasaki Heavy Industries, Ltd.

Mitsui O.S.K. Lines

A hydrogen supply chain is an essential
part of sustainable growth and Japan’s
efforts to become carbon neutral. In
consultation with DBJ, Kawasaki Heavy
Industries, Ltd. set key performanceindicators and sustainability performancetargets (SPTs) for its extensive
Hydrogen Road initiatives linking
hydrogen production sites with energy
consumers. DBJ Group then extended
DBJ Sustainability Linked Loans withEngagement Dialogue to the company.
During the loan period, we will support
the company through periodic dialogue
as it strives to achieve its SPTs.

Ferry Sunflower Limited, asubsidiary of Mitsui O.S.K. Lines,
plans to operate the first two
ferries fueled by liquefied naturalgas (LNG) in Japan. These LNGfueled ferries were selected as a
Climate Transition Finance Model
Project by the Ministry of Economy,
Trade and Industry, and the DBJ
Group extended a syndicatedtransition loan for this project.
This syndicated loan was put
together with Sumitomo Mitsui
Trust Bank, Limited and regional
financial institutions.

Example (3)Shikokuchuo City Carbon Neutrality
Council
As a part of their efforts to foster carbon
neutrality, Ehime Paper Co., Ltd., Daio Paper
Corporation, and Marusumi Paper Co., Ltd.
established this council to evaluate energy
conversion throughout the Shikokuchuo area.
As it examines the possibility of building
shared energy infrastructure for the region,
the council is gathering a wide range of
information about government policy trends
and assessments of the safety, economic
viability, and procurement reliability of hydrogenand other types of energy. The council is also
evaluating practical measures and road maps
in collaboration with local governments.

Risk Management
Risk Management
The DBJ Group recognizes that being underprepared for climate change is a risk that could significantly impact on management.
It therefore analyzes potential impacts based on a range of scenarios and formulates initiatives and policies to deal with this risk.
The DBJ Group has introduced business-specific policies for investments and loans in particular sectors, and monitors progressin partnership with the Sustainability Committee.
Initiatives Based on Environmental
and Social Management Policy for
Financing and Investment Activity
In 2021, the DBJ Group set policies
for investments and loans forbusinesses likely to entail majorrisks or negative impacts on theenvironment and society, and forfinance for specific sectors. In fiscal
2022, DBJ is reviewing these policies
as necessary.

Operations Based on the Equator
Principles

Operations Based on the Poseidon
Principles

The DBJ Group adopted the Equator
Principles in 2020 and uses them as
the basis for identifying, assessing,and managing the environmental andsocial risks associated with large-scale
projects, with guidance from theEnvironmental & Social Assessment
Office.

The Poseidon Principles were created as aframework for financial institutions to deal
with climate change risks in the marinetransportation industry. The DBJ Group
became a signatory in 2021, and every year
discloses its contributions to reducing GHG
emissions in the context of ship financing. We
endeavor to provide investments and loansthat take climate change risks into account.

Please refer to the DBJ website for more information about the Equator Principles.

https://www.dbj.jp/en/sustainability/collaboration/initiative/equator_principles.html

Please refer to the DBJ website for more information about the Poseidon Principles.

https://www.dbj.jp/en/topics/dbj_news/2021/html/20210520_203260.html

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Response to the TCFD Recommendations

Indicators and Targets

DBJ has set a target of ¥5.5 trillion in investments and loans
related to its GRIT Strategy over the five-year period of its Fifth
Medium-Term Management Plan. In fiscal 2021, DBJ made¥754.4 billion in investments and loans (see page 14). With aneye on future targets, we will proactively support initiatives totackle climate change at companies receiving investments
and loans from us.

GHG Emissions Targets

Based on its policy of achieving net zero GHG emissions for
its portfolio of investments and loans by 2050, the DBJ Groupis committed to measuring and disclosing its GHG emissions.
We believe it will be important to measure and monitor Scope
3 emissions along with the amount of credit provided to
sectors that emit large quantities of GHG emissions, such asenergy and transportation.
While deepening our understanding of measurement
methodologies in this context, we are validating andestimating GHG emissions in the energy sector following themethodology of the Global GHG Accounting and ReportingStandard for the Financial Industry, which was developed by
the Partnership for Carbon Accounting Financials (PCAF).

PCAF Methodology
Scope 1 and 2

Results
Fiscal 2019

Results
Fiscal 2020

Results
Fiscal 2021

3,270 t-CO2

3,074 t-CO2

2,473 t-CO2

Future Policies
The DBJ Group will measure Scope 3 emissions whileconsidering the following main validation issues in measurement.
(1) W e will select the energy sector (electricity, oil, and gas) as
the sector for measurement.
(2) W e will continue to examine the best indicators fordisclosure (emissions intensity, absolute emissions, etc.).
(3) We will aim to improve the quality of emissions data
gathering by updating data gathering methods in stages
with reference to ongoing dialogue with customers.

Corporate Data

Scope: DBJ Head Office, 10 branch offices, eight representative offices,
DBJ Capital Co., Ltd., DBJ Securities Co., Ltd., DBJ Asset Management
Co., Ltd., Japan Economic Research Institute Inc., Value Management
Institute Inc., DBJ Real Estate Co., Ltd., Consist Inc., DBJ BusinessSupport Co., Ltd.
Items covered: Scope 1: Gasoline in company vehicles
Scope 2: Electricity, fuel (kerosene, fuel oil, coal gas, city gas)

Regarding detailed measurement methods for GHG
emissions via investments and loans, the Global GHG
Accounting and Reporting Standard for the Financial Industry
is used to validate and estimate GHG emissions in each class ofassets for investment and loan activities for financial institutions.

Corporate Governance

Scope 1 and Scope 2 GHG emissions from corporate
activities are measured and tallied for DBJ and eight majordomestic Group companies. DBJ has created an environmental
management system overseen by the managing executive
officer in charge of the Corporate Planning & Coordination
Department and promotes ongoing initiatives to achieve
improvement targets and make specific contributions to theenvironment.

Strategy

The DBJ Group intends to pursue net zero emissions by
2050, not only for Scope 1 (direct emissions) and Scope 2(indirect emissions) but also for Scope 3 (emissions frominvestments and loans).

Scope 3
Value Creation Story

Climate Change-Related Targets at Companies
Receiving Investments and Loans

Data Section

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Development Bank of Japan Inc.
Integrated Report 2022

Corporate Governance

Messagefrom theChairmanWith ongoing efforts to strengthen
governance, DBJ contributes
to sustainable growth throughan innovative process of value
creation.

Creation of a Unique Business Model
The DBJ Group practices sustainability management in accordance with the Development Bank of Japan
Inc. Act, balancing economic and social value with the aim of building a sustainable society. We supply risk
capital to forward-looking initiatives through our Special Investment Operations program and collaborate
and cooperate with private financial institutions to stimulate new flows of risk capital in Japan. DBJ’s
investments and loans in new fields help strengthen Japan’s economic competitiveness. We also address
local issues through risk capital supplied through joint funds created with regional financial institutions.
Furthermore, DBJ functions as an emergency supplier of capital for responses to natural disasters andother crises. Following the Great East Japan Earthquake, the Kumamoto earthquakes, and other events
calling for rapid influxes of capital, DBJ has been there to provide relief.
After the Japanese government declared the COVID-19 pandemic a crisis in March 2020, as adesignated financial institution the DBJ Group concentrated on Crisis Response Operations to address theimpacts of the pandemic over the past few years. In fiscal 2021, in light of the requests being made by thegovernment with the pandemic still ongoing, we strengthened our temporary support for businesses by
arranging an underwriting fund for preferred shares issued by mid-tier and large enterprises in sectors thathave been hit hard by the pandemic, such as the restaurants and hotels sector.
While continuing to concentrate on Crisis Response Operations during the COVID-19 pandemic, DBJ
will pursue innovative ways to provide financing from a customer perspective based on its GRIT Strategy(see page 17), which sets out the priority fields the DBJ Group is focusing on under its Fifth Medium-Term
Management Plan to realize a sustainable society in the future.

Governance Suited to Our Unique Business Model and
Dialogue with Stakeholders
In order to continue playing this unique role, DBJ must have robust corporate governance, ensuretransparency in management, and consider the opinions of outside experts. To realize this aim, we havecreated the Internal Audit Committee, the Compensation Committee, and the Personnel Evaluation
Committee as advisory bodies to the Board of Directors. Listening to the views of our stakeholders isimperative to strengthening this framework.
It is essential that DBJ collaborate and cooperate with rather than compete with private financial
institutions. We hold regular events for this purpose, usually twice a year, involving discussions with

Development Bank of Japan Inc.
Integrated Report 2022

57

Corporate GovernanceYasushi Kinoshita
Chairman

Data Section

August 2022

Corporate Data

Corporate Governance

Given international trends that are accelerating the strengthening of measures to address climate change,such as the adoption of the Paris Agreement and the hosting of COP26 (the 26th United Nations Climate
Change Conference), the DBJ Group established its Sustainability Committee to deal with the growing
need to review corporate management from a sustainability standpoint, including the enhancement ofcorporate information disclosure about sustainability, and to discuss important management mattersregarding constantly changing social issues. In fiscal 2021, directors engaged in invigorating discussions
about the DBJ Group’s response and initiatives related to the transition to a carbon-free society and its
potential impact on Japan’s industrial structure. These discussions were reflected in business plans. In
fiscal 2022, we plan to discuss DBJ Group initiatives connected to the environment and society, including
our approach to energy and climate change-related issues, from a medium- to long-term perspective.
To realize a sustainable society while balancing economic and social value, the DBJ Group offers
solutions to issues faced by society and by our customers. The Group has continued to create innovative
business models, centered on the supply of risk capital, in an effort to advance sustainability management
and maintain a balanced value creation process. As the social significance of balancing these two types ofvalue increases, we will continue making every effort to engage in dialogue with our diverse stakeholders
and ensure robust and effective corporate governance, based on the notion that nothing is more important
than embodying best practices that will continue to earn us the trust of our customers and society.

Strategy

A Value Creation Process That Balances Economic andSocial Value

Value Creation Story

representatives of such institutions. We have also created the Special Investment Operations Monitoring
Board (see page 60) as an advisory body to the Board of Directors. The board meets twice a year to
discuss and evaluate the status of the Bank’s business performance, as well as its complementing andencouraging of private business and maintenance of non-competitive relationships.
The opinions we obtain both through our outreach to private financial institutions and through theoutcomes of deliberations by the Special Investment Operations Monitoring Board are debated by theAdvisory Board, an advisory body to the Board of Directors comprising outside experts and directors infields including manufacturing, infrastructure, regional communities, and finance (see page 59). The
Advisory Board provides valuable ideas on matters concerning the safeguarding of proper competition
with private financial institutions and the DBJ Group’s management plans. In my view, a distinct aspect ofcorporate governance at the DBJ Group is its continuous reassessment of its unique value creation
process while engaging in dialogue with diverse stakeholders.
Living up to the trust placed in us by society, we want to keep our initiatives one step ahead of thetimes, especially in regard to the supply of risk capital, and this means ensuring that we operate inconformity with the Companies Act. For this purpose, the Board of Directors formulated the Basic Policy
for Internal Control, which positions the strengthening of legal compliance, risk management, and internal
audits as important subjects for management.

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Development Bank of Japan Inc.
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Corporate Governance

Basic Position on Corporate Governance
DBJ is governed by the Development Bank of Japan Inc. Act (the DBJ Act) in accordance with the following objective.

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

DBJ is working to enhance its unique governance system in addition to usual management supervision as a company with a boardof directors and company auditors (Audit & Supervisory Board), through a business model built upon features such as integrated
investments and loans and proper execution of the preceding objective, in order to raise the value of tangible and intangible
management resources to be invested and to realize sustainable
management that aims for both economic and social value.
DBJ’s Corporate Governance System
Specifically, the 2015 revisions to the DBJ Act established
A company with a board ofSpecial Investment Operations and obligatory measures toInstitutional design configuration
directors and company auditors(Audit & Supervisory Board)
be considered, requiring that DBJ conduct its operations in
Number of members of the Board of10
a manner that does not obstruct appropriate competitive
Directors­relations with other entities, in particular, applying these Of whom are outside members(2)­requirements to the Advisory Board, made up of outside
Number of Board of Directors’
14
meetings in fiscal 2021
experts and outside members of the Board of Directors, andNumber of Audit & Supervisory Board
the Special Investment Operations Monitoring Board, composed5
membersof outside experts, which function as advisory bodies to the Of whom are outside members(3)
Board of Directors. These bodies provide advice on DBJ’s overall
Number of Audit & Supervisory Board
14
management and deliberate and evaluate business results,
meetings in fiscal 2021
including consistency with the policy objectives of Special
Adoption of executive officer system
Yes
Investment Operations, ensuring that appropriate competitive
Accounting auditor
Deloitte Touche Tohmatsu LLC
relations are maintained with private financial institutions.

Overview of DBJ’s Corporate Governance System
Matters requiring authorization ofcompetent minister• Appointment and dismissal of representative
members of the Board of Directors and Audit& Supervisory Board members• Concurrent positions as members of theBoard of Directors

General Meeting of
Shareholders• Disposition of surplus funds

Compensation
Committee• Basic policy on business plans, redemption
plans, and fund procurement

Cooperation
Internal
Audit Department

AuditsSpecial Investment Operations
Monitoring Board

Decision-making
bodies

Subsidiaries

Reporting

Advisory Board
Executive Committee

Departments

Accounting auditor

Personnel Evaluation
Committee• Mergers, corporate splits, and dissolutions

ALM & Risk
Management
Committee

ReportingInternal
Audit Committee
Board of Directors• Amendments to Articles of Incorporation

Audit & Supervisory
Board members,
Audit & Supervisory Board

Deliberative
bodiesGeneral Risk
Management
Committee

Committee on
Investment and
Loan Decisions

New Operation
Screening
Committee

Advisory Panelon Investments
and Loans

Sustainability
Committee

Investment
Management
Committee

AuditsDevelopment Bank of Japan Inc.
Integrated Report 2022

59

Corporate Governance	Audit & Supervisory Board Members, Audit & Supervisory Board

Value Creation Story

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

Advisory Bodies to the Board of Directors
In pursuit of sustainability management and corporate objectives, the following advisory bodies to the Board of Directors havebeen established for the purpose of maintaining transparency in management and to reflect the knowledge of outside experts.

Internal Audit Committee Compensation Committee Strategy

The Board of Directors has established the Internal Audit Committee, delegating to this body the authority to deliberate importantmatters related to internal audits. This committee met three times during the fiscal year ended March 31, 2022.

The Compensation Committee, the majority of which consists of outside executives, considers the type of executive compensation
structure that befits DBJ from the standpoint of ensuring transparency and objectivity regarding compensation.

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

Since DBJ’s establishment as a joint-stock company in October 2008, the Advisory Board has been in place as an advisory bodyto the Executive Committee, providing advice on overall management. Revisions in 2015 to the DBJ Act stipulate for an indefinite
period obligatory measures to be considered—in particular, requiring that DBJ conduct its operations in a manner that would not
obstruct appropriate competitive relations with other entities. Accordingly, this board is positioned anew as an advisory body to
the Board of Directors. As one of its roles, even more than before, the Advisory Board is tasked with deliberating and evaluating
important matters related to ensuring that appropriate competitive relations are maintained with private financial institutions.
This board convened twice during the fiscal year ended March 31, 2022. It is composed of the following outside members of
the Board of Directors and outside experts in fields including manufacturing, infrastructure, regional communities, and finance.

Corporate Governance

Advisory Board Outside Experts (As of June 30, 2022)
The Boston Consulting Group K.K. Co-Chairperson

Kazuaki Kama

Senior Advisor, IHI Corporation

Takeshi Kunibe

Chairman, Sumitomo Mitsui Financial Group, Inc.

Hidetoshi Sakuma

Chairman (Representative Director), Group Chief Executive Officer, The Chiba Bank, Ltd.

Yoshizumi Nezu

President, Tobu Railway Co., Ltd.

Corporate Data

Reiko Akiike

Outside Members of the Board of Directors
Akio Mimura

Honorary Chairman of Nippon Steel Corporation

Kazuo Ueda

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

Data Section

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Corporate GovernanceSpecial Investment Operations Monitoring Board One of the measures of the 2015 revisions to the DBJ Act was in regard to Special Investment Operations. The act stipulates theestablishment of a Special Investment Operations Monitoring Board as an advisory body to the Board of Directors. This monitoringboard is tasked with deliberating projects and evaluating their performance in terms of appropriateness against policy objectives
and with emboldening private-sector enterprises and complementing their operations while maintaining appropriate competitive
relations. This board, whose members include outside experts from private-sector financial institutions and capital markets,convened twice during the fiscal year ended March 31, 2022.
Moreover, in order to examine whether appropriate competitive relations with other entities are being maintained, roundtablediscussions are held regularly with the Japanese Bankers Association, the Regional Banks Association of Japan, and the Second
Association of Regional Banks, including these entities’ private financial institution members. Each group met twice in fiscal 2021,
for a total of six meetings. Disputes and opinions raised in these meetings are reported to and deliberated by the Advisory Boardand the Special Investment Operations Monitoring Board.
Outside Experts (as of June 30, 2022)
Takeshi Kunibe

Chairman, Sumitomo Mitsui Financial Group, Inc.

Hidetoshi Sakuma

Chairman (Representative Director), Group Chief Executive Officer, The Chiba Bank, Ltd.

Kosei Shindo

Representative Director and Chairman, Nippon Steel Corporation

Keiko Tashiro

Deputy President, Member of the Board, Daiwa Securities Group, Inc.

Tsuji Matsuo

Vice Chairman & Senior Executive Director, Japanese Bankers Association

Sadatoshi Tsumagari

Representative Director and President, Nippon Gas Co., Ltd.

Executive Committee 
The Board of Directors has vested in the Executive Committee
decision-making authority regarding the execution of business.
Accordingly, the Executive Committee makes importantmanagement decisions. The committee met 31 times during the
fiscal year ended March 31, 2022.

Internal Audits
DBJ has established the Internal Audit Department under the
direct supervision of the president and CEO of DBJ andindependent of other operating departments. The department
conducts inspections to ensure the appropriateness andeffectiveness of internal controls, including overall operational
compliance and risk management, and performs evaluations andrecommends improvements. The Internal Audit Committee
deliberates and decides audit plans, audit reports, and otherimportant matters related to internal audits, and this information isreported to the Board of Directors. As of June 29, 2022, 25
people belonged to the Internal Audit Department.

Committees under the Executive Committee
Name
ALM & Risk
Management
Committee

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

General Risk
Management
Committee

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

Committee on
Investment and
Loan Decisions

This committee handles, deliberates, and makes
decisions related to investments and loans, overseas
business strategy, and operations and management
conditions.

New Operation
Screening
Committee

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

Advisory Panelon Investments
and Loans

This panel handles the advance deliberation on andmonitoring of investments and loans as well as
deliberations on overseas business strategy andoperations and management conditions.

Sustainability
Committee

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

Investment
Management
Committee

This committee monitors investment projects andenhances the monitoring system, as well as discussing planned proposals for investment policies.

Accounting Audits
DBJ has in place an agreement whereby Deloitte Touche Tohmatsu LLC conducts accounting audits as the Company’s
accounting auditor in accordance with Article 396, Paragraph 1 of the Companies Act and Article 193, Paragraph 2 (i) of the
Financial Instruments and Exchange Act.

Three-Pronged Auditing Approach
DBJ’s Audit & Supervisory Board members, the Internal Audit Department, and the accounting auditor periodically and asnecessary exchange opinions and information, and communicate in an effort to ensure effective and appropriate audits.
Please refer to the links below for detailed information
regarding DBJ’s corporate governance.

Internal Control System Basic Policy (Japanese only)

https://www.dbj.jp/co/info/governance_
policy.html

Securities filings (state of corporate governance, etc.)(Japanese only)

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

https://www.dbj.jp/ir/financial/report.html

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

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Corporate Governance

Executive Compensation

Corporate Data

Details for fiscal 2021 are as follows.

Corporate Governance

Below is a description of the compensation structure for members of the Board of Directors.
Compensation for full-time members of the Board of Directors consists of fixed compensation, executive bonuses, andexecutive retirement benefits. To maintain their independence, part-time members of the Board of Directors receive fixedcompensation alone.
Compensation for full-time Audit & Supervisory Board members comprises fixed compensation, and executive retirement
benefits. Compensation for part-time Audit & Supervisory Board members consists solely of fixed compensation.
The amount of compensation paid to members of the Board of Directors is determined after deliberation by the Board of
Directors, within the maximum amount approved at the General Meeting of Shareholders following discussions by theCompensation Committee. Compensation amounts are based on the position and responsibilities of each member of the Boardof Directors, with due consideration given to social trends, DBJ’s financial performance, and other standards balanced against
employee salaries. The Articles of Incorporation limit the number of directors to 13 or less.
The General Meeting of Shareholders held on June 29, 2017, passed a resolution that sets ¥270 million as the maximum annual
amount for total compensation paid to members of the Board of Directors. The Company’s first General Meeting of Shareholders
held on September 22, 2008, passed a resolution that sets ¥80 million as the maximum annual amount for total compensation
paid to Audit & Supervisory Board members. The Articles of Incorporation set the number of Audit & Supervisory Board members
to five or fewer.
The Compensation Committee was established in 2008 to ensure transparency and objectivity in the process for ­determining
compensation, and a majority of members of the Compensation Committee comprises outside executives. This composition
allows independent outside executives to be involved and give relevant advice.

Strategy

In accordance with this approach, DBJ provides compensation to its executives in three forms: fixed compensation, executive
bonuses, and executive retirement benefits.
(1) F ixed compensation is paid monthly in an amount based on the executive’s position.
(2) E xecutive bonuses are distributed after taking into consideration the performance of each member of the Board of Directors
in carrying out their duties during the fiscal year. Bonuses start with a standard amount based on the position of the memberof the Board of Directors. Bonuses also include a quantitative assessment portion determined based on a preset distribution
percentage that reflects the achievement of the consolidated net income target, as well as a qualitative assessment portion
determined based on a preset distribution percentage that comprehensively considers each executive’s achievement of
performance targets in their business division. Consolidated net income (¥46,815 million in the fiscal year ended March 31,2021) is used as the performance indicator because it most accurately reflects DBJ’s performance.
(3) E xecutive retirement benefits are paid out upon retirement in an amount reflecting successful service over the
longer term.

Value Creation Story

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

Compensation Paid to DBJ Board Members in Fiscal 2021
Number of meetings held in
fiscal 2021

Compensation Committee

2Compensation Committee Members in Fiscal 2021
Yasushi Kinoshita(head of the committee)

President

Hajime Watanabe

Outside member of the Board of
Directors

Akio Mimura

Outside member of the Board of
Directors

Kazuo Ueda

Outside Audit & Supervisory Board
memberToshio Yamasaki

Number ofpeopleCompensation,
etc.
(Millions of yen)

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

10

205

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

2

39

Outside Executives

5

63

Total

17

308

Notes: 1. C ompensation amounts include provisions to reserves for executive
retirement benefits.
2. Numbers of persons paid and compensation amounts include two membersof the Board of Directors who retired during fiscal 2021.

Data Section

ChairmanCategory

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Development Bank of Japan Inc.
Integrated Report 2022

Members of the Board of Directors, Audit & Supervisory Board
Members, and Executive Officers (As of the end of July 2022)
Members of the Board of Directors

Chairman

Yasushi Kinoshita

President and CEO

Seiji Jige

Deputy President

Norifumi Sugimoto

Member of the Board of Directors,
Managing Executive Officer

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

Member of the Board of Directors,
Managing Executive Officer

Takeshi Harada
In charge of Treasury Department,
Syndication & Credit Trading Department,
Financial Institutions Department

1979:
2013:
2015:
2018:

Joined the Ministry of FinanceVice-Minister of Finance
Deputy President of DBJ
Chairman of DBJ

1986: Joined Japan Development Bank
2011: Executive Officer in Charge of Special Missions
2013:	Executive Officer,
Head of Corporate Planning & Coordination Department
2015: Managing Executive Officer of DBJ
2018:	Member of the Board of Directors,
Managing Executive Officer of DBJ
2020: Deputy President of DBJ
2022: President and CEO of DBJ

1988: Joined Japan Development Bank
2013: General Manager, Secretariat Office
2015:	Executive Officer,
Head of Corporate Planning & Coordination Department
2018: Managing Executive Officer of DBJ
2020:	Member of the Board of Directors,
Managing Executive Officer of DBJ
2022: Deputy President of DBJ

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

1988: Joined the Ministry of Finance2017:	Councilor of the Cabinet Secretariat Deputy Director of the
Office for the Promotion of Privatization of Postal Services,
Cabinet Secretariat
2019: Director-General, Tohoku Local Finance Bureau
2021:	Member of the Board of Directors,
Managing Executive Officer of DBJ

Note: Of the 15 members of the Board of Directors and the Audit & Supervisory Board, 14 are male and one is female. The female to male ratio is 6.7%.

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63

Members of the Board of Directors, Audit & Supervisory Board Members, and Executive Officers

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

Member of the Board of Directors,
Managing Executive Officer

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

Katsushi Kitajo
In charge of Business Planning &Coordination Department

1990: Joined Japan Development Bank
2017: Head of Business Development Department of DBJ
2019:	Executive Officer,
Head of Human Resources Management Department of DBJ
2021: Managing Executive Officer of DBJ
2022:	Member of the Board of Directors,
Managing Executive Officer of DBJ

Corporate GovernanceMember of the Board of Directors,
Managing Executive Officer

1988:	Joined Hokkaido-Tohoku Development Finance Public
Corporation
2015: Head of Hokkaido Branch of DBJ
2019:	Executive Officer (in charge of Internal Audit Department)of DBJ
2020: Managing Executive Officer of DBJ
2022:	Member of the Board of Directors,
Managing Executive Officer of DBJ

Strategy

Kazufusa Matsushima

1988: Joined Japan Development Bank
2012: General Manager, Structured Finance Group
2015: General Manager, Secretariat Office2017:	Executive Officer,
Head of Human Resources Management Department
2019: Managing Executive Officer of DBJ
2021:	Member of the Board of Directors,
Managing Executive Officer of DBJ

Value Creation Story

Member of the Board of Directors,
Managing Executive Officer

Outside Member of the Board of Directors

Akio Mimura

2008: Outside Member of the Board of Directors at DBJ
Corporate Data

Honorary Chairman of Nippon Steel Corporation,
Chairman of the Tokyo Chamber of Commerce andIndustry, Chairman of the Japan Chamber ofCommerce and Industry

Outside Member of the Board of Directors

Kazuo Ueda
Professor and Dean of Faculty ofBusiness Studies at Kyoritsu Women’s University,
Director of Tokyo University’s Center
for Advanced Research in Finance2008: Outside Member of the Board of Directors at DBJ

Data Section

Notes:• Standards and policies related to independence in the selection of outside members of the Board of Directors and outside Audit & Supervisory Board members are notapplicable.
• Directors Akio Mimura and Kazuo Ueda are outside members of the Board of Directors in accordance with Article 2, Paragraph 15 of the Companies Act.
Akio Mimura, Honorary Chairman of Nippon Steel Corporation, is an outside member of the Board of Directors of DBJ. DBJ has no special relationship with Mr. Mimura,and its business with Nippon Steel Corporation is conducted normally. Outside Audit & Supervisory Board member Naoko Saiki is also an outside director of Sojitz
Corporation. DBJ has no conflicts of interest with Sojitz Corporation, and its business is conducted normally with the Company. DBJ has no special-interest relationshipwith any other of its outside members of the Board of Directors or outside Audit & Supervisory Board members.
• DBJ has signed liability limitation agreements with its outside members of the Board of Directors and the Audit & Supervisory Board, based on Paragraph 1, Article 427, of
the Companies Act.

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Members of the Board of Directors, Audit & Supervisory Board Members, and Executive Officers

Audit & Supervisory Board Members

Audit & Supervisory Board Member

Atsushi Kurashige

Audit & Supervisory Board Member

Shigeru Tamagoshi

Outside Audit & Supervisory Board Member

Hitoshi Sato1986: Joined Japan Development Bank
2010: General Manager, Credit Analysis Department
2011: General Manager, Secretariat Office
2013:	General Manager, Head of Urban Development Department
2017: Audit & Supervisory Board Member of DBJ

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

1984: Joined The Sumitomo Trust and Banking Co., Ltd.
2015:	Managing Executive Officer of
Sumitomo Mitsui Trust Bank, Limited.
2021:	Director, Senior Managing Executive Officer of
Sumitomo Mitsui Trust Bank, Limited
2022: Audit & Supervisory Board Member of DBJ

Outside Audit & Supervisory Board Member

Masato Dogauchi

2020: Audit & Supervisory Board Member of DBJ

Professor, Waseda University, Law School
Senior Counsel, T&K Partners

Outside Audit & Supervisory Board Member

Naoko Saiki

2020: Audit & Supervisory Board Member of DBJ

Outside Director, Sojitz Corporation

Note: Directors Hitoshi Sato, Masato Dogauchi, and Naoko Saiki are outside directors in accordance with Article 2, Paragraph 16 of the Companies Act.

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

Managing Executive Officer

Executive Officer

Hiroshi Shimizu

Takao Isozaki

Isao Nishio

In charge of Urban Development Department,
Real Estate Finance Department, Structured Finance
Department (Japan), Hokuriku Branch,
Kyushu Branch, Minami-Kyushu Branch

In charge of Corporate Finance Department,
Divisions 1 and 6

In charge of Financial Institution

Managing Executive Officer

Hirofumi MakiManaging Executive Officer (Head of Kansai Branch)

Masao Masuda

Toshiyasu Takazawa

In charge of Corporate Finance Department,
Division 2, Sustainable Solution Department

In charge of Kansai Branch,
Chugoku Branch, Shikoku BranchManaging Executive Officer

Managing Executive Officer

Seiji Tomosada
In charge of Corporate Finance Department, Division3, Hokkaido Branch, Tohoku Branch, Niigata Branch,
Tokai BranchManaging Executive Officer

Tomoya SatoIn charge of Corporate Finance Department, Division 5

Fumiyo Harada

Executive Officer
Head of Corporate Planning & Coordination
Department
Executive Officer

Shingo Kobayashi
Head of Human Resources Management Department

In charge of Economic & Industrial Research
Department, Regional Research & Planning
Department, Structured Finance Department (Global)

Executive Officer

Managing Executive Officer

In charge of Internal Audit

Michiyo Machida

Executive Officer

In charge of Corporate Finance Department, Division 4

Yoshiyuki Takada
Yuichiro Mori
Head of Business Planning & Coordination
Department, Chief Manager of Crisis Response
Operations OfficeDevelopment Bank of Japan Inc.
Integrated Report 2022

65

Messages from Outside Members of the Board of Directors

Kazuo Ueda

Outside Member of the Board of Directors

Outside Member of the Board of Directors

The international movement toward a carbon-free society
has gained momentum since the adoption of the Paris
Agreement. To attain a carbon-neutral and sustainable
society, private-sector capital must be deployed alongwith advances in innovation and support for
decarbonization. DBJ has provided solutions in tune withthe times and constantly evolving social issues, such as
by developing its sustainability financing services,
including sustainability certification programs, and by
supplying risk capital through collaborative efforts withprivate-sector companies and financial institutions. We
will closely monitor global trends toward the achievementof a sustainable society, and redouble our efforts tocoordinate with stakeholders and achieve a balance
between social and economic value.
DBJ must continue to carry out these efforts with themedium- to long-term perspective of facilitating socialand economic development and achieving a sustainable
society. Proper governance is therefore essential. The
DBJ Group’s Advisory and Special Investment
Operations Monitoring Boards support the attainment ofthese goals and underpin DBJ’s unique business model.
As a member of the Advisory Board—in addition to myduties as an outside member of the Board of Directors—
I work closely with outside experts to advise on overallmanagement. I will do my part in pursuing the sustainablesocial development and sustainability management goals
shared throughout DBJ.

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

Data Section

CareerApril 1963:	Joined Fuji Iron & Steel Co., Ltd.
April 2003:	Representative Director and President of
Nippon Steel Corporation
April 2008:	Representative Director and Chairman of
Nippon Steel Corporation
October 2008:	Outside Member of the Board of Directors at DBJ(current position)
October 2012:	Director, Member of the Board, and Senior Advisor of
Nippon Steel & Sumitomo Metal Corporation
November 2013:	Senior Advisor, Honorary Chairman of Nippon Steel &Sumitomo Metal Corporation, Chairman of the Tokyo
Chamber of Commerce and Industry (current position),
Chairman of the Japan Chamber of Commerce andIndustry (current position)
June 2018:	Honorary Chairman of Nippon Steel & Sumitomo Metal
Corporation (now Nippon Steel Corporation)
April 2019:	Honorary Chairman of Nippon Steel Corporation(current position)

Corporate Data

I have served as an outside member of the Board of
Directors since DBJ became a joint stock company in 2008.
I am currently a member of the Advisory Board, an
independent body that facilitates corporate governanceby incorporating the opinions of outside experts into the
management of DBJ. In accordance with the amendmentof the DBJ Act in 2015, the Advisory Board is positioned
as an advisory body to the Board of Directors. The role of
the Advisory Board is not only to advise DBJ’s management
on balancing economic and social value but also todeliberate on the matter of ensuring suitable competitive
relations with private financial institutions. I believe that
the Advisory Board has fulfilled the responsibility of
performing checks, from a third-party perspective, on theproper execution of legally mandated Special Investment
Operations, Crisis Response Operations, collaboration
with private financial institutions, and sustainability
management by DBJ.
The COVID-19 pandemic has brought to the surface anumber of issues in Japan, such as the need for
digitalization, and for the strengthening of corporate
supply chains. Moreover, amid increasing uncertainties
on the international stage, issues have emerged related
to the transition to carbon neutrality while maintaining
international competitiveness, and ensuring economic,
energy, and food stability. I will continue to fulfill my
responsibilities on the governance front in facilitating
essential dialogue and cooperation with stakeholders
so that DBJ can help solve these social issues.

Corporate GovernanceReinforcing Corporate Governance toAdvance Sustainability Management

Strategy

Leveraging Corporate Governance toHelp Solve Social Issues

Value Creation Story

Akio Mimura

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Compliance

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

Business Conduct and Compliance
The DBJ Group is a unique financial group which provides financing, investment, consulting and advisory services, asset
management, and various other financial services. While reinforcing collaboration within the Group, DBJ creates proactive
and advanced business and core strategies. As a financial institution, DBJ’s first duty is to address the legitimate and logicalexpectations of its customers. Even in its initiatives in Crisis Response Operations and Special Investment Operations, DBJ
adheres to customer-oriented business conduct. DBJ conducts operations in compliance with all laws and regulations throughappropriate use of the Three Lines of Defense model to mitigate conduct risk. To achieve our corporate philosophy, all employees
and executives engage in work while pursuing both economic and social value in accordance with our Code of Conduct (Action
Guidelines), the basis for decisions and behavior by Group employees and executives.

Compliance Framework
The DBJ Group has determined basic policies and rules for compliance, creates and distributes compliance manuals for
employees and executives to follow, and conducts training and explanatory sessions to spread awareness of compliance. Eachfiscal year, all DBJ Group companies design compliance programs and evaluate and implement concrete compliance action planstailored to their particular business characteristics.
DBJ has established relevant departments that report on the status of compliance with laws and regulations to the Executive
Committee and Board of Directors. Compliance officers have been assigned to each department to ensure compliance by
employees and executives at each department.
Compliance officers are in charge of internal management
Internal Reporting System
as internal managers and function as contact points forreporting compliance matters while centralizing such matterswithin their departments. Through compliance officers, relevant
departments in charge of compliance provide advice andguidance to each department when necessary, with the aim of
ensuring compliance. In order to quickly discover and resolve
any compliance-related issues, DBJ has set up an internalreporting channel to relevant departments and Audit &Supervisory Board members, which circumvents the normal
reporting channels in the organizational structure. DBJ has also
created an external reporting channel through a law office.
In light of revisions to the Whistleblower Protection Act, DBJ
is updating its protections for whistleblowers. DBJ aims to
improve the credibility of its whistleblowing system, and isencouraging Group companies to adopt whistleblowing
systems based on DBJ’s system.

Board of Directors

General Risk
Management
Committee

Executive Committee

Relevant departmentsin charge of compliance

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

Audit &
Supervisory Board
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67

Compliance

Compliance Practices

Measures to Prevent Insider Trading 

Value Creation Story

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

In the provision of various financial services including i­nvestments and loans, the DBJ Group believes that complying with insider
trading regulations is essential to maintaining trust. For example, we have created rules for employees and e­ xecutives to follow
when trading in securities. Moreover, DBJ has established systems for preventing insider trading, as d
­ emonstrated by ourformulation of strict procedures for c­ onfirming and executing transactions in our investment o­ perations. In research operations,
we manage and handle corporate information carefully.

Elimination of Anti-Social Forces Strategy

The DBJ Group has a basic policy of not having any relationships with anti-social forces, and resolutely coping with them incooperation with the police and other external institutions. Our rules and training programs have thus been carefully crafted toprevent relationships with anti-social forces. DBJ thoroughly assesses and manages this risk for each project and takes
appropriate measures when necessary while communicating with special external institutions.

Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Measures 

Initiatives to Prevent Bribery and Corruption 
Due to the public nature of DBJ, the DBJ Act stipulates that the executives and employees of DBJ must not receive impropercompensation, and internal rules define matters that warrant caution when executives and employees come into contact withclients and other parties. In addition to preventing bribery and corruption at DBJ, we take steps to prevent involvement in thebribery and corruption of third parties and other entities, including recipients of investments and loans.

Corporate Governance

As it develops business worldwide, DBJ understands the importance of taking measures to prevent money laundering and thefinancing of terrorism. It has been reinforcing these measures based on guidance from the Financial Action Task Force (FATF) andthe supervisory authorities. Although DBJ does not engage in foreign currency transactions or accept deposits, DBJ implements
risk assessments as if it did, and takes steps based on the risks that would be involved. DBJ has systems in place to ensure thatproper procedures are taken, periodically conducts risk management operations, and provides thorough training in these for its
employees and executives. We also strive to continuously improve this structure by evaluating a variety of measures.

Customer Protection Management

Management of Conflicts of Interest When providing customers with financing, investment, consulting and advisory services, asset management, and other financial
services, the DBJ Group has systems in place for identifying and managing transactions in order to prevent conflicts of interest
and act fully in the interests of customers, based on the transaction type and degree of risk. When obtaining consent from
customers for a transaction, we provide them with accurate and appropriate information.

Corporate Data

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

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

https://www.dbj.jp/en/privacy.html
DBJ has created and disclosed the Declaration on Personal Information Protection for protecting
such information. Please refer to the DBJ website for more details about this declaration.

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Development Bank of Japan Inc.
Integrated Report 2022

Risk Management

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

Overview of Risk Management System
Board of Directors

Executive Committee

Committee on Investment and
Loan Decisions
New Operation Screening
Committee
Advisory Panel on Investments
and Loans
Sustainability Committee
Investment Management
Committee

ALM & Risk Management
Committee

General Risk Management
Committee

Credit risk

Operational risk

Investment risk

System risk

Country risk

Compliance and legal risk

Market risk

Countermeasures for anti-social forces

Market credit risk

Countermeasures for laundering moneyand funding terrorist organizations

Liquidity risk

Customer protection management

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

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

Credit Administration of Individual Loans 
When making an investment or loan, DBJ examines the entity’s project viability and the project’s profitability from a fair andimpartial standpoint. Based on the Banking Act and the Act on Emergency Measures for the Revitalization of Financial Functions(Act No. 132 of 1998), DBJ carries out independent asset assessments in an effort to properly grasp credit risk in a timely fashion.
The results of self-assessments are subject to an audit by an auditing corporation and are reported to management.
The sales and credit analysis departments hold separate roles in the screening and administering of credit for individual
projects, and each department keeps the operations of the other in check.
The Committee on Investment and Loan Decisions meets as needed to deliberate important issues concerning themanagement and operation of individual projects.
These mutual checking functions serve to ensure the appropriateness of the finance operation and management system.

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Risk Management

Borrower Rating System 

Value Creation Story

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

Borrower Rating Classifications
Borrower
ratingBorrower category

Normal borrowers

1–8

Definition

Claims classified under the
Financial Revitalization Act

Borrowers with favorable business conditions who have been confirmed to have noparticular problematic financial circumstances.
Normal claims
Borrowers in this category are experiencing weak or unstable business conditions, or are
having issues with their finances. These borrowers need to be managed with caution.

Substandard
borrowers

12

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

Substandard claims

Borrowers indanger ofbankruptcy

13

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

Doubtful claims

Effectively bankrupt
14borrowers

15

Although not legally or formally in bankruptcy, these borrowers are experiencing severe
financial difficulties and are realistically falling into bankruptcy as their lack of potential for
restructuring has been confirmed.

Claims in bankruptcy,
reorganization claims,
These borrowers are in bankruptcy, legally and formally. Specifically, these borrowers are in and similar claims
bankruptcy or liquidation, under corporate reorganization, bankruptcy proceedings or civil
rehabilitation, or have had transactions suspended by a bill clearinghouse.

Asset Self-Assessment System 
Asset self-assessments are used to define asset classifications that will offset recoverability risk or the degree of risk of value loss
based on the borrower rating, the corresponding borrower category, and the collateral or guarantee status. Such assessments
help DBJ establish timely and appropriate amortization schedules and reserve levels.

Corporate GovernanceBankrupt
borrowers

Strategy

Borrowers requiring
9–11
cautionPortfolio Management 

Corporate Data

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

Data Section

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Risk Management

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

Type

Major risks

Returns

Corporate mezzanine
financing

Credit risk, etc.

Dividends, etc.

Corporate investment(including listed shares)

Business risk
Market risk

Capital gains

Risk of change
in asset value
Operating risk at
operating entities

Income gains

Real estate andinfrastructure, etc.

Investment Policy 
The Executive Committee determines our investment policy
following deliberations each fiscal year by the Investment
Management Committee, based on our corporate philosophyof striking a balance between social value and economic value.
This policy takes into consideration the balance in risks andreturns in the overall portfolio, while also reflecting the externalbusiness environment, including changes in market conditions
and industrial structure, and a performance analysis of theexisting portfolio.

Overview of Investment Management System
Executive Committee
Decision on investment policy
Investment Management Committee
Deliberation on investment policy

Project information

Monitoring
Key projects
Debate over direction

Monitoring data, etc.

Chief Investment
OfficeLoan and Investment
Management Division

Chief Investment
Management Office

Investment
recommendation

Information gatheringand hub function

Portfolio management
and individual projectmonitoring

Credit Management of Individual Projects Investment decisions for individual projects are made after exit strategies are determined in case a downside scenario materializes,
and targets are set for returns based on the type of investment, which is also examined in order to manage credit risk.
In project management, DBJ periodically monitors every project and has established the Chief Investment Management Office
to enhance monitoring of key projects and improve the management of investment risks in the overall portfolio.

Portfolio Management The bulk of assets in our investment portfolio consists of unlisted shares and mezzanine loans. We quantify our risk exposure tothese assets with a focus on risk characteristics in each asset category and differences in methods for recouping investments.
Specifically, DBJ assesses credit risk based on asset type with the aim of recovering the investment, mainly through businesscash flow. We also take into account market risk for asset types where investments are likely to be recovered when the asset issold to a third party or the market. In these ways, DBJ quantifies risks by applying methods to estimate credit risk and market risk.

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Risk Management

Market Risk
DBJ classifies market risk as risk pertaining to investment and loan activities. The main risks it manages are interest rate risk andforeign exchange risk. DBJ does not have any trading-related risk (specified transactions).

Interest rate fluctuations can create mismatches on rates of interest on assets and liabilities or on interest periods, creating the riskof reduced profits or the risk of losses. Interest rate risk can reduce the economic value of DBJ’s assets or interest income.
Based on monitoring through multifaceted indices, such as value at risk (VaR) and interest rate sensitivity analyses (duration andbasis point value), as well as ALM policies established by the ALM & Risk Management Committee, DBJ conducts comprehensive
management of current assets and liabilities to optimize net interest expenses and economic value by adequately controllinginterest rate risk.

Value Creation Story

Interest Rate Risk 

Foreign Exchange Risk 
Foreign exchange risk is the risk of loss due to volatility in exchange rates, and this risk affects entities holding a net excess ofassets or liabilities denominated in foreign currencies. Foreign exchange risk derives from financing in foreign currencies andissuing foreign currency bonds. However, DBJ uses foreign exchange swaps and other instruments to limit this risk.
StrategyMarket Credit Risk
DBJ aims to reduce counterparty risk in derivatives transactions through margin transfers by means of a centralized exchange andmutual credit support annex. Financial institution transactions are managed within the limits of the creditworthiness of the counterparty. Transactions with operating companies and other customers are managed within the framework of comprehensive risk
management for fluctuation risks, and measurements of credit valuation adjustment (CVA) are based on accounting standards.

Liquidity Risk
Corporate Governance

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

Corporate Data
Data Section

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Risk Management

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

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

System Risk Management 
System risk refers to the risk of loss due to a computer system breakdown or malfunction, system defects, or improper computeruse. DBJ has implemented the following internal processes to optimize system risk management and properly manage risk withregard to system risk. The System Risk Management Division is responsible for managing DBJ’s system risk centrally, based on its
system risk management regulations. By determining security standards from a variety of viewpoints—from information system
planning and development to operation and use—the department extends the risk management system Bank-wide and addresses
appropriate system risk management operations.
Over the past few years, cyberattacks have rapidly become more advanced and cunning, and the DBJ Group is aware of theincreasing risk of being damaged by a cyberattack. Given these circumstances, the Group has set up the Cyber Security Officeand the DBJ Computer Security Incident Response Team (DBJ-CSIRT) as a team dedicated to responding to cybersecurity
incidents across related divisions, centered on the Cyber Security Office and the Corporate Planning & Coordination Department.
DBJ-CSIRT is in charge of responding to cybersecurity incidents within the DBJ Group as well as maintaining and updating thenecessary response systems.

Stress Tests
In addition to managing comprehensive risks based on risk exposure, DBJ performs stress tests on its own capital adequacy inorder to ensure uninterrupted financial functions, including Crisis Response Operations, while maintaining the soundness ofmanagement under stressful conditions. These stress tests are also used in evaluating the degree of impact on our own capitalfrom the creation of and changes to medium-term management plans and business plans, as well as in examining possible
responses to various management issues.
Based on the latest forecasts for economic conditions and in light of the international situation, these stress tests take into
account DBJ’s financial position in various scenarios for challenging conditions, such as a major economic recession or strong
market stressors. We evaluate whether financial functions can be smoothly executed and adequate financial health maintained
under stressful conditions, by factoring in various scenarios for how risk exposure and risk-weighted assets increase as a result oferosion of our own capital, and of changes in our portfolio of loans and investments.
We also verify the adequacy of our cash liquidity.

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Risk Management

Business Continuity Initiatives
Value Creation Story

DBJ has prepared a business continuity plan (BCP) to protect the interests of its stakeholders, including its clients, its
shareholders, and its executives and employees, as well as to fulfill its social mission. The BCP aims to ensure the continuity andrapid recovery of core operations in the event of emergencies, such as natural disasters (in particular, large-scale earthquakes),
influenza and other pandemics, system failures, and power outages.
The BCP describes in an easy-to-understand format the role of the Disaster Response Committee, work priorities, and specificactions and procedures to be taken in the event of a disaster. When drawing up policies for business continuity and restoration,
the Company envisions specific incidents, such as an earthquake underneath the Tokyo metropolis or a novel virus outbreak, andmethodically decides how to respond to anticipated damage in each disaster scenario.

Measures to Ensure Business Continuity
We have prepared a variety of measures to ensure business continuity.

Enhanced System Robustness Strategy

We have ensured advanced security levels at the main center and created a backup center to operate in the event that the main
center ceases to operate.

Multilayered Communication Procedures 
We have introduced a safety confirmation system to quickly determine the whereabouts and status of executives and employees
even at night and on holidays. In addition, we have distributed satellite telephones to key locations and personnel to ensure multilayered communication procedures.

Chain of Command and Delegation of Authority 

Clarification of Initial Response and Procedures for Continuing or Recovering Core Operations 
For individual business units, we have established in advance the procedures for the initial response and the continuation or
recovery of core operations so that relevant divisions can respond quickly and with certainty on core operations even when in astate of confusion.

Corporate GovernanceTo assure that decision-making concerning the continuity of core operations is prompt and certain in the event that it becomes
necessary to execute the plans of the Disaster Response Committee, we have put in place a chain of command and an alternative
hierarchy by which authority can be delegated.

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

74

Development Bank of Japan Inc.
Integrated Report 2022

Financial and Non-Financial Highlights

Financial Highlights
Balance of Investments and Loans(Non-Consolidated)

Common Equity Tier 1 Capital Ratio (Consolidated)(Billions of yen)(%)

18,00012,0001,686.7
952.1

1,129.3

13,467.7

13,584.6

1,454.4

20

1,740.3

15,284.1

14,878.6

16.81

16.65

2017

2018

17.26

16.65

16.97

2020

2021 (Fiscal year)

15

12,981.6

10

6,000
5

0

2017

2018

Loan balance

2019

2020

2021 (Fiscal year)

0

2019

Investment balance

The balance of investments and loans (non-consolidated) stoodat ¥16.6 trillion as of the end of fiscal 2021. The loan balancewas ¥14.8 trillion as of the end of the fiscal year under review.
The investment balance expanded to ¥1.7 trillion as of the endof fiscal 2021, reflecting DBJ’s focus on investment operations.

The common equity Tier 1 capital ratio (consolidated) was
16.97% as of the end of fiscal 2022. This ratio may decline,
for example, when DBJ supplies risk capital for strengthening
investment operations, but DBJ continues to work on keeping
this ratio at a sound level.

Gross Ordinary Income (Consolidated)(Billions of yen)
250

16.6
106.0

200

23.6
150

65.8

25.2
81.5

19.3
68.2

25.3
47.0

100

84.8

80.9

76.6

2017

2018

2019

91.7

95.3

2020

2021 (Fiscal year)

50

0

2012
Loans

2013
Investment

2014

2015

2016

Commission and fee income

In fiscal 2021, in loan operations, loan profits increased alongside growth in the average loan balance compared with fiscal 2020.
In investment operations, profits expanded due to such factors as dividend income from investees. Fee and commission income
decreased on a decline in fee income. Accordingly, gross ordinary income amounted to ¥218 billion, up from that of the previous
fiscal year.

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75

Financial and Non-Financial Highlights

Non-Financial Highlights
Increase in Dialogues with Customers via the
Sustainability Certification Program(Billions of yen)(No. of engagements)

300

100

276.8

280.8

241.9

82

75

74

72

200

186.9

59

50

100

Value Creation Story

Balance of Investments and Loans inRenewable Energy

62

124.2
25

2017

2018

2019

2020

2021 (Fiscal year)

0

2017

2018

2019

2020

2021 (Fiscal year)

Under the DBJ Sustainability Evaluation Certification Program(see page 20), at the request of customers, we provide feedback from a third-party perspective on the results of customers’
evaluations and help them understand the issues they should
address and enhance their management capabilities. Since theoutset of the COVID-19 pandemic, it became impractical to holdin-person award ceremonies for executives and employees.
Through the use of online meeting systems, however, we continued with feedback initiatives. Through dialogue, we will continue to support our customers’ efforts to advance sustainability
management.

Human Resource Development(No. of In-House Training Sessions)

Collaboration and Cooperation with Regional Financial Institutions(No. of Collaborative Funds with Regional Financial Institutions)(No. of sessions)(No. of funds)

60

50

54

53

48
40

51

42

40

44

Corporate GovernanceThe balance of investments and loans in renewable energy
stood at ¥280.8 billion as of the end of fiscal 2021. With
renewable energy drawing more attention as the world moves
away from carbon-based energy sources, the DBJ Group will
provide financial support to ventures in solar power, onshore
and offshore wind power, biomass, and hydropower based on
the advantages of each type of energy source, with a view
toward achieving the Japanese government’s goal of achievingcarbon neutrality by 2050.

Strategy

0

46

36

43
30

Corporate Data

30

20
20
10

0

2017

2018

2019

2020

2021 (Fiscal year)

2017

2018

2019

2020

2021 (Fiscal year)

As of the end of fiscal 2021, the DBJ Group had created 46
collaborative funds with regional financial institutions. The DBJ
Group and regional financial institutions, each with a local
customer base, supply risk capital to local companies. We draw
on the respective strengths of each financial institution with theaim of spurring initiatives to address regional issues.

Data Section

The DBJ Group provides abundant opportunities for training
through combinations of rank-based and business-related
training programs. In fiscal 2021, DBJ reassessed its training
programs for women and for management positions. Whileonline training remained the main format, some in-person
training was resumed while taking measures against COVID-19,
in a bid to maximize the effectiveness of training through optimal
formats. DBJ will continue to train personnel, proactively
encouraging employees to enhance their skills through training
seminars and improving the content of training based on DBJ’s
management strategy.

076Development Bank of Japan Inc.
Integrated Report 2022

Consolidated Financial Summary(Billions of yen)

Fiscal 2010

Fiscal 2011

Fiscal 2012

Fiscal 2013

(April 1, 2010 toMarch 31, 2011)(April 1, 2011 toMarch 31, 2012)(April 1, 2012 toMarch 31, 2013)(April 1, 2013 toMarch 31, 2014)

Total income

345.1

318.7

340.0

361.6

Income before income taxes

95.0

99.2

115.6

165.7

Extraordinary profit / loss

9.3

10.9

0.6

0.2

104.3

110.2

116.2

166.0

(1.3)

(31.9)(44.5)(40.8)Net income attributable to owners of the parent

101.5

77.3

71.3

124.3

Total dividend amount

50.0

37.3

35.2

30.8

Total assets

14,845.2

15,579.8

16,248.7

16,310.7

Loans

13,031.4

13,645.4

13,918.2

13,838.4

Securities

1,165.5

1,176.6

1,357.0

1,637.5

Total liabilities

12,435.2

13,118.8

13,710.1

13,682.9

Borrowed money

8,576.4

9,170.5

9,448.3

9,182.6

Debentures and corporate bonds

3,629.3

3,671.8

3,924.5

4,237.4

Total equity

2,409.9

2,461.0

2,538.5

2,627.7

Common stock

1,181.1

1,187.7

1,206.9

1,206.9

Capital adequacy ratio (Basel II, BIS standard)

20.50%

18.56%————

14.93%

15.30%

Ratio of loan balance in risk-managed assets

1.28%

1.47%

1.23%

0.99%

Return on assets (ROA)

0.67%

0.51%

0.45%

0.76%

Return on equity (ROE)

4.31%

3.18%

2.86%

4.83%

Number of employees

1,203

1,270

1,315

1,391

2,116.6

2,927.0

2,652.4

2,943.3

2,034.4

2,849.0

2,524.5

2,805.1

Investments

82.2

78.0

127.8

138.2

Funds raised (flow)

2,116.6

2,927.0

2,652.4

2,943.3

1,212.8

691.7

502.2

1,307.5

Consolidated

Income before income taxes and minority interests
Total income taxes

Common equity Tier 1 capital ratio(Basel III, BIS standard)

Investment and fund–raising flow (non–consolidated)
Loans and investments (flow)
Loans

Of which, recovered, etc.

2008–20102011–2013

First Medium-Term
Management Plan:
CHALLENGE 2010

Second Medium-Term Management Plan:
Endeavor 2013

Development Bank of Japan Inc.
Integrated Report 2022

77

Consolidated Financial Summary

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

(April 1, 2018 toMarch 31, 2019)(April 1, 2019 toMarch 31, 2020)(April 1, 2020 toMarch 31, 2021)(April 1, 2021 toMarch 31, 2022)

339.0

358.6

285.4

291.7

301.2

289.1

269.4

310.3

153.0

185.1

122.5

127.1

128.1

78.9

73.0

86.1

0.6

1.5

(0.0)

2.2

(1.3)

4.0

0.7

2.3

153.6

186.7

122.4

129.4

126.7

83.0

73.8

88.5

(58.9)(57.6)(34.6)(35.0)(33.5)(31.5)(26.9)(29.4)

92.7

128.9

87.6

91.9

91.9

50.4

45.2

57.6

22.5

29.2

19.7

22.1

21.0

9.9

8.1

15.6

16,360.6

15,907.1

16,570.4

16,952.2

17,079.5

17,693.6

21,221.8

21,508.5

13,261.3

12,952.5

13,039.5

12,725.2

12,923.9

12,415.9

14,757.1

14,346.1

1,887.9

1,803.0

1,750.3

1,866.4

1,961.0

2,374.2

2,535.8

3,034.4

13,613.3

13,022.9

13,584.2

13,842.1

13,783.2

14,259.6

17,518.4

17,676.5

8,598.2

7,892.1

8,472.3

8,574.1

7,987.8

8,070.9

10,664.5

10,573.6

4,569.3

4,727.9

4,711.8

4,932.9

5,296.9

5,696.8

6,223.4

6,392.3

2,747.2

2,884.2

2,986.2

3,110.1

3,296.3

3,434.0

3,703.4

3,832.0

1,206.9

1,000.4

1,000.4

1,000.4

1,000.4

1,000.4

1,000.4

1,000.4

—

—

—

—

—

—

—

—

16.22%

17.54%

17.22%

16.81%

16.65%

17.26%

16.65%

16.97%

0.77%

0.64%

0.54%

0.47%

0.40%

0.46%

0.76%

0.73%

0.57%

0.80%

0.54%

0.55%

0.54%

0.29%

0.23%

0.27%

3.47%

4.60%

2.99%

3.03%

2.88%

1.51%

1.27%

1.54%

1,407

1,435

1,546

1,631

1,650

1,703

1,781

1,809

2,544.2

3,027.7

4,012.6

3,153.4

3,790.8

3,951.8

5,786.7

3,222.6

2,262.7

2,861.3

3,805.8

2,973.6

3,490.4

3,401.5

5,484.2

2,994.6

281.4

166.3

206.7

179.7

300.4

555.0

302.5

227.9

2,544.2

3,027.7

4,012.6

3,153.4

3,790.8

3,951.8

5,786.7

3,222.6

1,129.9

1,639.7

1,526.1

1,005.0

2,051.4

1,546.1

1,191.4

1,078.0

2020

2021–

2017–2019
Fourth Medium-Term Management Plan:
Initiate Change, Create the Future

Crisis Response Fifth Medium-Term
Operations during Management Plan
the COVID-19
Connect andpandemic
Value Creation–Innovation for Sustainability–

Data Section

2014–2016
Third Medium-Term Management Plan:
Supporting Japan’s Sustained Growth asa Global Innovator

Corporate Data

Fiscal 2017
(April 1, 2017 toMarch 31, 2018)

Corporate GovernanceFiscal 2016
(April 1, 2016 to
March 31, 2017)

Strategy

Fiscal 2015
(April 1, 2015 toMarch 31, 2016

Value Creation Story

Fiscal 2014
(April 1, 2014 toMarch 31, 2015)

78

Development Bank of Japan Inc.
Integrated Report 2022

Timeline

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

Month

Event

1951

April

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

1952
1956

June

Hokkaido Development Finance Public Corporation established

1957

April

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

1960

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

1961
1962

April

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

1963
1964

July

1972

January

1985

June

1987

September

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

1989

JDB loans to assist disaster recovery commenced

1995

February

1997

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

1998

December

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

1999

June
October

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

2002

May

2005

December

2006

May

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

June

Policy-Based Financing Reform Plan decided upon by DBJ’s Head Office for the Implementation of Policy Finance Reform

2007

June

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

Important Policy of Administrative Reform approved by the Cabinet

Development Bank of Japan Inc.
Year

Month

2008

October

Event

Development Bank of Japan Inc. (DBJ) established (Capital: ¥1 trillion)
Crisis Response Operations begun by DBJ as a designated financial institution

December
2009

June

Act for Partial Amendment of the Development Bank of Japan Inc. Act (Act No. 67 of 2009) approved

September

Capital increased to ¥1,103,232 million

November

DBJ Europe Limited launched

2010

March

2011

May

2012

DBJ Singapore Limited launched

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

December

Capital increased to ¥1,187,364 million

March

Capital increased to ¥1,187,788 million

June

Capital increased to ¥1,198,316 million

December

Capital increased to ¥1,206,953 million

2014

June

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

2015

May

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

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

October

DBJ Americas Inc. launched

2020

May

Act for Partial Amendment of the Development Bank of Japan Inc. Act (Act No. 29 of 2020) approved

Development Bank of Japan Inc.
Integrated Report 2022

79

Shareholder Information

(As of March 31, 2022)

Name

Address

Number of shares held (thousands ofshares)Percentage of total equity (%)

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

43,632

100.0

Total

—

43,632100.0

Summary of Changes to the DBJ Act after Conversion toa Joint-Stock Company

Note: For the full text of the DBJ Act, please refer to the Data section(see pages 82–98).

1 Measures maintaining direction toward full-scale privatization

Full-scale privatization and disposal of all Japanese
government-held shares, targeting around five toseven years from April 1, 2015•	No changes in the main provisions, including Article 1, which stipulates DBJ’s objectives

Corporate Data

Highlights of 2015 Revisions to the DBJ Act

Beforerevision

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

Strategy

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

Value Creation Story

Finance Minister

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

2 Measures ensuring appropriate implementation of Crisis Response Operations

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

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

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

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

Provision of risk capital through the Fund for JapaneseIndustrial Competitiveness4 Provisions referencing consideration for private financial institutions through ongoing Japanese government involvement

Beforerevision

As per the Third Medium-Term Management Plan,sustainment of close communications, maintaining
a focus on operations in collaboration with otherfinancial institutions•	The Corporation shall, for an indefinite period, pay special attention in conducting its business sothat it will not affect its appropriate competitive relationships with other business entities

After•	The Japanese government shall hear the opinions of representatives of ordinary financial institutions
revision and other relevant persons concerning Japanese government revisions on an as-needed basis
regarding Crisis Response Operations and Special Investment Operations

Data Section

Beforerevision•	Reinforcement of the Fund for Japanese Industrial Competitiveness (a portion of the financial
resources for which are provided through measures for industrial investment); implementation ofSpecial Investment Operations as a measure for a limited period of time, through fiscal 2025 (at theAftersame time reflecting this obligation in the Articles of Incorporation, complementing and encouraging
revision private-sector enterprises, etc.)•	Obligation that the Japanese government shall hold one-half or more of shares until the conclusionof Special Investment Operations

80

Development Bank of Japan Inc.
Integrated Report 2022

Organizational Structure (As of June 1, 2022)

General Meeting of
Shareholders
Audit & Supervisory
Board Members /Audit & Supervisory
Board

Chief
Industry
Strategy
OfficeAudit & Supervisory
Board OfficeBusiness Planning & Coordination Department

Innovation Promotion OfficeFinancial Institutions Department

Global Business Planning OfficeUrban Development Department

Crisis Response Operating Office

Corporate Finance Department, Division 1

Transition Business Promotion Office

Corporate Finance Department, Division 2

Aerospace Office

Corporate Finance Department, Division 3

Global Logistics Office

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

Energy Strategy Office

Corporate Finance Department, Division 6

Healthcare Industry Office

Hokkaido Branch
Tohoku Branch
Board of Directors

Tohoku Recovery & Growth Support OfficeNiigata Branch

Executive Committee

Hokuriku Branch
Tokai Branch
Kansai Branch

Advisory Board

Chugoku Branch
Shikoku BranchSpecial Investment
Operations Monitoring
Board

Kyushu Branch

Kumamoto Recovery Office

Minami-Kyushu Branch
Strategic Finance Department
Chief
Investment
OfficeGrowth & Cross Border Investment Department
Regional Investment Department
Real Estate Finance Department
Structured Finance Department

Environmental & Social Assessment OfficeSyndication & Credit Trading Department
Business Development Department
Sustainable Solution Department

Representative Offices: Hakodate,
Kushiro, Aomori, Toyama, Matsue,
Okayama, Matsuyama, Oita
Overseas Subsidiaries:
DBJ Singapore Limited
DBJ Europe Limited
DBJ Investment Consulting(Beijing) Co., Ltd.
DBJ Americas Inc.
The Chief Investment Management
Office consists of the Corporate
Planning & Coordination Department,
the Business Planning & Coordination
Department, the Credit Analysis
Department, the Risk Management
Department, and the Accounting
Department.
Internal Audit
Committee

Chief
Research
OfficeChief
Investment
Management
OfficeEconomic & Industrial Research Department

Economic Research Office

Regional Research & Planning Department

Industrial Research &Customer Solution Planning Office

Research Institute of Capital Formation

Corporate Management &Accounting Research OfficeSecretariat Office
Human Resources Management Department

Public Relations Office

Corporate Planning & Coordination Department

Sustainability Management Office

Risk Management Department

Digital Strategy OfficeInformation Resources Department

Cyber Security Office

General Affairs Department
Accounting Department
Credit Analysis Department
Legal Affairs & Compliance Department
Treasury Department
Internal Audit Department

Settlement & Accounting Operation OfficeDevelopment Bank of Japan Inc.
Integrated Report 2022

81

Data Section

The Development Bank of Japan Inc. Act

P101

Financial Condition

Value Creation Story

P 82

Strategy
Corporate GovernanceCorporate Data
Data Section

82

Development Bank of Japan Inc.
Integrated Report 2022

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

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

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

Chapter I General Provisions
Article 1 Purpose
Development Bank of Japan Inc. (hereinafter referred to as the“Corporation”) shall be a joint stock company (kabushiki-kaisha)
whose object is to maintain the foundations of investment andfinancing functions of long-term business funds as theDevelopment Bank of Japan by conducting business activities
utilizing the methods of combining investments and financing andother sophisticated financial methodologies, while maintaining theautonomy of management with the goal of realizing full-scale
privatization, thereby contributing to smooth supply of funds tothose who need long-term business funds, as well as to thesophistication of financial functions.
Article 2 Restriction on Use of Trade Name
1. Any entity other than the Corporation shall not use the charactersof Development Bank of Japan Inc. (Kabushiki Kaisha Nippon
Seisaku Toshi Ginko), in its trade name.
2. The provision of Article 6, Paragraph 2 of the Banking Act (Act No.
59 of 1981) shall not apply to the Corporation.

Chapter II Business Operations
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) andother deposits stipulated in the Cabinet Order);(2) To lend money;(3) To make capital contributions;(4) To guarantee the due performance of debts and obligations;(5) To sell and purchase Securities (other than those that fallwithin monetary claims represented by certificates set forth in
Item (7), Short-term Notes, Etc.; the same in Item (8)) (otherthan those that fall within securities-related derivatives transactions (the securities-related derivatives transactions set forth in
Article 28, Paragraph 8, Item (6) of the Financial Instruments
and Exchange Act (Act No. 25 of 1948); hereinafter in this
Item and Item (11) the same), or enter into securities-related
derivatives transactions (limited to those made for investment
purposes), except in cases where these business operations
fall within those operations referred to in Item (3);(6) To lend Securities;(7) To acquire or transfer monetary claims (including claims represented by certificates stipulated in the Ministry of FinanceOrdinance such as negotiable bank deposit certificates);(8) To subscribe for Specified Bonds or Preferred Investment
Securities issued by a Specified Purpose Company (limited tothe cases where the Specified Purpose Company acquires
only monetary claims (excluding negotiable instruments payable to order set forth in Part III, Chapter I, Section 7,
Subsection 1 of the Civil Code (Act No. 89 of 1896), registered negotiable instrument payable to holder set forth in
Subsection 2 of the same Section, other registered negotiable
instruments set forth in Subsection 3 of the same Section andclaims regarding bearer instruments set forth in Subsection 4of the same Section and electronically recorded monetaryclaims set forth in Article 2, Paragraph (1) of the Electronically
Recorded Monetary Claims Act (Act No. 102 of 2007); hereinafter the same in this Item) or beneficial interests in trusts withwhich monetary claims are entrusted with cash proceeds
derived from issue of those Specified Bonds or Preferred
Investment Securities as set forth in the Asset Liquidation
Plans, and except for, in case of Specified Bonds, Specified
Short-term Notes; hereinafter the same in this Item), and othersecurities similar to Specified Bonds or Preferred Investment
Securities stipulated in the Ministry of Finance Ordinance(hereinafter in this Item referred to as the “Specified Bonds”)(except in cases where it is intended for secondary distribution(uridashi)), or to handle primary offering (boshu) of theSpecified Bonds so subscribed;(9) To acquire or transfer Short-term Notes, Etc.;(10) To act as an agent or intermediary for execution of agreements which provides for lending money on behalf of banks(the banks set forth in Article 2, Paragraph 1 of the Banking
Act (Act No. 59 of 1981); hereinafter the same) and 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 these business
operations fall within those operations referred to in Item (7);(12) To do the activities referred to in Article 2, Paragraph 8, Item(7) of the Financial Instruments and Exchange Act;
(13) To do the activities referred to in Article 2, Paragraph 8, Item(9) of the Financial Instruments and Exchange Act (limited, inthe case of the handling of primary offering or secondary distribution, to those to be conducted upon entrustment byfinancial instruments firms engaged in the type I financial
instruments trading business set forth in Article 28, Paragraph
1 of the Financial Instruments and Exchange Act (the financial
instruments firms set forth in Article 2, Paragraph 9 of the
Financial Instruments and Exchange Act; hereinafter thesame), and for such financial instruments firms);(14) To do the activities referred to in Article 2, Paragraph 8, Item
(11) of the Financial Instruments and Exchange Act;
(15) To do the activities referred to in Article 2, Paragraph 8, Item(13) of the Financial Instruments and Exchange Act;
(16) To do the activities referred to in Article 2, Paragraph 8, Item(15) of the Financial Instruments and Exchange Act;
(17) With respect to securities (including, if such securities are notissued, rights to be represented by such securities) or transactions referred to in each Item of Paragraph 2 of Article 33 of the
Financial Instruments and Exchange Act, to do the activities
set forth in each Item of the said Paragraph (other than thosereferred to in Items (3), (5), (7) through (9), (11) and (13));(18) To provide other entities with consulting services regarding
business transfer, merger, corporate split, share-for-shareexchange (kabushiki kokan) or share transfer (kabushiki iten),or to act as a broker for these transactions;(19) To provide other entities with consulting services regarding
management, and to conduct investigations or provide­information as required for the business operations of otherentities;

Development Bank of Japan Inc.
Integrated Report 2022

the words and phrases indicated in the right column, respectively:
Article 2, Paragraph 8(referred to asa “cooperative
financial
institution”)(referred to as the“Cooperative Financial
Institution”), Development
Bank of Japan Inc.

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

Cooperative Financial
Institution, Development
Bank of Japan Inc.

Article 33-8, Paragraph 1

a financial
institution are
the financial
institutions

is a financial institution thathas obtained the authorization referred to in Article 1,
paragraph (1) of the Act
on Engagement in TrustBusiness by a Financial
Institution, or if Development
Bank of Japan Inc. conducts
the business activity referred
to in Article 3, Paragraph 1,
Item (16) of The
Development Bank of Japan
Inc. Act (Act No. 85 of 2007)

Data Section

Article 6 Method of Issue of the Development Bank ofJapan Bonds
1. If the Corporation issues certificates representing the Development
Bank of Japan Bonds, such certificates shall be in bearer form;
provided, however, that the Corporation may issue those certificates in registered form upon request of a subscriber or owner ofthe Bonds.
2. If the Corporation issues the Development Bank of Japan Bonds,
the Corporation shall not enter into a custody agreement with asubscriber of the Bonds in which matters set forth in the Ministry of
Finance Ordinance and the Cabinet Office Ordinance arecontained.

Corporate Data

Article 5 Issue of the Development Bank of Japan Bonds
1. The Corporation may issue the Development Bank of Japan Bonds.
2. The provision of Article 702 of the Companies Act (Act No. 86 of2005) shall not apply where the Corporation issues theDevelopment Bank of Japan Bonds.
3. Only with respect to the Development Bank of Japan Bonds issued
outside of Japan, the Corporation may issue certificates representing the Development Bank of Japan Bonds (including interest
coupons appertaining thereto; hereinafter in this Paragraph, andArticle 13, Paragraphs 3 and 4, Item (1), the same), as prescribedin the Cabinet Order, in the event that it is necessary to deliver
replacement certificates to anyone who has lost those certificates.

Corporate Governance

2. Any directors, accounting counsel (kaikei sanyo) (including, if an
accounting counsel is a firm, its members who should perform theduties as such; hereinafter in this Paragraph the same), statutory
auditors, executive officers (shikkoyaku) or employees shall notify
the Minister of Finance without delay as set forth in the Minister ofFinance Ordinance if they take up a position of director, accounting
counsel, statutory auditor or executive officer of a Financial
Instruments Firm (limited to the firms that engages in the securitiesrelated business set forth in Article 28, Paragraph 8 of the Financial
Instruments and Exchange Act; hereinafter in this Paragraph thesame) (including the cases where a director, accounting counsel,
statutory auditor or executive officer of a Financial Instruments Firmcome to concurrently hold a position of director, accounting counsel, statutory auditor or executive officer of the Corporation), or they
resign a director, accounting counsel, statutory auditor or executive
officer of a Financial Instruments Firm.

Strategy

Article 4 Replacement of Terms for Application of Provisionsof Financial Instruments and Exchange Law
1. For the purpose of application of the provisions of the Financial
Instruments and Exchange Act to the Corporation, the words andphrases indicated in the center columns of the table below in theprovisions of that Act in the left columns shall be changed to read

The Development Bank of Japan Inc. Act

Value Creation Story(20) To conduct investigations, research or training regarding financial and other economic issues; and(21) To do activities incidental to each of the foregoing Items.
2. In addition to the business operations of the preceding Paragraph,
the Corporation may engage in such business activities as necessary to attain its object, subject to authorization of the Ministerof Finance.
3. “Securities” in Items (5) and (6) of Paragraph 1 and Paragraph 5
mean the securities set forth in Article 2, Paragraph 1 of the
Financial Instruments and Exchange Act, and the rights which are
deemed as securities as set forth in Article 2, Paragraph 2 of the
Financial Instruments and Exchange Act.
4. “Short-term Notes, Etc.” in Items (5) and (9) of Paragraph 1, andthe next following Paragraph mean:(1) Short-term notes Etc. set forth in Article 66, Item (1) of the Act
Concerning the Central Depositary System of Corporate
Debentures, Shares, Etc. (Act No. 75 of 2001);(2) Short-term investment corporation notes set forth in Article
139-12, Paragraph 1 of the Act Concerning Investment Trusts
and Investment Corporations (Act No. 198 of 1951);(3) Specified short-term notes set forth in Article 2, Paragraph 8of the Act concerning Liquidation of Assets (Act No. 105
of 1998);(4) Rights to be indicated on debt securities (other than thosehaving the nature of corporate debentures with stock acquisition rights (shinkabu-yoyaku-ken-tsuki shasai)) to be issued byforeign corporations, the ownership rights of which shall be
determined based on the entries or recordings in the central
depositary account register as prescribed by the Act
Concerning the Central Depository System of Corporate
Debentures, Shares, Etc., which satisfy all of the following
requirements:		a. The amount of each right is not less than 100 million yen;		b.	It is stipulated that the principal amount of such debt securities shall be redeemed on a definitely specified date
which occurs a year after the date on which the aggregate
amount of such rights is paid, and further that no payment
shall be made in installments; and		
c.	It is stipulated that interest shall become due and payable
on the same date as the maturity date of the principal
amount in Sub-item b.
5. The business operations referred to in Paragraph 1, Item (7) (in thecase of monetary claims represented by the certificates set forth in
the said Item which fall within Securities) and the business operations referred to in Paragraph 1, Item (9) (in the case of Short-term
Notes, Etc.) shall include the business operations to do the activities referred to in Article 2, Paragraph 8, Items (1) through (6), and(8) through (10) of the Financial Instruments and Exchange Act.
6. The terms “Specified Purpose Company,” “Asset Liquidation Plan,”“Specified Bonds,” “Specified Short-term Notes” or “Preferred
Investment Securities” referred to in Paragraph 1, Item (8) mean thespecified purpose company, asset liquidation plan, specified
bonds, specified short-term debentures or preferred investment
securities set forth in Article 2, Paragraphs 3, 4 or 7 through 9 of
the Act concerning Liquidation of Assets, respectively.
7. If the Corporation engages in the business activity referred toParagraph 1, Item (10), the provision of Article 52-36, Paragraph 1of the Banking Act and other provisions equivalent to that provisionof the said Paragraph which apply to those who engage in thefinancial business stipulated in the Cabinet Order set forth inParagraph 1, Item (10) and are prescribed in the Cabinet Order,
shall not apply.

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The Development Bank of Japan Inc. Act

3. The Corporation may issue certificates representing theDevelopment Bank of Japan Bonds by way of a secondary distribution (uridashi). In that case, the Corporation shall determine the
distribution period.
4. If the Corporation issues certificates representing the Development
Bank of Japan Bonds, the Corporation shall indicate the following
matters on the face of those certificates:(1) Trade name of the Corporation;(2) Amount of the Bonds represented by the certificate;(3) Interest rates on the Development Bank of Japan Bonds represented by the certificate;(4) Method of redemption and maturity date of the Development
Bank of Japan Bonds represented by the certificate; and(5) Numbers of the certificate.
5. If the Corporation intends to issue the Development Bank of Japan
Bonds by way of a secondary distribution, the Corporation shallgive public notice of the following matters:(1) Distribution period;(2) Aggregate amount of the Development Bank of Japan Bonds;(3) If payment for the Development Bank of Japan Bonds is madein more than one installment, the amount of, and time schedule for, such payments;(4) Issue price or minimum price of the Development Bank ofJapan Bonds;(5) If the Corporation intends to issue the Development Bank ofJapan Bonds, the ownership rights of which shall be determined based on the entries or recordings in the central
depositary account register as prescribed by the Act
Concerning the Central Depository System of Corporate
Debentures, Shares, Etc., description to the effect that theDevelopment Bank of Japan Bonds are subject to the said
Act; and(6) Matters referred to in Items (1) through (4) of the immediately­preceding Paragraph.
6. The Corporation may issue the Development Bank of Japan Bonds
at a discount.
Article 7 Extinctive Prescription of the Development Bank ofJapan Bonds
The extinctive prescription periods of the principal of, and interest
on, the Development Bank of Japan Bonds to be issued by the
Corporation shall be fifteen (15) years and five (5) years, respectively, from the time when it has become possible to exercise therights under such Bonds.
Article 8 M utatis Mutandis Application of the Currency andSecurities Counterfeiting Control Act
The Currency and Securities Counterfeiting Control Act (Act No. 28
of 1895) shall be applied mutatis mutandis to the counterfeiting ofcertificates representing the Development Bank of Japan to beissued by the Corporation.
Article 9 Special Rules When Starting Acceptance of
Deposits, Etc.
1. If the Corporation intends to start acceptance of deposits set forthin Article 3, Paragraph 1, Item (1) or issue of the Development
Bank of Japan Bonds, the Corporation shall obtain the priorapproval of the Minister of Finance.
2. If the Minister of Finance intends to give the approval referred to in
the preceding Paragraph, the Minister of Finance shall, in advance,
have a discussion with the Prime Minister and obtain his/her
consent.
3. The Prime Minister may request the Minister of Finance to provide
the Prime Minister with the required materials and explanations,whenever the Prime Minister deems necessary after the discussion
referred to in the immediately preceding Paragraph.
4. The Prime Minister may request the Corporation to cooperate with
the Prime Minister such as providing materials and explanations, tothe required extent, whenever the Prime Minister deems especiallynecessary after the discussion referred to in Paragraph 2.

5. The provisions of Article 4, Paragraph 1 of the Banking Act andArticle 4, Paragraph 1 of the Long-Term Credit Bank Act (Act No.
187 of 1952) shall not apply to the business operations to be conducted by the Corporation in the case that the Corporation obtains
the approval referred to in Paragraph 1.
Article 10 Mutatis Mutandis Application of the Banking Act
1. The provisions of Articles 12-2 (other than Paragraph 3), 13, 13-2,
13-4, 14, 14-2, 20, 21, 23 and 57-4 (limited to the portions relating to Item (1)) of the Banking Act shall apply mutatis mutandis
to the Corporation when the Corporation obtains the approvalreferred to in Paragraph 1 of the immediately preceding Article.
For this purpose, references to the “Prime Minister” and “Cabinet
Office Ordinance” in these provisions (other than the second sentence of Article 13-4 and Article 20, Paragraph 7 of the BankingAct) shall be changed to read the “Minister of Finance and thePrime Minister” and the “Ministry of Finance Ordinance and the
Cabinet Office Ordinance,” respectively, and reference to “Article
38, Items (1), (2), (7)” in Article 13-4 of the Banking Act shall bechanged to read “Article 38, Item (7)” and other necessary technical changes to read shall be prescribed in the Cabinet Order.
2. For the purpose of application of the provisions of the Financial
Instruments and Exchange Act which shall be applied mutatis
mutandis after changing to read in Article 13-4 of the Banking Act
which is applied mutatis mutandis after changing to read in thepreceding Paragraph, reference to the “Cabinet Office Ordinance”
in those provisions shall be changed to read the “Ministry of
Finance Ordinance and Cabinet Office Ordinance.”
3. If the Government stipulates an ordinance pursuant to the provisions of the Banking Act which shall be applied mutatis mutandis
after changing to read in Paragraph 1, the Government shall pay
attention so that interests of users of business operations of the
Corporation such as money lending, when it gives the approvalreferred to in Paragraph 1 of the immediately preceding Article may
not be unreasonably infringed.
Article 11 Fiscal YearThe fiscal year of the Corporation shall commence on April 1 ofeach year and end on March 31 of the following year.
Article 12 Shares
1. If the Corporation intends to solicit those who will subscribe forshares offered for sale set forth in Article 199, Paragraph 1 of theCompanies Act (Act No. 86 of 2005) (hereinafter in Article 34,
Item (4) referred to as the “Shares Offered for Sale”) or stock acquisition rights offered set forth in Article 238, Paragraph 1 of theCompanies Act (hereinafter in Article 34, Item (4) referred to the“Stock Acquisition Rights Offered”), or to deliver shares or stockacquisition rights in connection with a share-for-share exchange,
the Corporation shall obtain authorization of the Minister of Finance.
2. Without delay after the delivery of shares upon exercise of stockacquisition rights, the Corporation shall submit a report thereon to
the Minister of Finance.
Article 13 Corporate Debentures, Development Bank of Japan
Bonds and Borrowings
1. Prior to the beginning of each fiscal year, the Corporation shall prepare its basic policy regarding the issue of corporate debentures(shasai) (other than the Development Bank of Japan Bonds,“Corporate Debentures”; hereinafter the same) and theDevelopment Bank of Japan Bonds (excluding the short-term
notes set forth in Article 66, Item (1) of the Act Concerning theCentral Depositary System of Corporate Debentures, Shares, Etc.
(Act No. 75 of 2001) from both the Corporate Debentures and theDevelopment Bank of Japan Bonds, respectively; hereinafter 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 the same), which provides
for matters relating to the issue of the Corporate Debentures andthe Development Bank of Japan Bonds, and the borrowing of

Development Bank of Japan Inc.
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(3) Outstanding amount of Securities acquired (the Securities set
forth in Article 3, Paragraph 3 and exclude the Securities
referred to in Article 2, Paragraph 1, Items (1) and (2) of the
Financial Instruments and Exchange Act (including the rights
to be represented on such securities when such Securities
are not issued), and those relating to capital contributions
under the next following Item); and(4) Outstanding amount of capital contributions.
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. Any director (or, if the Corporation is a company maintaining committees (iinkai secchi kaisha), any executive officer) who performs
the day-to-day business of the Corporation shall not perform the
day-to-day business of any other corporation without authorizationof the Minister of Finance.
2. The Minister of Finance shall, upon receipt of an application for theauthorization referred to in the preceding Paragraph, grant his/herauthorization, except in cases where it is determined that any
matter so applied may interfere with sound and proper management of the Corporation.

Article 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 Ministryof Finance Ordinance. If the Corporation intends to revise it, thesame shall apply.

Corporate Data
Data Section

Article 19 Subsidiaries Subject to Authorization
If the Corporation intends to make any of the following entities(other than individuals in the cases of those referred to in Items (3),(4) and (7); hereinafter referred to as the “Subsidiaries Subject toAuthorization”) its subsidiary (the subsidiary set forth in Article 2,
Item (3) of the Companies Act), the Corporation shall obtain authorization of the Minister of Finance in advance:(1) Banks;(2) Long-term credit banks (the long-term credit banks set forth in
Article 2 of the Long-Term Credit Bank Act (Act No. 187
of 1952));(3) Financial Instruments Firms (limited to those who engage in typeI financial instruments trading business set forth in Article 28,
Paragraph 1 of the Financial Instruments and Exchange Act);(4) Money lenders (the money lenders set forth in Article 2,
Paragraph 2 of the Money Lending Business Act (Act No. 32
of 1983), and exclude those who concurrently conduct thebusiness referred to in the preceding Items or fall within otherrequirements stipulated in the Ministry of Finance Ordinance);(5) Trust companies (the trust companies set forth in Article 2,
Paragraph 2 of the Trust Business Act (Act No. 154 of 2004));(6) Insurance companies (the insurance companies set forth in
Article 2, Paragraph 2 of the Insurance Business Act (Act No.
105 of 1995)); andCorporate Governance

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.

Strategy

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

The Development Bank of Japan Inc. Act

Value Creation Story

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

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The Development Bank of Japan Inc. Act(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 than disposition oflosses) such as distribution, merger, corporate split, and dissolution shall not become effective without authorization of the Ministerof Finance.
2. If the Minister of Finance intends to grant the authorization referred
to in the preceding Paragraph (limited to resolutions for merger,
corporate split and dissolution), the Minister of Finance shall have a
discussion with the Minister of Land, Infrastructure and Transport.
Article 21 Submission of Balance Sheet and Other Financial
Statements
For each fiscal year, the Corporation shall submit to the Ministerof Finance, as stipulated in the Ministry of Finance Ordinance, itsbalance sheet, profit and loss statement and business report for
the interim fiscal year (the period from April 1 to September 30 of
the current fiscal year) of the current fiscal year, and its balance
sheet, profit and loss statement and business report for the current
fiscal year.
Article 22 Special Exemptions from Management of Fiscal
Loan Funds
Notwithstanding the provision of Article 10, Paragraph 1 of the
Fiscal Loan Funds Act (Act No. 100 of 1951), the fiscal loan
funds (the fiscal loan funds set forth in Article 2 of the Fiscal Loan
Funds Act; hereinafter the same) may be appropriated for loans(hereinafter in Article 24 referred to simply as the “Loans”) to the
Corporation when the Corporation borrows money for appropriation for expenses required for its operations set forth in Article 3,
Paragraphs 1 and 2.
Article 23
1. Notwithstanding the provision of Article 10, Paragraph 1 of the
Fiscal Loan Funds Act, the fiscal loan funds may be appropriatedfor the Corporate Debentures and the Development Bank 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.
2. If the fiscal loan fund is invested in the Debentures, Etc. or the Old
Bank Debentures, the fiscal loan fund shall not be used to underwrite, subscribe for or purchase (limited, in the case of the Old
Bank Debentures, to purchase; hereinafter in this Paragraphreferred to as the “Subscribe”) the Debentures, Etc. or the Old
Bank Debentures in excess of five-tenths (5/10) of the outstanding
amount of the Debentures, Etc. and the Old Bank Debentures or
six-tenths (6/10) of the total amount of the Debentures, Etc. to beissued by the Corporation at a time. In this case, the Debentures,
Etc. or the Old Bank Debentures to be Subscribed with the fiscal
loan funds shall be the same as those otherwise Subscribed forwith respect to the terms such as interest rate, collateral, methodof redemption and maturity.
Article 24
For the purpose of application of the provisions of the Act
Concerning Special Measures for Long-term Management of
Fiscal Loan Funds (Act No. 7 of 1973) to the fiscal loan funds to
be invested in making loans as set forth in Article 22 or the fiscal
loan funds to be invested in the Debentures, Etc. as set forth inParagraph 1 of the immediately preceding Article, the Corporation
shall be deemed as the corporation set forth in Article 10,
Paragraph 1, Item (7) of the Fiscal Loan Funds Act.
Article 25 Guarantee of Obligations
1. Notwithstanding the provision of Article 3 of the Act Concerning
Restrictions on Fiscal Assistance by the Government to
Corporations (Act No. 24 of 1946), the Government may enter
into a guarantee agreement for the obligations relating to theDebentures, Etc., to the extent of the amount approved by the resolutions of the Diet.
2. In addition to the provision of the preceding Paragraph, theGovernment may enter into a guarantee agreement for the­obligations relating to the Bond Certificates, Etc. to be issued
by the Corporation upon request for reissue to be made after adecision of nullification set forth in Article 699, Paragraph 2 of
the Companies Act, for delivery to those who have lost theBond Certificates, Etc., or for the obligations relating to the Bond
Certificates, Etc. to be issued by the Corporation as set forth in
Article 5, Paragraph 3 or Article 13, Paragraph 3.

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

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

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Corporate GovernanceCorporate Data

Article 29 Competent Ministers
1. The competent minister under this Act shall be the Minister ofFinance provided, however, that in the case that the Corporation
obtains the approval referred to in Article 9, Paragraph 1, the competent ministers for the following matters shall be the Minister ofFinance and the Prime Minister:(1) Matters regarding the provisions of the Banking Act which areapplied mutatis mutandis after changing to read in Article 10;(2) Matters regarding the directions and orders under Article 26,
Paragraph 2 (limited to those to be given when it is deemednecessary to secure sound and proper management of the
Corporation set forth in the said Paragraph);(3) Matters regarding the direction for report and on-site inspections under Article 27, Paragraph 1 (limited to those to bemade and conducted when it is deemed necessary to securesound and proper management of the Corporation set forth in
the said Paragraph); and(4) Matters regarding the direction for report and on-site inspections under Article 27, Paragraph 2 (limited to those to bemade and conducted when it is deemed especially necessary

Strategy

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

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

Value Creation Story

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

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

Data Section

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

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2. If the person who committed the crime referred to in the immediately
preceding Paragraph surrendered to justice, his/her penalty may be
reduced or he/she may be exempted from the punishment.
Article 32
1. The crime referred to in Article 30, Paragraph 1 shall comply with
Article 4 of the Criminal Code (Act No. 45 of 1907).
2. The crime referred to in Paragraph 1 of the immediately preceding
Article shall comply with Article 2 of the Criminal Code.
Article 33
1. Any directors, executive officers (shikkoyaku), accounting counsel(kaikei sanyo) (if an accounting counsel is a firm, its members whoshould perform the duties as such), statutory auditors, or employees of the Corporation who fail to make reports, or make false
reports on matters to be reported in accordance with the provisionof Article 27, Paragraph 1, or refuse, interrupt or avoid inspection inaccordance with the same paragraph, shall be punished with afine not exceeding 300,000 yen.
2. Any directors, executive officers (shikkoyaku), accounting counsel(kaikei sanyo) (if an accounting counsel is a firm, its members whoshould perform the duties as such), statutory auditors, or employees of the subsidiaries of the Corporation or the Contractors
who fail to make reports, or make false reports on matters to bereported in accordance with the provision of Article 27, Paragraph2, or refuse, interrupt or avoid inspection in accordance with thesame paragraph, shall be punished with a fine not exceeding
300,000 yen.
Article 34
In any of the following cases, any directors, executive officers (shikkoyaku), accounting counsel (kaikei sanyo) or its members whoshould perform the duties as such, or statutory auditors of the
Corporation shall be punished with a non-penal fine not exceeding
1,000,000 yen:
(1) When he/she has conducted business activities in violation of
the provision of Article 3, Paragraph 2;(2) When he/she has not notified of his/her concurrent position in
violation of the provision of Article 4, Paragraph 2;(3) When he/she has started acceptance of deposits or issue of
the Development Bank of Japan Bonds in violation of the provision of Article 9, Paragraph 1;(4) When he/she has solicited those who will subscribe for
Shares Offered for Sale or Stock Acquisition Rights Offered,or delivered shares or stock acquisition rights in connection
with a share-for-share exchange in violation of the provision of
Article 12, Paragraph 1;(5) When he/she has not submitted a report on the delivery ofshares in violation of the provision of Article 12, Paragraph 2;(6) When he/she has not obtained authorization for its basic
policy in violation of the provision of Article 13, Paragraph 1;(7) When he/she has not submitted a report on issue of the
Corporate Debentures or the Development Bank of Japan
Bonds, or borrowing money in violation of the provision of
Article 13, Paragraph 2;(8) When he/she has exceeded the limit or the total referred to in
Article 14, Paragraph 1 or Paragraph 2 in violation of the provision thereof;(9) When he/she has not obtained authorization for his/her concurrent position in violation of the provision of Article 16,
Paragraph 1;(10) When he/she has not obtained authorization for its businessplan in violation of the provision of Article 17;(11) When he/she has not obtained authorization for its redemption
plans in violation of the provision of Article 18;(12) When he/she has made Subsidiaries Subject to Authorization
its subsidiary in violation of the provision of Article 19;(13) When he/she has not submitted its balance sheet, profit andloss statement or business report, or has submitted the one
which includes false statements or records in violation of theprovision of Article 21;(14) When he/she has violated the orders referred to in Article 26,
Paragraph 2.
Article 35
Any person who violates the provision of Article 2, Paragraph 1 shallbe punished with a non-penal fine not exceeding 100,000 yen.

Supplementary Provisions (Extract)
Article 1 Enforcement Date
This Act shall come into force from the date of promulgation; provided, however, that the provisions set forth in the following Items
shall take effect from the date set forth in each Item:(1) The provisions of Paragraph 1, Items (5), and (11) through(17), Paragraph 3, Paragraph 4, Item (2), Paragraph 5 of
Article 3, Article 4, Article 10, Article 14, Paragraph 2, Item (3),Article 19, Item (3), and Article 21 of the Supplementary
Provisions: Date on which the Act Concerning Amendment toParts of the Securities and Exchange Act (Act No. 65 of 2006)
comes into force or the date on which this Act comes into
force, whichever is later.
(2) Provision of Article 19, Item (4): Date on which the Act
Concerning Amendment to Parts of the Act Concerning theRegulations on the Money Lending Business (Act No. 115 of2006) comes into force or the date on which this Act comes
into force, whichever is later.
(3) Provisions of Articles 26 through 60 and 62 through 65 of the
Supplementary Provisions: October 1, 2008.
Article 2 Disposition of Government-Owned Shares
1. Pursuant to the provision of Article 6, Paragraph 2 of the Act
Concerning Promotion of Administrative Reform for Realizing the
Simple and Effective Government (Act No. 47 of 2006), theGovernment shall make efforts to reduce the number of shares
held by it in the Corporation (hereinafter in the following Paragraphand the Article 3 of the Supplementary Provisions referred to as“Government-Owned Shares”), taking into account the effect on
the attainment of the objectives of the Corporation, as well as themarket situation, and shall dispose all of them as soon aspracticable.
2. For a period from the effectuation of this Act until the Government
disposes of all of the Government-Owned Shares, the Government
shall from time to time review matters, such as matters regarding
the method in which the Government-Owned Shares should be
disposed of and take the required measures based on the result ofsuch review, so that the foundation of the Corporation’s investment
and financing functions for long-term business funds will bemaintained.
Article 2-2 Capital Contribution by the Government
The Government may make capital contributions to the Corporation,
to the extent of the amount approved by the budget, whenever theGovernment deems necessary, until March 31, 2012.
Article 2-3 Issue of the Government Bonds
1. The Government may issue the government bonds to use forsecurement of capital that become necessary to secure soundness of financial conditions of the Corporation in performing crisis
response business set forth in Article 2, Item (5) of the Japan
Finance Corporation Act (Act No. 57 of 2007) (hereinafter referred
to as the “crisis response business”), until March 31, 2012.

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Article 2-9 Capital Contribution by the Government with
Regard to Crisis Response Business
The Government may, for an indefinite period, make capital contributions to the Corporation, to the extent of the amount approved by
the budget, whenever the Government deems necessary for proper
implementation of crisis response business by the Corporation.
Article 2-10 Implementation of Crisis Response Business1. The Corporation shall conduct crisis response business at thehead office or any other office designated by the Minister ofFinance (hereinafter in the following Paragraph and Article 2-31,
Paragraph 1, Item (1) of the Supplementary Provisions referred toas the “designated office”).
2. The Corporation shall neither suspend nor cease to conduct crisis
response business at the designated office, except in cases wherecrisis response business is temporarily suspended, in whole or inpart, at the designated office due to Acts of God or other reasons
beyond control, as stipulated in the Ministry of Finance Ordinance.
Article 2-11 Special Provisions, Etc., on Business Plan with
Regard to Crisis Response Business1. The Corporation shall include an implementation policy for its crisis
response business in its business plan provided for in Article 17,
as stipulated in the Ministry of Finance Ordinance.
2. The Corporation shall include the implementation status of its crisis
response business, based on the implementation policy set forth in
the immediately preceding Paragraph, in its business report provided for in Article 21, as stipulated in the Ministry of FinanceOrdinance.
3. In addition to matters set forth in each of the Items of Article 27 of
the Companies Act, matters regarding proper implementation ofcrisis response business shall be included or recorded in the
Articles of Incorporation of the Corporation.

Data Section

Article 2-12 Special Investment Operations
1. The Corporation shall, in order to attain its objectives, conduct
special investment operations, in accordance with the provisions
set forth in this Article, Articles 2-15 to 2-20, and Articles 2-23 to
2-30 of the Supplementary Provisions.
2. In this Article and up to Article 2-20 of the Supplementary
Provisions, as well as in Articles 2-23, 2-25, 2-27 and 2-31 of the
Supplementary Provisions, “special investment operations” means,among the investment businesses in special business activities,
those that are deemed to particularly contribute to the facilitation of
supply of funds by financial institutions and others, for the revitalization of business activities taking advantage of regional
characteristics that contribute to autonomous development of local
economies, or for the enhancement of competitiveness ofJapanese companies that contribute to the improvement ofCorporate Data

Article 2-6 Special Rules for Taxation of the Registration
License Tax
In case of the investment as set forth in Article 2-2 of the
Supplementary Provisions, or the redemption as set forth in Article
2-4, Paragraph 2 of the Supplementary Provisions, no registration
license tax shall be assessed on registration of the increase in theamount of the capital of the Corporation, limited to only those registered as set forth in the Minister of Finance Ordinance.

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

Corporate Governance

Article 2-5 Return of the Government Bonds
1. If there are any government bonds delivered as set forth in Article
2-3, Paragraph 2 of the Supplementary Provisions, those which
are not redeemed as of July 1, 2012, the Corporation shall returnthe unredeemed government bonds to the Government.
2. The Government shall immediately cancel the government bonds
when the government bonds are returned as set forth in the immediately preceding Paragraph.
3. In addition to those set forth in the preceding two Paragraphs,
other matters required for the return and the cancellation of thegovernment bonds delivered by the Government as set forth in
Article 2-3, Paragraph 2 of the Supplementary Provisions, shall be
stipulated in the Ministry of Finance Ordinance.

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

Strategy

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

The Development Bank of Japan Inc. Act

Value Creation Story

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

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socioeconomic vitality and sustainable development of Japan, as
well as for special business activities, and those of which the business entities that will receive funds from the said investment
business and the particulars of such supply are decided during theperiod from the date on which the authorization specified in Article
2-17, Paragraph 1 of the Supplementary Provisions is obtained
through March 31, 2026, and any other businesses incidental
thereto (including those conducted on and after April 1, 2026).
3. “Special business activities” set forth in the immediately preceding
Paragraph means the following business activities:(1) Business activities conducted by Japanese business entities
with the aim of improving productivity and profitability by cultivating new business through effective use of insufficiently its
management resources not sufficiently used, or by promoting
management innovation mainly through co-ordinated alignment with business entities in different fields and effective
combination of management resources; and(2) Business activities that provide funds to the business activities
set forth in the preceding Item.
4. “Investment business” set forth in Paragraph 2 means the following
businesses concerning supply of funds:(1) To lend money through subordinated loans (which means loans
made under loan agreements with special clause of subordinated contents with regard to the payment of principal andinterest, and stipulated in the Ministry of Finance Ordinance);(2) To make capital contributions;(3) To acquire subordinated corporate debentures (which means
corporate debentures with special clause of subordinatedcontents with regard to the payment of principal and interest,and stipulated in the Ministry of Finance Ordinance); and(4) In addition to those set forth in the preceding three Items, toprovide funds in the manner approved in advance by the
Minister of Finance.
Article 2-13 Government’s Holding of Shares with Regard toSpecial Investment Operations
With a view to ensure proper implementation of special investment
operations by the Corporation, the Government shall hold one-halfor more of the total number of issued shares of the Corporation,
until the Corporation completes the special investment operations.
Article 2-14 Capital Contribution, Etc., by the Government
with Regard to Special Investment Operations
1. The Government may make capital contributions to the
Corporation, to the extent of the amount approved by the budget,whenever the Government deems necessary for proper implementation of special investment operations by the Corporation, until
March 31, 2026.
2. The Corporation shall not appropriate money provided throughcapital contributions provided for in the preceding Paragraph toany funds other than funds for special investment operations.
Article 2-15 Supplement or Encouragement of Financing
Conducted by Financial Institutions, Etc., in
Special Investment Operations
The purpose of the Corporation in conducting special investment
operations shall be to supplement or encourage financing conducted by financial institutions and investment conducted byprivate sector.
Article 2-16 Special Investment Guidelines
1. Guidelines to be followed by the Corporation in conducting special
investment operations (in the following Paragraph and Paragraph 1of the immediately following Article referred to as the “special
investment guidelines”) shall be established and issued by the
Minister of Finance.
2. The special investment guidelines shall provide for the following
matters:(1) Standards to be followed in deciding the business entities thatwill receive funds from the special investment operations andthe particulars of such supply of funds;(2) Matters regarding appropriate financial management of thespecial investment operations;(3) Matters regarding securing of appropriate competitive relationships between the Corporation and other business entities;(4) Matters regarding the system to be established to evaluate
and supervise the implementation status of special investment
operations;(5) Matters regarding reporting to the Minister of Finance on theimplementation status of special investment operations; and(6) Any other matters necessary to ensure proper implementationof special investment operations.
Article 2-17 Special Investment Operations Rules
1. The Corporation shall set rules regarding special investment operations (in the following Paragraph referred to as the “special
investment operations rules”) in line with the special investment
guidelines, with respect to matters concerning implementation of
special investment operations stipulated in the Ministry of FinanceOrdinance, and shall obtain authorization therefor from the Ministerof Finance. If the Corporation intends to revise such rules, thesame shall apply.
2. The Minister of Finance may order the Corporation to revise thespecial investment operations rules authorized pursuant to the provision of the preceding Paragraph, if he/she deems that such rules
have become inappropriate for the proper implementation of special investment operations by the Corporation.
Article 2-18 Special Provisions, Etc., on Business Plan with
Regard to Special Investment Operations
1. The Corporation shall include the implementation policy for the
special investment operations in its business plans provided forunder Article 17, as stipulated in the Ministry of Finance Ordinance,
until the completion of the special investment operations.
2. The Corporation shall include the implementation status of the special investment operations based on the implementation policy
provided for under the immediately preceding Paragraph, in its business reports provided for under Article 21 for each fiscal year up to
the fiscal year including the date of completion of the special investment operations, as stipulated in the Ministry of Finance Ordinance.
3. In addition to matters set forth in each of the Items of Article 27 of
the Companies Act, matters regarding proper implementation of
special investment operations shall be included or recorded in the
Articles of Incorporation of the Corporation, until the completion of
the special investment operations.
Article 2-19 Status of Income and Expenditure with Regard toSpecial Investment Operations, Etc.
For each fiscal year, the Corporation shall, as stipulated in the
Ministry of Finance Ordinance, submit to the Minister of Financeand publish documents stating the status of income and expenditure of the following businesses by category for each fiscal year up
to the fiscal year including the date of completion of the special
investment operations:(1) Special investment operations; and(2) Businesses other than those listed in the preceding Item.
Article 2-20 Completion of Special Investment Operations
1. The Corporation shall, taking into account economic conditions,the state of business of the business entities that will receive funds
from special investment operations, and other circumstances,transfer or otherwise dispose of all of the securities (which means
the securities listed in Article 2, Paragraph 1 of the Financial
Instruments and Exchange Act, and the rights which are deemedas securities pursuant to the provision of Article 2, Paragraph 2 of
the Financial Instruments and Exchange Act) and receivables heldby it in the special investment operations, and seek to completeDevelopment Bank of Japan Inc.
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Data Section

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

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

Article 2-24 Special Provisions on Limits on Borrowing and
Limitation on Extension of Credit
For the purpose of application of the provision of Article 14, when
the amount of the crisis response reserve, the amount of the special investment reserve or the amount of the special investment
surplus funds is recorded, the total of the amounts so recorded
shall be included in the amount of paid-in capital and reserves.

Corporate Governance

Article 2-22 Crisis Response Reserve
1. The Corporation shall establish a crisis response reserve andappropriate to such reserve the amount contributed by theGovernment pursuant to the provision of Article 2-9 of the
Supplementary Provisions.
2. When the capital contributions have been made by theGovernment pursuant to the provision of Article 2-9 of the
Supplementary Provisions, the Corporation shall, notwithstanding
the provisions of Article 445, Paragraph 2 of the Companies Act,
record the whole of the amount contributed pursuant to the provision of Article 2-9 of the Supplementary Provisions as the amountof the crisis response reserve. For this purpose, reference to “thisAct” in Article 445, Paragraph 1 of the said Act shall be changed toread “this Act or the Development Bank of Japan Inc. Act (Act No.
85 of 2007).”as the “special investment reserve” in this Item, Paragraph 1, Item(2) of the following Article and Article 449, Paragraph 1),” reference
to “the amount to be appropriated to reserves” in the same Item
shall be changed to read “the amount to be appropriated toreserves or special investment reserve,” reference to “the paid-in
capital” in Article 448, Paragraph 1, Item (2) of the said Act shall bechanged to read “the paid-in capital or special investment reserve,”
and reference to “is appropriated to paid-in capital” in Article 449,
Paragraph 1 of the said Act shall be changed to read “is appropriated to paid-in capital or special investment reserve.”
4. The Corporation may reduce the amount of surplus funds andincrease the amount of its special investment reserve, whenever
the Corporation deems this necessary in order to implement the
special investment operations properly. For this purpose, the following matters shall be determined:(1) The amount by which the amount of surplus funds will be
reduced; and(2) The date on which the increase in the amount of the special
investment reserve will become effective.
5. The determination of the matters referred to in each Item of theimmediately preceding Paragraph shall be made by resolution of ashareholders’ meeting.
6. The amount provided for under Paragraph 4, Item (1) of this Article
may not exceed the amount of surplus funds as of the date provided for under Item (2) of the said Paragraph.
7. The Corporation shall establish the special investment surplus
funds and record the amount of profit or loss resulting from the calculation of profits and losses pertaining to the special investment
operations for each fiscal year as stipulated in the Ministry of
Finance Ordinance.

Strategy

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

The Development Bank of Japan Inc. Act

Value Creation Story

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

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4, Item (1) of the Supplementary Provisions that have been
paid to the national treasury), if any;(4) The amount by which the amount of paid-in capital orreserves has been reduced after the last day of the mostrecent fiscal year to increase the amount of the special investment reserve, if any;(5) The amount by which the amount of surplus funds has been
reduced after the last day of the most recent fiscal year toincrease the amount of the special investment reserve,
if any; and(6) In addition to those listed in the preceding two Items, the total
amount of the amounts recorded to each account as prescribed in the Ministry of Finance Ordinance.
3. If the Corporation calculates the distributable amount under Article
461, Paragraph 2 of the Companies Act (which shall, in Article
2-27, Paragraph 6 of the Supplementary Provisions, be referred toas the “Distributable Amount”), the Corporation shall deduct, fromthe total of the amounts set forth in Article 461, Paragraph 2, Items(1) and (2) of the said Act, the total of the amounts recorded toeach account as the amount of profit pertaining to the special
investment operations for the period set forth in Article 441,
Paragraph 1, Item (2) of the Companies Act in the case where the
Corporation obtains the approval referred to in Paragraph 4 of thesaid Article (or, in cases set forth in the proviso to the saidParagraph, the approval under Paragraph 3 of the said Article) of
the temporary financial statements referred to in Paragraph 1 of thesaid Article and any other amounts recorded to each account asprescribed in the Ministry of Finance Ordinance.
Article 2-26 Reduction in Amount of Crisis Response Reserve,
Etc., When Deficit Is Covered
1. If the amount of capital reserve and the amount of earned surplus
reserve have become zero, the Corporation may reduce theamount of the crisis response reserve, the amount of the special
investment reserve or the amount of the special investment surplus
funds (limited, as regards the amount of the special investment
surplus funds, to the case where such amount exceeds zero). For
this purpose, the following matters shall be determined by resolution of a shareholders’ meeting:(1) The amount by which the amount of the crisis response
reserve, the amount of the special investment reserve or theamount of the special investment surplus funds will be
reduced; and(2) The date on which the reduction of the amount of the crisis
response reserve, the amount of the special investment
reserve or the amount of the special investment surplus funds
will become effective.
2. The resolution provided for under the preceding Paragraph shall not
become effective without authorization of the Minister of Finance.
3. The amount of the crisis response reserve, the amount of the special investment reserve or the amount of the special investment
surplus funds under Paragraph 1, Item (1) of this Article may notexceed the amount of the crisis response reserve, the amount of
the special investment reserve or the amount of the special investment surplus funds, respectively, as of the date set forth in Item (2)of the said Paragraph.
4. The aggregate of the amount of the crisis response reserve, theamount of the special investment reserve and the amount of thespecial investment surplus funds as referred to in Paragraph 1,
Item (1) of this Article may not exceed the amount calculated by
the method prescribed by the Ministry of Finance Ordinance as theamount of deficit as of the date of the shareholders’ meetingreferred to in the said Paragraph.
5. If the amount of the special investment surplus funds is notexceeding zero, the amount of the special investment reserve as
referred to in Paragraph 1, Item (1) of this Article may not exceed
the amount calculated by the method prescribed by the Ministry of
Finance Ordinance as the amount by which the amount of thespecial investment reserve may be reduced.

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

Development Bank of Japan Inc.
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Corporate GovernanceCorporate Data
Data Section

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

828, Paragraph 1, Item (5) the same), the amount of special
investment reserve (special investment reserve set forth in Article
2-23, Paragraph 1 of the Supplementary Provisions of the said
Act; hereinafter in this Item the same), or special investment surplus funds (special investment surplus funds set forth in Article
2-23, Paragraph 7 of the Supplementary Provisions of the said
Act; hereinafter in this Item the same); “Article 447, Paragraph 1,
Item (3)” shall be changed to read “Article 2-26, Paragraph 1, Item(2) of the Supplementary Provisions of the said Act”; references to“paid-in capital of” in Article 828, Paragraph 1, Item (5) of the said
Act shall be changed to read “the amount of crisis response
reserve, the amount of special investment reserve, or special
investment surplus funds set forth in Article 2-26, Paragraph 1 of
the Supplementary Provisions of the Development Bank of Japan
Inc. Act concerning”; “on which the reduction in the amount ofpaid-in capital” shall be changed to read “on which the reduction in
the amount of the said crisis response reserve, the amount of special investment reserve, or the amount of special investment
surplus funds”; and references to “, the trustee in bankruptcy or acreditor, who did not give approval to the reduction in the amountof paid-in capital” in Paragraph 2, Item (5) of the said Article shallbe changed to read “or the trustee in bankruptcy.”
2. The provisions of Article 449 (other than the proviso of Paragraph 1
and Paragraph 6, Item (2)) and Article 828 (limited to the portions
relating to Paragraph 1, Item (5) and Paragraph 2, Item (5)) of theCompanies Act shall apply mutatis mutandis to cases where theamount of crisis response reserve is reduced as set forth in Article
2-27, Paragraph 1 of the Supplementary Provisions. For this purpose, references to “paid-in capital or reserves (hereinafter in this
Article referred to as “Paid-In Capital, Etc.”)” in the main clause of
Article 449, Paragraph 1 of the said Act shall be changed to read“crisis response reserve as set forth in Article 2-27, Paragraph 1 of
the Supplementary Provisions of the Development Bank of Japan
Inc. Act (Act No. 85 of 2007) (crisis response reserve set forth in
Article 2-22, Paragraph 1 of the Supplementary Provisions of thesaid Act; hereinafter in this Article and Article 828, Paragraph 1,
Item (5) and Paragraph 2, Item (5) the same)”; “In cases where...
(excluding cases where the whole of the amount by which thereserves are reduced is appropriated to the paid-in capital)” shallbe changed to read “In cases where…”; “of Paid-In Capital, Etc.”
shall be changed to read “of crisis response reserve”; references to“Paid-In Capital, Etc.” in Paragraph 2, Item (1) of the said Article
shall be changed to read “crisis response reserve”; references to“Ordinance of the Ministry of Justice” in Item (2) of the saidParagraph shall be changed to read the “Ministry of FinanceOrdinance”; references to “Paid-In Capital, Etc.” in Paragraph 4 andthe proviso of Paragraph 5 of the said Article shall be changed toread “crisis response reserve”; references to “paid-in capital” inParagraph 6, Item (1) of the said Article shall be changed to read“crisis response reserve set forth in Article 2-27, Paragraph 1 of the
Supplementary Provisions of the Development Bank of Japan Inc.
Act”; “Article 447, Paragraph 1, Item (3)” shall be changed to read
“Paragraph 4, Item (2) of the said Article”; references to “paid-in
capital of” in Article 828, Paragraph 1, Item (5) of the said Act shallbe changed to read “crisis response reserve set forth in Article
2-27, Paragraph 1 of the Supplementary Provisions of theDevelopment Bank of Japan Inc. Act concerning”; “on which the
reduction in the amount of paid-in capital” shall be changed to read“on which the reduction in the amount of the said crisis response
reserve”; and references to “paid-in capital” in Paragraph 2, Item (5)of the said Article shall be changed to read “crisis response reserve
set forth in Article 2-27, Paragraph 1 of the Supplementary
Provisions of the Development Bank of Japan Inc. Act.”
3. The provisions of Article 449 (other than the proviso of Paragraph 1
and Paragraph 6, Item (2)) and Article 828 (limited to the portions
relating to Paragraph 1, Item (5) and Paragraph 2, Item (5)) of theCompanies Act shall apply mutatis mutandis to cases where theamount of special investment reserve is reduced as set forth in
Article 2-27, Paragraph 2 of the Supplementary Provisions. For thisStrategy

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

The Development Bank of Japan Inc. Act

Value Creation Story

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

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purpose, references to “paid-in capital or reserves (hereinafter inthis Article referred to as “Paid-In Capital, Etc.”)” in the main clauseof Article 449, Paragraph 1 of the said Act shall be changed toread “special investment reserve as set forth in Article 2-27,
Paragraph 2 of the Supplementary Provisions of the Development
Bank of Japan Inc. Act (Act No. 85 of 2007) (special investment
reserve set forth in Article 2-23, Paragraph 1 of the Supplementary
Provisions of the said Act; hereinafter in this Article and Article 828,
Paragraph 1, Item (5) and Paragraph 2, Item (5) the same)”; “Incases where... (excluding cases where the whole of the amountby which the reserves are reduced is appropriated to the paid-in
capital)” shall be changed to read “In cases where…”; “of Paid-In
Capital, Etc.” shall be changed to read “of special investment
reserve”; references to “Paid-In Capital, Etc.” in Paragraph 2, Item(1) of the said Article shall be changed to read “special investment
reserve”; references to “Ordinance of the Ministry of Justice” in
Item (2) of the said Paragraph shall be changed to read the“Ministry of Finance Ordinance”; references to “Paid-In Capital,
Etc.” in Paragraph 4 and the proviso of Paragraph 5 of the said
Article shall be changed to read “special investment reserve”; references to “paid-in capital” in Paragraph 6, Item (1) of the said Article
shall be changed to read “special investment reserve set forth in
Article 2-27, Paragraph 2 of the Supplementary Provisions of theDevelopment Bank of Japan Inc. Act”; “Article 447, Paragraph 1,
Item (3)” shall be changed to read “Paragraph 4, Item (2) of thesaid Article”; references to “paid-in capital of” in Article 828,
Paragraph 1, Item (5) of the said Act shall be changed to read
“special investment reserve set forth in Article 2-27, Paragraph 2 of
the Supplementary Provisions of the Development Bank of Japan
Inc. Act concerning”; “on which the reduction in the amount ofpaid-in capital” shall be changed to read “on which the reduction in
the amount of the said special investment reserve”; and references
to “paid-in capital” in Paragraph 2, Item (5) of the said Article shallbe changed to read “special investment reserve set forth in Article
2-27, Paragraph 2 of the Supplementary Provisions of theDevelopment Bank of Japan Inc. Act.”
4. The provisions of Article 449 (other than the proviso of Paragraph 1
and Paragraph 6, Item (2)) and Article 828 (limited to the portions
relating to Paragraph 1, Item (5) and Paragraph 2, Item (5)) of theCompanies Act shall apply mutatis mutandis to cases where theamount of special investment surplus funds is reduced as set forthin Article 2-27, Paragraph 3 of the Supplementary Provisions. For
this purpose, references to “paid-in capital or reserves (hereinafterin this Article referred to as “Paid-In Capital, Etc.”)” in the mainclause of Article 449, Paragraph 1 of the said Act shall be changed
to read “special investment surplus funds as set forth in Article
2-27, Paragraph 3 of the Supplementary Provisions of theDevelopment Bank of Japan Inc. Act (Act No. 85 of 2007) (special
investment surplus funds set forth in Article 2-23, Paragraph 7 of
the Supplementary Provisions of the said Act; hereinafter in this
Article and Article 828, Paragraph 1, Item (5) and Paragraph 2, Item(5) the same)”; “In cases where... (excluding cases where thewhole of the amount by which the reserves are reduced is appropriated to the paid-in capital)” shall be changed to read “In cases
where…”; “of Paid-In Capital, Etc.” shall be changed to read “ofspecial investment surplus funds”; references to “Paid-In Capital,
Etc.” in Paragraph 2, Item (1) of the said Article shall be changed toread “special investment surplus funds”; references to “Ordinanceof the Ministry of Justice” in Item (2) of the said Paragraph shall bechanged to read the “Ministry of Finance Ordinance”; references to“Paid-In Capital, Etc.” in Paragraph 4 and the proviso of Paragraph
5 of the said Article shall be changed to read “special investment
surplus funds”; references to “paid-in capital” in Paragraph 6, Item(1) of the said Article shall be changed to read “special investment
surplus funds set forth in Article 2-27, Paragraph 3 of the
Supplementary Provisions of the Development Bank of Japan Inc.
Act”; “Article 447, Paragraph 1, Item (3)” shall be changed to read
“Paragraph 4, Item (2) of the said Article”; references to “paid-in
capital of” in Article 828, Paragraph 1, Item (5) of the said Act shallbe changed to read “special investment surplus funds set forth in
Article 2-27, Paragraph 3 of the Supplementary Provisions of theDevelopment Bank of Japan Inc. Act concerning”; “on which the
reduction in the amount of paid-in capital” shall be changed to read“on which the reduction in the amount of the said special investment surplus funds”; and references to “paid-in capital”
in Paragraph 2, Item (5) of the said Article shall be changed toread “special investment surplus funds set forth in Article 2-27,
Paragraph 3 of the Supplementary Provisions of the Development
Bank of Japan Inc. Act.”
Article 2-31 Penal Provisions
1. In any of the following cases, any directors, executive officers­(shikkoyaku), accounting counsel (kaikei sanyo) or its members
who should perform duties as such, or statutory auditors of the
Corporation shall be punished with a non-penal fine not exceeding
1,000,000 yen:
(1) When he/she has suspended or abolished crisis response
business at the designated office in violation of the provisionof Article 2-10, Paragraph 2 of the Supplementary Provisions;(2) When he/she has appropriated money provided through capital contributions as set forth in Article 2-14, Paragraph 1 toany fund other than the fund for special investment operations, in violation of the provision of Article 2-14, Paragraph 2of the Supplementary Provisions;(3) When he/she has violated the order referred to in Article 2-17,
Paragraph 2 of the Supplementary Provisions;(4) When he/she has not submitted or published documents
stating the status of income and expenditures for each category of business operations in each Item of Article 2-19 of the
Supplementary Provisions, or has submitted or publishedsuch documents containing false statements, in violation of
the provision of Article 2-19 of the Supplementary Provisions;(5) When he/she has not submitted a report on the completion of
special investment operations in violation of the provision of
Article 2-20, Paragraph 2 of the Supplementary Provisions.
2. With regard to the application of the provision of Article 34, Item (8)in the case where the provision of Article 2-24 of the
Supplementary Provisions applies, references to “limit” in the said
Item shall be changed to read “limit calculated by including theaggregate amount of crisis response reserve, special investment
reserve and special investment surplus funds in the amount ofpaid-in capital and reserves as set forth in the provisions of Article
2-24 of the Supplementary Provisions.”
3. With regard to the application of the provision of Article 34, Item(10) in the case where the provision of Article 2-11, Paragraph 1,
Article 2-18, Paragraph 1 or Article 2-21, Paragraph 2 of the
Supplementary Provisions applies, references to “Article 17” in thesaid Item shall be changed to read “Article 17, or Article 2-11,
Paragraph 1, Article 2-18, Paragraph 1 or Article 2-21, Paragraph
2 of the Supplementary Provisions.”
4. With regard to the application of the provision of Article 34, Item(13) in the case where the provision of Article 2-11, Paragraph 2,
Article 2-18, Paragraph 2 or Article 2-21, Paragraph 3 of the
Supplementary Provisions applies, references to “Article 21” in thesaid Item shall be changed to read “Article 21, or Article 2-11,
Paragraph 2, Article 2-18, Paragraph 2 or Article 2-21, Paragraph
3 of the Supplementary Provisions.”
Article 3 Abolition of This Act and Other Measures
If the Government disposes of all of the Government-Owned
Shares, the Government shall immediately take measures to abolish this Act, as well as measures necessary to smoothly assign thebusiness operations, functions, and rights and obligations of the
Corporation to any organization to be formed as a bearer of thefunctions commensurate with the investment and financing functions held by the Corporation.

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Article 9 Capital Contribution
Upon the incorporation of the Corporation, DBJ shall contribute allof its properties, except assets to be assumed by Japan pursuant
to the provision of Article 15, Paragraph 2 of the Supplementary
Provisions, to the Corporation.
Article 10 Organizational Meeting
For the purpose of application of the provision of Article 65,
Paragraph 1 of the Companies Act concerning the incorporation of
the Corporation, reference to the “on and after either the dateunder Article 58, Paragraph 1, Item (3) or the last day of the period
under such item, whichever comes later,” shall be changed to read
“after allotment of shares set forth in Article 8, Paragraph 1 of the
Supplementary Provisions of the Development Bank of Japan Inc.
Act (Act No. 85 of 2007).”
Article 11 Establishment of the Corporation
Contributions to be made by DBJ pursuant to the provision of
Article 9 of the Supplementary Provisions shall be made when theprovision of Article 26 of the Supplementary Provisions becomes
effective, and the Corporation shall be established, notwithstanding
the provision of Article 49 of the Companies Act.

Corporate Data

Article 12 Registration of Incorporation
Notwithstanding the provision of Article 911, Paragraph 1 of theCompanies Act, the Corporation shall register its incorporation
without delay after the establishment of the Corporation.
Article 13 Transfer to the Government without Consideration
The shares to be acquired by DBJ through its capital contribution
shall be transferred to the Government without consideration at thetime of establishment of the Corporation.
Article 14 Exception from Application of the Companies Act
The provisions of Article 30 and Part II, Chapter 1, Section 3 of theCompanies Act shall not apply to the incorporation of the
Corporation.
Article 15 Dissolution of DBJ, Etc.
1. DBJ shall be dissolved at the time of establishment of the
Corporation, whereupon any and all rights and obligations of DBJ

Data Section

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

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

Corporate Governance

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

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

Strategy

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

The Development Bank of Japan Inc. Act

Value Creation Story

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

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shall be taken over by the Corporation, except for those assets tobe assumed by the Government as set forth in the following
Paragraph.
2. Of the rights actually held by DBJ at the time of establishment of
the Corporation, the assets which will be considered no longer
necessary for the Corporation to smoothly perform its future business operation shall be assumed by Japan at the time ofestablishment of the Corporation.
3. The scope of assets to be assumed by Japan pursuant to the provision of the immediately preceding Paragraph, and other mattersrequired for transfer of those assets to Japan shall be prescribed in
the Cabinet Order.
4. The fiscal year of DBJ commencing on April 1, 2008 shall end on
the day immediately preceding the date of dissolution of DBJ.
5. Settlement of accounts, and preparations, Etc. of list of properties,balance sheets, and profits and loss statements of DBJ for the
fiscal year commencing on April 1, 2008 shall be conducted by
the Corporation as previously conducted, except for the portions
relating to Article 38, Paragraph 1 (limited to the portions relating to
the Auditor’s opinions) and Article 40, Paragraph 1 (limited to the
portions relating to the Auditor’s opinions) of the Old DBJ Act. For
this purpose, the reference to “for each half-year from April to
September and from October to March of the following year” and“for each half-year and for each fiscal year” in Article 38, Paragraph
1 of the Old DBJ Act shall be deleted, and references to “within
two months after the end of the relevant half-year or three months
after the end of the fiscal year” in the said Paragraph shall bechanged to read “on or prior to December 31, 2008.” Reference to“the settlement of accounts for each fiscal year not later than May
31 of the following fiscal year” in Article 39 of the Old DBJ Act shallbe changed to read “the settlement of accounts for the fiscal year
commencing on April 1, 2008 not later than November 30, 2008.”
Reference to “November 30 of the following fiscal year” in Article 4,
Paragraph 3 of the Old DBJ Act shall be changed to read
“November 30, 2009.”
6. Disposition of profits and payment into the national treasury by DBJ
under Article 41 of the Old DBJ Act for the fiscal year commencing
on April 1, 2008 shall be conducted by the Corporation as previously conducted. For this purpose, references to “each fiscal year”
and “May 31 of the following fiscal year” in Article 41, Paragraph 3of the Old DBJ Act shall be changed to read “the fiscal year commencing on April 1, 2008” and “November 30, 2008,” respectively.
7. The matters regarding the registration of the dissolution in the casethat DBJ is dissolved pursuant to the provision of Paragraph 1,
shall be prescribed in the Cabinet Order.
Article 16 Values of Properties Assumed
1. The values of assets and liabilities assumed by the Corporationfrom DBJ (in the immediately following Paragraph referred to as the“Assumed Properties”) shall be as evaluated by evaluation officers(hyoka iin).
2. If evaluation officers intend to make evaluations as set forth in thepreceding Paragraph, their evaluations shall be made based on themarket prices of the Assumed Properties as of the date on which
the Corporation is established; provided, however, that if it isdeemed inappropriate to use the market prices taking into accountthe matters of the Assumed Properties such as the kinds and purpose of use, their evaluations may be made not based on themarket prices of the Assumed Properties.
3. In addition to those set forth in the preceding two Paragraphs,
evaluation officers and other matters necessary for evaluations
shall be prescribed in the Cabinet Order.
Article 17 Transitional Measures in Connection with
Assumption of Rights and Obligations
1. With respect to the Old Bank Debentures and interest coupons
concerning the obligations to be assumed by the Corporation
pursuant to the provision of Article 15, Paragraph 1 of the
Supplementary Provisions, the provisions of Article 43, Paragraphs

5 and 6 of the Old DBJ Act shall remain effective and in force evenafter the provision of Article 26 of the Supplementary Provisions
becomes effective.
2. With respect to the old Hokuto bonds (the Hokkaido-Tohoku
Development Finance Corporation Bonds issued pursuant to theprovision of Article 27, Paragraph 1 of the Hokkaido-Tohoku
Development Finance Corporation Act (Act No. 97 of 1956; hereinafter in this Paragraph referred to as the “Old HTDFC Act”) before
abolishment under Article 17, Item (2) of the Supplementary
Provisions of the Old DBJ Act) and interest coupons to be
assumed by the Corporation pursuant to the provision of Article
15, Paragraph 1 of the Supplementary Provisions, the provisions ofArticle 27, Paragraphs 3 and 4 of the Old HTDFC Act shall remain
effective and in force even after the provision of Article 26 of the
Supplementary Provisions becomes effective.
3. The guarantee agreements executed by the Government pursuant
to the provision of Article 45, Paragraph 1 or 3 of the Old DBJ Act
with respect to the obligations concerning the Old Bank
Debentures to be assumed by the Corporation pursuant to theprovision of Article 15, Paragraph 1 of the Supplementary
Provisions shall continue to be effective upon the previous terms
and conditions with respect to such obligations concerning the Old
Bank Debentures even after the assumption thereof by the
Corporation.
4. The guarantee agreements executed by the Government pursuant
to the provision of Article 37-3, Paragraph 1 or 2 of the old Japan
Development Bank Act (Act No. 108 of 1951; hereinafter in thisParagraph referred to as the “Old JDB Act”) before abolishment
under Article 17, Item (1) of the Supplementary Provisions of the
Old DBJ Act with respect to the obligations concerning the foreign
currency-denominated bonds set forth in Article 37-2, Paragraph 1of the Old JDB Act issued pursuant to the provision of Article 37-2,
Paragraph 1 or 2 of the Old JDB Act to be assumed by the
Corporation pursuant to the provision of Article 15, Paragraph 1 of
the Supplementary Provisions shall continue to be effective upon
the previous terms and conditions with respect to such obligations
concerning the foreign currency-denominated bonds even after theassumption thereof by the Corporation.
5. The guarantee agreements executed by the Government pursuant
to the provision of Article 2, Paragraph 2 or 3 of the Act
Concerning Special Measures for Acceptance of Foreign Capitals
from the International Bank for Reconstruction and Development
and Other Organizations (Act No. 51 of 1953) with respect to the
obligations concerning the Old Bank Debentures to be assumed
by the Corporation pursuant to the provision of Article 15,
Paragraph 1 of the Supplementary Provisions shall continue to beeffective upon the previous terms and conditions with respect tosuch obligations constituting the Old Bank Debentures even after
the assumption thereof by the Corporation, and the public imposts
such as taxes on interests on and profits from redemption of the
Old Bank Debentures concerning those guarantee agreements
shall be the same as in effect under the previous arrangements.
Article 18 Competent Ministers
The competent ministers under Article 26, Paragraph 2 and Article
27, Paragraph 1 for management of assets to be assumed by the
Corporation pursuant to the provision of Article 15, Paragraph 1 of
the Supplementary Provisions (hereinafter in this Article referred toas the “Assumed Assets”) shall, notwithstanding the provision of
Article 29, Paragraph 1, be as follows:(1) For management of the Assumed Assets set forth in the
Cabinet Order in the Hokkaido or the Tohoku Region (theareas of Aomori, Iwate, Miyagi, Akita, Yamagata, Fukushima
and Niigata prefectures): Minister of Finance and Minister ofLand, Infrastructure and Transport; and(2) For management of the Assumed Assets other than the
Assumed Assets set forth in the preceding Item: Minister ofFinance.

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Article 19 Transitional Measures for the Fiscal Year
Notwithstanding the provision of Article 11, the first fiscal year of
the Corporation shall commence on the date on which of the
Corporation is established and end on March 31, 2009.

Corporate Data
Data Section

Article 22 Special Rules for Taxation of the Registration
License Tax
1. No registration license tax shall be assessed on registration of theincorporation of the Corporation pursuant to the provision of Article
12 of the Supplementary Provisions, and registration or recordationof the Corporation in connection with provisions of properties upon
the capital contribution by DBJ pursuant to the provision of Article
9 of the Supplementary Provisions.
2. With respect to the registration license tax for registration or recordation of origination (hozen), creation (settei) or transfer (iten) of lien(sakidori token), pledge (shichiken) or mortgage (teitoken) to secure
the claims concerning business operations set forth in Article 20,
Paragraph 1, Item (1) of the Old DBJ Act which shall be assumed
by the Corporation from DBJ pursuant to the provision of Article
15, Paragraph 1 of the Supplementary Provisions, or registration oftransfer of movable properties or transfer of claims, based on theagreements executed by DBJ before the provision of Article 48 of
the Supplementary Provisions comes into force, the provision of
Schedule III-22 of the Registration Tax Act (Act No. 35 of 1967)

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

Strategy

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

The Development Bank of Japan Inc. Act

Value Creation Story

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

97

98

Development Bank of Japan Inc.
Integrated Report 2022

The Development Bank of Japan Inc. Act

before amendment under Article 48 of the Supplementary
Provisions shall still remain effective and in force.
Article 23 Special Rules for Taxation of the Corporation Tax
1. Capital investment in the Corporation to be made by DBJ pursuant
to the provision of Article 9 of the Supplementary Provisions (hereinafter in this Article referred to as the “Specified In-kind Contribution”)
shall be deemed as qualified in-kind contribution set forth in Article
2, Item (12-14) of the Corporation Tax Act (Act No. 34 of 1965), andthe Corporation Tax Act and other laws and ordinances relating to
the corporation tax shall be applied on such basis.
2. With respect to assets and liabilities of DBJ to be transferred by
the Specified In-kind Contribution which shall be subject to the
Corporation Tax Act and other laws and ordinances relating to thecorporation tax pursuant to the provision of the immediately preceding Paragraph, the value evaluated by evaluation officers
pursuant to the provision of Article 16, Paragraph 1 of the
Supplementary Provisions shall be deemed as the book value;
provided, however, that with respect to allowance for loan losses,
the amount purported to be assumed by the Corporation pursuant
to the provision of the immediately following Paragraph shall bedeemed as the book value, and the book values of the amounts ofallowances prescribed by the Cabinet Order such as allowance forretirement payments shall be nil.
3. If it is determined to apply the provisions of Article 52 of the
Corporation Tax Act in the fiscal year in which the day prior to thedate of the Specified In-kind Contribution of the DBJ is included (inthe immediately following Paragraph referred to the “Final Fiscal
Year”), the amount up to the upper limit of individual allowance forloan losses set forth in Article 52, Paragraph 1 as calculated in thesaid Paragraph or the amount up to the amount calculated as prescribed by the Cabinet Order as set forth in Paragraph 2 of thesaid Article shall, notwithstanding the provisions of Paragraph 7 ofthe said Article, be assumed by the Corporation. For this purpose
with respect to calculation of the amount of income for the fiscal
year in which the date of the Specified In-kind Contribution of the
Corporation is included, the amount assumed by the Corporation
shall be included in the amount of profits.
4. The Corporation shall submit the financial statements of DBJ for
the Final Fiscal Year set forth in Article 38, Paragraph 1 of the Old
DBJ Act to the director of competent district tax office within three(3) months of the date of the Specified In-kind Contribution.
Article 24 Special Rules for Taxation of Local Taxes
No real estate acquisition tax or vehicle acquisition tax can be
imposed on acquisition of real estate or vehicle in connection withcapital investment to be made by DBJ pursuant to the provision of
Article 9 of the Supplementary Provisions.
Article 25 Delegation to the Cabinet Order
In addition to those set forth in Articles 2 to 24 of the
Supplementary Provisions, matters necessary for incorporation of
the Corporation and dissolution of DBJ, as well as other mattersnecessary for effectuation of these provisions shall be stipulated in
the Cabinet Order.
Article 26 Abolition of the Development Bank of Japan Act
The Development Bank of Japan Act shall be abolished.
Article 27 Transitional Measures for Abolition of theDevelopment Bank of Japan Act
1. Actions such as dispositions and procedures made, taken or done
pursuant to the provisions of the Old DBJ Act (except Article 10
thereof) before the provision of the immediately preceding Article
becomes effective shall be considered the actions such dispositions and procedures made, taken, or done pursuant to thecorresponding provisions of this Act.
2. The provisions of Article 16, Paragraphs 5 and 6 of the
Supplementary Provisions of the Old DBJ Act shall still remain
effective even after the provisions of the immediately preceding

Article takes effect, with respect to the lending of funds by the
Corporation to the designated entities under Article 2, Paragraph 5of the Act Concerning Facilitation of the Improvement, Etc. of
Public Facilities, Etc. by Private Fund (Act No. 117 of 1999). For
this purpose, reference to the “Bank” and reference to, “in accordance with the provision of Item (1), Paragraph 1, Article 20 hereof,
to provide funds required for businesses deemed under Article 13of the said Act” in Article 16, Paragraph 5 of the Old DBJ Act shallbe changed to read “Development Bank of Japan Inc.” and “toprovide funds required for business deemed under Article 13 of
the said Act”, respectively. References to “the interest-free loans
made by the Bank in accordance with the provisions of the preceding paragraph (excluding interest-free loans using money
deposited by the Private Urban Development Promotion
Organization provided in Article 3 of the Special Measure Act concerning Promotion of Private Urban Development (Act No. 62 of
1987)” and “to the Bank” in Article 16, Paragraph 6 of the Old DBJ
Act shall be changed to read “the interest-free loans made by
Development Bank of Japan Inc. in accordance with the provisionsof the preceding paragraph” and “to Development Bank of Japan
Inc.,” respectively.
3. In addition to those set forth in the preceding two Paragraphs, transitional measures necessary for the abolition of the DBJ Act shallbe prescribed by the Cabinet Order.
Article 28 Transitional Measures for Application of Penal
Provisions
Penal provisions which were applicable to acts conducted prior to
the implementation of the provision of Article 26 of the
Supplementary Provisions or acts conducted after the implementation of the provision of the said Article as to which the provisions
then in force remain applicable pursuant to the provisions of this Act
shall remain applicable even after the implementation of this Act.
Article 29 to Article 65(Translation omitted)
Article 66 Examinations
On or prior to the date set forth in Article 1, Item (3) of the
Supplementary Provisions, the Government shall examine measures to secure the equal competitive conditions with otherbusiness entities, with respect to the systems for which the investment and financing functions of DBJ are utilized pursuant to theprovisions of relevant laws (including ordinances under those laws),
such as the Act Concerning Collaterals for Borrowings of Electricity
Companies from The Development Bank of Japan (Act No. 145 of
1950), the Act Concerning the Securement of Oil Reserves, Etc.
(Act No. 96 of 1975), the Act Concerning Promotion of
Development and Promotion of Introduction of Alternative Energy to
Oil (Act No. 71 of 1980), the Special Measures Act Concerning
Promotion of Private Urban Development (Act No. 62 of 1987), theExtraordinary Measures Act Concerning Promotion of Business
Activities for Rationalization of Usage of Energy and Effective Use of
Resources (Act No. 18 of 1993) and the Act Concerning
Facilitation of the Improvement, Etc. of Public Facilities, Etc. by
Private Fund, Etc. (Act No. 117 of 1999), while considering theconvenience of users of those systems, and take the required
measures based on the results of such examination.
Article 67 Utilization of the Corporation’s Investment and
Financing Functions for Long-Term Business Funds
If the Government utilizes the Corporation’s investment and financing functions for long-term business funds on or after the date set
forth in Article 1, Item (3) of the Supplementary Provisions, theGovernment shall take measures necessary to secure the equal
competition conditions, as well as other measures necessary for
utilization of such investment and financing functions, paying attention to the Corporation’s appropriate competitive relationships withother business entities.

Development Bank of Japan Inc.
Integrated Report 2022

99

Act for Partial Amendment of the Development Bank of Japan Inc.
(Act No. 29 of May 22, 2020)(Enforcement Date)
1. This Act shall come into force from the date of promulgation.

Strategy

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

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

Corporate GovernanceCorporate Data
Data Section

Bank of Japan Inc.
100 Development
Integrated Report 2022

Development Bank of Japan Inc.
Integrated Report 2022

101

Financial Condition

Consolidated Financial Statements

P154

Non-Consolidated Financial Statements

P158

Capital Adequacy Ratio

Value Creation Story

P102

Strategy
Corporate GovernanceCorporate Data
Data Section

Bank of Japan Inc.
102 Development
Integrated Report 2022

CONSOLIDATED BALANCE SHEETS
Development Bank of Japan Inc. and Consolidated Subsidiaries

Thousands of
U.S. Dollars (Note 1)

Millions of Yen

As of March 31,

2022

2021

2022

¥ 2,191,525¥ 2,187,820$ 17,906,083

705,000

684,000

5,760,275

AssetsCash and due from banks (Notes 2(c), 11, 14 and 28)
Call loans and bills bought (Note 28)
Money held in trust (Notes 28 and 30)

15,021

17,856

122,732

Securities (Notes 3, 14, 28 and 30)

3,034,488

2,535,827

24,793,599

Loans (Notes 4, 5, 14 and 28)

14,346,188

14,757,131

117,216,996

Other assets (Notes 6, 11 and 14)

191,215

179,445

1,562,350

Tangible fixed assets (Notes 7, 11 and 14)

497,239

427,467

4,062,745

Intangible fixed assets (Notes 11 and 14)

37,55439,400306,842

Asset for retirement benefits (Note 23)

2,749

1,593

22,466

Deferred tax assets (Note 24)

14,307

2,572

116,900

Customers' liabilities for acceptances and guarantees (Note 13)557,127446,616

4,552,064

Allowance for loan losses (Notes 8 and 28)(83,792)(57,869)(684,636)

(33)

(33)

(270)

¥21,508,591¥21,221,829$175,738,145

Debentures (Notes 9, 14 and 28)¥ 3,339,098¥ 3,483,570$ 27,282,443

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

10,573,681

10,664,537

86,393,345

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

3,053,262

2,739,904

24,946,995

Other liabilities (Notes 12 and 31)

132,673

163,620

1,084,024

Accrued bonuses to employees

5,273

5,186

43,085

Allowance for investment losses  Total assets
Liabilities and equity
Liabilities:

Accrued bonuses to directors

23

15

188

Liability for retirement benefits (Note 23)

8,212

8,195

67,098Reserve for directors' retirement benefits

141

127

1,154

0

—

2

Reserve for contingent losses
Deferred tax liabilities (Note 24)
Acceptances and guarantees (Note 13)  Total liabilities

7,035

6,639

57,488557,127446,616

4,552,064

17,676,529

17,518,413

144,427,887

Equity:Common stock authorized, 160,000 thousand shares in 2022 and2021; issued, 43,632 thousand shares in 2022 and 2021 (Note 15)

1,000,424

1,000,424

8,174,067

Crisis response reserve (Note 16)

206,529

206,529

1,687,466

Special investment reserve (Note 17)

1,543,000

1,368,000

12,607,239

Special investment surplus (Note 17)

22,43828,172

183,337

Capital surplus (Note 15)

242,082

336,466

1,977,960

Retained earnings (Note 15)

750,175

695,697

6,129,384

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

42,29840,733345,601

Deferred gain on derivatives under hedge accounting

10,79813,271

88,232

Accumulated other comprehensive income:

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

(616)

(936)

(5,035)(1,036)(693)(8,465)

3,816,094

3,687,663

31,179,786

15,96815,752

130,471

3,832,062

3,703,415

31,310,258¥21,508,591¥21,221,829$175,738,145

Development Bank of Japan Inc.
Integrated Report 2022

103

CONSOLIDATED STATEMENTS OF INCOME
Development Bank of Japan Inc. and Consolidated Subsidiaries

Thousands of
U.S. Dollars (Note 1)

Millions of Yen

For the years ended March 31,

2022

2021

2022

Interest income:¥ 170,480¥159,422$1,392,928

Interest on loans

127,803

132,099

1,044,231

Interest and dividends on securities

37,97821,663

310,304

Interest on call loans and bills bought

71

120

585

Interest on due from banks

59

38

485

Interest on swaps

4,560

5,508

37,263

Other interest income

7

(7)

60

Fees and commissions

17,33820,922

141,663

Other operating income (Note 19)

14,49814,094

118,465

110,724

76,221

904,687  Total income

313,042

270,6612,557,743

46,04955,357376,248

Expenses
Interest expense:
Interest on debentures

21,743

158,523

(188)

(84)

(1,541)

Interest on payables under repurchase agreements

(100)

(69)

(821)

Interest on borrowed money (Note 31)

23,32229,008

190,558

Interest on short-term corporate bonds

8

62

69

3,418

4,504

27,930

187

191

1,530

Interest on corporate bonds
Other interest expense
Fees and commissions

1,287

642

10,519Other operating expenses (Note 21)

13,933

9,223

113,843

General and administrative expenses

58,04556,726474,270

Other expenses (Note 22)

105,219

74,910859,710  Total expenses

224,535

196,859

1,834,590   Income before income taxes

88,50673,802

723,153

Current

40,01132,852326,921

Deferred(10,603)(5,865)(86,641)

Total income taxes

29,407

26,986240,280

Net income

59,09846,815482,873

Corporate Governance

19,401

Interest on call money and bills sold

Strategy

Other income (Note 20)

Value Creation Story

IncomeIncome taxes (Note 24):

Net income attributable to owners of the parent

1,486

1,568

12,143¥  57,612¥ 45,246$  470,730

Yen

Corporate Data

Net income attributable to non-controlling interests

U.S. Dollars (Note 1)

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

¥1,382.07¥ 867.21$    11.29

358

186

2.93

See notes to consolidated financial statements.
Data Section

Bank of Japan Inc.
104 Development
Integrated Report 2022

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Development Bank of Japan Inc. and Consolidated Subsidiaries

Thousands of
U.S. Dollars (Note 1)

Millions of Yen

For the years ended March 31,

2022

2021

2022

Net income¥59,098¥46,815$482,873

Unrealized (loss) gain on available-for-sale securities(1,036)

17,499(8,470)

Deferred loss on derivatives under hedge accounting

Other comprehensive (loss) income (Note 26):
(3,710)(5,476)(30,320)

Foreign currency translation adjustments

304

146

2,487

Adjustments for retirement benefits

(344)

264

(2,813)

2,000

1,074

16,346 Share of other comprehensive income in affiliates
accounted for by the equity method
Total other comprehensive (loss) income(2,786)

13,508(22,769)¥56,312¥60,323$460,103

Owners of the parent¥54,806¥58,761$447,801

Non-controlling interests

1,505

1,561

12,302Comprehensive income
Total comprehensive income attributable to:

See notes to consolidated financial statements.

Development Bank of Japan Inc.
Integrated Report 2022

105

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Development Bank of Japan Inc. and Consolidated Subsidiaries

Millions of Yen

For the year ended March 31, 2022

Crisis response
reserve

Special investment Special investment
reserve
surplusCapitalsurplus¥1,000,424¥206,529¥1,368,000¥28,172¥336,466¥1,000,424¥206,529¥1,368,000
80,000¥28,172¥336,466

95,000Retainedearnings¥695,697(753)¥694,944(95,000)(5,734)

5,734(8,115)57,61293523¥1,000,424¥206,529¥1,543,000¥22,438¥242,082¥750,175
Strategy

Millions of Yen
Accumulated other comprehensive income

For the year ended March 31, 2022

Unrealized gain
on available-forsale securities¥40,773
1,876¥42,609

Deferred gain
on derivatives
under hedge
accounting

Foreign­ urrencyctranslation
adjustments

Accumulated
adjustments
for retirement
benefits¥13,271¥(936)¥   (693)¥13,271¥(936)¥   (693)

Total¥3,687,663
1,123¥3,688,787
80,000Noncontrollinginterests¥15,752¥15,752

Total equity¥3,703,415
1,123¥3,704,539
80,000—(311)¥42,298(2,473)¥10,798320¥(616)(342)¥(1,036)(8,115)57,612—(8,115)57,61293523(2,806)¥3,816,094

93
523(2,589)¥3,832,062

216¥15,968

Corporate Governance

Balance at beginning of year
Cumulative effects of changes in accounting policies
Restated balance
Investment from government Transfer from capital surplus to
special investment reserve Transfer from special investment
surplus to retained earnings
Cash dividends
Net income attributable to owners of the parent Changes due to purchases of treasury
stock of subsidiaries
Change in scope of consolidation
Net change during the year
Balance at end of year

Value Creation Story

Balance at beginning of year
Cumulative effects of changes in accounting policies
Restated balance
Investment from government Transfer from capital surplus to
special investment reserve Transfer from special investment
surplus to retained earnings
Cash dividends
Net income attributable to owners of the parent Changes due to purchases of treasury
stock of subsidiaries
Change in scope of consolidation
Net change during the year
Balance at end of year

CommonstockMillions of Yen

For the year ended March 31, 2021

¥1,000,424

Crisis response
reserve¥206,529

Special investment Special investment
reserve
surplus¥  848,000
220,000¥12,436

300,000

Capitalsurplus¥ 636,466

Retainedearnings¥675,842(300,000)(9,948)45,246
15,736¥1,000,424¥206,529¥1,368,000¥28,172

Corporate Data

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

Commonstock(15,736)292¥ 336,466¥695,697

Data Section

Bank of Japan Inc.
106 Development
Integrated Report 2022

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Millions of Yen
Accumulated other comprehensive income

For the year ended March 31, 2021

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

Unrealized gain
on available-forsale securities

Deferred gain
on derivatives
under hedge
accounting

Foreign­ urrencyctranslation
adjustments

Accumulated
adjustments
for retirement
benefits¥24,297¥16,934¥(1,414)¥(958)

16,435¥40,733(3,662)¥13,271477¥  (936)

Noncontrollinginterests

Total

264
¥(693)¥3,418,557
220,000¥15,496

Total equity¥3,434,054
220,000(9,948)45,246—(9,948)45,246292
13,515¥3,687,663—
292
13,770¥3,703,415

255¥15,752

Thousands of U.S. Dollars (Note 1)

For the year ended March 31, 2022

Balance at beginning of year
Cumulative effects of changes in accounting policies
Restated balance
Investment from government Transfer from capital surplus to
special investment reserve Transfer from special investment
surplus to retained earnings
Cash dividends
Net income attributable to owners of the parent Changes due to purchases of treasury
stock of subsidiaries
Change in scope of consolidation
Net change during the year
Balance at end of year

Commonstock

Crisis response
reserve

Special investment Special investment
reserve
surplusCapitalsurplus$8,174,067$1,687,466$11,177,384$230,188$2,749,113$8,174,067$1,687,466$11,177,384
653,648$230,188$2,749,113

776,207

Retainedearnings$5,684,267(6,154)$5,678,114(776,207)(46,850)

46,650(66,309)
470,730760
4,275$8,174,067$1,687,466$12,607,239$183,337$1,977,960$6,129,384

Thousands of U.S. Dollars (Note 1)
Accumulated other comprehensive income

For the year ended March 31, 2022

Balance at beginning of year
Cumulative effects of changes in accounting policies
Restated balance
Investment from government Transfer from capital surplus to
special investment reserve Transfer from special investment
surplus to retained earnings
Cash dividends
Net income attributable to owners of the parent Changes due to purchases of treasury
stock of subsidiaries
Change in scope of consolidation
Net change during the year
Balance at end of year
See notes to consolidated financial statements.

Unrealized gain
on available-forsale securities$332,183
15,332$348,146

Deferred gain
on derivatives
under hedge
accounting

Foreign­ urrencyctranslation
adjustments

Accumulated
adjustments
for retirement
benefits$108,439$(7,654)$(5,699)$108,439$(7,654)$(5,699)

Total$30,130,433
9,179$30,139,612
653,648

Noncontrollinginterests$128,704$128,704

Total equity$30,259,137
9,179$30,268,316
653,648—(2,545)$345,601(20,207)$ 88,232

2,619$(5,035)(2,795)$(8,465)(66,309)
470,730—(66,309)
470,730760
4,275(22,928)$31,179,786

760
4,275
(21,161)$31,310,258

1,767$130,471

Development Bank of Japan Inc.
Integrated Report 2022

107

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

Thousands of
U.S. Dollars (Note 1)

Millions of Yen

For the years ended March 31,¥     73,802$   723,153

15,072
1,820
266(2,588)(170,480)
46,049(18,873)(1,059)(22,000)(2,215)

14,862
1,820
324
6,908
(159,422)
55,357(23,214)(792)(13,426)(1,029)123,148
14,875
2,178(21,146)(1,392,928)
376,248(154,211)(8,658)(179,756)(18,098)

25,922(0)85
7(1,156)16
0411,523(144,472)(90,855)
313,357(191)(21,000)
169,746(47,207)(59,862)
490,413(42,058)
448,354

22,340
(3)
(159)
—
(329)
103
—
(2,341,056)
168,9142,593,588
357,678
19,99936,000156,479(59,010)(60,890)
848,844(25,848)
822,995

211,802(2)699
64(9,446)137
23,362,399(1,180,424)(742,345)
2,560,323(1,564)(171,583)
1,386,932(385,713)(489,113)
4,006,972(343,644)
3,663,328(799,793)
28,449332,473(2,531)
7,755(86,406)
7,044(4,581)(368,417)
56,527
201,873(944)
4,199(18,228)
4,761(3,221)(6,534,797)
232,451
2,716,508(20,684)
63,365(705,990)
57,560(37,436)294—(517,295)—
1(123,449)

2,403—(4,226,620)

80,000(8,115)220,000(9,948)653,648(66,309)

2,421
(435)
(2,686)(111)

34—(1,340)—19,781(3,554)(21,953)
(912)

(101)
70,970—208,745(832)
579,870938
2,967
2,141,734
545¥2,145,247

572
908,864
1,232,869—¥ 2,141,734

7,669
24,247
17,499,260
4,455$17,527,962

Data Section¥     88,506

Corporate Data

2022

Corporate Governance

2021

Strategy

See notes to consolidated financial statements.

2022

Value Creation Story

Cash flows from operating activities:
Income before income taxes
Adjustments for:
Depreciation
Amortization of goodwill
Losses on impairment of long-lived assets
Equity in (earnings) losses of affiliates
Interest income
Interest expense
Gain on securities – net
Gain on money held in trust – net
Foreign exchange gains
Gain on sales of fixed assets – net
Changes in operating assets and liabilities:   Allowance for loan losses   Allowance for investment losses   Accrued bonuses to employees   Accrued bonuses to directors   Asset for retirement benefits   Liability for retirement benefits   Reserve for contingent losses  Loans  Debentures  Borrowed money  Corporate bonds   Due from banks (excluding cash equivalents)   Call loans and bills boughtInterest received
Interest paid
Other – net  Sub-total   Payments for income taxes
Net cash provided by operating activities
Cash flows from investing activities:
Payments for purchases of securities
Proceeds from sales of securities
Proceeds from redemption of securities
Payments for increase of money held in trust
Proceeds from decrease of money held in trust
Payments for purchases of tangible fixed assets
Proceeds from sales of tangible fixed assets
Payments for purchases of intangible fixed assets Proceeds from purchases of stocks of subsidiaries resulting inchange in scope of consolidation
Proceeds from sales of intangible fixed assets
Net cash used in investing activities
Cash flows from financing activities:
Proceeds from investment from government
Payments for cash dividends Proceeds from issuance of securities to non-controllingshareholders of subsidiaries
Payments to non-controlling shareholders for capital reduction
Dividends paid to non-controlling shareholders of subsidiaries
Payments for purchases of treasury stock of subsidiaries Payments for purchases of stocks of subsidiaries not resulting inchange in scope of consolidation
Net cash provided by financing activities
Foreign currency translation adjustments on cash andcash equivalents
Net change in cash and cash equivalents
Cash and cash equivalents at beginning of year
Increase in cash and cash equivalents due to merger
Cash and cash equivalents at end of year (Note 2(c))

Bank of Japan Inc.
108 Development
Integrated Report 2022

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 theJapanese Financial Instruments and Exchange Act and its related accounting regulations and Ministerial Ordinance for Accountingof 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 the application and disclosure requirements of International
Financial Reporting Standards.
In preparing these consolidated financial statements, certain reclassifications and rearrangements have been made to theconsolidated financial statements issued domestically in order to present them in a form which is more familiar to readers outside
Japan. In addition, certain reclassifications have been made in the 2021 consolidated financial statements to conform to theclassifications used in 2022.
The amounts indicated in millions of yen are rounded down by omitting the figures less than one million yen. Accordingly,
the sum of each amount appearing in the accompanying financial statements and the notes thereto may not be equal to the sumof the individual account balances. Amounts in U.S. dollars are presented solely for the convenience of readers outside Japan.
The rate of ¥122.39 = $1.00, the effective exchange rate prevailing as of March 31, 2022, has been used in the conversion.
The presentation of such amounts is not intended to imply that Japanese yen amounts have been or could have been readilytranslated, realized or settled in U.S. dollars at that rate or any other rate.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(a) Principles of Consolidation(1) Scope of Consolidation
Under the control concept, those companies in which DBJ Inc., is able to directly or indirectly exercise control over
operations are fully consolidated. On September 8, 2006, the Accounting Standards Board of Japan (“ASBJ”) issued
Practical Issues Task Force (“PITF”) No. 20, “Practical Solution on Application of Control Criteria and Influence Criteria to
Investment Associations” which was effective for the period and the fiscal years ending on or after September 8, 2006.
The practical solution clarifies how the control and influence concept should be practically applied to the consolidation
scope of collective investment vehicles, such as limited partnerships, Tokumei Kumiai (silent partnership) and other entities
with similar characteristics.
(i) Consolidated subsidiaries
The number of consolidated subsidiaries as of March 31, 2022 was 45. The major consolidated subsidiaries as of March
31, 2022 were as follows:
DBJ Singapore Limited
Japan Economic Research Institute Inc.
DBJ Europe Limited
DBJ Real Estate Co., Ltd.
DBJ Investment Advisory Co., Ltd.
DBJ Capital Co., Ltd.
DBJ Securities Co., Ltd.
DBJ Asset Management Co., Ltd.
Value Management Institute, Inc.
DBJ Investment Consulting (Beijing) Co., Ltd.
Consist Inc.
DBJ Americas Inc.
DBJ Business Support Co., Ltd.
In the year ended March 31, 2022, South Tower Global Infrastructure Investments & Finance, L.P., four companies
including a silent partnership managed by Honmachi Properties Godo Kaisha and DBJ Business Support Co., Ltd. were
newly consolidated due to an increase in materiality, new investments and an increase in ownership interest, respectively.

Development Bank of Japan Inc.
Integrated Report 2022

109

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(iii) Companies not classified as subsidiaries where DBJ Inc. holds the majority of voting rights
Kinugawa Rubber Industrial Co., Ltd.
ORENO Corporation
GENTUITY, LLC
These companies were not treated as subsidiaries because the capital contributions were made for the purpose of
incubating their investees or earning capital gains, and not for the purpose of owning these investees under its control
through operational, personnel, capital or other form of transactions.

Strategy(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.

Value Creation Story(ii) Unconsolidated subsidiaries
The number of unconsolidated subsidiaries as of March 31, 2022 was 47. The major unconsolidated subsidiary as ofMarch 31, 2022 was DBJ Regional Investment Co., Ltd.
Unconsolidated subsidiaries were 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.

(i) Unconsolidated subsidiaries accounted for by the equity method
Not applicable.

(iii) Affiliates accounted for by the equity method
The number of affiliates accounted for by the equity method as of March 31, 2022 was 27. One of the major affiliates
accounted for by the equity method as of March 31, 2022 was AIRDO Co., Ltd.

Corporate Governance(ii) 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, 2022 was 47.
The major unconsolidated subsidiary not accounted for by the equity method was DBJ Regional Investment Co., Ltd.

Changes in the scope of affiliates accounted for by the equity method:
Mezzanine Solution II Limited Partnership was excluded from the scope of the equity method accounting due to liquidationin the year ended March 31, 2022.

Corporate Data(iv) Affiliates not accounted for by the equity method
The number of affiliates not accounted for by the equity method as of March 31, 2022 was 124. One of the major affiliates
as of March 31, 2022 was Arc Japan Inc.
Unconsolidated subsidiaries and affiliates that are not accounted for by the equity method have been excluded fromthe scope of the equity method because their aggregate effect in terms of net income, retained earnings and accumulated
other comprehensive income has no material impact on the consolidated financial statements of DBJ Inc.

Data Section

Bank of Japan Inc.
110 Development
Integrated Report 2022

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(v) Entities not classified as affiliates where DBJ Inc. holds voting rights of between 20% and 50%
The following companies of which DBJ Inc. holds voting rights of between 20% and 50% are not affiliates accounted
for by the equity method, because the capital contributions were made for the purpose of incubating their investees or
earning capital gains, and not for the purpose of owning these investees under its control through operational, personnel,
capital or other form of transactions.
As of March 31, 2022
Socionext Inc.
PT. PETROTEKNOCMIC CMO Co., Ltd.
Wilsonart (Thailand) Co., Ltd.
Wilsonart (Shanghai) Co., Ltd.
Wilsonart Asia Limited
NATIONAL CAR PARKS LIMITED
Megabass Inc.
TAKUMIYA HOLDINGS Co., Ltd.
FUJIBAMBI HOLDINGS Co., Ltd.
HIROFU CO., LTD.
Art Japan Co., Ltd.
SHIMONO CO., LTD.
MIYATAKE SEISAKUSHO CO., LTD.
KOJIMA MANUFACTURING CO., LTD.
(3) Balance Sheet Dates of Consolidated Subsidiaries
		 Balance sheet dates of consolidated subsidiaries are as follows:
Number of subsidiaries

2022

December 31

38

February 28 or 29

1

March 316

Consolidated subsidiaries are consolidated based on the financial statements that are prepared as of their year-end
balance sheet date.
The necessary adjustments are made in the consolidated financial statements to reflect significant transactions that
occur between the year-end balance sheet date of the subsidiary and the consolidated balance sheet date.
(4) Elimination of Intercompany Balances and Transactions
All significant intercompany balances and transactions have been eliminated in consolidation. All material unrealized profit
and loss resulting from transactions between DBJ Inc. and its consolidated subsidiaries are eliminated.
(5) Amortization of Goodwill
The difference between the fair value of net assets and the cost of the acquired subsidiary is amortized on a straight-line
basis over the estimated useful lives not exceeding 20 years. Minor differences are charged to expense in the year ofacquisition. The excess of the fair value over the cost of acquired subsidiaries (bargain purchase) is recognized as income
immediately as incurred.

Development Bank of Japan Inc.
Integrated Report 2022

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Thousands of
U.S. Dollars

Millions of Yen

Time deposits with banks

2022

2021

2022

¥2,191,525¥2,187,820$17,906,083(46,278)(46,086)(378,121)¥2,145,247¥2,141,734$17,527,962

Corporate Data(d) Securities
Held-to-maturity debt securities are stated at amortized cost with amortization computed on a straight-line basis, using
the weighted average method. Investments in unconsolidated subsidiaries and affiliates not accounted for by the equity
method are stated at cost using the weighted average method. Available-for-sale securities are carried at fair value with thecorresponding unrealized gains and losses, net of applicable taxes, recorded directly in a separate component of equity, after
deducting the amount charged to profit or losses by applying fair value hedge accounting. The cost of these securities uponsale is calculated principally using the weighted average method. Non-marketable equity securities are stated at cost using
the weighted average method.
Investments in limited partnerships and other similar partnerships are accounted for at their original cost plus DBJ Inc.’sinterest in earnings since acquisition and less any dividends received, based on the investees’ most recent financial
statements.
Securities which are components of trust assets in “Money held in trust” are accounted for based on the same standards
as other securities.

Corporate GovernanceCash and cash equivalents

Strategy(c) Cash and Cash Equivalents“Cash and Cash Equivalents” in the consolidated statement of cash flows are included in cash and due from banks.
The reconciliation between “Cash and cash equivalents” and “Cash and due from banks” in the consolidated balance
sheet is as follows:

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

Cash and due from banks

111(e) Valuation Method for Derivative Financial Instruments
All derivative financial instruments are carried at fair value. The fair value is determined as a unit for the group of financial
assets and financial liabilities based on net assets or liabilities after offsetting financial assets or liabilities regarding specified
market risk or specified credit risk.

Data Section

Bank of Japan Inc.
112 Development
Integrated Report 2022

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(f) Hedge Accounting(1) Hedge Accounting
DBJ Inc. applies the deferral method of hedge accounting or the accrual method (*1). The portfolio hedge is accounted forby the method stipulated in “Accounting and Auditing Treatments on the Application of Accounting Standards for Financial
Instruments in the Banking Industry,” issued by the Japanese Institute of Certified Public Accountants (JICPA Industry
Committee Practical Guidance No. 24 March 17, 2022; hereinafter, “JICPA Industry Committee Practical Guidance No.
24”). In addition, foreign currency swaps which are used to hedge foreign currency fluctuations are not stated at market
values but at contractual rates, as the foreign currency swap contracts meet the hedging criteria under the AccountingStandards for Financial Instruments. The portfolio hedge is accounted for by the deferral method provided in “Accounting
and Auditing Treatments on Accounting for Foreign Currency Transactions in the Banking Industry” (JICPA Industry
Committee Practical Guidance No. 25, October 8, 2020; hereinafter, “JICPA Industry Committee Practical Guidance
No. 25”).
In addition, DBJ Inc. applies portfolio hedges to hedge foreign currency fluctuations associated with equity investmentsin overseas subsidiaries and affiliates and foreign currency denominated available-for-sale securities (other than bonds).
The translation differences on hedging instruments are included in foreign currency translation adjustments in the case of
equity investments in overseas subsidiaries and affiliates; fair value hedges are applied to foreign currency denominatedavailable-for-sale securities (other than bonds).
(2) Hedging Instruments and Hedged Items• Hedging Instruments: Interest rate swaps
Hedged Items:
Debentures, Borrowed money, Corporate bonds, Securities and Loans• Hedging Instruments: Foreign currency swaps
Hedged Items:	Foreign currency denominated Debentures, Corporate bonds, Securities and Loans• Hedging Instruments: Forward liability denominated in foreign currency
Hedged Items:	Foreign currency denominated equity investments in overseas subsidiaries and affiliates andforeign currency denominated available-for-sale securities (other than bonds)(3) Hedging Policy
DBJ Inc. utilizes hedging instruments to hedge interest rates and foreign currency fluctuations on its assets and liabilities.
Individual or certain group contracts are drawn for each hedged item.
(4) Evaluation of Hedge EffectivenessAccording to the risk management policy, DBJ Inc. evaluates the effectiveness of the hedges by testing whether thederivatives are effective in reducing the risks associated with the hedged items.
In addition, with respect to portfolio hedging activities, for interest rate swaps used to hedge market interest rate
fluctuations, hedge effectiveness is assessed on a specifically identifiable group of hedged items and a corresponding
group of hedging instruments, and for interest rate swaps used to hedge variability in cash flows, hedge effectiveness is
assessed based on the correlation between the base interest rate index of the hedged cash flows and the hedging
instrument. For currency swaps used to hedge foreign exchange risks of foreign currency denominated financial assets
and liabilities, the effectiveness is assessed by confirming that the total foreign currency denominated financial assets andliabilities of the hedged items are equal to or larger than that of hedging instruments.
With respect to hedging activities against foreign exchange risk of equity investments in overseas subsidiaries andaffiliates and foreign currency denominated available-for-sale securities (other than bonds), the effectiveness is assessedby confirming that the total foreign currency position of the hedged items is equal to or larger than that of hedging
instruments.

Development Bank of Japan Inc.
Integrated Report 2022

113

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

With respect to an individual hedge, for both interest rate swap contracts which meet the hedging requirements of theaccrual method (*1) and foreign currency swap contracts which meet the hedging requirements of the assignment method(*2), DBJ Inc. is not required to periodically evaluate hedge effectiveness.

Corporate Governance(g) Fixed Assets(1) Depreciation of Tangible Fixed Assets
Tangible Fixed Assets are stated at cost less accumulated depreciation. Tangible Fixed Assets of DBJ Inc. are depreciatedusing the declining-balance method, except for buildings (excluding installed facilities) and installed facilities and structuresacquired on or after April 1, 2016 that are depreciated on a straight-line basis, and depreciation of tangible fixed assets ofconsolidated subsidiaries is computed principally using the straight-line method, based on the estimated useful lives of theassets.
The estimated useful lives are principally as follows:
Buildings : 3 years to 50 years
Others: 4 years to 20 years

Strategy(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 date of the contract and the book value of the asset or liability is recognized in the statement ofincome in the period since inception, and b) the discount or premium on the contract (that is, the difference
between the Japanese yen amount of the contract translated using the contracted forward rate and that translatedusing the spot rate at the inception date of the contract) is recognized over the term of the contract.
(ii)	If a foreign currency swap is executed to hedge a future transaction denominated in a foreign currency, the futuretransaction is recorded using the contracted forward rate, and no gains or losses on the foreign exchange forward
contract are recognized.

Value Creation Story(*1)	If interest rate swap contracts are used as hedges and meet certain hedging criteria, the net amount to be paid or
received under the interest rate swap contract is added to or deducted from the interest on the assets or liabilities forwhich the swap contract was executed.
(*2)	In cases where foreign currency swaps are used as hedges and meet certain hedging criteria, foreign exchange
forward contracts and hedged items are accounted for in the following manner:(2) Amortization of Intangible Fixed Assets
Intangible Fixed Assets are amortized using the straight-line method. Capitalized software for internal use is amortizedusing the straight-line method over the estimated useful lives (mainly 5 years).

(h) Long-lived Assets
DBJ Inc. reviews its long-lived assets for impairment whenever events or changes in circumstance indicate the carrying
amount of an asset or asset group may not be recoverable. Impairment losses are recognized if the carrying amount of anasset or asset group exceeds the sum of the undiscounted future cash flows expected to result from the continued use andeventual disposition of the asset or asset group. The impairment losses would be measured as the amount by which thecarrying amount of the asset exceeds its recoverable amount, which is the higher of the discounted cash flows from thecontinued use and eventual disposition of the asset or the net selling price at disposition.

Data Section(i) Debentures and Corporate Bonds Issuance Costs“Debentures and Corporate Bonds Issuance Costs” are charged to expense as incurred.

Corporate Data

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

Bank of Japan Inc.
114 Development
Integrated Report 2022

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(j) Foreign Currency Translation and Revaluation Method
Assets and liabilities denominated in foreign currencies held by DBJ Inc., except for shares of subsidiaries and affiliates
translated at historical rates, have been translated at the exchange rates prevailing as of the balance sheet date. Foreign
currency accounts held by consolidated foreign subsidiaries are translated into the currency of the subsidiaries at therespective year-end exchange rates. The foreign exchange gains and losses from transactions are recognized in thestatement of income to the extent that they are not hedged by forward exchange contracts. The balance sheet accounts ofthe consolidated foreign subsidiaries are translated into Japanese yen at the current exchange rate as of the balance sheet
date except for equity, which is translated at the historical rate. Differences arising from such translation are shown as “Foreign
Currency Transaction Adjustments” in a separate component of equity. Income and expense accounts of consolidated foreignsubsidiaries are translated into yen at the exchange rate prevailing as of the balance sheet date.
(k) Allowance for Loan Losses
DBJ Inc. provides for “Allowance for Loan Losses” as detailed below pursuant to the internal policies for self-assessment ofcredit quality and loan losses. The allowance for claims on debtors who are legally bankrupt, in special liquidation or effectively
bankrupt is provided for based on the amount of claims, after the write-off described below, net of amounts expected to be
recovered through disposal of collateral or execution of guarantees. The allowance for claims on debtors who are not legallybankrupt, 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 theclaims, net of amounts expected to be recovered through disposal of collateral or execution of guarantees. With respect tothe claims on debtors who are likely to become bankrupt or to be closely monitored, and for which future cash flows can reasonably be estimated, the allowance is provided for as the difference between the present value of expected future cash
flows discounted at the initial contracted interest rate and the carrying value of the claims. The allowance for claims on debtors
other than those described above is provided based on the amount of loss expected during the average remaining period ofloans, etc., which is calculated based on the average default rate in a certain historical period, added with adjustments asnecessary considering latest conditions and other factors. 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 theself-assessment.
With respect to the claims on debtors who are legally or substantially bankrupt with collateral or guarantees, the amount ofclaims exceeding the estimated market values of collateral or guarantees which are deemed uncollectible were written-off, andtotaled ¥7,134 million ($58,291 thousand) and ¥13,226 million for the years ended March 31, 2022 and 2021, respectively.
The consolidated subsidiaries calculate the general reserve for “normal” categories based on 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.
(l) Allowance for Investment Losses“Allowance for Investment Losses” is provided for based on the estimated losses on certain investments based on anassessment of the issuers’ financial condition.
(m) Accrued Bonuses to Employees and Directors“Accrued Bonuses to Employees and Directors” are provided for in the amount of the estimated bonuses which are
attributable to the years ended March 31, 2022 and 2021.

Development Bank of Japan Inc.
Integrated Report 2022

115

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Value Creation Story(n) Employees’ Retirement Benefits
DBJ Inc. has defined benefit pension plans, which consist of a defined benefit corporate pension plan and a lump-sum
severance indemnity plan, as well as a defined contribution pension plan. Some domestic consolidated subsidiaries havea lump-sum severance indemnity plan and defined contribution plans, and some overseas consolidated subsidiaries haveretirement benefit plans which are typically defined contribution plans. The projected benefit obligations are attributed toperiods on a straight-line basis. Actuarial gains and losses and service costs that are yet to be recognized in profit or loss
are recognized within equity (accumulated other comprehensive income), after adjusting for tax effects and are recognizedin profit or loss over ten years no longer than the expected average remaining service period of the employees.
(o) Reserve for Directors’ Retirement Benefits“Reserve for Directors’ Retirement Benefits” is accrued based on the amount that would be required if all directors retired at
the balance sheet date.

Strategy(p) Reserve for Contingent Losses“Reserve for Contingent Losses” is provided for possible contingent losses on loan commitment limits based on individuallyestimated losses.
(q) Lease Transactions
Finance Lease transactions are capitalized by recognizing lease assets and lease obligations in the consolidated balance sheet.

(s) Per Share Information
Equity per share is computed by dividing total equity less crisis response reserve, special investment reserve attributable to
the National Treasury, special investment surplus attributable to the National Treasury and non-controlling interests by theoutstanding number of shares of common stock as of March 31, 2022 and 2021.
Basic net income per share is computed by dividing net income available to owners of the parent related to common
stock by the weighted-average number of shares of common stock outstanding for the period, retroactively adjusted for stock
splits. Diluted net income per share for the years ended March 31, 2022 and 2021 is not disclosed because there are no
dilutive securities.
Cash dividends per share presented in the accompanying consolidated statement of income are dividends applicable tothe year including dividends to be paid after the end of the year.

Corporate Governance(r) Income Taxes
The provision for income taxes is computed based on the pretax income included in the consolidated statement of income.
The asset and liability approach is used to recognize deferred tax assets and liabilities for the expected future tax
consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Deferredtaxes are measured by applying currently enacted tax rates to the temporary differences.

Corporate Data
Data Section

Bank of Japan Inc.
116 Development
Integrated Report 2022

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(t) Significant Accounting Estimates
Significant accounting estimates which DBJ Inc. used in preparing the consolidated financial statements are
as follows:
1. Allowance for loan losses
DBJ Inc. and its consolidated subsidiaries (hereinafter the “Group”) consider allowance for loan losses to be significant inaccounting estimates since loans account for a relatively high portion of the consolidated balance sheet of the Group and therecording of allowance for loan losses has a significant impact on the operating results and financial positions.
(1) Allowances for loan losses of ¥83,792 million ($684,636 thousand) and ¥57,869 million were recorded in the consolidated
financial statements as of March 31, 2022 and 2021, respectively.
(2) Information to facilitate the understanding on significant accounting estimates made on the identified items
DBJ Inc. records an allowance for loan losses to provide for the risk of loss caused by a decrease in value or disappearanceof assets such as loans, etc. due to the deteriorated financial position of credit counterparties.
DBJ Inc. assumes that the impact of COVID-19, which has caused adverse effects of worsening business results, etc. in
the wide range of industries such as transportation and traffic fields and industrial fields, on economic and business activities
would continue through the following fiscal year onward and may affect the credit risk of its debtors.
The method DBJ Inc. takes to calculate its allowance for loan losses is stated in (k) “Allowance for Loan Losses” under Note
2 “SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.” Based on the assumption above, DBJ Inc. records allowance forloan losses upon reflecting information available as of the date of preparation of the financial statements on the individuallyclassified debtors or future cash flows under the cash flow estimation method as needed.
These are decided based on the best estimates and judgments of the management, but as it is uncertain how the ongoingpandemic will impact the economy and credit risk of the debtors of DBJ Inc., any changes in its impact may result in theamount of allowance for loan losses in the consolidated financial statements for the following fiscal year to fluctuate.
2. Valuation of non-marketable equity securities
The Group considers that the valuation of non-marketable equity securities is significant in accounting estimates, since themateriality of unlisted equity securities, etc. is relatively higher in the consolidated balance sheet of the Group and generally
accounting for impairment losses on non-marketable equity securities has a significant impact on the operating results andfinancial positions.
(1) Amount recorded in the consolidated financial statements for the fiscal year ended March 31, 2022
It is stated under Note 28 “FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES.”(2) Information to facilitate the understanding on significant accounting estimates made on the identified items
Information regarding non-marketable equity securities is disclosed in (Note 3) under Note 28 “FINANCIAL INSTRUMENTS
AND RELATED DISCLOSURES.” When substantial value significantly declines relative to the carrying amount, an impairment
loss or allowance for investment losses is recognized, unless recoverability of substantial value is supported by sufficientevidence. Determining that recoverability of substantial value is supported by sufficient evidence is based on the
management’s judgment that the investees’ business plans, etc. are reasonable.
As it is uncertain how the market environment for investees will change due to factors such as the impact of COVID-19,
any changes in conditions assumed in the management’s decisions that the business plans, etc. are reasonable may cause
unexpected losses due to the recording of an impairment loss or allowance for investment losses in the following fiscal year.
(u) Changes in Accounting Policies(Accounting Standards for Fair Value Measurement)
Effective the beginning of the year ended March 31, 2022, DBJ Inc. has applied “Accounting Standard for Fair Value
Measurement” (ASBJ Statement No. 30 issued on July 4, 2019), etc. and changed the risk adjustment method in the fairvalue measurement of derivatives to the method to maximize the use of observable inputs estimated from derivatives traded in
the market pursuant to Paragraph 8 of ASBJ Statement No. 30. In addition, pursuant to the transitional treatment provided in
Paragraph 44-2 of “Accounting Standard for Financial Instruments” (ASBJ Statement No.10 issued on July 4, 2019), DBJ Inc.
began determining the fair value of securities which are extremely difficult to identify the fair value other than non-marketable
equity securities.

Development Bank of Japan Inc.
Integrated Report 2022

117

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Strategy
Corporate Governance(v) New Accounting Pronouncement“Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Revised Guidance No. 31 issued onJune 17, 2021; hereinafter “Fair Value Measurement Guidance”)
The ASBJ published the Fair Value Measurement Standards, etc. on July 4, 2019 as an effort to ensure consistency
between Japanese accounting standards and the international accounting standards regarding guidance and disclosuresabout the fair value of financial instruments.
In the Fair Value Measurement Guidance, it was decided that the ASBJ will take approximately one year to study themeasurement of fair value of investment trusts after the issuance of Fair Value Measurement Standard since it is consideredthat the study would need a certain period of time for discussions, etc. with the related parties, and that the ASBJ will
determine the timing of application of the said amendment when the treatment of investment trust will be amended.
Furthermore, notes on fair value of investments in partnerships, etc. in which the net amount of equity interest is recordedon the balance sheet (Paragraph 132 and 308 of Statement No. 14 of JICPA Accounting Practice Committee (Practical
Guidelines on Accounting Standards for Financial Instruments)) had been discussed by the ASBJ since it requires a certain
level of study, and the revised implementation guidance has been published this time as deemed consistent with the Fair
Value Measurement Standard.
DBJ Inc. expects to apply the Fair Value Measurement Guidance effective April 1, 2022 and is in the process ofmeasuring the effects of the amendment to the Fair Value Measurement Guidance on the consolidated financial statements.

Value Creation Story

Such changes came after the adoption of Accounting Standard for Fair Value Measurement, etc. Pursuant to thetransitional treatment provided in the second sentence of Paragraph 20 of Accounting Standard for Fair Value Measurement,
DBJ Inc. reflected cumulative effects of applying the new accounting policy retroactively to the period before the beginning of
the year ended March 31, 2022 in retained earnings and accumulated other comprehensive income at the beginning of theyear ended March 31, 2022. As a result, retained earnings as of April 1, 2021 decreased by ¥753 million ($6,154 thousand),
unrealized gain on available-for-sale securities increased by ¥1,876 million ($15,332 thousand), securities increased by¥2,704 million ($22,099 thousand), other assets decreased by ¥1,085 million ($8,869 thousand) and deferred tax liabilities
increased by ¥495 million ($4,051 thousand).
In addition, DBJ Inc. decided to disclose details by level of the fair value of financial instruments. However, pursuant to thetransitional treatment provided in Paragraph 7-4 of the “Implementation Guidance on Disclosures about Fair Value of Financial
Instruments” (ASBJ Guidance No. 19 issued on July 4, 2019), the related notes for the fiscal year ended March 31, 2021 are
not presented.

Corporate Data
Data Section

Bank of Japan Inc.
118 Development
Integrated Report 2022

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3. SECURITIESSecurities as of March 31, 2022 and 2021 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

Japanese government bonds*3
Corporate bonds*2

2022

2021

2022

¥  295,774¥  129,047$ 2,416,656

819,041

812,512

6,692,060

835,435

822,641

6,826,013

Other securities*1

1,084,237

771,626

8,858,871

Total¥3,034,488¥2,535,827$24,793,599

Equities*1*1.	Investments in unconsolidated subsidiaries and affiliates included in “Equities” as of March 31, 2022 and 2021, are ¥63,687 million ($520,367 thousand) and ¥59,854 million, respectively.
Investments in unconsolidated subsidiaries and affiliates included in “Other securities” as of March 31, 2022 and 2021, are ¥176,100 million ($1,438,847 thousand) and ¥203,022 million,
respectively.
*2.	DBJ Inc. has contingent liabilities for guarantees of corporate bonds among securities which were issued by private placement (Article 2, Paragraph 3 of Financial Instruments and ExchangeAct), which amount to ¥3,488 million ($28,500 thousand) and ¥4,022 million as of March 31, 2022 and 2021, respectively.
*3.	Japanese government bonds include securities lent in accordance with the unsecured securities lending agreement in the amount of ¥35,014 million ($286,086 thousand) and ¥32,348
million as of March 31, 2022 and 2021, respectively.

Impairment losses on securities:
Securities available-for-sale (excluding non-marketable equity securities), whose fair value significantly declined compared with theacquisition cost, and is considered to be an item other than recoverable decline, were written down to the respective fair value
which is recorded as the carrying amount on the consolidated balance sheets.
The criterion for determining whether the fair value is “significantly declined” are as follows:
Fair value declined by 50% or more of the acquisition cost.
Fair value declined by 30% or more of the acquisition cost, and such decline is not considered as recoverable.
Impairment losses were not recognized on securities for the year ended March 31, 2022 and recognized on other securities in an
amount of ¥110 million for the year ended March 31, 2021.

4. NON-PERFORMING LOANS
Claims based on the Banking Act and the Act on Emergency Measures for the Reconstruction of the Financial Functions are
as follows:
Claims are defined as corporate bonds included in “Securities” in the consolidated balance sheet (the whole or part of theredemption of the principal and payment of interest are guaranteed and limited to the corporate bonds issued through private
placement of the securities (defined in Article 2, Paragraph 3 of the Financial Instruments and Exchange Act)), loans, other assets
and customers’ liabilities for acceptances and guarantees.
Thousands of
U.S. Dollars

Millions of Yen

2022

Claims under bankruptcy/rehabilitation or similar proceedings¥

Doubtful claims

2021

6,368

¥

72,913Loans past due three months or more
Restructured loans

2022

34,543$47,04752,033595,747———

25,21330,999206,013Sub-total¥

Performing loans

14,818,439

104,495¥

15,111,860

112,590$

121,075,571

853,792

Total¥14,922,934¥15,224,450$121,929,363

Claims under bankruptcy/rehabilitation or similar proceedings are claims to debtors under bankruptcy or similar proceedings
due to reasons such as commencement of bankruptcy proceedings, commencement of rehabilitation proceedings, and petition
for commencement of rehabilitation proceedings.
Doubtful claims are claims for which it is highly probable that the principal and interest cannot be collected and received
according to the contract due to the deteriorated financial positions and operating performances of the debtors, although they
have not yet gone bankrupt, and which do not fall in the category of claims under bankruptcy/rehabilitation or similar proceedings.

Development Bank of Japan Inc.
Integrated Report 2022

119

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Value Creation Story

Loans past due three months or more are loans whose principal or interest payment is three month or more past due from thecontract due date, and which do not fall under the category of claims under bankruptcy/rehabilitation or similar proceeds nor
doubtful claims.
Restructured loans are loans whose repayment terms have been modified to the advantage of debtors through means suchas 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 which do not fall under any of the above categories.
Performing loans are those which do not have any problem with the debtors’ financial positions and operating performance,
and are not classified in any of the above categories.
The amounts of above claims are presented before deducting allowance for loan losses.
(Change in presentation method)
Following the enforcement of the “Cabinet Office Ordinance for Partial Revision to the Ordinance for Enforcement of the Banking
Act, etc.” (Cabinet Office Ordinance No. 3 issued on January 24, 2020) effective on March 31, 2022, the categories of “Nonperforming loans” of the Banking Act are presented in accordance with the disclosure requirements based on the Act on
Emergency Measures for the Reconstruction of the Financial Functions.

Strategy

5. COMMITMENTS

Corporate Governance

Loan commitment limits are contracts under which DBJ Inc. lends to customers up to the prescribed limits in response tocustomers’ applications for loans as long as there is no violation of any terms and conditions in the contracts. As of March 31,
2022 and 2021, the amounts of unused commitments are ¥735,389 million ($6,008,577 thousand) and ¥798,060 million,
respectively. As of March 31, 2022 and 2021, the amounts of unused commitments with remaining contract term within one year
are ¥570,114 million ($4,658,176 thousand) and ¥568,245 million, respectively.
Since many of these commitments expire without being drawn down, the unused amount does not necessarily represent a
future cash requirement. Most of these contracts have terms and conditions whereby the Group can reject customers’applications for loans or decrease the contract limits with proper reason (e.g., changes in financial situation, deterioration incustomers’ credit worthiness). At the inception of contracts, the Group obtains liens on customers’ real estate, securities or otherassets as collateral as deemed necessary. Subsequently, the Group performs periodic reviews of the customers’ business results
based on internal rules, and take necessary measures to reconsider the terms and conditions of contracts and/or require
additional collateral and guarantees.

6. OTHER ASSETS
Other assets as of March 31, 2022 and 2021 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2021

2022

Prepaid expenses¥  5,891¥  3,842$   48,138

Accrued income

24,14625,076

197,291

Derivatives

55,63476,438454,569

Cash collateral paid for financial instruments

40,465

13,326

330,625

Margin deposits with the central clearing house

26,05424,022

212,880

Other

39,02336,739318,846

Total¥191,215¥179,445$1,562,350

Corporate Data

2022

Data Section

Bank of Japan Inc.
120 Development
Integrated Report 2022

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7. TANGIBLE FIXED ASSETS
Tangible fixed assets as of March 31, 2022 and 2021 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2022

Buildings
Land

2021

2022

¥ 17,780¥ 17,953$  145,273

90,037

90,151

735,657

529

586

4,325

Leased assets
Construction in progress

37

285

304

Other

388,855

318,491

3,177,185

Total¥497,239¥427,467$4,062,745

Note: Accumulated depreciation of tangible fixed assets as of March 31, 2022 and 2021, is ¥58,408 million ($477,233 thousand) and ¥48,099 million, respectively.

8. ALLOWANCE FOR LOAN LOSSES
Allowance for loan losses as of March 31, 2022 and 2021 is as follows:
Thousands of
U.S. Dollars

Millions of Yen

General allowance for loan losses

2022

2021

¥30,675¥29,098

2022$250,636

Specific allowance for loan losses

53,117

28,771

434,000

Total¥83,792¥57,869$684,636

9. DEBENTURES AND CORPORATE BONDS
Debentures and corporate bonds as of March 31, 2022 and 2021 are as follows:Development Bank of Japan Inc.
Integrated Report 2022

121

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Thousands of
U.S. Dollars

Millions of Yen

Issue date

Interest rate
(%)

2021

2022

Jun. 2021–
Jun. 2023¥  119,998[90,005]¥  210,002$   980,462[735,399]

Japanese government-guaranteed Dec. 2008– 0.001–
bonds 3, 4, 11, 14, 16, 19, 22,
Nov. 2021 2.1
23, 26, 28–44, 46, 48–73

Jun. 2021–
Jun. 2061

1,195,597[150,026]

1,510,937

9,768,754[1,225,803]

Japanese governmentguaranteed foreign bond 67*2, 7

Sep. 1998

1.81

Sep. 2028

25,02625,030204,479

Japanese governmentguaranteed foreign bonds
5–7, 10, 11, 14*1, 7

Dec. 2002– 1.05–
Nov. 2007 4.75

Sep. 2022–
Nov. 2027

369,015[105,033]

369,016

3,015,077[858,186]

Japanese government-guaranteed Sep. 2014– 0.5–
Euro MTN bonds 10, 12–25*3
Oct. 2021 3.25

Sep. 2021–
Oct. 2031

1,552,486[122,336]

1,291,611

12,684,747[999,565]

FILP agency domestic bonds 31,
34–36, 42 *4, 7

Mar. 2007– 2.23–
Dec. 2007 2.74

May 2027–
Mar. 2047

74,97474,972

612,583

Euro MTN FILP agency bond
2*4, 5, 7

Sep. 2008

2.032

Sep. 2023

2,000

2,000

16,341

Nov. 2012– 0–
Jan. 2022 1.183

Jun. 2021–
Apr. 2071

1,691,403[175,600]

1,522,001

13,819,783[1,434,760]

Corporate bonds through private Feb. 2015– 0.001–
placement 3–6, 8–21, 23–25, 27, Jan. 2022 1.16
28, 31, 34, 35, 39–42, 44–48,
52–69, 71–127

Apr. 2021–
Mar. 2058

426,500[70,000]

427,000

3,484,767[571,943]

Oct. 2013– 0.01–
Feb. 2022 3.749

Apr. 2021–
May 2049

930,233[140,547]

785,777

7,600,571[1,148,357]

Jun. 20190.25727

Jun. 2026

5,000

5,000

40,853

Sep. 20190.35727

Sep. 2026

125

125

1,021

¥6,392,360¥6,223,475$52,229,438(Issuer: DBJ Inc.)
Debentures
Japanese governmentguaranteed bonds
12, 14, 15, 17, 19, 20, 22 *1, 7

Jun. 2006– 2.0–
Jun. 2008 2.2

Strategy

2022

Value Creation Story

Maturity date

Corporate bonds

Corporate bonds Euro MTN
45, 48, 49, 52, 54, 55, 57,
60–90*6
Specified corporate bond 3*8

Corporate Data

(Issuer: Core Investment Japan TMK)

Corporate GovernanceCorporate bonds through public
placement
31, 40, 47, 50, 57, 60, 63, 65,
66, 68, 69, 71, 72, 74, 75,
77-79, 81-83, 85, 86, 88–153(Issuer: Hiratsuka Holding TMK)
Specified corporate bond 5*8
Total

Data Section*1.	These bonds are government-guaranteed bonds issued by the Development Bank of Japan.
*2.	This bond is a government-guaranteed bond issued by the Japan Development Bank.
*3.	These bonds are unsecured guaranteed bonds issued based on Medium Term Note program (“MTN program”).
*4.	Fiscal Investment and Loan Program (FILP) agency bonds (“FILP bonds”) are not government-guaranteed. These bonds are issued by the Development Bank of Japan.
*5.	This bond is a FILP bond issued based on MTN program.
*6.	These bonds are unsecured corporate bonds issued based on MTN program.
*7.	General mortgage under the DBJ Inc. Act (17 of the Supplementary Provisions) and the DBJ Act (Article 43).
*8.	These bonds are non-recourse debts.
*9.	Figures indicated in brackets [ ] indicate the amounts to be redeemed within one year.

Bank of Japan Inc.
122 Development
Integrated Report 2022

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Scheduled redemptions of above debentures and corporate bonds for the following 5 years subsequent to March 31, 2022 are
as follows:
Millions of Yen
Debentures/
corporate bonds

Thousands of U.S. Dollars

Non-recourse
corporate bonds

Debentures/
corporate bonds¥

Non-recourse
corporate bonds

The fiscal year ending March 31, 2023

¥853,549—$6,974,013

2024

868,776—

7,098,430

$

—

—

2025

987,528—

8,068,700

—

2026

782,606—

6,394,366

—

2027

674,482

5,125

5,510,925

41,874

10. BORROWED MONEY
Borrowed money as of March 31, 2022 and 2021 is as follows:
Thousands of
U.S. Dollars

Millions of Yen

Average interest rate (%)

Due date of repayment

2022

2021

2022

Borrowings

0.199

Apr. 2022–Nov. 2041

¥10,370,144¥10,479,970$84,730,324

Non-recourse borrowings

0.715

Apr. 2022–Dec. 2036

203,537

184,566

1,663,021

Total

0.209

¥10,573,681¥10,664,537$86,393,345

Scheduled repayments of above borrowings and non-recourse borrowings for the following 5 years subsequent to March 31,
2022 are as follows:
Millions of Yen
Borrowings

Thousands of U.S. Dollars

Non-recourse borrowings

Borrowings

Non-recourse borrowings

The fiscal year ending March 31, 2023

¥1,144,228¥ 7,695$9,349,038$ 62,876

2024

930,191

7,259

7,600,224

59,313

2025

973,664

6,513

7,955,424

53,2192026

1,047,858

71,3258,561,632

582,7762027

1,014,291

35,137

8,287,370

287,097

11. NON-RECOURSE DEBTS
Non-recourse debts in consolidated special purpose companies as of March 31, 2022 and 2021 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2022

2021

2022

Non-recourse debts:
Borrowed money¥203,537¥184,566$1,663,021

Corporate bonds

5,125

5,125

41,874

Cash and due from banks

17,454

13,410142,615

Other assets

2,650

3,412

21,656

Tangible fixed assets

266,545

225,666

2,177,836

Intangible fixed assets

4,564

4,847

37,294

Assets corresponding to non-recourse debts:

Development Bank of Japan Inc.
Integrated Report 2022

123

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

12. OTHER LIABILITIESOther liabilities as of March 31, 2022 and 2021 are as follows:

2022

2021

2022

Accrued expenses¥  9,956¥ 10,300$   81,350

Unearned income

658

516

5,382

Accrued income taxes

16,04017,599131,059

Derivatives

22,79729,523

186,268

454

511

3,714

Lease obligations
Asset retirement obligations

5,900

5,768

48,214

Other

76,86599,401

628,039

Total¥132,673¥163,620$1,084,024

Strategy

13. ACCEPTANCES AND GUARANTEES
Acceptances and guarantees as of March 31, 2022 and 2021 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2022

Guarantees

Value Creation Story

Thousands of
U.S. Dollars

Millions of Yen¥557,1272021¥446,616

2022$4,552,064

Corporate Data
Data Section

Cash and due from banks of ¥17,454 million ($142,615 thousand), other assets of ¥2,650 million ($21,656 thousand), tangible
fixed assets of ¥266,545 million ($2,177,836 thousand) and intangible fixed assets of ¥4,564 million ($37,294 thousand) arepledged as collateral for borrowed money of ¥203,537 million ($1,663,021 thousand) and corporate bonds of ¥5,125 million($41,874 thousand) as of March 31, 2022.
Cash and due from banks of ¥13,410 million, other assets of ¥3,412 million, tangible fixed assets of ¥225,666 million andintangible fixed assets of ¥4,847 million are pledged as collateral for borrowed money of ¥184,566 million and corporate bondsof ¥5,125 million as of March 31, 2021.
Securities and loans pledged as collateral in Real Time Gross Settlement for bank deposits at the Bank of Japan are¥213,178 million ($1,741,799 thousand) and ¥694,953 million ($5,678,190 thousand), as of March 31, 2022, respectively. Suchsecurities and loans are pledged as collateral for transactions, including exchange settlements as of March 31, 2022. On behalfof the investees who borrow from third parties, ¥15,064 million ($123,085 thousand) of securities are pledged as collateral as ofMarch 31, 2022. Additionally, ¥40,465 million ($330,625 thousand) of cash collateral paid for financial instruments and ¥26,054
million ($212,880 thousand) of margin deposits with the central clearing house are included in other assets as of March 31, 2022.
Under the DBJ Inc. Act (Article 17 of the Supplementary Provisions) and the DBJ Act (Article 43), obligations created by thebonds issued by DBJ are secured by a statutory preferential right over the property of DBJ Inc. The face value of thesedebentures amounts to ¥591,289 million ($4,831,187 thousand) as of March 31, 2022.
Securities and loans pledged as collateral in Real Time Gross Settlement for bank deposits at the Bank of Japan are¥169,189 million and ¥840,231 million, as of March 31, 2021, respectively. Such securities and loans are pledged as collateral
for transactions, including exchange settlements as of March 31, 2021. On behalf of the investees who borrow from third parties,¥15,451 million of securities are pledged as collateral as of March 31, 2021. Additionally, ¥13,326 million of cash collateral paid
for financial instruments and ¥24,022 million of margin deposits with the central clearing house are included in other assets asof March 31, 2021. Under the DBJ Inc. Act (Article 17 of the Supplementary Provisions) and the DBJ Act (Article 43), obligations
created by the bonds issued by DBJ are secured by a statutory preferential right over the property of DBJ Inc. The face value ofthese debentures amounts to ¥681,289 million as of March 31, 2021.

Corporate Governance

14. ASSETS PLEDGED AS COLLATERALBank of Japan Inc.
124 Development
Integrated Report 2022

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 year-end
dividend, upon resolution at the shareholders’ meeting. Additionally, for companies that meet certain criteria such as (1) having
a Board of Directors, (2) having independent auditors, (3) having a Board of Corporate Auditors, and (4) the term of serviceof the directors is prescribed as one year rather than two years of normal term in its articles of incorporation. With respect tothe third condition above, the Board of Directors may declare dividends (except for dividends in kind) at any time during the
fiscal year, if the Board of Directors can declare dividends as prescribed in the company’s articles of incorporation. DBJ Inc.,
however, shall not distribute such dividends based on resolution of the Board of Directors, since its articles of incorporation
do not prescribe that the Board of Directors can take such action. The Companies Act provides certain limitations on theamounts available for dividends or the purchase of treasury stock. Article 20 of the DBJ Inc. Act provides that the timing andamounts for dividends shall be authorized by the Finance Minister.
(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 appropriated as a legal reserve (a componentof retained earnings) or as additional paid-in capital (a component of capital surplus), depending on the equity account charged
for dividends, until the total aggregate amount of legal reserve and additional paid-in capital equal 25% of Common stock.
Under the Companies Act, the total amount of additional paid-in capital and legal reserve may be reversed without limitation.
The Companies Act also provides that common stock, legal reserve, additional paid-in capital, other capital surplus andretained earnings can be reclassified among the accounts under certain conditions and upon resolution of 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 to theshareholders which is determined by a specific formula.
Under the Companies Act, stock acquisition rights are presented as a separate component of equity.
The Companies Act also provides that companies can purchase both treasury stock acquisition rights and treasury stock.
The treasury stock acquisition rights are presented as a separate component of equity or deduction of stock acquisition rights.
(d) Solicitation and Delivery of Shares or Stock Acquisition Rights
Article 12 of the DBJ Inc. Act regulates that, if DBJ Inc. intends to solicit those who will subscribe for shares or stockacquisition rights offered, or to deliver shares or stock acquisition rights in connection with a share-for-share exchange,
DBJ Inc. shall obtain an authorization from the Finance Minister.

16. CRISIS RESPONSE RESERVEDBJ Inc. recorded the accumulated amounts of the government’s contribution to implement the crisis response operations inaccordance with the provision of Article 2-22 of the supplementary provision of the DBJ Inc. Act (hereinafter the “Act”) as “Crisis
response reserve.”
The reserve is characterized as follows:(a)	For the purpose of calculating the amount of surplus, the amount of crisis response reserve is included in the total amount ofcommon stock and capital surplus based on the provision of Article 2-25 of the supplementary provision of the Act.
(b)	In the event of a deficit, the amount of crisis response reserve may be decreased when the capital surplus and legal retained
earnings become nil based on the provision of Article 2-26 of the supplementary provision of the Act. When the surplus
becomes positive after the decrease in the amount of crisis response reserve, the amount of crisis response reserve shall be
increased based on the provision of Article 2-26 of the supplementary provision of the Act.

Development Bank of Japan Inc.
Integrated Report 2022

125

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Value Creation Story(c)	In case DBJ Inc. determined that a sufficient financial base required for the proper implementation of crisis response
operations has been secured, DBJ Inc. shall pay the full or partial amount of crisis response reserve to the National Treasury
according to the resolution of the shareholders meeting and authorization of the Minister of Finance, in accordance with theprovision of Article 2-27 of the supplementary provision of the Act.
(d)	If DBJ Inc. were to be liquidated, DBJ Inc. shall pay the amount of crisis response reserve to the National Treasury based on
the provision of Article 2-28 of the supplementary provision of the Act when residual assets exist after discharging debts.

17. SPECIAL INVESTMENT RESERVE AND SPECIAL INVESTMENT SURPLUS
DBJ Inc. recorded the amounts transferred from the government’s investment and capital surplus to implement the special
investment operations in accordance with the provision of Article 2-23 of the supplementary provision of the Act as “Special
investment reserve”. In addition, profit or loss arising from special investment operations is transferred from retained earnings to“Special investment surplus.”

Strategy
Corporate GovernanceSpecial Investment Reserve and Special Investment Surplus are characterized as follows:(a)	For the purpose of calculating the amount of surplus, the amounts of special investment reserve and special investment
surplus are included in the total amount of common stock and capital surplus based on the provision of Article 2-25 of the
supplementary provision of the Act.
(b)	In the event of a deficit, the amounts of special investment reserve or special investment surplus may be decreased when thecapital surplus and legal retained earnings become nil based on the provision of Article 2-26 of the supplementary provision of
the Act. When the surplus becomes positive after the decrease in the amounts of special investment reserve or special
investment surplus, the amounts of special investment reserve or special investment surplus shall be increased based on theprovision of Article 2-26 of the supplementary provision of the Act.
(c)	In case that DBJ Inc. determined that these amounts became unnecessary to implement special investment operations
properly, DBJ Inc. may pay the full or partial amount of special investment reserve or special investment surplus to the National
Treasury according to the resolution of the shareholders meeting and authorization of the Minister of Finance, in accordancewith the provision of Article 2-27 of the supplementary provision of the Act.
(d)	If DBJ Inc. were to be liquidated, DBJ Inc. shall pay the amounts of special investment reserve and special investment surplus
corresponding to the amount attributable to the National Treasury to the National Treasury based on the provision of Article
2-28 of the supplementary provision of the Act when residual assets exist after discharging debts.

Corporate Data
Data Section

Bank of Japan Inc.
126 Development
Integrated Report 2022

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

18. PER SHARE INFORMATION
Equity per share of common stock as of March 31, 2022 and 2021 and basic net income per common share (“EPS”) for theyears ended March 31, 2022 and 2021 are as follows:

March 31, 2022

Millions of Yen

Thousands of Shares

Yen

U.S. Dollars

Equity related tocommon stock

Outstanding numberof shares used to
calculate equity per share

Equity per share

Equity per share

43,632¥65,892.29$538.38

43,632¥64,719.67

Equity per share
Total equity
Items deducted from total equity¥3,832,062
957,025   (Crisis response reserve)

206,529  (Special investment reserve
attributable to the National Treasury)

724,000  (Special investment surplus
attributable to the National Treasury)

10,528  (Non-controlling interests)

15,968Equity related to common stock¥2,875,036

March 31, 2021

Equity per share
Total equity
Items deducted from total equity¥3,703,415
879,543   (Crisis response reserve)

206,529  (Special investment reserve
attributable to the National Treasury)

644,000  (Special investment surplus
attributable to the National Treasury)

13,262  (Non-controlling interests)

15,752Equity related to common stock¥2,823,872

March 31, 2022

Millions of Yen

Thousands of Shares

Yen

U.S. Dollars

Net income attributable toowners of the parent

Weighted average shares

EPS

EPS

Basic EPS
 Net income (loss) attributable toowners of the parent¥57,612 Net income (loss) not attributable to common shareholders (Amount attributable to the National Treasury related to
special investment operations)(2,690)Net income (loss) attributable to owners of
the parent related to common stock¥60,303

43,632¥1,382.07

43,632¥  867.21

March 31, 2021

Basic EPS
 Net income (loss) attributable to ownersof the parent¥45,246 Net income (loss) not attributable to common shareholders (Amount attributable to the National Treasury related to
special investment operations)

7,408

Net income (loss) attributable to ownersof the parent related to common stock¥37,838

Note: Diluted net income per share for the years ended March 31, 2022 and 2021 is not disclosed because there are no dilutive securities.

$11.29Development Bank of Japan Inc.
Integrated Report 2022

127

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

19. OTHER OPERATING INCOME
Other operating income for the years ended March 31, 2022 and 2021 is as follows:

Foreign exchange gains

2022

2021

¥14,498

¥

2022

—

$118,465

Gains on derivatives—

13,838

—

Other

—

256

—

Total

¥14,498¥ 14,094$118,465

Value Creation Story

Thousands of
U.S. Dollars

Millions of Yen

20. OTHER INCOME
Other income for the years ended March 31, 2022 and 2021 is as follows:
Thousands of
U.S. Dollars

Millions of Yen

2022$ 66,592

Gains on redemption of securities

1,116

359

9,121

Equity in earnings of affiliates

2,588

—

21,146

Gains on sales of fixed assets

2,268

1,199

18,537

Collection of written-off claims

3,052

423

24,942

Gains on investments in limited partnerships andother similar partnerships

59,26521,652484,236

Rental income on land and buildings

13,58812,520111,025

Sales of electric power

12,08010,946

98,704

Other

8,614

5,605

70,382

Total¥110,724¥76,221$904,687

Corporate Governance2022¥23,515

Strategy2021¥  8,150

Gains on sales of equities and other securities

21. OTHER OPERATING EXPENSES
Other operating expenses for the years ended March 31, 2022 and 2021 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2022

Foreign exchange losses

2022¥6,909936$—

Corporate bonds issuance costs

1,137

1,263

9,298

Losses on derivatives

12,288—100,405

4,134

Other

0

114

6

Total

¥13,933¥9,223$113,843

Corporate Data—
506

Debenture issuance costs

¥

2021

Data Section

Bank of Japan Inc.
128 Development
Integrated Report 2022

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

22. OTHER EXPENSES
Other expenses for the years ended March 31, 2022 and 2021 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2021

2022

¥ 41,760

2022¥ 9,352$341,212

—

6,908

—

Losses on investments in limited partnerships and othersimilar partnerships

7,743

12,762

63,272

Depreciation

9,091

8,954

74,283

Provision of allowance for loan losses

34,79423,970284,295

Other

11,828

12,96296,648

Total¥105,219¥74,910$859,710

Write-off of equities
Equity in losses of affiliates

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 under which
the termination occurs. If the termination is involuntary, caused by retirement at the mandatory retirement age or caused by death,the employee is entitled to greater payment than in the case of voluntary termination.
(a) Defined Benefit Pension Plan
(1) The changes in retirement benefit obligation for the years ended March 31, 2022 and 2021 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2022

2021

2022

¥37,267¥36,167$304,498

Service cost

1,648

1,591

13,467

Interest cost

406

393

3,318

Balance at beginning of year

Actuarial losses

451

931

3,687

Benefits paid

(1,852)(1,816)(15,139)

Other
Balance at end of year

42

—

349

¥37,963¥37,267$310,181(2) The changes in plan assets for the years ended March 31, 2022 and 2021 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2022

Balance at beginning of year

2021

2022

¥30,665¥29,338$250,557

153

146

1,253

Actuarial (losses) gains

(177)

1,108

(1,450)Contributions from the employer

2,691

965

21,990

Expected return on plan assets

Benefits paid
Balance at end of year

(832)

(894)

(6,800)¥32,500¥30,665$265,549

Development Bank of Japan Inc.
Integrated Report 2022

129

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(3)	Reconciliation between the liability for retirement benefits recorded in the consolidated balance sheet and the balances ofretirement benefit obligations and plan assets for the years ended March 31, 2022 and 2021 are as follows:

2021

2022

Funded retirement benefit obligations¥ 29,750¥ 29,072$ 243,083

Plan assets(32,500)(30,665)(265,549)(2,749)(1,593)(22,466)

8,212

8,195

67,098Net liability for retirement benefits recorded in
the consolidated balance sheet¥   5,462¥   6,601$   44,632

Liability for retirement benefits¥   8,212¥   8,195$   67,098

Asset for retirement benefits(2,749)(1,593)(22,466)¥   5,462¥   6,601$   44,632

Unfunded retirement benefit obligations

Net liability for retirement benefits recorded in the consolidatedbalance sheet

Strategy

2022

Value Creation Story

Thousands of
U.S. Dollars

Millions of Yen(4) The components of net periodic retirement benefit costs for the years ended March 31, 2022 and 2021 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2022

2021

2022

¥1,648¥1,591$13,467Interest cost

406

393

3,318

Expected return on plan assets

(153)

(146)

(1,253)

Amortization of net actuarial losses

128

196

1,047

Amortization of prior service cost

4

7

36

¥2,033¥2,042$16,616

Net periodic retirement benefit costs

Corporate Governance

Service cost(5)	Amounts recognized in other comprehensive income (before income tax effect) in respect of adjustments for retirement
benefit for the years ended March 31, 2022 and 2021 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2022

2021

2022

¥   4

¥  7

$     36

Actuarial (losses) gains

(500)

373

(4,090)Total¥(496)¥381$(4,054)(6)	Amounts recognized in accumulated other comprehensive income (before income tax effect) in respect of adjustment for
accumulated retirement benefit as of March 31, 2022 and 2021 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2022

Unrecognized prior service cost¥

Corporate Data

Prior service cost

2021

2022

—

¥  (4)$—

Unrecognized actuarial losses(1,480)(980)(12,099)

Total¥(1,480)¥(984)$(12,099)
Data Section

Bank of Japan Inc.
130 Development
Integrated Report 2022

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(7) Plan assets
		 (i) Components of plan assets
		 Plan assets as of March 31, 2022 and 2021 consisted of the following:
2022

2021

Debentures

86%

73%

Equity12%

13%

Others

2%

14%

Total

100%

100%

		

(ii) Method of determining the expected rate of return on plan assets
The expected rate of return on plan assets is determined considering the long-term rates of return which are expectedcurrently and in the future from the various components of the plan assets.

(8) Assumptions used for the years ended March 31, 2022 and 2021 were set forth as follows:
2022

Discount rate
Expected salary increase rate
Expected rate of return on plan assets

2021

1.1%

1.1%

2.1%–6.7%

2.1%–6.7%

0.5%

0.5%

(b) Defined Contribution Plans
The amounts of the required contribution to the defined contribution plans of DBJ Inc. and its consolidated subsidiaries for theyears ended March 31, 2022 and 2021 are ¥297 million ($2,433 thousand) and ¥273 million, respectively.

24. INCOME TAXESDBJ Inc. and its domestic consolidated subsidiaries are subject to Japanese national and local income taxes which, inthe aggregate, resulted in a normal effective statutory tax rate of approximately 30.62% for the years ended March 31, 2022
and 2021.
A reconciliation of the normal effective statutory tax rate with the actual effective tax rate for the years ended March 31, 2022
and 2021 is as follows:
2022

2021

30.62%

30.62%

Change in valuation allowance

4.36%

2.38%

Equity in earnings of affiliates(0.89)%

2.86%

Other

(0.87)%

0.70%

33.22%

36.56%

Normal effective statutory tax rate
Increase (decrease) in taxes resulting from:

Actual effective tax rate

Development Bank of Japan Inc.
Integrated Report 2022

131

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The tax effects of significant temporary differences and loss carryforwards which resulted in deferred tax assets and liabilities as ofMarch 31, 2022 and 2021 are as follows:

2022

2021

2022

¥ 27,265¥ 20,153$ 222,771

Losses from revaluation of securities

35,211

25,159287,701

Excess of fair value over assets of consolidated subsidiaries

3,120

3,120

25,499Liability for retirement benefits

2,021

2,027

16,521

Deferred tax assets:
Allowance for loan losses

Tax goodwill

1,135

8,130

7,275

100,737

Other

19,11916,357156,218

Sub-total

100,063

75,229817,577(51,830)(47,967)(423,490)(51,830)(47,967)(423,490)

48,232

27,262

394,086

Unrealized gain on available-for-sale securities(16,322)(16,282)(133,367)

Deferred gain on derivatives under hedge accounting(3,867)(5,962)(31,601)

Other(20,770)(9,084)(169,706)(40,960)(31,328)(334,674)¥  7,271¥ (4,066)$   59,412 Less-valuation allowance on total of temporary differences deductible
in future periods
Sub-total*1
Total

Strategy994
12,329Tax loss carryforwards

Value Creation Story

Thousands of
U.S. Dollars

Millions of Yen

Deferred tax liabilities:

Total*1. Changes in valuation allowance are principally due to an increase in that for allowance for loan losses.
*2. Net deferred tax assets are included in the following items in the consolidated balance sheets.

Thousands of
U.S. Dollars

Millions of Yen

2022

2021

2022

Deferred tax assets¥14,307¥ 2,572$116,900

Deferred tax liabilities(7,035)(6,639)(57,488)

Corporate GovernanceNet deferred tax assets (liabilities)*2

Corporate Data

25. LEASE TRANSACTIONS(a) Finance leases
Information about finance leases is omitted since the amounts are not material.
(b) Operating leases(As lessee)
The minimum lease commitments under non-cancelable operating leases as of March 31, 2022 and 2021 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

Due within 1 year

2022

2021

2022

¥1,593¥1,710$13,018

5,383

6,251

43,989

Total¥6,977¥7,961$57,007

Data Section

Due after 1 year

Bank of Japan Inc.
132 Development
Integrated Report 2022

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(As lessor)
The minimum lease commitments under non-cancelable operating leases as of March 31, 2022 and 2021 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2022

2021

2022

Due within 1 year

¥ 7,713¥ 5,695$ 63,024

Due after 1 year

38,30618,322

312,989

Total¥46,020¥24,017$376,013

26. OTHER COMPREHENSIVE INCOME (LOSS)
The components of other comprehensive income (loss) for the years ended March 31, 2022 and 2021 are as follows:
Thousands of
U.S. Dollars

Millions of Yen

2022

2021

2022

¥   6,989¥ 37,501$ 57,107(7,881)(11,129)(64,395)(891)

26,372(7,288)

Unrealized (loss) gain on available-for-sale securities:
Gain arising during the year
Reclassification adjustments to profit or loss   Amount before income tax effect   Income tax effect  Total(144)(8,872)(1,182)(1,036)

17,499(8,470)(7,844)(2,682)(64,096)

Deferred loss on derivatives under hedge accounting:
Loss arising during the year
Reclassification adjustments to profit or loss

(4,154)(5,210)(33,944)(11,999)(7,893)(98,040)   Income tax effect

8,288

2,417

67,720  Total(3,710)(5,476)(30,320)

Adjustments arising during the year

304

146

2,487

Reclassification adjustments to profit or loss

—

—

—

   Amount before income tax effect

304

146

2,487

   Income tax effect

—

—

—

  Total

304

146

2,487

   Amount before income tax effectForeign currency translation adjustments:

Adjustments for retirement benefits:
Adjustments arising during the year

(628)

177

(5,137)

Reclassification adjustments to profit or loss

132

204

1,083

(496)

381

(4,054)   Income tax effect

151

(116)

1,241

  Total

(344)

264

(2,813)Gain arising during the year

5,606

879

45,812

Reclassification adjustments to profit or loss

(3,606)

194(29,466)

2,000

1,074

16,346   Amount before income tax effect

Share of other comprehensive income in affiliates
accounted for by the equity method:   Amount before income tax effect   Income tax effect  Total
Total other comprehensive (loss) income

—

—

—

2,000

1,074

16,346¥ (2,786)¥ 13,508$(22,769)

Development Bank of Japan Inc.
Integrated Report 2022

133

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

27. SEGMENT INFORMATIONDBJ Inc. consists of only one business segment of long-term financing and accordingly, the disclosure of the reportable segment
information is omitted.

Millions of Yen

Year ended March 31, 2022

Ordinary income from external customers

Loan business¥130,856

Securities investment¥106,510

Other¥72,982

Total

Value Creation Story

Related information:
Segment information by service for the years ended March 31, 2022 and 2021 is following:¥310,349

Millions of Yen

Year ended March 31, 2021

Ordinary income from external customers

Loan business¥132,522

Securities investment¥67,192

Other¥69,747

Total¥269,462

Thousands of U.S. Dollars
Loan business

Ordinary income from external customers$1,069,173

Securities investment$870,255

Other$596,315

Total$2,535,742

StrategyYear ended March 31, 2022

28. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES

Data Section(3) Risk Management for Financial Instruments(i) Credit Risk Management
In accordance with the internal guidelines, DBJ Inc. utilizes credit exposure management and portfolio management forinvestments and loans. When making an investment or loan, DBJ Inc. examines the entity’s viability and the entity’s

Corporate Data

(2) Nature and Extent of Risks Arising from Financial Instruments
The financial assets of DBJ Inc. are mainly investments and loans in domestic customers, which are exposed to credit
risk that stems from customers’ default of contracts or decline of their creditworthiness. Main categories of industries ofdebtors are transportation, postal service, electricity, gas, thermal supply, water supply, real estate, article leasing, andothers as of March 31, 2022. The changes of economic circumstances surrounding these industries may influence thefulfillment of their obligations. DBJ Inc. holds securities such as bonds, equities and investments in limited partnerships
and other similar partnerships, which are exposed to issuer’s credit risk, interest rate risk, price volatility risk and 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 activities, interest-rate swap agreements and othertransactions.
Foreign currency denominated investments, loans and others are exposed to exchange rate risk. DBJ Inc. mitigatesthis risk by matching foreign currency investments, loans and others with foreign currency corporate bonds ascorresponding foreign currency denominated liabilities and by using exchange swaps and currency swaps.
DBJ Inc. utilizes derivative financial transactions such as interest-rate swap agreements and currency swap
agreements in order to hedge or manage the risks related to interest and currency. DBJ Inc. applies hedge accounting asnecessary. Details for hedging instruments, hedged items, hedging policy and assessment of effectiveness of the hedges
are described in Note 2 (f) “Hedge Accounting.”

Corporate Governance(a) Financial Instruments(1) Policy for Financial Instruments
DBJ Inc. provides investment and loan services that are aimed to provide long-term stable funding. As the main methodsof acquiring funds, in addition to issuing corporate bonds and long-term borrowings, DBJ Inc. relies on the stableprocurement of long-term funds from the government’s Fiscal Investment and Loan Program (FILP). Since the majority of
its assets are long-term with a fixed rate, DBJ Inc. raises its funds mainly with long-term, fixed rate liabilities.
From both funding and investment aspects, DBJ Inc. implements comprehensive asset/liability management in orderto mitigate the risk of capital shortfall and losses from fluctuations of interest rate and exchange rate. DBJ Inc. utilizes
derivative financial instruments in order to hedge or manage the risks related to interest and currency.

Bank of Japan Inc.
134 Development
Integrated Report 2022

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

project’s profitability. After that, DBJ Inc. sets ratings along with an internal rating system, grants credit amount, setscollateral and guarantee. The sales and credit analysis departments hold separate roles in the screening andadministering of credit for individual loans and each department keeps the operations of the other in check. The
Committee on Investment and Loan Decisions meets as needed to deliberate important issues concerning themanagement and governance of individual loans. DBJ Inc. performs a comprehensive analysis of data based onborrower ratings, and calculates the loan portfolio’s overall exposure to credit risk, which is measured regularly toensure that such risk remains within specified range of capital.
The credit risk of securities is managed in the same way as that of loans. In addition, DBJ Inc. regularly monitors
changes in the market value of securities with market value. As for counterparty risk arising from derivativetransactions, DBJ Inc. manages derivative transactions by setting a limit after continually monitoring the cost ofrestructuring its transactions and the creditworthiness of each counterparty and also manages risk by utilizing central
clearance organization and through receipt/payment of margin money based on Credit Support Annex (CSA) between
counterparties.
(ii) Market Risk Management
1) Interest Rate Risk Management
DBJ Inc. manages interest rate risk by asset/liability management. Details of risk management methods and proce­dures are determined on internal rules, and Management Committee and ALM & Risk Management Committee
determine policies related to asset/liability management, monitoring of implementation and future 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 interest rate sensitivity analyses (duration, basis
point value (BPV)), value at risk (VaR), and other methods. As part of asset/liability management, interest-rate
swaps are used to avoid or hedge interest rate risk.
2) Foreign Exchange Risk Management
Foreign currency investments, loans and others are exposed to exchange rate risk, therefore those risks arehedged or managed not only by offsetting some foreign currency denominated investments, loans and otherswith foreign currency denominated corporate bonds and debentures but also by using exchange swaps andcurrency swaps.
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 decision-making, as necessary. Throughregular monitoring, price volatility risks are reviewed on a timely basis and reported to ALM & Risk Management
Committee periodically.
4) Derivative Transactions
In conducting derivative transactions, segregation of duties is maintained in the front office, the back office andthe risk management department based on in-house regulations.
5) Quantitative Information about Market Risk
DBJ Inc. has not been engaged in trading activities, and all the assets and liabilities are financial instruments forthe purposes other than trading.
Market risk exposure (estimated loss) is based on VaR methods through interest rate sensitivity analyses(BPV) and variance-covariance method (holding period of 1 year, observation period of 5 years or more, andconfidence 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, 2022 and 2021 was ¥43,610 million ($356,316
thousand) and ¥61,135 million, respectively. Such measurements are conducted by the risk management
department on a regular basis and reported to the ALM & Risk Management Committee to utilize for establishing
ALM operating policies.

Development Bank of Japan Inc.
Integrated Report 2022

135

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Value Creation Story

VaR or BPV measures the market risk volume under a definite probability of incidence calculated based on thehistorical market movements and therefore, it may fail to capture risks which arise under exceptional market
conditions affected by drastic change.
DBJ Inc. recognizes that rigid risk management is being conducted as risks that cannot be captured by themodel alone are identified in detail by conducting backtesting to compare the risk volume calculated by the modelwith hypothetical performances calculated based on the actual market movements as well as performing
measurement using other risk indices and stress tests.
(iii) Liquidity Risk Management on Financing
The risk management department monitors the possession amount of cash liquidity and the cash flow ladder andreports it to the ALM & Risk Management Committee periodically in line with in-house regulations of liquidity risk
management on financing. The ALM & Risk Management Committee manages liquidity risk by appropriate operationsof financing and investing activities based on the risk situation.

Level 1: Fair value determined based on the unadjusted quoted price in the active market for the same asset or liability
Level 2: Fair value determined based on observable inputs other than the Level 1 inputs, either directly or indirectly
Level 3: Fair value determined based on significant unobservable inputs

Corporate Governance(b) Matters concerning Fair Value of Financial Instruments and Breakdown by Fair Value Hierarchy
	The following tables summarize the amount stated on consolidated balance sheets and the fair value of financial instruments
as of March 31, 2022 and March 31, 2021 together with their difference and the fair value of financial instruments by levelwithin the fair value hierarchy as of March 31, 2022 and March 31, 2021.
		 The following tables do not include non-marketable equity securities and investment in partnerships and others (SeeNote 3.).
		 The fair values of financial instruments are classified into the following three levels depending on the observability andsignificance of the input used for fair value measurement.

Strategy(4) Supplementary Explanation on Fair Value of Financial Instruments
Because certain assumptions are used in calculating the fair value of financial instruments, an assessed price could differ
if different assumptions are used.

Corporate Data
Data Section

Bank of Japan Inc.
136 Development
Integrated Report 2022

		 If multiple inputs are used that have a significant impact on the measurement of fair value, fair value is classified at thelowest level in the fair value measurement among the levels to which each of these inputs belongs.
Millions of Yen

2021
Carrying amount

Fair value

Difference

Cash and due from banks¥ 2,187,820¥ 2,187,820

Call loans and bills bought

684,000

684,000¥——

Money held in trust

16,824

16,981

156

Securities
Held-to-maturity debt securities
Available-for-sale securities
Investments in affiliates
Loans
Allowance for loan losses*1
Total assets

389,976

396,408

6,431

1,039,769

1,039,769

—

2,846

3,360

513

14,757,131(57,761)
14,699,369

15,171,552

472,183¥19,020,608¥19,499,893¥479,285

Debentures

3,483,570

3,548,364

64,793

Borrowed money

10,664,537

10,664,152(384)

Corporate bonds
Total liabilities

2,739,904

2,742,260

2,355¥16,888,012¥16,954,777

66,76551,42751,427—

Derivative transactions*2
Derivative transactions not qualifying for hedge accounting
Derivative transactions qualifying for hedge accounting
Total derivative transactions(4,512)(4,512)¥    46,915¥    46,915*1. General and specific allowances for loan losses are deducted.
*2. Assets and liabilities arising from derivative transactions are presented on a net basis. Total amounts, which are net liabilities, are presented in parentheses.

—¥—

Development Bank of Japan Inc.
Integrated Report 2022

137

(1) Financial Assets and Liabilities Stated at Fair Value on the Consolidated Balance Sheets
Millions of Yen

March 31, 2022
Level 2

¥215,440¥

Level 3

Total

Securities
Available-for-sale securities*1:   Japanese government bonds

—

¥

—

¥  215,440  Corporate bonds—

593,032

28,351

621,384  Equity securities

57,464501

322,193

380,158  Other—

6,116

22,13328,249Total assets¥272,904¥599,649¥372,678¥1,245,232¥¥

Value Creation Story

Fair Value
Level 1

Derivatives*2,*3,*4   Interest related instruments¥

Total derivatives—¥ 24,855

—

7,981

—

¥ 32,837¥—¥   24,855

—

7,981

—

¥   32,837

Strategy   Currency related instruments

Thousands of U.S. Dollars

March 31, 2022
Fair Value
Level 1

Level 2

Level 3

Total

Securities
Available-for-sale securities*1:   Japanese government bonds$1,760,278

$

—

$

—

$ 1,760,278—

4,845,431

231,651

5,077,082  Equity securities

469,518

4,093

2,632,514

3,106,125  Other—

49,973

180,840

230,813

Total assets$2,229,795$4,899,497$3,045,006$10,174,298$—$  203,086$—$   203,086—

65,215—65,215—$  268,301—$   268,301

Derivatives*2,*3,*4   Interest related instruments   Currency related instruments
Total derivatives$$

Corporate Data

*1. Pursuant to Paragraph 26 of the “Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No. 31 issued on July 4, 2019), the investment trusts towhich the transitional treatment is applied are not included in the above table. Such investment trusts were ¥123,081 million ($1,005,653 thousand) of financial assets in the consolidatedbalance sheet.
*2. Assets and liabilities arising from derivative transactions are presented on a net basis. Total amounts, which are net liabilities, are presented in parentheses.
*3. Derivative transactions to which hedge accounting is applied are ¥(2,287) million ($(18,687) thousand) in the consolidated balance sheet.
*4. Derivatives to which hedge accounting is applied are interest rate swaps, etc. designated as hedging instruments to offset market fluctuations of debentures, borrowed money, corporate
bonds and loans, etc. as hedged items, and are mainly applied by the accrual method. Of these hedging relationships, PITF No. 40, the “Practical Solution on the Treatment of Hedge
Accounting for Financial Instruments that Reference LIBOR” (March 17, 2022) is applied to all the hedging relationships subject to PITF No. 40.

Corporate Governance  Corporate bonds

Data Section

Bank of Japan Inc.
138 Development
Integrated Report 2022

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(2) Financial Assets and Financial Liabilities, Which Are Not Stated at Fair Value on the Consolidated Balance Sheets	Cash and due from banks, call loans, bills bought, payable under repurchase agreements, and short-term foreign currencydenominated sovereign bonds included in “Securities” are not included the following since they are short-term (within oneyear), and their carrying amounts approximate their fair values.
Millions of Yen

March 31, 2022
Fair Value
Level 1

Money held in trust
Securities: Held-to-maturity debt
securities:  Japanese government
bonds  Corporate bonds  Other
Shares in affiliates
Loans*1
Other assets   Total assets
Debentures
Borrowed money
Corporate bonds   Total liabilities

Carrying amount

Difference¥    15,075¥    15,021¥

83,152201,695
85,9582,104
14,554,560
36,115¥14,978,662¥ 3,382,813
10,464,172
3,039,047¥16,886,032

80,334
197,657
82,9793,106
14,262,553
23,822¥14,665,474¥ 3,339,098
10,573,681
3,053,262¥16,966,042

2,818
4,038
2,978
(1,002)
292,007
12,293¥ 313,188¥   43,715(109,509)(14,215)¥ (80,009)

Carrying amount

Difference

Level 2

Level 3Total—¥     1,820¥    13,255

83,152
—
—
2,104
—
—
¥85,256
¥
—
—
—
¥
—

—
499
—
—
—
—
¥     2,319¥ 3,382,813
10,267,486
3,033,922¥16,684,222—
201,196
85,958—14,554,560
36,115¥14,891,086¥—
196,6855,125¥   201,810¥

54*1. Allowances for credit losses of ¥83,634 million are deducted.

Thousands of U.S. Dollars

March 31, 2022
Fair Value
Level 1

Money held in trust
Securities: Held-to-maturity debt
securities:  Japanese government
bonds  Corporate bonds  Other
Shares in affiliates
Loans*1
Other assets   Total assets
Debentures
Borrowed money
Corporate bonds   Total liabilities

Level 2

Level 3Total—$     14,871$    108,308$    123,179$    122,732$      447

679,406——
17,193——$696,599
$
—
—
—
$
—

—
4,080
—
—
—
—
$     18,952$ 27,639,624
83,891,547
24,788,971$136,320,142—
1,643,895
702,334—
118,919,526
295,082$121,669,145$—
1,607,041
41,874$  1,648,915

679,406
1,647,976
702,334
17,193
118,919,526
295,082$122,384,696$ 27,639,624
85,498,588
24,830,846$137,969,058

656,378
1,614,977
677,996
25,385116,533,651
194,640$119,825,759$ 27,282,443
86,393,345
24,946,995$138,622,784

23,02832,99924,338(8,192)
2,385,875
100,442$2,558,937$  357,181(894,757)(116,150)$ (653,726)$*1. Allowances for credit losses of $683,345 thousand are deducted.

(Note 1) Explanation about valuation techniques and inputs used for fair value measurement
Securities
The fair value of securities is classified into Level 1 if the quoted prices unadjusted are available in active markets. Since
listed equity securities and Japanese government bonds are traded in active markets, the fair values of listed equity

Development Bank of Japan Inc.
Integrated Report 2022

139

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Value Creation Story

securities and Japanese government bonds are classified into Level 1. If the market is inactive, even if the quoted prices
are available, it is classified into Level 2. As the quoted market prices of corporate bonds are not considered to be in
active markets due to low market transactions, the fair values of corporate bonds are classified into Level 2.
When the quoted prices are not available, the fair value is determined using valuation techniques such as discounted
present value method of expected future cash flows. Inputs include swap rates, credit spread, and liquidity premium. If asignificant unobservable input is used in the determination, the fair value is classified into Level 3. Classified shares ofunlisted equity securities considered to have the similar characteristics with debentures are included in this classification.
Investment trusts are not classified into any fair value hierarchy, applying the transitional measures in accordance with
Paragraph 26 of the Implementation Guidance on Accounting Standard for Fair Value Measurement.
Derivatives
Derivatives are OTC transactions, and no quoted prices exist. The fair value is determined by utilizing valuation techniquessuch as the discounted present value method according to the type of transactions and maturity lengths. Key inputs usedin these valuation techniques are interest rates, foreign exchange rates, volatility, etc. and price adjustments based on thecredit risk of the counterparties are performed. The fair value is classified into Level 2.

Data Section

Debentures
The present value is determined by discounting the total amount of the principal and interest of the debentures classified
by certain definite period (or the total amount of the principal and interest by the related interest rate swap rate, for thedebentures to which the accrual method on interest swaps is applied) issued by DBJ Inc. at the interest rate considering
the remaining maturity period of the debentures and credit risk. For floating rate debentures issued by DBJ Inc., thecarrying amount is presented as the fair value, as such carrying amount approximates the fair value since they are within ashort-term period and reflect the market interest rate and there has been no significant change in the creditworthiness of
DBJ Inc. since such debentures were issued. (Certain foreign currency denominated debentures with foreign currency
forward contracts which qualify for the hedging requirements of the assignment method are translated using forward
contract rates and the fair value is determined as Japanese yen denominated debentures.) Such fair value is classified into
Level 2.

Corporate Data

Other assets
The fair value of other assets is determined using valuation techniques such as discounted future cash flows reflecting theestimated collectible amount. Input includes swap rates and liquidity premium. The fair value is classified into Level 3.

Corporate Governance

Loans
The fair value of loans is determined by discounting the total amount of the principal and interest by type of loans andcategory based on internal rating and lengths using the discount rate reflecting credit risk in the market interest rate. For
floating rate loans, which are within a short-term period and reflect the market interest rate, the carrying amount ispresented as the fair value, as such carrying amount approximates the fair value if there has been no significant change inthe creditworthiness of the borrowers since such loans were executed. The fair value of claims, whose cash flows on
recovery of the principal and receipt of the interest can be reasonably estimated out of claims on debtors which needspecial attention regarding all or part of claims, is determined by discounting the relevant cash flows reflecting credit risk,
etc. at the market interest rate. For claims on debtors who are legally bankrupt, effectively bankrupt, and likely to becomebankrupt, the fair value is determined based on the discounted present value of expected future cash flows or net ofamounts expected to be recovered through disposal of collateral or execution of guarantees. The fair value is classified
into Level 3.

Strategy

Money held in trust
The fair value of financial assets which are components of money held in trust is measured principally in the same manner
as “Loans” and classified principally into Level 3.
Notes on money held in trust by holding purpose are described in Note 30.

Bank of Japan Inc.
140 Development
Integrated Report 2022

Borrowed money
The present value is determined by discounting the total amount of the principal and interest of the borrowed moneyclassified by certain definite period (or the total amount of the principal and interest by the related interest rate swap rate,
for the borrowed money to which the accrual method on interest swaps is applied) at the interest rate considering theremaining maturity period of the borrowed money and credit risk. For floating rate borrowed money, the carrying amount ispresented as the fair value, as such carrying amount approximates the fair value since they are within a short-term period
and reflect the market interest rate and there has been no significant change in the creditworthiness of DBJ Inc. and its
consolidated subsidiaries since borrowed money was executed. (Certain foreign currency denominated borrowed moneywith foreign currency swaps which qualify for the hedging requirements of the assignment method are translated using
forward contract rates. As a result of this translation, the fair value is the same as Japanese yen denominated borrowed
money.) Such fair value is classified into Level 3, if the impact of unobservable input on the fair value is material. Otherwise,
it is classified into Level 2.
Corporate bonds
The fair value of marketable corporate bonds issued by DBJ Inc. and its consolidated subsidiaries are determined basedon the market prices and classified into Level 2. For corporate bonds without market prices, the present value isdetermined by discounting the total amount of the principal and interest of the corporate bonds (or the total amount of theprincipal and interest by the related interest rate swap rate, for the corporate bonds to which the accrual method oninterest swaps is applied) at the interest rate considering the remaining maturity period of the corporate bonds and credit
risk. For floating rate corporate bonds, the carrying amount is presented as the fair value, as such carrying amountapproximates the fair value since they are within a short-term period and reflect the market interest rate and there has
been no significant change in the creditworthiness of DBJ Inc. and its consolidated subsidiaries since the corporate bonds
were issued. (Certain foreign currency denominated corporate bonds with foreign currency swaps which qualify for thehedging requirements of the assignment method are translated using forward contract rates and the fair value isdetermined as Japanese yen denominated corporate bonds.) Such fair value is classified into Level 3, if the impact ofunobservable input on the fair value is material. Otherwise, it is classified into Level 2.
(Note 2) Information about fair value of financial assets and financial liabilities stated at fair value which is classified into Level 3(1) Quantitative information about significant unobservable inputs
As of March 31, 2022
Category

Valuation techniqueSignificant
unobservable inputs

Range of inputs

Weighted-averageof inputs

Securities Available-for-sale securities  Corporate bonds

Discounted present value method

Discount rate

0.2%–0.4%

0.2%  Equity securities

Discounted present value method

Liquidity premium

3.9%–4.2%

4.1%

Development Bank of Japan Inc.
Integrated Report 2022

141(2) A reconciliation of the beginning balance and the ending balance and unrealized gain (loss) recognized in net
income or loss
Millions of Yen

Included inother comprehensive
income*2

Changes due
to purchases,
issues, sales
and settlements

Transfers into
fair value ofLevel 3—

¥1,235¥(2,500)¥—

March 31, 2021

Included in
net income*1  Corporate bonds¥ 29,615¥  Equity securities

322,976

—

(783)

—

  Other

24,123

2,780

(677)

531

Transfers out offair value ofLevel 3

Change in unrealized
gains (losses) included
in net income for financial assets and liabilities still held at March
March 31, 2022
31, 2022*1

Value Creation Story

March 31, 2022

Securities Available-for-salesecurities:¥—¥ 28,351

¥

—

—

—

322,193——(4,625)

22,1332,081

March 31, 2022

March 31, 2021

Included inother comprehensive
income*2

Changes due
to purchases,
issues, sales
and settlements

Transfers into
fair value ofLevel 3—

$10,097$(20,427)$—

Included in
net income*1

Transfers out offair value ofLevel 3

Change in unrealized
gains (losses) included
in net income forfinancial assets andliabilities still held at
March 31, 2022
March 31, 2022*1

Strategy

Thousands of U.S. Dollars

Securities Available-for-salesecurities:$  241,980  Equity securities

2,638,915—(6,401)———

2,632,514—

197,10722,715(5,534)

4,344—(37,792)

180,840

17,005  Other$$— $  231,651$—*1. Included in “Other income” in the consolidated statement of income.
*2. Included in “Net unrealized gain on available-for-sale securities” and “Foreign currency translation adjustments” under “Other comprehensive income” in the consolidated statementof comprehensive income.

Corporate Data

(3) Explanation about the valuation process of fair value
The middle office and back office of DBJ Inc. have established the DBJ Inc. policy and procedures for fair value
measurement, by which the fair value is determined. With respect to the fair value determined, DBJ Inc. verifies thereasonableness of valuation techniques used in determining the fair value and inputs and appropriateness ofclassification of the level of the fair value.
In determining the fair value, DBJ Inc. uses the valuation models which can reflect most appropriately thenature, characteristics and risk associated with individual assets. In addition, when quoted prices obtained fromthird parties are used as fair value, their validity is verified taking appropriate methods such as confirming thevaluation techniques and inputs used and the reasonableness of the prices is verified by an appropriate way ofanalysis of chronological transition, etc.

Corporate Governance  Corporate bonds(4) Explanation about effects on fair value of changing a significant unobservable input
Discount rate
Discount rate is a rate of adjustment to the market interest rates such as overnight index swap rate, etc. andconsists of risk premium, etc. which are remuneration that market participants require on uncertainties of cash
flows of financial instruments arising principally from credit risk. A significant increase (decrease) in discount ratewould cause a significant decrease (increase) fair value.
Data Section

Bank of Japan Inc.
142 Development
Integrated Report 2022

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Liquidity premium
Liquidity premium is an adjustment to discount rates to reflect liquidity of the financial instruments. A significant increase(decrease) in liquidity premium would cause a significant decrease (increase) in fair value.
(Note 3) The carrying amounts of non-marketable equity securities and investment in partnerships and others are as follows andthey are not included in “Available-for-sale securities” under information about fair value of financial instruments.
Thousands of
U.S. Dollars

Millions of Yen

2022

2021

Non-marketable equity securities*1, *3¥  626,494¥  623,342$5,118,837

Investment in partnerships and others*2

429,055

379,875

3,505,638¥1,055,549¥1,003,218$8,624,474

Total

2022

*1.	Non-marketable equity securities include unlisted equity securities. Their fair value is not disclosed in accordance with Paragraph 5 of the “Implementation Guidance on Disclosures about Fair
Value of Financial Instruments” (ASBJ Guidance No.19 issued on March 31, 2020). Classified shares which are considered to have the similar characteristics with debentures are subject tofair value disclosure and not included in the above table.
*2.	Investment in partnerships and others mainly include silent partnerships and investment partnerships. Their fair values are not disclosed in accordance with Paragraph 27 of the“Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No.31 issued on July 4, 2019).
*3.	With respect to non-marketable equity securities, an impairment loss of ¥41,725 million ($340,920 thousand) and ¥9,316 million was recorded in the fiscal years ended March 31, 2022 and
2021, respectively.

(Note 4) Maturity analysis for financial assets and securities with contractual maturities as of March 31, 2022 and 2021 are
as follows:
Millions of Yen

2022

Due from banks
Call loans and bills bought

Due in1 year or lessDue after
1 year through3 years

Due after
3 years through5 years

Due after
5 years through7 years

Due after
7 years through10 years¥2,191,521

¥

¥

¥

¥

—

—

—

—

Due after
10 years¥—

705,000

—

—

—

—

—

 Held-to-maturity debt securities
with market values

327,545

51,903

134,957

39,021

48,9553,340   Japanese government bonds

4,999

10,034

10,047

10,00845,243

—

—

—

—

—

—

—

Securities   Japanese local government bonds   Short-term corporate bonds

—

—

—

—

—

—

  Corporate bonds

53,492

28,19889,90019,012

3,712

3,340

  Other

269,053

13,67035,01010,000—— Available-for-sale securities with
contractual maturities

72,262

173,222140,004

43,530101,773

306,031   Japanese government bonds—

18,2295,069—

24,771

167,370   Japanese local government bonds

—

—

—

—

—

—

   Short-term corporate bonds  Corporate bonds  Other

—

—

—

—

—

—

72,262

154,992

134,935

43,53077,002

138,661

—

—

—

—

—

—

Loans*

2,264,545

3,575,204

3,352,673

2,185,577

2,013,538

875,426

Total¥5,560,874¥3,800,330¥3,627,636¥2,268,129¥2,164,267¥1,184,797

Development Bank of Japan Inc.
Integrated Report 2022

143

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Millions of Yen

2021

Call loans and bills bought

Due after
3 years through5 years

Due after
5 years through7 years

Due after
7 years through10 years¥2,187,816

¥

¥

¥

¥

—

—

—

—

Due after
10 years¥—

684,000

—

—

—

—

—

with market values

70,957

116,450

91,33664,857

46,373—   Japanese government bonds

10,035

10,015

10,04810,04540,279

—

—

—

—

—

—

—

Securities Held-to-maturity debt securities   Japanese local government bonds   Short-term corporate bonds

—

—

—

—

—

44,93175,64663,30823,357

6,094—  Other

15,99030,78817,98031,455——

contractual maturities

58,970123,653

160,332

70,95958,310175,570   Japanese government bonds

25,136

5,109

18,378

—

—

—

—

—

—

—

—

—

 Available-for-sale securities with   Japanese local government bonds   Short-term corporate bonds  Corporate bonds  Other

—

—

—

—

—

—

33,834

118,543

141,954

70,95958,310175,570

—

—

—

—

—

2,503,573

3,415,686

3,172,485

2,482,452

2,172,577

928,861

Total¥5,505,318¥3,655,790¥3,424,155¥2,618,269¥2,277,261¥1,104,432

Due after
10 yearsThousands of U.S. Dollars

2022

Due from banks
Call loans and bills bought

Due in1 year or lessDue after
1 year through3 years

Due after
3 years through5 years

Due after
5 years through7 years

Due after
7 years through10 years$17,906,048

$

$

$

$

—

—

—

5,760,275——— Held-to-maturity debt securities
with market values

2,676,248

424,085

1,102,685   Japanese government bonds

40,84981,99082,091

—

—

—

—

$

Corporate Governance—

Loans*

Strategy—  Corporate bonds

Value Creation Story

Due from banks

Due in1 year or lessDue after
1 year through3 years———

318,830

399,999

27,29081,779369,669

—

—

—

—

Securities   Short-term corporate bonds

—

—

—

—

—

—

  Corporate bonds

437,069

230,402734,541

155,345

30,32927,290  Other

2,198,330

111,692

286,053

81,706—— Available-for-sale securities with
contractual maturities

590,425

1,415,329

1,143,925

355,666

831,553

2,500,462   Japanese government bonds—

148,945

41,417—202,398

1,367,518   Japanese local government bonds

—

—

—

—

—

—

   Short-term corporate bonds  Corporate bonds

—

—

—

—

—

1,266,383

1,102,508

355,666

629,155

1,132,945

—

—

—

—

—

—

Loans*

18,502,697

29,211,577

27,393,362

17,857,486

16,451,819

7,152,761

Total$45,435,693$31,050,991$29,639,972$18,531,983$17,683,370$9,680,513* Obligations to “Legally Bankrupt,” “Effectively Bankrupt” and “Possibly Bankrupt” amounting to ¥79,222 million ($647,294 thousand) and ¥81,494 million are not included as of March
31, 2022 and 2021, respectively.

Data Section  Other—
590,425

Corporate Data   Japanese local government bonds

Bank of Japan Inc.
144 Development
Integrated Report 2022

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Note 5) Maturity analysis for debentures, borrowed money and other interest-bearing liability as of March 31, 2022 and 2021
are as follows:
Millions of Yen

2022

Borrowed money
Debentures and Corporate bonds
Total

Due in1 year or lessDue after
1 year through3 years

Due after
3 years through5 years

Due after
5 years through7 years

Due after
7 years through10 years

Due after
10 years¥1,151,924¥1,917,628¥2,168,613¥1,362,364¥1,595,459¥2,377,691

853,549

1,856,305

1,462,213

812,096

1,019,238

388,958¥2,005,473¥3,773,933¥3,630,826¥2,174,460¥2,614,697¥2,766,650

Millions of Yen

2021

Borrowed money
Debentures and Corporate bonds
Total

Due in1 year or lessDue after
1 year through3 years

Due after
3 years through5 years

Due after
5 years through7 years

Due after
7 years through10 years

Due after
10 years¥1,467,933¥1,983,598¥2,040,843¥1,400,061¥1,554,376¥2,217,724

839,991

1,695,351

1,379,093

919,213

1,024,238

365,586¥2,307,924¥3,678,950¥3,419,937¥2,319,274¥2,578,614¥2,583,310

Thousands of U.S. Dollars

2022

Borrowed money
Debentures and Corporate bonds
Total

Due in1 year or lessDue after
1 year through3 years

Due after
3 years through5 years

Due after
5 years through7 years

Due after
7 years through10 years

Due after
10 years$ 9,411,914$15,668,179$17,718,876$11,131,336$13,035,865$19,427,175

6,974,013

15,167,130

11,947,165

6,635,315

8,327,792

3,178,024$16,385,927$30,835,309$29,666,041$17,766,651$21,363,657$22,605,199

29. DERIVATIVE TRANSACTIONS(a) Derivative Transactions to which Hedge Accounting is Not Applied(1) Interest rate-related transactions
Millions of Yen

2022
Contract amountTotal

Due after 1 year

Fair value

Unrealized gains(losses)Over-the-counter
Swaps   Receive fixed/ Pay float¥909,198¥839,934   Receive float/ Pay fixed

907,018

724,614(7,277)(7,277)——¥23,928¥23,928

Total¥31,205¥31,205

Millions of Yen

2021
Contract amountTotal

Due after 1 year

Fair value

Unrealized gains(losses)Over-the-counter
Swaps   Receive fixed/ Pay float¥923,879¥822,442¥ 50,915¥ 50,915   Receive float/ Pay fixed

922,028

821,128(23,262)(23,262)——¥ 27,653¥ 27,653

Total

Development Bank of Japan Inc.
Integrated Report 2022

145

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Thousands of U.S. Dollars

2022
Contract amountDue after 1 year

Fair value

Unrealized gains(losses)Over-the-counter
Swaps   Receive fixed/ Pay float$7,428,697$6,862,767   Receive float/ Pay fixed

7,410,888

5,920,539(59,463)(59,463)——$195,507$195,507

Total$254,970$254,970

Value Creation Story

Total* The above transactions are marked to market and changes in unrealized gains (losses) are included in the consolidated statement of income.

(2) Currency-related transactions
Millions of Yen

2022
Contract amountDue after 1 year

Fair value

Unrealized gains(losses)Over-the-counter
Swaps¥  5,226¥5,226¥    52¥    52  Sold48,404—(2,313)(2,313)  Bought

279,796—

13,457

13,457——¥11,196¥11,196

Strategy

Total

Forwards

Total

Millions of Yen

Total

Due after 1 year

Fair value

Unrealized gains(losses)Over-the-counter
Swaps¥  5,226¥5,226¥    61¥    61  Sold132,607—(4,275)(4,275)  Bought

522,151—

27,98827,988——¥23,774¥23,774

Forwards

Total

Corporate Governance

2021
Contract amountThousands of U.S. Dollars

2022
Contract amountDue after 1 year

Fair value

Unrealized gains(losses)Over-the-counter
Swaps$   42,706$42,706$     431$    431  Sold395,490—(18,906)(18,906)  Bought

2,286,107—

109,956

109,956——$ 91,481$ 91,481

Corporate Data

Total

Forwards

Total* The above transactions are marked to market and changes in unrealized gains (losses) are included in the consolidated statement of income.

(4) Bond-related transactions
Not applicable.

Data Section(3) Equity-related transactions
Not applicable.

Bank of Japan Inc.
146 Development
Integrated Report 2022

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(5) Commodity-related transactions
Not applicable.
(6) Credit derivative transactions
Not applicable.
(b) Derivative Transactions to which Hedge Accounting is Applied(1) Interest rate-related transactions
Millions of Yen

2022
Contract amount
Hedged item

Deferral method
Swaps
		

Receive float/ Pay fixed

Accrual method
Swaps
		

Receive fixed/ Pay float

		

Receive float/ Pay fixed

Borrowed money,
Loans and Securities

Debentures, Borrowed money,
Corporate bonds and Loans

Total

Due after 1 year

Fair value¥   79,508¥   73,009¥927

3,064,549

2,704,331

*2

6,130

—

—

—

Total

¥927

Millions of Yen

2021
Contract amount
Hedged item

Deferral method
Swaps
		

Receive float/ Pay fixed

Accrual method
Swaps
		

Receive fixed/ Pay float

		

Receive float/ Pay fixed

Borrowed money,
Loans and Securities

Debentures, Borrowed money,
Corporate bonds and Loans

Total

Due after 1 year

Fair value¥   82,376¥   74,573¥(2,798)

2,546,678

2,518,472

*2

9,111

6,130

—

—

Total

¥(2,798)

Thousands of U.S. Dollars

2022
Contract amount
Hedged item

Deferral method
Swaps
		

Receive float/ Pay fixed

Accrual method
Swaps
		

Receive fixed/ Pay float

		

Receive float/ Pay fixed

Total

Borrowed money,
Loans and Securities

Debentures, Borrowed money,
Corporate bonds and Loans

Total

Due after 1 year

Fair value$   649,635$   596,532$7,58025,039,217

22,096,014*2

50,090———$7,580*1. The deferral method or the accrual method is applied as a hedge accounting method.
*2..	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” is included in that of hedged items such as debentures, borrowed money, corporate bonds, securities and loans.

Development Bank of Japan Inc.
Integrated Report 2022

147

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(2) Currency-related transactions
Millions of Yen

2022
Hedged item

Deferral method

Total

Due after 1 year

Fair value

Foreign currency
denominated loans¥  5,503¥  5,503¥   (636)  

Swaps

Foreign-currency debentures, and Corporate bonds

156,660

145,704*2

Forwards

Foreign-currency
available-for-sale securities

32,804—(2,578)——¥(3,214)

Swaps
Translated at contractual rates

Total

Value Creation Story

Contract amountMillions of Yen

2021
Contract amountTotal

Due after 1 year

Strategy

Hedged item

Deferral method

Fair value

Foreign currency
denominated loans¥  5,503¥  5,503¥   (54)

Swaps

Foreign-currency debentures, Borrowed money, andCorporate bonds

267,332

156,660*2

Forwards

Foreign-currency
available-for-sale securities

30,075—(1,659)——¥(1,713)

Swaps
Translated at contractual rates

Total

Corporate GovernanceThousands of U.S. Dollars

2022
Contract amount
Hedged item

Deferral method

Total

Due after 1 year

Fair value

Foreign currency
denominated loans$   44,967$   44,967$ (5,199)

Swaps

Foreign-currency debentures, and Corporate bonds

1,280,012

1,190,495*2

Forwards

Foreign-currency
available-for-sale securities

268,029—(21,067)——$(26,266)

Swaps
Translated at contractual rates

Total

Corporate Data

*1.	These derivatives are primarily accounted for by the deferral method of hedge accounting provided in the Industry Committee Practical Guidance No. 25.
*2.	The above currency swaps which qualify for the hedging requirements of assignment method are not subject to the disclosure of fair value information. In addition, the fairvalue of such foreign currency swaps in Note 28 “Financial Instruments and Related Disclosures” is included in that of hedged items such as foreign-currency debenturesand corporate bonds.

(3) Equity-related transactions
Not applicable.
(4) Bond-related transactions
Not applicable.

Data Section

Bank of Japan Inc.
148 Development
Integrated Report 2022

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

30. FAIR VALUE OF SECURITIES AND MONEY HELD IN TRUSTFair value of securities, money held in trust and negotiable certificate of deposit classified as “Cash and due from banks” as ofMarch 31, 2022 and 2021 is summarized below.
(a) Securities(1) Held-to-maturity debt securities as of March 31, 2022 and 2021 are as follows:
Millions of Yen

2022
Carrying amount

Fair value exceeds
carrying amountSub-total
Fair value does notexceed carrying amountJapanese government bonds
Japanese local government bonds
Short-term corporate bonds
Corporate bonds
Other
Japanese government bonds
Japanese local government bonds
Short-term corporate bonds
Corporate bonds
Other

Sub-total
Total

Fair value¥ 40,106——
190,468
82,979313,555
40,227——
7,188
244,753
292,169¥605,724¥ 43,338——
194,575
85,958323,872
39,814——
7,120
244,753
291,688¥615,560

Difference¥ 3,232
—
—
4,106
2,978
10,317
(413)
—
—
(67)
—
(481)
¥ 9,835

Millions of Yen

2021
Carrying amount

Fair value exceeds
carrying amountSub-total
Fair value does notexceed carrying amountJapanese government bonds
Japanese local government bonds
Short-term corporate bonds
Corporate bonds
Other
Japanese government bonds
Japanese local government bonds
Short-term corporate bonds
Corporate bonds
Other

Sub-total
Total

Fair value¥ 50,170——
165,691
50,672
266,534
30,253——47,64745,541
123,442¥389,976¥ 54,510——
167,91351,355
273,779
30,141——
47,15645,331
122,628¥396,408

Difference¥4,340
—
—
2,222
682
7,245
(112)
—
—
(491)
(209)
(813)
¥6,431Thousands of U.S. Dollars

2022
Carrying amount

Fair value exceeds
carrying amountSub-total
Fair value does notexceed carrying amountJapanese government bonds
Japanese local government bonds
Short-term corporate bonds
Corporate bonds
Other
Japanese government bonds
Japanese local government bonds
Short-term corporate bonds
Corporate bonds
Other

Sub-total
Total
Note: Fair value is based on the closing price at the consolidated balance sheet date.

$  327,693——
1,556,246
677,996
2,561,935
328,685——
58,731
1,999,785
2,387,201$4,949,136

Fair value$  354,102——
1,589,798
702,334
2,646,233
325,304——
58,1781,999,785
2,383,268$5,029,501

Difference$26,409——33,551
24,33884,298(3,381)——(553)—(3,933)$80,365

Development Bank of Japan Inc.
Integrated Report 2022



149

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(2) Available-for-sale securities as of March 31, 2022 and 2021 are as follows:
Millions of Yen

2022

Carrying amountexceeds cost

Difference¥  374,597¥  323,429¥51,167

Bonds

256,161

251,761

4,399

28,47328,136

337

—

—

—

Japanese government bonds
Japanese local government bonds
Short-term corporate bonds
Corporate bonds
Other
Sub-total
Carrying amount does
not exceed cost

Acquisition cost

Equities———

227,688

223,625

4,062

24,56018,2896,271

655,319

593,481

61,838

5,561

6,815

(1,254)

Bonds

580,662

586,711(6,048)

186,967

190,540(3,573)———

Japanese government bonds
Japanese local government bonds
Short-term corporate bonds
Corporate bonds
Other
Sub-total
Total

—

—

—

393,695

396,171(2,475)43,68843,757(69)

629,912637,285(7,372)¥1,285,232¥1,230,766¥54,465

Strategy

Equities

Value Creation Story

Carrying amount(Fair value)

Millions of Yen

Carrying amountexceeds cost¥  373,851¥  323,756¥50,095

Bonds

360,175

356,126

4,048

48,62348,041

581

—

—

—

Japanese local government bonds
Short-term corporate bonds
Corporate bonds
Other
Sub-total——

308,085

3,466

11,639

9,359

2,280

689,242

56,423

4,067

5,069

(1,002)

Bonds

287,622289,383(1,761)

Japanese government bonds

—

—

—

Japanese local government bonds

—

—

—

Short-term corporate bonds

—

—

—

287,622289,383(1,761)42,41342,526(112)

334,103

336,979(2,876)¥1,079,769¥1,026,222¥53,547

Corporate Data

745,666

Corporate bonds

Total

—
311,551

Equities

Other
Sub-total

Difference

Equities
Japanese government bonds

Carrying amount does
not exceed cost

Acquisition cost

Corporate Governance2021
Carrying amount(Fair value)

Data Section

Bank of Japan Inc.
150 Development
Integrated Report 2022

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Thousands of U.S. Dollars

2022

Carrying amountexceeds cost

Carrying amount(Fair value)

Acquisition cost

Difference

Equities$ 3,060,687$ 2,642,616$418,070

Bonds

2,092,994

2,057,047

35,947

232,645

229,8882,756Japanese local government bonds

—

—

—

Short-term corporate bonds

—

—

—

1,860,349

1,827,158

33,191200,676

149,437

51,239Japanese government bonds

Corporate bonds
Other
Sub-total
Carrying amount does
not exceed cost

5,354,357

4,849,100

505,256

Equities

45,43955,690(10,251)

Bonds

4,744,366

4,793,788(49,421)

1,527,633

1,556,830(29,197)———

Japanese government bonds
Japanese local government bonds
Short-term corporate bonds
Corporate bonds
Other
Sub-total
Total

—

—

—

3,216,733

3,236,957(20,224)

356,961

357,527(566)

5,146,766

5,207,004(60,238)$10,501,122$10,056,105$445,018(3) Available-for-sale securities sold during the years ended March 31, 2022 and 2021 are as follows:
Millions of Yen

2022
Proceeds from sales

Total amount ofgains on sales

Total amount oflosses on sales

Equities¥ 9,632¥6,004

¥ —

Bonds

—

—

—

Japanese government bonds

—

—

—

Japanese local government bonds

—

—

—

Short-term corporate bonds

—

—

—

Corporate bonds

—

—

—

Other

18,409

1,065

153

Total

¥28,041¥7,070¥153

Millions of Yen

2021
Proceeds from sales

Equities¥44,011

Bonds

Total amount ofgains on sales¥20,199

Total amount oflosses on sales

¥ 0

1,998

—

1

Japanese government bonds

—

—

—

Japanese local government bonds

—

—

—

Short-term corporate bonds

—

—

—

1,998

—

1

Corporate bonds
Other

10,638

3,200

85

Total

¥56,648¥23,399¥88

Development Bank of Japan Inc.
Integrated Report 2022

151

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Thousands of U.S. Dollars

2022
Proceeds from sales

Equities$ 78,703$49,061

$

Bonds

—

—

—

Japanese government bonds

—

—

—

Japanese local government bonds

—

—

—

Short-term corporate bonds

—

—

—

Corporate bonds

—

—

—

Value Creation Story

Total amount oflosses on sales

Total amount ofgains on sales

—

Other

150,416

8,707

1,255

Total

$229,119$57,768$1,255Strategy(b) Money Held in Trust(1) Money held in trust for the purpose of investment and held to maturity
Not applicable.
(2) Other (other than for the purpose of investment and held to maturity)
Millions of Yen

2022
Unrealized gains (losses)
Carrying
amountOther money held in trust

Acquisition
cost¥15,021

Carrying amountexceeds costNet

¥13,039¥1,981(Carrying amount does
not exceed cost)¥1,981¥—
Corporate GovernanceMillions of Yen

2021
Unrealized gains (losses)
Carrying
amountOther money held in trust

Acquisition
cost¥17,856

Carrying amountexceeds costNet

¥17,154¥701(Carrying amount does
not exceed cost)

¥704

¥3

Thousands of U.S. Dollars

2022
Unrealized gains (losses)

Other money held in trust

Carrying
amountAcquisition
cost

Net

Carrying amountexceeds cost$122,732$106,539$16,193(Carrying amount does
not exceed cost)$16,193$—
Corporate Data(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

2022

2021

2022

¥ 54,865¥ 54,674$ 448,285

Unrealized gain on
Available-for-sale securities
Other money held in trust

411

9,842

(17,405)(17,260)(142,211)

Unrealized gain on available-for-sale securities before interest
adjustments

38,66537,825315,916

—

—

—

3,633

2,907

29,684¥ 42,298¥ 40,733$ 345,601

Amount corresponding to non-controlling interests
DBJ Inc.’s interest in net unrealized gain on available-for-sale securities
held by affiliates accounted for by the equity method
Unrealized gain on available-for-sale securities, net of taxes

Data Section

1,204

Deferred tax liabilities

Bank of Japan Inc.
152 Development
Integrated Report 2022

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS*1. The gain of ¥21,361 million ($174,539 thousand) and ¥4,737 million recognized by applying the fair value hedge accounting, which were reflected in profit or loss, are deducted from theabove unrealized gain, net of taxes, as of March 31, 2022 and 2021, respectively.
*2. Unrealized gain includes foreign currency translation adjustments on available-for-sale securities and other money held in trust denominated in foreign currency which do not have a market
price as of March 31, 2022 and 2021.

31. RELATED PARTY TRANSACTIONS
Related party transactions for the years ended March 31, 2022 and 2021 are as follows:
2022
Transaction Amount
Related party

Finance
MinisterCategory

Description

Shareholder Receipt ofcontribution*1

Account item—

Balance at March 31, 2022

Millions of Yen

Thousands of
U.S. Dollars¥   80,000$   653,648

780,000

6,373,070

396,7033,241,305

Millions of Yen

Thousands of
U.S. Dollars——¥5,862,551$47,900,574

Repayments

Borrowed
money

Payment forinterest

Accruedexpenses

15,371

125,597

3,831

31,308

Guarantees*3—

3,274,284

26,752,880——

Borrowings*2*1. Receipt of contribution is related to the special investment operations.
*2.	DBJ Inc. has borrowed from the fiscal investment and loan program funds, and applied interest rates for fiscal investment and loan. The last redemption period is November 20, 2041
without posting 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 ¥3,000,119 million ($24,512,781 thousand) from Japan Finance Corporation relating to thecrisis response operations.

2021
Related party

Finance
MinisterCategory

Description

Shareholder Receipt ofcontribution*1

Account item—

Transaction Amount

Balance at March 31, 2021

Millions of Yen

Millions of Yen¥  220,000—

Repayments

Borrowed
money

Payment forinterest

Accruedexpenses

18,934

4,755

Guarantees*3—

3,416,988—

Borrowings*2

1,050,000
386,940¥5,479,254*1. Receipt of contribution is related to the special investment operations.
*2.	DBJ Inc. has borrowed from the fiscal investment and loan program funds, and applied interest rates for fiscal investment and loan. The last redemption period is December 20, 2040
without posting 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 ¥3,335,948 million from Japan Finance Corporation relating to the crisis response operations.

32. SUBSEQUENT EVENT
1. Nichi-Iko Pharmaceutical Co., Ltd., a customer of DBJ, Inc. requested financial support based on the special dispute resolution
procedures by Japanese Association of Turnaround Professionals on May 13, 2022. Total amount of claims associated withthe business partner as of March 31, 2022 amounted to ¥30,375 million ($248,182 thousand), of which amount unsecured bycollateral, etc. was ¥30,375 million ($248,182 thousand). Depending on the future progress of such procedures, additional
allowance for loan losses on the amount of claims expected to be newly uncollectible may be required to be recorded, or suchamount may be directly deducted from the claims in the following fiscal year.
2. At the Board of Directors’ meeting held on May 16, 2022, DBJ Inc. resolved to submit the proposal for reduction of the amountof special investment reserve for deliberation at the general shareholders’ meeting held on June 29, 2022.
a.	Purpose of reduction of the amount of special investment reserve		Considering the status of implementation and financial position of special investment operations, such amount of reserve
is deemed unnecessary for implementing special investment operations properly, and accordingly, a portion of the amountof special investment reserve shall be reduced.

Development Bank of Japan Inc.
Integrated Report 2022

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Millions of Yen¥15,620

Strategy

3. Appropriation of retained earnings
On June 29, 2022, the shareholders approved the following appropriations of retained earnings. On the same day, the Finance
Minister authorized becoming effective of the timing and amounts for dividends as of June 30, 2022:
Appropriations of retained earnings as of March 31, 2022

Value Creation Storyb. Method of reducing the amount of special investment reserve		In accordance with the provision of Paragraph 2 of Article 2-27 of the supplementary provision of the Act, a portion of theamount of special investment reserve will be reduced, and at the same time, an amount equivalent to the amount to be
attributable to the National Treasury will be paid to the National Treasury and the remaining amount will be added to capitalsurplus.
c. Amount of special investment reserve to be reduced		The amount of special investment reserve of ¥1,543,000 million ($12,607,239 thousand) will be reduced by ¥68,910
million ($563,042 thousand), of which ¥34,455 million ($281,521 thousand) will be paid to the National Treasury, and¥34,455 million ($281,521 thousand) will be added to capital surplus.
d.	Time schedule of reduction of special investment reserve		Date of resolution by the Board of Directors: May 16, 2022
		Date of resolution by the shareholders’ meeting: June 29, 2022
		Date of application for approval of the Minister of Finance: June 29, 2022
		Final due date of making objections by creditors: July 31, 2022 (planned)		Effective date: August 31, 2022 (planned)

Year-end cash dividends-Common stock (¥358–$2.93 per share)

153

Thousands of
U.S. Dollars$127,628

Corporate GovernanceCorporate Data
Data Section

Bank of Japan Inc.
154 Development
Integrated Report 2022

NON-CONSOLIDATED BALANCE SHEETS (UNAUDITED)Development Bank of Japan Inc.

Thousands of
U.S. Dollars (Note)

Millions of Yen

As of March 31,

2022

2021

2022

¥ 2,115,882¥ 2,124,938$ 17,288,033

705,000

684,000

5,760,275

AssetsCash and due from banks
Call loans
Money held in trust

13,201

16,824

107,862

Securities

3,086,107

2,612,535

25,215,353

Loans

14,490,758

14,837,718

118,398,223

Other assets

168,673

164,520

1,378,163

Tangible fixed assets

109,724

110,369

896,519

Intangible fixed assets

10,938

10,77689,375Prepaid pension costs

2,736

1,078

22,355

Deferred tax assets

12,335—

100,786

Customers’ liabilities for acceptances and guarantees

557,127446,616

4,552,064

Allowance for loan losses(83,960)(57,935)(686,011)

(33)

(33)

(270)

¥21,188,490¥20,951,409$173,122,726

Debentures¥ 3,339,098¥ 3,483,570$ 27,282,443

Allowance for investment losses
Total assets
Liabilities and equity
Liabilities:
Borrowed money

10,370,044

10,479,945

84,729,507

Corporate bonds

3,048,137

2,734,779

24,905,121

Other liabilities

103,791

150,445848,040

4,848

4,734

39,616

Accrued bonuses to employees
Accrued bonuses to directors

23

15

188

Reserve for employees’ retirement benefits

6,408

6,447

52,359Reserve for directors’ retirement benefits

130

117

1,062

0

—

2

Reserve for contingent losses
Deferred tax liabilities
Acceptances and guarantees
Total liabilities

—

3,654

—

557,127446,616

4,552,064

17,429,609

17,310,326

142,410,404

Equity:Common stock authorized, 160,000 thousand shares in 2022 and2021; issued, 43,632 thousand shares in 2022 and 2021

1,000,424

1,000,424

8,174,067

Crisis response reserve

206,529

206,529

1,687,466

Special investment reserve

1,543,000

1,368,000

12,607,239

Special investment surplus

22,43828,172

183,337

Capital surplus

241,466

336,466

1,972,926

Retained earnings

705,538

651,840

5,764,672

Unrealized gain on available-for-sale securities

37,93637,519309,967

Deferred gain on derivatives under hedge accounting
Total equity
Total liabilities and equity

1,547

12,131

12,6483,758,881

3,641,083

30,712,322¥21,188,490¥20,951,409$173,122,726

Note: Amounts in U.S. dollars are presented solely for the convenience of readers outside Japan. The rate of ¥122.39 = $1.00, the effective exchange rate prevailing as of March 31, 2022,
has been used in the conversion.

Development Bank of Japan Inc.
Integrated Report 2022

155

NON-CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)Development Bank of Japan Inc.

Thousands of
U.S. Dollars (Note)

Millions of Yen

2022

2021

2022

IncomeInterest income:¥174,261¥160,461$1,423,824Interest on loans

128,163

132,477

1,047,173

Interest and dividends on securities

41,401

22,324

338,273

Interest on call loans

71

120

585

Interest on due from banks

57

38

470

4,560

5,508

37,263

Other interest income

Interest on swaps

7

(7)

60

Fees and commissions

10,36815,02684,719Other operating income

15,035

14,095

122,853

Total income

80,571

49,845

658,320

280,238

239,4292,289,717

44,47053,720363,347

19,401

21,743

158,523

Strategy

Other income

Value Creation Story

For the years ended March 31,

Expenses
Interest expense:
Interest on debentures

(188)

(84)

(1,541)

(100)

(69)

(821)

21,961

27,606

179,435

8

62

69

3,404

4,490

27,816

(16)

(28)

(136)

Interest on borrowed money
Interest on short-term corporate bonds
Interest on corporate bonds
Other interest expense
Fees and commissions

691

442

5,651

Other operating expenses

13,933

8,901

113,843

General and administrative expenses

54,154

52,982442,475

Other expenses

84,93252,754

693,950

Total expenses

198,181

168,800

1,619,266

Income before income taxes

82,05670,628670,451

Current

36,33029,010296,838

Deferred(11,106)(6,616)(90,745)

Corporate GovernanceInterest on call money
Interest on payables under repurchase agreements

Income taxes:

Net income

25,22322,393206,093¥ 56,832¥ 48,234$  464,357

Corporate Data

Total income taxes

Note: Amounts in U.S. dollars are presented solely for the convenience of readers outside Japan. The rate of¥122.39 = $1.00, the effective exchange rate prevailing as of March 31, 2022,
has been used in the conversion.

Data Section

Bank of Japan Inc.
156 Development
Integrated Report 2022

NON-CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)Development Bank of Japan Inc.

Millions of Yen

For the year ended March 31, 2022

Common stock

Crisis response
reserve

Special investment Special investment
reserve
surplus

Balance at beginning of year

¥1,000,424¥206,529¥1,368,000¥28,172¥336,466¥1,000,424¥206,529¥1,368,000¥28,172¥336,466

Capital surplus

Cumulative effects due to changes in accounting policies
Restated balance
Investment from government

80,000Transfer from capital surplus to special investment reserve

95,000Transfer from special investment surplus to retained earnings(95,000)(5,734)

Cash dividends
Net income
Net change during the year
Balance at end of year

¥1,000,424¥206,529¥1,543,000¥22,438¥241,466

Millions of Yen

For the year ended March 31, 2022

Balance at beginning of year
Cumulative effects due to changes in accounting policies
Restated balance

Retained earnings

Unrealized gain on
available-for-salesecurities

Deferred gain on­ erivatives underdhedge accounting¥651,840¥37,519¥ 12,131¥3,641,083¥37,519¥ 12,131¥3,640,330(753)¥651,087

Total equity(753)

Investment from government

80,000Transfer from capital surplus to special investment reserve—

Transfer from special investment surplus to retained earnings

5,734

—

Cash dividends(8,115)(8,115)

Net income

56,832

56,832

Net change during the year
Balance at end of year

¥705,538

417(10,584)(10,166)¥37,936¥   1,547¥3,758,881

Millions of Yen

For the year ended March 31, 2021

Common stock

Crisis response
reserve

Balance at beginning of year

¥1,000,424¥206,529

Special investment Special investment
reserve
surplus¥  848,000

Investment from government

220,000 Transfer from capital surplus to special investment reserve

300,000¥12,436

Capital surplus¥ 636,466(300,000)

Cash dividends
Net income Transfer from retained earnings to special investment surplus

15,736

Net change during the year
Balance at end of year

¥1,000,424¥206,529¥1,368,000¥28,172¥ 336,466

Millions of Yen

For the year ended March 31, 2021

Balance at beginning of year

Retained earnings

Unrealized gain on
available-for-salesecurities¥629,290¥20,709

Deferred gain on­ erivatives underdhedge accounting¥19,687

Investment from government

Total equity¥3,373,542
220,000 Transfer from capital surplus to special investment reserve—

Cash dividends(9,948)(9,948)Net income

48,234

48,234 Transfer from retained earnings to special investment surplus(15,736)

Net change during the year
Balance at end of year

¥651,840—
16,810(7,555)9,254¥37,519¥12,131¥3,641,083

Development Bank of Japan Inc.
Integrated Report 2022

157

NON-CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)

Thousands of U.S. Dollars (Note)

For the year ended March 31, 2022

Crisis response
reserve

Special investment Special investment
reserve
surplusCapitalsurplus$8,174,067$1,687,466$11,177,384$230,188$2,749,133$8,174,067$1,687,466$11,177,384$230,188$2,749,133

Cumulative effects due to changes in accounting policies
Restated balance
Investment from government

653,648

Transfer from capital surplus to special investment reserve776,207(776,207)

Transfer from special investment surplus to retained earnings

Value Creation Story

Balance at beginning of year

Commonstock(46,850)

Cash dividends
Net income
Net change during the year
Balance at end of year

$8,174,067$1,687,466$12,607,239$183,337$1,972,926

Thousands of U.S. Dollars (Note)

Balance at beginning of year
Cumulative effects due to changes in accounting policies
Restated balance

Deferred gain onderivatives underhedge accounting

Retained earnings$5,325,927$306,557$ 99,126$29,749,847$306,557$ 99,126$29,743,694(6,154)$5,319,774

Strategy

For the year ended March 31, 2022

Unrealized gain on
available-for-salesecurities

Total equity(6,154)

Investment from government

653,648

Transfer from capital surplus to special investment reserve—46,850—(66,309)(66,309)

Net income

464,357

464,357

Net change during the year
Balance at end of year

$5,764,672

3,410(86,478)(83,068)$309,967$ 12,648$30,712,322

Note: Amounts in U.S. dollars are presented solely for the convenience of readers outside Japan. The rate of ¥122.39=$1.00, the effective exchange rate prevailing as of March 31, 2022,
has been used in the conversion.

Corporate GovernanceTransfer from special investment surplus to retained earnings
Cash dividends

Corporate Data
Data Section

Bank of Japan Inc.
158 Development
Integrated Report 2022

Capital Adequacy Ratio

Although DBJ is not subject to Article 14-2 of the Banking Act, the capital adequacy ratio has been calculated in accordance with
“Standards for Bank to Examine the Adequacy of Its Capital Based on Assets, etc., under the Provision of Article 14-2 of the
Banking Act” (2006, Financial Services Agency Notification No. 19, hereinafter, the “Capital Adequacy Ratio Notification”), andtherefore effectively conforms to this act.
(Reference)
In addition to the application of uniform international standards, credit risk assets were calculated using the standardized
approach, and the operational risk equivalent amount was calculated using the basic indicator approach. DBJ Group has not
introduced procedures in line with market risk regulations.
As a complementary indicator to the capital adequacy ratio, the leverage ratio is calculated on a consolidated basis in accordancewith “Standards for Determining the Soundness of Leverage, Defined as a Complementary Indicator for the Standard to Determine
the Capital Adequacy of a Bank in Light of the Assets Owned by the Bank and Other Factors, Based on Article 14-2 of the
Banking Act.”[1] Capital Structure Information
Capital Structure Information (Consolidated)(Units: Millions of yen, %)Items

March 31, 2021

Common Equity Tier 1 capital: instruments and reserves (1)Directly issued qualifying common share capital plus related capital surplus
and retained earningsof which: common stock and capital surplusof which: retained earningsof which: treasury stockof which: planned distribution of incomeof which: other than the above
Accumulated other comprehensive income and other disclosed reserves
Adjusted non-controlling interests, etc. (amount allowed to be included in group Common Equity Tier 1)
Common Equity Tier 1 capital: instruments and reserves

(A)

Basel III
Template No.

2,024,471

1,977,060

1a+2–1c–26

1,336,890

1,242,506

1a695,696

750,174

2

—

—

1c

8,115

Rights to acquire new common shares

March 31, 2022

15,620 26

—

—

—

—

1b

1,655,075

1,823,412

3

—

—

5

3,679,548

3,800,473

6

Common Equity Tier 1 capital: regulatory adjustments (2)Total intangible assets (excluding those relating to mortgage servicing rights)

34,89332,942 8+9of which: goodwill (including those equivalent) of which: other intangible assets other than goodwill and mortgage servicing rights
Deferred tax assets that rely on future profitability excluding those arising from temporary differences (net of related tax liability)
Deferred gains or losses on derivatives under hedge accounting

22,673

20,852

8

12,21912,090

9

2,319

224

10

13,271

10,798

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

Assets for retirement benefits

1,105

1,799

15

Investments in own shares (excluding those reported in the Equity section)

—

—

16

Reciprocal cross-holdings in common equity
Investments in the capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation (“Other Financial Institutions”),
net of eligible short positions, where the bank does not own more than 10%of the issued share capital (amount above the 10% threshold)Amount exceeding the 10% threshold on specified items of which: significant investments in the common stock of Other Financial Institutions, net of eligible short positionsof which: mortgage servicing rights of which: deferred tax assets arising from temporary differences (net of related tax liability)
Amount exceeding the 15% threshold on specified items

—

—

17

—

—

18

—

—

19+20+21

—

—

19

—

—

20

—

—

21

—

—

22

Development Bank of Japan Inc.
Integrated Report 2022



159

(Units: Millions of yen, %)Items

March 31, 2021

Basel III
Template No.

—

—

23

—

—

24

—

25

—

—

27

51,59045,76628

3,627,957

3,754,707

29

—

—

—

—

—

—

—

—

1,875

1,757

34–35

—

—

33+35

—

—

33

Value Creation Story of which: significant investments in the common stock of Other Financial Institutions, net of eligible short positionsof which: mortgage servicing rights of which: deferred tax assets arising from temporary differences (net of related tax liability)
Regulatory adjustments applied to Common Equity Tier 1 due to insufficient Additional Tier 1 and Tier 2 to cover deductions
Common Equity Tier 1 capital: regulatory adjustments
(B)

March 31, 2022

Common Equity Tier 1 capital (CET1)
Common Equity Tier 1 capital (CET1) ((A)-(B))

(C)

31a
30

32

35
36

Investments in own Additional Tier 1 instruments

—

—

37

Reciprocal cross-holdings in Additional Tier 1 instruments
Investments in the capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions,where the bank does not own more than 10% of the issued common sharecapital of the entity (amount above the 10% threshold)
Significant investments in the Additional Tier 1 capital of Other Financial Institutions (net of eligible short positions)
Regulatory adjustments applied to Common Equity Tier 1 due to sufficient Additional Tier 2 to cover deductions
Additional Tier 1 capital: regulatory adjustments
(E)

—

—

38

—

—

39

17

19

40

Additional Tier 1 capital: regulatory adjustments

—

—

42

17

19

43

(F)

1,858

1,738

44

(G)

3,629,815

3,756,445

45Additional Tier 1 capital (AT1)

Corporate Data

—
1,757

Corporate Governance

—
1,875

Additional Tier 1 capital ((D)-(E))

31b

Strategy

Additional Tier 1 capital: instruments (3)Directly issued qualifying Additional Tier 1 instruments plus related capital surplus of which: classified as equity under applicable accounting standards
and the breakdown
Rights to acquire new shares in relation to Additional Tier 1 instruments
Directly issued qualifying Additional Tier 1 instruments plus related capital surplus of which: classified as liabilities under applicable accounting standards
Qualifying Additional Tier 1 instruments plus related capital surplus issued by special purpose vehicles and other equivalent entities
Adjusted non-controlling interests, etc. (amount allowed to be included in group Additional Tier 1)
Eligible Tier 1 capital instruments subject to transitional arrangements included in Additional Tier 1 capital: instrumentsof which: instruments issued by banks and their special purpose vehicles of which: instruments issued by subsidiaries (excluding banks’ special purpose vehicles)
Additional Tier 1 capital: instruments
(D)

Tier 1 capital (T1 = CET1 + AT1)
Tier 1 capital (T1 = CET1 + AT1) ((C)+(F))

—

—

—

—

—

—

—

—

441

382

48–49

—

—

47+49

46
Data Section

Tier 2 capital: instruments and reserves (4)Directly issued qualifying Tier 2 instruments plus related capital surplus of which:classified as equity under applicable accounting standards and its breakdown
Rights to acquire new shares in relation to Tier 2 instruments
Directly issued qualifying Tier 2 instruments plus related capital surplus of which: classified as liabilities under applicable accounting standards
Tier 2 instruments plus related capital surplus issued by special purpose vehicles and other equivalent entities
Adjusted non-controlling interests, etc. (amount allowed to be included in group Tier 2)
Eligible Tier 2 capital instruments subject to transitional arrangements included in Tier 2: instruments and reserves

Bank of Japan Inc.
160 Development
Integrated Report 2022

Capital Adequacy Ratio(Units: Millions of yen, %)Items

March 31, 2021

of which: instruments issued by banks and their special purpose vehicles of which: instruments issued by subsidiaries (excluding banks’ special
purpose vehicles)
Total of general allowance for loan losses and eligible reserves included in Tier 2—

March 31, 2022—

Basel III
Template No.

47

—

—

49

29,09830,67550

29,09830,675

50a

—

—

50b

29,53931,057

51

Investments in own Tier 2 instruments

—

—

52

Reciprocal cross-holdings in Tier 2 instruments and other TLAC liabilities
Non-significant investments in the Tier 2 capital and other TLAC liabilities of Other Financial Institutions, net of eligible short positions (amount above the
10% threshold)
Significant investments in the Tier 2 capital and other TLAC liabilities of Other Financial Institutions, net of eligible short positions
Tier 2 capital: regulatory adjustments
(I)

—

—

53

—

—

54

—

—

55

—

—

57

(J)

29,53931,05758(K)

3,659,354

3,787,502

59

21,787,451

22,112,712

60

16.65%

16.97%

61of which: general allowance for loan lossesof which: eligible reserves
Tier 2 capital: instruments and reserves

(H)

Tier 2 capital: regulatory adjustments (5)Tier 2 capital (T2)
Tier 2 capital (T2) ((H)-(I))
Total capital (TC = T1 + T2)
Total capital (TC = T1 + T2) ((G) + (J))
Risk weighted assets (6)Risk weighted assets
Capital ratio (consolidated) (7)Common Equity Tier 1 risk-weighted capital ratio (consolidated) ((C)/(L))
Tier 1 risk-weighted capital ratio (consolidated) ((G)/(L))

16.66%

16.98%

62

Total risk-weighted capital ratio (consolidated) ((K)/(L))

16.79%

17.12%

63

106,410

114,899

72

Regulatory adjustments (8)Non-significant Investments in the capital of Other Financial Institutions that are below the thresholds for deduction (before risk weighting)Significant investments in the common stock of Other Financial Institutions that are below the thresholds for deduction (before risk weighting)Mortgage servicing rights that are below the thresholds for deduction (before risk weighting)Deferred tax assets arising from temporary differences that are below the thresholds for deduction (before risk weighting)Reserves included in Tier 2 capital: instruments and reserves (9)

3,538
—
6,394

3,803 73—74

18,752 75

General allowance for loan losses

29,09830,67576

Cap on inclusion of general allowance for loan losses
Eligible reserves for inclusion in Tier 2 in respect of exposures subject to internal ratings-based approach (prior to application of cap)
Cap for inclusion of reserves in Tier 2 under internal ratings-based approach

269,591

273,422

77

—

—

78

—

—

79

—

—

82

Capital instruments subject to transitional arrangements (10)Current cap on Additional Tier 1 instruments subject to transitional arrangements
Amount excluded from Additional Tier 1 due to cap (excess over cap after redemptions and maturities)
Current cap on Tier 2 instruments subject to transitional arrangements
Amount excluded from Tier 2 due to cap (excess over cap after redemptions and maturities)

—

—

83

—

—

84

—

—

85

Development Bank of Japan Inc.
Integrated Report 2022



161

Capital Adequacy Ratio[2] Qualitative Disclosure

3. Overview of Risk
Characteristics and Risk
Management Policies,
Procedures andStructure of theConsolidated Group

Please refer to page 68 to 73, Section Four: “Risk Management”.

4. Credit Risk(a) Overview of Risk Management Policies and Procedure	Please refer to page 68 to 69, “Credit Risk in Comprehensive Risk” in Section Four:“Risk Management”.
(b) Rating Agencies Eligible to Weight Risks
	The rating agencies that DBJ uses for weighting risk are among the four that the FSA has named
eligible to perform such weighting. Eligible rating agencies are not selected according to type of
exposure.
	  The rating agencies are Rating and Investment Information, Inc. (R&I), Japan Credit Rating
Agency, Ltd. (JCR), Moody’s Investors Service, Inc. (Moody’s), and Standard & Poor’s Corp. (S&P).

5. Overview of Risk
Management Policies
and Procedures for
Reducing Credit Risk

DBJ obtains collateral or guarantees as necessary based on changes in the borrower’s
creditworthiness. If required, the effectiveness of collateral is determined from the perspective of theamount certain to be recovered based on a reasonable evaluation of the collateral.
In principle, collateral valuation is performed by the Credit Analysis Department, based on therequest of investment and loan departments/offices. Investment and loan departments/offices and theCredit Analysis Department manage credit risk based on valuation results. In principle, the valuation of
all collateral property is reviewed once or twice each year to ensure DBJ is aware of the current statusof its collateral property.

Corporate Data

Please refer to page 68 to 72, “Comprehensive Risk Management” in Section Four: “RiskManagement”.
Corporate Governance2. Overview of Methods
for Evaluating the
Degree of Capital
Adequacy

Strategy(1)	Differences and the reasons for those differences at companies included in the scope of
consolidation based on the regulation (Ministry of Finance Regulation No. 28, 1976) related tothe companies belonging to the group of companies included in the scope of calculation of theconsolidated capital adequacy ratio as provided in Article 3 of the Notification (hereinafter, the“Consolidated Group”), and the language, format and preparation method of their consolidated
financial statements (hereinafter, the “Scope of Accounting Consolidation”)
No differences.
(2)	Within the Consolidated Group, the number of consolidated subsidiaries and the names and main
businesses of principal consolidated subsidiaries
The number of consolidated subsidiaries as of March 31, 2022 is 45.
	Please refer to page 177, “Group Companies” in “Corporate Information” for major consolidated
subsidiaries.
(3)	Number of affiliated companies that conduct financial business to which Article 9 of the Notification
applies, the names of affiliated companies conducting such related financial business and theirprimary businesses
Not applicable.
(4)	Companies that belong to the Consolidated Group but are not included in the Scope of
Accounting Consolidation and companies that do not belong to the Consolidated Group but areincluded in the Scope of Accounting Consolidation, as well as the amount of total assets and net
assets on their balance sheets, and their primary businesses
Not applicable.
(5) Overview of limitations related to the transfer of funds or capital within the Consolidated GroupNot applicable.

Value Creation Story

1. Scope of Consolidation

Data Section

Bank of Japan Inc.
162 Development
Integrated Report 2022

Capital Adequacy Ratio

6. Overview of Risk
Management Policies
and Procedures Related
to Risk Involving
Counterparties in
Derivative ProductTransactions andTransactions with Long
Settlement Periods

DBJ regularly refers to the ratings and credit amounts of transaction counterparties to determine theadvisability of entering a transaction or to understand the risks of existing transactions.

7. Securitization Exposure(a) Overview of Risk Management Policies and Risk Characteristics
	Excluding credit derivatives, the majority of DBJ’s securitization exposure falls into the category of
specialized lending (Item 47, Article 1, of the Capital Adequacy Ratio Notification) employing
internal rating methods. Different from the internal ratings that are applied to standard corporate
credit, this exposure is given a rating by using a grading system applied to match thecharacteristics of specialized lending. DBJ conducts risk management in line with changes inrating level. In addition to rating its exposure when making new acquisitions, DBJ reviews theseratings periodically.
	  DBJ’s involvement in securitized and resecuritized transactions is typically that of an investor,and in principle the exposure acquired through such transactions continues until the
instrument’s maturity.
(b)	Overview of status of implementation and operation of systems stipulated in Article 248,
Paragraph 1, Items 1–4, of the Capital Adequacy Ratio Notification
	DBJ has created the systems necessary for operating within its credit risk management framework.
Specifically, as one aspect of our credit risk management, our sales department endeavors toappropriately collect information related to comprehensive risk characteristics and performance,
and DBJ monitors conditions to determine any changes in the borrower’s creditworthiness. Related
information is also provided to the credit analysis department, which may revise borrower ratings or
make other adjustments on the basis of this related information as necessary.
(c)	Name of Special Purpose Entity and its securitization exposure status in case DBJ
securitizes third party’s assets through Special Purpose Entity and, of subsidiaries andaffiliated companies of the Consolidated Group, name of those which hold securitization
exposure implemented by the Consolidated Group and whose management are involved oradvised by the Consolidated GroupNot applicable.
(d)	Name of Special Purpose Entity providing credit enhancement other than an agreement,
and effect of the credit enhancement other than the agreement on Capital Adequacy bySpecial Purpose Entity
Not applicable.
(e) Method of Accounting for Securitized Transactions
	DBJ’s involvement in securitized transactions is that of an investor. DBJ adequately accounts forthese transactions in accordance with the “Accounting Standard for Financial Instruments.”(f) Rating Agencies Eligible to Weight Risks by Type of Securitization Exposure	The rating agencies that DBJ uses for weighting risk are among the four that the FSA has named
eligible to perform such weighting. Eligible rating agencies are not selected according to type of
securitization exposure.
	  The rating agencies are Rating and Investment Information, Inc. (R&I), Japan Credit Rating
Agency, Ltd. (JCR), Moody’s Investors Service, Inc. (Moody’s), and Standard & Poor’s Corp. (S&P).

8. Market Risk

DBJ includes in its calculation method no market risk equivalent amount.

9. Operational Risk(a) Overview of Risk Management Policies and Procedures
	Please refer to page 72, “Operational Risk” in Comprehensive Risk in Section Four:“Risk Management”.
(b) Method Used to Calculate Operational Risk Equivalent AmountDBJ uses the basic indicator approach to calculate this risk.

Development Bank of Japan Inc.
Integrated Report 2022



163

Capital Adequacy Ratio

11. Interest Rate Risk(a) Overview of Risk Management Policies and Procedures
	Please refer to page 71, “Comprehensive Risk: Market Risk, Interest Rate	Risk” in “Risk Management.”(b) Overview of Methods for Calculating Interest Rate Risk
	The quantitative disclosure items, ΔEVE (changes in Economic Value of Equity) and ΔNII
(changes in Net Interest Income), are calculated as stated below.
	  First, as stipulated in the FSA Notification No. 7 in 2014, the changes in economic value ofequity and annual net interest income caused by interest rate shocks are measured for eachcurrency. Then, ΔEVE is calculated by adding up the amounts of such changes only if the changes
for the currency result in loss, and ΔNII is calculated by adding up the amounts of such changes.
	  In addition, DBJ measures interest rate risks using the following methods.
(1) VaR: Holding period of one year, Observation period of 10 years, Confidence interval of 99.9%,
using Delta method,(2) 100BPV: changes in economic value when interest rates are shifted by 1% (parallel)

Strategy

Please refer to page 70 “Comprehensive Risk: Investment Risk” in “Risk Management.”

Value Creation Story

10. Overview of Risk
Management Policies
and Procedures
Regarding Exposure to
Shares and Other
Equity Investments
and Capital Injections

Corporate GovernanceCorporate Data
Data Section

Bank of Japan Inc.
164 Development
Integrated Report 2022

Capital Adequacy Ratio[3] Quantitative Disclosure
Quantitative Disclosure (Consolidated)
1. Overview of Risk Weighted Assets
(Unit: Millions of yen)
Risk Weighted Assets

March 31, 2021

Capital Requirement

March 31, 2022

March 31, 2021

March 31, 2022

Credit Risk

12,220,757

11,786,801

977,660

942,943 Of which, exposure to which standardized approach applied

11,759,354

11,212,568

940,748

897,005

461,403574,233

36,91245,938Counterparty Credit Risk

Other

168,745

122,550

13,4989,802 Of which, exposure to which current exposure method applied

44,17830,098

3,534

2,407

124,286

92,198

9,942

7,375

281

254

22

20

Of which, CVA risk
 Of which, exposure for central counterparty clearing house

—

—

—

—

Equity investments in funds (look-through approach)Other

1,711,562

1,862,240

136,924

148,979

Equity investments in funds (mandate-based approach)

2,091,820

2,473,435

167,345

197,874

Equity investments in funds (simple approach (subject to 250% risk weight))

—

—

—

—

Equity investments in funds (simple approach (subject to 400% risk weight))

—

—

—

—

1,348,517

1,749,545

107,881

139,963

—

—

—

—

Securitization exposure subject to calculation of credit risk assets

4,001,100

3,822,811

320,086

305,824 Of which: securitisation external ratings-based
approach (SEC-ERBA)

31,98430,738

2,558

2,459

 Of which: securitisation standardised approach(SEC-SA)

1,187,906

1,115,585

95,032

89,246

Of which, exposure with a risk weight of 1,250%

2,781,210

2,676,488

222,496

214,119

Equity investments in funds (fall-back approach; 1.250% risk weight)
Unsettled transactions

Operational risk

220,111238,935

17,608

19,114 Of which, exposure to which basic indicator approach applied

220,111238,935

17,608

19,114

Exposure with related to specified items not included in adjustments

24,83356,390

1,986

4,511

Amount of items included in risk weighted assets subject to transitional arrangements
Total

—

—

—

—

21,787,451

22,112,712

1,742,988

1,769,010

Development Bank of Japan Inc.
Integrated Report 2022



165

Capital Adequacy Ratio

2. Items Related to Credit Risk(a) Fiscal year-end credit risk exposure, broken down as follows:		 (1) By region

(Unit: Millions of yen)Domestic

19,946,845

Overseas

109,503

Total

Value Creation Story

March 31, 2022

20,056,349

Note: “Overseas” refers to overseas consolidated subsidiaries. DBJ has no overseas branches.

		(2) By industry and transaction counterparty

(Unit: Millions of yen)March 31, 2022

Manufacturing4,045,647

Agriculture and forestry

606

Fisheries

0177,643

Construction

62,333

Electrical, gas, heat supply and water

2,942,341

Information and communications

216,260

Transportation and postal

3,260,440

Wholesale and retail

1,173,467

Finance and insurance

3,533,494

Real estate and leasing of goods

2,744,407

Services

476,165
12,771Other

1,410,767

Total

20,056,349(3) By period to maturity

(Unit: Millions of yen)

Corporate Governance

Municipal government		Strategy

Mining, quarrying and gravel extraction

March 31, 2022

Five years or less

10,611,629

More than five years, up to 10

4,934,996

More than 10 years, up to 15

1,461,928

More than 15 years

1,385,018
1,662,776

Total

20,056,349(b) Credit Risk Mitigation Techniques(Unit: Millions of yen)

Corporate Data

No maturity date

March 31, 2022
Exposure notsecured

Exposure
securedLoans

12,318,137

Securities (debt securities)
Other on-balance sheet assets(debt instruments)
Of which, default items

Exposure secured
by guarantee

Exposure secured
by credit derivatives

1,054,757—

921,274—

1,351,675

12,394—

12,394—705,013

—

—

—

—

14,374,825

1,067,151—

933,668

—

59

—

—

—

—

Data Section

Total

Exposure secured
by collateral

Bank of Japan Inc.
166 Development
Integrated Report 2022

Capital Adequacy Ratio(c) Standardized Approach - Credit risk exposure by asset class and risk weight

(Unit: Millions of yen)March 31, 2022
Amounts of credit risk exposure (after applying CCF and credit risk mitigation techniques)

Asset Class / Risk Weight
Cash

0%

10%

20%

50%

100%

150%

250%

1,250%

Total

2

—

—

—

—

—

—

—

2

Japanese government and Bank of Japan

1,609,101

—

—

—

—

—

—

—

1,604,462

Foreign central governments and central banks

244,753

—

—

—

—

—

—

—

244,753

—

—

—

—

—

—

—

—

—

Municipal governments in Japan

12,771

—

—

—

—

—

—

—

12,771

Foreign public bodies other than central banks

—

—

500

—

—

—

—

—

500

Multilateral Development Bank

—

—

—

—

—

—

—

—

—

Japan Finance Organization for Municipalities

—

—

—

—

—

—

—

—

—

Japanese government agencies

—

—

—

—

—

—

—

—

—

Three local public corporations

—

—

—

—

—

—

—

—

—

1,508,536

Bank for International Settlements and other

Financial institutions and Type I Financial Instruments Business
Operators——

1,486,905

12,982

4,010

—

—

—

36,320211,083

1,216,657

7,757,122

4,891,847——— 14,113,029

Small and medium-sized enterprises and individuals

—

—

—

—

—

—

—

—

Mortgage loans (loans secured by residential properties)

—

—

—

—

—

—

—

—

—

Real estate investment business

—

—

—

—

898,927———

898,927

Delinquent for 3 months or more (excluding mortgage loans)

—

—

—

—

—

59

—

—

59

Mortgage loans that are delinquent for 3 months or more

—

—

—

—

—

—

—

—

—

Bills and checks in process of collection

—

—

—

—

—

—

—

—

—

Guaranteed by Credit Guarantee Association and
other

—

—

—

—

—

—

—

—

—

Guaranteed by Regional Economy Vitalization
Corporation of Japan and other

—

—

—

—

—

—

—

—

—

Investments (excluding significant investments)

—

—

—

—

970,721———970,721

1,902,947

211,083

2,704,062

7,770,104

6,765,505

59—— 19,353,760

Corporations

Total

—

Development Bank of Japan Inc.
Integrated Report 2022

167

Capital Adequacy Ratio

3. Transaction Counterparties’ Risk on Derivative Product Transactions and Transactions with Long Settlement Periods(a) Counterparty credit risk		 (1) Counterparty credit risk exposure by technique(Unit: Millions of yen)

Exposure after applying acredit risk mitigation
technique

Current exposure method
		Value Creation Story

March 31, 2022
Amount ofrisk weighted assets

113,676

30,098(2) Counterparty credit risk exposure by industry and risk weight

(Unit: Millions of yen)March 31, 2022
Credit equivalent amount (after taking credit risk mitigations into account)
Asset Class / Risk Weight

0%

10%

20%

50%

75%

100%

150%

Other

Total

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Bank for International Settlements and others

—

—

—

—

—

—

—

—

—

Municipal governments in Japan

2

—

—

—

—

—

—

—

2

Foreign public bodies other than central banks

—

—

—

—

—

—

—

—

—

Multilateral Development Bank

—

—

—

—

—

—

—

—

—

Japan Finance Organization for Municipalities

—

—

—

—

—

—

—

—

—

Japanese government agencies

—

—

—

—

—

—

—

—

—

Three local public corporations

—

—

—

—

—

—

—

—

—

Financial institutions and Type I Financial Instruments Business
Operators——

103,605

—

—

—

—

—

103,605

Corporations

—

—

109

1,207

—

8,734

—

—

10,050

Small and medium-sized enterprises and individuals

—

—

—

—

—

—

—

—

—

Other

—

—

—

—

—

17

—

—

17

Total

2

—

103,714

1,207

—

8,751

—

—

113,674(Unit: Millions of yen)March 31, 2022
Exposure after applying acredit risk mitigation
technique

Total portfolio subject to the standardized risk measurement approach

113,845

Amount of risk weighted
assets (Amount calculatedby dividing CVA risk
equivalent by 8%)

Corporate Data(b) Capital requirement for CVA risk

Corporate Governance—Foreign central governments and central banks

Strategy

Japanese government and Bank of Japan

92,198

Data Section

Bank of Japan Inc.
168 Development
Integrated Report 2022

Capital Adequacy Ratio(c) Composition of collateral for counterparty credit risk exposure(Unit: Millions of yen)March 31, 2022
Collateral used in derivative transactions

Collateral used in repo transactions

Fair value of collateral received

Fair value of posted collateral

SegregatedUnsegregatedSegregatedUnsegregatedCash (domestic currency)

—

—

—

—

—

—

Cash (foreign currency)

—

—

—

—

—

—

Domestic sovereign bonds

—

—

—

—

—

—

Other sovereign bonds

—

—

—

—

—

—

Government-related agency bonds

—

—

—

—

—

—

Corporate bonds

—

—

—

—

—

—

Equity

—

—

—

—

—

—

Other collateral

—

—

—

—

—

—

Total

—

—

—

—

—

—

Fair value ofFair value ofcollateral received posted collateral(d) Exposure for central counterparty clearing house(Unit: Millions of yen)March 31, 2022
Protection purchased

Protection provided

Notional amountSingle-name credit default swaps——

Index credit default swaps——

Total return swaps——

Credit options——

Other credit derivatives

—

—

—

—

Positive fair value (Assets)——

Negative fair value (Liabilities)——

Total notional amount
Fair value(e) Exposure for central counterparty clearing house(Unit: Millions of yen)March 31, 2022
Exposure for central
clearing house(after applying a credit risk
mitigation technique)

Exposure for Qualified Central Counterparty Clearing House (Total)

Amount ofrisk weighted assets/

254 Trade exposure for Qualified Central Counterparty Clearing House(excluding initial margin)

12,745254   (i) Derivative product transactions (other than listed transactions)

12,745254   (ii) Derivative product transactions (listed transactions)——   (iii) Repurchase / reverse repurchase transactions——   (iv) Netting set in case where cross-product netting is approved——

Initial margin maintained in segregated accounts

32,000/Initial margin not maintained in segregated accounts——

Pre-contributed Clearing Fund——

Uncontributed Clearing Fund——

Development Bank of Japan Inc.
Integrated Report 2022



169

Capital Adequacy Ratio

4. Securitization Exposure(1)	Securitization exposure by underlying asset type (limited to the securitization exposure subject to calculation of credit risk assets)
(Unit: Millions of yen)

DBJ as an investor
DBJ as theoriginator

Retail (Total)

DBJ as thesponsor—

Wholesale (Total)

Traditional
securitization—

Synthetic
securitization—

Subtotal

—

—

—

—

1,404,589—

1,404,589

Structured Finance——

1,404,589—

1,404,589

Other

—

—

—

—

—

Resecuritization

—

—

—

—

—

(2) Securitization exposure subject to calculation of credit risk assets and required capital amounts

Value Creation Story

March 31, 2022

(Unit: Millions of yen)March 31, 2022

Securitization exposure by risk weight of 20% or less

60,983

Securitization exposure by risk weight of over 20% and 50% or less

1,835

Securitization exposure by risk weight of over 50% and 100% or less

1,119,224

Securitization exposure by risk weight of over 100% and below 1,250%

Strategy

Amount of exposure (by risk weight)

8,427

Securitization exposure by risk weight of 1,250%

214,119

Required capital amounts (by calculation method)
2,459

Required capital amounts for securitization exposure to which SEC-SA is applied

89,246

Required capital amounts for securitization exposure to which 1,250% risk weight is applied

214,119

5. Interest Rate Risk (Non-consolidated)

Corporate GovernanceRequired capital amounts for securitization exposure to which SEC-ERBA is applied(Unit: Hundred Millions of yen)March 31, 2021
ΔEVE

Parallel up

March 31, 2022
ΔNII

ΔEVE

ΔNII

94

—

138

Parallel down

1,157

(225)

815

(260)

Steepener

13

/

21

/

Flattener

811

/

577

/

Short rate up

125

/

98

/

Short rate down

20

/

31

/

1,157

94

815

138

Maximum
Tier 1 capital

March 31, 2021

March 31, 2022

36,12537,322

Corporate Data

3

Data Section

Bank of Japan Inc.
170 Development
Integrated Report 2022

Capital Adequacy Ratio

Composition of Leverage Ratio Disclosure (Consolidated)March 31, 2021

March 31, 2022

(Unit: Millions of yen)

Corresponding Line No.
on Basel III Disclosure Template
Table 2

Table 1On-balance sheet exposures (1)On-balance sheet exposures before deducting adjustments items

19,358,916

19,542,439

Total assets reported in the consolidated balance sheet

19,895,296

20,195,666

1a1 The amount of assets of subsidiaries that are not included in the scope of the leverage ratio on a consolidated basis (–)

—

—

1b

2

 The amount of assets of subsidiaries that are included in the scope of the leverage ratio on a consolidated basis (except those includedin the total assets reported in the consolidated balance sheet)

—

—

1c

7

536,380

653,227

1d

3 The amount of assets that are deducted from the total assets reported in the consolidated balance sheet (except adjustment
items) (–)
The amount of adjustment items pertaining to Tier 1 capital (–)
Total on-balance sheet exposures(a)1

38,33634,9862

19,320,579

19,507,453

3

7Exposures related to derivatives transactions (2) Replacement cost associated with derivatives transactions, multiplied by 1.4—

Add-on amount associated with derivatives transactions, etc.

135,643

PFE associated with derivatives transactions, multiplied by 1.4—— 4
70,324— 5 The amount of receivables arising from providing cash margin in relation to derivatives transactions, etc.

78,69373,069 The amount of receivables arising from providing cash margin in relation to with derivatives transactions

13,326

40,465 The amount of collateral paid for derivative transactions deducted from the consolidated balance sheet—— 6 The amount of receivables arising from providing cash margin, provided where deducted from the consolidated balance sheet
pursuant to the operative accounting framework—— The amount of deductions of receivables (out of those arising from providing cash variation margin) (–)—— 7 The amount of client-cleared trade exposures for which a bank or bank holding company acting as clearing member is not obliged tomake any indemnification (–)

—

—

—

— 9

Adjusted effective notional amount of written credit derivatives The amount of deductions from effective notional amount of written credit derivatives (–)
Total exposures related to derivative transactions(b)—
227,6628— 10
183,859

11

4

Exposures related to repo transactions (3)The amount of assets related to repo transactions, etc.

—

— 12

The amount of deductions from the assets above (line 12) (–)

—

— 13

The exposures for counterparty credit risk for repo transactions, etc.

—

— 14

The exposures for agent repo transactions

—

— 15

—

— 16

Total exposures related to repo transactions, etc.

(c)5Exposures related to off-balance sheet transactions (4)Notional amount of off-balance sheet transactions

1,695,244 The amount of adjustments for conversion in relation to off-balance sheet transactions (–)
Total exposures related to off-balance sheet transactions(d)1,748,435

17

510,137

598,85018

1,185,107

1,149,585

19

6

Development Bank of Japan Inc.
Integrated Report 2022

171

Capital Adequacy Ratio

Composition of Leverage Ratio Disclosure (Consolidated)March 31, 2021

March 31, 2022

(Unit: Millions of yen)

Corresponding Line No.
on Basel III Disclosure Template
Table 1

The amount of capital (Tier 1 capital)

(e)

3,629,815

3,756,446

20

Total exposures ((a)+(b)+(c)+(d))

(f)20,733,349

20,840,898

21

17.50%

18.02%

22

20,733,349

20,840,898

1,326,532

1,312,924

22,059,881

22,153,823

16.45%

16.95%

Leverage ratio on a consolidated basis ((e)/(f))

8Value Creation Story

Table 2

Leverage ratio on a consolidated basis (5)Consolidated leverage ratio when including deposits
for Japanese banks (6)Total amount of exposure (f)Amount of deposits for Japanese banks
Total amount of exposure when including deposits
for Japanese banks

(f’)

Key Indicators (Consolidated)

Strategy

Consolidated leverage ratio when including deposits
for Japanese banks((e)/(f’))(Unit: Millions of yen, %)March 31, 2021

September 30, 2021

March 31, 2022

Common Equity Tier 1 capital

3,627,957

3,714,491

3,754,707

Tier 1 capital

3,629,815

3,716,197

3,756,446

Total capital

3,659,355

3,738,895

3,787,503

21,787,451

21,811,569

22,112,712 Common Equity Tier 1 risk-weighted capital ratio(consolidated)

16.65%

17.02%

16.97%

Tier 1 risk-weighted capital ratio (consolidated)

16.66%

17.03%

16.98%

Total risk-weighted capital ratio (consolidated)

16.79%

17.14%

17.12%

20,733,349

20,400,241

20,840,898

17.50%

18.21%

18.02%

CapitalRisk weighted assets
Capital ratio

Corporate GovernanceRisk weighted assets

Leverage ratio (consolidated)
Total exposures
Leverage ratio (consolidated)

Corporate Data
Data Section

Bank of Japan Inc.
172 Development
Integrated Report 2022

Development Bank of Japan Inc.
Integrated Report 2022

173

Corporate Information

Name

Development Bank of Japan Inc.

Established

October 1, 2008
Otemachi Financial City South Tower, 9-6, Otemachi 1-chome, Chiyoda-ku, Tokyo 100-8178, Japan
Tel: +81-3-3270-3211

Capital¥1,000,424 million (All capital is funded by the Government of Japan.)Number of employees

1,809 (non-consolidated 1,257)

Value Creation Story

Head Office(As of March 31, 2022)

The DBJ Group provides diverse services that satisfy the needs of its customers.

StrategyGroup Companies
Overseas Bases
DBJ Singapore Limited

DBJ Europe Limited

DBJ Singapore Limited is a Singapore-based subsidiary. It mainly provides support for investments and loans as well asadvisory services in the Asia-Pacific region, and also collects and disseminates information locally.
DBJ Europe Limited is a London-based subsidiary. It mainly provides support for investment and loan services in Europe, and alsocollects and disseminates information locally.
DBJ Investment Consulting (Beijing) Co., Ltd. is based in Beijing and Shanghai. It mainly offers support for investment and loan
services in China, and also collects and disseminates information locally.

DBJ Americas Inc.

DBJ Americas Inc. is a local subsidiary based in New York, U.S.A. It mainly provides support for investment and loan services in
the Americas, and also collects and disseminates information locally.

Investments / Securities / Asset Management
DBJ Capital Co., Ltd. is the venture capital arm of the DBJ Group. It mainly makes
early-stage equity investments in venture firms, and supports their growth throughhands-on management.

DBJ Securities Co., Ltd.

DBJ Securities Co., Ltd. is a securities subsidiary that assists the DBJ Group with investment andloan services. It supports optimal capital procurement, centered on alternative product fields, provides asset management opportunities, and flexibly fulfills diverse needs.

DBJ Asset Management
Co., Ltd.

DBJ Asset Management Co., Ltd. Is an asset management company focused on real estate,
private equity, and infrastructure investments. It provides quality investment
opportunities to investors with the comprehensive financial backing of the DBJ Group.

Research / Consulting
Japan Economic ResearchInstitute Inc.

Japan Economic Research Institute Inc. is a comprehensive think tank that primarily
conducts surveys and consulting. It meets customer needs from a comprehensive
viewpoint, leveraging synergies in its three survey fields: public, solutions, and international.

Value Management Institute,
Inc.

Value Management Institute, Inc. is a comprehensive think tank with strengths derived from its
insight into advanced technologies and analysis using proprietary economic models. It provides
tailor-made solutions to a broad range of government policy issues.

Corporate Data

DBJ Capital Co., Ltd.

Corporate Governance

DBJ Investment Consulting(Beijing) Co., Ltd.

Real Estate Management / IT Services / Shared Services
DBJ Real Estate Co., Ltd.

DBJ Business Support
Co., Ltd.

Consist, Inc. provides one-stop consulting services for developing, maintaining, andoperating IT, using technology to help solve social issues.
DBJ Business Support Co., Ltd. is a shared services company of the DBJ Group.
It supports DBJ Group companies business by consolidating their administrative operations
and also streamlining processes with its operational expertise.

Data Section

Consist, Inc.

DBJ Real Estate Co., Ltd. Handles administrative functions for the DBJ Group for office building
leasing, rental conference rooms, and business libraries.

https://www.dbj.jp/en

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