Consolidated Financial Summary
for the Year Ended March 31, 2011
May 20, 2011

Company name:Sony Financial Holdings Inc.
(URL: http://www.sonyfh.co.jp/index_en.html)
Stock exchange listings: Tokyo Stock Exchange (code number: 8729)
Representative:
Katsumi Ihara, President and Representative Director
Inquiries:
Masaaki Konoo, General Manager—Corporate Communications & Investor Relations Dept.
(Fractional amounts of less than ¥1 million are discarded.)1.

Consolidated financial results for the year ended March 31, 2011
(1) Operating results
Ordinary Revenues
Ordinary Profit
For the year ended
March 31, 2011
For the year ended
March 31, 2010

Note: Comprehensive Income:Millions of yen% change

1,002,201

2.4

978,991

13.8

Millions of yen

Millions of yen% change

76,860(8.9)

41,716(13.3)

84,373146.3

48,126

56.7

For the year ended March 31, 2011: ¥31,963 million; (55.0)％
For the year ended March 31, 2010: ¥71,066 million; －％Net Income per Net Income per
Share
Share
(Fully Diluted)
Yen

For the year ended
March 31, 2011
For the year ended
March 31, 2010

Net Income% change

Net Income on
Ordinary Profit on Ordinary Profit on
Shareholders’
Total Assets
Ordinary Revenues
Equity

Yen

%

%

%

19,179.96

—

14.8

1.2

7.7

22,127.13

—

20.3

1.5

8.6

Note: Equity in earnings (losses) of affiliates: For the year ended March 31, 2011: ¥(944) million
For the year ended March 31, 2010: ¥(307) million(2) Financial conditions
Total Assets

Total Net Assets

Net Asset Ratio

Net Assets per Share

Millions of yen

Millions of yen%

Yen

As of March 31, 2011

6,597,140

294,877

4.5

135,575.94

As of March 31, 2010

6,001,088

269,439

4.5

123,880.11

Notes: 1. Shareholders’ equity:

As of March 31, 2011: ¥294,877 million
As of March 31, 2010: ¥269,439 million
2. The net asset ratio is computed by dividing the amount of total net assets by total assets at the end of the fiscal period.

(3)

Cash flows

For the year ended
March 31, 2011
For the year ended
March 31, 2010

Cash Flows fromOperating Activities

Cash Flows from
Investing Activities

Cash Flows from
Financing Activities

Cash and Cash
Equivalents at end of
fiscal year

Millions of yen

Millions of yen

Millions of yen

Millions of yen

527,582(559,771)(6,560)161,803494,225(378,706)(6,580)200,593

2. Dividends
AnnualDividend
1st quarter 2nd quarter 3rd quarter Year-end Annual Total
Amount
Yen
Yen
Yen
Yen
Yen
Millions of yen
Dividend per Share

Record date

For the year ended—
0.00—
3,000.00
3,000.00
March 31, 2010
For the year ended—
0.00—
4,000.00
4,000.00
March 31, 2011
For the year ending
—
0.00
—
20.00
20.00
March 31, 2012
(forecast)
Note: Sony Financial Holdings conducted a 200-for-1 stock split on April 1, 2011.
3.

Dividend
Payout
Ratio%

Dividend on
Net Assets
%

6,525

13.6

2.8

8,700

20.9

3.1

30.0

Forecast of consolidated financial results for the year ending March 31, 2012
(Percentage figures represent changes from the results of the previous fiscal year.)Ordinary Revenues

Ordinary Profit

Millions of yen % change Millions of yen% change

Net Income
Millions of yen

For the six months ending
497,000
0.2
27,000 （47.6）
13,000
September 30, 2011
For the year ending
1,022,000
2.0
59,000 （23.2）
29,000March 31, 2012
Note: Sony Financial Holdings conducted a 200-for-1 stock split on April 1, 2011.

% change

Net Income per
Share
Yen

（55.8）

29.89（30.5）

66.67

4. Other Information(1) Changes in scope of consolidation during the period under review (changes in specified subsidiaries accompanying
changes in scope of consolidation): None
(2) Changes in accounting policies, procedures and presentation(a) Changes due to revision of accounting standards: Yes(b) Changes due to other reasons: None
(3) Number of shares outstanding (common stock)(a) Number of shares outstanding (including treasury shares)
As of March 31, 2011:
2,175,000 shares
As of March 31, 2010:
2,175,000 shares(b) Number of treasury shares
As of March 31, 2011:— shares
As of March 31, 2010:— shares(c) Weighted-average number of shares
For the year ended March 31, 2011:
2,175,000 shares
For the year ended March 31, 2010:
2,175,000 shares
Audit of Quarterly Financial Statements
This earnings report is exempt from audit procedure based upon the Financial Instruments and Exchange Act. Audit procedures
are underway as of the date of this report.
Explanation for Appropriate Use of Forecasts and Other Notes
Sony Financial Holdings conducted a 200-for-1 stock split on April 1, 2011. Dividend forecasts for the fiscal year ending March
31, 2012, as well as the forecast for consolidated net income per share will be calculated on the basis of the number of shares
outstanding after the stock split.

Content of Supplemental Materials
I.

Qualitative Information and Financial Statements
1.

Qualitative Information on Consolidated Operating Performance・・・・・・・・・・・・・・ 3

2.

Qualitative Information on Consolidated Financial Position・・・・・・・・・・・・・・・・ 6

3.

Basic Policy on Returns to Shareholders and Dividends for theYear Ended March 31, 2011, and the Year Ending March 31, 2012・・・・・・・・・・・・・・ 7

II.
III.

IV.

Status of the Corporate GroupManagement Policies
1.

Company’s Basic Management Policies・・・・・・・・・・・・・・・・・・・・・・・・・・・ 9

2.

Key Management Benchmarks・・・・・・・・・・・・・・・・・・・・・・・・・・・ 93.

Medium- to Long-Term Management Strategies・・・・・・・・・・・・・・・・・・・・・・・・・・・ 10

4.

Tasks Ahead for the Company・・・・・・・・・・・・・・・・・・・・・・・・・・・ 10

Consolidated Financial Statements
1.

Consolidated Balance Sheets・・・・・・・・・・・・・・・・・・・・・・・・・・・ 122.

Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Consolidated Statements of Income) ・・・・・・・・・・・・・・・・・・・・・・・・・・・14(Consolidated Statements of Comprehensive Income) ・・・・・・・・・・・・・・・・・・・ 17
3.

Consolidated Statements of Changes in Net Assets・・・・・・・・・・・・・・・・・・・・・・・・・・・18

4.

Consolidated Statements of Cash Flows・・・・・・・・・・・・・・・・・・・・・・・・・・・ 20

5.

Notes to the Consolidated Financial Statements・・・・・・・・・・・・・・・・・・・・・・・・・・・22
1) Changes in Significant Accounting Policies in the Preparation of Consolidated
Financial Statements・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 22
2) Comprehensive Income・・・・・・・・・・・・・・・・・・・・・・・・・・・22
3) Segment Information・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 23
4) Financial Instruments・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 29
5) Investments in Securities･・・・・・・・・・・・・・・・・・・・・・・・・・・・ 41
6) Investments in Monetary Trusts・・・・・・・・・・・・・・・・・・・・・・・・・・・44
7) Derivative financial instruments・・・・・・・・・・・・・・・・・・・・・・・・・・・45
8) Per Share Information・・・・・・・・・・・・・・・・・・・・・・・・・・・ 48
9) Subsequent Events・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 48

V.

Other Information
1.

Changes in Executive Management・・・・・・・・・・・・・・・・・・・・・・・・・・・ 49

2.

Other Information・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・49(Attachment)
Consolidated Financial Results for the Year Ended March 31, 2011 and Preliminary Sony Life’s Market
Consistent Embedded Value* We will upload Preliminary Sony Life’s Market Consistent Embedded Value, as of March 31, 2011 on
May 20, 2011 at 15:00 (Tokyo).
Please see futher details at our website: http://www.sonyfh.co.jp/index_en.html

1* The Conference Call for explaining the SFH Group financial results will be held at 17:00, May 20, 2011.
We are sorry for any inconvenience that our Conference Call will be held only in Japanese.
We will upload the Presentation Materials with speech text on May 20, 2011, and its Q&A summary lateron Presentation Materials page on our website.
* On May 20, 2011, SFH’s significant subsidiaries: Sony Life Insurance Co., Ltd. (Sony Life), Sony Assurance
Inc. (Sony Assurance) and Sony Bank Inc. (Sony Bank) will announce its financial results for the year ended
March 31, 2011. SFH prepared an English-language summary of those Japanese announcements made by
above subsidiaries, solely for convenience of non-Japanese readers.
Please see further details at our website: http://www.sonyfh.co.jp/en/financial_info_e/results.html

2

I. Qualitative Information and Financial Statements
1. Qualitative Information on Consolidated Operating Performance
1) Analysis of Operating Performance
During the year ended March 31, 2011 (April 1, 2010 through March 31, 2011), the Japanese economy was in a phase of
gradual recovery following the previous year’s global financial disruption. The economy did not bottom out completely,
however, owing to sharp yen appreciation and employment uncertainty. Furthermore, on March 11, 2011, the Great East
Japan Earthquake caused massive destruction, including the release of radioactive materials at the Fukushima nuclear power
plant, which will take time to resolve. The resulting disruption is likely to delay recovery of the affected area and cause
manufacturing activity to stagnate, prompting concerns of an economic downturn in Japan.
Against this backdrop, the SFH Group provided high-quality products and services in its aim to become one of the mosthighly trusted financial services groups. The Group also implemented various measures to satisfy increasingly diverse
customer needs.
On the operational front, consolidated ordinary revenues grew 2.4% compared with the previous fiscal year, to ¥1,002.2
billion, owing to increases in ordinary revenues from the life insurance business and the non-life insurance business, althoughthese revenues were down in the banking business. Consolidated ordinary profit decreased 8.9% year on year, to ¥76.8
billion. By business segment, ordinary profit from the life insurance and non-life insurance businesses decreased, whereas
ordinary profit from the banking business increased year on year.
Looking at the effects of the earthquake on Group performance, consolidated operating profit was down approximately¥5.5 billion, due mainly to an increase in insurance claims and other payments including an increase in provision for reservefor outstanding claims in the life insurance business, a level we consider relatively limited.
Extraordinary losses of ¥8.8 billion were recorded during the year ended March 31, 2011, due mainly to the provision of areserve for price fluctuations of ¥7.1 billion in the life insurance business, compared with a ¥5.9 billion provision during theprevious fiscal year.
After accounting for extraordinary gains (losses), provision for reserve for policyholders’ dividends and income taxes,
net income for the year ended March 31, 2011, was down 13.3% year on year, to ¥41.7 billion.
Segment Information by Business< Life insurance business >In the life insurance business, income from insurance premiums increased year on year, associated with steady increases
in the new policy amount and the policy amount in force. On the other hand, investment income decreased mainly due
to the deterioration of investment performance on separate account assets, which offset the positive impact of higher
interest income and dividends and gains on sale of securities among general account assets. As a result, ordinary
revenues increased 2.1% from the previous fiscal year, to ¥900.3 billion. Ordinary profit decreased 9.5% year on year,to ¥72.1 billion, mainly reflecting an increase in provision for reserve for outstanding claims, affected by the Great East
Japan Earthquake, and an increase in provision of policy reserve for minimum guarantee for variable life insurance, as
well as an additional provision of policy reserve for some third-sector insurance products, due to a change in actuarial
assumptions , which offset the positive impact of higher investment revenues in the general account assets.

< Non-life insurance business >In the non-life insurance business, ordinary revenues increased 8.8% compared with the previous fiscal year, to¥74.1billion, due to increased net premiums written, as the number of insurance policies in force grew, primarily for ourmainstay automobile insurance. Ordinary profit decreased 16.4% year on year, to ¥2.1 billion, owing mainly toincreases in net losses paid and the provision for reserve for outstanding losses due to an increased number of car
accidents, which offset the positive impact of a lower expense ratio.

3

< Banking business > In the banking business, ordinary revenues decreased 3.2% compared with the previous fiscal year, to ¥29.5 billion,
due mainly to a decrease in gains on foreign exchange transactions. Gross operating profit increased, led by a
expanding business operations, especially mortgage loans, and improved investment performance. Ordinary profit
increased, as the business offset the negative impact of higher general and administrative expenses, particularly
system-related expenses. Ordinary profit increased 24.9% year on year, to ¥2.4 billion, as the business offset thenegative impact of higher general and administrative expenses, particularly system-related expenses.

Ordinary Revenues(Millions of yen)Life insurance business
Non-life insurance
business
Banking business
Subtotal
Corporate andeliminations
Consolidated

For the year ended
March 31, 2010
882,045

For the year ended
March 31, 2011
900,359

Change (%)
2.1

68,174

74,1668.8

30,520980,740

29,5591,004,085

(3.2)
2.4

(1,749)(1,883)

7.7

978,991

1,002,201

2.4

Ordinary Profit(Millions of yen)Life insurance business
Non-life insurance
business
Banking business
Subtotal
Corporate andeliminations
Consolidated

For the year ended
March 31, 2010
79,781For the year ended
March 31, 2011
72,172

Change (%)
(9.5)

2,565

2,144

(16.4)

1,928
84,2752,407
76,724

24.9
(9.0)

98

135

37.8

84,37376,860(8.9)2) Consolidated Financial Forecast for the Year Ending March 31, 2012
SFH’s consolidated financial results forecast for the fiscal year ending March 31, 2012 (April 1, 2011 through March 31,2012) is as follows. We expect consolidated ordinary revenues to increase 2.0%, to ¥1,022.0 billion, compared with theperiod ended March 31, 2011, owing to steady business expansion in all three business segments. Despite an anticipatedincrease in ordinary revenues, we expect consolidated ordinary profit and net income to decrease 23.2%, to ¥59.0 billion,
and 30.5%, to ¥29.0 billion, respectively. During the fiscal year ended March 31, 2011, Sony Life recorded net capital gainsof ¥23.8 billion in the life insurance business, reflecting the process of shifting bond holdings to ultralong-term bonds toreduce interest rate risk. However, the Company does not anticipate gains on the sale of securities for the year ending
March 31, 2012, because the process of shifting its bond holdings was largely completed in the previous period.
The above-mentioned consolidated forecast was made based on information currently available to us. To some extent,
the forecast factors in the currently anticipated effects of Great East Japan Earthquake. As it is difficult to precisely forecast
the risks accompanying a delay in economic recovery or future financial market conditions, we assume that interest rates,
foreign exchange rates, and stock market prices will not fluctuate significantly from their levels as of March 31, 2011.
Therefore, the figures stated above may differ from actual results for a variety of reasons.

4

(Billions of yen)
Net income

Ordinary revenues

Ordinary profit

497.0

27.0

13.0

496.2

51.5

29.4

Forecast for the year ending
March 31, 2012

1,022.0

59.0

29.0

(Reference)
Actual results for the year ended
March 31, 2011

1,002.2

76.8

41.7

For the first six months
Forecast for the six months ending
September 30, 2011
(Reference)
Actual results for the six months ended September 30,
2010
For the full year

Business segment forecasts for the fiscal year ending March 31, 2012 (April 1, 2011 through March 31, 2012) are as follows.
Forecast figures from each business reflect corporate and eliminations.
<Life insurance business>
Ordinary revenues for the year ending March 31, 2012, are expected to increase 1.0% year on year, to ¥909.3 billion. We
anticipate that income from insurance premiums will increase in line with steady growth of the policy amount in force. We
expect ordinary profit to decrease 26.6% year on year, to ¥53.0 billion. During the fiscal year ended March 31, 2011, Sony
Life recorded net capital gains of ¥23.8 billion, reflecting the process of shifting bond holdings to ultralong-term bonds toreduce interest rate risk. However, it does not anticipate gains on the sale of securities for the year ending March 31, 2012,
because the process of shifting its bond holdings was largely completed in the previous period.

Ordinary revenues(Billions of yen)
Ordinary profit

For the first six months
Forecast for the six months ending September 30, 2011

442.0

25.0

444.5

49.5

Forecast for the year ending March 31, 2012

909.3

53.0

(Reference)
Actual results for the year ended March 31, 2011

900.3

72.1

(Reference)
Actual results for the six months ended September 30, 2010
For the full year

<Non-life insurance business>
Ordinary revenues for the year ending March 31, 2012 are expected to rise 8.4% year on year, to ¥80.4 billion, due to anincrease in net premiums written, mainly for mainstay automobile insurance. Ordinary profit is expected to increase 21.2%
year on year, to ¥2.6 billion, due mainly to the aforementioned increase in ordinary revenues and an expected improvement in
the loss ratio in line with the February 2011 revision of automobile insurance premiums. This should offset an expected
increase in the expense ratio in line with the planned reinforcement of corporate systems and infrastructure based on the
expected expansion of business operations.

5Ordinary revenues(Billions of yen)
Ordinary profit

40.1

0.3

37.1

0.6

Forecast for the year ending March 31, 2012

80.4

2.6

(Reference)
Actual results for the year ended March 31, 2011

74.1

2.1

For the six months
Forecast for the six months ending September 30, 2011
(Reference)
Actual results for the six months ended September 30, 2010
For the full year

<Banking business>
Ordinary revenues for the year ending March 31, 2012, are expected to increase 11.0% year on year, to ¥32.8 billion, owing
mainly to an increase in net interest income, bolstered by a growing balance of loans, especially mortgages.
Ordinary profit is expected to grow 70.3%, to ¥4.1 billion, from the previous fiscal year, as we anticipate a steadyincrease in gross operating profit, driven by business expansion that should offset an increase in general and administrative
expenses related to new product and service developments.
(Billions of yen)
Ordinary revenues
Ordinary profit
For the six months
Forecast for the six months ending September 30, 2011

15.8

1.7

15.4

1.2

Forecast for the year ending March 31, 2012

32.8

4.1

(Reference)
Actual results for the year ended March 31, 2011

29.5

2.4

(Reference)
Actual results for the six months ended September 30, 2010
For the full year

2. Qualitative Information on Consolidated Financial Position
1) Assets, Liabilities and Net Assets
As of March 31, 2011, total assets amounted to ¥6,597.1 billion, up 9.9% from March 31, 2010. Among major components ofassets, securities, mostly Japanese government bonds, amounted to ¥5,031.0 billion, up 12.1% from March 31, 2010. Loanscame to ¥857.4 billion, up 20.0%, and monetary trusts amounted to ¥290.7 billion, down 3.3%.
Total liabilities were ¥6,302.2 billion, up 10.0% from March 31, 2010. Major components of liabilities included policy
reserve and others of ¥4,489.8 billion, up 9.8%, and deposits totaled ¥1,647.6 billion, up 9.2%.
Total net assets were ¥294.8 billion, up 9.4% from March 31, 2010. This included net unrealized gains on othersecurities, net of taxes, which decreased ¥8.9 billion, to ¥8.5 billion.
2) Cash FlowsNet cash provided by operating activities for the year ended March 31, 2011, was ¥527.5 billion, up ¥33.3 billion from thepreceding year. The major reasons were an increase in inflows due to a net decrease in call loans in the banking businessand increases in interest income and dividends and in income from insurance premiums in the life insurance business,,which offset a decrease in inflows from customer deposits and an increase in outflows due to a growing balance of loans in
the banking business.

6

Net cash used in investing activities was ¥559.7 billion, up ¥181.0 billion. The primary reason was a decrease ininflows from a declining cash collection from monetary trusts in the life insurance business, which offset an increase ininflows from sale and redemption of securities among the life insurance and the banking businesses.
Net cash used in financing activities came to ¥6.5 billion, almost unchanged from the previous year. This cash outflow
was due primarily to dividend payments.
As a result of the above factors, cash and cash equivalents at March 31, 2011, were ¥161.8 billion, down ¥38.7 billion fromMarch 31, 2010.

3. Basic Policy on Returns to Shareholders and Dividends for the Year Ended March 31, 2011, and theYear Ending March 31, 2012
We consider an increase in returns to our shareholders, as well as return on equity, among our most important managementtasks. Our basic policy on returning profits to our shareholders is to provide stable dividends to shareholders while ensuring
the high level of financial soundness that is necessary to maintain the trust of existing customers and attract new ones, as well
as securing sufficient retained earnings for future business development.
In keeping with the basic policy outlined above, we propose to pay an annual cash dividend of ¥4,000 per share (total
amount of ¥8.7 billion) for the year ended March 31, 2011, up ¥1,000 from the previous period.
We plan to pay the same amount of total dividends for the year ending March 31, 2012. In light of the 200-for-1 stock split,
effective on April 1, 2011, on shares listed or recorded in the final shareholder registry as of March 31, 2011, the annual cash
dividend per share for the year ending March 31, 2012, would be ¥20 under the above assumption.
We will continue to make dividend payments once a year, following the resolution of the general meeting of shareholders,with the dividend record date at the end of each fiscal year.

II. Status of the Corporate GroupOn April 1, 2004, SFH was established as a financial holding company (an insurance holding company and a bankholding company) through a corporate separation from Sony Corporation. On October 11, 2007, SFH listed its common
stock on the First Section of the Tokyo Stock Exchange, by publicly offering its shares to Japanese and overseas
investors, resulting in Sony Corporation’s ownerships to account for 60% of the total outstanding shares of SFH.
As of March 31, 2011, SFH Group included as direct subsidiaries Sony Life, Sony Assurance and Sony Bank andas indirect subsidiaries Sony Life Insurance (Philippines) Corporation, a subsidiary of Sony Life, and Sony Bank
Securities Inc. (Sony Bank Securities), a subsidiary of Sony Bank. It also includes AEGON Sony Life Insurance Co.,
Ltd. (AEGON Sony Life Insurance) and SA Reinsurance Ltd., as affiliated companies accounted for under the equity
method.
 Sony Financial Holdings Inc. (Management control of its subsidiaries and all duties incidental to that role)[Directly Held, indirectly held subsidiaries and affiliated companies accounted for under the equity method]<Life insurance business> Sony Life Insurance Co., Ltd. (Wholly-owned by SFH)
 Sony Life Insurance (Philippines) Corporation (Wholly-owned by Sony Life) AEGON Sony Life Insurance Co., Ltd. (50%-owned by Sony Life)
 SA Reinsurance Ltd. (50%-owned by Sony Life)

7

<Non-life insurance business> Sony Assurance Inc. (Wholly-owned by SFH)
<Banking business> Sony Bank Inc. (Wholly-owned by SFH)
 Sony Bank Securities Inc. (Wholly-owned by Sony Bank)[Organizational chart] (As of March 31, 2011)

Sony
Corporation

Sony Financial
Holdings Inc.

<Life insurance business>
Sony Life InsuranceCo., Ltd.

<Non-life insurance
business>Sony Assurance Inc.

<Life insurance
business><Life insurance
business>
SA Reinsurance Ltd.

<Life insurance
business>Sony Life Insurance

AEGON Sony Life

(Philippines)

Insurance Co., Ltd.

<Banking business>
Sony Bank Inc.

<Banking business>
Sony Bank
Securities Inc.

Corporation

Consolidated subsidiaries

Trade name and trademark licenseManagement control fee

Affiliated companies
accounted for under theequity method

Sales and referrals of
the other’s products

Shareholding

8III. Management Policies
1. Company’s Basic Management Policies
The SFH Group positions its corporate vision and philosophy as the basic policy for setting management strategy and
expediting management decision-making. The Group’s corporate vision and philosophies are described below.
a. Corporate Vision
The SFH Group seeks to become the most highly trusted financial services group by customers. To this end, the SFH
Group will combine many different financial functions (savings, investment, borrowing, and protection) to provide
high-value added financial products and high-quality services that meet every customer’s financial needs.
b. Corporate Principles
Put the Customer FirstWe will provide financial products and services that satisfy customers by embracing their individual views, toensure that we help them lead prosperous lives with financial security.
Give Back to Society
We believe that a special commitment to the public good is demanded of a financial services enterprise. Consciousof this, we will realize our vision by upholding the highest ethics and a strong sense of purpose, and thereby giveback to society. In addition, we will fulfill our responsibilities as a good corporate citizen and member of society.
Strive for Originality
We will constantly strive to come up with fresh ideas from basic principles as we pursue creativity and innovation,
instead of merely following custom and convention.
Foster an Open Corporate Culture
We believe that every employee’s contribution is important to develop our ideal of a financial services enterprise.
We will thus foster an open corporate culture where employees can freely express their individuality and demonstrate
their abilities to the fullest.

2. Key Management Benchmarks
SFH closely follows the following management benchmarks aiming at raising its corporate value.
■ Consolidated ordinary revenues■ Consolidated ordinary profit■ Consolidated net income■ Consolidated adjusted ROE
Consolidated adjusted ROE is calculated as follows.
Consolidated adjusted ROE = consolidated adjusted profit divided by consolidated adjusted capital
Consolidated adjusted profit is calculated as the sum of the following:
1) Sony Life:The amount of increase in Embedded Value (EV* : adjusted net worth plus value ofexisting business) during the fiscal year plus dividends paid
2) Sony Assurance: The net income plus provision for catastrophe reserve and its provision for reserve for pricefluctuations, in each case after taxes
3) Sony Bank:
Net income
Consolidated adjusted capital is calculated as the sum of the following:
1) Sony Life:
EV* as of the beginning of the fiscal year less dividends paid plus EV* as of the end of
the fiscal year, divided by two
2) Sony Assurance: The average amount of net assets plus the sum of catastrophe reserve and its reserve forprice fluctuations, in each case after taxes
3) Sony Bank:
The average amount of net assets

9

*Sony Life discloses Market Consistent Embedded Value (“MCEV”). Sony Life’s MCEV is calculated in compliancewith the European Insurance Chief Financial Officer (CFO) Forum Market Consistent Embedded Value Principles©
(“MCEV Principles”), the international standard in disclosing MCEV published by the CFO Forum comprised of CFOs
from major insurance companies in Europe.

Consolidated adjusted profit and consolidated adjusted capital take into consideration dividends from the Groupsubsidiaries and other special factors.

3. Medium- to Long-Term Management Strategies
The SFH Group aims to maximize the corporate value of the Group over the medium to long term by implementing themanagement strategies outlined below.
(a) Sustainable and Stable Growth of Group Companies
Sony Life:
Sony Life provides detailed tailored consulting and follow-up services through life insurance
professionals—Lifeplanner sales employees and Partners (independent agencies)—who havebroad-ranging expertise and extensive experience in such areas as economics, finance andtaxation. Sony Life strives to strengthen its capabilities and hone its competitive edge in theindividual life insurance market by providing value in a way that only Sony Life can.
Sony Assurance: Capitalizing on the strengths of its position as a direct insurance provider that communicateswith each of its customers directly via the Internet and the telephone, Sony Assurance precisely
understands customer opinions and needs, and provides products and services from a customer
viewpoint. Sony Assurance aims to increase its income from insurance premiums by offering
reasonably priced insurance premiums realized by risk-segmented products and operational
efficiency.
Sony Bank:
Sony Bank is an Internet bank focused on the needs of individual customers. By maximizing
information technologies, the bank works to provide fair and highly convenient financial
products and services. By ensuring its trustworthiness in such ways, the bank is working to
expand its operations further.
(b) Fostering Synergy among Group Companies
In addition to the growth of each company within the Group, we seek to enhance synergies among the companiesof the SFH Group. Such efforts include the joint offering of products and services, the sharing of distribution
channels and infrastructure and other forms of collaboration. By increasing intra-group synergies, SFH aims tooffer customers attractive and high-value-added products and services that are unmatched by conventional
financial institutions.
(c) Expanding into New Business Fields, Outside the Existing Framework
Through the growth of Group companies and increased synergies within the Group, we aim to move beyond theexisting framework of the SFH Group. We are examining active advancements into new business fields that willraise our corporate value even further.

4. Tasks Ahead for the Company
We expect the Japanese economy’s recovery to remain sluggish during the year ending March 31, 2012, due mainly
to the likely aftermath of the Great East Japan Earthquake, including stagnation in the manufacturing sector andconsumption reflecting uncertain electricity supply, as well as to sharply higher crude oil prices and ongoing yen
appreciation. Regardless, the insurance and banking industries must serve their role in providing proper and stablefinancial services, while consistently executing growth strategies.

10

The SFH Group seeks to become the financial services group that is most highly trusted by customers. To this end,
the Group has redoubled its internal control efforts focused on compliance, risk management, eradicating anti-social
influences and ensuring the protection of personal information. The SFH Group has also explored its ideal of providing
financial services for individual customers from various perspectives. We are working to realize our vision and achieve
ongoing increases in corporate value by executing the above management strategies. At the same time, we identify oursocial role and mission as a financial institution as contributing to the realization of a sustainable society. We will fulfill
our responsibilities to our stakeholders accordingly.

11IV. Consolidated Financial Statements
1. Consolidated Balance Sheets(Millions of yen)
As of March 31, 2010

As of March 31, 2011

AssetsCash and due from banks
Call loans and bills bought
Monetary claims purchased
Monetary trusts
Securities
Loans
Tangible fixed assets
Land
Buildings
Leased assets
Other tangible fixed assets
Intangible fixed assets
Software
Goodwill
Leased assets
Other intangible fixed assets
Due from reinsurers
Foreign exchanges
Other assets
Deferred tax assets
Customers’ liabilities for acceptances and guarantees
Reserve for possible loan losses¥103,649
146,879
3,292
300,7434,488,458
714,486
81,93133,07647,176274
1,405
20,687
19,120
1,503
0
64
205
5,100
101,684
34,987—(1,019)¥90,455
78,500—290,736
5,031,024
857,436
77,171
31,46944,088232
1,382
26,24625,190
1,002
—
53
108
8,432
88,32049,0571,000(1,349)Total Assets¥6,001,088¥6,597,140

12

(Millions of yen)

Liabilities
Policy reserves and others
Reserve for outstanding claims
Policy reserves
Reserve for policyholders’ dividends
Due to agencies
Due to reinsurers
Deposits
Call money and bills soldBorrowed money
Foreign exchanges
Other liabilities
Reserve for employees’ bonuses
Reserve for employees’ retirement benefits
Reserve for directors’ retirement benefits
Special reserves
Reserve for price fluctuations
Reserve for financial products transaction liabilities
Deferred tax liabilities
Deferred tax liabilities on land revaluation
Acceptances and guarantees
Total Liabilities
Net Assets
Common stock
Capital surplus
Retained earnings
Total shareholders’ equity
Net unrealized gains on other securities, net of taxes
Net deferred losses on hedging instruments, net of taxes
Land revaluation, net of taxes
Foreign currency translation adjustments
Total accumulated other comprehensive income
Total Net Assets
Total Liabilities and Net Assets

13

As of March 31, 2010

As of March 31, 2011

¥4,088,186
39,151
4,043,958
5,076
1,445
853
1,509,295
10,0002,000
2090,6992,496
15,915
360
9,667
9,665
2
0
706
—

¥4,489,809
49,1644,435,804
4,839
1,502
799
1,647,657
10,0002,000
17110,119
2,707
18,698441
16,817
16,812
4
—
693
1,000

5,731,648

6,302,263

19,900195,277
39,350254,527
17,511(960)(1,475)(163)
14,912

19,900195,277
74,565
289,742
8,525(1,558)(1,499)
(331)
5,135

269,439

294,877¥6,001,088¥6,597,140

2. Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Consolidated Statements of Income)(Millions of yen)
For the year ended
March 31, 2010

For the year ended
March 31, 2011

Ordinary Revenues¥978,991¥1,002,201

Ordinary Revenues from the Life Insurance Business

880,353

898,513699,459

769,711697,525

767,640

1,933

2,071

175,374

119,287

Interest income and dividends

70,59987,272

Income from monetary trusts, net

22,887

6,983

Gains on sale of securities

15,15325,030Gains on redemption of securities

3,939

0

37

1

Income from insurance premiums
Insurance premiums
Ceded reinsurance commissions
Investment income

Other investment income
Gains on separate accounts, net

62,757—

Other ordinary income

5,519

9,514

Ordinary Revenues from the Non-life Insurance Business

68,172

74,164

67,46873,37567,44073,343

27

31

681

767

688

784

Gains on sale of securities

7

3

Gains on redemption of securities

12

10

Transfer to interest and dividends on deposits of premiums

(27)

(31)

Other ordinary income

2222Underwriting income
Net premiums written
Interest and dividends on deposits of premiums
Investment income
Interest income and dividends

Ordinary Revenues from the Banking Business

30,46629,52323,393

23,667

Interest income on loans

11,962

12,443

Interest income and dividends on securities

10,93011,113

Interest income on call loans and bills bought

86

25Interest income on deposits with banks

53

52

Interest income on interest rate swaps

2

—

358

32

Interest income

Other interest income
Fees and commissions

1,924

1,946

Other operating income

5,122

3,869

4,723

2,677

398

1,192

26

40

Gains on foreign exchange transactions, net
OthersOther ordinary income(Continued)

14

(Millions of yen)

Ordinary Expenses
Ordinary Expenses from the Life Insurance Business

For the year ended
March 31, 2010

For the year ended
March 31, 2011

¥894,618¥925,341

801,870

827,717

Insurance claims and other payments
Insurance claims
Annuity payments
Insurance benefits
Surrender payments
Other payments
Reinsurance premiums
Provision for policy reserves and others
Provision for reserve for outstanding claims
Provision for policy reserves
Interest portion of reserve for policyholders’ dividends
Investment expenses
Interest expenses
Losses on sale of securities
Devaluation losses on securities
Losses on redemption of securities
Foreign exchange losses, net
Provision for reserve for possible loan losses
Depreciation of real estate for rent and others
Other investment expenses
Losses on separate accounts, net
Operating expenses

274,285
64,8597,742
34,670162,697
1,950
2,366
395,5832,311
393,267
4
20,411
29
10,078
—
361
870
3
2,693
6,373
—
96,777

297,973
76,514
8,224
38,346
170,7201,853
2,314
392,766
6,834
385,910
21
19,154
56
1,867
348
23
618
20
2,471
6,278
7,470
99,239Other ordinary expenses
Ordinary Expenses from the Non-life Insurance Business

14,81365,164

18,583
71,589Underwriting expenses

48,807

54,123Net losses paid
Loss adjustment expenses
Net commission and brokerage fees
Provision for reserve for outstanding losses
Provision for underwriting reserves
Other underwriting expenses
Investment expenses

34,573
4,009
893
1,996
7,334
0
13

39,256
4,782
957
3,178
5,948
0
2

Losses on sale of securities

12—

Losses on redemption of securities

1

2

16,322

17,42720

36

Operating, general and administrative expenses
Other ordinary expenses(Continued)

15

(Millions of yen)
For the year ended
March 31, 2010

For the year ended
March 31, 2011¥27,583¥26,033

Interest expenses
Interest expenses on deposits
Interest expenses on call money and bills soldInterest on borrowed money
Interest expenses on interest rate swaps
Other interest expenses

10,364
8,535
31
50
1,745
1

10,448
8,402
12
50
1,980
2

Fees and commissions

1,204

1,221

Other operating expenses

2,986

480

General and administrative expenses

12,621

13,360407

523

84,37376,860Extraordinary Gains
Gains on disposal of fixed assets

0
0

0
0

Extraordinary Losses
Losses on disposal of fixed assets

7,056
1,051

8,801
72

5

1,291

—

290

5,998

7,147

5,998

7,147

Provision for Reserve for Policyholders’ dividends

3,516

1,257

Income Before Income Taxes

73,79966,800

Income Taxes

25,67325,083- Current

24,07933,983- Deferred

1,593(8,899)—41,716¥48,126¥41,716

Ordinary Expenses from the Banking Business

Other ordinary expenses
Ordinary Profit

Impairment losses
Loss on adjustment for changes of accounting standard for
asset retirement obligations
Provision for special reserves
Provision for reserve for price fluctuations

Income Before Minority Interests
Net Income162. Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Consolidated Statements of Comprehensive Income)(Millions of yen)
For the year ended
March 31, 2010

For the year ended
March 31, 2011

Income Before Minority Interests—¥41,716

Other comprehensive income
Net unrealized losses on other securities, net of taxes—(8,986)

Net deferred losses on hedging instruments, net of taxes

—

(598)

Foreign currency translation adjustments

—

(168)

—

0

—

(9,752)Comprehensive income—

31,963(Details)
Comprehensive income attributable to parent company—

31,963Comprehensive income attributable to minority interests——

Share of other comprehensive income of affiliates accounted
for using equity method
Total other comprehensive income173. Consolidated Statements of Changes in Net Assets(Millions of yen)
For the year ended
March 31, 2010

For the year ended
March 31, 2011¥19,900¥19,900——

19,90019,900195,277

195,277——

195,277

195,277(2,251)39,350

Dividends from surplus(6,525)(6,525)

Net income

48,126

41,716—23

Total changes during the period

41,60135,215

Balance at the end of the current period

39,35074,565

212,925

254,527

Dividends from surplus(6,525)(6,525)

Net income

48,126

41,716—23

Total changes during the period

41,60135,215

Balance at the end of the current period

254,527

289,742(4,853)

17,511

Net changes of items other than shareholders’ equity

22,365(8,986)

Total changes during the period

22,365(8,986)

Balance at the end of the current period

17,511

Shareholders’ Equity
Common stock
Balance at the end of the previous period
Changes during the period
Total changes during the period
Balance at the end of the current period
Capital surplus
Balance at the end of the previous period
Changes during the period
Total changes during the period
Balance at the end of the current period
Retained earnings (deficits)
Balance at the end of the previous period
Changes during the period

Reversal of land revaluation

Total shareholders’ equity
Balance at the end of the previous period
Changes during the period

Reversal of land revaluation

Total accumulated other comprehensive income
Net unrealized gains (losses) on other securities, net of taxes
Balance at the end of the previous period
Changes during the period

8,525(Continued)

18

(Millions of yen)
For the year ended
March 31, 2010

For the year ended
March 31, 2011

Net deferred losses on hedging instruments, net of taxes
Balance at the end of the previous period¥(1,449)¥(960)Net changes of items other than shareholders’ equity

489

(598)

Total changes during the period

489

(598)

Balance at the end of the current period(960)(1,558)(1,475)(1,475)

Net changes of items other than shareholders’ equity

—

(23)

Total changes during the period

—

(23)

Balance at the end of the current period(1,475)(1,499)

(248)

(163)

Net changes of items other than shareholders’ equity

85

(168)

Total changes during the period

85

(168)

Balance at the end of the current period

(163)

(331)

(8,028)14,912

Net changes of items other than shareholders’ equity

22,940(9,776)

Total changes during the period

22,940(9.776)

Balance at the end of the current period
Total Net Assets

14,912

5,135

Balance at the end of the previous period

204,897

269,439

Dividends from surplus(6,525)(6,525)

Net income

48,126

41,716—23

Net changes of items other than shareholders’ equity

22,940(9,776)

Total changes during the period

64,541

25,438

Balance at the end of the current period¥269,439¥294,877

Changes during the period

Land revaluation, net of taxes
Balance at the end of the previous period
Changes during the period

Foreign currency translation adjustments
Balance at the end of the previous period
Changes during the period

Total accumulated other comprehensive income
Balance at the end of the previous period
Changes during the period

Changes during the period

Reversal of land revaluation

194. Consolidated Statements of Cash Flows(Millions of yen)
For the year ended
March 31, 2010

For the year ended
March 31, 2011

¥73,799¥66,800

Depreciation of real estate for rent and others

2,693

2,471

Depreciation and amortization

3,971

4,964

5

1,291

501

501

4,307

10,013400,601

391,858

4

21

3,516

1,257

354

334

Increase in reserve for employees’ retirement benefits

2,550

2,925

Increase in reserve for directors’ retirement benefits

50

80

Increase (decrease) in reserve for price fluctuations

5,998

7,147

1

1

Interest income and dividends(94,681)(111,723)(Gains) losses on securities(74,733)(22,935)

Interest expenses

10,394

10,504

Exchange losses

2,395

15,357

Losses on disposal of tangible fixed assets

198

338

Equity in losses of affiliates

307

944

Net increase in loans(109,797)(136,126)

Net increase in deposits

183,758

137,829

Net (increase) decrease in call loans and bills bought(5,170)45,079Net (increase) decrease in foreign exchange (assets)

1,254(3,332)

Net increase (decrease) in foreign exchange (liabilities)

11

(3)

Others, net

10,57826,468Subtotal

422,874452,072

Interest and dividends received

99,486

118,903

Interest paid

(11,165)(11,123)(983)(1,516)

Income taxes paid

(15,985)(30,752)

Net cash provided by operating activities

494,225

527,582

Cash flows from operating activities
Income before income taxes

Impairment losses
Amortization of goodwill
Increase in reserve for outstanding claims
Increase in policy reserve
Increase in interest portion of reserve for policyholders’dividends
Increase (decrease) in reserve for policyholders’ dividends
Increase in reserve for possible loan losses

Increase in reserve for financial products transaction liabilities

Policyholders’ dividends paid

(Continued)

20

(Millions of yen)
For the year ended
March 31, 2010

For the year ended
March 31, 2011

Cash flows from investing activities
Investments in monetary trusts¥(55,750)¥(2,290)

Proceeds from sale of monetary trusts

372,000

33,381(1,441,592)(1,441,560)

Proceeds from sale and redemption of securities

770,912886,094

Investments in loans(46,145)(46,680)

Collections of loans

17,84019,263

Others, net

13,583—(369,151)(551,791)

125,073(24,209)(2,514)(1,112)0

1,450

Purchases of intangible fixed assets(6,739)(8,310)Purchase of securities of a subsidiary

(300)

—

—

(7)

(378,706)(559,771)(6,521)(6,521)

(59)

(38)

(6,580)(6,560)20(40)

Net increase (decrease) in cash and cash equivalents

108,959(38,790)

Cash and cash equivalents at beginning of the fiscal year

91,634

200,593¥200,593¥161,803

Purchases of securities

Total of net cash used in investment transactions
Total of net cash provided by (used in) operating activities
and investment transactions
Purchases of tangible fixed assets
Proceeds from sale of tangible fixed assets

OthersNet cash used in investing activities
Cash flows from financing activities
Cash dividends paid
OthersNet cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents

Cash and cash equivalents at end of the fiscal year

Note: Cash flows from investing activities include cash flows from lending operations of the insurance business.

21

5. Notes to the Consolidated Financial Statements
1) Changes in Significant Accounting Policies in the Preparation of Consolidated Financial Statements(Application of “Accounting Standard for Asset Retirement Obligations”)
Effective from the year ended March 31, 2011 SFH applied the “Accounting Standard for Asset Retirement Obligations”(ASBJ Statement No.18 of March 31, 2008) and the “Guidance on Accounting Standard for Asset Retirement Obligations”(ASBJ Guidance No.21 of March 31, 2008). Accordingly, ordinary profit and income before income taxes for the year
ended March 31, 2011, were ¥35 million and ¥326 million lower, respectively, than they would have been absent thisapplication. The change in asset retirement obligations incurred due to the initial application of the accounting standard forthe fiscal year was ¥659 millions.
2) Comprehensive Income
For the year ended March 31, 2011
(Millions of yen)Note1:

Note2:

Comprehensive income for the year ended March 31, 2010
Comprehensive income attributable to parent company
Comprehensive income attributable to minority interests
Total
Other comprehensive income for the year ended March 31, 2010
Net unrealized gains on other securities, net of taxes
Net deferred gains on hedging instruments, net of taxes
Foreign currency translation adjustments
Share of other comprehensive income of affiliates accounted for by theequity method
Total

22

¥71,066―¥71,066¥22,365489
85(0)¥22,940

3) Segment Information

Life insurance
business

Millions of yen
As of and for the year ended March 31, 2010
Non-life
Banking
insurance
Total
Elimination
businessbusiness

Consolidated

Ordinary revenues:
External customers
Intersegment
Total
Ordinary expenses
Ordinary profit¥880,353
1,692
882,045
802,264¥79,781¥68,1722
68,17465,609¥2,565¥30,46654
30,52028,592¥1,928¥978,991
1,749
980,740
896,465¥84,275—¥(1,749)(1,749)(1,847)¥98¥978,991—
978,991
894,618¥84,373

Assets, depreciationand capital
expenditure:
AssetsDepreciation
Capital expenditure¥4,286,045
5,103
5,049

¥98,340509
1,428¥1,613,010
1,227
1,952

¥5,997,396
6,840
8,430

¥3,69112
2¥6,001,088
6,852
8,432

Notes:
1. The life insurance business consists of Sony Life Insurance Co., Ltd., Sony Life Insurance (Philippines) Corporation,
and AEGON Sony Life Insurance Co., Ltd. (whose name was changed from AEGON Sony Life Planning Co., Ltd., in
August 2009.). The non-life insurance business consists of Sony Assurance Inc., and the banking business consists ofSony Bank Inc. and Sony Bank Securities Inc. In addition to those companies, SA Reinsurance Ltd. was included in
the life insurance business in the year ended March 31, 2010.
2. Unallocated ordinary expenses that are included in “elimination” for the year ended March 31, 2010 amount to ¥969
million, most of which are ordinary expenses of SFH. Unallocated corporate assets that are included in “elimination”
are ¥4,619 million, most of which are deposits and others of SFH.

23

As ASBJ Statement No.17 “Accounting Standard for Disclosures about Segments of an Enterprise and Related Information”(March 27, 2009) and ASBJ Guidance No.20 “Guidance on Accounting Standard for Disclosures about Segments of anEnterprise and Related Information” (March 21, 2008) went into effect for fiscal years beginning on or after April 1, 2010,
SFH applied these guidelines from the year ended March 31, 2011.
(1) Outline of reporting segments
SFH Group’s reporting segments are components of the Group whose operating results are regularly reviewed by the Boardof Directors to make decisions about resources to be allocated to the segments and assess their performance, for which
discrete financial information is available.
SFH is the financial holding company of Sony Life Insurance Co., Sony Assurance Inc., and Sony Bank Inc., andpursues financial group strategies. The subsidiaries make their own business plans and engage in business activities fromwhich they may earn revenues and incur expenses, under the Insurance Business Law of Japan, the Banking Law of Japan,
and other regulations.
The SFH Group consists of three reporting segments: the life insurance business, the non-life insurance business andthe banking business.
The life insurance business consists of Sony Life Insurance Co., Ltd., Sony Life Insurance (Philippines)
Corporation, AEGON Sony Life Insurance Co., Ltd. and SA Reinsurance Ltd.
The non-life insurance business consists of Sony Assurance Inc.

The banking business consists of Sony Bank Inc. and Sony Bank Securities Inc.
(2) Segment Information by reporting segment(i) For the year ended March 31, 2010Life
insurancebusiness
Ordinary revenues
External customers
Intersegment
Total
Segment profit
Segment assets
OthersDepreciation
Interest income anddividends
Interest expenses
Equity in earnings(losses) of affiliates
Investments in affiliates
Increase in tangible
fixed assets andintangible fixed assets

Millions of yen
Non-life
Banking
insurancebusinessbusiness

Total¥880,353
1,692
882,045
79,781
4,286,045¥68,1722
68,174
2,565
98,340¥30,46654
30,5201,928
1,613,010¥978,991
1,749
980,740
84,275
5,997,396

5,103

509

1,227

6,840

70,86429

688—

23,393
10,364

94,946
10,394(307)
11,936

—
—

—
—

(307)
11,936¥5,049¥1,428¥1,952¥8,43024

(ii) For the year ended March 31, 2011Life
insurancebusiness
Ordinary revenues
External customers
Intersegment
Total
Segment profit
Segment assets
OthersDepreciation
Interest income anddividends
Interest expenses
Equity in earnings(losses) of affiliates
Investments in affiliates
Increase in tangible
fixed assets andintangible fixed assets

Millions of yen
Non-life
Banking
insurancebusinessbusiness

Total¥898,513
1,846
900,359
72,172
4,721,641¥74,1642
74,166
2,144
109,382¥29,52335
29,5592,407
1,761,072¥1,002,201
1,883
1,004,085
76,724
6,592,097

5,310

729

1,481

7,521

87,69556

784—

23,666
10,448112,146
10,504(944)
10,980

—
—

—
—

(944)
10,980¥7,297¥2,557¥1,371¥11,226(3) Reconciliations of the totals of each segment item to corresponding enterprise amounts

Ordinary revenues in statement of income

Millions of yen
For the year ended
For the year ended
March 31, 2010
March 31, 2011
¥980,740¥1,004,085(1,749)(1,883)¥1,002,201¥978,991

Totals of reporting segments
Adjustments for intersegment transactions
Amount not allocated to reporting segments
Ordinary profit in statement of income

Millions of yen
For the year ended
For the year ended
March 31, 2010
March 31, 2011¥84,275¥76,724—
12
98
123¥76,860¥84,373

Totals of reporting segments
Adjustments for intersegment transactions
Amount not allocated to reporting segments
Assets in balance sheets

Millions of yen
For the year ended
For the year ended
March 31, 2010
March 31, 2011
¥5,997,396¥6,592,097
(927)
(862)
4,619
5,905
¥6,597,140¥6,001,088

Totals of reporting segments
Adjustments for intersegment transactions

25

Depreciation
Interest income and dividends
Interest expenses
Equity in earnings (losses) ofaffiliates
Investments in affiliates
Increase in tangible fixed assets
and intangible fixed assets

Depreciation
Interest income and dividends
Interest expenses
Equity in earnings (losses) ofaffiliates
Investments in affiliates
Increase in tangible fixed assets
and intangible fixed assets

Millions of yen
For the year ended March 31, 2010
Consolidated
Total
Adjustments
financialstatements¥6,840¥12¥6,852
94,946(265)
94,681
10,394(0)
10,394(307)
11,936——(307)
11,936 3¥8,430¥2¥8,432Millions of yen
For the year ended March 31, 2011
Consolidated
Total
Adjustments
financialstatements¥7,521¥1¥7,522
112,146(422)
111,723
10,504(0)
10,504(944)
10,980——(944)
10,980 3¥11,226¥17¥11,243

Relative information
For the year ended March 31, 2010
1. Information by business segmentLife
insurancebusiness
Ordinary revenues from
External customers¥880,353

Millions of yen
Non-life
Banking
insurancebusinessbusiness¥68,172¥30,466

Total¥978,991

2. Geographic segment information(1) Ordinary revenues
Ordinary revenues information by geographic segment is not shown, as ordinary revenues from external customers inJapan accounted for more than 90% of ordinary revenues in the consolidated statements of income.
(2) Tangible fixed assets
Information on tangible fixed assets by geographic segment is not shown, as tangible fixed assets in Japan accounted formore than 90% of tangible fixed assets in the consolidated balance sheets.
3. Information by major client
Information by major client is not shown, as ordinary revenues from external customers who are major clients accounted
for less than 10% of ordinary revenues in the consolidated statements of income.

26

For the year ended March 31, 2011
1. Information by business segment
Millions of yen
Non-life
Banking
insurancebusinessbusinessLifeinsurancebusiness
Ordinary revenues from
External customers¥898,513¥74,164

Total¥29,523¥1,002,201

2. Geographic segment information(1) Ordinary revenues
Ordinary revenues information by geographic segment is not shown, as ordinary revenues from external customers inJapan accounted for more than 90% of ordinary revenues in the consolidated statements of income.
(2) Tangible fixed assets
Information on tangible fixed assets by geographic segment is not shown, as tangible fixed assets in Japan accounted formore than 90% of tangible fixed assets in the consolidated balance sheets.
3. Information by major client
Information by major client is not shown, as ordinary revenues from external customers who are major clients accounted
for less than 10% of ordinary revenues in the consolidated statements of income.
Information on impairment losses on fixed assets by business segment
For the year ended March 31, 2010
No significant items to be reported.
For the year ended March 31, 2011
Millions of yen
Reporting segments
Life insurance
business
Impairment losses¥1,291

Non-life
insurancebusiness—

OthersBankingbusiness—

Consolidated

Total¥1,291—¥1,291

Information on amortization of goodwill and unamortized balance by business segment
For the year ended March 31, 2010
Millions of yen
Reporting segmentsLifeinsurancebusiness
Amortization of
goodwill
Balance at end of period

Non-life
insurancebusiness

OthersBankingbusiness

Consolidated

Total

—

—

¥501

¥501

—

¥501

—

—

¥1,503¥1,503—¥1,50327

For the year ended March 31, 2011
Millions of yen
Reporting segmentsLifeinsurancebusiness
Amortization of
goodwill
Balance at end of period

Non-life
insurancebusiness

OthersBankingbusiness

Consolidated

Total

—

—

¥501

¥501

—

¥501

—

—

¥1,002¥1,002—¥1,002

Information on negative goodwill by business segment
For the year ended March 31, 2010
No significant items to be reported.
For the year ended March 31, 2011
No significant items to be reported.

284) Financial Instruments(1)For the year ended March 31, 2010
As ASBJ Statement No. 10 “Accounting Standard for Financial Instruments” (March 10, 2008) and ASBJ Guidance No. 19“Guidance on Disclosures about Fair Value of Financial Instruments” (March 10, 2008) went into effect for fiscal years
beginning on or after April 1, 2009, SFH applied these guidelines in the fiscal year ended March 31, 2010.
(1) Description of financial instruments(i) Policy on financial instruments
The SFH Group conducts its life insurance, non-life insurance and banking businesses in accordance with the provisions of
the Insurance Business Law of Japan, the Banking Law of Japan and other relevant provisions. With regard to financial assets(except for assets in separate accounts as stipulated in Item 1, Article 118 of the Insurance Business Law of Japan in the life
insurance business), to ensure steady investment income SFH holds various investment assets, including Japanese
government and corporate bonds, foreign government and corporate bonds, Japanese stocks and loans. Deposits fromindividual customers in the banking business account for nearly all of SFH’s financial liabilities. Although SFH holds
financial assets as well as financial liabilities, which are subject to the risk of interest and exchange rate fluctuations, it strives
to protect itself from the negative effects of these fluctuations by maintaining an appropriate balance between assets andliabilities by conducting asset-liability management (ALM) in each of its businesses. In addition, the banking subsidiaryconducted derivatives transactions as one aspect of its ALM.
(ii) Financial instruments and related risk
Securities and loans constitute the majority of the SFH Group’s financial asset holdings. Most of its securities holdings are in
Japanese government and corporate bonds. Other holdings include Japanese stocks, convertible bonds, foreign securities andfunds invested in investment associations. These holdings are intended either for holding to maturity or for purely investment
purposes, and they are subject to various risks, including interest rate fluctuation risk, issuer credit risk, stock pricefluctuation risk and exchange rate fluctuation risk. Furthermore, the Group holds some of its financial assets in the shares ofoverseas unlisted companies, which have limited liquidity.
The majority of loans in the life insurance business comprise policy loans, and in the banking business, individual
mortgage loans. These loans carry the credit risk of default, as well as interest rate risk. However, policy loans are limited tothe amount of surrender payments, and mortgage loans are backed by real estate. Consequently, loan-related risks are
relatively low.
Financial liabilities, meanwhile, are mainly deposits from individual customers, which are subject to interest rate risk.
As some of these deposits are denominated in foreign currencies, they are subject to exchange rate fluctuation risk, as well asinterest rate risk.
Derivatives transactions in the banking business are conducted primarily as one aspect of ALM. In this category, weapply hedge accounting. Interest swap transactions are used to hedge against the interest rate risk of fixed-rate loans. When
hedges commence, the banking subsidiary ensures hedge effectiveness by confirming that the finance receivables to behedged and the interest rates swaps (the hedging method used) are grouped to within three months of each other. Interest rate
swaps and others are used as hedging instruments to offset fluctuations in the fair value of fixed-rate bonds classified asavailable-for-sale securities. When the hedge is implemented, the banking subsidiary determines hedge effectiveness byconfirming that the cash flows of the securities to be hedged match those of the hedging method (such as interest-rate swaps).
In addition to hedging purposes, derivatives transactions are conducted within an extremely narrow band, with tradingtransactions based on short-term interest and exchange rate forecasts and used to mitigate interest and exchange rate risk.
Transactions involving financial instruments are subject to liquidity risk. Liquidity risk includes cash flow risk andmarket liquidity risk. Cash flow risk is the risk of loss owing to our inability to make cash payments when due because of an
inability to maintain sufficient cash reserves, as well as the risk of loss if we are forced to raise funds under unfavorable
conditions in order to obtain cash to meet our payment obligations. Market liquidity risk is risk of loss due to an inability to
conduct market transactions, in particular from an inability to change our market position at a given time, as well as the riskof loss if we are forced to complete transactions under unfavorable market conditions, in each case due to market turmoil orother factors.
(iii) Risk assessment of financial instruments
SFH formulates fundamental principles for risk management and manages risks specific to its subsidiaries’ scale, business
content and other attributes. Our Risk Management Guidelines establish specific conditions for managing Group risks, while
each of the Group’s subsidiaries manages risks on its own. SFH’s Corporate Control Department submits periodic reports to
SFH’s Board of Directors and Executive Committee on subsidiaries’ risk management conditions recognized through29

monitoring or by holding Risk Management Meetings.
Credit risk
The SFH Group uses the following methods to manage the credit risk of its principal subsidiaries.
(a) To manage issuer credit risk on securities, at SFH’s life insurance subsidiary, the risk management divisionperiodically obtains credit and market value information.
(b) In line with various provisions for asset management risk, at SFH’s non-life insurance subsidiary, the investment
division is the operating division that determines issuer credit risk and market values on securities. In addition, thisdivision periodically submits reports to the Executive Committee on a monthly basis.
(c) In line with various provisions for managing credit risks, SFH’s banking subsidiary manages risks involving lending
to individual customers. For each loan, the subsidiary conducts credit screenings, manages credit information,
determines collateral and handles problem assets. In this manner, the banking subsidiary operates a system to manage
individual credit.
With regard to lending to corporate customers, for each loan the banking subsidiary performs credit
screenings, sets credit limits, manages credit information such as credit ratings by outside agencies, determines
security and collateral and handles problem assets. In this manner, the banking subsidiary operates a system tomanage risk. The subsidiary manages market credit risk, such as securities issuer credit risk and, on derivatives
transactions, counterparty risk, by periodically determining credit and market value information.
The risk management division manages credit. The division periodically reports risk management conditions
to management via Executive Committee and Board of Directors meetings. In addition, the internal audit division
conducts regular audits.
Market risk
The SFH Group uses the following methods to manage the market risk of its principal subsidiaries.
(a) The life insurance subsidiary manages various market-related risks in the following manner.
 Interest rate risk
Asset management risk management provisions clearly spell out such details as risk management methods andprocedures. Based on ALM policies that are determined through such methods as deliberation by the Executive
Committee, the subsidiary determines and confirms actual risk conditions at Board of Directors meetings. The
subsidiary’s risk management division maintains an overall grasp on the interest rates and durations of financial assets,
and monitors risk through gap analysis and interest rate sensitivity analysis, among other methods. The divisionperiodically reports such information to the Board of Directors and the Executive Committee.
 Exchange rate risk
With regard to the risk of exchange rate fluctuations, in accordance with ALM policy the subsidiary allocates assets toensure the amount of its securities denominated in foreign currencies are remain within a specified percentage of total
assets.
 Price fluctuation risk
The subsidiary’s risk management division periodically analyzes the amount of risk on its securities holdings bydetermining their basis point value. The risk management division reports this information regularly to the Board of
Directors and the Executive Committee.
(b) SFH’s non-life insurance subsidiary manages various market-related risks in the following manner.
 Interest rate risk
Asset management risk provisions clearly spell out such details as risk management methods and procedures, based onrisk management policies determined by the Board of Directors. Accordingly, the investment division manages risk on
an ongoing basis. The risk management division monitors individual risks and reports to the Executive Committee on amonthly basis.
 Price fluctuation risk
The risk management division sets the risk tolerance limits on available-for-sale securities holdings, monitors theseholdings to ensure that they do not exceed the prescribed risk amount, and reports to the Executive Committee on amonthly basis.
(c) SFH’s banking subsidiary manages various market-related risks in the following manner. The risk management
division handles each of these risks and reports risk management conditions regularly to management via Executive
Committee and Board of Directors meetings. In addition, the internal audit division conducts regular audits.
 Interest and exchange rate risk
In accordance with market risk management provisions, the subsidiary manages the risk of changes in value and losses

30

in income resulting from changes in the value of assets and liabilities (including off-balance-sheet items), owing tofluctuations in various market risk factors, such as interest rates, exchange rates and stock prices. Market risk
management provisions clearly spell out such details as risk management methods and procedures. Based on ALM
policies that are determined through such methods as deliberation by the Board of Directors, an ALM committee
meets—typically once each month—to understand and confirm actual conditions and deliberate future responses andrisk conditions. On a daily basis, the risk management division maintains an overall understanding of interest andexchange rates on financial assets and liabilities, as well as their durations, conducts monitoring that includes value atrisk (VaR) and interest rate sensitivity analysis, and ensures regulatory conformance. The subsidiary also uses ALM to
conduct interest-rate swaps, currency swaps, foreign exchange and other derivatives transactions to hedge againstinterest and exchange rate fluctuation risks.
 Market price fluctuation risk
The subsidiary manages holdings of investment products, including securities, in accordance with market risk
management provisions. Of these, the investment division, which primarily purchases securities externally, strives toreduce market price fluctuation risk by conducting pre-screening, setting investment limits and monitoring investments
on an ongoing basis. In addition, based on short-term interest and exchange rate forecasts the risk management
division uses VaR to understand the amount of trading-related market risk involved in securities held for trading
purposes, as well as currency- and interest-rate-related derivatives transactions. The division also ensures regulatory
conformance.
 Derivatives transactions
The subsidiary manages derivatives transactions in accordance with market risk and credit risk provisions. The
subsidiary also separates and conducts internal checks of individual departments’ execution of transactions, evaluationof hedge effectiveness and operations management.
Liquidity risk
The SFH Group uses the following methods to manage the liquidity risk of its principal subsidiaries.
(i) At the life insurance subsidiary, in line with liquidity risk management provisions the accounting division preparesand updates cash flow plans in a timely manner based on the reports it receives from individual divisions, and the risk
management division manages on-hand liquidity.
(ii) SFH’s non-life insurance subsidiary establishes provisions related to liquidity risk. Its cash flow management
division handles daily cash flow. The investment division, in addition to understanding these circumstances, works tofacilitate cash flow and ensure cash. The risk management division performs checks to monitor the situation.
(iii) SFH’s banking subsidiary manages cash flow by dividing the situation into phases, depending on the degree ofpressure on cash flow. In addition to establishing reporting methods, the subsidiary establishes and revises guidelines
as necessary. To manage market liquidity risk, the subsidiary works to understand market liquidity conditions thatpertain to the types of products it handles. The subsidiary formulates and revises guidelines on a product by productbasis, as necessary. The risk management division handles the liquidity management mentioned above, and thedivision reports risk management conditions regularly to management via Board of Directors and Executive
Committee meetings. In addition, the internal audit division conducts regular audits.
(iv) Supplementary explanation of the fair value of financial instruments
Market prices of financial instruments are considered to indicate their fair value, unless market prices are not available. In
this case, rational methods are used to calculate their fair values. Although these calculations use assumptions that are
believed to be reasonable under the circumstances, the resulting values may differ if calculated using different assumptions.
Derivatives transaction contact amounts indicated in “(2) Fair value information on financial instruments” do notthemselves indicate market risk related to derivatives transactions.

31

(2) Fair value information on financial instruments
Below is fair value information on financial instruments as of March 31, 2010, excluding securities whose fair values are notreadily determinable.
Financial assets

Cash and due from banks
Call loans and bills bought
Monetary claims purchased
Monetary trusts
Monetary trusts for trading
purposes
Other monetary trusts
Securities
Trading securities
Held-to-maturity securities
Available-for-sale securities
Loans
Reserve for possible loan
losses*Total Financial Assets

Millions of yen
As of March 31, 2010
Consolidated
Fair value
Difference
balance sheet
amount¥103,649¥103,649—
146,879
146,879
—
3,292
3,292
—
681

681

—

300,061

300,061—

350,255
2,346,789
1,757,936
714,486

350,255
2,327,483
1,757,936—¥(19,305)—

713,678782,898

69,220¥5,723,225¥5,773,139¥49,914(807)* Excludes general and specific reserves for possible loan losses.

Financial liabilities

Deposits
Call money and bills soldTotal Financial Liabilities

Millions of yen
As of March 31, 2010
Consolidatedbalance sheet
Fair value
Difference
amount¥1,509,295¥1,508,525¥(770)
10,00010,000—¥1,519,295¥1,518,525¥(770)

Derivative financial instruments

Hedge accounting not applied*
Hedge accounting applied
Total Derivative Financial
Instruments

Millions of yen
As of March 31, 2011
Consolidated
Fair value
Difference
balance sheet
amount¥4,740¥4,740—(7,525)(7,525)—¥(2,784)¥(2,784)—* Figures are totals resulting from derivatives transactions, which are accounted for as other assets and liabilities on the consolidatedbalance sheets. If the total is a debt amount, the above figure is negative.

32

Calculation of the fair value of financial instruments
Financial Assets
Cash and due from banks, call loans and bills bought, and commercial paper and other debt purchased
The fair value is regarded as the carrying amount, as they are approximately equal.
Monetary trusts
In individual monetary trusts mainly for investment purposes, the fair value of stocks is the market price on stock
markets, and that of bonds is the market price on financial instrument exchanges or the price indicated by a financial
institution. Please see “investment in monetary trust,” which indicates fair values by purpose.
Securities
The fair value of stocks is the market price on stock markets or financial instrument exchanges. The fair value of bonds
and investment funds is the market price or the price indicated by a financial institution. Please see “investment insecurities,” which indicates fair values by purpose.
Loans(i) Loans in the banking business
The value of these loans is calculated by estimating their future cash flows and then applying a prescribed discount rate.
The discount rate is determined by adding to the Libor-based yield curve a rate corresponding to a set risk premium.
On loans to individual customers, the risk premium equals the rate used to determine the reserve for possible loan
losses. For loans to corporate customers, the rate equals the cumulative default rate, determined by rating.
(ii) Policy loans in the life insurance business
Policyholder loans are valued by discounting future cash flows to their current value. For automatic premium loans,the book value is used as a near approximation of their fair value.
Financial Liabilities
Deposits
The value of deposits is calculated by type, by estimating their future cash flows and then applying a prescribed discountrate. The discount rate is determined by adding to the Libor-based yield curve a premium corresponding to the banking
subsidiary’s cumulative default rate by rating.
Call money and bills sold
The fair value is regarded as the carrying amount, as they are approximately equal.
Derivative Transactions
Please see “derivative financial instruments,” which indicates calculations of fair value.
Securities whose fair values are not readily determinable
Millions of yen
As of March 31, 2010
Non-consolidated subsidiaries andaffiliates that are unlisted*1
Japanese stocks that are not listed on thestock market*1
Investment in partnership*2, *3
Total¥12,23690
21,151¥33,477

Notes:*1. Unlisted stocks have no market prices and fair values are not readily determinable.
*2. Assets included in “investment in partnership” are stocks in unlisted companies.
*3. Impairment losses of ¥449 million were recorded for the year ended March 31, 2010. Impairment losses are principally recorded
when their fair value as of the end of the fiscal year has declined by 50% or more from the acquisition cost.

33

The future redemption schedule of monetary claims and securities with maturities

1 year or less
Cash and due from banks
Call loans and bills bought
Monetary claims purchased
Securities
Held-to-maturity securities
Bonds
Japanese government
and municipal bonds
Japanese corporate
bonds
OthersAvailable-for-sale securities
Bonds
Japanese government
and municipal bonds
Japanese corporate
bonds
OthersLoans*
Total¥103,649
146,879
3,310

Millions of yen
As of March 31, 2010
More than 1
More than 5
year to 5 years years to 10 years
—
—
—
—
—
—

Over 10 years
—
—
—

7,745

¥45,939¥9,127¥2,298,223

6,103

38,0078,817

2,220,203

1,542

7,232

205

22,928100
218,242700
577,069104
447,802

55,092397,923

67,449140,522400,061

396,083

108,953

227,853

21,821

597

41,8398,500

208,693
22,37425,92022,071

1,242
533,924¥488,327¥645,383¥479,002¥3,230,071* This figure excludes loans of ¥127,615 million that have no fixed redemption period such as policyholder loans.

The future return schedule of deposits and other liabilities with interest

Deposits*
Call money and bills
sold
Total

Millions of yen
As of March 31, 2010
More than More than More than More than More than
1 year
1 year
2 years
3 years
4 yearsor less
5 years
to 2 years to 3 years
to 4 years to 5 years¥1,440,003¥26,619¥17,241¥3,307¥2,028¥20,095
10,000

—

—

—

—

—

¥1,450,003¥26,619¥17,241¥3,307¥2,028¥20,095*Demand deposits are included in “1 year or less.”

34

(2)For the year ended March 31, 2011
(1) Description of financial instruments(i) Policy on financial instruments
The SFH Group conducts its life insurance, non-life insurance and banking businesses in accordance with the provisions of
the Insurance Business Law of Japan, the Banking Law of Japan and other relevant provisions. With regard to financial assets(except for assets in separate accounts as stipulated in Item 1, Article 118 of the Insurance Business Law of Japan in the life
insurance business), to ensure steady investment income SFH holds various investment assets, including Japanese
government and corporate bonds, foreign government and corporate bonds, Japanese stocks and loans. Deposits fromindividual customers in the banking business account for nearly all of SFH’s financial liabilities. Although SFH holds
financial assets as well as financial liabilities, which are subject to the risk of interest and exchange rate fluctuations, it strives
to protect itself from the negative effects of these fluctuations by maintaining an appropriate balance between assets andliabilities by conducting asset-liability management (ALM) in each of its businesses. In addition, the banking subsidiaryconducted derivatives transactions as one aspect of its ALM.
(ii) Financial instruments and related risk
Securities and loans constitute the majority of the SFH Group’s financial asset holdings. Most of its securities holdings are in
Japanese government and corporate bonds. Other holdings include Japanese stocks, foreign securities and funds invested ininvestment associations. These holdings are intended either for holding to maturity or for purely investment purposes, andthey are subject to various risks, including interest rate fluctuation risk, issuer credit risk, stock price fluctuation risk andexchange rate fluctuation risk. Furthermore, the Group holds some of its financial assets in the shares of overseas unlistedcompanies, which have limited liquidity.
The majority of loans in the life insurance business comprise policy loans, and in the banking business, individual
mortgage loans. These loans carry the credit risk of default, as well as interest rate risk. However, policy loans are limited tothe amount of surrender payments, and mortgage loans are backed by real estate. Consequently, loan-related risks are
relatively low.
Financial liabilities, meanwhile, are mainly deposits from individual customers, which are subject to interest rate risk.
As some of these deposits are denominated in foreign currencies, they are subject to exchange rate fluctuation risk, as well asinterest rate risk.
Derivatives transactions in the banking business are conducted primarily as one aspect of ALM. In this category, weapply hedge accounting. Interest swap transactions are used to hedge against the interest rate risk of fixed-rate loans. When
hedges commence, the banking subsidiary ensures hedge effectiveness by confirming that the finance receivables to behedged and the interest rates swaps (the hedging method used) are grouped to within three months of each other. Interest rate
swaps and others are used as hedging instruments to offset fluctuations in the fair value of fixed-rate bonds classified asavailable-for-sale securities. When the hedge is implemented, the banking subsidiary determines hedge effectiveness byconfirming that the cash flows of the securities to be hedged match those of the hedging method (such as interest-rate swaps).
In addition to hedging purposes, derivatives transactions are conducted within an extremely narrow band, with tradingtransactions based on short-term interest and exchange rate forecasts and used to mitigate interest and exchange rate risk.
Transactions involving financial instruments are subject to liquidity risk. Liquidity risk includes cash flow risk andmarket liquidity risk. Cash flow risk is the risk of loss owing to our inability to make cash payments when due because of an
inability to maintain sufficient cash reserves, as well as the risk of loss if we are forced to raise funds under unfavorable
conditions in order to obtain cash to meet our payment obligations. Market liquidity risk is risk of loss due to an inability to
conduct market transactions, in particular from an inability to change our market position at a given time, as well as the riskof loss if we are forced to complete transactions under unfavorable market conditions, in each case due to market turmoil orother factors.
(iii) Risk assessment of financial instruments
SFH formulates fundamental principles for risk management and manages risks specific to its subsidiaries’ scale, business
content and other attributes. Our Risk Management Guidelines establish specific conditions for managing Group risks, while
each of the Group’s subsidiaries manages risks on its own. SFH’s Corporate Control Department submits periodic reports to
SFH’s Board of Directors and Executive Committee on subsidiaries’ risk management conditions recognized throughmonitoring or by holding Risk Management Meetings.
Credit risk
The SFH Group uses the following methods to manage the credit risk of its principal subsidiaries.
(a) SFH’s life insurance subsidiary manages issuer credit risk on securities according to detailed regulations, including
risk management techniques and procedures. The risk management division periodically reports this information to35

the Board of Directors and the Executive Committee.
(b) In line with various provisions for asset management risk, at SFH’s non-life insurance subsidiary the risk
management division is the operating division that determines issuer credit risk and market values on securities. In
addition, this division periodically submits reports to the Executive Committee.
(c) In line with various provisions for managing credit risks, SFH’s banking subsidiary manages risks involving lending
to individual customers. For each loan, the subsidiary conducts credit screenings, manages credit information,
determines collateral and handles problem assets. In this manner, the banking subsidiary operates a system to manage
individual credit.
With regard to lending to corporate customers, for each loan the banking subsidiary performs credit
screenings, sets credit limits, manages credit information such as credit ratings by outside agencies, determines
security and collateral and handles problem assets. In this manner, the banking subsidiary operates a system tomanage risk. The subsidiary manages market credit risk, such as securities issuer credit risk and, on derivatives
transactions, counterparty risk, by periodically determining credit and market value information.
The risk management division manages credit. The division periodically reports risk management conditions
to management via Executive Committee and Board of Directors meetings. In addition, the internal audit division
conducts regular audits.
Market risk
The SFH Group uses the following methods to manage the market risk of its principal subsidiaries.
(a) The life insurance subsidiary manages various market-related risks in the following manner.
 Interest rate risk
Asset management risk management provisions clearly spell out such details as risk management methods andprocedures. Based on ALM policies that are determined through such methods as deliberation by the Executive
Committee, the subsidiary determines and confirms actual risk conditions at Board of Directors meetings. The
subsidiary’s risk management division maintains an overall grasp on the interest rates and durations of financial assets,
and monitors risk through gap analysis and interest rate sensitivity analysis, among other methods. The divisionperiodically reports such information to the Board of Directors and the Executive Committee.
 Exchange rate risk
With regard to the risk of exchange rate fluctuations clearly spell out such as risk management methods and procedures.
The risk management division reports this information regularly to the Board of Directors and the Executive
Committee.
 Price fluctuation risk
The subsidiary’s risk management division periodically analyzes the amount of risk on its securities holdings bydetermining their basis point value. The risk management division reports this information regularly to the Board of
Directors and the Executive Committee.
(b) SFH’s non-life insurance subsidiary manages various market-related risks in the following manner.
 Interest rate risk
Asset management risk provisions clearly spell out such details as risk management methods and procedures, based onrisk management policies determined by the Board of Directors. Accordingly, the investment division manages risk on
an ongoing basis. The risk management division monitors individual risks and reports regularly to the Board of
Directors and the Executive Committee.
 Price fluctuation risk
The risk management division sets the risk tolerance limits on available-for-sale securities holdings, monitors theseholdings to ensure that they do not exceed the prescribed risk amount, and reports regularly to the Board of Directors
and the Executive Committee.
(c) SFH’s banking subsidiary manages various market-related risks in the following manner. The risk management
division handles each of these risks and reports risk management conditions regularly to management via Executive
Committee and Board of Directors meetings. In addition, the internal audit division conducts regular audits.
 Interest and exchange rate risk
In accordance with market risk management provisions, the subsidiary manages the risk of changes in value and losses
in income resulting from changes in the value of assets and liabilities (including off-balance-sheet items), owing tofluctuations in various market risk factors, such as interest rates, exchange rates and stock prices. Market risk
management provisions clearly spell out such details as risk management methods and procedures. Based on ALM
policies that are determined through such methods as deliberation by the Board of Directors, an ALM committee and arisk management committee meet—typically once each month—to understand and confirm actual conditions and36

deliberate future responses and risk conditions. On a daily basis, the risk management division maintains an overall
understanding of interest and exchange rates on financial assets and liabilities, as well as their durations, conducts
monitoring that includes value at risk (VaR) and interest rate sensitivity analysis, and ensures regulatory conformance.
The subsidiary also uses ALM to conduct interest-rate swaps, currency swaps, foreign exchange and other derivatives
transactions to hedge against interest and exchange rate fluctuation risks.
 Market price fluctuation risk
The subsidiary manages holdings of investment products, including securities, in accordance with market risk
management provisions. Of these, the investment division, which primarily purchases securities externally, strives toreduce market price fluctuation risk by conducting pre-screening, setting investment limits and monitoring investments
on an ongoing basis. In addition, based on short-term interest and exchange rate forecasts the risk management
division uses VaR to understand the amount of trading-related market risk involved in securities held for trading
purposes, as well as currency- and interest-rate-related derivatives transactions. The division also ensures regulatory
conformance.
 Derivatives transactions
The subsidiary manages derivatives transactions in accordance with market risk and credit risk provisions. The
subsidiary also separates and conducts internal checks of individual departments’ execution of transactions, evaluationof hedge effectiveness and operations management.
 Quantitative information on market risk
The principal financial instruments affected by the major risk parameters of interest rate risk and exchange rate
fluctuation risk are loans, securities, deposits in the banking business and derivatives transactions.
The impact of such risks on these financial assets and financial liabilities was calculated using the
Variance-Covariance Method to determine gains or losses over a given period of 10 business days, assuming thefluctuation of interest and exchange rates within a rational forecast band determined over an observation period of 250
business days. We then employed quantitative analysis to manage interest rate and exchange rate fluctuation risks. The
resulting risk amount, with a 99% confidence interval was ¥1,360 million as of March 31, 2011.
This amount of impact is based on the assumption that risk parameters other than interest rates and exchange rates
are fixed, and that a correlation exists between interest rates and exchange rates. However, no correlation with otherrisk parameters is assumed. Moreover, in the event that fluctuations exceed the rationally forecast fluctuation band forinterest and exchange rates, the risk impact may exceed the amount calculated.
Liquidity risk
The SFH Group uses the following methods to manage the liquidity risk of its principal subsidiaries.
(i) At the life insurance subsidiary, in line with liquidity risk management provisions the accounting division preparesand updates cash flow plans in a timely manner based on the reports it receives from individual divisions, and the risk
management division manages on-hand liquidity.
(ii) SFH’s non-life insurance subsidiary establishes provisions related to liquidity risk. Its cash flow management
division handles daily cash flow. The investment division, in addition to understanding these circumstances, works tofacilitate cash flow and ensure cash. The risk management division performs checks to monitor the situation.
(iii) SFH’s banking subsidiary manages cash flow by dividing the situation into phases, depending on the degree ofpressure on cash flow. In addition to establishing reporting methods, the subsidiary establishes and revises guidelines
as necessary. To manage market liquidity risk, the subsidiary works to understand market liquidity conditions thatpertain to the types of products it handles. The subsidiary formulates and revises guidelines on a product by productbasis, as necessary. The risk management division handles the liquidity management mentioned above, and thedivision reports risk management conditions regularly to management via Board of Directors and Executive
Committee meetings. In addition, the internal audit division conducts regular audits.
(iv) Supplementary explanation of the fair value of financial instruments
Market prices of financial instruments are considered to indicate their fair value, unless market prices are not available. In
this case, rational methods are used to calculate their fair values. Although these calculations use assumptions that are
believed to be reasonable under the circumstances, the resulting values may differ if calculated using different assumptions.
Derivatives transaction contact amounts indicated in “(2) Fair value information on financial instruments” do notthemselves indicate market risk related to derivatives transactions.

37

(2) Fair value information on financial instruments
Below is fair value information on financial instruments as of March 31, 2011, excluding securities whose fair values are notreadily determinable.
Financial assets

Cash and due from banks
Call loans and bills bought
Monetary trusts
Securities
Trading securities
Held-to-maturity securities
Available-for-sale securities
Loans
Reserve for possible loan
losses*Total Financial Assets

Millions of yen
As of March 31, 2011
Consolidated
Fair value
Difference
balance sheet
amount¥90,455¥90,455—
78,50078,500—290,736
290,736—
372,801
2,996,772
1,623,713
857,436

372,801
2,975,519
1,623,713—¥(21,253)—

856,316

927,884

71,567¥6,309,297¥6,359,610¥50,313(1,119)* Excludes general and specific reserves for possible loan losses.

Financial liabilities

Deposits
Call money and bills soldTotal Financial Liabilities

Millions of yen
As of March 31, 2011
Consolidated
Fair value
Difference
balance sheet
amount¥1,647,657¥1,647,696¥38
10,00010,000—¥1,657,657¥1,657,696¥38

Derivative financial instruments

Hedge accounting not applied*
Hedge accounting applied
Total Derivative Financial
Instruments

Millions of yen
As of March 31, 2011
Consolidated
Fair value
Difference
balance sheet
amount¥1,827¥1,827—(9,520)(9,520)—¥(7,693)¥(7,693)—* Figures are totals resulting from derivatives transactions, which are accounted for as other assets and liabilities on the consolidatedbalance sheets. If the total is a debt amount, the above figure is negative.

38

Calculation of the fair value of financial instruments
Financial Assets
Cash and due from banks, call loans and bills bought
The fair value is regarded as the carrying amount, as they are approximately equal.
Monetary trusts
In individual monetary trusts mainly for investment purposes, the fair value of bonds is the market price on financial
instrument exchanges or the price indicated by a financial institution. Please see “investment in monetary trust,” whichindicates fair values by purpose.
Securities
The fair value of stocks is the market price on stock market or financial instrument exchanges. The fair value of bonds
and investment funds is the market price or the price indicated by a financial institution. Please see “investment insecurities,” which indicates fair values by purpose.
Loans(i) Loans in the banking business
The value of these loans is calculated by estimating their future cash flows and then applying a prescribed discount rate.
The discount rate is determined by adding to the Libor-based yield curve a rate corresponding to a set risk premium.
On loans to individual customers, the risk premium equals the rate used to determine the reserve for possible loan
losses. For loans to corporate customers, the rate equals the cumulative default rate, determined by rating.
(ii) Policy loans in the life insurance business
Policyholder loans are valued by discounting future cash flows to their current value. For automatic premium loans,the book value is used as a near approximation of their fair value.
Financial Liabilities
Deposits
The value of deposits is calculated by type, by estimating their future cash flows and then applying a prescribed discountrate. The discount rate is determined by adding to the Libor-based yield curve a premium corresponding to the banking
subsidiary’s cumulative default rate by rating.
Call money and bills sold
The fair value is regarded as the carrying amount, as they are approximately equal.
Derivative Transactions
Please see “derivative financial instruments,” which indicates calculations of fair value.
Securities whose fair values are not readily determinable
Millions of yen
As of March 31, 2011
Non-consolidated subsidiaries andaffiliates that are unlisted*1
Japanese stocks that are not listed on thestock market*1
Investment in partnership*2, *3
Total¥11,280
4
26,450¥37,735

Notes:*1. Unlisted stocks have no market prices and fair values are not readily determinable.
*2. Assets included in “investment in partnership” are stocks in unlisted companies.
*3. No impairment loss was recognized for the year ended March 31, 2011. Impairment losses are principally recorded when their fairvalue as of the end of the fiscal year has declined by 50% or more from the acquisition cost.

39

The future redemption schedule of monetary claims and securities with maturities

1 year or less
Cash and due from banks
Call loans and bills bought
Securities
Held-to-maturity securities
Bonds
Japanese government
and municipal bonds
Japanese corporate
bonds
OthersAvailable-for-sale securities
Bonds
Japanese government
and municipal bonds
Japanese corporate
bonds
OthersLoans*
Total¥90,455
78,500Millions of yen
As of March 31, 2011
More than 1
More than 5
year to 5 years years to 10 years————

Over 10 years——

17,228¥38,767¥9,053¥2,922,182

13,51633,2708,506

2,843,900

3,712

4,796

447

23,182—
252,466700
519,405100
222,293

55,100533,218

74,70383,492

184,800

530,050

96,520221,856

12,000100

81,243
11,954

214,056
54,031

25,493
26,975

3,068
629,882¥450,604¥612,204¥258,322¥4,085,283* This figure excludes loans of ¥134,434 million that have no fixed redemption period such as policyholder loans.

The future return schedule of deposits and other liabilities with interest

Deposits*
Call money and bills
sold
Total

Millions of yen
As of March 31, 2011
More than More than More than More than More than
1 year
1 year
2 years
3 years
4 yearsor less
5 years
to 2 years to 3 years
to 4 years to 5 years¥1,567,646¥24,155¥16,840¥1,970¥8,809¥28,236
10,000

—

—

—

—

—

¥1,577,646¥24,155¥16,840¥1,970¥8,809¥28,236*Demand deposits are included in “1 year or less.”405) Investments in Securities
Trading securities

Millions of yen
For the year ended March 31,
2010
2011
Valuation losses
Valuation gains
charged to income
charged to income¥67,293¥(7,579)

Held-to-maturity securities

Bonds
Japanese government
and municipal bonds
Japanese corporate
bonds
Others
Total

Bonds
Japanese government
and municipal bonds
Japanese corporate
bonds
Others
Total

Fair values exceeding theconsolidated balance sheet amountMillions of yen
As of March 31, 2010
Fair values not exceeding theconsolidated balance sheet amount

Consolidated
Grossbalance sheet unrealized
amountgains

Consolidatedbalance sheet
amount¥278,989¥3,681

11,798150

42,503¥333,291

7,945¥11,777

Fair valueNet
unrealized
lossesFair value¥282,671 ¥1,992,857 ¥(30,756) ¥1,962,100

—

—

—

19,922———50,448399(6)392¥345,068 ¥2,013,498 ¥(31,083) ¥1,982,415—¥2,346,789—¥(19,305)—¥2,327,483

Fair value

11,94820,241(319)

Fair values exceeding theconsolidated balance sheet amountMillions of yen
As of March 31, 2011
Fair values not exceeding theconsolidated balance sheet amount

Consolidated
Grossbalance sheet unrealized Fair value
amountgains

Consolidatedbalance sheet
amount¥1,060,573
11,49243,083¥1,115,150

Total
Consolidatedbalance sheet
amountGrossunrealized
losses

Total

Fair value

Consolidatedbalance sheet
amountNet
unrealized
lossesFair value¥22,439 ¥1,083,013 ¥1,860,571 ¥(47,844) ¥1,812,727

—

—

—

20,787

—

—

—

4,061
47,145196(3)
193¥26,659 ¥1,141,810 ¥1,881,622 ¥(47,913) ¥1,833,709—¥2,996,772—¥(21,253)—¥2,975,519

158

11,651

20,85341

Grossunrealized
losses(66)

Available-for-sale securities

Fair values exceeding theconsolidated balance sheet amountMillions of yen
As of March 31, 2010
Fair values not exceeding theconsolidated balance sheet amount

Consolidated
Consolidated
Gross
Gross
Acquisition
Acquisition
balance sheet unrealizedbalance sheet unrealized
cost
cost
amountamountgains
losses

Bonds
Japanesegovernment andmunicipal bonds
Japanese corporate
bonds
Equity securities
Others
Total

Total
Consolidatedbalance sheet
amountNet
unrealized
gains

Acquisitioncost¥876,312¥26,636¥849,676¥152,549¥(3,576)¥156,126———

294,792

3,804

290,987

69,427(584)

70,012———

51,198
171,815¥1,394,119

10,956
5,568¥46,966

40,242
166,246¥1,347,153

10,984
134,147¥367,109(497)(2,677)¥(7,336)

11,481
136,825¥374,446——¥1,761,229——¥39,629——¥1,721,599

Note: This chart as of March 31, 2010, excludes ¥42 million in unlisted stocks and an investment in partnership of ¥21,151 million(consolidated balance sheet amounts).
Monetary claims purchased (commercial paper) of ¥3,292 million is included in the table above (consolidated balance sheet amounts
and acquisition cost).

Fair values exceeding theconsolidated balance sheet amountMillions of yen
As of March 31, 2011
Fair values not exceeding theconsolidated balance sheet amount

Consolidated
Consolidated
Gross
Gross
Acquisition
Acquisition
balance sheet unrealizedbalance sheet unrealized
cost
cost
amountamountgains
losses

Bonds
Japanesegovernment andmunicipal bonds
Japanese corporate
bonds
Equity securities
Others
Total

Total
Consolidatedbalance sheet
amountNet
unrealized
gains

Acquisition
cost¥587,981¥16,232¥571,748¥302,488¥(5,641)¥308,129———207,014

1,585

205,429

126,623(441)

127,064———

30,521
180,783¥1,006,301

7,207
3,639
¥28,664

23,314
177,144¥977,636

23,185(3,357)
165,115(2,727)¥617,411 ¥(12,168)

26,542
167,842¥629,580——¥1,623,713——¥16,496——¥1,607,216

Note: This chart as of March 31, 2011, excludes ¥4 million in unlisted stocks and an investment in partnership of ¥26,450 million(consolidated balance sheet amounts).

42

Available-for-sale securities sold during the period
Millions of yen
For the year ended March 31, 2010
Sales
Gains on sales
Losses on sales
Bonds
Japanese government
and municipal bonds
Japanese corporate
bonds
Equity securities
OthersTotal¥180,599¥4,139¥277

138,500

3,972

7,272

32,02848,386¥399,516

6,712
734¥15,559581
2,307¥10,438

Millions of yen
For the year ended March 31, 2011
Sales
Gains on sales
Losses on sales
Bonds
Japanese government
and municipal bonds
Japanese corporate
bonds
Equity securities
OthersTotal¥391,496¥23,370—

55,289

1,185

¥305

10,14140,378¥497,305

818
564¥25,9381,285
357¥1,948

Reclassification of debt securities
In accordance with the Practical Issue Task Force No. 26 “Tentative Solution on Reclassification of Debt Securities”(December 5, 2008), some securities(bonds linked to the Nikkei 225 stock index) were reclassified from “available-for-salesecurities” to “held-to-maturity securities” on December 17, 2008.

Market value
Consolidated balance sheet amountNet unrealized losses on othersecurities, net of taxes

Millions of yen
As of March 31,2010¥49,832¥41,904¥(8,353)

Impairment of available-for-sale securities:
Available-for-sale securities with market value are considered impaired if the market value decreases materially below the acquisition costand such decline is considered non-recoverable. The market value is recognized as the consolidated balance sheet amount and thewrite-down is accounted for as a devaluation loss for the fiscal year.
No impairment loss was recognized for the year ended March 31, 2010, but ¥348 million was recognized for the year ended March
31, 2011.
“Material decline” is indicated when the market value is 30% or less than the acquisition cost.

436) Investments in Monetary Trusts
Monetary trusts for trading purposes
Millions of yen
As of March 31, 2010
As of March 31, 2011
Consolidated
Consolidated
Valuation gains
Valuation gains
balance sheet
balance sheet
charged to income
charged to income
amountamount¥681¥5,711——
Note: Valuation gains or losses charged to income includes reversal of valuation gains or loss recorded at the end of the previous period.

Other monetary trusts

Other monetary trusts

Other monetary trusts

Consolidatedbalance sheet
amount¥300,061

Millions of yen
As of March 31, 2010
Gross
Gross
Acquisition
unrealized unrealized
cost
gains
losses¥2,968¥(453)¥297,546

Consolidatedbalance sheet
amount¥290,736

Millions of yen
As of March 31, 2011
Gross
Gross
unrealized unrealized Acquisition
cost
gains
losses¥7,814—¥282,922

Note: Jointly invested monetary trusts included in the table above amount to ¥271 million for the years ended March 31, 2010 and 2011.

Impairment of other monetary trusts
Securities with market values that are included in monetary trusts for purposes other than trading, holding to maturity or policy reserve
matching are considered impaired if their market value decreases materially below the acquisition cost and such decline is considered
non-recoverable. Their market value is recognized as the consolidated balance sheet amount and the write-down is accounted for as adevaluation loss for the fiscal year.
No impairment loss was recognized for the year ended March 31, 2010 and 2011.
“Material decline” is indicated when the market value is 30% or less than the acquisition cost.

447) Derivative Financial Instruments(1) Hedge accounting not applied
Below is a summary of contractual or notional amounts, current market or fair values, valuation gains or losses, and themethod of calculating the fair values of derivatives, classified by transaction, to which hedge accounting is not applied.
Notional amounts do not indicate exposure to credit loss.
(i) Interest rate derivatives
Millions of yen
As of March 31, 2010
Notional amount
Over
Total
Fair value
1 yearOver-the-counter transactions
Interest rate swaps
Total¥52,820—¥52,820—¥(200)¥(200)

Valuation
losses¥(200)¥(200)

Notes:
1. The above transactions are valued at market, and valuation losses are recorded in the consolidated statements of income.
2. Market values of over-the-counter transactions are calculated mainly using discounted present value and other methods.

Millions of yen
As of March 31, 2011
Notional amount
Over
Total
Fair value
1 yearOver-the-counter transactions
Interest rate swaps
Total¥52,820—¥20,000—¥(376)¥(376)

Valuation
losses¥(376)¥(376)

Notes:
1. The above transactions are valued at market, and valuation losses are recorded in the consolidated statements of income.
2. Market value is calculated using discounted present value.

(ii) Currency derivatives
Millions of yen
As of March 31, 2010
Notional amount
Over
Total
Fair value
1 yearOver-the-counter transactions:
Forward foreign exchanges:
Sold
BoughtForeign exchange margintransactions
Sold
BoughtCurrency options
Sold
Total

Valuation
gains (losses)¥58,692
170,793

—
—

¥(62)
4,197

¥(62)
4,197

32,68013,818

—
—

503
346

503
346

406
—

—
—

(10)
¥4,974(5)¥4,980Notes:
1. The above transactions are valued at market, and valuation losses are recorded in the consolidated statements of income.
2. Market values of over-the-counter transactions are calculated mainly using discounted present value and other methods.

45

Millions of yen
As of March 31, 2011
Notional amount
Over
Total
Fair value
1 yearOver-the-counter transactions:
Forward foreign exchanges:
Sold
BoughtForeign exchange margintransactions
Sold
BoughtCurrency options
Sold
Total

Valuation
gains (losses)¥57,999
113,665

—
—

¥(10)
483

¥(10)
483

33,551
12,648

—
—

1,299
434

1,299
434

423
—

—
—

(9)
¥2,197(5)¥2,201

Notes:
1. The above transactions are valued at market, and valuation losses are recorded in the consolidated statements of income.
2. Market values are calculated using discounted present value and option pricing models.

(iii) Credit derivatives transactions
Millions of yen
As of March 31, 2010
Notional amount
Over
Total
Fair value
1 yearOver-the-counter transactions
Credit default options
Sold
Bought
Total

¥932
9,564
—

¥932
6,138
—

¥(100)
66¥(33)

Valuation
gains (losses)¥(100)
66¥(33)

Notes:
1. The above transactions are valued at market, and valuation gains (losses) are recorded in the consolidated statements of income.
2. Market values are calculated based on factors such as the values of underlying assets and contract terms.
3. “Sold” represents transactions in which the credit risk is accepted; “Bought” represents transactions in which the credit risk istransferred.

Millions of yen
As of March 31, 2011
Notional amount
Over
Total
Fair value
1 yearOver-the-counter transactions
Credit default options
BoughtTotal¥4,840—¥1,413—¥5¥5

Valuation
gains

¥5
¥5

Notes:
1. The above transactions are valued at market, and valuation gains are recorded in the consolidated statements of income.
2. Market values are calculated based on factors such as the values of underlying assets and contract terms and other methods.
3. “Bought” represents transactions in which the credit risk is transferred.

46

(2) Hedge accounting applied
The following provides a summary of contractual or notional amounts, current market or fair values, valuation gains or losses,
and the method of calculating the fair values of derivatives, classified by transactions, to which hedge accounting is applied.
Notional amounts do not indicate exposure to credit loss.
(i) Interest rate derivatives
Millions of yen
As of March 31, 2010
Notional amount
Over
Total
1 yearDeferred hedge accounting
Interest rate swaps
Fair value hedge accounting
Interest rate swaps
Total

Fair value

Hedged item

¥164,970¥164,592¥(2,301) Loans

160,791—

140,398—(7,121) Available-for-sale securities (bonds)¥(9,422)
Millions of yen
As of March 31, 2011

Notional amount
Over
Total
1 yearDeferred hedge accounting
Interest rate swaps
Fair value hedge accounting
Interest rate swaps
Total

Fair value

Hedged item

¥149,231¥148,994¥(2,929) Loans

189,300—

155,260—(8,619) Available-for-sale securities (bonds)¥(11,548)

Notes:
1. SFH applies deferred hedge accounting and fair value hedge accounting in accordance with “Accounting and Auditing Treatments on
Application of Accounting Standard for Financial Instruments in the Banking Industry” (Industry Audit Committee of Japanese Instituteof Certified Public Accountants No. 24).
2. Market value is calculated using discounted present value.

(ii) Currency derivatives
Millions of yen
As of March 31, 2010
Notional amount
Over
Total
1 yearFair value hedge accounting
Currency swaps
Total¥45,651—

Fair value¥32,300—

Hedged item

¥1,897 Available-for-sale securities (bonds)¥1,897
Millions of yen
As of March 31, 2011

Notional amount
Over
Total
1 yearFair value hedge accounting
Currency swaps
Total¥112,700—

Fair value¥53,000—

Notes:
1. SFH applies mainly fair value hedge accounting.
2. Market value is calculated mainly using discounted present value and other methods.

47

Hedged item

¥2,028 Available-for-sale securities (bonds)¥2,028

8) Per Share Information
Net income per share is based on the weighted-average number of shares of common stock outstanding during the period.
For the year ended March 31, 2010 and 2011, net income per share was ¥22,127.13 and ¥19,179.96, respectively. There
were no potential dilutive securities. Net assets per share, based on the number of shares of common stock outstanding as ofMarch 31, 2010, and 2011, were ¥123,880.11 and ¥135,575.94, respectively.
The basis for this calculation for the years ended March 31, 2010, and 2011 is net income of ¥48,126 million and¥41,716 million, respectively, the entire amounts of which are applicable to common stock. The weighted-average numberof shares outstanding for the years ended March 31, 2010, and 2011, was 2,175 thousand.

9) Subsequent Events(1)For the year ended March 31, 2010
There were no applicable subsequent events.
(2)For the year ended March 31, 2011
Stock Split
March 8, 2011-At a Board of Directors’ Meeting resolved to implement a stock split on April 1, 2011.
(i)Method
Shares held by shareholders listed or recorded in the final shareholder registry as of March 31, 2011, were split at a ratioof 200 to one.
(ii)Increase in shares resulting from the stock split
Increase resulting from the stock split:
432,825,000 shares
Per share information is provided below for the fiscal year under review, calculated as if the stock split had been conductedat the beginning of the fiscal year, and again as if it had conducted at the beginning of the preceding fiscal year.
Net income per share is based on the weighted-average number of shares of common stock outstanding during the period.
For the year ended March 31, 2010 and 2011, net income per share was ¥110.64 and ¥95.90, respectively. There were no
potential dilutive securities. Net assets per share, based on the number of shares of common stock outstanding as of March
31, 2010, and 2011, were ¥619.40 and ¥677.88, respectively.

48

V. Other Information

1. Changes in Executive Management
Please refer to our press release announced today, May 20, 2011, for details.

2. Other Information
None

49

This Consolidated Financial Summary contains statements concerning the current plans,
expectations, strategies and beliefs of the Sony Financial Holdings Group (“SFH Group”). Anystatements contained herein that pertain to future operating performance and that are not historicfacts are forward-looking statements. Forward-looking statements may include—but are not limited
to—statements using words such as “believe,” “anticipate,” “plan,” “strategy,” “expect,” “forecast,”“predict,” and “possibility” that describe future operating activities, financial performance, events orconditions. Forward-looking statements, whether spoken or written, are based on judgments made by
the management of SFH Group based on information that is currently available to it. As such,forward-looking statements are subject to various risks and uncertainties, and actual results may vary
substantially from those expressed or implied in forward-looking statements. Consequently,
investors are cautioned not to place undue reliance on forward-looking statements. SFH Group
disclaims any obligation to revise forward-looking statements in light of new information, future
events or other findings.

For inquiries:
Masaaki Konoo or Hiroko Hanakura
Corporate Communications & Investor Relations Dept.
Sony Financial Holdings Inc.
Telephone: +81-3-5785-1074
E-mail: press@sonyfh.co.jp

Website of Sony Financial Holdings Inc.
http://www.sonyfh.co.jp/index_en.html

50

(Attachment)
Presentation Material Content
1.
2.
3.
4.
5.

Consolidated Operating Results for the Year Ended March 31, 2011・・・・・・・・
Consolidated Financial Forecast for the Year Ending March 31, 2012・・・・・・・
Dividend Policies・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Preliminary Sony Life’s Market Consistent Embedded Valueas of March 31, 2011・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Appendix・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

P.2
P.29
P.31
P.33
P.35

Presentation Material

Consolidated Financial Results for theYear Ended March 31, 2011
andPreliminary Sony Life’s
Market Consistent Embedded Value
Sony Financial Holdings Inc.
May 20, 2011

Content■Consolidated Operating Results for the Year Ended March 31, 2011

P.2

■Consolidated Financial Forecast for the Year Ending March 31, 2012
2012

P.29

■Dividend Policies

P.31■ Preliminary Sony Life’
Life’s Market Consistent Embedded Value as of March 31, 2011

P.33

■ Appendix

P.35

Disclaimers:
This presentation material contains statements concerning the current plans, expectations, strategies and beliefs of the SonyFinancial Holdings Group (the “SFH Group”). Any statements contained herein that pertain to future operating performance andthat are not historic facts are forward-looking statements. Forward-looking statements may include—but are not limited to—words such as “believe,” “anticipate,” “plan,” “strategy,” “expect,” “forecast,” “predict,” and “possibility” that describe future
operating activities, business performance, events or conditions. Forward-looking statements, whether spoken or written, arebased on judgments made by the management of the SFH Group, based on information that is currently available to it. As such,these forward-looking statements are subject to various risks and uncertainties, and actual business results may vary
substantially from the forecasts expressed or implied in forward-looking statements. Consequently, investors are cautioned not toplace undue reliance on forward-looking statements. The SFH Group disclaims any obligation to revise forward-looking
statements in light of new information, future events or other findings. The information contained in this presentation does notconstitute or form part of any offer for sale or subscription of or solicitation or invitation of any offer to buy or subscribe for any
securities, nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment
whatsoever.

1Consolidated Operating Results for
the Year Ended March 31, 2011

2

Management Review

For the year ended March 31, 2011, consolidated ordinary revenues
increased but consolidated ordinary profit decreased year on year.

The life insurance business continued its stable growth, due tofavorable sales of mainstay death-protection type and third-sector
insurance products such as living benefit and nursing-care insurance.

The non-life insurance business enjoyed brisk sales. An ongoing upward
trend in the number of car accidents for automobile insurance in the firsthalf of FY10 showed signs of slowing during the second half.

The banking business increased profit owing to a growing balance ofloans, especially mortgages, which offset the negative impact of lower
interest rates.

The damage from the Great East Japan Earthquake on our FY10
operating results was limited.
3

Highlights of Consolidated Operating Performancefor the Year Ended March 31, 2011 (1)(Billions of yen)

Ordinary revenues

978.9

Ordinary profit

1,002.2
+2.4%

76.8

900.3

+18.3

+2.1%

Ordinary profit

79.7

72.1

(7.6)

(9.5%)

Non-life
insurancebusiness

Ordinary revenues

68.1

74.1

+5.9

+8.8%

2.5

2.1

(0.4)

(16.4%)

30.5

29.5

(0.9)

(3.2%)

1.9

2.4

+0.4

+24.9%

(1.7)

(1.8)

(0.1)

+7.7%

0.0

0.1

+0.0

+37.8%

978.9

1,002.2

+23.2

+2.4%

Ordinary profit

84.3

76.8

(7.5)

(8.9%)Net income

48.1

41.7

(6.4)

(13.3%)

10.3.3111.3.31

Change from 10.3.31

Total assets

6,001.0

6,597.1+596.0+9.9%

Net assets

269.4

294.8

+25.4

+9.4%

Ordinary profit
Ordinary revenues
Ordinary profit

Corporateandelimination

Ordinary revenues
Ordinary profit
Ordinary revenues

Consolidated(Billions of yen)

FY10(Billions of yen)

882.0

ChangeOrdinary revenues

84.3

FY09

FY10

Life
insurancebusiness

Bankingbusiness(8.9%)

FY09

Consolidated(Note) Comprehensive income: FY09: ¥71.0 billion, FY10: ¥31,9 billion yen
Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

4

Highlights of Consolidated Operating Performancefor the Year Ended March 31, 2011 (2) Life Insurance: Ordinary revenues increased year on year, due to higher income from insurance

premiums associated with steady increases in the new policy amount and the policy amount in force,
which offset a negative impact of a decrease in investment income. Ordinary profit decreased, mainlyreflecting an increase in provision for reserve for outstanding claims, affected by the Great East Japan
Earthquake, and an increase in provision of policy reserve for minimum guarantee for variable life
insurance, as well as an additional provision of policy reserve for some third-sector insurance products,
due to a change in actuarial assumptions, which offset the positive impact of higher investment
revenues in the general account assets.
 Non-life Insurance: Ordinary revenues increased year on year, due to increased net premiums written,

as the number of insurance policies in force grew, primarily for our mainstay automobile insurance.
Ordinary profit decreased, owing mainly to increases in net losses paid and the provision for reservefor outstanding losses due to an increased number of car accidents, which offset the positive impact ofa lower expense ratio.
 Banking: Ordinary revenues decreased year on year, due mainly to a decrease in gains on foreignexchange transactions. Gross operating profit increased, led by a expanding business operations,especially mortgage loans, and improved investment performance. Ordinary profit increased, as thebusiness offset the negative impact of higher general and administrative expenses, particularly
system-related expenses.
 Consolidated ordinary revenues increased 2.4% compared with the previous fiscal year, to ¥1,002.2

billion, however, consolidated ordinary profit and net income decreased 8.9%, to ¥76.8 billion, and13.3%, to ¥41.7 billion respectively.

5Consolidated Operating Performancefor the Year Ended March 31, 2011 (Appendix)
Negative impact on consolidated ordinary
profit of the Great East Japan Earthquake: ¥5.5 billion
Principal Impact on Each BusinessLife Insurance Business・ Insurance claims and other payments (including provision for reserve for outstanding claims) of¥5.4 billion*, others* The figure above is the amount which impact to the operating profit. The total insurance claims and other payments amounted to approx. ¥5.9 billion.

Non-Life Insurance Business・ Mainstay automobile insurance exempt from earthquakes and tsunamis
Banking Business・ Increased allowance for mortgage loans in stricken region
Reference: Principal Responses to Customers Affected by DisasterSony Life・Paid full amount of claims on insurance for death due to disaster
・Extended period after which policyholder nonpayment results in lapse of coverage
・Simplified and expedited payment of claims, benefits and policyholder loans・Applied special interest rate to new policyholder loans (concessionary interest rates)
・Introduced special handling for hospital treatment, others

Sony Assurance
・Introduced special facilities for automobile insurance policy extension procedures and established period after which nonpayment results in lapse of coverage・Introduced special facilities to handle cancellation procedures and issue certifications of suspension on automobile insurance
・Introduced special facilities for payment of hospitalization insurance claims and surgery insurance claims on medical and cancer insurance, others

Sony Bank・Offered telephone consultation on extending repayment of mortgage loans
・Began handling mortgage loans with special interest rates, others
・Enabled transfers to other banks, upon telephone confirmation of identity

・Waived reissuance fee for customers who had lost cash cards

Highlights of Operating Performance:
Sony Life (Non-consolidated)
Ordinary revenues

881.7

Ordinary profit(Billions of yen)

900.0

Ordinary revenues

73.1

+18.2

+2.1%

Income from insurance premiums

700.1

770.3

+70.2

+10.0%

Investment income(31.9%)

175.3

119.5

(55.8)

Interest income and dividends

70.6

87.5

+16.8

+23.9%

Income from monetary trusts, net

22.8

6.9

(15.9)(69.5%)

Gains on sale of securities

15.1

24.9

+9.8

+65.4%

Gains on separate accounts, net

62.7

－

(62.7)(100.0%)

+3.1%

801.6

826.9

+25.2

Insurance claims and other payments

274.2

297.9

+23.6

+8.6%

Provision for policy reserve and others

395.5

392.7

(2.8)

(0.7%)

Investment expenses

20.5

19.3

(1.2)

(6.2%)

10.0

1.8

(8.2)

(81.5%)

Losses on sale of securities

FY10(Billions of yen)Ordinary revenues increased but ordinary profit decreased
year on year.
Income from insurance premiums increased due toincreases in the new policy amount and the policy amountin force.
Investment income decreased mainly due to the deterioration of
investment performance on separate account assets, which offset
the positive impact of higher interest income and dividends andgains on sale of securities among general account assets.
Ordinary profit decreased, mainly reflecting an increase in provision
for reserve for outstanding claims, affected by the Great East Japan
Earthquake, and an increase in provision of policy reserve forminimum guarantee for variable life insurance, as well as anadditional provision of policy reserve for some third-sector insurance
products, due to a change in actuarial assumptions, which offset thepositive impact of higher investment revenues in the general accountassets.

Change900.0

Ordinary expenses

FY09

FY10

881.7

+2.1%

80.0 (8.6%)

FY09

－

7.4

+7.4

－

96.8

99.3

+2.5

+2.6%

Ordinary profit

80.0

73.1

(6.9)

(8.6%)Net income

46.1

40.2

(5.9)

(12.8%)

Losses on separate accounts, net
Operating expenses(Billions of yen)

10.3.3111.3.31

Change from 10.3.31

Securities

3,539.1

4,017.5+478.4+13.5%

Policy reserves

3,985.6

4,371.4+385.8+9.7%

Total net assets

191.3

215.3

+24.0

+12.6%

15.4

7.0

(8.4)

(54.6%)

4,286.5

4,723.3+436.7+10.2%

373.6

398.1

+24.5

+6.6%

Net unrealized gains onother securities
Total assets
Separate account assets

Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

7

Overview of Performance:
Sony Life (Non-consolidated)(Billions of yen)

FY09

FY10

(Reasons for changes)

ChangeNew policy amount

4,049.2

4,199.0+3.7%

Lapse and surrender amount

2,342.4

2,143.6(8.5%)

Lapse and surrender rate

7.21%

6.41%

(0.80pt)

Policy amount in force

33,470.7

34,748.5+3.8%Annualized premiums from new policies

68.7

71.2

+3.6%

Of which, third-sector products

16.2

16.6

+2.6%

573.3

604.7

+5.5%

133.0

140.7

+5.8%

Annualized premiums from insurance in force
Of which, third-sector products(Billions of yen)

FY09

ChangeFY10

Gains from investment, net (General account)

92.0

107.6

+17.0%

Core profit

64.5

56.2

(12.7%)

Negative spread

11.5

6.3

(45.2%)

Solvency Margin Ratio

10.3.3111.3.31

Changefrom
10.3.312,637.3%

2,900.1%＋262.8pt

Notes:*1 Figures for new policy amount, lapse and surrender amount, lapse and surrender rate, policy amount in force,
annualized premiums from new policies and annualized premiums from insurance in force are calculated as thetotal of individual life insurance and individual annuities.
*2 The lapse and surrender rate shows the ratio derived by dividing the amount of lapses and surrenders, notadjusted for policy amount decreases, increases, and reinstatements, by the policy amount in force at the
beginning of the fiscal year.

 Increased, due mainly to favorable sales of living
benefit insurance, nursing-care insurance and term life
insurance.

 Decreased due to the lowering lapse and surrender
rates in most products, mainly in family income
insurance, which is life insurance with disability benefit.

 Increased due to an increase in interest income anddividends, as well as gains on sale of securities in linewith the shift from investing in bonds with short terms
to maturity to those with ultralong-terms.

 Declined, mainly reflecting an increase in provision forreserve for outstanding claims, affected by the Great
East Japan Earthquake, and an increase in provisionof policy reserve for minimum guarantee for variable
life insurance, despite increases in income frominsurance premiums and interest income anddividends.

Line item amounts are truncated below ¥100 million;
percentage change figures are rounded.

8

Sony Life Operating Performance (1)Number of New Policy and Amount

Annualized Premiums from New Policies(Individual Life Insurance + Individual Annuities)(Individual Life Insurance + Individual Annuities)

New policy amount

Number of new policies
Annualized premiums from new policies(Thousands of policies)(Billions of yen)
+2.9%

5.0

599

582

(Trillions of yen)

524

600
80

534
4.19

4.0

3.80

3.87

Of which, third-sector

500

70

63.4

4.02

71.2

68.7
61.6

+3.6%

60
+3.7%

400
50

3.0

300

40
30

2.0

200
+2.6%

20
1.0

100

0.0

0
FY07

FY08

FY09

FY10

Line item amounts are truncated below ¥10 billion; numbers of policies aretruncated below 1,000 policies; percentage change figures are rounded.

10

13.3

13.4

FY07

FY08

16.2

16.6

FY09

FY10

0

Line item amounts are truncated below ¥100 million; percentage figures are rounded.

9Sony Life Operating Performance (2)Number of Policy and Policy Amount in Force

Annualized Premiums from Insurance in Force(Individual Life Insurance + Individual Annuities)(Individual Life Insurance + Individual Annuities)
Policy amount in force

Of which, third sector

Annualized premiums from insurance in force

Number of policies in force(Millions of policies)(Trillions of yen)(Billions of yen)

5.34

+6.7%

50

600

5.01
4.43

530.0

5

4.70

547.8

573.3

500

40

32.5

31.4

604.7

+5.5%

34.7

33.4

4

+3.8%

400

30
3
300

20

2

200
+5.8%

10

1

0

0
08.3.31

09.3.3110.3.31

100

122.8

126.6

133.0

140.7

08.3.31

09.3.3110.3.3111.3.310

11.3.31

Line item amounts are truncated below ¥100 billion; numbers of policies aretruncated below 10,000 policies; percentage change figures are rounded.

Line item amounts are truncated below ¥100 million;
percentage change figures are rounded

10

Sony Life Operating Performance (3)Lapse and Surrender Rate*

Income from Insurance Premiums(Individual Life Insurance + Individual Annuities)+10.0%

800
(%)

10

648.4

662.0

FY07

FY08

770.3

700.1

600
8

6.79

7.21

6.41

6.12
6

400

(0.80pt)

4

200
2

0

0

FY07

FY08

FY09

FY10

FY09

FY10

*The lapse and surrender rate shows the ratio derived by dividing the amount oflapses and surrenders, not adjusted for policy amount decreases, increases, andreinstatements, by the policy amount in force at the beginning of the fiscal year.

11Sony Life Operating Performance (4)Ordinary Profit

Core Profit(Billions of yen)(Billions of yen)

70

64.5

100

56.2

60

80.0

80

(12.7%)

73.1

50(8.6%)

38.0

40
30

60

40

23.5

39.2
32.4

20

20
10

0

0
FY07

FY08

FY09

FY07

FY10

FY08

FY09

FY10

Line item amounts are truncated below ¥100 million; percentage figures are rounded.

12

Sony Life Operating Performance (5)Average
Average Assumed
Assumed Interest
Interest Rate,
Rate,
Investment
Investment Yield
Yield forfor CoreCore Profit
Profit andandInvestment
Investment yield
yield inin General
General Account
Account

Negative Spread
4.00%

Average assumed Interest rate

(Billions of yen)

Investment yield in general account30

Investment yield for core profit

26.7
3.00%

25

2.68%

21.3

2.54%
2.68%

20
2.00%

15

11.5
10

2.59%

2.17%

2.51%

2.43%

2.17%

2.26%

FY09

FY10

1.90%
(45.2%)

1.73%

6.3
1.00%

1.11%

5

0

FY07

FY08

FY09

FY10

0.00%
FY07

FY08

Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

13

Sony Life Operating Performance (6)Number of Lifeplanner Sales Employees

Number of Independent Agents(Number)(Number)

4,036
4,000

3,891

2,500

4,017
(19)

2,151

3,779

2,112

2,089

2,000

2,064
(25)

3,500
1,500

3,000
0

0
1,000
08.3.31

09.3.3110.3.3111.3.3108.3.31

09.3.3110.3.3111.3.31* “Lifeplanner” is a registered trademark of Sony Life Insurance Co., Ltd.

14

Sony Life Operating Performance (7)Breakdown of General Account Assets
10.3.3111.3.31<Asset management review>(Billions of yen)AmountJapanese governmentand corporate bonds%

Amount%3,032.9

77.5%

3,499.9

80.9%

72.5

1.9%

64.0

1.5%

Japanese government and corporate bonds:
Continued to accumulate ultralong-term bonds during
FY10.

<Lengthened
asset duration><L
Japanese stocks
Foreign securities

49.9

1.3%

44.2

1.0%

Foreign stocks

25.3

0.6%

30.0

0.7%

Monetary trusts

288.7

7.4%

276.4

6.4%

Policyholder loans

127.5

3.3%

134.4

3.1%

Real estate

79.9

2.0%

75.1

1.7%

Cash and call loans

116.4

3.0%

80.0

1.9%

Other

119.4

3.0%

120.9

2.8%

3,912.9

100.0％

4,325.2

100.0％

Total

09. 3.31

13.6 years

10. 3.31

17.6 years

11. 3.31

18.5 years

Japanese stocks: Maintained the ratio of stock
holding at the end of March 2009.

■CB and Japanese stock holding
As of March 31, 2010：
The balance of CBs was ¥13.2 billon included in Japanese
government and corporate bonds. The balance of Japanesestocks included in the monetary trusts was zero.
As of March 31, 2011：
The balance of CBs were zero in all categories and Japanesestocks included in the monetary trusts was zero.
■Investment in the monetary trusts are mainly into Japanese
government and corporate bonds■The holding ratio on the real status, of Japanese government andcorporate bonds including those invested in monetary trusts in thegeneral account assets:
As of March 31, 2011: 87.3%, As of March 31, 2010: 84.6%

15

Sony Life Operating Performance (8)Solvency Margin Ratio

Adjusted Net Assets（％）(Billions of yen)

2,900.1

3,000

700

[629.1]

2,637.3[583.8]612.0[505.9]

600

2,500

532.6

2,060.5
2,000

606.9

563.4
+7.7%

500

1,747.9400

1,500＜Reference＞

300

New solvency margin ratio effective
as of the end of FY11

1,000

As of March 31, 2011 : 1,720.0%
500

200

Variation factor from the previous standard ：◆Change of includable amount for margin calculation

100◆Tightening standard for risk factor calculation

0008.3.31

09.3.3110.3.3111.3.3108.3.31

Note:
Legislation concerning the calculation of the solvency margin ratio has been revised fromthe standpoint of raising its credibility, and these new standards are to become effective asof the end of fiscal 2011 (March 31, 2012). The above-stated figures are calculated on theassumption that these changes are applied at the end of FY10.

09.3.3110.3.3111.3.31※Amount in [ ] excludes unrealized gains (losses) on held-to-maturity securities
and on policy reserve matching bonds.
Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

* New solvency margin ratio for Sony Life is on P 40.

16

Highlights of Operating Performance:
Sony Assurance
Ordinary revenues

68.1

Ordinary profit

+8.8%

74.1

(Billions of yen)

FY09

Change

74.1

+5.9

+8.8%

Underwriting income

67.4

73.3

+5.9

+8.8%

Investment income

0.6

0.7

+0.0

+12.5%

65.6

72.0

+6.4

+9.8%

Underwriting expenses

49.1

54.4

+5.3

+10.8%

Investment expenses

0.0

0.0

(0.0)

(81.1%)

16.3

17.4

+1.1

+6.7%

Ordinary profit

2.5

2.1

(0.4)

(16.4%)Net income

1.6

1.2

(0.3)

(19.2%)

2.1
Operating, general andadministrative expenses(16.4%)

FY10

68.1

Ordinary revenues

Ordinary expenses

2.5

FY09

FY10
(Billions of yen)Ordinary revenues increased but ordinary profit
decreased year on year.
Ordinary revenues increased, due to an increase in
net premiums written led by a growing number of
in-force policies primarily for automobile insurance.
Ordinary profit decreased, owing mainly to increases in
net losses paid and the provision for reserve foroutstanding losses due to an increased number of car
accidents, which offset the positive impact of a lower
expense ratio.

(Billions of yen)

10.3.3111.3.31

Change from 10.3.31

Underwriting reserves

58.1

64.0

+5.9

+10.2%

Total net assets

15.4

16.7

+1.2

+8.3%

Total assets

98.3

109.3

+11.0

+11.2%

Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

17

Overview of Performance:
Sony Assurance(Reasons for changes)(Billions of yen)

FY09

FY10

ChangeDirect premiums written

67.0

72.8

+8.6%

Net premiums written

67.4

73.3

+8.8%

Net losses paid

34.5

39.2

+13.5%

Underwriting profit

1.9

1.4

(25.8%)Net loss ratio

57.2%

60.0%

+2.8ptNet expense ratio

26.1%

25.5%

(0.6pt)Combined ratio

83.3%

85.6%

+2.3ptNet expense ratio is equal to the ratio of total underwriting costs to net premiums written.
Net loss ratio is equal to the ratio of net losses paid and loss adjustment expenses to net premiums written.

Number of policies in force
Solvency margin ratio

10.3.3111.3.31

1.27 million

1.38 million

1,018.5%

981.4%The number of policies in force is the total of automobile insurance andmedical and cancer insurance, which accounts for 99% of net premiums written.

 Increased, owing to an increase in thenumber of policies in force for automobile
insurance.
 Increased, owing to an increase in thenumber of policies in force and a risingnumber of loss ratio for automobile
insurance.
 Decreased, due to increased net
premiums written which offset anincrease in underwriting costs.

 Increased, due to an increase in thenumber of policies in force for automobile
insurance.

Change from 10.3.31+0.10 million+8.4%(37.1pt)

Line item amounts are truncated below ¥ 100 million; numbers of policies aretruncated below 10,000 policies; percentage change figures are rounded.

18

Sony Assurance’s Underwriting Performanceby Type of Policy
Direct Premiums Written

Net Premiums Written

FY09

FY10

FY09

Change

278

Fire

185

－

MarinePersonal accident*
Voluntary automobile

6,941
59,849Compulsory
automobile liability
Total

FY10

Change(Millions of yen)

(Millions of yen)－
7,135
65,516(33.6%)

Fire

12

8

(34.6%)

Marine2

5+148.2%+2.8%

Personal accident*

7,168

7,369

+2.8%

+9.5%

Voluntary automobile

59,60465,245

+9.5%

651

714

+9.7%

67,44073,343

+8.8%

－

－

－

－

67,06972,837+8.6%

Net losses paid

Compulsory
automobile liability
Total*SURE, medical and cancer insurance is included in personal accident.
FY09

ChangeFY10(Millions of yen)
Fire

0

0

+292.5%

Marine2

11+271.1%

Personal accident*

1,479

1,620

+9.5%

Voluntary automobile

32,55536,941+13.5%

535

683+27.7%

34,57339,256+13.5%

Compulsory
automobile liability
Total

Line item amounts are truncated below ¥ 1 million;
Percentage change figures are rounded.

19

Sony Assurance Operating Performance (1)Net Premiums Written andNumber of Policies in Force
Voluntary automobile insurance

Ordinary Profit

Personal accident insurance(Millions of policies)

Number of policies in force

Other(Billions of yen)

1.38

+8.4%

100

1.4

1.27

90

1.15

80

4

67.4

1

61.1

60

5

1.2

73.3

1.02

70

(Billions of yen)

+8.8%

55.0

0.8

2.8

3

2.5

50
0.6

40
30

2.1

2.1
2

(16.4%)

0.4

20

1

0.2
10
0

0
FY07

FY08

FY09

0
FY07

FY10

The number of policies in force is the total of automobile insurance and medical
and cancer insurance policies, which account for 99% of net premiums written.
More than 90% of personal accident insurance is medical and cancer insurance.

FY08

FY09

FY10

Line item amounts are truncated below ¥100 million; numbers of policies aretruncated below 10,000 policies; percentage change figures are rounded.

20

Sony Assurance Operating Performance (2)Reference
Net Expense Ratio +Earned/Incurred Loss Ratio
Net expense ratio

Combined Ratio(Net Expense Ratio + Net Loss Ratio)

Earned/Incurred loss ratio

Net expense ratio(%)+3.3pt

100

89.0

90.2

95.2

91.9

100
+2.3pt80

80+3.9pt

60
62.3

63.5

80.3

81.7

83.3

55.0

57.2

85.6

69.7

60

65.8

53.5

40

20

Net loss ratio(%)+2.8pt

60.0

40

26.7

26.7

20

(0.6pt)

26.1

25.5

FY09

FY10

0

26.7

26.7

FY07

FY08

(0.6pt)

26.1

25.5

FY09

FY10

0
FY07

FY08

Earned/Incurred loss ratio is equal to the ratio of the sum of net losses paid, loss
adjustment expenses and accumulation in provision for reserve for outstanding
losses to earned premiums.
*Note that earthquake insurance and compulsory automobile liability

Net expense ratio is equal to the ratio of total underwriting costs to net premiums written.
Net loss ratio is equal to the ratio of net losses paid and loss adjustment expenses to
net premiums written.

insurance are excluded from the above calculation.

21

Sony Assurance Operating Performance (3)Solvency Margin Ratio
(%)

1,200

1,073.9993.0

1,018.5

981.4

800

＜Reference＞
New solvency margin ratio effective as of the end of FY11

As of March 31, 2011 : 631.0%

400

Variation factor from the previous standard◆Tightening standard for risk factor calculation

008.3.31

09.3.3110.3.3111.3.31

Note:
Legislation concerning the calculation of the solvency margin ratio has been revised from the standpoint of raising its credibility, and these new standards are to
become effective as of the end of fiscal 2011 (March 31, 2012). The above-stated figures are calculated on the assumption that these changes are applied at theend of FY10.

22Highlights of Operating Performance:
Sony Bank (Non-consolidated)
Ordinary revenues

Ordinary profit

30.5(Billions of yen)

29.5
(3.2%)

3.3+15.3%

2.9

FY09

Ordinary revenues decreased but ordinary profit
increased year on year.
Gross operating profit increased ¥1.5 billion due toincreases in net interest income and net other operating
income.
- Net interest income increased ¥0.2 billion owing to a
growing balance of investment assets, especiallymortgage loans, in its business expansion.
- Net other operating income increased ¥1.2 billion
reflecting improved investment performance.
Net operating profit increased, owing mainly to anincrease in gross operating profit, which offset higher
general and administrative expenses.
Customer assets increased ¥145.5 billion from March 31,
2010, of which deposit balance increased ¥139.0 billion.

FY10

Change

30.5

29.5

(0.9)

(3.2%)

Gross operating profit

14.9

16.4

+1.5

+10.1%+1.8%

Net interest income

13.0

13.2

+0.2

Net fees and commissions

(0.1)

(0.1)

+0.0

－

Net other operating income

2.1

3.3

+1.2

+58.7%

General andadministrative expenses

11.6

12.6

+0.9

+7.9%

Ordinary profit

2.9

3.3

+0.4

+15.3%Net income

1.6

2.0

+0.4

+24.8%Net operating profit

3.2

3.6

+0.4

+13.4%(Billions of yen)

FY10(Billions of yen)

FY09

Ordinary revenues

10.3.3111.3.31

Change from 10.3.31

Securities

880.1

940.1

+59.9

+6.8%

Loans

586.6

722.4

+135.7+23.1%

Deposits

1,510.0

1,649.1+139.0+9.2%

Customer assets

1,610.0

1,755.5+145.5+9.0%

Total net assets

58.9

59.9

+0.9

+1.7%

0.9

0.4

(0.4)

(52.7%)

1,612.1

1,761.8+149.6+9.3%

Net unrealized gains (losses)
on other securities (net of taxes)
Total assets

Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

23

Overview of Performance:
Sony Bank (Non-consolidated) (1)(Reasons for changes)
FY09

FY10

Customer assets

1,610.0

1,755.5+145.5+9.0%

Deposits

1,510.0

1,649.1+139.0+9.2%

Yen

1,184.9

1,289.8+104.8

+8.9%

325.0

359.2

+34.1

+10.5%

100.0

106.4

+6.4

+6.5%

586.6

722.4

+135.7+23.1%

Change

Foreign currency
Investment trusts
Loans outstanding
Mortgage loans

555.1

656.0

+100.9+18.2%

Others31.5

66.4(*1)+34.8+110.5%

Number of accounts(thousands)

796

859
*1

+62

+7.8%

12.09%

10.84%

Capital adequacy ratio(*2)(domestic criteria)

Foreign currency deposit increased
reflecting growing demand for saving
foreign currency under the market
fluctuation even though the sharp hike inthe yen might have the negative impact
on the foreign exchange conversion.

 Loan balance steadily increased due toincreases in mortgage loans andcorporate lending centering on syndicatedloans.

(1.25pt).

*1 Loans in others include corporate loans of ¥58.4 billion.
*2 Please refer to the graph of the non-consolidated capital adequacy ratio (domestic criteria) on P28.
Line item amounts are truncated below ¥100 million; numbers of accounts are truncated below 1,000 accounts; percentage change figures are rounded.

24

Overview of Performance:
Sony Bank (Non-consolidated) (2)<Reference><Reference> On Managerial Accounting Basis(Billions of yen)
Gross operating profit
Net interest income *1 ①

FY09

FY10

14.9

16.4

+1.5

+10.1%

13.7

15.1

+1.3

+10.2%

0.9

0.8

(0.1)

(14.2%)Net other operating
income *3

0.2

0.4

+0.1

+69.4%

14.6

15.9

+1.2

+8.6%

Operating expenses andother expenses ③
Net operating profit(core profit)= (A)－③

Gross operating profit (core profit)

Net operating profit (core profit)

Operating expenses and other expenses

Net fees andcommissions *2 ②Gross operating profit(core profit) (A)= ①＋②

Net Operating Profit (Core Profit),
Operating Expenses and Other Expenses& Gross Operating Profit (Core Profit)

Change(Billions of yen)

20

11.7

12.8

+1.0

+9.2%

15

14.6
11.7

2.9

3.0

+0.1

+8.6%

15.9

+9.2%

12.8

+6.3%

10

●Managerial accounting basis
The following adjustments are made to the figures on a financial accounting basis toaccount for profits and losses more appropriately.
*1: Net interest income: Includes profits and losses associated with fund investment
recorded in net other operating income, including gains or losses from currency
swap transactions.
*2: Net fees and commissions: Includes profits and losses for customer dealings in foreign
currency transactions recorded in net other operating income.
*3: Net other operating income: After the above adjustments (*1 and *2), consists of profits
and losses for bond and derivative dealing transactions.

5

2.9

+6.3%

3.0

0

●Core profit
FY09
FY10
Profits and losses exclude net other operating income, which includes those on bond andderivative dealing transactions, and stands for Sony Bank’s basic profits.
Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

25

Sony Bank Operating Performance (1)<Reference>＜参考＞ Interest Spread (Managerial Accounting Basis)
Interest spread

Yield on financing

Yield on investment

(%)

2.00

1.49

1.50

1.44

1.44

1.42

1.40

+0.06%

0.90

1.00

0.59

0.86

0.87

0.88

0.58

0.57

0.53

0.94

0.45

0.50

0.00
FY09.4Q

FY10.1Q

FY10.2Q

FY10.3Q

FY10.4Q

Notes: Interest spread = Yield on investment – Yield on financing
Yield on investment includes primarily gains or losses from currency swap transactions in net other operating income.

26

Sony Bank Operating Performance (2)Customer Assets (Deposits + Investment Trusts)
and Number of Accounts
Yen deposits
Foreign currency deposits
Number of accounts (thousands)(Billions of yen)
2,000

723

Loans
Mortgage loans

Investment trusts
+62

796

610

Others*Including corporate loans of ¥58.4 billion.

(Billions of yen)
800

859

722.4
+135.7

1,755.5

66.4*+145.5106.4

1,610.0
1,500

1,403.6

586.6

600

359.2

477.0

1,247.3
400
1,000

347.0
656.0

Deposits total:¥1,649.1 billion

1,289.8

200

500

0

0

08.3.31

09.3.3110.3.3111.3.3108.3.31

09.3.3110.3.3111.3.31

Line item amounts are truncated below ¥100 million; number of accounts are truncated below 1,000 accounts.

27

Sony Bank Operating Performance (3)Non-Consolidated Capital Adequacy Ratio(Domestic Criteria)

Balance of Securities by Credit Ratings
AAA
AA
BBB
BB
(Billions of yen)
1,200

A
Other

(%)

20

+59.9
940.1

1,000

823.1

880.1
13.37

15

800

12.09
10.84

600

10

488.7

9.15
(1.25pt)

400
5

200

0

0
08.3.31

09.3.3110.3.3111.3.3108.3.31

09.3.3110.3.3111.3.31* Sony Bank’s non-consolidated capital adequacy ratio was calculated based on the standard
stipulated by Article 14-2 of the Banking Law of Japan, in accordance with Financial Services
Agency of Japan (“FSA”) public ministerial announcement No. 19 of 2006.

Amounts are truncated below ¥100 million.

28

Consolidated Financial Forecast
for the Year Ending March 31, 201229

Consolidated Financial Forecast
for the Year Ending March 31, 2012

Consolidated ordinary revenues

FY10

1H FY11

ActualForecast

FY11
Forecast

ChangeFY10 actual vs.

1,002.2

497.0

1,022.0+ 2.0%

Life insurance business

900.3

442.0

909.3

+ 1.0%

Non-life insurance business

74.1

40.1

80.4

+ 8.4%

Banking business

29.5

15.8

32.8

+ 11.0%

76.8

27.0

59.0

(23.2%)

Consolidated ordinary profit(Billions of yen)

Banking business
Non-life insurance businessLife insurance business

1,200

1,002.2

1,000

1,022.0800

Life insurance business

72.1

25.0

53.0

(26.6%)

Non-life insurance business

2.1

0.3

2.6

+ 21.2%

Banking business

2.4

1.7

4.1

+ 70.3%

41.7

13.0

29.0

(30.5％)

Consolidated net income

Consolidated Ordinary Revenues

FY11 forecast

600
400
200
0
FY10 (Actual)■Life insurance business
Ordinary revenues for the year ending March 31, 2012, are expected to increase 1.0% year on year, to ¥909.3 billion. We
anticipate that income from insurance premiums will increase in line with steady growth of the policy amount in force. We
expect ordinary profit to decrease 26.6% year on year, to ¥53.0 billion. During the fiscal year ended March 31, 2011, thebusiness generated net capital gains of ¥23.8 billion, reflecting the process of shifting bond holdings to ultralong-term bonds toreduce interest rate risk. However, we do not anticipate gains on the sale of securities for the year ending March 31, 2012,
because the process of shifting our bond holdings was largely completed in the previous period.

Consolidated Ordinary Profit(Billions of yen)100

■Non-life insurance business

90

Ordinary revenues for the year ending March 31, 2012 are expected to rise 8.4% year on year, to ¥80.4 billion, due to anincrease in net premiums written, mainly for mainstay automobile insurance. Ordinary profit is expected to increase 21.2% year
on year, to ¥2.6 billion, due mainly to the aforementioned increase in ordinary revenues and an expected improvement in theloss ratio in line with the February 2011 revision of automobile insurance premiums. This should offset an expected increase in
the expense ratio in line with the planned reinforcement of corporate systems and infrastructure based on the expected
expansion of business operations.

80■Banking Business

FY11 (Forecast)

Banking business
Non-life insurance businessLife insurance business

76.8

70

59.0

60
50
40
30

Ordinary revenues for the year ending March 31, 2012, are expected to increase 11.0% year on year, to ¥32.8 billion, owing
mainly to an increase in net interest income, bolstered by a growing balance of loans, especially mortgages. Ordinary profit isexpected to grow 70.3%, to ¥4.1 billion, from the previous fiscal year, as we anticipate a steady increase in gross operating
profit, driven by business expansion that should offset an increase in general and administrative expenses related to new
product and service developments.

2010
0
FY10 (Actual)(Billions of yen; amounts are truncated below ¥100 million; percentage changes are rounded.)

FY11 (Forecast)30

(3) Dividend Policies

31

Dividend Policies■Basic Idea of Capital and Dividend Policies
We consider an increase in returns to our shareholders, as well as return on equity, among our most importantmanagement tasks. Our basic policy on returning profits to our shareholders is to provide stable dividends toshareholders while ensuring the high level of financial soundness that is necessary to maintain the trust of existingcustomers and attract new ones, as well as securing sufficient retained earnings for future business development.

Dividend Forecast

FY10 : ¥4,000 per share (forecast) FY09 : ¥3,000 per share (actual)FY11 : ¥20 per share (forecast)* FY11 dividend forecast reflect the 200-for-1 stock split .

 We propose to pay an annual cash dividend of ¥4,000 per share for the year ended March 31, 2011, up ¥1,000 from theprevious period of ¥3,000.
Consolidated net income has risen steadily since October 2007, when we listed our shares on the First Section of theTokyo Stock Exchange. In particular, Sony Life now expects to generate stable asset investment returns, primarily inthe form of interest income, from its asset portfolio over the medium to long term, as a result of revising its asset
portfolio. Furthermore, Sony Life currently maintains sufficient financial soundness from a regulatory perspective.
Even if an indicator based on economic value were introduced in future in a way where we could anticipate, we would
have sufficient surplus available for dividends.
 We plan to pay the annual cash dividend of ¥20 per share for the year ending March 31, 2012 if the total dividend

amount is the same as for the year ended March 31, 2011 and reflects the 200-for-1 stock split.
 On April 1, 2011, SFH conducted a stock split at a ratio of 200 to one, to improve the environment for investing in its

stock by lowering the unit investment amount and increasing the liquidity of the stock, with the aim of expanding its
investor base. SFH also adopted a Share Unit system, which defines 100 shares as one unit.

32Preliminary Sony Life’s
Market Consistent Embedded Valueas of March 31, 201133

Preliminary Sony Life’s Market Consistent
Embedded Value as of March 31, 2011MCEV results 【Preliminary】(Billions of yen)

10.3.31
MCEV

11.3.31

Change

894.0

853.6

(40.4)

Adjusted net worth

206.2

230.3

+24.1

Value of existing business

687.8

623.3

(64.5)

55.6

56.8

+1.2

Of which, new business value

 Sony Life’s preliminary MCEV as of the end of March 31, 2011 decreased year on year, due to decreased value ofexisting business which offset the positive impact of an increase in adjusted net worth under the change of financial
market conditions such as lowering of ultralong-term interest rates.
 Furthermore, to the extent of ultralong-term interest rates as of March 31, 2011, interest swap rates were lower thanJapanese government bond (JGB) yields. Sony Life has been comprehensively managing interest rate risk residing
in its assets and liabilities by investing mainly in ultralong-term JGB in asset side to prepare for the future insurance
claims and other payments in liability side. Thus, it is considered reasonable and proper to use JGB yields as riskfree-rate for calculation of liability side for the purpose of internal risk management. As for the calculation of MCEV
above, we use interest swap rates. Meanwhile, if we calculated the sum of the present value of certainty-equivalentprofit and the time value of options and guarantees which consists of components of value of existing business byusing the JGB yields, instead of interest swap rates, as of the March 31, 2011, this calculation would have shown an
increase in the value of existing business and new business value by ¥47.6 billion and ¥4.8 billion, respectively.

* Please keep in mind that the validity of these calculations has not been verified by outside specialists. MCEV as of March 31, 2011,
calculated in accordance with the MCEV principles and verified by outside specialists, is scheduled to be announced at May 27, 2011.

34

Appendix

35

Recent Topics 1
AEGON SONY LIFE INSURANCE Sales Update
Launch of sales：December 1, 2009
Common stock：¥20 billion (including capital surplus of ¥10 billion)
Equity ownership：Sony Life insurance Co., Ltd. 50%, AEGON・international B.V. 50%
Marketing products: Variable Individual Annuity (3 types, 5 products)
Sales Channels: Lifeplanner sales employees and affiliated Banks (7*) As of May 20, 2011
Financial Highlights for FY10:
Number of new policies: 781, New policy amount: ¥7.6 billion
Number of policies in force: 1,218 policies, Policy amount in force: ¥13.8 billion

Sony Bank’s Mortgage Loans through Sony Life
Sony Life accounts for 24% of the balance ofmortgage loans as of March 31, 2011
Sony Life accounts for 28% of the amount of
new mortgage loans for FY10*Sony Life started handling banking agency business in January 2008.

Sony Assurance’s Auto Insurance Sold by Sony Life
Sony Life accounts for approx. 5% of new automobile policies
for FY10* Sony Life started handling automobile insurance in May 2001.
“Lifeplanner” is a registered trademark of Sony Life Insurance Co., Ltd.

36

Recent Topics 2<Highlights for FY10>
2010-4-1

AEGON Sony Life Insurance ’s variable individual annuity product commenced to be offered at Minato Bank

2010-4-12Sony Assurance launched automobile insurance sales via Bank of Yokohama

2010-4-19

AEGON Sony Life Insurance 's variable individual annuity product commenced to be offered at Fukushima Bank

Sony Bank entered tie-up with Kintetsu Real Estate in mortgage loans

2010-5-1

Sony Life newly opened a branch in Yamagata prefecture to expand its service network through community-based approachSony Assurance launched automobile insurance sales via Tama Shinkin Bank
Sony Life commenced operations at LIPLA Co., Ltd., a wholly owned subsidiary of Sony Life, and opened the first one-stop shop “LIPLA”

2010-6-24

Sony Bank opened the first over-the-counter branch, called "Housing Loan Plaza

2010-7-12

AEGON Sony Life Insurance 's variable Individual annuity product to be offered at Chiba Kogyo Bank

2010-7-26

Sony Bank launched foreign currency delivery service

2010-9-13

Sony Bank began offering mortgage loans for used condominiums

2010-9-16

Sony Life opened the second one-stop insurance Shop, "LIPLA"

2010-10-4

Sony Bank entered tie-up with Ohkuraya Juutaku in mortgage loans

2010-11-2

Sony Life began offering new products: Whole life nursing-care insurance (reduced surrender value), lump- sum payment nursing-care rider,and discount rider for nonsmokers and others in excellent health for decreasing term life insurance

2010-11-08

Sony Bank began providing a service to accept dividends on investment trusts

2010-11-29

Sony Bank added six funds (monthly dividend type) to investment trusts lineup

2011-01-17

AEGON Sony Life Insurance began offering new variable individual annuity product, Catch Point, at SMBC

2010-01-24

Sony Bank added two funds (monthly dividend type) to its lineup of investment trusts. The bank began offering the COMMONS 30 FUND,

2010-02-01

AEGON Sony Life Insurance began offering new variable individual annuity product, W Account, throughSony Life's Lifeplanner sales employees and at Minato Bank

2010-02-01

Sony Assurance introduced several revisions to its automobile insurance products, including to insurance premiums and2011-02-07

AEGON Sony Life Insurance began offering new variable individual annuity product, W Account, at Juroku Bank

2011-3-19

Sony Life opened the third one-stop insurance shop, "LIPLA"

which previously was only sold directly by Commons Asset Management.

subdivisions of driving distance criteria.

2011-4-01

Sony Assurance declared conformity with the ISO 10002 International Standard for Complaints Management Systems

2011-4-01

Sony Bank began offering Wide Danshin group credit life insurance to mortgage loan borrowers

2011-4-11

AEGON Sony Life Insurance began offering new variable individual annuity product, W Account, at Kansai Urban Banking

2011-4-28

Sony Assurance began offering free application, “Trouble Navigation” to smart phone users

2011-5-01

Sony Bank to enter credit card business; began issuing the Sony Card.

2011-5-02

Sony Life began sales of new income protection insurance to cover three major diseases (type II)2011-5-16

Sony Bank began offering Brazilian real for foreign currency deposits

37

Sony Life: Fair Value Information on Securities(General Account Assets)
Fair Value Information on Securities
zFair value information on securities with market value (except trading-purpose securities)(Billions of yen)zValuation gains (losses) on trading-purpose securities(Billions of yen)

Notes:
1) Line item amounts are truncated below ¥100 million.
2) Amounts above include those categorized as “monetary trusts.

38

Sony Life’s Breakdown of Net Assets
Net Assets on BS, Real Net Assets and Solvency Margin(Billions of yen)
①Net Assets
(B/S)

②Real
Net Assets③Solvency
Margin10.3.3111.3.3110.3.3111.3.3110.3.3111.3.31

Total shareholders’ equity

177.3

209.8

177.3

209.8

170.3

200.7

Net unrealized gains on other securities, net of taxes

Reserve for possible loan losses

15.4
－
(1.4)
－
－
－

7.0
－
(1.4)
－
－
－

15.4
－
(1.4)
9.6
48.4
－

7.0
－
(1.4)
16.7
51.5
－

－
33.0
－
9.6
48.4
0.0

－
20.8
－
16.7
51.5
0.0

Net unrealized gains on real estate

－

－

2.6

1.9

1.6

1.0

－
－
－
－
－
－
191.3

－
－
－
－
－
－
215.3

316.5
2.3
－
－
(20.4)
12.8
563.4

334.2
1.1
－
－
(22.1)
8.0
606.9

316.5
2.3
1.0
47.2
－
－
630.2

334.2
1.1
0.6
63.3
－
－
690.3

Net unrealized gains (losses) on available-for-sale securities
Land revaluation, net of taxes
Reserve for price fluctuations
Contingency reserve

Excess amount of policy reserves based on Zillmer method
Unallotted portion of reserve for policyholders' dividends
Future profits
Deferred tax assets
Unrealized gains (losses) on held-to-maturity bonds
Deferred tax liabilities for available-for-sale securities
Total

Notes
③After estimateddistributed income
deducted③Before tax x 90%②Before tax（after revaluation）③Before tax(Before revaluation) X85%

②Before tax

Note: Real net assets excluding net unrealized gains (losses) on held-to-maturity securities and on policy reserve matching bonds, are¥583.8 billion as of March 31, 2010, and ¥629.1 billion as of March 31, 2011.

Amounts are truncated below ¥100 million.

39

Sony Life’s Solvency Margin Ratio(Billions of yen)
11.3.31(Currennt )Category

11.3.31
(New)
690.3

625.7

Common stocks, etc

200.7

200.7

Reserve for price fluctuations

16.7

16.7

Contingency reserve

51.5

51.5

Reserve for possible loan losses

0.0

0.0

20.8

20.8

Total solvency margin(A)

Net unrealized gains on other securities
multiplied by 90% if gains or 100% if losses
Net unrealized gains on real estate
multiplied by 85% if gains or 100% if losses

1.0

1.0

Excess amount of policy reserves based on Zillmer method

334.2

334.2

Unallotted portion of reserve for policyholders' dividends

1.1

1.1

Future profits

0.6

Deferred tax assets

63.3

Subordinated debt-

That portion of the excess amount of policy reserves based on
Zillmer method and subordinated debt that is not included in the margin
Deductible items

Total risk
Insurance risk

(B)
R1

63.3
(63.9)

-

-

47.6

72.7

20.0

20.0

Third-sector insurance risk

R8

7.2

7.2

Assumed interest rate risk

R2

11.5

27.9

Asset management risk

R3

16.8

28.7

Business management risk

R4

1.2

1.8

Minimum guarantee risk

R7

9.0

8.8

2,900.1%

1,720.0%

Solvency margin ratio [(A)/{(B)×1/2}]×100

Note: Cabinet Office Ordinance No. 23 of 2010 and FSA public ministerial announcement 48 of 2010 prescribe a revision in the methods of calculating
total solvency margin and total risk (increasing the strictness of margin inclusion, and making risk measurement stricter and more sensitive).
These changes are to be applied from FY11. The above-stated figures are calculated on the assumption that these changes are applied at the end of FY10.

Amounts are truncated below ¥100 million.

40

Contact: Corporate Communications & Investor Relations Department
Sony Financial Holdings Inc.
TEL： +81-3-5785-1074

41