Annual Report

Growth and Value Creation

Growth and Value Creation
The Sony Financial Holdings Group (the SFH Group) works to differentiate itself fromcompetitors in its three businesses, namely, life insurance, non-life insurance and banking
by building a unique and distinctive business model.
The SFH Group also strives to provide customer-oriented and highly convenient financial
products and services to individual customers.
In addition to sustainable growth in these three businesses, SFH Group aims at raising its
corporate value by creating group-wide synergies and entering into new business domains.
Contents
Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1

SFH Group Growth Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . .

2

About Sony Life . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

30

About the Sony Financial Holdings Group . . . . . . . . . . . . . . . . . . . .

4

About Sony Assurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

36

Management Message . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6

About Sony Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

40

About Sony Bank Securities . . . . . . . . . . . . . . . . . . . . . . . . . .

44

SFH Group Company Profiles

Corporate Governance and CSR Section
Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Social Contributions and Environmental Activities . . . . . . . . . . . . 18

Financial Section
Analysis of Operating Performance for FY2008 . . . . . . . . . . . . .

46

SFH Consolidated Financial Statements . . . . . . . . . . . . . . . . . .

62

Capital Adequacy Status . . . . . . . . . . . . . . . . . . . . . . . . . . .

83

Corporate Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Sony Life's Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . .

94

Senior Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Sony Assurance's Financial Data . . . . . . . . . . . . . . . . . . . . . .

98

Senior Management of the SFH Group Companies . . . . . . . . . . . . 24

Sony Bank's Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . 101

Corporate Section

Stock Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
History of the SFH Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104

Major Topics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

SFH's Website Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108■"Lifeplanner" and "LIFEPLANNER VALUE" are registered trademarks of Sony Life Insurance Co., Ltd.
■"MONEYKit" is registered trademark of Sony Bank Inc.
■"RiskGrade" is registered trademark of RiskMetrics Group.

Disclaimers:
This annual report contains statements concerning the current plans, expectations, strategies and beliefs of the SFH Group. Any statements contained herein thatpertain to future operating performance and that are not historic facts are forward-looking statements. Forward-looking statements may include—but are notlimited to—words such as “believe,” “anticipate,” “plan,” “strategy,” “expect,” “forecast,” “predict,” “possibility” that describe future operating activities,business performance, events or conditions. Forward-looking statements are based 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 to place undue relianceon forward-looking statements. The SFH Group disclaims any obligation to revise forward-looking statements in light of new information, future events or otherfindings. The information contained in this annual report does not constitute 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.

Financial Highlights(Millions of yen)

2005
653,259
12,2696,375

2006
758,71125,377
11,537

2007
759,280
18,354
10,021

2008
822,153
44,50024,255

2009
860,323
34,25330,722

3,282,269
Total assets
182,817
Net assets(Note3)
12.17%
Consolidated capital adequacy ratio (Domestic criteria)

3,917,048
263,040
9.99%

4,323,780
270,179
12.01%

4,977,450
261,627
14.62%

5,313,677
204,89713.32%

604,093
17,07010,102

696,426
24,3599,616

689,591
14,895
7,494

741,250
39,29018,514765,910
32,40933,783

2,617,266
141,142

3,103,241
217,833

3,445,970
216,568

3,659,786
182,6713,810,929
140,730

38,159(2,806)(1,981)45,703(764)(441)

51,0202,044
1,598

55,6492,817
2,185

61,882
2,178(1,556)

46,68512,086

56,103
11,70967,46813,32078,645
15,38586,69813,678For the years ended March 31

Ordinary revenues
Ordinary profit
Net income
As of March 31(Consolidated)

For the years ended March 31

Ordinary revenues
Ordinary profit
Net income(Non-consolidated)

As of March 31

Total assets
Net assets

As of March 31

Total assets
Net assets

Sony Financial Holdings

For the years ended March 31

Ordinary revenues
Ordinary profit (loss)
Net income (loss)

01
For the years ended March 31(Non-consolidated)

11,353(1,659)(1,663)

17,2252,228
3,258

19,4701,354
1,023

25,9882,746
4,492

33,361
414(710)

Total assets
618,459
Net assets
35,318Non-consolidated capital adequacy ratio (Domestic criteria) (Note 4) 11.97%

754,768
34,7159.24%

806,848
36,87811.49%

1,211,000
35,7129.15%

1,411,956
46,26413.37%

As of March 31

Notes: 1. All figures have been rounded down to the nearly ¥1 million.
2. Total assets and net assets have been calculated based on the “Accounting Standard for Presentation of Net Assets in the Balance Sheet” (ASBJ Statement No. 5) and the “Guidanceon Accounting Standard for Presentation of Net Assets in the Balance Sheet” (ASBJ Guidance No. 8) since FY2006.
3. SFH has calculated the consolidated capital adequacy ratio (domestic criteria) based on formulas stipulated in the FSA Notification No. 20 (2006), which is based on Article 52-25of the Banking Law, since FY2006. The Company applies Standard Two. The Company calculated the consolidated capital adequacy ratio based on formulas stipulated in the Ministryof Finance Announcement No. 62 (1998), which is based on Article 52-25 of the Banking Law, through FY2005. Calculations in all periods do not include insurance subsidiaries
within the scope of consolidation. The Company has applied FSA Notification No. 79 (2008), which establishes exceptions to the standards based on Article 52-25 of the Banking Law
for determining the capital adequacy of a bank holding company in light of the assets held by the bank holding company and its subsidiaries, since the end of March 2009.
4. Sony Bank has calculated its non-consolidated capital adequacy ratio (domestic criteria) based on the FSA Notification No. 19 (2006), which establishes standards based on
Article 14-2 of the Banking Law for determining the capital adequacy of a bank in light of the assets held by the bank, since the end of March 2007. The Bank applied previous
standards through FY2005. The Bank has applied FSA Notification No. 79 (2008), which establishes exceptions to the standards in FSA Notification No. 19 (2006), which establishes
standards based on Article 14-2 of the Banking Law for determining the capital adequacy of a bank in light of the assets held by the bank, since the end of March 2009.

Sony Financial Holdings (Consolidated)
Ordinary revenues(Billions of yen)

Ordinary profit(Billions of yen)

Net income

Total assets (Billions of yen)(Billions of yen)

900

60

60

6,000

600

40

40

4,000

300

20

20

2,000

05

06

07

08

For the years ended March 31

09 (year)

0

0

0

0

05

06

07

08

For the years ended March 31

09 (year)

05

06

07

08

For the years ended March 31

09 (year)

05

06

As of March 31

07

08

09 (year)

Financial Highlights

Ordinary revenues
Ordinary profit (loss)
Net income (loss)

SFH Group Growth Strategies
Aspiring to Be the Financial Services Group Foremost in Customers' Minds and Trust
The SFH Group aims to be the financial services group customers think of first and trust most by integrating the many functionsof financial service providers—everything from saving and asset building to borrowing and protection—and deliveringhigh-valued-added products and quality services, all tailored to the specific needs of every one of our individual customers.

SFH Group Growth Strategies

Sustainable growthin three core existing businesses
Sony Life
Sony AssuranceSony Bank
Sony Financial Holdings

Contribution from cross sellingand other group synergies
Entry into new business domains

SFH Group Growth Strategies

02＜SFHG today＞＜SFHG in future＞

Sony Financial Holdings Inc. (SFH) seeks to increase corporate value based on steady growth at our threemain subsidiaries. We also work to enhance the corporate value of the SFH Group by generating synergies
through cross selling and other means and by entering into new business domains.

Financial Soundness
In addition to pursuing steady growth, SFH Group works to ensure a high degree of financial soundness to acquire and maintain
trust of our individual customers as a financial institution.

Financial Soundness Indicators (As of March 31, 2009)
Sony Life

Sony AssuranceSony Bank

Solvency margin ratio : 2,060.5%

Solvency margin ratio : 993.0%

Capital adequacy ratio: 13.37%(Non-consolidated basis)(Domestic Criteria)*See page 52, 56, 61 for the details.

Credit Ratings (As of July 1, 2009)
Rating Agency

SFH
Sony Life

Sony Bank

RatingRating and Investment Information (R&I)

Issuer ratings

AA−

Rating and Investment Information (R&I)

Insurance claims paying ability

AA (Very high claim paying ability supported by excellent factors)

Japan Credit Rating Agency (JCR)

Ability to pay insurance claims

high capacity to honor the financial commitment
AA (Veryon the obligation)

Moody's Investors Service

Insurance financial strength rating

Aa3

Standard & Poor's (S&P)

Insurer financial strength rating

A＋(Strong)Long-term counterparty credit ratingA−

Short-term counterparty credit rating

A−2

Long-term senior debts rating

AA−

Standard & Poor's (S&P)
Japan Credit Rating Agency (JCR)Strengths of Our Three Main Subsidiaries and Growth Strategies● Death-protection insurance● Medical insurance, other● Automobile insurance(risk segmented)● SURE medical andcancer insurance● Deposits (yen, foreign currency)● Mortgage loans● Investment trusts,
foreign exchange margintransactions, otherSony Financial Holdings

Main Products

The SFH Group growth strategies are based on sustainable and stable growth of our core group members, Sony Life Insurance Co.,
Ltd. (Sony Life), Sony Assurance Inc. (Sony Assurance), and Sony Bank Inc. (Sony Bank). Pursuing their own respective growthstrategies, our three business segments seek to capitalize on their strengths and advantages, as well as accelerating the growth.

Strengths
Growth Strategies● Internet● Partners (Independent agencies)● Telephone

Provide quality services through ahighly capable sales force with
consulting expertise

Provide quality services withreasonable premiums

Provide highly convenient andquality products and services thattake advantage of the Internet● Design and sell life insurance
tailored to individual customers
through life planningconsultation● Unique products at morereasonable premiums than otherinsurers● Low-cost structure as an
Internet bank without branch
offices● Extensive after-sales follow-up
services● Quality services that are pricecompetitive with other insurers● More advantageous andconvenient product lineup■ Focus on death protection, forwhich consulting sales are themost effective■ Expand share of direct insurance
within the overall automobile
insurance market■ Diversify revenue sources andexpand business scope bycontinuing to introduce unique
new products and services■ Actively develop individual
annuity products■ Ensure high profitability throughreasonable pricing andappropriate cost control● Internet■ Bolster offerings of securities
and foreign currency products
as an asset management bankfor individuals

SFH Group Growth Strategies

Sales Channels

03● Lifeplanner sales employees

About the Sony Financial Holdings GroupThe SFH Group is a financial services group comprising Sony Financial Holdings, subsidiaries Sony Life,
Sony Assurance, Sony Bank, and other group companies.

Sony Financial Holdings

Sony Financial Holdings, the group holding company, pursues integrated andcomprehensive group-wide financial service strategies that respect groupcompanies' management independence while developing cross-company products
and services and advancing functional integration.

About the Sony Financial Holdings Group04

Sony Life Insurance(Philippines) Corporation

Corporate
VisionThe SFH Group aims to be the financial services group customers think of first
and trust most by integrating the many functions of financial service
providers—everything from saving and asset building to borrowing andprotection—and delivering high-valued-added products and quality services,
all tailored to the specific needs of every one of our individual customers.

Corporate
Philosophy

Focus on the customer
We help our customers live rich and secure lives by opening our ears and hearts
to their opinions and concerns to provide products and services that meet theirsatisfaction.
Contribute to society
We appreciate the public nature of financial services and seek to achieve ourcorporate vision and contribute to society by maintaining high ethical standards
and levels of responsibility. We also fulfill our other obligations as a member ofsociety and a good corporate citizen.
Pursue originality
We pursue creativity and innovation informed by original ideas and unfettered byconvention.
Encourage a free and open-minded corporate culture
We recognize the importance of individual employee contributions in providing
ideal financial services. We encourage a free and open-minded corporate culture
to allow employees to fully display their individualities and abilities in their work.

Group Overview (As of July 6, 2009)
Sony Financial Holdings Inc.
Established
Head officeBusiness
Common Stock
Shares outstanding
Major shareholders

April 1, 2004
1-1, Minami Aoyama 1-chome, Minato-ku, Tokyo, Japan
Management control of life insurance, non-life insurance, banking, and other subsidiaries
based on the provisions of the Insurance Business Law and the Banking Law and other incidental operations¥19,900 million
2,175,000 sharesSony Corporation 60% (see page 25 for further details)

Sony Life Insurance Co., Ltd.
August 10, 1979
1-1, Minami Aoyama 1-chome, Minato-ku, Tokyo, Japan
Life insurance¥70,000 million
70,000,000 sharesSony Financial Holdings Inc. 100%

Sony Assurance Inc.
June 10, 1998
37-1, Kamata 5-chome, Ota-ku, Tokyo, Japan
Non-life insurance¥20,000 million
400,000 sharesSony Financial Holdings Inc. 100%

Sony Bank Inc.
Established
Head officeBusiness
Common Stock
Shares outstanding
Share ownership

April 2, 2001
3-26, Kanda-Nishikicho, Chiyoda-ku, Tokyo, Japan
Banking¥31,000 million
620,000 sharesSony Financial Holdings Inc. 100%

Sony Life Insurance (Philippines) Corporation
Established
Head officeBusiness
Common Stock
Shares outstanding
Share ownership

August 26, 1998
Makati City, Philippines
Life insurance
937 million Philippine pesos
9,370,000 sharesSony Life Insurance Co., Ltd. 100%

Sony Bank Securities Inc.
Established
Head officeBusiness
Common Stock
Shares outstanding
Share ownership

June 19, 2007
3-26, Kanda-Nishikicho, Chiyoda-ku, Tokyo, Japan
Financial products and exchange business¥1,500 million
30,000 sharesSony Bank Inc. 100%05
About the Sony Financial Holdings Group

Established
Head officeBusiness
Common Stock
Shares outstanding
Share ownershipSony Financial Holdings

Established
Head officeBusiness
Common Stock
Shares outstanding
Share ownership

Management Message

Sony Financial Holdings

FY2008, especially from the second half onward, was characterized by the global financial markets turmoil and a worldwide
recession. In these conditions, the SFH Group strives to grow its value through expansion of each of its businesses, enhancing
the group synergies and strengthening our management structure.

Management Message

06

Q：Could you give us an overview of businessenvironment and consolidated financial results in
FY2008, the year ended March 31, 2009?
A：The financial market turmoil that started in the U.S. had asevere impact on the economies of other countries andsnowballed into a worldwide recession. Affected by strong
yen and a decline in stock market prices, Japan’ s economy
remains in a serious state, with a growing trend of capital
expenditure cutbacks and labor adjustment, and a slump
in personal consumption.
The SFH Group's consolidated financial results wereaffected, because impairment losses on securities held
mainly by Sony Life increased as a result of equity andcorporate bond market declines. Sony Life's market
consistent embedded value (MCEV, one of the benchmarksof life insurance companies' corporate value) fell sharply
from ¥816.5 billion at the end of March 2008 to ¥400.9
billion at the end of March 2009. This reflects the fall of
equity and corporate bond markets and the interest rateenvironment at the end of March 2009.
At the same time, the SFH Group steadily expandedbusiness operations, posting an increase in ordinary
revenue in all three business segments (life insurance,
non-life insurance, and banking). We believe that ourtireless management efforts have been supported bycustomers, as reflected in consistently high evaluations inthird-party surveys of customer satisfaction and othermeasures.
SFH posted consolidated ordinary revenues of ¥860.3
billion, an increase of 4.6% year-on-year. Sony Life's
premium income grew on the back of an increase in policy
amount in force. Sony Assurance also recorded growth inThird-party assessments in FY2008
Shukan Economist
Reliable life insurance
ranking

1st

Shukan Economist, August 26, 2008
J.D. Power Asia PacificJapan automobile
insurance customer
satisfaction survey
J.D. Power Asia Pacific, announced July 29, 2008

1st

Nikkei financial
institution ranking
Customer satisfaction

1st

Nihon Keizai Shimbun, December 14, 2008

net premiums written on a rise in the number of policies inforce, with the number of automobile insurance policies
exceeding a million at the end of December 2008. Sony
Bank recorded an increase in the balance of customer
assets (the sum of deposits and investment trusts) to¥1,403.6 billion.
However, consolidated ordinary expenses also increased
in all three segments, rising 6.2% in total to ¥826.0 billion.
This is due to higher investment expenses at Sony Life,
including impairment losses on securities; an increase ininsurance payouts at Sony Assurance because of natural
disasters, and a rise in interest expenses at Sony Bank.
Consequently all three business segments recorded lower
profits, with consolidated ordinary profits down 23.0%
year-on-year, to ¥34.2 billion. SFH recorded extraordinary
gain of ¥20.4 billion, due to a partial reversal of reservefor price fluctuations at Sony Life, and an extraordinary
losses of ¥3.9 billion on disposal of fixed assets (softwarein progress) at Sony Assurance. Consequently, net income
grew 26.7% year-on-year, to ¥30.7 billion.
To expand the scope of its business, SFH increased thecapital of Sony Life by ¥10 billion in FY2008 as a provision
for establishing a joint-venture which was planned todevelop and sell individual annuities, as well as the capitalof Sony Bank by ¥12 billion to ensure capital adequacy.
Q：Could you give us details about major initiatives in eachof your business segments? Let's start with life
insurance.
A：Sony Life adheres to its corporate slogan of LIFEPLANNERVALUE and endeavors to provide unique services developedwith the customer's perspective in mind. Sony Life adopts
a consulting-based sales approach through its Lifeplanner
sales employees and Partners (independent agencies) tooffer protection tailored to each individual's life plan. In
addition, Sony Life provides finely tuned after-sales
follow-up services to enhance customer confidence further.
In FY2008, we exceeded the previous fiscal year's
performance in both new policy amount and policy amountin force through our commitment to the consulting-based
sales approach and strengthening after-sales follow-up
services. Improving the quality and quantity of sales
channels such as Lifeplanner sales employees is essential
to the growth of Sony Life; the number of registered
Lifeplanner sales employees increased to 3,891 at the endof March 2009.

Sony Financial Holdings
07
Management Message

Hiromichi Fujikata

Teruhisa Tokunaka

Katsumi Ihara

Executive Vice President, Representative Director

President, Representative Director

Executive Vice President, Representative Director

In October 2008, we introduced level premium term life
insurance with no surrender value (no dividends) and level
premium term life insurance rider with no surrender value(no dividends). These life insurance products feature
reasonable premiums because they do not have a surrender
value.
To prepare to do business in overseas markets other than
the Philippines, Sony Life opened a representative office inBeijing in China in October 2008, and Taiwan, ROC in July2009 to research the financial and life insurance markets inGreater China (including Taiwan, Hong Kong and thePeople's Republic of China).

Number of Lifeplanner sales
employees in Sony Life
5,000
4,000
3,000
2,000
1,000
0

05
4,170

As of March 31

06

07

08

09

(year)

3,826

3,776

3,779

3,891

Sony Financial Holdings
Management Message

08

Q：Tell us about the non-life insurance business.
A：Sony Assurance employs the direct business model,
communicating with customers directly over the telephone
and via the Internet to provide quality insurance services
with reasonable premiums. Operating under the slogan“Feel the Difference—a difference that will change
insurance,” Sony Assurance seeks to provide services
based on its deeply held commitment to help customers
feel its value and difference that could only come fromSony Assurance.
In FY2008, Sony Assurance continued with its TV
commercial-intensive advertising as well as starting a
new online advertising campaign. These resulted in a
steady increase in the total number of automobile
insurance and medical and cancer insurance policies inforce to 1.15 million at the end of March 2009. The
number of automobile insurance policies in force topped 1
million at the end of December 2008, nine years and threemonths after the company began selling automobile
insurance.
Sony Assurance increased the discount offered to new
automobile insurance customers who had insurance
quotes and signed up online, and whose cover started on
or after February 1, 2009. In January 2009, the company
set up a new insurance selection page on the website andbegan selling pet insurance through alliance with Anicom
Insurance Inc. as Sony Assurance's first “recommended
insurance product.”
In terms of service, Sony Assurance extended the freevehicle recovery towing distance for automobile policyholders
in their first year to the same as that for those who haverenewed their policies so that they could use theirbreakdown service menu with confidence. The company also
launched the Car Life Discount Service*, which offers
discounts for car rental and entry to leisure facilities as a
new benefit for policyholders. As well, the company
established a new claims service center for receiving
accidents reports in Sapporo in July 2008 in addition to the

Number of automobile insurance
policies at Sony Assurance(Thousands of policies)
1,000(As of December 31, 2008)
1millionpolicies in force

800

Tokyo center, to strengthen its accident resolution capability.
* The Car Life Discount Service is provided by Sony Assurance business
partners.

Q：And what about the banking business?
A：Sony Bank provides highly convenient quality financial
products and services to individual customers over theInternet, with a focus on asset management. In FY2008,
Sony Bank took maximum advantage of its unique strengths
and the management base it has built since its businesslaunch June 2001. It has focused on accelerating thebusiness expansion by strengthening products and services,
and improving reliability.
In May 2008, Sony Bank launched foreign exchange
margin transactions as a foreign currency investment
option, which has proved very popular with customers. In
October 2008, Sony Bank strengthened its foreign
currency service—one of its mainstay products—byintroducing a credit card that makes available settlementin two currencies. Accordingly, the customers can debit
cash from their foreign currency accounts at which they
can also save foreign currency deposits.
For financial product intermediary services with Sony
Bank Securities Inc., in October 2008, Sony Bank began a
sweep service that automatically transfers funds for buying
and selling stocks and other securities between bank andbrokerage accounts to make it more convenient for customers.
Sony Bank also strengthened investment trust services,
including expanding its product range and reviewing thesales commission structure. Further, Sony Bank strengthenedmortgage loan alliances to extend sales channels, signing
up Seven Bank, Ltd. as a banking agent in FY2008.
To improve security, Sony Bank made it possible foraccount holders to set a daily transfer limit online to help
prevent bank transfer fraud.
As a result, Sony Bank's retail balance (sum ofcustomers' yen deposits, foreign currency deposits,
investment trusts, and personal loan balance) recorded
solid year-on-year, growth to ¥1,880.7 billion.

Retail balance at Sony Bank(Billions of yen)
2,000
1,500

600

1,000

400

500

200

0
05

0
00 01 02 03 04 05 06 07 08 09 (year)

As of March 31

06

07

08

0 9 (year)

702.7 914.5 1,133.6 1,594.4 1,880.7
As of March 31

Q：How does the SFH Group harness synergies?
A：In addition to expanding business operations for individualcompanies, we leverage each company's operational basefor cross selling to enhance synergies through increased
collaboration between group companies. Cross selling
utilizing the consulting capabilities of Sony Life's Lifeplanner
sales employees has been particularly successful. In
FY2008, Lifeplanner sales employees sold about 6% ofSony Assurance's new acquisition of automobile insurance
policies and about 30% of the balance of Sony Bank's
mortgage loans executed.

Q：Finally, please tell us about the SFH Group's growthstrategy.
A：SFH Group companies differentiate themselves fromcompetitors in each industry by building unique anddistinctive business models, and to provide customer-oriented
and highly convenient products and services to individual
customers. Going forward, the SFH Group plans to sustain
growth by strengthening the competitive edge of each ofits subsidiaries and establishing a solid presence in eachindustry where they are active.
Through increased collaboration between groupcompanies, we work to enhance synergies in the provision

Teruhisa Tokunaka
President, Representative Director

09

Hiromichi Fujikata
Executive Vice President, Representative Director

Katsumi Ihara
Executive Vice President, Representative Director

Management Message* Financial institutions are allowed to calculate their capital adequacy
ratios without deducting net unrealized losses on other securities.

July 1, 2009
Sony Financial Holdings

Q：Financial markets have experienced unprecedented
disruption since the second half of FY2008. Has the SFH
Group been able to maintain its financial soundness?
A：Indicators of financial soundness include the solvency
margin ratio in insurance, which shows insurance claim
payment capability, and the capital adequacy ratio inbanking. At the end of March 2009, Sony Life and Sony
Assurance had solvency margin ratios of 2,060.5% and993.0%, respectively—both figures near the top end of
the range in the industry. Sony Bank's consolidated
capital adequacy ratio (domestic criteria) stood at
13.25% at the end of March 2009 (or 11.08% based on
the previous standard, without applying the exceptions*provided in Financial Services Agency Public
Announcement No. 79 of 2008). These figures are far
higher than the required soundness standard of 4% underthe Banking Law of Japan for banks without overseas
business operations.
Financial and capital markets have been in turmoil
since the second half of FY2008 in the wake of theLehman Brothers collapse. The SFH Group has been
affected by market conditions as a whole but has no
exposure to securities associated with subprime loans or
Lehman Brothers. The SFH Group is confident that it iscapable of sustaining a sound financial position
represented by the solvency margin ratio and capital
adequacy ratio despite challenging business conditions.

of products and services as well as in the sharing of eachother's sales channels and infrastructure to offer highvalue-added products and services that other more-traditional
financial institutions do not offer. We also strive to raise
corporate value by aggressively exploring new business
opportunities outside our existing domains of operations.
The SFH Group added a third representative director,
Katsumi Ihara, to the management team as of June 23,
2009. Mr. Ihara joins us to help us further strengthen ourmanagement structure at a time of business expansion. We
are fully committed to enhancing our management structureand expanding the operations of the SFH Group, and we are
grateful to our stakeholders for their ongoing support andunderstanding.

Corporate
Governance& CSR Section

Corporate GovernanceSocial Contributions and Environmental Activities
Corporate Governance. . . . . . . . . . . . 11

Social Contributions andEnvironmental Activities . . . . . . . . . . . 18

Corporate Governance
Basic Stance on Corporate Governance
The SFH Group's corporate vision and philosophy is its basis
for setting management strategy and expediting decision-making
initiatives. One goal of our corporate vision is to become thefinancial services group foremost in customers' minds andtrust. Although group subsidiaries have different histories,
scales of operation, and business characteristics, SFH as agroup works to achieve this goal by making the most effective
use of the operating characteristics of, and information
available from, each subsidiary within the scope permitted bylaw. In taking this approach, we place the utmost importanceon the soundness and accuracy of our operations. To this end,
we have designed a management structure to ensuregroupwide compliance and risk management.

Board of Directors, Auditors, and other
Officers(As of July 1, 2009)■ Board of Directors■ Compensation for SFH's Directors and Group

Companies' Representative Directors
SFH has a Compensation Advisory Committee to decide on thepolicies and frameworks for compensation and present
proposals for the compensation of SFH's directors and groupcompanies' representative directors. This is designed toensure transparency and objectivity of compensation
decisions. The committee reports to the board of directors of
SFH and SFH group companies in which SFH has a direct
investment.

The Board of Statutory Auditors has five members, of whom three
are outside statutory auditors. The board receives reports onimportant audit matters, discusses them, and makes decisions
under the rules of the Board of Statutory Auditors. Based on theaudit policies and plans stipulated by the Board of Statutory
Auditors, members are responsible for attending important
meetings, including Board of Directors’ meetings, and for
examining the operations and financial condition of the company
as well as supervising the duties executed by directors while
maintaining close collaboration with independent auditors andinternal Audit Department, e.g., receiving reports from them. As arule, the standing statutory auditors of the SFH Group meet once
quarterly to share information within the group.
(Internal Audits)

SFH performs internal audits through its Audit Department. SFH's
Audit Department reports directly to the president andrepresentative director of SFH and is independent of thecompany's operating divisions. The Audit Department examines
the appropriateness and effectiveness of the company's internal
control structures such as the governance processes, compliance,and risk management structure from an independent andobjective standpoint. (see page 17 for details).
(Accounting Audits)

The names, accounting firm, and back-up team of the Certified
Public Accountants (CPAs) who acted as the accounting auditors
of SFH are as follows:
Accounting firm:

PricewaterhouseCoopers Aarata

CPAs

Keiichi Otsuka, Takuei Maruyama

Accounting audit teamThree CPAs, five others■ Personal Relationships, Capital Relationships, Business

Relationships and other Conflicts of Interest
There are no personal relationships between SFH's outside
directors/auditors and SFH's other directors and auditors.
Individual outside directors and auditors have no financial orother interest in SFH.
■ Exemption from Liability for Directors and Auditors
The Articles of Incorporation of SFH stipulate that the Board of
Directors may exempt directors and auditors (including those
who previously held these positions) from liability arising fromnegligence up to the statutory limit as provided in Article 426,
Paragraph 1 of the Companies Act of Japan. The purpose of
the exemption is to provide a setting in which directors andauditors can exercise their capabilities to the full and fulfill
the roles expected of them in carrying out their duties.

11
Basic Stance on Corporate Governance / Board of Directors, Auditors, and other Officers

SFH's Board of Directors comprises nine members, responsible
for making key business decisions and supervising business
operations to ensure and expand the integrity of the SFH
Group. SFH, as a pure holding company, allows its
representative directors to hold the post of subsidiaries'
directors and representative directors of the subsidiaries to be
SFH’ s directors, aiming at integrating its management
system and strengthening its corporate governance. Of thesenine members, six are directors of subsidiaries within thegroup, one is a representative corporate executive officer ofSony Corporation, one is an outside director of Sony
Corporation, and one is an outside director. The outside
director is designated to enhance SFH's managementtransparency and objectivity.
The Articles of Incorporation of SFH stipulate that the
maximum number of directors on the board is 12.

(Statutory Audits)

Sony Financial Holdings

Note: SFH produces a Corporate Governance Report, available on SFH website
at http://www.sonyfh.co.jp/index_en.html■ Audits and Supervision

■ Overview of Limited Liability Agreement
SFH has concluded an agreement with outside director under
the provisions of Article 427, Paragraph 1 of the Companies
Act of Japan and the Articles of Incorporation of SFH to limit
liability as provided in Article 423, Paragraph 1 of theCompanies Act of Japan. The maximum amount of liability as
stipulated in the agreement is the minimum amount ofliability provided in Article 425, Paragraph 1 of the Companies
Act of Japan. Limited liability is only recognized when theduties carried out by the outside director that became thecause of liability, were performed in good faith and do notconstitute severe negligence.
■ Requirements for Decision by General Meeting ofSony Financial Holdings

Shareholders■ Internal Controls
SFH's Board of Directors has implemented a Basic Policy on
Establishing an Internal Control System* in compliance with
the Companies Act of Japan and the Ordinance for
Enforcement of the Companies Act of Japan. In line with thispolicy, SFH has established and now operates an appropriate
internal control system.
The Financial Instruments and Exchange Law of Japan
introduced internal control and financial reporting
requirements in FY2008. SFH is listed and therefore has set up
an internal control system to gather the financial informationthat must be reported in the “Yuka Shoken Hokokusho” andother securities reports. SFH's president and representative
director is charged with evaluating these controls andensuring their effectiveness. His/her evaluation then is
audited externally by a CPA or similarly qualified professional.
SFH has filed a report for FY2008 stating that its internal
controls are effective.
* Visit SFH website at http://www.sonyfh.co.jp/index_en.html for more about
Basic Policy on Establishing an Internal Control System and Internal Control
Report.

SFH Group Internal Control
General Meeting of Shareholders

SFH
Board of Statutory Auditors
Statutory Auditors

Board of Directors

Compensation Advisory Committee

Executive Committee

Human Resources andGeneral Affairs Department

Corporate Planning
Department

Corporate Communications &Investor Relations Department

Corporate Control
Department

Convey group policies
AdviseSony Life

Sony Assurance

Accounting
Department

Audit Department

Serve concurrently as directors and statutory auditors
Attend committees and other meetings
Share and confirm information

Sony Bank

Independent Auditor

Board of Directors, Auditors, and other Officers

12

The Articles of Incorporation of SFH stipulate that special
resolutions by the General Meeting of Shareholders asprovided in Article 309, Paragraph 2 of the Companies Act ofJapan require the attendance of shareholders with a minimumof one third of voting rights, and a majority vote of at least
two-thirds of the voting rights.
The Articles of Incorporation of SFH also stipulate that
director appointments require the attendance of shareholders
with a minimum of one third of voting rights, and a majority vote.

These rules aim to relax the quorum requirement to facilitate
the running of General Meeting of Shareholders.

Conflicts of Interest Policy（Summary）
SFH has formulated a Management Policy Concerning
Conflicts of Interest and established the structures required by
the Banking Law of Japan, the Insurance Business Law ofJapan, and the Financial Instruments and Exchange Law ofJapan. The policy and structures are designed to ensure that
customers’ interests are not harmed by SFH Group companies.
■ Summary of Conflicts of Interest Policy
I. Basic Policy* Under this policy, “SFH Group companies” represents Sony Life, Sony Life
Insurance (Philippines) Corporation, Sony Assurance, Sony Bank, and Sony
Bank Securities; “SFH Group” represents SFH and SFH Group companies;
and “Sony Group finance companies” represents SFH Group companies
and Sony Finance International, Inc.

1. SFH has established a structure and take all necessary
action to prevent customers' interests from being harmed
by the transactions outlined below (“transactions to be
managed”).
1) Transactions that put the SFH Group's interest first in
circumstances where there is a conflict of interest
between the SFH Group and customers
2) Transactions that profit from customer information
3) Transactions that profit from competing interests
between customers4) Other transactions in which it is evident that theinterests of customers may be harmed by SFH Group
companies
2. For the purposes of the Management Policy Concerning
Conflicts of Interest, “customers” whose interest should beprotected are customers of the following businesses thatSFH Group companies engage in.
1) Sony Life Insurance Co., Ltd.
Life insurance business, business of registered financial
institutions, and other businesses that can be conductedby Sony Life under relevant laws.
2) Sony Life Insurance (Philippines) Corporation
Life insurance business and other business that can be
conducted by Sony Life Insurance (Philippines)
Corporation under relevant local laws.

1. Structure
SFH has established a structure to manage conflicts ofinterest in the SFH Group by making the director who is headof the Corporate Control Department responsible foroversight of managing conflicts of interest, and the
Corporate Control Department the business unit responsible
for the managing conflicts of interest.
2. Action
The director responsible for oversight of managing conflictsof interest shall order SFH Group companies to take theactions outlined below when the director deems themnecessary on the basis of reports from SFH Group companies,
customer complaints, or other sources:
1) Block the flow of information between divisions where aconflict of interest may arise2) Suspend the transaction concerned, or change the terms
and conditions or method of the transaction
3) Disclose the conflict of interest, or the potential for a
conflict of interest, to customers4) Take any other action deemed necessary by the business
unit responsible for the managing conflicts of interest
3. Record-keeping
The division responsible for managing conflicts of interest
shall maintain records as outlined below and retain them forfive years.
1) Records that specify transactions to be managed
2) Records associated with actions taken to appropriately
protect customers

Basic Policy on Eradicating Criminal
Influences
SFH has formulated a Basic Group Policy on Eradicating
Criminal Influences, described as the following. SFH and theSFH Group companies have built the structures to take a firm
stance on countering criminal influences.

13
Conflicts of Interest Policy / Basic Policy on Eradicating Criminal Influences

II. Transactions to be Managed

III. Structure for Management of Conflicts of Interest

Sony Financial Holdings

The SFH Group* has established a structure under theprovisions of the Banking Law of Japan, the Insurance
Business Law of Japan, and the Financial Instruments andExchange Law of Japan to ensure that customers' interests are
not harmed when making transactions with SFH Group
companies* in circumstances of potential conflict of interest
between customers of SFH Group companies and Sony Groupfinance companies* or between customers of SFH Group
companies and customers of Sony Group finance companies.

3) Sony Assurance Inc.
Non-life insurance business and other business that canbe conducted by Sony Assurance under relevant laws
4) Sony Bank Inc.
Banking business (including bank agency business bybanking agents), business of registered financial
institutions, and other business that can be conductedby Sony Bank under relevant laws.
5) Sony Bank Securities Inc.
Trading of financial instruments and other businesses thatcan be conducted by Sony Bank Securities under relevant laws.

■ Basic Group Policy on Eradicating Criminal Influences

Sony Financial Holdings

1. The SFH Group recognizes the importance of strictly
avoiding any association with criminal elements from theperspectives of social responsibility, compliance, andcorporate defense. It has therefore implemented frameworks
to shut out criminal influences.
2. The SFH Group strictly rejects unfounded demands bycriminal influences. Furthermore, the Group has put inplace a framework for acting firmly, on an organizational
basis, against those who make unfounded demands.
3. The SFH Group works closely with the police and external
specialist entities, even during the peacetime, to ensure
appropriate assistance and cooperation should it bethreatened by criminal influences.

Compliance

14Compliance■ Basic Stance on ComplianceTo ensure the ongoing health and appropriateness of business
operations, SFH must encourage all the executives andemployees to deepen their understanding of SFH's corporate
philosophy and the laws and regulations that pertain to its
businesses, foster compliance with these laws and regulations
and manage its operations in a transparent and appropriatemanner based on a strong sense of ethics. Including all thesefactors in its definition of “compliance”, SFH considers
compliance one of its most important management tasks.
Accordingly, SFH has established systems to ensure that all
executives and employees are fully aware of their duties andresponsibilities under those laws and regulations.
As a financial holding company with insurance andbanking subsidiaries, SFH is responsible for understanding
the state of compliance of its group companies and advisingthese companies on compliance issues as it deems necessary.
The first level of compliance-related responsibility lies withindividual group companies, which are responsible forestablishing systems to raise their level of compliance in linewith their specific industry, type of operations and scale ofbusiness. SFH, on the other hand, has the role of maintaining
an ongoing understanding of and promoting group companies'
compliance from the viewpoint of group management.
■ Compliance Systems at SFH and SFH Group Companies
・SFH's Compliance Systems
SFH's Board of Directors has established a compliancemanual* and compliance program**. SFH mounts ongoing
efforts to ensure the conformance and the state of progress ofcompliance and takes the initiative in establishingcompliance systems for itself and its group companies.
Under authority delegated by its Board of Directors, SFH's

Executive Committee directs each department to plan andenforce necessary compliance-related measures.
SFH's Corporate Control Department takes overall control ofcompliance planning, proposal creation and promotion. This
department also monitors the compliance status of groupcompanies.
・Compliance Systems at SFH Group Companies
Group companies are responsible for establishing effective
compliance systems in line with their specific industry andtype of operations.
・Compliance Meetings
SFH holds regular Compliance Meetings with group companies
to conduct prior consultation on compliance-related issues
and exchange information regarding the state of compliancepromotion and legal issues. The Corporate Control Department
serves as the secretariat for these meetings, whose members
include SFH and group company executives, general managers
and other staff in charge of compliance, depending on items
being discussed. The results of meeting deliberations arereported to the Board of Directors and at meetings of other bodies.
* Compliance manualThis manual outlines SFH's compliance system, describes the group's
corporate philosophy and indicates laws and regulations for conformance of
which executives and employees should be aware. The manual also establishes
measures for handling situations discovered to be in conflict with laws andregulations—non-compliant activities—and for confirming the compliancestatus.
** Compliance programThis program, conducted annually, in principal, defines a specific set ofactions for confirming the state of compliance, as well as training and otherrelated items.

■ Internal Hotline System
An internal hotline system is in place to enable executives andemployees of SFH and the SFH Group companies, as well as
temporary employees and the employees of business partners,
to report business policies of the Sony Group, SFH and the SFH
Group or operating or other activities that they are convinced
contravene (or are in danger of contravening) laws andregulations or the internal regulations of the Sony Group, SFH
or SFH Group companies. Informants may notify any of the
hotline desks that have been established at each SFH Group
company or the Compliance Hotline at Sony Corporation, which
serves as the desk for the Sony Group, as appropriate. SFH is
responsible for taking appropriate measures to protect
informants and strictly managing and responding to any
information they provide.
SFH communicates with Sony Corporation regarding
appropriate responses to notifications received via theCompliance Hotline at Sony Corporation, as well as about
notifications of issues having the potential to affect Sony
Group companies other than those in the SFH Group.

Risk Management
One of SFH's roles as a financial holding company is to further enhance and integrate group-wide risk management by
centralizing the Group's management resources.

Basic Policy on Group Risk Management● As a financial holding company, SFH enhances corporate value of the group by aligning risk management with group-wide

strategic objectives and management policies, while tailoring operating subsidiaries' risk management to the types ofrisk inherent in their respective lines of business.
● SFH adopts all necessary supplemental measures to ensure effective risk management, after confirming each
operating subsidiary independently and responsibly to establish its own risk management structure to achieve its own
management objectives.
● SFH takes steps to eliminate excessive concentration of risk in specific areas, establish appropriate controls overintra-group transactions and control the ripple effect of risk within the group.

each assess, monitor, and manage their risks on theirown, the Corporate Control Department, responsible for
SFH's risk management, controls their risks throughmonitoring and holding the Risk Management Meetings
with subsidiaries' risk management divisions. The
Corporate Control Department also reports its finding on
the state of risk management regularly to SFH's Board of
Directors and Executive Committee.

SFH
Board of Statutory Auditors

General Meeting of Shareholders

Statutory Auditors

Board of Directors

President and Representative Director
Reporting

Audit Department
Reporting

ReportingExecutive Committee

Audit

Corporate Control Department(Centralized Risk Management)

Investment Risks
Market Risk

Supervisory Department: Corporate Control Department

Insurance
Underwriting Risk

Credit Risk

Administrative Risk
Systems Risk

Supervisory Department:
Corporate
Communications& Investor Relations
Department

Supervisory Department:
Corporate Planning
Department

Reputational Risk

Going Concern Risk

Liquidity Risk
Real Estate Investment Risk

Confirmation

ReportingSony Life

Legal Risk

Risk Management Meetings

Sony Assurance

Present risk management
policies

Control, advice,monitorSony Bank

Each company puts risk management into practice independently

15
Risk Management

Risk Management StructureSony Financial Holdings

SFH's Board of Directors formulates fundamental
principles for risk management and communicates themto directors and employees throughout the SFH Group. The
Board also identifies the types of risks specific tosubsidiaries scale, business content, and other attributesand establishes structures designed to manage themeffectively. SFH's Executive Committee, appointed by the
Board of Directors, executes routine tasks pertaining togroup risk management; specifically, while subsidiaries

Types of Risk Managed by SFH and Subsidiaries
Market Risk
Credit Risk
Real Estate Investment Risk

Liquidity Risk
Insurance Underwriting Risk
Administrative Risk

Systems Risk
Legal Risk

Reputational Risk
Going Concern Risk

Definitions
Each Group company establishes its own framework for managing risk as appropriate for its scale and the attributes and type of
its business, and they optimize their frameworks for the types of risks they face according to internal definitions.
As the operating and business environment changes, their risk management departments review the risk types and definitions
set forth below, amending them as appropriate for new conditions.

Sony Financial Holdings■ Market Risk

Risk Management

16

Risks associated with losses due to changes in the value of
assets, including off-balance-sheet assets such as derivative
instruments, as a result of unfavorable fluctuations in interest
rates, the value of securities held, exchange rates, and otherfactors.
■ Credit Risk
Risks associated with losses due to declines in the value of
assets, including off-balance-sheet assets such as derivative
instruments, resulting from deteriorations in the financial
position of the issuers of the debt obligations held, or ofcounterparties to derivatives and other contracts entered into.
■ Real Estate Investment Risk
Risks associated with losses due to declines in the market
value of owned real estate or in the profitability of real estateholdings on account of unfavorable trends in rents or otherfactors.
■ Liquidity Risk, Including:• Cash Flow Risk
Risks associated with losses due to our inability to makecash payments because of an inability to maintainsufficient cash reserves, as well as risks associated withlosses if SFH and group companies are forced to raise
funds under unfavorable conditions in order to fulfill its
cash-payment obligations.
• Market Liquidity Risk
Risks associated with losses due to inability to conduct
market transactions, in particular from an inability tochange our market position at a given time, as well as
risks associate with losses if we are forced to complete
transactions under unfavorable market conditions, ineach case due to market turmoil or other factors.
■ Insurance Underwriting Risk
Risks associated with losses due to significant differences
between the assumptions SFH and group companies use toestablish appropriate premium levels, including assumptions
regarding the expected frequency and scale of insured eventsand future economic conditions.
■ Administrative Risk
Risks associated with losses due to errors, misconduct,
malfunction, and other factors related to problems with ourinternal administrative processes.
■ Systems Risk
Risks associated with losses arising from IT-system
malfunction or breakdown, improper use or leakage ofconfidential information stemming from IT system problems.
■ Legal Risk
Risks associated with losses due to violations of applicablelaws, rules and regulations occurring during the course of
doing business operations, as well as the risk of loss due tolitigation. In particular, we are exposed to legal risk withrespect to:• the provision of services, including the introduction of
new businesses, products and services;• entry into various legal agreements, as well as therenewal, amendment, termination or rescission ofagreements; and• various legal and administrative proceedings.
■ Reputational Risk
Risks associated with losses resulting from harm to our
reputation in the market and among customers as a result of
unethical behavior, unfair business practices, improper
disclosure, or other factors.
■ Going Concern Risk
The risk that SFH and group companies will be unable tocontinue operations as the result of a deterioration in our
financial position, liquidity problems, system failures,
scandals, accidents, and other crises.

Internal Audits
SFH performs internal audits through its Audit Department.
Reporting directly to the president and representative director,
this department operates outside the other lines ofoperational reporting and, from an independent and objective
standpoint, conducts internal audits to check and evaluate
the appropriateness of work processes and risk management.
SFH subsidiaries each have their own internal audit
departments to perform internal audits designed to match
their specific industry sector, the scale of their businesses,
and the types of risk they face. SFH's Audit Department keeps
abreast of subsidiaries' internal audits by monitoring theiraudit plans and audit reports and on the basis of information

shared at SFH Group Internal Audit Meetings. When necessary,
SFH’ s Audit Department provides advice and proposals to its
subsidiaries’ internal audit departments. SFH’ s Audit
Department regularly reports the results of its monitoring
activities to the president and representative director and theBoard of Directors. Should SFH's president and representative
director perceive it necessary, as a result of the monitoring,
SFH's Audit Department may directly audit subsidiaries within
the scope of governing laws and regulations.
The Audit Department also cooperates with SFH’ s statutory
auditors and external auditors, such as the independent
auditor.

Internal Auditing Structure
President and Representative Director

Executive Committee

Sony Financial Holdings

SFH

Operational Departments

17

Board of
Statutory Auditors

Board of Directors

Reporting

Reporting

Audit

Statutory Auditors

Audit Department
Audit

Internal Audits

Directly Auditing, as needed
MonitorSony Life

Sony AssuranceSony BankInternal Audit Division(Internal Audit Department)Internal Audit Division(Internal Audit Department)Internal Audit Division(Internal Audit Department)

Audit

Operational Divisions

Audit

Operational Divisions

Audit

Operational Divisions

Privacy Policy
SFH has formulated a Privacy Policy* governing the handlingof personal information. It sets out the company's policies on
its use of personal information within the specific purposes
and its acquisition of personal information to ensurecompliance with applicable laws and regulations. SFH has
also established and observes Rules on Information Security
that set out specific security control protocols.
SFH monitors how SFH group companies' security control
protocols are working. Specific group measures include theformulation of and revision of the Privacy Policy, setting up anorganization to protect personal information and appointing

persons responsible, preparing a set of rules and a manual
covering the handling of personal information, and educationand training programs on the handling of personal
information and information security.
SFH and SFH Group companies strive to maintain entrusted
personal information to be accurate and updated to the extent
necessary for the purposes of its use, and to protect personal
information through steps to prevent unauthorized access,leakage, falsification, loss, destruction, and other incidents.
* Visit SFH website at (http://www.sonyfh.co.jp/index_en.html) for more about
Privacy Policy.

Social Contributions and Environmental Activities
Social Contribution Initiatives
The SFH Group recognizes that its participation in the financial services business comes with public obligations.
Consequently, we contribute to society with a strong sense of ethics and responsibility and we conduct various activities
to carry out our responsibilities as a member of society.

Sony Financial Holdings

Volunteer Activities

Social Contributions and Environmental Activities

18

Sony Life established a Social Contribution Department tostrengthen support and share information on volunteer
activities undertaken by its employees throughout Japan.
Along the same lines, Sony Life has created the Volunteer
Activity Coordination Committee.
Sony Life has designated the anniversary of its founding
as Volunteer Day, when all employees are encouraged toconsider and implement local clean-ups and otheractivities that benefit their community.
To help its employees actively contribute to society, Sony
Life has established a volunteer leave program andimplemented a leave program for bone marrow donors.
Sony Life also donates to the Eye Mate Fund, supports
Special Olympics Nippon (Japan) and offers a Life
Planning Course for students who are preparing to maketheir own way in society.
Sony Assurance participates in fundraising activities for
the Japan Committee for UNICEF. Sony Assurance alsocollects cancelled stamps to help organizations thatprovide medical care overseas.

among its other contributions, by supporting daily
activities and charity concerts. By supporting Special
Olympics Nippon, Sony Life will continue to facilitate theindependence of people with intellectual disabilities andhelp them participate in their community.

Sony Life employees volunteering at the Special Olympics Nippon
National Winter Games Yamagata

Eye Mate Fund
Since FY1997, Sony Life has made financial donations to
the Eye Mate Fund, established by The Eye Mate, Inc.,
which aims to help visually-challenged people participate
in society. Sony Life donates an amount each year thatmatches the total raised by its employees. In FY2008, Sony
Life and its employees donated a total of ¥11.79 million to
Eye Mate, bringing its cumulative donations for training
guide dogs to more than ¥130 million.

Sony Life employees volunteering for clean-up duties

Support for Special Olympics Nippon (Japan)
Since FY1996, Sony Life has been offering financial support toSpecial Olympics Nippon, an accredited nonprofit
organization that helps people with intellectual disabilities
by providing independence and opportunities to participate
in the community through sports. Employees also volunteer
to help conduct the events. Sony Life is increasingawareness and understanding of Special Olympics
Nippon's activities through regional organizations and,Sony Life employee's child conducting walking training
experience with a guide dog

“Life Planning Course” Held Nationwide forPlanning Lives to Achieve Dreams

Sony Bank's Participations in “Climate & Children
Supporters” Program to Prevent Global Warmingand Support Developing Countries“Climate and Children Supporters” is a program that
supports a global warming prevention project and children
in developing countries through a donation to UNICEF.
By participating in this program, Sony Bank has supported
the areas frequently damaged by natural disasters causedby the changing climate, in addition to the global warming
prevention activities through the purchase and redemptionof emissions rights. Sony Bank has supported a water andsanitation project in the Republic of Mozambique by
donating ¥2 million annually for three years to UNICEF, as
well as by purchasing the emissions rights, enabling SonyBank's customers to participate in environmental initiatives.

Sony Financial Holdings

To provide the insurance protection products that optimally
match customers' lives, Sony Life's Lifeplanner sales
employees map out a specific life plan with each customer.
Sony Life refers to this process as “life planning”.
Lifeplanner sales employees have offered “Life Planning
Course” for students throughout Japan. Although highschool students are the focus of our course, Lifeplanner
sales employees also offer course for junior high school
and university students. The simulation begins by creatinga family. Lifeplanner sales employees help them to imagine
childbirth, plans for education, buying a house and otherfuture events in their goals and dreams. Next, the course
takes on an economic focus, looking at the financial
resources that are needed to achieve the simulated life
plan. Lifeplanner sales employees offer advice, using Sony
Life's proprietary software for simulations. Consulting froman economic perspective, we examine the income, expenses

and savings that will be needed. This realistic approachgives students a better understanding of what is needed toachieve their goals and dreams.

19

 UNICEF/MozambiqueSony Life Volunteers' ClubThe Sony Life Volunteers' Club was established by a Sony Life volunteer group in 1995, after the Great Hanshin-Awaji
Earthquake. Each member of the group participates in running the club with their donations. The club continues tosupport the elderly victims of the earthquake. Sony Life Volunteers' Club also supports a wide range of activities
including hosting youth education events at care houses, operational support for the “Oita International Wheelchair
Marathon”, a worldwide tournament of wheelchair marathon, and support for the “Relay For Life”.
Relay For Life
Relay for Life events raise cancer awareness and as well as funds for fighting
the disease. Patients, survivors, and their families participate in day-long(usually 24-hour) relay races, held so far at over 5,000 locations in more than
20 countries. Japan's first one took place in Tsukuba, Ibaraki Prefecture, whenparticipants walked the track of a Tsukuba University stadium for eight hours
in 2006. The events are gaining traction in Japan and were held at sevenlocations in 2008, a year when over 700 Sony life employees and family
members participated from the planning stage, walking in the 24-hour-longrelays together with current cancer patients and their families as well as
helping to organize and run the events.
Sony Life Volunteers' Club also supports to continue providing support for
Relay for Life whenever and everywhere they are held as its way of contributing
to building a society that does not fear cancer, and a society that helps
patients live with it.

Sony Life employees participating in 24-hour team relay

Social Contributions and Environmental Activities

Life planning course held by Sony Life

Environmental Initiatives
The SFH Group considers preserving the earth's environment as one of the most important issues facing people worldwide.
We therefore conduct environmentally conscious activities and implement appropriate initiatives.

Acquisition of ISO 14001 Certification
Sony Life, Sony Assurance and Sony Bank have acquired ISO
14001 certification, the international standard forenvironmental management systems. All three companies
pursue energy-saving and natural resource-saving activities,
such as working toward targets for the reduced consumptionof energy and photocopier paper and promoting green
procurement to raise the portion of eco-products used as
office supplies.

Sony Financial Holdings

System for Using Green PowerIn April 2005, Sony Life became the first company in theJapanese life insurance industry to employ the Green Power
Certification System. This system promotes the use of green
power to help protect the environment by reducing CO2
emissions. At present, Sony Assurance and Sony Bank are also
participating in this system, thereby helping to promote
geothermal, wind-powered, solar, biomass, and other power
generation that uses renewable energy resources.

organization engaged in global warming prevention activities,
Sony Assurance has launched a program to install solar
generation equipments at kindergartens by capitalizing on its
method of calculating automobile insurance premiums basedon the distance driven in a year. The program is linked to thecalculation of actual distances driven when renewing policies.
Policyholders whose actual distance driven is less than theirforecasted amount are considered to be contributing toenvironmental conservation through this reduction in theestimated emission of carbon dioxide. Sony Assurance willfurther enhance its policyholders' contribution to environmental
conservation by donating ¥1 per 100 kilometers of distance notdriven to the “Solarbear Fund”. Money raised through Sony
Assurance's donations will be used by the “Solarbear Fund” toinstall solar generations equipments “Solarbear power generationequipments” at kindergartens and nursery schools across Japan.

Social Contributions and Environmental Activities

20

The brothers Solar (left) and
Bear (right) are the Solarbear
Fund's characters. DesignerShinzi Katoh modeled them onpolar bears who are graduallylosing their habitat as thenorthern polar cap recedes
due to global warming.

[ Green Power Certification ]Green Power Certification System
By trading the natural electric power (green power) generated
from solar, wind, geothermal, biomass, and other naturalenergy sources as a form of certification, companies need notbuild their own power generating facilities. Even when
distance to a green generation facility makes direct
consumption of green power unfeasible, this system includes
companies that consume green power indirectly.
Consequently, this system helps companies contribute to theproliferation of natural electric power generation and toprotect the environment as part of their voluntary measures.
For more details on the green power certification system,
please refer to the website of Japan Natural Energy Co., Ltd.
(http://natural-e.co.jp/english/).

Donating to the “Solarbear Fund”- A program to install solar generationequipments at kindergartens In collaboration with the “Solarbear Fund”, a non-profit

Helping Customers Contribute to Reducing
Greenhouse Gas Emissions
Sony Bank has created a system through which customers cancontribute to reducing greenhouse gas emissions by purchasing
emissions rights on behalf of its customers who invest a certain
amount in its eco-funds for donation to the Japanese
government. Since Sony Bank purchases emission rights by using
a portion of its commissions on the sales and custodial fees forthe eco-funds, customers can participate in environmental
preservation activities as they manage their assets.
Customers holding
target funds

Emission rights
market (CDM)

Sales commissions
and trust fees

Purchase from part ofsales commissions
and trust feesSony Bank
Issue contribution
certificate

Donate emission rights

Japanese government

Emissions rights

Corporate
SectionCorporate Section
Corporate Information . . . . . . . . . . . . . . . . . . . . . . . 22
Senior Management . . . . . . . . . . . . . . . . . . . . . . . . 23
Senior Management of the SFH Group Companies . . . 24
Stock Information . . . . . . . . . . . . . . . . . . . . . . . . . . 25
History of the SFH Group . . . . . . . . . . . . . . . . . . . . . . 26
Major Topics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Corporate Information
Business
Management of subsidiaries involved in life insurance, non-life insurance, banking, and other subsidiaries based on theprovisions of the Insurance Business Law and the Banking Law and other incidental operations.

Organizational Chart (As of July 1, 2009)
Sony Financial Holdings
Board of Statutory
Auditors

General Meeting of Shareholders

Statutory Auditors

Board of Directors

Audit Department audits group companies, including SFH
Executive Committee

Sony Financial Holdings

Business Execution Departments
Corporate Planning Department

Business planning and administration
Pursue synergies among group businesses

Corporate Communications &Investor Relations Department

Corporate communications and investor relations

Corporate Control Department

Risk management and compliance

Accounting Department

Accounting

Human Resources andGeneral Affairs Department

Human resources and general affairs

Corporate Information

22

Organizational Chart of Business Operations (As of March 31, 2009)* Consolidated subsidiarySony Corporation

Trade name andtrademark license
Sales and referrals of
the other's productsManagement
control fee
Shareholding

SFH(Life insurance business)* Sony Life Insurance Co., Ltd.

(Life insurance business)* Sony Life Insurance (Philippines)
Corporation(Non-life insurance business)* Sony Assurance Inc.

(Life insurance business)
AEGON Sony Life Planning Co., Ltd.

(Banking business)* Sony Bank Inc.

(Banking business)* Sony Bank Securities Inc.

Note: AEGON Sony Life Planning, a 50-50 joint venture between Sony Life and AEGON Group of the Netherlands, has been included as an equity method affiliate in
SFH's consolidated financial statements since FY2008.

Number of Employees (As of March 31, 2009)
SFH

Life Insurance Business

Non-Life Insurance BusinessBanking Business

SFH Group

30

5,631

752

214

6,627

Note: SFH employees include those on loan from Sony, Sony Life, Sony Assurance, and Sony Bank.

Senior Management
Directors and Statutory Auditors (As of July 1, 2009)
Title
President
Representative Director

Name

Other Concurrent Responsibilities

Teruhisa Tokunaka Director of Sony Life Insurance Co., Ltd.
Director of Sony Assurance Inc.

Executive Vice President Hiromichi Fujikata
Representative Director

Director of Sony Life Insurance Co., Ltd.
Director of Sony Assurance Inc.
Director of Sony Bank Inc.

Executive Vice President Katsumi Ihara
Representative Director

Director of Sony Life Insurance Co., Ltd.
Director of Sony Assurance Inc.
Director of Sony Bank Inc.

Director

Taro Okuda

Director

Shinichi Yamamoto President, Representative Director of Sony Assurance Inc.

Director

Shigeru Ishii

President, Representative Director and CEO of Sony Bank Inc.

Director

Nobuyuki Oneda

Executive Deputy President, Representative Corporate Executive Officer, Chief

President, Representative Director of Sony Life Insurance Co., Ltd.

Director

Yasushi Ikeda

Attorney and Partner, Miyake Imai & Ikeda

Director

Ryuji Yasuda

Outside Director of Sony Corporation

Standing Statutory
AuditorHiroshi Sano

Statutory Auditor of Sony Life Insurance Co., Ltd.

Statutory Auditor

Takemi Nagasaka

VP, Senior General Manager, Accounting Division of Sony Corporation

Statutory Auditor

Hiroshi Ueda

Standing Statutory Auditor of Sony Bank Inc.

Statutory Auditor

So SatoStanding Statutory Auditor of Sony Life Insurance Co., Ltd.

Statutory Auditor

Takatoshi Yajima

Standing Statutory Auditor of Sony Assurance Inc.

Sony Financial Holdings

Financial Officer, Director of Sony Corporation

23

Statutory Auditor of Sony Assurance Inc.

Note: Yasushi Ikeda is an outside director.

Senior Management

Statutory Auditor of Sony Life Insurance Co., Ltd.

Senior Management of the SFH Group Companies
Sony Life (As of July 1, 2009)
Title
Chairman, Director
President, Representative Director
Director
Director
Director

Name
Kunitake Ando
Taro Okuda
Masamitsu Shimaoka
Mitsuhiro Koizumi
Teruhisa Tokunaka

Director

Hiromichi Fujikata

Director

Katsumi Ihara

Standing Statutory Auditor
Statutory Auditor

So Sato
Hiroshi Sano

Statutory Auditor

Takatoshi Yajima

Concurrent Responsibilities
Director of AEGON Sony Life Planning Co., Ltd.
Director of Sony Financial Holdings Inc.
President and Representative Director of Sony Financial Holdings Inc.
Director of Sony Assurance Inc.
Executive Vice President and Representative Director of Sony Financial Holdings Inc.
Director of Sony Assurance Inc., Director of Sony Bank Inc.
Executive Vice President and Representative Director of Sony Financial Holdings Inc.
Director of Sony Assurance Inc., Director of Sony Bank Inc.
Statutory Auditor of Sony Financial Holdings Inc.
Standing Statutory Auditor of Sony Financial Holdings Inc.
Statutory Auditor of Sony Assurance Inc.
Standing Statutory Auditor of Sony Assurance Inc.
Statutory Auditor of Sony Financial Holdings Inc.

Sony Financial Holdings

Sony Assurance (As of July 1, 2009)

Senior Management of the SFH Group Companies

24

Title
Name
President, Representative Director Shinichi Yamamoto
Director
Norio Misaka
Director
Teruhisa Tokunaka
Director

Hiromichi Fujikata

Director

Katsumi Ihara

Standing Statutory Auditor

Takatoshi Yajima

Statutory Auditor

Hiroshi Sano

Statutory Auditor

Yoshiki Matsuyama

Concurrent Responsibilities
Director of Sony Financial Holdings Inc.
President and Representative Director of Sony Financial Holdings Inc.
Director of Sony Life Insurance Co., Ltd.
Executive Vice President and Representative Director of Sony Financial Holdings Inc.
Director of Sony Life Insurance Co., Ltd., Director of Sony Bank Inc.
Executive Vice President and Representative Director of Sony Financial Holdings Inc.
Director of Sony Life Insurance Co., Ltd., Director of Sony Bank Inc.
Statutory Auditor of Sony Financial Holdings Inc.
Statutory Auditor of Sony Life Insurance Co., Ltd.
Standing Statutory Auditor of Sony Financial Holdings Inc.
Statutory Auditor of Sony Life Insurance Co., Ltd.
General Manager, Accounting Department, Accounting Division of Sony Corporation

Sony Bank (As of July 1, 2009)
Title
Name
President, Representative Director and CEO Shigeru Ishii
Director and CFO
Hidehiko Nakamura
Director and CIO
Masahiko Tokuyama
Director
Hiromichi Fujikata
Director
Director
Director
Director*Standing Statutory Auditor
Statutory Auditor
Statutory Auditor

Concurrent Responsibilities
Director of Sony Financial Holdings Inc.
Executive Vice President and Representative Director of Sony Financial Holdings Inc.
Director of Sony Life Insurance Co., Ltd., Director of Sony Assurance Inc.
Katsumi Ihara
Executive Vice President and Representative Director of Sony Financial Holdings Inc.
Director of Sony Life Insurance Co., Ltd., Director of Sony Assurance Inc.
Executive Vice President, Member of the Board of Directors of So-net Entertainment Corporation
Hiroki Totoki
General Manager, Corporate Planning Department of Sony Financial Holdings Inc.
Manabu Idei
Partner, Nagashima Ohno & Tsunematsu
Tohru Nakajima
Statutory Auditor of Sony Financial Holdings Inc.
Hiroshi Ueda
Hidemichi Takenaka Planning Manager, International Tax Planning Section, Planning and Administration Department,
Accounting Division of Sony Corporation
Junichi Yoshikawa Consolidation Accounting Manager, Consolidation Accounting Department,
Accounting Division of Sony Corporation* Tohru Nakajima is an outside director.

Sony Bank Securities (As of July 1, 2009)
Title
President, Representative Director
Director
Director
Statutory Auditor

Name
Yasuhiro Sugiura
Hideki Azumi
Shoji Ohyama
Masashi Yoshida

Concurrent Responsibilities-

Stock Information
Information on Common Stock, Shares Outstanding
Historical Data on Common Stock and Total Number of Shares Outstanding
Increase ofIssued Shares

Date

April 1, 2004 (Note 2)
June 25, 2004 (Note 3)
October 10, 2007 (Note4)

2,000,000
100,000
75,000Total number of
Shares Outstanding

Increase in Common Stock

Common Stock

Increase in Capital Surplus

Capital Surplus(millions of yen)(millions of yen)(millions of yen)(millions of yen)

2,000,000
2,100,000
2,175,000

500
5,000
14,400500
5,500
19,900175,877
5,000
14,400175,877
180,877
195,277

Notes: 1. SFH is authorized to issue 8,000,000 shares of common stock. The shares outstanding listed above are all common stock with full voting rights and no restrictions, which isthe standard share for SFH. SFH does not use a trading unit system.
2. Issued when the company was established.
3. Issued in a private placement of 100,000 shares (0.05 shares for each share) to shareholders for an issue price of ¥100,000 per share. The amount added to common stock was ¥50,000 per share.
4. Issued in a general book-building offering for an issue price of ¥400,000 per share and an underwriting price of ¥384,000 per share. The amount added to common stock was¥192,000 per share and the total amount paid was ¥28.8 billion.

Major Shareholders (As of March 31, 2009)
Name

Percentage ofOwnership（%）

Number of Shares Held1,305,000
64,58754,623
48,573
46,46344,35731,01326,02024,49815,210

60.00
2.96
2.51
2.23
2.13
2.03
1.42
1.19
1.12
0.69

Sony Financial Holdings

Sony Corporation
Goldman Sachs and Company Regular AccountJapan Trustee Services Bank, Ltd. (Trust Account)
Japan Trustee Services Bank, Ltd. (Trust Account 4G)
The Chase Manhattan Bank 385036
The Master Trust Bank of Japan, Ltd. (Trust Account)
State Street Bank and Trust Company 505103
State Street Bank and Trust Company 505223
The Chase Manhattan Bank NA London SL Omnibus Account
Mellon Bank NA Treaty Client Omnibus

25
Stock Information

Stock Exchange Listing (As of July 1, 2009)
The First Section of the Tokyo Stock Exchange (Securities code: 8729)

Dividend Policy
Dividends
FY2006
Dividend per Share

Year-end
Annual

FY2007¥3,095.24¥3,095.24¥6,500 million
64.9%
2.4%

Annual Dividend Amount
Dividend Payout Ratio (Consolidated)
Dividend on Net Assets (Consolidated)

FY2008¥3,000.00¥3,000.00¥6,525 million
26.4%
2.5%

¥3,000.00¥3,000.00¥6,525 million
21.2%
2.8%

Basic Policy on Returning Profits to Shareholders
SFH places priority on returning profits to shareholders and raising return on equity. Our basic policy is to pay a stable dividend to shareholders while ensuring
the high financial soundness needed to gain and maintain the confidence of customers of group companies as well as the internal reserves needed for futurebusiness development.
SFH pays dividends from surplus once yearly as a year-end dividend. The General Meeting of Shareholders is responsible for deciding on year-end dividends
and the Board of Directors decides on interim dividends. SFH’ s articles of incorporation allow for the payment of interim dividends. Based on a resolution at theGeneral Meeting of Shareholders held on June 23, 2009, SFH paid an annual dividend of ¥3,000 per share in FY2008, for a total payment of ¥6,525 million, basedon the foregoing basic policy. We plan to continue paying dividends once yearly based on a resolution by the General Meeting of Shareholders with the record date
being the end of the fiscal year. We seek to return profits to shareholders while expanding our businesses and increasing profits by effectively using internal
reserves to develop new businesses, starting with the establishment of an individual annuity company, and to invest in IT systems as our businesses expand.

Share Prices
High
Low

(Yen)

FY2007

FY2008January 2009

February 2009

March 2009

April 2009

May 2009

June 2009

451,000
375,000

487,000
205,200

349,000
262,200

316,000
245,300

304,000
215,500

323,000
259,400

328,000
266,800

281,900
226,000

Note: Data on share prices (high and low) is from the First Section of the Tokyo Stock Exchange.
On October 11, 2007, we became a listed company in the First Section of the Tokyo Stock Exchange.

History of the SFH GroupSony Financial Holdings

Sony Financial Holdings

Sony Life

Sony Assurance

1979 August“Sony Prudential Life Insurance Co., Ltd.” (Sony Prudential Life) (now Sony Life) is established1981 April

Sony Prudential Life commences operations with the launch of Lifeplanner system

1986 OctoberSony Prudential Life launches sales of variable life insurance (whole-life protection)

1987 July

Sony Prudential Life agrees with Prudential to terminate joint venture

1987 SeptemberSony Prudential Life changes name to “Sony Pruco Life Insurance Co., Ltd.” (Sony Pruco Life) (now Sony Life)

1989 OctoberSony Pruco Life establishes independent agency system

1991 April

Sony Pruco Life changes name to “Sony Life Insurance Co., Ltd.” (Sony Life)

1992 April

Sony Life launches sales of comprehensive medical insurance

1998 June“Sony Insurance Planning Co., Ltd.” (Sony Insurance Planning) (now Sony Assurance) is established1998 AugustSony Life establishes “Sony Life Insurance (Philippines) Corporation” in the Philippines

1999 April

Sony Life launches sales of whole-life comprehensive medical insurance

1999 SeptemberSony Insurance Planning changes name to “Sony Assurance Inc.” (Sony Assurance)
Sony Assurance begins accepting automobile insurance applications over the Internet

26
History of the SFH GroupSony Bank

Sony Assurance's transit adat the time of its launch
1999 OctoberSony Assurance begins accepting automobile insurance applications over the phone2001 April“Sony Bank Inc.” (Sony Bank) is establishedSony Assurance opens Claims Service Center2001 MaySony Life's Lifeplanner sales employees begin selling Sony Assurance automobile insurance

2001 June

Sony Bank commences operations (products comprise ordinary yen
deposits, yen time deposits, investment trusts and card loans)Sony Bank launches the “MONEYKit” service siteSony Bank's “MONEYKit” interface
at the time of its launch2001 SeptemberSony Bank starts handling foreign currency deposits

Sony Bank's ad forforeign currency deposits
2002 MarchSony Bank starts offering mortgage loans
Sony Life begins underwriting group credit life insurance for Sony Bank’ s mortgage loans

2002 June

Sony Assurance launches sales of medical and cancer insuranceSony Assurance opens Sapporo Customer CenterSony Bank begins offering special-purpose loans
Sony Assurance's Customer Center

“Sony Financial Holdings Inc.” (Sony Financial Holdings) is establishedSony Life, Sony Assurance, and Sony Bank become subsidiaries of Sony Financial Holdings

2004 June

Sony Bank launches sales of individual annuities offered by Sony Life

2004 OctoberSony Assurance begins offering fire insurance to Sony Bank's mortgage loan customers

2004 DecemberSony Life's Lifeplanner sales employees begin introducing Sony Bank's mortgage loans

2005 July

Sony Life registers “LIFEPLANNER VALUE” trademark

2005 DecemberSony Bank begins handling credit cards and commences financial products intermediary services

2006 April

Sony Assurance launches “Customers and Sony Assurance Communication Site”

2006 June

Sony Bank launches mobile banking service

2006 SeptemberSony Life opens “Life Planning SQUARE” showroom in the Sony Buildingin Ginza, Tokyo
Sony Life ties up with Watami Co., Ltd. in the nursing care businessSony Life's “Life Planning SQUARE”

2006 OctoberSony Bank begins offering new credit card loans
Sony Life completes construction of Sony City, the new headquarters ofSony Corporation

Sony Financial Holdings

2004 April

27

Sony City
Sony Bank establishes “Sony Bank Securities Inc.” (Sony Bank Securities) as a wholly-owned subsidiary2007 AugustSony Life establishes “AEGON Sony Life Planning Co., Ltd.”

2007 OctoberSony Bank launches financial products intermediary services through Sony Bank Securities
Sony Financial Holdings is listed on the First Section of the Tokyo Stock Exchange

2007 DecemberSony Life permitted to handle banking agency business for Sony Bank

2008 MarchSony Bank becomes a wholly-owned subsidiary of Sony Financial Holdings

2008 MaySony Bank begins handling foreign exchange margin transactions

2008 AugustSony Bank ties up with Seven Bank, Ltd. in banking agency business2008 OctoberSony Life opens a representative office in Beijing

2009 JanuarySony Assurance creates a new section called “Insurance Selection” thatfeatures recommended insurance products, and launches sales of pet
insurance through alliance with Anicom Insurance, Inc., as the first
product featured in this section
Sony Assurance:
Top page of the pet insurance website

2009 MaySony Assurance launches sales of overseas travel accident insuranceSony Assurance:
Top page of the overseas travel accident insurance website
2009 July

Sony Life opens a representative office in Taipei

History of the SFH Group

2007 JuneMajor Topics
Sony Financial Holdings

Sony Life

Sony Assurance

May 2008
Sony Bank Begins Foreign Exchange Margin
Transactions

Sony Financial Holdings

Sony Bank began handling foreign exchange margin transactions
in response to customers' diverse foreign currency investment
needs. The foreign exchange margin transactions make itpossible to trade foreign exchange closer to market rates thanforeign currency deposits 24 hours a day, 365 days a year. We
now offer closer alignment between margins and deposits, andallow customers to transfer funds in foreign currencies, as wellas handling with spot delivery settlement.

Major Topics

28

Sony Bank

October 2008
Sony Life Commences Sales of New Products withNo Surrender Value
Sony Life launched sales of “a level-premium term life insurance(no dividends) and a level-premium term life insurance rider(no dividends), both with no surrender value”. The company canoffer even more reasonable premiums by providing products withno surrender value.

October 2008
Sony Bank Starts Handling Credit Cards with
Dual-Currency Settlement Function

July 2008
Sony Assurance Opens its Sapporo Claims
Service Center for Receiving Accident Reports
In July 2008, Sony Assurance opened its second claims service
center for receiving accident reports in Sapporo aiming at
responding to the increased number of policies in force and atstrengthening the measures against large-scale disasteroccurrence risks.

In October 2008, Sony Bank started handling a “Sony Card”
with dual-currency settlement function, which allows
cardholders to pay in yen when in Japan and in U.S. dollars
outside Japan. As U.S. dollar charges are debited from
customers' U.S. dollar ordinary deposit accounts, customers
will be able to save on foreign exchange costs.

September 2008
SFH Obtains AA- Issuer Rating
SFH obtained an AA- (outlook: stable) issuer rating from
Rating and Investment Information, Inc.（R&I）as a growing
group of companies, to establish a structure whereby SFH can
expeditiously respond to its financing needs which arise in
future.

October 2008
Sony Life Opens Representative Office in BeijingSony Life opened a representative office in Beijing, thePeoples' Republic of China, to research the Chinese financial
and life insurance markets.

Credit card capable of settling transactions
in two currencies

March 2009
Sony Assurance Begins to Offer Car Life DiscountServiceSony Assurance began offering the “Car Life Discount Service”
as an exclusive benefit to its policyholders, with discounted
and complimentary services available in a range of
automobile-related situations.

Policyholder benefits website

SFH Group
Company
ProfilesSFH Group Company Profiles
About Sony Life . . . . . . . . . . . . . . . . . . 30
About Sony Assurance . . . . . . . . . . . . . 36
About Sony Bank. . . . . . . . . . . . . . . . 40

About Sony Bank Securities . . . . . . . . . 44

About Sony Life

http://www.sonylife.co.jp(Japanese only)

About Sony LifeManagement Message

Management Message

30

Sony Life was founded in August 1979 with the goal ofproviding customers with the full range of value that life
insurance could offer. Since then, in line with its corporate
mission “To work for customers' financial security andstability by offering optimal life insurance products andhigh-quality services”, Sony Life has pursued its originalideals for life insurance. We strive to continue providing value
in a way in which only Sony Life can. As we move toward
FY2009, which marks the 30th anniversary of our founding,the number of policies in force exceeded 4.7 million. The
support and understanding of our customers has facilitatedthis expansion.
In FY2008, Sony Life's new policy amount* was up 1.9%
from previous year to ¥3,873.7 billion. In addition, our policy
amount in force* as of March 31, 2009, was ¥32,517.6 billion,
up 3.2% from one year earlier. Our solvency margin ratio,
which is one indicator of an insurance company's financial
soundness, remained high, at 2,060.5%**.
Our corporate slogan, “LIFEPLANNER VALUE”, expresses ourcommitment to accompanying customers through each life

stage and help them realize their dreams and live fulfilling
lives. In the 30 years since our founding, we have come tobelieve in the ideal of standing by our customers. Throughconsulting services based on each customer's life plan, we
seek to share with customers their dreams and wishes andtheir thoughts for their families, as well as their uncertainties
and concerns for the future. We seek to provide optimal
protection so that customers can continue to fulfill theirfamilies' dreams for the future, even if the unfortunate occurs.
Even after they have taken out life insurance, customers’
life plans and economic circumstances may change. Throughfinely tuned follow-up services, we help customers maintainappropriate protection so that their lives remain secure as
they move toward their dreams.
Sony Life aims to be a trusted and indispensible presence
to its customers. To achieve this goal, we will keep working toenhance our level of quality and to increase the number ofpeople who experience our value offerings.
We promise our customers that, as we continue to grow, we
will win the trust that they have placed in us by becoming theworld quality leader in life insurance.
July 1, 2009

Taro Okuda
President, Representative Director
Sony Life Insurance Co., Ltd.

* The new policy amount and policy amount in force are the total ofindividual life insurance and individual annuities.
** The solvency margin ratio is one administrative control indicator used tojudge if an insurer has the “ability to pay” (solvency margin) insurance
claims in sufficient response to a major disaster or other unforeseen event.

Industry Trends and the Sony Life Characteristics

Figure 1: Policy amount in force ★share

Figure 2：Net new policy amount ★share(Trillions of yen)
2,000

(%)
4.0

(Trillions of yen)
200

1,500

3.0

150

1000

2.0

100

500

1.0

50

0

0
92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 (year)

0

(%)
7.0
6.0
6.0
4.0
3.0
2.0
1.0

Policy amount in force

Sony Life's share

As of March 31
Source: Statics of Life Insurance Business in Japan and data officially disclosed by individual life insures.
★ All figures for individual life insurance

0
92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07

New policy amountSony Life's share

For the years ended March 31
Excludes increases or decreases in policy conversions(year)

31
Industry Trends and the Sony Life Characteristics

has sustained growth of policy amount in force amid an
overall contraction of the market (Figure 1), and we havesteadily increased market share measured in new policy
amount (Figure 2).
A breakdown of new Sony Life customers by age groupshows a large majority in their 30s. This is a group that has
experienced major life events—marriage and childbirth, forinstance—and requires life insurance protection for the
future. This pattern is also a feature of Sony Life. AlthoughSony Life offers a range of products to fulfill diverse customer
requirements, death benefit and other similar protection
products account for over 80% of policies in force.
Death-benefit products account for a substantial share inpolicies in force as a result of customers' awareness of theirneed during the life-planning and consulting process, though
the need is generally too latent to be recognized.
The Japanese population continues to decline. Sony Life isconfident that it can continue to leverage its strengths andachieve growth in the medium term at a time when thesecond baby boomer generation has reached the target age
range of Sony Life's mainstay customers. As well, Sony Life isseeking to expand business with older customers in their 50s
and 60s and is exploring to expand business domains, suchas by making a serious entry into the individual annuities
business and expanding overseas. Sony Life established
50–50 joint venture AEGON Sony Life Planning Co., Ltd. in
preparation for establishing and commencing operation of a
new life insurance company that develops individual annuity
products for over-the-counter sale at banks as well as
through the Lifeplanner sales channel.

About Sony LifeJapan's life insurance market is the second-largest in theworld after that of the U.S. However, new policy amount andpolicy amount in force of the life insurance business as awhole have been on a downward trend since peaking in the
1990s amid a change in the macroenvironment; namely, thatof population decline that we are now in. Life insurance canbe broadly categorized by area of protection into death benefit(whole life insurance, term insurance, and endowment
insurance), “third sector” insurance such as medical andlong-term nursing care insurance, and individual annuities,
including variable and fixed annuities. The death benefit
category continues to account for a majority share of the life
insurance market, but this business has been driving thedecline of the overall market, because new policy amount inthis category has been sluggish in the past few years. The
third sector and individual annuities businesses grew sharply
on the back of deregulation, but growth peaked in 2006. The
individual annuity business in particular has recorded a
sharp drop in sales that began in the second half of FY2008,
when products lost their appeal due to the global financial
crisis.
Sony Life differentiates itself from the competitors throughits sales channels. Lifeplanner sales employees and Partners(independent agencies) armed with extensive knowledge anda wealth of experience use a consulting-sales approach toprovide life insurance protection tailored to each customer's
life plan. Even after customers sign up for life insurance, Sony
Life focuses on after-sales follow-up services that include
reconfiguring their protection to be more appropriate to newneeds when their situations change. Customers appreciate
this service with an individual touch, and as a result Sony Life

Life Planning Support Service for Optimum Protection
Before proposing life insurance plans, Sony Life asks customers about their current lifestyles and plans forthe future. By making specific forecasts of what events await in a number of years' time and what eachmember of the family will be doing in the future, customers can identify their hopes and dreams andanticipate the kind and extent of protection they will need to assure their future vision for their families.
Life insurance needs to provide solid protection for lives that are long and constantly changing. The key
to connecting the uncertain future with reliable protection is Sony Life's proprietary Life Planning Support
Service (LiPSS) software.
To ensure that the life plans of customers and their families are fulfilled even in the event of unforeseen
circumstances, we forecast their futures and estimate economic risks and the kind and extent of protection
they'll need. With LiPSS, we deliver quality assurance to our customers.

About Sony Life

Life PlanningLife Planning maps out customers' hopes and dreams
We map out the future paths of our customers and all family
members, and their hopes and dreams and foreseeable life
events. We then anticipate the future to create a vision for the

What the Life Plan Chart tells us

32Life Planning Support Service for Optimum Protection

whole family, then formulate a Life Plan Chart thatchronologically projects life events and incorporates thefamily's hopes and dreams for the future.

・We can ascertain how a family's life willchange over the next few decades.
・We can map out how a customer's children
progress from kindergarten through to university,and how old other family members will be ateach milestone.
・If a policyholder has children, we can project
when educational expenses will be high.
・We can use the chart to allow for living withand caring for elderly parents and to plan forthe customer's own retirement.
・We can allow for the timing of major expenditures
such as home purchase or renovation.
・We can allow for career plans—such as jobchanges or business launches—and for whena customer might put dreams into action.

Life Plan Simulation
Household income and expenditure simulation
How do household income and expenditures change assumingthat policyholders follow their life plan? We compare forecast
income and expenditures on an annual basis to examine thefinancial feasibility of life plans. By doing simulations of thebalance between income and expenditures and prioritizing
spending, we can plan for tuitions, manageable mortgage loan
repayments, and even early mortgage repayments.

Income and expenditure graph (when living)

Financial asset balance graphHousehold Income and Expenditure Simulation in the Case of Customers'
Unexpected DeathWe also estimate potential customers' family income andexpenditures in the event of unexpected death. We examine

whether families have sufficient total income (spouse income,survivor pensions, etc.) to realize their life plans.

Income and expenditure graph (in the case of unexpected death)

Financial asset balance graphProtection Planning
Lifeplanner sales employees and Partners (independentagencies) identify future economic risks before presenting life
protection plans tailored to each customer's situation.

Required protection graph
33

Family's living expenses in theevent of customer's death
Financial planning for inheritanceFunds for home purchase
Emergency savings
Funds for settling one's affairs
after death* We calculate the required protection from projected expenditures thatexceed income in the simulation of the customer's unexpected death; i.e.,the deficit that remains after deducting government benefits such as
survivors' pension from forecasted expenses.
We build customers' life insurance plan on the basis of each customers'
hopes, dreams, and what they want for their families.

Life Planning Showroom “Life Planning SQUARE”
Life Planning SQUARE, inside the Sony Building in Ginza,
Tokyo, is a life planning showroom designed to help customers
and prospects have fun learning about life planning.
Life Planning SQUARE provides content so visitors canrelax and have fun while trying their hand at life planningthemselves. Lifeplanner sales employees are also there toassist people interested in the real life planning
experience. And a Sony Bank counter opened at Life Planning
SQUARE, so customers can open Sony Bank accounts andsign up for mortgage loans there, too.

Note: Customers can not sign up for new life insurance policies or change
existing coverage at Life Planning SQUARE.

Life Planning Support Service for Optimum Protection* Essential funds
Educational expenses
Rent or mortgage loan
Cost of long-term convalescence
Funds for rebuilding your life
Children's wedding expenses
Post-retirement living expenses

About Sony Life

Consulting-based sales based on life plan
What does a family need so its members can maintain theirlifestyle in the event that the breadwinner dies? How muchmoney does a family need for its members to realize their life
plan? Based on the customer's life plan and simulation
results, Lifeplanner sales employees and Partners(independent agencies)—insurance professionals—analyze
and discuss with them their insurance requirements frommultiple perspectives using 11 key factors* to advise them.

Embedded Value
Sony Life discloses Embedded Value (EV) at the end of each fiscal year. EV is one measure of corporate
value for life insurance companies, and it is widely used outside Japan, especially in Europe, as a tool in
the comprehensive valuation of life insurance companies. Corporate earnings can generally be assessed
based on financial statements and other documents, but, as supplementary information, Sony Lifeconsiders EV to be an important management benchmark.
Sony Life switched from using Traditional Embedded Value (TEV) to using Market Consistent Embedded
Value (MCEV) in FY2008.

About Sony Life

■ EV as supplement to financial statements

Embedded Value

34

In general, we can expect that in income statements showing
a company's periodic earnings, an increase in sales in aparticular fiscal year is likely to be accompanied by an increasein profits. However, life insurers have a profit structure inwhich initial costs exceed annual premiums in the fiscal year
in which an insurance policy is sold, and profits are made byrecovering these costs during the period of insurance.
Consequently, business management cannot be accurately
assessed based solely on results data for a single fiscal year.

Said differently, the income statement of a life insurancecompany will show an increase in costs and a decrease in profits
during a fiscal year in which new policy sales are strong.
Accordingly, Sony Life discloses EV, which is used widely inEurope, as a management benchmark supplementing its
financial statements.
Institutional investors also focus on EV as one indicatorwhen making investment decisions on listed life insurancecompanies.

EV● EV is one measure of corporate value for life insurers.
● Life insurers have a profit structure in which initial costs exceed annual premiums in the initial fiscal year of a new policy, and profits

are made by recovering these costs during the period of insurance. Consequently, business management cannot be accurately assessed
based solely on results data for a single fiscal year.
● Accordingly, EV is widely used overseas, especially in Europe, as a tool for comprehensively evaluating life insurers.

General profit structure of a life insurer

Profits

Policy date
PeriodCosts

EV structure
MCEV

Adjusted net worth calculated from balance sheets

future value of in-force business (value of existing business)(Results of business activities to date)
Total of the following amounts on the balance sheet date

Future value of in-force business (value of existing business)(Expected future profits from existing policies)
Calculate the total amount of future profits from policies inforce on the balance sheet date: Profits in one year + profits in
two years + profits in three years … profits in 50 years.

Total of net assets section+ Reserve for price fluctuations+ Contingency reserve+ Reserve for possible loan losses+ Net gains on held-to-maturity securities+ Net gains on land and buildings+ Unfunded retirement benefit obligations+ Intangible fixed assets− Tax effect adjustments related to the foregoing seven items

However, this total is discounted to give a present value
because these profits are not obtainable on the balance sheet
date, nor are they guaranteed to be earned in the future.
(Valuations reflect future assumptions about changes ininterest rates and mortality rates.)Sony Life concludes policies with new customers each year, but EV represents the future value of net assets and policies in force on a certain balance
sheet date, and does not include the value of new policies it may write in the future.

■ Reasons for disclosing MCEV
EV was devised at a conference of major insurance companies
in Europe, and listed life insurers and life insurance
subsidiaries of non-life insurers in Japan have also disclosed
EV in recent years. However, there are currently no uniform
methods and rules for calculating and disclosing EV.
Consequently, a conference of major insurance companies in
Europe was convened to unify methods and rules. Thisconference established the MCEV Principles© in June 2008
and the use of EV is expected to be unified in the future basedon these principles.

Sony Life, in light of these trends, will now calculate anddisclose MCEV based on the MCEV Principles©, rather thanthe previous TEV.

■ Sony Life's MCEVSony Life's MCEV (as of March 31, 2009)(Billions of yen)March 31, 2009

Change

816.5

400.9

(415.6)

MCEV(Billions of yen)

About Sony Life

March 31, 2008

1,000

MCEV

750

248.5

195.4

(53.1)

Value ofexisting business

568.0

205.4

(362.5)New business value

48.2

500
250

35

0
08

15.4

(32.9)

Adjusted net worth
MCEV
New business value

09(year)

Value of existing business※As of March 31

Sony Life's MCEV as of March 31, 2009, was ¥400.9 billion,
down ¥415.6 billion compared with its level on March 31,
2008, ¥816.5 billion. This is because the value of existing
business (value of in-force business), representing future
profits, fell sharply as a result of expecting lower returns on
investment in the future than was expected on March 31, 2008,
due to a decline in interest rates and other financial-market
changes. In addition, adjusted net worth decreased due to a
decline in fair market value of stocks and convertible bonds
held affected by deteriorating stock market conditions.
EV is derived by discounting by a certain interest rate thefuture profits expected to be earned over the long term basedon a company's policies in force on the balance sheet date.
Interest rates are one assumption used in calculating EV, andwe use interest rates on the balance sheet date. Interest rates
on March 31, 2009, were down sharply from a year earlier,especially long-term rates in excess of 20 years, affected byturmoil in global financial markets precipitated by the
subprime loan situation. This pushed EV down due to a lower
estimate of future profits.
Insurance involves investment of assets comprisingpremiums received from customers over the long term. An

impact on MCEV from interest rate changes is small as
maturities of insurance policies are matched to those ofinvested assets, and the impact is bigger when bothmaturities are mismatched. As for Sony Life, duration of
invested assets is shorter than remaining period of insurance
policies. Accordingly EV increases as interest rates rise anddecreases in the opposite case.
Sony Life is working to increase EV by expanding thenumber of new policies and improving its lapse and surrender
rate and expense ratio. We are also pursuing measures tomitigate the decline in EV even in an unfavorable market
condition that interest rates decrease. Specifically, in view ofthe long-term nature of the insurance policies of ourcustomers, we plan to continue efforts started in FY2008 toextend the duration of our assets, including by investing inultralong-term bonds.
The third-party actuary Milliman, Inc. drafted a report on how Sony Life's MCEV
is calculated.
Further information about MCEV is available on our website at
http://www.sonyfh.co.jp/en/news_e/article_e/090601_01.pdf
Copyright© Stichting CFO Forum Foundation 2008

Embedded Value

Adjusted
net worthAbout Sony Assurance

http://www.sonysonpo.co.jp(Japanese only)

Management Message

About Sony Assurance

market conditions following a backdrop of deregulation.
Competition intensified amid progressive liberalization of
products and premiums, resulting in a spate of insurancecompany mergers and new players entering the market.
Another feature of this period was major changes in sales
channels as reflected in the rise of direct insurancecompanies like Sony Assurance. Direct insurance companies
have accelerated their growth on the back of the increasing
trend among consumers to shop around for the best deal, andwe expect this business model to continue recording
substantial growth.
Sony Assurance will continue to do business focused on ourbasic strategies of establishing a price advantage thatharnesses the strengths of our business model and providing
a superior standard of service. As well, we are strengthening
our online application acceptance, services, and marketing intoday's Internet age so that we can grow further as a leading
direct insurance company.

Management Message

36

FY2008 saw strong growth in the number of new policies inforce, primarily for automobile insurance, and net premiums
written in all categories grew 11.1% to ¥61.1 billion. Ordinary
revenues grew 11.2% to ¥61.8 billion. Despite an increase inordinary revenues, ordinary profit declined 22.7% to ¥2.1
billion, because the loss ratio worsened due to natural
disasters, and in FY2007 a change in the method for
calculating underwriting reserves in some categories added¥0.5 billion to profits. Sony Assurance posted a net loss of¥1.5 billion, having recorded losses on disposal of fixed
assets* under extraordinary losses. The company continued tomaintain a high standard of financial soundness with thesolvency margin ratio standing at 993.0% at the end of March2009.
Brisk growth in the number of new automobile insurance
policies took the number of policies in force over the one
million mark. We gratefully regarded this as a proof that ourcustomers appreciate our automobile insurance services..
Sony Assurance marks the 10th anniversary of its businesslaunch in October 2009. During the past decade, we havebeen facing one of drastic changes in non-life insurance

July 1, 2009

Shinichi Yamamoto
President, Representative Director
Sony Assurance, Inc.

* For the purpose of enhancing system and operational efficiency, Sony
Assurance began developing new systems in FY2006. However, in FY2008,
Sony Assurance decided to suspend this development and to overhaul its
development policy. Accordingly, some software assets that were previously
recorded as intangible fixed assets (software in progress) and for which
future use is uncertain were disposed of, resulting in losses on disposal of
fixed assets.

Industry Trends and the Sony Assurance Characteristics

Figure 1: Automobile insurance market
and market share of direct insurers

Figure 2: Share of automobile insurance direct
premiums written of six major direct insurers(Billions of yen)
4,000Sony Assurance 32%

(%)
5.0
4.0

3,000

3.0

FY2008

2,000
2.0
1,000

1.0

0

0
97 98 99 00 01 02 03 04 05 06 07 (year)

Total direct premiums written(domestic and foreign-owned insurers)
Market share of direct insurers
For the years ended March 31
Source: Based on data officially disclosed by individual non-life insurers

For the year ended March 31, 200937
Industry Trends and the Sony Assurance Characteristics

businesses are run more efficiently, giving them a tighter cost
structure that means they can offer more attractive premiums
than the non-direct non-life insurance majors. Consumers arealso more and more aware that direct insurance companies
provide consistent, quality service. These factors appeal tocustomers, who additionally have grown more price-conscious
in the recent economic downturn.
Sony Assurance opened for business in October 1999. Since
then, the company has met the challenge of valuing the direct
relationship with each and every customer, and always
providing new value for customers. Sony Assurance's
automobile insurance offers excellent coverage at areasonable premium by making a detailed breakdown of risk
factors, such as distance driven per year. In terms of service,
we always guarantee the level of service we provide, so that
customers know what quality of accident response service
they will receive. Customers appreciate our competitive
pricing and customer-focused service structure and in
FY2008 Sony Assurance ranked as Japan's top automobile's
direct insurer with an around 30% share of Japan's direct
insurance business (total of six major direct insurers) (Figure 2).
Sony Assurance has also enhanced its product lineup inareas other than automobile insurance. New offerings include
our SURE Medical and Cancer Insurance products, also
intended to offer a wide range of insurance plans at
reasonable premiums, as well as pet insurance and overseas
travel accident insurance products launched in 2009.

About Sony Assurance

Japan's non-life insurance industry went though a major
shake-up around 2000, and now, some years later, moves
toward consolidation have resumed, with several leading
non-life insurers announcing plans to integrate theirbusinesses in the future. Accordingly more fierce competitionis expected. Automobile insurance—Sony Assurance's
mainstay product—forms the largest share in non-life
insurance markets in Japan, accounting for about half of all
non-life premiums. Growth of insurance premium revenue has
been weak in recent years, however, because of the decline in
new car sales, shift in demand to light motor vehicles, anddownward premium rates based on good driving records at
renewal of policies. Japan's automobile insurance market
itself is unlikely to grow in the coming years, since we cannot
expect a substantial increase in car ownership, due in part tothe economic recession triggered by the global financial crisis.
Since direct insurance companies, which allow customers
to sign up for automobile insurance directly by phone or via
the Internet, appeared in the second half of the 1990s, they
have steadily increased insurance premiums. They have also
enjoyed sustained market share growth, though leading
non-life insurance companies, which sell automobile
insurance through agencies around the country, account forover 90% of Japan's automobile insurance market (Figure 1).
We expect direct insurers to continue increasing theirinsurance premiums and their market share even in suchunfavorable business conditions as more fierce market
competition accelerated by the industry consolidation andshrinking overall insurance premiums. This is because theirOverview of Products and Services
Sony Assurance sells automobile insurance and SURE medical and cancer insurance. It started selling overseas travel
accident insurance in May 2009 and launched agency sales of pet insurance in January 2009 and cancer treatment
insurance in June 2009.

1. Development of original products andservices

Overview of Products and Services

38■ Automobile insurance popular from time of launchSony Assurance offers automobile insurance at reasonablepremiums by using risk-segmented categories to account foreach customer's driving characteristics—distance driven peryear, reason for car use, car model, number of years since firstregistering car ownership, age, and type of driver’ s license—and by reducing costs using direct sales to centralize
operations and enhance efficiency. Sony Assurance also offers
the original Oritemo Rider to provide indemnity coverage forpolicyholders who are injured or have personal belongings
damaged after exiting their insured vehicles temporarily while
out for a drive. Customers also like our unique Kurikoshi
discount program. Distance driven per year is one ofrisk-segmented categories, and the program offers a premium
discount in the following year for customers that fall short ofthe maximum distance written in their policies.

■ Popular medical and cancer insurance plan offers
half-price premiums from age 60
Sony Assurance's medical and cancer insurance offers robust
protection for cancer, which often results in high medical
costs and long treatment periods. We also offer the industry's
first plans that reduce monthly premiums by half starting atage 60* —an attribute that has made them popular withcustomers for the way they reduce future premiums. We alsoseek to contribute to society through our non-life insurance
business by automatically including a Bone Marrow Support
Rider† in all policies.
* The SURE Smart Fit and SURE Wide plans offer half-priced premiums fromage 60 and are available to customers under the age of 57.
† Bone marrow donors provide their own bone marrow and can receive one
claims payment during the insurance period for surgery to extract bonemarrow stem cells. (Policyholders are not eligible for claims payments until
after one year from the insurance start date.)

Automobile insurance product pamphlet

Premiums for
distance not driven
Premiums for
distance
driven this year
This year

SURE medical and cancer insurance product brochure
Discount of premiums for
distance not driven(Kurikoshi discount)Premiums to be
paid next year
Next year

Premiums forongoing policy

Premiums paid this year

About Sony AssuranceSony Assurance, thanks to its focus on providing productsthat customers value, has created a variety of original
products and services. We will continue our efforts to develop
and offer the valued products and services that only Sony
Assurance can deliver.

■ Sony Assurance accident response services
As part of its accident response services, Sony Assurance
promises policyholders that they will be initially contacted by
an appointed staff member within three hours of an accident
report's arrival. We also offer the On the Day, Any Day,
Response service. This allows policyholders to get same-day
service (initial response as well as an explanation of results
and subsequent procedures) when they make accident reports
over the phone by 8:00 p.m. any day of the week, including
Saturdays, Sundays and holidays. With these and otherefforts, Sony Assurance works to quickly alleviate the concernsof policyholders involved in an accident.

2. Website initiatives■ Customers and the Sony Assurance Communication Site
(Japanese only)
Sony Assurance has launched a website to convey its desire to
walk together with policyholders by continuing to provide
them with products and services that meet their needs
through closer communication. The site is intended as avehicle for customers to express their opinions, and all pages
have links to a contribution section. Staff members will
respond to posts in a timely manner.

3. Sony Assurance service structure■ Breakdown assistance services desk
To help make car ownership more pleasant for its customers,
Sony Assurance's automobile insurance includes free*breakdown assistance to help customers in the event of an
accident or breakdown. The breakdown assistance services
desk provides prompt, appropriate responses to customer
calls to provide them with a greater sense of security.
* Charges may be levied in some circumstances depending on the services
provided.

Emergency contact card

Customer center

39
Overview of Products and Services■ Customer centers
Customer centers are designed to respond to phoned-in andemailed customer inquiries, to help guide customers throughthe policy process, and to provide follow-up services once
policies are in place. To facilitate smooth communication andprovide optimum solutions, every staff member is trained toanswer callers' questions promptly and thoroughly.

■ Service centers
Automobile insurance policyholders can call a toll-freenumber to report accidents 24 hours a day, 365 days a year.
When an accident report is received, a staff member directly
contacts the customer and provides responsible support until
the issue is resolved.
For medical and fire insurance as well, staff members holda variety of consultations with customers and provide
meticulous support until claims are settled.
About Sony Assurance

Top page of the Customers andSony Assurance Communication Site

■ Customer consultation offices
To enhance the value of its products and services Sony
Assurance databases customer opinions and requests so they
can be shared by different internal departments. This allows
staff members to weigh the options that will most benefit
customers.

About Sony Bank

http://sonybank.net/(Japanese only)

About Sony BankManagement Message

Management Message

40

So stark was the contrast in financial market conditions
between the first and second halves of FY2008 that they could
have been two different worlds. The crisis was triggered by thecollapse of Lehman Brothers in September 2008. Gone was
the optimistic outlook that had prevailed until that point;
world credit markets contracted, and the impact on theeconomy was substantial. Even Japan, with limited exposure
to the subprime loan crisis, experienced an economic
downturn and a flurry of corporate bankruptcies.
Sony Bank was no exception in being caught up in thefinancial market turmoil. The bank made a shift in focus of its
strategy from building the foundations for future earnings tocurrent profitability. Specifically, we offered competitive
interest rates in the first half of FY2008 to attract deposits,
and maintained reasonable prices based on market levels inthe second half, as it had done in the past. Sony Bank
recorded solid sales of loan products via banking agents, who
are allowed to explain the features of each product.
Sony Bank continued to introduce new services. New
services that started in or after 2008 are the private asset
management tool named “LifePass-Book” (March 2008),

foreign exchange margin transactions (May 2008), and credit
cards whose payments can be made in two currencies(October 2008). In October 2008, Sony Bank also launched asweep service that automatically transfers funds between
Sony Bank yen ordinary deposit and Sony Bank Securities
trading accounts to improve the convenience of asset
management services. In response to many customer requests
to increase the number of ATMs, Sony Bank signed up with
LAWSON ATM Networks and E-net so that account holders
could use LAWSON ATMs beginning in October 2008 and E-net
ATMs beginning in November 2008.
To strengthen our financial position as a way of underpinningthese business developments, we raised capital by a capitalincrease totaling ¥12 billion (¥6 billion each in April andNovember 2008) and a ¥2 billion subordinated loan in June
2008. In October 2008, Sony Bank received a long-term seniordebts rating of AA− from Japan Credit Rating Agency, Ltd. (JCR).
Sony Bank anticipates ongoing instability of financial
markets through FY2009. The substance and direction of SonyBank's services are meeting customers' needs. We are seeking
to diversify Sony Bank Securities' services, which are still
somewhat limited, so that customers can take advantage of
deregulation of banks and securities firms and enjoy greater
trading convenience. In an area less visible to customers, weare also making further efficiency improvements by reviewing
operations. Sony Bank is strengthening its financial position,
which is the basis for the trust and confidence of ourcustomers, so that it is capable of dealing with difficult
market conditions.
July 1, 2009

Shigeru Ishii
President, Representative Director and CEO
Sony Bank Inc.

Industry Trends and the Sony Bank Characteristics(Billions of yen)
500
400
300
200
100
0
05

06

07

08

09

(year)

Internet sales channel
Affiliated sales channel
Banking services agent

122.8 234.3 278.0 338.8 468.3
As of March 31

41
Industry Trends and the Sony Bank Characteristics

Figure 1: Mortgage loan balance

At the end of March 2009, customers had some 723 thousandaccounts with Sony Bank, and customer assets (deposits andinvestment trusts) totaled ¥1,403.6 billion for a high level of
average customer assets of around ¥2 million. These figures
illustrate the degree of trust and popularity that Sony Bankhas won from customers as an online bank for asset
management purposes.
Sony Bank adopted a profit-oriented strategy in thefinancial market turmoil of the second half of FY2008,
offering deposits at interest rates that guaranteed areasonable spread. The balance of yen deposits at the end of
March 2009 exceeded ¥1 trillion. Foreign currency deposits,
for which Sony Bank offered distinctive services such as low
foreign exchange charges and trading rates close to market
rates, have grown into a business whose product features arewidely recognized by our customers. This is reflected in ourmarket share of over 5%, which makes Sony Bank asubstantial presence in the banking industry.
Sony Bank has recorded steady growth of mortgage loanbalances and market share in the mortgage business because
customers continue to appreciate the convenience of applying
and signing for the loan, making early repayments, andchanging the type of interest rate online without having tovisit a branch. We noticed in FY2008 an increase in loans
signed via sales channels where personnel meet customers
face-to-face, such as Sony Bank sales agents Sony Life's
Lifeplanner sales employee and Seven Bank's staffed outlets(Figure 1).

About Sony Bank

When the Financial Instruments and Exchange Act went into
force in September 2007, a user protection framework was put
in place in Japan's banking industry across a broad spectrumof financial instruments. In June 2008, a partial revision of
the Financial Instruments and Exchange Act was enacted,
including more flexible firewall regulations between banks
and securities firms. This has led to progressive deregulationthat included enabling an extended scope of business
operations.
FY2008 was characterized by global financial market
turmoil from September 2008 onward, reigniting credit fears
concerning financial institutions in Japan and overseas.
Investor motivation waned and risk avoidance became more
prominent as economic conditions deteriorated. In thebanking industry, additional risk control measures wererequired amid the global economic slowdown and heightening
financial crisis.
Sony Bank provides a range of convenient financial
products and services centered on asset management via theInternet to individual customers. Sony Bank set itself apartfrom traditional, full-service banks with bricks-and-mortar
branches as well from other newer banks that focus on
handling settlements. We thus occupy a distinctive position
and run a unique business by offering yen and foreign
currency deposit, investment trust, foreign exchange margintransactions, and other asset management products as well
as mortgages and other loan products—all online and at
rates that are fair, reasonable, and close to market prices.

Sony Bank Products and Services■ Service Sites
Sony Bank is an Internet bank doing business solely through websites. These
include a corporate site that makes information about the bank available, as well
as service sites that customers use for their banking transactions.
http://moneykit.net/

MONEYKit service site

■ Asset Management Products

About Sony Bank

● Yen deposits (ordinary deposits, time deposits, thrift

Sony Bank Products and Services

42

saving deposits)
New customers are asked to start doing business with Sony
Bank by opening a yen-denominated ordinary deposit accountthrough which they can then buy other Sony Bank products
and services. Our yen-denominated time deposit accounts,
with interest rates closely linked to market rates, letcustomers manage their assets in a way that fits well with
their personal objectives and the timing of market interest
rate changes, since they can set maturity terms and rollovers
online at any time.
● Foreign currency deposits (ordinary deposits, time
deposits, time deposits with special terms)
Foreign currency accounts are available in eight currencies—
U.S. dollars, Euros, UK pounds, Australian dollars, New
Zealand dollars, Canadian dollars, Swiss francs, and Hong
Kong dollars.
The concept of foreign currency deposits is to bring retailcustomers closer to the market. By enabling them to tradeforeign currency 24 hours a day, 365 days a year at rates
linked to constantly updated forex market rates, we can offer
interest and exchange rates that closely shadow market rates.
Depending on the yen equivalent of a customer's foreign
currency deposit balance at the end of the month, Sony Bank
offers preferential interest rates on foreign currency time
deposits second following month, reduced exchange charges,
and reduced commissions on limit orders.
Interbank market

Customer market

Customers

Banks

Banks
Customers
Transaction

Foreignexchange broker

Monetary
authorities

Banks
Brokerage

Foreign exchange market● Foreign exchange margin tradingSony Bank customers can engage in forex margin trading in
12 pairs of currencies:s 7ITH YEN 53 DOLLARS EUROS 5+ POUNDS !USTRALIAN
dollars, New Zealand dollars, Canadian dollars, Swiss
francs, Hong Kong dollars
s 7ITH 53 DOLLARS %UROS 5+ POUNDS !USTRALIAN DOLLARS .EW
Zealand dollars
This service allows customers to trade foreign currencies 24hours a day, 365 days a year at rates even closer to market
RATES THAN OUR FOREIGN CURRENCY DEPOSITS 7E HAVE MADE IT
possible to make smooth fund transfers in foreign currencies.
Delivery (spot settlement) is also available.
● Investment trusts (59 funds by 24 companies as of July

1, 2009)
Sony Bank offers a range of quality funds that serve the needs
OF INDIVIDUAL CUSTOMER PORTFOLIOS 7E ALSO PROVIDE A MONTHLY
installment plan for investing a fixed monthly amount ininvestment trusts by direct debit from customers' yen ordinary
deposit accounts.
● Financial product intermediary services
Sony Bank offers a financial product intermediary service oncommission from Sony Bank Securities (see p.44) and Monex)NC 7E OFFER A COMPREHENSIVE SERVICE VIA 3ONY "ANKgS SERVICE
site MONEYKit, from opening a securities trading account withSony Bank Securities to fund transfers, acting as a broker forbuying and selling domestic equities, and providing
statements of transactions. Sony Bank also offers services
such as opening a Monex securities trading account andproviding information about foreign bonds, newly listed
stocks, and public offers and sales of stocks.
● InsuranceSony Bank markets two Sony Life yen-based individual annuity
products for long-term asset building, as well as Sony
Assurance Fire Insurance for MONEYKit, available to Sony
Bank mortgage holders only.

■ Loan Products and Credit Cards● Mortgage Loans

Sony Bank's mortgage loans are extremely convenient.
Customers can apply for a loan and sign up online with noneed to visit a branch, and even change to a different interest
rate plan or make early repayments anytime as many times as
they wish online. Customers on a fixed interest rate plan
(lasting 2, 3, 5, 7, 10, 15, and 20 years, or 20 plus years forthe full term of the loan) can still switch to a variable rate oranother fixed rate plan, as well as taking the option of a
combined plan with part of the loan with a fixed rate and therest with a variable rate. Customers can also add aninsurance rider for protection against the three majordiseases (cancer, heart attack, and stroke) to group credit life
insurance. Eligible customers may also take advantage of theMortgage Loan Interest Rate Plan, which offers a discounted
rate from the Sony Bank Mortgage Loan base rate.
● Special-purpose loans and Card loans
Sony Bank offers three types of special-purpose loans—
educational loans, new car loans, and general-purpose loans,and card loans in response to various kinds of funding needs.
● Credit cards
Sony Bank offers five credit cards that customers can apply
for online via its service site. Credit cards whose payments
can be made in two currencies (yen in Japan and U.S. dollars
overseas) allow cardholders to spend U.S. dollars saved inforeign currency deposit accounts when shopping overseas.

About Sony Bank

■ Asset Management Support Tools● Life Passbook : Life Passbook is a new private asset management tool with five mainand seven currencies against the U.S. dollar● Market news and reports : Sony Bank keeps customers up-to-date with the latest

43

Money Map

Foreign exchange chart

financial market information.

■ Customer Center
At Sony Bank's Customer Center, communicators with specialist knowledge are available daily (including weekends and public
holidays) to respond to customer inquiries about Sony Bank products and services by phone or email.

■ Affiliated ATMs
Customers can withdraw and deposit cash or transfer funds using the following ATMs operated by the organizations affiliatedwith Sony Bank:● ATMs operated by Sumitomo Mitsui Banking Corporation● ATMs operated by Seven Bank
● @BΛNK ATMs at the am/pm convenience store chain● ATMs operated by the LAWSON convenience store chain(except those in Kyushu)(stores displaying the LAWSON ATM logo)● ATMs operated by the Bank of Tokyo-Mitsubishi UFJ, Ltd.
● E-net ATMs at the FamilyMart convenience store chain● ATMs operated nationwide by Japan Post Bankand other shops with E-net brand logo.

Sony Bank Products and Services

features:s -ONEY MAPA VISUAL PORTFOLIO ANALYSIS TOOL THAT ASSESSES THE RISKS AND RETURNS OF
customers' assets
s #ALENDAR-ONEY INFORMATION PROVIDED IN CALENDAR FORMAT
s !CCOUNT INFORMATION AT A GLANCEPROVIDES SERVICE INFORMATION OF MORE THAN 
financial institutions in table form
s 0OINTS MANAGER-ANAGES  PLUS LOYALTY POINT PROGRAMS AND PROVIDES SIMULATIONS OF
switching programss ,IFE PLAN SIMULATOR0ROVIDES ADVICE ON FUTURE PLANNING BASED ON FAMILY LIFESTYLE
information such as income and expenditure, and financial asset information● Risk Grade : An indicator of risk of a financial asset● Foreign exchange chart : Exchange rate chart for eight currencies against the yenAbout Sony Bank Securities

http://sonybank-sec.net/(Japanese only)

About Sony Bank Securities

Sony Bank Securities was founded in June 2007 as a wholly-owned subsidiary ofSony Bank to offer Sony Bank account holders equity and other securities trading
services. Working with Sony Bank, Sony Bank Securities offers retail financial
services at a fair price to support customers looking for solid returns with a long-term
perspective.

Sony Bank Securities' website

Trading with MONEYKit
Using Sony Bank's MONEYKit banking service site, customers
can open Sony Bank Securities trading accounts and carry outtransactions such as transfer of funds between their Sony
Bank yen ordinary deposit and Sony Bank Securities trading
accounts, placing buy and sell orders for Japanese equities,
and requesting statements of transaction from Sony Bank
Securities. They can also use MONEYKit to compare financial
products offered by Sony Bank, such as yen deposits, foreign
currency deposits, and investment trusts, with products suchas equities and exchange traded funds (ETFs). This offers
customers a convenient, centralized asset management andinvestment facility that allows them to diversify theirinvestment portfolios to fit their own investment goals andreview their portfolios regularly.

Sweep service
The sweep service automatically transfers funds between Sony
Bank yen ordinary deposit and securities trading accounts
when trading securities to improve the convenience of asset
management services. The purchase amount is automaticallydebited from customers' yen ordinary deposit accounts when
they place a buy order, and the sale amount automaticallycredited to the same account on the delivery date. Thus there
is no need for customers to transfer funds themselves.

Credits and debits in real time, free
fund transfers
Even if customers do not set up the sweep service, they canstill transfer funds back and forth between Sony Bank yen
ordinary deposit and Sony Bank Securities trading accounts inreal time without paying fees. They can credit their trading
accounts in real time to buy equities and other financial
products so that they don't miss out on investment
opportunities. They can also debit their trading accounts inreal time and transfer funds to their Sony Bank yen ordinary
deposit accounts.

Financial Section
Analysis of Operating Performance for FY2008 . . . . . 46
SFH Consolidated Financial Statements . . . . . . . . . . . 62
Capital Adequacy Status . . . . . . . . . . . . . . . . . . . . . . 83
Sony Life's Financial Data . . . . . . . . . . . . . . . . . . . . . 94
Sony Assurance's Financial Data . . . . . . . . . . . . . . . . 98
Sony Bank’ s Financial Data . . . . . . . . . . . . . . . . . . . 101

Analysis of Operating Performance for FY2008
Ordinary Revenues and Ordinary Profit(Billions of yen)(Billions of yen)

1,000

80

750

60

500

40

250

20

0

0
08

Ordinary revenues

822.1
44.5

Sony Financial Holdings

For the years ended March 31

Analysis of Operating Performance for FY2008

46

09(year)

Ordinary profit

860.3
34.2

SFH
■ Operating results
In FY2008, SFH's consolidated ordinary revenues grew 4.6% compared with the previous fiscal
year, to ¥860.3 billion, owing to increases in ordinary revenues from all the businesses: life
insurance, non-life insurance and banking. In the life insurance business, ordinary revenues grew
3.4% year-on-year, to ¥766.2 billion, owing to higher income from insurance premiums
associated with a steady increase in policy amount in force. In the non-life insurance business,ordinary revenues rose 11.2% year-on-year, to ¥61.8 billion, due to higher net premiums written,
resulting from strong sales of automobile insurance policies. In the banking business, ordinary
revenues grew 28.5% year-on-year, to ¥33.3 billion, as a higher balance of investment assets inline with the bank's business expansion led to an increase mainly in interest income.
Consolidated ordinary expenses increased 6.2% compared with the previous fiscal year, to¥826.0 billion, owing to increases in ordinary expenses from all the businesses. In the life
insurance business, ordinary expenses increased 4.5% year-on-year, to ¥733.7 billion, due toincreased investment expenses associated with a significant decline in Japanese stock market
prices. In the non-life insurance business, ordinary expenses grew 13.0% year-on-year, to ¥59.7
billion, owing mainly to an increase in the amount of claims paid, led by those resulting fromnatural disasters. In the banking business, higher interest expenses, increased general andadministrative expenses—mostly system-related expenses—and amortization of goodwill
pushed up ordinary expenses 44.0% year-on-year, to ¥33.9 billion.
As a result, consolidated ordinary profit decreased 23.0% compared with the previous fiscal
year, to ¥34.2 billion. Broken down by business, ordinary profit from the life insurance businessdeclined 16.7% year-on-year, to ¥32.5 billion. Ordinary profit from the non-life insurance
business decreased 22.7% year-on-year, to ¥2.1 billion. In the banking business, an ordinary lossof ¥0.5 billion was recorded, compared to ¥2.4 billion in ordinary profit in the previous fiscal year.
Extraordinary gains of ¥20.4 billion and extraordinary losses of ¥3.9 billion were recorded.
Extraordinary gains were primarily due to a partial reversal of the reserve for price fluctuations in
the life insurance business. Extraordinary losses were due mainly to losses on disposal of fixed
assets in the non-life insurance business.
After accounting for extraordinary gains and losses, reversal for reserve for policyholders'
dividends, and income taxes, net income increased 26.7% compared with the previous fiscal
year, to ¥30.7 billion.
■ Financial condition
As of March 31, 2009, total assets amounted to ¥5,313.6 billion, up 6.8% from March 31, 2008.
As for major components of assets, securities, mostly Japanese government bonds, amounted to¥3,703.0 billion, up 26.4% from March 31, 2008. Monetary trusts amounted to ¥608.8 billion,
down 32.0% from March 31, 2008, and loans amounted to ¥597.5 billion, up 31.1% from March
31, 2008.
Total liabilities amounted to ¥5,108.7 billion as of March 31, 2009, up 8.3% from March 31,
2008. As for major components of liabilities, policy reserve and others amounted to ¥3,680.7
billion, up 6.6% from March 31, 2008, and deposits amounted to ¥1,325.3 billion, up 15.9% fromMarch 31, 2008.
Total net assets amounted to ¥204.8 billion as of March 31, 2009, down 21.7% from March
31, 2008. Net unrealized losses on other securities, net of taxes, of ¥4.8 billion were recorded,
down by ¥79.7 billion from March 31, 2008, owing to a decrease in the fair market value of
securities held, associated with a significant decline in Japanese stock market prices.
■ Cash flows
Net cash provided by operating activities in FY2008 was ¥730.0 billion, up ¥284.5 billion from
FY2007. The major factors were an increase in inflows due to a net decrease in call loans,although inflows from a net increase in deposits in the banking business decreased.
Net cash used in investing activities in FY2008 was ¥769.8 billion, up ¥164.5 billion from
FY2007. The primary reasons were outflows due to payments for purchases of securities
exceeding inflows from sales and redemption of securities, despite inflows owing to a net
decrease in investment in monetary trusts.
Net cash used in financing activities in FY2008 was ¥4.5 billion, down ¥26.8 billion from
FY2007. The decrease was due to an absence of inflows of ¥28.8 billion received from theissuance of common stock in FY2007, despite the proceeds from subordinated debts in thebanking business, which aimed to strengthen the financial soundness in the banking business.
As a result of the above factors, cash and cash equivalents as of March 31, 2009, were ¥91.6
billion, down ¥44.5 billion from March 31, 2008.
■ Risk-monitored loans
As of March 31(Millions of yen)

Category

2008

15
227
−
244
487

64
674
−
225
964

Sony Financial Holdings

Bankrupt loans
Non-accrual delinquent loans
Past due loans (three months or more)
Restructured loans
Total

2009

SFH's consolidated operating results come from its life insurance, non-life insurance,and banking businesses. Segment-by-segment reviews of FY2008 operating performanceare presented below.

47

Ordinary Revenues and Ordinary Profit

SFH's life insurance business consists of Sony Life, a wholly-owned subsidiary of SFH;
Sony Life Insurance (Philippines), a wholly-owned subsidiary of Sony Life; and AEGON Sony
Life Planning, a 50%-owned affiliate of Sony Life and accounted for under the equity method.
Ordinary revenues in the life insurance business grew 3.4% year-on-year to ¥766.2
billion in FY2008, driven by growth in income from insurance premiums on firm policy
amount in force. Operating expenses rose 4.5% to ¥733.7 billion on an increase ininvestment expenses accompanying a sharp drop in the stock market. Ordinary profit fell
16.7% to ¥32.5 billion.

(Billions of yen)(Billions of yen)

800

80

600

60

400

40

200

20
0

0
08

09

Ordinary revenues(year)

Ordinary profit

741.3
39.0

766.2
32.5

For the years ended March 31

Sony Life accounts for nearly all of SFH's life insurance business. A discussion of its
non-consolidated operating performance of Sony Life follows.

New Policy Amount and Number of New Policies(Individual life insurance + Individual annuities)(Billions of yen)

■ New policy amount
New policy amount—total policy amount of new insurance policies—for individual life
insurance and individual annuities grew 1.9% year-on-year, to ¥3,873.3 billion in
FY2008. The number of new policies rose 1.8% to 534 thousand. Sales of family income
insurance were robust.
A breakdown of the new policy amount shows that individual life insurance was up
2.4% year-on-year at ¥3,834.6 billion, and individual annuities were down 32.5% at¥39.1 billion. Additionally, group life insurance jumped 155.2% to ¥15.1 billion.
Annualized premiums from new policies for individual life insurance and individual
annuities fell 2.8% to ¥61.6 billion. Within this, annualized premiums for medical(Thousands of policies)

4,000

800

3,000

600

2,000

400

1,000

200

0
05

06

New policy amount07

08

09 (year)0

Number of new policies

3,724.2 3,392.1 3,429.4 3,802.5 3,873.7
534
512
517
524
534
For the years ended March 31

Analysis of Operating Performance for FY2008 (Life insurance business)

Life insurance businessPolicy Amount in Force and Number of Policies in Force(Individual life insurance + Individual annuities in force)(Trillions of yen)(Thousands of policies)

40

6,000

30

4,500

20

3,000

10

1,500
0

0
05

06

07

08

Policy amount in force

09(year)

Number of policies in force

27.8 29.0 30.2 31.4 32.5
3,559 3,845 4,145 4,438 4,708
As of March 31

Sony Financial Holdings

New Policy Amount by Type of Product(Policy amount basis, FY08)
Other 3.8％
Variable life
11.3％

Analysis of Operating Performance for FY2008 (Life insurance business)48

Whole life 13.2％

FY2008Endowment andeducational 10.3％

Term life 61.4％

Lapse and Surrender Rate and Persistency Rates(Individual life insurance on a policy amount basis)
(%)

(%)

8

100

7

95

6

90

5

85
0

0
06

07

08

09 (year)

Lapse and surrender rate
13-month persistency rate
25-month persistency rate
6.39

5.88

5.90

6.27

6.98

94.6

95.5

95.5

95.5

95.2

87.6

89.3

90.7

90.5

90.2

For the years ended March 31■ Policy amount in force
Policy amount in force refers to the total amount of coverage that Sony Life provides toindividual policyholders. The total policy amount in force for individual life insurance andindividual annuities rose 3.2% year-on-year to ¥32,517.6 billion as of March 31, 2009.
The number of policies in force increased 6.1% to 4,708 thousand. We believe thesefigures reflect a high level of customer satisfaction with policy details and high acclaim
for after-sale follow-up services. Although the overall policy amount in force in Japan’slife insurance industry has been declining since 1996, Sony Life’s policy amount in force
for individual life insurance and individual annuities increased by ¥1,020.3 billion in
FY2008, maintaining steady growth for a 28th year since commencing operations.
A breakdown of policy amount in force shows that individual life insurance was up
3.2% year-on-year at ¥32,229.1 billion, and individual annuities were up 10.9% at¥288.5 billion. Additionally, group life insurance was up 8.8% at ¥1,019.4 billion, andgroup annuities were up 0.3% at ¥73.4 billion.
Annualized premiums from insurance in force for individual life insurance andindividual annuities grew 3.4% year-on-year, to ¥547.8 billion. Within this, annualized
premiums for medical protection and living benefit protection products rose 3.1% to¥126.6 billion.
■ Sales of products
Death protection type of products accounted for about 80% of new policies (policy
amount basis) in FY2008. Within this, whole life insurance accounted for 13.2%, term life
insurance for 61.4%, endowment and educational insurance for 10.3%, variable life
insurance for 11.3%, and other for 3.8%. Term insurance products sold especially well,notably family income insurance. We believe these strong results stem from our ability toprovide reasonable life insurance protection at relatively low premiums.

For the year ended March 31, 200905

protection and living benefit protection products edged up 0.6% to ¥13.4 billion.
Annualized premiums from new policies decreased due primarily to a decline in thosefrom variable life insurance policies, though new policy amount increased.

■ Lapse and surrender rate and persistency rates
The lapse and surrender rate* (policy amount basis) for individual life insurance rose
0.71 percentage points year-on-year to 6.98% in FY2008, due mainly to an increase insurrenders for corporate term life insurance and individual variable life insurance. We
think this reflects a worsening economic and investment environment.
Persistency rates for individual life insurance (policy amount basis) remained high,with the 13-month rate down 0.3 percentage points year-on-year at 95.2% and the
25-month rate down 0.3 percentages points at 90.2%. We believe this reflects customer
satisfaction with the way Lifeplanner sales employees and Partners (independentagencies) provide products tailored to the specific needs of each customer based on
courteous consultation as well as meticulous after-sale follow-up services.
* The lapse and surrender rate shows the ratio derived by dividing the amount of lapses and surrenders,adjusted for policy amount decreases, increases, and reinstatements, by the policy amount in force at the
beginning of the fiscal year.

■ Income from insurance premiums and insurance claims and other payments
Insurance premiums received from policyholders totaled ¥660.6 billion in FY2008, up
nicely from ¥646.9 billion in FY2007, as a result of growth in the policy amount in force.
Income from insurance premiums also rose 2.1% to ¥662.0 billion on growth in the policy
amount in force. At the same time, insurance claims paid to policyholders totaled ¥62.0
billion in FY2008, versus ¥60.0 billion in FY2007; insurance benefits were ¥32.8 billion,
versus ¥28.4 billion; annuity payments were ¥7.1 billion, versus ¥6.3 billion; andsurrender payments were ¥168.1 billion, versus ¥141.8 billion. Insurance claims andother payments rose 14.0% year-on-year, to ¥274.7 billion.

(Billions of yen)
800
600
400
200
0
05

06

07

09 (year)08

Income from insurance premiums

551.6 580.5 605.5 648.4 662.0
For the years ended March 31

General Account Asset Composition
Real estate
2.3％

Cash and call loans 1.6％

Sony Financial Holdings

Other 3.1％

Policyholder loans
3.4％
Monetary trusts
17.2％

FY2008¥3,535.7
billion49
Japanese stocks 1.4％
Foreign government andcorporate bonds 2.7％

Japanese governmentand corporate bonds
67.4％

Foreign stocks 0.6％
Other securities 0.2％
As of March 31, 2009

Unrealized Gains on Securities(Billions of yen)250
200

■ Unrealized gains and losses on securities
Unrealized gains and losses on securities* refer to the differences between the bookvalues and fair values of securities. When the fair value of an asset is higher than its
book value, the sale of the asset at fair value would result in a gain on the sale.
Consequently, unrealized gains can function as a provision for various risks. A portion of
unrealized gains and losses on securities and real estate are included in the totalsolvency margin (numerator) used in calculating the solvency margin ratio (see page 52).
Unrealized gains on securities in the general account totaled ¥50.9 billion as of March
31, 2009, down 60.2% from March 31, 2008. Of this, Japanese stocks had unrealized gainsof ¥1.4 billion, versus ¥50.8 billion a year earlier; Japanese government and corporate
bonds had unrealized gains of ¥53.8 billion, versus ¥83.4 billion; and foreign securities
had unrealized losses of ¥3.8 billion, versus ¥9.5 billion. Further, convertible bonds had
unrealized losses of ¥21.2 billion, versus unrealized gains of ¥9.2 billion a year earlier.
Reference: As of March 31, 2009, Sony Life assumed unrealized gains on stocks would be zero with the Nikkei
Stock Average at ¥8,002 and TOPIX at 763.47 points.
* Unrealized gains and losses on securities list the total of net unrealized gains or losses on held-to-maturity
bonds and other securities with fair values.

150
100
50
0
09

(year)

88.0 202.8 198.2 127.8

50.9

05

06

07

08

Unrealized gains on securities

As of March 31

Analysis of Operating Performance for FY2008 (Life insurance business)■ Asset management
Sony Life’ s investment policy in its general account is to invest with an emphasis onbalancing returns and market risk while seeking to ensure stable interest and dividend
income and sound assets. We are working to extend the duration of our portfolio byinvesting in bonds, mainly Japanese government bonds, and shifting from bonds withshort maturities to longer maturity ones.
We invested mainly in ultralong-term bonds with maturities of 10 years or more in
FY2008. In response to market changes and issuance conditions, we reduced ourholdings in equity-related assets, notably Japanese stocks and convertible bonds.
Assets in the general account totaled ¥3,535.7 billion as of March 31, 2009, up 5.9%,
or ¥197.7 billion, from March 31, 2008. Within the general account, Japanese governmentand corporate bonds totaled ¥2,384.4 billion, accounting for 67.4% of the generalaccount total; Japanese stocks ¥50.9 billion, accounting for 1.4%; foreign government andcorporate bonds ¥93.7 billion, accounting for 2.7%; monetary trusts ¥607.6 billion, accountingfor 17.2%; policyholder loans ¥120.4 billion, accounting for 3.4%; real estate ¥81.7
billion, accounting for 2.3%; and cash and call loans ¥58.0 billion, accounting for 1.6%.
Sony Life holds monetary trusts for accounting classification purposes, and thesetrusts also include convertible bonds and Japanese stocks. Adding the equity-related
assets included in monetary trusts, our holdings in Japanese stocks totaled ¥61.3 billion,
including ¥10.4 billion in monetary trusts, accounting for 1.7% of general accountassets, down from 6.2% a year earlier. Our holdings in convertible bonds totaled ¥298.1
billion, including ¥96.8 billion in monetary trusts, accounting for 8.4% of generalaccount assets, down from 12.8%.

Income from Insurance Premiums

Core Profit(Billions of yen)
40
30
20
10
0
05

06

07

08

28.5

24.3

23.5

09 (year)Core profit

24.3

Sony Financial Holdings

For the years ended March 31

Analysis of Operating Performance for FY2008 (Life insurance business)

50

38.0

■ Core profit
Core profit is an indicator of the profit-earning capacity of the primary insurance
business over a one-year period. Primary insurance business refers to the management of
insurance premiums received from policyholders, along with investment income to pay
insurance claims, benefits, and annuities, and to make policy reserve provisions for
future payments. The addition to core profit of capital gains and losses, including gains
and losses on the sale of securities, as well as one-time gains and losses, results inordinary profit as listed in the statements of income.
Sony Life's core profit rose 61.2% to ¥38.0 billion in FY2008, buoyed by growth inpremium income on an increase in policy amount in force and by growth in interest anddividend income from the purchase of ultralong-term bonds.
Note: Sony Life, similar to most life insurers organized as stock companies, primarily sells non-participating life
insurance. This contrasts with life insurers organized as mutual companies, which typically offer participating
policies for which premiums include an additional amount equal to the funds used for policyholder dividends.
This additional amount is recorded as core profit and the funds used for policyholder dividends are included incore profits. Mutual companies consequently tend to show relatively higher core profits than stock companies ofsimilar scale.

Breakdown of Ordinary Profit (Core Profit)
For the years ended March 31(Millions of yen)

2008
[A] . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Core profit
Capital gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gains on monetary trusts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gains on investments in trading securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gains on sale of securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gains on financial derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gains on foreign exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other capital gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Losses on monetary trusts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Losses on investments in trading securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Losses on sale of securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Losses on valuation of securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Losses on financial derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Losses on foreign exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other capital losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
[B] . . . . . . . . . . . . . . . . . . . . . . . . . . ...
Net capital gain (loss)[A+B] . . . . . . . . . . . . . . . . . . . . . . . . . . .
Core profit plus net capital gains
Other one-time gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reinsurance income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reversal of contingency reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other one-time losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reinsurance premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provisions for contingency reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provisions for specific reserve for possible loan losses . . . . . . . . . . . . . . . . . . . . . . .
Provisions for specific reserve for overseas loans . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loan amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other extraordinary losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
[C] . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total other one-time gain (loss)[ A + B +C ] . . . . . . . . . . . . . . . . . . . . . . .
Ordinary profit

2009
23,571
29,963
5,304
324
24,023−310−
13,119
−
−
1,563
6,697
4,858
−
−
16,84440,416
1,662
−
−
1,662
2,787
−
2,776
10
−
−
−
(1,125)39,29038,005
42,137−
1,084
32,115
8,937−−
63,914
12,842−
16,15731,899−2,614
399(21,776)
16,22816,315−
16,315
−
134
−
−
134
−
−
−
16,18032,409Notes: 1.Core profit in FY2008 includes ¥11,986 million in gains on monetary trusts related to income gains. Other capital losses comprise a ¥399 million
impairment loss on an investment partnership.
2.Core profit in FY2007 includes ¥9,471 million in gains on monetary trusts related to income gains. Other one-time losses comprise ¥1,662 million in■ Negative spread
Life insurers use a portion of the premiums received from policyholders to provide policy
reserves for the payment of future claims. The policy reserves assume an annual return
based on a fixed interest rate. This interest rate is known as the assumed interest rate. A
negative spread occurs when the actual investment yield for some policies is lower than
the assumed interest rate due to deterioration in the investment environment or otherreasons.
Sony Life's negative spread decreased from ¥26.7 billion in FY2007 to ¥21.3 billion in
FY2008 due to an increase in interest and dividend income. We are working to make ourbusiness more efficient to keep earnings at a level sufficient to withstand a continued
negative spread. The investment yield for core profit was 1.90% in FY2008, up from
1.73% in FY2007; and the average assumed interest rate was 2.59%, down from 2.68%.
The general account investment yield decreased from 2.17% in FY2007 to 1.11% in
FY2008 as a result of impairment losses on securities held.

(Billions of yen)
40
30
20
10
0
05

06

07

08

33.1

37.3

26.7

09 (year)

Negative spread

34.5

21.3

For the years ended March 31

Assumed interest rate, investment
yield for core profit, andinvestment yield (general account)Sony Financial Holdings

Formula for Calculating Negative Spread

Negative spread

(%)
4.00

Investment yield for core profit¹

Average assumed interest rate²

3.00
2.00

General accountpolicy reserves³
Negative spread

0
05

06

07

08

09 (year)

Average assumed interest rate
Investment yield (general account)
Investment yield for core profit

3.08
1.70
1.38

2.92
2.22
1.45

2.77
2.02
1.31

2.68
2.17
1.73

2.59
1.11
1.90

For the years ended March 31■ Ordinary profit and net income
Sony Life's ordinary revenues grew 3.3% year-on-year to ¥765.9 billion in FY2008, driven
by growth in income from insurance premiums on firm policy amount in force. Despite
firm income from insurance premiums on growth in policy amount in force, ordinary profit
fell 17.5% to ¥32.4 billion as a result of higher investment expenses accompanying a
sharp drop in the Japanese stock market. We reversed a portion of contingency reserves to
respond to a decline in investment yields caused by worsening conditions in financial
markets. Net income rose 82.5% to ¥33.7 billion due to the partial reversal of the reservefor price fluctuations.

Ordinary profit and net income(Non-consolidated)(Billions of yen)
40
30
20
10
0
05

06

Ordinary profit

07

08

09 (year)

Net income

17.0

24.3

14.8

39.2

32.4

10.1

9.6

7.4

18.5

33.7

For the years ended March 31

51
Analysis of Operating Performance for FY2008 (Life insurance business)

Notes: 1.Investment yield for core profit is the yield on general account policy reserves after subtracting provision forpolicyholder dividend reserve from general account investment returns included in core profit.
2.Average assumed interest rate is the assumed yield on general account policy reserves.
3.General account policy reserves are calculated based on the following formula for policy reserves in the generalaccount, excluding contingency reserve: (Policy reserves at beginning of term + policy reserves at end of term –assumed interest) × 1/2

1.00

Solvency margin ratio
(%)
2,500
2,000
1,500
1,000
500
0
05

06

07

08

09 (year)Solvency margin ratio

1,317.1 1,547.0 1,852.0 1,747.9 2,060.5

Sony Financial Holdings

As of March 31

Analysis of Operating Performance for FY2008 (Life insurance business)

52■ Solvency margin
The solvency margin is an indicator of payment ability. Life insurers accumulate policy
reserves to prepare for the payment of future claims, allowing them to adequately
respond to risks within a normally anticipated range. However, unforeseen events canoccur as a result of changes in the environment, including major disasters andsubstantial declines in the stock market. The solvency margin ratio is one measure usedby regulatory authorities to determine whether an insurer has the ability to pay inresponse to the risk of such unpredictable events.
Sony Life still had a high solvency margin ratio of 2,060.5% as of March 31, 2009, up
312.6 percentage points from March 31, 2008. Although net unrealized gains on othersecurities decreased within the solvency margin due to the impact of falling share prices,
the solvency margin ratio increased from a year earlier due to a sharp decline in asset
management risks on a reduction in stocks, convertible bonds, and other equity-related
assets and purchases of held-to-maturity ultralong-term bonds.

Solvency margin ratio
As of March 31(Millions of yen)

2008
[A] ..............
Total solvency margin
Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reserve for price fluctuations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Contingency reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reserve for possible loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net unrealized gains on other securities × 90% (100% if losses) . . . . . . . . . . . . . . . .
Net unrealized gains on real estate × 85% (100% if losses) . . . . . . . . . . . . . . . . . . .
Excess policy reserves based on Zillmer method . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unallocated portion of policyholder dividend reserve . . . . . . . . . . . . . . . . . . . . . . . . .
Future profits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subordinated debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deductible items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total risk

531,321
131,190
3,653
45,491
0
17,6794,899
302,226382
ー
25,797ーー[B] ..............

69,11951,571

R1
R8
R2
R3
R4
R7

...............
...............
...............
...............
...............
...............

17,9896,926
11,09545,3761,750
6,120

18,595
7,008
11,241
24,6891,375
7,243

× 100 . . . . . . . . . . . . . . . . . . . . .

1,747.9%

2,060.5%2
2+（R2+R3+R7）+ R4（R1+R8）Insurance risk
Third-sector insurance risk
Assumed interest rate risk
Asset management risk
Business management risk
Minimum guarantee risk

2009
604,078
94,40724,09961,807
0116,735
5,172
287,332
2,347
787
11,388ーー[A]Solvency margin ratio（［B］× 1 /2 ）Notes: 1.The foregoing figures were calculated based on provisions in Articles 86 and 87 of the Insurance Business Law Enforcement Regulations and the Ministry of Finance
Announcement No. 50 (1996). (Excess policy reserves based on Zillmer method were calculated based on Article 1-3-1 of the Ministry of Finance Announcement No. 50.)
2.Minimum guarantee risk was calculated based on the standardized approach.

■ Non-performing assets
Sony Life's asset assessment is shown below and we do not have any risk-monitored loans (loans for which repayment conditions
are not ordinary). Moreover, all figures listed in the loans by borrower category are classified as normal loans.
Sony Life's loan balance was ¥120.4 billion as of March 31, 2009. As we do not engage in commercial lending, the entire loanbalance consists of policyholder loans, which are limited to recoverable surrender payments.
★
Life insurers earn interest income by lending a portion of their assets under asset management. Loans are categorized as either policyholder loans provided as aservice to customers or commercial loans. The loan balance comprises the sum of these two categories.

Loans by Borrower Category

Risk-Monitored Loans
As of March 31

Category
Bankrupt loans
Non-accrual delinquent loans
Past-due loans (three months or more)
Restructured loans
Total

2008
−
−
−
−
−

(Millions of yen)

As of March 31

2009
−
−
−
−
−

(Millions of yen)

Category

2008

2009

Bankrupt and quasi-bankrupt loans
Doubtful loans
Sub-standard loans
Normal loans
Total

−
−
−
110,662
110,662−−−
122,600
122,600
Sony Financial Holdings
53
Analysis of Operating Performance for FY2008 (Life insurance business)Ordinary Revenues and Ordinary Profit(Billions of yen)(Billions of yen)

80

8

60

6

40

4

20

2
0

0
08

(year)

09

Ordinary revenues

Ordinary profit

55.6
2.8

Non-life insurance business
SFH's non-life insurance business is conducted by wholly-owned subsidiary Sony Assurance.
The business's ordinary revenues rose 11.2% year-on-year to ¥61.8 billion in FY2008,
driven by growth in net premiums written on strong acquisition of new automobile
insurance policies. Operating expenses rose 13.0% to ¥59.7 billion, due partly to higher
insurance claims paid for natural disasters. As a result, ordinary profit fell 22.7% to ¥2.1
billion.

61.8
2.1

For the years ended March 31

A discussion of Sony Assurance's operating performance, which operates
SFH's non-life insurance business, follows.
Sony Financial Holdings

Number of Policies in Force54(Automobile insurance + Medical and cancer insurance policies)■ Policies in force
The number of policyholders of Sony Assurance's mainstay automobile insurance andmedical and cancer insurance continued to grow steadily in FY2008. Number of policies
in force—the sum of automobile insurance and medical and cancer insurance—rose by
about 130 thousand year-on-year to over 1.15 million as of March 31, 2009. Automobile
insurance policies in force reached 1 million as of December 31, 2008, marking nine
years and three months since starting sales.

(Ten thousand of policies)
120
90
60
30
0

Analysis of Operating Performance for FY2008 (Non-life insurance business)

05

06

07

08

09 (year)

Number of policies in force(Automobile insurance + Medical and cancer insurance policies)

67

82

93

102

115

As of March 31

Net Premiums Written(Billions of yen)
80
60
40
20
0
05

06

07

08

09 (year)

Voluntary automobile insurance
Personal accident insurance
Other

34.2
3.1
0.4
Total 37.8

39.8
4.8
0.5
45.2

43.9
5.9
0.5
50.4

For the years ended March 31

47.8
6.5
0.6
55.0

53.6
6.9
0.5
61.1

■ Net premiums written
Net premiums written correspond to sales at most non-life insurance companies andcomprise the premiums received from policyholders (direct premiums written), plus orminus reinsurance premiums (adding direct reinsurance premiums received andsubtracting direct reinsurance premiums paid). Sony Assurance's net premiums writtenrose 11.1% year-on-year to ¥61.1 billion in FY2008. Broken down by type of insurance,
voluntary automobile insurance grew 12.1% to ¥53.6 billion, accounting for 87.7% of
total net premiums written; personal accident insurance, consisting mainly of medical
and cancer insurance, increased 6.6% to ¥6.9 billion, accounting for ¥11.3% of the total;
non–voluntary-automobile, non-personal-accident insurance—i.e., fire, marine, andcompulsory automobile liability insurance—was down 15.4% to ¥0.5 billion.

■ Net loss ratio
The net loss ratio describes the ratio of the total amount of insurance-claim payments(net losses paid) and damage-survey expenses (loss adjustment expenses) to net
premiums written. Sony Assurance's net loss ratio rose 1.5 percentage points, from
53.5% in FY2007 to 55.0% in FY2008, due to the impact of natural disasters and otherfactors. By type of insurance, net loss ratio on voluntary automobile insurance rose 1.2
percentage points, from 57.6% to 58.8%; and the ratio on personal accident insurance,
including medical and cancer insurance, increased 1.4 percentage points, from 21.0% to22.4%.

■ Ordinary profits and net income (loss)
Sony Assurance's ordinary revenues grew 11.2% year-on-year to ¥61.8 billion in FY2008,
driven by growth in net premiums written on robust sales of new automobile insurance
policies. Despite an increase in premium income, ordinary profit fell 22.7% to ¥2.1 billion
as a result of higher insurance claims paid for natural disasters. The company incurred a
net loss of ¥1.5 billion in FY2008, versus net income of ¥2.1 billion in FY2007, due torecording losses on disposal of fixed assets under extraordinary losses. For the purpose ofenhancing system and operational efficiency, Sony Assurance began developing new
systems in FY2006. However, in FY2008, Sony Assurance decided to suspend thisdevelopment and to overhaul its development policy. Accordingly, some software assetsthat were previously recorded as intangible fixed assets (software in progress) and forwhich future use is uncertain were disposed of, resulting in losses on disposal of fixed
assets of ¥3.7 billion.

60
55
50
45
0
05

06

07

08

09 (year)

52.3

53.6

53.5

55.0

Net loss ratio

51.9

For the years ended March 31

Net Expenses Ratio
(%)
40
30
20
10
0
05

06

07

08

09 (year)

26.3

26.7

26.7

Net expenses ratio

34.6

30.3

55

For the years ended March 31

Underwriting Profits (Losses)(Billions of yen))
4
2
0
-2
-4
05

06

07

09 (year)08

Underwriting profits (losses)(3.0) (1.1)

1.6

2.2

1.6

For the years ended March 31

Ordinary Profits (Losses) and Net Income (Losses)(Billions of yen))
3.0
1.5
0
-1.5
-3.0
05

06

07

Ordinary profits (losses)(2.8) (0.7)(1.9) (0.4)
For the years ended March 31

08

09 (year)

Net income (losses)

2.0
1.5

2.8
2.1
2.1 (1.5)

Analysis of Operating Performance for FY2008 (Non-life insurance business)■ Underwriting profits
Underwriting profits indicate profits generated from underwriting insurance. Underwriting
profits are calculated by subtracting from underwriting income (net premiums written,etc.), any underwriting expenses (net losses paid and loss adjustment expenses, etc.) andoperating, general, and administrative expenses associated with underwriting, thenadding or subtracting other income and expenses (corporate taxes associated withcompulsory automobile liability insurance, etc.). Sony Assurance's underwriting profits
fell 26.9% year-on-year to ¥1.6 billion in FY2008. Despite a rise in net premiums written,
underwriting profits decreased due to a higher net loss ratio and the absence of a ¥0.5
billion boost in FY2007 resulting from a change in how underwriting reserves arecalculated. By type of insurance, voluntary automobile insurance brought in underwriting
profits of ¥1.0 billion, and personal accident insurance, including medical and cancer
insurance, brought in profits of ¥0.3 billion.

(%)

Sony Financial Holdings■ Net expense ratio
The net expense ratio is the ratio of the total cost for marketing and maintaining
insurance to net premiums written. These expenses include company operating costs andnew product development costs. Sony Assurance's net expense ratio was 26.7% in
FY2008, on par with FY2007 thanks to efforts to enhance operating efficiency.
The combined ratio—the sum of the net loss ratio and the net expense ratio—rose 1.4
percentage points, from 80.3% in FY2007 to 81.7% in FY2008.

Net Loss Ratio

Composition of Total Assets
Deferred tax assets 6.1％
Other assets 14.0％

Cash and deposits 3.3％

FY2008¥86.6 billion■ Total assets composition and investment policy
Sony Assurance's total assets grew 10.2% year-on-year to ¥86.6 billion as of March 31,
2009. Of total assets, cash and deposits totaled ¥2.8 billion, accounting for 3.3% of total
assets; securities ¥64.3 billion, accounting for 74.2%; tangible fixed assets ¥0.2 billion,
accounting for 0.3%; intangible fixed assets ¥1.8 billion, accounting for 2.2%; otherassets ¥12.1 billion, accounting for 14.0%; and deferred tax assets ¥5.2 billion,
accounting for 6.1%. Sony Assurance's basic investment policy is to invest in
yen-denominated bonds in order to ensure stable investment returns over the medium tolong term, taking into account the market environment and investment risks.

Tangible fixed
assets 0.3％
Securities 74.2％

Intangible fixed
assets 2.2％
As of March 31, 2009

■ Solvency margin ratio
The solvency margin ratio is an important indicator of the ability of non-life insurers to
pay claims. Sony Assurance's solvency margin ratio was 993.0% as of March 31, 2009,
down 80.9 percentage points from March 31, 2008, but still at a sound level.

Solvency margin ratio
Sony Financial Holdings

(%)
1,500

1,000

500

0
05

56

07

08

09 (year)Solvency margin ratio

1,095.2
Analysis of Operating Performance for FY2008 (Non-life insurance business)

06

976.1 1,009.7 1,073.9

993.0

As of March 31

As of March 31(Millions of yen)

2008
23,977
15,408
36
2
8,553
ー
(23)
ー
ー
ー
ー
ー

2009
24,195
13,85212
310,500
ー
(173)
ー
ー
ー
ー
ー

[B] . . . . . . . . . . . . . . . . . . .

4,465

4,872

R1 . . . . . . . . . . . . . . . . . . . .
R2 . . . . . . . . . . . . . . . . . . . .
R3 . . . . . . . . . . . . . . . . . . . .
R4 . . . . . . . . . . . . . . . . . . . .
R5 . . . . . . . . . . . . . . . . . . . .
R6 . . . . . . . . . . . . . . . . . . . .

3,701
0
6
306
138
611

4,097
0
8
294
150
614

× 100 . . . . . . . . . . . . . . . . . . .

1,073.9%993.0%[A] ..................
Total solvency margin
Capital or treasury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reserve for price fluctuations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Contingency reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Catastrophe reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reserve for possible loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net unrealized gains on other securities (before subtracting tax effects) . . . . . . . . . .
Net unrealized gains on real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Excess refund reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subordinated debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deductible items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total risk

2
2+（R3+R4）+R5 +R6（R1+R2）

Ordinary insurance risk
Third-sector insurance risk
Assumed interest rate risk
Asset management risk
Business management risk
Major catastrophe risk
Solvency margin ratio［A］（［B］× 1 /2 ）Note: The forgoing figures were calculated based on provisions in Articles 86 and 87 of the Insurance Business Law Enforcement Regulations and the Ministry of Finance Announcement
No. 50 (1996). Capital or treasury is derived by subtracting expected outflows, net unrealized valuation and translation gains/losses, and deferred tax assets from total net
assets.

■ Non-performing assets
Sony Assurance's self-assessment indicates its assets are sound, as shown below.
Loans by Borrower Category

Risk-Monitored Loans
As of March 31

Category
Bankrupt loans
Non-accrual delinquent loans
Past-due loans (three months or more)
Restructured loans
Total

2008
−
−
−
−
−

(Millions of yen)

As of March 31

2009

Category

−
−
−
−
−

Bankrupt and quasi-bankrupt loans
Doubtful loans
Sub-standard loans
Normal loans
Total(Millions of yen)

2008
−
−
−
−
−

2009
−
−
−
−
−

Sony Financial Holdings
57
Analysis of Operating Performance for FY2008 (Non-life insurance business)Ordinary Revenues and Ordinary Profit (Loss)(Billions of yen)(Billions of yen)

45

4.5

30

3.0

15

1.5

0

0
-1.5

-15
08

(year)

09

Ordinary revenues

Ordinary profit (loss)

25.9
2.4

33.3
(0.5)

For the years ended March 31

Banking business
SFH's banking business comprises Sony Bank*, a wholly-owned subsidiary, and Sony Bank
Securities, a wholly-owned subsidiary of Sony Bank.
Ordinary revenues in this business grew 28.5% year-on-year to ¥33.3 billion, as a
growing balance of investment assets in line with the bank’ s business expansion mainly
led to an increase in interest income. Ordinary expenses rose 44.0% to ¥33.9 billion as aresult of higher interest expenses, an increase in general and administrative expenses,
mainly system-related expenses, and amortization of goodwill. As a result, the businessposted an ordinary loss of ¥0.5 billion in FY2008, versus ordinary profit of ¥2.4 billion in
FY2007.
* SFH raised its stake in Sony Bank from 88.0% in FY2006 to 100% in March 2008.
** Sony Bank Securities was established in June 2007 and commenced operations in October 2007.

Sony Financial Holdings

Gross Operating Profit

Sony Bank accounts for nearly all of SFH's banking business. A discussion of theoperating performance of Sony Bank (non-consolidated) and Sony Bank Securities follows.

(Billions of yen)
12
9
6
3

58

0

Analysis of Operating Performance for FY2008 (Banking business)

05

06

07

08

(year)

09

Net interest income
Net fees and commissions
Net other operating income

Total

3.7
0.1
1.4
5.3

4.8
0.4
4.1
9.4

4.5
0.5
3.9
9.0

5.1
0.3
5.4
10.9

6.6
0.3
3.9
10.8

For the years ended March 31

General and Administrative Expenses(Billions of yen)
12
9
6
3
0
05

06

07

08

09 (year)

General and administrative expenses

6.9

7.0

For the years ended March 31

7.6

8.1

10.3

■ Gross operating profit
Sony Bank's gross operating profit fell 0.8% year-on-year to ¥10.8 billion in FY2008, due
mainly to a decline in net other operating income. The bank derives gross operating profit
from net interest income, net fees and commissions, and net other operating income.
Sony Bank uses the deposits received from customers primarily to invest in securities
and provide mortgage loans. Net interest income refers to the spread between funding
costs, including interest paid on deposits, and the interest received on securities, loans,and other items. Net interest income jumped 30.2% year-on-year to ¥6.6 billion in
FY2008, due partly to growth in interest and dividends on securities and interest on loans.
Net fees and commissions refers to the spread between the fees and commissions
received from investment trust, foreign exchange, and other operations, and the fees andcommissions paid for ATM usage, foreign exchange, and other operations. Net fees andcommissions fell 21.3% year-on-year to ¥0.3 billion in FY2008, due mainly to lower
brokerage fees and commissions received.
Net other operating income refers to income from operations not included in net
interest income or net fees and commissions. These include gains and losses on foreignexchange transactions; gains and losses on the sale and purchase of bonds, including
government bonds; and gains and losses on swaps and other financial derivatives held
as hedges for securities and other investments. Despite an increase in income fromforeign exchange transactions associated with investment into foreign currency deposits,
net other operating income fell 28.3% year-on-year to ¥3.9 billion in FY2008 as a resultof impairment losses on securities.
■ General and administrative expenses
General and administrative expenses rose 26.6% year-on-year to ¥10.3 billion, due
mainly to higher system-related expenses.

■ Ordinary profit and net income (loss)
Sony Bank's ordinary revenues grew 28.4% year-on-year to ¥33.3 billion, buoyed mainly
by higher interest income derived from a growing balance of investment assets in linewith the bank's business expansion. Ordinary profit dropped 84.9% to ¥0.4 billion, due
primarily to impairment losses on securities prompted by a worsening market
environment. The bank had a net loss of ¥0.7 billion in FY2008, versus net income of ¥4.4
billion in FY2007, due to lower ordinary profit and higher income taxes (deferred).

Ordinary Profit (Loss) and Net Income (Loss)(Billions of yen)
6
4
2
0
-2
05

06

07

Ordinary profit (loss)

(1.6)
(1.6)

2.2
3.2

09 (year)08

Net income (loss)

1.3
1.0

2.7
4.4

0.4
(0.7)

For the years ended March 31

Number of Accounts(Thousand of accounts)
800
600
400
200
0
05

06

09 (year)

07

08

491

610

Sony Financial Holdings■ Number of accounts
Sony Bank continued efforts to acquire new customers in FY2008 while working to expand
its lineups of products and services and raise brand recognition. As a result, the numberof customer accounts increased by 113 thousand year-on-year to 723 thousand as ofMarch 31, 2009.

Number of accounts

367

430

723

As of March 31

Customer Assets(Billions of yen)
2,000
1,500
1,000
500
0
05

06

07

08

09

(year)

Yen deposits
Foreign currency deposits
Investment trusts

387.6 451.0 604.4 892.6 1,044.2
159.1 148.9 147.8 251.7 282.1
29.6 75.1 96.5 102.9 77.2
Total 576.3 675.1 848.8 1,247.3 1,403.6
As of March 31■ Loans
Loans rose 37.5% year-on-year to ¥477.0 billion as of March 31, 2009. Mortgage loans
accounted for 98.2% of overall loans. In addition to mortgage loans, we provide credit
card loans and special-purpose loans.
The balance of mortgage loans rose steadily in FY2008, buoyed by Sony Life providingbanking agency services for Sony Bank, which it started in January 2008. As a result, thebalance of mortgage loans was up 38.2% year-on-year to ¥468.3 billion as of March 31,
2009.

Loans
(Billions of yen)
600
450
300
150
0
05

Mortgage loans

06

07

08

09

(year)

Other

122.7 234.3 278.0 338.8 468.3
3.6
5.0
6.6
8.1
8.7
Total 126.3 239.4 284.7 347.0 477.0
As of March 31

Analysis of Operating Performance for FY2008 (Banking business)■ Customer assets
Customer assets (total of deposits and investment trusts) rose 12.5% year-on-year to¥1,403.6 billion as of March 31, 2009, due mainly to growth in yen deposits. Yen deposits
were up 17.0% at ¥1,044.2 billion, accounting for 74.4% of customer assets; and foreign
currency deposits were up 12.1% at ¥282.1 billion, accounting for 20.1%. As a result,
total deposits grew 15.9% to ¥1,326.3 billion, accounting for 94.5% of customer assets.
Additionally, investment trusts fell 24.9% to ¥77.2 billion, accounting for 5.5% ofcustomer assets. Yen time deposits increased on a boost from offering special bonus
interest rates during the summer of 2008. Foreign currency deposits achieved robust
growth due to the yen's appreciation from autumn 2008. The balance of investment trusts
decreased as nearly all funds lost significant value due to the global stock market
decline.

59Securities (by Ratings)(Billions of yen)
1,000
800
600
400
200
0

Sony Financial Holdings

AAA
Other

05

06

07

AA

A

BBB

08

09 (year)BB

146.6 214.4 157.5 277.2 572.6
17.0 53.6 54.8 69.1 90.2
81.5 121.0 110.1 113.3 134.3
69.3 53.3 32.7 18.2 16.1
0.9
−
−
−
−
6.9 26.0 10.7
7.0
8.8
Total 321.6 449.5 381.2 488.7 823.1

Note: Sony Bank uses the Basel II standardized approach and classifies its securities, based on ratings by five rating agencies:
Moody's Investors Service, Standard & Poor's, Rating and Investment Information, Japan Credit Rating Agency, and Fitch
Ratings.

As of March 31

Composition of Total Assets
Cash and duefrom banks 0.8%
Call loans
3.5%

Monetary claims 1.1%
Other 2.5%

60
Analysis of Operating Performance for FY2008 (Banking business)■ Securities
Sony Bank's securities investments* consist of investments with interest rate risk, mainly
Japanese government bonds, and investments with credit risk, mainly investment grade
corporate bonds. The balance of securities increased ¥334.3 billion year-on-year, or
68.4%, to ¥823.1 billion as of March 31, 2009, due to a shift in investments from callloans to securities. Japanese government bonds were up ¥171.1 billion at ¥288.3 billion;
municipal bonds were up ¥5.3 billion at ¥5.3 billion; corporate bonds were up ¥152.1
billion at ¥303.3 billion; and other securities were up ¥60.6 billion at ¥223.1 billion.
Additionally, securities rated AA or above accounted for 80.5% of the total.
Sony Bank's investment in Sony Bank Securities of ¥3.0 billion (¥1.5 billion in common
stock and ¥1.5 billion in capital surplus) is recorded as Japanese stocks.

■ Total asset composition
Sony Bank's total assets grew 16.6% year-on-year to ¥1,411.9 billion as of March 31,
2009. For main items, securities totaled ¥823.1 billion, accounting for 58.3% of total
assets; loans ¥477.0 billion, accounting for 33.8%; call loans ¥49.9 billion, accounting
for 3.5%; and monetary claims bought ¥16.1 billion, accounting for 1.1%.

FY2008¥1,411.9
billionLoans 33.8%

Securities 58.3%

As of March 31, 2009

Capital Adequacy Ratio (Domestic Criteria)
(%)
20
15
10
5
0
05

06

07

08

09 (year)

Capital Adequacy Ratio (Domestic Criteria)

11.97

9.24 11.49

9.15 13.37■ Capital adequacy ratio
The capital adequacy ratio* is an important measure of a bank's financial soundness.
Sony Bank's non-consolidated capital adequacy ratio (domestic criteria) was 13.37% asof March 31, 2009, up 4.22 percentage points from 9.15% a year earlier. This ratio is well
above the 4.0% required by the Banking Law as a minimum for banks that operate only inJapan. This indicates that Sony Bank maintains a sound financial position. There are twomain reasons for this increase in the capital adequacy ratio: (1) a capital increase of¥12.0 billion through a private placement of shares with SFH in FY2008; and (2) the
exclusion of net unrealized gains on other securities, net of taxes, from the calculation ofcapital adequacy, based on changes in standards according to a Financial Services
Agency notification.

As of March 31

Note: Calculated based on FSA Notification No. 19 (2006), which establishes standards based on Article 14-2 of the Banking
Law for determining the capital adequacy of a bank in light of the assets held by the bank. Sony Bank has applied FSA
Notification No. 79 (2008), which establishes exceptions to the standards based on Article 14-2 of the Banking Law for
determining the capital adequacy of a bank in light of the assets held by the bank, since FY2009. Sony Bank applies
domestic criteria.

Sony Bank non-consolidated capital adequacy ratio (domestic criteria)
As of March 31(Millions of yen)

Category

2008■Capital
TierⅠ(core) capital

37,241−
25,00015,000
6,296
9,055
161
161
−
−
−
37,402−37,402

57,586−31,00021,000
5,586
−
2,211
211
2,000
2,000
−
59,798−59,798［G］ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance sheet items . . . . . . . . . . . . . . . . . . . . . . . .
Off-balance sheet items . . . . . . . . . . . . . . . . . . . . .
Result of dividing operational risk equivalent amount by 8% . . .
....................................
［F］
［G］
/
....................................
［A］
［G］
/

408,710386,395
312
22,0029.15％
9.11％

447,052
422,826
1,395
22,83013.37％
12.88％

Capital adequacy ratio (domestic criteria)
Reference: TierⅠratio (domestic criteria)

Note: Calculated based on FSA Notification No. 19 (2006), which establishes standards based on Article 14-2 of the Banking Law for determining the capital adequacy of a bank in lightof the assets held by the bank. Sony Bank has applied FSA Notification No. 79 (2008), which establishes exceptions to the standards based on Article 14-2 of the Banking Law for
determining the capital adequacy of a bank in light of the assets held by the bank, since FY2008. Sony Bank applies domestic criteria.

Problem Loans Based on the Financial Reconstruction Law

Risk-Monitored Loans
As of March 31

Category
Bankrupt loans
Non-accrual delinquent loans
Past-due loans (three months or more)
Restructured loans
Total

2008

15
227
−
244
487

(Millions of yen)

As of March 31

2009

Category

2008

2009

Bankrupt and quasi-bankrupt loans
Doubtful loans
Sub-standard loans
Normal loans
Total

152
90
244
350,854351,342

154
584
225
485,603
486,568

64
674
−
225
964

(Millions of yen)

■ Sony Bank Securities
Sony Bank Securities opened for business in October 2007 and had a total of 28 thousand accounts as of March 31, 2009,up from 11 thousand accounts a year earlier. Deposited assets totaled ¥10.2 billion as of March 31, 2009, up from ¥3.8
billion a year earlier.

61
Analysis of Operating Performance for FY2008 (Banking business)■ Non-performing assets
Sony Bank strives for small-loan diversification in its lending to individuals, screens potential borrowers based on prescribed
credit screening standards, and manages loans after they have been granted. As a result of these efforts, non-performing loans
remain low in all categories as shown below, and the bank maintains a sound asset structure.

Sony Financial Holdings［A］ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Preferred securities with step-up interest rate provision . . .
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital surplus . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . .
Net unrealized losses on other securities . . . . . . . . . . .
［B］ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General reserve for possible loan losses . . . . . . . . . . .
Subordinated debt . . . . . . . . . . . . . . . . . . . . . . . .
Subordinated term debt and term preferred stock . . .
［C］ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
［D］ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
［E］ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
［F］ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

TierⅡ(supplementary) capital

TierⅢ(sub-supplementary) capital
Capital subtotal［A＋B＋C］
Deductions−［E］
Total capital［D］■Risk-adjusted assets
Risk-adjusted assets

2009SFH Consolidated Financial Statements
SFH's consolidated financial statements—consolidated balance sheets, consolidated statements of income, consolidated
statements of changes in net assets, and consolidated statements of cash flows—were audited by PricewaterhouseCoopers
Aarata in accordance with Article 193-2-1 of the Financial Instruments and Exchange Law.
Documents prepared based on Article 52-28-1 of the Banking Law were audited by PricewaterhouseCoopers Aarata based on
Article 396-1 of the Company Law.

Consolidated Balance Sheets(Millions of yen)
As of March 31,

2008

2009

Sony Financial Holdings

Assets:SFH Consolidated Financial Statements

62

Cash and due from banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

60,05842,794

Call loans and bills bought . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

424,868

95,709Commercial paper and other debt purchased . . . . . . . . . . . . . . . . . . . . .

−16,163

Monetary trusts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

895,672

608,846

Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,930,441

3,703,062

Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

455,763597,542

Tangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

84,451

83,619Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

−33,076

Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

−47,790

Leased assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

−340

Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

−

1,179

Other tangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

−

1,232

Intangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16,412

18,788

Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

−16,710Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

−

2,004

Leased assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

−0

Other intangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

−72

Due from agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

−1

Due from reinsurers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

256

144

Foreign exchanges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,683

6,355

Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

101,229

91,424

Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,937

49,889Reserve for possible loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(327)

(665)

Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,977,450

5,313,677

(Millions of yen)

2008

As of March 31,

2009

Liabilities:
3,680,731

Reserve for outstanding claims . . . . . . . . . . . . . . . . . . . . . . . . . . . .

31,653

34,843

Policy reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,418,006

3,643,348

Reserve for policyholders’ dividends . . . . . . . . . . . . . . . . . . . . . . . . .

4,506

2,539

Due to agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,308

1,216

Due to reinsurers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

926

1,042

Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,143,476

1,325,320

Call money and bills sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10,00010,000Borrowed money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

−

2,000

Foreign exchanges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

0

8

Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

62,53068,086

Reserve for employees' bonuses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,240

2,251

Reserve for employees' retirement benefits . . . . . . . . . . . . . . . . . . . . . . .

11,92013,435Reserve for directors' retirement benefits . . . . . . . . . . . . . . . . . . . . . . . .

252

310

Special reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24,136

3,667

Reserve for price fluctuations . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24,136

3,666

Reserve for financial products transaction liabilities . . . . . . . . . . . . . .

01

Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,156

0

Deferred tax liabilities on land revaluation . . . . . . . . . . . . . . . . . . . . . . .

706

706

Total Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,715,822

5,108,779

Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19,90019,900Capital surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

195,277

195,277

Retained deficits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(26,417)(2,251)

Total shareholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

188,759

212,925

Net unrealized gains (losses) on other securities, net of taxes . . . . . . . . .

74,902(4,853)Net deferred losses on hedging instruments, net of taxes . . . . . . . . . . .

(1,345)(1,449)Land revaluation, net of taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1,475)(1,475)

Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . .

786

(248)

...................

72,868(8,028)

Total Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

261,627

204,897

Total Liabilities and Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,977,450

5,313,677

Net Assets:
Shareholders' equity

Valuation and translation adjustments

Total valuation and translation adjustments

See accompanying notes to the consolidated financial statements.

63
SFH Consolidated Financial Statements

3,454,167

Sony Financial Holdings

Policy reserve and others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated Statements of Income(Millions of yen)

2008

For the years ended March 31,

822,153

860,323

Ordinary Revenues from the Life Insurance Business: . . . . . . . . . . . . . . .

740,596

765,145

Income from insurance premiums . . . . . . . . . . . . . . . . . . . . . . . . . .

648,178

661,676

Insurance premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

646,748660,308

Ceded reinsurance commissions . . . . . . . . . . . . . . . . . . . . . . . . .

1,430

1,368

Investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

87,542

99,064..........................

48,22756,056

Income from monetary trusts, net . . . . . . . . . . . . . . . . . . . . . . . .

14,776−

Income from trading securities, net . . . . . . . . . . . . . . . . . . . . . . .

324

1,084

Gains on sale of securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24,06832,145

Gains on redemption of securities . . . . . . . . . . . . . . . . . . . . . . . .

145

807

Gains on derivatives, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

−

8,937

Other investment income.............................

0

33

Other ordinary income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,875

4,404

Ordinary Revenues from the Non-life Insurance Business: . . . . . . . . . . . .

55,62561,872

Underwriting income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

55,036

61,137

Net premiums written . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

55,001

61,106

Interest and dividends on deposits of premiums . . . . . . . . . . . . . . .

35

31

Investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

572

718

..........................

583

685

Gains on sale of securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24

61

Gains on redemption of securities . . . . . . . . . . . . . . . . . . . . . . . .

−3Transfer to interest and dividends on deposits of premiums . . . . . . .

(35)

(31)

Other ordinary income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16

16

Ordinary Revenues from the Banking Business: . . . . . . . . . . . . . . . . . . .

25,93133,306

Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17,162

22,046

Interest income on loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7,045

9,293

Interest income and dividends on securities . . . . . . . . . . . . . . . . . .

7,320

10,452

Interest income on call loans and bills bought . . . . . . . . . . . . . . . .

2,647

2,021

....................

17

10

Interest income on interest rate swaps . . . . . . . . . . . . . . . . . . . . .

26

10

Other interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

104

258

.................................

1,753

2,106

Other operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7,001

9,035

Gains on foreign exchange transactions, net . . . . . . . . . . . . . . . . .

−

7,938

Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

−

1,096

Other ordinary income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15

118

Sony Financial HoldingsInterest income and dividends

SFH Consolidated Financial Statements

64

2009

Ordinary Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Interest income and dividends

Interest income on deposits with banks

Fees and commissions

(Millions of yen)

2008

For the years ended March 31,

Ordinary Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2009

777,653

826,070...............

702,056

733,544.......................

241,114274,793

Insurance claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

60,056

62,102

Annuity payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,350

7,111

Insurance benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Ordinary Expenses from the Life Insurance Business:
Insurance claims and other payments

141,845

Other payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,054

2,172

Reinsurance premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,350

2,371

Provision for policy reserve and others . . . . . . . . . . . . . . . . . . . . . . .

286,271

219,075

Provision for reserve for outstanding claims . . . . . . . . . . . . . . . . . .

−

1,708

Provision for policy reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

286,257

217,327

Interest portion of reserve for policyholders’ dividends . . . . . . . . . . .

13

39

Investment expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

69,903

133,545

Interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15

42

Losses from monetary trusts, net . . . . . . . . . . . . . . . . . . . . . . . . .

−856............................

1,563

16,157

Devaluation losses on securities . . . . . . . . . . . . . . . . . . . . . . . . .

6,697

31,899Losses on redemption of securities . . . . . . . . . . . . . . . . . . . . . . . .

21

262

.............................

4,858

−

Foreign exchange losses, net . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7

2,382

Provision for reserve for possible loan losses . . . . . . . . . . . . . . . . .

10

134

Depreciation of real estate for rent and others . . . . . . . . . . . . . . . .

3,149

2,932

Other investment expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,263

6,664

Losses on separate accounts, net . . . . . . . . . . . . . . . . . . . . . . . . .

48,31572,212

Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

94,18993,883

Other ordinary expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10,57812,246

Ordinary Expenses from the Non-life Insurance Business: . . . . . . . . . . . . .

52,42059,257

Underwriting expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

38,634

43,829Net losses paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

26,22529,952

Loss adjustment expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,204

3,632

Net commission and brokerage fees . . . . . . . . . . . . . . . . . . . . . . .

586

681

Provision for reserve for outstanding claims . . . . . . . . . . . . . . . . . .

2,010

1,482

Provision for underwriting reserve . . . . . . . . . . . . . . . . . . . . . . . .

6,607

8,079

Other underwriting expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . .

−0Investment expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5177............................

3

143

Devaluation losses on securities . . . . . . . . . . . . . . . . . . . . . . . . .

−29

Losses on redemption of securities . . . . . . . . . . . . . . . . . . . . . . . .

4................

2
13,763

15,242Other ordinary expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16

7

Losses on sale of securities

Losses on derivatives, net

Losses on sale of securities

Operating, general and administrative expenses

65
SFH Consolidated Financial Statements

32,898168,137

Sony Financial Holdings

28,457

Surrender payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consolidated Statements of Income (Continued)(Millions of yen)Sony Financial Holdings

For the years ended March 31,

SFH Consolidated Financial Statements

66

2008

2009

Ordinary Expenses from the Banking Business: . . . . . . . . . . . . . . . . . . . .

23,17533,268Interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12,045

15,394

Interest expenses on deposits . . . . . . . . . . . . . . . . . . . . . . . . . . .

11,37914,501

Interest expenses on call money and bills sold . . . . . . . . . . . . . . . .

133

58

Interest on borrowed money . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

−38

Interest expenses on interest rate swaps . . . . . . . . . . . . . . . . . . . .

532

796

Other interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

00Fees and commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,049

1,225

Other operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,524

5,107

General and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . .

8,411

11,264

Other ordinary expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

144

275

Ordinary Profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

44,50034,253Extraordinary Gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

220,471

Gains on disposal of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

01

Reversal of reserve for price fluctuations . . . . . . . . . . . . . . . . . . . . . .

−20,470

Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1−

Extraordinary Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,820

3,917

Losses on disposal of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .

63

3,879

Impairment losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

125

20

Provision for reserve for price fluctuations . . . . . . . . . . . . . . . . . . . . .

3,228

−

Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

402

16

Provision (Reversal) for Reserve for Policyholders’ Dividends . . . . . . . . . . . . .

3,159

(429)

Income Before Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

37,522

51,238

Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

−20,516- Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,690

14,915- Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,078

5,600

Minority Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

497−

Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24,25530,722

See accompanying notes to the consolidated financial statements.

Consolidated Statements of Changes in Net Assets(Millions of yen)
For the years ended March 31,

2008

2009

Shareholder's Equity
Common stock
Balance at the end of the previous period . . . . . . . . . . . . . . . . . . . . .

5,500

19,900Issuance of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14,400−Total changes during the period . . . . . . . . . . . . . . . . . . . . . . . . . .

14,400−

Balance at the end of the current period . . . . . . . . . . . . . . . . . . . . . .

19,90019,900180,877

195,277

Issuance of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14,400−Total changes during the period . . . . . . . . . . . . . . . . . . . . . . . . . .

14,400−

Balance at the end of the current period . . . . . . . . . . . . . . . . . . . . . .

195,277

195,277(44,173)(26,417)

Changes during the period

Capital surplus
Balance at the end of the previous period . . . . . . . . . . . . . . . . . . . . .
Changes during the period

Balance at the end of the previous period . . . . . . . . . . . . . . . . . . . . .
Changes during the period

67(6,500)(6,525)

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24,25530,722

Decrease resulting from change in scope of application of equity method . .

−

(31)

Total changes during the period . . . . . . . . . . . . . . . . . . . . . . . . . .

17,75524,166

Balance at the end of the current period . . . . . . . . . . . . . . . . . . . . . .

(26,417)(2,251)

142,203

188,759

Issuance of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

28,800−

Dividends from surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6,500)(6,525)

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24,25530,722

Decrease resulting from change in scope of application of equity method . .

−

(31)

Total changes during the period . . . . . . . . . . . . . . . . . . . . . . . . . .

46,55524,166

Balance at the end of the current period . . . . . . . . . . . . . . . . . . . . . .

188,759

212,925

Total shareholder's equity
Changes during the period

SFH Consolidated Financial Statements

Dividends from surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Balance at the end of the previous period . . . . . . . . . . . . . . . . . . . . .

Sony Financial Holdings

Retained deficits

Consolidated Statements of Changes in Net Assets (Continued)(Millions of yen)

2008

For the years ended March 31,

2009

Valuation and Translation Adjustments
Net unrealized gains on other securities, net of taxes.....................

125,043

74,902

Net changes of items other than shareholder's equity . . . . . . . . . . .

(50,140)(79,756)

Total changes during the period . . . . . . . . . . . . . . . . . . . . . . . . . .

(50,140)(79,756)

Balance at the end of the current period . . . . . . . . . . . . . . . . . . . . . .

74,902(4,853)(408)(1,345)...........

(937)

(104)

Total changes during the period . . . . . . . . . . . . . . . . . . . . . . . . . .

(937)

(104)

Balance at the end of the current period . . . . . . . . . . . . . . . . . . . . . .

(1,345)(1,449).....................

(1,475)(1,475)

Total changes during the period . . . . . . . . . . . . . . . . . . . . . . . . . .

−−Balance at the end of the current period . . . . . . . . . . . . . . . . . . . . . .

(1,475)(1,475)390786...........

396(1,035)

Total changes during the period . . . . . . . . . . . . . . . . . . . . . . . . . .

396(1,035)

Balance at the end of the current period . . . . . . . . . . . . . . . . . . . . . .

786

(248)

.....................

123,549

72,868Net changes of items other than shareholder's equity . . . . . . . . . . .

(50,681)(80,896)

Total changes during the period . . . . . . . . . . . . . . . . . . . . . . . . . .

(50,681)(80,896)

Balance at the end of the current period . . . . . . . . . . . . . . . . . . . . . .

72,868(8,028)4,425−

Net changes of items other than shareholder’ s equity . . . . . . . . . . . . .

(4,425)−

Total changes during the period . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4,425)−

Balance at the end of the current period . . . . . . . . . . . . . . . . . . . . . . . .

−−Balance at the end of the previous period
Changes during the period

Net deferred losses on hedging instruments, net of taxes
Balance at the end of the previous period.....................

Sony Financial Holdings

Changes during the period
Net changes of items other than shareholder's equity

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

SFH Consolidated Financial Statements

68

Changes during the period

Foreign currency transaction adjustments
Balance at the end of the previous period . . . . . . . . . . . . . . . . . . . . .
Changes during the period
Net changes of items other than shareholder's equity

Total valuation and translation adjustments
Balance at the end of the previous period
Changes during the period

Minority Interests
Balance at the end of the previous period . . . . . . . . . . . . . . . . . . . . . . .
Changes during the period

(Millions of yen)
For the years ended March 31,

2008

2009

Total Net Assets
270,179

261,627

Issuance of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

28,800−

Dividends from surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6,500)(6,525)

Net income.........................................

24,25530,722

Decrease resulting from change in scope of application of equity method . .

−

(31)

Net changes of items other than shareholder’ s equity . . . . . . . . . . . . .

(55,106)(80,896)

Total changes during the period . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8,551)(56,730)

Balance at the end of the current period . . . . . . . . . . . . . . . . . . . . . . . .

261,627

204,897

Balance at the end of the previous period . . . . . . . . . . . . . . . . . . . . . . .
Changes during the periodSony Financial Holdings

See accompanying notes to the consolidated financial statements.

69
SFH Consolidated Financial Statements

Consolidated Statements of Cash Flows(Millions of yen)

2008

For the years ended March 31,

2009Sony Financial Holdings

Cash flows from operating activities:

SFH Consolidated Financial Statements

70

Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

37,522

51,238Depreciation of real estate for lease . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,149

2,932

Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,363

3,243

Impairment losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

125

20

Amortization of goodwill..................................

−

501

Increase in reserve for outstanding claims . . . . . . . . . . . . . . . . . . . . . .

1,733

3,190

Increase in policy reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

292,865

225,407

Increase in interest portion of reserve for policyholders’ dividends . . . . . . .

13

39

Increase in reserve for policyholders' dividends . . . . . . . . . . . . . . . . . . .

3,159

(429)

Increase (decrease) in reserve for possible loan losses . . . . . . . . . . . . . . .

101

338

Increase (decrease) in reserve for employees' retirement benefits . . . . . . .

(118)

1,936

Increase (decrease) in reserve for directors' retirement benefits . . . . . . . .

1057

Increase (decrease) in reserve for price fluctuations . . . . . . . . . . . . . . . .

3,228(20,470)

Increase in reserve for financial products transaction liabilities . . . . . . . .

−0Interest income and dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(65,973)(78,789)(Gains) losses on securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

31,61587,400Interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12,061

15,437

Exchange losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,902

8,416

Losses on disposal of tangible fixed assets . . . . . . . . . . . . . . . . . . . . . .

54

68

Equity in losses of affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

−173

Net (increase) decrease in loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(62,352)(130,007)

Net increase (decrease) in deposits . . . . . . . . . . . . . . . . . . . . . . . . . . .

390,559

182,175

Net (increase) decrease in call loans and bills bought . . . . . . . . . . . . . . .

(249,509)

302,659

Net (increase) decrease in foreign exchanges (assets) . . . . . . . . . . . . . . .

2,472(4,671)

Net increase (decrease) in foreign exchanges (liabilities) . . . . . . . . . . . . .

0

8

Others, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(575)

22,823

Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

411,410

673,703

Interest and dividends received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

64,65381,813

Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(9,947)(14,567)

Policyholders' dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1,264)(1,577)

Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(19,398)(9,334)

Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . .

445,452

730,038(Millions of yen)

2008

For the years ended March 31,

2009

Cash flows from investing activities:(177,263)(34,758)

Proceeds from sale of monetary trusts . . . . . . . . . . . . . . . . . . . . . . . . . .

−316,794

Purchases of securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1,544,414)(2,288,460)

Proceeds from sale and redemption of securities . . . . . . . . . . . . . . . . . . .

1,152,322

1,285,092

Investments in loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(44,140)(47,351)

Collections of loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

32,673

13,683

Others, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6,364)(2,655)

Total of net cash used in investment transactions . . . . . . . . . . . . . . . . . .

(587,187)(757,656)

Total of net cash used in operating activities and investment transactions . . .

(141,735)(27,618)

Purchases of tangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4,981)(2,413)

Proceeds from sale of tangible fixed assets . . . . . . . . . . . . . . . . . . . . . .

01Purchases of intangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6,361)(9,745)Purchase of securities of a consolidated subsidiary . . . . . . . . . . . . . . . . .

(6,750)−Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . .

(605,280)(769,813)

Cash flows from financing activities:

71

2,000

.............................

28,800−Cash dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6,500)(6,515)

Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

−

(76)

Net cash provided by (used in) financing activities . . . . . . . . . . . . . . . . .

22,300(4,591)

Effect of exchange rate changes on cash and cash equivalents . . . . . . . . . . .

(45)

(184)

Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . .

(137,573)(44,551)

Cash and cash equivalents at beginning of the fiscal year . . . . . . . . . . . . . .

273,760

136,186

Cash and cash equivalents at end of the fiscal year . . . . . . . . . . . . . . . . . .

136,186

91,634

See accompanying notes to the consolidated financial statements.
Note: The above Consolidated Statements of Cash Flows have been prepared based on Article 210-10 of the Insurance Business Law Enforcement Regulations.

SFH Consolidated Financial Statements−

Increase in subordinated borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from issuance of stockSony Financial Holdings

Investments in monetary trusts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Notes to the Consolidated Financial Statements
For the year ended March 31, 2009
1. Basis of Presenting Consolidated Financial Statements
Sony Financial Holdings Inc. (“SFH”) and its domestic subsidiaries maintain their accounting records and prepare their financial
statements in Japanese yen in accordance with the provisions set forth in the Company Law of Japan, the Insurance Business
Law of Japan and the Banking Law of Japan and in conformity with generally accepted accounting principles and practices inJapan, which differ in certain respects from the application and disclosure requirements of generally accepted accounting principles
and practices under the International Financial Reporting Standards. SFH’ s overseas subsidiary, located in the Philippines,
maintains its accounting records and prepares its financial statements in conformity with generally accepted accounting
principles and practices prevailing in the Philippines.

Sony Financial Holdings

2. Principles of Consolidation

SFH Consolidated Financial Statements

72(1) Scope of consolidation
Number of consolidated subsidiaries : 5
Consolidated subsidiaries : Sony Life Insurance Co., Ltd., Sony Life Insurance (Philippines) Corporation, Sony Assurance Inc.,
Sony Bank Inc., Sony Bank Securities Inc.
(2) Application of the equity method
Number of consolidated subsidiaries and affiliates accounted for by the equity method : 1
Consolidated subsidiaries and affiliates accounted for by the equity method : AEGON Sony Life Planning Co., Ltd.
AEGON Sony Life Planning Co., Ltd. has been included in the scope of equity method from this fiscal year because its net
income and retained deficits are not immaterial.
(3) Fiscal year-end of consolidated subsidiaries
The financial statements of Sony Life Insurance (Philippines) Corporation are prepared with a fiscal year-end of December
31. Appropriate adjustments are made for material transactions between December 31 and March 31, the date of theconsolidated financial statements of SFH. All other subsidiaries prepare their respective financial statements as of March
31, the same date as the consolidated financial statements of SFH.
(4) Valuation of assets and liabilities of consolidated subsidiaries
A full portion of the assets and liabilities of the acquired subsidiaries is stated at fair value as of the date of acquisitionof control.
(5) Amortization of goodwill
Goodwill is amortized using the straight-line method over five years.

3. Summary of Significant Accounting Policies(1) Securities
Securities are stated in the following manner: Securities held for trading purposes (“trading securities”) are stated atfair value with unrealized gains and losses charged to income. The cost of such securities sold is determined by themoving-average method. Held-to-maturity securities are stated at amortized cost (straight-line method) using themoving-average method. Available-for-sale securities whose fair value is readily determinable are stated at fair value inthe consolidated balance sheets based on market prices prevailing at each balance sheet date, with unrealized gains(losses), net of income taxes, included in net assets and acquisition costs calculated using the moving-average method.
Available-for-sale securities whose fair value is not readily determinable are stated at amortized cost (straight-line
method) or at acquisition cost based on the moving-average method.
(2) Derivative financial instruments
Derivative financial instruments are stated at fair value, with changes in fair value included in income for the period inwhich they arise, except for derivatives that are designated by SFH and its domestic subsidiaries (the “Companies”) as“hedging instruments”.

(3) Tangible fixed assets (excluding leased assets)
All tangible fixed assets, including real estate for lease, are initially recorded at cost. Subsequent expenses related toasset improvements are capitalized or are recognized as a separate asset, as appropriate, only when it is probable that
future economic benefits associated with the item will flow to the Companies and the cost of the item can be measured
reliably. All other repairs and maintenance charges are charged to income when incurred.
Depreciation is generally computed by the straight-line method for buildings and by the declining-balance method forother tangible fixed assets over the estimated useful lives of the assets, as follows:
2 to 45 years
・Buildings
tangible
fixed
assets
2
to
20
years
・Other(4) Intangible fixed assets (excluding leased assets)
Intangible fixed assets are amortized using the straight-line method. Software for internal use is amortized using thestraight-line method mainly over 5 years, its estimated useful life.

(7) Reserve for employees' bonuses
The reserve for employees' bonuses is provided for the estimated amount of bonuses the Companies are required to pay
for services provided during the current fiscal year.
(8) Reserve for employees' retirement benefits
The reserve for employees' retirement benefits is provided for the payment of retirement benefits to employees, in theamount deemed accrued at the fiscal year-end, based on the projected retirement benefit obligation and the fair value ofplan assets at the fiscal year-end. Unrecognized prior service cost is amortized using the straight-line method over 10
years within the employees' average remaining service period at incurrence. Unrecognized net actuarial gain (loss) isamortized using the straight-line method over 7 to 10 years within the employees' average remaining service period,
commencing from the fiscal year immediately following incurrence. Unrecognized net obligation at transition is amortizedusing the straight-line method over 15 years.
(9) Reserve for directors' retirement benefits
The reserve for directors' and statutory auditors' retirement benefits is provided based on the internal regulations of SFH
and its domestic subsidiaries and calculated at the amount that would be payable if all eligible directors and statutory
auditors were to resign at the fiscal year-end.
(10) Reserve for price fluctuations
Pursuant to requirements under the Insurance Business Law, the reserve for price fluctuations is provided for pricefluctuations primarily related to stocks, bonds and foreign currency-denominated assets which are exposed to losses due
to market price fluctuations. This reserve is only used to reduce deficits arising from price fluctuations on those assets.

73
SFH Consolidated Financial Statements(6) Reserve for possible loan losses
The reserve for possible loan losses is calculated by the Companies in accordance with self-assessment guidelines andwrite-off and reserve guidelines established at each subsidiary. With respect to loans to borrowers subject to bankruptcy,
court-guided rehabilitation or similar legal or formal proceedings, the Companies provide a specific reserve in the amountof the loan balance less amounts collectable from collateral, guarantees and other means. For other loans, the Companies
provide a general reserve by applying the historical loan loss ratio determined over certain periods. Each loan is subject
to asset assessment by the operational department of the relevant company in accordance with its self-assessment
guidelines, and the results of the assessment are reviewed by the respective internal audit departments, which are
independent from the operational departments, before the amount of reserve is finalized.

Sony Financial Holdings(5) Leased assets
All leased assets with respect to non-ownership-transfer finance leases are amortized by the straight-line method overthe lease term, without any residual value.

Sony Financial Holdings(11) Translation of foreign currencies
Assets and liabilities denominated in foreign currencies are translated into Japanese yen at the foreign exchange rates in
effect at each balance sheet date, whereas components of net assets denominated in foreign currencies are translated athistorical rates. The current year's profit and loss accounts are translated into yen using the average exchange rate for the
fiscal year.

SFH Consolidated Financial Statements

74(12) Hedge accounting
SFH's banking subsidiary applies either deferred hedge accounting or fair value hedge accounting to account fortransactions it enters into to hedge interest rate risks on financial assets. SFH's banking subsidiary uses interest rate
swaps to offset fluctuations in interest rates on fixed-rate loans by identifying the hedged items that are grouped basedon their maturity, in accordance with “Accounting and Auditing Treatments on Application of Accounting Standard for
Financial Instruments in the Banking Industry” (Industry Audit Committee of Japanese Institute of Certified Public
Accountants No. 24). Interest rate swaps and others are used as hedging instruments to offset fluctuations in the fairvalue of fixed-rate bonds which are classified as other securities. Both of the above-mentioned hedging instruments
are identified so that their significant terms are nearly identical to those of the hedged items. Accordingly, such hedges
are considered as highly effective, resulting in a substitution for evaluating the effectiveness of the hedging
transactions.
(13) Accounting for consumption taxes
The consumption taxes received and paid by SFH and its domestic subsidiaries, excluding loss adjustment expenses
and operating, general and administrative expenses of SFH's non-life insurance subsidiary, are not included in income
and expenses. Under the Consumption Tax Law of Japan, the consumption taxes paid on property and equipment are notdeductible from the consumption taxes received; they are recorded as “other assets” and amortized on a straight-line
basis over 5 years. Other non-deductible consumption taxes are charged to income as incurred.
(14) Policy reserve
Pursuant to the Insurance Business Law, SFH's domestic life insurance subsidiary maintains a policy reserve for thefulfillment of future obligations under life insurance contracts. The policy reserve is established by the net level
premium method, which assumes a constant or level amount of net insurance premiums over the term of the relevant
policy in calculating the amount of the reserve required to fund all future policy benefits. The net insurance premium isa portion of the premium covering insurance underwriting risk, which is estimated based on factors such as mortality
rates, investment yield, surrender rates and other factors. The net level premium reserve for individual insurance
contracts underwritten from FY1996 is calculated using mortality and interest rates set by the Financial Services
Agency as standard policy reserve. Additionally, the net level premium reserve for individual insurance contracts
underwritten before FY1996 is calculated using mortality and interest rates approved by the supervisor of insurance
business in Japan.
(15) Cash and cash equivalents
Cash equivalents consist of highly liquid investments without significant market risks, such as demand deposits andshort-term investments with an original maturity of three months or less.
(16) Changes in accounting policies, procedures and presentation rules
・Reclassification of debt securities
As the Practical Issue Task Force No.26 “Tentative Solution on Reclassification of Debt Securities” (December 5, 2008)
is applicable from a date of its publication until March 31, 2010, a domestic life insurance subsidiary has adopted
this practical solution. A part of its “Securities” was reclassified from “available-for-sale securities” to“held-to-maturity securities”. The adoption of the practical solution resulted in an increase of ¥163 million in“Securities,” a decrease of ¥59 million in “Deferred tax assets,” and an increase of ¥104 million in “Net unrealized
gains (losses) on other securities, net of taxes” as of March 31, 2009.
・Lease transactions
Finance leases that do not transfer ownership of the leased assets to the lessee used to be accounted for as operatingleases. As the Accounting Standard Board of Japan (“ASBJ”) Statement No.13 “Accounting Standard for Lease
Transactions” (March 30, 2007) and ASBJ Guidance No.16 “Guidance for Accounting Standard for Lease Transactions”

(March 30, 2007) became effective for fiscal years beginning after April 1, 2008, SFH has applied them starting fromthe fiscal year ended March 31, 2009. The impact of this change to SFH's consolidated ordinary profit and net income
before taxes is not material.

・Reversal of contingency reserve
Pursuant to provisions of the Insurance Business Law, a domestic life insurance subsidiary reversed its contingency
reserve of ¥19,000 million to compensate for the loss incurred due to the negative spread for the year ended March 31, 2009.
・Reversal of reserve for price fluctuations
Pursuant to provisions of the Insurance Business Law, a domestic life insurance subsidiary reversed its reserve forprice fluctuations of ¥21,207 million to compensate for the loss incurred due to trading or devaluation of the equity
investment and the fluctuation of foreign exchange for the year ended March 31, 2009.

75
SFH Consolidated Financial Statements(18) Additional information
・Evaluation of securities
Floating-rate Japanese government bonds that are included in “securities” were previously evaluated based on theirfair market values. As the Practical Issue Task Force No. 25 “Practical Solution on Measurement of Fair Value of
Financial Assets” (October 28, 2008) was published, a domestic banking subsidiary examined its accounting
treatment of the floating-rate Japanese government bonds it held and determined that the fair market values could
not be deemed fair values. Therefore, SFH evaluated the floating-rate Japanese government bonds based onreasonably estimated amounts starting in the year ended March 31, 2009. This change resulted in an increase of¥2,891 million in “Securities” a decrease of ¥240 million in “Deferred tax assets” and an increase of ¥2,650 million in“Net unrealized gains (losses) on othersecurities, net of taxes.” Reasonably estimated amounts were calculated as of March 31, 2009, using the Constant
Maturity Treasury (“CMT”) model. The interest rate used in the CMT model as a primary parameter is the forward rateof Japanese government bonds. The discount rate used in the model is the rate of the yield curve of Japanese government
bonds based on the consideration of a certain liquidity risk.

Sony Financial Holdings(17) Changes in presentation
・Consolidated balance sheets
In response to revision of the Insurance Business Law Enforcement Regulations (Ministry of Finance Ordinance No.5,
1996), the following changes in presentation were required from the fiscal year ended March 31, 2009.
(a) Tangible fixed assets include the subcategories of land, buildings, leased assets, construction in progress, andother tangible fixed assets. As of March 31, 2008, land totaled ¥32,996 million, buildings ¥50,068 million,
construction in progress ¥84 million, and other tangible fixed assets ¥1,302 million, respectively.
(b) Intangible fixed assets include the subcategories of software, goodwill, lease assets, and other intangible
fixed assets. As of March 31, 2008, software totaled ¥13,817 million, goodwill ¥2,505 million, and otherintangible fixed assets ¥89 million, respectively.
・Consolidated statements of income
Other operating income includes the subcategory of “Gains on foreign exchange transactions, net” due to anincrease in its significance. As of March 31, 2008, “Gains on foreign exchange transactions, net” included in otheroperating income totaled ¥5,773 million.

4. Notes to the Consolidated Balance Sheets

Sony Financial Holdings(1) The balance of loans includes ¥64 million in loans to debtors in bankruptcy (before deductions for reserve for possible
loan losses) ¥674 million in “non-accrual delinquent loans” (before deductions for reserve for possible loan losses). Loans to
debtors in bankruptcy include debtors that have been in arrears on principal or interest payments for a considerably
long period of time or loans (before deductions for reserve for possible loan losses) on which principal or interest
payments are considered unlikely to occur in the future for other reasons and on which interest income is not recognized.
These loans with reasons defined under Article 96-1-3, i through iv of the Corporate Income Tax Law Enforcement
Guidelines (Enforcement Order 97 of 1965), or 96-1-3 or Item 4 of the same guidelines.
“Non-accrual delinquent loans” are loans on which accrued interest income is not recognized, excluding “bankrupt
loans” and loans on which interest payments are deferred in order to support the borrowers' recovery from financial
difficulties.

SFH Consolidated Financial Statements

76(2) The balance of loans includes ¥225 million in “restructured loans” (before deductions for reserve for possible loan losses).
“Restructured loans” are loans on which terms and conditions have been amended in favor of the borrowers (e.g.,
reduction of the original interest rate, deferral of interest payments, extension of principal repayments or debt
forgiveness) in order to support the borrowers' recovery from financial difficulties, excluding “bankrupt loans”,“non-accrual delinquent loans” and “past due loans (three months or more)”.
(3) On March 31, 2002, SFH's domestic life insurance subsidiary revalued its land for operating purposes, as permitted
by the Land Revaluation Law (Law No. 34, enacted March 31, 1998—the “Law”). The tax effect of the revaluationdifference is accounted for differently, depending on whether there are gains or losses; when there is a loss, avaluation allowance is fully provided for the tax effect of the loss, and when there is a gain, the tax effect is recordedin “deferred tax liabilities on land revaluation”. After excluding these amounts, the net revaluation difference isreported as “land revaluation” in net assets. The revaluation method stipulated by Article 3-3 of the Law was basedon the land appraisal in conformity with Article 2-5 of the Law Enforcement Order related to the Law (Government
Ordinance No. 119, effective from March 31, 1998).
(4) Accumulated depreciation of tangible fixed assets as of March 31, 2009 was ¥14,176 million.
(5) The balance sheet includes ¥275,160 million of assets and liabilities in equal amounts related to separate accounts
as of March 31, 2009, as stipulated in Article 118 of the Insurance Business Law.
(6) Securities include shares in affiliated companies worth ¥2,795 million. These shares are all investments in jointly
controlled companies.
(7) Changes in the reserve for policyholders' dividends at SFH's domestic life insurance subsidiary for the fiscal year
ended March 31, 2009, are as follows:
Balance at beginning of the fiscal year:¥4,506 million
Policyholders' dividends during the fiscal year:¥1,577 million
Increase in interest:¥39 million
Reversal for reserve for policyholders' dividends:¥429 million
Balance at end of the fiscal year:¥2,539 million(8) Securities with a book value of ¥10,266 million were pledged as collateral for ¥10,000 million of call money and bills
sold at March 31, 2009. In addition to the assets described above, securities with a book value of ¥92,602 million
were pledged as collateral for cash settlements, variation margins of futures markets and certain other purposes at March
31, 2009.
(9) Net assets per share amounted to ¥94,205.75.

(10) The following provides fair value information on securities as of March 31, 2009:■ Trading securities:(Millions of yen)

Consolidated balance sheet amount

Valuation gains/losses charged to income
260,401(73,616)■ Held-to-maturity securities with fair values:(Millions of yen)

Consolidated balance
sheet amount

Fair value

Net unrealized
gains/losses

1,423,075

1,450,943

27,867

Unrealized gains
30,004

Unrealized losses

Bonds
Japanese government
and municipal bonds
Japanese corporate bonds
Others1,412,868

1,440,643

27,77429,884

2,109

10,20642,524

10,29942,372

92
(151)

120
15

27
167

Total

1,465,599

1,493,315

27,71530,020

2,304

2,137

(Millions of yen)

Total

Consolidated balance
sheet amountNet unrealized
gains/losses

Unrealized gains

Unrealized losses

1,602,956

1,618,569

15,61337,022

21,4081,057,037

1,084,890

27,85331,493

3,640(12,239)
1,897(17,315)
196

5,528
4,115
790
41,92817,7672,217
18,10541,732545,918
46,072315,998
1,965,026

533,679
47,970298,683
1,965,222

Note: Impairment losses amounting to ¥34,402 million were recognized for "other securities" with market value for the year ended March 31, 2009.
Impairment losses are principally recorded when their fair value as of the end of the fiscal year has declined by 30% or more from the book value.

■ Other securities sold during the period:(Millions of yen)

Sales

Gains on sales¥861,922

Losses on sales
32,456■ Securities that are not marked to market:(Millions of yen)

Investment in affiliates
Available-for-sale securities
Equity securities
Others
Total

Consolidated balance sheet amount
2,795
25,206
4
25,201
28,002

Note: Impairment losses of ¥399 million were recorded for "other securities" that are not marked to market for the year ended March 31, 2009. 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 price.

18,02477
SFH Consolidated Financial Statements

Bonds
Japanese government
and municipal bonds
Japanese corporate bonds
Equity securities
OthersAcquisition costSony Financial Holdings■ Other securities with fair values:■ Reclassification of debt securities:
As the Practical Issue Task Force No. 26 “Tentative Solution on Reclassification of Debt Securities” (December 5, 2008) isapplicable from the date of its publication until March 31, 2010, a part of “securities” was reclassified from “other securities” to“held-to-maturity securities”. This reclassification is the result of recent drastic changes in the market environment that haveseverely affected the liquidity of these securities and made them difficult to sell at appropriate prices.
(Millions of yen)

Securities
Market value as of December 17, 2008:
Market value as of March 31, 2009:
Consolidated balance sheet amount as of March 31, 2009:
Net unrealized gains (losses) on other securities, net of taxes as of March 31, 2009:

Bonds linked to the Nikkei 225 stock index
41,266
41,262
41,426(8,658)■ The future redemption schedule of other securities with maturities and held-to-maturity securities:(Millions of yen)Sony Financial Holdings

1 year or less

78

Bonds
Japanese government
and municipal bonds
Japanese corporate bonds
Others
Total

More than 1 year to 5 years More than 5 years to 10 years

Over 10 years

178,921565,455

603,313

1,693,954

69,732

195,995

555,740

1,676,290

109,188
75,150254,071369,460
203,977
769,432

47,57325,851
629,165

17,663
43,622
1,737,577(11) The fair value information on monetary trusts as of March 31, 2009, is as follows:

SFH Consolidated Financial Statements■ Monetary trusts for trading purposes:(Millions of yen)

Consolidated balance sheet amount

Valuation gains/losses charged to income
32,020(4,413)■ Other monetary trusts:(Millions of yen)

Acquisition cost
Other monetary trusts

568,520

Consolidatedbalance sheet amount
576,826

Net unrealized
gains/losses
8,306

Unrealized gains
17,478

Unrealized losses
9,172

Note: 1. Amounts of jointly invested monetary trusts that are included in the table above for the years ended March 31, 2009 are ¥271 million.
2. Impairment losses amounting to ¥12,605 million were recognized for "Other monetary trusts" with market value for the year ended March 31, 2009. Impairment losses areaccounted for principally if market value of each security decreases equal to or more than 30% of its book value at the end of the period.

(12) Derivative financial instruments
The Companies utilize various types of derivative financial instruments, including interest rate-related transactions(such as interest rate futures and interest rate swaps), currency-related transactions (such as currency swaps, foreignexchanges contracts and currency options), equity-related transactions (such as equity price index options, individual
equity options and equity price index futures), bond-related transactions (such as futures and options), credit derivatives, etc.
The Companies use various derivative financial instruments primarily for hedging purposes to perform the integrated
controls of assets and liabilities. Certain derivative transactions can be executed for trading purposes within a certain
limit in accordance with the respective internal risk management policies set at a company level.
Those derivative transactions, as well as on-balance sheet assets, consist mainly of market risks, credit risks andmarket liquidity risks. Market risks are the risks of losses due to changes in the value of derivative transactions as aresult of unfavorable market fluctuations in interest rates, securities prices, foreign exchange rates and other factors.
Credit risks are the risks of losses due to a decline in the value of derivative transactions as a result of deterioration in
the financial position of individual obligors, issuers of the debt obligations we hold, or counterparties to the derivatives
and other contracts we have entered into. Market liquidity risks are the risks of losses 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 risks oflosses if we are forced to complete transactions under unfavorable market conditions, in each case due to market turmoil
or other factors.
SFH formulates fundamental principles for risk management activities at the holding company level and the respective
operating subsidiaries establish risk management structures and carry out the risk management activities, based on thefundamental principles. The respective risk management departments of the Companies periodically evaluate, monitor
and measure risks related to derivative financial instruments, and submit periodic report on those conditions to our
Board of Directors and Executive Committee of SFH and each subsidiary. The Board of Directors and Executive Committee
then approve the fundamental principles and appropriate limits applied to risk management activities. In addition, as a
subcommittee of the Board of Directors and Executive Committee, SFH holds Risk Management Meeting, and othercommittees such as Investment Committee, Risk Management Committee, Assets Management Meeting and ALM Committee,etc., each subsidiary implements appropriate risk management frameworks. The risk management structure includes
separate front, middle and back office divisions to deal with derivative transactions. Accordingly, inception and executionof derivative transactions and risks, positions and gains and losses related to derivative financial instruments arestrictly monitored.

[ i ] Interest rate derivatives:(Millions of yen)

Notional amount
Total
Over 1 year79

151,640−

169,864−

Valuation gains/losses(4,738)(4,738)(4,738)(4,738)

Note: 1. The above transactions are valuated at the market value, and the valuation gains (losses) are recorded in the consolidated statements of income. Derivativetransactions which hedge accounting is applied are not included in the amounts above.
2. Market value of transactions listed on exchange is calculated mainly using the closing prices on the Tokyo International Financial Futures Exchange and others. Market
value of over-the-counter transactions is calculated mainly using discounted present value and others.

[ ii ] Currency derivatives:(Millions of yen)

Notional amountOver 1 year
Total
Over-the-counter transactions:
Currency swaps
Forward foreign exchanges:
Sold
BoughtForeign Exchange Margin Transactions:
Sold
BoughtCurrency options:
Sold
Total

Valuation gains/losses

Fair value

1,791

−

(11)

(11)

115,880
268,513−−(1,053)
4,716(1,053)
4,716

15,66814,009

−
−

451
393

451
393

404
−

−
−

(13)
4,482

(5)
4,490

Note: 1. The above transactions are valuated at the market value, and the valuation gains (losses) are recorded in the consolidated statements of income. Derivativetransactions which hedge accounting is applied are not included in the amounts above.
2. Market value is calculated mainly using discounted present value and others.
3. Figures include discounted forward forex contracts.

SFH Consolidated Financial Statements

Over-the-counter transactions:Interest rate swaps
Total

Fair value

Sony Financial Holdings

The following tables show a summary of the notional amounts and current market or fair values of derivative financial
instruments held as of March 31, 2009. Notional amounts do not represent exposure to credit loss.

[ iii ] Credit derivatives transactions:(Millions of yen)

Total
Over-the-counter transactions:Credit default options
Sold
BoughtTotal

Notional amountOver 1 year

981
10,837−

Fair value

981
9,837
−

Valuation gains/losses

(223)
1,135
912

(223)
1,135
912

Note: 1. The above transactions are valuated at the market value, and the valuation gains (losses) are recorded in the consolidated statements of income.
2. Market value is calculated mainly using discounted present value.
3. "Bought" refers to underwriting involving credit risk, "Sold" refers to deliveries involving credit risk.

Sony Financial Holdings(13) Retirement benefit obligations and its supplemental information as of March 31, 2009 were as follows.

SFH Consolidated Financial Statements80[ i ] Overview of retirement benefit plans
The domestic life insurance subsidiary provides a lump-sum retirement benefit plan to sales staff and a defined benefit
corporate pension plan and defined contribution pension plan to internal office staff. The non-life insurance subsidiary
provides a lump-sum retirement benefit plan and a defined contribution pension plan (introduced in May 2008). SFH
and its banking subsidiary mainly provide a lump-sum retirement benefit plan.
[ ii ] Retirement benefit obligations(Millions of yen)

(23,504)
4,538(18,965)
2,486
5,065
(774)
(12,189)
1,246(13,435)

Retirement benefit obligations
Plan assets
Unfunded retirement benefit obligations
Unrecognized net obligation at transition
Unrecognized net actuarial gain
Unrecognized prior service cost
Net retirement benefit obligations
Prepaid pension costs
Reserve for employees' retirement benefits

Note: SFH and certain consolidated subsidiaries calculate retirement benefit obligations based on the simplified method.

[ iii ] Retirement benefit costs(Millions of yen)

2,059
279
(141)
414
132
(129)
237
2,852

Service cost
Interest cost
Expected return on plan assets
Amortization of net obligation at transition
Amortization of net actuarial gain
Amortization of prior service cost
Other
Retirement benefit expenses

Note: 1. SFH and certain consolidated subsidiaries include the retirement benefit expenses in the service costs based on the simplified method.
2. Other includes defined contribution pension plan payments.

[ iv ] Basis for calculating retirement benefit obligations
Method of allocating projected retirement benefits
Discount rate
Expected return on plan assets
Prior service cost amortization period
Net actuarial gain amortization period
Net obligation at transition amortization period

Straight-line or point method
1.3%–1.4%
3.3%
10 years
7–10 years
15 years

(14) Commitments to provide credit line contracts on overdrafts of the banking subsidiary and loans are agreements to lend
to customers, up to a prescribed amount, as long as there is no violation of any condition established in the contracts.
The amount of unused commitments at March 31, 2009 was ¥11,557 million and the amount of unused commitments
whose original contract terms are within one year at March 31, 2009 was ¥11,557 million.
(15) Borrowed money includes subordinated borrowings of ¥2,000 million subject to a special contract that subordinates thefulfillment of this obligation to other obligations.
(16) Expected future losses of the domestic life insurance subsidiary under the life insurance policyholder protection structure
stipulated under Article 259 of the Insurance Business Law amounted to ¥7,482 million. Such losses are recognized as
expenses during the fiscal year in which they are defined.

5. Notes to the Consolidated Statements of Income

6. Notes to the Consolidated Statement of Changes in Net Assets(1) Types and numbers of shares issued are as follows:

Sony Financial Holdings

Net income per share is calculated based on the weighted-average number of shares of common stock outstanding during theperiod. For the year ended March 31, 2009, net income per share was ¥14,125.14. There were no potential dilutive securities.
The basis for this calculation for the year ended March 31, 2009 is net income of ¥30,722 million, the entire amount of which
is applicable to common stocks. The weighted-average number of shares outstanding for the year ended March 31, 2009 was
2,175,000 shares.

(Thousands of shares)

Numbers of shares
Numbers of shares
increased during the period decreased during the period

Numbers of shares

2,175
2,175

−
−

−
−

2,175
2,175

−
−

−

−
−

−
−

−

(2) Information on dividends is as follows:a. Dividends paid
Date of resolution

Type of shares

Aggregate amountof dividends

Cash dividends
per share

Record date

Effective dateOrdinary General Meeting of
Shareholders held on June 26, 2008

Common stock¥6,525 million¥3,000March 31, 2008

June 27, 2008

b. Dividends to be paid in the next fiscal year
Type of shares

Source ofdividends

Aggregate amount Cash dividendsof dividends
per share

Ordinary General
Meeting of Shareholders Common stock
held on June 23, 2009

Retainedearnings¥6,525 million

Date of resolution¥3,000Record date

Effective date

March 31, 2009

June 24, 200981
SFH Consolidated Financial Statements

Issued shares
Common stock
Total
Treasury stock
Common stock
Total

Number of shares as ofMarch 31, 2009

7. Notes to the Consolidated Statements of Cash Flows(1) The reconciliation of cash and cash equivalents in the statements of cash flows to cash and cash deposits as stated in
the consolidated balance sheets as of March 31, 2009, is as follows:(Millions of yen)

Cash and due from banks
Call loans of domestic life insurance subsidiary
Securities of the non-life insurance subsidiary maturing
within three months of the acquisition dateCash and cash equivalents

42,79445,8003,040
91,634

Sony Financial Holdings(2) Cash flows from investing activities include cash flows from lending operations of the insurance business.

SFH Consolidated Financial Statements

82

Capital Adequacy Status
Qualitative Disclosure(3) Overview of Method for Assessing the Holding Company Group's Capital Adequacy Based on the Consolidated Capital
Adequacy Ratio Public Announcement
Our capital adequacy ratio was 13.32% (TierⅠratio: 46.63%) at the end of March 2009, as calculated based on theConsolidated Capital Adequacy Ratio Public Announcement. This ratio is well above the domestic criteria of 4%, indicatingthat our business is sufficiently sound and secure. In calculating our consolidated capital adequacy ratio, we use thestandard method to calculate credit risk and the basic method to calculate operational risk.
At Sony Bank, a core operating company of the Holding Company Group based on the Consolidated Capital Adequacy
Ratio Public Announcement, in addition to management and assessment based on the capital adequacy ratio, we conduct
management through capital allocation to ensure sufficient soundness while balancing risk and return. To perform thiscapital allocation, we prepared Risk Management Guidelines to serve as one method of risk management for the SonyFinancial Holdings Group. We perform capital allocation by measuring various risks, including credit risk, market risk, andoperational risk, using methods appropriate to risk characteristics, and then allocating capital within the scope of SonyBank's business capacity (capital). We monitor Sony Bank's methods of capital allocation, levels of allocated capital, andlevels of actual capital used of the allocated capital, based on the Risk Management Guidelines. Through these efforts, weseek from a comprehensive standpoint to ensure the adequacy of non-consolidated capital at Sony Bank and consolidated
capital for the Holding Company Group.
To replenish capital in the future, we intend to increase capital through the profits earned by pursuing operations
based on the business plans prepared each fiscal year by Sony Financial Holdings, and group companies including Sony

83
Capital Adequacy Status(2) Overview of Capital Raising Methods
We raise all TierⅠcapital through the issuance of common stock. Shareholders comprise Sony Corporation with a 60.0%
equity stake and other shareholders with a 40.0% equity stake. We also raise TierⅡcapital through subordinated term debt.

Sony Financial Holdings(1) Scope of Consolidation
The group of companies used in calculating Sony Financial Holdings’ consolidated capital adequacy ratio (hereinafter,“Holding Company Group”) is determined based on the “Standards based on Article 52-25 of the Banking Law of Japan for
determining the capital adequacy of the bank holding company in light of the assets held by the bank holding company andits subsidiary (Financial Services Agency Public Announcement No. 20 published on March 27, 2006, hereinafter,“Consolidated Capital Adequacy Ratio Public Announcement”)”. This Holding Company Group includes Sony Bank and Sony
Bank Securities as consolidated subsidiaries, but does not include in consolidation the three insurance subsidiaries of Sony
Life Insurance, Sony Life Insurance (Philippines), and Sony Assurance. The three insurance subsidiaries are subject tocapital deductions listed in Article 20, Paragraph 1, Item 2 (c) (insurance subsidiaries, etc.) of the Consolidated Capital
Adequacy Ratio Public Announcement. However, the five companies of Sony Life Insurance, Sony Life Insurance(Philippines), Sony Assurance, Sony Bank, and Sony Bank Securities are included in consolidation based on regulations forpurpose of consolidated financial statements.
For details on the operations of Sony Life Insurance, Sony Life Insurance (Philippines), Sony Assurance, Sony Bank, and Sony
Bank Securities, please refer to pages 30 to 44 of this report.
We do not have any affiliated companies engaged in financial services subject to Article 21 of the Consolidated Capital
Adequacy Ratio Public Announcement; companies subject to deductions listed in Article 20, Paragraph 1, Item 2 (a) and (b)of the Consolidated Capital Adequacy Ratio Public Announcement; or companies listed in Article 52-23, Paragraph 1, Item
10 the Banking Law of Japan that engage mainly in services listed in Item 10 (a) or companies listed in Item 11 that do notbelong to the Holding Company Group.
As noted above, the Holding Company Group based on the Consolidated Capital Adequacy Ratio Public Announcement
comprises Sony Financial Holdings, Sony Bank, and Sony Bank Securities. We do not have any particular restrictions related
to the movement of funds and capital between Sony Financial Holdings and Sony Bank or Sony Bank Securities, but we do nothave any fund transactions between the three companies. We also give sufficient attention to the soundness of subsidiarySony Bank and work to maintain required capital.

Bank. Additionally, in response to increased risk from expanding our operations, we intend to augment capital as needed
through capital increases at Sony Financial Holdings and Sony Bank.

Sony Financial Holdings

The consolidated risk assets of Sony Financial Holdings and Sony Bank, which belong to the Holding Company Group
based on the Consolidated Capital Adequacy Ratio Public Announcement, are subject the various risks outlined below.
This discussion focuses mainly on the risk assets of Sony Bank because risk assets account for a small percentage ofthe non-consolidated assets owned by Sony Financial Holdings, which is a bank holding company, and because SonyFinancial Holdings, aside from owning stock in its subsidiaries, does not engage in marketable securities investments,
loans, or financial derivative product transactions.
Sony Financial Holdings, as a bank holding company, conducts general monitoring of the risk management
approach of Sony Bank as explained below, and pursues risk management for the overall Sony Financial HoldingsGroup by setting Risk Management Guidelines and holding risk management meetings. For information about theoverall risk management approach of the Sony Financial Holdings Group, please refer to the Risk Management section
on page 15 and 16 of this report.

Capital Adequacy Status

84(4) Credit Risk(a) Overview of Risk Management Policies and Procedures(i) Individual Credit Risk
Individual credit risk refers to the risk of incurring losses from a decrease or disappearance in the value ofcredit-related assets due to deterioration in the credit standing of individual debtors. At Sony Bank, the department
responsible for individual credit risk prepares policies related to risk measurement, monitoring, and management.
The Board of Directors prepares basic policies on individual credit risk management and an appropriate credit risk
management structure based on a recognition of the existence and characteristics of individual credit risk as well themethods for measuring and managing this risk.
Individual credit risk involves the management of mortgage loans, special-purpose loans, card loans, and othercustomer transactions for which the management of individual credit risk is deemed necessary. These loans arescreened by the responsible departments based on screening criteria administered by the individual credit risk
department. The individual credit risk department also monitors the default status of granted loans on a daily basis
and periodically reports on the results of this monitoring to the Board of Directors.
We also record reserve for possible loan losses as described below based on amortization and reserve criteria
determined in advance. We divide normal loans and potential problem loans into specific categories and provide
reserves based on a loan loss ratio derived from historical loan losses in each category in certain periods. For loans toborrowers at risk of bankruptcy, we subtract the amount we expect to recover through collateral disposal andguarantees, and based on the remaining balance, we provide reserves at an amount deemed necessary. For loans toeffectively bankrupt borrowers, we subtract the amount we expect to recover through collateral disposal andguarantees, and provide reserves for the remaining balance. An asset assessment department conducts asset
assessments for all loans based on asset self-assessment standards and with the cooperation of related
departments, and we provide reserves based on the assessment results.
(ii) Market Credit Risk
Market credit risk refers to the risk of incurring losses from changes in the market value of securities due to changes
in the credit standing of the issuer of owned securities, and the risk of incurring losses from the non-fulfillment ofcontracts due to changes in the financial standing of contract counterparties in market transactions. At Sony Bank,
the department responsible for market credit risk prepares policies related to risk measurement, monitoring, andmanagement. The Board of Directors prepares basic policies on market credit risk management and an appropriate
credit risk management structure based on a recognition of the existence and characteristics of market credit risk aswell the methods for measuring and managing this risk.
Market credit risk involves the management of risk arising from marketable securities transactions, yen andforeign currency monetary transactions, foreign exchange transactions, financial derivative product transactions, andother market transactions for which risk management is deemed necessary. We manage market credit risk by firstestablishing capital-at-risk ceiling and other credit limits based in principle on ratings by external rating
institutions, various guidelines, and credit monitoring stages, and by then monitoring and reporting on compliancewith established limits and guidelines, and reporting to management if limits are exceeded and considering
necessary responses. We also periodically report on the status of risk management to the Board of Directors.
We classify owned marketable securities according to self-assessment standards and classification methods
established by Sony Bank and manage any problem assets.
(b) Eligible Rating Agencies Used to Determine Risk Weights
Sony Financial Holdings and Sony Bank use the five eligible rating institutions listed below to determine risk weights. We
do not use different eligible rating institutions for different types of exposure.
The five eligible rating agencies are Rating and Investment Information, Inc., Japan Credit Rating Agency, Ltd.,
Moody's Investors Service, Inc., Standard & Poor's Corp. and Fitch Ratings, Ltd.

We use certain credit derivatives as a means of reducing credit risk on securities. In using credit derivatives, we establish
transaction limits based on the rating of the protection provider, and employ restrictions to prevent bias toward certain
providers. In using legally valid netting contracts in derivatives transactions, we conclude an International Swap Dealers
Association (ISDA) master contracts and confirm legal validity.
(6) Overview of Risk Management Policies and Procedures Related to Counterparties Risks in Derivative Product Transactionsand Long Settlement Transactions
Sony Bank uses derivative product transactions for the main purpose of appropriate market risk management. Derivative
product transactions have the market risk of possibly incurring losses from market fluctuations and the credit risk ofpossibly incurring losses from the inability of transaction counterparties to meet payment obligations.
We respond to market risk by calculating daily transaction valuation gains/losses and the amount of market risk. Sony
Bank uses maximum expected loss (Value at Risk) as a general measure of its overall market risk and establishes risk limits
to keep the amount of risk within an appropriate range. We respond to credit risk by establishing and managing credit limits
based on counterparty ratings and transaction periods. We set these limits within the range of our business capacity basedon capital allocation. We do not calculate collateral coverage and reserves. Even if we would need to provide additional
collateral to transaction counterparties due to deterioration in Sony Bank’ s creditworthiness, we have sufficient assets
available and the impact would be limited.
We do not have any long settlement transactions.

85
Capital Adequacy Status

For some mortgage loans we accept guarantees by certain business partners in place of real estate collateral. Of these,
only Sony Corporation is subject to the credit risk reduction methods in Basel II. These guarantees account for 0.78% of our
total loan exposure, which is not an excessive concentration.

Sony Financial Holdings(5) Overview of Risk Management Policies and Procedures for Credit Risk Mitigation
Sony Bank's loan exposure is limited to loans to individuals, comprising mortgage loans, special-purpose loans and cardloans. We seek adequate small-loan diversification. We try to have all special-purpose loans and card loans guaranteed bysurety companies. Home loans are all secured by real estate collateral, and we increase collection effectiveness by
outsourcing collection activities to credit management and collection companies (servicers). We reappraise real estatecollateral on an annual basis.

(7) Securitization Exposure(a) Overview of Risk Management Policies and Procedures
We strive to recognize and appropriately manage risk associated with securitized products based on an understanding ofmarket trends, status of underlying assets, market valuations, and rating information provided by eligible rating
institutions. We also manage risk by setting transaction limits according to ratings and time to maturity. We have nosecuritization exposure as of the end of March 2009.
(b) Method for Calculating Credit Risk Asset Amount of Securitization Exposure
Sony Financial Holdings and Sony Bank use the standard method.

Sony Financial Holdings(c) Method of Accounting for Securitization Transactions
We appropriately account for securitization transactions based on the Practical Guidelines for Accounting for Financial
Instruments published by the Japanese Institute of Certified Public Accountants.

Capital Adequacy Status

86(d) Eligible Rating Agencies Used to Determine Risk Weights by Securitization Exposure TypeWe employ the five eligible rating institutions listed below to determine risk weights of securitization exposure. We do notuse different eligible rating institutions for different types of exposure.
The five eligible rating agencies are Rating and Investment Information, Inc., Japan Credit Rating Agency, Ltd.,
Moody's Investors Service, Inc., Standard & Poor's Corp. and Fitch Ratings, Ltd.
(8) Market Risk
Not applicable because, in accordance with Article 16 of the Consolidated Capital Adequacy Ratio Public Announcement,
Sony Financial Holdings does not include a market risk equivalent amount in its calculation based on Article 14 of said
notification.
(9) Operational Risk(a) Overview of Risk Management Policies and ProceduresSony Bank faces the following operational risks. Administrative risk is the risk of incurring tangible or intangible losses
from mistakes, misconduct, or trouble related to problems with administrative processes. System risk is the risk of
incurring losses from trouble, damage, improper use, or information leaks related to systems. Outsourcing risk is the riskof incurring losses from inappropriate management of operations and information by outsourcers and from difficulty inmaintaining outsourcing contracts. Legal risk is the risk of incurring losses from legal violations or contractual issues.
Reputational risk is the risk of incurring losses from erosion of the company’ s reputation in the market and amongcustomers due to acts contrary to social mores, unfair transactions, or inappropriate information disclosure. The various
departments responsible for these operational risks prepare policies related to risk measurement, monitoring, andmanagement. The Board of Directors prepares basic risk management policies and an appropriate risk management
structure based on a recognition of the existence and characteristics of operational risks as well the methods formeasuring and managing these risks.
Risk management departments monitor the risks for which they are responsible, report to management if serious riskmaterializes, and consider required responses. These departments also report periodically to the Board of Directors on
the status of risk management.
(b) Method for Calculating Operational Risk Equivalent AmountSony Financial Holdings and Sony Bank use the basic method.
(10) Overview of Risk Management Policies and Procedures for Banking Account Investments and Equity Exposures
The consolidate groups of Sony Bank and Sony Bank Securities, the main banking entities of the Holding Company Group
based on the Consolidated Capital Adequacy Ratio Public Announcement, do not have any investments or equity exposures.

(11) Banking Account Interest Rate Risk(a) Overview of Risk Management Policies and ProceduresInterest rate risk is the risk of incurring losses from fluctuations in market interest rates. Sony Bank regularly assesses
and measures this risk and prepares appropriate countermeasures.
Specifically, in addition to managing and assessing interest rate risk measured by Basel II, we periodically measurebanking account interest rate risk (BPV) assuming certain interest rate shocks as well as value at risk. This informationis reported to management and considered by the ALM committee. Through these and other actions, we seek to control
risk to optimize assets and liabilities.

・Measurement method

GPS approach・Interest rate sensitive assets Deposits, loans, foreign exchange, securities, fund transactions, and financial
and liabilities
derivative products
・Core deposits

87
Capital Adequacy Status

Target: Yen liquid deposits (ordinary deposits)
Calculation method: Use the lowest of the (1) smallest balance during the past five
years, (2) balance after subtracting the largest annual outflow
during the past five years from the current balance, or (3) 50% of
the current balance
Maturity: Within five years (average two and a half years)
・Repayment prior to maturity For mortgage loans, we calculate the rate of repayment prior to maturity based on
historical results and add this to cash flow
Use 99th or 1st percentile of interest rate fluctuations on products held for one year as
・Interest rate shock margin
measured during the previous five years
・Risk measurement frequency Quarterly (based on the end of the preceding month)Sony Financial Holdings(b) Overview of Method for Calculating Banking Account Interest Rate Risk Used for Internal Control
Banking account interest rate risk is the amount of risk resulting from an interest rate shock for certain financial
institution assets and liabilities affected by market interest rates (e.g., loans, deposits, and securities). For liquid
deposits, we measure the amount of risk based on balance and maturity assumptions for core deposits, defined as those
deposits that are not withdrawn and remain at the bank for a long period of time, from among demand deposits that do
not have defined interest rate revision intervals and can be withdrawn by depositors at any time.
Sony Bank calculates banking account interest rate risk in Basel II based on the following definitions.

Quantitative Disclosure(1) Companies subject to deductions listed in Article 8, Paragraph 1, Item 2 (a) to (c), and in Article 20, Paragraph 1, Item 2(a) to (c) of the Consolidated Capital Adequacy Ratio Public Announcement that are deficient in regulatory capital, andthe amount of regulatory capital deficiency
Not applicable(2) Capital composition
As of March 31(Millions of yen)

Item

2008

2009

19,900195,277
3,087
7,788
−
2,505
207,970
−
161
−
−
−
161
−
208,131

19,900195,277
1,926
−
−
2,004
215,098
−
211
2,000
−
2,000
2,211
−
217,310

145,881
145,881
62,249155,881
155,881
61,428389,532
312
35,861
425,705
17,02814.62 ％
48.85％

422,781
1,395
37,154
461,332
18,45313.32 ％
46.63 ％

Sony Financial Holdings■Capital

Capital Adequacy Status

88

Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net unrealized losses on other securities . . . . . . . . . . . . . . . . .
Minority interests in consolidated subsidiaries . . . . . . . . . . . . .
Goodwill equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TierⅠ(core) capital[A]
Preferred securities with step-up interest rate conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General reserve for possible loan losses . . . . . . . . . . . . . . . . .
Fund-raising procedures . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subordinated debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subordinated term debt and term preferred stock . . . . . . . . .
TierⅡ(supplementary) capital[B]
TierⅢ(sub-supplementary) capital [C]Capital subtotal [A+B+ C][D]
Fund-raising procedures by financial subsidiaries, subsidiaries
engaged in financial services, insurance subsidiaries, and affiliates
engaged in financial services that are not included in consolidation . . .
Deductions[E]
Total capital [D］− [E］[F]■Risk-adjusted assets
Balance sheet items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Off-balance-sheet items . . . . . . . . . . . . . . . . . . . . . . . . . . .
Result of dividing operational risk equivalent amount by 8% . . .
Total risk assets[G]
Consolidated capital requirement [G] × 4%
Capital adequacy ratio (domestic criteria) [F] / [G]Reference: TierⅠratio (domestic criteria) [A] / [G]Notes: 1. Calculated based on the “Standards based on Article 52-25 of the Banking Law of Japan for determining the capital adequacy of the bank holding
company in light of the assets held by the bank holding company and its subsidiary (Financial Services Agency Public Announcement No. 20 publishedon March 27, 2006)”. We apply Standard Two (domestic criteria).
2. Since FY2008, we have applied the “Special Provision of Standards based on Article 52-25 of the Banking Law of Japan for determining the capital
adequacy of the bank holding company in light of the assets held by the bank holding company and its subsidiary (Financial Services Agency Public
Announcement No. 79 published in 2008)”.
3. Goodwill equivalent amounts are listed in Article 17, Paragraph 1, Items 1 to 4 of the Consolidated Capital Adequacy Ratio Public Announcement.
4. Calculated without including insurance subsidiaries within the scope of consolidation.

(3) Capital adequacy
As of March 31(Millions of yen)(a) Total credit risk assets and required capital(1) Exposure by portfolio applying the standard method(i) Sovereigns(ii) Financial institutions(iii) Corporations(iv) Small and medium-sized businesses, individuals(v) Collateralized mortgage loans(vi) Real estate related businesses(vii) Exposure to items past due by three months or more(viii) Others(2) Securitization risk exposure(b) Operational risk(c) Consolidated total of required capital (a+b)

2008
Risk assets
Required Capital
389,844
15,593389,844
15,593
5,697
227
142,217
5,688
71,7452,869
79,063
3,162
83,997
3,359
−
−
39
1
7,083
283
−
−
35,861
1,434
425,705
17,0282009
Risk assets
424,177
424,177
8,861
93,66877,609114,396
113,020−
159
16,460−37,154
461,332

Required Capital
16,967
16,967
354
3,746
3,104
4,575
4,520
−
6
658
−
1,486
18,453

Method of calculating operational risk (basic method):
Gross profit (total of positive values during the previous three years) × 15%÷ 8%
Number of years with positive gross profit during the previous three years

Sony Financial Holdings

Notes: 1. Required capital = risk assets × 4%
2. “Exposure” consists of the credit equivalent amount of assets (excluding assets resulting from derivative product transactions), off-balance-sheettransactions and derivative product transactions.
3. “Sovereign” refers to central governments, central banks, local public entities, Japanese government-affiliated institutions, overseas public sector
bodies other than central banks, international development banks, and international settlement banks.
4.“Exposure to items past due by three months or more” refers to exposure to debtors whose principal or interest payments are past due by three months
or more from the day following the contract payment date.
5. We apply the basic method for operational risk.

89

6. Consolidated total of required capital = Denominator of consolidated capital adequacy ratio × 4%

■ Year-end exposure by industries and counterparties(Millions of yen)

As of March 31

Sovereigns
Financial institutions
Corporations
Small and medium-sizedbusinesses, individuals
Collateralized mortgage loans
Real estate related businesses
Other
Total

2008
297,415
479,031104,283

Year-end credit risk exposure
Loans
Marketable securities
2009
2008
2009
2008
2009
602,945
295,404
609,296−−
112,104
86,604
202,332−−
121,288
103,769−
121,895−

106,874

153,933

106,964

154,129−

239,991−
7,653
1,235,250

322,900−
16,584
1,426,943

239,991−
109
347,065

322,942−−477,072−−−
485,777

Exposure to items past dueby three months or more
2008

2009
−
−
−

−
−
−

−

39

149

−
−
−
836,338

−
−
−
39

20
−
−
170

Note: “Exposure to items past due by three months or more” refers to exposure to debtors whose principal or interest payments are past due by three or moremonths from the day following the contract payment date.

Capital Adequacy Status(4) Credit risk (excluding securitization exposure)(a) Year-end credit risk exposure and breakdown by main categories

■ Year-end balance of loans by type and department(Millions of yen)

As of March 31

2008
Loans on bills
Loans on deeds
Overdrafts
Discount bills
Total

2009

Domestic

International

Total

Domestic

International

Total

−
339,088
7,498−
346,586

−
478
−
−
478

−
339,566
7,498−
347,065−
468,420
8,096−
476,517

−
555
−
−
555

−
468,975
8,096−
477,072■ Year-end balance of loans by maturity(Millions of yen)Sony Financial Holdings

As of March 31

Under one year
One to three years
Three to five years
Five to seven years
Over seven years
Unspecified period
Total

Fixed interest rate
26
300
892
1,969
156,284−
159,473

2008
Variable interest rate
46
349
849
1,958
176,890
7,498
187,592

Total
72
650
1,741
3,927
333,174
7,498
347,065

Fixed interest rate
25
439
1,273
2,100
233,727−
237,565

2009
Variable interest rate
54
402
1,164
2,121
227,666
8,096
239,506

Total
79
842
2,437
4,221
461,394
8,096
477,072■ Year-end balance of securities by type and department
90(Millions of yen)

As of March 31

Capital Adequacy Status

2008
JGBs
Municipal bonds
Short-term corporate bonds
Corporate bonds
StocksOther securities
Foreign bonds
Foreign stocks
Other
Total

2009

Domestic

International

Total

Domestic

International

Total

171,157−−
152,107
−
9,705
−
−
9,705
332,971−−−−−
152,806
152,806−−
152,806

171,157−−
152,107−
162,512
152,806−
9,705
485,777

288,348
5,305−
303,353
−
7,848
−
−
7,848
604,854−−−−−
231,483
215,319−
16,163
231,483

288,348
5,305−
303,353−
239,331
215,319−
24,011
836,338■ Year-end balance of securities by maturity
As of March 31, 2009

JGBs
Municipal bonds
Corporate bonds
StocksOther securities
Foreign bonds
Other
Total

(Millions of yen)Under
one year
57,240−40,219−65,88749,723
16,163
163,348

One tothree years
80,343
3,193
178,610−
107,281
107,281−369,428

Three tofive years
25,374−80,760−52,95952,959−159,093

Five toseven years
−
−
2,865
−
3,239
3,239
−
6,105

Seven toten years
9,944
2,112
−
−
2,115
2,115
−
14,171Over
ten years
115,445
−
896
−
−
−
−
116,342

Unspecified
period
−
−
−
−
7,848
−
7,848
7,848

Total
288,348
5,305
303,353−
239,331
215,319
24,011
836,338

As of March 31, 2008

JGBs
Municipal bonds
Corporate bonds
StocksOther securities
Foreign bonds
Other
Total

(Millions of yen)Under
one year
13,315−
18,575−27,36027,360−59,251

One tothree years
17,993−62,443−68,964
68,964−
149,401

Three tofive years
24,722−
69,051−
46,522
46,522−140,296

Five toseven years

Seven toten years
4,002
−
−
−
−
−
−
4,002

−
−
1,032
−
9,959
9,959
−
10,992Over
ten years
111,123
−
1,003
−
−
−
−
112,126

Unspecified
period
−
−
−
−
9,705
−
9,705
9,705

Total
171,157−
152,107−
162,512
152,806
9,705
485,777(b) Year-end balance and change during year of general and specific reserves for possible loan losses(Millions of yen)

For the years ended March 31

BeginningbalanceSpecific reserve forpossible loan losses
Total

2008
2009
2008
2009
2008
2009

161
211
91
244
253
456

152
161
9
91
162
253

Ending balance
161
211
91
244
253
456

Note: Loan loss reserves target all individual accounts.

91(c) Loan amortization by category

2008

Capital Adequacy Status(Millions of yen)

For the years ended March 31

Individuals

2009
0

0

(d) Exposure by risk weight(Millions of yen)

As of March 31

Exposure
Risk weight basedon notification
0%
10%
20%
35%
50%
75%
100%
150%
350%
Capital deductions
Total

Sony Financial Holdings

General reserve forpossible loan losses

Decrease
Use for purpose
Other
152
−
161
−
9
−
19
72
162
−
19
233

Increase

2008
Rated

2009
Not rated

241,336
55,185434,110−45,558−96,834−−−873,024

Rated
−
−
713
239,991
4,248
102,585
14,6860−−362,225

Notes: 1. Ratings are only provided by eligible rating agencies.
2. Exposure is separated by risk weight after applying credit risk mitigation methods.

Not rated
532,935
64,110167,959−
50,594−
112,076−−−
927,676−−154
322,900
3,725
150,058
22,427−−−499,267(5) Credit risk mitigation■ Exposures subject to credit risk mitigation(Millions of yen)

As of March 31

Eligible financial collateral
2008
2009

Sony Financial Holdings

Exposures subject tocredit risk mitigation(i) Sovereigns(ii) Financial institutions(iii) Corporations(iv) Small and medium-sizedbusinesses, individuals(v) Collateralized mortgage loans(vi) Real estate related businesses(vii)Exposure to items past due by
three months or more

Credit derivatives
2008
2009

−

10,000

4,248

3,705

15,997

8,668

−
−
−

−
10,000
−

−
−
−

−
−
−

−
8,760
7,237

−
4,112
4,555

−

−

4,248

3,705

−

−

−
−

−
−

−
−

−
−

−
−

−
−

−

−

−

−

−

−

(6) Counterparties risk on derivative transactions and long settlement transactions(Millions of yen)

As of March 31

Method for calculating credit equivalent amounts
Gross restructuring costs

92
Capital Adequacy Status

Guarantees
2008
2009

2008
Current exposure method

2009
Current exposure method
600

Credit equivalent amount before
credit risk mitigation from collateral
2008(1) Derivative transactions(i) Foreign exchange transactions(ii) Interest rate transactions(iii) Gold transactions(iv) Stock transactions(v) Precious metals (excluding gold) transactions(vi) Other commodity transactions(vii) Credit derivatives
Credit equivalent amount reduction
from close out netting contracts(2) Long settlement transactions
Total

2009

4,522
Credit equivalent amount after
credit risk mitigation from collateral
2008

2009

1,557
1,715
1,557
−
−
−
−
−

4,735
4,779
3,155
−
−
−
−
51

1,557
1,715
1,557
−
−
−
−
−

4,735
4,779
3,155
−
−
−
−
51

1,715
−
1,557

3,250
−
4,735

1,715
−
1,557

3,250
−
4,735

Notes: 1. Gross restructuring costs are limited to items that do not fall below zero.
2.“Credit equivalent amount reduction from close out netting contracts” is derived by subtracting the “credit equivalent amount before credit risk
mitigation from collateral” from total gross restructuring costs and total gross add-ons.
3. We do not use credit risk mitigation from collateral for derivative transactions.
4. Credit derivatives subject to credit equivalent amount calculation were purchased as protection for credit default swaps and have notional principal of¥650 million.
5. Credit derivatives used to account for credit risk mitigation have notional principal of ¥10,187 million.

(7) Securitization exposure(a) Securitization exposure as originator
Not applicable(b) Securitization exposure as investor
1) Securitization exposure amount and breakdown by main underlying assets
Not applicable2) Securitization exposure balances by risk weight and capital requirements
Not applicable3) Credit risk assets calculated based on Article 15 of the Supplementary Provisions to the Consolidated Capital
Adequacy Ratio Public Announcement (Interim measure for securitization exposure).
Not applicable(8) Market risk
Not applicable because, in accordance with Article 16 of the Consolidated Capital Adequacy Ratio Public Announcement,
Sony Financial Holdings does not include a market risk equivalent amount in its calculation based on Article 14 of said
public announcement.
(9) Banking account investments and equity exposures
The consolidate groups of Sony Bank and Sony Bank Securities, the main banking entities of the Holding Company Group
based on the Consolidated Capital Adequacy Ratio Public Announcement, do not have any investments or equity exposures.
(10) Exposures considered credit risk assets and subject to calculation
Not applicable because Sony Financial Holdings and Sony Bank use the standardized approach in calculating credit risk.

(Millions of yen)

As of March 31

Interest rate risk
2008

2009
3,447

9,699

Japanese yen
U.S. dollars
OthersOutlier ratio

3,056
185
204
9.2％

8,246
540
911
16.2％

Notes: 1. We measure the decrease in economic value from an interest rate shock based on the calculation method shown on page 87 under “11. Banking
Account Interest Rate Risk” in the qualitative disclosure section.
2. We manage these figures on a non-consolidated basis for Sony Bank because interest rate risk at Sony Financial Holdings and Sony Bank Securities isnegligible.

93
Capital Adequacy Status

Decrease in economic value
from an interest rate shock

Sony Financial Holdings(11) Banking account interest rate risk

Sony Life's Financial Data
Condensed Financial Statements■ Non-Consolidated Balance Sheets

Sony Financial Holdings

As of March 31,

Sony Life's Financial Data

94

Assets:Cash and deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Call loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Monetary trusts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Japanese government bonds) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Municipal bonds) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Japanese corporate bonds) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Japanese stocks) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Foreign securities) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Other securities) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Policy loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lease assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other tangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lease assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due from agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due from reinsurers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Money on deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Collateral pledged on forward transactions . . . . . . . . . . . . . . . . . . .
Advance payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allowance for doubtful accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Millions of yen)2008
22,99919
22,97972,300893,952
2,388,932
1,425,010
35,869371,852
198,233
271,423
86,542
108,688
108,688
83,651
32,99649,787
−
84
783
8,095
8,045
−
49
−
144
81,09640,402845
29,724
5,336
2,183
1,288
1,316
−
(74)
3,659,786

2009
25,17415
25,15845,800607,625
2,819,638
2,196,830
29,190270,253
70,620189,426
63,317
120,462
120,462
82,79333,07647,498
337
1,179
701
12,187
12,1360
49
1
104
61,911
29,096992
11,252
3,969
13,583
1,336
1,679
35,439(208)
3,810,929

(Millions of yen)

2008

As of March 31,

2009

Liabilities:
Policy reserves and others.......................................

Reserve for outstanding claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Policy reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reserve for policyholders' dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due to agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due to reinsurers.............................................

Other liabilities..............................................

Accrued income tax
Other payable.........................................

.............................................

Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deposits received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deposits received for guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Borrowed securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivatives liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Policy suspense and other suspense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reserve for employees' retirement benefits............................

Reserve for price fluctuations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reserve for price fluctuations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities on land revaluation
Total Liabilities............................

..............................................

65,000865
865
35,542
7,078
28,46428,464
101,40782,739(1,475)
81,263
182,6713,659,786

70,0005,865
5,865
62,325
8,478
53,84753,847138,190
4,015(1,475)
2,539
140,730
3,810,929

Net assets:
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital surplus..............................................

Capital reserve............................................

Retained earnings............................................

Earned reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unappropriated retained earnings for the period . . . . . . . . . . . . . . . . . . . . .
Total stockholder's equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net unrealized gains on other securities, net of taxes . . . . . . . . . . . . . . . . . . . . . .
Land revaluation, net of taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total valuation and translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Liabilities and Net Assets....................................

95
Sony Life's Financial Data

Reserve for directors' retirement benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,614,027
19,111
3,592,376
2,539
1,216
880
36,891
9,530
6,032
11,883
883
360
6,252
−
−
388
1,560
12,727
95
3,653
3,653
−
706
3,670,198

Sony Financial Holdings

Unearned income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,397,003
17,405
3,375,090
4,506
1,308
740
37,704
3,925
11,29011,754
971
361
5,803
1,812
63
−
1,721
11,32471
24,09924,0994,155
706
3,477,115

■ Non-Consolidated Statements of Income

Sony Financial Holdings

For the years ended March 31,

Sony Life's Financial Data

96

Ordinary revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from insurance premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Insurance premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ceded reinsurance commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income and dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income from deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income and devidends from securities . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income from loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rent revenue from real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other interest income and dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from monetary trusts, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from trading securities, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gains on sale of securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gains on redemption of securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gains on derivatives, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange gains, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other ordinary income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income for annuity riders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income for differed payment of claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reversal of reserves for outstanding claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other ordinary income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ordinary expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Insurance claims and other payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Insurance claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Annuity payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Insurance benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Surrender payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Refund to policyholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reinsurance premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for policy reserves and others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for reserves for outstanding claims . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for policy reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest on policyholders' dividend reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Losses on monetary trusts, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Losses on sale of securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Devaluation losses on securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Losses on redemption of securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Losses on derivatives, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other ordinary expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments of deferred claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Taxes other than income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for reserve for employees' retirement benefits . . . . . . . . . . . . . . . . . . . . . .
Provision for reserve for directors' retirement benefits . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ordinary profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Millions of yen)

2008

2009
741,250
648,406
646,976
1,430
87,493
47,913476
31,346
4,319
11,609161
14,776324
24,023
145
ー
310
0
5,350
2,485
1,605
277
982
701,959
241,106
60,0526,350
28,457
141,8422,054
2,349
286,215
ー
286,202
13
69,895
15
ー
1,563
6,697
21
4,858
ー
10
3,149
5,262
48,31594,367
10,375
1,286
6,257
1,097
1,696
ー
37
39,290765,910662,011
660,642
1,368
98,78155,803
039,033
4,732
11,632404
ー
1,084
32,115
807
8,937
ー
32
5,117
1,779
2,351
ー
987
733,500
274,778
62,0907,111
32,898168,135
2,172
2,370
219,0311,706
217,285
39
133,77742856
16,15731,899
262
ー
2,614
134
2,932
6,664
72,212
93,928
11,983
1,898
6,226
1,836
1,995
24
2
32,409(Millions of yen)
For the years ended March 31,

2009
0
0
ー
ー
3,406
63
125
3,216
3,216
ー
3,159
32,725
4,897
9,313
14,21018,514

20,446ー
20,446
20,446
97
60
20
ー
ー
16
(429)
53,18814,087
5,317
19,40433,783

Sony Financial Holdings

Extraordinary gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gains on sales of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reversal of reserve for price fluctuations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reversal of reserve for price fluctuations . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Extraordinary losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Losses from disposal of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for reserve for price fluctuations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for reserve for price fluctuations . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other extraordinary losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision (reversal) for reserve for policyholers' dividends . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes -Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes -Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes -Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2008

97
Sony Life's Financial Data

Sony Assurance's Financial Data
Condensed Financial Statements■ Non-Consolidated Balance Sheets

Sony Financial Holdings

As of March 31,

Sony Assurance's Financial Data

98

Assets:Cash and deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japanese government bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japanese municipal bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japanese corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other tangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Software in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other intangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due from reinsurers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due from foreign reinsures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deposits for earthquake insurance . . . . . . . . . . . . . . . . . . . . . . . . . .
Suspense payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Millions of yen)

2008

2009
2,929
0
2,929
56,2372,316
35,794
13,491
807
3,828
231
201
29
4,075
1,013
3,024
36
10,736
963
112
ー
7,278
138
354
19
1,869
4,434
78,645

2,819
0
2,819
64,30914,502
31,87013,797
1,097
3,040
270
220
50
1,898
744
1,134
20
12,139
1,018
38
1
8,384
149
356
22
2,169
5,260
86,698(Millions of yen)
As of March 31,

2009
66,52015,72950,791
5,411
158
3
556
5
1,847
2,839
1
462
37
575
12
12
73,02020,00020,00020,00020,00020,00020,000(24,591)(24,591)(24,591)
15,408(26,147)(26,147)(26,147)
13,852(23)(23)
15,38578,645(173)(173)
13,67886,69899
Sony Assurance's Financial Data

56,95814,24642,711
5,284
177
7
516
4
2,115
2,462
−
412
39
529
36
36
63,260Sony Financial Holdings

Liabilities:
Policy reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reserves for outstanding losses . . . . . . . . . . . . . . . . . . . . . . . . . . .
Underwriting reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due to reinsurers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due to foreign reinsurers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deposits received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Suspense receipt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reserve for employees' retirement benefits . . . . . . . . . . . . . . . . . . . . . . .
Reserve for directors' retirement benefits . . . . . . . . . . . . . . . . . . . . . . . .
Reserve for employees' bonuses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reserve for price fluctuations and others . . . . . . . . . . . . . . . . . . . . . . . .
Reserve for price fluctuations . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net Assets:
Stockholder's equity
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital surplus
Capital reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total capital surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained deficits
Other retained deficits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unappropriated retained deficits . . . . . . . . . . . . . . . . . . . . . . .
Total retained deficits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total stockholder's equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation and translation adjustments
Net unrealized losses on other securities, net of taxes . . . . . . . . . . . . .
Total valuation and translation adjustments . . . . . . . . . . . . . . . . . . .
Total Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Liabilities and Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2008

■ Non-Consolidated Statements of Income

Sony Financial Holdings

For the years ended March 31,

Sony Assurance's Financial Data

100

Ordinary revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Underwriting income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net premiums written . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest and dividends on deposits of premiums . . . . . . . . . . . . . . . . .
Investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income and dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gains on sale of securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gains on redemption of securities . . . . . . . . . . . . . . . . . . . . . . . . . .
Transfer to interest and dividends on deposits of premiums . . . . . . . . .
Other ordinary income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ordinary expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Underwriting expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net losses paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss adjustment expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net commissions and brokerage fees . . . . . . . . . . . . . . . . . . . . . . . .
Provision for reserve for outstanding losses . . . . . . . . . . . . . . . . . . .
Provision for underwriting reserves . . . . . . . . . . . . . . . . . . . . . . . . .
Other underwriting expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Losses on sale of securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Devaluation losses on securities . . . . . . . . . . . . . . . . . . . . . . . . . . .
Losses on redemption of securities . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating, general and administrative expenses . . . . . . . . . . . . . . . . . . .
Other ordinary expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ordinary profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Extraordinary gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reversal of reserve for price fluctuations and others . . . . . . . . . . . . . . . .
Reversal of reserve for price fluctuations . . . . . . . . . . . . . . . . . . . . . .
Extraordinary losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Losses on sale or disposal of fixed assets . . . . . . . . . . . . . . . . . . . . . . .
Provision for reserve for price fluctuations and others . . . . . . . . . . . . . . .
Provision for reserve for price fluctuations . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income (loss) before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes –Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes –Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Millions of yen)

2008

2009
55,64955,03655,001
35
567
578
24
ー
(35)
44
52,831
38,97026,225
3,204
922
2,010
6,607
ー
5
3
ー
2
13,838
16
2,817
ー
ー
ー
413
0
11
11
402
2,403
1,674
(1,457)
ー
2,185

61,882
61,137
61,106
31
717
684
61
3
(31)
28
59,704
44,211
29,952
3,632
1,063
1,482
8,079
0
177
143
29
4
15,308
7
2,178
23
23
23
3,819
3,819
ー
ー
ー
(1,617)
765
(826)
(60)
(1,556)

Sony Bank's Financial Data
Condensed Financial Statements■ Non-consolidated Balance Sheets
As of March 31,

2008

11,705
11,70549,90916,163
823,174
288,348
5,305
303,353
3,000
223,168
477,072
468,975
8,096
6,355
6,355
16,095
51
35
3,140
2,831
8,099
933
1,004
504
53
1
449
2,324
2,321
3
9,106
(456)
1,411,956

101
Sony Bank's Financial Data

7,346
7,346
352,568
ー
488,777
171,157
ー
152,107
3,000
162,512
347,065
339,566
7,498
1,683
1,683
9,367
322
14
2,592
3,267
1,286
1,131
752
504
56
ー
447
1,506
1,503
2
2,433
(253)
1,211,000

2009

Sony Financial Holdings

Assets:Cash and due from banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due from banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Call loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commercial paper and other debt purchased . . . . . . . . . . . . . . . . . . . . .
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japanese government bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japanese municipal bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japanese corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japanese stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loan on deeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Overdrafts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchanges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due from foreign banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Domestic exchange settlement account debit . . . . . . . . . . . . . . . . . . .
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Initial margins of future markets . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leased assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other tangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other intangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reserve for possible loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Millions of yen)

■ Non-Consolidated Balance Sheets (Continued)

Sony Financial Holdings

As of March 31,

Sony Bank's Financial Data

102

Liabilities:
Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ordinary deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Time deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Call money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Borrowed money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Borrowed money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchanges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign bills payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unearned revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Initial margins of future markets . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leased obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reserve for employees' bonuses . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reserve for employees' retirement benefits . . . . . . . . . . . . . . . . . . . . . .
Reserve for directors' retirement benefits . . . . . . . . . . . . . . . . . . . . . . .
Total Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net Assets:
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unappropriated retained earnings . . . . . . . . . . . . . . . . . . . . . . . . .
Total shareholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net unrealized gains (losses) on other securities, net of taxes . . . . . . . . . .
Net deferred gains (losses) on hedging instruments, net of taxes . . . . . . . .
Total valuation and translation adjustments . . . . . . . . . . . . . . . . . . . . .
Total Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Liabilities and Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Millions of yen)

2008

2009

1,144,398
216,677
675,445
252,276
10,000ーー0020,311
63
5,350
1
ー
7,290
ー
7,605
369
157
50
1,175,288

1,326,360
280,297
763,161
282,901
10,000
2,000
2,000
8
8
26,773
84
6,788
1
7,328
9,392
1
3,176
274
213
61
1,365,692

25,00015,00015,000
6,296
6,296
6,296
46,296(9,055)(1,529)(10,584)
35,712
1,211,000

31,00021,00021,000
5,586
5,586
5,586
57,586(9,688)(1,633)(11,322)
46,264
1,411,956

■ Non-Consolidated Statements of Income
For the years ended March 31,

2008

2009
33,361
22,044
9,293
10,452
2,021
7
10
258
2,171
197
1,973
9,035
7,938
250
0
846
111
111
32,947
15,397
14,503
58
38
796
0
1,857
76
1,780
5,107
2,634
2,473
ー
10,309
274
223
0
51
414
414
3
1,121
1,124
(710)

103
Sony Bank's Financial Data

25,98817,152
7,045
7,320
2,647
7
26
104
1,823
183
1,639
7,001
5,773
734
0
492
11
11
23,242
12,046
11,380
133
ー
532
0
1,424
69
1,355
1,524
1,319
ー
205
8,145
100
90
0
8
2,746
2,746
3
(1,749)ー
4,492Sony Financial Holdings

Ordinary revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income on loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income and dividends on securities . . . . . . . . . . . . . . . . . . .
Interest income on call loans and bills bought . . . . . . . . . . . . . . . . . .
Interest income on deposits with banks . . . . . . . . . . . . . . . . . . . . . .
Interest income on interest rate swaps . . . . . . . . . . . . . . . . . . . . . . .
Other interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fees and commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fees and commissions on domestic and foreign exchanges . . . . . . . . . .
Other fees and commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gains on foreign exchange transactions . . . . . . . . . . . . . . . . . . . . . .
Gains on sales of bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gains on redemption of bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from derivatives other than for trading or hedging . . . . . . . . . .
Other ordinary income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ordinary expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expenses on deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expenses on call money and bills sold . . . . . . . . . . . . . . . . . .
Interest on borrowed money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expenses on interest rate swaps . . . . . . . . . . . . . . . . . . . . . .
Other interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fees and commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fees and commissions on domestic and foreign exchanges . . . . . . . . .
Other fees and commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on sales of bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on redemption of bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . .
Other ordinary expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision of allowance for loan losses . . . . . . . . . . . . . . . . . . . . . . .
Written-off of loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ordinary profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes-Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes-Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Millions of yen)Glossary (in alphabetical order)[ A ] Assumed interest rate (life and non-life insurance)
Insurance companies anticipate a certain return on
invested assets in advance and discount insurance
premiums by only this amount. This discount is called theassumed interest rate.
[ B ] Bank sales of insurance products (life and non-life
insurance, banking)
A bank serves as an insurance agency to solicit insurance.
There were previously restrictions on what products could
be sold, but these restrictions were abolished on December
22, 2007, and banks can now sell a variety of insurance
products.

Sony Financial Holdings

Benefits (life insurance)
Money paid by an insurance company to a beneficiary in theevent of hospitalization, surgery, or other action involving
the insured.

Glossary

1 04[ C ] Combined ratio (non-life insurance)
Total of an insurance company's net loss ratio and net
expense ratio. Indicates an insurance company's efficiency
based on income and payments.
Contingency reserve (life and non-life insurance)
Reserve to prepare for abnormal payments in the future
resulting from various factors, including insurance risk andassumed interest rate risk. Insurance companies list
contingency reserves at every account closing as one
component of policy reserves in the financial statements.
Core profit (life insurance)Core profit is an indicator of profits in the primary
insurance business over a one-year period. It is derived bysubtracting from ordinary profit any profits earned fromoperations other than the primary insurance business,
including profits from the sale of assets owned by the
insurance company. Profit categories subtracted fromordinary profit include gains and losses on the sale ofsecurities and one-time gains and losses.
Capital adequacy ratio (banking)Indicator of whether a bank has enough capital, includingcommon stock, in relation to credit risk assets (of total
assets, those which could become non-performing).
If a bank is unable to recover a large amount of loans, it
can draw on capital and write off these loans. A sharp
decrease in capital creates difficulties for bankmanagement.
Capital adequacy ratio regulations ensure that banks are
soundly managed by keeping the capital adequacy ratio
above a certain level. This ratio is therefore an important
indicator.

Compulsory automobile liability insurance (non-life
insurance)
Compulsory automobile liability insurance is legallyrequired for all vehicles and provides protection for victimsof traffic accidents resulting in injury or death. Compulsory
automobile liability mutual aid is similar. With compulsory
automobile liability insurance (mutual aid), indemnity
payments per person per accident are capped at ¥30
million for death, ¥40 million for serious residual disability,and ¥1.2 million for injury. It should be noted that benefits
are not paid for vehicle or property damage.
[ D ] Direct premiums written (non-life insurance)
Calculated by subtracting various refunds (excluding
maturity refunds) from direct premium income (gross).
Direct premium income (non-life insurance)
Premiums received by insurance companies based on direct
insurance policies.
[ E ] Endowment insurance (life insurance)
Endowment insurance entitles a beneficiary to receive
death or serious injury benefits upon the death or serious
injury of the insured within an insurance period specified
when the policy is concluded, or to receive maturity benefits
upon policy maturity.
Expense ratio (non-life insurance)
Ratio of expenses for soliciting, maintaining, and managing
insurance to insurance premiums. Used as an indicator of
business efficiency at insurance companies. Ratio isnormally derived by adding operating, general, andadministrative expenses related to insurance underwriting
to net commissions and brokerage fees, and then dividing
by net premiums written.
[ F ] Financial products intermediary service (banking)Service in which a bank is entrusted by a securities
company to open general securities accounts for customers,
solicit trading orders for stocks, foreign bonds, and othersecurities, and pass applications to the partnering
securities company.
[ G ] Gross operating profit (banking)Gross operating profit is the total income from the four
components of banking services income: net interest
income, net fees and commissions, net trading income, andnet other operating income. Equivalent to gross profit (sales
minus purchases) and an indicator of the amount of profitsa bank generates from its main services. Sony Bank does
not currently generate net trading income.
General account (life insurance)
Account for managing financials assets not included inseparate accounts. This account guarantees policyholders acertain assumed interest rate.

Group credit life insurance (life insurance)
Insurance provided to home loan borrowers and otherdebtors. Upon death of the insured, the creditor will be paida death benefit equivalent to the loan balance at that time,
thereby paying off the loan.
[I]

Individual annuities (life insurance)
Policyholders are eligible for receiving annuity payments,from funds accumulated by paid insurance premiums andstarting at a certain age prescribed in the policy. There area variety of types depending on the period for receiving theannuity, structure of the annuity, method for paying
premiums, and death protection prior to receiving theannuity.

Insurance claim (life and non-life insurance)
Money paid by an insurance company to the insured upon
the death or serious injury of the insured or policy maturity
in the case of life insurance; upon damage caused by acompensation event according to the insurance policy in thecase of non-life insurance; and upon hospitalization orsurgery of the insured in the case of third-sector insurance.
Insurance premiums (life and non-life insurance)
Money paid by policyholders to an insurance company
based on the insurance policy. Even after submitting an
insurance policy application, no protection or compensation
is provided unless premiums are paid.
[ L ] Lapse (life insurance)
Life insurance policies require that premiums continue tobe paid until a certain date, according to the payment
method, to remain effective. If a policyholder stops paying
premiums, the policy will lapse after a payment grace
period (a lapsed policy no longer provides protection), andthe policyholder will be not eligible to receive benefits.

Loss adjustment expense (non-life insurance)
Expense incurred by an insurance company in examining an
insured event. These include personnel and non-personnel
expenses.
Loss ratio (non-life insurance)
Ratio of insurance claims paid to premium income. Used inanalyzing the business of an insurance company and in
calculating insurance premium rates. Net loss ratio is theratio derived by adding loss adjustment expense to net
losses paid, then dividing by net premiums written.
[ M ] Medical insurance (life and non-life insurance)
Medical insurance provides policyholders withhospitalization and surgical benefits in the event of
hospitalization or surgery due to illness or injury.
[ N ] Negative spread (life insurance)
A negative spread occurs when the investment of assets byan insurance company yields an actual return that is lower
than the assumed interest rate.
Net fees and commissions (banking)Fees and commissions charged for providing services.
These include bank transfer fees and investment trust salescommissions.

105
Glossary

Insurance Business Law (life and non-life insurance)
Insurance business has a public aspect and the Insurance
Business Law, as noted in Article 1-1, is intended to protect
policyholders and contribute to stable lives of Japanesecitizens and to sound national economic development by
ensuring sound and appropriate business practices and fairinsurance solicitation by parties engaged in insurance
business.

Losses on the disposal of fixed assets (life and non-life
insurance, banking)In the sale of assets other than securities, including realestate and movable assets, should the sale price be lower
than the total of book value and transfer costs, thedifference is recorded as a loss. This item also includes theretirement of assets other than securities throughdemolition or other means, losses caused by disaster ortheft, and losses on the transfer of receivables, includingloans to debtor countries.

Sony Financial Holdings

Insured (life and non-life insurance)
Person receiving insurance protection and compensation or
person who has insurance coverage for their life, illness, orinjury. This can be the same or different person from thepolicyholder.

Lapse and surrender rate (life insurance)
Lapse and surrender rate is the ratio of lapses andsurrenders to policies in force. Annual Report documents
show, in addition to lapses and surrenders, the ratio
derived by dividing the amount of lapses and surrenders,adjusted for policy amount decreases, increases, andreinstatements, by the policy amount in force at the
beginning of the fiscal year.

Sony Financial Holdings

Net interest income (banking)
Net interest income accounts for the largest percentage ofthe four income components of gross operating profit.
Banks generally use the deposits received from individuals
and the funds raised in interbank markets to provide loans
to individuals and companies and to invest in securities.
Net interest income is the difference between the totalinterest received from loans and other items (interest
income) and the total interest paid for deposits and otheritems (interest expenses). Net interest income is affected bychanges in interest rates (e.g., if deposit interest rates rise
while loan interest rates stay the same, net interest income
will decrease), and by deposit and loan balances.

Glossary106

Net other operating income (banking)
Net other operating income is derived from services otherthan the primary banking services income categories of net
interest income, net fees and commissions, and net trading
income. One example is buying and selling in dollars andother foreign currencies. In this case, after purchasing
foreign currency at a certain price, any gain from
subsequent sale at a price higher than the purchase pricewould be recorded in other operating income, and any loss
from subsequent sale at a price lower than the purchaseprice would be recorded in other operating expenses.
Net premiums written (non-life insurance)
Premiums received directly from policyholders (direct
premiums written), adjusting for reinsurance premiums(subtracting direct reinsurance premiums paid and adding
direct reinsurance premiums received), and subtracting
accumulated premiums.
Non-performing assets (life and non-life insurance, banking)Non-performing assets are claims against parties inbankruptcy, claims against parties in effective bankruptcy
due to poor business or other reasons, and claims against
parties at risk of bankruptcy. Non-performing assets also
include loans for which principal or interest payments are
past due by three months or more, and loans for which
repayment on initial terms is impossible and interest has
been reduced or exempted and the repayment of principal
has been extended.
[ O ] Operating expenses (life and non-life insurance)
The practical expenses of insurance companies. Similar tothe selling, general, and administrative expenses of generalbusiness corporations. Life insurance companies record theexpenses required for soliciting new policies, maintaining
policies in force, and paying claims and other items.
Non-life insurance companies use the general categories ofloss adjustment expenses; operating, general, andadministrative expenses; and net commissions andbrokerage fees.

[ P ] Policy amount in force (life insurance)
Total amount of protection provided by life insurancecompanies to individual policyholders. This is different fromthe total amount of premiums paid by policyholders(premium income).
Policyholder loans (life insurance)
Loans provided up to a certain level of the surrender
payment on life insurance policies.
In general, policyholders retain insurance protection andrights to receive dividends during the period of thepolicyholder loan.
However, policyholder loans may not be available
depending on the type of insurance.
Policyholder (life and non-life insurance)
Person that concludes an insurance policy with aninsurance company and has various rights (e.g., request ofchanges in the policy details) and obligations (e.g.,
payment of premiums) based on the policy.
Policy reserves (life and non-life insurance)
Reserves that insurance companies accumulate inadvance, funded by premiums, investment income, andother sources, to prepare for future liabilities resulting frominsurance policies, including payments of claims,
annuities, and benefits. Policy reserves include ordinary
policy reserves, catastrophe reserves, contingency reserves,
refund reserves, and reserves for policyholders’ dividends.
Policy reserves and others (life and non-life insurance)
Reserves recorded in the liabilities section of the balance
sheets for which insurance companies are required in the
Insurance Business Law to accumulate to prepare for thepayment of future claims and other items to fulfill their
obligations for paying claims and other actions based on
insurance policies. Policy reserves and others include
reserves for outstanding claims, policy reserves, andreserves for policyholders’ dividends.
[ R ] Reinsurance (life and non-life insurance)
Insurance agreement that insurance companies conclude
with domestic and overseas reinsurance companies forsome of the insurance they underwrite, mainly large
policies, in order to diversify risks on insurance policy.
Reserve for price fluctuations (life and non-life insurance)
Reserve to prepare for losses caused by future declines inprices of assets owned by an insurance company that are
subject to sharp price fluctuations, including stocks andbonds. This reserve is listed in the liabilities section of thebalance sheets.
The reserve is provided at a certain percentage of assets
based on Article 115-1 of the Insurance Business Law.
When losses on stock trading and other transactions exceed
profits, the difference is covered by the reserve.

Reserve for outstanding claims (life and non-life
insurance)
Reserve for the estimated amount of insurance paymentsthat are unconfirmed and insurance claims that are unpaid
at the end of the fiscal year, from among payment
obligations for insurance claims, surrender payments, andother benefits.
Riders (life and non-life insurance)
Riders can enlarge the scope of protection in the main
policy by adding provisions to the main policy. Riders do notconstitute a policy by themselves. Multiple riders can be
added to the main policy. Riders are canceled when themain policy is canceled due to maturity, surrender, or otherreason.

Separate accounts (life insurance)
Separate accounts are used with variable life insurance,
variable annuities, and other insurance products to invest
assets separately from the other financial assets owned by
a company in order to pay investment returns directly topolicyholders.
Surrender (life and non-life insurance)
Cancellation of an insurance policy for the future. Surrendercancels the policy and ceases insurance protection.

Third-sector insurance (life and non-life insurance)
Third-sector insurance refers to insurance positioned
between life insurance (first sector) and non-life insurance(second sector). It encompasses a variety of types of
insurance, including medical insurance, cancer insurance,
nursing care insurance, and personal accident insurance.
Regulatory easing allowed both life and non-life insurancecompanies to handle all third-sector insurance products
from July 2001.
[ U ] Underwriting profits (non-life insurance)
Underwriting profits are calculated by subtracting fromunderwriting income (e.g., net premiums written) any
underwriting expenses (e.g., net losses paid and loss
adjustment expenses) and operating, general, andadministrative expenses associated with underwriting, thenadding or subtracting other income and expenses (e.g.,
corporate taxes associated with compulsory automobile
liability insurance).
[ V ] Variable life insurance (life insurance)
Insurance product in which assets are invested mainly instocks and bonds and claims and surrender payments
increase or decrease depending on investment returns. The
individual assumes the investment risk.
Variable individual annuity (life insurance)
Individual annuity product in which assets are invested
mainly in stocks and bonds and annuity and surrender
payments increase or decrease depending on investment
returns. The individual assumes the investment risk.

107
Glossary[ S ] Solvency margin (life and non-life insurance)
The solvency margin indicates payment ability. Life
insurance companies accumulate policy reserves to prepare
for the payment of future claims, allowing them toadequately respond to risks within a normally anticipatedrange. However, unforeseen events can occur, including
major disasters and substantial declines in the stock
market. The solvency margin ratio is one measure used byregulatory authorities to determine whether an insurancecompany has the ability to pay in response to the risk ofsuch unpredictable events. If this ratio falls below 200%,
the Financial Services Agency will take steps to quickly
restore financial soundness.

[ T ] Term insurance (life insurance)
Term insurance entitles a beneficiary to receive benefits inthe event of death or serious injury of the insured within an
insurance period specified when the policy is concluded.

Sony Financial Holdings

Risk segmented automobile insurance (non-life insurance)
Automobile insurance that segments the risk factors on
which insurance premium calculations are based. The
Insurance Business Law Enforcement Regulations
recognized nine risk segment categories: age, sex, driving
history, purpose of use, conditions of use, region, vehicle
model, presence of safety equipment, and number ofvehicles owned.

Surrender payments (life and non-life insurance)
Money refunded to the policyholder in the event that theinsurance policy is surrendered or cancelled due toconcealment or other reason. Surrender payment amounts
vary depending on several factors, including the type of
insurance, insurance period, and years elapsed. Normally, ashorter payment period would result in a smaller amountcompared with total insurance premiums paid.

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Sony Financial Holdings

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Sony Life

Sony AssuranceSony Bank

Sony Bank Securities

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http://sonybank.net /http://sonybank-sec.net /Sony Financial Holdings Inc.
Head office:1-1, Minami Aoyama 1-chome, Minato-ku, Tokyo, Japan
Tel:+81-(0)3-5785-1074
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Sony Financial Holdings Group