To be a financial group that nurtures andgrows with our region

YMFG

Yamaguchi Bank

Momiji Bank

Kitakyushu BankANNUAL REPORT 2015
For the year ended March 31, 2015

YMFG PROFILE (As of July 31, 2015)

YMFG Networks

Dalian Branch(Yamaguchi Bank)

Yamaguchi Bank
(Head office: Shimonoseki City)

YM Securities

Busan Branch
Qingdao Branch(Head office: Shimonoseki City)

Momiji Bank
(Head office: Hiroshima City)(Yamaguchi Bank)(Yamaguchi Bank)

Hong Kong Representative Office(Yamaguchi Bank)

Kitakyushu Bank
(Head office: Kitakyushu City) Yamaguchi Bank
Networks in Japan: 134 (109 head office and branch offices, 25 sub-branch offices)
Networks in overseas: 4 (3 branch offices, 1 representative office) Momiji Bank
Networks in Japan: 114 (96 head office and branch offices, 18 sub-branch offices) Kitakyushu Bank
Networks in Japan: 34 (33 head office and branch offices, 1 sub-branch office) YM Securities
Networks in Japan: 18 offices

Contents
YMFG Profile .........................................................................1

Overseas Networks ..............................................................13

Message from the President ...................................................3

Corporate Governance.........................................................14

Goals, Strategies and Achievements .......................................5Internal Audits and Compliance System ...............................15

YMFG Medium-Term Management Plan 2013 .......................7

Risk Management System ....................................................16

Performance Highlights (YMFG) .............................................9Contributions to the Community and the Environment ........17

Performance Highlights (Three Banks) ..................................11

Financial Section ..................................................................18

Economies and Industries of Yamaguchi Prefecture,
Hiroshima Prefecture, and Kitakyushu City (Reference) .........12

Disclaimer Regarding Forward-Looking Statements
The forward-looking statements in this Annual Report are based on management’s assumptions and beliefs in light of information available as of the date of
publication, and involve both known and unknown risks and uncertainties. Actual financial results may differ materially from those presented in this document,
being dependent on a number of factors.

1

YMFG Annual Report 2015

YMFG Financial Highlights (For the fiscal year ended March 31, 2015)¥10

Total Assets

Net Income(Consolidated)(Consolidated)

We reached total assets of¥10 trillion, a goal we havetrillion¥9

had since our establishment.

billion year on year, tobillionBalance of Loans(Three Banks)(Three Banks)and savings deposits bothrose favorably.

¥6

Principal contributors to theincrease were rises in hous-trillion

Capital Ratio(Basel 3)

13.43

%

¥30.5 billion.

Deposit Balance

Liquid deposits and time

trillion¥30

Net income was down ¥0.7

(Consolidated)
This represented a year-on-

ing loans and loans toregional government bodies.

Tier 1 Ratio(Basel 3)

11.73

%

year increase of 0.74 per-(Consolidated)
This ratio was up 0.63
percentage point.

centage point.

Non-Performing
Loan Ratio

1.84

%

(Three Banks)
Our non-performing loan
ratio improved substantially,
dropping by 0.47 percent-Credit RatingA(Stable)R&I(YMFG)
Date of rating announcement: June 30, 2014

age point.

YMFG Annual Report 20152

Message from the President

Strengthening the Group’s management
base, bolster operating performance andcontribute to the region

hank you for your continued support of theTclients, support their funding needs and augment our

Yamaguchi Financial Group (“YMFG”).

consulting function.

Group and its business results for the fiscal year

the start of “YMFG Medium-Term Management Plan

ended March 31, 2015, and is designed to help you

2013.” In the fiscal year ended March 31, 2015, theunderstand more about YMFG.

second year for this plan, we strengthened regional

This annual report provides an overview of the

The fiscal year ended March 31, 2014, marked

In line with their mission of contributing torelations as a financial group comprising three banks:regional economic development, regional financial

Yamaguchi Bank, Momiji Bank and Kitakyushu Bank.

institutions face vigorous requests to deliver stronger

In collaboration with YM Securities, YM Consulting

financial soundness and profitability, supply funding

and other Group companies, we are working

more flexibly and further enhance their financial

together to leverage our comprehensive Group

services. Amid these conditions, supported by its

strengths as “One YMFG.”

shareholders and business partners all YMFG’s

In the fiscal year ending March 31, 2016, the final

officers and employees were united in their efforts toyear of our medium-term management plan, we will

strengthen the Group’s management base, bolster

undertake a variety of measures to bring the plan

operating performance and contribute to the region.

to completion.

In accordance with our aim of being a financial

We will do our utmost to foster relationships ofgroup with strong operations in Asia, in Marchmutual prosperity among the region, our customers

2015 we signed a memorandum of understanding

and the YMFG Group as we work to invigorate theinvolving a business tie-up with Vietcombank, aregion by providing diverse financial services.

leading bank in Vietnam. This move was part ofour ongoing measures to further enhance our
Asian network.

We look forward to your continued patronage
and support.
August 2015

In March 2015, we issued $300 million in US
dollar-denominated convertible bonds to meetthe dollar funding needs of customers conducting
business overseas.
Moving forward, we will continue working toprovide overseas business opportunities to our
3

YMFG Annual Report 2015

Koichi Fukuda
President
Yamaguchi Financial Group, Inc.

Establishing a New Company Dedicated to Regional Revitalization—YMFG ZONE PLANNING—
YMFG has established an entirely new company, YMFG Zone Planning (“YM-ZOP”), dedicated to regional
revitalization. Operating throughout YMFG’s business area (the “YMFG Zone”), the new company will promote
new directions in business, focusing in particular on utilizing the strength of the private sector.
Linking the regional relationships, expertise and Group networks possessed by Group companies, particularly
Yamaguchi Bank, Momiji Bank and Kitakyushu Bank, the new company will strive to address broad-ranging
issues, including those related to the region, economic layout and business environment.

Five Pillars of Businesst Assist strategy formulationt Generally encourage and cultivate startups
throughout the regiont Create networks of sales contacts
t Discover and support companies with strong
growth potential
t Support efforts to train human resources andyoung managers

Building Growth
Platforms for
Middle-Ranking Smalland Medium-Sized
Companies

Creating Business
Databasest Utilize regional economic
analysis systems
t Perform structural analysesof regional economiest Marketing analyses andproposalst Analyze competitors’
business strategiest Discover and support companies with strong
growth potential
t Support efforts to train human resources andyoung managers
t Help to improve quality of life for woment Improve youth financial literacyt Support efforts to increase the participation of
women in societyt Support the improvement of workplaceenvironments, particularly those employing women

Boosting Labor
Productivity

YM-ZOP

Regional
revitalization

Open Innovationt Networks of small and medium-sized companiest Collaborative networks with large companiest Networks involving industry, government, academia,banks and NPOst YMFG ZONE network (across the region)

Building Regional
Infrastructuret Propose profitable town developmentt Suggest dismantling empty homest Build networks with real estate owners
t Use energy measures to promote regional invigorationt Make a full-fledged entry into the infrastructure
investment business, and reinforce public–private relations

YMFG Annual Report 2015

4

Goals, Strategies and Achievements

Three Goals — Group strategies
 We formulated our first plan (the First Medium-Term Management Plan) in October 2006, at thetime of YMFG’s establishment. The Group’s vision aligned with this plan is as described below.
 Management policy: Maintain a sound and proactive enterprising spirit
 Slogan: Look to a future that extends beyond our region
 Goals: The three goals outlined below

We are preparing our next medium-term management plan (for fiscal 2016–2018) as a milestonemarking YMFG’s 10th anniversary of establishment in fiscal 2016.
April 2007

March 2015t4PMVUJPO#VTJOFTTTo be the largest and mostrespected financial group in the
Chugoku Sikoku region

To achieve total Group assets of
10 trillion yen

To attain a firm businessadvantage In Asia, throughoperations in region on the
Yellow Sea Rim

5

YMFG Annual Report 2015

to create distribution channels

t3FTQPOTFUP-JGFTUBHFTBOEåOBODJBMOFFETBank-securities collaboration
Personal loans

Achievement
10 trillion yen/FYU(PBM（March 2015）‒passage point‒t4VQQPSUGPSHMPCBMCVTJOFTTMake the best use of Asia networkSucceeding as a Frontrunner through a Management Merger
 YMFG was formed in October 2006 through the first management merger of regional banks in
adjoining prefectures.
 We have made steady progress on clearing the hurdles related to the integration of our people,
physical items and money.
t Commence personnel exchanges (headquarters organization)

Human resourcest Unify personnel system platformst Conduct joint training for new employees of the three bankst Commence personnel exchanges (operating branches)

Personnel systems
Unified Group personnel systems in 2016
Employee integration

Physical items

t Integrate personnel systemst Unify employment at YMFGt Consolidate branches in overlapping areas(Centered on Momiji Bank in Yamaguchi Prefecture)(Centered on Yamaguchi Bank in Hiroshima Prefecture)

t Proactively open new branches in strategic regions
Restructuring of
branch networks(Kitakyushu Bank, Yamaguchi Bank Toyosu Branch)t Revise capital relationships among Group companies
Reorganization ofGroup companies

Money

Commonalize systems

Amortize consolidated
goodwill¨All under direct control of the holding company(Reinforce holding company’s internal control function andstrengthen operating relationships)

t Depreciate systems commonization
Completed in 2015 for Yamaguchi Bank, in 2016 for Momiji Bank andKitakyushu Bank
Notes: In addition to integrating the core systems, this combination included theintegration of peripheral systems (operating office networks, ATMs, data
centers, etc.)
Going forward, we will consider integrating financing systems and terminals.

t Amortize goodwill
Complete in the fiscal year ending March 31, 2017

We have cleared the hurdles to management integration,
and are now at the stage where we can benefit from the merger.
¨YMFG moves on to the next phase

YMFG Annual Report 2015

6

YMFG Medium-Term Management Plan 2013

Our Goal

To be a financial group that nurtures andgrows with our region
Road to “YMFG Zone”
Zone of Over-regional Network Economy(Going beyond individual regions to forge links among the regions, creating a growing economic zone)

Core Objective

Achieve mutual prosperity with the region by transforming into “One YMFG”
As a financial group comprising three banks—Yamaguchi Bank, Momiji Bank and Kitakyushu Bank—we will build relationships deeply rooted in these regions. At the same time, we will forge connections
between the regions, nurture them, and deliver collective Group strength through our transformation into“One YMFG.” Through these efforts, we aim to invigorate the regions and ensure YMFG’s growth.

Priority Measures for Achieving the Core Objective

Transforming into “One YMFG”
Q

Becoming one, going to the “regions” — From “company” to “regions”
We will work to bring together companies and employees, strengthen points of contact between regions
and customers, and leverage the strengths of each bank’s brand to build deep relationships with the regions.

Q

As one “YMFG” —From “company” to “YMFG”
We will enhance Group controls and connections, cultivating a sense of togetherness as the Group, andaugmenting the collective power of the Group as one “YMFG.”

Achieving Mutual Prosperity between the Region and YMFG
Q

Generating regional vigor —As the leading company in the region
By leveraging the network of our Group, including its bases in Asia, we will strive to strengthen points ofcontact between individual regions, between regions and customers, and among customers, thereby
invigorating the region.

Q

Increasing the number of YMFG fans —As the best company in the region
As the best company in the region, we will take advantage of our strengths as a comprehensive financial groupto provide consulting-based sales and unique products and services, increasing the number of YMFG fans.

Reinforcing the Management Foundation to Support “One YMFG”
To transform ourselves into “One YMFG,” we will build a robust management foundation that can adapt toall manner of changes in the environment.

7

YMFG Annual Report 2015

YMFG Forecast for the Fiscal Year Ending March 31, 2016
 We expect total income to fall and other income and profit categories to increase during the
fiscal year ending March 31, 2016. One positive factor for profits is expected to be a decrease in
expenses (reduced system costs, etc.).
 In the final year of our medium-term management plan (2013–2016), we expect consolidated
ordinary profits for the YMFG Group to amount to ¥50.0 billion, up ¥2.6 billion year on year. We
also anticipate profit attributable to owners of parent of ¥31.5 billion, up ¥1.0 billion.
(Billions of yen)

YMFG (Consolidated)
Fiscal Year Ending
March 31, 2016

Year-on-Year Change

Compared with MediumTerm Management Plan

Total income

156.0

(3.0)

—

Business profits from core operations

34.5

3.1

(8.5)

Ordinary profits

50.0

2.6

8.5

Profit attributable to owners of parent

31.5

1.0

6.5

Yamaguchi Bank (Non-Consolidated)
Fiscal Year Ending
March 31, 2016

Year-on-Year Change

Total income

79.5

(5.5)

Business profits from core operations

26.6

4.1

Ordinary profits

35.0

3.7

Profit attributable to owners of parent

23.5

3.4

Momiji Bank (Non-Consolidated)
Fiscal Year Ending
March 31, 2016

Year-on-Year Change

Total income

48.5

(3.1)

Business profits from core operations

8.4

(0.9)

Ordinary profits

14.5

(0.9)

Profit attributable to owners of parent

10.0

(0.6)

Kitakyushu Bank (Non-Consolidated)
Fiscal Year Ending
March 31, 2016

Year-on-Year Change

Total income

14.5

0.5

Business profits from core operations

2.2

0.3

Ordinary profits

3.0

0.0

Profit attributable to owners of parent

2.0

0.5

Note: Figures have been rounded off below the stated amounts.
YMFG Annual Report 20158

Performance Highlights (YMFG)
Performance during the fiscal year ended March 31, 2015
Business Profits from Core Operations/
Ordinary Profits/Net Income (Three Banks)

Capital Adequacy Ratio (YMFG)
YMFG’s consolidated capital adequacy ratio (uniform

Business profits from core operations increased ¥3.2 billion

international standard) under Basel III was 13.43%. The total

year on year, to ¥33.7 billion. This outcome stemmed fromTier 1 capital adequacy ratio was 11.73%, and consolidated

higher interest income and a decrease in expenses comparedcommon equity Tier I capital adequacy ratio was 11.73%.

with the previous fiscal year.
Ordinary profits decreased ¥0.2 billion, to ¥49.8 billion, andnet income amounted to ¥32.1 billion.
Business Profits from Core Operations
Ordinary Profits
Net Income
60

40

14

30.5

30

12.69

12

49.8

11.73

11

33.1

30.5

13.43

13.34

13

45.7
34.2

(%)

(Billions of yen)

50.0

50

Capital Adequacy Ratio
Tier I Ratio

33.7

11.01

11.10

2013

2014

10

32.1

0

20

2015
(Basel III)

10
0

2013

2014

Capital Strategy (Euro-dollar convertible bonds
issued and Repurchase own shares)

2015

Non-Performing Assets Based on the Financial
Revitalization Law (Three Banks)
Bankrupt and Quasi-Bankrupt Assets
Doubtful Assets
Sub-Standard Loans
Non-Performing Loan Ratio

Euro-dollar convertible bonds issued (Mar. 2015)
Amount
Coupon

Maturity$300 million
5 years
Three-month U.S. dollar LIBOR -0.5% (however,with 0% as minimum)Objective(Billions of yen)(%)

To meet the growing needs of the Group’s corporate

400

4customers as they move into overseas markets and expand theirbusinesses and transactions overseas, YMFG aims to augment

300

2.68

YMFG
1.87

2.31
200

1.84
157.5

140.9

53.5

54.7

100

0

78.0

63.4

26.0

22.9

2013

2014

3

convertible bonds to facilitate stable U.S. dollar fundraising.

YMFG 2
118.1

118.0
47.0
55.1
16.0
2015

its foreign-denominated lending. We have issued these1

By attaching contingent conversion and call conditions, we
aim to restrain convertibility to common stock, thereby providing
a debt product that gives ample consideration to existing
shareholders. Rather than being zero-coupon, the bonds have a0variable interest rate to further restrain potential dilution.
Purchase of treasury stock (Mar. 2015)
Amount

10 million shares

Objective

To offset the impact of dilution by raising capital efficiency.
Diagram of scheme(Before)Debt(CB issued)(Repurchase own shares)

Debt

Debt

CB

CB
Capital Adequacy
Ratio is still high.
(13.43%)
CapitalCapitalCapitalRepurchase own shares

Lowering funding cost of U.S.$ with minimizing dilution shareholder value

9

YMFG Annual Report 2015

Ratings for YMFG, Yamaguchi Bank andMomiji Bank

Deposit Balance (Three Banks)

Ratings for the Group companies were A (stable) for YMFG,
A+ (stable) for Yamaguchi Bank and Momiji Bank.

¥9,295.2 billion including Negotiable Certificates of Deposit

The total deposit balance at term-end was ¥8,522.7 billion, or(NCDs). This came about because of the expansion of products
and services and steady marketing efforts based on solidcommunity relationships.

AAA

Rating and Investment Information, Inc.

AA

(As of June 20, 2014)

A

YMFG

BBB

10,000

Yamaguchi BankB

A+ (stable)

CCC

8,809.4

2013

2014

9,295.2

6,000

A+ (stable)

C

8,464.7

8,000

Momiji BankCC(Billions of yen)

12,000A (stable)

BB

Deposit Balance (Three Banks)

4,000
2,000
0

2015

Note: The deposit balance includes the NCD balance.

Balance of Loans/Balance of Personal Loans (Three Banks)
The balance of loans at term-end was ¥6,326.0 billion, as a result of active efforts to live up to the trust placed in us by ourcustomers by meeting healthy demand for funds.
Balance of Loans
Balance of Loans in Japan
Balance of Loans to Small and Medium-Sized Businesses(Billions of yen)(Billions of yen)

7,000
6,000

Balance of Personal Loans

5,819.9

6,326.0

6,032.2
6,003.2

5,793.8

1,200
1,000

6,290.4

5,000

800

4,000

3,652.0
58.1%

3,520.6
58.6%

3,383.5
58.4%

3,000

400

1,000

200
2013

2014

1,078.6
18.0%

1,136.5
18.1%

600

2,000

0

1,020.2
17.6%

0

2015

2013

2014

2015

Note: The percentages of loans to small and medium-sized businesses and personal loans are calculated on the basis of the balance of loans in Japan.

Dividend Policy (YMFG)

Expected Performance for the Fiscal YearEnding March 31, 2016 (YMFG)We have continued to provide stable dividends to ourshareholders while securing profits and reinforcing financial

YMFG aims to achieve its consolidated ordinary profits ofhealth to maintain our credit strength.

¥50.0 billion and profit attributable to owners of parent ofIn the year ended March 31, 2015, the dividend per share¥31.5 billion.

at term-end was ¥7. Combined with the interim dividend of ¥7
per share, the full-year dividend amounted to ¥14 per share.
FY2012FY2013

FY2014(Yen)
FY2015(Forecast)

Annual dividend per share
12.0(Interim dividend) (6.0)

13.0
(6.0)

14.0
(7.0)

15.0
(7.0)

YMFG Annual Report 201510

Performance Highlights (Three Banks)

Yamaguchi Bank (Non-consolidated) Gross Operating Income/Business Ordinary Profits/Net Income Capital Adequacy Ratio

Profits From Core Operations
Gross Operating Income
Business Profits From Core Operations(Billions of yen)

80

66.7
59.0

60

20

0

40

30

30.6

2013

19.8

2014

31.3

26.6

20

18.4

Tier I Ratio(Billions of yen)

65.9

40

Capital Adequacy Ratio

Ordinary Profits
Net Income

15
14

19.0

16.7

20.0

22.5

(%)

16

15.22

14.38
14.22
13.00

13

14.06
13.27

12
10

0

2015

2013

2014

2015

0

2013

2014

2015
(Basel III)

Momiji Bank (Non-Consolidated) Gross Operating Income/Business Ordinary Profits/Net Income Capital Adequacy Ratio

Profits From Core Operations
Gross Operating Income
Business Profits from Core Operations(Billions of yen)

60

Ordinary Profits
Net Income
20

17.1

50.9
50

41.5

40

40.0

16

15.5

14

12.9

12.5

13.9

2013

8.9

9.3

2014

2015

(%)

14.01

17.3

10

10
0

(Billions of yen)

10.6

30
20

15

Capital Adequacy Ratio

12

11.55

11.31

2014

2015

10

5

0

0
2013

2014

2015

2013
(Basel II)(Basel III)

Kitakyushu Bank (Non-Consolidated) Gross Operating Income/Business Ordinary Profits/Net Income Capital Adequacy Ratio

Profits From Core Operations
Gross Operating Income
Business Profits from Core Operations
12(Billions of yen)

10.8

10.9

11.0

Ordinary Profits
Net Income

Capital Adequacy Ratio

4

10
3
8

2.1

4
2
0

1.8

1.9

1.9

2013

2014

2015

14

3.0

13

1.2

1.2

2013

2014

(%)

12.45

11.49

1.5

11

1

0

0
2015

2013
(Basel II)

11

YMFG Annual Report 2015

12.10

12

2.1

2

6

(Billions of yen)

2014

2015
(Basel III)

Economies and Industries of Yamaguchi Prefecture,
Hiroshima Prefecture, and Kitakyushu City (Reference)
Yamaguchi Prefecture
Excellent industrial
concentration

Gateway to exchanges with
Asia

Rich industrial humanresources• Many plants of major corporations • Excellent harbor conditions with 2 • Excellent historical backgroundlocated owing to the excellent
international harbors and 4 majorthat has traditionally nurtured thetransportation network
harbors in the prefecturesocial climate encouraging study
and education•Concentration of primary material • The largest export and importindustries such as cement andchemicals owing to the richmineral resources• Increasing entries of processing
and assembly industries such astransportation machinery andmore recently the pharmaceuticalindustry

Major companies and plants
in Yamaguchi Prefecture• Ube Industries Ltd. (cement,chemicals)• Tokuyama Corporation (cement,chemicals)

center in the Chugoku region such • Excellent support system under the • Chofu Seisakusho Co., Ltd. (metal
as auto parts and chemicals
industry-academic coordination
products)
such as joint research between• Serves as the production center• Mitsubishi Heavy Industries, Ltd.
a university and a private-sector
in western Japan for many global(shipbuilding)company, R&D to develop next
enterprises•
Bridgestone Corporation (rubber)generation industries, etc.
• Nippon Steel & Sumikin StainlessSteel Corporation (steel pipes)• Tosoh Corporation (chemicals)

Hiroshima Prefecture
The largest industrial
prefecture in the Chugoku
and Shikoku regions

Manufacturing industry
centered around Mazda
Motor Corporation• Growth of heavy industries,
particularly transportation
machinery such as automobiles
and shipbuilding, leveraging thetechnological strength developed
through military manufacturing• The formation of a group of
broad-based automobile-relatedcompanies with Mazda Motor
Corporation on top of thehierarchy• Ranks No. 12 in Japan in terms of
nominal gross prefectural productwith a share of 2.3%
in Japan.

• The shipbuilding industry
encompassing middle-ranking
and small and medium-sized
shipbuilding companies andrelated manufacturers such as
pumps and turbines, which holds
the No. 1 share in Japan

Home of many No. 1
enterprises

Major companies and plants
in Hiroshima Prefecture• Many local enterprises in a variety • Mazda Motor Corporationof industries with nationwide(automobile)
reputation and a large domestic• Tsuneishi Holdings Corporation
market share through leveraging(shipbuilding)
excellent technologies• Ryobi Limited (non-ferrous metal)(Refer to the right section)• JMS Co., Ltd. (medical equipment)• Molten Corporation (athletic balls)• Aoyama Trading Co., Ltd.
(menswear)• Additional concentration of
traditional industries suchas the fiber industry and the
manufacturing of furniture for
newlywed couples

Kitakyushu City
Concentration of a variety of City of manufacturingindustries• Steel accounts for approximately• Kitakyushu City was born in 1963
through a merger of 5 cities.

40% of the total manufacturingindustry• Concentration of auto assemblyplants including Nissan Motor• New concentration of increasingly Kyushu Co., Ltd., Toyota Motor
Kyushu, Inc., and Daihatsu Motordiverse industries such as autoKyushu Co., Ltd.
related industries due to the• Recent concentration ofproximity to Asia and the highly
semiconductor design companies
developed logistics infrastructure
owing to the development of
Kitakyushu Science and ResearchPark• Mainly heavy and chemicalindustries (steel in the main)

Environmental and energy
industries

Major companies and plants
in Kitakyushu City

• A forerunner of the ecotown business leveraging theconcentration of industrial
technology with broad
manufacturing bases• Nippon Steel & Sumitomo Metal
Corporation (iron manufacturing,steel)• TOTO Ltd. (construction equipment)• Mitsubishi Chemical Corporation• Research and development is(petrochemical functional
conducted on new energy sources products)
such as the technology to reduce• Yasukawa Electric Corporation
the oxygen content under the(industrial robots)
promotion system developed• Mitsui High-tec, Inc.
through the industry-academic(semiconductor-related products)
public coordination• Zenrin Co., Ltd. (information andcommunication)

YMFG Annual Report 201512

Overseas Networks

Provide support to overseas business expansion by customers
through our 3 branches in Dalian, Busan, and Qingdao and a
representative office in Hong Kong
Expand overseas business support
services through business allianceswith domestic and foreign financial
institutions and other companies

Mumbai[India]Business alliance:
State Bank of India[China]-Yamaguchi Bank, Dalian Branch-Liaoning Normal University
Language trainee:1[China]-Yamaguchi Bank, Qingdao Branch

Dalian[China]-Yamaguchi Bank
Hong Kong Representative Office

QingdaoBusan[China]-Kitakyusyu Business
Promotive Office, SHANGHAIAssigned employees:1

Shanghai[Thailand]Business Alliance:TMB Bank
Assigned employees: 2

TaipeiHong Kong
YangonBangkok

ManilaHo Chi Minh
[Vietnam]Business alliance: Bietcombank[Philippines]
Business alliance:
Metropolitan Bank & Trust Company[Taiwan, Philippines, Myanmar, Vietnam]
Business alliance: Daiwa Securities Group

JakartaInternational Department
2-36, 4-chome Takezaki-cho, Shimonoseki, P.O. Box 24,
Shimonoseki 750-8603, Japan SWIFT Address: YMBKJPJT[Indonesia]
Business alliance:Bank Negara Indonesia

Loans of overseas branches (As of March 31)(Millions of yen)

40,00035,551
28,97630,00022,278Overseas Offices
BUSAN BRANCH
4F, Postal Insurance Busan Bldg., Jungang-Dong 3-Ga, 63,
Jungang-Daero, Jung-Gu, Busan, Republic of Korea
SWIFT Address: YMBKKR2P
QINGDAO BRANCH
2F, Crowne Plaza Hotel Qingdao, 76 Hong Kong Central
Road, Qingdao, Shandong Province, The People’s Republic of
China
SWIFT Address: YMBKCNBQDALIAN BRANCH
14F Senmao Building No. 147, Zhongshan Road Xigang
District, Dalian, Liaoning Province, The People’s Republicof China
SWIFT Address: YMBKCNBDHONG KONG
403, 4/F, Far East Finance Centre, 16 Harcourt Road,
Hong Kong
REPRESENTATIVE OFFICE Fax: +852-28104902

13

YMFG Annual Report 2015

[Korea]-Yamaguchi Bank, Busan Branch-Pusan National Univ.
Language trainee:1

24,95720,00010,000

0

2012

2013

2014

2015

Yamaguchi Bank: The first local bank that can deal with RMB
in ChinaCorporate GovernanceIn conducting our business activities, we recognize that fair

Both guarantee the objectivity and transparency of decision-practices in compliance with laws and corporate ethics are ourmaking processes.

corporate social responsibility, and we recognize corporate

YMFG has adopted an audit and supervisory committee

governance as an important management priority. Basedsystem. The Audit and Supervisory Committee comprises three

on this understanding, we endeavor to raise our level of

directors, of whom two are outside directors. In principle, thesoundness, enhance corporate value, boost transparency andcommittee meets monthly to audit the execution of operations

reinforce our corporate governance structure.

by directors, configure, audit and verify the operation of

The Board of Directors, consisting of nine directors

internal control systems at YMFG and its subsidiaries, and(including three outside directors), makes decisions about

prepare audit reports. Committee members, centering onimportant matters related to the Group’s management andoutside directors, exercise the right to decide on the content

supervises the directors. The Board of Directors meeting isof proposals made by the Board of Directors for submission

held once a month in principle and is presided over by theto the General Meeting of Shareholders with regard topresident. Materials for discussion are sent to the outside

the selection, appointment, or decision not to reappoint

director beforehand so the director can gain a comprehensive

accounting auditors, thereby supervising the execution ofunderstanding of the subjects up for discussion and can state

operations by directors.

his/her opinions from a neutral standpoint. The Nomination

The Group Compliance Committee, the Group Asset

Committee discusses matters related to the appointment andand Liability Management Committee and Groupdismissal of directors, and the Compensation Committee

Operational Risk Management Committee discuss important

discusses matters related to the compensation of the directors.

management issues.

YMFG Corporate Governance Structure
YMFG (Company with an Audit and Supervisory Committee)
General Meeting of Stockholders
Appointment/Dismissal(including 2 outside directors)

Audit(Legality and adequacy)

Cooperation
ReportAuditors and Supervisory
Committee Office

9 Directors(including 3 outside directors)

Accounting Auditor
Appointment
Accounting Audit

Appointment/Dismissal
Supervision

Command

Audit and Inspection Dept. Report

Compensation
Committee

Reports andRecommendation

Internal Audit

Nomination
Committee(Voluntary advisory body)PresidentGroup ALM Committee

Business Execution Structure

Designated Board Members

Group Compliance Committee(Executive directors)
CommandGroup Operational Risk Management Committee
ReportAppointment/Dismissal

Board of Directors

Audit and Supervisory Committee
3 Members

Appointment/Dismissal

Cooperation

Policy Indication/Plan Approval

Operation Departments

Yamaguchi Bank

Momiji Bank

Kitakyushu Bank

YM Securities Izutsuya Withcard, YM Consulting, YM Lease, Sanyu, Yamagin Card Holdings, Yamagin Card, Yamagin Credit
Guarantee, Momiji Estate, Kitakyushu Economics Institute, YM Saison, Yamaguchi Capital, Momiji Card

Company with an audit and supervisory committee

YMFG Board of Directors and Corporate Auditors (As of July 1, 2015)
President

Director

Senior Managing Director

Director

Mitsuhiro Hirozane

Fumio Nosaka

Takeshi Yoshimura

Senior Managing Director

Director

Director
Audit and Supervisory Committee Member

Hiroaki Tamura*

Koichi Fukuda

Toshio Kato

Hirohide Umemoto

Director
Audit and Supervisory Committee Member

Kazuo Tsukuda*

Director
Audit and Supervisory Committee Member

Michiaki Kunimasa** Hiroaki Tamura, Kazuo Tsukuda and Michiaki Kunimasa are outside directors under Article 15 of Section 2 of the Companies Act.

YMFG Annual Report 201514

Internal Audits and Compliance System

Internal Audits
Principles of Internal Audits

for the whole Group, implements audits and supervises each

We define an internal audit as a series of processes forGroup company’s internal audits.

objective verification of the appropriateness and effectiveness

The YMFG Audit and Inspection Dept. devises the rules andof internal controls (including risk management) and as

medium- to long-term plans for the Group’s internal audits,making suggestions for necessary improvements.

implements audits of the Group companies’ compliance/risk

YMFG has devised standard internal audit rules for the

management departments and checks the accuracy of thewhole Group. On the basis of these rules, the internalfinancial statements of the Group companies. The department

audit departments of each Group company verify themonitors and gives guidance and advice to the Groupappropriateness and effectiveness of internal controls andcompanies’ audit and inspection departments. On the basis

make suggestions for necessary improvements.

of their audit reports, the department reports on the internal

Further, YMFG creates the Group’s medium- to long-term
internal audit plan on the basis of its management policy andaudits of the Group to the Board of Directors.
The banks’ audit and inspection departments implement

conditions. Internal audits by the auditing bodies of eachinternal audits of branches in Japan and overseas, and reports

Group company are conducted on the basis of this plan toto YMFG and to the Board of Directors. In particular, internal

ensure their effectiveness and efficiency.

audits of front-line sales outlets are performed to verify thestatus of compliance and risk management functions and

Implementation of Internal Audits

ensure their mutual effectiveness.

YMFG’s Audit and Inspection Dept. plans audit processes

Compliance System
YMFG’s Attitude toward Compliancecommittee discusses ways to create and reinforce compliance

YMFG and its Group companies share a common understanding

systems, reports the results of these deliberations to the Boardof their responsibilities to fulfill their public mission andof Directors and reflects these results in Group operations.

corporate social responsibilities. Accordingly, we accord

YMFG’s Compliance Administration Department

topmost management priority to thorough compliance, takecommunicates with compliance personnel at each Groupthe seriousness of compliance seriously and consider earningcompany and, in accordance with the deliberations of thethe trust of a broad-based society our fundamental policy.

Group Compliance Committee, ensures the appropriateness ofcompliance systems for the entire Group.

Compliance System
We have established a compliance administration department

Efforts to Prevent Money Laundering

to take overall charge of ensuring appropriate compliance

The Act on Punishment of Organized Crimes and Control offor YMFG and its Group companies. Individual companies’

Crime Proceeds and the Law for Prevention of Transfer ofcompliance departments handle the centralized management

Criminal Proceeds prescribes heightened measures to preventof compliance-related activities, including the creation ofmoney laundering. The Group’s efforts are appropriate and incompliance structures and the training of executives andconformance with these regulations, in keeping with our aim

general employees. Compliance supervisors and officers at allof maintaining society’s trust in us as a financial institution.

departments and branches foster an enhanced awareness ofSpecifically, we have formulated a policy of controls andappropriate compliance in daily operations.

procedures reasonably designed to prevent and detect money

The Group Compliance Committee, chaired by thelaundering/terrorist financing activities. We have appointed

president, acts as a deliberative body. This committee

a senior officer to take charge of this policy and establishedformulates Group compliance programs for each fiscal year

training programs on this topic for all management and staff.

and monitors the status of program implementation. The

15

YMFG Annual Report 2015

Risk Management System

YMFG Risk Management System
YMFG#PBSEPG%JSFDUPST "VEJUBOE4VQFSWJTPSZ$PNNJUUFF
ReportGroup ALM Committee

Committees

Risk Administration Dept.

Risk Management
Control Department
Risk Category

Risk
Administration Dept.

Risk
Administration Dept.

*OEFQFOEFOU
Auditors

Audit

Operational Riskt1SPDFTTJOHSJTL
t4ZTUFNSJTLt*OGPSNBUJPOSJTLt-FHBMSJTLt5BOHJCMFBTTFUSJTLt1FSTPOOFMSJTL

Market Risk
-JRVJEJUZ3JTL

Credit Risk

Department in Chargeof Risk Management

Group Operational Risk Management Committee

Risk Administration Dept.
Compliance Administration Dept.
Corporate Administration Dept.

Audit and*OTQFDUJPO%FQU

Rumor Risk

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risk management)

Audit

CustomerCommunication Dept.

Groupwide Risk Management
Report on risk
management%JSFDUJPOTPOCBTJDQPMJDJFTBVEJUTZTUFNQSJODJQMFT

Yamaguchi Bank

Momiji Bank

Kitakyushu Bank#PBSEPG%JSFDUPST "VEJUBOE4VQFSWJTPSZ$PNNJUUFF
Committees

Group ALM Committee

Risk Category

Credit Risk

ReportGroup Operational Risk Management Committee

Risk Administration Dept.

Risk Management
Control Department

Direction/Audit

Audit

Operational Riskt1SPDFTTJOHSJTL
t4ZTUFNSJTLt*OGPSNBUJPOSJTLt-FHBMSJTLt5BOHJCMFBTTFUSJTLt1FSTPOOFMSJTL

Market Risk
-JRVJEJUZ3JTL

Reputational Risk
FG Audit and*OTQFDUJPO%FQU

Audit

Department in Chargeof Risk Management
Related Departments

HQ departments

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risk management)

Risk management departments)2EFQBSUNFOUT4FDUJPOTSFMBUFEUPSJTLNBOBHFNFOU
0QFSBUJPOTCZ)2 CSBODIFT BGåMJBUFT FUD

Operations

YM Securities*OEFQFOEFOU
Auditors

Izutsuya Withcard

YM Consulting

YM Lease

Sanyu

Yamagin Card Holdings

Yamagin Card

Yamagin Credit Guarantee Momiji Estate Kitakyushu Economics Institute YM Saison Yamaguchi Capital Momiji CardYMFG faces all kinds of risks that have become moremeasured by a uniform method, capital is allocated on thediversified and complex along with changes in the economy

basis of these methods, and risks are collectively managed.

and in society. Risk management is one of the most important
issues facing the Group.
As part of our basic risk management policy, we havedevised standard risk management rules that apply to YMFG
and its subsidiaries.
The subsidiaries have organized risk management sections,

YMFG’s risk management sections cooperates with its
counterparts in the subsidiaries to check risk management
conditions in the whole Group.
The Audit and Inspection Department, which is
independent of the operation departments, implementsinternal audits to ascertain the appropriateness andrisk management departments and Group Operational Risk

effectiveness of risk management. This system applies both toManagement committee to cope with risks. Risk amounts are

YMFG and to its subsidiaries.
YMFG Annual Report 201516

Contributions to the Community and the Environment

Invitation of Foreign Students to Attend Shimonoseki City University
Supporting young human resources from Asia, who are expected to flourish
after returning to their countries
Since 1986, The Yamaguchi Bank has invited students from China, Thailand and Turkey
to attend Shimonoseki City University. The bank has invited a total of 156 students,
offering them housing and financial and lifestyle support to ensure a comfortable study
environment.
Foreign students to Shimonoseki City University
in fiscal 2015

Japan–China Elementary School Exchanges

Yamaguchi Bank Cup Japanese Speech Contest

Inviting school children to Japan every year from
Qingdao and Dalian, China

Advancing grassroots international exchange throughJapanese language education

The Yamaguchi Bank invites school children from Qingdao

Since 1992, we have regularly held the Yamaguchi Bank Cup

and Dalian to Japan to spread the “Small Kindness”

Japanese Language Speech Contest in Qingdao, China. The

movement. The children visit elementary schools and interact

contest has earned praise from the city government for its

with Japanese children, fostering relations between the two

extensive contributions to Japanese-language education, andcountries.

has long driven cultural exchange at the grassroots level.

Efforts on Environmental Issues
Implementing Groupwide Initiatives for the Environment
As part of its efforts to contribute to the creation of a sustainable society, YMFG is working on a number of initiatives to prevent
global warming.
Since 2008, the Group has participated in the Cool Biz campaign for lighter clothing during summer and an early lights-out
campaign, and participates in the Warm Biz campaign for heavier clothing in winter. We are also giving out eco-goods to customers
visiting Group banks on the anniversaries of bank branch openings, and we remain committed to further environmental contribution
activities.

Early Lights-Out Campaign Implementation

Cool Biz Implementation

Period:From June 2009

Period:From June 1 to September 30, 2015

Actions:

One day each month is designated for earlyParticipants:

All Group companies

lights out at 6 p.m.

Actions:

As a general rule, indoor temperatures are set
to 28°C and suit jackets and neckties are notDistributing Eco-Goods

worn.

The Yamaguchi Bank and Momiji Bank are holding campaigns
to curb global warming, such as by giving out environmentally

Warm Biz Implementation

friendly eco-goods on the anniversaries of the opening of each

Period:From December 1, 2014 to March 31, 2015

branch.

Participants:

All Group companies

Actions:

As a general rule, indoor temperatures are set
to 20°C.

17

YMFG Annual Report 2015

Financial Section

Financial Section
YMFG Business Situation........................................... 19
YMFG Consolidated Financial Statements ................. 21
YMFG Notes to Consolidated Financial Statements ... 25
Independent Auditor’s Report ................................... 54
Yamaguchi Bank Financial Statements ...................... 55
Momiji Bank Financial Statements ............................. 57
Kitakyushu Bank Financial Statements ....................... 59
YMFG Annual Report 201518

YMFG Business Situation
Summary of Business Results

together to leverage our comprehensive Group strengths
as “One YMFG.”

Performance

YMFG will also put forth every effort toward developing

During the fiscal year ended March 31, 2015, despite

mutually beneficial relationships with local communities

some signs of weakness the Japanese economy remained

and customers, aiming to provide a variety of financial

in a state of gradual recovery. Manufacturing activity

services that invigorate our region.

was lackluster in some areas, affected by a backlash in

Banking operations, which are the core of YMFG’s

demand following the consumption tax hike, but began

business, are conducted through the efforts of its banks toto rebound in the second half of the year thanks to themeet the varied financial needs of customers in the regions

impact of overseas economic recovery, particularly in thewhere they conduct business via a wide range of financial

United States. The employment situation also continued to

products through their deposit and loan operations.

improve steadily, leading to firm personal consumption.

In deposits, we ran an integrated three-bank campaign

Meanwhile, the region continued to enjoy a modest

under the name of “YMFG Thanksgiving,” stressing ourrecovery. Overall production activity was solid, with strong
performance centering on the automotive sector, andappreciation for customer support of our operations to date.
In June 2014, we set up the Information Strategy Group

employment and income conditions improved. Affected bywithin YMFG’s Business Strategy Planning Department andthe consumption tax hike, however, personal consumption

established Solution Operating Departments at each of ourwas sluggish, as demonstrated by home electronics sales

three Group banks. These organizations are designed toand unit sales of new passenger cars.

share and make use of information throughout the Group

Under these circumstances, in line with their mission ofin order to offer the best possible solutions to the issues

contributing to regional economic development, regionalcustomers face. These departments will step up efforts tofinancial institutions face vigorous requests to deliver stronger

provide information in a timely manner and support thefinancial soundness and profitability, supply funding more

expansion of our networks.

flexibly and further enhance their financial services.

In May 2014, we set up a regional invigoration fundthrough the collaboration of our three banks, Nishi-

YMFG Performance

19

Chugoku Shinkin Bank, Daiwa Securities Group’s

Amid these financial and economic conditions, supported

headquarters, Yamaguchi Capital and REVIC Capital,

by its shareholders and business partners all YMFG’sa fund-operating subsidiary of the Regional Economy

officers and employees were united in their efforts to

Vitalization Corporation of Japan (REVIC). By supporting ourstrengthen the Group’s management base, bolster

business partners, this fund is intended to have economic

operating performance and contribute to the region.

effects for the entire region and help increase employment.

Based on the “YMFG Medium-Term Management

In international operations, in March 2015 we signed aPlan 2013,” which commenced in the fiscal year ended

memorandum of understanding involving a business tie-up

March 31, 2014, as a financial Group with three banks—with Vietcombank, a leading bank in Vietnam. This move

Yamaguchi Bank, Momiji Bank and Kitakyushu Bank—

was aimed at strengthening our Asian network.

we worked to strengthen ties with the banks’ regions.

In March 2015, we issued $300 million in US dollar-

Furthermore, in collaboration with YM Securities, YM

denominated convertible bonds to meet the dollar funding

Consulting and other Group companies, we are working

needs of clients conducting business overseas.

YMFG Annual Report 2015

bonds. This change reflected investment decisions made in

Financial Results
YMFG’s consolidated operating performance for the year

consideration of market fluctuations.
Total assets amounted to ¥10,195 billion at fiscal year-

ended March 31, 2015, is outlined below.
Total income amounted to ¥161,437 million, up ¥257

end, up ¥560 billion from one year earlier. This rise was

million from the preceding fiscal year. The main reasons for

attributable to growth in loans and bills discounted, based

this increase were higher interest and dividends on securities.

on the increase in deposits, including NCDs.

Total expenses, meanwhile, rose ¥533 million, toAt the end of the fiscal year, the consolidated capital¥112,122 million, due to such factors as an increase inadequacy ratio for the Yamaguchi Financial Group (uniform

other operating expenses. As a result, income before

international standard) was 13.43%. Our consolidated

income taxes decreased ¥276 million, to ¥49,315 million,

total Tier 1 capital adequacy ratio was 11.73%, and ourand net income fell ¥719 million, to ¥30,523 million.

consolidated common equity Tier I capital adequacy ratio

Although interest rates remained low, due to the
expansion of products and services to meet increasingly

was 11.73%.
Net cash provided by operating activities was ¥227

diverse customer needs and steady marketing efforts based

billion, ¥299 billion lower than in the preceding fiscal year,

on solid community relationships, the Group succeeded

mainly due to the net change in loans and bills discounted.

in boosting deposits ¥444 billion year on year, to ¥9,209

Net cash used in investing activities was ¥177 billion, abillion, including negotiable certificates of deposit (NCDs).

¥232 billion change from cash provided by these activities

Loans and bills discounted increased ¥264 billion,in the previous year, principally because of increased

to ¥6,228 billion as of March 31, 2015, due to thepurchases of securities. Net cash provided by financing

Group’s efforts to fulfill its role as a regional financial

activities amounted to ¥19 billion, a change of ¥39 billion

institution through its function as a financial intermediaryfrom the cash used in these activities in the fiscal year

and aggressive efforts to meet demand from businessended March 31, 2014. The main changes were in thepartners with whom the Group has developed trust-

categories of subordinated bonds payable and purchases

based relationships.

of treasury stock. As a result of these cash flows, cash and

The Group’s holdings of securities came to ¥2,324 billion
at year-end, up ¥252 billion, due to increases in Japanese

cash equivalents at the end of the fiscal year came to ¥943
billion, up ¥69 billion.

Yamaguchi Financial Group, Inc., Management Indices (Consolidated)

Consolidated total income
Consolidated net income
Consolidated comprehensive income
Consolidated total net assets
Consolidated total assets
Net assets per share
Current term net income per share(current term net loss per share)
Current term net income per share after
stock adjustment
Capital ratio*2
Earnings on equity - increase
Group price earnings ratio

Millions of yen
2015

Millions of yen
2014

Millions of yen
2013

Millions of yen
2012

161,437
30,52375,211
578,388
10,195,184
2,346.56
yen
120.88yen
108.24yen
13.43%
5.61%
11.44 times

161,180
31,242
34,322
521,470
9,635,044
2,040.02
yen
120.68yen
116.57yen
12.69%
6.04%
7.70 times

158,452
27,23351,743
521,423
9,327,236
1,901.30
yen
102.48yen
102.18yen
13.34%
5.52%
9.28 times

156,095
17,91929,120472,405
9,115,427
1,720.56
yen
66.99
yen
66.88
yen
11.75%
3.92%
11.22 times

Thousands of
U.S. dollars*1
2015

1,343,405
253,999625,872
4,813,081
84,839,677
19.53
U.S. dollars
1.01
U.S. dollars
0.90
U.S. dollars*1 US dollar amounts have been translated, for convenience only, at the rate of ¥120.17 = US$1.00 as of March 31, 2015.
*2 YMFG calculated its capital ratio according to the first standard through the fiscal year ended March 31, 2012. From the fiscal year ended March 31, 2013, this ratio is calculated according to theuniform international standard (Basel 3).

YMFG Annual Report 201520

YMFG Consolidated Financial Statements
CONSOLIDATED BALANCE SHEETSMarch 31, 2015 and 2014

Millions of yen
2014

Thousands of
U.S. dollars (Note 1)
2015¥

965,275
283,251
8,362
6,244
48,0962,323,985
6,228,014
14,281
13,349185,284
87,99916,88633,4762,880
52,293(74,491)¥ 10,195,184¥

915,056
315,198
8,869
5,753
49,996
2,071,990
5,964,133
15,497—
171,199
89,34828,09822,882
15,63948,079(86,693)¥ 9,635,044$ 8,032,579
2,357,086
69,58551,960400,233
19,339,145
51,826,696
118,840
111,084
1,541,846
732,288
140,518
278,572
23,966435,159(619,880)$ 84,839,677¥ 9,209,080
75,071
24,0285,424
39,822309
25,00072,102
81,218
3,015
3,467
36
37
1,357
71
12
12,991
11,46352,2939,616,796
50,00059,686386,187(24,320)
471,553
71,146(316)
23,994
5,003
99,827512
6,496
578,388¥ 10,195,184¥ 8,764,966
78,897
13,2693,188
29,769287
45,00030,87675,812
3,093
4,479
28
62
1,108
67
7
1,917
12,67048,079
9,113,574
50,00059,713361,184(10,393)
460,504
36,706(352)
22,845(3,465)55,734431
4,801
521,470¥ 9,635,044$ 76,633,769
624,707
199,950
45,136331,381
2,571
208,039
600,000
675,858
25,08928,851300
308
11,292591
100
108,105
95,390435,159
80,026,596
416,077
496,680
3,213,672(202,380)
3,924,049
592,045(2,630)199,667
41,633
830,715
4,261
54,056
4,813,081$ 84,839,677

Millions of yen
2015

ASSETS
AssetsCash and due from banks (Notes 3, 4 and 9)
Call loans and bills purchased (Note 4)
Monetary claims bought
Trading assets (Notes 4 and 6)
Money held in trust (Notes 4 and 6)
Securities (Notes 4, 5, 6 and 9)
Loans and bills discounted (Notes 4 and 7)
Foreign exchanges
Lease receivables and investment assets
Other assets
Tangible fixed assets (Notes 10, 15 and 20)
Intangible fixed assets (Note 20)
Net defined benefit asset
Deferred tax assets (Note 21)
Customers’ liabilities for acceptances and guarantees (Note 16)
Allowance for loan losses
Total assets

LIABILITIES AND NET ASSETS
Liabilities

Net Assets(Notes 20
and 21)

Deposits (Notes 4 and 9)
Call money and bills sold (Note 9)
Payables under securities lending transactions (Note 9)
Trading liabilities (Notes 4 and 6)
Borrowed money (Notes 9 and 12)
Foreign exchanges
Bonds payable (Notes 4 and 13)
Bonds with warrants
Other liabilities
Provision for bonuses
Net defined benefit liability
Provision for directors’ retirement benefits
Provision for loss on interest repayments
Provision for reimbursement of deposits
Provision for customers point services
Reserves under special laws
Deferred tax liabilities (Note 21)
Deferred tax liabilities for land revaluation (Notes 15 and 21)
Acceptances and guarantees (Note 16)
Total liabilities
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Unrealized gains (losses) on available-for-sale securities
Deferred gains (losses) on hedges
Revaluation reserve for land (Note 15)
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Stock options
Minority interests
Total net assets
Total liabilities and net assets

See accompanying notes.

21

YMFG Annual Report 2015

CONSOLIDATED STATEMENTS OF INCOME
Years ended March 31, 2015 and 2014

Millions of yen
2015

IncomeInterest income:Interest on loans and discounts
Interest and dividends on securities
Other interest income
Trust fees
Fees and commissions
Trading income
Other ordinary income
Recoveries of written-off claims
Negative goodwill generated
Other income (Note 17)
Total income
Expenses
Interest expense:
Interest on deposits
Interest on borrowings and rediscounts
Interest on bonds payable
Other interest expense
Fees and commissions payments
Other operating expenses
General and administrative expenses (Note 18)
Impairment losses (Note 11)
Losses related to staged acquisition
Other expenses (Note 19)
Total expenses
Income before income taxes
Income taxes (Note 21):
Current
DeferredIncome before minority interests
Minority interests in income
Net income
Amounts per share of common stock:
Net income (Note 29)¥¥

78,181
25,3261,289
124,3482,574
14,580321
2,391
12,426
161,437

Millions of yen
2014

¥

$

650,587
210,751
10,7268
202,613
21,420121,328
2,671
19,897
103,404
1,343,405

6,859
684
418
283
7,465
7,318
85,423
132
200
3,340
112,122
49,315

7,606
519
581
287
7,331
5,321
87,387
46—
2,511
111,589
49,591

57,077
5,692
3,478
2,355
62,12060,897710,851
1,098
1,664
27,796
933,028
410,377

11,244
6,992
31,079556
30,523

9,908
7,663
32,020778
31,242

93,56758,184
258,626
4,627
253,999

¥

Yen
2015

¥

80,457
21,3241,191
124,782
2,330
11,461
21—
19,613
161,180

Thousands of
U.S. dollars (Note 1)
2015

120.88

Yen
2014

¥

120.68$

U.S. dollars (Note 1)
2015

$

1.01

See accompanying notes.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Years ended March 31, 2015 and 2014

Millions of yen
2015

Income before minority interests
Other comprehensive income (Note 26)
Unrealized gains (losses) on available-for-sale securities
Deferred gains (losses) on hedges
Revaluation reserve for landRemeasurements of defined benefit plans
Share of other comprehensive income in affiliated companies
accounted for using equity method
Comprehensive income (Note 26)
Total comprehensive income attributable to owners of the parent
Total comprehensive income attributable to minority interests¥

31,07944,132
34,454
36
1,187
8,468
(13)
75,211
74,645566

Millions of yen
2014¥

32,020
2,302
2,204
94
—
—
4
34,32233,544
778

Thousands of
U.S. dollars (Note 1)
2015$

258,626
367,246
286,709300
9,878
70,467(108)625,872
621,162
4,710

See accompanying notes.

YMFG Annual Report 201522

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
Years ended March 31, 2015 and 2014

Millions of yen
Shareholders’ Equity
CapitalStock

Balance at 31st March 2013
Cumulative effects of changes inaccounting policies
Restated balance
Changes of items during the year
Dividend paid
Net income
Purchase of treasury stock
Disposal of treasury stock
Retirement of treasury stockReversal of revaluation reserve for land
Net changes in terms other thanshareholders’ equity
Total changes of items during the year
Balance at 31st March 2014
Cumulative effects of changes inaccounting policies
Restated balance
Changes of items during the year
Dividend paid
Net income
Purchase of treasury stock
Disposal of treasury stock
Increase in treasury stock associated withan increase in consolidated subsidiaries
Decrease in treasury stock associatedwith a decrease in affiliates accounted
for under the equity method
Reversal of revaluation reserve for land
Net changes in terms other thanshareholders’ equity
Total changes of items during the year
Balance at 31st March 2015

CapitalSurplusRetained
Earnings

Accumulated other comprehensive income

Unrealized
Total
gains onTreasury
Shareholders’ availableStock
Equityfor-salesecurities¥50,000 ¥ 79,628 ¥332,868 ¥ (2,731) ¥459,765
50,000(367)
79,261(27)
332,841398(2,333)(3,387)
31,242(27,972)377
19,535(13)(19,535)488

4459,769

Total
Deferred Revaluation Remeasurements accumulated
losses on reserve forof definedotherhedgeslandbenefit plans comprehensive
income¥34,498¥(446)¥23,333

34,498(446)

23,333¥Stock
options

Minority
Interests

Total Net
Assets—¥57,385¥249¥4,024 ¥521,423—

57,385249

4,024(3,387)
31,242(27,972)
364
—
488

4
521,427(3,387)
31,242(27,972)364—
488— (19,548) 28,343(8,060)735¥50,000 ¥ 59,713 ¥361,184 ¥(10,393) ¥460,504

2,208
2,208
¥36,70694
94¥(352)(488)(488)¥22,845(3,465)(3,465)¥(3,465)(1,651)(1,651)¥55,734

182
182
¥431

777
(692)
777
43
¥4,801 ¥521,470(1,994)359,190

36,706(352)

22,845(3,465)55,734431

4,801

50,00059,713(10,393)(1,994)
458,510(14,320)407(3,564)30,523(14,320)380(3,564)30,523(14,320)
380

(29)

(29)

(29)

15

15
38

15
38

(3,564)30,523(27)38—(27) 26,997 (13,927) 13,043¥50,000 ¥ 59,686 ¥386,187 ¥(24,320) ¥471,553

34,44034,440¥71,14636
36¥(316)

1,149
1,149¥23,994

8,468
8,468
¥ 5,003

44,09344,093¥99,827

81
81
¥512

(1,994)519,476

1,695
45,8691,695
58,912¥6,496 ¥578,388

Thousands of U.S. dollars (Note 1)
Shareholders’ Equity

Balance at 31st March 2014
Cumulative effects of changes inaccounting policies
Restated balance
Changes of items during the year
Dividend paid
Net income
Purchase of treasury stock
Disposal of treasury stock
Increase in treasury stock associated withan increase in consolidated subsidiaries
Decrease in treasury stock associatedwith a decrease in affiliates accounted
for under the equity method
Reversal of revaluation reserve for land
Net changes in terms other thanshareholders’ equity
Total changes of items during the year
Balance at 31st March 2015
See accompanying notes.

23

YMFG Annual Report 2015

Retained
Earnings

Accumulated other comprehensive income

Unrealized
Total
gains onTreasury
Shareholders’ availableStock
Equityfor-salesecurities

Total
Deferred Revaluation Remeasurements accumulated
losses on reserve forof definedotherhedgeslandbenefit plans comprehensive
incomeStockoptions

Minority
Interests

Total Net
AssetsCapitalStock

CapitalSurplus$416,077$496,904 $3,005,609$ (86,486) $3,832,104$305,451$(2,930)$190,106$(28,834)$463,793$3,587$39,960 $4,339,444

416,077

496,904(16,594)
2,989,015(16,594)(86,486) 3,815,510

305,451(2,930)190,106(28,834)

463,793

3,587

39,960(29,658)
253,999(119,165)
3,387(29,658)
253,999(119,165)
3,163(29,658)
253,999(119,165)
3,163

(241)

(241)

(241)

125
316

125
316

125
316

(224) 224,657$496,680 $3,213,672(115,894) 108,539$(202,380) $3,924,049

(224)

—
$416,077

286,594
286,594$592,045

300
300$(2,630)

9,561
9,561
$199,667

70,46770,467$ 41,633

366,922366,922$830,715

674
674$4,261(16,594)
4,322,850

14,096381,692
14,096490,231$54,056 $4,813,081

CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended March 31, 2015 and 2014
Millions of yen
2015

Cash flows from operating activities:
Income before income taxes
Depreciation
Impairment losses
Amortization of goodwill
Negative goodwill generated
Losses related to staged acquisition
Equity in earnings of affiliates
Net change in allowance for loan losses
Net change in provision for bonuses
Net change in defined benefit asset
Net change in defined benefit liability
Net change in provision for directors’ retirement benefits
Net change in provision for loss on interest repayments
Net change in provision for reimbursement of deposits
Net change in provision for customers point services
Net change in reserves under special laws
Interest income
Interest expenses
Net gains related to securities transactions
Net losses (gains) from money held in trust
Net exchange gains
Net losses from disposition of fixed assets
Net change in trading assets
Net change in trading liabilities
Net change in loans and bills discounted
Net change in deposits
Net change in negotiable certificates of deposits
Net change in borrowed money excluding subordinated loans
Net change in deposits with bank
Net change in call loans and bills purchased
Net change in call money and bills soldNet change in payables under securities lending transactions
Net change in foreign exchanges (asset account)
Net change in foreign exchanges (liability account)
Net change in lease receivables and investment assets
Net change in issuance and redemption of unsubordinated bonds payable
Interest received
Interest paid
Other, net
Subtotal
Income taxes paid
Income taxes refunds
Net cash provided by operating activities¥

Cash flows from investing activities:
Purchases of securities
Proceeds from sales of securities
Proceeds from maturity of securities
Purchases of money held in trust
Proceeds from sales of money held in trust
Purchases of tangible fixed assets
Proceeds from sales of tangible fixed assets
Purchases of intangible fixed assets
Purchases of shares in subsidiaries associated with changes in the scope of consolidation
Net cash provided by (used in) investing activities

49,315
10,518132
4,935(2,391)200(44)(12,203)(78)(10,594)(1,012)
9
(25)
250
3
5
(104,797)
8,244(12,936)
1,162(13,554)
70
(492)
2,236
(263,881)
294,519
149,596
10,053
18,55932,454(3,826)
10,7591,216
22(13,349)(20,000)
97,621(11,091)
15,000236,605(10,385)994
227,214

Thousands of
U.S. dollars (Note 1)
2015

Millions of yen
2014¥

49,591
10,786
46
4,950
—
—
(31)
(11,459)
181(11,476)
1,899
6
(24)
22
(8)
3
(102,971)
8,993(13,646)(677)(8,479)
203
3,479
227
(152,167)
278,468
33,440532(7,002)
333,440
35,906
8,939(2,758)(182)—(30,000)
101,712(8,118)13,390537,215(11,028)18
526,205$

410,377
87,526
1,098
41,067(19,897)
1,664
(366)
(101,548)(649)(88,158)(8,421)
75
(208)
2,080
25
42
(872,073)
68,603(107,647)
9,670(112,790)
583(4,094)18,607(2,195,897)
2,450,853
1,244,870
83,656
154,440
270,067(31,838)
89,531
10,119183(111,084)(166,431)
812,357(92,294)
124,820
1,968,918(86,419)
8,272
1,890,771(3,063,268)
2,775,634
113,275(11,000)
11,574(1,936)37(1,367)(94)(177,145)(2,758,575)
2,723,138
88,616(9,480)15,638(2,897)141(1,716)—54,865(25,491,121)
23,097,562
942,623(91,537)
96,314(16,111)308(11,376)(782)(1,474,120)

Cash flows from financing activities:
Proceeds from issuance of bonds with warrants
Decrease in subordinated bonds payable
Dividends paid
Dividends paid to minority shareholders
Purchases of treasury stock
Proceeds from disposal of treasury stock
Net cash provided by (used in) financing activities

36,051—(3,564)(1)(14,319)508
18,67530,876(20,000)(3,386)(1)(27,972)364(20,119)300,000—(29,658)(8)(119,156)
4,227
155,405

Effect of exchange rate changes on cash and cash equivalents
Net change in cash and cash equivalents
Cash and cash equivalents at the beginning of fiscal year
Cash and cash equivalents at the end of fiscal year (Note 3)

33
68,777874,205
942,98228
560,979
313,226874,205275
572,3317,274,736
7,847,067¥¥$

See accompanying notes.

YMFG Annual Report 201524

YMFG Notes to Consolidated Financial Statements
Years ended March 31, 2015 and 201425

1. BASIS OF PRESENTATION

2. SIGNIFICANT ACCOUNTING POLICIESYamaguchi Financial Group, Inc. (“YMFG”) was establishedon October 2, 2006 as a holding company for The
Yamaguchi Bank, Ltd. (“Yamaguchi Bank”) and Momiji
Holdings, Inc. (“Momiji Holdings”) through a statutory
share transfer (kabushiki iten). Upon formation of YMFG
and completion of the statutory share transfer, Yamaguchi
Bank and Momiji Holdings became wholly owned
subsidiaries of YMFG.
Furthermore, in September 2011 Kitakyushu Financial
Project Co., Ltd., received a transfer of approval to handle
business split off from Yamaguchi Bank in the Kyushu
region and commenced operations on October 3, 2011.
YMFG and its consolidated subsidiaries (“the Group”)
maintain their accounts and records in accordance withthe provisions set forth in the Financial Instruments andExchange Law and its related accounting regulation andin conformity with accounting principles and practices
generally accepted in Japan (“Japanese GAAP”). Japanese
GAAP are different in certain respects as to application anddisclosure requirements of International Financial ReportingStandards.
The accompanying consolidated financial statements
are a translation of the audited consolidated financial
statements of YMFG which were prepared in accordancewith Japanese GAAP and were filed with the appropriate
Local Finance Bureau of the Ministry of Finance as requiredby the Financial Instruments and Exchange Law.
In preparing the accompanying consolidated financial
statements, certain restructuring and reclassifications havebeen made in the consolidated financial statements issued
domestically in order to present them in a form which ismore familiar to readers outside Japan.
The consolidated financial statements are stated inJapanese yen. The translations of the Japanese yenamounts into U.S. dollars are included solely for theconvenience of readers, using the prevailing exchange rate
at March 31, 2015, which was ¥120.17 to U.S.$1.00. Suchtranslations should not be construed as representations
that the Japanese yen amounts have been, could havebeen, or could in the future be, converted into U.S. dollars
at this or any other rate of exchange.

Consolidation and equity method(1) Scope of consolidation

YMFG Annual Report 2015

Japanese accounting standards on consolidated
financial statements require a company to consolidate
any subsidiaries of which the company substantiallycontrols the operations, even if it is not a majority
owned subsidiary. Control is defined as the power togovern the decision making body of an enterprise.
(i) 13 consolidated subsidiaries at March 31, 2015
and 12 at March 31, 2014.
The names of the consolidated subsidiaries arelisted on page 1.
YM Lease Co., Ltd., formerly accounted forby the equity method, was excluded from thescope of application of equity-method affiliates
and included in the scope of consolidation fromthe fiscal year ended March 31, 2015, as YMFG
acquired additional shares in YM Lease, increasing
its percentage of voting rights.
(ii) Five unconsolidated subsidiaries at March 31,
2015, and six at March 31, 2014.
Name of major subsidiary:
Yamaguchi Capital 2nd Investment Business
Limited Liability Association
The unconsolidated subsidiaries are excluded
from the scope of consolidation because their total
assets, ordinary income, net income (in proportion
to ownership), retained earnings (in proportion toownership) and accumulated other comprehensive
income are so immaterial that they do not hinder arational judgment of YMFG’s consolidated financial
position and results of operations.

(2) Application of the equity method
Japanese accounting standards also require any
unconsolidated subsidiaries and affiliates with financial
and operating policies over which YMFG is able toexercise material influence to be accounted for by theequity method.
(i) No unconsolidated subsidiaries were accounted
for by the equity method at March 31, 2015 and2014.
(ii) As at March 31, 2015, three affiliates accounted
for by the equity method and four at March
31, 2014. Affiliates accounted for by the equity
method at March 31, 2015 were as follows:YM Saison Co., Ltd.
Yamaguchi Capital Co., Ltd.
Momiji Card Co., Ltd.
YM Lease Co., Ltd., formerly accounted for by
the equity method, was included in the scopeof consolidation and excluded from the scopeof application of equity-method affiliates fromthe fiscal year ended March 31, 2015, as YMFG
acquired additional shares in YM Lease, increasing
its percentage of voting rights.
(iii) As at March 31, 2015, five unconsolidated
subsidiaries were not accounted for by the equity
method, and six at March 31, 2014.
Name of major subsidiary:
Yamaguchi Capital 2nd Investment Business
Limited Liability Association
The unconsolidated subsidiaries that are notaccounted for by the equity method are also
excluded from the scope of application of equity
method because their net income (in proportion
to ownership), retained earnings (in proportion toownership) and accumulated other comprehensive
income (in proportion to ownership) are so
immaterial that they do not hinder a rational
judgment of YMFG’s consolidated financial
position and results of operations.
(iv) There were no affiliates that were not accounted
for by the equity method as at March 31, 2015 and2014.

(3) The balance sheet dates of consolidated
subsidiaries
The balance sheet date of consolidated subsidiaries is
as follows:
March 31, 2015
13 companies
March 31, 2014
12 companies(4) Accounting Policies
Trading assets, trading liabilities andtransactions for trading purposes
The valuation method of “Trading assets” and “Trading
liabilities” is as follows:
Balances incurred by transactions of which the purpose
is to earn a profit by taking advantage of short-term
fluctuations in a market or discrepancies in different
markets of interest rates, currency exchange rates, shareprices or other indices (hereinafter referred to as “trading
purposes”) are included in “Trading assets” or “Trading
liabilities” in the consolidated balance sheets as of thedate on which the transactions have been contracted.

The income or losses on these transactions are recorded
as “Trading income” and “Trading expenses” on the
consolidated statements of income.
Trading assets and trading liabilities are valued, in thecase of securities and commercial paper, at the market
value as of the date of the balance sheet and, in the caseof derivatives, including swaps, futures and options, at theamount due if the transactions were to be settled as of thedate of the balance sheet. “Trading income” and “Trading
expenses” include interest income and interest expense,
respectively, and gains and losses, respectively, resulting
from the valuation of securities, commercial paper,
derivatives, etc., which are included in “Trading assets” or“Trading liabilities.”

Securities
With regard to the valuation of securities, held-to-maturity
debt securities are stated at amortized cost (straight-line
method) using the moving-average method. Investments
in unconsolidated subsidiaries that are not accounted forby the equity method are stated at cost determined by themoving-average method. Available-for-sale securities are in
general stated at fair value (cost of sale calculated primarily
according to the moving-average method) indicatedaccording to market price at the consolidated balance
sheet date (for equity securities, the average market priceduring the one-month period ending on the consolidatedbalance sheet date). Available-for-sale securities having noreadily available market value are valued at cost using themoving-average method.
Unrealized gains (losses) on available-for-sale securities
are reported as a component of net assets.
Securities constituting trust assets within money held in
trust are valued using the same methods as those for theabove-mentioned trading assets, liabilities and securities.

Derivatives
Derivatives other than those for specific trading purpose or
those for which certain exceptional accounting treatment isapplied are stated at fair value.

Method of hedge accounting
The subsidiaries that conduct banking business (“theBanks”) apply deferred hedge accounting in accordancewith “Treatments of Accounting and Audit on Applicationof Accounting Standard for Financial Instruments in
Banking Industry”(The Japanese Institute of Certified Public
Accountants (“JICPA”) Industry Audit Committee Report
YMFG Annual Report 201526

No.24). As for the hedge to offset market fluctuation, theBanks assess the effectiveness of the hedge by grouping thehedged items such as deposits and loans and the hedging
instruments such as interest rate swaps by their maturity.
Also, the Banks apply deferred hedge accounting tohedge foreign exchange risks associated with various
foreign currency denominated monetary assets andliabilities as stipulated in “Treatment of Accounting and
Auditing Concerning Accounting for Foreign Currency
Transactions in Banking Industry” (JICPA Industry Audit
Committee Report No. 25). The effectiveness of thecurrency swap transactions, exchange swap transactions
and similar transactions hedging the foreign exchange risks
of monetary assets and liabilities denominated in foreign
currencies is assessed based on comparison of the foreign
currency position of the hedged monetary assets andliabilities and the hedging instruments.
The Banks apply exceptional treatments permitted forinterest rate swaps to certain assets.

Allowance for loan losses

Tangible fixed assets (excluding lease assets)
Tangible fixed assets are stated at cost less accumulated
depreciation, except for certain revalued land.
Depreciation of tangible fixed assets of the Banks iscomputed by using the declining-balance method except
for buildings (excluding fixtures) acquired after March
31, 1998, which are depreciated using the straight-line
method.
The estimated useful lives of the assets are primarily as
follows:
Buildings: 7 to 50 years
Others: 3 to 15 years
Other consolidated subsidiaries depreciate their tangible
fixed assets using mainly the declining-balance method
over the useful lives of the respective assets provided by
the tax act in Japan.

Intangible fixed assets (excluding lease assets)
Amortization of intangible fixed assets is computed byusing the straight-line method. Software costs for internal
uses are amortized over the estimated useful life (5 years).

The Banks provide allowance for loan losses according to
the following write-off and provisioning standards.
For loans to borrowers who are legally bankrupt (dueto bankruptcy, composition, suspension of transactions
with banks by the rules of clearinghouses, etc.) or
substantially bankrupt, an allowance is provided in theamount of loans, net of amounts expected to be collected
through disposition of collateral or through execution ofguarantees.
For loans to borrowers in danger of bankruptcy,
an allowance is provided in the amount considered
uncollectible based on the amount of loans, net of amounts
expected to be collected through disposition of collateral or
through execution of guarantees, and other sources.
Loans to normal borrowers and borrowers requiringcaution are classified into certain groups, and an allowance
is provided for each group using the rate of loan losses
experienced for the Group during certain reference periodsin the past.
Each branch as well as the credit supervision department
evaluates all loans in accordance with the self-assessment rule.
Other consolidated subsidiaries provide an allowance foran amount calculated using the rate of collection losses in thepast for loans of normal borrowers in addition to amounts
estimated based on collectibility analysis for borrowers indanger of bankruptcy and certain other borrowers.

27

YMFG Annual Report 2015

Lease assets
Lease assets included within tangible and intangible fixed
assets related to finance lease transactions that do nottransfer ownership are depreciated over the lease termusing the straight-line method. For lease assets with aguaranteed residual value stated in their lease agreements,
the residual value is set at the guaranteed amount.
Otherwise, the residual value is assumed to be zero.

Accounting for certain lease transactions
Consolidated subsidiaries’ finance lease transactions that
do not transfer ownership belonging to accounting periods
that commenced prior to April 1, 2008, are treated as
operating lease transactions.

Income taxes
Income taxes comprise corporate, enterprise and inhabitanttaxes. The Group recognizes tax effects of temporary
differences between the financial statement basis andthe tax basis of assets and liabilities. The asset and liability
approach is used to recognize deferred tax assets andliabilities for the expected future tax consequences of
temporary differences.

Foreign currency translation

Provision for loss on interest repayment

YMFG and foreign currency assets and liabilities and theaccounts of overseas branches of consolidated subsidiaries
are translated into yen at the rates prevailing at theconsolidated balance sheet date.

Provision for loss on interest repayment is provided forpossible losses on reimbursements of excess interest
payments and loan losses related to consumer financeloans extended at interest rates in excess of the maximum
interest rate prescribed in the Interest Rate Restriction Law.
In accordance with “Audit Guidelines on Consumer
Finance Companies’ Provisions for Possible Losses on
Reimbursements of Excess Interest Payments,” issued by
JICPA in 2006, the amount of such provision is rationallyestimated and booked based on actual historical repayment
claims by debtors.

Provision for bonuses
Provision for bonuses is provided for payment of bonuses
to employees, in the amount of estimated bonuses that are
attributable to the fiscal year.

Method of accounting for retirement benefits
When calculating retirement benefit obligations, thebenefit formula method is used for attributing expected
retirement benefits to periods through the year-end. The
methods for recognizing past service cost and actuarial
gains or losses are as follows:
Past service cost:
Recognition of past service cost
is apportioned by the straightline method over a fixed numberof years (2 years) within theemployees’ average remaining
service period from the time of
their occurrence
Actuarial gains or losses: Recognition of actuarial gains
or losses are apportioned by thestraight-line method over a fixed
number of years (Mainly 10 to
11 years) within the employees’
average remaining service period
at the time of their occurrencein each fiscal year, starting fromthe following fiscal year
Some consolidated subsidiaries employ the simplified
method for calculating retirement benefit obligations
and periodic benefit costs, stating retirement benefit
obligations at the amounts required as if all employees
voluntarily terminate their employment as of the year-end.

Provision for directors’ retirement benefits
The provision for directors’ retirement benefits forconsolidated subsidiaries outside the banking businessis provided for the estimated amount corresponding to
accrued retirement benefit payments to directors as of theend of the fiscal year.

Provision for reimbursement of deposits
Provision for reimbursement of deposits is provided for inorder to meet depositor requests for reimbursement on
deposits already derecognized as liabilities, in an amountdeemed necessary by estimating the losses corresponding
to the expected requests for reimbursements in the future.

Provision for customer point services
Provision for customer point services is provided inconjunction with a point system to promote credit carduse. The reserve is recorded for the expected cost to be
incurred when credit card members use points they havereceived as of the balance sheet date.

Reserves under special laws
Reserves under special laws consist of the financial
instruments transaction responsibility reserve posted by YM
Securities Co., Ltd., which were calculated according to thespecifications of Article 46-5 of the Financial Instruments
and Exchange Act and Article 175 of the Cabinet Office
Order Related to the Financial Instruments Business, toprepare for losses originating from incidents relating to thepurchase and sale of securities or other transactions.

Amounts per share of common stock
Computations of net income per share of common stock
are based on the weighted-average number of shares
outstanding during each year.
YMFG has issued potential shares, but “current term
net income per share after stock adjustment” is not shown
because these shares have no dilutive effect.
Cash dividends per share represent the cash dividends
declared as applicable to each year.

YMFG Annual Report 201528

Amortization of goodwill
Goodwill is mainly amortized over a 10-year period using
the straight-line method.

Consumption tax
YMFG and its consolidated subsidiaries in Japan employ
the tax exclusion method for consumption tax and local
consumption taxes, meaning that transaction amounts
and consumption tax amounts are treated separately foraccounting purposes.
However, non-deductible consumption taxes forpurchase of property, plant and equipment are recognized
as expenses for the year of the purchase.

Adoption of Consolidated Tax Payment System
YMFG and certain of its consolidated subsidiaries adopted
the consolidated tax payment system as provided under
the Corporation Tax Act.

Changes in Accounting Principles(Changes in accounting principles due to revisions inaccounting standards)(Adoption of the “Accounting Standard for Consolidated
Financial Statements”)
YMFG adopted the “Accounting Standard for Consolidated
Financial Statements” (ASBJ Statement No. 22, September
13, 2013) from the fiscal year ended March 31, 2014.
This adoption had no impact on the consolidated
financial statements.
(Adoption of the “Accounting Standard for Retirement
Benefits”)
For the year ended March 31, 2014
From the year ended March 31, 2014, YMFG adopted
the “Accounting Standard for Retirement Benefits”(ASBJ Statement No. 26, May 17, 2012) and the“Implementation Guidance for the Accounting Standard
for Retirement Benefits” (ASBJ Guidance No. 25, May
17, 2012) (excluding the provisions found in the body ofParagraph 35 of the Accounting Standard for Retirement
Benefits and Paragraph 67 of the Implementation
Guidance for the Accounting Standard for Retirement
Benefits). Accordingly, from March 31, 2014, YMFG
has recorded the difference between retirement benefit
obligations and plan assets as net defined benefit asset or
net defined benefit liability.

29

YMFG Annual Report 2015

With regard to the application of the AccountingStandard for Retirement Benefits, in accordance with thetransitional treatment stipulated in Paragraph 37 of the
Accounting Standard for Retirement Benefits, the impactof these changes is included in remeasurements of defined
benefit plans within accumulated other comprehensive
income as of March 31, 2014.
As a result, as of March 31, 2014, YMFG recorded net
defined benefit asset of ¥22,882 million and net defined
benefit liability of ¥4,479 million. Furthermore, deferred tax
assets increased by ¥1,897 million and accumulated othercomprehensive income decreased by ¥3,465 million.
For the year ended March 31, 2015
YMFG adopted the “Accounting Standard for Retirement
Benefits” (ASBJ Statement No. 26, May 17, 2012) and the“Implementation Guidance for the Accounting Standard
for Retirement Benefits” (ASBJ Guidance No. 25, March
26, 2015), applying the provisions found in the body ofParagraph 35 of the Accounting Standard for Retirement
Benefits and Paragraph 67 of the Implementation
Guidance for the Accounting Standard for Retirement
Benefits from the fiscal year ended March 31, 2015.
Accordingly, the Company reviewed the method for
calculating retirement benefit obligations and current
service costs, and changed a method of attributing
expected benefit to periods from the straight-line method
to the benefit formula method. In addition, YMFG haschanged its method of determining discount rates froma method of using a single discount rate based on the
average remaining service period and average benefit
period to a method of using multiple discount rates foreach expected retirement benefit period.
With regard to the application of the AccountingStandard for Retirement Benefits, in accordance withthe transitional treatment stipulated in Paragraph 37of the Accounting Standard for Retirement Benefits,
from the beginning of the fiscal year ended March 31,
2015, changes in amounts resulting from the method of
calculating retirement benefit obligations and past services
costs were recorded in retained earnings.
As a result, at the beginning of the fiscal year ended
March 31, 2015, retirement benefit liabilities increased¥3,086 million ($26 million), and retained earnings
decreased ¥1,994 million ($17 million). Also, the income
before income taxes for the fiscal year ended March 31,
2015 increased by ¥368 million ($3 million).

(Adoption of the “Practical Solution on Transactions ofDelivering the Company’s Own Stock to Employees etc.
through Trusts”)
YMFG adopted the “Practical Solution on Transactions ofDelivering the Company’s Own Stock to Employees etc.
through Trusts” (Practical Issues Task Force No. 30, issued
March 26, 2015) from the fiscal year ended March 31,
2015. Accordingly, the Company recognized at the time ofdisposal the difference arising from the disposal of treasury
shares by the Company to the trust, and posts as liabilities
the differences arising from the net amount of gain or loss
from sales of shares sold by the trust to the employee stock
ownership plan (ESOP), dividends paid by the Company forthe shares held by the trust and miscellaneous expenses
related to the trust.
These accounting policies have been applied
retroactively, and the consolidated financial statements
for the fiscal year ended March 31, 2014, reflect thisretroactive application.
Compared with the figures before retroactive
application, as of March 31, 2014, other liabilities
increased ¥92 million, and treasury stock, capital surplus
and retained earnings decreased by ¥301 million, ¥351
million and ¥42 million, respectively.
Due to the reflection of the cumulative effect on net
assets as of April 1, 2013, after retroactive adjustment to theconsolidated statements of changes in net assets, treasury
stock, capital surplus and retained earnings decreased by¥398 million, ¥367 million and ¥27 million, respectively.

Accounting Standards Not Applied“Accounting Standard for Retirement Benefits” (ASBJ
Statement, May 17, 2012)(i) Overview
With the view of financial reporting improvements andtrends in international convergence, this accounting
standard mainly focuses on, how unrealized actuarial gains
and losses and past service costs should be accounted
for and how retirement benefit obligations and current
service costs should be determined for the enhancement of
disclosures.
(ii) Effective Dates
The revised method of calculation of retirement benefit
obligations and current service costs will be effective on the
Banks’ consolidated financial statements at the beginningof the fiscal year commencing April 1, 2014.

(iii) Effects of Adoption of the Accounting Standard
The expected effect of adopting this accounting standard isto reduce retained earnings by ¥1,994 million ($19 million)in the fiscal year beginning on April 1, 2014.
“Accounting Standard for Business Combinations” (ASBJ
Statement, Sep. 13, 2013)(i) Overview
This accounting standard revises primarily the following
areas of the current standard: (1) the treatment of changes
in the parent company’s ownership interest in a subsidiaryin case where additional shares of the subsidiary are
acquired and the controlling ownership remains in theparent company, (2) the treatment of acquisition-related
expenses, (3) the treatment of the transitional accounting
and (4) the presentation of net income and changes fromminority interest to noncontrolling shareholder interest.
(ii) Effective Dates
The accounting standard will be applied to the Group’s
consolidated financial statements from the beginning of
the fiscal year commencing April 1, 2015.
(iii) Effects of Adoption of the Accounting Standard
The Group is currently evaluating the effects.
“Practical Solution on Transactions of Delivering theCompany’s Own Stock to Employees etc. through Trusts”(Dec. 25, 2013)(i) Overview
This standard clarifies the practical treatment oftransactions of delivering the company stock to employees
or employee stock ownership plans through trusts.
(ii) Effective Dates
The accounting standard will be applied to the Group’s
consolidated financial statements from the beginning of
the fiscal year commencing April 1, 2014.
(iii) Effects of Adoption of the Accounting Standard
The Group is currently evaluating the effects.

Additional Information(ESOP Trust)
To enhance its welfare benefits, YMFG has introduced the
ESOP Trust for Group employees (hereinafter, “Employees”)(1) Overview of Transactions
Of those Employees enrolled in the Yamaguchi Financial
Group Employee Stock Ownership Plan (hereinafter, the“Company’s ESOP”), the Company has established thetrust for those beneficiaries satisfying certain conditions.

YMFG Annual Report 201530

This trust acquired as a lump sum a number of shares in
the Company corresponding to the number expected to beacquired by the Company’s ESOP over the five-year period
beginning in September 2011. Thereafter, the trust has
sold the Company’s shares to the Company’s ESOP eachmonth on a specific date.
(2) Company Shares Residing in the Trust
Company shares residing in the trust are recorded intreasury stock in the net assets section according to thebook value of the trust (excluding ancillary expenses). The
book value and the number of shares of this treasury stock
amounted to ¥1,050 million and 1,400 thousand shares on
March 31, 2014, and ¥785 million ($7 million) and 1,047
thousand shares on March 31, 2015.
(3) Book Value of Borrowings Recorded by Applying theGross Price Method
The book value of borrowings recorded by applying thegross price method was ¥1,050 million on March 31, 2014,and ¥630 million ($5 million) on March 31, 2015.

3. CONSOLIDATED STATEMENTS OF CASHFLOWS AND CASH EQUIVALENTS
In preparing the consolidated statements of cash flows, theGroup considers cash and due from THE BANK OF JAPAN
as cash and cash equivalents.
The reconciliation of cash and due from banks in the
consolidated balance sheets and cash and cash equivalentsin the consolidated statements of cash flows at March 31,
2015 and 2014 were as follows:

Cash and due from banks
Time deposits in other banks
Other
Cash and cash equivalents

Thousands ofMillions of yen
U.S. dollars
2015
2014
2015
¥965,275 ¥915,056 $8,032,579(13,393)(7,497)(111,450)(8,900)(33,354)(74,062)¥942,982 ¥874,205 $7,847,067

4. FINANCIAL INSTRUMENTS
Items pertaining to the status of financial
instruments(1) Policies on financial instruments
YMFG provides community-based integrated financial
services centered on the banking business and including
the securities and credit card businesses. Accordingly,

31

YMFG Annual Report 2015

the Group is subject to a variety of risks, including credit
risk, market risk and liquidity risk. Due to changes in
economic, social and financial conditions, these risks havegrown more diverse and complex. Under these conditions,
the Group considers strengthening its risk management
structure as a priority issue. To maintain and enhance thesoundness of its operations, YMFG has created groupwide
risk management regulations, which clarify the Group’s
fundamental stance on risk management.

(2) Content and risks of financial instruments
Of financial assets held by the Group, principally loans andbills discounted extended to business partners are subject
to the credit risk of breach of contract. The Group holds
securities, principally debt securities, equity securities andinvestment trusts, for trading purposes, for holding tomaturity, for purely investment purposes and to promote
positive business relations. These securities are subject toissuer credit risk, interest rate fluctuation risk and market
price fluctuation risk.
The Group’s financial liabilities center on deposits andnegotiable certificates of deposit, and call money that itraises in the market. However, the Group is subject tothe liquidity risk of becoming unable to secure necessary
funding. The Group is also subject to interest rate risk arisingfrom fluctuations in financial and economic conditions.
The Group employs derivative transactions to hedge
underlying market risks on its assets and liabilities. The
Group also provides derivatives as financial products tomeet customers’ needs. Interest-related and securitiesrelated derivative transactions are employed to limit the
impact on income of future interest rate fluctuations andprice fluctuations for loans and bills discounted, deposits,
securities and other instruments bearing long-term interest
at fixed rates. Currency-related derivative transactions areused primarily to avoid fluctuations in income stemmingfrom future exchange rate fluctuations, stabilize funding
denominated in foreign currencies, as well as offered as
products to clients. With regard to transactions to secure
income through changes in market rates, which areconducted on a limited basis, the Group has establishedstringent standards that include risk limits and loss limits.
As market risk factors, interest rate related andsecurities-related derivative transactions are subject tothe risk of fluctuations in interest rates and prices, andcurrency-related derivative transactions are subject toexchange rate fluctuations. For transactions that are
not conducted on exchanges, the Group is subject tocredit risk, the risk of loss in the event a counterparty
becomes unable to fulfill its contractual obligations due todeteriorating financial conditions.
With regard to use of hedge accounting, the Group applies
deferred hedge accounting after it ensured in advance thatthe established conditions are satisfied. As for hedging
methods, the Group employs the portfolio hedge wherecertain group of assets with similar risk is identified andsuch risk is hedged comprehensively. In addition, for certain
interest swap contracts, exceptional treatments are applied.

(3) Risk management structure related tofinancial instruments(i) Management of credit risk
Through the appropriate operation of a credit rating
system, the Group endeavors to determine the financial
conditions of business partners and accurately evaluate
their credit risk. The Group has enhanced the precisionof its credit evaluations, reviewing business partner credit
ratings swiftly and appropriately for each financial period
and each time their credit conditions change.
The Group conducts self assessments according tostringent standards that are consistent throughout theGroup. YMFG performs write-off and provisions basedon the results of its self assessments. The Group’s
authentication departments verify the content of suchinspections. Independence is maintained through internal
audits conducted by audit departments. In addition,
the Group undergoes external audits conducted by its
independent external auditors.
With regard to the screening of individual transactions,
the Group employs a screening system suited to eachsubsidiary bank’s size of the business and characteristics
to conduct detailed screenings that take individual sector
and regional characteristics into consideration. In terms of
portfolio management, the Group strives to enhance its
risk management by first measuring credit risk, and thenmanaging risk by category, sector and geographic area.
Risk management departments periodically obtain
credit information and fair value as a part of managing
credit risks on securities issuers and counterparty risks onderivative transactions.
(ii) Management of market risk
Qualitative information on the management of market risk
The Group has formulated a market risk management
process that identifies and quantitatively measures inherent
market risks. An asset-liability management (ALM) system is
employed to control market risk within allowable limits, and

the Group ALM Committee is periodically held to respondto such risks.
YMFG periodically evaluates market risk conditions andverifies the appropriateness of risk controls.
Quantitative information on the management of market risk
The market risk (estimated loss amount) of the loans,securities, deposits and derivatives transactions of Yamaguchi
Bank, Momiji Bank and Kitakyushu Bank of the Group arecalculated according to value at risk (VaR). Furthermore, thecovariance method is used to calculate VaR.
As of March 31, 2015, the market risk (estimated loss
amount) of Yamaguchi Bank was ¥73,513 million ($612
million), the market risk (estimated loss amount) of Momiji
Bank was ¥21,416 million ($178 million) and the maket
risk (estimated loss amount) of Kitakyushu Bank was¥12,536 million ($104 million). Also, as of March 31, 2014,
the market risk (estimated loss amount) of Yamaguchi
Bank was ¥63,526 million, the market risk (estimated loss
amount) of Momiji Bank was ¥18,079 million and themarket risk (estimated loss amount) of Kitakyushu Bank was¥11,439 million.
Assumptions used in calculating VaR include a holding
period of three months (however, one year for a holding
period for shares held for the purpose of strategic
investment), a confidence interval of 99.9% and an
observation period of five years.
Yamaguchi Bank, Momiji Bank and Kitakyushu Bank
conduct back-testing to compare the VaR calculated by themodel with the actual losses. Based on the results for the year
ended March 31, 2015 and 2014, the measurement model
is considered to have captured market risk to an acceptable
degree of accuracy. However, as measurements of market risk
employ certain probabilities of occurrence which is statisticallycalculated on the basis of historical market fluctuations, it
is possible that this method may not adequately capture
market risk in the event of sudden changes in the market
environment outside the normally expected scope.
(iii) Management of liquidity risk related to fundraising
The majority of funds is raised through deposits, whichconstitute a stable base for procuring funds. The Groupmanages funds on the basis of elaborate forecasts,
confirming cash flows primarily through cash controls infinancial markets.
For cash flow management, the Group strives tomaintain the liquidity risk by reducing liquidity risk,
ensuring stability, preparing for unexpected events, andmaintaining highly liquid assets.

YMFG Annual Report 201532

(4) Supplementary explanation of items
pertaining to the fair value of financial
instruments
The fair values of some financial instruments are basedon market prices. The fair values of other instruments, forwhich market prices are not readily available, are basedon rational calculation. However, as assumptions areused in these calculations, different assumptions can yield
different values.

Items pertaining to the fair value of financial
instruments
The table below indicates the consolidated balance sheet
amounts of financial instruments, as well as their fair values
and the differences between the two. Line items with little
significance to balance sheet amounts have been omitted.
Unlisted equity securities and other instruments for which
fair value is not easily determinable are not included in thetable below. (Refer to (Note 2).)Millions of yen
2015
Consolidatedbalance sheet Fair value Difference
amount(1) Cash and due from banks ¥ 965,275 ¥ 965,275¥—(2) Call loans and bills purchased
283,251
283,251—(3) Money held in trust
48,09648,096—(4) Securities
Held-to-maturity debt securities
4,447
4,519
72
Available-for-sale securities
2,310,718 2,310,718—(5) Loans and bills discounted
6,228,014
Allowance for loan losses (* 1)(71,801)
6,156,213 6,210,677
54,464
Total assets¥9,768,000 ¥9,822,536¥54,536(1) Deposits¥8,441,552 ¥8,443,962¥ 2,410(2) Negotiable certificates of
767,528
767,528—
deposit
Total liabilities¥9,209,080 ¥9,211,490¥ 2,410
Derivative transactions (* 2)Hedge accounting not applied ¥(8,761) ¥(8,761) ¥—Hedge accounting applied(1,326)(1,326)—
Total derivative transactions¥ (10,087) ¥ (10,087) ¥—Millions of yen
2014
Consolidatedbalance sheet Fair value Difference
amount(1) Cash and due from banks ¥ 915,056 ¥ 915,056¥—(2) Call loans and bills purchased
315,198
315,198—(3) Money held in trust
49,99649,996—(4) Securities
Held-to-maturity debt securities
3,171
3,187
16
Available-for-sale securities
2,061,118 2,061,118—(5) Loans and bills discounted
5,964,133
Allowance for loan losses (* 1)(85,152)
5,878,981 5,910,384
31,403
Total assets¥9,223,520 ¥9,254,939¥31,419(1) Deposits¥8,147,033 ¥8,149,311¥ 2,278(2) Negotiable certificates of
617,933
617,933—
deposit(3) Bonds payable
45,00045,251251
Total liabilities¥8,809,966 ¥8,812,495¥ 2,529
Derivative transactions (* 2)Hedge accounting not applied ¥(2,145) ¥(2,145) ¥—Hedge accounting applied
(974)
(974)
—
Total derivative transactions¥(3,119) ¥(3,119) ¥—Thousands of U.S. dollars
2015
Consolidatedbalance sheet Fair value Difference
amount$—(1) Cash and due from banks $ 8,032,579 $ 8,032,579(2) Call loans and bills purchased 2,357,086
2,357,086—(3) Money held in trust
400,233
400,233—(4) Securities
Held-to-maturity debt securities
37,006
37,605599
Available-for-sale securities
19,228,743 19,228,743—(5) Loans and bills discounted
51,826,696
Allowance for loan losses (* 1)(597,497)
51,229,199 51,682,425
453,226
Total assets$81,284,846 $81,738,671$453,825(1) Deposits$70,246,751 $70,266,806$ 20,055(2) Negotiable certificates of
6,387,018
6,387,018
deposit
Total liabilities$76,633,769 $76,653,824$ 20,055
Derivative transactions (* 2)Hedge accounting not applied $(72,905) $(72,905) $—Hedge accounting applied(11,034)(11,034)—
Total derivative transactions$(83,939) $(83,939) $—(* 1) The general allowance for loan losses and specific allowance for loan losses are deducted.
(* 2) The amount collectively represents derivative transactions that are recorded as trading
assets and liabilities, and other trading assets and liabilities.
This indicates the net amount of rights and obligations under derivative transactions.
Parentheses, ( ), indicate that the net amount is negative.

(Note 1) Methods of calculating the fair value of financial
instruments(1) Assets(i) Cash and due from banks
As the settlement term of these instruments is short(within one year) and their fair values and book values are

33

YMFG Annual Report 2015

approximately the same, their book values are taken as
their fair values.
(ii) Call loans and bills purchased
As the settlement term of these instruments is short(within one year) and their fair values and book values areapproximately the same, their book values are taken as
their fair values.
(iii) Money held in trust
As for the securities held as trusted assets in money heldin trust established independently for the purpose ofinvesting mainly in the securities of the Group, the value
on stock exchanges is taken as fair value for the equity
securities, and either the value on exchanges or a priceindicated by other financial institutions dealing with thespecific instruments is taken as fair value.
Notes pertaining to money held in trust exchanges forthe purpose of holding are indicated within “Money heldin trust.”(iv) Securities
For equity securities, fair value is determined by stock
exchange prices; the fair value of debt securities isdetermined by exchange prices or prices received frominformation vendors. Fair values of investment trusts are
determined by exchange prices or standard prices disclosed
by investment trust management companies.
The fair value of private placement bonds guaranteedby Yamaguchi Bank and Momiji Bank is determined foreach internal rating category and period by discounting topresent value the total amount of interest and principal,
using as the discount rate the risk-free rate plus thecredit cost determined for each internal rating category.
However, fair value of bonds of legally bankrupt debtors,
substantially bankrupt debtors and debtors in dangerof bankruptcy is determined by deducting the expectedamount of loss on the bond by using the same method
applied to loans from the bond’s face value.
(v) Loans and bills discounted
For loans and bills discounted with floating interest rates,
as in the short term their values reflect market interest
rates, unless the credit status of the obligor has changed
significantly since the loans were extended, their fair value
is similar to their book value, so their book value is taken as
their fair value.
For loans and bills discounted bearing fixed interest
rates, fair value is determined for each internal rating
category and period by discounting to present value
the total amount of interest and principal, using as thediscount rate the risk-free rate for operating loans andbills discounted plus the credit cost for each internalrating category. For consumer loans and bills discounted,
fair value is determined by discounting the total amountof interest and principal to their present value using theassumed interest rate on new loans of the same type. For
instruments having a short settlement period (within oneyear), as their fair values and book values are approximately
the same, their book value is taken as their fair value.
With regard to loans to legally bankrupt obligors,
substantially bankrupt obligors or obligors who are indanger of bankruptcy, the estimated collectible amountis based on either the present value of estimated future
cash flows or the expected amounts recoverable fromthe disposal of collateral and/or under guarantees. As
the fair value is essentially equivalent to the amount after
deducting the allowance for possible loan losses from thebook value as of the consolidated balance sheet date, thisamount is taken as fair value.
For loans that have no specific repayment period, as thefair value is assumed to be equivalent with the book value
according to the expected payment dates and interest
rates, book value is taken as the fair value.
(2) Liabilities(i) Deposits and (ii) Negotiable certificates of deposit
The fair value of demand deposits is determined as
the payment amount if payment were required on the
consolidated balance sheet date (book value). The fairvalue of time deposits is determined by discounting future
cash flows to their present value by certain time periods.
The discount rate employed is the interest rate required for
newly accepted deposits. For deposits having a short period(within one year), as their fair values and book values areapproximately the same, their book value is taken as theirfair value.
(iii) Bonds payable
The fair value of bonds issued by the Group is determinedby using prices publicly quoted by third-party institutions.
(3)Derivative transactions
The fair value of derivative transactions, comprisinginterest-rate-related transactions (such as interest rate
futures, interest rate options and interest rate swaps)
currency-related transactions (such as currency futures,
currency options and currency swaps), bond-relatedtransactions (such as bond futures and bond options) istaken as their value on exchanges, discounted present

YMFG Annual Report 201534

value or price as calculated using option pricing models.
Interest rates swaps that employ exceptional accounting
treatment are accounted for as part of the loans and bills
discounted that are hedged. Therefore, their fair value isincluded in the fair value of loans and bills discounted.
(Note 2) The consolidated balance sheet amounts offinancial instruments for which market prices are notreadily available
Financial instruments for which market prices are notreadily available are not included in “Assets (4) Availablefor-sale securities.”

Category(1) Unlisted equity securities(*1, *2)(2) Investments in partnerships,
etc. (*3)
Total

Thousands of
U.S. dollars
Millions of yen
2015
2014
2015
Consolidated balance sheet amount¥6,057¥6,090$50,404
2,762

1,611

22,984¥8,819¥7,701$73,388(*1) As unlisted equity securities have no market prices and their fair value is not readily
available, they are not included in the scope of fair value disclosures.
(*2) During the fiscal year ended March 31, 2014 and 2015, impairment losses of ¥22 millionand ¥15 million ($125 thousand) were recorded on unlisted equity securities.
(*3) Of investments in partnerships, those partnership assets comprising unlisted equity
securities, which have no readily available fair value, are not included in the scope of fairvalue disclosure.

35

YMFG Annual Report 2015

(Note 3) Expected maturity amount of monetary claims andsecurities with maturities after the consolidated balance
sheet dateMillions of yen
2015
More than More than More thanWithinone year three years five years More than
one year and within and within and within seven years
three years five years seven years¥869,860 ¥
— ¥
— ¥
— ¥
—

(1) Due frombanks(2) Call loans
283,251——and bills
purchased(3) Securities
242,598
564,180
531,630
Held-to546
885
723
maturity debt
securities
Local
—
—
—
government
bond
Corporate
110
570
723
bond
Others436
315—
Available-for242,052
563,295
530,907
sale securities
with maturities
Japanese
80,170151,197
237,361
government
bond
Local
16,4184,163
4,273
government
bond
Corporate131,735
353,197
253,978bond
Others13,72954,73835,295(4) Loans and 2,146,945 1,126,783
808,102bills discounted
(*)
Total
¥3,542,654 ¥1,690,963 ¥1,339,732——

338,24730

376,982
2,263

—

900

30

1,363

—
338,217—374,719

170,809

96,770

9,676

4,961

135,888

226,843

21,844
46,145555,296 1,590,889¥893,543 ¥1,967,871

Millions of yen
2014
More than More than More thanWithinone year three years five years More than
one year and within and within and within seven years
three years five years seven years¥819,863 ¥
— ¥
— ¥
— ¥
—

(1) Due frombanks(2) Call loans
315,198——
and bills
purchased(3) Securities
102,685522,639644,212
Held-to260
1,139
692
maturity debt
securities
Local
—
—
—
government
bond
Corporate
260
470
692
bond
Others—669—
Available-for102,425
521,500
643,520
sale securities
with maturities
Japanese
26,716
139,128
216,876
government
bond
Local
7,976
19,262
3,345
government
bond
Corporate
58,230335,503
328,065
bond
Others9,503
27,607
95,234(4) Loans and 2,040,816 1,148,253
819,357
bills discounted
(*)
Total
¥3,278,562 ¥1,670,892 ¥1,463,569——

189,964—

411,702
1,080

—

500

—

580

—
189,964—
410,62264,575126,004

3,631

10,157

100,976

260,711

20,782
13,750502,276 1,453,431¥692,240 ¥1,865,133

Thousands of U.S. dollars
2015
More than More than More thanWithinone year three years five years More than
one year and within and within and within seven years
three years five years seven years$ 7,238,579 $
— $
— $
— $
—

(1) Due frombanks(2) Call loans
2,357,086————
and bills
purchased(3) Securities
2,018,789 4,694,850 4,423,982 2,814,738 3,137,072
Held-to4,543
7,364
6,016
250
18,831maturity debt
securities
Local
—
—
—
—
7,489
government
bond
Corporate
915
4,743
6,016
250
11,342bond
Others
3,628
2,621
—
—
—
Available-for2,014,246 4,687,486 4,417,966 2,814,488 3,118,241
sale securities
with maturities
Japanese
667,138 1,258,193 1,975,210 1,421,395
805,276
government
bond
Local
136,623
34,64335,55880,51941,283government
bond
Corporate
1,096,239 2,939,145 2,113,489 1,130,798 1,887,684
bond
Others114,246455,505
293,709
181,776
383,998(4) Loans and 17,865,898 9,376,575 6,724,657 4,620,920 13,238,654
bills discounted
(*)
Total
$29,480,352 $14,071,425 $11,148,639 $7,435,658 $16,375,726(*) Loans and bills discounted for which no period is specified are included in “within one year.”(Note 4) Estimated repayment amounts of deposits, negotiablecertificates of deposit and other interest-bearing liabilities to be
repaid after the consolidated balance sheet dateMillions of yen
2015
More than More thanThree
Withinone year two years
or
one year and within and within years
more
two years three years¥7,359,032 ¥563,053 ¥484,617¥34,850
Deposits (*)
Negotiable certificates766,740788——
of deposit
Total¥8,125,772 ¥563,841 ¥484,617¥34,850

Millions of yen
2014
More than More thanThree
Withinone year two years
or
one year and within and within years
more
two years three years¥7,476,391 ¥464,376 ¥165,186¥41,080
Deposits (*)
Negotiable certificates
617,582350——of deposit
Bonds payable
20,000——25,000Total¥8,113,973 ¥464,726 ¥165,186¥66,080

YMFG Annual Report 201536

Thousands of U.S. dollars
2015
More than More thanThree
Withinone year two years
years orone year and within and within
more
two years three years$61,238,512 $4,685,471 $4,032,762$290,006
Deposits (*)
Negotiable certificates
6,380,461
6,557——
of deposit
Total$67,618,973 $4,692,028 $4,032,762$290,006(*) Within deposits, demand deposits are included in “within one year.”

5. SECURITIESSecurities held at March 31, 2015 include shares of
unconsolidated subsidiaries and affiliates amounting to¥86 million ($1 million) and investments of ¥853 million($7 million). Corresponding figures at March 31, 2014,
were ¥355 million and ¥700 million.
The amount of guarantee obligations for private
placement bonds (Financial Instruments and Exchange
Law, Article 2, Item 3), out of bonds included in securities,
amounted to ¥4,785 million ($40 million) and ¥3,301 million
as of March 31, 2015 and March 31, 2014 respectively.
Bonds included in securities also include securities
lent through unsecured loan agreements (bond lendingtransactions) of ¥18,561 million ($154 million) and¥15,015 million, at March 31, 2015 and March 31,
2014 respectively.

(b) Held-to-maturity debt securities:
Type
Securities with fairLocalvalue exceeding book government
value
bonds
Corporate
bonds
OthersSubtotal
Securities with fairLocalvalue not exceeding government
book value
bonds
Corporate
bonds
OthersSubtotal
Total

Type
Securities with fairLocalvalue exceeding book government
value
bonds
Corporate
bonds
OthersSubtotal
Securities with fairLocalvalue not exceeding government
book value
bonds
Corporate
bonds
OthersSubtotal
Total

Millions of yen
2015Book value Fair value Difference
¥ 900

¥ 915

¥15

2,686

2,727

41

751
4,337

767
4,409

16
72

—

—

—

110

110

(0)

—
110
¥4,447—110¥4,519—(0)¥72

Millions of yen
2014Book value Fair value Difference
¥ 500

¥ 502

¥ 2

1,713

1,717

4

670
2,883

680
2,899

10
16

—

—

—

288

288

—

—
288
¥3,171—288¥3,187——¥16

6. FAIR VALUE INFORMATION
Securities
The following tables summarize book values, fair value andacquisition cost of securities with available fair values as ofMarch 31, 2015 and 2014:(a) Trading securities
Amount of unrealized gain (loss) on trading securities
included in the consolidated statement of income— ¥14 million ($117 thousand) and ¥(73) million as at
March 31, 2015 and 2014, respectively.

37

YMFG Annual Report 2015

Type
Securities with fairLocalvalue exceeding book government
value
bonds
Corporate
bonds
OthersSubtotal
Securities with fairLocalvalue not exceeding government
book value
bonds
Corporate
bonds
OthersSubtotal
Total

Thousands of U.S. dollars
2015Book value Fair value Difference$ 7,489$ 7,614$125

22,352

22,693341

6,250
36,091

6,383
36,690

133
599

—

—

—

915

915

(0)

—
915
$37,006—
915$37,605

—
(0)
$599

(c) Available-for-sale securities

Type

Millions of yen
2015
Acquisition
Book value
Differencecost¥ 133,436 ¥ 56,513 ¥ 76,923

Securities with book Sharesvalue exceeding
Japaneseacquisition costgovernment
678,753674,788bonds
Local
government
35,75235,088bonds
Corporate
1,054,576 1,041,975
bonds
Others223,373
210,685
Subtotal
2,125,890 2,019,049
Securities with book Shares
5,695
6,355
value not exceeding Japaneseacquisition costgovernment
57,55657,858bonds
Local
government
3,739
3,759
bonds
Corporate
47,05647,346bonds
Others70,782
72,682
Subtotal
184,828
188,000
Total¥2,310,718 ¥2,207,049

Type

3,965
664
12,601
12,688106,841
(660)
(302)
(20)
(290)
(1,900)(3,172)¥103,669

Millions of yen
2014
Acquisition
Book value
Difference
cost¥ 106,333 ¥ 54,479¥51,854

Securities with book Sharesvalue exceeding
Japaneseacquisition costgovernment
438,638
436,586bonds
Local
government
40,68739,909bonds
Corporate
931,557
922,097
bonds
Others
68,976
68,197
Subtotal
1,586,191 1,521,268
Securities with book Shares
8,996
10,506value not exceeding Japaneseacquisition costgovernment
134,662
135,042bonds
Local
government
3,685
3,693
bonds
Corporate
151,919
152,730
bonds
Others
175,664
182,847
Subtotal
474,926
484,818
Total¥2,061,117 ¥2,006,086

Type

Securities with book Sharesvalue exceeding
Japaneseacquisition costgovernment 5,648,273 5,615,278
bonds
Local
government
297,512291,986bonds
Corporate
8,775,701 8,670,841
bonds
Others1,858,809 1,753,226
Subtotal
17,690,689 16,801,606
Securities with book Shares
47,391
52,883value not exceeding Japaneseacquisition costgovernment
478,955
481,468bonds
Local
government
31,11431,281bonds
Corporate
391,579
393,992
bonds
Others589,015604,826
Subtotal
1,538,054 1,564,450
Total$19,228,743 $18,366,056

5,526
104,860
105,583
889,083(5,492)(2,513)(167)(2,413)(15,811)(26,396)$862,687

fiscal year ended March 31, 2015 and 2014.
(e) Available-for-sale securities sold during the fiscal year

SharesJapanese government bonds
Local government bonds
Corporate bonds
Others
Total

Millions of yen
2015
Sale
Total gain Total loss
amounton saleon sale
¥
4,677
¥ 760
¥ 92
1,759,555
6,757
913
4,477
23
—
358,5381,641
42
330,695
6,482
846¥2,457,942¥15,663¥1,893

SharesJapanese government bonds
Local government bonds
Corporate bonds
Others
Total

Millions of yen
2014
Sale
Total gain Total loss
amounton saleon sale¥5,273¥ 1,998¥ 31
1,725,598
5,972
1,941
10,179242—
533,3282,449
159
288,129
7,731
1,376¥2,562,507¥18,392¥3,507778

779
64,923(1,510)32,995(d) Held-to-maturity debt securities sold during the fiscal year
There were no held-to-maturity securities sold during the

2,052

9,460

Thousands of U.S. dollars
2015
Acquisition
Book value
Differencecost$ 1,110,394 $ 470,275$640,119

(380)
(8)
(811)
(7,183)(9,892)¥55,031

YMFG Annual Report 201538

Shares
Japanese government bonds
Local government bonds
Corporate bonds
Others
Total

Thousands of U.S. dollars
2015
Sale
Total gain Total loss
amounton saleon sale$ 38,920$ 6,324$ 766
14,642,215
56,2297,598
37,256191—
2,983,590
13,656350
2,751,893
53,940
7,039$20,453,874$130,340$15,753(b) Money held in trust classified as held-to-maturity
There are no corresponding transactions as at March
31, 2015 and 2014.
(c) Available-for-sale money held in trust

Available-for-sale money heldin trust(f) Securities for which purpose of holding changed
There were no securities for which the purpose of holding
changed at March 31, 2015 and 2014.

Impairment losses on securities
Regarding securities (excluding those for which market
prices are not readily available) other than trading securities,
if their market values have fallen substantially below theiracquisition price and are not expected to recover to theacquisition price, such market values are recorded in the
consolidated balance sheets. The valuation difference
is recorded as a loss for the fiscal year in which suchdifference is realized (hereinafter, “impairment losses”).
During the fiscal year ended March 31, 2015,
impairment losses were ¥16 million ($133 thousand) on
equity securities and during the fiscal year ended March
31, 2014, impairment losses totaled ¥113 million on equity
securities. The basis for determining whether the market
value has fallen significantly is as follows.
If the market value of the securities in general has
fallen by 30% or more compared with the acquisition
cost, the value of the securities is determined to have“fallen significantly.” However in the case of sharesand equivalent securities, if their market value has fallen
by 30% or more but less than 50% of the acquisition
cost, the determination of whether the value has “fallen
significantly” takes into consideration other factors
such as the issuing company’s credit risk (independent
debtor classification, external ratings, etc.) and previous
percentage decreases over a specific period of time in the
past.

Money held in trust
Information on money held in trust as of March 31, 2015
and 2014 is as follows:(a) Money held in trust classified as trading purposes
There are no corresponding amounts as at March 31,
2015 and 2014.

39

YMFG Annual Report 2015

Available-for-sale money heldin trust

Available-for-sale money heldin trust

Millions of yen
2015
Consolidated
Unrealized
Acquisition
balance sheet
gains
cost
amount(losses)¥48,096¥48,273¥(177)

Millions of yen
2014
Consolidated
Unrealized
Acquisition
balance sheet
gains
cost
amount(losses)¥49,996¥50,013¥(17)

Thousands of U.S. dollars
2015
Consolidated
Unrealized
Acquisition
balance sheet
gains
cost
amount(losses)$400,233 $401,706$(1,473)

Unrealized gains (losses) on available-for-salesecurities
Information on unrealized gains (losses) on available-forsale securities and available-for-sale money held in trust is
as follows:

Net unrealized gains
Available-for-sale securities
Available-for-sale money heldin trust
Deferred tax liabilities
Unrealized gains on availablefor-sale securities before
following adjustment
Equivalent to minority interests
YMFG’s interest in net
unrealized gains on valuationof available-for-sale securities
held by affiliates accounted forby the equity method
Unrealized gains on availablefor-sale securities

Millions of yen
2015
2014
¥103,611 ¥55,338
103,788
55,355(177)(17)

Thousands of
U.S. dollars
2015$862,204
863,677(1,473)32,455
71,156(18,646)
36,692270,076
592,128

10
0

—
14

83
0

¥ 71,146¥36,706$592,045

Valuation differences on investments in partnerships,
etc., of ¥120 million ($999 thousand) at March 31, 2015and ¥324 million at March 31, 2014, for which market
values are extremely difficult to determine, are recorded inavailable-for-sale securities of net unrealized gains in thelist above.

Derivatives(b) Currency-related:(1) Derivative transactions at March 31, 2015 and 2014, towhich hedge accounting is not applied(a) Interest-rate-related:
Millions of yen
2015
Type
Over-the-counter:
Interest rate swaps:
Receivable fixed,
payable floating
Receivable floating,payable fixedInterest rate cap
Sold
Total

Contract
amounts

Over oneyear

Fair value

Realized
gains(losses)¥50,546¥37,556

¥ 582

¥ 582

50,63737,648

(466)

(466)

96
—

(0)
¥ 116

4
¥ 120

¥

96
—

¥

Millions of yen
2015

Type
Over-the-counter:
Currency swaps
Foreign exchange
forward contracts:
Sold
BoughtCurrency options
Sold
BoughtTotal

TypeOver-the-counter:
Interest rate swaps:
Receivable fixed,
payable floating
Receivable floating,payable fixedInterest rate cap
Sold
Total

Over oneyear

Fair value

Realized
gains(losses)¥59,080¥55,080

¥ 763

¥ 762

59,20455,204

(622)

(622)

128
—

128
—

(0)
¥ 141

4
¥ 144

¥

¥

¥261,656 ¥141,121

158,367
25,690Type
Over-the-counter:
Interest rate swaps:
Receivable fixed,
payable floating
Receivable floating,payable fixedInterest rate cap
Sold
Total

Over oneyear

Fair value

Realized
gains(losses)$420,621 $312,524$ 4,843$ 4,843

421,378(3,878)(3,878)$313,290

799
— $

799
—

$

(0)
965

7,268
3,059

174,828 130,634
174,828 130,634
¥
— ¥
—

Type
Over-the-counter:
Currency swaps
Foreign exchange
forward contracts:
Sold
BoughtCurrency options
Sold
BoughtTotal

Contract
amounts

Over oneyear¥145,534¥83,213

119,873
14,229615—

203,186 146,722
203,186 146,722¥— ¥—Thousands of U.S. dollars
2015
Contract
amounts

Over oneyear

Fair value

Realized
gains(losses)¥(10,093) ¥ (1,732)

(929)
774

(929)
774

(4,767)
6,847
6,413(3,169)¥(8,602) ¥ 1,791

Millions of yen
2014

Millions of yen
2014
Contract
amounts

Contract
amounts33$ 998

Fair value

Realized
gains(losses)¥(3,022) ¥ (1,295)

(694)
83

(694)
83

(5,833)
10,551
7,120(6,706)¥(2,346) ¥ 1,939

Thousands of U.S. dollars
2015

Type
Over-the-counter:
Currency swaps
Foreign exchange
forward contracts:
Sold
BoughtCurrency options
Sold
Bought
Total

Over oneyear

Fair value

Realized
gains(losses)$2,177,382 $1,174,345$(83,989)$(14,413)

60,48125,456(7,731)
6,441(7,731)6,441

1,454,839 1,087,077
1,454,839 1,087,077$— $—(39,669)
53,366$(71,582)

56,978(26,371)$ 14,904

Contract
amounts

1,317,858
213,780

YMFG Annual Report 201540

(c) Stock-related:
There were no stock-related transactions as at March 31,
2015 and 2014.
(d) Bond-related:
Millions of yen
2015

Type
Listed:Bond futures
Sold
Total

Contract
amounts

Over oneyear¥111,318
¥
—

¥—
¥—

Fair value¥(275)¥(275)

Realized
gains(losses)

Contract
amounts

Over oneyear

Fair value

Realized
gains(losses)¥62,247
¥
—

¥—
¥—

¥60
¥60

¥60
¥60

Thousands of U.S. dollars
2015

Type
Listed:Bond futures
Sold
Total

Contract
amounts

Over oneyear

Fair value$926,338
$
—

$—
$—

$(2,288)$(2,288)

Type
Principal accounting procedure:Interest rate swaps
Receive floating, payable fixedInterest rate swaps employing
exceptional accounting:Interest rate swaps
Receive floating, payable fixed
Total¥(275)¥(275)

Millions of yen
2014

Type
Listed:Bond futures
Sold
Total

(a) Interest-rate-related:

Realized
gains(losses)$(2,288)$(2,288)(e) Commodity-related:
There were no commodity-related transactions as at March
31, 2015 and 2014.
(f) Credit-derivatives:
There were no credit related transactions as at March 31,
2015 and 2014.

Type
Principal accounting procedure:Interest rate swaps
Receive floating, payable fixedInterest rate swaps employing
exceptional accounting:Interest rate swaps
Receive floating, payable fixed
Total

Type
Principal accounting procedure:Interest rate swaps
Receive floating, payable fixedInterest rate swaps employing
exceptional accounting:Interest rate swaps
Receive floating, payable fixed
Total

¥

¥13,710¥(499)

242—*¥(499)

275—¥

Millions of yen
2014
Contract Over one
Fair value
amountsyear¥16,054¥¥15,346¥(615)

275—*¥(615)

308—¥

Thousands of U.S. dollars
2015
Contract Over one
Fair value
amounts
year$114,088 $114,088

$

2,288
— $

2,014
—

$(4,152)*$(4,152)(b) Currency-related:

Type
Principal accounting procedure:
Currency swaps
Total

Type
Principal accounting procedure:
Currency swaps
Total

YMFG Annual Report 2015

¥13,710(*) Of interest rate swaps employing exceptional accounting, as these instruments areaccounted for together with the hedged loans and bills discounted, their fair value isincluded in the fair value of said loans and bills discounted within “Financial instruments.”(2) Derivative transactions as at March 31, 2015 and 2014,
to which hedge accounting is applied

41

Millions of yen
2015
Contract Over one
Fair value
amountsyear

Millions of yen
2015
Contract Over one
Fair value
amountsyear¥32,730¥—¥—¥—¥(828)¥(828)

Millions of yen
2014
Contract Over one
Fair value
amounts
year¥29,267¥—¥—¥—¥(360)¥(360)

Type
Principal accounting procedure:
Currency swaps
Total

Thousands of U.S. dollars
2015
Contract Over one
Fair value
amounts
year$272,364
$
—

$—
$—

$(6,890)$(6,890)(c) Stock-related:
There were no stock-related transactions at March 31,
2015 and 2014.
(d) Bond-related:
There were no bond-related transactions at March 31,
2015 and 2014.

7. LOANS AND BILLS DISCOUNTED
Loans at March 31, 2015 and 2014 include “Risk-Managed
Loan Amounts” as follows:(1) Loans to borrowers in bankruptcy amounting to¥21,398 million ($178 million) and ¥25,936 million
denote loans subject to Article 96-1-3 and 96-1-4 of“Order for Enforcement of the Corporation Tax Act”
(Cabinet Order No. 97 of 1965) on which interest
accrual has stopped as there is doubt about thecollectability of either principal or interest because they
have been contractually past due for a considerable
period of time or for other reasons.
(2) Other delinquent loans amounting to ¥80,077 million($666 million) and ¥91,479 million denote loans
on which the Banks have stopped accruing interest
excluding loans to borrowers in bankruptcy and loans
on which interest payments are deferred in order topromote recovery of borrowers in economic difficulty.
(3) Loans past due for three months or more amounting to¥692 million ($6 million) and ¥448 million denote loans
where payment of interest or principal has been delayed
for three months or more excluding loans to borrowers
in bankruptcy and other delinquent loans.
(4) Restructured loans amounting to ¥15,260 million($127 million) and ¥22,435 million denote loans toborrowers for which the repayment terms have been
modified to more favorable terms including reductionof interest rate, deferral of interest payments, extensionof principal payments and debt forgiveness withthe objective of promoting recovery of borrowers ineconomic difficulty excluding loans to borrowers inbankruptcy, other delinquent loans, and past-due loans.
(5) The total of loans to borrowers in bankruptcy, otherdelinquent loans, past-due loans, and restructuredloans amounted to ¥117,427 million ($977 million) and¥140,298 million.
The loan amounts disclosed from (1) to (5) above areamounts before deducting an allowance for loan losses.

Commercial bills
Bills discounted are accounted for as financing transactionsin accordance with the Industry Audit Committee Report
No. 24 of the JICPA, although the Banks have the rightto sell or pledge them without restrictions. The total facevalue of commercial bills and purchased foreign exchangebills obtained as a result of discounting was ¥45,680
million ($380 million) at March 31, 2015 and ¥47,896
million at March 31, 2014.

8. COMMITMENT LINES
Loan agreements and commitment line agreements
relating to loans are agreements that oblige theconsolidated subsidiaries to lend funds up to a certain limit
agreed in advance. The consolidated subsidiaries make theloans upon the request of an obligor to draw down funds
under such loan agreements as long as there is no breachof the various terms and conditions stipulated in therelevant loan agreement. The unused commitment balance
relating to these loan agreements amounted to ¥898,025
million ($7,473 million) at March 31, 2015 and came to¥860,659 million at March 31, 2014. Of this amount,¥831,960 million ($6,923 million) at March 31, 2015, and¥802,427 million at March 31, 2014, relates to loans forwhich the term of the agreement is one year or less, or
unconditional cancellation of the agreement is allowed at
any time.
In many cases the term of the agreement runs its course
without the loan ever being drawn down. Therefore,
the unused loan commitment will not necessarily affectfuture cash flows. Conditions are included in certain loan
agreements that allow the consolidated subsidiaries either
to decline the request for a loan draw-down or to reduce
the agreed limit amount when there is due cause to do so,such as when there is a change in financial condition orwhen it is necessary to protect the consolidated subsidiaries’
credit. Consolidated subsidiaries take various measures

YMFG Annual Report 201542

to protect their credit. Such measures include having theobligor pledge collateral to the consolidated subsidiaries
in the form of real estate, securities, etc., at entering intoa loan agreement or in accordance with the consolidated
subsidiaries’ established internal procedures for confirming
the obligor’s financial condition, etc., at regular intervals.

9. PLEDGED ASSETSAt March 31, 2015 and 2014, the following assets were
pledged as collateral for certain liabilities of the Banks.

Cash and due from banks
Securities
Lease receivables andinvestment assets

Millions of yen
2015
2014
¥
18 ¥
18
231,785
222,558
1,955—

Thousands of
U.S. dollars
2015
$
150
1,928,809
16,269The collateral was pledged to secure the following:

Deposits
Payables under securities lending transactions
Borrowed money

Millions of yen
2015
2014
¥40,055¥27,600
24,02813,269
5,580

3,823

Thousands
ofU.S. dollars
2015$333,319
199,950
46,434

In addition, securities not included in the aboveschedules were pledged as collateral for operatingtransactions, such as foreign exchange contracts andforward exchange contracts. These securities amounted to¥107,910 million ($898 million), cash and due from banks¥3 million ($25 thousand) and net other assets ¥1,197
million ($10 million) including security deposits of ¥3,229
million ($27 million) at March 31, 2015. The corresponding
figures at March 31, 2014, were ¥106,203 million, ¥3million and ¥1,201 million, including security deposits of¥2,997 million.

10. ACCUMULATED DEPRECIATION
Accumulated depreciation of tangible assets was ¥74,452
million ($620 million) at March 31, 2015, and ¥72,993
million at March 31, 2014.

43

YMFG Annual Report 2015

11. IMPAIRMENT LOSSES
During the fiscal year ended March 31, 2015 and 2014,
impairment losses were recorded on the following assets.
Location
WithinHiroshima
Prefecture
WithinFukuoka
Prefecture
WithinYamaguchi
Prefecture
Total

Primary
use

Type

Asset
Land,
scheduled buildings
for saleBusiness- Land,use assets, buildings
idle assete
Asset
Land,
scheduled buildings
for sale

Impairment loss
Thousands ofMillions of yen
U.S. dollars
2015
2014
2015
¥ 20
¥—
$ 166

¥112

—

$ 932

¥ —

¥46

$

¥132

¥46

$1,098—The Bank and its consolidated subsidiaries that engage
in the banking and securities business group theirbusiness-use assets into the smallest units possible fromthe standpoint of management accounting, which is thebranch. Idle assets are, in principle, grouped as units ofindividual assets. In addition, corporate headquarters,
administrative centers, training facilities, company housing
and dormitories are considered corporate assets, as these
are related to all the consolidated subsidiaries which areengaged in the banking businesses.
Consolidated subsidiaries that do not engage in thebanking and securities business group their assets, inprinciple, on an individual company basis.
In the fiscal year ended March 31, 2015, the book valuesof the business-use and idle assets, which have problem inoperating cash flow, and assets that are scheduled for sale
are reduced to their recoverable values, and recognized the
reduction of ¥132 million ($1,098 thousand) as impairment
losses. This amount includes land of ¥67 million ($558
thousand) and buildings of ¥65 million ($541 thousand).
In the fiscal year ended March 31, 2014, the book valuesof the idle assets and assets that are scheduled for sale are
reduced to their recoverable values, and recognized the
reduction of ¥46 million as impairment losses. This amountincludes land of ¥34 million and buildings of ¥12 million.
The recoverable amount used to estimate theimpairment loss for the fiscal year ended March 31, 2015
and 2014, is the net selling price, which is calculated bydeducting the expected disposal cost from the expected
disposal value.

12. BORROWED MONEY
Payment schedule of borrowed money as of March 31,
2015 is as follows:
2015
2016
2017
2018
2019
Thereafter
Total

Thousands of
U.S. dollars$163,094
50,15438,704
26,621
14,704
38,104$331,381

Millions of yen¥19,599
6,027
4,651
3,199
1,767
4,579
¥39,822

13. BONDS PAYABLE
Bonds payable include subordinated bonds of ¥25,000
million ($208 million) as of March 31, 2015 and ¥25,000
million as of March 31, 2014.

(2) Reconciliation of plan asset balances at the
beginning and the end of the fiscal year ended
March 31, 2015 and 2014

Balance of plan assets at the
beginning of the fiscal year
Expected return on plan assets
Actuarial differences
Contribution from employer
Retirement benefit payments
OthersBalance of plan assets at theend of the fiscal year

Millions of yen
2015
2014
¥76,382¥67,200
2,805
11,714
1,629(2,368)228¥90,390

Thousands of
U.S. dollars
2015$635,616

1,919
7,480
1,941
(2,396)
238¥76,382

23,342
97,47913,556(19,705)
1,896$752,184(3) Reconciliation of the balances of retirement
benefit obligations and plan assets at the end of
the fiscal year ended March 31, 2015 and 2014,
and the carrying amounts of net defined benefit
liability and net defined benefit asset
Millions of yen
2015
2014
¥ 60,328 ¥ 57,935

Thousands of
U.S. dollars
2015$502,022

14. PROVISION FOR EMPLOYEERETIREMENT BENEFITS

Retirement benefit obligationsof funded plans
Plan assets

Overview of severance payments and pension plans
Some consolidated subsidiaries employ funded andunfunded defined benefit and defined contribution plans as
employee retirement benefits.
Defined benefit plans include defined benefit corporate
pension plans and lump-sum retirement plans. Also, someare established as retirement benefit trusts.
Some consolidated subsidiaries employ the simplified
method for calculating retirement benefit obligations.

Retirement benefit obligationsof unfunded plans
Net carrying amount of
obligations and assets

Defined benefit plans(1) Reconciliation of retirement benefit obligation
balances at the beginning and the end of the
fiscal year ended March 31, 2015 and 2014

(4) Retirement benefit costs and their breakdowns

Retirement benefit obligations at
the beginning of the fiscal year
Cumulative effects of changes
in accounting policies
Restated balance
Service cost
Interest cost
Actuarial differences
Retirement benefit payments
OthersRetirement benefit obligations
at the end of the fiscal year

Millions of yen
2015
2014
¥57,979¥58,375

Thousands of
U.S. dollars
2015$482,475

3,086—

25,68061,065
1,555
634
627
(3,742)
242¥60,381

58,347
1,556
1,042
645
(3,878)239¥57,979

508,155
12,9405,276
5,218(31,139)
2,013$502,463

Net retirement benefit liability
Net retirement benefit asset
Net carrying amount of
obligations and assets

Service cost*
Interest cost
Expected return on plan assets
Recognized actuarial loss
Amortization of past service
cost
OthersRetirement benefit costs on
defined benefit plans(90,390)(30,062)53(76,382)(18,447)44(752,184)(250,162)
441¥(30,009)¥(18,403)$(249,721)

Millions of yen
2015
2014
¥ 3,467 ¥ 4,479(33,476)(22,882)¥(30,009) ¥(18,403)

Thousands of
U.S. dollars
2015$ 28,851(278,572)$(249,721)

Millions of yen
2015
2014
¥ 1,555¥ 1,556634
1,042(2,805)(1,919)
1,637
1,840
0
1
57
¥ 1,078

Thousands of
U.S. dollars
2015$ 12,940
5,276(23,342)
13,622064¥ 2,584475$ 8,971* Excludes employee contribution portion of defined benefit corporate pensions

YMFG Annual Report 201544

(5) Remeasurements of defined benefit plans

Defined contribution plans

Items posted as remeasurements of defined benefit plans(before tax-effect exclusions) break down as follows.

The required contribution to the consolidated subsidiaries’
defined contribution plans at the end of the fiscal year
ended March 31, 2015 and 2014 were ¥153 million($1,273 million) and ¥157 million, respectively.

Past service cost
Actuarial gain (loss)
Total

Millions of yen
2015
2014
¥
0
¥—
12,723—¥12,723¥—

Thousands of
U.S. dollars
2015$
0
105,875$105,875(6) Cumulative remeasurements of defined benefit
plans
Items posted as cumulative remeasurements of defined
benefit plans (before tax-effect exclusions) break down
as follows.

Unrecognized past service cost
Unrecognized actuarial gain
(loss)
Total

Millions of yen
2015
2014
¥
—
¥
0
(7,361)
5,362¥(7,361)¥5,362Thousands of
U.S. dollars
2015$—(61,255)$(61,255)(7) Plan assets(i) Percentages of major asset categories to total plan assets
are as follows.
2015
20%
64%
16%
100%

Bonds
SharesOthers
Total

2014
25%
59%
16%
100%

(Note) Plan assets include 30% of corporate pension plans established as retirement benefit
trusts at the end of the fiscal year ended March 31, 2015, and 28% at March 31, 2014.

(ii) Method of establishing expected long-term return onplan assets(Corporate pensions)
Based on the expected rate of return for individual
investment fiduciary institutions, deducting investment costfrom the weighted average rate for the policy asset mix(medium- to long-term portfolio)(Retirement benefit trusts)
Past dividend performance is converted to yield.

(8) Basis of actuarial calculation
The basis of actuarial calculations as of March 31, 2015 and2014
Discount rate

45

2015
2014
0.03%—1.64% 1.50%—2.00%

Expected long-term rate of returnon plan assets

1.50%—6.20% 1.60%—3.80%

Expected rate of salary increase

0.80%—4.65% 0.94%—4.65%

YMFG Annual Report 2015

15. REVALUATION RESERVE FOR LAND
Pursuant to the Law concerning Revaluation of Land (Law
No. 34, promulgated March 31, 1998, the “Law”), YMFG
revalued certain land used for banking operations by
consolidated subsidiaries. The tax-equivalent portion ofthis revaluation amount was recorded in liabilities under“deferred tax liabilities for revaluation reserve for land,”and the reminder under net assets as “revaluation reserve
for land.”
Revaluation date: March 31, 1998
Item 3, Article 3, of the Law establishes the evaluation
method as that prescribed by Article 2-4 of the Order for
Enforcement of Law on Revaluation of Land (Enforcement
Order No. 119, promulgated March 31, 1998), and theamount of land tax is calculated on the basis of the land
tax amount specified under Article 16 of the Land-holding
Tax Act, adjusted rationally in accordance with the basis of
calculation announced officially by the Director General of
the National Tax Administration Agency.
Total difference between market value of land forbusiness use revalued in accordance with Article 10 of the
Law and the total post-revaluation book value of land at
March 31, 2015 and 2014 were ¥23,409 million ($195
million) and ¥23,419 million, respectively.

16. CONTINGENT LIABILITIES —ACCEPTANCES AND GUARANTEESAll contingent liabilities, including letters of credit,
acceptances and guarantees are reflected in acceptancesand guarantees. As a contra account, customers’ liabilities
for acceptances and guarantees are shown on the asset side,which represent the Banks’ right of indemnity from customers.

17. OTHER INCOME
Other income for the fiscal year ended March 31, 2015 and2014 included the gains on sale of stock of ¥5,150 million($43 million) and ¥8,597 million, respectively.

18. GENERAL AND ADMINISTRATIVE
EXPENSES

are not capitalized and are accounted for in the samemanner as operating leases. Certain information forsuch non-capitalized finance leases for the year ended
March 31, 2015 and 2014 were as follows:
Equivalent amount:
Acquisition cost
Accumulated depreciation
Net book value

Millions of yen
2015
2014
¥11
¥69
11
67
¥—
¥ 2

Thousands of
U.S. dollars
2015
$92
92
$—

Lease payments
Equivalent depreciation expense
Equivalent interest expense

Millions of yen
2015
2014
¥2
¥21
2
19
¥0
¥ 0

Thousands of
U.S. dollars
2015
$17
17
$ 0

Items included operating expenses for the year ended
March 31, 2015 and 2014 were as follows:

Salary and allowance
Retirement benefit costs
Depreciation

Millions of yen
2015
2014
¥30,988¥31,436
897
2,596
10,518
10,786

Millions of
U.S. dollars
2015
$258
7
88

19. OTHER EXPENSES
Other expenses included ¥616 million ($5,126 thousand)in loss on sale of stock, ¥31 million ($258 thousand) indevaluation of stock and ¥1,199 million ($9,978 thousand)in loss on investment of money held in trust for the year
ended March 31, 2015. For the year ended March 31,
2014, other expenses included ¥928 million in loss on saleof stock, and ¥135 million in devaluation of stock andthere are no loss on investment of money held in trust.

20. LEASE TRANSACTIONS
1. Finance lease transactions(1) Finance lease transactions that do not transfer
ownership(i) Content of lease assets
Tangible fixed assets
Mainly office equipment
Intangible fixed assets
Software(ii) Depreciation method for lease assets
As described in “Lease assets under” (5) Accounting
Policies, in “2. SIGNIFICANT ACCOUNTING POLICIES.”(2) The Banks and other consolidated subsidiaries leasecertain equipment under noncancelable finance leases.
Finance leases that do not transfer ownership to lessees

Equivalent depreciation expense is computed using thestraight-line method over the lease terms assuming noresidual value. Equivalent interest expense is computed
using the interest rate method over the lease terms forthe difference between acquisition cost and total lease
payments.
Future minimum lease payments under non-cancelable
finance leases having remaining terms in excess of one year
at March 31, 2015 and 2014 were as follows:
At March 31, 20152016
2017 and thereafter
Total minimum lease payments

Millions of yen¥——¥—

Thousands of
U.S. dollars$——$—

At March 31, 2014
Millions of yen
¥ 2
—
¥ 2

2015
2016 and thereafter
Total minimum lease payments

2. Operating leases
Future minimum lease payments at March 31, 2015 and2014 were as follows:
At March 31, 20152016
2017 and thereafter
Total minimum lease payments

Millions of yen
¥ 84
1,097
¥1,181Thousands of
U.S. dollars
$ 699
9,129
$9,828YMFG Annual Report 201546

At March 31, 2014%
Millions of yen
¥ 52
747
¥799

2015
2016 and thereafter
Total minimum lease payments

21. INCOME TAXES
1. Significant components of the deferred tax assets andliabilities as of March 31, 2015 and 2014 were as follows:

Deferred tax assets:
Allowance for loan losses
Provision for bonuses
Net defined benefit liability
Depreciation
Losses on devaluation of
securities
Net operating losses
carryforwards
Other
Deferred tax assets
Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Unrealized gains onavailable-for-sale securities
Securities contributed toretirement benefit trusts
Other
Total deferred tax liabilities
Net deferred tax assets(liabilities)

Millions of yen
2015
2014

Thousands of
U.S. dollars
2015¥ 19,703
1,035
4,357
941
2,775

¥ 24,891
1,148
7,252
951
3,542

$ 163,959
8,613
36,257
7,831
23,092

406

2,555

3,379

4,374
33,591(3,873)29,7184,605
44,944(5,995)38,94936,398279,529(32,229)
247,300(32,447)(18,646)(270,009)(4,676)(5,160)(38,912)(2,706)(39,829)¥(10,111)(1,421)(25,227)¥ 13,722(22,518)(331,439)$ (84,139)

2. Significant differences between the statutory effective
tax rate and the actual income tax rate after applicationof deferred income tax accounting for the year ended
March 31, 2015 and 2014 were as follows:

47

YMFG Annual Report 2015

Effective statutory tax rate
(Adjustments)
Revision of valuation allowances
Items permanently exempted from income suchas dividend income
Non-deductable goodwill amortization
Inhabitant tax on per capita basis
Items permanently excluded from expense suchas entertainment expenses
Stated difference of tax rates on special
reconstruction surtax
Expiration of losses carried forward
Consolidation adjustment
OthersActual tax rate after application of deferredincome tax accounting

2015
—

2014
37.75

—
—

(10.39)(1.60)

—
—
—

3.73
0.27
0.31

—

1.46

—
—
—
—

5.69
(1.40)(0.39)
35.43(Note) Information for the year ended March 31, 2015 is omitted, as the difference between
the effective statutory tax rate and the actual tax rate after application of deferredincome tax accounting is 5% or less.

3. Revisions in amounts of deferred taxes assets andliabilities due to changes in the corporate tax rate
For the year ended March 31, 2014
The “Act on Partial revision of Income Tax Act” (Law
No. 10 of 2014) was promulgated on March 31, 2014,
repealing the special reconstruction surtax from the fiscal
years beginning on or after April 1, 2014. Accordingly, thestatutory effective tax rate used for calculating deferred tax
assets and liabilities was reduced from 37.75% to 35.38%,
applied for temporary differences that are expected to be
deductible in the fiscal year beginning April 1, 2014. Thischange in the tax rate had the effect of reducing deferred
tax assets by ¥547 million and increasing income tax
adjustments by ¥547 million.
For the year ended March 31, 2015
The “Act on Partial revision of Income Tax Act” (Law No.
9 of 2015) and the “Act on Partial Revision of the Local
Tax Act” (Law No. 2 of 2015) were promulgated on March
31, 2015, lowering the corporate tax rate from the fiscal
years beginning on or after April 1, 2015. Accordingly, thestatutory effective tax rate used for calculating deferred tax
assets and liabilities was reduced from 35.38% to 32.38%
applied for temporary differences that are expected to be
deductible in the fiscal year beginning April 1, 2015, andfurther to 32.06% applied for temporary differences thatare expected to be deductible in the fiscal year beginning
April 1, 2016.
This change in the tax rate had the effect of reducing
deferred tax liabilities by ¥1,358 million ($11 million),increasing unrealized gains on available-for-sale securitiesby ¥3,364 million ($28 million), reducing deferred gains
or losses on hedges by ¥16 million ($133 thousand),increasing remeasurements of defined benefit plans by¥273 million ($2 million) and raising deferred income
taxes by ¥2,263 million ($19 million). Deferred tax
liabilities for land revaluation decreased ¥1,187 million($10 million), and revaluation reserve for land increased by
the same amount.

to ¥1,712 million ($14 million). Such appropriations havenot been accrued in the Consolidated Financial Statements
as of March 31, 2015 and to be recognized in the period inwhich they are approved by the shareholders.
At the annual shareholders’ meeting, held on June
26, 2014, the shareholders approved cash dividends
amounting to ¥1,772 million. Such appropriations have notbeen accrued in the Consolidated Financial Statements asof March 31, 2014 and to be recognized in the period inwhich they are approved by the shareholders.

22. NET ASSETS
23. CHANGES IN NET ASSETSThe Companies Act of Japan (the “Act”) became effective
on May 1, 2006, replacing the Japanese Commercial Code(the “Code”). The Act is generally applicable to eventsand transactions occurring after April 30, 2006 and for the
fiscal years ending after that date.
Under the Act, the entire amount paid for new sharesis in principle required to be designated as common stock.
However, a company may, by a resolution of the Board of
Directors, designate an amount not exceeding one-half ofthe price of the new shares as additional paid-in capital,
which is included in capital surplus.
Under the Act, in cases where dividend distribution of
surplus is made, the smaller of an amount equal to 10%of the dividend or the excess, if any, of 25% of common
stock over the total of additional paid-in capital and legal
earnings reserve must be set aside as additional paid-in
capital or legal earnings reserve. Legal earnings reserve
is included in retained earnings in the accompanying
Consolidated Balance Sheets.
Under the Act, legal earnings reserve and additional
paid-in capital may be used to eliminate or reduce a
deficit, or may be capitalized, by a resolution of theshareholders’ meeting.
Under the Act, additional paid-in capital and legal
earnings reserve may not be distributed as dividends,
however all of these may be transferred to other capitalsurplus and retained earnings, respectively, which arepotentially available for dividends.
The maximum amount that YMFG can distribute as
dividends is calculated based on the Non-Consolidated
Financial Statements of the Company in accordance with
the Act.
At the annual shareholders’ meeting, held on June 26,
2015, the shareholders approved cash dividends amounting

1. Type and number of shares issued and treasury shareswere as follows:
Number of shares (in thousand)March 31,
March 31,
Increase Decrease
2014
2015
Shares issued
Common stock
Total
Treasury stock
Common stock*1, *2
Total

264,353
264,353——

264,353
264,353

11,29911,29910,062
10,062504
504

20,857
20,857*1 Of the increase in the number of shares, 10,000 thousand shares were acquired in themarket, 35 thousand shares were due to the acquisition of fractional shares and 27
thousand shares were due to the transition of a company from an equity-method affiliate
to a consolidated subsidiary. Of the decrease in the number of shares, 353 thousand
shares were due to the sale of shares to the Group’s employee stock ownership program
ESOP Trust for Employee Shareholders, 150 thousand shares were due to the exercise ofstock options, and 1 thousand shares were in response to demand for the purchase of
fractional shares.
*2 Treasury stock as of beginning and ending of fiscal year ended March 31, 2015 include
1,400 thousand shares and 1,047 thousand shares held by the ESOP Trust for Employee
Shareholders.

Number of shares (in thousand)March 31,
March 31,
Increase Decrease
2013
2014
Shares issued
Common stock
Preferred stock (Type 3)*1
Preferred stock (Type 4)*1
Total
Treasury stock
Common stock*2, *3
Preferred stock (Type 3)*1
Preferred stock (Type 4)*1
Total

264,35311
9264,373

—
—
—
—

—
11
9
20

264,353——
264,353

2,749
—
—
2,749

9,042
11
9
9,062

492
11
9
512

11,299——11,299*1 Increases and decreases in the number of shares are due to acquisitions andextinguishments of Type 3 and Type 4 preferred stock.
*2 Of the increase in the number of shares, 9,000 thousand shares were acquired in themarket, and 42 thousand shares were due to the acquisition of fractional shares. Of thedecrease in the number of shares, 449 thousand shares were due to the sale of sharesto the Group’s employee stock ownership program, 41 thousand shares were due to theexercise of stock options, and 1 thousand shares were in response to demand for thepurchase of fractional shares.
*3 Treasury stock as of beginning and ending of fiscal year ended March 31, 2014
include 1,849 thousand shares and 1,400 thousand shares held by the ESOP Trust for
Employee Shareholders.

YMFG Annual Report 201548

2. Information on dividends is as follows:(a) Dividends paid in the fiscal year ended March 31, 2015
and 2014.

Type of shares
Resolved at the boardof directors meetingon May 9, 2014
Common stock
Resolved at the boardof directors meetingon November 7, 2014
Common stock

Aggregate
amount ofdividends(Millionsof yen)Cashdividends
per share(Yen)¥1,781*1 ¥¥1,782*2 ¥Recorddate(b) Dividends to be paid in the fiscal year ending March 31,
2016 and 2015 are as follows:

Effectivedate

7.00 Mar. 31, Jun. 27,
2014
2014

7.00 Sep. 30, Dec. 10,
2014
2014

Type of shares
Resolved at theboard of directors
meeting on May
8, 2015
Common stock

Type of shares
Resolved at the boardof directors meetingon May 10, 2013
Common stock
Preferred stock(Type 3)Preferred stock(Type 4)
Resolved at the boardof directors meetingon November 8, 2013
Common stockCashdividends
per share(Yen)

Recorddate¥1,581*1 ¥6.00 Mar. 31,
2013¥11,500 Mar. 31,
2013¥11,500 Mar. 31,
2013

¥ 127
¥

98

¥1,581*2 ¥6.00 Sep. 30,
2013

Effective
dateJun. 27,2013
Jun. 27,2013
Jun. 27,2013

Dec. 10,2013*1 The total amount of dividend on common stock include ¥11 million in dividends to ESOP
Trust for employee shareholders. This is because shares held by ESOP trust are treated astreasury stock.
*2 The total amount of dividend on common stock include ¥10 million in dividends to ESOP
Trust for employee shareholders. This is because shares held by ESOP trust are treated astreasury stock.

Type of shares
Resolved at the boardof directors meetingon May 9, 2014
Common stock
Resolved at the boardof directors meetingon November 7, 2014
Common stock

AggregateCashamount ofdividends
dividends
per share(Thousands of(U.S. dollars)
U.S. dollars)

Recorddate

Effectivedate

YMFG Annual Report 2015

7.00 Mar. 31,
2015

Jun. 29,2015

Type of shares
Resolved at theboard of directors
meeting on May
9, 2014
Common stock(Millions of yen, except per share amount)
AggregateCashamount of Source
dividends Record
Effective
dividendsof
per share
datedate(Millions of dividends
(Yen)
yen)

¥1,781 Retained ¥earnings

7.00 Mar. 31,
2014

Jun. 27,2014(Note) The total amount of dividend on common stock includes ¥10 million in dividends to
ESOP Trust for employee shareholders.

(Thousands of U.S. dollars, except per share amount)
Aggregate
amount ofCashdividends
Source dividends
RecordEffective(Thouofper sharedatedatesands of dividends (U.S. dolU.S. dollars)
lars)Type of shares
Resolved at theboard of directors
meeting on May
8, 2015$14,246 Retained
Common stockearnings$0.06 Mar. 31,
2015

Jun. 29,2015(Note) The total amount of dividend on common stock includes $58 thousand in dividends to
ESOP Trust for employee shareholders.

24. STOCK OPTIONS
1$14,821*$0.06 Mar. 31, Jun. 27,
2014
2014

$14,829*2$0.06 Sep. 30, Dec. 10,
2014
2014

*1 The total amount of dividend on common stock includes $83 thousand in dividends to
ESOP Trust for employee shareholders.
*2 The total amount of dividend on common stock includes $67 thousand in dividends to
ESOP Trust for employee shareholders.

49¥1,712 Retained ¥earnings(Note) The total amount of dividend on common stock includes ¥7 million in dividends to
ESOP Trust for employee shareholders.

*1 The total amount of dividend on common stock includes ¥10 million in dividends to ESOP
Trust for employee shareholders.
*2 The total amount of dividend on common stock includes ¥8 million in dividends to ESOP
Trust for employee shareholders.

Aggregate
amount ofdividends(Millionsof yen)(Millions of yen, except per share amount)
AggregateCashamount of Source
dividends Record
Effective
dividendsof
per share
datedate(Millions of dividends
(Yen)
yen)

At a Board of Directors meeting on September 22, 2011,a resolution was passed with regard to subscription
requirements for the allotment of stock options ascompensation to directors of YMFG’s banking subsidiaries,
Yamaguchi Bank, Momiji Bank and Kitakyushu Bank. The
details of this resolution are described below.

1. Recording of expenses related to stock options and thename of line items

General and administrative
expensesMillions of yen
2015
2014
¥194
¥208

Thousands
ofU.S. dollars
2015$1,614

2. The content of the stock options is as outlined below.
2015
Category and number of
27 directors (excluding outside directors)
persons to be granted stock of YMFG’s subsidiaries, Yamaguchi
options
Bank, Momiji Bank and Kitakyushu Bank.
Number of stock options by 182,900 shares of YMFG’s common
class of stock*stock
Grant dateJuly 29, 2014

Vesting conditions

No vesting conditions set

Target length of service
periodNo target length of service period set

Period for exercise of rights July 30, 2014—July 29, 2044

2014
Category and number of
27 directors (excluding outside directors)
persons to be granted stock of YMFG’s subsidiaries, Yamaguchi
options
Bank, Momiji Bank and Kitakyushu Bank.
Number of stock options by 225,100 shares of YMFG’s common
class of stock*stock
Grant dateJuly 23, 2013

Vesting conditions

No vesting conditions set

Target length of service
periodNo target length of service period set

2012
Category and number of
27 directors (excluding outside directors)
persons to be granted stock of YMFG’s subsidiaries, Yamaguchi
options
Bank, Momiji Bank and Kitakyushu Bank.
Number of stock options by 192,600 shares of YMFG’s common
class of stock*stock
Grant date

October 31, 2011

Vesting conditions

No vesting conditions set

Target length of service
periodNo target length of service period set

Period for exercise of rights November 1, 2011—October 31, 2041
Note: Stated as the equivalent number of shares.

3. The summary of stock option activity is as indicated below.
(a) Number of stock options
2015
2014
2013
2012
Prior to vesting
As of the end of the previous— 225,100——
consolidated fiscal year
Granted
182,900———
Expired————
Vested— 225,100——
Rights not yet determined
182,900———
After vesting
As of the end of the previous—— 267,500 153,400
consolidated fiscal year
Rights determined————
Rights exercised— 54,200 62,100 33,700
Expiry————Amount unexercised— 170,900 205,400 119,700(b) Price information

Period for exercise of rights July 24, 2013—July 23, 2043

2013
Category and number of
27 directors (excluding outside directors)
persons to be granted stock of YMFG’s subsidiaries, Yamaguchi
options
Bank, Momiji Bank and Kitakyushu Bank.

Yen
2015
2014
2013
2012
Exercise price
¥
1 ¥
1 ¥
1 ¥
1
Average share price— 1,075 1,075 1,075
at time of exercise
Fair value on date
1,015
973
619
660
grantedU.S. dollars
2015
$0.01
—
8.45

Number of stock options by 294,900 shares of YMFG’s common
class of stock*stock
Grant dateJuly 30, 2012

Vesting conditions

No vesting conditions set

Target length of service
periodNo target length of service period set

Period for exercise of rights July 31, 2012—July 30, 2042

4. Method of estimating the fair value of stock options
The method employed to estimate the fair value of stock
options granted during the consolidated fiscal year ended
March 31, 2015 and 2014 are as follows:(a) Valuation method employed: Black-Scholes method(b) Main base figures and estimation method
Volatility of stock price*1
Expected number of years remaining*2
Forecast dividend*3
Risk-free interest rate*4

2015
24.89%
3.69 years¥13/share
0.101%*1 Calculated on the basis of stock price performance during a period (November 2010 toJuly 2014) corresponding to the expected number of years remaining (3.69 years).
*2 The number of remaining years in service of current directors is estimated on the basis of
the average number of years of service of directors retiring, excluding the current service
period.
*3 Based on the actual dividend for the fiscal year ended March 31, 2014.
*4 Japanese government bond yields for the expected number of years remaining.

YMFG Annual Report 201550

Volatility of stock price*1
Expected number of years remaining*2
Forecast dividend*3
Risk-free interest rate*4

2014
24.78%
3.92 years¥12/share
0.197%*1 Calculated on the basis of stock price performance during a period (August 2009 to July2013) corresponding to the expected number of years remaining (3.92 years).
*2 The number of remaining years in service of current directors is estimated on the basis of theaverage number of years of service of directors retiring, excluding the current service period.
*3 Based on the actual dividend for the fiscal year ended March 31, 2013.
*4 Japanese government bond yields for the expected number of years remaining.

5. Method for estimating the number of rights determined
for stock options
Due to the difficulty of rationally estimating the future
number of rights that will expire, in general a method is
employed that reflects only the number of rights that haveactually expired.

25. INVESTMENT AND RENTAL PROPERTYThis note is omitted, as the total amount of investment andrental property is immaterial.

51

YMFG Annual Report 2015

26. CONSOLIDATED STATEMENT OFCOMPREHENSIVE INCOME
Amounts of reclassification adjustments and tax effectamounts related to other comprehensive income in the
consolidated fiscal year ended March 31, 2015 and 2014
were as follows.
Thousands of
U.S. dollars
2015

Millions of Yen
2015
2014
Unrealized gains (losses) on
available- for-sale securities
Amount generated during
the year
Reclassification adjustments
Before tax effect adjustment
Tax effect amount
Unrealized gains (losses) on
available-for-sale securities
Deferred gains (losses) onhedges:Amount generated during
the year
Reclassification adjustments
Before tax effect adjustment
Tax effect amountDeferred gains (losses)on hedges
Revaluation reserve for land
Amount generated during
the year
Reclassification adjustment
Before adjustment for tax
effects
Tax effect amount
Revaluation reserve for landRemeasurements of defined
benefit plans
Amount generated during
the year
Reclassification adjustment
Before adjustment for tax
effects
Tax effect amountRemeasurements of defined
benefit plans
Share of other comprehensive
income in affiliated companies
accounted for using theequity method
Amount generated during
the year
Reclassification adjustments
Before tax effect adjustment
Tax effect amount
Share of other comprehensive
income in affiliated companies
accounted for using theequity method
Total other comprehensive
income¥61,429¥17,249$511,184(12,951)
48,478(14,024)
34,454(13,413)
3,836(1,632)
2,204(107,772)
403,412(116,703)
286,709

(170)

(89)

(1,415)

250
80
(44)
36

235
146
(52)
94

2,080
665
(365)
300

—

—

—

—
—

—
—

—
—

1,187
1,187

—
—

9,878
9,878

11,086—92,253

1,637
12,723——

13,622
105,875(4,255)
8,468——(35,408)
70,467

(13)

4

(108)

—
(13)
—
(13)

—
4
—
4

—
(108)
—
(108)

44,132

2,302

367,24627. SEGMENT INFORMATION

Net income per share is calculated based on the following:

Business segment information is not presented, as the Bankand consolidated subsidiaries operate in one segment.
Geographic segment information is not presented, as
domestic income of the Bank and consolidated subsidiaries
and their consolidated assets located substantially in Japan
represent more than 90% of the Group’s consolidated
income and assets.
Overseas sales information is not presented, as overseas
sales are less than 10% of the Group’s consolidated income.

28. RELATED PARTY TRANSACTIONSThere are no significant transactions that should indicate
dealings with related parties.

29. PER SHARE DATA
Yen
2015
2014
Net assets per share¥2,346.56 ¥2,040.02
Net income per share
120.88120.68Net income per share (diluted) ¥ 108.24 ¥ 116.57

U.S. dollars
2015$19.531.01$ 0.90Net income
Amount not attributable tocommon shareholders
Net income attributable tocommon stock
Average shares of common
stock during the year*(in thousands)

Millions of yen
except number ofshares2015
2014¥30,523¥31,242——
30,52331,242

252,514

258,870

Thousands of
U.S. dollars
2015$253,999—
253,999* Shares of the Company held by the ESOP trust are shown on the balance sheets as treasury
stock, so are not included in the above average shares of common stock during the year.
The average number of shares was 1,598 thousand in the fiscal year ended March 31,
2014, and 1,193 thousand in the fiscal year ended March 31, 2015.
(Note) As previously described in Changes in Accounting Principles, YMFG adopted the“Accounting Standard for Retirement Benefits” (ASBJ Statement No. 26, May 17,2012) and the “Implementation Guidance for the Accounting Standard for Retirement
Benefits” (ASBJ Guidance No. 25, March 26, 2015), applying the provisions foundin the body of Paragraph 35 of the Accounting Standard for Retirement Benefits
and Paragraph 67 of the Implementation Guidance for the Accounting Standard for
Retirement Benefits from the fiscal year ended March 31, 2015, and in accordance withthe transitional treatment stipulated in Paragraph 37 of the Accounting Standard for
Retirement Benefits.
As a result, at the beginning of the fiscal year ended March 31, 2015, net assets per
share decreased ¥7.88 ($0.07), and net income per share and diluted net income pershare increased ¥0.94 ($0.01) and ¥0.84 ($0.01) respectively.
In the fiscal year ended March 31, 2014, as previously described in Changes in
Accounting Principles, YMFG adopted the “Accounting Standard for Retirement
Benefits” and in accordance with the transitional treatment stipulated in Paragraph 37of the Accounting Standard for Retirement Benefits.
As a result, net assets per share decreased ¥13.69 in the fiscal year ended March
31, 2014.

30. SUBSEQUENT EVENTSNet assets per share are calculated based on the following:

Net assets
Amounts excluded from net
assetsstock options
minority interests
Net assets attributable tocommon stock at the fiscal
year-end
Number of common stock at
the fiscal year-end used forthe calculation of net assets
per share (in thousands)*

Millions of yen
except number ofshares2015
2014¥578,388 ¥521,470¥ 7,008 ¥ 5,232

Thousands of
U.S. dollars
2015$4,813,081$ 58,317

512
6,496
571,380431
4,801
516,238

4,261
54,056
4,754,764

243,497

253,055* Shares of the Company held by the ESOP trust are shown on the balance sheets as treasury
stock, so are not included in the above number of common stock at the fiscal year-end used
for the calculation of net assets per share. This number of shares held by the ESOP was
1,400 thousand as of March 31, 2014, and 1,047 thousand as of March 31, 2015.

There were no significant subsequent events. Dividends
were made in June 2015 and 2014. Please refer to “21.
NET ASSETS.”

31. BUSINESS COMBINATIONSBusiness combinations due to acquisition
1. Overview of business combination(1) Name and business of acquired company
Name of acquired company YM Lease Co., Ltd.
Business
Leasing(2) Principal reasons for business combination
YM Lease Co., Ltd. has been operating as a leasing
company, and the business combination was executed tofurther enhance the financial services of the financial group
including three banks; Yamaguchi Bank, Momiji Bank andKitakyushu Bank
(3) Date of corporate combination
December 5, 2014
YMFG Annual Report 201552

(4) Legal form of the business combination
YM Lease Co., Ltd. became a subsidiary of the Groupthrough the acquisition of shares in YM Lease Co., Ltd.
(5) Company name following the combination
The company’s name remains unchanged following the
combination.
(6) Percentage of voting rights acquired
Percentage of voting rights immediately prior to acquisition
21.1% (Note)
Percentage of voting rights acquired on the date of thebusiness combination
28.9%
Total percentage of voting rights following the acquisition
50.0%(Note) This figure includes shares owned by YMFG subsidiaries The Yamaguchi Bank Co., Ltd.,and Yamagin Card Co., Ltd.

(7) Key factors leading to the corporate acquisition decision
Owning 40% or more of the shares in YM Lease Co., Ltd.,
enables YMFG to convert the company to a subsidiary on
the basis of a controlling interest.
2. Period for which acquired company’s operating
performance is included in the consolidated statements
of income for the period under review
April 1, 2014 to March 31, 2015
As the acquisition date is deemed to have been December
31, 2014, income of the acquired company for the period
from April 1, 2014, through December 31, 2014, isrecorded as equity method investment income.
3. Acquisition cost for the acquired company and its breakdown
Fair value of common stock in
YM Lease Co., Ltd., owned
immediately prior to thebusiness combination¥104 million ($866 thousand)Fair value of additional common
stock in YM Lease Co., Ltd.,acquired on the date of thebusiness combination¥94 million ($782 thousand)Acquisition cost
¥198 million ($1,648 thousand)
4. Difference between the acquisition cost of the acquiredcompany and total acquisition cost for individualtransactions leading up to the transaction Loss related tostaged acquisition¥200 million ($1,664 thousand)53

YMFG Annual Report 2015

5. Negative goodwill generated and reason for generation(1) Amount of negative goodwill generated¥2,331 million ($19,398 thousand)(2) Reason for generation
The fair value of net assets exceeded the acquisition cost at
the time of acquisition.
6. Amount and general breakdown of assets acquired
and obligations assumed on the date of the corporate
combination(1) Assets
Current assets¥21,692 million ($180,511 thousand)Noncurrent assets¥644 million ($5,359 thousand)Total assets¥22,336 million ($185,870 thousand)(2) Liabilities
Current liabilities¥5,968 million ($49,663 thousand)Long-term liabilities ¥12,591 million ($104,777 thousand)Total liabilities¥18,559 million ($154,440 thousand)
7. Impact on the consolidated statements of income forthe fiscal year under review based on the assumptionthat the corporate combination was concluded on thestarting day of the fiscal year under review
This information has been omitted, as its impact is negligible.

YMFG Annual Report 2015

54

Yamaguchi Bank Financial Statements
NONCONSOLIDATED BALANCE SHEETS (UNAUDITED)March 31, 2015 and 2014

Millions of yen
2015

ASSETS
AssetsCash and due from banks
Call loans and bills purchased
Monetary claims bought
Trading assets
Money held in trust
Securities
Loans and bills discounted
Foreign exchanges
Other assets
Tangible fixed assets
Intangible fixed assets
Prepaid pension cost
Customers’ liabilities for acceptances and guarantees
Allowance for loan losses
Total assets

Millions of yen
2014

Thousands of
U.S. dollars
2015¥

531,489
263,224
7,769
5,563
44,306
1,584,517
3,450,436
8,272
91,57445,337
3,269
17,38230,541(29,067)¥ 6,054,612¥

503,708
288,125
8,296
5,208
48,016
1,358,088
3,299,187
10,26981,67546,497
6,976
17,986
27,680(31,488)¥ 5,670,223$ 4,422,809
2,190,430
64,65046,293368,694
13,185,629
28,712,957
68,836762,037
377,274
27,203
144,645
254,148(241,882)$ 50,383,723¥ 5,454,733
76,79012,329
5,631
9,765
3,052
57,855
1,554
106
933
43
18,0997,820
30,541
5,679,251
10,006
380
293,793304,179
55,083(303)
16,402
71,182
375,361¥ 6,054,612¥ 5,134,128
83,173
4,566
3,405
9,622
1,559
54,001
1,519
85
765
40
7,366
8,632
27,6805,336,541
10,006380
277,885
288,271
30,167(353)
15,59745,411
333,682¥ 5,670,223$ 45,391,803
639,011
102,596
46,85981,26025,397
481,444
12,932
882
7,764
358
150,61265,074254,148
47,260,140
83,265
3,162
2,444,812
2,531,239
458,376(2,521)
136,489592,344
3,123,583$ 50,383,723

LIABILITIES AND NET ASSETS (SHAREHOLDERS’ EQUITY)
Liabilities:

Net assets:

55

Deposits
Call money and bills soldPayables under securities lending transactions
Trading liabilities
Borrowed money
Foreign exchanges
Other liabilities
Provision for bonuses
Provision for retirement benefits
Provision for reimbursement of deposits
Reserve for frequent users services
Deferred tax liabilities
Deferred tax liabilities for land revaluation
Acceptances and guarantees
Total liabilities
Capital stock
Capital surplus
Retained earnings
Total shareholders’ equity
Net unrealized gains on securities
Deferred gains or losses on hedges
Revaluation reserve for land
Total valuation and translation adjustments
Total net assets
Total liabilities, and net assets

YMFG Annual Report 2015

NONCONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Years ended March 31, 2015 and 2014

Millions of yen
2015

IncomeInterest income:Interest on loans and discounts
Interest and dividends on securities
Other interest income
Fees and commissions
Trading income
Other ordinary income
Other income
Total income
Expenses
Interest expense:
Interest on deposits
Interest on borrowings and rediscounts
Other interest expense
Fees and commissions payments
Other operating expenses
General and administrative expenses
Impairment losses
Other expenses
Total expenses
Income before income taxes and minority interests
Income taxes:
Current
Deferred
Net income

Amounts per share of common stock:
Net income
Cash dividends applicable to the year¥¥

41,40816,014
1,002
11,833
54
8,962
5,789
85,062¥

42,144
12,582940
11,618
98
4,666
11,66083,708$344,579
133,261
8,338
98,469449
74,57848,173
707,847

4,171
586
165
4,045
4,481
37,99002,296
53,73431,328

4,528
487
182
3,973
3,960
39,005447
1,095
53,67730,031

34,7094,876
1,373
33,66137,289316,135
0
19,107447,150
260,697

9,764
1,557
20,007

8,387
2,687
18,957

81,251
12,957
166,489

¥

Yen
2015

¥

Thousands of
U.S. dollars
2015

Millions of yen
2014

100.03
14.00

$

Yen
2014

¥

94.79
13.00

U.S. dollars
2015

$

0.83
0.12

YMFG Annual Report 2015

56

Momiji Bank Financial Statements
NONCONSOLIDATED BALANCE SHEETS (UNAUDITED)March 31, 2015 and 2014

Millions of yen
2015

ASSETS
AssetsCash and due from banks
Call loans and bills purchased
Monetary claims bought
Trading assets
Securities
Loans and bills discounted
Foreign exchanges
Other assets
Tangible fixed assets
Intangible fixed assets
Prepaid pension cost
Deferred tax assets
Customers’ liabilities for acceptances and guarantees
Allowance for loan losses
Total assets

Millions of yen
2014

Thousands of
U.S. dollars
2015¥

355,974
20,092593
696
708,923
2,006,372
3,366
76,36533,738
5,612
7,337
10,271
12,816(28,126)¥ 3,214,029¥

332,781
27,144573
554
691,112
1,928,364
3,353
80,521
34,424
8,083
6,827
17,77012,329(37,569)¥ 3,106,266$ 2,962,253
167,196
4,935
5,792
5,899,334
16,696,114
28,010635,475
280,752
46,701
61,05585,471
106,649(234,052)$ 26,745,685¥ 2,945,565
1,122
11,69917,291
61
12,470
942
2,096
353
4,709
12,816
3,009,124
87,46642,06758,538188,071
8,632
(21)
8,223
16,834204,905¥ 3,214,029¥ 2,845,348
875
8,703
16,911
105
15,104
1,050
1,621
301
5,204
12,3292,907,551
87,46642,06760,036
189,569
1,404
(8)
7,750
9,146
198,715¥ 3,106,266$ 24,511,650
9,337
97,354
143,888508
103,768
7,839
17,442
2,938
39,186
106,649
25,040,559
727,852
350,062
487,127
1,565,041
71,832(175)
68,428140,085
1,705,126$ 26,745,685

LIABILITIES AND NET ASSETS (SHAREHOLDERS’ EQUITY)
Liabilities:

Net assets:

57

Deposits
Call money and bills soldPayables under securities lending transactions
Borrowed money
Foreign exchanges
Other liabilities
Provision for bonuses
Provision for retirement benefits
Provision for reimbursement of deposits
Deferred tax liabilities for land revaluation
Acceptances and guarantees
Total liabilities
Capital stock
Capital surplus
Retained earnings
Total shareholders’ equity
Net unrealized gains on securities
Deferred gains or losses on hedges
Revaluation reserve for land
Total valuation and translation adjustments
Total net assets
Total liabilities, and net assets

YMFG Annual Report 2015

NONCONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Years ended March 31, 2015 and 2014

Millions of yen
2015

IncomeInterest income:Interest on loans and discounts
Interest and dividends on securities
Other interest income
Fees and commissions
Other ordinary income
Other income
Total income
Expenses
Interest expense:
Interest on deposits
Interest on borrowings and rediscounts
Other interest expense
Fees and commissions payments
Other operating expenses
General and administrative expenses
Impairment losses
Other expenses
Total expenses
Income before income taxes and minority interests
Income taxes:
Current
Deferred
Net income

Amounts per share of common stock:
Net income
Cash dividends applicable to the year¥¥

26,721
9,027
241
7,134
2,778
5,737
51,638¥28,115
8,583
214
7,025
4,463
7,762
56,162$

222,360
75,1192,005
59,36623,11747,741
429,708

1,791
55
111
3,251
678
29,44928
892
36,255
15,383

2,120
46
86
3,175
1,444
30,78095
1,264
39,01017,152

14,904458
924
27,053
5,642
245,061
233
7,423
301,698
128,010

195
4,557
10,631

251
3,969
12,932

1,623
37,921
88,466

¥

Yen
2015

¥

Thousands of
U.S. dollars
2015

Millions of yen
2014

17.89
2.65

$

Yen
2014

¥

21.76
27.84

U.S. dollars
2015

$

0.15
0.02

YMFG Annual Report 2015

58

Kitakyushu Bank Financial Statements
NONCONSOLIDATED BALANCE SHEETS (UNAUDITED)March 31, 2015 and 2014

Millions of yen
2015

ASSETS
AssetsCash and due from banks
Call loans and bills purchased
Securities
Loans and bills discounted
Foreign exchanges
Other assets
Tangible fixed assets
Intangible fixed assets
Prepaid pension cost
Deferred tax assets
Customers’ liabilities for acceptances and guarantees
Allowance for loan losses
Total assets¥

Thousands of
U.S. dollars
2015

Millions of yen
2014

76,871
2,841
30,306869,186
5,494
13,35018,677
1,349
864
316
8,936
(15,369)¥ 1,012,821

¥

¥

¥

¥

78,8105,151
22,694
804,664
3,338
18,113
18,128
1,796
890
1,865
8,070
(16,868)
946,651$

639,685
23,642
252,193
7,232,970
45,719111,092
155,421
11,226
7,190
2,630
74,361(127,894)$ 8,428,235

829,93971
316
86
18,140
340
988
42
4,038
8,070
862,030
10,00062,133
72,133
5,240
7,248
12,48884,621
946,651$ 7,446,784
541
9,603
391
112,991
2,962
9,528
591
30,31574,361
7,688,067
83,215
528,743
611,958
65,041
63,169128,210740,168$ 8,428,235

LIABILITIES AND NET ASSETS (SHAREHOLDERS’ EQUITY)
Liabilities:

Net assets:

59

Deposits
Call money and bills soldBorrowed money
Foreign exchanges
Other liabilities
Provision for bonuses
Provision for retirement benefits
Provision for reimbursement of deposits
Deferred tax liabilities for land revaluation
Acceptances and guarantees
Total liabilities
Capital stock
Retained earnings
Total shareholders’ equity
Net unrealized gains on securities
Revaluation reserve for land
Total valuation and translation adjustments
Total net assets
Total liabilities, and net assets

YMFG Annual Report 2015

894,880
65
1,154
47
13,578
356
1,145
71
3,643
8,936
923,875
10,00063,53973,5397,816
7,591
15,407
88,946¥ 1,012,821¥

NONCONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Years ended March 31, 2015 and 2014

Millions of yen
2015

IncomeInterest income:Interest on loans and discounts
Interest and dividends on securities
Other interest income
Fees and commissions
Other ordinary income
Other income
Total income
Expenses
Interest expense:
Interest on deposits
Interest on borrowings and rediscounts
Other interest expense
Fees and commissions payments
Other operating expenses
General and administrative expenses
Impairment losses
Other expenses
Total expenses
Income before income taxes and minority interests
Income taxes:
Current
Deferred
Net income

Amounts per share of common stock:
Net income¥¥

10,384
355
63
1,496
257
1,361
13,916¥

10,406
273
67
1,421
274
377
12,818$86,411
2,954
524
12,4492,139
11,326
115,803

907
2
10
627
—
9,255
112
136
11,049
2,867

963
4
15
569
1
9,133
—
54
10,739
2,079

7,548
17
83
5,218
—
77,016932
1,131
91,94523,858

476
884
1,507

237
671
1,171

3,961
7,356
12,541

Yen
2015

¥

Thousands of
U.S. dollars
2015

Millions of yen
2014

1,506,950

¥

$

Yen
2014

¥ 1,170,940.85

U.S. dollars
2015$

12,540.15

YMFG Annual Report 201560