May 26, 2014

Financial Results for the Year Ended March 31, 2014

Fukoku Mutual Life Insurance Company (President: Yoshiteru Yoneyama) announces financial results
for the year ended March 31, 2014.

[Contents]
1. Business Highlights…………………

P.1

2. Policies in Force by Coverage Type…………………

P.3

3. Investment Activities of General Account Assets…………………

P.4

4. Non-consolidated Balance Sheets…………………

P.12

5. Non-consolidated Statements of Operations…………………

P.13

6. Breakdown of Ordinary Profits (Fundamental Profit)…………………

P.26

7. Non-consolidated Statements of Changes in Net Assets…………………

P.27

8. Non-consolidated Statements of Surplus…………………

P.29

9. Disclosed Claims Based on Categories of Obligors…………………

P.30

10. Risk-monitored Loans…………………

P.31

11. Solvency Margin Ratio…………………

P.32

12. Status of Separate Account…………………

P.33

13. Status of the Company, Subsidiaries and Affiliates…………………

P.40

Attached: Supplementary Materials for the Year Ended March 31, 2014

Financial Summary for the Year Ended March 31, 2014
1. Business Highlights(1) Policies in Force, New Policies and Surrendered and Lapsed Policies.
(i) Policies in Force
As of March 31, 2013
Number of policies

As of March 31, 2014

AmountNumber of policies(Thousands)

Changes(%, YoY)(100 millionsof yen)Changes(%, YoY)

Individual insurance

3,008

100.8

248,851

Individual annuities

783

101.7

3,791

101.0

Subtotal

Amount(Thousands)

Changes(%, YoY)(100 millionsof yen)Changes(%, YoY)

95.9

3,044

101.2

242,084

97.3

30,341

101.2

758

96.8

29,48797.2

279,192

96.4

3,802

100.3

271,572

97.3

Group insurance－－ 163,902

102.1

－

－ 165,468

101.0Group annuities

－

－

101.1

－

－

101.8

19,946

20,305

Notes: 1. Policy amounts for individual annuities are equal to (a) the funds to be held at the time annuity payments are to commence for anannuity
for which payments have not yet commenced, and (b) the amount of policy reserve for an annuity for which payments have
保険に付加されている定期保険特約を合計したものです。
commenced.
2. Policy amount in force for group annuities is equal to the amount of outstanding policy reserve.

(ii) New Policies
Total
Year ended
March 31, 2013

New business

Number of policies

AmountAmount

Net increase by
conversion
Amount(Thousands)

Changes(%, YoY)(100 millionsof yen)Changes(%, YoY)(100 millionsof yen)Changes(%, YoY)(100 millionsof yen)Individual insurance

398

102.8

13,438101.0

15,472101.6(2,034)－

Individual annuities

43

100.8

1,521

106.5

1,548

106.7

(27)

－

441

102.6

14,959101.5

17,021102.1(2,061)－

Group insurance

－

－

201

108.4

201

108.4

－

－

Group annuities

－

－

91

12,438.6

91

12,438.6－－

Subtotal

Total
Year ended
March 31, 2014

New business

Number of policies

AmountAmountChanges(%, YoY)

Net increase by
conversion
Amount(Thousands)

Changes(%, YoY)(100 millionsof yen)Changes(%, YoY)(100 millionsof yen)Changes(%, YoY)(100 millionsof yen)Individual insurance

362

91.0

15,969118.8

15,897

102.7

71

－

Individual annuities

17

40.1

565

37.2

583

37.7

(18)

－

379

86.0

16,534110.5

16,481

96.8

52

－

Group insurance

－

－

554

275.8

554

275.8

－

－

Group annuities

－

－

0

0.2

0

0.2

－

－

Subtotal

Changes(%, YoY)

Notes: 1. Number of new policies is the sum of new business and policies after conversion.
2. Amount of new policies for individual annuities, both new business and net increase by conversion, is equal to the funds to be held at
the time annuity payments are to commence.
3. Amount for group annuities is equal to the initial premium payment.

(iii) Surrendered and Lapsed Policies (Individual Insurance and Individual Annuities)
Year ended March 31, 2013

Year ended March 31, 2014

Changes(%, YoY)

Changes(%, YoY)

Amount of surrender and ｌapses(100 millions of yen)

16,065

97.6

15,414

95.9

Surrender and lapse ratio (%)

5.55

0.07

5.52

(0.03)

Notes: 1. The amount of lapse is not offset by the amount of reinstatement which was once lapsed.
2. The column of "Changes" of surrender and lapse ratio are increase-decrease points over year.

-1-

Fukoku Mutual Life Insurance Company

(2) Annualized Premiums(i) Policies in Force(100 millions of yen except percentage)

As of March 31, 2013

As of March 31, 2014

Changes(%, YoY)

Changes(%, YoY)

Individual insurance

2,770

98.6

2,750

99.3

Individual annuities

1,335

102.5

1,326

99.3

Total

4,106

99.9

4,077

99.3

1,053

101.7

1,061

100.8

Medical coverage and living benefits(ii) New Policies(100 millions of yen except percentage)

Year ended March 31, 2013

Year ended March 31, 2014

Changes(%, YoY)

Changes(%, YoY)

Individual insurance

208

101.6

198

95.3

Individual annuities

60

94.0

24

41.5

Total

268

99.8

223

83.3

85

102.4

75

88.2

Medical coverage and living benefits

Notes: 1. Annualized premiums are calculated by using coefficients based on the premium payment method. (For single premium contracts,
the amount is calculated by dividing the premium by the coverage period.)
2. Figures for medical coverage and living benefits represent portion of annualized premium corresponding to the medical benefits(hospitalization benefits and surgery benefits, etc.), living benefits (nursing care benefits, etc.) and premium waiver benefits, inwhich disability cause is excluded but causes such as specific illness are included.
3. Amounts of new policies include net increase by conversion.

(3) Selected Items of Statements of Operations(100 millions of yen except percentage)

Year ended March 31, 2013

Year ended March 31, 2014

Changes(%, YoY)

Changes(%, YoY)

Premium and other income

6,477

109.8

5,983

92.4

Investment income

1,788

122.7

1,930

108.0

Claims and other payments

5,202

107.7

5,037

96.8

Investment expenses

596

109.3

500

83.8

Ordinary profits

693

137.5

719

103.7

(4) Statements of Surplus(100 millions of yen except percentage)

Year ended March 31, 2013

Year ended March 31, 2014

Changes(%, YoY)

Changes(%, YoY)

Unappropriated surplus

712

123.1

783

110.0

Reserve for dividends to policyholders

277

115.7

315

113.8

Net surplus

197

145.4

197

100.1

Unappropriated surplus carried forward

237

116.9

270

113.9

Note: Unappropriated surplus for the years ended March 31, 2013 and 2014 included reversal of voluntary surplus reserve of ¥144 millionand ¥3,707 million, respectively.

(5) Total Assets(100 millions of yen except percentage)

As of March 31, 2013

As of March 31, 2014

Changes(%, YoY)

Total assets

60,072-2-

105.4

Changes(%, YoY)

62,147

103.5

Fukoku Mutual Life Insurance Company

2. Policies in Force by Coverage Type[As of March 31, 2014](Thousands of number, 100 millions of yen)

Individual insurance Individual annuities

Group insurance

Total

NumberAmountNumberAmountNumberAmountNumberAmountIllness and accident

1,968

167,968－823

17,998

165,442

19,966334,234

Accident

1,293

26,845

264

772

2,539

5,749

4,098

33,367

－

－

－

－

0

7

0

7

1,075

62,919758

28,657

7

26

1,841

91,602

Accident

1,466

85

－

－

1,086

3

2,552

88

Illness

1,464

85

－

－

－

－

1,464

85

Others

1,985

97

－

－

0

0

1,986

97

Injury coverage

1,326

－

3

－

2,036

－

3,366

－

Surgical coverage

3,366

－

－

－

－

－

3,366

－

Disability coverage

185

11,197

0

6

－

－

185

11,203

Death coverage

OthersSurvival coverage
Hospitalization coverage(Thousands of number, 100 millions of yen)Group annuities

Survival coverage

Worker's asset formation
insurance and annuities

Total

NumberAmountNumberAmountNumberAmount9,970

20,305

17

350

9,987

20,655(Thousands of number, millions of yen)(Thousands of number, millions of yen)

Medical careinsurance

Hospitalization coverage

NumberAmount303

106

Group disability
insurance

Disability coverage

NumberAmount477

Notes: 1. Number of group insurance, group annuities, worker's asset formation insurance and annuities, medical care insurance
and group disability insurance show the number of insured.
2. Amounts in survival coverage for individual insurance and group insurance (other than annuity rider) show the sum ofsurvival benefits, survival claims and nursing care benefits. Amounts in survival coverage for individual annuities, annuity
rider for group insurance, worker's asset formation annuities (other than worker's asset formation funding annuities) show
the sum of (a) the funds to be held at the time annuity payments are to commence for an annuity for which annuity
payments have not yet commenced, and (b) the amount of policy reserve for an annuity for which payments havecommenced. Amounts in survival coverage for group annuities, worker's asset formation insurance and worker's asset
formation funding annuities show the amount of outstanding policy reserve.
3. Amounts in hospitalization coverage show daily hospitalization benefits.
4. Amount in hospitalization coverage for medical care insurance shows daily hospitalization benefits due to illness.
5. Amount for group disability insurance shows monthly disability benefits.

-3-

Fukoku Mutual Life Insurance Company

3. Investment Activities of General Account Assets(1) Asset Composition
As of March 31, 2013
Percentage

Amount(Millions of yen)
As of March 31, 2014
Percentage

AmountCash, deposits, call loans

103,767

Monetary claims bought

1,111

0.0

1,011

0.0

Money held in trust

31,3220.5

31,981

0.5

4,557,314

76.9

4,798,502

78.2

Domestic bonds

2,971,689

50.1

2,876,176

46.9

Domestic stocks

431,715

7.3

482,308

7.9

Foreign securities

1,087,223

18.3

1,365,396

22.3

Foreign bonds

855,41014.4

1,109,910

18.1

Foreign stocks and other securities

231,8123.9

255,485

4.2

66,686

1.1

74,621

1.2

907,508

15.3

835,860

13.6

Policy loans

66,8071.1

65,206

1.1

Ordinary loans

840,70114.2

770,65412.6

267,5544.5

228,183

3.7

Securities

Other securities
Loans

Real estate

1.7 %183,333

3.0 %

－

－

－

－

Others63,3071.1

56,903

0.9

Allowance for possible loan losses(2,201)(0.0)(2,281)(0.0)

5,929,684

100.0

6,133,495

100.0

959,81316.2

1,302,072

21.2

Deferred tax assets

Total
Foreign currency denominated assets(2) Changes (Increase/Decrease) in Assets(Millions of yen)
Year ended March 31, 2013

Year ended March 31, 2014

Cash, deposits, call loans

8,909

79,566

Monetary claims bought
Money held in trust
Securities(239)(3,872)(100)
658

481,376

241,187

Domestic bonds

234,317(95,512)

Domestic stocks

78,46750,592Foreign securities

159,845

278,173

Foreign bonds

126,408

254,500

33,436

23,672Foreign stocks and other securities
Other securities

8,745

7,934

(131,854)(71,647)

Policy loans(3,356)(1,600)Ordinary loans

Loans(128,497)(70,047)

Real estate(5,692)(39,370)

Deferred tax assets(47,130)

－

8,825
98

(6,404)(80)

310,419

203,810

189,371342,259

OthersAllowance for possible loan losses
Total
Foreign currency denominated assets-4-

Fukoku Mutual Life Insurance Company

(3) Investment Income(Millions of yen)Interest, dividends and other income
Interest from deposits

Year ended
March 31, 2013

Year ended
March 31, 2014

119,020

126,56419

7Interest and dividends from securities

83,604

94,534

Interest from loans

19,136

17,317

Income from real estate for rent

16,041

14,469Other interest and dividends
Gains from money held in trust, net

217

235

1,157

669

Gains from trading securities, net

38,49819,402

Gains on sales of securities

7,917

33,499Gains on sales of domestic bonds

4,732

17,369Gains on sales of domestic stocks

2,220

13,029Gains on sales of foreign securities

862

2,658

102

442

－
908

－
2,212

－
1,230

－
279

168,732

182,626

OthersGains on redemption of securities
Foreign exchange gains, net
Reversal of allowance for possible loan losses
Other investment income
Total(4) Investment Expenses(Millions of yen)Interest expenses
Losses from trading securities, net
Losses on sales of securities

Year ended
March 31, 2013

Year ended
March 31, 2014

1,777

3,633

－

－

10,596

9,289

Losses on sales of domestic bonds

1,208

32

Losses on sales of domestic stocks

5,729

3,617

Losses on sales of foreign securities

3,429

5,639

228
1,009

－
52

Losses on valuation of domestic bonds－－

Losses on valuation of domestic stocks

1,009

52

Losses on valuation of foreign securities－－－
34,773－25,116

－
58

－
56

5,802

5,082

Others
Losses on valuation of securities

Others
Losses from derivative instruments, net
Foreign exchange losses, net
Provision for allowance for possible loan losses
Depreciation of real estate for rent and other assets
Other investment expenses

5,658

6,778

Total

59,67750,010(5) Net Investment Income(Millions of yen)

Net investment income-5-Year ended
March 31, 2013

Year ended
March 31, 2014

109,055

132,616

Fukoku Mutual Life Insurance Company

(6) Other Information on Investments(i) Investment Yield by Asset Categories(%)
Year ended
March 31, 2013

Year ended
March 31, 2014

Cash, deposits, call loans(0.00)

0.28

Monetary claims bought

2.41

2.31

Money held in trust

3.77

2.14

Securities

2.09

2.77

Domestic bonds

1.89

2.44

Domestic stocks

1.01

4.24

Foreign securities

2.95

2.95

Foreign bonds

2.86

2.50

Foreign stocks and other securities

3.26

4.85

2.09

2.01

1.92

1.82

Real estate

2.38

1.99

Total

1.93

2.31

3.38

3.15

Loans
Ordinary loans

Overseas investments

Notes: 1. Investment yield above are calculated by dividing the net investment income by the average daily balance on a bookvalue basis.
2. Overseas investments represent the total of foreign currency denominated assets and yen denominated assets.

(ii) Average Daily Balance(Millions of yen)
Year ended
March 31, 2013

Year ended
March 31, 2014

Cash, deposits, call loans

99,713

135,643

Monetary claims bought

1,289

1,051

Money held in trust

30,69831,324

4,126,502

4,311,113

Domestic bonds

2,782,634

2,828,281

Domestic stocks

315,681311,296

Foreign securities

966,250

1,107,697

Foreign bonds

758,175

895,775

Foreign stocks and other securities

208,075

211,922

973,484

866,490905,234

800,673

273,496

248,8635,651,326

5,745,255

991,385

1,162,686

Securities

Loans
Ordinary loans
Real estate
Total
Overseas investments-6-

Fukoku Mutual Life Insurance Company

(iii) Net Valuation Gains/Losses on Trading Securities(Millions of yen)
As of March 31, 2013
Net valuation gains/losses
included in the statementof operations

Carrying value on
the balance sheet
Trading securities

As of March 31, 2014

288,515

Net valuation gains/losses
included in the statementof operations

Carrying value on
the balance sheet

33,508302,041

7,200

Note: The table above includes money held in trust for trading purpose.

(iv) Fair Value Information on Securities (with fair value, other than trading securities)(Millions of yen)
As of March 31, 2013

As of March 31, 2014

Gains/losses

Book value Fair value

Gains/losses

Book value Fair value

Gains

Losses822,875

902,871

79,99680,084

88

843,433

922,909

79,476

79,476－

Domestic bonds

772,539

849,531

76,992

76,992－

768,744845,557

76,81376,813－Foreign bonds

Held-to-maturity debt securities

Gains

Losses

50,33553,339

3,003

3,091

88

74,68977,352

2,662

2,662

－

Monetary claims bought

－

－

－

－

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

－

－

－

－

Others

－

－

－

－

－

－

－

－

－

－

1,037,091 1,121,931

84,84085,184344 1,210,016 1,294,587

84,57084,798227

1,015,980 1,100,527

344 1,190,715 1,275,012

224

Policy-reserve-matching bonds
Domestic bonds
Foreign bonds
Investments in subsidiaries and affiliates
Available-for-sale securities
Domestic bonds

84,54784,891

84,29784,522

21,11021,403

292

292

－

19,301

19,575

273

276

2

1,393

948

(444)

－

444

1,393

1,096

(296)

－

296

2,074,912 2,386,795

311,883

323,232

11,349 2,046,003 2,421,417

375,414379,801

4,387

1,050,811 1,155,266

104,455

104,882426

815,104

886,899

71,794

72,132337

Domestic stocks

269,432

388,416

118,984

126,549

7,565

269,792

439,094

169,301

171,769

2,467

Foreign securities

703,721784,093

80,371

83,532

3,160

905,773 1,028,769

122,996

124,501

1,505

Foreign bonds

490,828

553,673

62,84464,074

1,229

690,428

774,677

84,24985,3981,149

Foreign stocks and other securities

212,892

230,419

17,526

19,4571,930

215,345

254,092

38,746

39,102355

50,94759,018

8,071

8,268

197

55,332

66,653

11,321

11,39776

Money held in trust

－

－

－

－

－

－

－

－

－

－

Monetary claims bought

－

－

－

－

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

－

－

－

－

Others

－

－

－

－

－

－

－

－

－

－

3,936,271 4,412,547

476,275

488,502

12,226 4,100,846 4,640,011

539,164544,075

4,911

2,839,330 3,105,326

770 2,774,564 3,007,469

Other securities

Total
Domestic bonds

265,995

266,766

232,904

233,467

562

Domestic stocks

269,432

388,416

118,984

126,549

7,565

439,094

169,301

171,769

2,467

Foreign securities

776,561

859,785

83,22386,916

3,692 1,001,157 1,126,794

125,636

127,440

1,804

Foreign bonds

562,275

628,416

66,141

67,4591,317

784,419

871,604

87,18588,337

1,152

Foreign stocks and other securities

214,285

231,368

17,082

19,4572,375

216,738

255,189

38,45039,102652

50,94759,018

8,071

8,268

197

55,332

66,653

11,321

11,39776

Money held in trust

－

－

－

－

－

－

－

－

－

－

Monetary claims bought

－

－

－

－

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

－

－

－

－

Others

－

－

－

－

－

－

－

－

－

－

Other securities

269,792

Note: The table above includes assets which are considered appropriate to deem as securities under the Financial Instruments and Exchange Law.

* Book value of securities whose market value are deemed extremely difficult to obtain are as follows:(Millions of yen)
As of March 31, 2013 As of March 31, 2014
Held-to-maturity debt securities－－

Unlisted foreign bonds－－

Others－－－－Investments in subsidiaries and affiliates

35,56035,560Available-for-sale securities

15,405

15,620

7,738

7,653

Unlisted foreign stocks (except over-the-counter stocks)－－

Unlisted foreign bonds

－

－

7,667

7,967

50,966

51,181

Policy-reserve-matching bonds

Unlisted domestic stocks (except over-the-counter stocks)

OthersTotal-7-

Fukoku Mutual Life Insurance Company

(v) Fair Value Information on Money Held in Trust(Millions of yen)
As of March 31, 2013
Carrying value on
the balance sheet

Money held in trust

31,322As of March 31, 2014

Gains/losses

Fair value

Gains31,322－－Losses－Carrying value on
the balance sheet

31,981

Gains/losses

Fair value

Gains
31,981－－

Losses－* Money held in trust for trading purpose(Millions of yen)
As of March 31, 2013

As of March 31, 2014

Net valuation gains/losses
included in the statementof operations

Carrying value on
the balance sheet
30,322

Money held in trust for trading purpose

Net valuation gains/losses
included in the statementof operations

Carrying value on
the balance sheet

0－30,981* Money held in trust classified as held-to-maturity, policy-reserve-matching and available-for-sale(Millions of yen)
As of March 31, 2013
Book value

As of March 31, 2014

Gains/losses

Fair value

Gains

Book value

Gains/losses

Fair value

Losses

Gains

LossesMoney held in trust for held-to-maturity

－

－

－

－

－

－

－

－

－

－

Money held in trust for policy-reserve-matching

－

－

－

－

－

－

－

－

－

－

Money held in trust for available-for-sale

－

－

－

－

－

－

－

－

－

－

-8-

Fukoku Mutual Life Insurance Company

(reference) Fair Value Information on Derivative Instruments (General Account)(i) Gains and Losses on Derivatives(Millions of yen)Interestrelated
93
(137)
(43)
Interestrelated
3
(18)
(14)

As of March 31, 2013
Hedge accounting applied
Hedge accounting not applied
Total
As of March 31, 2014
Hedge accounting applied
Hedge accounting not applied
Total

Currencyrelated
(888)
967
78
Currencyrelated(2,427)(2,119)(4,546)

Stockrelated

Bondrelated－－－

Stockrelated
－
(152)
(152)

Others

－
(498)
(498)
Bondrelated
－
370
370

－
－
－
Others
－
－
－

Total
(795)
331
(463)
Total
(2,423)(1,920)(4,343)

Note: Gains and losses from applying fair value hedge accounting (currency- related, losses of ¥888 million as of March 31, 2013and losses of ¥2,427 million as of March 31, 2014) included in gains and losses with hedge accounting applied, and gains andlosses with hedge accounting not applied are reported in the statements of operations.

(ii) Interest-related Transactions(Millions of yen)
As of March 31, 2013
Notional amount/contract value
Fair
value
Over
1 yearOver-the-counter transactions
Yen interest rate swap contracts
Receipt fixed, payment floating
Payment fixed, receipt floating
Yen interest rate swaption contracts
Sold
Receipt fixed, payment floating

12,495－[
Payment fixed, receipt floating[
BoughtReceipt fixed, payment floating[
Payment fixed, receipt floating
[

495
－

－
－ ]
－
－ ]

－

－
－ ]
300,000307 ]－As of March 31, 2014
Notional amount/contract value
Fair
value
Over
1 yearGains(losses)

93
－

93
－

－

－ [

－
－

－ [

－

－ [

－
170

Total

(137) [

290
－

170
－

－
－ ]
－
－ ]

－

－
－ ]
100,000
89 ]

－

Gains
(losses)

3
－

3
－

－

－

－

－

－

－

70

(18)

－

－

(43)

(14)

* Interest rate swap contracts by contractual maturity dates(Millions of yen)
As of March 31, 2014

As of March 31, 2013
Yen interest rate swap contracts
1 year or
shorter
Notional amount (receipts fixed, payments floating)

Average fixed rate (receipt)
Average floating rate (payment)
Notional amount (receipts floating, payments fixed)

Average floating rate (receipt)
Average fixed rate (payment)

12,000
1.65%
0.53%
－
－
－

Over
1 year to
3 years
495
2.30%
1.15%
－
－
－

Over
3 years

1 year or
shorter
－
－
－
－
－
－

-9-

120
2.12%
1.11%
－
－
－

Over
1 year to
3 years
170
2.47%
1.11%
－
－
－

Over
3 years
－
－
－
－
－
－

Fukoku Mutual Life Insurance Company

(iii) Currency-related Transactions(Millions of yen)
As of March 31, 2014
Notional amount/contract value
Fair
Gains
value
(losses)Over
1 yearAs of March 31, 2013
Notional amount/contract value
Fair
Gains
value
(losses)Over
1 yearOver-the-counter transactions
Currency forward contracts
Sold
US dollar
Euro
Australian dollar
Canadian dollar
British Pound
BoughtCurrency Options
Sold
Calls
[
US dollar
[
Euro
[
Puts
[
Bought
Calls
[
Puts
[
US dollar[
Euro[

330,489
149,706
86,79345,84029,554
18,595－－ 330,378－ 150,340－ 85,403－ 46,417－ 29,611－ 18,606－－

15,681
108 ]
9,402
66 ]
6,279
41 ]
－
－ ]

－

－
－ ]
20,550
116 ]
9,000
66 ]
11,550
50 ]

－

33

111
(633)
1,390
(576)
(57)
(11)
－

74 [

－
32

34 [

－
1

40 [

－
－

－ [

－

－ [

－
9

(107) [－
0(66) [－
9Total(41) [

575,950
354,098
101,850
51,14934,93633,915－－ 580,474－ 355,881－ 102,236－ 52,730－ 35,385－ 34,240
－
－

－
－]
－
－]
－
－]
－
－ ]

－

－
－ ]
9,800
23 ]
9,800
23 ]
－
－]

－

(4,523)(1,782)(386)(1,580)
(448)
(325)
－

－

－

－

－

－

－

－

－

－

－

0

(23)

0

(23)

－

－

－
－
－

－
－
－

78

(4,546)

Notes: 1. Figures in [ ] are option premiums which are included in balance sheet.
2. Forward exchange rates are used for exchange rates as of the end of fiscal year.
3. Regarding assets and liabilities which are denominated in foreign currencies but have fixed settlement in yen under currency forward contracts
and are reported in yen amounts in the balance sheet, those currency forward contracts are excluded from the table above.

(iv) Stock-related Transactions(Millions of yen)
As of March 31, 2014
Notional amount/contract value
Gains
Fair value(losses)Over
1 yearAs of March 31, 2013
Notional amount/contract value
Gains
Fair value(losses)Over
1 yearExchange-traded transactions
Yen stock index options
Sold
Calls
[
Puts
[
Bought
Calls
[
Puts
[

－
－ ]
－
－ ]

－

－
－ ]
－
－ ]

－

－

－ [

－
－

－ [

－

－ [

－
－

Total

－ [
－

－
－ ]
－
－ ]

－

－
－ ]
10,687
306 ]

－

－

－

－

－

－

－

153

(152)
(152)

－

－

Note: 1. Figures in [ ] are option premiums which are included in balance sheet.

(v) Bond-related Transactions(Millions of yen)
As of March 31, 2014
Notional amount/contract value
Gains
Fair value(losses)Over
1 yearAs of March 31, 2013
Notional amount/contract value
Gains
Fair value(losses)Over
1 yearExchange-traded transactions
Yen bond futures
Sold
Bought174,087－－ 174,552
－
－

(464)
－

144,825－－ 144,620
－
－

205
－

Foreign bond futures
Sold
Bought10,517
－

－
－

(34)
－
(498)

27,492
－

－
－

165
－
370

Total

- 10 -

10,551－

27,327－

Fukoku Mutual Life Insurance Company

(reference) Fair Value of Real Estate (Land and Leaseholds)(Millions of yen)
As of March 31, 2013
Carrying value on
the balance sheet
160,530

Fair value
228,982

As of March 31, 2014
Carrying value on
the balance sheet

Gains(losses)
68,451

132,914

Fair value
223,067

Gains(losses)
90,152

Notes: 1. As of March 31, 2013, fair value is based on the appraisal value by the real-estate appraiser, the appraisal value for property

tax as of January 1, 2013 and the road rate as of January 1, 2012.
2. As of March 31, 2014, fair value is based on the appraisal value by the real-estate appraiser, the appraisal value for property
tax as of January 1, 2014 and the road rate as of January 1, 2013.

- 11 -

Fukoku Mutual Life Insurance Company

4. Non-consolidated Balance Sheets(Millions of yen)
As of March
31, 2013
Assets:Cash and deposits
CashBank deposits
Call loans
Monetary claims bought
Money held in trust
Securities
Government bonds
Local government bonds
Corporate bonds
StocksForeign securities
Other securities
Loans
Policy loans
Ordinary loans
Tangible fixed assets
Land
Buildings
Lease assets
Construction in progress
Other tangible fixed assets
Intangible fixed assets
Software
Other intangible fixed assets
Reinsurance receivables
Other assets
Accounts receivable
Prepaid expenses
Accrued income
Deposits
Differential account for futures trading
Derivatives
Suspense payments
Lease investment assets
Other assets
Allowance for possible loan losses

33,566
169
33,39670,3001,111
31,322
4,633,067
2,181,123
168,921652,931454,902
1,108,137
67,050907,508
66,807840,701
271,841
160,528
105,728
1,430
1,297
2,855
11,652
11,378273
4249,0207,479
1,155
27,005
2,055
978
3,473
3,222
868
2,780
(2,201)

As of March
31, 2014

As of March As of March
31, 2013
31, 2014

Liabilities:
34,768 Policy reserves
Reserve for outstanding claims
159
Policy reserve
34,609Reserve for dividends to policyholders
148,700
1,011 Reinsurance payables
31,981 Subordinated bonds
4,877,141 Other liabilities
Corporate income tax payable
2,097,463
Accounts payable
157,102
Accrued expenses
654,161
Unearned income
504,442
Deposits received
1,389,208
Guarantee deposits received
74,762
835,860
Differential account for futures trading
Derivatives
65,206
Asset retirement obligations
770,654
Suspense receipts
232,115
132,912 Reserve for employees' retirement benefits
94,991 Reserve for price fluctuation of securities
1,159 Deferred tax liabilities
280 Deferred tax liabilities for revaluation reserve for land
2,771 Total liabilities
10,827 Net assets:
10,554 Foundation funds
273 Accumulated foundation funds redeemed
78 Reserve for revaluation
44,592 Surplus
Legal reserve for future losses
6,297
Other surplus
993
28,028Reserve for redemption of foundation funds
1,894
Reserve for dividend allowances
Accumulated fund for price fluctuation－
879
Reserve for advanced depreciation of realestate for tax purpose
2,430

5,343,750
22,673
5,268,768
52,30786
66,18749,8138,352
2,717
11,268411
5,289
13,584
－
3,937
2,966
1,284
44,965
41,62816,938
16,1195,579,488

5,412,622
23,067
5,338,547
51,007
98
122,346
53,524
11,9452,350
11,112341
5,355
12,839
216
5,223
2,951
1,188
43,11244,01629,245
15,9295,720,895

35,00071,000112
102,260
2,399
99,861
9,000
3,895
11,00035,00071,000112
124,780
2,485
122,294
18,0003,895
21,000

4,114

3,969

767
71,084
208,372

767
74,662230,892

215,885

259,861

62
3,421

2
3,144

Total valuation and translation adjustments

219,370

263,008

Total net assets

427,742493,900

6,214,796 Total liabilities and net assets

6,007,231

6,214,796

835
Other reserves
3,233
Unappropriated surplus(2,281) Total foundation funds, surplus and others
Net unrealized gains (losses) on available-for-salesecurities, net of tax
Deferred valuation gains (losses) under hedge accounting

Revaluation reserve for land, net of tax

Total assets

6,007,231- 12 -

Fukoku Mutual Life Insurance Company

5. Non-consolidated Statements of Operations(Millions of yen)

Ordinary revenues:
Premium and other income
Premium income
Reinsurance income
Investment income
Interest, dividends and other income
Interest on deposits
Interest and dividends on securities
Interest on loans
Income from real estate for rent
Other interest and dividends
Gains from money held in trust, net
Gains from trading securities, net
Gains on sales of securities
Foreign exchange gains, net
Other investment income
Gains from separate accounts, net
Other ordinary revenues
Fund receipt from annuity rider
Fund receipt from deposit of claims paid
Reversal of reserve for employees' retirement benefits
OthersTotal ordinary revenues
Ordinary expenditures:
Claims and other payments
ClaimsAnnuities
Benefits
Surrenders
Other payments
Reinsurance premiums
Provision for policy reserve and others
Provision for reserve for outstanding claims
Provision for policy reserve
Interest on accumulated dividends to policyholders
Investment expenses
Interest expenses
Losses on sales of securities
Losses on valuation of securities
Losses from derivative instruments, net
Provision for allowance for possible loan losses
Depreciation of real estate for rent and other assets
Other investment expenses
Operating expenses
Other ordinary expenditures
Claim deposit payments
Taxes
Depreciation
OthersTotal ordinary expenditures
Ordinary profits
Extraordinary gains:
Gains on disposal of fixed assets
Other extraordinary gains
Total extraordinary gains
Extraordinary losses:
Losses on disposal of fixed assets
Impairment losses
Provision for reserve for price fluctuation of securities
Total extraordinary losses
Surplus before income taxes
Income taxes：
Current
Deferred
Total income taxes
Net surplus for the year

- 13 -

Year ended March
31, 2013

Year ended March
31, 2014

647,798
647,446352
178,808
119,020
19
83,604
19,136
16,041217
1,157
38,498
7,917
908
1,230
10,075
10,129
1,071
5,123
1,351
2,583
836,736598,367598,227140
193,044
126,564
7
94,534
17,317
14,469235
669
19,40233,4992,212
279
10,417
10,914
1,271
5,083
1,849
2,710
802,326

520,212
168,766
101,437
129,048
89,34831,283328
78,762
58
78,62776
59,677
1,777
10,596
1,009
34,773
58
5,802
5,658
88,846
19,897
8,976
4,771
5,571
578
767,395
69,340503,718
135,639
134,935
122,255
77,82032,681
385
70,247393
69,77974
50,010
3,633
9,289
52
25,116
56
5,082
6,778
86,203
20,246
8,970
4,573
6,023
678
730,426
71,900

60
193
254

2,005
－
2,005

348
600
6,140
7,088
62,506

7,314
1,775
2,388
11,47762,427

13,553(1,870)11,68350,822

19,208(7,403)
11,80450,622

Fukoku Mutual Life Insurance Company

Notes to the Non-consolidated Financial Statements
I. Presentation of the Non-consolidated Financial Statements
1. Basis of Presentation
The accompanying non-consolidated financial statements have been prepared from the accounts
maintained by Fukoku Mutual Life Insurance Company (the “Company”) in accordance with theprovisions set forth in the Insurance Business Law of Japan and its related rules and regulations and in
conformity with accounting principles generally accepted in Japan, which are different in certain
respects from accounting principles generally accepted in countries and jurisdictions other than Japan.
In addition, the notes to the non-consolidated financial statements include information which is not
required under accounting principles generally accepted in Japan but is presented herein as additional
information.
Amounts of less than one million yen have been eliminated. As a result, total in yen shown herein
do not necessarily agree with the sum of the individual amounts.

II. Notes to Balance Sheets
1. Significant Accounting Policies(1) Valuation Methods of Securities
The valuation of securities, including bank deposits and monetary claims bought which are equivalent
to securities, and securities managed as trust assets in money held in trust, is as follows:i)

Trading securities are stated at fair market value. Costs of their sales are determined by themoving average method.

ii)

Held-to-maturity debt securities are stated at amortized cost under the straight-line method,
cost being determined by the moving average method.

iii)

Policy-reserve-matching bonds are stated at amortized cost under the straight-line method,
cost being determined by the moving average method in accordance with “Temporary
Treatment of Accounting and Auditing Concerning Policy-reserve-matching Bonds inInsurance Industry” (Industry Audit Committee Report No.21 issued by the Japanese Instituteof Certified Public Accountants on November 16, 2000).

iv)

Investments in subsidiaries and affiliates are stated at cost, cost being determined by themoving average method.

v)

Available-for-sale securities with fair market values are stated at fair market value based on
the market prices at the end of fiscal year. Costs of their sales are determined by the moving
average method. Net unrealized gains or losses on these available-for-sale securities, net oftaxes, are recorded as a separate component of net assets.
Available-for-sale securities whose fair market values are deemed extremely difficult toobtain are stated at cost, cost being determined by the moving average method, except for
public and corporate bonds including foreign bonds, of which the difference between
acquisition cost and face value is considered to be an adjustment of interest. Such bonds arestated at amortized cost under the straight-line method, cost being determined by the moving
average method.

(2) Valuation Methods of Derivative Instruments
Derivative instruments are stated at fair market value.
(3) Revaluation of Land
The Company revalued the land for business purposes based on the Law for Revaluation of Land (Law
No.34 promulgated on March 31, 1998). The difference between fair value and book value resulting
from the revaluation, net of related taxes, is recorded as revaluation reserve for land as a separate- 14 -

Fukoku Mutual Life Insurance Company

component of net assets and the related tax is recorded as deferred tax liabilities for revaluation
reserve for land.
 Date of revaluation: March 31, 2002
 Method of revaluation as prescribed for in Article 3 Paragraph 3 of the said Law:
Calculation is based on the appraisal value for property tax set forth in Article 2 item 3 of the
Enforcement Ordinance of the Law for Revaluation of Land (Government Ordinance No.119
promulgated on March 31, 1998) and the road rate set forth in Article 2 item 4 of the said
Ordinance with certain reasonable adjustments.
(4) Depreciation of Tangible Fixed Assets
Depreciation of tangible fixed assets is calculated by the following methods.
 Tangible fixed assets (excluding lease assets):Declining-balance method
However, buildings (excluding building attachments and structures) acquired on or after April 1, 1998
are depreciated using Straight-line method.
 Lease assets related to finance lease transactions that do not transfer ownership: Straight-line
method over the lease term without residual value
Other tangible fixed assets acquired for ¥100,000 or more but less than ¥200,000 are depreciatedequally over three years.
(5) Foreign Currency Translation
Foreign currency-denominated assets and liabilities, except for investments in subsidiaries andaffiliates, are translated into Japanese yen at the effective exchange rate prevailing at the balance
sheet date. Investments in subsidiaries and affiliates are translated into Japanese yen at the exchange
rate on the date of acquisition.
(6) Allowance for Possible Loan Losses
Allowance for possible loan losses is provided in accordance with the Company’s standards of selfassessment and write-offs and reserves on credit quality:i)

For the credits of borrowers who are legally bankrupt such as being in the proceedings ofbankruptcy or civil rehabilitation (hereinafter called “legally bankrupt borrowers”) and who aresubstantially bankrupt (hereinafter called “substantially bankrupt borrowers”), the Company
provides the remaining amount of credits after the direct write-off described below and the
deductions of the amount expected to be collected through the disposal of collateral or the
execution of guarantees.

ii)

For the credits of borrowers who are not currently bankrupt but have a high possibility ofbankruptcy (hereinafter called “not currently bankrupt borrowers”), the Company provides theamounts deemed as necessary considering the borrowers’ ability to pay, within the amounts
after deductions of the amount expected to be collected through the disposal of collateral or
the execution of guarantees.

iii)

For the credits of borrowers other than the above, the Company provides the amounts
calculated by multiplying the borrowers’ balance by the actual ratio of bad debt losses on
defaults during a certain past period.

All credits are assessed by the relevant departments in accordance with the Company’s standards ofself-assessment on credit quality. The results of the assessment are reviewed by the audit department,
which is independent of business-related divisions. Subsequently, the allowance for possible loan
losses are provided based on the results of these assessments.
For the credits of legally bankrupt borrowers and substantially bankrupt borrowers, the amounts
remaining after deductions of collateral value or the amounts collectible through the execution ofguarantees is written-off directly from the borrower’s balance as the estimated uncollectible amounts.
The amount written-off as of March 31, 2014 was ¥271 million.

- 15 -

Fukoku Mutual Life Insurance Company

(7) Reserve for Employees’ Retirement Benefits and Method of Amortizing Retirement Benefit
Expenses
Reserve for employees' retirement benefits are presented for the employees' retirement benefits basedon projected benefit obligation and pension plan assets at the balance sheet date.
The Company uses the following methods for amortizing retirement benefit obligations andretirement benefit expenses:
 Method for allocation of projected retirement benefits .....................
 Amortization period of actuarial differences .........................................
 Amortization period of prior service cost ..............................................

Straight-line
basis
10 years
10 years(8) Reserve for Price Fluctuation of Securities
Reserve for price fluctuation of securities is calculated in accordance with Article 115 of the Insurance
Business Law.
(9) Lease Transactions as a Lessee
Finance lease transactions that do not transfer ownership to the lessee whose commencement day
was on or before March 31, 2008 continued to be accounted for in a manner similar to accounting
treatment for ordinary rental transactions.
(10) Lease Transactions as a Lessor
As for the finance lease transactions where the Company is a lessor, the lease fee is recorded in“interest, dividends and other income” at the time of receiving lease fee. The corresponding cost of thelease transactions is recorded in “other investment expenses”, which is calculated by deducting anamount equivalent to the interest allocated over the lease term from the lease fee received.
(11) Accounting for Hedge Activities
Hedge accounting is based on “Accounting Standards for Financial Instruments” (ASBJ Statement
No.10 issued by the Accounting Standards Board of Japan on August 11, 2006).
For the foreign currency forward contracts against the exchange rate fluctuations in the value of
foreign currency-denominated bonds classified as available-for-sale securities, which qualify for hedge
accounting because of high correlation and effectiveness between the hedging instruments and thehedged items, valuation gains and losses on the foreign currency forward contracts are recorded in thestatements of operations.
For the interest rate swaps against the interest rate fluctuations regarding loans, which qualify forhedge accounting because of high correlation and effectiveness between the hedging instruments andthe hedged items, valuation gains and losses on the interest rate swaps are deferred until the maturityof the hedged transactions.
The Company applies foreign currency swap appropriated treatment as a hedge for the foreignexchange fluctuation risk associated with foreign currency denominated bonds issued by the Company.
For judging the effectiveness of hedge used, ratio analysis of comparing the fluctuations in the fairvalue or cash flows of hedged items and hedging instruments is mostly applied.
(12) Accounting for Employees’ Retirement Benefits
Accounting of unrecognized actuarial differences and unrecognized prior service costs related to
employees' retirement benefits is different to the methods used for these items in the consolidated
financial statements.

- 16 -

Fukoku Mutual Life Insurance Company

(13) Accounting for Consumption Taxes
The Company accounts for consumption taxes by the tax-exclusion method. The consumption taxes oncertain assets, which are not deductible from consumption taxes withheld and that are stipulated to bedeferred under the Tax Law, are deferred as prepaid expenses and amortized equally over five years.
Consumption taxes other than deferred consumption taxes are recognized as an expense whenincurred.
(14) Policy Reserve
Policy reserve is based on Article 116 of the Insurance Business Law, and the premium reserve at theend of fiscal year is calculated by the following method:
In regard to the policies subject to the standard policy reserve, the method as prescribed by theCommissioner of Financial Services Agency (Ministry of Finance Ordinance No. 48, 1996) is applied.
In regard to the policies not subject to the standard policy reserve, the net level premium method isapplied.
Based on the provision of paragraph 5, Article 69 of the Enforcement Regulation of the Insurance
Business Law, certain individual annuity insurance policies, certain hospitalization riders with surgery
benefits and long-term hospitalization benefits, and non-participating educational insurance havefunded policy reserves included.
(15) Software
The software for internal use is amortized based on straight-line method over the estimated useful lives.
(16) Deferred Assets
Discount on bonds is amortized equally over the period for which interest on bonds is fixed. This
amount is deducted from bonds.
(17) Policy-reserve-matching Bonds
Of the bonds corresponding to the sub-groups of individual insurance and annuities which are set by
insurance types and investment policies, the bonds that are held to match the duration of liabilities areclassified as policy-reserve-matching bonds in accordance with “Temporary Treatment of Accounting
and Auditing Concerning Policy-reserve-matching Bonds in Insurance Industry” (Industry Audit
Committee Report No.21 issued by the Japanese Institute of Certified Public Accountants on
November 16, 2000).
2. The Principal Accounting Standards Published before March 31, 2014 but not Applied are as
follows.
With the publication of the “Accounting Standard for Retirement Benefits” (ASBJ Statement No. 26,
May 17, 2012) and the “Guidance on Accounting Standard for Retirement Benefits” (ASBJ Guidance
No. 25, May 17, 2012), the method for calculating retirement benefit obligations, current service costand others will be changed.
Compulsory application of the standard is mandatory from the beginning of the fiscal year
commencing on or after April 1, 2014, and the Company plans to apply the standard from the beginningof fiscal 2014.
The Company is currently evaluating the impact in the fiscal year after the application of thestandard.
3. Financial Instruments
Asset management of the general accounts other than the separate accounts stipulated in Article 118
Paragraph 1 of the Insurance Business Law is conducted on the principle of prudent and profitable
investments, considering public and social responsibilities of the insurance business. Based on thispolicy, the Company allocates the fund, securing its liquidity, from the medium-to-long term viewpoints.

- 17 -

Fukoku Mutual Life Insurance Company

The Company is diversifying investments in assets such as foreign securities and equity securities
within the acceptable range of risk in order to enhance the profitability, although yen-denominatedinterest bearing assets including debt securities such as Japanese government bonds and loans are
the cores of the portfolios. Derivatives are mainly used to mitigate the market risk regarding thesecurities and loans. Major financial instruments including securities, loans and derivatives are
exposed to market risk and credit risk.
The Company manages its asset management risk by establishing internal control systems
including various rules pursuant to the “Three Basic Rules related to Enterprise Risk Management”
established by the Board of Directors. Specifically, the Company eliminates excessive risk deviatingfrom the basic principle and secures the safety of the assets by utilizing control functions of the
Financial and Investment Risk Management Department towards the asset management sections,monitoring the status of market risk and credit risk periodically on a daily or monthly basis. In addition,
the Company quantifies the market risk and credit risk using value-at-risk (VaR) method in order tocontrol the possible maximum losses which may arise from the holding assets within a certain range ofrisk buffers.
The carrying amounts, fair values and their related differences of major financial assets andliabilities as of March 31, 2014 were as follows:
Carrying
amountFair value

Difference(Millions of yen)

Cash and deposits: ..................................................
Cash and deposits not treated as securities¥
34,633
Total cash and deposits
34,633
Call loans .................................................................
148,700
Monetary claims bought:
Claims treated as loans .......................................
1,011
Total monetary claims bought ..............................
1,011
Money held in trust:
Trading securities .................................................
30,981
Total money held in trust ......................................
30,981
Securities:
Trading securities .................................................
271,060
Held-to-maturity debt securities ...........................
843,433
Policy-reserve-matching bonds ...........................
1,210,016
Investments in subsidiaries and affiliates ............
1,393
Available-for-sale securities .................................
2,421,417
Total securities .....................................................
4,747,321
Loans:
Policy loans ..........................................................
65,206
Ordinary loans .....................................................
770,654
Total loans ............................................................
835,860
Assets total
5,798,508
1
Subordinated bonds*
122,346
Liabilities total
122,3462
Derivative instruments* :Hedge accounting not applied .............................
(1,920 )Hedge accounting applied ...................................
(2,423 )Total derivative instruments ................................. ¥(4,343 )¥¥34,633
34,633
148,700

¥

―
―
―

1,054
1,054

43
43

30,981
30,981――

271,060
922,909
1,294,587
1,096
2,421,417
4,911,071―
79,476
84,570(296 )―
163,750

65,206
793,401
858,608
5,985,049
126,900
126,900(0 )22,74722,747
186,541
4,554
4,554

(1,920 )(2,423 )(4,343 )―――¥*1 The fair value of derivative instruments that are currency swaps under designated hedge accounting is includedin the fair value of subordinated bonds because it is accounted for as an integral part of the subordinatedbonds that are the hedge items.
*2 Assets and liabilities generated by derivative instruments are offset and presented net. Net liabilities in total arepresented in brackets.

- 18 -

Fukoku Mutual Life Insurance Company

(1) Cash, deposits (excluding financial instruments treated as securities based on “AccountingStandards for Financial Instruments” (ASBJ Statement No.10)) and call loans:
The fair values of cash, deposits and call loans are based on their book values since fair values
approximate book values due to their short maturities.
(2) Securities including deposits and monetary claims bought which are treated as securities based on“Accounting Standards for Financial Instruments” (ASBJ Statement No.10) and securities
managed as trust assets in money held in trust:
The fair values of marketable securities are measured at the quoted market price at the end of
fiscal year. The fair values of other securities without the quoted market price are based on theprices reasonably calculated such as the prices offered by the information vendors or counterparty
financial institutions.
Investments in subsidiaries and affiliates, unlisted stocks and investments in partnerships
whereby partnership assets consist of unlisted stocks whose fair values are deemed extremely
difficult to obtain, are excluded from above securities. The carrying amounts of investments in
subsidiaries and affiliates, unlisted stocks and investments in partnerships as of March 31, 2014
were ¥35,560 million, ¥7,653 million and ¥7,967 million, respectively.
(3) Loans and monetary claims bought treated as loans:
The fair values of policy loans are deemed to approximate book values, considering estimatedrepayment period and interest rate conditions since their repayment deadline have not been set up
due to the characteristics that the loan is limited to the amount of cash surrender values. Therefore,
the book values are used as the fair values of policy loans.
The fair values of floating interest rate loans among the ordinary loans and monetary claimsbought treated as loans approximate the book values because the market interest rates arereflected in future cash flows in a short period. Therefore, the fair values of floating interest rateloans and monetary claims bought treated as loans are based on their book values. The fairvalues of fixed interest rate loans are measured by discounting the future cash flows to the present
values.
The fair values of loans receivable from legally bankrupt borrowers, substantially bankrupt
borrowers and not currently bankrupt borrowers and monetary claims bought treated as loans arecomputed by deducting the amount of the allowance for doubtful accounts from the book values
before direct write-offs.
(4) Subordinated bonds:
Subordinated bonds issued by the Company are stated at fair market value.
(5) Derivative instruments:i)

The fair values of the futures and options traded at the exchange are measured at thesettlement price of the exchange.
ii) The fair values of options and swaps traded over the counter are based on the quoted prices
offered by counterparty financial institutions.
iii) The fair values of foreign currency forward contracts are determined based on the spot
exchange rate and forward contract rate.
4. Investment and Rental Property
The Company holds investment and rental properties such as office buildings in Tokyo and other areas.
The carrying amount and the fair value of these investment and rental properties as of March 31, 2014
were ¥182,229 million and ¥263,688 million, respectively. The fair value is mainly based on the value
calculated by the Company in accordance with real estate appraisal standards which includes someadjustments using the reference prices.
The amount corresponding to asset retirement obligations included in the carrying amount ofinvestment and rental properties was ¥1,192 million as of March 31, 2014.

- 19 -

Fukoku Mutual Life Insurance Company

5. Securities Lent under Lending Agreements
The amount of securities lent under lending agreements was ¥71,815 million as of March 31, 2014.
6. Loans Receivable
The amounts of credits to bankrupt borrowers, delinquent loans and restructured loans, which were
included in loans, were ¥195 million, ¥747 million and ¥660 million, respectively and their total amountwas ¥1,602 million as of March 31, 2014. There was no balance of delinquent loans past 3 months ormore as of March 31, 2014.
The direct write-offs of loans led to a decrease in credits to bankrupt borrowers of ¥251 million asof March 31, 2014.
Credits to bankrupt borrowers represent loans, excluding the balances already written-off, whichmeet the conditions prescribed in Article 96 Paragraph 1 Item 3 and 4 of the Enforcement Regulationsof the Corporate Tax Law. Moreover, accruing interest on these loans is not recorded as income after
determining that principal of or interest on these loans is unlikely to be collected due to the significant
delay in repayment of principal or interest payment or for some other reasons.
Delinquent loans are credits whose accruing interest is not recorded as income due to the same
reasons as described above, and exclude credits to bankrupt borrowers and loans for which interest
payments have been suspended and rescheduled to assist and support the borrowers in the
restructuring of their business.
Delinquent loans past 3 months or more are loans for which interest payment or repayment ofprincipal are delinquent for 3 months or more from the due date under the terms of the related loan
agreements, excluding those loans classified as credits to bankrupt borrowers and delinquent loans.
Restructured loans are loans for which certain concessions favorable to borrowers, such as
interest reduction or exemptions, rescheduling of due date of principal or interest payment, waiver ofclaim or other terms, have been negotiated for the purpose of assisting and supporting the borrowers in
the restructuring of their business. This category excludes loans classified as credits to bankrupt
borrowers, delinquent loans and delinquent loans past 3 months or more.
7. Accumulated Depreciation of Tangible Fixed Assets
Accumulated depreciation of tangible fixed assets totaled to ¥145,245 million as of March 31, 2014.
8. Separate Accounts
Total assets in separate accounts provided for in Article 118 of the Insurance Business Law were¥82,680 million as of March 31, 2014. The amount of separate account liabilities was the same as
separate account assets.
9. Receivables from/Payables to Subsidiaries
The total amounts of receivables from/payables to subsidiaries were ¥3,445 million and ¥1,324 million
as of March 31, 2014, respectively.
10. Income Taxes
Deferred tax assets and deferred tax liabilities as of March 31, 2014 were ¥91,561 million and¥117,760 million, respectively. Valuation allowance for deferred tax assets was ¥3,046 million.
Major components of deferred tax assets were ¥56,115 million of policy reserves, ¥13,548 millionof reserve for price fluctuation of securities and ¥13,270 million of reserve for employees’ retirement
benefits as of March 31, 2014.
Major component of deferred tax liabilities was ¥115,552 million of net unrealized gains onavailable-for-sale securities as of March 31, 2014.
The statutory tax rate and the actual effective tax rate for the year ended March 31, 2014 were33.3% and 18.9%, respectively. The major difference between the statutory tax rate and the actual
effective tax rate was (16.9%) of reserve for dividends to the policyholders.

- 20 -

Fukoku Mutual Life Insurance Company

Accompanying the promulgation of the “Act for Partial Revision to the Income Tax Act, etc.” (ActNo. 10, 2014), the effective statutory tax rate used to calculate deferred tax assets and deferred tax
liabilities was changed. The Company had previously used an effective statutory tax rate of 33.3% foritems expected to be collected or paid in the period from April 1, 2014, to March 31, 2015, and a rate of
30.8% for items expected to be collected or paid on or after April 1, 2015. However, owing to theaforementioned law change, the rate of 30.8% for items expected to be collected or paid after April 1,2014 is used. As a result of this change in statutory tax rate, deferred tax liabilities increased ¥538
million, and deferred tax liabilities for revaluation reserve for land decreased ¥3 million. Deferredincome taxes increased by ¥538 million.

11. Reserve for Dividends to Policyholders
Changes in reserve for dividends to policyholders for the year ended March 31, 2014 were as follows:(Millions of yen)
Balance at the beginning of current fiscal year...........
Transfer from surplus in previous fiscal year ..............
Dividends paid in the current fiscal year .....................
Increase in interest .....................................................
Balance at the end of current fiscal year ....................

¥ 52,307
27,762
29,13774¥ 51,007

12. Stocks of Subsidiaries
The amount of stocks of subsidiaries the Company held as of March 31, 2014 was ¥36,953 million.
13. Pledged Assets and Secured Debts
Assets pledged as collateral as of March 31, 2014 were ¥28,231 million of securities and ￥1,241
million of bank deposits. Secured debts as of March 31, 2014 were ¥4,679 million.
14. Policy Reserves for the Reinsurance Contracts
Reserve for outstanding claims for the reinsurance contracts provided in accordance with Article 71
Paragraph 1 of the Enforcement Regulation of the Insurance Business Law (hereinafter called “reservefor outstanding claims for ceded reinsurance”) was ¥4 million as of March 31, 2014.
Policy reserve for the reinsurance contracts provided in accordance with Article 71 Paragraph 1 of
the Enforcement Regulation of the Insurance Business Law (hereinafter called “policy reserve forceded reinsurance”) was ¥30 million as of March 31, 2014.
15. Adjustment Items for Redemption of Foundation Funds and Appropriation of Net Surplus
The total amount of adjustment items for redemption of foundation funds and appropriation of net
surplus defined in Article 30 Paragraph 2 of the Enforcement Regulation of the Insurance Business
Law was ¥263,120 million as of March 31, 2014.
16. Commitment LineAs of March 31, 2014, there were unused commitment line agreements under which the Company is
the lender of ¥872 million.
17. Subordinated Bonds
Repayments of subordinated bonds are subordinated to other obligations.

- 21 -

Fukoku Mutual Life Insurance Company

18. Assets Denominated in Foreign Currencies
Assets denominated in foreign currencies as of March 31, 2014 totaled to ¥1,326,050 million. The
principal foreign currency asset amounts as of March 31, 2014 were US$7,212 million and 2,094
million euros.
Liabilities denominated in foreign currencies as of March 31, 2014 totaled to ¥43,615 million. The
principal foreign currency liability amount as of March 31, 2014 was 306 million euros.
19. Contribution to Policyholders Protection Corporation
The future contribution to the Life Insurance Policyholders Protection Corporation of Japan under
Article 259 of the Insurance Business Law was estimated at ¥10,534 million as of March 31, 2014. The
contribution was charged as operating expenses in the year in which it was paid.
20. Employees’ Retirement Benefits(1) Overview of Employees' Retirement Benefit System
As a defined benefit plan for office-based employees, the Company has a defined benefit
corporate pension plan and retirement lump-sum grants. As a defined contribution plan for these
employees, the Company also has a defined contribution pension plan.
As a defined benefit plan for sales employees, the Company has retirement lump-sum grants.
(2) Defined Benefit Plani) Reconciliation of beginning and end of balance of retirement benefit obligation(Millions of yen)
Retirement benefit obligation at the beginning of current fiscal year ........
Service cost ...............................................................................................
Interest cost ...............................................................................................
Actuarial difference occurred during the fiscal year ..................................
Retirement benefits payments ...................................................................
Retirement benefit obligation at the end of current fiscal year ..................

¥ 72,507
2,838
1,448
171
(5,347 )¥ 71,618ii) Reconciliation of beginning and end of balance of pension plan assets(Millions of yen)
Pension plan assets at the beginning of current fiscal year ......................
Expected return on pension plan assets ...................................................
Actuarial difference occurred during the fiscal year ..................................
Contributions by the employer ...................................................................
Retirement benefits payments ...................................................................
Pension plan assets at the end of current fiscal year ................................

¥ 20,006
600
1,333
2,309
(1,405 )¥ 22,844iii) Reconciliation of end of balance of retirement benefit obligation and pension plan assets withreserve for employees’ retirement benefits presented on the balance sheets(Millions of yen)a. Funded plan retirement benefit obligation ............................................
b. Pension plan assets .............................................................................
c. (a+b) ....................................................................................................
d. Unfunded plan retirement benefit obligation ........................................
e. Unrecognized actuarial differences ......................................................

- 22 -¥ 29,130(22,844 )
6,285
42,487(6,212 )Fukoku Mutual Life Insurance Company

f. Unrecognized prior service cost ...........................................................
g. Reserve for employees’ retirement benefits (c+d+e+f) ........................

551¥ 43,112iv) Breakdown of retirement benefit gains and losses(Millions of yen)
Service cost ...............................................................................................
Interest cost ...............................................................................................
Expected return on pension plan assets ...................................................
Amortization of actuarial differences .........................................................
Amortization of prior service cost ..............................................................
Retirement benefit expenses related to defined benefit plan ....................

¥ 2,8381,448(600 )
759(47 )¥ 4,399v) Breakdown of main pension plan assets
The breakdown of main asset categories as a percentage of total pension plan assets is as follows: Life insurance general account ............................................................
 Domestic bonds ....................................................................................
 Domestic stocks ...................................................................................
 Foreign stocks ......................................................................................
 Foreign bonds .......................................................................................
 Cash and deposits ................................................................................
 Others ...................................................................................................
 Total ......................................................................................................

45.2%
16.7%
16.7%
14.4%
6.1%
0.9%
0.0%
100.0%vi) Method for setting the expected long-term rate of return
To set the expected long-term rate of return on pension plan assets, the Company takes into
account the present and future allocation of pension plan assets, and the present and expected
future long-term rate of return on the diverse range of assets that makes up the pension assets.

vii) Underlying actuarial assumptions
Main underlying actuarial assumptions as of March 31, 2014, were as follows: Discount rate ........................................................................................
 Expected long-term rate of return on pension plan assets ...................

2.0%
3.0%

(3) Defined contribution plan
The required contribution amount by the Company to the defined contribution plan was ¥184 million.

- 23 -

Fukoku Mutual Life Insurance Company

III. Notes to Statements of Operations
1. Transactions with Subsidiaries
The total amounts of revenues and expenditures in connection with subsidiaries were ¥854 million and¥8,351 million for the year ended March 31, 2014.
2. Gains on Sales of Securities
Major items of gains on sales of securities for the year ended March 31, 2014 were as follows:(Millions of yen)Domestic bonds ..........................................................................
Domestic stocks and others........................................................
Foreign securities .......................................................................

¥ 17,369
13,0292,658

3. Losses on Sales of Securities
Major items of losses on sales of securities for the year ended March 31, 2014 were as follows:(Millions of yen)Domestic bonds ..........................................................................
Domestic stocks and others........................................................
Foreign securities .......................................................................

¥ 32
3,617
5,639

4. Losses on Valuation of Securities
Major items of losses on valuation of securities for the year ended March 31, 2014 were as follows:(Millions of yen)Domestic stocks and others........................................................

¥ 52

5. Policy Reserves for the Reinsurance Contracts
For the year ended March 31, 2014, provision for reserve for outstanding claims for ceded reinsurance
considered in calculation of provision for reserve for outstanding claims was ¥2 million and provision forpolicy reserve for ceded reinsurance considered in calculation of reversal of policy reserve was ¥0
million.
6. Gains (Losses) from Trading Securities
Major items of gains (losses) from trading securities for the year ended March 31, 2014 were as
follows:(Millions of yen)Interest, dividends and other income..........................................
Gains (Losses) on sales of trading securities .............................
Gains (Losses) on valuation of trading securities .......................

¥ 8,652(0))
7,200

7. Losses from Derivative Instruments
Losses from derivative instruments for the year ended March 31, 2014 included valuation losses of¥2,251 million.

8. Impairment Losses of Fixed Assets
For the year ended March 31, 2014, impairment losses of fixed assets were as follows:(1) Method of grouping- 24 -

Fukoku Mutual Life Insurance Company

Real estate and other assets used for insurance business operations are classified as one asset groupas a whole. Other assets such as real estate for rent and unused real estate are classified as one
group individually.
(2) Background of recognizing the impairment losses
Profitability of certain real estate for rent dropped down significantly due to a decrease in the level ofrental income and a declining trend of market prices of land. The Company reduced its book values ofsuch real estate for rent and unused real estate to their recoverable amounts. The amounts reduced
were recognized as impairment losses and included in the extraordinary losses.
(3) Asset groups recognized impairment losses and losses by fixed assets

Asset

Land

Impairment losses
Buildings
and others

Total(Millions of yen)(i) Real estate for rent .............................................
¥ 1,541(ii) Unused real estate .............................................
35
Total (i)+(ii) ..........................................................
¥ 1,577

¥ 140
58
¥ 198

¥ 1,68293¥ 1,775(4) Calculation method of recoverable amount
Recoverable amount is based on net sales value. Net sales value is determined based on appraisal
value, posted price or road rate.

- 25 -

Fukoku Mutual Life Insurance Company

6. Breakdown of Ordinary Profits (Fundamental Profit)
Year ended
March 31, 2013

(Millions of yen)
Year ended
March 31, 2014

A

77,59386,517

Capital gains
Gains from money held in trust, net
Gains from trading securities, net
Gains on sales of securities
Gains from derivative instruments, net
Foreign exchange gains, net
Other capital gains
Capital losses
Losses from money held in trust, net
Losses from trading securities, net
Losses on sales of securities
Losses on valuation of securities
Losses from derivative instruments, net
Foreign exchange losses, net
Other capital losses
Net capital gains (losses)
B
Fundamental profit plus net capital gains (losses)
A+B
Other one-time gains
Reinsurance income
Reversal of contingency reserve
Reversal for specific allowance for possible loan losses
OthersOther one-time losses
Reinsurance premiums
Provision for contingency reserve
Provision for specific allowance for possible loan losses
Allowance for specified overseas loans
Write-off of loans
OthersOther one-time gains (losses)
C
Ordinary profits
A+B+C

40,727934
30,966
7,917
－
908
－
46,379－－10,596
1,009
34,773－－(5,652)
71,94062,741－62,741－－
65,342－－24－－
65,317(2,600)69,34046,945484
10,74933,499－2,212－
34,458－－9,289
52
25,116－－
12,48699,004－－－－－
27,104－
26,845258－－－(27,104)
71,900Fundamental profit

Notes: 1. The following amounts in respect of gains / losses from money held in trust have been excluded from
capital gains / losses and included in fundamental profit due to their income nature (being interest anddividend income): ¥223 million in respect of the year ended March 31, 2013 and ¥184 million in respectof the year ended March 31, 2014.
2. The following amounts in respect of gains / losses from trading securities have been excluded from
capital gains / losses and included in fundamental profit due to their income nature (being interest anddividend income): ¥7,532 million in respect of the year ended March 31, 2013 and ¥8,652 million in respectof the year ended March 31, 2014.
3. For the year ended March 31, 2013, other non-recurring losses represent the losses relating to provision of theadditional policy reserves in accordance with Article 69, Paragraph 5 of the Enforcement Regulations of the
Insurance Business Act.

- 26 -

Fukoku Mutual Life Insurance Company

7. Non-consolidated Statements of Changes in Net Assets[For the year ended March 31, 2013](Millions of yen)Foundation funds, surplus and others
Surplus
Other surplus

Balance at the beginning ofcurrent fiscal year

Foundation
funds

Accumulated
foundation
funds
redeemed

35,00071,000Reserve forReserve for Legal reserve
Reserve foradvanced
Reserve for Accumulated
revaluation
for future
redemption
depreciation
dividend
fund for pricelossesof foundationof real estate
allowances
fluctuation
funds
for tax
purpose

112

2,325

－

3,895

11,000289

Total
surplusTotal
foundation
funds,
surplus andothersOther
reserves

Unappropriatedsurplus767

57,827

76,104

182,216(23,989)(23,989)(23,989)

Changes in the current fiscal
year
Additions to reserve fordividends to policyholders
Additions to legal reserve for
future losses

(74)

－

－

Payment of interest on
foundation funds

(621)

(621)

(621)

Net surplus for the year

50,82250,82250,822(9,000)

－

－

3,857

(3,857)

－

－

(32)

32

－

－

(55)

(55)

(55)

74

Additons to reserve forredemption of foundation
funds

9,000

Additions to reserve foradvanced depreciation ofreal estate for tax purpose
Reversal of reserve foradvanced depreciation ofreal estate for tax purpose
Reversal of revaluation
reserve for land
Net changes, excluding
foundation funds, surplus
and others
Total changes in the current
fiscal year

－

－

－

74

9,000

－

－

3,825

－

13,25626,155

26,155

Balance at the end of current
fiscal year

35,00071,000

112

2,399

9,000

3,895

11,0004,114

767

71,084102,260

208,372

Revaluation
Total
reserve for valuation andland, net oftranslationtax
adjustments

Total
net assets

Valuation and translation adjustments
Net
unrealized
Deferredgains
valuation(losses) on
gains
available-for(losses)
saleunder hedge
securities,
accounting
net of tax
Balance at the beginning ofcurrent fiscal year

67,684170

3,383

71,239253,455

Changes in the current fiscal
year
Additions to reserve fordividends to policyholders(23,989)

Additions to legal reserve for
future losses－

Payment of interest on
foundation funds(621)

Net surplus for the year

50,822

Additons to reserve forredemption of foundation
funds

－

Additions to reserve foradvanced depreciation ofreal estate for tax purpose－

Reversal of reserve foradvanced depreciation ofreal estate for tax purpose－

Reversal of revaluation
reserve for land
Net changes, excluding
foundation funds, surplus
and others
Total changes in the current
fiscal year
Balance at the end of current
fiscal year(55)
148,200(107)

38

148,131

148,131

148,200(107)

38

148,131

174,287

215,885

62

3,421

219,370

427,742- 27 -

Fukoku Mutual Life Insurance Company

[For the year ended March 31, 2014](Millions of yen)Foundation funds, surplus and others
Surplus
Other surplus

Foundation
funds

Accumulated
foundation
funds
redeemed

35,00071,000Reserve forReserve for Legal reserve
Reserve foradvanced
Reserve for Accumulated
revaluation
for future
redemption
depreciation
dividend
fund for pricelossesof foundationof real estate
allowances
fluctuation
funds
for tax
purposeTotal
surplusTotal
foundation
funds,
surplus andothersOther
reserves

Unappropriatedsurplus

767

71,084102,260

208,372(27,762)(27,762)(27,762)

(86)

－

－

Payment of interest on
foundation funds

(621)

(621)

(621)

Net surplus for the year

50,622

50,622

50,622(9,000)－－(10,000)

－

－

144

－

－

281

281

281

Balance at the beginning ofcurrent fiscal year

112

2,399

9,000

3,895

11,0004,114

Changes in the current fiscal
year
Additions to reserve fordividends to policyholders
Additions to legal reserve for
future losses

86

Additions to reserve forredemption of foundation
funds

9,000

Additions to accumulated
fund for price fluctuation

10,000

Reversal of reserve foradvanced depreciation ofreal estate for tax purpose(144)

Reversal of revaluation
reserve for land
Net changes, excluding
foundation funds, surplus
and others
Total changes in the current
fiscal year

－

－

－

86

9,000

－

10,000

(144)

－

3,578

22,51922,519Balance at the end of current
fiscal year

35,00071,000112

2,485

18,0003,895

21,0003,969

767

74,662

124,780

230,892

Revaluation
Total
reserve for valuation andland, net oftranslationtax
adjustments

Total
net assets

Valuation and translation adjustments
Net
unrealized
Deferredgains
valuation(losses) on
gains
available-for(losses)
saleunder hedge
securities,
accounting
net of tax
Balance at the beginning ofcurrent fiscal year

215,885

62

3,421

219,370

427,742

Changes in the current fiscal
year
Additions to reserve fordividends to policyholders(27,762)

Additions to legal reserve for
future losses－

Payment of interest on
foundation funds(621)

Net surplus for the year

50,622

Additions to reserve forredemption of foundation
funds
Additions to accumulated
fund for price fluctuation
Reversal of reserve foradvanced depreciation ofreal estate for tax purpose
Reversal of revaluation
reserve for land

－
－
－
281

Net changes, excluding
foundation funds, surplus
and others

43,976

(60)

(277)

43,63843,638

Total changes in the current
fiscal year

43,976

(60)

(277)

43,63866,157

Balance at the end of current
fiscal year

259,861

2

3,144

263,008

493,900- 28 -

Fukoku Mutual Life Insurance Company

8. Non-consolidated Statements of Surplus(Millions of Yen)
Year ended
March 31, 2013

Year ended
March 31, 2014

71,08474,662

144

3,707

144

3,707

Total

71,22878,369Appropriation of surplus

47,47051,314

Reserve for dividends to policyholders

27,762

31,595Net surplus

19,707

19,718Legal reserve for future losses

86

97Interest payment for foundation funds

621

621

19,00019,000Reserve for redemption of foundation funds

9,000

9,000

Accumulated fund for price fluctuation

10,00010,000

Revaluation reserve for land, net of tax－

0

23,75827,055

Unappropriated surplus
Reversal of voluntary surplus reserve
Reversal of reserve for advanced depreciation of realestate for tax purpose

Voluntary surplus reserve

Unappropriated surplus carried forward

Note: Net surplus is calculated by deducting reserve for dividends to policyholders from the sum of unappropriatedsurplus and reversal of voluntary surplus reserve.

- 29 -

Fukoku Mutual Life Insurance Company

9. Disclosed Claims Based on Categories of Obligors(Millions of yen)
As of March 31, 2013 As of March 31, 2014
Claims against bankrupt and quasi-bankrupt obligors

326

216

Claims with collection risk

526

732

Claims for special attention

950

660

1,803

1,609

[0.19%][0.18%]

955,991910,205

957,795

911,815

Subtotal[Percentage of total]
Claims against normal obligors
Total

Notes: 1. Claims against bankrupt and quasi-bankrupt obligors are loans to borrowers who are subject to bankruptcy,
corporate reorganisation or rehabilitation or other similar proceedings and other borrowers in serious financial
difficulties.
2. Claims with collection risk are loans to obligors (other than bankrupt and quasi-bankrupt obligors) withdeteriorated financial condition and results of operations from which it is unlikely that the principal and interest on
the loans will be recovered.
3. Claims for special attention are loans on which principal and/or interest are past due for three months or more andloans with a concessionary interest rate, as well as loans with renegotiated conditions in favour of the borrower,
including renegotiated schedule and/or waivers, in each case, other than the loans described in note 1 or 2 above.
4. Claims against normal obligors are all other loans.

- 30 -

Fukoku Mutual Life Insurance Company

10. Risk-monitored Loans(Millions of yen)
As of March 31, 2013 As of March 31, 2014
Credits to bankrupt borrowers

217

195

Delinquent loans

590

747

Delinquent loans past three months or more－－

Restructured loans

950

660

1,759

1,602

[0.19%][0.19%]

Total[Percentage of total loans]

Notes: 1. For the credits of legally bankrupt borrowers and substantially bankrupt borrowers, the amounts
remaining after deductions of collateral value or the amounts collectible through the execution ofguarantees is written-off directly from the borrower’s balance as the estimated uncollectible amounts.
The amounts written-off related to credits to bankrupt borrowers were ¥1 million as of March 31, 2013and ¥251 million as of March 31, 2014. The amounts written-off related to delinquent loans were ¥288
million as of March 31, 2013.
2. Credits to bankrupt borrowers represent loans which are subject to bankruptcy, corporate
reorganization or rehabilitation or other similar, including but not limited to foreign, proceedings.
Accruing interest of these loans is not recorded as income after determining that principal of or intereston these loans is unlikely to be collected due to the significant delay in repayment of principal orinterest payment or for some other reasons.
3. Delinquent loans are credits whose accruing interest is not recorded as income due to the same
reasons as described in note 2 above, and exclude credits to bankrupt borrowers and loans for whichinterest payments have been suspended and rescheduled to assist and support the borrowers in the
restructuring of their business.
4. Delinquent loans past three months or more are loans for which interest payment or repayment ofprincipal are delinquent for three months or more from the due date under the terms of the related loan
agreements, excluding those loans classified as credits to bankrupt borrowers and delinquent loans.
5. Restructured loans are loans for which certain concessions favorable to borrowers, such as interest
reduction or exemptions, rescheduling of due date of principal or interest payment, waiver of claim orother terms, have been negotiated for the purpose of assisting and supporting the borrowers in the
restructuring of their business. This category excludes loans classified as credits to bankrupt
borrowers, delinquent loans and delinquent loans past three months or more.

- 31 -

Fukoku Mutual Life Insurance Company

11. Solvency Margin Ratio(Millions of yen)

As of
As of
March 31, 2013 March 31, 2014
Total solvency margin(A)

919,451

1,109,068

Foundation funds and surplus

178,622

196,835

Reserve for price fluctuation of securities

41,62844,016

Contingency reserve

83,446110,291

Allowance for possible loan losses

1,796

1,594

Net unrealized gains on available - for - sale securities x 90%(multiplied by 100% if losses)

280,694

337,872

Net unrealized gains on real estate x 85%

72,44190,719

Excess amount of policy reserve based on full-time Zillmer method

187,478

193,088

Qualifying subordinated debt

66,187

122,346－－

Deductible items(19,000)(19,000)

Others26,15531,303

189,414201,663

The amount of "excess amount of policy reserve based on full-time Zillmer method"and "qualifying subordinated debt" excluded from the calculation of solvency margin

Total amount of risk

( R1  R8 ) 2  R2  R3  R7   R4
2

(B)

Insurance risk

R1

27,301

26,371

3rd sector insurance risk

R8

9,634

9,631

Assumed investment yield risk

R2

35,95635,884

Minimum guarantee risk

R7

2

0

Investment riskR3145,367

157,866

Business risk

R4

4,365

4,595

970.8%

1099.9%Solvency margin ratio(A)(1/2) x (B)x 100

Notes: 1. Above figures are calculated based on Articles 86 and 87 of the Enforcement Regulation of the Insurance Business Law and
Ministry of Finance No.50,1996.
2. "Deductible items" represent the capital increase to the subsidiary, Fukokushinrai Life Insurance Co., Ltd.
3. "Minimum guarantee risk" is calculated by standard method.

- 32 -

Fukoku Mutual Life Insurance Company

12. Status of Separate Account(1) Separate Account Assets by Products(Millions of yen)
As of
As of
March 31, 2013 March 31, 2014
AmountAmountIndividual variable insurance－－

Individual variable annuities

461

272

Group annuities

78,35382,408

Total

78,81582,680(2) Individual Variable Insurance (Separate Account)
The company has not sold the individual variable insurance.

(3) Individual Variable Annuities (Separate Account)(i) Policies in Force
As of March 31, 2013
Number ofAmountpolicies(Millions of yen except number of policies)
As of March 31, 2014
Number ofAmountpolicies

Individual variable annuities

140

468

81

265

Total

140

468

81

265

(ii) Breakdown of Separate Account Assets for Individual Variable Annuities(Millions of yen)
As of March 31, 2014
AmountPercentage

As of March 31, 2013
AmountPercentage
Cash, deposits, call loans

97

21.0

131

48.2

Securities

364

79.0

141

51.8

Domestic bonds

－

－

－

－

Domestic stocks

－

－

－

－

Foreign securities

－

－

－

－

Foreign bonds

－

－

－

－

Foreign stocks and other securities

－

－

－

－

364

79.0

141

51.8

Loans

－

－

－

－

Others－－－－Allowance for possible loan losses

－

－

－

－

461

100.0

272

100.0

Other securities

Total- 33 -

Fukoku Mutual Life Insurance Company

(iii) Investment Income and Expenses of Separate Account for Individual Variable Annuities(Millions of yen)
Year ended March 31, 2013

Year ended March 31, 2014

AmountAmountInterest, dividends and other income

649

Gains on sales of securities－－

Gains of redemption of securities－－

Gains on valuation of securities

66

30

Foreign exchange gains, net－－

Gains from derivative instruments－－

Other investment income－

0

Losses on sales of securities

5－

Losses on redemption of securities－－

Losses on valuation of securities

15

41

Foreign exchange losses, net－－

Losses from derivative instruments－－

Other investment expenses－

0

Net investment income

5238(iv) Fair Value Information on Securities in Separate Account for Individual Variable Annuities* Net Valuation Gains/Losses on Trading Securities(Millions of yen)
As of March 31, 2014

As of March 31, 2013

Trading securities

Carrying valueon the balancesheet

Net valuation
gains/losses
included in thestatementof operations

Carrying valueon the balancesheet

Net valuation
gains/losses
included in thestatementof operations

364

51

141

(11)

Note: The company has no balances of money held in trust and derivative instruments.

- 34 -

Fukoku Mutual Life Insurance Company

(reference) Fair Value Information on Securities (Total of General Account and Separate Account)
Net Valuation Gains/Losses on Trading Securities(Millions of yen)
As of March 31, 2013
Net valuation gains/losses
included in the statementof operations

Carrying value onbalance sheet
Trading securities

As of March 31, 2014

364,268

Net valuation gains/losses
included in the statementof operations

Carrying value onbalance sheet

42,594

380,680

10,324

Note: The table above includes money held in trust for trading purpose.

Fair Value Information on Securities (with fair value, other than trading securities)(Millions of yen)
As of March 31, 2013

As of March 31, 2014

Gains/losses

Book value

Fair value

822,875

902,871

79,99680,084

Domestic bonds

772,539

849,531

76,992Foreign bonds

50,33553,339

Monetary claims bought－

Negotiable certificate of deposits
OthersGains/losses

Book value

Fair value

88

843,433

922,909

79,476

79,476－76,992－

768,744845,557

76,81376,813

－

3,003

3,091

88

74,68977,352

2,662

2,662

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

1,037,091

1,121,931

84,84085,184344

1,210,016

1,294,587

84,57084,798227

Domestic bonds

1,015,980

1,100,527

84,54784,891344

1,190,715

1,275,012

84,29784,522

224

Foreign bonds

21,11021,403

292

292

－

19,301

19,575

273

276

2

1,393

948

(444)

－

444

1,393

1,096

(296)

－

296
4,387

Gains
Held-to-maturity debt securities

Policy-reserve-matching bonds

Investments in subsidiaries and affiliates
Available-for-sale securities

Losses

Gains

Losses2,074,912

2,386,795

311,883

323,232

11,3492,046,003

2,421,417

375,414379,801

Domestic bonds

1,050,811

1,155,266

104,455

104,882426

815,104

886,899

71,794

72,132337

Domestic stocks

269,432

388,416

118,984

126,549

7,565

269,792

439,094

169,301

171,769

2,467

Foreign securities

703,721784,093

80,371

83,532

3,160

905,773

1,028,769

122,996

124,501

1,505

Foreign bonds

490,828

553,673

62,84464,074

1,229

690,428

774,677

84,24985,3981,149

Foreign stocks and other securities

212,892

230,419

17,526

19,4571,930

215,345

254,092

38,746

39,102355

50,94759,018

8,071

8,268

197

55,332

66,653

11,321

11,39776

Money held in trust

－

－

－

－

－

－

－

－

－

－

Monetary claims bought

－

－

－

－

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

－

－

－

－

Others

－

－

－

－

－

－

－

－

－

－

3,936,271

4,412,547

476,275

488,502

12,226

4,100,846

4,640,011

539,164544,075

4,911

Domestic bonds

2,839,330

3,105,326

265,995

266,766770

2,774,564

3,007,469

232,904

233,467

562

Domestic stocks

269,432

388,416

118,984

126,549

7,565

269,792

439,094

169,301

171,769

2,467

Foreign securities

776,561

859,785

83,22386,9163,692

1,001,157

1,126,794

125,636

127,440

1,804

Foreign bonds

562,275

628,416

66,141

67,4591,317

784,419

871,604

87,18588,337

1,152

Foreign stocks and other securities

214,285

231,368

17,082

19,4572,375

216,738

255,189

38,45039,102652

50,94759,018

8,071

8,268

197

55,332

66,653

11,321

11,39776

Money held in trust

－

－

－

－

－

－

－

－

－

－

Monetary claims bought

－

－

－

－

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

－

－

－

－

Others

－

－

－

－

－

－

－

－

－

－

Other securities

Total

Other securities

Note: The table above includes assets which are considered appropriate to deem as securities under the Financial Instruments and Exchange Law.

・ Held-to-maturity Debt Securities(Millions of yen)
As of March 31, 2013

Securities whose fair value exceeds the
carrying value on the balance sheet

As of March 31, 2014

Carrying
value on thebalance
sheet

Fair value

Differences

Carrying
value on thebalance
sheet

Fair value

Differences

819,253

899,337

80,084

843,433

922,909

79,476

Domestic bonds

772,539

849,531

76,992

768,744845,557

76,813Foreign bonds

46,71449,805

3,091

74,68977,352

2,662

Money claims bought

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

Others

－

－

－

－

－

－

3,621

3,533

(88)

－

－

－

Securities whose fair value does not exceed
the carrying value on the balance sheet

－

－

－

－

－

－

3,621

3,533

(88)

－

－

－

Money claims bought

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

Others

－

－

－

－

－

－

Domestic bonds
Foreign bonds- 35 -

Fukoku Mutual Life Insurance Company

・ Policy-reserve-matching Bonds(Millions of yen)
As of March 31, 2013

Bonds whose fair value exceeds the carrying
value on the balance sheet

As of March 31, 2014

Carrying
value on thebalance
sheet

Fair value

Differences

Carrying
value on thebalance
sheet

Fair value

Differences

1,032,379

1,117,564

85,184

1,205,007

1,289,805

84,798Domestic bonds

1,011,268

1,096,160

84,891

1,186,005

1,270,527

84,522Foreign bonds

21,11021,403292

19,001

19,277

276

－

－

－

－

－

－

4,711

4,367

(344)

5,009

4,782

(227)

OthersBonds whose fair value does not exceed thecarrying value on the balance sheet
Domestic bonds

4,711

4,367

(344)

4,709

4,484

(224)

Foreign bonds

－

－

－

300

297

(2)

Others

－

－

－

－

－

－

・ Available-for-sale Securities(Millions of yen)
As of March 31, 2013

Securities whose carrying value on the balance
sheet exceeds the book value

As of March 31, 2014

Book value

Carrying
Carrying
value on thevalue on the
Differences Book value
Differencesbalancebalance
sheet
sheet

1,929,626

2,252,859

323,232

1,859,060

2,238,861

Domestic bonds

1,033,793

1,138,675

104,882

796,157

868,289

72,132

Domestic stocks

209,314335,864

126,549

232,850

404,620

171,769

Foreign securities

644,141

727,674

83,532780,763905,265

124,501

Foreign bonds

464,221528,295

64,074

581,574

666,973

85,398Foreign stocks

179,920

199,378

19,457

199,188

238,291

39,102

42,37650,644

8,268

49,28860,686

11,397

Money held in trust

－

－

－

－

－

－

Money claims bought

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

Others

－

－

－

－

－

－
(4,387)

Other securities

Securities whose carrying value on the balance
sheet does not exceed the book value

379,801

145,286

133,936(11,349)

186,942

182,555

Domestic bonds

17,017

16,591(426)

18,947

18,609(337)

Domestic stocks

60,11752,552(7,565)36,941

34,474(2,467)

Foreign securities

59,57956,419(3,160)125,009

123,504(1,505)

Foreign bonds

26,60725,377(1,229)108,853

107,703(1,149)Foreign stocks

32,972

31,041(1,930)16,15615,800

(355)

8,570

8,373

(197)

6,043

5,967

(76)

Money held in trust

－

－

－

－

－

－

Money claims bought

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

Others

－

－

－

－

－

－

Other securities* Book value of securities whose market value are deemed extremely difficult to obtain are as follows:(Millions of yen)
As of March 31, 2013

As of March 31, 2014－－

Unlisted foreign bonds－－

Others－－

Held-to-maturity bonds－－

Investments in subsidiaries and affiliates

35,56035,560Available-for-sale securities

15,405

15,620

7,738

7,653

Unlisted foreign stocks (except over-the-counter stocks)－－

Unlisted foreign bonds

－

－

7,667

7,967

50,966

51,181

Policy-reserve-matching bonds

Unlisted domestic stocks (except over-the-counter stocks)

OthersTotal- 36 -

Fukoku Mutual Life Insurance Company

(reference) Fair Value Information on Derivative Instruments (Total of General Account and Separate Account)(i) Gains and Losses on Derivatives(Millions of yen)Interestrelated

As of March 31, 2013
Hedge accounting applied
Hedge accounting not applied
Total

93
(137)
(43)
Interestrelated
3
(18)
(14)

As of March 31, 2014
Hedge accounting applied
Hedge accounting not applied
Total

Currencyrelated
(888)
967
78
Currencyrelated(2,427)

Stockrelated

Bondrelated
－
－
－

－
(152)
(152)

370
370

Stockrelated(2,119)(4,546)

Others

－
(498)
(498)
Bondrelated－－－－
Others
－
－
－

Total
(795)
331
(463)
Total
(2,423)(1,920)(4,343)

Note: Gains and losses from applying fair value hedge accounting (currency- related, losses of ¥888 million as of March 31, 2013and losses of ¥2,427 million as of March 31, 2014) included in gains and losses with hedge accounting applied, and gains andlosses with hedge accounting not applied are reported in the statements of operations.

(ii) Hedge Accounting not Applied・ Interest-related Transactions(Millions of yen)
As of March 31, 2013
Notional amount/contract value
Fair
value
Over
1 yearOver-the-counter transactions
Yen interest rate swaption contracts
Sold
Receipt fixed, payment floating[
Payment fixed, receipt floating[
BoughtReceipt fixed, payment floating[
Payment fixed, receipt floating
[

－
－ ]
－
－ ]

－

－
－ ]
300,000
307 ]

－

－

As of March 31, 2014
Notional amount/contract value
Fair
value
Over
1 yearGains(losses)

－ [

－
－

－ [

－

－ [

－
170

Total

(137) [
(137)

－
－ ]
－
－ ]

－

－
－ ]
100,000
89 ]

－

Gains
(losses)

－

－

－

－

－

－

70

(18)

－

－

(18)

Note: Figures in [ ] are option premium which are included in balance sheet.

- 37 -

Fukoku Mutual Life Insurance Company

・ Currency-related Transactions
As of March 31, 2013
Notional amount/contract value
Fair
value
Over
1 yearOver-the-counter transactions
Currency forward contracts
Sold
Euro
US dollar
Australian dollar
Canadian dollar
British pound
Singapore dollar
BoughtEuro
Currency Options
Sold
Calls
[
US dollar
[
Euro
[
Puts
[
Bought
Calls
[
Puts
[
US dollar[
Euro[

190,966
52,09054,73135,99429,554
18,5950－－－ 189,966－ 50,993－ 54,070－ 36,684－ 29,611－ 18,606
0
－
－
－
－
－

15,681
108 ]
9,402
66 ]
6,279
41 ]
－
－ ]

－

－
－ ]
20,550
116 ]
9,000
66 ]
11,55050 ]－33(Millions of yen)
As of March 31, 2014
Notional amount/contract value
Fair
Gains
value
(losses)Over
1 yearGains(losses)

999
1,097
660
(690)
(57)
(11)
0
－
－

211,168
61,87458,32537,32434,936
18,708
－
9
9

74 [

－
32

34 [

－
1

40 [

－
－

－ [

－

－ [

－
9

(107) [－
0(66) [－
9Total(41) [－ 213,264－ 61,883－ 58,658－ 38,499－ 35,385－ 18,838
－
－
9
－
9
－

－
－ ]
－
－ ]
－
－ ]
－
－ ]

－

－
－ ]
9,800
23 ]
9,800
23 ]
－
－ ]

－

(2,096)(8)(333)(1,175)
(448)
(130)
－
0
0

－

－

－

－

－

－

－

－

－

－

0

(23)

0

(23)

－

－

－
－
－

－
－
－

967

(2,119)As of March 31, 2013
Notional amount/contract value
Gains
Fair value(losses)Over
1 year(Millions of yen)
As of March 31, 2014
Notional amount/contract value
Gains
Fair value(losses)Over
1 yearNotes: 1. Figures in [ ] are option premiums which are included in balance sheet.
2. Forward exchange rates are used for exchange rates as of the end of fiscal year.

・ Stock-related Transactions

Stock index option
Sold
Call
[
Put
[
Bought
Call
[
Put
[

－
－ ]
－
－ ]

－

－
－ ]
－
－ ]

－

－

－ [

－
－

－ [

－

－ [

－
－

－ [

－
－ ]
－
－ ]

－

－
－ ]
10,687
306 ]

－

－

－

－

－

－

－

153

(152)

－

－

－

(152)

As of March 31, 2013
Notional amount/contract value
Gains
Fair value(losses)Over
1 year(Millions of yen)
As of March 31, 2014
Notional amount/contract value
Gains
Fair value(losses)Over
1 yearTotal
Note: Figures in [ ] are option premiums which are included in balance sheet.

・ Bond-related Transactions

Exchange-traded transactions
Yen bond futures
Sold
Bought174,087－－ 174,552
－
－

(464)
－

144,825－－ 144,620
－
－

205
－

Foreign bond futures
Sold
Bought10,517
－

－
－

(34)
－

27,492
－

－
－

165
－

Total

10,551－(498)- 38 -

27,327－370

Fukoku Mutual Life Insurance Company

(iii) Hedge Accounting Applied・ Interest-related Transactions[As of March 31, 2013]
Method ofhedge accounting
Deferral hedge
method(Millions of yen)
Hedging instruments

Yen interest rate swap contracts
Receipt fixed, payment floating
Payment fixed, receipt floating

Hedged items

Notional amount / contract value

Fair valueOver 1 year

Loans
12,495
－

495
－

93
－

1 year or shorter
Over 1 year to 3 years
12,000
495
1.65%
2.30%
0.53%
1.15%
－
－
－
－
－
－

(Millions of yen)Over 3 years
－
－
－
－
－
－

Total
* Interest rate swap contracts by contractual maturity dates

Notional amount (receipts fixed, payments floating)
Average fixed rate (receipt)
Average floating rate (payment)
Notional amount (receipts floating, payments fixed)
Average floating rate (receipt)
Average fixed rate (payment)[As of March 31, 2014]
Method of
Hedging instruments
hedge accounting
Deferral hedge
Yen interest rate swap contracts
methodReceipt fixed, payment floating(Millions of yen)
Hedged items

Notional amount / contract valueOver 1 year

Fair value

Loans
290
－

Payment fixed, receipt floating

170
－

3
－

Total
* Interest rate swap contracts by contractual maturity dates(Millions of yen)
1 year or shorter
Over 1 year to 3 years
120
170
2.12%
2.47%
1.11%
1.11%
－
－
－
－
－
－

Notional amount (receipts fixed, payments floating)
Average fixed rate (receipt)
Average floating rate (payment)
Notional amount (receipts floating, payments fixed)
Average floating rate (receipt)
Average fixed rate (payment)

Over 3 years
－
－
－
－
－
－

・ Currency-related Transactions[As of March 31, 2013]
Method of
Hedging instruments
hedge accounting
Fair value hedge
Currency forward contracts
methodSold
US dollar
Euro
Australian dollar
Bought(Millions of yen)
Hedged items
Foreigncurrencydenominatedbonds

Notional amount / contract valueOver 1 year
139,523
94,97434,703
9,845－

Fair Value

－
－
－
－
－

140,412
96,26934,409
9,732
－

Total
[As of March 31, 2014]
Method of
Hedging instruments
hedge accounting
Fair value hedge
Currency forward contracts
methodSold
US dollar
Euro
British pound
Australian dollar
Bought(Millions of yen)
Hedged items
Foreigncurrencydenominatedbonds

Notional amount / contract valueOver 1 year
364,791
295,783
39,976
15,206
13,825－

Fair Value

－
－
－
－
－
－

367,218
297,232
40,353
15,401
14,231－

Total
Notes 1. Forward exchange rates are used for exchange rates as of the end of fiscal year.
2. Regarding assets and liabilities which are denominated in foreign currencies but have fixed settlement in yen under currency forward
contracts and are reported in yen amounts in the balance sheet, those currency forward contracts are excluded from the table above.

・ Stock-related Transactions
No ending balance as of March 31, 2013 and 2014.

・ Bond-related Transactions
No ending balance as of March 31, 2013 and 2014.

- 39 -

Fukoku Mutual Life Insurance Company

13. Status of the Company, Subsidiaries and Affiliates(1) Selected Financial Data

(Millions of yen)
Year ended
March 31, 2013

Year ended
March 31, 2014

Ordinary revenues

1,073,135

935,620

Ordinary profits

72,86876,441

Net surplus for the year

50,26751,782Comprehensive income

201,755

95,703As of March 31,
2013

As of March 31,
2014

7,538,862

7,817,668

994.6%

1120.0%Total assets
Solvency Margin Ratio(2) Scope of consolidation and application of equity method
Number of consolidated subsidiaries: 5

Number of unconsolidated subsidiaries accounted for under the equity method: 0
Number of affiliates accounted for under the equity method: 0- 40 -

Fukoku Mutual Life Insurance Company

(3) Consolidated Balance Sheets(Millions of yen)
As of March
31, 2013
Assets:Cash and deposits
Call loans
Monetary claims bought
Money held in trust
Securities
Loans
Tangible fixed assets
Land
Buildings
Lease assets
Construction in progress
Other tangible fixed assets
Intangible fixed assets
Software
Goodwill
Lease assets
Other intangible fixed assets
Agency receivables
Reinsurance receivables
Other assets
Deferred tax assets
Allowance for possible loan losses

72,86870,3001,111
31,322
6,108,723
910,657
272,228
160,528
105,882
1,430
1,297
3,089
18,727
12,321
3,855
2,271
279
6
56
54,698362(2,201)

As of March
31, 2014

As of March As of March
31, 2013
31, 2014

Liabilities:
91,021 Policy reserves
Reserve for outstanding claims
148,700
Policy reserve
1,011
Reserve for dividends to policyholders
31,981
Reserve for dividends to policyholders (subsidiary)
6,406,927
839,244 Agency payables
232,492 Reinsurance payables
132,912 Subordinated bonds
95,148 Other liabilities
1,159 Reserve for employees' retirement benefits
280 Net defined benefit liabilities
2,992 Reserve for price fluctuation of securities
16,369 Deferred tax liabilities
11,339 Deferred tax liabilities for revaluation reserve for land
3,091 Total liabilities
1,659 Net assets:
279 Foundation funds
1 Accumulated foundation funds redeemed
94 Reserve for revaluation
51,065 Consolidated surplus
1,041 Total foundation funds, surplus and others(2,281) Net unrealized gains (losses) on available-for-salesecurities, net of tax
Deferred valuation gains (losses) under hedge accounting

Revaluation reserve for land, net of tax
Foreign currency translation adjustment
Accumulated remeasurements of defined benefit plans
Total accumulated other comprehensive income

Total assets

7,538,862

6,856,928
24,6636,779,259
52,307697
375
113
66,18753,91845,153－
46,625
16,938
16,1197,102,360

6,995,343
25,1706,918,429
51,007735
339
113
122,346
57,036－
48,84050,32527,502
15,9297,317,778

35,00071,000112
102,904
209,016

35,00071,000112
126,584
232,696219,719

263,161

62
3,421
(635)
－

2
3,144
(261)
(3,918)

222,569

262,127

Minority interests

4,916

5,066

Total net assets

436,502499,890

7,817,668 Total liabilities and net assets

7,538,862

7,817,668- 41 -

Fukoku Mutual Life Insurance Company

(4) Consolidated Statements of Operations and Comprehensive Income[Consolidated Statements of Operations](Millions of yen)

Ordinary revenues:
Premium and other income
Investment income
Interest, dividends and other income
Gains from money held in trust, net
Gains from trading securities, net
Gains on sales of securities
Foreign exchange gains, net
Other investment income
Gains from separate accounts, net
Other ordinary revenues
Total ordinary revenues
Ordinary expenditures:
Claims and other payments
ClaimsAnnuities
Benefits
Surrenders
Other payments
Provision for policy reserve and others
Provision for reserve for outstanding claims
Provision for policy reserve
Interest on accumulated dividends to policyholders
Interest on accumulated dividends to policyholders (subsidiary)
Investment expenses
Interest expenses
Losses on sales of securities
Losses on valuation of securities
Losses from derivative instruments, net
Provision for allowance for possible loan losses
Depreciation of real estate for rent and other assets
Other investment expenses
Operating expenses
Other ordinary expenditures
Total ordinary expenditures
Ordinary profits
Extraordinary gains:
Gains on disposal of fixed assets
Total extraordinary gains
Extraordinary losses:
Losses on disposal of fixed assets
Impairment losses
Provision for reserve for price fluctuation of securities
Other extraordinary losses
Total extraordinary losses
Provision for reserve for dividends to policyholders (subsidiary)
Surplus before income taxes
Income taxes：
Current
Deferred
Total income taxes
Net surplus before minority interests
Minority interests
Net surplus for the year

- 42 -

Year ended March
31, 2013

Year ended March
31, 2014

862,225
200,056
139,897
1,157
38,498
8,290
907
1,230
10,075
10,854
1,073,135

707,044
216,832
149,176669
19,402
34,672
2,214
279
10,417
11,743
935,620550,677
171,223
101,713
136,427
109,133
32,179269,040
514
268,44976
059,072
1,801
10,7901,009
34,773
74
5,802
4,820
99,232
22,2441,000,266
72,868552,830
138,689
135,437
131,069
114,188
33,444
139,752507
139,16974
049,005
3,655
9,289
52
25,116
56
5,082
5,751
95,27822,313
859,179
76,441

60
60

2,005
2,005

395
600
8,441
2
9,439
455
63,034

7,314
1,775
3,700
－
12,791
542
65,112

15,138(2,499)12,63950,395
128
50,267

20,867(7,773)13,09352,019236
51,782

Fukoku Mutual Life Insurance Company

(4) Consolidated Statements of Operations and Comprehensive Income(Continued)[Consolidated Statement of Comprehensive Income](Millions of yen)

Net surplus before minority interests
Other comprehensive income
Net unrealized gains (losses) on available-for-sale securities, net of tax

Deferred valuation gains (losses) under hedge accounting
Revaluation reserve for land, net of tax
Foreign currency translation adjustment
Comprehensive income
Parent company
Minority interests- 43 -

Year ended March
31, 2013
50,395
151,359
151,291
(107)
(17)
193
201,755
201,248
507

Year ended March
31, 2014
52,01943,68443,367(60)
3373
95,703
95,541
162

Fukoku Mutual Life Insurance Company

(5) Consolidated Statements of Cash Flows(Millions of yen)

Year ended
March 31, 2013

Year ended
March 31, 2014

Cash flows from operating activities:
Surplus before income taxes
Depreciation of real estate for rent and other assets
Depreciation
Impairment losses
Amortization of goodwill
Increase (Decrease) in reserve for outstanding claims
Increase (Decrease) in policy reserve
Interest on accumulated dividends to policyholders
Interest on accumulated dividends to policyholders (subsidiary)
Provision for reserve for dividends to policyholders (subsidiary)
Increase (Decrease) in allowance for possible loan losses
Increase (Decrease) in reserve for employees' retirement benefits
Increase (Decrease) in net defined benefit liabilities
Increase (Decrease) in reserve for price fluctuation of securities
Interest, dividends and other income(Gains) Losses on securities
Interest expenses
Foreign exchange (gains) losses, net(Gains) Losses on tangible fixed assets(Increase) Decrease in agency receivables(Increase) Decrease in reinsurance receivables(Increase) Decrease in other assets except from investing and financing activities
Increase (Decrease) in agency payables
Increase (Decrease) in reinsurance payables
Increase (Decrease) in other liabilities except from investing and financing activities
OthersSubtotalInterest, dividends and other income received
Interest paid
Dividends to policyholders paid
Dividends to policyholders paid (subsidiary)Corporate income tax (paid) refunded
Net cash provided by (used in) operating activities (I)63,034
5,802
6,528
600
763
514
268,449
76
0
455
(74)
(1,231)－
8,441(139,897)(11,447)
1,801
(907)
174
0
67
145
(184)
24
(1,494)
16,632
218,275
146,798(1,392)(25,727)(406)(7,647)
329,899

65,112
5,082
7,109
1,775
763
507
139,169
74
0
542
80
－
(1,973)3,700(149,176)(30,702)
3,655(2,214)
5,130
5
(37)
(880)
(36)
(0)
(2,568)17,015
62,135
159,741(3,430)(29,137)(504)(17,291)
171,511

(191)
220
－
5,034
(1,048,127)
638,224(94,197)
214,939(37,627)(24,962)(346,686)(16,787) ] [(4,704)444(3,616)173(330)(354,721)(684)
98(2,000)1,999(867,499)
700,791(86,787)
148,350(21,671)(20,399)(147,800)
23,710 ](4,607)30,441(2,777)－－(124,744)

Cash flows from investing activities:(Increase) Decrease in deposits
Proceeds from sales and redemption of monetary claims bought
Payments for increase in money held in trust
Proceeds from decrease in money held in trust
Payments for purchase of securities
Proceeds from sales and redemption of securities
Payments for additions to loans
Proceeds from collections of loans
Proceeds from settlement of derivatives
OthersSubtotal (IIa)[(I+IIa)Payments for purchase of tangible fixed assets
Proceeds from sales of tangible fixed assets
Payments for purchase of intangible fixed assets
Proceeds from sales of intangible fixed assets
Payments for stocks of subsidiaries and affiliates with change of scope of consolidation
Net cash provided by (used in) investing activities- 44 -

Fukoku Mutual Life Insurance Company

(5) Consolidated Statements of Cash Flows (Continued)(Millions of yen)

Year ended
March 31, 2013

Year ended
March 31, 2014

Cash flows from financing activities:
Financing of subordinated bonds
Interest payment for foundation funds
Dividends paid to minority interests
Payments for lease obligations
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year

- 45 -

30,000
(621)
(12)
(518)
28,847
67
4,091
138,504
142,596

49,870
(621)
(12)
(752)
48,483526
95,777
142,596
238,373

Fukoku Mutual Life Insurance Company

(6) Consolidated Statements of Changes in Net Assets[For the year ended March 31, 2013](Millions of yen)Foundation funds, surplus and others

Foundation
funds

Balance at the beginning ofcurrent fiscal year

35,000

Accumulated
Total foundation
foundation Reserve for Consolidated
funds, surplus
funds
revaluation
surplusand others
redeemed

71,000112

77,183

183,295(23,989)(23,989)

Payment of interest on
foundation funds

(621)

(621)

Net surplus for the year

50,26750,267

Reversal of revaluation
reserve for land

(55)

(55)

Change of scope of
consolidation

120

120

Changes in the current fiscal
year
Additions to reserve fordividends to policyholders

Net changes, excluding
foundation funds, surplus
and others
Total changes in the current
fiscal year

－

－

－

25,721

25,721

Balance at the end of current
fiscal year

35,00071,000112

102,904

209,016

Accumulated other comprehensive incomeNet
unrealized
Deferredgains
valuation
Revaluation(losses) on
gains
reserve foravailable-for(losses)
land, net ofsale
under hedge
tax
securities,
accounting
net of tax
Balance at the beginning ofcurrent fiscal year

68,806170

Total
Foreign
Accumulated
accumulated
currency
remeasurements
othertranslation of defined benefit
comprehensive
adjustment
plansincome

3,383

(828)

－

71,532

Minority
interests

Total net
assets4,421 259,249

Changes in the current fiscal
year
Additions to reserve fordividends to policyholders(23,989)

Payment of interest on
foundation funds(621)

Net surplus for the year

50,267

Reversal of revaluation
reserve for land

(55)

Change of scope of
consolidation120

Net changes, excluding
foundation funds, surplus
and others

150,912

(107)

38

193

－

151,036495 151,531

Total changes in the current
fiscal year

150,912

(107)

38

193

－

151,036495 177,252

Balance at the end of current
fiscal year

219,719

62

3,421

(635)

－

222,569

4,916 436,502- 46 -

Fukoku Mutual Life Insurance Company

[For the year ended March 31, 2014](Millions of yen)Foundation funds, surplus and others

Foundation
funds

Balance at the beginning ofcurrent fiscal year

35,000

Accumulated
Total foundation
foundation Reserve for Consolidated
funds, surplus
funds
revaluation
surplusand others
redeemed

71,000112

102,904

209,016(27,762)(27,762)

Payment of interest on
foundation funds

(621)

(621)

Net surplus for the year

51,782

51,782281

281

Changes in the current fiscal
year
Additions to reserve fordividends to policyholders

Reversal of revaluation
reserve for land
Net changes, excluding
foundation funds, surplus
and others
Total changes in the current
fiscal year

－

－

－

23,67923,679Balance at the end of current
fiscal year

35,00071,000112

126,584

232,696

Accumulated other comprehensive incomeNet
unrealized
Deferredgains
valuation
Revaluation(losses) on
gains
reserve foravailable-for(losses)
land, net ofsale
under hedge
tax
securities,
accounting
net of tax
Balance at the beginning ofcurrent fiscal year

219,71962

Total
Foreign
Accumulated
accumulated
currency
remeasurements
othertranslation of defined benefit
comprehensive
adjustment
plansincome

3,421

(635)

－

222,569

Minority
interests

Total net
assets

4,916 436,502

Changes in the current fiscal
year
Additions to reserve fordividends to policyholders(27,762)

Payment of interest on
foundation funds(621)

Net surplus for the year

51,782

Reversal of revaluation
reserve for land281

Net changes, excluding
foundation funds, surplus
and others

43,441

(60)

(277)

373

(3,918)39,558149

39,708

Total changes in the current
fiscal year

43,441

(60)

(277)

373

(3,918)39,558

149

63,388

Balance at the end of current
fiscal year

263,161

2

3,144

(261)

(3,918)262,127- 47 -

5,066 499,890

Fukoku Mutual Life Insurance Company

Notes to the Consolidated Financial Statements
I. Presentation of the Consolidated Financial Statements
1. Basis of Presentation
The accompanying consolidated financial statements have been prepared from the accounts
maintained by Fukoku Mutual Life Insurance Company (the “Company”) and its consolidated
subsidiaries in accordance with the provisions set forth in the Insurance Business Law of Japan and its
related rules and regulations and in conformity with accounting principles generally accepted in Japan,
which are different in certain respects from accounting principles generally accepted in countries andjurisdictions other than Japan.
In addition, the notes to the consolidated financial statements include information which is not
required under accounting principles generally accepted in Japan but is presented herein as additional
information.
Amounts of less than one million yen have been eliminated. As a result, total in yen shown herein
do not necessarily agree with the sum of the individual amounts.
2. Principles of Consolidation(1) Scope of Consolidation
Consolidated subsidiaries for the year ended March 31, 2014 are listed below:
Fukoku Capital Management, Inc.
Fukokushinrai Life Insurance Company
Fukoku Information Systems Co., Ltd.
Fukoku Life International (U.K.) Limited
Fukoku Life International (America) Inc.
Major unconsolidated subsidiary is Fukoku Seimei Building Company Limited.
Seven subsidiaries are excluded from the scope of consolidation, as each one of them is small in
its total assets, amount of sales, net surplus for the year and surplus and is sufficiently insignificant toreasonable judgement on its impact on the financial position and results of operation of the Company's
group.
(2) Application of Equity Method
Unconsolidated subsidiaries (such as Fukoku Seimei building Company Limited, etc.) are insignificant
in their impact on net surplus and surplus, and also immaterial as a whole, therefore, application ofequity method is withheld.
There are no affiliates for the year ended March 31, 2014.
(3) Fiscal Year of Consolidated Subsidiaries
Among the subsidiaries to be consolidated, fiscal year-end of overseas subsidiaries is December 31.
For the preparation of consolidated financial statements, financial statements as of that date are usedand concerning any important transaction taking place in between December 31 and the consolidated
closing date, necessary adjustments for consolidation are made.
(4) Amortization of Goodwill
Goodwill was amortized by the straight-line method over a period of 10 years and in case of theimmaterial amount of goodwill, such amount is fully charged to operating expenses when incurred.

- 48 -

Fukoku Mutual Life Insurance Company

II. Notes to Balance Sheets
1. Significant Accounting Policies(1) Valuation Methods of Securities
The valuation of securities, including bank deposits and monetary claims bought which are equivalent
to securities, and securities managed as trust assets in money held in trust, is as follows:i)

Trading securities are stated at fair market value. Costs of their sales are determined by themoving average method.

ii)

Held-to-maturity debt securities are stated at amortized cost under the straight-line method,
cost being determined by the moving average method.

iii)

Policy-reserve-matching bonds are stated at amortized cost under the straight-line method,
cost being determined by the moving average method in accordance with “Temporary
Treatment of Accounting and Auditing Concerning Policy-reserve-matching Bonds inInsurance Industry” (Industry Audit Committee Report No.21 issued by the Japanese Instituteof Certified Public Accountants on November 16, 2000).

iv)

Investments in unconsolidated subsidiaries and affiliates which are not accounted for underthe equity method are stated at cost, cost being determined by the moving average method.

v)

Available-for-sale securities with fair market value are stated at fair market value based on
the market prices at the end of fiscal year. Costs of their sales are determined by the moving
average method. Net unrealized gains or losses on these available-for-sale securities, net oftaxes, are recorded as a separate component of net assets.
Available-for-sale securities whose fair market values are deemed extremely difficult toobtain are stated at cost, cost being determined by the moving average method, except for
public and corporate bonds including foreign bonds, of which the difference between
acquisition cost and face value is considered to be an adjustment of interest. Such bonds arestated at amortized cost under the straight-line method, cost being determined by the moving
average method.

(2) Valuation Methods of Derivative Instruments
Derivative instruments are stated at fair market value.
(3) Revaluation of Land
The Company revalued the land for business purposes based on the Law for Revaluation of Land
(Law No.34 promulgated on March 31, 1998). The difference between fair value and book value
resulting from the revaluation, net of related taxes, is recorded as revaluation reserve for land as aseparate component of net assets and the related tax is recorded as deferred tax liabilities forrevaluation reserve for land.
 Date of revaluation: March 31, 2002
 Method of revaluation as prescribed for in Article 3 Paragraph 3 of the said Law:
Calculation is based on the appraisal value for property tax set forth in Article 2 item 3 of the
Enforcement Ordinance of the Law for Revaluation of Land (Government Ordinance No.119
promulgated on March 31, 1998) and the road rate set forth in Article 2 item 4 of the said
Ordinance with certain reasonable adjustments.
(4) Depreciation of Tangible Fixed Assets
Depreciation of the Company’s tangible fixed assets is calculated by the following methods.
 Tangible fixed assets (excluding lease assets):Declining-balance method
However, buildings (excluding building attachments and structures) acquired on or after April 1, 1998
are depreciated using Straight-line method.

- 49 -

Fukoku Mutual Life Insurance Company

 Lease assets related to finance lease transactions that do not transfer ownership: Straight-line
method over the lease term without residual value
Other tangible fixed assets acquired for ¥100,000 or more but less than ¥200,000 are depreciatedequally over three years.
(5) Foreign Currency Translation
Foreign currency-denominated assets and liabilities are translated into Japanese yen at the effective
exchange rate prevailing at the balance sheet date.
(6) Allowance for Possible Loan Losses
Allowance for possible loan losses is provided in accordance with the Company’s standards of selfassessment and write-offs and reserves on credit quality:i)

For the credits of borrowers who are legally bankrupt such as being in the proceedings ofbankruptcy or civil rehabilitation (hereinafter called “legally bankrupt borrowers”) and who aresubstantially bankrupt (hereinafter called “substantially bankrupt borrowers”), the Company
provides the remaining amount of credits after the direct write-off described below and the
deductions of the amount expected to be collected through the disposal of collateral or the
execution of guarantees.

ii)

For the credits of borrowers who are not currently bankrupt but have a high possibility ofbankruptcy (hereinafter called “not currently bankrupt borrowers”), the Company provides theamounts deemed as necessary considering the borrowers’ ability to pay, within the amounts
after deductions of the amount expected to be collected through the disposal of collateral or
the execution of guarantees.

iii)

For the credits of borrowers other than the above, the Company provides the amounts
calculated by multiplying the borrowers’ balance by the actual ratio of bad debt losses on
defaults during a certain past period.

All credits are assessed by the relevant departments in accordance with the Company’s standards ofself-assessment on credit quality. The results of the assessment are reviewed by the audit department,
which is independent of business-related divisions. Subsequently, the allowance for possible loan
losses are provided based on the results of these assessments.
For the credits of legally bankrupt borrowers and substantially bankrupt borrowers, the amounts
remaining after deductions of collateral value or the amounts collectible through the execution ofguarantees is written-off directly from the borrower’s balance as the estimated uncollectible amounts.
The amount written-off as of March 31, 2014 was ¥271 million.
(7) Accounting of Employees’ Retirement Benefits
Net defined benefit liabilities are presented for the employees' retirement benefits after deducting
pension plan assets from retirement benefit obligations, based on estimated amounts as of thebalance sheet date.
The Company uses the following methods of accounting in relation to retirement benefits.
 Method for allocation of projected retirement benefits ..................... Straight-line basis
 Amortization period of actuarial differences .........................................
10 years
 Amortization period of prior service cost ..............................................
10 years(8) Reserve for Price Fluctuation of Securities
Reserve for price fluctuation of securities is calculated in accordance with Article 115 of the Insurance
Business Law.

(9) Lease Transactions as a Lessee- 50 -

Fukoku Mutual Life Insurance Company

Finance lease transactions that do not transfer ownership to the lessee whose commencement day
was on or before March 31, 2008 continued to be accounted for in a manner similar to accounting
treatment for ordinary rental transactions.

(10) Lease Transactions as a Lessor
As for the finance lease transactions where the Company is a lessor, the lease fee is recorded in“interest, dividends and other income” at the time of receiving lease fee. The corresponding cost of thelease transactions is recorded in “other investment expenses,” which is calculated by deducting anamount equivalent to the interest allocated over the lease term from the lease fee received.
(11) Accounting for Hedge Activities
Hedge accounting is based on “Accounting Standards for Financial Instruments” (ASBJ Statement
No.10 issued by the Accounting Standards Board of Japan on August 11, 2006).
For the foreign currency forward contracts against the exchange rate fluctuations in the value of
foreign currency-denominated bonds classified as available-for-sale securities, which qualify for hedge
accounting because of high correlation and effectiveness between the hedging instruments and thehedged items, valuation gains and losses on the foreign currency forward contracts are recorded in
the statements of operations.
For the interest rate swaps against the interest rate fluctuations regarding loans, which qualify forhedge accounting because of high correlation and effectiveness between the hedging instruments andthe hedged items, valuation gains and losses on the interest rate swaps are deferred until the maturityof the hedged transactions.
The Company applies foreign currency swap appropriated treatment as a hedge for the foreignexchange fluctuation risk associated with foreign currency denominated bonds issued by the Company.
For judging the effectiveness of hedge used, ratio analysis of comparing the fluctuations in the fairvalue or cash flows of hedged items and hedging instruments is mostly applied.
(12) Accounting for Consumption Taxes
The Company accounts for consumption taxes by the tax-exclusion method. The consumption taxes
on certain assets, which are not deductible from consumption taxes withheld and that are stipulated to
be deferred under the Tax Law, are deferred as prepaid expenses and amortized equally over five
years. Consumption taxes other than deferred consumption taxes are recognized as an expense whenincurred.
(13) Policy Reserve
Policy reserve is based on Article 116 of the Insurance Business Law, and the premium reserve at theend of fiscal year is calculated by the following method:
In regard to the policies subject to the standard policy reserve, the method as prescribed by theCommissioner of Financial Services Agency (Ministry of Finance Ordinance No. 48, 1996) is applied.
In regard to the policies not subject to the standard policy reserve, the net level premium method
is applied.
Based on the provision of paragraph 5, Article 69 of the Enforcement Regulation of the Insurance
Business Law, the Company's certain individual annuity insurance policies, certain hospitalizationriders with surgery benefits and long-term hospitalization benefits, and non-participating educational
insurance have funded policy reserves included.

(14) Amortization Method for Intangible Fixed Assets
Intangible fixed assets are amortized as follows:i)

Software- 51 -

Fukoku Mutual Life Insurance Company

Software for internal use is amortized based on a straight-line method over the estimateduseful lives.
ii) Lease assets
Lease assets are amortized based on a straight-line method over the lease terms.
(15) Deferred Assets
Discount on bonds is amortized equally over the period for which interest on bonds is fixed. This
amount is deducted from bonds.

(16) Policy-reserve-matching Bonds
Of the bonds corresponding to the sub-groups of individual insurance and annuities which are set by
insurance types and investment policies, the bonds that are held to match the duration of liabilities areclassified by the Company as policy-reserve-matching bonds in accordance with “Temporary
Treatment of Accounting and Auditing Concerning Policy-reserve-matching Bonds in Insurance
Industry” (Industry Audit Committee Report No.21 issued by the Japanese Institute of Certified Public
Accountants on November 16, 2000).

2. Accounting Changes and Error Corrections and its Implementation
Effective from the fiscal year ended March 31, 2014, in accordance with the “Accounting Standard for
Retirement Benefits” (Accounting Standards Board of Japan (ASBJ) Statement No. 26, May 17, 2012,
excluding the provision of article 35) and the “Guidance on Accounting Standard for Retirement
Benefits” (ASBJ Guidance No. 25, May 17, 2012, excluding the provision of article 67), the Company
has changed its method of presenting net defined benefit liabilities. These liabilities are presented after
deducting pension plan assets from retirement benefit obligations. Unrecognized actuarial differences
and unrecognized prior service cost are presented within net defined benefit liabilities.
As of March 31, 2014, in accordance with transitional treatment as stipulated in article 37 of the
Accounting Standard for Retirement Benefits, the impact of the changes in accounting policies is
included in accumulated remeasurements of defined benefit plans in accumulated othercomprehensive income.
As a result, the Company recognized ¥48,840 million as net defined benefit liabilities andaccumulated other comprehensive income decreased by ¥3,918 million.
3. The Principal Accounting Standards Published before March 31, 2014 but not Applied are as
follows.
(1) With the publication of the “Accounting Standard for Retirement Benefits” (ASBJ Statement No.
26, May 17, 2012) and the “Guidance on Accounting Standard for Retirement Benefits” (ASBJ
Guidance No. 25, May 17, 2012), the method for calculating retirement benefit obligations,current service cost and others will be changed.
Compulsory application of this standard is from the commencement of fiscal years beginningon or after April 1, 2014. The Company plans to apply this standard from the start of the fiscal
year ending March 31, 2015.
The Company and its consolidated subsidiaries are currently evaluating the impact in the
consolidated fiscal years after the application of the standards.

(2) With the publication of the “Revised Accounting Standard for Business Combinations”(Accounting Standards Board of Japan (ASBJ) Statement No. 21, September 13, 2013), the“Revised Guidance on Accounting Standard for Business Combinations and AccountingStandard for Business Divestitures” (ASBJ Guidance No.10, September 13, 2013), and the“Revised Accounting Standard for Consolidated Financial Statements” (ASBJ Statement No. 22,
September 13, 2013), the accounting treatment for handling amount differences stemming fromchanges in a parent company’s ownership interest in a subsidiary when the parent company- 52 -

Fukoku Mutual Life Insurance Company

retains control over the subsidiary as well as the treatment of acquisition-related costs in abusiness combination were revised. In addition, the names of items presented in the
consolidated financial statements were revised.
Compulsory application of these standards is from the commencement of fiscal years beginningon or after April 1, 2015. The Company plans to apply this standard from the start of the fiscal
year ending March 31, 2016.
The Company is currently evaluating the impact in the consolidated fiscal years after theapplication of these standards.
4. Financial Instruments
Asset management of the Company’s general accounts other than the separate accounts stipulated in
Article 118 Paragraph 1 of the Insurance Business Law is conducted on the principle of prudent andprofitable investments, considering public and social responsibilities of the insurance business. Basedon this policy, the Company allocates the fund, securing its liquidity, from the medium-to-long term
viewpoints. The Company is diversifying investments in assets such as foreign securities and equity
securities within the acceptable range of risk in order to enhance the profitability, although yendenominated interest bearing assets including debt securities such as Japanese government bonds
and loans are the cores of the portfolios. Derivatives are mainly used to mitigate the market risk
regarding the securities and loans. Major financial instruments including securities, loans andderivatives are exposed to market risk and credit risk.
The Company manages its asset management risk by establishing internal control systems
including various rules pursuant to the “Three Basic Rules related to Enterprise Risk Management”
established by the Board of Directors. Specifically, the Company eliminates excessive risk deviatingfrom the basic principle and secures the safety of the assets by utilizing control functions of the
Financial and Investment Risk Management Department towards the asset management sections,monitoring the status of market risk and credit risk periodically on a daily or monthly basis. In addition,
the Company quantifies the market risk and credit risk using value-at-risk (VaR) method in order tocontrol the possible maximum losses which may arise from the holding assets within a certain range ofrisk buffers.
The carrying amounts, fair values and their related differences of major financial assets andliabilities as of March 31, 2014 were as follows:- 53 -

Fukoku Mutual Life Insurance Company

CarryingamountFair value

Difference(Millions of yen)

Cash and deposits: ..................................................
Cash and deposits not treated as securities¥
90,886
Total cash and deposits
90,886
Call loans .................................................................
148,700
Monetary claims bought:
Claims treated as loans .......................................
1,011
Total monetary claims bought ..............................
1,011
Money held in trust:
Trading securities .................................................
30,981
Total money held in trust ......................................
30,981
Securities:
Trading securities .................................................
271,060
Held-to-maturity debt securities ...........................
1,265,332
Policy-reserve-matching bonds ...........................
2,071,506
Available-for-sale securities .................................
2,704,248
Total securities .....................................................
6,312,148
Loans:
Policy loans ..........................................................
68,590Ordinary loans .....................................................
770,654
Total loans ............................................................
839,244
Assets total
7,422,971
1
Subordinated bonds*
122,346
Liabilities total
122,3462
Derivative instruments* :Hedge accounting not applied .............................
(1,920 )Hedge accounting applied ...................................
(2,423 )Total derivative instruments ................................. ¥(4,343 )¥¥90,88690,886
148,700

¥

―
―
―

1,054
1,054

43
43

30,981
30,981――

271,060
1,379,802
2,214,902
2,704,248
6,570,014―
114,470
143,395―
257,865

68,590793,401
861,991
7,703,628
126,900
126,900(0 )22,74722,747
280,656
4,554
4,554

(1,920 )(2,423 )(4,343 )―――¥*1 The fair value of derivative instruments that are currency swaps under designated hedge accounting is
included in the fair value of subordinated bonds because it is accounted for as an integral part of thesubordinated bonds that are the hedge items.
*2 Assets and liabilities generated by derivative instruments are offset and presented net. Net liabilities in total
are presented in brackets.

(1) Cash, deposits (excluding financial instruments treated as securities based on “AccountingStandards for Financial Instruments” (ASBJ Statement No.10)) and call loans:
The fair values of cash, deposits and call loans are based on their book values since fairvalues approximate book values due to their short maturities.
(2) Securities including deposits and monetary claims bought which are treated as securities basedon “Accounting Standards for Financial Instruments” (ASBJ Statement No.10) and securities
managed as trust assets in money held in trust:
The fair values of marketable securities are measured at the quoted market price at the endof fiscal year. The fair values of other securities without the quoted market price are based on theprices reasonably calculated such as the prices offered by the information vendors or
counterparty financial institutions.
Investments in unconsolidated subsidiaries and affiliates, unlisted stocks and investments inpartnerships whereby partnership assets consist of unlisted stocks whose fair values are deemed- 54 -

Fukoku Mutual Life Insurance Company

extremely difficult to obtain, are excluded from above securities. The carrying amounts ofinvestments in unconsolidated subsidiaries and affiliates, unlisted stocks and investments inpartnerships as of March 31, 2014 were ¥519 million, ¥7,653 million and ¥7,967 million,
respectively.
(3) Loans and monetary claims bought treated as loans:
The fair values of policy loans are deemed to approximate book values, considering estimatedrepayment period and interest rate conditions since their repayment deadline have not been set
up due to the characteristics that the loan is limited to the amount of cash surrender values.
Therefore, the book values are used as the fair values of policy loans.
The fair values of floating interest rate loans among the ordinary loans and monetary claimsbought treated as loans approximate the book values because the market interest rates arereflected in future cash flows in a short period. Therefore, the fair values of floating interest rateloans and monetary claims bought treated as loans are based on their book values. The fairvalues of fixed interest rate loans are measured by discounting the future cash flows to thepresent values.
The fair values of loans receivable from legally bankrupt borrowers, substantially bankrupt
borrowers and not currently bankrupt borrowers and monetary claims bought treated as loans arecomputed by deducting the amount of the allowance for doubtful accounts from the book values
before direct write-offs.
(4) Subordinated bonds:
Subordinated bonds issued by the Company are stated at fair market value.
(5) Derivative instruments:i) The fair values of the futures and options traded at the exchange are measured at thesettlement price of the exchange.
ii) The fair values of options and swaps traded over the counter are based on the quoted prices
offered by counterparty financial institutions.
iii) The fair values of foreign currency forward contracts are determined based on the spot
exchange rate and forward contract rate.
5. Investment and Rental Property
The Company holds investment and rental properties such as office buildings in Tokyo and otherareas. The carrying amount and the fair value of these investment and rental properties as of March
31, 2014 were ¥180,400 million and ¥261,345 million, respectively. The fair value is mainly based on
the value calculated by the Company in accordance with real estate appraisal standards which
includes some adjustments using the reference prices.
The amount corresponding to asset retirement obligations included in the carrying amount ofinvestment and rental properties was ¥1,176 million as of March 31, 2014.
6. Securities Lent under Lending Agreements
The amount of securities lent under lending agreements was ¥71,815 million as of March 31, 2014.
7. Loans Receivable
The amounts of credits to bankrupt borrowers, delinquent loans and restructured loans, which were
included in loans, were ¥195 million, ¥747 million and ¥660 million, respectively and their total
amounts were ¥1,603 million as of March 31, 2014. There was no balance of delinquent loans past 3
months or more as of March 31, 2014.
The direct write-offs related to loans decreased credits to bankrupt borrowers by ¥251 million asof March 31, 2014.
Credits to bankrupt borrowers represent loans, excluding the balances already written-off, whichmeet the conditions prescribed in Article 96 Paragraph 1 Item 3 and 4 of the Enforcement Regulationsof the Corporate Tax Law. Moreover, accruing interest on these loans is not recorded as income after- 55 -

Fukoku Mutual Life Insurance Company

determining that principal of or interest on these loans is unlikely to be collected due to the significant
delay in repayment of principal or interest payment or for some other reasons.
Delinquent loans are credits whose accruing interest is not recorded as income due to the same
reasons as described above, and exclude credits to bankrupt borrowers and loans for which interest
payments have been suspended and rescheduled to assist and support the borrowers in the
restructuring of their business.
Delinquent loans past 3 months or more are loans for which interest payment or repayment ofprincipal are delinquent for 3 months or more from the due date under the terms of the related loan
agreements, excluding those loans classified as credits to bankrupt borrowers and delinquent loans.
Restructured loans are loans for which certain concessions favorable to borrowers, such as
interest reduction or exemptions, rescheduling of due date of principal or interest payment, waiver ofclaim or other terms, have been negotiated for the purpose of assisting and supporting the borrowers
in the restructuring of their business. This category excludes loans classified as credits to bankrupt
borrowers, delinquent loans and delinquent loans past 3 months or more.
8. Accumulated Depreciation of Tangible Fixed Assets
Accumulated depreciation of tangible fixed assets totaled to ¥145,599 million as of March 31, 2014.
9. Separate Accounts
Total assets in separate accounts provided for in Article 118 of the Insurance Business Law were¥82,680 million as of March 31, 2014. The amount of separate account liabilities was the same as
separate account assets.
10. Receivables from/Payables to Unconsolidated Subsidiaries
The total amounts of receivables from/payables to unconsolidated subsidiaries were ¥3,288 millionand ¥182million as of March 31, 2014, respectively.
11. Income Taxes
Deferred tax assets and deferred tax liabilities as of March 31, 2014 were ¥96,261 million and¥119,541 million, respectively. Valuation allowance for deferred tax assets was ¥3,181 million.
Major components of deferred tax assets were ¥56,752 million of policy reserves, ¥15,490 millionof reserve for price fluctuation of securities and ¥15,035 million of net defined benefit liabilities as ofMarch 31, 2014.
Major component of deferred tax liabilities was ¥117,327 million of net unrealized gains onavailable-for-sale securities as of March 31, 2014.
The statutory tax rate and the actual effective tax rate for the year ended March 31, 2014 were33.3% and 20.1%, respectively. The major difference between the statutory tax rate and the actual
effective tax rate was (16.2%) of reserve for dividends to the policyholders.
Accompanying the promulgation of the “Act for Partial Revision to the Income Tax Act, etc.” (ActNo. 10, 2014), the effective statutory tax rate used to calculate deferred tax assets and deferred tax
liabilities was changed. The Company had previously used an effective statutory tax rate of 33.3% foritems expected to be collected or paid in the period from April 1, 2014, to March 31, 2015, and a rateof 30.8% for items expected to be collected or paid on or after April 1, 2015. However, owing to theaforementioned law change, the rate of 30.8% for items expected to be collected or paid after April 1,2014 is used. As a result of this change in statutory tax rate, deferred tax assets decreased ¥22 million,
deferred tax liabilities increased ¥538 million, and deferred tax liabilities for revaluation reserve forland decreased ¥3 million. Deferred income taxes increased by ¥561 million.

- 56 -

Fukoku Mutual Life Insurance Company

12. Reserve for Dividends to Policyholders
Changes in reserve for dividends to policyholders for the year ended March 31, 2014 were as follows:(Millions of yen)
Balance at the beginning of current fiscal year..........................
Transfer from surplus in previous fiscal year .............................
Dividends paid in the current fiscal year ....................................
Increase in interest ....................................................................
Balance at the end of current fiscal year ...................................

¥ 52,307
27,762
29,13774¥ 51,007

13. Reserve for Dividends to Policyholders (Fukokushinrai Life Insurance Company)
Changes in reserve for dividends to policyholders for the year ended March 31, 2014 were as follows:(Millions of yen)
Balance at the beginning of current fiscal year..........................
Dividends paid in the current fiscal year ....................................
Increase in interest ....................................................................
Provision for reserve for dividends to policyholders ..................
Balance at the end of current fiscal year ...................................

¥ 697
504
0
542
¥ 735

14. Stocks of Unconsolidated Subsidiaries
The amount of stocks of unconsolidated subsidiaries the Company held as of March 31, 2014 was¥519 million.
15. Pledged Assets and Secured Debts
Assets pledged as collateral as of March 31, 2014 were ¥28,231 million of securities and ￥1,241
million of deposits. Secured debts as of March 31, 2014 were ¥4,679 million.
16. Policy Reserves for the Reinsurance Contracts
Reserve for outstanding claims for the reinsurance contracts provided in accordance with Article 71
Paragraph 1 of the Enforcement Regulation of the Insurance Business Law (hereinafter called“reserve for outstanding claims for ceded reinsurance”) was ¥4 million as of March 31, 2014.
Policy reserve for the reinsurance contracts provided in accordance with Article 71 Paragraph 1 of
the Enforcement Regulation of the Insurance Business Law (hereinafter called “policy reserve forceded reinsurance”) was ¥50 million as of March 31, 2014.
17. Commitment LineAs of March 31, 2014, there were unused commitment line agreements under which the Company is
the lender of ¥872 million.
18. Subordinated Bonds
Repayments of subordinated bonds are subordinated to other obligations.
19. Contribution to Policyholders Protection Corporation
The future contribution to the Life Insurance Policyholders Protection Corporation of Japan under
Article 259 of the Insurance Business Law was estimated at ¥12,453million as of March 31, 2014. The
contribution was charged as operating expenses in the year in which it was paid.

- 57 -

Fukoku Mutual Life Insurance Company

20. Employees’ Retirement Benefits(1) Overview of Employees' Retirement Benefit System
As a defined benefit plan for office-based employees, the Company and its consolidated
subsidiaries have a defined benefit corporate pension plan and retirement lump-sum grants. As adefined contribution plan for these employees, the Company also has a defined contribution
pension plan.
As a defined contribution plan for sales employees, the Company has retirement lump-sum
grants.
(2) Defined Benefit Plani) Reconciliation of beginning and end of balance of retirement benefit obligation(Millions of yen)
Retirement benefit obligation at the beginning of current fiscal year ........
Service cost ...............................................................................................
Interest cost ...............................................................................................
Actuarial difference occurred during the fiscal year ..................................
Retirement benefits payments ...................................................................
Others ........................................................................................................
Retirement benefit obligation at the end of current fiscal year ..................

¥ 72,695
2,852
1,448
171
(5,349 )(134 )¥ 71,685ii) Reconciliation of beginning and end of balance of pension plan assets(Millions of yen)
Pension plan assets at the beginning of current fiscal year ......................
Expected return on pension plan assets ...................................................
Actuarial difference occurred during the fiscal year ..................................
Contributions by the employer ...................................................................
Retirement benefits payments ...................................................................
Pension plan assets at the end of current fiscal year ................................

¥ 20,006
600
1,333
2,309
(1,405 )¥ 22,844iii) Reconciliation of retirement benefit obligation and pension plan assets with net defined benefit
liabilities presented on the consolidated balance sheets(Millions of yen)a. Funded plan retirement benefit obligation .............................................
b. Pension plan assets ...............................................................................
c. (a+b) .......................................................................................................
d. Unfunded plan retirement benefit obligation ..........................................
e. Net amount of liabilities and assets presented on the consolidated
bbbalancebalancesheets
sheets.........................................................................................
.......................................................................................
f. Net defined benefit liabilities ..................................................................
g. Net defined benefit assets .....................................................................
h. Net amount of liabilities and assets presented on the consolidatedbalancesheets(c+d+e+f)............................................................................
Balancesheets......................................................................................

- 58 -¥ 29,130(22,844 )
6,285
42,554
48,84048,840―¥ 48,840

Fukoku Mutual Life Insurance Company

iv) Breakdown of retirement benefit gains and losses(Millions of yen)
Service cost ...............................................................................................
Interest cost ...............................................................................................
Expected return on pension plan assets ...................................................
Amortization of actuarial differences .........................................................
Amortization of prior service cost ..............................................................
Retirement benefit expenses related to defined benefit plan ....................

¥ 2,8521,448(600 )
759(47 )¥ 4,413v) Accumulated remeasurements of defined benefit plan
Accumulated remeasurements of defined benefit plan (before tax effects) comprised the following:(Millions of yen)
Unrecognized actuarial differences ...........................................................
Unrecognized prior service cost ................................................................
.....................................................................................................................
Total ...........................................................................................................

¥ (6,212 )551¥ (5,661 )vi) Breakdown of main pension plan assets
The breakdown of main asset categories as a percentage of total pension plan assets is as follows: Life insurance general account ............................................................
 Domestic bonds ....................................................................................
 Domestic stocks ...................................................................................
 Foreign stocks ......................................................................................
 Foreign bonds .......................................................................................
 Cash and deposits ................................................................................
 Others ...................................................................................................
 Total ......................................................................................................

45.2%
16.7%
16.7%
14.4%
6.1%
0.9%
0.0%
100.0%

vii) Method for setting the expected long-term rate of return
To set the expected long-term rate of return on pension plan assets, the Company takes into
account the present and future allocation of pension plan assets, and the present and expected
future long-term rate of return on the diverse range of assets that makes up the pension assets.

viii) Underlying actuarial assumptions
Main underlying actuarial assumptions as of March 31, 2014, were as follows: Discount rate ........................................................................................
 Expected long-term rate of return on pension plan assets ...................

2.0%
3.0%

(3) Defined contribution plan
The required contribution amount by the Company and its subsidiaries to the defined contribution
plan was ¥255 million.

- 59 -

Fukoku Mutual Life Insurance Company

III. Notes to Statements of Operations
1. Transactions with Unconsolidated Subsidiaries
The total amounts of revenues and expenditures in connection with unconsolidated subsidiaries were¥106 million and ¥2,973 million for the year ended March 31, 2014.
2. Policy Reserves for the Reinsurance Contracts
For the year ended March 31, 2014, provision for reserve for outstanding claims for ceded reinsurance
considered in calculation of provision for reserve for outstanding claims was ¥2 million and reversal ofpolicy reserve for ceded reinsurance considered in calculation of provision for policy reserve was ¥2
million.
3. Impairment Losses of Fixed Assets
For the year ended March 31, 2014, impairment losses of fixed assets were as follows:(1) Method of grouping
Real estate and other assets used for insurance business operations are classified as one asset groupas a whole. Other assets such as real estate for rent and unused real estate are classified as one
group individually.
(2) Background of recognizing the impairment losses
Profitability of certain real estate for rent dropped down significantly due to a decrease in the level ofrental income and a declining trend of market prices of land. The Company reduced its book values ofsuch real estate for rent and unused real estate to their recoverable amounts. The amounts reduced
were recognized as impairment losses and included in the extraordinary losses.
(3) Asset groups recognized impairment losses and losses by fixed assets

Asset

Land

Impairment losses
Buildings
and others

Total(Millions of yen)(i) Real estate for rent .............................................
¥ 1,541(ii) Unused real estate .............................................
35
Total (i)+(ii) ..........................................................
¥ 1,577

¥ 140
58
¥ 198

¥ 1,68293¥ 1,775(4) Calculation method of recoverable amount
Recoverable amount is based on net sales value. Net sales value is determined based on appraisal
value, posted price or road rate.

- 60 -

Fukoku Mutual Life Insurance Company

IV. Notes to Statement of Comprehensive Income
1. Other Comprehensive Income
The amounts recycled and tax effect amounts related to other comprehensive income were as
follows:(Millions of yen)
Net unrealized gains (losses) on available-for-sale securities, net of tax
Amount incurred during the fiscal year ended March 31,2014 ................
Amount recycled .......................................................................................
Before tax adjustment ...........................................................................
Tax effects .............................................................................................
Net unrealized gains (losses) on available-for-sale securities, net oftax................................................................................................................
Deferred valuation gains (losses) under hedge accounting, net of tax
Amount incurred during the fiscal year ended March 31,2014 ................
Amount recycled .......................................................................................
Before tax adjustment ...........................................................................
Tax effects .............................................................................................
Deferred valuation gains (losses) under hedge accounting, net of tax .
Revaluation reserve for land, net of tax
Amount incurred during the fiscal year ended March 31,2014 ................
Amount recycled .......................................................................................
Before tax adjustment ...........................................................................
Tax effects .............................................................................................
Revaluation reserve for land, net of tax ................................................
Foreign currency translation adjustment
Amount incurred during the fiscal year ended March 31,2014 ................
Amount recycled .......................................................................................
Before tax adjustment ...........................................................................
Tax effects .............................................................................................
Foreign currency translation adjustment ...............................................
Total other comprehensive income ..............................................................

- 61 -¥87,278(24,665 )
62,613(19,246 )
43,367
(18 )
(71 )
(90 )
30
(60 )
―
―
―
3
3
373
―
373
―
373
¥43,684

Fukoku Mutual Life Insurance Company

IV.Notes to Statements of Cash Flows
1. Scope of Cash and Cash Equivalents
Cash and cash equivalents as of March 31, 2014 consist of "Cash," "Deposits in transfer account,""Current deposits," "Ordinary deposits," "Notice deposits," "Time deposits maturing within 3 months ofthe date of acquisition," "Foreign currency deposits maturing within 3 months of the date ofacquisition," "Negotiable certificate of deposits maturing within 3 months of the date of acquisition,""Call loans" and "Monetary claims bought maturing within 3 months of the date of acquisition."
2. Reconciliations of Cash and Cash Equivalents
Reconciliations of cash and cash equivalents in the consolidated statements of cash flows to theconsolidated balance sheets accounts as of March 31, 2014 were as follows:(Millions of yen)
Cash and deposits ..............................................................................................
Call loans ............................................................................................................
Monetary claims bought......................................................................................
Time deposits maturing over 3 months of the date of acquisition ......................
Foreign currency deposits maturing over 3 months of the date of acquisition ...
Monetary claims bought maturing over 3 months of the date of acquisition ......
Cash and cash equivalents.................................................................................

- 62 -¥91,021
148,700
1,011(300 )(1,047 )(1,011 )¥ 238,373

Fukoku Mutual Life Insurance Company

(7) Risk-monitored Loans(Millions of yen)
As of March 31, 2013 As of March 31, 2014
Credits to bankrupt borrowers

218

195

Delinquent loans

590

747

Delinquent loans past three months or more－－

Restructured loans

950

660

1,759

1,603

[0.19%][0.19%]

Total[Percentage of total loans]

Notes: 1. For the credits of legally bankrupt borrowers and substantially bankrupt borrowers, the amounts
remaining after deductions of collateral value or the amounts collectible through the execution ofguarantees is written-off directly from the borrower’s balance as the estimated uncollectible amounts.
The amounts written-off related to credits to bankrupt borrowers were ¥1million as of March 31, 2013.
The amounts written-off related to delinquent loans were ¥288 million as of March 31, 2013 and¥251 million as of March 31, 2014.
2. Credits to bankrupt borrowers represent loans which are subject to bankruptcy, corporate
reorganization or rehabilitation or other similar, including but not limited to foreign, proceedings.
Accruing interest of these loans is not recorded as income after determining that principal of or intereston these loans is unlikely to be collected due to the significant delay in repayment of principal orinterest payment or for some other reasons.
3. Delinquent loans are credits whose accruing interest is not recorded as income due to the same
reasons as described in note 2 above, and exclude credits to bankrupt borrowers and loans for whichinterest payments have been suspended and rescheduled to assist and support the borrowers in the
restructuring of their business.
4. Delinquent loans past three months or more are loans for which interest payment or repayment ofprincipal are delinquent for three months or more from the due date under the terms of the related loan
agreements, excluding those loans classified as credits to bankrupt borrowers and delinquent loans.
5. Restructured loans are loans for which certain concessions favorable to borrowers, such as interest
reduction or exemptions, rescheduling of due date of principal or interest payment, waiver of claim orother terms, have been negotiated for the purpose of assisting and supporting the borrowers in the
restructuring of their business. This category excludes loans classified as credits to bankrupt
borrowers, delinquent loans and delinquent loans past three months or more.

- 63 -

Fukoku Mutual Life Insurance Company

(8) Status of Insurance Claims Paying Ability of Insurance Subsidiaries(Consolidated Solvency Margin Ratio)(Millions of yen)

Fukokushinrai Life Insurance Company
As ofMarch 31, 2013

As ofMarch 31, 2014

956,020

1,143,749

Common stock and others

180,855

201,167

Reserve for price fluctuation of securities

46,62550,325

Contingency reserve

85,102

112,094

－

－

1,796

1,594

Net unrealized gains on available - for - sale securities x 90%(multiplied by 100% if losses)

286,774

343,140

Net unrealized gains on real estate x 85%

72,44190,719－(5,661)

Excess amount of policy reserve based on full-time Zillmer method

189,458

195,290

Qualifying subordinated debt

66,187

122,346

The amount of "excess amount of policy reserve based on full-time Zillmer method" and "qualifying
subordinated debt" excluded from the calculation of solvency margin－－

Deductible items－－

26,77732,732

192,238204,232

Total solvency margin(A)

Catastrophe loss reserve
Allowance for possible loan losses

Sum of unrecognized actuarial differences and unrecognized prior service cost

OthersTotal amount of risk

( R1  R5  R8  R9 )2  ( R2  R3  R7 )2  R4  R6
2

2

(B)

Insurance risk

R1

27,902

26,983General insurance risk

R5

－

－

Catastrophe risk

R6

－

－

3rd sector insurance risk

R8

9,754

9,748

Small amount and short-term insurance risk

R9

－

－

Assumed investment yield risk

R2

36,32636,260

Minimum guarantee risk

R7

2

0

Investment risk

R3

147,663

159,903

Business risk

R4

4,432

4,657

994.6%

1120.0%

Solvency margin ratio(A)(1/2) x (B)x 100

Notes: 1. Above figures are calculated based on Articles 86-2 and 88 of the Enforcement Regulation of the Insurance Business Law andNotification of the Financial Services Agency No.23,2011.
2. The figures as of March 31, 2014 are calculated, including the sum of unrecognized actuarial differences and unrecognizedprior service cost (the figures as of March 31, 2013 are calculated based on previous standards).
3. "Minimum guarantee risk" is calculated by standard method.

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Fukoku Mutual Life Insurance Company

(9) Status of Insurance Claims Paying Ability of Insurance Subsidiaries(Solvency Margin Ratio)(Millions of yen)

Fukokushinrai Life Insurance Company

As of
As of
March 31, 2013 March 31, 2014
Total solvency margin(A)

47,66851,146

Common stock and others

32,321

34,137

Reserve for price fluctuation of securities

4,997

6,309

Contingency reserve

1,656

1,802

0

0

6,091

5,265

－

－

1,979

2,202

Qualifying subordinated debt－－

The amount of "excess amount of policy reserve based on full-time Zillmer method"and "qualifying subordinated debt" excluded from the calculation of solvency margin－－

Deductible items

－

－

622

1,429

16,763

17,700Allowance for possible loan losses
Net unrealized gains on available - for - sale securities x 90%(multiplied by 100% if losses)
Net unrealized gains on real estate x 85%
Excess amount of policy reserve based on full-time Zillmer method

OthersTotal amount of risk

( R1  R8 ) 2  R2  R3  R7   R4
2

(B)

Insurance risk

R1

626

640

3rd sector insurance risk

R8

120

117

Assumed investment yield risk

R2

369

375

Minimum guarantee risk

R7

－

－

Investment risk

R3

16,033

16,946

Business risk

R4

342

361

568.7%

577.9%

Solvency margin ratio(A)(1/2) x (B)x 100

Note: 1. Above figures are calculated based on Articles 86 and 87 of the Enforcement Regulation of the Insurance Business Law and
Ministry of Finance No.50,1996.

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Fukoku Mutual Life Insurance Company