N O M U R A R e p o r t 2 0 1 2 Nomura Holdings, Inc. NOMURA Report 2012 NOMURA Report 2012 NOMURA Report 2012 The NOMURA Report represents an integrated version of our annual and citizenship reports to help foster broader understanding of our business activities. Our Founder’s Principles have been an integral part of Nomura’s culture for over 80 years. Everything we do is focused on our clients, an approach that reflects our founder’s philosophy of prospering with our clients. With greater economic globalization taking place and following the financial crisis, the importance of companies engaging in corporate social responsibility (CSR) as well as environment, society and governance (ESG) activities has become clear and the expectation for the business increased. In the midst of this, we recognize the value of responding to a changing society while in turn meeting our clients’ needs. As a result of this perspective, and beginning with the fiscal year under review, we have decided to publish the NOMURA Report, which represents an integrated version of our annual and citizenship reports detailing our CSR initiatives. In this manner, we will more actively disclose information to our stakeholders. Through this report, we hope that readers can gain a broader understanding of our efforts as Asia’s global investment bank to help society develop sustainably, and about our business activities that grow together with our stakeholders. Contents Nomura Group Highlights Global Network Message from the Group CEO Message from the Group COO Chapter I Business for Sustainability Stakeholder Dialog: Creating a New Business Model to Drive Regional Revitalization At a Glance Retail Asset Management Wholesale Global Research Message from CFO Chapter II Responsible Business Corporate Governance CSR Management Risk Management Compliance Restoring Trust and Credibility Chapter III Citizenship Stakeholder Dialog: Responding to the Voice of Society Our Community Our People Our Environment Data Section Five-Year Financial Summary Key Facts related to CSR Independent Assurance on Environmental Reporting/External Assessment related to CSR Board of Directors/Executive Management Structure Nomura Securities Domestic Network Corporate Data Website Information 03 05 07 10 12 15 17 21 25 31 33 36 39 41 43 45 48 51 55 59 63 65 69 70 72 73 74 Report Period Previous Report Next Report Entities Covered Reference Guidelines April 1, 2011 to March 31, 2012 (although some content may be outside this timeframe) September 2011 August 2013 Nomura Holdings, Inc. and its major subsidiaries and affiliates. Numerical data are presented alongside information on the scope of companies covered. • Sustainability Reporting Guidelines (G3.1) of Global Reporting Initiative (The GRI Guidelines Index is published on our corporate website at the following address. http://www.nomuraholdings.com/csr/) • Environmental Reporting Guidelines (2012 Version) of Japan’s Ministry of the Environment • Charter of Corporate Behavior of Nippon Keidanren Forward-Looking Statements This report contains forward-looking statements about the future plans, strategies, beliefs, and performance of the Nomura Group. These forward-looking statements are not historical facts. They are expectations, estimates, forecasts, and projections based on information currently available to the Company and are subject to a number of risks, uncertainties, and assumptions, which, without limitation, include market trends, economic trends, competition in the financial industry, laws and regulations, and the tax system. As such, actual results may differ materially from those projected. NOMURA Report 2012 Nomura Group Highlights Business Domains Retail Nomura delivers a wide array of financial services to individual and corporate a nationwide network of 178 branch offices, call centers and online. through clients Asset Management Nomura offers asset management services globally retail and institutional investors. to Retail client assets Total assets under management ¥72.0 trillion (As of March 31, 2012) ¥24.6 trillion (As of March 31, 2012) Wholesale Fixed Income Equities Investment Banking Nomura provides research and distribution, structuring and trading of global securities. The Tokyo Stock Exchange overall ranking: 1st The London Stock Exchange customer ranking: 1st Nomura provides equity and debt financing, risk solutions and advisory services to a broad range of international clients. Japan-related ECM, DCM and M&A league tables*: 1st Global ECM league table*: 10 th * Source: Thomson Reuters (January 2011 – December 2011) for ECM and M&A, and Thomson DealWatch (April 2011 – March 2012) for Japan-related DCM. Net revenue by business segment (Billions of yen) 1,500 Other Wholesale Asset Management Retail 1,000 500 0 –500 Income (loss) before income taxes by business segment (Billions of yen) 400 200 0 –200 –800 Other Asset Management Retail Wholesale Number of employees by region (People) 40,000 30,000 20,000 10,000 0 Asia-Pacific Americas Europe Japan 2007/08 2008/09 2009/10 2010/11 2011/12 (Fiscal year) 2007/08 2008/09 2009/10 2010/11 2011/12 (Fiscal year) 2007/08 2008/09 2009/10 2010/11 2011/12 (Fiscal year) NOMURA Report 2012 External Assessment Nomura’s CSR initiatives have won strong commendations. We have been included in the Dow Jones Sustainability Indexes, the FTSE4Good Index and the MS-SRI Index (as of January 2012). FTSE4Good ESG Ratings: Nomura recognized as a Supersector leader Nomura Holdings was recognized as Supersector leader for the second consecutive year in FTSE4Good ESG Ratings*. In fiscal 2011, Nomura was recognized as first in the financial services sector and first among Japanese companies. (as of March 2012) * FTSE4Good ESG Ratings: An assessment of 2,300 companies around the world conducted by FTSE, a subsidiary of the London Stock Exchange, and EIRIS, a socially responsible investing research firm. Memberships Nomura belongs to and is an active member of numerous business and trade associations, including: • Nippon Keidanren • Principles for Financial Action towards a • British Bankers Association • Japan Securities Dealers Association • The Investment Trusts Association, Japan • Japan Securities Investment Advisers Association • The Financial Futures Association of Japan • KEIZAI DOYUKAI (Japan Association of Corporate Executives) Sustainable Society (Principles for Financial Action for the 21st Century) • World Economic Forum • Confederation of British Industry • Institute of International Finance • Opportunity Now (Gender equality • UN PRI (Principles for Responsible organization) Investment) • Banking Environment Initiative • Association of Financial Markets Europe • Employer’s Forum on Disability • The Japan Society Total risk-weighted assets and Tier 1 ratio Total assets Short-term and long-term unsecured debt (Billions of yen) 15,000 12,000 9,000 6,000 3,000 0 (%) 20 16 12 Tier 1 ratio Total risk-weighted assets 8 4 0 (Trillions of yen) 40 (Billions of yen) 10,000 30 20 10 0 Short-term unsecured debt Long-term unsecured debt 8,000 6,000 4,000 2,000 0 2008/09 2009/10 2010/11 2011/12 (Fiscal year) 2007/08 2008/09 2009/10 2010/11 2011/12 (Fiscal year) 2007/08 2008/09 2009/10 2010/11 2011/12 (Fiscal year) NOMURA Report 2012 Global Network 276 sites in 39 countries (consolidated subsidiaries and companies accounted for by the equity method) London Major Subsidiaries and Affiliates Retail Asset Management Wholesale Others Tokyo New York Hong Kong Singapore Europe & Middle East Asia Pacific Americas Capital Nomura Securities Public Company Limited * Nomura Asset Management Hong Kong Ltd. Head and branch offices and business offices: Hong Kong, Shanghai Nomura Asset Management Singapore Ltd. Nomura Asset Management Malaysia Sdn. Bhd. Nomura Islamic Asset Management Sdn. Bhd. Nomura Asset Management Australia Pty Limited Nomura Asia Holding N.V. Nomura International (Hong Kong) Limited Head and branch offices and business offices: Hong Kong, Taipei, Hanoi Nomura Singapore Limited Other affiliated company locations Singapore, Kuala Lumpur, Sydney, Manila, Jakarta, Seoul, Bangkok, Shanghai, Powai, Mumbai Nomura Asset Management U.K. Limited Nomura Asset Management Deutschland KAG mbH Nomura Europe Holdings PLC Nomura International PLC Head and branch offices and business offices: London, Madrid, Vienna, Dubai, Qatar Nomura Bank International PLC Head and branch offices and business offices: London, Italy, Labuan Nomura Principal Investment PLC Nomura Capital Markets PLC Other affiliated company locations Amsterdam, Paris, Luxembourg, Zurich, Milan, Warsaw, Moscow, Bahrain, Dublin Nomura Bank (Luxembourg) S.A. Other affiliated company locations Powai Japan Nomura Securities Co., Ltd. Nomura Healthcare Co., Ltd. Nomura Agri Planning & Advisory Co., Ltd. Nomura Farm Co., Ltd. Nomura Securities Co., Ltd. Nomura Capital Investment Co., Ltd. Nomura Principal Finance Co., Ltd. Nomura Asset Management Co., Ltd. Nomura Funds Research and Technologies Co., Ltd. Nomura Private Equity Capital Co., Ltd. Nomura Asset Management USA Inc. Nomura Global Alpha LLC Nomura Corporate Research and Asset Management Inc. Nomura Funds Research and Technologies America, Inc. Nomura Holding America Inc. Head and branch offices and business offices: New York, Washington, D.C. Nomura Securities International, Inc. Head and branch offices and business offices: New York, Atlanta, São Paulo, San Francisco, Chicago, Houston, Boston, Miami, Los Angeles INSTINET INCORPORATED Other affiliated company locations Toronto The Nomura Trust & Banking Nomura Babcock & Brown Co., Ltd. Co., Ltd. Nomura Pension Support & Service Nomura Facilities, Inc. Co., Ltd. Nomura Land and Building Co., Ltd. Nomura Research & Advisory Co., Ltd. Nomura Real Estate Holdings, Inc. Nomura Research Institute, Ltd. * Nomura Investor Relations Co., Ltd. JAFCO Co., Ltd. * Nomura Business Services Co., Ltd. Nomura Institute of Capital Markets Research NOMURA Report 2012 * Affiliated companies accounted for by the equity method London Major Subsidiaries and Affiliates Retail Asset Management Others Tokyo New York Hong Kong Singapore Nomura Asset Management Hong Kong Ltd. Head and branch offices and business offices: Hong Kong, Shanghai Nomura Asset Management Singapore Ltd. Nomura Asset Management Malaysia Sdn. Bhd. Nomura Islamic Asset Management Sdn. Bhd. Nomura Asset Management Australia Pty Limited Nomura Asia Holding N.V. Nomura International (Hong Kong) Limited Hong Kong, Taipei, Hanoi Nomura Singapore Limited Other affiliated company locations Singapore, Kuala Lumpur, Sydney, Manila, Jakarta, Seoul, Bangkok, Shanghai, Powai, Mumbai Wholesale Head and branch offices and business offices: London, Italy, Labuan Nomura Europe Holdings PLC Nomura International PLC Dubai, Qatar Nomura Bank International PLC Nomura Principal Investment PLC Nomura Capital Markets PLC Other affiliated company locations Amsterdam, Paris, Luxembourg, Zurich, Milan, Warsaw, Moscow, Bahrain, Dublin Nomura Bank (Luxembourg) S.A. Other affiliated company locations Powai Europe & Middle East Asia Pacific Capital Nomura Securities Public Company Limited * Japan Nomura Securities Co., Ltd. Nomura Healthcare Co., Ltd. Nomura Agri Planning & Advisory Co., Ltd. Nomura Farm Co., Ltd. Americas Nomura Asset Management U.K. Limited Nomura Asset Management Deutschland KAG mbH Nomura Asset Management Co., Ltd. Nomura Funds Research and Technologies Co., Ltd. Nomura Private Equity Capital Co., Ltd. Nomura Asset Management USA Inc. Nomura Global Alpha LLC Nomura Corporate Research and Asset Management Inc. Nomura Funds Research and Technologies America, Inc. Head and branch offices and business offices: London, Madrid, Vienna, Head and branch offices and business offices: Nomura Securities Co., Ltd. Nomura Capital Investment Co., Ltd. Nomura Principal Finance Co., Ltd. Nomura Holding America Inc. Head and branch offices and business offices: New York, Washington, D.C. Nomura Securities International, Inc. Head and branch offices and business offices: New York, Atlanta, São Paulo, San Francisco, Chicago, Houston, Boston, Miami, Los Angeles INSTINET INCORPORATED Other affiliated company locations Toronto * Affiliated companies accounted for by the equity method NOMURA Report 2012 The Nomura Trust & Banking Co., Ltd. Nomura Facilities, Inc. Nomura Land and Building Co., Ltd. Nomura Real Estate Holdings, Inc. Nomura Investor Relations Co., Ltd. Nomura Business Services Co., Ltd. Nomura Institute of Capital Markets Research Nomura Babcock & Brown Co., Ltd. Nomura Pension Support & Service Co., Ltd. Nomura Research & Advisory Co., Ltd. Nomura Research Institute, Ltd. * JAFCO Co., Ltd. * Message from the Group CEO Placing clients at the heart of everything we do and ensuring Nomura is fit for the future Rebuilding trust In August 2012, Nomura Securities Co., Ltd., a core Nomura Group company in Japan, was subject to a business improvement order by Japan’s Financial Services Agency. We take this matter very seriously and deeply regret the trouble caused. I would like to take this opportunity to apologize to all of our stakeholders. We are currently enhancing our internal controls across the entire group. We are conducting training sessions for executives and employees and implementing a series of improvement measures to prevent similar incidents from occurring in the future. To monitor progress, Nomura Securities has established an Improvement Measures Implementation Committee, which is under my direct control and includes our Internal Control Supervisory Manager and relevant executive officers and department heads. Koji Nagai Group CEO NOMURA Report 2012 A new Nomura As we work to rebuild trust, Nomura is committed to realizing the social mission of the securities business of contributing to economic growth and sustainable social development. I intend to create a new Nomura by reaffirming our responsibility to society as a leading company in the capital markets and by encouraging a change in the mindset of all Nomura people through revising our organizational structure, including our personnel systems. Meeting the needs of our clients and society The global economy currently faces significant challenges that are leading to transformational changes in society. In order to remain a trusted partner to our clients and a responsible corporate citizen, we must tailor our services to the increasingly diverse and sophisticated needs of our clients and adjust to the ongoing changes in the communities where we live and work. In other words, we have to ensure we are fit for the future by changing ourselves to adapt to social change and our clients’ needs. We aim to deliver high value-added financial services by placing our clients at the heart of everything we do. Asia’s global investment bank Nomura remains committed to being Asia’s global investment bank. We are closely analyzing the current market environment, including the economic situation in Europe and the global shift to tighter regulations. We will allocate management resources to areas where we can leverage our strengths. Asia is poised to drive the global economy over the coming years and we believe Nomura is well placed to play a leading role in the region’s growth. As such, we will further develop our global business model centering on our home market of Asia including Japan. We have set a medium-term target of achieving earnings per share of ¥50 by the end of March 2016. In terms of pretax income, that translates to around ¥250 billion, which we expect to be made up of ¥125 billion from Wholesale, ¥100 billion from Retail, and ¥25 billion yen from Asset Management. In Wholesale, we will leverage our global platform and focus on cross- border businesses that connect Asia with Europe and the Americas. Our highest priority in Retail is to listen closely to our clients and provide consulting based NOMURA Report 2012 services to meet their individual needs. Asset Management aims to establish itself as a distinct Asian asset manager by offering clients a diverse range of investment opportunities. These initiatives will increase the ability of both Retail and Asset Management to provide the firm with a stable earnings base. This year we have combined the financial information from our annual report and the corporate social responsibility and environmental, social, and corporate governance initiatives outlined in our citizenship report into a single report. With this new Nomura Report we hope to provide all of our stakeholders with a detailed view of the direction we are moving in as we navigate the changing environment to take the firm the next level. To further integrate our business activities and corporate citizenship initiatives, I have taken over as chairman of the firm’s CSR Committee. Nomura is committed to contributing to sustainable development through our core business and corporate activities in order to make the world a better place for future generations. We will focus everything we do on our clients, transforming Nomura into a corporate citizen that works closely with the communities in which we operate and listens intently to our clients and other stakeholders. Koji Nagai Group CEO Message from the Group CEO Nomura Report NOMURA Report 2012 Message from the Group COO Asia advantage Nomura’s competitive advantage lies in our roots in Asia, a region expected to enjoy strong growth in the years ahead and the location of a deep pool of funds looking for investment opportunities. As Asia’s global investment bank, Nomura has a formidable client franchise across all our businesses in Japan and we have built up a global platform tailored to regional strategies in the Americas, EMEA, and Asia ex- Japan. This allows us to work with our clients on local businesses in each region and on cross-border opportunities that bridge East and West. A strong commitment to collaboration across regions and divisions within the firm means we are well placed to deliver best-in-class solutions that meet the diverse needs of our global client base. Wholesale profitability The challenges faced by our industry are underscored by the current global economic slowdown, precipitated by the sovereign debt crisis in Europe, and the ongoing move to tighter financial regulations around the world. Given that we expect this environment to continue, our immediate priority is to improve the profitability of our Wholesale division. We have positioned Asia including Japan as our home market and we are shifting to a global business model centered on Asia. We are focusing on businesses in each region that offer synergies with other regions and divisions or are profitable on a stand-alone basis. At the same time, we are working to lower our break-even point to ensure Wholesale is profitable without relying on a market recovery. Nomura has a long history in Asia. Over the years we have forged close relationships with a broad range of clients in the region. Combined with our dominant client franchise in Japan, this forms a solid base to connect with our operations in EMEA and the Americas for a globally linked business platform to drive earnings growth. Looking ahead, we aim to further enhance our presence as a trusted financial services group focused on our global client base. Atsushi Yoshikawa Group COO NOMURA Report 2012 0 Chapter I Business for Sustainability Business for Sustainability Responsible Business Citizenship NOMURA Report 2012 Business for Sustainability Responsible Business Citizenship Stakeholder Dialog Creating a New Business Model to Drive Regional Revitalization Case 1 Establishing an Agribusiness Model for Future Generations Nomura Agri Planning & Advisory is helping to industrialize agriculture by utilizing local information obtained from the Nomura Group’s nationwide network of 178 head and branch offices and wealth of financial expertise. The company’s subsidiary Nomura Farm is working together with agricultural producers’ co-operative corporation “wagoen” in Chiba Prefecture, Japan, to build expertise on farm management through growing tomatoes. Views from Stakeholders Building a food manufacturing industry in a speedy manner Hirokazu Kiuchi President Agricultural producers’ co-operative corporation “wagoen” in the Defining agriculture as a ‘food manufacturing industry’ can help people gain a business management perspective that is lacking today, generate employment opportunities local community, and develop the industry for future generations. The strength of Japan’s agriculture is forward-looking, exciting products that capture consumer demand. Once it can utilize the expertise of other industries and establish an integrated service combining production, processing and distribution, Japan’s agribusiness will be able to accommodate domestic demand even better and also capture foreign currency through international demand, and it will be able to contribute to the benefit of the country. I expect the Nomura Group to serve as a facilitator between a wide range of industries, provide information on international markets, and offer financing support, which is the ‘blood’ flowing through the veins of industry. On the other hand, the food industry experiences fast-paced trend cycles, meaning that strategies will face a quick expiration date. This is why I’d like Nomura to help us quickly come up with a successful business model. Helping to industrialize agribusiness by utilizing experience in agriculture as a management resource Yuuki Takagi President (former Administrative Vice-Minister for MAFF) Japan Professional Agriculture Total Support Organization In order to sustain agriculture as an industry, we need to increase the number of people who engage in agriculture with an eye on business management, or so-called ‘sustainable agribusiness entities.’ The Japan Professional Agriculture Total Support Organization (J-PAO) engages in activities aimed at this goal. I believe many of Japan’s technologies and its know- how from other industries can and should be widely applied to agriculture. In order to attract the technologies and know-how of various sectors and companies to agriculture, it will be important to promote a greater interest in agriculture from people throughout Japan. I would like the Nomura Group to connect agriculture with a wide range of industries by utilizing its broad business network and the agribusiness know-how it has accumulated through partnerships in tomato cultivation with producers. I anticipate that Nomura’s unique management resources will play a key role in establishing a new agribusiness model and speeding up the industrialization process. Response to Stakeholder Dialog Supporting agriculture’s industrialization while recognizing regional revitalization as a business opportunity Agriculture is an industry deeply rooted in the local community. Revitalizing this important industry will not only enhance local economies and provide demand for financing, but also can become a solution for many of the challenges facing society today, such as Japan’s declining birthrate and aging population, economic disparities between regions, food security and environmental issues. Although agriculture faces many challenges, Nomura believes that this means there are also many opportunities to revitalize regional economies. Regional revitalization and the international expansion of Japan’s agribusiness represent major business opportunities for Nomura. I hope to contribute to the industrialization of agriculture more quickly by leveraging the financial expertise from our core business, our domestic and international network and the know-how gained from our business experiences in agriculture. Takashi Nishizawa President Nomura Agri Planning & Advisory Co., Ltd. NOMURA Report 2012 Business for Sustainability Responsible Business Citizenship Stakeholder Dialog Creating a New Business Model to Drive Regional Revitalization Case 2 Supporting Regional Economic Revitalization in Mie Prefecture Nomura Securities is helping to support regional economic revitalization in Mie Prefecture through its involvement in Mie University’s Regional Area Strategy Center together with local regional banks and other parties. The center is a think tank that works to resolve regional issues by leveraging the university’s intellectual assets and private-sector network. The center has also begun to provide support to companies from Mie Prefecture looking to expand into the ASEAN market. Going forward, we stand at the ready to provide a wide range of support to the regional revitalization of Mie Prefecture by capitalizing on the strengths of the Nomura Group. Views from Stakeholders Developing a local think tank that can help revitalize the regional economy Atsumasa Uchida President Mie University Mie University’s Regional Area Strategy Center is a local think tank established to tackle the challenges faced by the prefecture’s local economy. Although we are one of Japan’s leading universities in terms of joint research conducted with local companies, we still need to capitalize on the knowledge accumulated by the university to play a role as a coordinator that connects local residents, companies, municipalities and the national government. This is why we decided to welcome the involvement of the Nomura Group to take full advantage of its vast network. The center has already launched several projects, including one aimed at commercializing citrus fruit production in the southern part of the prefecture to help promote regional revitalization. Conventionally, such projects were the domain of the prefectural government, but the center won a mandate for implementation, making it one of Japan’s forerunners in terms of regional revitalization through business–academia collaboration. Moving forward, I anticipate that we will be able to make greater progress with regional collaboration thanks to our newfound knowledge of Japan and the world through our partnership with the Nomura Group. Response to Stakeholder Dialog Using ‘collaborative innovation’ to revitalize Mie’s economy and generate employment opportunities Susumu Yamakawa General Manager Economics and Employment Department Mie Prefectural Government Today, Mie Prefecture’s economy is supported by mid- stream industries that serve as materials processing suppliers to major manufacturers. Our challenge will be making these industries stronger and capable of generating more employment opportunities. With more of these companies expanding operations overseas, it has become increasingly important to focus on capturing global demand by reviewing the role of Japan and Mie Prefecture from the perspective of international markets. As a result, Mie Prefecture has established a Sales and Marketing Division the prefecture’s manufacturing base once again into key export industries. transform to help Mie Prefecture has positioned the concept of ‘collaborative innovation’ with private sector companies and local communities as an important pillar in its vision for the prefecture. I have high expectations that the Nomura Group will be able to provide support as a globally minded professional organization with financing solutions and the capabilities needed to help build the overseas presence of Mie Prefecture companies. Contributing to the revitalization of regional industries through initiatives directly related to our core business We are providing a wide range of support aimed at regional economic revitalization in Mie Prefecture. This includes support to the prefecture’s only national university through our involvement in the Regional Area Strategy Center and to its government by helping companies in the prefecture to expand into the ASEAN market. We believe that assisting regional initiatives and helping to revitalize the local economy are integral to the growth of our own core business as well as to fulfilling our social responsibility. While this process is expected to require some time, we expect that our competitiveness will also be enhanced over the long term as a result. Using our nationwide network of 178 head and branch offices, we will continually identify the needs of our clients locally and provide solutions to key issues by combining information obtained through these ventures with our group’s vast global network. Masamichi Niisato Managing Director, Tsu Branch Office Nomura Securities NOMURA Report 2012 Case 3 Helping Rebuild in the Aftermath of the Great East Japan Earthquake In April 2012, Nomura Securities concluded an agreement with Fukushima University to support the reconstruction effort following the devastating earthquake and tsunami that struck in 2011. Fukushima University has been working diligently on reconstruction initiatives in Fukushima Prefecture, which suffered extensive damage from the earthquake, tsunami and nuclear accident at the Fukushima Daiichi Nuclear Power Plant. Through this agreement, Nomura Securities is committed to assisting not only Fukushima University, but also the reconstruction effort across the whole of Fukushima Prefecture as well. Views from Stakeholders I would like to combine our university’s knowledge with Nomura’s broad network Osamu Nittono President Fukushima University As a university in the region, Fukushima University established the Fukushima Future Center for Regional Revitalization in April 2011 in order to promote an organized, long-term approach to the reconstruction effort together with Fukushima Prefecture, municipalities, various organizations and NPOs. However, the university lacks the information and intellectual properties needed to push forward with the real reconstruction effort today and beyond. This is why we decided to conclude an agreement with the Nomura Group, to capitalize on its wealth of information and broad network. For us, the Nomura Group’s truly extensive network caught our eye, as did its involvement in small-scale hydroelectric power, energy conservation and smart grids, which will form an important part of the reconstruction effort. In addition, we will be conducting surveys on the disaster-affected areas together with the Nomura Group, including surveys on harmful rumors. By aptly combining one another’s strengths and perspectives, I believe that together we will be able to successfully establish a foundation for the reconstruction effort. Response to Stakeholder Dialog I welcome the frank feedback and advice provided by the private sector Youichi Nozaki General Manager Planning and Coordination Department Fukushima Prefectural Government Following the earthquake, Fukushima Prefecture has seen an exodus of its population. Therefore, we are taking prefecture- wide efforts to address this issue by focusing on employment and healthcare. We have developed mechanisms to attract private sector companies and generate employment, in order to develop an environment where the young generation can live with peace of mind. I believe the reconstruction effort in Fukushima Prefecture will not be a success without a local government, private sector, partnership companies, NPOs and local residents. involving The Nomura Group has many tools at its disposal that can help supplant any shortfalls in the government or local communities. I believe that Fukushima University will be able to leverage these tools in the reconstruction effort and thereby provide more effective support to municipalities throughout the prefecture. I would also like the Nomura Group to share its perspective as a private sector company to point out shortfalls and what needs to be done by the government. Contributing to the reconstruction of Fukushima Prefecture and creating a new future as a corporate citizen intertwined with the local economy Our nationwide network of 178 head and branch offices shows that we are a company truly rooted in the local economy. We cannot grow as a company without regional economic growth. As a result, we are committed more than ever before to helping local economies grow, as evidenced by our regional revitalization initiatives implemented in tandem with universities and local governments across Japan. We have three branch offices located in Fukushima Prefecture, which is in the process of recovering from the Great East Japan Earthquake of 2011. Over the years we have provided information to and held discussions with Fukushima University and Fukushima Prefectural Government. Our agreement with Fukushima University will enable us to leverage our network for the benefit of reconstruction assistance initiatives, which in turn will help Fukushima recover quicker and enable us to create a new future together. Masaru Omori Managing Director Institutional Clients Consulting Department Nomura Securities NOMURA Report 2012 Business for Sustainability Responsible Business Citizenship At a Glance Retail Nomura’s Retail business in Japan delivers a wide array of financial services to individual and corporate clients through a nationwide network of 178 branch offices (as of March 31, 2012), call centers, and online. Our branch offices provide in-depth, consulting-based services tailored to our clients’ individual needs. This is backed by a range of services, investment insights, and financial products available through our call centers and online platforms. p.17 Asset Management Asset Management operates as a global business with ¥25.0 trillion of assets under management from both retail and institutional investors. (as of March 31, 2012) Our investment trust business in Japan delivers a diverse range of products through distribution channels such as securities firms including Nomura Securities Company, banks, Japan Post Bank, and branches of Japan Post. We also run a global investment advisory business that offers a high level of service to pension funds, governments and central banks, commercial banks, insurers, and other institutional investors around the world. p. 21 Wholesale Consists of Fixed Income, Equities, Investment Banking and serves a broad range of global corporations, governments and financial institutions. The Fixed Income and Equities focus on institutional investment research and the distribution, structuring and trading of global securities. Investment Banking provides equity and debt financing, risk solutions and advisory services to a broad range of international clients. Note: Wholesale results do not reflect reclassifications due to a reorganization in April 2012. NOMURA Report 2012 p. 25 Net revenue 2011/2012 ¥350.3 billion Down 10.7% year on year Non-interest expenses 2011/2012 ¥287.1billion Down 1.4% year on year Net income before income taxes 2011/2012 ¥63.1billion Down 37.6% year on year (Billions of yen) 500 (Billions of yen) 300 (Billions of yen) 150 400 300 200 100 0 200 100 0 100 50 0 2007/08 08/09 09/10 10/11 11/12 (Fiscal year) 2007/08 08/09 09/10 10/11 11/12 (Fiscal year) 2007/08 08/09 09/10 10/11 11/12 (Fiscal year) Net revenue 2011/2012 ¥65.8 billion Down 1.1% year on year (Billions of yen) 100 80 60 40 20 0 Non-interest expenses 2011/2012 ¥45.3 billion Down 2.6% year on year Net income before income taxes 2011/2012 ¥20.5 billion Up 2.5% year on year (Billions of yen) (Billions of yen) 60 40 20 0 40 30 20 10 0 2007/08 08/09 09/10 10/11 11/12 (Fiscal year) 2007/08 08/09 09/10 10/11 11/12 (Fiscal year) 2007/08 08/09 09/10 10/11 11/12 (Fiscal year) Net revenue 2011/2012 ¥555.9 billion Down 11.8% year on year Non-interest expenses 2011/2012 ¥593.5 billion Down 4.9% year on year Net income (loss) before income taxes 2011/2012 ¥-37.6 billion (Billions of yen) 800 (Billions of yen) 800 (Billions of yen) 200 600 400 200 0 -200 600 400 200 0 100 0 -100 -200 -800 2007/08 08/09 09/10 10/11 11/12 (Fiscal year) 2007/08 08/09 09/10 10/11 11/12 (Fiscal year) 2007/08 08/09 09/10 10/11 11/12 (Fiscal year) NOMURA Report 2012 Business for Sustainability Responsible Business Citizenship Retail The Retail Division delivers a wide range of financial products and high quality investment advice, consistently enhancing its services in order to respond to the diverse and increasingly sophisticated needs of clients. These services are provided through several channels including a nationwide network of 178 branch offices (as of March 31, 2012) and Nomura Net & Call, which commenced services in October 2011. We seek to strengthen our consulting-based sales, and deliver top-quality products and services tailored to the needs of each client, so that the Nomura Group can remain a trusted partner to our clients. Financial Review environment. As a result, our clients are concerned about how they should design their investments for the future, in order to prepare for the likely risks that lie ahead and safely pass on their assets to future generations. Market Environment Retail investors in Japan face an increasingly Meanwhile, the evolution of digital information devices and the growth of global uncertain environment both at home and communication networks have reduced the abroad. Domestically, more than a year and a disparity that once existed in accessing half have passed since the earthquake and information. These have enabled anyone to tsunami disaster, but Japan continues to face keep abreast of the latest information, and as a many issues including serious structural result, clients’ engagement with the market is challenges that were present prior to the changing at an accelerated pace. disaster, such as the country’s fiscal problem, a Given this environment, clients’ financial dwindling birthrate and an aging population. needs are becoming increasingly diverse and Internationally, the prolonged European sophisticated. This requires financial institutions sovereign debt crisis and other geopolitical risks to provide even greater levels of service, tailored are deepening. to the needs of each individual client. With uncertainty growing due to this Over half of Japan’s personal financial complicated mixture of social factors, it has also assets continue to remain in savings and deposit become difficult to predict the emerging market accounts. As a result, the role of financial Retail client assets (Trillions of yen) 72.2 73.5 70.6 72.0 59.3 80 60 40 20 0 institutions continues to be essential in ensuring a smooth flow of funds into the economy. Moreover, through their services, financial institutions are expected to make contributions to the development of the economy and society. With a nationwide network of branch offices, call centers and Internet services, we will continue to provide world-class products and services centered on consulting-based sales, and implement a series of strategic initiatives to ensure we remain a trusted partner to our clients. Other Overseas Mutual Funds Bond Investment Trusts Stock Investment Trusts Domestic Bonds Foreign Currency Bonds Equities 2007/08 2008/09 2009/10 2010/11 2011/12 (Fiscal year) NOMURA Report 2012 Financial Results for FY2011/12 Despite the extremely challenging economic services, we have set up special desks staffed with highly knowledgeable financial professionals environment, net revenue for FY2011/12 was at our nationwide network of branch offices. In ¥350.3 billion, non-interest expenses were FY2011/12, an additional four branches were ¥287.1 billion, and income before income taxes opened in Tottori, Imabari, Shonai and Kamiooka was ¥63.1 billion. These results helped drive in order to broaden interaction with our clients. company-wide profits for the year. We launched Nomura Net & Call last October to At the end of March 2012, we had 4.985 provide non face-to-face services via the million client accounts, an increase of about Internet and call centers. We will continue to 49,000 accounts from March 2011. We steadily enhance our service offerings with the hope of expanded our client franchise during the year laying the groundwork for addressing the needs with net asset inflows of ¥2.4 trillion. of an increasing number of clients going forward. Retail client assets increased by ¥1.4 For clients with Japanese-style ESOPs and trillion to ¥72.0 trillion as of March 31, 2012. defined contribution pension funds, we also Retail maintained a high level of total sales, continue to provide convenient services. driven primarily by a wide variety of investment In addition to these structural improvements, trusts tailored to the needs of our clients, and Retail recognizes the importance of enhancing selected foreign denominated bonds. client satisfaction by delivering top quality Looking Forward The challenging business environment will likely services that meet the various needs of clients better than ever before. We offer our people on- the-job training to help them increase their persist in FY2012/13. Nevertheless, Retail will consulting skills. This practical training is seek ways to expand profitability by promoting reinforced by head office support given to a thorough approach to consulting-based sales, branch offices. Moreover, we continue to expand while also growing client assets. We will continue our lineup of products and services that to focus on strategic initiatives around our accommodate client needs, streamline our distribution channels, marketing, network of operations using IT technologies and focus on branches, human resources, products and IT enhancing our level of client service. As we build technologies, and we will implement various up our capabilities, we remain committed to tactical measures aimed at making further taking our Retail operations to the next level and strides forward. creating an organization that contributes to our In catering to the diverse needs of both clients, our regional economies, and our society. retail and corporate clients with face-to face Business results (Billions of yen) Accounts with balance FY2007 /08 FY2008 /09 FY2009 /10 FY2010 /11 FY2011 /12 Net revenue 402.0 291.9 388.3 392.4 350.3 Non-interest expenses 279.7 273.6 274.9 291.2 287.1 Income before income taxes 122.3 18.2 113.4 101.2 63.1 (Thousands) 5,000 4,000 3,000 0 2007/08 2008/09 2009/10 2010/11 2011/12 (Fiscal year) NOMURA Report 2012 Business for Sustainability Responsible Business Citizenship Retail Responding to Clients’ Needs/Feedback from Clients Promoting Consulting-based Services to Enhance Customer Satisfaction Retail capitalizes on a diverse array of tools to visit the Nomura Securities website. http://www.nomura.co.jp/support/voice/index.html Customer Questionnaire In order to ascertain customer satisfaction levels, since January 2011 we have regularly conducted a Customer Questionnaire, which covers our customer services and product provide consulting-based services that fulfill the explanations. Results of this questionnaire are needs of its clients. The Asset Design Service is shared with management, head office and a tool that uses interviews with clients to branch offices, and as a result improvement ascertain and analyze their current asset situation measures are examined by Retail to provide and deliver an optimal investment management better overall service. plan customized to their life goals. NOMURA i-port is a system that enhances the risk management of corporate clients by centrally managing information on their securities portfolios, including balances, profit and loss, and risk. Retail is committed to leveraging the various services and tools at its disposal to improve customer satisfaction. Business for Sustainability Lineup of Products Tailored to the Diverse Needs of an Aging Society Older clients need to set aside funds for living Customer Satisfaction Improvement Committee Since FY2010/11, Retail has organized the once expenses later in life as well as make preparations for leaving an inheritance for their dependants. monthly CS (Customer Satisfaction) Improvement To meet these needs, Nomura is taking steps to Liaison Meeting chaired by the Retail CEO and enhance its product lineup by offering annuities consisting of Managing Directors from key that provide regular income, whole life insurance departments. The liaison meeting reviews for those clients thinking about their legacy, complaints, feedback and requests made comparatively low-risk investment trusts, and through customer service centers, call centers reconstruction bonds In addition to these and our website, and based on these reviews, works to improve the systems and rules so as to products, we also offer a full lineup of services that meets the diverse needs of an aging society, enhance the products and services offered and such as seminars on inheritance matters and standards of customer service. For more details, “My Life Note,” a message written by the client Customer Satisfaction Questionnaire* Other 2.6% Dissatisfied 15.9% Neither 30.9% NOMURA Report 2012 * Conducted in January 2012 using postcards Satisfied 50.6% to their family members. Working together with Local Governments, Universities and Companies Industry-academia-government collaborations which leverage the knowledge of the local universities are essential for revitalizing the Japanese region’s – the driving force behind Japan’s national economy. Nomura Securities works closely in such partnerships all over Japan, focusing on helping to ‘jump start’ these regional economies. In Mie Prefecture, Nomura Securities collaborated with Mie University and businesses. NAPA works with 25 financial Hyakugo Bank to establish a regional think tank institutions across Japan to share information at Mie University that serves local governments and promote the agricultural industry, with and regional industries and also helps to develop regional revitalization its main objective. NAPA’s venture businesses in the region. Nomura affiliate works with local farmers in Chiba Securities also works with Utsunomiya University and Hokkaido to produce both outdoor and and Fukushima University to help revitalize local indoor grown agricultural crops. Production economies and provide support for earthquake technologies and farm management expertise reconstruction initiatives. are in turn used in NAPA’s consulting business. Donations of ¥8 Million Made to Fukushima University Thanks to Reduced Use of Paper from E-statements In April 2012, Nomura Securities concluded a comprehensive partnership agreement with Fukushima University’s Fukushima Future Center for Regional Revitalization, which is assisting earthquake reconstruction activities in High sugar-content tomatoes —the first crop harvested by Nomura Wago Farm Helping Revitalize Regional Medicine through Efforts in Healthcare the prefecture. This marks the first time that The healthcare industry in Japan is expected to Nomura Securities has concluded a partnership grow on the back of the country’s slowing agreement with a national university to assist birthrate and aging population, but the industry the earthquake reconstruction effort. As part of is also faced with serious challenges, such as its support, Nomura Securities initiated the how to strengthen its management structure Paper Reduction Project where it donated ¥100 and improve its financial standing. Nomura is to the Center for every client that agreed to helping to secure the safety of regional receive their statements in electronic format. As medicine, revitalize regional economies and a result, thanks to the shared commitment of generate employment opportunities through our clients, Nomura Securities was able to make healthcare and nursing care consulting and the a donation of ¥8,063,400. Nomura Securities provision of financial solutions by Nomura stands committed to this accord and will Healthcare Co., Ltd. to proactively assist earthquake continue reconstruction efforts led by universities and Nomura Securities also supports hospitals that provide helicopter emergency medical local governments. Helping Revitalize Regional Economies through Agribusiness With lower industrialization but increasing demand for new and innovative food products, agribusiness offers a significant opportunity for the revitalization of regional economies. Nomura is supporting the growth of community based agricultural industries through the Nomura Agri Planning & Advisory Co. Ltd. (NAPA). This leverages the financial services know how and information gathering abilities of Nomura’s 178 nationwide branch offices to help grow services to help build-up the capabilities of regional medicine. By the end of June 2012, it had donated ¥1 million to each of 11 hospitals with a helicopter emergency medical service. Helicopter emergency medical services play a key role on the frontlines of regional medicine in Japan. NOMURA Report 2012 0 Business for Sustainability Responsible Business Citizenship Asset Management FY2011/12 saw a challenging environment amid sluggish market conditions caused by the European sovereign debt crisis and concerns over a global economic slowdown. Nevertheless, Asset Management reported higher income in FY2011/12 on the back of inflows of funds into various products, including actively managed funds, and cost reduction efforts. We will continue to build on this momentum and remain focused on winning greater trust from retail and institutional investors in Japan and abroad, and on delivering on our strategy to build a world-class asset management firm with a strong competitive edge in Asia. Financial Review Market Environment and Financial Results for FY2011/12 assets under management. In addition we focused on ensuring compliance with investment trust regulation. Consequently, Nomura Asset Management’s share (net asset basis) of Japan’s publicly offered investment trust market stood at 22.1% as of the end of March 2012. Despite the challenging environment, our Japan’s publicly offered investment trust market investment advisory business steadily increased declined 5.0% in FY2011/12 to ¥62 trillion due mandates from institutional investors, including to sluggish market conditions caused by the pension funds in Japan and abroad and global European sovereign debt crisis and concerns sovereign wealth funds, by responding to the over a global economic slowdown. However, specific set of needs that exist in each region we did see positive inflows of funds from retail and differing fund management objectives. investors during the year. Assets under management totaled ¥24.6 Our investment trust business was able to trillion at the end of March 2012 on the back of overcome market price drops thanks to an inflow inflows of funds into various products including of funds into a wide range of investment trusts. actively managed funds. These include trusts focused on Japanese equities As a result, Asset Management reported and overseas bonds. Funds managed by an net revenue of ¥65.8 billion, down 1.0% year on investment strategy tailored for the changing year, and income before income taxes of ¥20.5 economic climate in FY2011/12 helped us expand billion, an increase of 2.0% year on year. Total assets under management Share of public investment trust market in Japan (As of March 31, 2012) (Trillions of yen) 30 20 10 0 2007/08 2008/09 2009/10 2010/11 2011/12 (Fiscal year) Note: The sum for asset management companies that belong to the Asset Management Division after adjusting for asset overlaps. NOMURA Report 2012 Other 26.9% #9 2.9% #8 3.0% #7 3.4% #6 4.1% Nomura Asset Management 22.1% #2 14.7% #3 10.6% #4 6.9% #5 5.4% Looking Forward Asset Management is committed to earning further enhancing our product and our service offering, and providing educational opportunities even greater trust from investors around the for participants on how to manage their world and growing its business by providing investments within the schemes. competitive performance of equity and bond In the investment advisory business, we funds not only in Japan and other parts of Asia, will strive to deliver products that reflect the but globally. diverse needs of our clients. In Japan, we will We will further strengthen our management fulfill our fiduciary duty and address changes capabilities for Japanese and Asian equity funds taking place in the employees’ pension plan. In where we offer superior experience and results, terms of product strategy, overall we will aim to expand fund management services and deliver return while reducing total risk in the research in Emerging Markets, and strengthen emerging equity funds where we anticipate strong returns. portfolio. We will increase the availability of absolute return, high alpha and RAFI® products*, enabling clients to enhance yield and returns in We will provide unique fixed income the context of a balanced portfolio. Outside of products like global bond (where we have an Japan, we will strive to provide competitive, established track record) and high-yield bond actively managed funds, including Japanese funds managed by Nomura Corporate Research equity, Asian equity and global bond funds, to and Asset Management Inc., high alpha funds institutional investors like pension funds in by Nomura Global Alpha, and inflation-linked Europe and North America as well as sovereign bond funds by Nomura Asset Management wealth funds in Asia and the Middle East. Deutschland KAG mbH. In addition to growing revenues, we will In the investment trust business, we will continue to closely manage costs and establish an even stronger presence in Japan’s effectively make use of our limited headcount investment trust market. Along with delivering and resources. diverse investment opportunities to meet the Capitalizing on the above initiatives, Asset broad range of retail investor needs, we will Management will achieve stable and sustainable strive to grow the overall market by expanding growth as an asset management company that the scale of our existing products while is trusted by investors around the world and will complying with investment trust regulations. contribute to an increase in earnings by expanding The defined contribution pension plan the client franchise of the Nomura Group. segment represents an important growth driver for the investment trust market. We will focus on Investment advisory assets under management * RAFI® products: Products that use a portfolio building method where weight is assigned to a stock based on fundamental indicators rather than stock price. Business results FY2007 /08 FY2008 /09 FY2009 /10 FY2010 /11 FY2011 /12 (Trillions of yen) 10 (Billions of yen) Net revenue 81.1 51.9 62.1 66.5 65.8 Non-interest expenses 50.0 47.8 46.8 46.5 45.3 Income before income taxes 31.1 4.1 15.2 20.0 20.5 Notes: 1) The defined contribution pension plan business in Asset Management was integrated to Other business in the second quarter of the fiscal year ended March 31, 2009. Certain reclassifications of previously reported amounts have been made to conform to the current presentation. 2) Nomura Bank (Luxembourg) S.A. in Asset Management was integrated to Other business in April 2011. Certain reclassifications of previously reported amounts have been made to conform to the current presentation. 8 6 4 2 0 Overseas Domestic 2007/08 2008/09 2009/10 2010/11 2011/12 (Fiscal year) NOMURA Report 2012 Business for Sustainability Responsible Business Citizenship Asset Management Responding to Clients’ Needs/Feedback from Clients Survey on Investment Trusts Since 2005, we have conducted the Investment Trust Survey once per annum. This survey interviews people who have already invested in or are thinking of investing in investment trusts Client Feedback Inquiries from retail investors and distributors of in order to study investment trust ownership, future ownership plans, and customer investment trusts such as securities firms, satisfaction. Survey results are published on banks, Japan Post Bank, and Japan Post are Nomura Asset Management’s corporate website handled at a dedicated toll free customer service and utilized to find ways to broaden the range of center. Client feedback and requests received investment trust ownership. here are shared with related departments and reflected in product development and service enhancements where possible. Study Sessions for Distributors and Investor Seminars http://www.nomura-am.co.jp/ishiki-chosa/ Awards Received by Our Managed Funds Investment trusts managed by Nomura Asset Management have received countless awards from ratings agencies. Lipper Fund Awards Every year we hold a total of about 8,000 study Japan 2012 recognized 10 Nomura funds, sessions for investment trust sales staff and including the Rainbow Fund (Earthly seminars for retail investors at branches of Environment Fund) with a best funds award Nomura Securities, and other securities firms, based on an evaluation of their mid- to long- banks, Japan Post Bank and Japan Post. These term performance. In addition, four Nomura seminars are used to deliver easy-to-understand funds received awards from Morningstar’s Fund information that helps broaden both sales staff of the Year 2011, and Nomura managed funds and retail investor understanding of the risks were also presented with awards in five divisions and characteristics of investment trusts. We of the R&I Fund Award 2012. also utilize these meetings as an opportunity to deepen our understanding of investors’ needs. Major awards received by Nomura Asset Management managed funds (year ended March 2012) Lipper Fund Awards Japan 2012 Best Funds Evaluation Period 3 years 5 years 10 years 3 including Nomura US High Yield Corporate Bond Fund Course A 5 including High Yield Corporate Bond Open Yen Hedged 2 including Rainbow Fund (Earthly Environment Fund) Morningstar Fund of the Year 2011 Best Awarded Fund in the Balanced Fund Division Nomura Global Six Assets Diversified Fund (Stability Type) Excellent Awarded Fund in the Domestic Stock Fund Division 3 including Strategic Value Open "Shinka-ron" R&I Fund Award 2012 Best Fund Best Awarded Fund Excellent Awarded Fund Investment Trusts / Foreign Bond fund Aggregate 2 including J-REIT Open (J-REIT type) 2 including Global REIT Open (foreign REIT type) NOMURA Report 2012 Business for Sustainability Nomura’s Pledge toward a Sustainable Society Reflecting Nomura Securities and Nomura Nomura’s East Japan Revival Support Bond Fund Receives a 2011 Nikkei Superior Products & Services Awards In May 2011, Nomura Asset Management launched the East Japan Revival Support Bond Fund 1105 with the goal of providing disaster relief assistance to those areas affected by Asset Management signed the Principles for Japan’s earthquake and tsunami disaster. Financial Action towards a Sustainable Society The fund is structured so that it provides (Principles for Financial Action for the 21st donations (about 0.2% annually on the total daily Century) in January 2012. The principles are net assets of the fund) once every six-month intended to provide guidelines for financial settlement period. Thus far, the fund has donated institutions to fulfill their roles and responsibilities a portion of its custodian fee from the first in shaping a sustainable society. settlement period to Aomori Prefecture, Iwate Nomura Asset Management is also a Prefecture, Miyagi Prefecture, Fukushima Prefecture, signatory of the United Nations-backed Principles Ibaraki Prefecture and Sendai City to be used for for Responsible Investment (UN PRI), and has reconstruction projects. In addition to these local established the ESG Committee, which is chaired governments, the recipients of the donation from by its CIO and consists of responsible officers the second settlement period also included charitable from Investment Management and Research, funds providing educational and living support for Client Services and the Corporate Office. ESG children orphaned in the earthquake and tsunami. stands for environment, social and governance. The fund was recognized with the Great In this regard, Nomura recognizes that continually East Japan Earthquake Response Special taking initiatives to fulfill its responsibilities toward Award during the 2011 Nikkei Superior Products society will lead to the long-term enhancement & Services Awards. The fund was selected for of corporate value. As such, it incorporates this this honor based on a comprehensive evaluation perspective into its corporate management, of its concept of investing in bonds that which focuses both on shareholder returns and contribute to the relief effort, its scheme of urging the same responsible approach in the providing continual donations from the custodian businesses it invests in. Examples of financial products offered by Nomura Asset Management that contribute to sustainability Rainbow Fund (Earthly Environment Fund) Nomura Global SRI 100 (also known as Nomura Global Social Responsibility Investment) Nomura High Yield Supranational Bond Fund Monthly Dividend (also known as Global Assist) Nomura Japan Smart City Stock Fund (also known as Nippon no Mirai) fee, and Nomura Asset Management’s ability to quickly plan and arrange such a novel financial product in the aftermath of the earthquake. Similar donations as those noted above will be provided a total of 10 times over the fund’s five-year term. Status of donations from the East Japan Revival Support Bond Fund Settlement Period First (November 2011) Second (May 2012) Recipient Amount Aomori Prefecture, Iwate Prefecture, Miyagi Prefecture, Fukushima Prefecture, Ibaraki Prefecture, and Sendai City ¥45 million In addition to the above local governments, the Iwate Learning Hope Fund, the Funds for the benefit of Miyagi Children after the Great East Japan Earthquake, and the Fukushima Donation for Orphans affected by the Great East Japan Earthquake ¥49 million NOMURA Report 2012 Business for Sustainability Responsible Business Citizenship Wholesale The Wholesale division provides capital raising and advisory services, structuring, sales and trading of global securities, and distinctive investment research to global corporations, governments and financial institutions. Wholesale’s mission is to be Asia’s global investment bank, with depth at home complemented by a solid global platform. Our business is client-centric and focused on markets and segments where we know we can add value. We aim to be globally competitive, delivering sustainable profits in those areas in which we choose to compete. Our offering is innovation- and knowledge-led, delivered in a “one firm” manner. Financial Review of reductions were implemented with only limited impact on our underlying revenue momentum. We also simplified management structure and upgraded talent in a number of areas. Market Environment and Financial Results for FY2011/12 Looking Forward While we expect the overall wholesale market to Net revenue for the fiscal year was ¥555.9 billion, remain suppressed this year driven by continuing a fall of 12% from the previous year. Loss before macro economic uncertainty, there are several income taxes was ¥37.6 billion, compared to a pockets of potential upside, such as in the fixed profit of ¥6.7 billion the year before, reflecting a income and equity electronic trading segment very challenging business environment. and in providing sophisticated risk solutions to Despite the challenges, our underlying our clients. We expect to take advantage of any business momentum continued. Client penetration emerging opportunities. increased across our Fixed Income and Equities Moving forward, we will continue businesses, and we engaged in some of the strengthening our global footprint, including year’s most significant Investment Banking further expansion of local market businesses. transactions. Our expansion into the Americas Specific investments will be focused on products continued, with the region becoming profitable where we have an edge, such as those in the final quarter of the year. businesses that depend on innovation and Reacting to the continuing market intellectual capital. Combined with our deterioration, we announced wholesale level organizational agility, this will ensure strong cost reductions of over $1 billion, substantially market positioning and sustainable economics lowering our breakeven point. At year’s end, 81% for Wholesale. Business results (Billions of yen) FY2007/08 FY2008/09 FY2009/10 FY2010/11 FY2011/12 Net revenue 243.5 (163.6) 789.5 630.5 555.9 Non-interest expenses 393.6 553.7 614.3 623.8 593.5 Income (Loss) before income taxes (150.1) (717.3) 175.2 6.7 (37.6) Note: Wholesale results do not reflect reclassifications due to a reorganization in April 2012. NOMURA Report 2012 Fixed Income Market Environment and Financial Results for FY2011/12 Looking Forward We expect Fixed Income markets to remain FY2011/12 was another challenging year for subdued given low interest rate expectation, the industry, with a trading environment continued macro uncertainty and regulatory characterized by high levels of volatility, shallow pressure. We also expect to see greater liquidity and depressed client volumes as the emphasis on central clearing and electronic Eurozone continued to dominate the Macro trading throughout the course of the year. agenda. Spread products suffered as basis risk The nimbleness of our franchise is one of widened while, in Macro products, a decline in our key advantages in these markets and we the Rates business was partially offset by continue to align our business portfolio to increased client activity in FX. With the traditional compete and grow through an evolving market funding markets under significant stress and environment. Going forward, our emphasis will regulatory changes imminent, investor demand be to further strengthen our core flow for structured funding and solutions saw an businesses and infrastructure, and deploy our uptick during the year. resources in markets where we have a clear Nomura Fixed Income franchise remained competitive advantage. resilient despite difficult markets, and delivered We aim to reinforce our position as the stronger performance versus the previous fiscal “gateway to/from Asia” and be at the center of year. Revenues increased by 4% year on year, flows to and from the region. We are among the and we gained market share despite intense few banks less affected by the changing competition in a shrinking revenue pool. Growth regulatory landscape, but nonetheless, we are in flow business was driven by resilient client focused on rebalancing our portfolio toward the flows and robust risk management, while businesses with highest potential return. structured business increased on strong deal flow and continued product innovation. We continued to be a leader in Research in Japan as reflected in our #1 rank in the Nikkei Veritas poll, while making significant strides in other regions, including attaining a #2 position in FinanceAsia’s Fixed Income Research ranking for Asia, and #5 and #7 ranks in the most recent Research surveys by Institutional Investor for EMEA and the Americas, respectively. NOMURA Report 2012 Business for Sustainability Responsible Business Citizenship Wholesale Equities Market Environment and Financial Results for FY2011/12 Looking Forward Despite the market challenges, we are expecting FY2011/12 was a very difficult year for equities client confidence and activity to gradually resume globally, especially in the second quarter of the as the global economy stabilizes. Our global year, as markets declined and exchange volumes trading capabilities will help provide liquidity to waned. Execution Services performed in-line our clients as the markets recover, while the with the market volume declines, while Derivatives change in global market structure provides was particularly challenging in certain products, Nomura the opportunity to offer state of the art, Derivatives did, however, show resilience with best execution tools and services to our clients. innovative products in Japan along with tailored The derivatives market still remains solutions for corporates globally. Year-on-year challenging with regulation looming on the revenue declined 20%, although performance horizon. However, with the build-up of our global improved in each subsequent quarter after the derivatives platform, we look to provide clients market lows of the second quarter. with more global and innovative solutions across Equities remains a key liquidity provider in different asset classes, tailored to client needs. the market with #1 market share on the Tokyo and London stock exchanges. While EMEA continues to present a tough market environment, our expansion in the Americas and market penetration in AEJ are increasing our diversified revenue streams. We remained focused on providing a full service globally in our key markets and product areas. Equities TSE market share 1st Total rank (%) LSE market share 1st Customer rank (%) 14% 14% 14% 13% 13% 12% 15% 14% 14% 14% 13% 13% 13% 12% 12% 12% 15 10 5 0 10% 9% 9% 9% 9% 9% 9% 8% 8% 8% 8% 8% 8% 8% 7% 7% 10 5 0 Feb. Mar. Apr. Jan. 2011 May Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. 2012 Feb. Mar. Apr. Jan. 2011 Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. 2012 Feb. Mar. Apr. NOMURA Report 2012 Investment Banking Market Environment and Financial Results for FY2011/12 transactions. In Asia ex-Japan, we successfully executed Investment Banking continued to build ECM deals including the offer for sale of Oil and momentum globally, reporting gross revenue of Natural Gas Corporation Limited (ONGC) in ¥141.7 billion for the fiscal year ended March India, the real estate fund IPO of Tesco Lotus, a 31, 2012. The environment proved challenging retailer in Thailand, and the CB*3 offering of for many of our clients and businesses, Lotte Shopping. We also played an important especially in equity capital markets, due to the role in a number of cross-border deals between lingering effects of the European sovereign debt Asia and other regions including Japan. crisis and the natural disaster in Japan. However, In the Americas, we book-ran the LBO Solutions businesses, such as non-traditional financing*4 for Apollo Global Management’s financing, interest rate and FX risk hedging, acquisition of Belgian chemical manufacturer expanded, benefiting from financial institutions, Taminco, and debt issuances for a corporate particularly in Europe, actively raising capital on client in Brazil. We also executed several deals the back of tighter regulation. This helped to for financial institutions clients and solutions diversify our revenue sources globally. transactions, steadily increasing revenues in In Japan, equity issuance declined the region. significantly compared to FY2010/11, but the number of cross-border M&A deals involving Japanese companies, seeking growth Looking forward We will drive profitable growth by focusing on opportunities abroad, continued to increase. areas where Nomura can win, with clients and We advised on several major M&A deals, on opportunities where we can truly differentiate. including Asahi Group Holdings’ acquisition of We are focused globally on key sectors such as Independent Liquor, a major manufacturer and Financial Institutions, Natural Resources/Power, distributor of alcoholic beverages in New Consumer/Retail and Sponsors, and value- Zealand, and Tonen General’s acquisition of added products including cross-border M&A Exxon Mobil’s Japanese subsidiary. We book- and Solution services, while delivering results in ran a selection of significant equity offerings, Asia to enable our clients to access dynamic including Nexon’s IPO. We also underwrote a growth markets. number of debt issuances from domestic and - In Japan, maintain dominance in traditional foreign issuers in a relatively stable Japanese businesses and grow our Solutions business. bond market. This enabled us to maintain our - In AEJ, focus on large fee pools, high-growth leading market share in each product. countries and on enhancing cross-border In EMEA, we executed a number of capital collaboration with other regions. raising transactions for European financial - In EMEA, focus on strengthening core institutions, including the rights issue*1 of Banco geographic markets and key products de Sabadell in Spain and Tier 1 capital including structured solutions. securities*2 of Rabobank in the Netherlands, - In the Americas, pursue a multi-year phased and also advised on several high-profile M&A growth strategy. deals, including the merger of major Swiss mining company Xstrata with Glencore International. We executed innovative solutions for our clients’ financing needs relating to M&A, as well as FX and interest rate risk hedging NOMURA Report 2012 increasing *1 A method of capital existing where shareholders are allotted, without consideration, warrants that can be used to purchase the stock at a price below the market price *2 Securities that have both a debt and equity component that are considered as capital for ratings purposes *3 Convertible bond (bond with share warrant attached) *4 Financing provided to an acquirer in an M&A deal that is secured by the assets or cash flow of the target Business for Sustainability Responsible Business Citizenship Wholesale Responding to Clients’ Needs/Feedback from Clients Fixed Income Enhancing Service Quality to Respond to Clients’ Needs and analyst reports and meetings. We continuously strive to improve our services based on these qualitative and quantitative assessments. We are also focusing efforts on providing the latest, most advanced trading services with optimized order placement and execution via order systems using sophisticated algorithms and high-speed order placement Nomura’s Fixed Income is working to enhance systems directly connected to exchanges. its services in order to respond to the diverse These efforts to improve our services have needs of its extensive global client base, which helped us capture a large share of the market in spans from institutional investors to retail clients. major exchanges around the world, including We currently serve as a primary dealer in 16 Tokyo and London. countries, which enables us to easily trade various types of debt securities, including government bonds. Through these activities, Nomura’s Fixed Income is striving to expand its presence and supply greater liquidity to markets. Investment Banking Providing Financial Solutions to Meet the Diversified and Sophisticated Needs of Our Clients We are also providing more opportunities The business environment has become more in cross-border transactions by means of our complex and the needs of our clients have diversified capabilities in foreign currencies. grown more diverse, requiring more innovative Furthermore, we are expanding customized bespoke solutions. We continue to leverage our solutions using financial technologies like global client coverage and structured product derivatives, in order to respond to the unique capabilities to provide an extensive range of needs of each and every client. financial solutions. Our clients have recognized our ongoing As tighter capital regulations are imposed and worldwide efforts, and service quality globally, many financial institutions, particularly surveys have shown that our ranking among in Europe, are seeking to raise capital or divest peers is on the rise in markets around the world. assets. Given this environment, we are Equities Capturing even Higher Market Share by Enhancing Service Quality Based on Customer Feedback supporting such clients in order to improve their capital adequacy ratio through various instruments, such as rights issues, CB and Tier 1 capital securities. Nomura’s Equities is structured on a global League Table Ranking (CY2011) scale to respond quickly and accurately to the sophisticated needs of its clients and is able to consistently provide high quality products and services. Our clients can be found in every Japan-related ECM, DCM, M&A: corner of the world and include major institutional Global ECM: investors and asset managers that manage investment trusts and pension assets. We gain an understanding of these clients and their needs through daily communication. We also ask clients to regularly provide feedback on the services we provide, including sales, trading, NOMURA Report 2012 Global M&A: Note: Japan-related DCM represents ranking for fiscal year ended March 2012 Source: Thomson Reuters for ECM and M&A, Thomson DealWatch for DCM 1 10 13 st th th Business for Sustainability Supporting Our Clients to Play a Greater Role in Resolving Social Issues with Financial Services These include JBIC, DBJ and JICA in Japan as well as Kommunalbanken and Kommuninvest internationally. In addition, we also served as a financial advisor as part of our initiative to help public institutions support private sector companies in improving and redeveloping social infrastructure. Nomura supports clients to solve social issues through their business in areas such as clean Sustainable Investing The benefits of Sustainable Investing are to technology and healthcare sectors, by providing both help find solutions for social challenges financial services globally. and earn returns commensurate with the risk of In the clean technology sector, we the broader issue. Nomura acts as a bridge supported the financing for new eco-friendly between investors who want their investments products and technological developments, to benefit society, and the financing needs of which included capital raising for Ceramic Fuel our clients to fund socially responsible projects Cells in Australia and TMO Renewables in the around the world. UK. We also hosted the 8th Nomura Global In February, April and September of 2011 Environment Technology Conference 2012 Nomura underwrote the Green Bonds issued by where we helped to promote collaboration IFC and distributed them to investors through among companies, universities, public agencies, our retail network in which proceeds are set municipalities and financial institutions with the aside for investing exclusively in renewable theme of venture capital support. energy, energy efficiency and other climate- In the healthcare sector, we supported friendly projects in developing countries. In May the financing for new products and technological 2012 we also supported the issuance of ADB developments aimed at people’s health and Clean Energy Bonds, which are used to invest advancements in the medical field, which in a variety of clean energy projects in developing included capital raising for MDxHealth in Belgium countries in Asia. Going forward, we will continue and Vernalis in the UK. We also acted as a to actively promote financial products that help financial advisor for Japanese healthcare resolve social issues. companies looking to expand into emerging countries that have strong demand for pharmaceuticals. These include the acquisition of a Swiss pharmaceutical company Nycomed by Takeda Pharmaceutical and the acquisition of shares in C&O Pharmaceutical Technology of China by Shionogi & Co. Helping Build Social Infrastructure by Meeting the Financing and M&A Needs of Public Institutions Nomura helped public institutions around the world in their fund raising to lend money to or make investments in private sector companies, with the purpose of promoting economic development, industrial growth and exports. ADB Photo Library NOMURA Report 2012 0 Business for Sustainability Responsible Business Citizenship Global Research Nomura: A force in global research The Nomura name has been synonymous with research since our founding. We remain dedicated to offering insightful research and analysis, which is ever more important in today’s uncertain investment environment. With research hubs in key Asia-Pacific markets, including Tokyo and Hong Kong, and in London and New York, we currently have almost 600 researchers in 15 countries and regions globally. Our researchers collaborate closely across regions and disciplines to track changes and spot future trends in politics, economics, foreign exchange, interest rates, equities, credit and quantitative analysis. This extensive network of intellectual capital provides our clients with timely, actionable information. Broad Equity Research Coverage Our research offering is our distinctively broad Award-winning Research Our research consistently receives high industry coverage in equity research. We launched our US recognition. In the 2012 equity research rankings coverage in earnest in October 2010 and have announced by Institutional Investor, we again extended coverage there to key sectors, which ranked number one overall in Japan, while in include financial services, telecommunications, overseas regions we ranked first or second in a technology, and retail. In Southeast Asia, we range of sectors and disciplines including, in have broadened our scope to include Indonesia, Asia ex-Japan, telecommunications, financial Malaysia, and the Philippines in tandem with services and fixed income strategy. In Japan, growing business needs. At of the end of March we topped the Nikkei Veritas rankings for bond 2012, our global equity research coverage analysts and economists and Japanese equity extended to about 2,000 companies across analysts, while in FinanceAsia’s fixed income Japan, Europe, Asia and the US. poll, we jumped to second place overall. In foreign exchange research, our teams have won high marks around the world, placing top in the Institutional Investor rankings in the US, second in Europe, and third in Asia. Growth of equity research coverage Research coverage in Asia 2,000 1,500 1,000 500 0 1,520 394 545 581 1,029 130 296 603 1,940 120 561 1,761 594 581 659 1,958 203 414 765 586 600 576 Americas Europe Asia (Excluding Japan) Japan Philippines 0.4% New Zealand 0.7% Thailand 1.3% Malaysia 4.7% Singapore 6.3% Indonesia 6.3% Taiwan 10.3% 9/2008 3/2009 3/2010 3/2011 3/2012 Note: Excluding Japan (As of March 31, 2012) NOMURA Report 2012 China 28.0% India 16.5% South Korea 13.3% Australia 12.3% High-quality, Timely Research with a Focus on Global Trends We offer timely, clearly presented evaluations of global trends and anticipated developments in reports covering such themes as the risk of a collapse in the euro, the practical application of renewable energy, and corporate governance. Our top-level teams in such specialist fields as geopolitics, economics, interest rates, equities and credit work together to coordinate investment opinions and offer investors high- value-added investment ideas. We observe that the sustainability of companies being considered for investment is increasingly being evaluated in three non- financial areas—environmental, social, and governance (ESG). In North America and Europe, such evaluation is not only a requirement for “responsible investment,” but some investors consider ESG to be a standard for valuing a company’s long-term performance. At Nomura, we have started listing companies’ ESG ratings along with our fundamental analysts’ ratings in research reports with strong environmental themes, such as ones on geothermal power and power grid stabilization measures. We intend to increase the number of ESG-oriented reports and also develop indexes based on ESG information to meet client needs. ESG rating Information for evaluating companies Environmental Nonfinancial information Social ESG rating Governance Financial information Fundamental analysts’ ratings Examples of reports NOMURA Report 2012 Message from CFO We aim to achieve sustainable profitability and growth as Asia’s global investment bank by leveraging our robust financial position and allocating resources more efficiently. Financial institutions currently face a constantly changing operating environment. The sovereign debt problems in Europe continue to heighten market volatility, while the shift to Basel III and other tougher regulations and oversight is gathering pace. Amid this environment, global financial institutions face three challenges: maintaining a healthy balance sheet, enhancing capital to satisfy regulatory requirements, and structuring costs in line with current market opportunities. We anticipated the changing environment and regulatory reforms, and acted swiftly to address the first two challenges. As a result, our financial position is now one of the healthiest and most robust among our global peers. And Last year, we started addressing the third challenge by optimizing our cost structure. Healthy balance sheet We have built a structurally stable balance sheet. As of the end of March 2012, total assets stood at ¥35.7 trillion, shareholders’ equity was ¥2.1 trillion, and our gross leverage was 16.9 times. Highly liquid trading assets that are marked to market on a daily basis accounted for 78% of our total assets. The remainder consists of long-term debt with an average maturity of over six years and equity. We maintain a liquidity portfolio of ¥5.4 trillion, which represents 15% of total assets. We believe this provides us with ample liquidity to respond to changes in the operating environment. Junko Nakagawa Chief Financial Officer NOMURA Report 2012 Sufficient capital The most significant regulatory reform for Nomura is the requirements for Tier 1 common capital that will be phased in from 2013 under Basel III. To ensure we achieve sustainable growth in the new regulatory environment, we have reduced private equity assets and other capital intensive assets. At the end of March 2012, our Tier 1 common ratio under Basel 2.5 was 12.2%, which is more than sufficient to meet the requirements under Basel III next year. We believe our robust financial position is a distinct competitive advantage for Nomura. It allows us to provide liquidity to our clients and offer the products and services they require. Profitability in a changing environment Driven by the shifting market landscape and regulatory reforms, overall industry fee pools are trending down. In response, we started reviewing our cost structure last year and have been working to lower our breakeven point. Although our FY2011/12 return on equity was 0.6% due primarily to the effects of the sovereign debt crisis in Europe during the first half of the year, profits improved in the third and fourth quarters on the back of stronger business momentum and stringent expense management. Fourth quarter net income attributable to Nomura Holdings shareholders was ¥22.1 billion. On an annualized basis, this equates to a return on equity of 4.2%. Shareholder returns Our underlying approach to shareholder returns centers on continually raising shareholder value while also paying dividends. We aim to deliver stable dividends using a consolidated payout ratio of 30% as a key indicator. In determining dividend payments, we take into account a comprehensive range of factors including global regulatory reforms and our consolidated financial performance. Our annual dividend for FY2011/12 was ¥6 per share. With an eye to raising shareholder value, retained earnings are put to use not only for regulatory requirements, but also to invest in our infrastructure and business areas that offer prospects of high profitability and strong growth. Asia’s global investment bank Looking ahead, we expect the environment to remain challenging. As such, we will focus on maintaining our robust financial position, ensuring disciplined cost control, and allocating resources optimally across regions. In doing so, we aim to deliver growth coupled with sustainable profits as Asia’s global investment bank. We are also taking on new initiatives in areas such as agriculture, the environment, and healthcare that fully leverage our extensive network. We believe these efforts to solve social issues through our core business will prove to be a source of competitiveness and earnings over the longer term and will allow us to support the sustainable development of society. NOMURA Report 2012 Chapter II Responsible Business Business for Sustainability Responsible Business Citizenship NOMURA Report 2012 Business for Sustainability Responsible Business Citizenship Corporate Governance Underlying Concept We have determined the Committee System to be the most suitable form of corporate governance for the Company. By separating management oversight functions from the day-to- Nomura Holdings strives for transparency and day execution of business, we have strengthened speed in the management of its operations and oversight and transparency of our management. while aiming to enhance the corporate value of the At the same time, to manage the Company’s group in the medium to long term, we place our consolidated operations with speed, the Board of highest importance on strengthening and further Directors has delegated to the Executive Officers enhancing our corporate governance system. a wide scope of authority for business execution. Upon becoming a holding company and We also believe that, among various our listing on the New York Stock Exchange organizational structures applicable in Japan, (NYSE) both in 2001, we appointed outside the Committee System is most compatible with directors, established the Executive the corporate governance system stipulated in Management Committee (currently the Internal the NYSE Listed Company Manual. Controls Committee), a compensation committee (consisting of a majority of Outside Directors) as well as the Advisory Board (consisting of outside experts) and also took measures to further enhance our disclosure. Further, in 2003, we adopted a committee– based corporate governance system (Committee System) and set up the Nomination, Audit and Compensation committees, each comprised of a majority of outside directors. Board of directors (As of August 1, 2012) Outside directors 64 % (7 of 11) Non-Japanese directors 27 % (3 of 11) Female directors 9 % (1 of 11) Management structure Shareholders’ Meeting Board of Directors Nomination Committee Audit Committee Compensation Committee • Three directors, including two outside directors • Determines the details of proposals on the election and dismissal of directors for submission to a meeting of shareholders in accordance with a set criteria for character, insight, experience, and independence • Directors concurrently serving as executive officers are not members • Three directors, including two outside directors • Audits the execution of duties by the Directors and Executive Officers, prepares audit reports, and determines details of proposals regarding the election, dismissal, and non- reelection of the Independent Auditor for submission to a meeting of shareholders. • All committee members are acknowledged as an independent director as stipulated by the Sarbanes-Oxley Act of 2002 • Three directors, including two outside directors • Determines policy with respect to the particulars of compensation to be paid to directors and executive officers, as well as the individual compensation • Directors concurrently serving as executive officers are not members Group CEO Executive Management Board Deliberates on and determines important management matters, such as the management strategy for Nomura Group, business plans, budgets, and capital allocation Group Integrated Risk Management Committee Deliberates on and determines important matters concerning the integrated risk management of Nomura Group Internal Controls Committee Deliberates on and determines matters concerning the establishment and assessment of internal control of Nomura Group and promoting proper corporate behavior NOMURA Report 2012 Business for Sustainability Responsible Business Citizenship Corporate Governance Board of Directors Internal Controls Our Board consists of 11 directors, of which 7 We are strengthening and improving our internal are outside directors. A director who does not control system to promote proper corporate concurrently serve as an executive officer acts behavior throughout the group from the as chairman. viewpoints of efficient and transparent Nomura places high value on achieving management, legal compliance, risk business oversight from multiple perspectives management, ensuring the reliability of business by diversifying the Board, as well as each and financial reports, and timely and appropriate director’s advanced professional knowledge. disclosure of information. Specifically, each of the seven outside directors Furthermore, in order to ensure effective brings different backgrounds to the table, and appropriate internal controls, we have including nationality, gender and professional established the Group Internal Audit Department, experience. The outside directors’ are playing which is independent from the business lines, an exemplary role in determining important and along with internal audit departments managerial matters and oversight of the established in significant subsidiaries, conducts business, by applying their rich experience in internal audits of the Company and its their respective fields such as business managers, subsidiaries. The Group Internal Audit attorneys, accountants or with government Department acts under the direction of the organizations. We report all seven outside Internal Controls Committee in execution of its directors as independent directors, as stipulated duties. Results of the internal audits are reported by the rules of the Tokyo Stock Exchange. not only to business lines, but also to the Audit Committee and the Audit Mission Director. Internal controls system Internal Controls Committee Audit Committee Audit Mission Director • Four executive officers and senior managing • Three directors, including two outside • A full-time director who does not directors, including the Group CEO directors - One outside director (Chairman of the Audit • Audits the execution of duties by the Committee) - One director (Audit Committee member) • Deliberates on and determines matters concerning the maintenance and assessment of internal control and promoting proper corporate behavior Directors and Executive Officers, prepares audit reports, and determines details of proposals regarding the election, dismissal, and non-reelection of the Independent Auditor for submission to a meeting of shareholders. concurrently serve as an Executive Officer Audit plan approval Report Office of Audit Committee Report • Assists audits by members of the Audit Committee and the Audit Mission Director • Handles administrative tasks for the Audit Committee Report Group Internal Audit Department Internal audits Management Nomura Holdings and subsidiaries Business Risk Management Compliance NOMURA Report 2012 Business Execution The most important matters of business shall be deliberated and decided by specific 1. Align with Nomura values and strategies 2. Reflect firm, division, and individual performance 3. Establish appropriate performance measurement with a focus on risk 4. Align employee and shareholder interests 5. Establish appropriate compensation structures 6. Ensure robust governance and control processes management structures of the Company, including the Executive Management Board, Compensation Policies Applicable to the Board of Directors and Executive Officers the Group Integrated Risk Management The compensation of directors and executive Committee, and the Internal Controls officers comprises base salary, an annual Committee. Each of the management structure bonus, and a long-term incentive plan. The reports to the Board of Directors at least once Compensation Committee has approved the every three months on the status of their following matters related to compensation of deliberations. In addition, we have established directors and executive officers: the Advisory Board consisting of prominent 1. Base Salary experts as a consultative panel to the Executive Management Board. In order to further enhance our business execution framework in the face of increasing sophistication and specialization in the finance industry, we have created Senior Managing Directors (“SMDs”) who receive a delegation of authority from the Executive Officers so that each SMD is responsible for his/her individual business line and operations. Compensation for Directors and Executive Officers As Nomura has adopted a committee system for corporate governance, the Compensation Committee has prepared and approved the Compensation Policy of Nomura Group and Compensation Policy for Directors and Officers of Nomura Holdings, Inc. Nomura Group’s Compensation Policy Nomura has developed our compensation policy for both executives and employees of group to enable us to achieve sustainable Base salary is determined based on factors such as professional background, career history, responsibilities, and compensation standards of related business fields. A portion of base salary may be paid in the form of equity-based compensation with a certain non-exercise period to ensure that the interests of Directors and Executive Officers are closely aligned with those of shareholders. 2. Cash Bonus subjective assessment of Cash bonuses of Directors and Executive Officers are determined by taking into account both quantitative and qualitative factors. Quantitative factors include performance of the whole Group and business division results, while qualitative factors include achievement of individual goals individual and contributions. Depending on the level of bonus payment, a portion of payment in cash may be deferred. In addition, a portion of deferred bonus may be paid in equity-based compensation with a certain non-exercise period in lieu of cash. Such deferred bonus may be unpaid or forfeited under specific circumstances. 3. Long-Term Incentive Plans Long-term incentive plans may be awarded to Directors and Executive Officers depending on their individual responsibilities and performance. Payments under long-term incentive plans are made when a certain degree of achievement is accomplished. Payments are made in equity based compensation with a certain non-exercise period the mid-/long-term that interests of Directors and Executive Officers are closely aligned with those of shareholders. to ensure growth, realize a long-term increase in Please refer to the 20-F. shareholder value, deliver client excellence, compete in a global market and enhance our reputation. Our compensation policy is based around the following six key themes. http://www.nomuraholdings.com/investor/library/ar/ index.html NOMURA Report 2012 Business for Sustainability Responsible Business Citizenship CSR Management Fundamental Approach CSR Activities Promotion Framework We recognize CSR is not only an effective risk The CSR Committee is the management level management tool, but is also a way to identify decision-making entity for corporate social opportunities for our business. Through our responsibility. Chaired by the Group CEO, the involvement, we also aim to contribute to committee comprises of six executive officers developing a sustainable society. We have been and one audit mission director as of September taking steps to strategically analyze the impact 2012. The Corporate Citizenship Department of the group’s business processes on the serves as its secretariat and spearheads environment, community and society as part of inclusive and effective CSR activities. The our management decision-making. Corporate Citizenship Department also works The core role of any financial institution is to closely with the business divisions globally to contribute to the sustainable development of the ensure a consistent and proactive approach to economy and society by promoting sound capital their community affairs activities in line with markets through providing its products and the needs of the local community as well as services. In March 2010, we established “For their operations. Future Generations,” which represents our goal across the entire Nomura Group to support the next generation. We engage in our business and community affairs activities in line with this goal. For Future Generations To ensure our business goals are aligned with providing positive contributions to our stakeholders and the communities where we operate. We create opportunities for a sustainable future, making sure that the decisions we make today support the success of future generations. Citizenship To build relationships of trust with local communities, society and stakeholders as good corporate citizens. Business for Sustainability To provide innovation through our products and services to deliver long-term solutions for the changing needs of clients and society. Responsible Business To build value for clients through responsible businesses practices which respond to client needs. NOMURA Report 2012 Communication with Stakeholders Our communications with external stakeholders take the form of information dissemination via reports and our website, in addition we undertake stakeholder dialog We believe internal and external communications sessions and interactive communication via are important mechanisms to showcase our social media, such as our official Twitter account business and community activities to ensure and Facebook pages. we are addressing the expectations of our In fiscal 2011, we received important external stakeholders. feedback from stakeholders regarding our We strive to raise awareness and educate business and community affairs activities (see our employees on corporate social responsibilities pages 12 and 48). We also rolled out business through messages and information on CSR and community affairs activities for the local provided by senior management through our community that reflected the voices of intranet system. This is based on our belief that stakeholders and clients as part of our assistance it is essential for employees, who engage with to the earthquake and tsunami reconstruction various stakeholders, to take the lead role in effort (see pages 20, 24, and 54). implementing CSR activities. Organizational structure CSR Committee Chairman: Group CEO Secretariat Corporate Citizenship Department Strategy Responsible Business Key issues Goals Corporate Governance Enhance medium to long-term corporate value by ensuring timely decision- making and strong oversight of management using a diverse group of directors Compliance Identify and appropriately address compliance risks that are highly relevant to our business Risk Management In addition to market and credit risk management, identify and appropriately address the indirect impact of our business on the environment and society CSR Management Take steps to strategically analyze the group’s impact on the environment and society as part of our management decision-making, social contribution activities, and business processes Japan AEJ EMEA Americas Progress in fiscal 2011 p. 36 p. 43 p. 41 p. 39 Client Focused Maintain client trust to create added value pp. 19, 23, 29 Business for Sustainability — Actively engage in businesses that contribute to addressing social and environmental challenges pp. 19, 24, 30 Community Investment Promote community affairs activities that meet the needs of sustainable development in each community Citizenship Diversity & Inclusion Promote global initiatives on personnel development as well as diversity and inclusion Environmental Footprint Identify the environmental impact of our operations and pursue initiatives for reducing such impact p. 51 p. 55 p. 59 NOMURA Report 2012 0 Business for Sustainability Responsible Business Citizenship Risk Management Fundamental Approach include Nomura’s risk appetite, risk tolerance criteria based on the management strategies, goals and financial grounding of the entire group. In order to achieve the risk management Our business activities are inherently subject to market risk*1, credit risk*2, operational risks*3 such as administrative risk and system risk, and framework set out above, Nomura’s risk management departments around the world work together with the Chief Risk Officer (CRO) risks resulting from other factors. Managing to build a Group-wide risk management these risks is an integral part of management’s framework and manage this in an integrated responsibilities to secure financial health as well way using stress scenario analysis and other as to help maintain and expand corporate value. means. Each business department has also Guided by senior management’s proactive strengthened its risk management practices on commitment to risk management, our risk a variety of levels in order to maximize revenues management framework and governance structure from trading activities without deviating from are intended to provide comprehensive controls, Nomura’s predetermined risk appetite. monitoring and reporting on a global basis. Nomura’s Internal Audit Department Risk Management Structure operates independently from other departments in the organization and strives toward enhancing the effectiveness of internal control, including our risk management structure, and it makes proposals and recommendations for operational The Nomura Group’s Executive Management improvements based on the evaluations of the Board has delegated to the Group Integrated Risk Management Committee*4 the authority to deliberate and make decisions on key issues related to integrated risk management. These effectiveness and validity of risk identification and risk management practices. For more information, please see: http://www.nomuraholdings.com/investor/library/ *1 Market risk: potential loss in the value of an asset resulting from changes in market prices, rates, indices, volatilities, correlations or other market factors *2 Credit risk: risk of losses arising from the decrease of asset values (including items) off-balance sheet due in creditworthiness or default of an obligor or counterparty to deterioration *3 Operational risk: risk of losses arising from inadequate or failed internal processes, people and systems or from external events *4 The Group Integrated Risk Management Committee is chaired by the Group CEO and comprised of the Group COO, business division CEOs, the Chief Risk Officer, the Chief Financial Officer, the Executive/ Senior Managing Director responsible for the Corporate Office, the Group Compliance Head, the Chief Legal Officer and the Deputy CRO Risk management structure Report Board of Directors Executive Management Board Group Integrated Risk Management Committee Group Internal Audit Department CFO CRO Risk Management Departments Audit Report Check Individual Business Units • Market risk management • Credit risk management • Operational risk management • Other NOMURA Report 2012 Social and Environmental Risk Management policy, we constantly implement measures to prevent crises, and in the event one should occur, this policy clarifies the organizational structure that will ensure we are ready to take We believe that advancing the management of prompt and appropriate action. our reputational risks is possible by broadening Specifically, the Nomura Group Crisis our scope beyond legal compliance to effective Management Committee, which is chaired by control of social and environmental risks that an executive officer nominated by the Group may arise from various transactions. In this CEO and comprised of crisis management officers regard, we have strengthened our risk of each group company worldwide, has been management structure. established to confront crises as they occur. For example, when executing underwriting In addition, the committee’s secretariat deals, we review and confirm the issuer’s maintains our ability to confirm the safety of all of awareness of any potentially associated risks to our employees and their family members in any society and the environment and that the issuer emergency situation through ongoing efforts to has taken appropriate steps to address such foster employee awareness of crisis management, risks, including the disclosure of information including regular drills, business continuity about those risks. Impact on the environment procedures and crisis management training. and society, as well as the financial condition and results of operations, and other aspects, are included in the overall guidelines applied by Strengthening Our Response to Disasters We have been stepping up our preparedness relevant departments during the assessment for major disasters following the lessons learned process as vital items that must be confirmed from the earthquake and tsunami disaster that when taking on underwriting deals. struck Japan in March 2011. In FY 2011/12, we Assessment process Assessment of transaction Decision • Regulations • Environmental and social issues Crisis Management focused efforts on the following initiatives. 1. Upgrading of communication methods • Deployed satellite phones, wireless radio system and other communications equipment • Enhanced employee safety confirmation system • Improved public address system in the head office building 2. Reinforcement of emergency supplies • Expanded stored supplies of water and food • Established area-by-area strategy an for emergency supplies • Distributed emergency kits to all employees 3. Implementation of earthquake-resistance measures • Fixed furnishings and fixtures in place We established the Nomura Group Crisis 4. Creation of evacuation methods and procedures Management Policy in 2005 to mitigate damage and quickly restore operations from natural disasters or fires in Japan and overseas. This policy covers a wide range of risks facing the company, including natural disasters, fires, serious crimes committed by the company or its executive officers or employees, system interruptions, transmittable diseases and the divulgation of information assets. Based on this • Distributed disaster card that specifies our initial response procedures for a disaster 5. Revisions to rules and manuals • Shifted decision-making authority in a disaster to (department and branch onsite supervisors office heads) NOMURA Report 2012 Business for Sustainability Responsible Business Citizenship Compliance Fundamental Approach compliance-related issues under the direction of the Head of Group Compliance. Compliance is a top management priority for Nomura Securities’ Compliance Structure In addition to group-wide initiatives, Nomura the Nomura Group, and the Nomura Group Securities has also established a Compliance Code of Ethics represents our fundamental Program as a detailed action plan and put into place policy on compliance. a compliance framework based on this program. Compliance Framework A Compliance Committee chaired by the President oversees company-wide initiatives and is in charge of establishing and deliberating on important issues related to internal controls. In addition, the company has assigned an Internal We work to eliminate behavior that could result Administration Supervisor to monitor compliance in legal or regulatory violations. Should such issues and set up the Compliance Division. suspicions arise, corporate structures and The Compliance Division strengthens and systems have been put into place to effectively improves legal and regulatory compliance as handle them, including the prompt delivery of all well as the internal controls system by related information without exception to formulating internal rules and disseminating management. them throughout the company. It also monitors Specifically, we have appointed a Group the status of compliance with respect to these Compliance Head to oversee compliance for rules at each department and branch office. the group as a whole along with a Group Should any problems arise, the division takes Compliance Department that provides support. remedial action such as increasing awareness A Wholesale Compliance Head has also been of the rules or revising them as needed. designated to strengthen our internal controls due to international business expansion. Compliance Officers are also assigned to each group company, including overseas offices, to develop and maintain their respective compliance structures and report on Compliance framework Nomura Holdings Board of Directors Audit Committee Executive Management Board Group Compliance Head Direction Report Wholesale Compliance Head Direction Report Group Compliance Department Direction Report Compliance Officers Direction Report Departments Nomura Group companies NOMURA Report 2012 Nomura Securities’ Primary Initiatives • Protocols for preventing money laundering, including reporting of suspicious identification and the transactions • Protocols for eliminating all transactions associated with criminal or unethical organizations or activities in violation of applicable laws, such as not allowing organized crime groups to participate in trading with Nomura Securities • Managing conflicts of interest and insider information from a global perspective by concentrating information in the Group Compliance Department Compliance Hotline Employees in Japan who have become aware of potential legal or regulatory violations are able to directly report their concerns to staff designated by Nomura Holdings through the Compliance Hotline. Information can be provided anonymously, and employees have been informed that systems are in place to ensure that individuals who give their name when reporting violations will not suffer any negative consequences. Compliance Training We conduct comprehensive compliance training protection of clients’ personal information and other information assets of the group. Each for all executive officers and employees on company in the group maintains its own topics such as the prevention of money supplemental rules based on this policy and laundering and insider trading, firewall endeavors to strengthen its management regulations, and guidelines for managing systems by disseminating these supplemental customer information. rules and ensuring full compliance by all Examples of Nomura Securities’ Initiatives • Training for operating officers, internal controls officers, and employees of internal controls departments, as well as quality improvement training for securities sales representatives • Training for branch managers, general administration managers, new employees, newly appointed managers and others, aimed at increasing knowledge and deepening the understanding of compliance • Supplementary compliance education and drills during various training sessions and meetings • Training for Compliance Officers • Monthly Compliance Hour at branch offices and departments Fair Business Practices executive officers and employees. Information Security Management Structure We have established the Nomura Group Information Security Policy in order to ensure the presence of a rigorous structure for managing information assets. The Nomura Group Information Security Committee was also established to deliberate key information security issues, and the committee has developed a system for reporting as necessary to the Group Management Committee. In addition, all department and branch office heads of Nomura Holdings, Nomura Securities, Nomura Asset Management and The Nomura Trust & Banking serve as Nomura Securities seeks to enhance the quality Information Security Managers as well as of financial products offered to customers through personal data controllers as defined by the the following initiatives under the Guidelines for Financial Services Agency. They are responsible Financial Instruments Business Supervision. for the security and proper management of information assets handled by their work area and for properly providing employees and staff with advice and guidance. Customer-related personal information is handled under stringent standards set out in the Nomura Group Privacy Policy and other information security-related rules, and in full compliance with personal information-related laws and regulations. For more information, please see: http://www.nomuraholdings.com/policy/privacy.html Examples of Nomura Securities’ Initiatives • Appointing officers internal controls, to oversee compliance, etc., and developing systems to ensure compliance and the appropriateness of operations • Thoroughly screening account openings and conducting proper examination when underwriting securities • Carefully reviewing product details and taking action to provide accurate and comprehensive information • Conducting sales and solicitation activities in compliance with the Financial Instruments and Exchange Act and laws and regulations governing each operation with an overall understanding of the customer’s knowledge of financial instruments and financial conditions • Ensuring thorough compliance with laws, regulations and internal rules through compliance training Information Security The Nomura Group Information Security Policy is the basic document governing the effective NOMURA Report 2012 Business for Sustainability Responsible Business Citizenship Restoring Trust and Credibility On March 21, May 29 and June 8 of this year, the Securities and Exchange Surveillance Commission recommended orders for administrative monetary penalties against certain entities for insider trading. On findings that these entities had received inside information from Nomura employees, an Investigation Committee of external attorneys commissioned by Nomura has conducted an extensive investigation to identify the facts and analyze the causes of these incidents. On June 29, we released a report from the Investigation Committee on problems found in the management system for corporate- related information and institutional investor sales at Nomura Securities as well as on preventative measures. We also announced improvement measures at this time. On July 26, we released an additional internal report based on the findings of the Investigation Committee and in conjunction with a report on the implementation status of the improvement measures. On August 8, Nomura Securities submitted a report on the following business improvement measures as well as progress it has made to Japan’s Financial Services Agency in accordance with the business improvement order issued on August 3. We established an Improvement Measures Implementation Committee to monitor the implementation of improvement measures. The committee reports directly to the President of Nomura Securities, Koji Nagai, and includes the company’s Internal Control Supervisory Manager, Shoichi Nagamatsu, as well as relevant executive officers and department heads. Going forward, we will continue to further enhance our internal controls by continually conducting self-led inspections and investigations while working to prevent similar incidents and regain the trust of the capital markets by thoroughly implementing improvement measures. • Re the Securities and Exchange Surveillance Commission’s Recommendations: Report of the Committee’s Investigation and Nomura’s Proposed Improvement Measures (News Releases) http://www.nomuraholdings.com/news/nr/holdings/20120629/20120629_b.pdf • Re: Status of Progress of Improvement Measures concerning the Securities and Exchange Surveillance Commission’s Recommendations and Additional Investigations (News Releases) http://www.nomuraholdings.com/news/nr/holdings/20120726/20120726_b.pdf Outline of Improvement Measures 1. Enhancement of the control system for Corporate-related Information • The newly established “Equity Administration Department” shall monitor call recordings, use of e-mails and online chats, and use of entertainment expenses by the employees in the departments in charge of institutional equity sales. • It shall be the responsibility of the Equity Administration Department to prepare for public offerings, thereby not allowing salespeople to interfere with such matters. This process shall prevent Corporate-related Information from being inferred by the salespeople. • The employees in the departments in charge of institutional equity sales shall be provided with mobile phones with a recording function, and the use of such mobile phones shall be required. The use of private mobile phones for business purposes shall be prohibited. The retention period for call recordings (both the office phones and the mobile phones) for the departments in charge of institutional equity sales shall be two years. • The employees in the departments in charge of institutional equity sales shall be prohibited from making any inquiries regarding Corporate- related Information to analysts or to private-side departments* such as the Syndicate Department. • Inadvertent dissemination of information that may suggest Corporate- related Information shall be prevented by limiting the users of chat functionalities to those approved by the Equity Administration Department and by restricting what could be communicated in online chats. • The transfer of information that is clearly recognizable as Corporate- related Information as well as any information that may suggest Corporate-related Information shall be prohibited by internal rules. * “Private-side departments” means those divisions at an operational level that have a high likelihood of contact with corporate-related Information 2. Improvement of personnel management system • In performance appraisals, “Business Ethics/Compliance” shall be emphasized as an important assessment criterion to be ranked equal to “Achievement and Result” and “Potentiality.” • In reviewing our compensation scheme, (1) the qualitative assessment of business ethics shall be given more weight in the promotion criteria, (2) the year-end assessment/compensation (bonus) shall reflect the qualitative assessment, and (3) guidelines concerning the reduction or clawback of deferred compensations on the ground of receiving a disciplinary action in connection with a breach of compliance rules and policies shall be prepared. • The category of employees for whom the passing of the Japan Securities Dealers Association’s “Internal Administration Supervisor Qualification Examination” is a prerequisite for promotion to the manager grade level shall be expanded. • Compliance and ethical values shall be emphasized in the firm’s recruitment process. In conducting aptitude checks, further emphasis shall be placed on “White-collar crime” and “Leakage of information” among wrong-doing tendencies and in conducting interviews, the interviewee’s compliance awareness shall be evaluated. 3. Imbuing of business ethics • All officers and employees shall be required to attend a mandatory group training session on business ethics once a year. In addition to the annual training session, the employees in charge of institutional equity sales shall be required to attend a semi-annual training session on business ethics. Through these training sessions, each employee shall be made fully aware that any breach of laws and regulations would result in severe disciplinary action and that a history of disciplinary action would affect future performance appraisals and/or promotion decisions. • The employees of the departments in charge of institutional equity sales shall submit semi-annually a declaration of compliance relating to such topics as information control and the prohibition against insider trading. • All employees shall be reminded that, in the event that one notes any questionable matter suggesting a lack of compliance, he/she should actively report it to the Compliance Hotline. • By drawing up guidelines prescribing the use of entertainment expenses, restrictions shall be imposed on certain entertainment and gifts, and excessive concentration on particular clients shall be prohibited. The expense auditing by the Inspection & Examination Department shall also be reinforced. Inappropriate use of entertainment expenses shall be subject to severe disciplinary action. NOMURA Report 2012 Code of Ethics and Compliance Nomura Group established a Code of Ethics in March 2004 that covers all of its executives and employees around the world. Every year each of our executives and employees must renew their pledge to abide by the Code of Ethics. Employees with divisions at an operational level that often come into contact with corporate-related information and confidential information are required to sign a confidentiality pledge twice each year. Our personnel management also places emphasis on compliance awareness and professional ethics. At the time of hiring, the compliance awareness of all prospective employees, regardless if they are new graduates or mid- career hires, is carefully scrutinized. Professional ethics and compliance is an important indicator for personal evaluations for performance assessments or job transfers after joining the company. Our executives and employees always set their challenges related to professional ethics and compliance as part of the issues they plan to address determined at the outset of each fiscal year. If problems are found, the assessor provides proper guidance and reflects evaluation results in their pay scale. See pages 43 and 44 for more on our compliance system. Visit our corporate website for more on the Code of Ethics. http://www.nomuraholdings.com/company/basic/ Reinforcing our commitment to compliance and professional ethics I would like to share my thoughts on the problems that would ever occur if we just automatically followed the came to light regarding inside information being shared by rules. The Improvement Measures Implementation our employees in relation to public offerings. I would also Committee has already reviewed our systems and like to convey the measures that we are taking to prevent practices and will take steps to continually reinforce our this from occurring again. internal controls and improve our self-discipline. I believe First, all of our executives and employees must that we must build a more effective information recognize that these incidents are not merely a problem management system and ensure that all of our employees related to certain departments and employees, but rather understand and follow this system. We also need to they should be seen as a company-wide issue. Under the increase the severity of disciplinary action and make our challenging business environment since the spring of compliance hotline more known to our employees so they 2009, Japan has seen a number of large equity finance can use it to report violations. I will continue to ensure that transactions. We served as a lead underwriter on many of we take measures to not forget what happened and how these deals and our employees engaged in both we respond. underwriting operations and primary and secondary sales. As a market leader, our responsibility to society can The fundamental problem behind these incidents is that as be found in our efforts to help ensure the fair operation and capital market professionals we failed to see the unusual development of Japan’s capital markets. I will make certain events that occurred in the market during this time as a that our entire company works together in order to raise problem. I believe that everyone at Nomura Securities our awareness of this responsibility, establish a high should have thought for themselves and pointed out anything standard of professional ethics, regain the trust of public, they felt was not right. We should have worked harder to and contribute to the sound development of Japan’s ensure the sound operation of Japan’s capital markets. capital markets. The second problem I would like to address is our compliance practices. We have taken pride in the fact that our compliance system is one of the most stringent in Japan and is backed by clearly defined rules. However, this pride may have made us believe that no problems Shoichi Nagamatsu Representative Executive Officer Compliance Division and Corporate Planning Nomura Securities Co., Ltd. NOMURA Report 2012 Chapter III Citizenship Nomura Group in Chapter III refers to the Nomura Group without Nomura Land and Building Co., Ltd. (NLB) as well as the company that became a consolidated subsidiary through the acquisition of shares in NLB by Nomura Holdings, Inc. The same applies for Key Facts related to CSR on p. 65 - p. 68. NOMURA Report 2012 Business for Sustainability Responsible Business Citizenship Stakeholder Dialog Responding to the Voice of Society Case 1 Financial Literacy Programs in Japan The Nomura Group was among the first in the industry to begin offering financial and economics education programs for youth. These include courses for college students that began in 2001, lectures for elementary and junior high school students, and our sponsorship of the Nikkei Stock League Contest for junior high school students through to college students. Since their inception, more than 500,000 participants have taken part in these programs. We sat down with stakeholders from both inside and outside the company to discuss the future of our financial and economics education programs. Challenges Related to Financial and Economics Education in Japan Nagasawa: If asked why we need financial and economics education, I would respond that we need to use this as knowledge in order to have a better quality of life. This education should be provided from the elementary school level, and I believe it is too late to wait until later in life when someone finally begins to realize the need for asset building. Moreover, consumers must be better educated under the premise that more trustworthy financial products be provided to the market. Takahashi: Financial and economics education has recently been included in government guidelines on school curriculum, and teachers’ mindsets have also changed from viewing finance and economics as a subject that should not be taught to one that is integral in today’s educational curriculums. It is important to continually deliver a strong message that in order to build a sound society it is necessary to cultivate sound companies. This is because many of the companies at which students will work in the future have grown thanks to investment. What Role Should Nomura Play Nagasawa: During times when society must change, finance is the field that helps change major social frameworks and lead to new innovation. Finance also helps new companies grow and in this regard investment plays a major role in forming a sustainable society. Since a certain level of professional knowledge is necessary to teach finance and economics, the financial institutions should provide knowledge and personnel to schools. However, marketing and education are two different things, so I would like Nomura to recognize the need to maintain a neutral stance in the classroom. Takahashi: I would like Nomura to be involved in financial and economics education from the standpoint of cultivating Japan’s future leaders. The other day my students and I were invited to attend the Nikkei Stock League Contest’s networking session*. Students appeared to be inspired by the words of Nomura employees. I hope Nomura continues to provide this type of stimulus. Also, I’d like Nomura to develop a stronger interest in training teachers involved in financial and economics education. Koike: Mr. Takahashi mentioned that the goal of financial and economics education is to build a better society. I believe the securities industry shares this same goal for the future. I’m in charge of training programs and find that employees are motivated by the fact that they can make the future of Japan and society in general better through investment. Yet, unfortunately, I feel most people in Japan tend to view investing as simply a way to make money. Financial and economics education will play an important role in conveying the true function of investment. Toh: Our branch offices are involved with financial and economics lectures provided in classrooms and I, too, have had the chance to be a lecturer at an elementary school. We also receive similar requests from schools outside this program and the opportunity for frontline staff to make contributions to the local community gives them a stronger sense of purpose. I believe that our employees’ involvement in financial and economics education, where they play a role in conveying the role of investment and brokerage houses, will directly contribute to the growth of the Nomura Group. * The Nomura Group has served as a special sponsor of the Nikkei Stock League Contest, a stock education competition held by the Nihon Keizai Shimbun, Inc., for more than a decade. The networking session held for the winning team and Nomura employees involves a presentation by students and Q&A session for employees. Yumiko Nagasawa Executive Director, Foster Forum Member, Financial System Council, FSA Katsuya Takahashi Tokyo Metropolitan Oshukan Secondary Education School Executive Director Civics and Social Studies Research Society Rumi Koike Human Resource Development, Retail Strategy Department Nomura Securities Yuichi Toh Sales, Koishikawa Branch Nomura Securities NOMURA Report 2012 Business for Sustainability Responsible Business Citizenship Stakeholder Dialog Responding to the Voice of Society Case 2 Initiatives to Address Youth Unemployment in the UK The UK’s youth unemployment rate stands at its highest level in the last 25 years, while London has seen its population of NEET (Not in Education, Employment or Training) between the ages of 16 to 24 jump to an estimated 120,000. The Nomura Group’s London Office is working to address this issue together with a local NPO as part of its philanthropic activities. Stakeholders from both inside and outside the company came together to discuss the topic of youth unemployment and Nomura’s initiatives. Major Societal Issues in London Tyler: The key issues within the region and specifically urban centers are around disengaged youth, unemployment and lack of social mobility. The problems of youth unemployment stem from a variety of reasons but all contribute to creating a lost generation of talent and holding young people back from fulfilling their true potential. Nomura’s Initiatives to Address These Issues Rahman: Through working closely with Tower Hamlets Education Business Partnership and funding, through The Nomura Charitable Trust our ‘Passport to Employability’ program, Nomura is committed to engaging with young people before they reach the NEET stage. The program is designed to familiarize and prepare young people for the world of work and help to raise their aspirations and confidence levels. Harte: Some of the neighborhoods adjacent to Nomura’s office in London face very high levels of deprivation, so all our community affairs activities support the most vulnerable in society. However, Nomura alone cannot resolve all the social issues that are present in our local communities, but through developing strong partnerships with the voluntary sector, Nomura is making a positive difference to those most in need. In addition, by working closely with peers in the financial sector, we have identified streams of our giving so we can maximize the impact we are making. For Nomura, this includes addressing the aspirations, attainment and employability of disadvantaged young people. Leveraging the Skills and Professional Knowledge of Nomura Employees Harte: We know that to make a significant contribution to the voluntary sector, our involvement needs to extend beyond just financial contributions. Our diverse workforce in London has a wide range of skills, expertise and knowledge that can be used to inspire a generation of disadvantaged young people to help them reach their full potential and achieve their goals. Across the organization frequent workshops and activities that support the employability potential of young people take place at Nomura, including mock interviews and CV writing. Nomura employees help break down barriers and change misconceptions about working in the City of London through advice, support and guidance to the young people. Amrani: I attended Oaklands Secondary School (one of Nomura’s UK school partners) before gaining employment at Nomura. Working for Nomura now, I was keen to give something back to my local community and as such joined one of the school partner schemes at Oaklands Secondary School where I visited the school every two weeks to work with a small group of students during their lunch hour. Subsequently to this I took up a mentoring role with a young student at the school who now has expressed an interest in the graduate scheme at Nomura. Mike Tyler MBE Director Tower Hamlets Education Business Partnership Imdadur Rahman ‘Passport to Employability’ Project Manager Tower Hamlets Education Business Partnership Anthony Harte Head of Community Affairs EMEA Nomura International PLC Sofian Amrani Finance Division, Nomura International PLC former Oaklands Secondary School pupil NOMURA Report 2012 Case 3 Initiatives to Help Lesser Privileged Children in India Despite its rapid economic growth, India is still faced with serious poverty issues. Although the poverty rate is higher in rural parts of the country compared to urban areas, cases of extreme poverty are said to be most prevalent in cities. India also faces the problem of high primary education dropout rates. The Nomura Group’s Powai Office and NGO partners engaged in these issues sat down to discuss their activities. Issues Facing Education in the Local Community Manvi: The underprivileged in Mumbai are mainly slum dwellers, who are illiterate immigrants from different parts of India. They are unable to provide education to their children; some families have low income and lack of work, so instead of sending their children to school, they are sent to work. The female child dropout rate is high as girls are expected to share the burden of child care and housework. These children lack adequate role models to motivate them toward gaining education. Sanaa: The conditions they live in can hamper their access to education, despite the availability of free primary education. The valiant efforts made by the government, municipal corporations and the NGOs are not very effective as the issue of school drop-outs and non-enrollment continue to plague our society. Nomura’s Assistance and Its Effect Natasha: We would like to address the developmental needs of the underprivileged children supported by our NGO partners by focusing on increasing the reach of our volunteer led programs like Spoken English, Saturday Club, Computer program and Drop out remedial program, and Extend support to more communities by associating with some more NGOs. Ruby: We measure the impact of our community affairs initiatives in the area of education by measuring the number of children supported through our initiatives, the number of volunteers, the volunteer hours, funds raised through initiatives. In addition to those we recognize that fostering innovations are required for new activities to address an unserved need or an existing need in a better way. Leveraging the Skills and Professional Knowledge of Nomura Employees CSR Volunteers: Through various community affairs initiatives we leverage the employees’ skills and their ability to make positive contributions to the community. Currently our volunteers are using their knowledge and skills to teach underprivileged children basic computer skills, spoken English, mathematics and science. Sneha: Many volunteers lead these initiatives and are able to put their leadership and organizing skills to use. Our volunteers form a relationship of trust and mutual respect with the children they support wherein the children look up to them as role models. Natasha: For employees, deploying their skills, time and effort to give back to the communities gives them satisfaction through the positive contributions they make. Volunteering is a platform that allows employees to support and work closely with various NGOs. It involves going out into the communities, teaching, participating in meaningful activities, volunteering in the pediatric wards and old age homes or merely spending time with the underprivileged children and women. This encourages and fosters teamwork and bonding among our employees, as they spend time with each other in activities toward a common cause, which are also outside of the work environment. Manvi Singh Program Head, Vidya Sanaa Shaikh Director, Education and Donor Relations, Aseema Charitable Trust Sneha Senapati Program Manager, Udaan India Foundation Natasha Mathur Head of Recruitment, L&D, D&I and CSR, Nomura, Powai Ruby Lahir CSR Lead, Nomura, Powai CSR Divisional Representatives •Devina Malik •Santosh Huprikar •Sonal Patnaik •Darius Rastagiri CSR Volunteers •Ajith Menon •Ankush Agrawal •Kirk Fonseca •Vipul Bhardwaj NOMURA Report 2012 0 Business for Sustainability Responsible Business Citizenship Our Community Fundamental Approach Initiatives in Japan Nomura’s initiatives in Japan mainly focus on financial and economics education programs and the Pacific Music Festival (PMF) aimed at Under its goal of “For Future Generations,” the developing the next generation. We also work Nomura Group participates in dialog with its to resolve social issues through participation in stakeholders and gets involved with a wide range community activities, relief assistance to of social action programs around the world disasters worldwide and our financial services. through its business operations and as a member of the local community. In order to achieve Financial and Economics Education Programs sustainable development in society for future Nomura believes that knowledge of finance generations, we actively promote employee- and economics is crucial not only for building driven activities in the areas of education, adequate wealth but also for the sound, community affairs and environmental protection. long-term development of the capital markets. In the important field of education, Since the 1990s, we have provided financial employees actively participate in activities such and economics education for students as well as financial and economics education programs, as adults. Our involvement spans the distribution basic education in developing countries and of textbooks for elementary, junior and senior employment assistance to youngsters. As part of high school students to financial lectures, and our community affairs, Nomura works as a whole financial courses for university students to resolve various social issues through different worldwide, and employee-led programs for events, support of regional health and welfare- elementary, junior and senior high school related programs and environmental conservation students, and a stock education contest for activities. These initiatives also provide an junior and senior high school and university opportunity for our employees to grow. students through the Nikkei Stock League. See our website for details. Breakdown of community contribution expenditure http://www.nomuraholdings.com/csr/citizenship/ society/education.html Community-based Activities Our more than 170 branches and offices in Japan contribute to local communities through sponsorship of regional events and social activities, and other employee-driven community affairs activities. In fiscal 2011, employees also took part in charity marathons and local festivals, Education 48.2% Total ¥1.2 billion Arts, culture and sports 8.7% Science and academic achievement 6.5% Other 6.5% Disaster relief 5.8% Human rights and labor 0.2% Environment 3.5% Welfare and health 4.0% Community contribution 16.5% Notes: 1) Total expenditure worldwide (Fiscal 2011) 2) Figures includes: - Approximately ¥230 million from the Nomura Foundation - Approximately ¥80 million from the Nomura Charitable Trust - Approximately ¥20 million from the Nomura America Foundation NOMURA Report 2012 Over 200 employees and their families took part in the Nihonbashi Bridge Cleanup Event regularly visited orphanages and assisted in volunteers visit an NGO and teach various community clean-ups. Initiatives in AEJ In AEJ, our Community Affairs Network conducts subjects to children aged six to eight. A spoken English program prepares pre-college students, and a remedial program helps young girls who have left school and taken up menial jobs to volunteer activities aimed at resolving issues add to their family income. The volunteers raise related to the environment and children based awareness about alternate careers and help the on community needs. In March 2012, the girls develop vocational skills in arts and crafts Network launched a two-year partnership with and acquire a basic understanding of HandsOn HK, an NGO working with local mathematics and English. charities to develop volunteer programs and to recruit, train and manage volunteers for these projects. The initiative focuses on children, the Initiatives in EMEA Our community affairs program in EMEA focuses elderly, people with disabilities and animal welfare. on supporting disadvantaged young people in In Powai, we partner with NGOs to the local communities in which we operate. Our implement programs in four areas— approach is to help young people break through environment, education, fundraising and the limitations of their environment and raise employee engagement. Our emphasis in 2011 their aspirations. Like initiatives elsewhere, we was on employee engagement and education partner with charities and local community as we worked to raise awareness in our offices organizations to provide the financial of key issues facing local communities. We try contributions as well as the variety of skills and to address these issues through employee expertise of our employees required to deliver initiatives and structured forums and events. the most meaningful and sustainable results. Lead Sponsor for the Hong Kong International Costal Cleanup Challenge Rainbow Trust Partnership (2011–13) Nomura’s London Charity Partner, Rainbow For the third consecutive year, Nomura Trust, provides emotional and practical support International Limited (Hong Kong) was the lead to families who have a child with a life-threatening sponsor of the Hong Kong International Coastal or terminal illness. Over the last fourteen months, Cleanup Challenge (HKICCC), a two-month 697 employees have helped raise more than event organized annually by the Ocean £310,000. The money will fund a brand new Conservancy. It is the world’s largest central London team of support workers to help environmental volunteer effort, comprised of half families in need. a million people from over 100 countries. This year’s program attracted 11,912 participants Oaklands Secondary School (Volunteering) who removed 47,942kg of waste from over The partnership between Oaklands Secondary 170km of local beaches in Hong Kong. Over School in London and Nomura has been in 160 Nomura volunteers spent a day cleaning the existence since October 2008. The partnership Suk Kwu Wan beach on Lamma Island. is firmly rooted in the daily operations of the bank, through seven volunteer schemes, welcoming students into our offices and hosting work experience placements. Education Programs for Children Supported by Our Partner NGOs The Powai office partners with NGOs that support underprivileged children while employee volunteers work with them on educational initiatives. At a Saturday club program, Nomura NOMURA Report 2012 Business for Sustainability Responsible Business Citizenship Our Community Initiatives in the Americas Our community affairs program in the Americas supports international exchanges to foster US– Japan cultural, educational and economic ties. Foundations Employee volunteers also provide help based Nomura Foundation (Japan) on community needs. Japan Day 2011 The Nomura Foundation is a public benefit foundation established in April 2010 through the merger of Nomura Foundation for Social Science, Nomura Holding America Inc. (NHA) sponsored The Nomura Cultural Foundation and Tokyo Club the fifth annual “Japan Day @ Central Park” in Foundation for Global Studies. Its goals are to New York on May 22, 2011. In light of the March advance academic research in Japan, the world 11 disaster in Japan, the festival’s theme was economy and arts and culture, fostering “Ganbare! Japan!” (“Don’t give up, Japan”). international talent and encouraging international Events included cultural workshops and understanding. The foundation extends grants demonstrations, and a special appearance by for the social sciences, awards scholarships to Hello Kitty. foreign students, and supports global economic The festival builds bridges of cultural research and arts and culture. See our website understanding between the two countries and for details. facilitates stronger grassroots connections http://www.nomurafoundation.or.jp/en/ within the local Japanese community. Initiatives by INSTINET INSTINET INCORPORATED supports a range The Nomura Charitable Trust (UK) The Nomura Charitable Trust was established in 2009 to improve the lives of disadvantaged of charitable organizations globally, primarily young people who need assistance in London directing aid to healthcare and educational and across the region. The trust focuses on initiatives. The Nomura subsidiary encourages raising educational attainment, employability employee participation in its charitable potential and aspirations of disadvantaged endeavors, with staff nominating most young people. In 2011, nine grants were beneficiary organizations. awarded, supporting more than 8,000 young people across the region. Elevate New York Mentoring Partnership Since early 2011, Instinet employees have mentored Bronx high school students through Nomura America Foundation (US) The Nomura America Foundation awards grants the Elevate New York program, aimed at building to organizations for charitable, scientific, literary long-term, life-changing relationships between and educational purposes. The foundation urban youth and professionals. Participating supports a variety of large and small Instinet employees donated approximately 500 organizations that promote the arts, cultural work hours to the effort in FY2011, each week awareness, music, science, education, discussing one of 13 character qualities and life children’s welfare and community projects. skills, as well as providing practical assistance In 2011, the foundation established two with college preparation, career selection and matching gift programs through which it matches resume development. In the summer of 2012, donations made by employees of NHA and Instinet will expand the relationship by providing certain US affiliates to qualified educational internships to Elevate New York graduates. institutions and international relief organizations. NOMURA Report 2012 Column Reconstruction Assistance Following the Great East Japan Earthquake Nomura has been supporting disaster victims and stricken areas through our regular operations (see pages 14, 20 and 24) and volunteer efforts by employees. We are continuing to provide support as needs have shifted from emergency relief to reconstruction. Employee Volunteer Activities/ Donations • Participated in volunteer relief and recovery programs, including debris removal in stricken areas such as Rikuzentakata city in Iwate. • Provided employee volunteer support to hold sports days for elementary and junior high schools through the “Sports Festival Support Caravan 2011.” • Collected funds in-house in Japan, EMEA, AEJ, and the Americas, and made donations to five prefectural governments in stricken areas through Japan Platform and the Red Cross, etc. • Donated over 170 pieces of office furniture to five fisheries facilities in three towns through “Signal of Hope Project” for the recovery of fishing ports and markets. • Employees in New York and Washington, D.C. The children of Uiso Elementary School, Miyako City, Iwate Prefecture “This has really made the students think about what they can do to repay such kindness, and we are all working hard to foster them as forces of reconstruction so that they can contribute to society in the future.” stated one junior high participated in “Run for Japan” and other charity school principal in a word of thanks. events. • Served salads and sandwiches using vegetables from stricken areas at company cafeterias to counter harmful rumors and encouraged the purchase of fruit from Fukushima within the Group. Relief and reconstruction volunteer activities in stricken area Donated Musical Instruments through PMF Charity Concert Nomura held a charity concert on August 4, 2011, together with the Pacific Music Festival (PMF), an international educational music festival we have supported for 20 years. A total of 30 instruments were donated to elementary and junior high schools in stricken areas using ticket proceeds and donations collected at the concert and from employees. Continued to Support Stricken Areas through “Sakura Project 3.11” Nomura supported “Sakura Project 3.11” by helping to plant cherry trees in Tohanayama in Miyagi Prefecture and through donations. Plans are to continue supporting tree planting and nature conservation activities in this area. Nomura Foundation Scholarship Supports Regional Revival The Nomura Foundation provides ¥100 million in scholarships over five years (¥20 million annually) to students of Iwate University, Tohoku University and Fukushima University that are in stricken areas to provide much-needed financial support, help developing researchers and promote regional education. NOMURA Report 2012 Business for Sustainability Responsible Business Citizenship Our People Fundamental Approach programs that will help enhance each employee’s competitiveness and build teamwork. Through these education and training programs, we provide employees with the The Nomura Group employs a diverse pool of necessary skills for their current workplace and professional personnel around the world who develop the personnel who will serve as the are capable of providing sophisticated financial future leaders of the finance industry. Another services and whose career paths within the aim of these programs is to help employees group and values are unique. We strive to build their respective future careers at Nomura. manage our personnel in a flexible and suitable manner so that each and every one of our employees can thrive as they contribute their skills to the workplace. [Training Program Example 1] Development Program for Junior Employees: Receiving Feedback In addition to providing well-developed Junior employees need to be able to analyze education and training programs to support feedback from their supervisors and use it for our employees’ self-led skill building personal growth and skills development. This endeavors, we also evaluate the achievements program teaches them how to examine and and skills of each employee and deploy our take advantage of supervisor feedback. personnel with an eye on the future career Participants learn how to interpret feedback and path of each individual. recognize differences in feedback resulting from In this manner, the Nomura Group is able the communication style of their supervisor. to maximize the skills of each employee and further enhance its client services through personnel management that emphasizes [Training Program Example 2] Program for Managers: Leading Change diversity in the workplace. Personnel Development Constantly changing markets demand leaders capable of understanding the process of these changes, driving organization-wide changes, and providing management and support. This program teaches managers about the actions leaders should take in order to cope with and Wholesale Division Today, the Nomura Group’s workforce includes make changes. Past participants have shared the following feedback on the program: employees representing more than 70 “I learned about the importance of nationalities. This diverse pool of personnel is communication and coaching,” and, “I was able our most important asset, and as such, we are to understand the process for leading change.” committed to providing education and training Personnel Development Policy • Partner with our business divisions to identify needs, and provide practical, relevant solutions to drive employee and organizational performance. • Plan, develop and deliver learning programs to create opportunities for our people to build their core skills. • Provide various platforms for our people to establish networks across products, divisions and regions. • Build organizational and leadership capability to manage change and continue to build the Nomura global franchise. NOMURA Report 2012 Retail Division To provide sophisticated financial services that activities at our business sites. Today, these networks include Women in Nomura (WIN), better respond to clients’ needs, our Retail Division which encourages the career development of has been encouraging the personal growth of and provides networking opportunities for its employees through educational programs women, Life & Family, which promotes healthy that develop capabilities for independently living and managing a work-life balance, and thinking, acting and delivering results. Lesbian, Gay, Bisexual and Transgender (LGBT), Group training for the first three years of which works to foster understanding about employment and training at given milestones gender minorities. These networks are run by (new hire, appointment or promotion) provide our employees who organize and implement the specific knowledge and skills required while their activities. also reinforcing personal qualities and strengthening compliance and professional ethics. In addition to Web-based tools and Employee Network Activities As part of WIN activities in Japan, we regularly e-learning, practical business training is host the WIN Roundtable. Each session involves conducted by individual departments and for presentations made by women role models on each job title as required to effectively upgrade certain themes as well as interactive discussions employee competencies. We cover the costs of with participants. The purpose of the WIN certification examination fees and other expenses Roundtable is to help employees share their as well as voluntary training programs, and feelings and understand issues facing them provide support for commuting and through discussions to build a more correspondence courses associated with learning accommodating workplace. another language. Looking ahead, we plan to further upgrade programs with new methods The 2nd WIN Roundtable held on February 1, 2012, featured discussions on a and approaches based on employee feedback. SWOT (strengths, weaknesses, opportunities, Diversity and Inclusion at Nomura threats) analysis of the Nomura Group based on the work experiences of women employees who joined Nomura at the time of the Lehman Brothers acquisition and mid-career female hires who had professional experience at Nomura recognizes the importance for a non-Japanese financial institutions prior to multinational company to offer workplace joining Nomura. environments that encourage diversity and inclusion, to promote recognition of differences, respect for one another and team work. The Nomura Group considers the promotion of diversity and inclusion to be one of its most important tasks. This belief is deeply ingrained in our action plan for all employees, hiring criteria and personnel development policy. Employee networks play a central role in The 2nd WIN Roundtable NOMURA Report 2012 Business for Sustainability Responsible Business Citizenship Our People Good Work Environments to Facilitate Productivity provides easy-to-understand commentary on basic approaches to mental healthcare and how to work with employees affected by a mental illness. These initiatives have helped us The Nomura Group recognizes the importance build a solid employee mental healthcare system of maintaining decent, comfortable working that covers all workplaces. environments. We offer employee benefits programs, such as childcare, family nursing care and employee healthcare to ensure Diversity in Work Formats We have established workplaces where each employees can complete their work confidently employee can thrive at work, regardless of his and enthusiastically on an ongoing basis. or her age or physical ability. In advance of revisions made to Japan’s Occupational Health and Safety We support working conditions that allow each Act for Stabilization etc. of Employment of Older Persons in 2006, we introduced a re- employee to fully concentrate on their work in a employment program fully compliant with the healthy condition, both with good physical and new law. Since then, we have provided flexible mental health. We have shifted our emphasis to employment opportunities in principle to all early discovery and intervention. applicants, spanning from after mandatory Our industrial physicians periodically visit retirement at age 60 to age 65, based on their our worksites for health monitoring and conduct experience and requests. Each of these face-to-face interviews with supervising employees has been able to balance their work managers. Improvement measures are being with their post-retirement lifestyle, contributing introduced to departments with a history of their skills in a wide array of workplaces. employees working long hours, and mandatory The Nomura Group also provides a broad health examinations are provided for employees range of employment opportunities to persons who work extended hours. with disabilities. Each workplace is consulted To safeguard the mental health of our with on how best to utilize the skills and aptitudes employees, we provide access to psychiatrists of these individuals so that they are motivated and an employee counseling room staffed by a and committed to their duties. Nomura Securities dedicated professional. We also offer provides employment opportunities to persons consultation services provided by medical staff with disabilities that exceed the number as at our Health Management Center. For required by law, and these individuals can be employees affected by a mental illness, we found in a variety of workplaces at the company. assign a dedicated medical staff member that maintains regular and close contact with the employee and also works with their supervisor Helping Employees Balance Work and Childcare to ensure a smooth transition back to work. The Nomura Group has developed a wide range In fiscal 2011, we compiled and distributed of programs based on Japan’s Act for Measures a Mental Healthcare Manual to managers that to Support the Development of the Next Action Plan for the Act for Measures to Support the Development of the Next Generation (Term: April 1, 2012 to March 31, 2015) Target 1 Maintain the following standards in terms of employees taking childcare leave during the term of the action plan: • Male employees: Ensure childcare leave is taken by at least one male employee • Female employees: Ensure childcare leave is taken by more than 80% of eligible female employees Target 2 Make the daycare subsidy program better known to employees during the term of the action plan Target 3 Make the babysitter discount program known to employees during the term of the action plan NOMURA Report 2012 Generation, which encourages companies to basic policies and guidelines to address the provide workplace environments where employees various forms of harassment and for protecting can balance their work and childcare needs. the rights of people infected with HIV. All types Nomura Securities sets targets for the of consultation contacts are available both number of male employees taking childcare within and outside the company through our leave and for the use of its benefit programs Sexual Harassment/Power Harassment Hotline such as special work hours during child-rearing to help prevent harassment in the workplace. years, among other themes. As a result of these initiatives, we were certified with the Kurumin logo as part of the Act for Measures to Support the Development of the Next Generation again in fiscal 2012, following similar recognition in 2007 and 2009. Respecting Human Rights We have established various mechanisms to prevent discrimination and harassment. Nomura Securities strives to spread awareness of human rights through ongoing human rights training, primarily based on the efforts of the Nomura Securities Human Rights Committee. Committee membership includes compliance officers in each department and branch, who remind employees of the importance of human rights and conduct training programs to impart accurate knowledge and deepen employees’ understanding of human rights. We have also established and comply with HIV In April 2006, we revised our existing guidelines on HIV-infected employees first established in 1994, creating the Basic Policy Concerning HIV- infected Employees. This policy clearly stipulates that the Nomura Group will eliminate discrimination and prejudice and work harder to safeguard the human rights of HIV-infected employees. Basic Policy Concerning HIV-infected Employees in Japan 1. The Nomura Group shall neither dismiss employees on the grounds of HIV infection nor subject them to any other form of discrimination. 2. The Nomura Group shall rigorously safeguard the personal data of HIV-infected employees. 3. The Nomura Group shall not test for HIV in regular employee health checks. 4. The Nomura Group shall strive to ensure that executive officers and employees have a correct understanding of HIV to prevent infection and eliminate prejudice toward those infected with HIV. 5. The Nomura Group shall create workplaces can employees where HIV-infected comfortably work. Human rights training structure Human Rights Education Committee Chairperson (Appointed by President) Secretary: Executive officer, human resources Secretariat: Human Rights Education Department Members: Selected executive officers and managing directors Human Rights Awareness Promotion Members: Department / Branch Compliance Officers Review and Monitor Employment System Develop Awareness and Training Program Platforms Hiring-related systems • Assess recruiting and hiring tools • Assess selection methods and criteria Hiring-related training • Participate in external workshops • Train hiring managers in-house Human rights education and training • Participate in external workshops • In-house training NOMURA Report 2012 Business for Sustainability Responsible Business Citizenship Our Environment Fundamental Approach comprehensively conduct environmental preservation activities through an environmental management system (EMS) based on PDCA (Plan-Do-Check-Act) cycles. The Nomura Group is working to lower its overall The Environmental Activities Working environmental impact. We have established an Group in Japan collaborates with environmental environmental management system to drive managers at each of our business locations in comprehensive efforts in Japan, and our business EMEA, the Americas and AEJ to ensure that offices across the globe are taking initiatives to environmental information is collected on a manage their environmental footprints. We have worldwide basis. expanded our disclosure globally, and report The scope of environmental information group environmental targets and achievements. disclosed for fiscal 2010 includes Nomura Group Environmental Statement and Environmental Policy locations in Japan, EMEA and India. For fiscal 2011, we have expanded this scope to include our primary locations in AEJ and the Americas. All our employees engage in activities aligned with Nomura International PLC, our UK our Environmental Statement and Environmental subsidiary, has maintained ISO 14001 Policy, both established in 2009, which are based certification of its environmental management on our commitment to environmental issues as system at its former London headquarters at stated in our Code of Ethics. Environmental Management Structure Under the leadership of the Environmental 1 St. Martin’s-le-Grand since August 2007 based on assessment by the British Standards Institution. In August 2010, 1 Angel Lane, the new London headquarters, was also certified to Activities Working Group, we systematically and ISO 14001 following an intensive audit. Environmental Statement The Nomura Group believes a healthy environment is the foundation of stable economic and social conditions for future generations. We are committed to acting in an environmentally responsible manner and should therefore approach environmental issues positively. Environmental Policy • We encourage investment and constructive engagement in environmentally friendly goods and services. • We will assess environmental risks and continually strive to minimize pollution and improve the environment. • We will comply with relevant environmental laws and regulations and engage with external stakeholders on environmental issues. • We are committed to reducing waste and conserving energy and resources to minimize the impact of our footprint on the environment. • We will communicate this policy to all employees to raise awareness of environmental issues and encourage environmentally friendly initiatives. • We make this policy available for public review. Environmental management structure Japan Group CEO EMEA Head of Environmental Affairs Head of Environmental Affairs, EMEA Secretariat (Environmental Activities Working Group) Environmental Management Forum / Working Group Branch Offices Companies Divisions / Companies NOMURA Report 2012 Environmental Targets We set environmental goals for each year and closely manage the progress of our environmental preservation activities. Environmental goals are Efforts to Address Climate Change set for each region, and the Environmental We are addressing the issue of climate change Activities Working Group checks to see if these through such efforts as reducing power targets are met. Moreover, the Head of consumption at offices, reducing CO2 emissions Environmental Affairs reviews activities at the from employee travel and purchasing green end of each fiscal year to assess the relative power certificates. We also collect and disclose achievement of environmental goals and ensure group-wide environmental information. continuous improvements are being made. To ensure the effectiveness of the group environmental management system, we Reducing Power Consumption We are reducing power consumption at Group- conduct an environmental training program for owned buildings under an ongoing program of all Nomura Group employees, in which 85% of replacing electrical equipment with energy- employees participated in Japan in fiscal 2011, saving models and managing these with greater and an environmental efforts status review, efficiency. For example, we are encouraging the which garnered a 92% response rate in Japan replacement of air-conditioning units with more in fiscal 2011. efficient models and implementing energy- In the UK, we established a new goal to saving operations by reducing hours of usage achieve a 10% reduction in CO2 emissions over the and adjusting room temperature settings. We next three years compared to our fiscal 2011 level. are also actively working to reduce power consumption from lighting, as Nomura Asset Management changed over all of its lighting at its head office building and the Daiichi Edobashi Building to LED in fiscal 2011. Fiscal 2011 environmental objectives and progress, fiscal 2012 targets (Japan) Reduction of greenhouse gas emissions Promotion of green purchasing Reduction of paper usage Fiscal 2011 targets Assessment Fiscal 2012 targets Lower CO2 emissions at Nihonbashi head office to 20% below fiscal 2002 level Fuel-efficient, low-pollution vehicles to account for 80% of fleet Raise waste recycling rate at Nihonbashi head office to 90% Reduced 49.0% 82.9% of vehicles replaced Recycling rate: 89.5% Lower CO2 emissions at Nihonbashi head office to 25% below fiscal 2002 level Have fuel-efficient, low-pollution vehicles to account for 80% of fleet Raise waste recycling rate at Nihonbashi head office and Nagoya Branch to 87% Green products to account for 75% of supplies request system items Green products accounted for 77.1% of purchase Have green products account for 75% of supplies request system items Reduce use of paper per person bought through supplies request system to 20% below fiscal 2006 level Increase number of accounts that accept prospectuses in electronic form by promoting electronic documentation Reduce use of paper for internal forms by promoting electronic documentation of confirmation forms Reduced 41.4% Number of accounts increased to 1.29 million 179 types of forms digitized on the application and approval system (Savings of 140 thousand sheets of paper) Reduce use of paper per person bought through supplies request system to 25% below fiscal 2006 level Increase number of accounts that accept prospectuses in electronic form by promoting electronic documentation Reduce use of paper for internal forms by promoting electronic documentation of confirmation forms Promulgation of environmental business — — Expand the number of products and services that help resolve social issues NOMURA Report 2012 0 Business for Sustainability Responsible Business Citizenship Our Environment Expanding the Use of Green Energy We have been purchasing green power certificates every year since fiscal 2006 as part of our efforts to expand our use of green energy. Going Paperless and Promoting Recycling In fiscal 2011, we purchased green power We are making efforts to more effectively use certificates equivalent to an annual 6.4 million limited natural resources and reduce our kWh, which we allocated to our Nihonbashi environmental impact to assist in the creation of head office and Takanawa Training Center. We a recycling-oriented society. also purchased an additional 2,000kWh of green power at the 31st Central Bank Seminar held in April 2012. Moreover, our offices in Cutting Paper Use by Distributing Digital Prospectuses and Reports Switzerland and Germany have actively Nomura Securities encourages the distribution switched over to renewable energy sources, of electronic prospectuses and reports to clients such as hydroelectricity. as a way to conserve paper and reduce waste. We began e-mailing prospectus files to clients Reducing CO2 Emissions from Employee Travel We are in the process of changing over vehicles in 2008, and by the end of March 2012, 1.29 million client accounts received such documents leased by the company to low-emission models, electronically. We are also bolstering our Home and in order to promote eco-friendly driving Trade Service, which enables clients to check habits we provide information through our the status of transactions online. We offer intranet and instituted a system to monitor the Nomura Eco Discounts on account management driving practices of drivers. We have also fees and stock brokerage fees for clients who implemented a car sharing system as part of subscribe to these services. our commitment to effectively utilize company- owned vehicles. In addition, we have installed videoconferencing systems at our locations in Eliminating and Digitizing Internal Forms We are digitizing internal paper forms and reports Japan and overseas to reduce employee travel through our application and approval system, by vehicle and airplane. which we launched in July 2008. At the end of Our German office has also been using a March 2012, we had completely digitized 179 program by Deutsche Bahn, Germany’s types of forms, which reduced annual paper national railway operator, to run 100% of its consumption by 140,000 sheets in fiscal 2011. trains on renewable energy. As a result, business travel using Deutsche Bahn has been CO2 free since 2011. Green Power certificate consumption from Nomura Group events When Event Location Green power contracted (kWh) November 2011 Nomura Investment Forum 2011 Tokyo 20,000 January 2012 Nomura New Year Reception “Japan in the World” Tokyo/Nagoya/ Osaka/Sapporo/ Fukuoka March 2012 Nomura Global Environment Technology Conference April 2012 31st Central Bank Seminar Tokyo Tokyo 4,000 2,000 2,000 NOMURA Report 2012 Reducing Office Paper Consumption We are working to raise employee awareness of the amount of copy paper they use as part of our campaign to reduce paper consumption. In fiscal 2011, Nomura Securities used about 701 metric tons of A4 copy paper, or some 32% less than the 1,027 metric tons used in fiscal 2006. This also marks a 41% reduction in paper consumption per employee. Environmental Activities in the Local Community solar lanterns while learning about global warming. Children participating in the event expressed their intention to live a more eco- friendly lifestyle, with one stating, “I learned the The Nomura Group carries out environmental importance of saving electricity. I’ll try my best events and programs worldwide to raise each day not to waste electricity.” Overall, the awareness of environmental issues. event helped to cultivate greater awareness about energy conservation. Plan Bee (UK) In July 2011, Nomura installed beehives on the roof of our London headquarters’ building. The Participating in Earth Hour 2012 (Global) About 35 Nomura Group offices in EMEA and bees are part of Nomura’s wider initiative to AEJ participated in the World Wildlife Fund’s work together with local communities toward a Earth Hour 2012 on March 31. Lights were sustainable future and growth. We are partnering turned off for one hour starting at 8:30 p.m., with The Golden Company, a social enterprise local time, while employees were also that works with young people from inner-city encouraged to turn off unnecessary lights at London to develop business skills through home and in the office, allowing the entire group producing, marketing and selling urban honey to share a renewed awareness of the importance and related products. Nomura is contributing to of saving energy. the local community by supporting the pollinators and inner-city youth. Summer Holidays Environmental Event (Japan) In August 2011, the Nomura Group Tree Planting Activities (China) A volunteer team from Nomura’s Beijing Office partnered with iearth, an environmental NGO, and Beijing Foreign Enterprises Human Environmental Activities Working Group co- Resources Service Co., Ltd. (FESCO) to conduct hosted an environmental event with an tree-planting activities in China. Nomura environmental NPO entitled, “Summer Holiday Group’s employee volunteers and their family Environment Event – Make a Solar Lantern.” A members helped plant more than 1,000 trees total of 117 participants attended, including 71 on the outskirts of Beijing as part of an effort to children of Nomura employees and 46 of their parents. Participants made their own original raise environmental awareness and reduce CO2 emissions. Solar lanterns made by participants Volunteers at work planting trees NOMURA Report 2012 Data Section Five-Year Financial Summary (US GAAP) For the fiscal years beginning April 1 and ending March 31 of the following year Note: This financial summary is prepared solely for convenience. Readers are recommended to refer to the Form 20-F. OPERAtInG RESUltS: Revenue: Commissions Fees from investment banking Asset management and portfolio service fees Net gain (loss) on trading Gain (loss) on private equity investments Interest and dividends Gain (loss) on investments in equity securities Other total revenue Interest expense net revenue non-interest expenses: Compensation and benefits Commissions and floor brokerage Information processing and communications Occupancy and related depreciation Business development expenses Other total non-interest expenses Income (loss) before income taxes Income tax expense (benefit) net income (loss) less: net income (loss) attributable to noncontrolling interests net income (loss) attributable to nHI BAlAnCE SHEEtS (PERIOD EnD): Cash and cash deposits loans and receivables Collateralized agreements trading assets and private equity investments Other assets total assets Short-term borrowings Payables and deposits Collateralized financing trading liabilities Other liabilities long-term borrowings total liabilities total nHI shareholders’ equity noncontrolling interests total equity total liabilities and equity CASH FlOWS: net cash used in operating activities net cash used in investing activities net cash provided by financing activities Effect of initial adoption of investment company accounting on cash and cash equivalents Effect of exchange rate changes on cash and cash equivalents net increase (decrease) in cash and cash equivalents NOMURA Report 2012 FY2007/08 FY2008/09 FY2009/10 FY2010/11 ¥ 404,659 85,096 189,712 61,720 76,505 796,540 (48,695) 28,185 1,593,722 806,465 787,257 366,805 90,192 135,004 64,841 38,135 157,190 852,167 (64,910) 3,259 (68,169) (322) (67,847) ¥ ¥ 1,434,067 1,187,600 10,391,367 10,278,188 1,944,832 ¥25,236,054 ¥ 1,426,266 950,381 10,540,731 4,469,942 623,206 5,224,426 23,234,952 1,988,124 12,978 2,001,102 ¥25,236,054 ¥ (647,906) (102,019) 942,879 (38,427) (57,319) ¥ 97,208 ¥ 306,803 ¥ 395,083 ¥ 405,463 ¥ 347,135 ¥ (708,192) ¥ 67,798 ¥ 28,661 ¥ 11,583 54,953 140,166 (128,339) (54,791) 331,356 (25,500) 39,863 664,511 351,884 312,627 491,555 73,681 154,980 78,480 31,638 262,558 1,092,892 (780,265) (70,854) (709,411) (1,219) ¥ 1,422,709 1,643,007 8,412,618 11,672,612 1,686,902 ¥24,837,848 ¥ 1,183,374 1,242,318 10,157,954 4,752,054 467,574 5,483,028 23,286,302 1,539,396 12,150 1,551,546 ¥24,837,848 ¥ (712,629) (98,905) 999,760 — (81,896) 121,254 132,249 417,424 11,906 235,310 6,042 37,483 1,356,751 205,929 1,150,822 526,238 86,129 175,575 87,806 27,333 142,494 1,045,575 105,247 37,161 68,086 288 ¥ 1,352,244 2,071,714 12,467,213 14,700,282 1,638,975 ¥32,230,428 ¥ 1,301,664 1,528,419 11,216,481 8,356,806 494,983 7,199,061 30,097,414 2,126,929 6,085 2,133,014 ¥32,230,428 ¥ (1,500,770) (269,643) 2,176,530 — 964 ¥ 106,330 ¥ 407,081 107,005 143,939 336,503 19,292 346,103 (16,677) 43,864 1,385,492 254,794 1,130,698 518,993 92,088 182,918 87,843 30,153 125,448 1,037,443 93,255 61,330 31,925 3,264 ¥ 2,150,453 2,227,822 15,156,318 15,241,931 1,916,466 ¥36,692,990 ¥ 1,167,077 2,103,608 13,686,438 8,688,998 552,316 8,402,917 34,601,354 2,082,754 8,882 2,091,636 ¥36,692,990 ¥ (235,090) (423,214) 1,284,243 — (26,246) ¥ 599,693 Millions of yen FY2011/12 59,638 144,251 272,557 25,098 435,890 4,005 563,186 1,851,760 315,901 1,535,859 534,648 93,500 177,148 100,891 48,488 496,227 1,450,902 84,957 58,903 26,054 14,471 ¥ 1,953,677 2,211,423 13,742,646 14,123,594 3,665,972 ¥35,697,312 ¥ 1,185,613 2,437,370 12,519,274 7,495,177 1,165,901 8,504,840 33,308,175 2,107,241 281,896 2,389,137 ¥35,697,312 ¥ 290,863 9,942 (844,311) — (6,314) ¥ (549,820) FY2007/08 FY2008/09 FY2009/10 FY2010/11 OPERAtInG RESUltS: Revenue: Commissions Fees from investment banking Asset management and portfolio service fees Net gain (loss) on trading Gain (loss) on private equity investments Interest and dividends Gain (loss) on investments in equity securities Other total revenue Interest expense net revenue non-interest expenses: Compensation and benefits Commissions and floor brokerage Information processing and communications Occupancy and related depreciation Business development expenses Other total non-interest expenses Income (loss) before income taxes Income tax expense (benefit) net income (loss) net income (loss) attributable to nHI BAlAnCE SHEEtS (PERIOD EnD): Cash and cash deposits loans and receivables Collateralized agreements trading assets and private equity investments Other assets total assets Short-term borrowings Payables and deposits Collateralized financing trading liabilities Other liabilities long-term borrowings total liabilities total nHI shareholders’ equity noncontrolling interests total equity total liabilities and equity CASH FlOWS: net cash used in operating activities net cash used in investing activities net cash provided by financing activities Effect of initial adoption of investment company accounting on cash and cash equivalents Effect of exchange rate changes on cash and cash equivalents net increase (decrease) in cash and cash equivalents ¥ 404,659 85,096 189,712 61,720 76,505 796,540 (48,695) 28,185 1,593,722 806,465 787,257 366,805 90,192 135,004 64,841 38,135 157,190 852,167 (64,910) 3,259 (68,169) (322) ¥ 1,434,067 1,187,600 10,391,367 10,278,188 1,944,832 ¥25,236,054 ¥ 1,426,266 950,381 10,540,731 4,469,942 623,206 5,224,426 23,234,952 1,988,124 12,978 2,001,102 ¥25,236,054 ¥ (647,906) (102,019) 942,879 (38,427) (57,319) ¥ 97,208 ¥ 306,803 54,953 140,166 (128,339) (54,791) 331,356 (25,500) 39,863 664,511 351,884 312,627 less: net income (loss) attributable to noncontrolling interests ¥ (67,847) ¥ 491,555 73,681 154,980 78,480 31,638 262,558 1,092,892 (780,265) (70,854) (709,411) (1,219) (708,192) ¥ 1,422,709 1,643,007 8,412,618 11,672,612 1,686,902 ¥24,837,848 ¥ 1,183,374 1,242,318 10,157,954 4,752,054 467,574 5,483,028 23,286,302 1,539,396 12,150 1,551,546 ¥24,837,848 ¥ (712,629) (98,905) 999,760 — (81,896) ¥ 106,330 ¥ 395,083 121,254 132,249 417,424 11,906 235,310 6,042 37,483 1,356,751 205,929 1,150,822 526,238 86,129 175,575 87,806 27,333 142,494 1,045,575 105,247 37,161 68,086 288 ¥ 67,798 ¥ 1,352,244 2,071,714 12,467,213 14,700,282 1,638,975 ¥32,230,428 ¥ 1,301,664 1,528,419 11,216,481 8,356,806 494,983 7,199,061 30,097,414 2,126,929 6,085 2,133,014 ¥32,230,428 ¥ (1,500,770) (269,643) 2,176,530 — 964 407,081 ¥ ¥ 405,463 107,005 143,939 336,503 19,292 346,103 (16,677) 43,864 1,385,492 254,794 1,130,698 518,993 92,088 182,918 87,843 30,153 125,448 1,037,443 93,255 61,330 31,925 3,264 ¥ 28,661 ¥ 2,150,453 2,227,822 15,156,318 15,241,931 1,916,466 ¥36,692,990 ¥ 1,167,077 2,103,608 13,686,438 8,688,998 552,316 8,402,917 34,601,354 2,082,754 8,882 2,091,636 ¥36,692,990 ¥ (235,090) (423,214) 1,284,243 — (26,246) ¥ 599,693 Millions of yen FY2011/12 ¥ 347,135 59,638 144,251 272,557 25,098 435,890 4,005 563,186 1,851,760 315,901 1,535,859 534,648 93,500 177,148 100,891 48,488 496,227 1,450,902 84,957 58,903 26,054 14,471 ¥ 11,583 ¥ 1,953,677 2,211,423 13,742,646 14,123,594 3,665,972 ¥35,697,312 ¥ 1,185,613 2,437,370 12,519,274 7,495,177 1,165,901 8,504,840 33,308,175 2,107,241 281,896 2,389,137 ¥35,697,312 ¥ ¥ 290,863 9,942 (844,311) — (6,314) (549,820) NOMURA Report 2012 Data Section Key Facts related to CSR Chapter I Responding to Clients’ Needs/Evaluations from Clients Results of customer satisfaction survey (Retail Division) (%) Satisfied/Neither Dissatisfied Other Caseload at Customer Help Desk Department (Retail Division) total Complaints Inquiries Opinions and requests Other Universally accessible branch offices (Retail Division) Certified universally accessible With toilets for the physically challenged With elevators for the physically challenged With steps removed from entrances and exits (with ramps, elevators or no steps) With installations to mitigate entrance and exit steps (railings or step heights reduced) Chapter II Corporate Governance 2010 80 10 10 2010 5,189 2,359 2,408 256 166 2010 30 78 53 136 15 2011 82 16 3 2011 5,005 3,012 1,836 13 144 2011 30 80 54 140 14 Members of the board Board of directors Outside directors Non-Japanese directors Female directors Chapter III Our Community Community contribution expenditures total Education Arts, culture and sports Science and academic achievement Community contribution Welfare and health Environment Human rights and labor Disaster relief Other Participants and materials in financial and economics education 2010 2011 No. of people Ratio (%) No. of people Ratio (%) 14 8 4 1 - 57 29 7 11 7 3 1 - 64 27 9 Amount (Millions of yen) Ratio (%) 2010 2011 Amount (Millions of yen) Ratio (%) 1,369 622 70 161 138 54 25 27 120 152 - 45.4 5.2 11.7 10.1 3.9 1.8 1.9 8.8 11.1 1,205 582 106 79 199 49 43 3 71 79 - 48.2 8.7 6.5 16.5 4.0 3.5 0.2 5.8 6.5 Teaching material for elementary schools (The Economics Classroom) Teaching material for junior high schools (The t-shirt shop) Visiting classes (elementary, junior, senior high schools) No. of schools / participants Nikkei Stock League No. of teams / members Finance courses for universities No. of schools / participants Financial courses for the general public No. of courses / participants NOMURA Report 2012 Unit No. of schools / copies 2011 120 / 5,000 Cumulative total 2,320 / 205,000 No. of schools / copies 180 / 17,200 3,880 / 397,200 24 / 847 1,420 / 5,741 115 / 12,000 536 / 27,839 77 / 4,067 18,939 / 75,493 1,214 / 173,000 5,593 / 295,461 Number of community development projects implemented total Japan EMEA Americas AEJ Assistance provided to groups that contribute to society No. of groups assisted Chapter III Our People Education and training expenses total Japan EMEA Americas AEJ Participation in education and training (in-house training) 2010 173 40 83 31 19 2010 200 2010 2,455 1,573 489 257 136 2010 2011 370 27 196 107 40 2011 243 2011 2,033 1,468 133 280 153 2011 (Millions of yen) total Japan EMEA Americas AEJ Aggregate no. of hours Aggregate no. of participants Aggregate no. of hours Aggregate no. of participants 272,528 207,458 3,790 - 61,280 13,146 8,255 407 - 4,484 225,184 169,385 2,766 7,390 45,643 21,928 11,965 977 1,182 7,804 Note: The decline in aggregate number of hours for Japan is because training for new recruits was shortened from the usual one month to one week due to the impact of the Great East Japan Earthquake. Ratio of employees by region total Japan EMEA Americas AEJ Number of employees total Japan EMEA Americas AEJ Number of new hires total Japan EMEA Americas AEJ 2010 100 55 16 9 20 2010 (%) 2011 100 56 15 9 20 2011 No. of employees Ratio of male employees (%) Ratio of female employees (%) No. of employees Ratio of male employees (%) Ratio of female employees (%) 26,871 14,918 4,353 2,348 5,252 62 56 70 74 68 2010 3,634 990 754 638 1,252 38 44 30 26 32 27,168 15,145 4,014 2,420 5,589 38 44 30 26 34 62 56 70 74 66 2011 3,280 989 663 478 1,150 NOMURA Report 2012 Data Section Key Facts related to CSR Composition by employment contract (Japan) Full-time regular employment Part-time regular employment Composition of managers (Managing Director) total Japan (Nomura Securities, Nomura Holdings) EMEA Americas AEJ Composition of managers (Executive Director/Vice President) 2010 14,918 788 2010 (No. of employees) 2011 15,145 766 2011 Men Women Ratio of women (%) Men Women Ratio of women (%) 953 322 338 157 136 58 7 19 11 21 6 2 5 7 13 1,138 385 366 216 171 66 7 20 16 23 5 2 5 7 12 2010 2011 Men Women Ratio of women (%) Men Women Ratio of women (%) total Japan (Nomura Securities, Nomura Holdings) EMEA Americas AEJ 5,690 3,152 1,215 629 694 Use of childcare and family nursing care support plans (Nomura Securities) Pre- and post-natal leave Childcare leave Leave to care for sick or injured children Childcare time Assistance with daycare expenses Family nursing care leave Reduced working hour plan for family nursing care Paid leave for family nursing care 840 166 298 148 228 2010 233 338 435 104 332 13 0 30 13 5 20 19 25 6,058 3,238 1,327 844 649 14 6 19 21 28 (No. of employees) 978 198 305 227 248 2011 237 367 478 148 365 6 0 33 Post-childcare leave reinstatement and retention rates (Nomura Securities) (%) Reinstatement rate Retention rate Human rights training (Nomura Securities) Human rights training Status of other personnel and labor-related issues 2010 Women 96 95 Men 100 100 2011 Women 99 98 Men 100 100 2010 No. of sessions No. of participants 32 13,827 2011 No. of sessions 20 No. of participants 9,823 Employee turnover rate (Japan) Number of seniors (aged 60 years and over) rehired (Japan) Percentage of employees with disabilities (Nomura Securities) Average number of annual paid leave days used (Nomura Securities) Percentage of employees with labor union memberships (Nomura Securities) Average annual salary (Nomura Securities) Unit % No. of employees % days % 2010 5 713 1.86 9.7 53.8 Thousands of yen 10,869 2011 6 763 2.00 9.9 52.8 10,660 NOMURA Report 2012 Chapter III Our Environment Environmental performance CO2 emissions*1 Nomura Group companies in Japan Main EMEA offices Main AEJ offices Main American offices Unit tons-CO2 tons-CO2 tons-CO2 tons-CO2 CO2 emissions per employee Nomura Group companies in Japan tons-CO2/FTE Main EMEA offices Main AEJ offices Main American offices tons-CO2/FTE tons-CO2/FTE tons-CO2/FTE Electricity consumption Nomura Group companies in Japan Main EMEA offices Main AEJ offices Main American offices Gas consumption Nomura Group companies in Japan Main EMEA offices Main AEJ offices Main American offices Purchased amount of Green Power*2 CO2 emissions from employee travel*3 Nomura Group companies in Japan Main EMEA offices AEJ Americas MWh MWh MWh MWh MWh MWh MWh MWh MWh tons-CO2 tons-CO2 tons-CO2 tons-CO2 Water consumption*4 Nomura Group companies in Japan thousand m3 Main EMEA offices Main AEJ offices Main American offices thousand m3 thousand m3 thousand m3 Copy paper consumption*5 Nomura Group companies in Japan Main EMEA offices Main AEJ offices Amount of waste generated*6 Waste recycling ratio*6 Green purchasing ratio*7 ton ton ton ton % % 2009 48,402 13,620 - - 3.2 4.1 - - 89,966 26,261 - - 14,019 1,801 - - 5,900 10,952 - - - 197 47 - - 730 - - 701 91.6 74.9 2010 44,626 25,850 16,917 - 3.0 5.9 1.8 - 89,674 51,196 17,813 - 13,406 6,783 176 - 5,900 12,407 - 2,595 - 204 101 36 - 726 - - 681 91.3 74.3 2011 36,579 24,358 23,857 8,253 2.4 7.4 5.1 4.1 74,632 49,274 27,438 13,439 11,859 6,745 132 0 7,424 11,873 9,446 11,883 6,060 188 136 33 4 701 90 134 629 89.3 77.1 *1 Calculated using the emissions factor applied under the Act on Promotion of Global Warming Countermeasures for the Nomura Group in Japan, from the Greenhouse Gas Protocol (the World Resources Institute and the World Business Council for Sustainable Development) for main EMEA and AEJ offices, and under the US EPA, eGRID2012 Version 1.0 (created April 2012) for main American offices. In fiscal 2010, calculated totals for our main AEJ offices only included India. From fiscal 2011, however, these totals also include our Hong Kong and Singapore offices. *2 In fiscal 2010, data applied only to the Nomura Group in Japan. From fiscal 2011, however, our Frankfurt and Zurich offices are included in the totals. *3 Data compiled on domestic and international flights and long-distance railway transportation tickets purchased through designated firms. Totals for our main AEJ offices only included India in fiscal 2010, but from fiscal 2011 include all of our AEJ offices. Data for regular automobile usage by the Nomura Group in Japan and by our India office, out of our main AEJ offices, is also included in the tally. *4 Totals for our main EMEA offices only included the London office in fiscal 2010, but from fiscal 2011 include the Paris, Frankfurt, and Zurich offices as well. *5 Data compiled on items purchased through designated suppliers at Nomura Securities, out of the Nomura Group in Japan. Data compiled from fiscal 2011 only includes the London office, out of our main EMEA offices, and the India office, out of our main AEJ offices. *6 Data compiled on the Nomura Securities Nihonbashi head office. From fiscal 2011, data for the Nomura Securities Nagoya branch is also included. *7 Data compiled on items purchased through the supplies request system at Nomura Securities. Main EMEA offices are located in London, Paris, Frankfurt, and Zurich. Main AEJ offices are located in Hong Kong, Singapore, and India. Main American offices are located in New York. NOMURA Report 2012 Data Section Independent Assurance on Environmental Reporting External Assessment related to CSR The China Charity Awards Nomura has been named one of the Corporate Winners of the China Charity Awards. Carbon Trust Standard Awarded to Nomura International plc (U.K.) in recognition of measuring, managing and reducing its carbon emissions. Clean City Award Received a platinum City of London Clean City Award for environmental conservation activities in the city. NOMURA Report 2012 Board of Directors Board of Directors Nobuyuki Koga Haruo Tsuji* (As of August 1, 2012) Chairman of the Board of Directors Chairman of the Nomination Committee, Chairman of the Compensation Committee Corporate Advisor of Sharp Corporation Chairman of the Audit Committee Masahiro Sakane* Director and Chairman of Komatsu Ltd. Member of the Nomination Committee, Member of the Compensation Committee Tsuguoki Fujinuma* Advisor of The Japanese Institute of Certified Public Accountants Member of the Audit Committee Dame Clara Furse* Former Chief Executive of London Stock Exchange Group Takao Kusakari* Corporate Advisor of Nippon Yusen Kabushiki Kaisha Toshinori Kanemoto* Of-Counsel, City-Yuwa Partners Former President of ICPO INTERPOL Member of the Nomination Committee, Member of the Compensation Committee Michael Lim Choo San* Former Executive Chairman of PricewaterhouseCoopers, Singapore Masanori Itatani Audit Mission Director Masanori Nishimatsu David Benson * Outside Directors NOMURA Report 2012 0 Data Section Executive Management Structure Executive Management Structure (As of September 30, 2012) Group CEO Group COO; Wholesale CEO Retail Retail CEO Asset Management Asset Management CEO Wholesale Group COO; Wholesale CEO Wholesale Division Fixed Income Global Head of Fixed Income Equities Joint Global Head of Equities Joint Global Head of Equities Investment Banking Head of Investment Banking Research Global Research Chief Financial Officer Co-Deputy CFO Chief Risk Officer Deputy Chief Risk Officer Co-Group CAO (Co-CIO, Global Operations) Wholesale Co-CIO Group Compliance Chief Legal Officer and Secretariat Corporate Office Co-Group CAO (Co-CIO, Global Operations) Corporate Office (Group Strategy) Corporate, Others Koji Nagai Atsushi Yoshikawa Toshio Morita Toshihiro Iwasaki Atsushi Yoshikawa Hiromasa Yamazaki Steven Ashley Naoki Matsuba Benoit Savoret Kentaro Okuda Hideyuki Takahashi Junko Nakagawa Shigeki Fujitani Lewis O’Donald Yuji Nakata Paul Spanswick Naohiro Sako Hisato Miyashita Noriaki Nagai Hiroyuki Suzuki Chie Toriumi Corporate Office (Regional Management Support, Government Affairs and Risk Advisory Group) Shigesuke Kashiwagi Group Corporate Communications Global Human Resources Internal Audit Group Internal Audit Americas EMEA Regional CEO, Americas Regional Co-CEO, Americas Regional CEO, EMEA Regional COO, EMEA Regional CEO, Asia ex-Japan Eiji Miura Akihito Watanabe Masaru Konno David Findlay Toshiya Hasegawa John Phizackerley Yasuo Kashiwagi Minoru Shinohara AEJ Corporate Office (Head of China Committee) Noriyasu Yoshizawa Wealth Management, Asia Koki Miura NOMURA Report 2012 nomura Securities Domestic network (As of August 1, 2012) Hokuriku (4 Branches) Fukui Branch Kanazawa Branch Niigata Branch Toyama Branch Kinki (30 Branches) Akashi Branch Daito Branch Esaka Office Gakuenmae Branch Higashiosaka Branch Himeji Branch Hirakata Branch Ibaraki Branch Kawanishi Branch Kishiwada Branch Kobe Branch Kurakuen Branch Kyoto Branch Kyoto Branch, Kyoto Station Building, the Cube Office Nanba Branch Nara Branch Nishinomiya Branch Okamoto Branch Osaka Branch Otsu Branch Sakai Branch Senri Branch Takarazuka Branch Takatsuki Branch Tennoji Branch Toyonaka Branch Tsukaguchi Branch Uehonmachi Branch Umeda Branch Wakayama Branch Shikoku (5 Branches) Imabari Office Kochi Branch Matsuyama Branch Takamatsu Branch Tokushima Branch Chugoku (9 Branches) Fukuyama Branch Hiroshima Branch Kurashiki Branch Matsue Branch Okayama Branch Shimonoseki Branch Tokuyama Branch Tottori Office Yonago Branch Kyushu (11 Branches) Fukuoka Branch Fukuoka Branch, Amu Plaza Hakata Office Kagoshima Branch Kitakyushu Branch Kumamoto Branch Kurume Branch Miyazaki Branch Nagasaki Branch Oita Branch Saga Branch Sasebo Branch Okinawa (1 Branch) Naha Branch Hokkaido (5 Branches) Asahikawa Branch Hakodate Branch Kushiro Branch Sapporo Branch Tokachi/Obihiro Office tohoku (10 Branches) Akita Branch Aomori Branch Fukushima Branch Hachinohe Branch Iwaki Office Koriyama Branch Morioka Branch Sendai Branch Shonai Office Yamagata Branch tokyo metropolitan area (41 Branches) Chofu Branch Denenchofu Branch Fuchu Branch Gotanda Branch Hachioji Branch Hamadayama Office Hatagaya Branch Head Office Iidabashi Branch Ikebukuro Branch Ikebukuro Metropolitan Plaza Branch Jiyugaoka Branch Kamata Branch Kanda Branch Kichijoji Branch Kinshicho Branch Koishikawa Branch Koiwa Branch Kokubunji Branch Machida Branch Mita Branch Nakameguro Branch Kanto (43 Branches) Aeon Mall Funabashi Office Aobadai Branch Atsugi Branch Chiba Branch Fujisawa Branch Funabashi Branch Futamatagawa Office Hiratsuka Branch Ichikawa Branch Kamakura Branch Kamiooka Branch Kashiwa Branch Kawagoe Branch Kawaguchi Branch Kawasaki Branch Kofu Branch Konandai Office Koshigaya Branch Kumagaya Branch Matsudo Branch Mito Branch Musashikosugi Branch Odawara Branch Chubu (16 Branches) Gifu Branch Hamamatsu Branch Kanayama Branch Kariya Branch Kasugai Branch Matsumoto Branch Nagano Branch Nagoya Branch Nakano Branch Nerima Branch Ogikubo Branch Omori Branch Sakurashinmachi Office Sangenjaya Office Seijo Branch Senju Branch Shibuya Branch Shinbashi Branch Shinjuku Branch Shinjuku Nomura Building Branch Shinjuku-eki Nishiguchi Branch Tachikawa Branch Tamagawa Branch Tanashi Branch Tokyo Branch Toranomon Branch Ueno Branch Omiya Nishiguchi Branch Ota Branch Sagamihara Branch Saitama Branch Saitama Branch, Omiya Higashiguchi Office Shiki Branch Shinyurigaoka Branch Takasaki Branch Tama Plaza Branch Tokorozawa Branch Totsuka Branch Tsuchiura Branch Tsukuba Branch Tsurumi Branch Urawa Branch Utsunomiya Branch Yachiyodai Office Yokohama Bashamichi Branch Yokohama Branch Yokosuka Branch Nagoya-ekimae Branch Numazu Branch Okazaki Branch Shizuoka Branch Toyohashi Branch Toyota Branch Tsu Branch Yokkaichi Branch NOMURA Report 2012 Data Section Corporate Data Corporate data Company name Nomura Holdings, Inc. Paid-in capital ¥594.5 billion (As of March 31, 2012) Head office 1-9-1, Nihonbashi, Chuo-ku, Tokyo 103- 8645, Japan Group employees 34,395 (As of March 31, 2012) transfer agent and registrar Mitsubishi UFJ Trust and Banking Corporation Corporate Agency Department: +81 (3) 5391-1900 Depositary for American Depositary Receipts (ADRs) The Bank of New York Mellon Depositary Receipts Division: +1 (866) 680-6825 http://www.adrbnymellon.com Ratio: 1 ADR = 1 ordinary share Component ratio of shareholders (%) 100 80 60 40 20 0 Individuals and Others Foreign Legal Entities Other Legal Entities Financial Institutions 3/2008 3/2009 3/2010 3/2011 3/2012 President & CEO Koji Nagai December 25, 1925 Investment and financial services Date of incorporation Business description Share data Common stock issued 3,822,562,601 shares (As of March 31, 2012) listing The common shares of Nomura Holdings, Inc. are listed on the Tokyo, Osaka, Nagoya, and Singapore stock exchanges. The shares are also listed on the NYSE in the form of American Depositary Shares (ADSs) evidenced by American Depositary Receipts (ADRs). Each ADS repre- sents one share of common stock. (As of March 31, 2012) Securities code 8604 (Tokyo Stock Exchange) NMR (New York Stock Exchange) number of shareholders 477,052 (Unit shareholders: 454,025) (As of March 31, 2012) Major shareholders (top 10) Names of shareholders Shares held (Thousand shares) Percentage of issued shares (%) Japan Trustee Services Bank, Ltd. (Trust Account) The Master Trust Bank of Japan, Ltd. (Trust Account) SSBT OD05 Omnibus Account Treaty Clients State Street Bank and Trust Company The Chase Manhattan Bank ,N.A. London S.L.Omnibus Account Japan Trustee Services Bank, Ltd. (Trust Account 9) Japan Trustee Services Bank, Ltd. (Trust Account 4) State Street Bank - West Pension Fund Clients - Exempt Japan Trustee Services Bank, Ltd. (Trust Account 1) Nomura Group Employee’s Stock Ownership Association 187,713 135,436 93,365 50,926 47,713 37,090 34,577 33,413 33,268 33,115 4.91 3.54 2.44 1.33 1.25 0.97 0.90 0.87 0.87 0.87 Note: The Company has 155,753 thousand shares of treasury stock as of March 31, 2012 which is not included in the major shareholders list above. Date of record for dividend payments Second quarter Year-end September 30 March 31 Dividend payment date December 1 June 1 Other Credit rating Standard & Poor’s Moody’s Investors Service R&I JCR Note: As of June 30, 2012 NOMURA Report 2012 Nomura Holdings Nomura Securities Long-term Short-term Long-term Short-term BBB+ Baa3 A+ AA– A-2 — a-1 — A– Baa2 A+ AA– A-2 P-2 a-1 — Website Information Nomura Holdings Website http://www.nomura.com/ Corporate Citizenship Site Investor Relations Site http://www.nomuraholdings.com/csr/ http://www.nomuraholdings.com/investor/ Delivers information on the Nomura Group’s CSR initiatives in a timely manner and contains detailed dialog held with stakeholders. Provides various investor relations information for the Nomura Group, including earnings presentations, financial data, annual reports, notices for shareholders and information per- taining to corporate governance. Inquiries nomura Holdings, Inc. Investor Relations Corporate Citizenship Department Urbannet Otemachi Building 2-2-2, Otemachi, Chiyoda-ku, Tokyo 100-8130, Japan Tel. +81 (3) 5255-1000 Otemachi Nomura Building 2-1-1, Otemachi, Chiyoda-ku, Tokyo 100-8170, Japan Tel. +81 (3) 5255-1000 e-mail: csr@jp.nomura.com NOMURA Report 2012 N O M U R A R e p o r t 2 0 1 2 Nomura Holdings, Inc. NOMURA Report 2012 This report was produced using FSC certified paper and vegetable oil-based printing inks. A waterless printing technique that generates no harmful effluent was used in the printing process. All electricity to print this booklet is generated by green energy. (300 kWh)
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