Corporate Profile Nomura is a leading financial services group and the External Recognition preeminent Asia-based investment bank with a worldwide reach. Our Retail, Asset Management and Wholesale divisions provide a broad range of innovative, value-added solutions tailored to the specific requirements of individual, institutional, corporate and government clients through an Nomura’s CSR initiatives and information disclosure practices have been widely recognized outside the company. Nomura Holdings has been selected for inclusion in the Dow Jones Sustainability Indexes and the FTSE4Good Index, both socially responsible investment (SRI) indexes. Nomura was also selected as the only international network in over 30 countries around the world. financial services company recognized in the Japan 500 CDLI. Returning to Our Roots For over 80 years, we have continued to uphold our founder’s principles. One of these principles, “putting the customer first,” evolved into “prospering with our clients” and is now defined by our commitment to “place clients at the heart of everything we do.” Although the words may change, over unwavering focus on our clients remains the same. Involvement in External ESG Initiatives • UN PRI (Principles for Responsible Investment) • Principles for Financial Action towards a Sustainable Society (Principles for Financial Action for the 21st Century) • Multistakeholder Forum on Social Responsibility for a Sustainable Future • Banking Environment Initiative Editorial Policy In FY2011/12, we began publishing the Nomura Report, an integrated version of our annual report and our citizenship report, which detailed our CSR initiatives. We hope that this new integrated report helps readers gain a broader understanding of our activities to support sustainable development and grow together with our stakeholders as Asia’s global investment bank. Report Period April 1, 2012 to March 31, 2013 (Some content may be outside this timeframe) Previous Report September 2012 Next Report August 2014 Entities Covered Nomura Holdings, Inc. and its major subsidiaries and affiliates. (http://www.nomuraholdings.com/company/group/) Numerical data are presented alongside information on the scope of companies covered. Reference Guidelines • 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/gri/ • Environmental Reporting Guidelines (2012 Version) of Japan’s Ministry of the Environment • Charter of Corporate Behavior of Keidanren 1 Nomura Report 2013 C o n t e n t s Financial Highlights Message from the Group CEO Placing clients at the heart of everything we do as Asia’s global investment bank Interview with the CEO and COO Leveraging our unique network to provide high value-added services Message from the CFO Reallocating resources in line with the changing environment to build on our strengths as a global financial services group At a Glance Retail Asset Management Wholesale Global Research Business for Sustainability Column Collaborating across Regions and Divisions for Our Clients and Society Rebuilding Trust Corporate Governance Compliance Risk Management CSR Management Our Community Our People Our Environment Data Section Forward-Looking Statements This forward-looking report contains statements about the future plans, strategies, beliefs, and performance of the Company. 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. Five-Year Financial Summary CSR Key Facts Independent Assurance on Environmental Reporting Global Network Nomura Securities Domestic Network Corporate Data Website Information 3 5 7 11 13 15 19 23 29 31 33 35 37 43 45 47 49 51 53 55 57 62 63 64 65 66 Nomura Report 2013 2 Financial Highlights (US GAAP) For the fiscal years beginning April 1 and ending March 31 of the following year MAJOR FINANCIAL DATA Net revenue Income (loss) before income taxes Net income (loss)*1,3 Total assets Shareholders’ equity*2,3 Short-term unsecured debt Long-term unsecured debt Total risk-weighted assets*4 PER SHARE DATA Net income (loss)—diluted Shareholders’ equity Cash dividends MAJOR MANAGEMENT INDICATORS ROE Gross leverage (times) Net leverage (times)*5 Consolidated capital adequacy ratio*4 Tier 1 ratio*4 *1 Net income (loss) attributable to Nomura Holdings, Inc. shareholders *2 Total Nomura Holdings, Inc. shareholders’ equity FY2008/09 FY2009/10 FY2010/11 FY2011/12 FY2012/13 312.6 (780.3) (708.2) 1,150.8 1,130.7 1,535.9 1,813.6 105.2 67.8 93.3 28.7 85.0 11.6 237.7 107.2 Billions of yen 24,837.8 32,230.4 36,693.0 35,697.3 37,942.4 1,539.4 2,126.9 2,082.8 2,107.2 2,294.4 1,932.4 4,646.4 2,153.5 6,024.6 2,634.3 6,466.9 3,009.1 6,373.0 2,293.3 6,457.3 11,935.9 11,525.7 11,629.5 14,681.0 17,546.7 (366.16) 590.99 25.5 21.59 579.70 8.0 7.86 578.40 8.0 3.14 575.20 6.0 - 16.1 10.7 18.9 11.7 3.7 15.2 9.3 24.3 17.3 1.4 17.6 10.3 22.2 16.4 0.6 16.9 10.4 16.5 14.2 Yen 28.37 618.27 8.0 % 4.9 16.5 10.4 13.9 11.9 *3 On April 1, 2009, we adopted new guidance for the accounting and reporting for noncontrolling interests. In the above table, this guidance has been retrospectively applied to the amounts as of and for the years ended March 31, 2009. *4 FY2008/09 - FY2010/11 based on Basel 2; FY2011/12 based on Basel 2.5; FY2012/13 based on Basel 3. *5 Total assets minus securities purchased under agreements to resell and securities borrowed, divided by Nomura Holdings shareholders’ equity. FY2008/09 FY2009/10 FY2010/11 FY2011/12 FY2012/13 25,626 15,320 4,294 1,079 4,933 26,374 15,053 4,369 1,781 5,171 26,871 14,918 4,353 2,348 5,252 34,395 21,609 4,014 2,420 6,352 People 27,956 16,030 3,618 2,271 6,037 NUMBER OF EMPLOYEES Total Japan Europe Americas Asia-Pacific 3 Nomura Report 2013 Net revenue (Billions of yen) 2,000 Segment income (loss) before income taxes (Billions of yen) 400 1,500 1,000 500 0 -500 Other Wholesale Asset Management Retail 200 0 -200 -800 Other Wholesale Asset Management Retail 2008/09 2009/10 2010/11 2011/12 2012/13 (Fiscal year) 2008/09 2009/10 2010/11 2011/12 2012/13 (Fiscal year) Total assets (Trillions of yen) 40 Unsecured debt (Billions of yen) 10,000 Total risk-weighted assets and Tier 1 ratio*4 (Billions of yen) (%) 20,000 20 Tier 1 ratio 30 20 10 0 8,000 6,000 4,000 2,000 0 Short-term unsecured debt Long-term unsecured debt 16,000 12,000 8,000 4,000 0 2008/09 2009/10 2010/11 2011/12 2012/13 (Fiscal year) 2008/09 2009/10 2010/11 2011/12 2012/13 (Fiscal year) 2008/09 2009/10 2010/11 2011/12 2012/13 16 12 8 4 Total risk- weighted assets 0 (Fiscal year) Number of employees by region Europe 3,618 Asia-Pacific 6,037 Japan 16,030 Americas 2,271 Nomura Report 2013 4 Message from the Group CEO Placing clients at the heart of everything we do as Asia’s global investment bank Nomura has been a client-focused organization since our earliest days. By placing clients at the heart of everything we do, we are able to deliver high value-added products and services that meet the needs of our clients and local communities, thereby contributing to social development and economic growth. Supporting Japan’s Future Our home market of Japan is on the verge of significant change. Since the new government came to power last year, we have seen early signs of an economic recovery. To build on this momentum, we need to look hard at what the country requires and how we can contribute. 5 Nomura Report 2013 Given that Japan is the world’s largest creditor nation and has the world’s fastest aging population, one area that requires attention is the creation of a new social framework. At the same time, we need to revise the structure of our financial system. For Japan to grow sustainably into the future, the capital markets will have to play a more prominent role. Indeed, Japan’s approximately ¥1,500 trillion in personal financial assets holds the key to the country’s future growth. Nomura aims to support this growth by facilitating the flow of funds throughout the economy. Connecting Markets East & West Asia is expected to account for half of the world’s GDP by 2050 and will no doubt remain the growth engine of the global economy over the coming years. However, for the region to realize its full potential, Asian countries must finance the large-scale infrastructure projects required to underpin economic growth. Japan can play a leading role here, growing together with the rest of Asia by putting its financial assets to work across the region. With Asia as our home market, this is an area in which Nomura has a distinct competitive advantage. As economies around the world mature and become increasingly global, companies and investors in the West are looking east for growth opportunities. As the only Japanese financial institution with a truly global network, Nomura is well placed to connect markets in the East and the West by leveraging our franchise to provide liquidity in the world’s capital markets. By meeting the needs of our global client base and expanding our business, we can contribute to economic growth and social development. In doing so, we aim to win the trust of our clients and society as we work towards being Asia’s global investment bank. Koji Nagai Group CEO Nomura Report 2013 6 Interview with the CEO and COO Leveraging our unique network to provide high value-added services Koji Nagai Group CEO Atsushi Yoshikawa President and Group COO Q1 How were the operating environment and the firm’s performance in FY2012/13? Nagai: We reported a significant gain in revenues and income during the year ended March 2013. Net revenue increased 18% year on year to ¥1,813.6 billion, pretax income jumped 180% to ¥237.7 billion, and net income grew by 9.3 times to ¥107.2 billion. At both the pretax and net income levels we had our best year since the year ended March 2007, positioning us well as we work towards achieving our target of earnings per share of ¥50 by March 2016. While our performance partly reflects the benefits gained from the market rally in Japan on the back of Abenomics, we are also starting to see results flow through from the initiatives we took last year. Specifically, Retail continued to develop its consulting based sales approach and Wholesale reduced costs in order to improve profitability. Yoshikawa: Last summer, one of the biggest challenges we faced was to return our international Wholesale operations to profit. To address this, we have been rebuilding our business and we saw a huge improvement in performance. Wholesale reported pretax income of ¥71.7 billion in FY2012/13 versus a pretax loss of ¥37.7 billion in the previous year. 7 Nomura Report 2013 We are working to lower our breakeven point. Last September, we announced a $1 billion cost reduction program, which was 78% complete as of the end of March 2013 with one year to go until the target completion date. As part of this program, the migration of our Execution Services businesses in EMEA, the Americas, and Asia ex-Japan to Instinet is progressing as scheduled. In addition, we have right-sized our international operations, particularly in EMEA, and reduced risk weighted assets in light of Basel 3 and other regulatory reforms. Q2 What is your vision for future growth? Nagai: We boast an extensive client franchise in Japan, a country known for its deep pool of financial assets. We have also built up a solid retail channel across Japan. Our business model combines our strengths by integrating the management of our Retail and Wholesale businesses. We are independent firm. And we are headquartered in Asia, the world’s fastest growing region. These attributes are our unique strategic strengths. We believe that the regulatory reforms faced by global financial institutions could prove to be relatively positive for Nomura. We expect to see European financial institutions refocus on their home markets and indeed this trend is already starting to take hold. This presents us with business opportunities that we aim to capture with a focus on our core businesses. As the only Japanese financial institution with a truly global platform, we are leveraging our deep product expertise and extensive network to deliver high value-added financial services to our clients as Asia’s global investment bank. Q3 How does your international strategy fit in with your vision for the firm? Yoshikawa: We have shifted from a global full coverage, full service structure to a more sharpened strategy. We now focus on businesses where we can leverage our strengths to add value for our clients. We don’t expect to monetize our Asian business immediately. That said, we are prioritizing market share growth in the region by positioning Asia including Japan as our home market and pursuing cross-border opportunities between the East and West. We are working to improve profitability in EMEA by realigning our Nomura Report 2013 8 Interview with the CEO and COO 9 Nomura Report 2013 business to reflect the operating environment. In the US, which has the world’s largest fee pool, we are investing selectively in areas such as Fixed Income sales, while focusing on businesses where we have a competitive advantage, such as Securitized Products and Credit. As Mr. Nagai mentioned, some of our competitors are scaling back their operations and returning to their home markets in the wake of the European debt crisis. This is opening up room for us to expand our Fixed Income and cross-border businesses. Q4 What steps have you taken to rebuild the firm from the ground up? Nagai: We first looked at what had to change and what should remain the same. We then communicated that to our people. We realized that we shouldn’t change our corporate philosophy or the principles of conduct that underpin the way Nomura people work. However, based on our underlying philosophy of placing our clients at the center of everything we do, we felt that we should reaffirm with everyone the importance of being client focused, an attribute that has defined Nomura since our earliest days. On the other hand, we recognized the need to change the mindset of individuals in the firm. In relation to the insider trading incidents last year, we were criticized for allowing a culture to develop in which people thought they could do anything as long as they stayed within the letter of the law. In other words, people didn’t take the time to consider the spirit or purpose of the applicable laws and regulations. This highlighted the need to make sure each person in the firm thinks long and hard about all the consequences of their actions before making decisions. In addition to such reforms, the efforts of each division have allowed us to capture the benefits of the market rally in Japan and deliver solid financial results by living up to the trust placed in us by our clients. Q5 How are you revamping the organization and HR systems in order to improve client satisfaction? Nagai: Our clients’ needs are extremely diverse, yet closely linked. In spite of this, when looking for solutions for their clients, our people only turned to their own business line. As such, I felt we weren’t fully leveraging our competitive strengths. And this held us back from improving client satisfaction levels. Our people come from diverse backgrounds in terms of their work experience, gender, and nationality. It is important that we make the most of this diversity to ensure we place our clients at the center of everything we do. Therefore, we revised our HR systems recently to make it easier for people to move across divisions. By creating an environment where people can share their diverse skills, experience, and knowledge, we can create new value which will ultimately enhance client satisfaction. Yoshikawa: Earlier this year our Retail business announced the results of a client satisfaction survey. Wholesale is also working to ensure our clients turn to Nomura as a trusted partner. We remain focused on improving our league table standings, market share, and financial performance, all of which are evidence of client satisfaction. Q6 How is Nomura contributing to sustainable development? Nagai: Our business can’t grow without strong local economies in the communities in which we operate. It is very important for us to help energize local economies. In Japan, we put our financial expertise to work to support new agricultural businesses and environmental and energy-related businesses. We also work closely with industry and academia to encourage the development of new industries. From a long-term perspective, we play an important role in using the capital markets to finance the development of social infrastructure in Asia and other emerging markets. Asia is expected to account for more than half of the world’s GDP by 2050. But that will require $8 trillion in infrastructure investment. To raise this money, Asia will have to further develop its primary and secondary capital markets. We have a long history of providing financial education programs aimed at creating sound capital markets by educating future generations. Since 1995, our branch managers and other employees have lectured at over 100 universities across Japan. We also conduct classes for elementary and junior high school students and we are a long-standing sponsor of the Nikkei Stock League Contest, which encourages students from junior high through to university to learn about investing. These activities allow us to use our expertise to contribute to sustainable growth. We aim to grow together with local communities in order to meet the expectations of all our stakeholders. Nomura Report 2013 10 Message from the CFO Reallocating resources in line with the changing environment to build on our strengths as a global financial services group For the past few years, financial institutions have faced a rapidly changing environment. Nomura moved swiftly to adapt to these changes by further enhancing our financial position and reducing our cost base. As CFO, I see my job as consisting of two main roles. First, to allocate the firm’s resources in a way that allows us to best meet regulatory requirements and adapt to the changing market environment. Second, improve communication with shareholders, counterparties, ratings agencies, regulatory authorities, ESG* research organizations, and other stakeholders in order to disclose accurate and timely information about the current status of the firm. We expect the shift to tighter regulation to continue in the future. However, given that we will be relatively less affected by the reforms than our competitors, we believe this trend will present new opportunities for Nomura. Accordingly, we will continue to solidify our position to ensure sustainable profits under any environment. * Environmental, social, and governance. Robust Financial Position At the end of March 2013, when Japan became one of the first countries to implement Basel 3, Nomura reported total assets of ¥37.9 trillion, shareholders’ equity of ¥2.3 trillion, and gross leverage of 16.5 times. Ahead of the introduction of the new regulations, we reallocated resources by selling our stake in Annington, a private equity investee company, in December 2012 and deconsolidating Nomura Real Estate Holdings in March 2013. As a result, our Tier 1 common ratio under Basel 3 was 11.9% at the end of March 2013. Based on a forward simulation using our March 2013 year-end balance sheet, our fully loaded 2019 Tier 1 common ratio is approximately 10%, which places us among the industry leaders. We also held a high quality liquidity portfolio surplus of ¥5.9 trillion as of the end of March 2013. This allows us to continue operating for one year without the need for additional unsecured funding or asset sales even under stressed market conditions. In addition, the liability side of our balance sheet is dominated by long-term debt, and we have diversified our sources of funding across currencies. This robust financial position is a competitive advantage that directly benefits our clients by allowing us to deliver the best products and services tailored to their specific requirements. Shigesuke Kashiwagi Chief Financial Officer 11 Nomura Report 2013 Adapting to the Changing Environment The global fee pool in our industry has been shrinking since the start of the European debt crisis. Coupled with this, financial institutions have been forced to rethink their strategies due to the shift to tighter regulations. To reposition Nomura for this new environment, we have revised our cost base, which was set for the much larger fee pool environment of 2009, and we have been working on a $2 billion cost reduction program since July 2011 aimed at lowering the breakeven point of our Wholesale business. Of this $2 billion, the $1 billion cost reductions announced in September 2012 were 78% complete as of the end of March 2013, with personnel expense reductions running ahead of schedule. Despite the recently improved revenue environment, we remain focused on completing the cost reductions by March 2014. By enhancing the profitability of our international Wholesale operations, we aim to achieve our management target of earnings per share of ¥50 by the year ending March 2016. 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 full-year consolidated payout ratio of 30% as a key indicator. In determining dividend payments, we take into account a comprehensive range of factors including our consolidated financial performance and global regulatory reforms such as the new Basel regulations. Based on this policy, we paid an annual dividend of ¥8 per share in FY2012/13. In addition, we seek to efficiently invest retained earnings in business areas with prospects of high profitability and growth, while also taking into account the regulatory environment, in order to increase shareholder value. Since the Abe administration came to office in December 2012, the world has started to look on Japan in a new light and expectations are rising over the country’s future. As the dominant player in Japan’s financial and capital markets, Nomura is well placed to connect markets in the East and the West, further stimulating Japan’s economy. To remain a trusted partner for our global clients, we will leverage our access to Japan’s deep pool of funds and our geographic advantage in the world’s growth region of Asia. Nomura Report 2013 12 At a Glance 13 Nomura Report 2013 Retail Nomura’s Retail business in Japan delivers a wide array of financial services to individual and corporate clients through a nationwide network of 177 branch offices (as of March 31, 2013), 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.15 Asset Management Asset Management operates as a global business with ¥27.9 trillion of assets under management from both retail and institutional investors (as of March 31, 2013). Our investment trust business in Japan delivers a diverse range of products through distribution channels such as securities firms including Nomura Securities, 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.19 Wholesale This business consists of Global Markets, Investment Banking and serves a broad range of global corporations, governments and financial institutions. Global Markets 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: Due to a reorganization in April 2012, reported amounts for Wholesale and Other have been reclassified. p. 23 Net revenue FY2012/2013 ¥397.9 billion Up 13.6% year on year Non-interest expenses FY2012/2013 ¥297.3 billion Up 3.5% year on year Net income before income taxes FY2012/2013 ¥100.6 billion Up 59.4% year on year (Billions of yen) 400 (Billions of yen) 300 (Billions of yen) 150 300 200 100 0 200 100 0 100 50 0 2008/09 09/10 10/11 11/12 12/13 (Fiscal year) 2008/09 09/10 10/11 11/12 12/13 (Fiscal year) 2008/09 09/10 10/11 11/12 12/13 (Fiscal year) Net revenue FY2012/2013 ¥68.9 billion Up 4.8% year on year Non-interest expenses FY2012/2013 ¥47.8 billion Up 5.5% year on year Net income before income taxes FY2012/2013 ¥21.2 billion Up 3.2% year on year (Billions of yen) 80 (Billions of yen) 60 (Billions of yen) 30 60 40 20 0 40 20 0 20 10 0 2008/09 09/10 10/11 11/12 12/13 (Fiscal year) 2008/09 09/10 10/11 11/12 12/13 (Fiscal year) 2008/09 09/10 10/11 11/12 12/13 (Fiscal year) Net revenue FY2012/2013 ¥644.9 billion Up 16.2% year on year Non-interest expenses FY2012/2013 ¥573.2 billion Down 3.3% year on year Net income (loss) before income taxes FY2012/2013 ¥71.7 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 2008/09 09/10 10/11 11/12 12/13 (Fiscal year) 2008/09 09/10 10/11 11/12 12/13 (Fiscal year) 2008/09 09/10 10/11 11/12 12/13 (Fiscal year) Nomura Report 2013 14 Retail The Retail Division delivers a wide range of financial products and high-quality investment advice, constantly 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 177 branch offices (as of March 31, 2013) and Nomura Net & Call. 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. Toshio Morita Retail CEO Market Environment The market environment remained challenging for most of FY2012/13, but the large-scale monetary easing program initiated after the start of the new Abe administration in December 2012 resulted in a significant boost to Japanese equities and a highly positive outlook. However, many issues remain entrenched around the world, including Japan’s fiscal woes, a dwindling birthrate and an aging population, as well as Europe’s sovereign debt crisis and other global geopolitical risks. This has meant that our clients face a constantly evolving landscape, with future prospects somewhat uncertain. Amid growing uncertainty about the increasing complexity and rapid advancements in an information-intensive society, our clients’ interests, values and challenges continue to grow more diverse. The same can be said about financial assets, as the answer to the question of how to protect, use and pass on financial assets to future generations is different for each client, Business results FY2008/09 FY2009/10 FY2010/11 FY2011/12 FY2012/13 (Billions of yen) Net revenue 291.9 388.3 392.4 350.3 397.9 Non-interest expenses 273.6 274.9 291.2 287.1 297.3 Income before income taxes 18.2 113.4 101.2 63.1 100.6 15 Nomura Report 2013 depending on their individual lifeplan, family members, and approach to capital preservation. With many unsure of how best to design their portfolio, financial institutions now more than ever need to provide services tailored to the unique needs of each client. Over half of Japan’s personal financial assets remain in savings and deposit accounts. As a result, the role of securities brokerages continues to be essential in ensuring a smooth flow of funds into the economy. Moreover, through their services, securities brokerages are expected to make contributions to the development of the economy and society. Via branch offices, online, and call-center channels, Retail will continue to provide quality 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. Financial Results for FY2012/13 Although the economic environment remained challenging for much of the year, the markets have seen a strong upturn since the end of 2012. As a result, net revenue for FY2012/13 was ¥397.9 billion, non-interest expenses were ¥297.3 billion, and income before income taxes was ¥100.6 billion, up 59% compared to the previous year. At the end of March 2013, we had 5.02 million client accounts, an increase of about 40,000 accounts since March 2012. We steadily expanded our client franchise during the year, with net asset inflows of ¥1.355 trillion. Retail also expanded total sales by providing a range of products suitable for individual client needs, investment strategies and risk appetites. As a result of this expansion and the major upturn in markets, Retail client assets increased to ¥83.8 trillion as of March 31, 2013. Retail client assets Accounts with balances (Trillions of yen) 80 60 59.3 83.8 73.5 70.6 72.0 40 20 0 Other*2 Overseas mutual funds Bond investment trusts Stock investment trusts Domestic bonds*1 Foreign currency bonds Equities (Thousands) 5,000 4,000 3,000 0 2008/09 2009/10 2010/11 2011/12 2012/13 (Fiscal year) 2008/09 2009/10 2010/11 2011/12 2012/13 (Fiscal year) *1 Includes CBs and warrants *2 Includes variable annuity insurance Nomura Report 2013 16 Enhancing Client Satisfaction Since FY2010/11, Retail has held a monthly CS (Customer Satisfaction) Improvement Meeting chaired by the Retail CEO and attended by Senior Managing Directors and other key stakeholders. The meeting reviews complaints, feedback and requests made through the customer help desk, call centers and our website, and based on these reviews, works to improve products, services and systems. As part of our efforts, we have established a service assistance program where specially trained employees provide services to our elderly and disabled clients. This program was rolled at 128 (70%) of our branch offices in March 2013, and we became the first securities brokerage in Japan to have a team of several hundred service assistants operating in this way. Going forward, our service assistants will ensure that we provide a more customer-centric and enhanced level of service to our client base as it ages. Customer Satisfaction Survey In order to remain cognizant of customer satisfaction levels, since January 2011 we have been conducting customer questionnaires with clients who meet our financial services specialists, which cover our over-the-counter services such as customer service and product explanations. These questionnaires were conducted at 126 branch offices in FY2012/13. (See page 57 for the results for survey.) In February 2013, we conducted a customer satisfaction survey about our sales staff. Asset management consultants who received particularly high praise from clients were rewarded and introduced on the Nomura Securities website. Results of these surveys are shared with management, the head office and branch offices, and potential improvement measures are examined by Retail to provide better overall service. Looking Forward In FY2013/14, Retail continues to leverage its consulting-based services to foster greater trust among clients and to capture greater business opportunities. We aim to increase client assets, which provide a symbol of the trust our clients place in us, while striving to expand recurring revenues such as investment trust administration fees. This approach will enable us to build a solid and stable earnings base. Also, we continue to expand our line-up of low-risk products to meet the needs of our older clients who tend to prefer safer investment options. Retail 17 Nomura Report 2013 To enhance the quality of our consulting services, we are expanding on-the-job training programs and increasing the support provided to branch offices by the head office. Furthermore, we strive to enhance client satisfaction by utilizing the wide range of tools at our disposal, such as the Asset Planning Service, which conducts interviews with clients to ascertain and analyze their current asset situation, and NOMURA i-port, which is used to centrally manage the securities portfolios of corporate clients. Starting in August 2012, a tablet PC was distributed to each of our sales staff to use for delivery of useful and important information to our clients in a timely manner from locations both inside and outside branches. Going forward, each and every one of us at Nomura is committed to delivering superior quality service that satisfies the increasingly diverse needs of our clients, and to contributing to local economies and society as a whole through our core business. Nippon Individual Savings Accounts (NISA) Japan’s equity markets are paying close attention to the start of Nippon Individual Savings Accounts (NISA), slated for January 2014. Under this program, individuals will be able to invest up to ¥1 million tax free each year. This represents a great opportunity to expand the horizons of securities investing for those with no investment experience and to encourage clients who have taken time off from investing to come back to the markets. Retail is organizing various seminars across our domestic branch network to continue to meet the needs of its clients looking to invest using NISA. Expanding the Number of Products and Services for Aging Societies Older clients need to set aside funds for living expenses later in life as well as make preparations for leaving an inheritance for their dependants. To meet these needs, Nomura is taking steps to enhance its product lineup by offering annuities that provide regular income, whole life insurance for those clients thinking about their legacy, and comparatively low-risk investment trusts. In addition to these products, we also offer a full lineup of services that meets the diverse needs of an aging society, such as seminars on inheritance matters and “My Life Note,” a message written by the client to their family members. Outside the realm of finance, we are partnering with companies that provide products and services geared toward seniors to host “Happy Life Seminars,” which have been held at our branch offices across Japan since January 2013. This approach to satisfying an even broader range of needs is helping us to build a stronger rapport with our clients. Nomura Report 2013 18 Asset Management Based in Asia, the Asset Management Division provides a range of products and services that satisfy a broad mix of investment needs. We are striving to enhance our asset management performance and to establish a solid presence as a firm trusted by investors around the world. Although FY2012/13 got off to a challenging start in the first half, we did see fund inflows into domestic investment trusts and an increase in mandates from foreign institutional investors. We also strove to reduce costs. In the second half, fund inflows continued and the environment improved, leading to an increase in assets under management. As a result, for the full year, Asset Management realized revenues and income before income taxes that surpassed the previous year. Market Environment Japan’s public investment trust market grew 17.0% in FY2012/13 to ¥73 trillion. Although the first half of FY2012/13 was marred by the re-emergence of the European sovereign debt crisis and concerns of a worldwide economic slowdown, the market environment enjoyed an upturn thanks to policy changes initiated by the new Japanese government administration. Toshihiro Iwasaki Asset Management CEO Business results FY2008/09 FY2009/10 FY2010/11 FY2011/12 FY2012/13 (Billions of yen) Net revenue 51.9 Non-interest expenses 47.8 Income before income taxes 4.1 62.1 46.8 15.2 66.5 46.5 20.0 65.8 45.3 20.5 68.9 47.8 21.2 Note: Due to a reorganization in April 2011, reported amounts for Asset Management and Other have been reclassified. 19 Nomura Report 2013 * UCITS: The Undertakings for Collective Investment in Transferable Securities Financial Results for FY2012/13 Our investment trust business offered a truly wide range of products, including funds aimed at reducing risk and funds tailored to the current investment environment. As a result, we saw investment inflows into our Premium strategy fund, which combines investments in global equities, REIT and Japanese stocks with derivative transactions, and our other high-yield bond and emerging market bond funds. We listed a number of new ETFs as part of the NEXT FUNDS family, including ETFs linked to the Nikkei 225 Leveraged Index, Nikkei 225 Inverse Index and the Nomura Japan Equity High Dividend 70. This approach enabled us to capture fund inflows for a wide range of products throughout the year, despite the changing market conditions. Consequently, Nomura Asset Management’s share (net asset basis) of Japan’s public investment trust market stood at 22.3% as of the end of March 2013, compared to 22.1% at the end of the previous year. Our investment advisory business steadily increased mandates for Japanese stocks, high yield bonds and global bonds primarily from European financial institutions and sovereign wealth funds in Asia, which helped to steadily increase our assets under management. We also increased net assets by providing Japanese equity funds and US high yield bond funds compliant with Europe’s UCITS* mainly to high net worth individuals outside of Japan. As a result, assets under management reached ¥27.9 trillion at the end of March 2013, marking a ¥3.3 trillion increase compared to the previous fiscal year end. Asset Management reported net revenue of ¥68.9 billion, up 5.0% year on year, and income before income taxes of ¥21.2 billion, an increase of 3.0% year on year. Assets under management (Trillions of yen) 30 27.9 23.4 24.7 24.6 20 10 0 2009/10 2010/11 2011/12 2012/13 (Fiscal year) Note: Net after deduction duplications from total assets under management of companies that belong to the Asset Management Division Share of public investment trust market in Japan (As of March 31, 2013) Others 27.3% #9 2.8% #8 3.2% #7 3.3% #6 3.6% Nomura Asset Management 22.3% #2 14.4% #3 11.1% #4 7.2% #5 4.8% Nomura Report 2013 20 Asset Management 21 Nomura Report 2013 Nomura Fund Recognized with Award Nomura Asset Management’s investment trusts have earned a strong reputation from investment trust rating agencies for their ability to satisfy a broad range of investment strategies. Nine of Nomura’s funds, including the “World Water Fund Course A,” received a best funds award at the “Lipper Fund Awards 2013 Japan” for their solid mid- to long-term performance. In addition, Nomura funds also received Morningstar’s “Fund of the Year 2012” and “R&I Fund Award 2012.” Responsible Investment Nomura Asset Management is a signatory of the United Nations-backed Principles for Responsible Investment (UN PRI) and ensures that its client-focused asset management services are performed in accordance with the firm’s social responsibilities. To that end, we have established the ESG Committee, which is chaired by the CIO and meets twice a year to deliberate our approach to addressing environment, social and governance issues. In FY2012/13, we organized in-house training programs for asset managers in order to raise awareness and broaden their understanding of responsible investments. Looking Forward Delivering Highly Competitive and Industry-Leading Performance Asset Management is committed to leveraging its core active management capabilities to deliver highly competitive and industry-leading performance for Japanese and Asian equities funds, where it offers superior experience and results, Asian bonds and emerging equities funds through its expanded investment management and research reach, and J-REITs, where it has established a solid track record over the years. Main awards received by Nomura Asset Management managed funds (FY2012/13) Morningstar Fund of the Year 2012 Excellent Awarded Fund High Dividend Bond Fund Division / Nomura Emerging Bond Open Course A R&I Fund Award 2012 (defined benefits pension plan category) Japanese Core Equity Fund Category / Japan Equity Advanced Alpha Japanese Growth Equity Fund Category / Japan Equity Active Growth We will also strive to provide a more unique range of asset management solutions, such as the management of high yield and inflation-linked bond funds, which require advanced financial expertise, high alpha bond funds that seek absolute returns, and Shariah-compliant asset * Shariah-compliant asset management services: A method of asset management fully compliant with Islamic Shariah Law. management services*, where demand is expected to grow. Encouraging a Shift from Savings to Investing through Investment Trusts In the investment trust business, we will deliver diverse investment opportunities that meet a broad range of retail investor needs in order to strengthen our presence in the domestic investment trust market. Furthermore, we will strive to grow the overall market by expanding the scale of our existing products. We will continue to offer a toll free customer service center for retail investors and investment trust sales staff, study sessions for distributors, and retail investor seminars. This will help us broaden investor understanding about investment trust products and associated risks and gain a better recognition of investor needs. In turn, this knowledge will be utilized to further enhance our services. We will further expand our product lineup in order to capture opportunities from the growth of defined contribution pension plans. At the same time, we will increase investor education programs, correct the imbalance toward more conservative products within defined contribution plans, and make improvements to these plans to enable other products to be rolled into investment trusts. In advance of the Nippon Individual Savings Account (NISA) program slated to begin in January 2014, we conducted a survey of retail investors and published the results in April 2013. Going forward, we will continue to share easy-to-understand information to raise awareness about NISA and promote the use of this program. We will also develop products fully compliant with the program. Further Expanding the Investment Advisory Business In the investment advisory business, we will work to develop asset management policies tailored to each client segment, country and region, and propose a strategy best suited to each client’s investment objectives. Asset Management is in the process of expanding its lineup of products that seek absolute returns, to complement its existing strengths in Japanese equities and Asian equities as well as global and high yield bonds. With Japan’s employee pension scheme undergoing changes, we will respond to a broad range of asset management needs and fulfill our fiduciary duty to our clients. Outside of Japan, we will continue to increase mandates from sovereign wealth funds, central banks and major pension funds. We will also further expand the fund business in Europe and Asia by utilizing UCITS-compliant funds. Nomura Report 2013 22 Wholesale The Wholesale division provides a wide range of financial products and solutions to clients globally. It comprises Global Markets which offers structuring, sales and trading of global securities and Investment Banking which offers capital raising and advisory services. We position ourselves as Asia’s Global Investment Bank. We aim to increase profitability by focusing on the businesses where we have a competitive edge and by providing high value-add services to our clients. Atsushi Yoshikawa Wholesale CEO Market Environment and Results of FY2012/13 Net revenue for the fiscal year was ¥644.9 billion, an increase of 16% from the previous year. Income before income taxes was ¥71.7 billion, compared to a loss of ¥37.7billion the year before, marking a strong year-on-year turnaround. It was a year of evolving fortunes, with overall business performance improving significantly in the second half. This was driven by increasing client volumes in Fixed Income flow products and a robust recovery in income from Japanese equities transactions thanks to the impact of the “Abenomics” policy measures announced by the Japanese government and the Bank of Japan. Fixed Income delivered a strong performance with revenues increasing 38% over the previous year. Growth was seen across the global franchise - all international regions grew significantly, with the Americas delivering their highest revenues since 2010, when we started the US build out. Business results FY2008/09 FY2009/10 FY2010/11 FY2011/12 FY2012/13 (Billions of yen) Net revenue (163.6) 789.5 626.1 555.0 644.9 Non-interest expenses 553.7 614.3 622.0 592.7 573.2 Income (loss) before income taxes (717.3) 175.2 4.1 (37.7) 71.7 Note: Due to a reorganization in April 2012, reported amounts for Wholesale and Other from the year ended March 2011 have been reclassified. 23 Nomura Report 2013 Equities results were broadly in line with the previous year. This was despite the disruption through significant changes to the cost structure of the business, for example, through the migration of our execution capabilities to Instinet and the reorganization of our equity research platform. Investment Banking revenues improved significantly based on increased Equity issuance in Japan in the second half of the year. In the international business we underwrote a number of capital raising transactions for European financial institutions and were involved in a wide range of Asia related cross-regional advisory and financing deals. Looking Forward While we believe that more time is needed for an economic recovery to gain traction in Europe, we have a largely positive outlook for the economies of Japan and the United States. Meanwhile, the economic outlook for Asia, which is expected to see strong growth over the medium to long term, remains somewhat unclear in the short term amid uncertainties surrounding the Chinese economy. Internationally, multinational financial services firms will continue to face an unstable earnings environment because of macroeconomic conditions, international politics, and tighter regulatory requirements around capital, liquidity, leverage, etc. Our strategy for Wholesale is to act as a gatekeeper between Asia and the rest of world, focusing on sectors and products where we have an advantage. In facilitating cross-border commerce between Japan and the rest of Asia and between APAC and the rest of the world we will continue to build on our position as Asia’s Global Investment Bank and achieve standalone profitability in each region and business line. FY2012/13 Wholesale net revenue by region (Billions of yen) 200 150 100 50 0 137.1 121.9 189.0 196.9 AEJ Americas EMEA Japan Q1 Q2 Q3 Q4 Nomura Report 2013 24 Wholesale 25 Nomura Report 2013 Global Markets Market Environment and Results of FY2012/13 FY2012/13 was another tumultuous year for the financial markets. It started with a selloff of risk assets on the back of Eurozone concerns and political gridlock in the US. However, the business environment improved in later quarters following the European Central Bank’s bond-buying program and the Federal Reserve Bank’s QE3 program implemented in September 2012, and further driven by a major liquidity injection by the Bank of Japan in December 2012. Fixed income markets saw improving conditions as spreads tightened in most regions during the second half of the year. Client transactions also increased thanks to more favorable conditions for Credit and Securitized Products given the recovery in investor sentiment. Our Fixed Income franchise reported market share gains across all major products and delivered its best performance in three years, driven by steady client flows on the back of worldwide monetary easing. We continue to enhance our Fixed Income services to respond to the diverse needs of our clients, spanning from institutional investors globally to retail clients in Japan. In particular, we continue to extended our electronic and clearing offerings to allow investors to address the evolving market structure. These efforts have been acknowledged by our clients as reflected in higher market recognition. Equities markets remained subdued in the first half of the year in line with low market volumes as clients shied away from riskier assets amid the uncertain macroeconomic outlook. However, Japan’s aggressive monetary easing policies introduced in December 2012 by the new government and the Bank of Japan as part of “Abenomics” spurred renewed confidence in the Japanese markets, providing fresh inflows of funds in to the market. Awards & Rankings Institutional Investor All-Japan Research Team • No.1: All-Japan Research Team • No.1: All-Japan Sales Team • No.1: All-Japan Trading Team All-America Fixed Income Research Team • No.1: Currency/Foreign Exchange • No.2: RMBS Strategy/Agency All-Europe Fixed Income Research Team Risk Magazine Risk Institutional Investor Nikkei Nikkei analyst survey • No.2: Currency/Foreign Exchange • No.1: All Rates Products-Yen • No.1: Interest Rate Swaps-Yen • No.1: Single-name Credit Default Swaps (Investment-grade and high yield) – Asia • Analyst Ranking: No.1 overall • Fixed Income Analyst / Economist: No.1 overall Equities reported stronger Japanese product related revenues on larger number of transactions in both the Cash and Derivatives businesses. Meanwhile, we remain focused on building a profitable business structure by reducing costs through initiatives such as consolidating our execution capabilities with Instinet. Looking Forward Market Outlook With the varied pace of economic recovery and divergence in fiscal and monetary policies around the world, the outlook for both the fixed income and equities markets remains uncertain. A more cautious outlook in the financial markets is warranted as the trend towards stricter capital requirements will continue to put downward pressure on fee pools. Integrated Platform Combined with Home Market Advantage in Asia In December 2012, we reorganized Fixed Income and Equities into an integrated Global Markets structure in order to further enhance our operating efficiencies. This change will not only result in cost synergies, but also enable us to leverage the newly integrated Global Markets platform to deliver innovative cross-asset products and solutions to our clients and to maximize our return on financial resources. As the only Asian house with a global reach, we are leveraging our market leading position in Japan to expand our share of cross-border flows connecting Asia with EMEA and the Americas. Equities Trading Volume Share TSE market share (%) 15 13 13 12 11 10 5 0 Q1 FY2012/13 Q2 Q3 Q4 Nomura Report 2013 26 Wholesale Investment Banking Market Environment and Financial Results for FY2012/13 Financing and M&A deals were down globally in the first half of FY2012/13 due to the lingering effects of the European sovereign debt crisis and concerns over a slowdown in the Chinese and European economies, while in the second half markets received a boost from an increase in monetary easing programs around the world, which helped drive a recovery in equity financings, especially in Japan. Investment Banking continued to build momentum globally, reporting gross revenue of ¥143.0 billion for FY2012/13. With clients’ needs growing even more diverse and global, Nomura stepped up collaboration between different regions and business divisions to participate in more cross-border M&A deals and financings in global markets. We also captured non-traditional solution business associated with such deals, including interest rate and FX risk hedging. This approach enabled us to meet a wide range of client needs and play a key role in the growth of their businesses. Nomura advised a number of clients on cross-border M&A deals, which covered acquisitions by Japanese companies seeking growth opportunities abroad and takeovers of European companies by Asian companies. Examples of these deals include Itochu Corporation’s acquisition of business units from Dole Food Co. and Cheung Kong Infrastructure Holdings’ takeover of Wales & West Utilities of the UK by a consortium led by Cheung Kong Infrastructure. We also played a key role in a number of major industry consolidations taking place in Europe. These included Credit Agricole’s sales of its Greek subsidiary as well as the restructuring of Spanish banks led by The Fund for Orderly Bank Restructuring (FROB). As for financings, Nomura worked as a bookrunner on a number of major deals in Japan where equities markets continued to stage a strong comeback. These included All Nippon Airways’ (currently ANA Holdings) global offering and Sony’s euro-yen convertible bond. We also underwrote bonds issuances for many domestic and foreign issuers, including Takeda Pharmaceutical’s US dollar bond and a Samurai bond issued by Rabobank. League table ranking (CY2012) Japan-related M&A Japan-related ECM Samurai Bond 27 Nomura Report 2013 st 1 Global ECM 1 1 Global M&A st st 11 12 th th Source: Thomson Reuters In Europe, we executed a number of capital raising transactions for European financial institutions, including rights issues*1 by Italian insurance companies Fondiaria and Unipol. We also executed Électricité de France’s (EDF) US dollar hybrid bond. In Asia, we acted as a bookrunner on a number of financings aimed at unlocking future growth opportunities, including IPOs for Haitong Securities (in Hong Kong) and Religare Health Trust (an Indian company controlled by hospital operator Fortis Healthcare). As clients’ needs become increasingly diverse and sophisticated, Nomura also provided various solutions related to M&A and financing activities, including interest rate and FX risk hedging, mainly to financial sponsors and financial institution clients. This approach helped to boost revenues. *1 Rights issue: A method of increasing capital where existing shareholders are allotted, without consideration, warrants that can be used to purchase the stock at a price below the market price *2 Hybrid securities: Securities that have both a debt and equity component that are considered as capital for ratings purposes Looking Forward We will further enhance and drive profitable growth by focusing on areas where Nomura can win and providing a wide range of sophisticated solutions to our clients. M&A Advisory In addition to capturing major deals associated with industry consolidation in Japan and abroad, we will focus on pursuing cross-border M&A deals by encouraging greater collaboration among regions. Such deals involve Japanese companies seeking growth opportunities overseas and growing Asian companies. Major Japanese Trading Companies and Financial Sponsors As new investments and exits continue to be brisk, we aim to provide truly comprehensive solutions that include M&A advisory, acquisition & leveraged finance, underwriting IPOs of portfolio companies, as well as the provision of ancillary transactions like FX hedging. Financial Institutions As capital regulations become tighter with the implementation of Basel III, we will provide a variety of solutions aimed at improving the financial strength of clients by way of underwriting rights issues and hybrid securities*2, as well as advising on their disinvestment of non-core businesses. Expanding our Presence in the Americas The Americas is home to the largest fee pool in the world. With financial sponsors here expected to be active going forward, we will pursue a multi-year phased growth strategy that will include increasing M&A deals including those involving the portfolio companies of financial sponsors, strengthening capabilities in leveraged finance and expanding our client base. Nomura Report 2013 28 Global Research 29 Nomura Report 2013 Nomura’s global research is renowned for its combination of accuracy and forward- looking coverage. With research hubs in key Asia-Pacific markets, including Tokyo, Hong Kong and Singapore, as well as in London and New York, we currently have some 560 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 strategies. This extensive network of intellectual capital provides our clients with timely, actionable information. Macro Approach to Global Research Nomura’s global research covers GDP data FX research, with its Asian FX and Rates Strategy team ranked #1 in the 2013 for 38 countries and regions around the Institutional Investor All-Asia Research Team world, 32 different currencies, and every survey. The achievement of Nomura’s Asian major stock market in Japan, North America, FX and rates strategy team mirrors that of its Europe and Asia. This represents 90% of the number one ranked FX/Currency Research world’s economic and financial indicators, team in the most recent Institutional Investor positioning us well to provide timely All-America Fixed Income Research survey, information that investors can put to and number two ranked FX Research Team in immediate use. the All-Europe Fixed Income Research survey. Nomura’s bond research also received Award-Winning Research Our research consistently receives high strong recognition, with our Bond Strategy team in Japan ranked number one and our industry recognition. In the 2013 equity US MBS team ranked second in their research rankings announced by Institutional respective fields. Furthermore, we topped the Investor, we topped the All-Japan Research Nikkei Veritas rankings for bond analysts, Team for the fourth year running. credit analysts, securitization analysts, and Meanwhile, Nomura has confirmed its Japanese equity analysts. position as the world’s pre-eminent provider of Global equity research coverage (As of June 30, 2013) Total: 1,851 companies Europe 376 Americas 203 Japan 548 Asia (Excluding Japan) 724 Leading the Global Flow of Money Nomura’s award-winning worldwide forex teams to enable more seamless coverage of growing Asian markets. As of March 31, research team consists of 17 full-time 2013, we covered some 1,300 companies in researchers covering 32 major currencies. By Japan and Asia and approximately 400 stocks providing timely information on forecasts and in Europe. strategy for each currency, they help money from Japan flow to the rest of the world and money from the rest of the world flow into Japan and Asia. High-Quality Research with a Focus on Global Trends We offer timely, clearly presented evaluations Another strength found in Nomura’s of global trends and anticipated developments global research is our ability to quickly provide in reports covering such themes as the investment ideas on multiple asset classes change of government administrations seen based on multifaceted analysis of standalone around the world in 2012, the risk of a themes. For example, in April 2013 our collapse in the euro, the US fiscal cliff, shale researchers around the world debated the gas, and corporate governance. impact that the Bank of Japan’s quantitative With growing interest in the sustainability easing program would have on individual of companies and other organizations, financial products. These discussions were Nomura has been conducting research on used to provide investment implications on themes with a close correlation to the not only Japanese equities, the yen-dollar environment, including power grid stabilization exchange rate, and the Japanese economy, measures as well as the carbon capture and but also European and North American debt, storage business. international equities and emerging market Meanwhile, investments that are currencies to clients. In this regard, our considerate of the environment, society and researchers played a key role in leading the governance, or ESG, are beginning to catch global flow of money. on more widely among mainly European investors. Yet, with the release of the In-Depth Equity Research Coverage The cornerstone of Nomura’s equity research Principles for Financial Action towards a Sustainable Society by Japan’s Ministry of is our in-depth, focused analysis of core the Environment in 2011, interest has also global sectors, particularly those that are blossomed in ESG-friendly investments highly sensitive to economic, market and among Japanese investors as well. With this corporate trends in the Asia-Pacific region, in mind, Nomura organized its first seminar where Nomura can leverage its natural on ESG investments in July 2012. Nomura advantage as Asia’s global investment bank. also publishes reports on utilizing ESG We launched our US coverage in earnest in information in equity investing as part of its October 2010 and after narrowing our focus ongoing commitment to provide investment to key sectors, which include financial ideas and hints on how best to use ESG services, telecommunications, technology, information. Going forward, Nomura will and retail, our US coverage has expanded to continue to provide beneficial research to its more than 200 stocks. In Asia, we merged clients through the development of related our Japan and ex-Japan equity research equity indexes and other means. Nomura Report 2013 30 Business for Sustainability The Nomura Group recognizes that the financial services industry plays a vital role in contributing to economic growth and the sustainable development of society by stimulating the circulation of capital through its products and services. As such, we are firmly committed to solving a variety of social issues around the world through our core businesses. East Japan Revival Support Bond Fund 1105 natural gas power generation, to ensure the availability of alternative power sources. Nomura Asset Management has been managing the East Japan Revival Support Bond Fund 1105 since its inception in May Underwriter for JICA Bond Issuance Japan International Cooperation Agency 2011, with the goal of providing disaster relief (JICA) is the unified implementing body of assistance to those areas affected by the Great Japan’s Overseas Development Assistance East Japan Earthquake. The fund is structured (ODA). In order to diversify its fundraising and so that it provides donations (approximately widely share its mission to the people of 0.2% annually of the fund’s total daily net Japan, JICA issues bonds for retail investors assets) once every six-month settlement called JICA bonds. In December 2012, period. The fund donated a portion of its Nomura was given the opportunity to custodial fees from the settlement periods of underwrite a JICA bond issuance as one of November 2012 and May 2013 to Aomori the lead managers. Prefecture, Iwate Prefecture, Miyagi Prefecture, For this occasion, Nomura organized Fukushima Prefecture, Ibaraki Prefecture and investment seminars across Japan for retail Sendai City, to be used for reconstruction investors and also distributed a video projects. In addition to these local governments, program on JICA bonds for salespeople at all donations were also provided for educational of its branches in Japan. Going forward, we and living support for children orphaned by the will continue to market and promote the disaster. The total amount donated was ¥33 million.*1 A total of 10 donations will be made over the fund’s five-year term. Public–Private Partnership Infrastructure Fund Distribution positive implications of making contributions to international society through investing. Supporting Investment in Clean Energy Projects The Banking Environment Initiative (BEI) is In September 2012, Nomura Securities an environmental and social sustainability commenced sales of the SPARX – Public – Private Partnership Green Energy Investment Limited Liability Partnership, in order to help establish initiative spearheaded by multinational financial institutions. As one of the ten*2 the Nomura Group founding members, a financing system for infrastructure participates in the organization’s Clean development and ensure the stable supply of Energy Working Group, and as part of this, electricity. This is a public–private partnership Nomura Securities has researched valuation fund established by the Tokyo Metropolitan methods employed in clean energy project Government to prevent an energy crisis in the investment. In November 2012, the results of wake of the Great East Japan Earthquake and this research were presented in the keynote nuclear power plant shutdowns. Through this presentation “An Options Approach to fund, Nomura Securities solicits investments Unlocking Investment in Clean Energy,” at the in power providers, including solar, wind and 1st BEI Forum held in London. *1 The total amount from the fourth settlement period (November 2012 to May 2013) *2 BEI participants: Nomura Group, Bank of New York Mellon, Barclays, Credit Suisse, Deustche Bank, Westpac, and others. 31 Nomura Report 2013 Contributing to the Real Economy through Innovative Businesses Based on its commitment to helping grow Japan’s economy through regional economic revitalization, the Nomura Group leverages its strong network of head and branch offices in Japan to engage in a variety of new innovative businesses, including agribusiness, healthcare and regional funds. Pursuing Regional Economic Revitalization Helping Revitalize Regional Economies through a Broader Approach to Agribusiness industrial policy Agribusiness offers a significant opportunity for the revitalization of regional economies. This is because of the hidden potential it offers as for promoting sixth-order a pillar of Japan’s industrialization with agriculture, forestry and fisheries industries. The Nomura Group is supporting the growth of community based agricultural industries through Nomura Agri Planning & Advisory Co. Ltd. (NAPA) by leveraging the financial services know-how and information gathering capabilities of Nomura’s nationwide branch office network. NAPA utilizes expertise gained from experimental farms located in Chiba and Hokkaido to support companies that are newcomers to agriculture, to assist in the development of a new agricultural business model for areas damaged in the Great East Japan Earthquake, and to host seminars with the support of the Ministry of Agriculture, Forestry and Fisheries to encourage sixth-order industrialization across Japan. Taking Part in Commercialization Projects through Industry–Academia Partnerships The Nomura Group considers the lack of accumulated expertise in commercialization as a major issue facing today’s industry–academia partnerships. To solve this, the Nomura Group is committed to proactively providing the know-how that it has accumulated over many years in the field. In April 2013, Nomura Holdings and Nomura Securities were recognized as “Project Promoters” for the Ministry of Education, Culture, Sports, Science and Technology’s “Program for Creating STart-ups from Advanced Research and Technology” (START). Under this program, Project Promoters partner with universities to cultivate their research and development into viable businesses. To that end, the Nomura Group is fully utilizing its network and functions to create the new industries and new markets of the future. Learn more about the Nomura Group’s “Business for Sustainability” on our corporate website: http://www.nomuraholdings.com/csr/sustainable/services.html http://www.nomuraholdings.com/csr/sustainable/products.html Supporting the Establishment and Management of Regional Funds The Nomura Group has been involved in the establishment and management of funds by regional banks, such as Akita Bank’s “Akita Regional Revitalization Assistance Fund No. 2” and Yamagata Bank’s “Yamagata Regional Growth Fund.” These funds seek to incubate local companies engaged in future growth fields, including renewable energies. Helping Revitalize Regional Medicine through Healthcare Initiatives The healthcare industry in Japan is expected to grow on the back of the country’s slowing birthrate and aging population, but the industry also faces serious social challenges, such as how to strengthen its management structure and improve its financial standing. The Nomura Group is helping to secure the safety of regional medicine, revitalize regional economies and generate employment opportunities through healthcare and nursing care consulting and the provision of financial solutions by Nomura Healthcare Co., Ltd. In FY2012/13, Nomura provided consulting services on the construction of new hospitals in the Kinki region of Japan. Moreover, by the end of March 2013, Nomura Securities had donated to each of 25 hospitals with a helicopter emergency medical service. Nomura Report 2013 32 Column Collaborating across Regions and Divisions for Our Clients and Society Nomura stands committed to being Asia’s global investment bank. Utilizing our global business platform, we are working in a variety of ways to connect our clients to the growth markets of Asia through collaboration that transcends both regions and business divisions. Below, we introduce the case of ADB Clean Energy Bonds as a highlight of these efforts. By arranging such financial instruments, we contribute to the sustainable economic growth of Asia. Supporting the Enhancement of Social Infrastructure in Asia through Financial Instruments It has been said that around $8 trillion will be required to divisions (Investment Banking and Global Markets enhance social infrastructure in the coming years to units), with our offices in London and Japan working achieve further growth in Asia, which is a key driver of together. Going forward, we will use similar collaboration global economic growth. Nomura serves as a bridge transcending both regions and business divisions to between investors who wish to make a contribution to develop and offer products and services that help society through their investments and the financial resolve social issues and fulfill a variety of client needs. needs of projects that aim to resolve the region’s many social issues. As an example, in January 2013 Nomura underwrote the Clean Energy Bonds issued by the Asian Development Bank (ADB) and distributed them to Japanese investors. Proceeds from these bonds are used to fund clean energy projects such as solar and wind power, which contributes to the sustainable economic development of Asia. These bonds were structured and distributed through a collaborative effort by our Retail and Wholesale Clean Energy Projects Receiving Support from the ADB PRC Zhangbei Wind Power Project ADB Photo Library Philippine Energy Efficiency Project ADB Photo Library Stakeholder Feedback Supporting Energy Projects with Green Energy Bonds Anthony J. Jude Chair, Energy Committee; Senior Advisor and Practice Leader (Energy) Regional and Sustainable Development Department, Asian Development Bank The Asian Development Bank has raised, through Nomura International plc, the equivalent of more than $400 million from its second sale of Clean Energy Bonds to Japanese retail investors in 2012/13. The Clean Energy Bonds provide a way for investors to direct funding to clean energy projects. The bonds will support ADB’s ongoing renewable energy and energy efficiency projects in Asia and the Pacific. In 2012, ADB approved $2.36 billion investment in clean energy projects up from $2.1 billion in 2011 and surpassing the 2013 target of $2 billion. About 41.3% of this amount is for energy efficiency projects with the remaining amount going to renewable energy projects. Renewable energy projects include hydro, solar, wind, biomass, and waste-to-energy projects. Energy efficiency projects consist of district heating retrofits, electric vehicles, loss reduction in transmission and distribution lines, and industrial energy efficiency improvements. The 2012 ADB clean energy projects are expected to add 1,255 MW of renewable energy capacity, to save annually 871 GWh of electricity and 71,938 TJ of fuel and to avoid 15.9 million tons of CO2. ADB and Nomura will continue to promote and support socially- in clean responsible energy as they move forward to create a sustainable society free of poverty. investments 33 Nomura Report 2013 Partnerships and Business Flow Transcending Regions and Business Divisions Asia Clean energy projects in Asian countries Investment Asian Development Bank (ADB) Investment capital UK Nomura Group Investment Banking Working with the ADB Corporate Document preparation The clean energy bonds issued together with the ADB yielded an excellent result. The proceeds help the ADB to diversify its funding sources and make an impactful contribution to sustainability. Japan Malik Menzer Debt Capital Markets Overall deal coordination This deal connected the ADB, which is supporting clean energy projects, with the broad range of Japanese investor needs through team-wide collaboration across different regions and business divisions. Saori Tanaka Syndicate Department Intermediary to distributors Product planning Retail Division Gary Durham Transaction Legal - Debt Capital Markets Global Markets Information and order provision to Sales Takuji Nishike Fixed Income Marketing Dept. There is increasing demand for contributing to society through investments, rather than donations or charitable fundraising. This product was developed to cultivate these needs. Regional banks, etc. Product sales Tatsuya Kitamura Brokerage Alliance Business Consulting Dept. Takahiro Kikutake Product Development and Planning Dept. Product sales Product sales I received a great deal of positive feedback from clients. This included that it was easy to understand how the funds would be used and that they were happy to know their investment would make a difference. This reaffirmed for me the important role that we played in helping to connect investors with financing demand. Noriko Suzaki Yokohama Branch Office Mikiko Omori Sendai Branch Office Product sales Investors I helped clients to understand the importance of the issuer’s rating, the purpose of financing, and currency diversification, which provided a real sense of contributing to the betterment of society through investing. Nomura Report 2013 34 Rebuilding Trust Nomura would like to take this opportunity to put in place remain effective. To this end, the once again apologize to its many stakeholders status of implementation of the improvement for any trouble or concern it may have caused measures will be monitored by the in relation to the series of insider trading Improvement Measures Implementation incidents in 2012 related to public offerings Committee under the direct control of the for which Japan’s Securities and Exchange Representative Executive Officer and President Surveillance Commission has recommended of Nomura Securities. administrative penalties. By thoroughly implementing the improvement measures, we will work to Overview On June 29, 2012, Nomura Securities prevent such incidents from occurring again and strive to regain the public’s trust while announced a series of business improvement continuing to reinforce our internal controls. measures to address these incidents that have now been fully implemented. While we believe that all the improvement measures Improvement Measures The following represents the main are functioning effectively, we recognize the improvement measures implemented for this importance of maintaining consistent series of insider trading incidents related to implementation of the measures to ensure public offerings. the new organizational structure and systems Summary of Implemented Improvement Measures 1. Enhancement of the Control System for Corporate-Related Information reported to related departments and the relevant executive officers in charge. Company rules were revised and the departments in charge of institutional equity sales are now prohibited from requesting corporate-related information from analysts or departments that are likely to be in contact with corporate- related information for business reasons, such as the Syndicate Department. Rules are now more rigorously enforced to ensure that both corporate-related information and information that is indicative of corporate-related information is no longer transmitted by the departments in charge of institutional equity sales. 2. New Establishment of Equity Administration Department (Currently GM Sales Administration Department) In July 2012, the Equity Administration Department was established. Since then, this department has been monitoring call recordings, use of e-mails and online chats, and use of entertainment expenses by employees in the departments in charge of institutional equity sales. In April 2013, the name of this department was changed to the GM Sales Administration Department and its scope of monitoring was expanded to departments in charge of bond sales. At the same time, a framework for monitoring the sales activities of all departments in charge of sales targeting institutional investors was also set up. In order to monitor exchanges with clients, employees of departments in charge of institutional equity sales have been issued mobile phones with a call recording function that must be used at all times. The results of monitoring activities are 35 Nomura Report 2013 3. Improvement of Personnel System and Implementation of Training Changes were made to the personnel system and performance appraisals now emphasize “Business Ethics/ Compliance” as an important assessment criterion that is equally ranked with “Achievements and Results” and “Potential.” Changes were also made to the compensation scheme and new guidelines created to give qualitative assessment of business ethics more weight in promotion criteria, to reflect the qualitative assessment in the year- end assessment/compensation (bonus), and to prepare guidelines concerning the reduction or clawback of deferred compensation on the grounds of receiving a disciplinary action in connection with a breach of compliance rules and policies. In addition, all officers and employees must now participate in an annual training session to raise greater awareness Furthermore, employees of departments in charge of sales targeting institutional investors must take part in these training sessions biannually. about business ethics. In order to rationalize the use of entertainment expenses, company rules have been put in place to regulate gifts and business entertainment expenses outside of the Company as well as to prohibit the excessive concentration of gifts and business entertainment expenses on particular clients. Shoichi Nagamatsu Executive Managing Director Chief of Staff Nomura Holdings, Inc. Re-Imbuing Compliance and Business Ethics Nomura has reinforced and made changes to its compliance system as well as initiated various measures to foster greater compliance awareness and business ethics among all its executive officers and employees in order to prevent insider trading scandals from ever happening again. Specifically, these efforts can be broken down into three points. First, Nomura changed the way it manages corporate-related information and established a system for properly managing this information between departments that have such information, departments without such information, and clients. Second, Nomura newly established the Equity Administration Department to reinforce its monitoring functions of departments in charge Hisato Miyashita Senior Managing Director Group Compliance Head Nomura Holdings, Inc. Representative Executive Officer Compliance Division, Internal Control Supervisory Manager Nomura Securities Co., Ltd. Internal Control Supervisory Manager, Living up to the Trust Our Clients Place in Us In April 2013, I was appointed as Representative Executive Officer of Nomura Securities Co., Ltd., Compliance to Division, complement my current posting of Senior Managing Director of Nomura Holdings and Group Compliance Head. In 2012, Nomura Securities drew up preventive measures for the series of insider trading incidents related to public offerings for which Japan’s Securities and Exchange Surveillance Commission recommended administrative penalties. Each and every one of these preventive measures is now being fully implemented, and we are currently monitoring the implementation process, making further changes and taking steps to further enhance of institutional equity sales. The name of this department was changed to the GM Sales Administration Department as of April 1, 2013, and its scope was expanded to departments in charge of bond sales. Third, Nomura has made improvements to its personnel management system and training programs. Greater weight has been given to business ethics and compliance for performance appraisals and promotions, and business ethics training sessions are now held regularly for all executive officers and employees. Going forward, the most important action we can take is to ensure that our efforts are maintained and sustained. To that end, each and every executive officer and employee must be fully prepared to remake the company from the ground up and maintain the same high level of business ethics demanded from professionals in the financial services industry. Such business ethics are formed through training as well as daily communication between supervisors, junior staff and fellow colleagues as well as clients. Nomura will continue to implement these compounding, company-wide efforts that are essential to restoring our trust and credibility and to making market growth possible. and reinforce our internal control framework. I am committed to ensure the continuity and sustained functionality of these preventive measures and to make further improvements going forward. I believe that the essence of compliance can be found in professionalism underpinned by business ethics and social conventions. In this sense, compliance forms a vital element that determines the true value of the many services we provide clients. Each and every one of our employees needs to abide by the rules, which includes the laws and regulations that form a vital part of their duties, to understand the essence and act according to these rules, and constantly be aware of their own role in society as someone working in the financial services industry. That is, it is critical for Nomura to foster a corporate culture where employees perform their duties with a strong sense of business ethics and commitment to compliance. I am convinced that such a corporate culture will enable us to regain the trust of our clients and make further contributions to the sound development of capital markets. Going forward, we will continue to build up our compliance framework with an even greater commitment than before. Nomura Report 2013 36 Corporate Governance Approach to Corporate Governance Nomura Holdings recognizes that enhancement of corporate governance is one of the top priorities to achieve its management visions of enhancing corporate value by deepening society’s trust in the firm and increasing the satisfaction of stakeholders, including that of shareholders and clients. On this basis, we are committed to strengthening and improving the governance framework by pursuing transparency in our management and expediting the decision-making process within the Nomura Group. Measures for Reinforcing Governance When we adopted a holding company by adopting the Committee System, a system in which management oversight and business structure and listed on the New York Stock execution functions are clearly separated. Exchange (NYSE) in 2001, we installed In 2004, we established the “Code of Outside Directors, established an Internal Ethics of Nomura Group”, which specifies Controls Committee, a Compensation matters to be observed by each director, Committee (the majority of the members are officer and employee of the Nomura Group Outside Directors) as well as an Advisory with respect to corporate governance and Board of eminent persons from outside the corporate social responsibility. We are striving company, and further improved our information to thoroughly implement such matters by disclosure system, as part of our commitment obtaining a compliance pledge once a year to ensure management transparency. and conducting training programs. Please In addition, in 2003, we further see our corporate website for more details. strengthened and increased the transparency Code of Ethics of Nomura Group of our oversight functions and expedited the Nomura Group’s decision-making process http://www.nomuraholdings.com/company/ basic/ethics.html 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 satisfy requirements for independent directors as defined in the Sarbanes-Oxley Act of 2002 • Three Directors, including two Outside Directors • Determines policy with respect to the particulars of compensation for each Director and Executive officer, as well as the individual compensation • Directors concurrently serving as executive officers are not members Group CEO Executive Management Board Advisory Board Deliberates on and determines important management matters, such as the management strategy for Nomura Group, business plans, budgets, and allocation of management resources Established as a consulting body to the Executive Management Board, with the aim to bring an external perspective to the formation of our management strategy 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 37 Nomura Report 2013 Corporate Governance System The Committee System clearly separates Directors, and based on supervision with an emphasis on the external perspective, we are management oversight and business aspiring to put in practice management with execution functions. The Committee System a high level of transparency. We emphasize expedites the decision–making process by the independence of Outside Directors from broadly delegating authority for the execution the Nomura Group, and in order to maintain of business functions from the Board of such independence, we have established the Directors to the Executive Officers. Further, “Independence Criteria for Outside Directors.” the Committee System enhances management As none of the Outside Directors fall under oversight by establishing the Nomination, the categories for which independence is Audit and Compensation Committees, and considered suspect, and since none of the the majority of the members of each Outside Directors have any conflicts of interests committee are Outside Directors. Among the with the shareholders, we have reported that various organizational structures we could each of the six Outside Directors are have chosen to adopt, we believe that the independent directors in our submission to the Committee System is the most compatible Tokyo Stock Exchange. Please see our Annual with the corporate governance standards Securities Report for more information on the which form a part of the NYSE Listed Independence Criteria for Outside Directors. Company Manual. 6-K Based on this, we determined that the Committee System is the most suitable form of corporate governance for us at this point in time. Board of Directors In order to achieve effective oversight of business execution functions from multiple perspectives, we place importance on diversity within the Board of Directors. Each director has a diverse background in terms of http://www.nomuraholdings.com/investor/ library/sec Board of Directors (As of June 26, 2013) Outside Directors 54% (6 of 11) Non-Japanese Directors 27% (3 of 11) nationality, gender, professional experience, Female Directors etc., and by utilizing their extensive experience in their respective fields, such as business manager, legal/accounting professional and public servant, the directors assist with the FY2012/13 Board Meetings 9% (1 of 11) determination of important managerial Convened: matters and oversee business execution. Average attendance rate: 11 times 97% Additionally, six of the eleven Directors making up our Board of Directors are Outside Note: The number of meetings and average attendance rate for the Board of Directors represents results for fiscal 2012 (April 2012 to March 2013) Nomura Report 2013 38 Corporate Governance Business Execution The Board of Directors has broadly delegated Internal Controls We are committed to strengthening and decision making authority for business improving our internal controls system to execution functions to the Executive officers promote proper corporate behavior to ensure that they can execute the company’s throughout the Nomura Group, from the business with speed and efficiency. Among viewpoints of ensuring management the matters delegated to the Executive transparency and efficiency, complying with Officers by resolutions adopted by the Board laws and regulations, controlling risks, of Directors, the most important matters of ensuring the reliability of business and business must be deliberated and decided financial reports and fostering the timely and by specific management bodies within the appropriate disclosure of information. company, including the Executive Management Furthermore, in order to ensure effective Board, the Group Integrated Risk Management and adequate internal controls, the Group Committee, and the Internal Controls Internal Audit Department, which is independent Committee. These management bodies are from the business execution functions, and required to report to the Board of Directors other similar audit sections placed in major on the status of their deliberations at least subsidiaries, conduct internal audits of the once every three months. company and its subsidiaries. In order to further bolster our business The implementation status of internal execution framework for financial operations audits are also reported to the Board of that are becoming increasingly sophisticated Directors and the Audit Committee. and specialized, we utilize a system whereby In addition, to strengthen the the Executive Officers delegate a part of their independence of the internal audit sections authority for business execution decisions to from the business execution functions, Senior Managing Directors (SMDs), who implementation plans and the formulation of focus on individual business line activities. the budget of the Internal Audit Divisions, as well as the election and dismissal of the Head Nomura Internal Controls Internal Controls Committee Agrees on IA’s audit plan, human resources and budget Audit Committee • Deliberates on and determines matters concerning the maintenance and assessment of internal controls and promoting proper corporate behavior • Members include two Audit Committee members, the Group CEO and the Group COO • Audit plan and budget approval • Appointment and dismissal of IA head Report Report Report • Consists of two Outside Directors, and one Director not concurrently serving as an Executive Officer Assists the Audit Committee with its duties Office of Audit Committee Internal Audit Internal audits Management Business Risk Management Compliance 39 Nomura Report 2013 of the Internal Audit Division require the history, responsibilities, and compensation consent of the Audit Committee. Audit standards of related business fields. A portion Committee members may recommend of base salary may be paid in the form of changes to the implementation plan, etc., to equity-based compensation with a certain Executive Officers. Compensation for Directors and Executive Officers non-exercise period to ensure that the interests of Directors and Executive Officers are closely aligned with those of shareholders. As Nomura has adopted a committee system for corporate governance, the Compensation 2. Annual Bonus Annual Bonuses of Directors and Executive Committee has prepared and approved the Officers are determined by taking into account Compensation Policy of Nomura Group and both quantitative and qualitative factors. Compensation Policy for Directors and Quantitative factors include performance of the Officers of Nomura Holdings, Inc. Group and the division results, while qualitative factors include achievement of Compensation Policy of Nomura Group individual goals and subjective assessment To enable us to achieve sustainable growth, of individual contributions. Depending on the realize a long-term increase in shareholder level of bonus payment, a portion of payment value, deliver added value to our clients, in cash may be deferred. In addition, a portion compete in the global market and enhance of deferred bonus may be paid in equity- our reputation, Nomura has developed the based compensation with a certain non- Compensation Policy of Nomura Group exercise period in lieu of cash. Such deferred applicable to regular employees, including bonus may be unpaid or forfeited under senior management. The policy is broadly specific circumstances. divided into six key themes. 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 Compensation Policy for Directors and Executive Officers of Nomura Holdings, Inc. 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 achievements are accomplished. Payments are made in equity linked awards The compensation of directors and executive with appropriate vesting periods to ensure officers comprises base salary, an annual that medium to long-term interests of bonus, and a long-term incentive plan. The Directors and Executive Officers are closely Compensation Committee has approved the aligned with those of shareholders. following matters related to compensation of directors and executive officers: Please refer to the 20-F. 1. Base Salary Base salary is determined based on factors such as professional background, career Form 20-F http://www.nomuraholdings.com/investor/ library/ar/ Nomura Report 2013 40 Corporate Governance Board of Directors (As of June 26, 2013) Nobuyuki Koga Chairman of the Board of Directors Chairman of the Nomination Committee Chairman of the Compensation Committee Masahiro Sakane Outside Director Nomination Committee Member Compensation Committee Member Councilor and Senior Adviser of Komatsu Ltd. Takao Kusakari Outside Director Nomination Committee Member Compensation Committee Member Corporate Advisor of NYK Line Tsuguoki Fujinuma Outside Director Chairman of the Audit Committee Certified Public Accountant Former Chairman and President of the Japanese Institute of Certified Public Accountants Toshinori Kanemoto Outside Director Audit Committee Member Attorney-at-Law Of-Counsel, City-Yuwa Partners Former President of ICPO-INTERPOL Hiroyuki Suzuki Audit Committee Member Executive Management Structure (As of August, 2013) Group CEO President and Group COO; Wholesale CEO Retail Retail CEO Asset Management Asset Management CEO Wholesale Global Markets Group COO; Wholesale CEO Head of Global Markets Co-Head of Global Markets Investment Banking Head of Investment Banking AEJ Americas EMEA Regional CEO, Asia ex-Japan Regional CEO, Americas Regional Co-CEO, Americas Regional CEO, EMEA Regional Co-CEO, EMEA 41 Nomura Report 2013 Koji Nagai Atsushi Yoshikawa Toshio Morita Toshihiro Iwasaki Atsushi Yoshikawa Steven Ashley Naoki Matsuba Kentaro Okuda Minoru Shinohara David Findlay Toshiya Hasegawa Jeremy Bennett Yasuo Kashiwagi Board of Directors (As of June 26, 2013) Executive Management Structure (As of August, 2013) Koji Nagai Representative Executive Officer Group CEO Atsushi Yoshikawa Representative Executive Officer President and Group COO Dame Clara Furse Outside Director Former Chief Executive of London Stock Exchange Group Member of the Bank of England’s Financial Policy Committee Michael Lim Choo San Outside Director Former Executive Chairman of PricewaterhouseCoopers, Singapore David Benson Chief of Staff Chief Financial Officer Chief Risk Officer Deputy Chief Risk Officer Deputy Chief of Staff Shoichi Nagamatsu Shigesuke Kashiwagi Lewis O’Donald Yuji Nakata Chie Toriumi Corporate, Others Group CAO (Wholesale IT, Global Operations, Facility Management) Paul Spanswick CIO Naohiro Sako Head of Group Compliance and Wholesale Compliance Head Hisato Miyashita Global Operations, General Services Chief Legal Officer and Secretariat Group Corporate Communications Head of Global Human Resources Internal Audit Group Internal Audit Masaru Konno Noriaki Nagai Eiji Miura Akihito Watanabe Junko Nakagawa Head of Asia Strategy and Wealth Management, Asia Hiromasa Yamazaki Nomura Report 2013 42 Compliance Compliance framework Nomura Holdings Nomura Group companies 43 Nomura Report 2013 Fundamental Approach Compliance is a top management priority for of the Head of Group Compliance are also assigned to each Group company, including the Nomura Group, and the Nomura Group overseas offices, to develop and maintain Code of Ethics represents our fundamental their respective compliance structures. policy on compliance. Nomura Securities’ Compliance Structure Compliance Framework We work to eliminate behavior that could In addition to group-wide initiatives, Nomura Securities has established a Compliance result in legal or regulatory violations. Should Program as a detailed action plan, and put such suspicions arise, corporate structures into place a compliance framework based on and systems have been put into place to this program. effectively handle them, including the prompt A Compliance Committee chaired by delivery of all related information without the President oversees company-wide exception to management. initiatives and is in charge of establishing and Specifically, we have appointed a deliberating on important issues related to Group Compliance Head to oversee internal controls. In addition, the Company compliance for the Group as a whole along has assigned an Internal Administration with a Group Compliance Department that Supervisor to monitor compliance issues and provides support. A Wholesale Compliance set up the Compliance Division. Head has also been designated to strengthen The Compliance Division strengthens our internal controls in response to global and improves legal and regulatory compliance business expansion. as well as the internal controls system by Compliance Officers that report on formulating internal rules and disseminating compliance-related issues under the direction them throughout the Company. It also monitors the status of compliance with respect to these rules in each department and branch office. Should any problems arise, the division takes remedial action such as increasing awareness of the rules or Board of Directors Audit Committee revising them as needed. Executive Management Board Group Compliance Head Direction Report Wholesale Compliance Head Direction Report Group Compliance Department Direction Report Compliance Officers Direction Report Departments 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. Compliance Training We conduct comprehensive compliance training for all executive officers and Nomura Securities’ Primary Initiatives • Appointing officers to oversee internal controls, compliance, etc., and developing systems to ensure compliance and the appropriateness of operations • Thoroughly screening account openings and conducting proper examinations when underwriting securities • Conducting sales and solicitation activities • Carefully reviewing product details and taking action to provide accurate and comprehensive information 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 status employees on topics such as the prevention • Ensuring thorough compliance with laws, regulations of money laundering and insider trading, firewall regulations, and guidelines for managing customer information. Nomura Securities’ Primary Initiatives • Training for sales 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 personnel 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 Enhancing the Quality of Financial Products and Services and internal rules through compliance training Fair Business Practices The Nomura Group strives to ensure fair business practices by prohibiting transactions with anti-social forces, stipulating rules on gifts and entertainment of public officials and private sector groups, and ensuring that all employees fully comply with both. Information Security The Nomura Group Information Security Policy is the basic document governing the effective protection of clients’ personal information and other information assets of the Group. Customer-related personal information Nomura Securities seeks to enhance the quality is handled under stringent standards set out in of financial products and services offered to the Nomura Group Privacy Policy and other customers under the Guidelines for Financial information security-related rules, and in full Instruments Business Supervision. Some of its compliance with personal information-related initiatives include rigorous screening of account laws and regulations. For more information, openings and securities underwriting practices please see: as well as the provision of accurate and easy- Nomura Group Privacy Policy to-understand information. http://www.nomuraholdings.com/policy/ privacy.html Nomura Report 2013 44 Risk Management Fundamental Approach The business activities of the Nomura Group are exposed to various risks such as market risk*1, credit risk*2, operational risk*3 and other risks caused by external factors. We of the risk management framework, while Risk Management Departments, which are independent from our business lines, work together globally under the leadership of the CRO to build group-wide risk management have established a risk management frameworks and comprehensively manage framework to provide comprehensive risk through the use of stress testing and controls, monitoring and reporting of these other methods. risks in order to maintain financial soundness Nomura’s Internal Audit Department and the Company’s corporate values. operates independently from other departments in the organization and strives Risk Management Structure Our fundamental policy concerning risk toward enhancing the effectiveness of internal controls, including our risk management management is to control risks arising in the structure, and it makes proposals and course of business operations to the confines recommendations for operational improvements of the Company’s risk appetite, which is based on audits and evaluations of the clearly established based on risk tolerance in effectiveness and validity of risk identification line with group-wide business strategy, and risk management practices. business targets, management strength and Form 20-F capital base. In accordance with this, the Group Integrated Risk Management Committee*4 has been delegated by the Executive Management Board to deliberate and determine important matters pertaining http://www.nomuraholdings.com/investor/ library/ar/ Social and Environmental Risk Management to integrated risk management. We believe that considering the social and The Chief Risk Officer (CRO) is environmental risks that may arise from various responsible for maintaining the effectiveness transactions is key to managing our reputational *1 Market risk: Risk of losses arising from fluctuations in values of financial assets and debts (including off-balance sheet items) due to fluctuations in market risk factors (interest rates, foreign exchange rates, prices of securities and others) *2 Credit risk: Risk of losses arising from the decrease of asset values (including off-balance sheet items) due to deterioration in creditworthiness or default of an obligor or counterparty *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 Chief Legal Officer, the Deputy CRO, and other members appointed by the chairman. Risk management structure Board of Directors Report 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 risk. As such, in executing our business operations we focus on these risks in the same way we are careful about legal compliance. For example, underwriting financing deals, we review and confirm the issuer’s awareness of any associated potential risks to society and the environment and that the issuer has taken appropriate steps to address such risks, including the disclosure of information about those risks. Impact on the environment Assessment process Assessment of transaction Decision • Regulations • Environmental and social issues 45 Nomura Report 2013 and society, as well as financial condition, Strengthening Our Response to Disasters operating results, and other aspects, are The Nomura Group has revised the risk included in the overall guidelines applied by scenarios it uses based on the lessons relevant departments during the assessment learned from the Great East Japan process as vital items that must be confirmed Earthquake in order to be fully prepared for when taking on underwriting deals. other natural disasters, such as a major Crisis Management The Nomura Group has established the Crisis earthquake that may strike directly below the Tokyo area or in the Nankai Trough off the coast of Nagoya. We are also strengthening Management Committee, comprised of crisis our organizational disaster preparedness management officers of each Group company measures on a global basis. In FY2012/13, worldwide, to address any crisis that may we focused efforts on the following initiatives. occur. Chaired by an executive officer nominated by the Group CEO, this committee has established a system for managing crises and ensuring business continuity in the event of an emergency. This committee's secretariat regularly 1. Increased supply stockpiles • Increased supplies of food and water at the head office and branch offices • Provided additional supplies to branch offices located in areas likely to be damaged by a tsunami 2. Strengthened collaboration between Group companies in Japan and overseas conducts employee safety verification drills, • Bolstered the system to collect and share disaster prevention drills, and business continuity drills, in order to be fully prepared to check the status of all Nomura employees during an emergency. As part of these efforts, the secretariat is also tasked with fostering greater awareness of crisis management as well as maintaining and strengthening our ability to respond to emergencies. This system and these measures are stipulated in the Nomura Group Crisis Management Policy. This policy covers a wide range of risks facing the Company, including natural disasters, fires, serious crimes committed against the Company or its information with overseas branch offices • Enhanced information sharing with domestic Group companies 3. Conducted training drills • Conducted drill based on the scenario of an earthquake striking directly beneath Tokyo • Carried out street-wide exercises • Performed drills to verify the safety of employees 4. Fostered greater awareness of crisis management • Conducted crisis management training 5. Business continuity plan • Analyzed degree of impacts on business operations • Revised business continuity plan in conjunction with core system renewals Security Measures for Online Services executive officers and employees, system In order to accommodate the diverse needs of interruptions, transmittable diseases and the its clients, the Nomura Group provides a leakage of information assets. We have wide range of its services over the Internet. delegated significant authority to crisis These services use the latest, most advanced management officers to ensure they can encryption technologies to ensure that important promptly make decisions onsite should a client information is always safeguarded. crisis occur. The above policy dictates that Furthermore, we have strengthened crisis management officers be able to take surveillance of our in-house systems and the most appropriate actions necessary to implemented new security systems in order ensure people’s safety and minimize the to prevent illegal access from external parties spread of damage. or information leakages caused by cyber- attacks, which have become increasingly threatening in recent years. Nomura Report 2013 46 CSR Management 47 Nomura Report 2013 Fundamental Approach We recognize that CSR is not only an effective that spans the entire Nomura Group to support the next generation. We engage in risk management tool, but is also a way to our business and community affairs activities identify opportunities for our business. We in line with this goal. have been taking steps to strategically analyze the relationship between the group’s business activities and society as well as the CSR Activities Promotion Framework The CSR Committee is the management level environment, and are taking steps to decision-making entity for the corporate social incorporate these into our management responsibility program. Chaired by the Group decision-making, business processes and CEO, the committee comprises six executive community affairs activities. In March 2010, officers. The Corporate Citizenship Department we formulated “For Future Generations” as serves as its secretariat and spearheads our key focus area to be shared among all of comprehensive CSR activities. The Corporate our executive officers and employees. Citizenship Department also works closely The core role of any financial institution with regional offices globally to ensure that is to contribute to the sustainable development business divisions maintain a consistent and of the economy and society by promoting proactive approach to their community affairs sound capital markets through its products activities in line with their operations as well as and services. We established “For Future the needs of the local community. Generations,” which represents a commitment 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 and to contribute to developing a sustainable society for future generations Business for Sustainability To provide innovation through our products based on market mechanisms 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 Communication with Stakeholders We internal believe and external communications are important mechanisms that ensure we are addressing the expectations of our external stakeholders as well as incorporating the needs of society in our business activities. We strive to raise awareness and educate our employees on corporate social responsibilities through messages and information provided by senior management through our intranet system. This is based on our belief that it is essential for employees, who engage with various stakeholders, to take the lead role in implementing CSR activities. Our communications with external stakeholders take the form of information dissemination via reports and our website. In addition, we undertake stakeholder dialogue sessions and interactive communication via social media, such as our official Twitter account and Facebook pages. Community affairs activities are considered important platforms for encouraging direct interaction between employees and external stakeholders, and include financial and Organizational structure CSR Committee Chairman: Group CEO Strategy Secretariat Corporate Citizenship Department Japan AEJ EMEA Americas Key issues Goals Progress in fiscal 2012 Responsible Business Corporate Governance Enhance medium- to long-term corporate value by ensuring timely decision-making and strong management oversight using a diverse group of directors pp. 37– 42 Compliance Identify and appropriately address compliance risks that are highly relevant to our business pp. 35– 36, 43 – 44 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 pp. 45– 46 CSR Management Identify business opportunities and risks associated with social and environmental factors and reflect these in business activities and community affairs activities pp. 47– 48 Client Win the trust of clients by providing high quality services pp. 15– 28 economics education and support for the Business for Sustainability reconstruction effort following the Great East Japan Earthquake. In addition, we are involved in initiatives as well as multi- Business activities Proactively support businesses that contribute to solving social and environmental through financial mechanisms, thereby generating added value issues pp. 31– 34 stakeholder frameworks aimed at making Citizenship contributions to society and the environment both in Japan and abroad. We also receive valuable feedback from our stakeholders about our community affairs activities, including financial and economics education programs and regional revitalization initiatives. Stakeholder Dialogue http://www.nomuraholdings.com/csr/ dialogue/ Community Investment Promote community affairs activities that meet the needs of each community with a focus on developing the next generation pp. 49 – 50 Diversity & Inclusion Promote human resources development to train highly professional employees capable of working on the global stage pp. 51– 52 Environmental Footprint Identify the environmental impacts of our operations and pursue initiatives to reduce such impacts pp. 53 – 54 Nomura Report 2013 48 Our Community Fundamental Approach Under its goal of “For Future Generations,” the and economics is crucial not only for building adequate wealth but also for the sound, long- Nomura Group is contributing to a sustainable term development of the capital markets. tomorrow by investments in young people Since the 1990s, we have provided financial through its core businesses as well as its and economics education for students as diverse employee-led volunteer activities. well as adults. A core focus for our work is to support Our involvement includes the distribution educational activities, which vary depending of textbooks, financial courses for university on the needs of each region. Employees students worldwide, employee-led programs participate in activities such as financial and for elementary and junior high school economics education programs, basic students, and a stock education contest for education in developing countries and junior and senior high school and university employment assistance for youth. students through the Nikkei Stock League. Initiatives in Japan Nomura’s initiatives in Japan All told, more than 580,000 students have taken part in our programs. focus on In continuation from the previous year, financial and economics education programs in fiscal 2013 we hosted a stakeholder and the Pacific Music Festival (PMF) aimed at dialogue session with people from both developing the next generation. As an integral inside and outside the Company on the topic member of the local community, we are also of how best to utilize financial and economics committed to various community activities education in school curriculum. and to assisting the reconstruction effort Stakeholder Dialogue following the Great East Japan Earthquake. http://www.nomuraholdings.com/csr/dialogue/ sl.html Financial and Economics Education Programs Restoration Assistance Following the Great East Japan Earthquake Nomura believes that knowledge of finance We are assisting the people and communities affected by the Great East Japan Earthquake through a number of initiatives. In addition to our support through our core businesses (see page 31), our employees have volunteered to plant cherry trees and carry out a variety of other rebuilding activities. We were recognized at the Make a CHANGE Day for our efforts to host events aimed at facilitating people to communicate directly with those working in the affected areas. Breakdown of community contribution expenditure Others 12.6% Disaster relief 6.5% Human rights and labor 0.2% Environment 3.4% Welfare and health 5.8% Community contribution 14.7% Education 41.2% Total ¥1.35 billion Arts, culture and sports 6.0% Science and academic achievement 9.5% Notes: 1) Total expenditure worldwide (Fiscal 2012) 2) Figures includes: - Approximately ¥220 million from the Nomura Foundation - Approximately ¥60 million from the Nomura Charitable Trust - Approximately ¥10 million from the Nomura America Foundation Employee volunteers planting cherry trees in spring 2012 (the third time this activity has been organized) 49 Nomura Report 2013 Initiatives around the World The Nomura Group engages in numerous community affairs activities at its offices around the world. As a member of the local community, Nomura participates in dialogue with its stakeholders in order to better understand cultural differences and needs, and actively gets involved through employee-driven activities intended to educate, help local communities and protect the environment. EMEA Americas Instinet In the EMEA region, our community contributions are focused towards helping disadvantaged young people break through the limitations of their environment their and aspirations to reach new goals. Our activities to support these young people are based on collaborative efforts with NPOs and other local organizations. raising Our program encourages employees to become involved with monthly initiatives focused on the local community. Our educational partnership with Everybody WINS provides mentoring and literacy support local children, allowing Nomura to focus its efforts on future generations. for A large number of Instinet employees participate in local initiatives, centered on efforts to assist young people. Examples include a partnership with the Make-a-Wish Foundation to assist sick children, work with Operation Backpack to provide disadvantaged youngsters with school supplies, and our high school mentoring efforts with Elevate New York. End of the school year celebrations with our partner primary school, Southwark Park Children’s holiday party held in our office The Elevate students (and the CEO of Elevate New York, Kevin Singleton, in the middle) on Instinet's trading floor Powai, India employees Nomura’s Powai CSR program encourages to become involved with initiatives focused on giving back to our community. Our partnership with NGOs helps support literacy programs, environmental activities and health initiatives for the lesser privileged. Children and a team of employees volunteering at one of our partners Mumbai Mobile Crèches' Day Care Center AEJ NomuraCARES (Nomura Community Affairs Raising Funds and Employee Services) is an AEJ network started by employees based on a desire to give back to communities in Asia through philanthropic initiatives focused primarily on causes that help children, the elderly and the environment. Learn more about our relationship with local communities on our corporate website: http://www.nomuraholdings.com/csr/citizenship/ Over 200 Nomura employees spent a day for the Hong Kong Cleanup Challenge Nomura Report 2013 50 Our People 51 Nomura Report 2013 Personnel Development Today, the Nomura Group’s workforce Diversity and Inclusion at Nomura The Nomura Group is committed to fostering includes employees representing more than a corporate culture that respects its people’s 70 different nationalities. This diverse pool of values regardless of background, such as personnel is our most important asset, and gender, nationality, age or sexual orientation. as such, we are committed to providing education and training programs that will help Employee Networks enhance each employee’s competitiveness Nomura engages in activities through and build teamwork. networks run independently by its employees. The Retail Division has been encouraging A total of three networks, one focused on the personal growth of its employees through women in the workplace, one on life and educational programs that develop family, and one on generational and cultural capabilities for independently thinking, acting differences, disseminate information as well and delivering results. Group training for the as plan and implement events. These first three years of employment and training networks also proactively host events jointly at given milestones (new hire, appointment or with other companies. promotion) provide the specific knowledge and skills required while also reinforcing personal qualities and strengthening compliance awareness. The Wholesale Division offers practical training to build upon the core skills of employees and raise the performance of the entire organization, based on its own set of needs. Specifically, this includes a program for improving presentation skills, a program on communication and coaching to get the most out of an organization, and leadership training. Photo taken at the five-company cross-industrial women’s forum hosted by Women In Nomura (WIN) Furthermore, we have company-wide External Networks programs to support employees in obtaining The promotion of diversity is shifting from the licensing or other certifications as well as to phase in which companies make efforts and develop their own career path. We are also innovate on a standalone basis to the phase helping to build internal networks by enabling where networks are created to share employees from different divisions and information and best practices. The Nomura geographic regions to take part in the same Group has established a network with more training programs. than 30 companies from varying industries and segments, through which it hosts bimonthly round table meetings to exchange information on issues related to diversity. Employee-Friendly Work Environments Respecting Human Rights We have established various mechanisms to We support working conditions that allow prevent discrimination and harassment, in each employee to fully concentrate on their accordance with the Nomura Group Code of work in a healthy condition, with both good Ethics. Specifically, we set up the Nomura physical and mental health. We have shifted Group Human Rights Committee to debate our emphasis to early discovery and and determine human rights initiatives as well intervention. Our industrial physicians as to share information across the Group periodically visit our worksites for health from its secretariat. monitoring and conduct face-to-face In addition, we continue to hold human interviews with supervising managers. rights training for all Nomura people in order Improvement measures are being introduced to raise greater awareness about human to departments with a history of employees rights issues. working long hours, and mandatory health All types of consultation contacts are examinations are provided for employees available both within and outside the who work extended hours. company through our Sexual Harassment/ Power Harassment Hotline to help prevent Mental Healthcare harassment in the workplace. To safeguard the mental health of our employees, we provide access to psychiatrists and an employee counseling Making Efforts to Resolve Human Rights Issues through Multi-Stakeholder Dialogue room staffed by a dedicated professional. We As part of our human rights initiatives, we also offer consultation services provided by participate in the Human Rights Due Diligence medical staff at our Health Management Workshop, which approaches issues through Center. Furthermore, we are committed to dialogue with a wide range of stakeholders. helping employees who have overcome In 2012, more than 40 companies and more mental illnesses return to the workplace. than 10 human rights NGOs gathered to hold Initiatives in Fiscal 2012 We developed tools to help employees manage their own mental healthcare needs. (1) We published basic information on mental health on our in-house website (2) We streamed a program on how to deal with stress on our in-house website (3) We began conducting stress checks that include a physician interview on employees working especially long hours in order to objectively determine the level of stress these employees are under discussions on human rights issues that should be identified and addressed by companies. Discussions concerning how we can review, recognize the importance of, and address our own human rights issues took place. Going forward, we will continue to tackle human rights issues through our involvement in this workshop. Learn more about our relationship with employees on our corporate website: http://www.nomuraholdings.com/csr/citizenship/ Nomura Report 2013 52 Our Environment Environmental Management Section 10 of our Code of Ethics states, Environmental Targets We set environmental goals for each year and “Nomura Group is committed to acting in an closely manage the progress of our environmentally responsible manner and environmental preservation activities. should therefore approach environmental Environmental goals are set for each region, issues positively.” Based on this commitment, and the Environmental Activities Working in 2009 we created both our Environmental Group checks to see if these targets are met. Statement and Environmental Policy, and are Moreover, the Head of Environmental Affairs proactively working to reduce our reviews activities at the end of each fiscal environmental impacts. year to assess the relative achievement of In Japan, we have established an environmental goals and ensure continuous environmental management system (EMS) improvements are being made. and are implementing comprehensive To ensure the effectiveness of the environmental preservation activities based group environmental management system, on a correct awareness of environmental we conduct an environmental training risks and issues. Our offices around the world program for all Nomura Group employees, in are also implementing environmentally which 91.4% of employees participated in friendly initiatives, which include our London Japan in fiscal 2012, and an environmental headquarters building obtaining ISO 14001 efforts status review, which garnered a 81.4% certification in 2007 following an audit response rate in Japan in fiscal 2012. performed by a local accreditation body. Furthermore, we stream information over our intranet system and host events to raise environmental awareness. Fiscal 2012 environmental objectives and progress, fiscal 2013 targets (Japan) Fiscal 2012 targets Assessment Fiscal 2013 targets Lower CO2 emissions at Nihonbashi head office to 25% below fiscal 2002 level Reduced 36.8% Reduction of greenhouse gas emissions Fuel-efficient, low-pollution vehicles to account for 80% of fleet 82.0% of vehicles replaced Reduce CO2 emissions per square meter of floor area at Nomura Group offices in Japan by 15% of fiscal 2009 levels Have fuel-efficient, low-pollution vehicles to account for 90% of fleet Raise waste recycling rate at Nihonbashi head office and Nagoya branch office to 87% Nihonbashi 89.2% Nagoya 88.0% Raise waste recycling rate at Nihonbashi head office to 90% and Nagoya Branch to 88% Promotion of green purchasing Green products to account for 75% of supplies request system items Green products accounted for 75.7% of purchases Have green products account for 75% of supplies request system items Reduce use of paper per person bought through supplies request system to 25% below fiscal 2006 level Reduced 44.8% Reduce use of paper per person bought through supplies request system to 30% below fiscal 2006 level Reduction of paper usage Increase number of accounts that agree to accept documents electronically by promoting electronic receipt of prospectuses 1.26 million accounts Promote electronic receipt of documents Reduce use of paper for internal forms by promoting electronic documentation 196 types of forms digitized on the application and approval system (Savings of 110,000 sheets of paper) Reduce use of paper for internal forms by promoting electronic documentation of confirmation forms Increase the number financial products and services that help resolve social issues Expand lineup, including ADB bonds and JICA bonds Increase the number of financial products and services that help resolve social issues Promulgation of environmental business 53 Nomura Report 2013 Efforts to Address Climate Change The Nomura Group addresses climate usage we continue to digitize prospectuses, reports, forms, and other documents. change from the standpoint of both risk and In August 2012, we issued tablet opportunity and recognizes it as an important devices featuring digitized sales and issue to tackle. As a multinational corporation marketing tools to all of our sales staff in with offices around the world, we are making order to enhance the quality of our services every effort to help resolve climate change and further reduce paper usage at the same issues through our business (see pages 31 to time. In January 2013, we expanded the 34) and to reduce the environmental impacts range of documents for which electronic from our own business activities. distribution will apply for our Nomura Home We collect and disclose group-wide Trade service. environmental information and since fiscal At our offices, we are working to raise 2011 we have introduced third-party employee awareness of the amount of paper assurance verifications to ensure the reliability they use as part of our campaign to reduce of this information. In each region, we are paper consumption. Some of our back addressing the issue of climate change offices have even become paperless without through our continued efforts to reduce a single printer on the floor. Going forward, power consumption at offices and reduce we will continue to reduce our paper CO2 emissions from employee travel. consumption and strive to raise awareness Our purchases of green power about paper usage across the entire Group. certificates, which we began domestically in fiscal 2006, have reached a total of 41.36 million kWh, including 5.4 million kWh purchased in fiscal 2012. These certificates are allocated to seminar events as well as our Nihonbashi head office and Takanawa Training Center. Moreover, our offices in Switzerland and Germany have actively switched over to renewable energy sources, such as hydroelectricity. Going Paperless and Promoting Recycling We are making efforts to more effectively use limited natural resources and reduce our environmental impacts to assist in the creation of a recycling-oriented society. As part of our commitment to reducing paper TOPICS Nomura Selected for Inclusion in the Carbon Disclosure Leadership Index by the CDP In November 2012, Nomura Holdings became the only company from Japan’s financial sector to be selected for inclusion in the Japan 500* Carbon Disclosure Leadership Index (CDLI). This was based on a survey conducted by the CDP about climate change strategy and greenhouse gas reduction efforts that showed Nomura Holdings to be a leader in information disclosure. Nomura Group has implemented a system to reflect its corporate social responsibilities in its decision making, business processes and community affairs activities, based on a strategic recognition of the relationship between its business activities and society and the environment. Under this system, we have been disclosing information to the CDP since 2003. Going forward, we will continue with our environmental management practices, work together globally, and proactively disclose information. * 500 major Japanese companies surveyed by the CDP Learn more about our environmental initiatives on our corporate website: http://www.nomuraholdings.com/csr/citizenship/ Nomura Report 2013 54 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 shareholders 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 provided by (used in) operating activities Net cash provided by (used in) investing activities Net cash provided by (used in) financing activities Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents 55 Nomura Report 2013 FY2008/09 FY2009/10 FY2010/11 FY2011/12 ¥ 306,803 ¥ 395,083 ¥ 405,463 ¥ 347,135 ¥ 359,069 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) ¥ (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 ¥ 67,798 ¥ 28,661 ¥ ¥ 107,234 121,254 132,249 417,424 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 ¥ (1,500,770) (269,643) 2,176,530 964 ¥ 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 ¥ (235,090) (423,214) 1,284,243 (26,246) ¥ 599,693 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 9,942 (844,311) (6,314) ¥ 32,230,428 ¥ 36,692,990 ¥ 35,697,312 ¥ 37,942,439 ¥ 290,863 ¥ 549,501 ¥ (549,820) ¥ (265,433) Millions of yen FY2012/13 62,353 141,029 367,979 8,053 394,007 38,686 708,767 2,079,943 266,312 1,813,631 547,591 91,388 179,904 91,545 49,010 616,463 1,575,901 237,730 132,039 105,691 (1,543) ¥ 1,652,752 2,629,875 14,115,257 17,124,349 2,420,206 ¥ 37,942,439 ¥ 738,445 2,413,801 15,409,383 8,491,296 978,163 7,592,368 35,623,456 2,294,371 24,612 2,318,983 (160,486) (701,623) 47,175 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) Trading assets and private equity investments Balance Sheets (Period End): Cash and cash deposits Loans and receivables Collateralized agreements 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 Cash Flows: Total liabilities and equity Less: Net income (loss) attributable to noncontrolling interests Net income (loss) attributable to NHI shareholders Net cash provided by (used in) operating activities Net cash provided by (used in) investing activities Net cash provided by (used in) financing activities Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents FY2008/09 FY2009/10 FY2010/11 FY2011/12 Millions of yen FY2012/13 ¥ 306,803 ¥ 395,083 ¥ 405,463 ¥ 347,135 ¥ 359,069 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) ¥ (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) ¥ 106,330 121,254 132,249 417,424 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 68,086 288 107,005 143,939 336,503 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 ¥ 67,798 ¥ 28,661 ¥ 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 ¥ 1,352,244 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 ¥ 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 ¥ 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 62,353 141,029 367,979 8,053 394,007 38,686 708,767 2,079,943 266,312 1,813,631 547,591 91,388 179,904 91,545 49,010 616,463 1,575,901 237,730 132,039 105,691 (1,543) ¥ 107,234 ¥ 1,652,752 2,629,875 14,115,257 17,124,349 2,420,206 ¥ 37,942,439 ¥ 738,445 2,413,801 15,409,383 8,491,296 978,163 7,592,368 35,623,456 2,294,371 24,612 2,318,983 ¥ 32,230,428 ¥ 36,692,990 ¥ 35,697,312 ¥ 37,942,439 ¥ (1,500,770) (269,643) 2,176,530 964 ¥ 407,081 ¥ (235,090) (423,214) 1,284,243 (26,246) ¥ 599,693 ¥ 290,863 ¥ 549,501 9,942 (844,311) (6,314) (160,486) (701,623) 47,175 ¥ (549,820) ¥ (265,433) Nomura Report 2013 56 Data Section CSR Key Facts Corporate Governance Members of the board Board of directors Outside directors Non-Japanese directors Female directors Unit June 30, 2011 June 30, 2012 June 30, 2013 No. of people Ratio (%) No. of people Ratio (%) No. of people Ratio (%) No. of people Ratio (%) 14 - 8 57 4 29 1 7 11 - 7 64 3 27 1 9 11 - 6 54 3 27 1 9 Unit April 1, 2011 April 1, 2012 April 1, 2013 Officers (Executive Officers and Senior Managing Directors) Men Women Ratio of women No. of people No. of people % 30 1 3.2 41 2 4.6 23 2 8 Board of directors meetings No. of times held Average attendance rate Client Focused Unit FY2010/11 FY2011/12 FY2012/13 No. of times % 10 96 10 95 11 97 Unit FY2010/11 FY2011/12 FY2012/13 Caseload at Customer Help Desk Department (Retail Division) Total Complaints Inquiries Opinions and requests Other No. of cases No. of cases No. of cases No. of cases No. of cases 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) No. of branch offices No. of branch offices No. of branch offices No. of branch offices No. of branch offices 5,189 2,359 2,408 256 166 30 78 53 136 15 5,005 3,012 1,836 13 144 30 80 54 140 14 5,693 3,409 2,119 23 142 30 81 57 139 13 Results for survey of customer satisfaction with branch office service (Retail Division) Unit June 1, 2012 September 1, 2012 Extremely satisfied/satisfied Neither satisfied nor dissatisfied Extremely dissatisfied/dissatisfied Note: These surveys were conducted at 126 branch offices. % % % 76.6 20.0 3.4 77.0 19.1 3.9 57 Nomura Report 2013 Unit FY2010/11 FY2011/12 FY2012/13 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 Amount (Millions of yen) Ratio (%) Amount (Millions of yen) Ratio (%) Amount (Millions of yen) Ratio (%) Amount (Millions of yen) Ratio (%) Amount (Millions of yen) Ratio (%) Amount (Millions of yen) Ratio (%) Amount (Millions of yen) Ratio (%) Amount (Millions of yen) Ratio (%) Amount (Millions of yen) Ratio (%) Amount (Millions of yen) Ratio (%) Number of community development projects implemented Total Japan EMEA Americas AEJ No. of projects No. of projects No. of projects No. of projects No. of projects Assistance provided to groups that contribute to society No. of groups assisted No. of groups 1,400 - 623 44.5 71 5.0 162 11.6 138 9.8 55 3.9 25 1.8 27 1.9 121 8.6 182 13.0 173 40 83 31 19 200 1,235 - 582 47.1 106 8.6 83 6.7 200 16.1 49 3.9 43 3.4 3 0.2 71 5.7 103 8.3 370 27 196 107 40 243 1,348 - 556 41.2 81 6.0 129 9.5 199 14.7 79 5.8 47 3.4 4 0.2 88 6.5 171 12.6 423 24 195 151 53 274 Unit FY2011/12 FY2012/13 Cumulative total Participants and materials in financial and economics education 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, teachers) Nikkei Stock League Since 2008 Since 2006 Since 2008 Since 2000 Finance courses for universities Since 2001 Financial courses for the general public Since 2003 No. of schools No. of copies No. of schools No. of copies No. of classes No. of participants No. of teams No. of members No. of schools No. of participants No. of courses No. of participants 120 5,000 180 17,200 22 1,087 1,420 5,741 115 12,000 536 27,839 396 17,422 387 17,326 31 1,865 1,287 5,120 114 11,000 444 21,696 2,716 222,422 4,267 414,526 106 6,172 20,226 80,613 1,328 184,000 6,037 317,157 Nomura Report 2013 58 Unit FY2010/11 FY2011/12 FY2012/13 Data Section CSR Key Facts Our People Education and training expenses Total Japan EMEA Americas AEJ Millions of yen Millions of yen Millions of yen Millions of yen Millions of yen Participation in education and training (in-house training) Total Japan EMEA Americas AEJ Number of employees Total Japan EMEA Americas AEJ Aggregate no. of hours Aggregate no. of participants Aggregate no. of hours Aggregate no. of participants Aggregate no. of hours Aggregate no. of participants Aggregate no. of hours Aggregate no. of participants Aggregate no. of hours Aggregate no. of participants No. of employees Ratio of male employees (%) Ratio of female employees (%) No. of employees Ratio of male employees (%) Ratio of female employees (%) No. of employees Ratio of male employees (%) Ratio of female employees (%) No. of employees Ratio of male employees (%) Ratio of female employees (%) No. of employees Ratio of male employees (%) Ratio of female employees (%) Ratio of employees by region Total Japan EMEA Americas AEJ % % % % % 2,455 1,573 489 257 136 272,528 13,146 207,458 8,255 3,790 407 - - 61,280 4,484 26,871 62 38 14,918 56 44 4,353 70 30 2,348 74 26 5,252 68 32 100 55 16 9 20 2,033 1,468 133 280 153 225,184 21,928 169,385 11,965 2,766 977 7,390 1,182 45,643 7,804 27,168 62 38 15,145 56 44 4,014 70 30 2,420 74 26 5,589 66 34 100 56 15 9 20 2,441 1,907 108 233 193 254,117 22,048 208,087 12,081 1,732 647 7,204 1,794 37,094 7,526 26,242 62 38 15,004 57 43 3,618 70 30 2,271 74 26 5,349 65 35 100 57 14 9 20 Composition by employment contract (Japan) Full-time regular employment Part-time regular employment No. of employees No. of employees 14,918 788 15,145 766 15,004 606 59 Nomura Report 2013 Unit FY2010/11 FY2011/12 FY2012/13 Number of new hires Total Japan EMEA Americas AEJ Composition of managers Total Japan (Nomura Holdings, Nomura Securities) EMEA Americas AEJ No. of employees No. of employees No. of employees No. of employees No. of employees Men Women Ratio of women (%) Men Women Ratio of women (%) Men Women Ratio of women (%) Men Women Ratio of women (%) Men Women Ratio of women (%) 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 No. of employees No. of employees No. of employees No. of employees No. of employees No. of employees No. of employees No. of employees Post-childcare leave reinstatement and retention rates (Nomura Securities) Reinstatement rate Retention rate Men (%) Women (%) Men (%) Women (%) Human rights training (Nomura Securities) 3,634 990 754 638 1,252 6,643 898 12 3,474 173 5 1,553 317 17 786 159 17 830 249 23 233 338 435 104 332 13 0 30 100 96 100 95 3,280 989 663 478 1,150 7,299 1,064 13 3,623 205 5 1,693 325 16 1,060 243 19 923 291 24 237 367 478 148 365 6 0 33 100 99 100 98 2,465 938 307 361 859 7,024 1,055 13 3,549 219 6 1,557 315 17 1,016 234 19 902 287 24 249 392 529 175 390 11 2 43 100 98 50 98 Sessions Participants No. of sessions No. of participants 32 13,827 20 9,823 16 14,129 Status of other personnel and labor-related issues 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) % No. of employees % days % 5 713 1.86 9.7 53.8 6 763 2.00 9.9 52.8 Thousands of yen 10,869 10,660 7 727 2.02 10.0 53.0 9,990 Nomura Report 2013 60 Data Section CSR Key Facts Our Environment Environmental performance Unit FY2010/11 FY2011/12 FY2012/13 CO2 emissions*1 CO2 emissions per employee Electricity consumption*2 Fuel consumption*2 Purchased amount of Green Power*3 CO2 emissions from employee travel*4 Water consumption*5 Copy paper consumption*6 Amount of waste generated*7 Nomura Group companies in Japan Main EMEA offices Main AEJ offices Main American offices Nomura Group companies in Japan Main EMEA offices Main AEJ offices Main American offices Nomura Group companies in Japan Main EMEA offices Main AEJ offices Main American offices Nomura Group companies in Japan Main EMEA offices Main AEJ offices Main American offices Nomura Group companies in Japan Nomura Group companies in EMEA Nomura Group companies in AEJ Nomura Group companies in Americas Nomura Group companies in Japan Main EMEA offices Main AEJ offices Main American offices Nomura Group companies in Japan Main EMEA offices Main AEJ offices Nomura Group companies in Japan Main EMEA offices Main AEJ offices tons-CO2 tons-CO2 tons-CO2 tons-CO2 tons-CO2/FTE tons-CO2/FTE tons-CO2/FTE tons-CO2/FTE MWh MWh MWh MWh MWh MWh MWh MWh MWh tons-CO2 tons-CO2 tons-CO2 tons-CO2 thousand m3 thousand m3 thousand m3 thousand m3 ton ton ton ton ton ton 44,626 23,664 16,917 - 3.0 6.4 1.8 - 89,674 47,830 17,813 - 14,275 6,783 406 - 5,900 12,407 - 2,595 - 204 101 36 - 726 - - 1,078 - 372 36,588 22,927 23,899 15,018 2.4 6.9 4.9 6.2 74,648 50,091 27,474 23,197 12,664 6,981 272 0 7,424 18,505 9,446 11,883 6,060 188 136 33 4 701 90 134 945 - 278 41,215 18,159 23,966 14,720 2.7 6.2 5.3 6.5 74,249 38,679 28,012 22,665 11,948 7,025 800 0 6,329 17,919 9,728 11,057 5,124 178 124 159 4 654 78 92 884 722 297 *1 Totals for our main AEJ offices only included the India office in fiscal 2010. Data for fiscal 2011 was revised by expanding the scope of aggregation (the same applies to electricity and fuel consumption). Data for our main EMEA offices was revised as follows. (1) The data for fiscal 2010 and fiscal 2011 was revised by changing the CO2 emissions factor applied to the London office. (2) The data for fiscal 2010 was revised by refining the scope of inclusion. Calculation of CO2 emissions is based on electricity, fuel and heat consumption. See http://www.nomuraholdings.com/csr/data for details about the emissions factors applied. *2 Totals for our main AEJ offices only included the India office in fiscal 2010. *3 In fiscal 2010, data applied only to the Nomura Group companies in Japan. From fiscal 2011, however, in addition to the Nomura Group companies in Japan, the Frankfurt and Zurich offices from our main EMEA offices are included in the totals. *4 Data compiled on domestic and international flights and long-distance railway transportation tickets purchased through designated firms. Totals for the Nomura Group companies in AEJ only included the India office in fiscal 2010. Data for regular automobile usage by the Nomura Group companies in Japan, the Nomura Group companies in EMEA and by our India office out of the Nomura Group companies in AEJ is also included in the tally. Fiscal 2011 data for the Nomura Group companies in Japan was revised by refining the method of aggregation. See http://www.nomuraholdings.com/csr/data for details about the emissions factors applied. *5 Totals for our main EMEA offices only included the London office in fiscal 2010. Totals for our main AEJ offices only applied to the India office in fiscal 2010 and fiscal 2011. *6 Totals for the Nomura Group in Japan include items purchased through designated firms by Nomura Securities. Totals for our main EMEA offices include the London office, and totals for our main AEJ offices include the India office. *7 Of the Nomura Group companies in Japan, totals include Nomura Securities Nihonbashi Head Office building, the Dai-ni Edobashi Building, the Osaka Branch, and the Nagoya Branch. Of our main EMEA offices, totals include the London, Paris, Frankfurt, and Zurich offices. Of our main AEJ offices, totals include the India office. Fiscal 2010 and fiscal 2011 data for the Nomura Group companies in Japan was revised by expanding the scope of aggregation. Of our main AEJ offices, the fiscal 2012 data for our Hong Kong and Singapore offices is as follows. - CO2 emissions: 6,175 tons-CO2 - CO2 emissions per employee: 4.7 tons-CO2 - Electricity consumption: 9.420MWh - Fuel consumption: 0MWh - CO2 emissions from employee travel: 6,077 tons-CO2 - Water consumption: 493m3 Our main EMEA offices are located in London, Paris, Frankfurt, Zurich, Madrid , and Milan . Our main AEJ offices are located in Hong Kong, Singapore, India, and Dalian in China. Our main American offices are located in New York and include INSTINET offices. Offices to which the scope of aggregation was expanded. 61 Nomura Report 2013 Independent Assurance on Environmental Reporting Nomura Report 2013 62 Data Section Global Network Major Subsidiaries and Affiliates Europe Retail Asia-Pacific Japan Americas • Nomura Securities Co., Ltd. • Nomura Healthcare Co., Ltd. • Nomura Agri Planning & Advisory Co., Ltd. • Nomura Farm Co., Ltd. • Nomura Asset Management • Nomura Asset Management • Nomura Asset Management • Nomura Asset Management U.K. Limited • Nomura Asset Management Deutschland KAG mbH Hong Kong LTD. Offices: Hong Kong, Shanghai • Nomura Asset Management Singapore LTD. • Nomura Funds Research and Technologies Co., Ltd. • Nomura Private Equity Co., Ltd. USA Inc. • Nomura Global Alpha LLC • Nomura Corporate Research and Asset Management Inc. • Nomura Funds Research and Technologies America, Inc. • Nomura Asset Management Capital Co., Ltd. Malaysia Sdn. Bhd. • Nomura Islamic Asset Management Sdn.Bhd. • Nomura Asset Management Australia Pty LTD. • Nomura Europe Holdings PLC • Nomura Asia Holding N.V. • Nomura International (Hong • Nomura Securities Co., Ltd. • Nomura Capital Investment • Nomura Holding America Inc. Offices: New York, Washington, D.C. Co., Ltd. • Nomura International PLC Offices: London, Frankfurt, Helsinki, Madrid, Milan, Stockholm, Vienna, Doha, Dubai • Banque Nomura France • Nomura Bank (Switzerland) Ltd. • Nomura Nederland N.V. • Nomura Bank International PLC Offices: London, Milan, Labuan Kong) LIMITED Offices: Hong Kong, Hanoi, Taipei • Nomura Australia LIMITED • Nomura Financial Advisory and Securities (India) Private Limited • Nomura Financial Investment (Korea) Co. Ltd. • Nomura Malaysia Sdn. Bhd. • Nomura Singapore LIMITED • P.T. Nomura Indonesia Other office locations Dublin, Warszawa, Bahrain Other office locations Beijing, Shanghai, Manila, Powai • Nomura Securities International, Inc. Offices: New York, Atlanta, Boston, Chicago, Houston, Miami, San Francisco, Toronto, São Paulo • INSTINET Incorporated Asset Management Wholesale*1 Others • The Nomura Trust & Banking Co., Ltd. • Nomura Investor Relations Co., Ltd. • Nomura Babcock & Brown Co., Ltd. • Nomura Research & Advisory Co., Ltd. • Nomura Business Services Co., Ltd. • Nomura Facilities, Inc. • Nomura Institute of Capital Markets Research • Nomura Financial Products & Services, Inc. • Nomura Land and Building Co., Ltd. • Nomura Bank (Luxembourg) S.A. • Nomura Information Technology (Dalian) Co., Ltd • Nomura Research Institute, Ltd.*2 • JAFCO Co., Ltd.*2 • Nomura Real Estate Holdings, Inc.*2 • Capital Nomura Securities Public Company Limited*2 *1 Subsidiaries and offices involved primarily in Wholesale related businesses. *2 Affiliated companies accounted for by the equity method 63 Nomura Report 2013 Nomura Securities Domestic Network (As of August 1, 2013) 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 (40 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 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 Office 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 2013 64 Data Section Corporate Data Corporate Data Company name Nomura Holdings, Inc. Paid-in capital ¥594.5 billion (As of March 31, 2013) 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, 2013) Listing The common shares of Nomura Holdings, Inc. are listed on the Tokyo, 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 represents one share of common stock. (As of March 31, 2013) Securities code 8604 (Tokyo Stock Exchange) NMR (New York Stock Exchange) Number of shareholders 482,935 (Unit shareholders: 459,985) (As of March 31, 2013) Major shareholders (Top 10) Names of shareholders Number of shares Percentage (rounded to two decimal places) Japan Trustee Services Bank, Ltd. (Trust Account) 181,118,532 4.74% The Master Trust Bank of Japan, Ltd. (Trust Account) 143,236,500 3.75% SSBT OD05 Omnibus Account Treaty Clients 92,515,219 2.42% CACEIS BANK FRANCE,ORDINARY ACCOUNT 62,518,270 1.64% Japan Trustee Services Bank, Ltd. (Trust Account 9) 38,988,900 1.02% State Street Bank and Trust Company 505225 38,865,003 1.02% Head office 1-9-1, Nihonbashi, Chuo-ku, Tokyo 103-8645, Japan Group employees 27,956 (As of March 31, 2013) 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 The Chase Manhattan Bank, N.A. London S.L.Omnibus Account 37,287,773 0.98% 3/2009 3/2010 3/2011 3/2012 3/2013 Japan Trustee Services Bank, Ltd. (Trust Account 1) 37,005,700 0.97% Nomura Group Employee’s Stock Ownership Association 36,573,507 0.96% Northern Trust Company (AVFC) Sub-account American Client 36,448,600 0.95% Note: The Company has 108,435,696 shares (2.84%) of treasury stock as of March 31, 2013, which is not included in the major shareholders list above. Date of record for dividend payments Second quarter Year-end September 30 March 31 Other Credit rating Standard & Poor’s Moody’s Investors Service R&I JCR Note: As of May 31, 2013 65 Nomura Report 2013 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/ The Nomura Group strives to make its corporate website broadly accessible by eliminating troubles people may have in accessing information and services due to visual, hearing, speech or other physical impairments. http://www.nomuraholdings.com/policy/acresult.html 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 pertaining 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 2013 66
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