FORM 6-K/A
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
Commission File Number: 1-15270
For the month of June 2024

NOMURA HOLDINGS, INC.
(Translation of registrant’s name into English)

13-1, Nihonbashi 1-chome
Chuo-ku, Tokyo 103-8645
Japan(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F

X

Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):On June 24, 2022, Nomura Holdings, Inc. filed its Annual Securities Report for the year ended March 31, 2022 with the Director of the Kanto
Local Finance Bureau of the Ministry of Finance pursuant to the Financial Instruments and Exchange Act.
Information furnished on this form:
EXHIBITS
Exhibit Number
1.

English translation of certain items disclosed in the Annual Securities Report pursuant to the Financial Instruments and Exchange Act for the fiscal
year ended March 31, 2022.

2.

English translation of Management’s Report on Internal Control over Financial Reporting and Confirmation Letter.

EXPLANATORY NOTE: The registrant furnished with the Securities and Exchange Commission (the “SEC”) a report on Form 6-K on July 22,2022 (the “Original Form 6-K”). The registrant is furnishing this Form 6-K/A in order to amend certain information contained in Exhibit 1 “English
translation of certain items disclosed in the Annual Securities Report pursuant to the Financial Instruments and Exchange Act for the fiscal year ended
March 31, 2022” and Exhibit 2 “English translation of Management’s Report on Internal Control over Financial Reporting and Confirmation Letter“
furnished on the Original Form 6-K.
As shown in Exhibits 1 and 2 to this Form 6-K/A, amendments are indicated by “underline” and relate to the following:•

PART I Corporate Information—Item 1. Information on the Company and Its Subsidiaries and Affiliates—1. Selected Financial Data—(1)Selected consolidated financial data for the latest five fiscal years•

PART I Corporate Information—Item 2. Operating and Financial Review—2. Risk Factors•

PART I Corporate Information—Item 2. Operating and Financial Review—3. Operating, Financial and Cash Flow Analyses byManagement—(5) Liquidity and Capital Resources—Cash Flows•

PART I Corporate Information—Item 5. Financial Information—CONSOLIDATED STATEMENTS OF CASH FLOWS•PART I Corporate Information—Item 5. Financial Information—NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS— 1.
Summary of accounting policies•

Management’s Report on Internal Control over Financial Reporting —3. [Report of Evaluation]

No other portion of the Original Form 6-K is being amended hereby.

SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by theundersigned, thereunto duly authorized.
NOMURA HOLDINGS, INC.
Date: June 25, 2024

By:/s/ Yoshifumi Kishida
Yoshifumi Kishida
Senior Managing Director

EXHIBIT 1
Annual Securities Report Pursuant to the Financial Instruments and Exchange Act for the Fiscal Year Ended March 31, 2022
Table of Contents
Page

PART I

Corporate Information

2

Item 1. Information on the Company and Its Subsidiaries and Affiliates
1. Selected Financial Data
2. History and Development of the Company and Its Subsidiaries and Affiliates
3. Business Overview
4. Subsidiaries and Affiliates
5. Employees

22

Item 2. Operating and Financial Review
1. Management Challenges and Strategies
2. Risk Factors
3. Operating, Financial and Cash Flow Analyses by Management
4. Significant Contracts
5. Research and Development, Patent and Licenses, etc.

5
5
12
26
61

4

Item 3. Property, Plants and Equipment
1. Results of Capital Expenditure
2. Our Properties
3. Prospects of New Capital Expenditure, Abandonment and Other
Item 4. Company Information
1. Share Capital Information
2. Stock Repurchase
3. Dividend Policy
4. Status of Corporate Governance and Other*

62
62
67
68
70

Item 5. Financial Information
1. Consolidated Financial Statements and Other
2. Unconsolidated Financial Statements

112
113
250

Item 6. Information on Share Handling, etc.
Item 7. Reference Information
PART II

Information on Guarantor of the Company

Report of Independent Auditors

263

An English translation of the underlined items above is included in this document.
* Status of Directors and Senior Management in Item 4.4. Status of Corporate Governance and Other is not translated.
1

PART I

Corporate Information

Item 1. Information on the Company and Its Subsidiaries and Affiliates
1. Selected Financial Data.
(1) Selected consolidated financial data for the latest five fiscal years.
Year ended March 31

2018

Total revenue (millions of yen)
Net revenue (millions of yen)
Income (loss) before income taxes (millions of yen)
Net income (loss) attributable to Nomura Holdings, Inc. (“NHI”)
shareholders (millions of yen)Comprehensive income (loss) attributable to NHI shareholders(millions of yen)
Total equity (millions of yen)
Total assets (millions of yen)
Shareholders’ equity per share (yen)Net income (loss) attributable to NHI common shareholders per share—
basic (yen)Net income (loss) attributable to NHI common shareholders per share—
diluted (yen)Total NHI shareholders’ equity as a percentage of total assets (%)
Return on shareholders’ equity (%)
Price/earnings ratio (times)
Cash flows from operating activities (millions of yen)
Cash flows from investing activities (millions of yen)
Cash flows from financing activities (millions of yen)Cash, cash equivalents, restricted cash and restricted cash equivalents at endof the year (millions of yen)
Number of staffs[Average number of temporary staffs, excluded from above]

2020

2021

2022

1,972,158
1,496,969
328,158

1,835,118
1,116,770(37,701)2019

1,952,482
1,287,829
248,261

1,617,235
1,401,872
230,671

1,593,999
1,363,890
226,623

219,343(100,442)

216,998

153,116

142,996

126,335
2,799,824
40,343,947
810.31(70,136)2,680,793
40,969,439
794.69219,943
2,731,264
43,999,815
873.26141,077
2,756,451
42,516,480879.79309,113
2,972,803
43,412,156965.8063.13(29.90)

67.76

50.11

46.68

61.88
6.8
7.92
9.75
(341,305)(296,741)
509,352(29.92)
6.4(3.73)—(62,010)(420,464)
769,997

66.20
6.0
8.21
6.76
(94,709)(180,541)
807,705

48.63
6.3
5.73
11.60
667,610
257,932(668,725)

45.23
6.7
5.10
11.04
(862,832)(593,182)
1,112,718

2,354,868
28,048[4,671]

2,687,132
27,864[4,492]

3,192,310
26,629[4,313]3,510,011
26,402[4,224]

3,316,408
26,585[4,339]1

The selected financial data of Nomura Holdings, Inc. and its consolidated subsidiaries (“Nomura”) were stated in accordance with the accounting
principles generally accepted in the United States of America (“U.S. GAAP”).

2

Shareholders’ equity per share, Total NHI shareholders’ equity as a percentage of total assets, Return on shareholders’ equity are calculated using
Total NHI shareholders’ equity.

3

The consumption tax and local consumption tax on taxable transaction are accounted for based on the tax exclusion method.

4

Certain contract employees are included in Number of staffs.

5

Due to Accounting Standards Update 2014-09, “Revenue from Contracts with Customers” and the changes in our accounting policy which
Nomura adopted on April 1, 2018, certain reclassifications of previously reported amounts have been made to conform to the current year
presentation.

6

Price/earnings ratio (times) is not stated for the year ended March 31, 2019 due to net loss.

7

As discussed in Note 1 “Summary of Accounting Policies”, amounts for Cash flows from operating activities, Cash flows from investing activities
and Cash flows from financing activities have been restated to correct certain errors identified during the fourth quarter ended March 31, 2024.
2

(2)Selected stand-alone financial data for the latest five fiscal years

Year ended March 31,

2018

Operating revenue (millions of yen)
Ordinary income (millions of yen)
Net income (loss) (millions of yen)
Common stock (millions of yen)
Number of issued shares (thousands of shares)
Shareholders’ equity (millions of yen)
Total assets (millions of yen)
Shareholders’ equity per share (yen)Dividend per share (yen)The first quarter
The second quarter
The third quarter
The end of a term (the fourth quarter)
Net income (loss) per share (yen)Net income per share—diluted (yen)Shareholders’ equity as a percentage of total assets (%)
Return on shareholders’ equity (%)
Price/earnings ratio (times)
Payout ratio (%)
Dividend on shareholders’ equity (%)
Number of staffs[Average number of temporary staffs, excluded from above]
Total Shareholder Return(%)[Comparison index with the above : TOPIX Total Return Index]
Highest stock price (yen)Lowest stock price (yen)484,396
231,730
281,006
594,4933,643,563
2,633,851
6,932,921
776.20
20.00
—
9.00
—
11.00
80.86
79.29
37.6
11.03
7.76
24.45
2.64
132
[—]
91.8
[115.9]
756.5
567.7

2019

325,407
95,229(12,470)
594,4933,493,563
2,516,921
7,080,156
760.13
6.00
—
3.00
—
3.00
(3.71)—
35.2(0.49)
—
—
0.81
165
[—]
61.6
[110.0]
650.0
393.0

2020

348,003
119,658
281,212594,4933,493,563
2,598,561
7,535,957
855.09
20.00
—
15.00
—
5.00
87.80
85.82
34.3
11.08
5.33
22.64
2.46
173
[—]
72.8
[99.6]
586.4
330.7

2021

328,625
88,992(1,508)594,493
3,233,563
2,510,710
7,891,346
819.55
35.00
—
20.00
—
15.00
(0.49)—
31.7(0.06)
—
—
4.28
154
[—]
95.7
[141.5]
721.0
402.5

2022

355,487
114,577
176,470
594,493
3,233,563
2,546,193
8,985,161
843.62
22.00
—
8.00
—
14.00
57.60
55.86
28.3
7.00
9.22
37.98
2.64
187
[—]
89.3
[144.3]
614.8
460.3

1

Number of staffs represents staffs who work at the Company.

2

Stock prices are quoted on the Tokyo Stock Exchange (First Section of the Tokyo Stock Exchange).

3

No net income per share—diluted information was provided, as there was net loss per share, although there are dilutive shares for the years ended
March 31, 2019 and 2021.

4

No Price/earnings ratio (times) or payout ratio was provided due to the net loss for the years ended March 31, 2019 and 2021.
3

3. Business Overview.
The Company and its 1,331 consolidated subsidiaries and variable interest entities primarily operate investment and financial services businessfocusing on securities business as their core business. Nomura provides wide-ranging services to customers for both of financing and investment
through the operations in Japan and other major financial capital markets in the world. Such services include securities trading and brokerage,
underwriting and distribution, arrangement of public offering and secondary distribution, arrangement of private placement, principal investment, asset
management and other broker-dealer and financial business. There are also 15 companies accounted for under the equity method as of March 31, 2022.
The reporting of the business operations and results of the Company and its consolidated subsidiaries are based on business segments referred in
Note 21 “Segment and geographic information” in our consolidated financial statements included in this annual report. Please refer to the table below inthe organizational structure listing the main companies by business segments.
Organizational Structure
The following table lists Nomura Holdings, Inc. and its significant subsidiaries and affiliates by business segments.
Nomura Holdings, Inc.
Retail Division(Domestic)
Nomura Securities Co., Ltd. and others
Investment Management Division(Domestic)
Nomura Asset Management Co., Ltd. and others
Wholesale Division(Domestic)
Nomura Securities Co., Ltd.
Nomura Financial Products & Services, Inc.
Nomura Asia Pacific Holdings Co., Ltd. and others(Overseas)
Nomura Holding America Inc.
Nomura Securities International, Inc.
Nomura America Mortgage Finance, LLC
Instinet, Incorporated
Nomura Europe Holdings plc
Nomura International plc
Nomura International (Hong Kong) Limited
Nomura Singapore Limited and others
Others(Domestic)
The Nomura Trust and Banking Co., Ltd.
Nomura Properties, Inc.
Nomura Research Institute, Ltd.(1)Nomura Real Estate Holdings, Inc.(1)(1)

Affiliates
4

Item 2. Operating and Financial Review
1. Management Challenges and Strategies
All matters relating to the future in the sections below are based on the current views as of the date of filing this Securities Report.
(1) Fundamental Management Policy① Fundamental Management Policy
In Fundamental Management Policy formulated by the Board of Directors, our company has set the following Management Vision and Basic
Vision of Group Management.
Fundamental Management Policy of Nomura Holdings, Inc.
(Management Vision)
Nomura Group’s management vision is to enhance its corporate value by deepening society’s trust in the firm and increasing satisfaction of
stakeholders, including that of shareholders and clients.
As a global investment bank, the Company will provide high value-added solutions to clients globally, and recognizing its wider social
responsibility, the Company will continue to contribute to the economic growth and development of society.
To enhance its corporate value, the Company utilizes return on equity (“ROE”) as a management indicator and will strive for sustainable business
transformation.
(Basic Vision of Group Management)(1) Nomura Group will establish its modernized growth model by itself through realizing expansion of its business in new domains. Nomura Groupwill also establish earning structure not subject to market condition with proper cost control and risk management.
(2) Nomura Group will aim to serve its customers at the highest level in every investment, by paying thorough attention to the needs of its
customers and the market and by providing its customers with highly value-added solutions in financial and capital markets.
(3) Nomura Group will emphasize compliance with applicable laws and regulations and proper corporate behavior to carry out compliance andconduct risk management in daily business operations. Each company of Nomura Group shall respect customers’ interests and comply withapplicable laws and regulations relating to the business.
(4) Nomura Group seeks to ensure effective management oversight and increase management transparency.
(5) Nomura Group will contribute to expanding securities markets through daily business and continuously engage in educational activities
regarding investment in order to broaden participation in the securities market.
We have established the following management vision based on the management goals.
② Management Vision
Our diverse businesses rely on the trust of our clients and all stakeholders. We recognize that raising our corporate value and ensuring sustainablegrowth of society as a whole are closely linked together. This is why our management vision is to achieve sustainable growth by helping resolve social
issues.
(2) Business environment
The global economy experienced repeated slowdowns in the fiscal year ended March 31, 2022 in response to flare-ups in the COVID-19
pandemic. Even so, economic activity resumed to a great extent, particularly in the countries of the West that were at the forefront in administering
COVID-19 vaccination programs. The pandemic had a lingering impact on emerging market economies in particular, causing sluggishness in production
and distribution that, when combined with the pent-up demand unleashed by the economic recovery, led to increasingly severe supply constraints and, inturn, rising inflation. Despite initial expectations that it would not last, this rise in inflation became protracted, and as a result the central banks of majorcountries and regions around the world became more inclined to execute monetary policy tightening sooner than they had previously expected to, or toraise their policy interest rates in larger increments. This led to greater concern over rising interest rates in financial markets. Global equity markets
stayed in an overall uptrend, albeit punctuated by numerous downward adjustments prompted by worries over sustained inflation and rising market
interest rates. China’s economic growth slowed, in part due to curbs on production executed in the interest of stepping up the pace of decarbonizationand tightening controls and regulations under China’s “common prosperity” drive.
5

Japan’s economy performed sluggishly. The country suffered repeated flare-ups in the pandemic—in part because it was slower than the countriesof the West to roll out vaccinations—and supply constraints ended up causing a slump in exports. However, in spite of lackluster performance in the real
economy and rising costs (including in the form of higher prices for imported raw materials due to accelerating global inflation and high market prices
for raw materials and fuel), earnings at major Japanese companies kept up solid growth. The Japanese equity market set a fresh post-bubble high in
September, buoyed by rising global equity markets and improvement in corporate earnings at home, but performance thereafter softened under the
influence of downward adjustments in equity markets around the world triggered in part by worries over rising interest rates.
(3) Management vision
Our business environment is undergoing significant changes. We will continue to respond to it flexibly while maintaining an appropriate financial
standing and effectively utilizing management resources through improved capital efficiency. In addition, we are never satisfied with ourselves and will
constantly implement new initiatives with the aim of expanding existing businesses and providing value-added services to clients.
(i) Urgent Priority Issues
As a global financial services group, we continue to seek to deliver value-added products and services to our clients globally. Given thediversification of its products and services, as well as the multifaceted nature and expansion of global business, enhancing risk management is essential
for us.
In response to the U.S. Prime Brokerage Event in 2021, we immediately launched a thorough review of our business management processes aswell as our procedures and organizational structure. Based on this review, we analyzed a number of areas, such as how we manages our business in thecurrent environment, communication and coordination across departments, and allocation of management resources. In light of this, we have taken steps
to further enhance our risk management including revamping our organizational structure and realigning headcount in related departments.
We see enhanced risk management as an urgent key management project and one of the top priorities for us over the medium to long-term. Our
senior management is committed to leveraging the full capabilities of the group to strengthen risk management, including building a stronger risk culture
and raising the risk awareness our employees and executive officers.
(ii) Medium-to Long-term Priority Issues to respond to changed environment① The Group’s growth strategy for the sustainable improvement of our corporate value
Our vision is to take Nomura to the next stage. To realize this, we launched a new strategy of expanding into private markets to complement ourbusinesses in the public markets. We are committed to strengthening the provision of bespoke services and solutions made for each specific client,through a three-pronged approach, namely the expansion of our client base, expansion of products and services, and delivery utilizing digital technology.
Based on this strategy, for instance, we are starting to see results from the following efforts.
For more information on the strategies in each division, please refer to the challenges and strategies in each division.
•

Strengthening Investment Management Division

We newly established our Investment Management Division, in April 2021, aiming to meet our clients’ diverse needs, as part of our management
strategy: Expanding our scope of business from public to private. This division aims not only to expand and strengthen traditional investment products
but also to provide investment opportunities into private section such as alternative assets. Nomura Babcock & Brown Co., Ltd, which conducts aircraft
leasing and was not under any business division before the establishment of Investment Management Division, was consolidated into Investment
Management Division as a key company under the new division. By bringing together diverse expertise under the same structure, we aim to deliver evengreater added value.
•

Shifting to asset consulting businessWe are shifting to an asset consulting business for domestic individual customers. We provide asset consulting services that we believe provide
preferable medium-to long-term solutions for our clients. We support clients in increasing their assets, and we aim to increase the fee income we receive
as a result by increasing assets under custody. The steady increase in income from stock assets such as investment trusts, for which fees such as
management and administration expenses are charged for assets under management, contributes to more stable revenue stream for us. We alsoestablished our Chief Investment Office (“CIO”) Group in July 2020 to provide consulting services similar to those already offered towards institutional
investors, to individual investors. In November 2020, we introduced the CIO services for discretionary investment services to improve operational
performance. We are also promoting the introduction of “Nomura Navigation”, a tool that helps clients manage their portfolios and enhance theirconsulting services. Besides, in addition to the existing commission system which requires payment every time a transaction is made, we are introducing
a new fee system that allows customers to select a level fee based on level of client assets. In April 2022, all of our branches began offering this product.
In addition to ensuring quality through CIO services, we are building a structure that provides advice that aligns the interests of customers and ourcompany more closely than ever before.
6•

Diversifying Wholesale revenues

In our Wholesale Division, we are diversifying our revenue sources while maintaining a high market share in core products. Capital-lightorigination business, including M&A advisory, grow global business centered on Americas. Especially, in the U.S., we acquired Greentech Capital,
LLC, a firm with a solid presence in sustainable technology and infrastructure, and launched Nomura Greentech in April 2020. We will seamlessly
provide financial and other solutions to our global customer base. In addition, regarding solutions business that is less suspectible to changes in market
environment, we build up experience in structured finance including infrastructure finance.
② Digitalization to provide new value-added services and convenience to our clients
Our digital transformation efforts are directly linked to our competitiveness with other financial institutions in the future, and we will continue topromote a wide range of initiatives based on our strategy in order to provide highly convenient services to our clients and respond to diversifying needs.
We also believe that our people are the source of the added value created by the Nomura Group even in a world of increasing where digitization anddigitalization are advanced. We will continue to strengthen the development of our human resources with the qualities required for the upcoming era,such as consulting capabilities that make full use of both face-to-face and virtual communications. In addition, we established “Digital Company” in
April 2022, aiming to strengthen collaboration in the digital domain across group entities, including in our international operations, while also bolstering
initiatives in focus areas. Our efforts to promote digitalization are as follows.
•

Streamline and enhance internal operations

We are working to focus on high value-added analysis and advisory services by promoting the automation and efficiency of internal operations.
We also aim to provide services through highly satisfactory communication methods by improving existing services. For instance, our Retail Divisionutilizes “Remote Consulting” which is original system supporting sales representatives. In addition, we have launched an internal Digital IQ program tosupport digital e-learning with the aim of lifting the base-level knowledge of digital initiatives across the Group.
•

Attracting a new client baseWe have developed a platform to deliver services for young people and the working generations, who we have not provided with many products
and services, by utilizing digital technology. We expand to utilize LINE Securities Corporation established together with LINE Financial Corporation,
OneStock which is an asset management smartphone application, FINTOS! which is an investment information application.
•

Participation in Digital Asset Business

Nomura and BOOSTRY Co., Ltd., which is a joint venture between Nomura and Nomura Research Institute, Ltd. have provided technicalinfrastructure and other support on digital asset bond and digital bond offerings. This is the first bond offering using blockchain technology by aJapanese issuer. Through our approach to the digital asset business, we aim to provide new added value that goes beyond the boundaries of conventional
finance by utilizing advanced technologies and our network. Going forward, we will continue to build a system that can respond to diversifying clientneeds through products and services in the digital asset value chain, from origination to custody. In addition, in order to systematically accelerate such
efforts, we established “Digital Company Strategy Department” and “Digital Asset Strategy Office”, effective April 1, 2022.
③ Initiatives for Sustainability
Our management vision is to achieve sustainable growth by helping resolve social issues, and we have integrated sustainability into ourmanagement strategy. We now make decisions on sustainability issues at through our Sustainability Committee, which comprises Executive
Management Board members, and therefore, we are responding to our own sustainable development issues and other broad social issues in a timely
manner. Sustainability promotion in Nomura has value in two ways. One is to support the sustainability efforts of our clients and various stakeholders.
The second is to promote the sustainability efforts in our own operations.
•Supporting the sustainability efforts of our clients and stakeholders

Our core role as a financial services group is to support clients through the flow of funds and capital. We believe it is important to strengthen ourfunctions to promote the sustainable circulation of capital by underwriting green bonds and social bonds issued by companies and financial institutions,providing strategic advisory services such as M&A advisory, and by developing ESG-related funds as investments and providing them to individual
investors. In addition, we will take advantage of our comprehensive strengths in providing solutions to social issues by leveraging the functions we havecultivated over many years, including support for business succession, promoting innovation in the fields of regional revitalization, agriculture andmedical care, and our expertise and knowledge in the field of research and analysis. Since the 1990s, we have been providing financial and economics
education programs in Japan for elementary and junior high school students as well as adults. Starting from April 2022, Japanese high schools haveclasses on financial education, based on the new guidelines of education. In response to this policy, we have appointed Executive in charge of Financial
Education, and will continue to strengthen initiatives to improve the financial literacy of society as a whole.
7•

Our company’s own efforts

We have committed to achieve net zero greenhouse gas (“GHG”) emissions for our own operations by 2030, and to transition attributable GHG
emissions from our lending and investment portfolios to align with pathways achieving net zero by 2050. To materialize these initiatives, we joined the
Net-Zero Banking Alliance (“NZBA”) in 2021. We participate in and endorse numerous initiatives besides NZBA to further promote the realization of asustainable environment and society in cooperation with stakeholders regarding how we will address social issues.
The challenges and strategies in each division are as follows:•

Retail Division
Based on the basic concept of “Enriching clients by responding to their concerns about assets”, our Retail Division aims to become a financial
institution fulfilling the needs of many people. We will continue working on improving the skills of our clients, and enhance our wide rangeof products and services in order to accurately respond to diversifying clients’ asset issues such as inheritance or anxiety about lack of funds
after retirement. In addition, we will enhance online services and remote consulting service through contact centers.

•

Investment Management Division
Our Investment Management Division is responsible for expanding product offerings and improving our services to meet the diversifying
investment needs of our clients in the broad asset management business. By combining our expertise in traditional assets such as stocks andbonds to alternative assets such as private equity, we provide added value and offer advanced services and solutions to meet the diverse needsof our clients. In the public market business, we aim to strengthen existing businesses and improve through digital transformation. In theprivate market business, we will strive to expand our product offerings as investors’ demand for alternative investments increases. We will
also seek to execute inorganic strategies (such as alliances and equity investments) to expand our product offerings and client base.

•

Wholesale Division
Our Wholesale Division faces challenges presented by increasingly sophisticated client needs and technological advancement, coupled withuncertainty in the market environment and the possibility of an economic downturn. To ensure continuity of service as well as added value toclients, we will continue to enhance collaboration across regions and divisions while ensuring tight risk control. We will continue efforts todiversify our business portfolio through targeted growth in areas including private markets as well as deploy financial resources to selective,
high growth opportunities.
Global Markets aims to provide uninterrupted liquidity to our clients while reinforcing risk control and governance. Additionally, we aim tofurther diversify our business portfolio, reinforce global connectivity and cross-sell to leverage our global platform and client franchise,pursue growth opportunities such as structured financing and solution business as well as international wealth management business, andcontinue to build on the strength of our Flow businesses.
Investment banking aims to provide advisory services and financing to domestic as well as crossborder restructurings and industry-wideconsolidations, as well as interest rate and FX solutions related to these transactions as volatile business environments impact our clients’businesses. While we expand our global advisory business, we will focus on broadening ESG related businesses with initiatives such as
further utilization of Nomura Greentech’s expertise and enhancement of our sustainable finance platform.

•

Risk Management and Compliance, etc.
We have defined our risk appetite in our Risk Appetite Statement which includes the types and level of risk that the Nomura Group is willingto assume in pursuit of our strategic objectives and business plans. Further, we continue to develop our risk management framework in a waythat is strategically aligned to our business plans and incorporates decision-making by senior management, thereby securing capital soundness
and enhancing our corporate value.
8

We recognized substantial losses during the years ended March 31, 2021 and 2022 as a result of the U.S. Prime Brokerage Event. To address
this issue, we have launched an extensive internal remediation and enhancement program (The “Risk Management Enhancement Program” or“RMEP”) in order to identify specific issues which may have contributed to the loss and areas of improvement in order to strengthen our risk
management.
As a part of RMEP, we have clearly defined in our Risk Appetite Statement that all executives and employees must actively engage in risk
management through our Three Lines of Defense framework and have provided extensive training to all executives and employees affectedby RMEP.
With regard to compliance, we continue to focus on improving the management structure to comply with local laws and regulations in the
countries where we operate. We also continue to review our internal systems and rules so that all executive management and employees canwork autonomously with high ethical standards.
In order to ensure not only compliance with laws and regulations, but also that all directors, officers and employees are able to act inaccordance with social norms, we have established the “Nomura Group Code of Conduct” as guidelines for actions to be taken, and throughassociated trainings and other measures, we are working to promote appropriate actions (“Conduct”) based on the Code of Conduct. At the‘Nomura Founding Principles and Corporate Ethics Day’ held in every August, all directors, officers and employees reaffirm the lessons
learned from past incidents and renew our determination to prevent similar incidents then to maintain and gain the trust society places in us;
discussions are held regarding the proper way to conduct after looking back on past incidents, and a pledge is made to comply with the Codeof Conduct.
In order for us to be able to respond to the changing demands of society, the Code of Conduct is regularly reviewed to constantly examine
ourselves and to ensure that our thinking aligns with society’s norms. In March 2022, we added a new item “Managing Risks Appropriately”
to instill a robust risk culture within Nomura Group, and articulated in writing that each executive and employee will deepen one’s knowledge
and understanding on risks, properly recognize and evaluate them, and actively engage in risk management to prepare for all possible
contingencies.
By addressing and resolving the above issues, we will strive for the stability and further development of financial markets as well as thesustainable growth of the Nomura Group.
(4) Human Capital Initiatives(i) Nomura’s Approach to Human Resources•

Philosophy of “Human resources is the greatest asset”

With the belief that our people are our most valuable asset, we consistently aim to create a workplace where our employees can build long-term
careers and play an active role in our business and are implementing various initiatives to enhance the physical and mental health of our employees.
•

Talent Management Based on Corporate Philosophy

We regard “We help to enrich society through our expertise in capital markets” as our social mission in our corporate philosophy. To realize thismission, we have set “Entrepreneurial Leadership,” “Teamwork” and “Integrity” as being core values that must be maintained at all times, andestablished the Nomura Code of Conduct to provide clear guidelines for connecting our corporate philosophy with these values. As talent management
embodies these needs, we are working on the following various initiatives to foster and embed these values in our employees.
9(ii) Talent Management Initiatives
We are working on the following Initiatives to foster values of “Entrepreneurial Leadership,” “Teamwork,” and “Integrity” that must be maintained at all
times.
Main Objective

Examples of Initiatives•

Internship and Nomura passport
We offer internship programs in Nomura Securities which offer students the opportunity to experience working
in various areas of our business, and to deepen their knowledge of the financial services industry. In addition to this,students also learn about the roles and purpose of the securities industry. This helps students broaden theirknowledge and experience and gives them the opportunity to think about their future careers.

Securing diverse humanresources

We have also introduced an employment program called “Nomura Passport” for students pursuing doctoral
degrees in the fields of science and technology in order to identify talent with expertise in such areas as AI
development, data science and digitalization which will be increasingly critical to our business going forward.
•

Training
In addition to training programs for new hires, training programs in Japan mainly consist of group training andon-the-job training to develop and train our employees. Global training is conducted separately by year of entry andposition. Additionally, we conduct a leadership program aimed at developing our next generation of leaders and a
program to support the development of women as executives with participants selected based on their performanceand potential. We also offer a global program that is held annually in our Tokyo headquarters for managers of ouroverseas entities. In addition, we have established a self-improvement support system, consisting of a large numberof external training and correspondence courses as well as voluntary group training on weekends at our company
training facilities, in order to support the development of our employees on a voluntary basis.

Providing andsupporting growth
opportunities anddeveloping professional
human resources•

Study-abroad program
Over the past 60 years, more than 600 Nomura Securities employees have studied at business and law schools
in more than 20 countries and regions, mainly in the United Kingdom and the United States.

•

Global Mobility (International Transfer)
In addition to transferring from Japan to overseas, we actively provide opportunities for employees of ouroverseas entities to transfer to Japan to develop employees with experience of working in different countries andcultures.

•

Digital IQ program
As we enter an era in which digital-related knowledge determines the competitiveness of global financial
institutions, we have introduced the “Digital IQ” Program. This program is an online program for all of our global
employees to improve their knowledge and skills.

•

Compensation system based on the pay-for-performance principle
Based on our principle that employees are paid based on their performance, we ensure our compensation
policies and practices are sound and competitive from a market perspective. This helps us realize our businessstrategy and generate long-term profits, with the aim of achieving sustainable growth and improving enterprise value
over the medium to long term.

Proper evaluation andtreatment•

360-degree evaluation
We conduct a “360-degree evaluation” in which relevant managers are evaluated by colleagues other than their
immediate superiors. This leads to further skill development and behavioral change for managers.

•

ERCC goal
We have introduced a standard ERCC goal, which sets goal from the perspectives of ethics, risk management,compliance, and conduct. We aim to raise the awareness of the Code for each employee and to instill the concept of
the Code throughout our business, thereby creating an environment in which employees can speak out.
10•

Employee engagement survey
We conduct the “Nomura Group Employee Survey” to monitor, maintain and improve the status ofcommunication across our business and to understand the level of our employee satisfaction. As part of the mostrecent survey conducted during the year ended March 31, 2022, many employees responded positively to thequestion, “I am proud to work for the firm.”

Employee engagement•

Fostering a risk culture
We have made it an objective for all of our global employees to foster a risk culture within our business byencouraging respectful relationships (Respect), reporting to their manager (Escalate), and performing constructive
checks (Challenge).

Fostering a risk culture•

DE&I
As we have employees from about 90 different nationalities across our business, the development of humanresources that respect diversity is one of our most important issues. These diverse human resources are our greatest
asset. We believe that through mutual recognition and cooperation with others who have different backgrounds andvalues, we can meet the diverse needs of our clients and provide higher value-added services.

DE & I, Health &Productivity
Management, andprovision of equal
opportunities andprohibition of
discrimination

Based on this philosophy, our Sustainability Committee, chaired by the Group CEO, discuss and promote
global strategies about DE&I. In addition, voluntary employee networks are promoting diversity issues in our offices
globally. We are working on these issues from both a top-down and bottom-up approach. In accordance with theenactment of the “The Act on Promotion of Women’s Participation and Advancement in the Workplace” in Japan,
we have formulated an action plan focused on the promotion of women’s participation and advancement and we are
implementing various programs to achieve this.
•Health & Productivity Management
In July 2016, we adopted the Nomura Health & Productivity Declaration Statement as part of our efforts led by
the Group Chief Health Officer (CHO) to maintain and improve the health of our employees. Starting in the year
ended March 31, 2021, in order to work toward our management vision of “Achieve sustainable growth by helping
resolve social issues,” we are communicating to all employees our goal that “All people who work at Nomura will
not simply be healthy, but also physically, mentally and socially sound (overall well-being).”•

Provision of equal opportunities and prohibition of discrimination
For each and every employee to be active and successful in utilizing their capabilities and personal strengths,
we provide equal opportunities in recruitment, development, evaluation, promotion and assignment. As part of the“Respect diversity and human rights” Section of the Nomura Group Code of Conduct, we state that “We promoteequal opportunity and do not discriminate on grounds such as nationality, race, sex, gender identity, sexual
orientation, creed, social status, or existence of or nonexistence of disability.”11

2. Risk Factors
You should carefully consider the risks described below before making an investment decision. If any of the risks described below actually occurs,
our business, financial condition, results of operations or cash flows could be adversely affected. In that event, the trading prices of our shares could
decline, and you may lose all or part of your investment. In addition to the risks listed below, risks not currently known to us or that we now deem
immaterial may also harm us and affect your investment.
INDEX● Risks Relating to the Business Environment
1

2

Our business may be materially affected by financial markets, economic conditions and market fluctuations in Japan and elsewherearound the world(1)

The COVID-19 pandemic has affected our business, clients and employees and this may continue in the future(2)

Natural disaster, terrorism, military dispute and infectious disease other than COVID-19 could adversely affect our business(3)

Governmental fiscal and monetary policy changes in Japan, or in any other country or region where we conduct business may affect ourbusiness, financial condition and results of operations(4)

Transition from U.S. Dollar LIBOR to alternative rate indices may adversely affect our business(5)

Extended market declines and decreases in market participants can reduce liquidity and lead to material losses(6)

The consequences of Brexit may adversely affect our business on various fronts

The financial services industry faces intense competition(1)Competition with other financial firms and financial services by non-financial companies is increasing(2)

Increased consolidation, business alliance and cooperation in the financial services industry mean increased competition for us(3)

Our global business continues to face intense competition and may require further revisions to its business model3

Event risk may cause losses in our trading and investment assets as well as market and liquidity risk

4

Environmental, Social and Governance (“ESG”) factors including climate change and broader associated policy changes in eachjurisdiction could adversely affect our business● Risks Relating to Our Businesses
5

6

Our business may incur losses due to various factors in the conduct of its operations(1)

We may incur significant losses from our trading and investment activities(2)

Holding large and concentrated positions of securities and other assets may expose us to large losses(3)

Our hedging strategies may not prevent losses(4)

Our risk management policies and procedures may not be fully effective in managing risk

(5)Market risk may increase other risks that we face(6)

Our brokerage and asset management revenues may decline(7)

Our investment banking revenues may decline(8)

Our electronic trading business revenues may decline

We may be exposed to losses when third parties do not perform their obligations to us(1)

Defaults by a large financial institution could adversely affect the financial markets generally and us specifically(2)

There can be no assurance as to the accuracy of the information about our credit risk, or the sufficiency of the collateral we use inmanaging it(3)

Our clients and counterparties may be unable to perform their obligations to us as a result of political or economic conditions

7

We are a holding company and depend on payments from our subsidiaries

8

We may not be able to realize gains we expect, and may even suffer losses, on our investments in equity securities and non-trading debt
securities

9

We may face an outflow of clients’ assets due to losses of cash reserve funds or debt securities we offer
12

● Risks Relating to Our Financial Position
10

We may have to recognize impairment losses with regard to the amount of goodwill, tangible and intangible assets recognized on ourconsolidated balance sheets

11

Liquidity risk could impair our ability to fund operations and jeopardize our financial condition

12

(1)

We may be unable to access unsecured or secured funding(2)

We may be unable to sell assets(3)

Lowering of our credit ratings could impact our funding

Equity investments in affiliates and other investees accounted for under the equity method in our consolidated financial statements may
decline significantly over a period of time and result in us incurring impairment losses● Risks Relating to Legal, Compliance and Other Operational Issues
13

We have identified a material weakness in our internal control over financial reporting and, despite our efforts to remediate, may identify
further material weaknesses in the future

14

Misconduct or fraud by an employee, director or officer, or any third party, could occur, and our reputation in the market and ourrelationships with clients could be harmed

15

A failure to identify and appropriately address conflicts of interest could adversely affect our business16

Our business is subject to substantial legal, regulatory and reputational risks(1)

Legal liability may occur due to events such as market downturn and could adversely affect our business, financial condition and results ofoperations(2)

Extensive regulation of our businesses limits our activities and may subject us to significant penalties and losses(3)

Tightening of regulations applicable to the financial system and financial industry could adversely affect our business, financial condition
and results of operations(4)

Deferred tax assets may be impacted due to a change in business condition or in laws and regulations, resulting in an adverse effect on ouroperating results and financial condition(5)

Defects in our anti-money laundering and counter-terrorism financing measures could have serious consequences such as, administrative
penalties or punitive fines.

17

Unauthorized disclosure or misuse of personal information held by us may adversely affect our business

18

System failure, information leakage and the cost of maintaining sufficient cybersecurity could adversely affect our business19

Our business may be adversely affected if we are unable to hire, retain and develop qualified personnel
13

● Risks Relating to the Business Environment
1. Our business may be materially affected by financial markets, economic conditions and market fluctuations in Japan and elsewhere aroundthe world
Our business and revenues may be affected by any adverse changes or volatility in the Japanese and global economic environments and financial
markets. In addition, not only purely economic factors but also wars, acts of terrorism, economic or political sanctions, pandemics, forecasts ofgeopolitical risks and geopolitical events which have actually occurred, natural disasters or other similar events could have an effect on the financial
markets and economies of each country. If any adverse events including those discussed above were to occur, a market or economic downturn may last
for a long period of time, which could adversely affect our business and can result in us incurring substantial losses. In addition to conditions in financial
markets, social conditions such as the long-term trends of population aging and population decline faced by Japan are expected to continue to put
downward pressure on demand in the businesses in which we operate, including, in particular, our Retail business. The following are certain risks related
to the financial markets and economic conditions for our specific businesses.
(1) The COVID-19 pandemic has affected our business, clients and employees and this may continue in the future
The COVID-19 pandemic that began in 2020, and governmental measures to prevent its spread, have significantly affected the operating
environment, for example causing volatility in global equity prices, interest rates and elsewhere and a widening of credit spreads. Government
responses to the pandemic, such as lockdowns on buildings and cities, or curfews or other restrictions on movement in areas affected by the
pandemic, continue to occur. In response to such measures, we have implemented robust arrangements for our employees to work remotely.
However, these measures may not be successful or sufficient, and may cause additional risks, such as challenges in supervision over employees
working remotely or increased risk of cyberattacks. Additionally, new strains or variants may arise, leading governments to impose new or additional
restrictions which may impact societal and economic functions and adversely affect our business, results of operations and financial condition. While
the spread or impact of the disease may gradually subside as vaccination efforts progress, ongoing negative effects on markets, economic activity or
the operating environment could further adversely affect our business, results of operations and financial condition. We will continue to monitor andmanage related risk trends in the business environment as well as our internal crisis management.
(2) Natural disaster, terrorism, military dispute and infectious disease other than COVID-19 could adversely affect our businessWe have developed a contingency plan for addressing unexpected situations and conduct crisis management exercises including staff notification
tests. We also developed a business resilience framework which includes an establishment of an emergency command center in the event of an actual
disaster to account for the safety of our employees and their families. However, disaster, terrorism, military disputes or widespread infectious
diseases afflicting our management and employees could exceed the assumptions of our plan and our framework, and could adversely affect ourbusiness. In addition, there is a possibility that unknown infectious diseases other than COVID-19 pandemic may hinder the operational duties of ourmanagement and employees.
(3) Governmental fiscal and monetary policy changes in Japan, or in any other country or region where we conduct business may affect ourbusiness, financial condition and results of operations
We engage in our business globally through domestic and international offices. Governmental fiscal, monetary and other policy changes in Japan,
or in any other country or region where we conduct business may affect our business, financial condition and results of operations. In addition, anychanges to the monetary policy of the Bank of Japan or central banks in major economies worldwide, which could potentially be followed byvolatility of interest rate or yields may negatively affect our ability to provide asset management products to our clients as well as our and our clients’trading and investment activities, for example by decreased returns for fixed income products in the prolonged low interest rate environment inJapan.
(4) Transition from U.S. Dollar LIBOR to alternative rate indices may adversely affect our business
The United Kingdom (“U.K.”) Financial Conduct Authority confirmed on March 5, 2021 that U.S. Dollar LIBOR settings will cease after June 30,
2023. All transaction agreements which refer to U.S. Dollar LIBOR and remain after its cessation are expected to be amended to refer alternativereference rates; or to be altered by adding fallback provisions that are agreed between the contracting parties in advance. These changes could require
us to incur additional costs and subject us to risks associated with systematic reform, operational application and client disclosure, or adversely
impact the pricing, volatility and liquidity of financial products including derivatives, bonds and loans which reference U.S. Dollar LIBOR.
Therefore, our business, financial condition and results of operations could be materially and adversely affected and/or we could be subject todisputes, litigation or other actions with counterparties or relative participants.
14

(5) Extended market declines and decreases in market participants can reduce liquidity and lead to material losses
Extended market declines can reduce the level of market activity and the liquidity of the assets traded in those markets in which we operate.
Market liquidity may also be affected by decreases in market participants that could occur, for example, if financial institutions scale back marketrelated businesses due to increasing regulation or other reasons. As a result, it may be difficult for us to sell, hedge or value such assets held. Also, inthe event that a market fails in pricing such assets, it will be difficult to estimate their value. If we cannot properly close out or hedge our associatedpositions in a timely manner or in full, particularly with respect to Over-The-Counter (“OTC”) derivatives, we may incur substantial losses. Further,
if the liquidity of a market significantly decreases and the market may become unable to price financial instruments held by us, this could lead tounanticipated losses.
We have established a risk management system that measures these market risk and liquidity risk on a daily basis and takes immediate actions if
the pre-set limits are exceeded.
(6) The consequences of Brexit may adversely affect our business on various fronts
On January 31, 2020, the U.K. withdrew from the European Union (“EU”) under the Withdrawal Agreement between the U.K. and the EU(“Brexit”), followed by a 12 month transition period during which the rules and regulations of the EU continued to apply to the U.K. up to
December 31, 2020. Although the U.K. and EU entered a trade and cooperation agreement governing their new relationship, such agreement does notcomprehensively address the financial industry, and there continues to be uncertainty as to the longer term consequences that Brexit may have on ourbusiness. Prior to Brexit, we conducted business in Europe primarily through Nomura International plc, our broker-dealer arm established in London,as our regional hub; but following the end of the transition period, we moved to a structure that provides client-facing services and other services
centered on Nomura Financial Products Europe GmbH, our licensed broker-dealer in Germany. Although we have taken various measures to manage
the risks associated with Brexit and to mitigate the impacts of uncertainty in the market as a whole, further developments including further
adjustments to the operating boundaries between the U.K. and EU may adversely affect our business, results of operations and financial condition.
2. The financial services industry faces intense competition
Our businesses are intensely competitive, and are expected to remain so. We compete on the basis of a number of factors, including transaction
execution capability, our products and services, innovation, reputation and price. We have experienced intense price competition, particularly inbrokerage, investment banking and other businesses.
(1) Competition with other financial firms and financial services by non-financial companies is increasing
Since the late 1990s, the financial services sector in Japan has undergone deregulation. Banks and certain other financial institutions became able
to enter into the securities brokerage business in 2004 and firewalls between commercial banks and securities firms were deregulated in 2009,
increasing the ability of securities firms with affiliated commercial banks to cooperate more closely them. As a result, securities subsidiaries ofcommercial banks and non-Japanese firms with increased competitiveness have been affecting our market shares in the sales and trading, investmentbanking and retail businesses. In recent years, competition has intensified beyond the traditional financial sector based on the increasing digitalizationof the industry, not only with the rise of online securities firms but also FinTech companies and the entry of non-financial companies into thefinancial services sector. In order to address such changes in the competitive landscape, we have already begun various efforts to these changes in thecompetitive environment. However, these measures may not be successful in growing or maintaining our market share in this increasingly fierce
competitive environment, and we may lose business or transactions to our competitors, harming our business and results of operations.
(2) Increased consolidation, business alliance and cooperation in the financial services industry mean increased competition for us
There has been substantial consolidation and convergence among companies in the financial services industry. In particular, a number of largecommercial banks and other broad-based large financial services groups have established or acquired broker-dealers or have consolidated with otherfinancial institutions. These large financial services groups have developed business linkage within their respective groups in order to provide
comprehensive financial services to clients, offering a wide range of products, including loans, deposit-taking, insurance, brokerage, asset
management and investment banking services within their group, which may enhance their competitive position compared with us. They also havethe ability to supplement their investment banking and brokerage businesses with commercial banking and other financial services revenues in aneffort to gain market share. In addition, the financial services industry has seen collaboration beyond the borders of businesses and industries, such asalliances between commercial banks and securities companies outside of framework of existing corporate groups and recent alliances with
non-financial companies including emerging companies. Our competitiveness may be adversely affected if our competitors are able to expand theirbusinesses and improve their profitability through such business alliances.
15

(3) Our global business continues to face intense competition and may require further revisions to its business model
We continue to believe there are significant opportunities in the international markets, but there is also significant competition associated withsuch opportunities. In order to take advantage of these opportunities, we will have to compete successfully with financial services firms based inimportant non-Japanese markets, including the U.S., Europe and Asia. Despite our efforts facing competition, we recognized an impairment loss on
goodwill attributable to previous overseas acquisitions of ¥81,372 million in the fiscal year ended March 31, 2019. Since April 2019, we have beenworking to rebuild our global business platform, under which we aim to transform our business portfolio and pivot towards client businesses andgrowth areas, which we believe has been successful. In order to support further development of our international operations, Nomura continues togrow its business organically and inorganically such as acquisition of Greentech Capital Advisors in 2020. We will continue to review our entire
business portfolio while looking at the competitive environment, and intend to implement our strategies in consideration of potential risks. However,
the risk remains that we may be required to incur greater expenses than expected, or to commit greater financial, management and other resources tothe strategies than expected, which could adversely affect our business and results of operations. Moreover, the assumptions and expectations uponwhich the strategies are based may not be correct, which could lead to us realizing fewer benefits than expected or could even harm our business andresults of operations overall. Furthermore, to the extent we reduce compensation or headcount as part of this strategy, our ability to attract and retain
the employees needed to successfully run our businesses could be adversely affected. We may also be unsuccessful in designing a streamlined
management structure, which could harm our ability to properly control or supervise our many businesses across the world.
3. Event risk may cause losses in our trading and investment assets as well as market and liquidity risk
Event risk refers to potential losses we may suffer through unpredictable events that cause large unexpected market price movements such as
natural or man-made disasters, epidemics, acts of terrorism, armed conflicts or political instability, as well as adverse events specifically affecting ourbusiness activities or counterparties. These events include not only significant events such as the Great East Japan Earthquake in March 2011, theincreasing tensions on Korean Peninsula following North Korean nuclear tests in 2017, sudden and unexpected developments in global trade or security
policies such as tensions between the United States and China since 2018, the COVID-19 pandemic in 2020, and the invasion of Ukraine by the RussianFederation in 2022, but also more specifically the following types of events that could cause losses in our trading and investment assets:•

sudden and significant reductions in credit ratings with regard to financial instruments held by our trading and investment businesses bymajor rating agencies,•

sudden changes in trading, tax, accounting, regulatory requirements, laws and other related rules which may make our trading strategy
obsolete, less competitive or no longer viable, or•an unexpected failure in a corporate transaction in which we participate resulting in our not receiving the consideration we should havereceived, as well as bankruptcy, deliberate acts of fraud, and administrative penalty with respect to the issuers of our trading andinvestment assets.

4. Environmental, Social and Governance (“ESG”) factors including climate change and broader associated policy changes in each jurisdiction
could adversely affect our business
Increasing attention to the management of Environmental, Social and Governance (“ESG”) factors in the business makes it imperative that we
continue to develop policies and capabilities in these areas, and that we position ourselves in a positive light to interested stakeholders including ourshareholders, clients and society at large. Amid rapidly changing circumstances around ESG, lack of sufficient focus on ESG considerations may not
only impede our ability to build a sustainable business model, but may also adversely affect our reputation, results of operations and financial condition.
Reputational risks also include the risk associated with over-stating our credentials, or not delivering on commitments made (also known as“greenwashing”).
We consider climate change one of the most important global challenges facing society. The direct impact of climate change, and the resulting
changes in the business environment could cause us to incur losses. Climate risks are widely recognized to have two aspects—physical and transition
risks. Physical risk refers to the risk of loss or damage driven by extreme weather events, such as hurricane, flood, drought, heatwave or frost, or fromthe longer term shifts in climate patterns and rising sea levels. Transition risk is the risk associated with the transition to a low-carbon economy, andcould result from changing government policies, technologies or changes to consumer demand.
16

● Risks Relating to Our Businesses
5. Our business may incur losses due to various factors in the conduct of its operations.
(1) We may incur significant losses from our trading and investment activities
We maintain trading and investment positions in fixed income, equity and other markets, both for proprietary purposes and for the purpose of
facilitating our clients’ trades. Our positions consist of various types of assets, including securities, derivatives transactions with equity, interest rate,currency, credit and other underliers, as well as loans, and reverse repurchase agreements. Fluctuations in the markets where these assets are traded
can adversely affect the value of our positions, in these assets, with downturns potentially negatively affecting long positions and upturns potentiallynegatively affecting short positions. Although we continue to mitigate these position risks with a variety of hedging techniques, we may also incur
losses if the value of these assets fluctuates or if the financial system is overly stressed and the markets move in a way we have not anticipated.
Our businesses have been, and may continue to be, affected by changes in market volatility levels. Certain of our trading businesses such as thoseengaged in trading and arbitrage opportunities depend on market volatility to generate revenues. Lower volatility may lead to a decrease in business
opportunities which may affect the results of operations of these businesses. On the other hand, while higher volatility can increase trading volumes
and spreads, it also increases risk as measured by Value-at-Risk (“VaR”) and may expose us to higher risks in connection with our market-making
and proprietary businesses. Higher volatility can also cause us to reduce the outstanding positions or size of these businesses in order to avoid
increasing our VaR.
For example, in March 2021, following the default of a U.S. prime brokerage client in respect of a margin call, we issued a close-out event notice
to such client, and proceeded to wind down positions held as hedges for transactions with the client, leading us to recognize significant trading losseson the unwinding of the underlying positions and a provision for expected credit losses to reflect a shortfall in the value of securities pledged by theclient as collateral against financing provided to it. We refer to this event and the losses caused as the “U.S. Prime Brokerage Event.” See Item 4.
“Risk Management Enhancement Program” for further information on the nature of this event. Despite our actions in response to the U.S. Prime
Brokerage Event, including to improve our risk management activities, our business model necessarily involves significant trading activity, and wemay record significant losses as a result of such trading activity again in the future.
Furthermore, we commit capital to take relatively large positions for underwriting or warehousing assets to facilitate certain capital market
transactions. We also structure and take positions in pilot funds for developing financial investment products and invest seed money to set up andsupport financial investment products. We may incur significant losses from these positions in the event of significant market fluctuations.
In addition, if we are the party providing collateral in a transaction, significant declines in the value of the collateral or a requirement to provide
additional collateral due to a decline in our creditworthiness (by way of a lowered credit rating or otherwise) can increase our costs and reduce our
profitability. On the other hand, if we are the party receiving collateral from our clients and counterparties, such declines may also affect our
profitability due to decrease in client transactions. Following the U.S. Prime Brokerage Event, multiple ratings agencies downgraded their outlookwith regards to our ratings, which, if not resolved positively, may lead to downgrades in our ratings. See also “—11. Risks Relating to Our Financial
Position—Liquidity risk could impair our ability to fund operations and jeopardize our financial condition—(3) Lowering of our credit ratings could
impact our funding”.
17

(2) Holding large and concentrated positions of securities and other assets may expose us to large losses
We regularly hold large and concentrated positions of certain securities in our businesses such as market-making, block trading, underwriting,asset securitization, prime brokerage, acquiring newly-issued convertible debt securities through third-party allotment or providing business solutions
to meet clients’ needs. We have committed substantial amounts of capital to these businesses. This often requires us to take large positions in the
securities of a particular issuer or issuers in a particular industry, country or region. Fluctuations in the prices of these securities can significantly
affect the prices at which we are able to liquidate them when needed, resulting in the recording of significant trading losses, such as occurred inconnection with the U.S. Prime Brokerage Event. See Item 4. “Risk Management Enhancement Program” for further information on the nature ofthis event. We generally have higher exposure to those issuers engaged in financial services businesses, including commercial banks, broker-dealers,
clearing houses, exchanges and investment companies. There may also be cases where we hold relatively large amounts of securities by issuers inparticular countries or regions due to the business we conduct with our clients or our counterparties. In addition, we may incur losses due to market
fluctuations on asset-backed securities such as residential mortgage-backed securities (“RMBS”) and commercial mortgage-backed securities(“CMBS”).
(3) Our hedging strategies may not prevent losses
We use a variety of financial instruments and strategies to hedge our exposure to financial risks arising from the financial instruments we enter
into for proprietary purposes or for our clients. If our hedging strategies are not effective, we may incur losses. We base many of our hedging
strategies on historical trading patterns and correlations. For example, if we hold an asset, we may hedge this position by taking a position in anotherasset which has, historically, moved in a direction that would offset a change in value of the former asset. However, historical trading patterns andcorrelations may not continue, as seen in the case of past financial crises, and these hedging strategies may not be fully effective in mitigating our risk
exposure because we are exposed to all types of risk in a variety of market environments. Moreover, not all hedging strategies are effective against allkinds of risk, and certain strategies may, if the risk is not otherwise appropriately managed, increase our risk. For example, many of the transactions
leading to the U.S. Prime Brokerage Event entailed providing the client with “total return swap” derivative exposure to certain equities. See Item 4.
“Risk Management Enhancement Program” for further information on the nature of this event. In order to hedge the “total return” payments we were
obligated to make to the client, we held cash positions in the underlying equities. However, this specific hedging strategy was not intended to hedge
the risk of a default by the client and the potential need to liquidate the underlying positions in a volatile market environment. When such risk was
realized, our hedging strategy of holding the underlying securities meant that we were exposed to such market fluctuations, contributing to the losses
we recognized.
(4) Our risk management policies and procedures may not be fully effective in managing risks
Our policies and procedures to identify, monitor and manage risks may not be fully effective. Although some of our methods of managing risk arebased upon observed historical market data, the future movements in the financial markets may not be the same as was observed in the past. As aresult, we may suffer large losses through unexpected future risk exposures. Other risk management methods that we use also rely on our evaluationof information regarding markets, clients or other matters, which is publicly available or otherwise accessible by us. This information may not be
accurate, complete, up-to-date or properly evaluated, and we may be unable to properly assess our risks, and thereby suffer large losses. Furthermore,certain factors, such as market volatility, may render our risk evaluation model unsuitable for a new market environment. In such event, we may
become unable to evaluate or otherwise manage our risks adequately. Moreover, regardless of how well policies and procedures are designed, theymust be properly implemented and followed in order to be effective, which may not always occur despite our diligent efforts. Further, potential
weaknesses in our organization structures and governance frameworks may lead to misunderstanding over roles and responsibilities.
For example, with respect to the U.S. Prime Brokerage Event, we suffered significant losses through exposures to the client’s counterparty risk
and market risks relating to the securities underlying the prime brokerage transactions with the client. We have reviewed and are in the process ofcompleting a number of actions to comprehensively review, revise and strengthen our risk management policies and procedures and theimplementation thereof. See Item 4. “Risk Management Enhancement Program” for further information on the nature and status of these review
procedures. Such actions remain ongoing, however, and when completed, may not be sufficient to prevent similar exposure to such risks in the future,including to identify and rectify potential shortcomings, whether within the same business or among our many other business units, impairing theability of such policies and procedures to prevent future losses.
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(5) Market risk may increase other risks that we face
In addition to the potentially adverse effects on our businesses described above, market risk could exacerbate other risks that we face. For
example, the risks inherent in financial instruments developed through financial engineering and innovation may be increased by market risk.
Also, if we incur substantial trading losses caused by our exposure to market risk, our need for liquidity could rise sharply while our access to cash
may be impaired as a result of market perception of our credit risk.
Furthermore, in a downturn in the market overall or for specific securities, our clients and counterparties could incur substantial losses orexperience other adverse events of their own, thereby weakening their financial condition and, as a result, increasing the credit risk they pose to us,
such as occurred as part of the U.S. Prime Brokerage Event.
(6) Our brokerage and asset management revenues may decline
A market downturn could result in a decline in the revenues generated by our brokerage business because of a decline in the volume and value of
securities that we broker for our clients. Also, within our asset management and investment management business, in most cases, we charge fees for
managing our clients’ portfolios that are based on the market value of their portfolios. A market downturn that reduces the market value of our clients’portfolios may increase the amount of withdrawals or reduce the amount of new investments in these portfolios, and would reduce the revenue we
receive from these businesses. Also, any changes in our clients’ investment preference on their asset portfolios, including shifting investment assets tostable assets such as deposits and/or passive funds, which bring us relatively low fee revenue, may reduce our revenue as well.
(7) Our investment banking revenues may decline
Changes in financial or economic conditions would likely affect the number and size of transactions for which we provide securities underwriting,financial advisory and other investment banking services. Our investment banking revenues, which include fees from these services, are directly
related to the number and size of the transactions in which we participate and would therefore decrease if there are financial and market changes
unfavorable to our investment banking business and our clients.
For example, net revenue from our investment banking activities declined during the year ended March 31, 2020 compared to the year ended
March 31, 2019 primarily due to a market downturn from February 2020 as a result of the COVID-19 pandemic. While our investment banking net
revenues have increased during the years ended March 31, 2021 and 2022, M&A activities and other investment banking activities are expected tocontinue to be negatively impacted by the pandemic for the foreseeable future.
(8) Our electronic trading business revenues may decline
Electronic trading is essential for our business in order to execute trades faster with fewer resources. Utilizing these systems allows us to provide
an efficient execution platform and on-line content and tools to our clients via exchanges or other automated trading facilities. Revenue from ourelectronic trading, which includes trading commissions and bid-offer spreads is directly correlated with the number and size of the transactions inwhich we participate. Competition in electronic trading is intense and the introduction of highly discounted or no-commission trades at competitors
has and will continue to exert pressure on our electronic and traditional trading revenue. Moreover, such revenue would decrease if there are financial
market or economic changes that would cause our clients to trade less frequently or in a smaller amounts. Even if trade volumes increase due to theconvenience of electronic trading, this may not be sufficient to offset margin erosion in our execution business, leading to a potential decline inrevenue generated from this business. We continue to invest in developing technologies to provide an efficient trading platform, however, we may failto maximize returns on these investments due to this increased pressure on lowering margins.
6. We may be exposed to losses when third parties do not perform their obligations to us
Our counterparties are from time to time indebted or otherwise owe certain obligations (such as with regards to the posting of collateral) to us as aresult of transactions or contracts, including loans, commitments to lend, other contingent liabilities and derivative transactions. We may incur material
losses when our counterparties default or fail to perform on their obligations to us due to their filing for bankruptcy, a deterioration in their
creditworthiness, lack of liquidity, operational failure, an economic or political event, repudiation of the transaction or for other reasons. The U.S. Prime
Brokerage Event, during which a U.S. prime brokerage client defaulted on obligations to us to post additional margin in respect of trading activities aswell as to repay amounts lent against collateral held by us, is an example. See Item 4. “Risk Management Enhancement Program” for further
information on the nature of this event. Although we establish and maintain allowances for credit losses, such allowances reflect management judgments
and assumptions based on information available to us, which may provide incorrect or incomplete, and these judgments and assumptions may prove to
be incorrect, potentially significantly so.
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Credit risk may also arise from:•holding securities issued by third parties, or•the execution of securities, futures, currency or derivative transactions that fail to settle at the required time due to non-delivery by thecounterparty of Nomura, such as financial institutions and hedge funds, or to systems failure by clearing agents, exchanges, clearing
houses or other financial infrastructure.

Issues related to third party credit risk may include the following:(1) Defaults by a large financial institution could adversely affect the financial markets generally and us specifically
The commercial soundness of many financial institutions is closely interrelated as a result of credit, trading, clearing or other relationships among
the institutions. As a result, concern about the creditworthiness of or a default by, a certain financial institution could lead to significant liquidity
problems or losses in, or defaults by, other financial institutions. This may adversely affect financial intermediaries, such as clearing agencies,
clearing houses, banks, securities firms and exchanges, with which we interact on a daily basis. Actual defaults, increases in perceived default risk
and other similar events could arise in the future and could have an adverse effect on the financial markets and on us. Our funding operations may be
adversely affected if major financial institutions, Japanese or otherwise, fail or experience severe liquidity or solvency problems.
(2) There can be no assurance as to the accuracy of the information about our credit risk, or the sufficiency of the collateral we use in managing it
We regularly review our credit exposure to specific clients or counterparties and to specific countries and regions that we believe may present
credit concerns. Default risk, however, may arise from events or circumstances that we do not detect, such as account-rigging and fraud. We may also
fail to receive full information with respect to the risks of a counterparty, or to accurately manage and assess such information internally. For
example, our credit risk assessments with respect to the client whose default led to the U.S. Prime Brokerage Event did not reflect the full extent of
the client’s relevant trading activity. In addition, in cases where we have extended credit against collateral, we may fall into a deficiency in value inthe collateral if sudden declines in market values reduce the value of our collateral, as was the case with loans extended to the prime brokerage client
leading in part to the U.S. Prime Brokerage Event. See Item 4. “Risk Management Enhancement Program” for further information on the nature ofthis event.
(3) Our clients and counterparties may be unable to perform their obligations to us as a result of political or economic conditions
Country, regional and political risks are components of credit risk, as well as market risk. Political or economic pressures in a country or region,
including those arising from local market disruptions or currency crises, may adversely affect the ability of clients or counterparties located in thatcountry or region to obtain credit or foreign exchange, and therefore to perform their obligations owed to us.
7. We are a holding company and depend on payments from our subsidiaries
We are a holding company and heavily depend on dividends, distributions and other payments from our subsidiaries to make payments on our
obligations. Regulatory and other legal restrictions, such as those under the Companies Act, may limit our ability to transfer funds freely, either to orfrom our subsidiaries. In particular, many of our subsidiaries, including our broker-dealer subsidiaries, are subject to laws and regulations, including
regulatory capital requirements, that authorize regulatory bodies to block or reduce the flow of funds to the parent holding company, or that prohibit
such transfers altogether in certain circumstances. For example, Nomura Securities Co., Ltd. (“NSC”), Nomura Securities International, Inc., Nomura
International plc and Nomura International (Hong Kong) Limited, our main broker-dealer subsidiaries, are subject to regulatory capital requirements andchanges in such regulatory capital requirements and the required level could limit the transfer of funds to us. While we monitor and manage the transfer
of funds among Nomura Group on the basis of the relevant laws and regulations on a daily basis, these laws and regulations may hinder our ability toaccess funds needed to make payments on our obligations.
8. We may not be able to realize gains we expect, and may even suffer losses, on our investments in equity securities and non-trading debt
securities
We hold substantial investments in equity securities including private equity investments and non-trading debt securities. Under U.S. GAAP,
depending on market conditions, we may recognize significant unrealized gains or losses on our investments in equity securities and debt securities,
which could have an adverse impact on our financial condition and results of operations. For example, in the fiscal year ended March 31, 2020, we
recognized a loss of ¥16.4 billion related to our investment in American Century Investments and ¥16.6 billion on our investments in equity securities
resulting from market declines arising from the COVID-19 pandemic. Depending on the market conditions, we may also not be able to dispose of theseequity securities and debt securities when we would like to do so, as quickly as we may wish or at the desired price.
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9. We may face an outflow of clients’ assets due to losses of cash reserve funds or debt securities we offer
Cash reserve funds, such as money market funds and money reserve funds are categorized as low risk financial products. As a result of a sudden
rise in interest rates, such cash reserve funds may fall below par value due to losses resulting from price decreases of debt securities in the portfolio,
defaults of debt securities in the portfolio or charges of negative interest. If we determine that a stable return cannot be achieved from the investment
performance of cash reserve funds, we may accelerate the redemption of, or impose a deposit limit on, such cash reserve funds.
In addition, debt securities that we offer may default or experience delays in the payment of interest and/or principal.
These events above may result in the loss of client confidence and lead to an outflow of client assets from our custody or preclude us fromincreasing such client assets.
● Risks Relating to Our Financial Position
10. We may have to recognize impairment losses with regard to the amount of goodwill, tangible and intangible assets recognized on ourconsolidated balance sheets
We have purchased all or a part of the equity interests in, or operations from, certain other companies in order to pursue our business expansion,and expect to continue to do so when and as we deem appropriate. We account for certain of those and similar purchases and acquisitions as a businesscombination under U.S. GAAP by allocating our acquisition costs to the assets acquired and liabilities assumed and recognizing the remaining amountas goodwill. On April 1, 2020, Nomura acquired 100% of Greentech Capital, LLC (“Greentech”) and goodwill of ¥12,480 million is reported on ourconsolidated balance sheet. We also possess tangible and intangible assets other than those stated above.
We may have to recognize impairment losses, as well as other losses associated with subsequent transactions, with regard to the amount of
goodwill, tangible and intangible assets and, recognized on our consolidated group balance sheet which may adversely affect our financial condition andresults of operations. For example, during the year ended March 31, 2019, we recognized an impairment loss on goodwill in our Wholesale segment
attributable to previous overseas acquisitions of ¥81,372 million.
11. Liquidity risk could impair our ability to fund operations and jeopardize our financial condition
Liquidity, or having ready access to cash, is essential to our business. We define liquidity risk as the risk of loss arising from difficulty in securing
the necessary funding or from a significantly higher cost of funding than normal levels due to deterioration of our creditworthiness or deterioration inmarket conditions. In addition to maintaining a readily available cash position, we seek to secure ample liquidity through repurchase agreements andsecurities lending transactions, long-term borrowings and the issuance of long-term debt securities, diversification of our short-term funding sources
such as commercial paper, and by holding a portfolio of highly liquid assets. We bear the risk that we may lose liquidity under certain circumstances,including the following:(1) We may be unable to access unsecured or secured funding
We continuously access unsecured funding from issuance of securities in the short-term credit markets and debt capital markets as well as bankborrowings to finance our day-to-day operations, including refinancing. We also enter into repurchase agreements and securities lending transactions
to raise secured funding for our trading businesses. An inability to access unsecured or secured funding or funding at significantly higher cost thannormal levels could have a substantial negative effect on our liquidity. For example, lenders could refuse to extend the credit necessary for us to
conduct our business based on their assessment of our long-term or short-term financial prospects if:•

We incur large trading losses,•

The level of our business activity decreases due to a market downturn,•

Regulatory authorities take significant action against us, or•

Our credit rating is downgraded.

In addition to the above, our ability to borrow in the debt capital markets could also be adversely impacted by factors that are not specific to us,
such as increases in market interest rates, reductions in banks’ lending capacity, a severe disruption of the financial and credit markets, negative views
about the general prospects for the investment banking, brokerage or financial services industries, or negative market perceptions of Japan’s financial
soundness.
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(2) We may be unable to sell assets
If we are unable to raise funds or if our liquidity declines significantly, we will need to liquidate assets or take other actions in order to meet our
maturing liabilities. In volatile or uncertain market environments, overall market liquidity may decline. In a time of reduced market liquidity, we may
be unable to sell some of our assets, or we may have to sell at depressed prices, which could adversely affect our results of operations and financial
condition. Our ability to sell assets may also be adversely impacted by other market participants seeking to sell similar assets into the market at thesame time.
(3) Lowering of our credit ratings could impact our funding
Our funding depends significantly on our credit ratings. Rating agencies may reduce or withdraw their ratings or place us on “credit watch” withnegative implications. For example, following the U.S. Prime Brokerage Event, in March 2021, Fitch Ratings, Inc. placed our credit ratings on
negative watch and Moody’s Investors Service, Inc. changed the outlook on our credit ratings to negative, which may lead either agency todowngrade our credit ratings in the future. See Item 4. “Risk Management Enhancement Program” for further information on the nature of this event.
Future downgrades could increase our funding costs and limit our funding. This, in turn, could adversely affect our result of operations and ourfinancial condition. In addition, other factors which are not specific to us may impact our funding, such as negative market perceptions of Japan’s
financial soundness.
12. Equity investments in affiliates and other investees accounted for under the equity method in our consolidated financial statements may
decline significantly over a period of time and result in us incurring impairment losses
We have affiliates and investees accounted for under the equity method in our consolidated financial statements and whose shares are publicly
traded. If there is a decline in the market price, of the shares we hold in such affiliates over a period of time, and we determine that the decline is otherthan-temporary, then we recognize an impairment loss for the applicable fiscal period which may have an adverse effect on our financial condition andresults of operations. For example, we recognized an impairment loss of ¥47,661 million against its investment in Nomura Real Estate Holdings, Inc.
during the year ended March 31, 2021.
● Risks Relating to Legal, Compliance and Other Operational Issues
13. We have identified a material weakness in our internal control over financial reporting and, despite our efforts to remediate, may identify
further material weaknesses in the future
The Company identified a material weakness in our internal control over financial reporting during the quarter ended March 2024 in relation tocertain classification and presentation matters within the consolidated statement of cash flows as included within our consolidated financial statements,
which has resulted in the need to restate the consolidated statement of cash flows in certain of the Company’s annual and interim consolidated financial
statements. The Company has identified and is in the process of implementing a number of remediation actions, which are also being tested, to address
this material weakness and intended to mitigate the risk of similar errors occurring in the future within the consolidated statement of cash flows.
Nonetheless, additional material weaknesses or other issues may arise in the future resulting in the Company not being able to provide financial
information in our consolidated financial statements and elsewhere in an accurate, timely and reliable manner or requiring additional restatements of ourconsolidated financial statements or other aspects of our periodic reporting. This may undermine confidence in our published financial information andother reported information by users of our consolidated financial statements, including holders of our securities, resulting in reductions in the price ofour common stock and/or ADRs as well as limit our access to capital markets, impact client or counterparty appetite to enter into transactions with us
and subject us to potential regulatory investigations and sanctions, each of which may materially and adversely affect our business, results of operations
and financial condition. See Note 1. “Summary of accounting policies” in the consolidated financial statements for further details of the nature of theerrors identified within the consolidated statement of cash flows and Exhibit 2 “Management’s Report on Internal Control over Financial Reporting” forfurther details on the material weakness identified and our remediation actions to address this material weakness.
14. Misconduct or fraud by an employee, director or officer, or any third party, could occur, and our reputation in the market and ourrelationships with clients could be harmed
We always face the risk that our employees, directors or officers, or any third party, could engage in misconduct that may adversely affect ourbusiness. Misconduct by an employee, director or officer includes conduct such as entering into transactions in excess of authorized limits, acceptanceof risks that exceed our limits, or concealment of unauthorized or unsuccessful activities. The misconduct could also involve the improper use or
disclosure of non-public information relating to us or our clients, such as insider trading improper transmission of such information and therecommendation of trades based on such information, as well as other crimes, which could result in regulatory sanctions, legal liability and serious
reputational or financial damage to us.
For example, on March 5, 2019, a researcher at Nomura Research Institute, Ltd. (“NRI”), our equity-method affiliate, revealed information that
there was a high possibility that the standard for designating the top market of the Tokyo Stock Exchange (the “TSE”) would fall to ¥25 billion, which
had been under review at the TSE, to a chief strategist (the “NSC Strategist”) in the research division of NSC. The researcher at NRI was a member ofthe Advisory Group to Review the TSE Equity Market Structure and received this information in such capacity. On the same day and the next day, the
NSC Strategist communicated the information to certain people including members of Japanese stock sales team of NSC and Nomura International(Hong Kong) Limited, some of whom provided the information to their institutional investor clients. Although the provision of the information did not
represent a violation of law, they were inappropriate conducts and impaired the implicit trust placed in us and our employees by other market
participants. Following a special internal investigation conducted by external experts, on May 24, 2019, we announced a remediation plan and the
reduction of compensation of certain of our executives and those of NSC. On May 28, 2019, the FSA issued a business improvement order to us and toNSC, requiring us to clarify responsibility for this incident, develop and submit a detailed improvement plan, and report periodically on theimplementation and effectiveness of measures for improvement, and on August 28, 2019, a fine of ¥10 million was imposed by Tokyo Stock Exchange,
Inc. as a penalty.
Third parties may also engage in fraudulent activities, including devising a fraudulent scheme to induce our investment, loans, guarantee or any
other form of financial commitment, both direct and indirect. Because of the broad range of businesses that we engage in and the large number of third
parties with whom we deal in our day-to-day business operations, such fraud or any other misconduct may be difficult to prevent or detect, and our
future reputation and financial condition could be adversely affected, which could result in serious reputational or financial damage to us in the future.
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We have taken measures in line with the improvement plan to detect and prevent such fraudulent or misconduct in the future, including theestablishment and implementation of the “Nomura Group Code of Conduct” on March 19, 2021 including ensuring its thorough dissemination
throughout the group and ensuring thorough compliance with its terms, and through compliance training or any other programs, as well as an enhanced
internal reporting system. However, the measures we have implemented or additional measures that may be implemented in the future may not beeffective in preventing or managing the risk of misconduct or fraud in all cases, and we may not always be able to detect or deter misconduct or fraud byan employee, director, officers, or third parties. If any administrative or judicial sanction is issued against us as a result of such fraudulent or misconduct,
we may lose business opportunities, and our future revenue and results of operations may be materially and adversely affected, even after the sanction islifted, if and to the extent that our clients, especially public institutions, decide not to engage us for their financial transactions.
15. A failure to identify and appropriately address conflicts of interest could adversely affect our businessWe are a global financial institution that provides a wide range of products and services to a diverse group of clients, including individuals,
corporations, other financial institutions and governmental institutions. As such, we face potential conflicts of interest in the ordinary course of ourbusiness. Conflicts of interests can arise when our services to a particular client conflict or compete, or are perceived to conflict or compete, with ourown interests. In addition, where non-public information is not appropriately restricted or shared within the firm, conflicts of interest can also arise
where a transaction within the Nomura Group and or a transaction with another client conflict or compete, or is perceived to conflict or compete, with atransaction with a particular client. While we have extensive internal procedures and controls designed to identify and address conflicts of interest on thebasis of the Nomura Group Conflicts of Interest Management Policy, a failure, or a perceived failure, to identify, disclose and appropriately address suchconflicts could adversely affect our reputation, the willingness of current or potential clients to do business with us and our revenues and results ofoperations. In addition, conflicts of interest could give rise to regulatory actions or litigation.
16. Our business is subject to substantial legal, regulatory and reputational risks
Substantial legal liability or a significant regulatory action against us could have a material adverse effect on our business, financial condition or
results of operations, or cause reputational harm to us. Also, material changes in regulations applicable to us or to the markets in which we operate could
adversely affect our business. See Note 20 “Commitments, contingencies and guarantees” in our consolidated financial statements included in thisannual report for further information regarding the significant investigations, lawsuits and other legal proceedings that we are currently facing.
We face significant legal risks in our businesses. These risks include liability under securities or other laws in connection with securities
underwriting and offering transactions, liability arising from the purchase or sale of any securities or other financial products, disputes over the terms
and conditions of complex trading arrangements or the validity of contracts for our transactions, disputes with our business alliance partners and legal
claims concerning our other businesses. When we face the substantial legal liability, we seek advice from experts and third-parties, develop appropriate
policies, and address the cases accordingly. However, depending on the disputes, our reputation, financial condition and results of operations could be
adversely affected.
(1) Legal liability may occur due to events such as market downturn and could adversely affect our business, financial condition and results ofoperations
During a prolonged market downturn or upon the occurrence of an event that adversely affects the market, we would expect claims against us toincrease. We may also face significant litigation. The cost of defending such litigation may be substantial and our involvement in litigation may
damage our reputation. For example, during the fiscal year ended March 31, 2022, approximately ¥62.0 billion related to legacy transactions in the
U.S. from before the global financial crisis (2007 – 2008) was recognized including legal expenses as well as certain transactions intended to mitigate
future losses. In addition, even legal transactions might be subject to adverse public reaction according to the particular details of such transactions.
These risks may be difficult to assess or quantify and their existence and magnitude may remain unknown for substantial periods of time.
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(2) Extensive regulation of our businesses limits our activities and may subject us to significant penalties and losses
The financial services industry is subject to extensive regulation. We are subject to increasing regulation by governmental and self-regulatoryorganizations in Japan and in virtually all other jurisdictions in which we operate, and such governmental and regulatory scrutiny may increase as
our operations expand or as laws change. In addition, while regulatory complexities increase, possibilities of extra-territorial application of aregulation in one jurisdiction to business activities outside of such jurisdiction may also increase. These regulations are broadly designed to ensure
the stability of financial systems and the integrity of the financial markets and financial institutions, and to protect clients and other third parties
who deal with us, and often limit our activities and/or affect our profitability, through net capital, client protection and market conduct requirements.
In addition, on top of traditional finance-related legislation, the scope of laws and regulations applying to, and/or impacting on, our operations may
become wider depending on the situation of the wider international political and economic environment or policy approaches taken by
governmental authorities in respect of regulatory application or law enforcement. In particular, the number of investigations and proceedings
against the financial services industry by governmental and self-regulatory organizations has increased substantially and the consequences of suchinvestigations and proceedings have become more severe in recent years, and we are subject to face the risk of such investigations and proceedings.
For example, the U.S. Department of Justice (the “DOJ”) conducted an investigation regarding residential mortgage-backed securities securitizedby some of our U.S. subsidiaries prior to 2009. On October 15, 2018, the U.S. subsidiaries settled the investigation with the DOJ and agreed to pay$480 million. Although we take measures such as timely monitoring and establishing internal governance procedures in order to prevent violationsof law and regulation we may not always be able to prevent such violations, and we could be fined, prohibited from engaging in some of ourbusiness activities, ordered to improve our internal governance procedures or be subject to revocation of our license to conduct business. Our
reputation could also suffer from the adverse publicity that any administrative or judicial sanction against us may create, which may negatively
affect our business opportunities and ability to secure human resources. As a result of any such sanction, we may lose business opportunities for aperiod of time, even after the sanction is lifted, if and to the extent that our clients, especially public institutions, decide not to engage us for theirfinancial transactions. In addition, certain market participants may refrain from investing in or entering into transactions with us if we engage inbusiness activities in regions subject to international sanctions, even if our activities do not constitute violations of sanctions laws and regulations.
(3) Tightening of regulations applicable to the financial system and financial industry could adversely affect our business, financial condition andresults of operations
If regulations that apply to our businesses are introduced, modified or removed, we could be adversely affected directly or through resulting
changes in market conditions. The impact of such developments could make it economically unreasonable for us to continue to conduct all or certainof our businesses, or could cause us to incur significant costs to adjust to such changes.
New regulations or revisions to existing regulations relating to accounting standards, regulatory capital adequacy ratios, liquidity ratios andleverage ratios applicable to us could also have a material adverse effect on our business, financial condition and results of operations. Such new
regulations or revisions to existing regulations include the so-called Basel III package formulated by the Basel Committee on Banking Supervision(“Basel Committee”) and the finalized Basel III reforms published in December 2017. Furthermore, in October 2012, the Basel Committee developed
and published a set of principles on the assessment methodology and higher loss absorbency requirements for domestic systemically important banks(“D-SIBs”), and, in December 2015, the FSA identified us as a D-SIB and imposed a surcharge of 0.5% on our required capital ratio after March
2016 with 3-year transitional arrangement. In addition, FSB published the final standard requiring global systemically important banks (“G-SIBs”) to
maintain a certain level of total loss-absorbing capacity (“TLAC”) upon their failure in November 2015. Under the FSA’s policy implementing the
TLAC framework in Japan as updated in April 2018, the TLAC requirements in Japan apply not only to Japanese G-SIBs but also to Japanese
D-SIBs that are deemed (i) of particular need for a cross-border resolution arrangement and (ii) of particular systemic significance to Japanesefinancial system if they fail. Based on the revised policy, in March 2019, the FSA published the notices and guidelines of TLAC regulations in Japan.
According to these notices and guidelines, Nomura is subject to the TLAC requirements in Japan from March 31, 2021 although Nomura is not
identified as a G-SIB as of the date of this annual report. These changes in regulations may increase our funding costs or require us to liquidate
financial instruments and other assets, raise additional capital or otherwise restrict our business activities in a manner that could adversely affect ouroperating or financing activities or the interests of our shareholders.
(4) Deferred tax assets may be impacted due to a change in business condition or in laws and regulations, resulting in an adverse effect on ouroperating results and financial condition
We recognize deferred tax assets in our consolidated balance sheets as a possible benefit of tax relief in the future. If we experience or forecast
future operating losses, if tax laws or enacted tax rates in the relevant tax jurisdictions in which we operate change, or if there is a change inaccounting standards in the future, we may reduce the deferred tax assets recognized in our consolidated balance sheets. As a result, it could
adversely affect our financial condition and results of operations. See Note 15 “Income taxes” in our consolidated financial statements included inthis annual report for further information regarding the deferred tax assets that we currently recognize.
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(5) Defects in our anti-money laundering and counter-terrorism financing measures could have serious consequences such as, administrative
penalties or punitive fines.
In recent years, financial crimes have become more sophisticated, complex, and diverse. As the world faces growing threats of war, terrorism, andcyberattacks, it is highly important to counter the financing of crimes and terrorism. Financial institutions around the world are expected to takestrong measures to combat money laundering and terrorist financing. Despite our efforts to improve our anti-money laundering and counter-terrorism
financing measures, which we have implemented consistently across Nomura Group in accordance with the Recommendations provided by the
Financial Action Task Force (FATF) and the FSA’s “Guidelines on Anti-Money Laundering and Terrorist Financing”, there remains a risk that suchmeasures will not be fully effective in preventing or detecting all violations in a timely manner. As a consequence, we could be subject toadministrative penalties or punitive fines. See “15.Our business is subject to substantial legal, regulatory and reputational risks—(2) Extensive
regulation of our businesses limits our activities and may subject us to significant penalties and losses” for further information regarding regulatory
actions and other legal proceedings as well as consequences thereof.
17. Unauthorized disclosure or misuse of personal information held by us may adversely affect our businessWe keep and manage personal information obtained from clients in connection with our business. In recent years, there have been many reported
cases of personal information and records in the possession of corporations and institutions being improperly accessed disclosed or misused.
Although we exercise care to protect the confidentiality of personal information and have in place policies and procedures designed to safeguard
such information and ensure that it is used in compliance with applicable laws, rules and regulations, were any unauthorized disclosure or misuse of
personal information to occur, our business could be adversely affected. For example, we could be subject to government actions such as administrative
actions or penalties in case there is any violation of applicable personal data protection laws, rules and regulations or be subject to complaints andlawsuits for damages from clients if they are adversely affected due to the unauthorized disclosure or misuse of their personal information (including
leakage of such information by an external service provider). In addition, we could incur additional expenses associated with changing our security
systems, either voluntarily or in response to administrative guidance or other regulatory initiatives. Moreover, restrictions on our ability to use personal
information collected from clients may adversely affect our existing businesses or to develop new ones. Furthermore, any damage to our reputation
caused by such unauthorized disclosure or misuse could lead to a decline in new clients and/or a loss of existing clients, as well as to increased costs andexpenses incurred for public relations campaigns designed to prevent or mitigate damage to our corporate or brand image or reputation.
18. System failure, the information leakage and the cost of maintaining sufficient cybersecurity could adversely affect our businessOur businesses rely on secure processing, storage, transmission and reception of personal, confidential and proprietary information on oursystems. We have been in the past and may again become the target of attempted unauthorized access, computer viruses or malware, and other cyberattacks designed to access and obtain information on our systems or to disrupt and cause other damage to our services. For example, in June 2018, oneof our foreign subsidiaries experienced a spear phishing incident that resulted in the unauthorized access to the firm’s desktop network, requiring us to
immediately launch an internal investigation to assess and remediate the incident, notify the appropriate authorities of its occurrence and communicate
with clients and other individuals whose data may have been impacted. In response to the COVID-19 pandemic, many of our employees now work
remotely using networking or other technologies, and these technologies have become even more critical to our business. The implementation of remote
work arrangements may also increase the possibility that we will be subject to cyber-attacks and other information security breaches. Although thesethreats may originate from human error or technological failure, they may also originate from the malice or fraud of internal parties, such as employees,
or third parties, including foreign non-state actors and extremist parties. Additionally, we could also be adversely impacted if any of the third-party
vendors, exchanges, clearing houses or other financial institutions to whom we are interconnected are subject to cyber-attacks or other informational
security breaches. Such events could cause interruptions to our systems, reputational damage, client dissatisfaction, legal liability, enforcement actions
or additional costs, any and all of which could adversely affect our financial condition and operations.
While we continue to devote significant resources to monitor and update our systems and implement information security measures to protect oursystems, there can be no assurance that any controls and procedures we have in place will be sufficient to protect us from future security breaches. As
cyber threats are continually evolving, our controls and procedures may become inadequate and we may be required to devote additional resources tomodify or enhance our systems in the future.
19. Our business may be adversely affected if we are unable to hire, retain and develop qualified personnel
Nomura believe that our people are our greatest asset and we implement various talent management initiatives in a comprehensive manner. Any
failure to hire, retain, and develop qualified personnel may materially and adversely affect our business, financial condition and results of operations.
There is significant competition for such personnel, based on factors such as compensation, the working environment, training and benefits available toemployees and our reputation as an employer. Spending on our human resource initiatives may harm our profitability. Moreover, developing our humanresources and instilling in them a uniform corporate culture is a continuous, intensive process, and we may not be successful in doing so.
25

3. Operating, Financial and Cash Flow Analyses by Management(1) Operating Results.
Executive Summary[Overall results of business]
We recognized net revenue of ¥1,363.9 billion for the fiscal year ended March 31, 2022, a decrease of 2.7% from the previous fiscal year.
Non-interest expenses decreased by 2.9% to ¥1,137.3 billion, income before income taxes was ¥226.6 billion, and net income attributable to theshareholders of Nomura Holdings, Inc. was ¥143.0 billion. Return on equity was 5.1%. EPS(1) for the fiscal year ended March 31, 2022 was ¥45.23, adecrease from ¥48.63 for the fiscal year ended March 31, 2021. We have decided to pay a dividend of ¥14 per share to shareholders of record as ofMarch 31, 2022. As a result, the total annual dividend will be ¥22 per share for the fiscal year ended March 31, 2022.
(Note):
1.
Diluted net income attributable to Nomura Holdings’ shareholders per share.
[Management’s assessment of events that had a particular impact on the results of the year]
In the Retail Division, the shift towards the asset consulting business is progressing. In the fiscal year ended March 31, 2022, there was anincrease in stock and consulting revenues due to a net increase in investment trusts and discretionary investment balances. However, because offlare-ups in the COVID-19 pandemic, changes to the monetary policy of central banks, and heightened geopolitical risks, clients’ risk aversion attitude
became prominent, and profits from flows such as stock and investment trust transactions decreased.
In the Investment Management Division, investment income decreased by market factors. On the other hand, there was an inflow of funds for the
fourth consecutive quarter, and in December of last year, the balance of assets under management reached a record high. Thereby operating income
mainly from management fees increased.
Profits in the Wholesale Division increased. In Investment Banking, the advisory business, particularly overseas, performed well, resulting in thehighest earnings in the past six years. In Global Markets, loss of Equity arising from transactions with a US client decreased.
Also, the fiscal year ended March 31, 2022 was affected by a variety of temporary factors. Continuing from the fiscal year ended March 31, 2021,
we recognized loss of ¥65.4 billion arising from transactions with a US client during the first quarter, part of which is estimated to be recoverable
resulting in recognition of profit of ¥14.7 billion in the third and fourth quarters. In addition, approximately ¥62 billion related to legacy transactions in
the U.S. from before the global financial crisis (2007–2008) was recognized including legal expenses as well as certain transactions intended to mitigate
future losses. On the other hand, we recognized income of approximately ¥79.0 billion from the sale of a part of its shares held in Nomura ResearchInstitute, Ltd, which is affiliated company, in the first and fourth quarters.
The fiscal year ended March 31, 2022 was more challenging than the previous fiscal year. However, we believe that the results of our medium-to
long-term initiatives were steady. At the end of the fiscal year, we have almost completed the accounting treatment of legacy transactions in theAmericas from before the global financial crisis, freeing up management resources to be allocated to growth areas.
[Capital policy and shareholder returns]
We plan to maintain appropriate capital ratios and aim for sustainable growth through optimal capital allocation. As preparatory steps to achieve
our management vision, while controlling cost levels, we are investing for growth to realize our management strategy of expanding the scope of ourbusiness from public into private markets, in order to balance investment and shareholder returns, and maximize shareholder value by improving
productivity and expanding revenue sources.
We strive to pay dividends using a consolidated payout ratio of 30 % of each semi-annual consolidated earnings as a key indicator. Additionally
we aim for a total payout ratio, which includes dividends and share buybacks, of at least 50 %. The total amount of shareholder returns for each fiscal
year is determined by comprehensively taking into account trends in the regulatory environment in Japan and overseas, including the strengthening ofBasel regulations, as well as the consolidated results of our business divisions. For further details of our dividend policy, refer to Item 4. “Company
Information—3.Dividend Policy”.
[Summary by Segment]
In our Retail Division, net revenue for the year ended March 31, 2022 decreased by 11.1% from the previous fiscal year to ¥328.0 billion.
Non-interest expenses decreased by 2.8% to ¥268.7 billion. As a result, income before income taxes decreased by 35.8% to ¥59.2 billion. Based on thebasic concept of “Enriching clients by responding to their asset concerns”, our Retail Division has been working on consulting business in close
cooperation with each client with the aim of becoming “the most trusted partner”. During the fiscal year, purchases of stocks and investment trusts weresluggish due to the uncertain market environment, but we expanded our recurring revenue assets by consulting on the entire assets of our clients.
26

We are also enhancing our initiatives to reach the working generation by strengthening our remote consulting through contact centers. Goingforward, not only providing support for asset management, we will strive to enhance our products and services to provide solutions for a variety of clientissues, such as real estate and inheritance. In addition, we will aim to establish a new business model by combining both digital and human touch
service.
In our Investment Management Division, net revenue for the year ended March 31, 2022 decreased by 9.3% from the previous fiscal year to¥148.0 billion. Non-interest expenses increased by 6.0% to ¥76.5 billion. As a result, income before income taxes decreased by 21.4% to ¥71.5 billion.
The Investment Management Division, which was established on April 1, 2021, has been broadly engaged in the asset management business while
expanding its product lineup and improving its services to meet the diversifying investment needs of clients. During the fiscal year under review, thebalance of assets under management remained high, due to inflows of funds which continued for four consecutive quarters, resulting in an increase inbusiness revenue that is relatively stable in nature.
On the other hand, although Nomura Capital Partners recorded profit from valuation and sale of shares of its investee company following its initialpublic offering, a decrease in gain related to American Century Investments resulted in a year on year decrease in investment gain and loss. As part ofour efforts to expand our private market products, Nomura SPARX Investment, a joint venture with the SPARX Group Co., Ltd. was established andstarted managing an investment corporation that invests in unlisted companies.
In addition, in collaboration with Japan Search Fund Accelerator Co., Ltd., we established Japan Search Fund Platform Investment Limited
Partnership, which specializes in investments for business succession, and completed the first close of fund raising.
In our Wholesale Division, net revenue for the year ended March 31, 2022 increased by 1.7% from the previous fiscal year to ¥703.1 billion.
Non-interest expenses increased by 0.2% to 628.6 billion. As a result, income before income taxes increased by 15.8% to ¥74.5 billion. In Global
Markets, we continued to reinforce our core strengths across regions, enhanced risk control and governance and focused on providing uninterrupted
service and liquidity to our clients, as they rebalance their portfolio amidst highly volatile markets. We delivered steady performance, deepening
engagement with clients across flow as well as structured financing and solution business. In Investment Banking, client activity was active and, wewere able to execute large domestic as well as cross-border business restructurings and industry-wide consolidations by carefully responding to ourclients’ needs. In addition to M&A advisory and underwriting businesses for both equity and debt, the expansion of the acquisition finance market also
led to robust growth for the fiscal year. The number of deals executed by Nomura Greentech increased and contributed to revenue, while we were able todeepen our alliance with Wolfe Research LLC and have started joint branding which has led to an increase in deal numbers.
27

Progress on Key Performance Indicators[Management Indicators]
One component of Nomura’s management vision is “achieving sustainable growth by solving social issues” and we have set Return on Equity(ROE) as one of the most important indicators towards the fiscal year ending March 2025. After the introduction of the Corporate Governance Code inJapan, the importance of management having an awareness of capital costs has increased among Japanese companies. In addition, since the financial
services industry is subject to stringent financial capital regulations, more effective use of capital is required. As a result, we believe that the optimal
allocation of management resources will become even more important for our company in the future. Accordingly, beginning in the year ended
March 31, 2021, we adopted ROE as a key management indicator, which management uses to track the progress of our sustainable business
transformation. At the Board of Directors meeting held in May 2020, in-depth discussions were held on the management indicators and basic concepts
described as follows.
Return on equity
ROE is defined and calculated as net income attributable to NHI shareholders divided by total NHI shareholders’ equity. We believe that
disclosure of ROE is useful to investors in that it helps them to assess business conditions and effective use of capital to enhance corporate value.
We have set a medium to long-term ROE target of 8-10% for the fiscal year end March 2025, reflecting the cost of capital demanded by ourcompany. However, ROE may be of limited use in that it does not necessarily reflect financial soundness. In order to avoid the excessive pursuit ofcapital efficiency with the aim of improving ROE at the expense of financial soundness, we attach importance to the creation of corporate value, giving
due consideration to financial soundness, and thereby improving ROE. ROE for the year ended March 31, 2022 decreased to 5.1% from 5.7% for theprior fiscal year.
Common equity Tier1 ratio (CET1 ratio)
In addition to ROE, there are multiple global financial regulations that we must comply with, including capital regulations established by BaselCommittee on Banking Supervision as interpreted and implemented by the FSA which have a direct impact on the way we conduct business. For thisreason, we have set a target of maintaining a common equity Tier 1 ratio (CET1 ratio) of at least 11%, so that we will take into consideration thefinancial soundness including certain buffer against severe market stress. Our CET1 ratio increased to 17.22% as of March 31, 2022 from 15.81% as ofMarch 31, 2021. For further details, on the key capital requirements we must follow, see Item 2. “Operating and Financial Review—3. Operating,
Financial and Cash Flow Analyses by Management—(5) Liquidity and Capital Resources—Consolidated Regulatory Capital Requirements”.
28

[Indicators by Business Segment]
In addition to the Group KPIs, our management also uses certain divisional specific KPIs to monitor and assess performance of the divisions.
RetailWe have adopted the following key indicators in the Retail Division to quantify the outcomes of those efforts and monitor our business: Recurring
revenue assets; Consulting-related revenue; and Net inflows of cash and securities; Active clients; so that our management will be able to monitor the
progress and target sustainable and further business growth. We believe that disclosure of those indicators is useful to investors in that it helps them toassess the progress of the division’s client-facing activities as well as digest and understand our growth potential.

2020

Recurring revenue assets
Consulting-related revenue
Net inflows of cash and securities
Active clients¥ 15,300¥
14.9¥ (429.4)
1,071,000

Year ended March 31 (Billions of Japanese Yen)
% Changefrom previous
year
2022
2021

¥ 18,200
¥
13.4
¥
887.7
1,019,000

19% ¥ 19,600(10.1)% ¥
16.7
— % ¥
351.5
(4.9)% 1,009,000% Changefrom previous
year

7.7%
24.6%
(60.4)%(1.0)%

Recurring revenue assets
Recurring revenue assets are defined by adding related loans to the total amount of assets, such as investment trusts and discretionary investments,
for which management fees and other fees are charged. The total amount of Loan is reported by ¥614.3 billion within Loans receivable in the
consolidated balance sheets as of March 31, 2022. Recurring revenue assets such as investment trusts and discretionary investments grew driven by themarket rally and net inflows into investment trusts, contributing to higher recurring revenue.
Consulting-related revenue
Consulting-related revenue consists of revenues that are not derived from purchase and sales of securities, but revenue related to service such as
insurance and real estate. For the current fiscal year, pension insurance and business insurance contracts and M & A contracts contributed to the increase
compared to the fiscal year ended March 31, 2021.
Net inflows of cash and securities
Net inflows of cash and securities is defined and calculated as cash and securities inflows minus outflows, excluding regional financial
institutions. Net inflows of cash and securities was over ¥351.5 billion in annual total which combined with market factors. Retail client assets was¥122.1 trillion as of March 31, 2022.
Active clients
Active clients are defined as a number of clients who transacted at least one purchase since April 1 (accumulated). Growth in the number of Active
clients exceeded previous fiscal year results until the 3rd Quarter but slowed down due to the U.S. monetary policy and heightened geopolitical risks.
Investment Management Division
We have set the balance of assets under management as a key performance indicator for the Investment Management Division. The businesses in
the Investment Management Division generally earn management and similar fees based on the amount of assets under management, meaning thatrevenue trends for these businesses tend to follow trends in the amount of assets under management, and our management considers this measure to beeffective in monitoring the progress of these businesses. We also believe that it is an important indicator of how well investment products are received
by investors.
29

Year ended March 31 (Trillions of Japanese Yen)
% Changefrom previous
2021
year
2022

2020*

Assets under management
*

¥

N/A

¥

64.7

— %

¥

% Changefrom previous
year

67.9

4.9%

No comparable data available for 2020.

The balance of assets under management includes the net balance (after deducting duplications) of assets under management (gross) of Nomura
Asset Management, Nomura Corporate Research and Asset Management, and Wealth Square, as well as third-party investments in funds managed by
Nomura SPARX Investment, Nomura Mezzanine Partners, Nomura Capital Partners, and Nomura Research & Advisory.
During the fiscal year ended March 31, 2022, the balance of investment trusts increased mainly through bank channels and ETFs. In addition tolarge inflows from domestic pension funds in the investment advisory services, for our overseas business, funds flowed into Nomura Corporate
Research and Asset Management’s high yield bond strategy. In addition to these inflows, the balance increased due to market factors.
Wholesale
Starting April 2019, we have adopted a cost-to-income ratio and a revenue to modified RWA ratio as additional key performance indicators in ourWholesale Division. We believe that disclosure of these indicators would be useful for investors to assess progress in terms of cost and resource
efficiency. Additionally, we use these indicators to evaluate our business based on progress on cost savings initiatives and return on resources.

2020

Cost-to-income ratio
Revenue/modified RWA

2021

86%
6.5%

Year ended March 31% Changefrom previous
year

91%
6.4%

5.8%
(1.5)%% Changefrom previous
year

2022

89%
7.0%

(2.2)%
9.4%

Cost-to-income ratio
The cost-to-income ratio for the Wholesale Division is calculated by dividing non-interest expenses for the Division for a given reporting periodby net revenue generated by the Division for the same period, calculated consistently, in each case, with our segment presentation for the division. It ismonitored at a divisional level to track operating margins for the business. The ratio decreased during the year ended March 31, 2022 compared to theprior fiscal year primarily due to less impact from the U.S. Prime Brokerage Event on revenue and cost during the year. However, there was some effecton costs due to international hiring in line with strategic initiatives and market-driven base salary adjustments. The ratio increased during the year ended
March 31, 2021 compared to the prior fiscal year because of the impact of the U.S. Prime Brokerage Event on revenue and cost for the year. However,the negative impact was mitigated by other increases in revenue as well as pro-active cost management after adjusting for the impact of pay for
performance and other revenue driven costs.
Revenue to modified Risk Weighted Asset (RWA) ratio
The revenue to modified RWA ratio for the Wholesale division is calculated by dividing net revenue generated by our Wholesale Division for agiven reporting period (in the case of net revenue for the Wholesale Division for periods shorter than a full fiscal year, on an annualized basis) by theaverage balance of modified RWA used by the Wholesale Division for the same period. The Revenue to modified RWA ratio is monitored to track ourrevenue earning capacity against risk resources deployed. Modified RWA is the total of (i) average daily risk-weighted assets as calculated and presented
under Basel regulations as interpreted and implemented by the FSA and (ii) an adjustment equal to the regulatory adjustment to common equity tier1(CET1) capital calculated and presented under Basel regulations as interpreted and implemented by the FSA divided by our internal minimum capitalratio target of 12.5%. (daily average for the accounting period), which we use to estimate the amount of deductions to RWA generated by the division.
The revenue to modified RWA as we calculate and present it may differ from similarly titled measures presented by our competitors due to the approachand methodologies used for calculation. Our credit risk-weighted assets and operational risk equivalent assets are calculated by using the foundation
Internal Ratings-Based Approach and the Standardized Approach, respectively, with the approval of the FSA. Furthermore, Market risk equivalent assets
are calculated by using the Internal Models Approach for market risk. The conversion of Wholesale RWA to modified RWA is based on adjustments
reflecting our internal minimum capital ratio target. Moreover, the usefulness of this ratio may be limited in that the adjustment applied to RWA, whichis intended to capture the appropriate amount of RWA to attribute to our businesses (as opposed to RWA as calculated for regulatory capital purposes), isan estimate incorporating our internal risk tolerance; however, this adjustment may not appropriately reflect the actual regulatory capital impact of thecharged assets that are used by our business. Revenue to modified RWA increased for the year ended March 31, 2022 compared to the prior fiscal year
primarily because of less impact from the U.S. Prime Brokerage Event on revenue as well as increased Investment Banking revenue. The impact of the
U.S. Prime Brokerage Event was the main reason why the ratio declined for the year ended March 31, 2021 compared to the prior fiscal year.
30Results of Operations
Overview
The following table provides selected consolidated statements of income information for the years ended March 31, 2020, 2021 and 2022.
Millions of yen, except percentages
Year ended March 31% Changefrom previous
2021
year
2022

2020

Non-interest revenues:
Commissions
Fees from investment banking
Asset management and portfolio service fees
Net gain on trading
Gain (loss) on private equity and debt investments
Gain (loss) on investments in equity securities
Other
Total Non-interest revenues
Net interest revenue
Net revenue
Non-interest expenses
Income before income taxes
Income tax expense
Net income
Less: Net income attributable to noncontrolling interests
Net income attributable to NHI shareholders
Return on equity¥ 308,805
103,222238,202356,609(93)(14,726)
165,991
1,158,010
129,819
1,287,829
1,039,568
248,261
28,894¥ 219,367
2,369¥ 216,998
8.2%¥ 376,897
108,681230,047
310,040
12,734
14,053208,317
1,260,769
141,1031,401,872
1,171,201
230,671
70,274¥ 160,397
7,281¥ 153,116
5.7%

22.1%
5.3
(3.4)
(13.1)
—
—
25.5
8.9
8.7
8.9
12.7
(7.1)
143.2
(26.9)%
207.3(29.4)%% Changefrom previous
year¥ 332,344
149,603269,985368,799
30,7685,446
152,832
1,309,777
54,113
1,363,890
1,137,267
226,623
80,090¥ 146,533
3,537¥ 142,996(11.8)%
37.7
17.4
19.0
141.6
(61.2)(26.6)
3.9(61.7)
(2.7)
(2.9)
(1.8)
14.0
(8.6)%(51.4)(6.6)%

5.1%

Net revenue decreased from the year ended March 31, 2021 to the year ended March 31, 2022. This decrease is primarily driven by Commissions
earned by Retail Division. Commissions decreased from the year ended March 31, 2021 to the year ended March 31, 2022 primarily due to a decrease incommissions received from the brokerage commissions from equity and equity-related products and the distribution of investment trusts. Fees frominvestment banking increased from the year ended March 31, 2021 to the year ended March 31, 2022 primarily due to an increase in revenue fromadvisory services. Asset management and portfolio service fees increased from the year ended March 31, 2021 to the year ended March 31, 2022 mainly
due to increases in recurring revenue in Retail Division and in revenue from high level of asset under management in Investment Management Division.
Net gain on trading increased from the year ended March 31, 2021 to the year ended March 31, 2022, primarily due to the U.S. Prime Brokerage Event
subsided. Net gain on trading also included total gains of ¥8.2 billion attributable to changes in Nomura’s own creditworthiness with respect toderivative liabilities primarily due to a widening of Nomura’s credit spread. Gain (loss) on investments in equity securities decreased from the year
ended March 31, 2021 to the year ended March 31, 2022, primarily due to a result of market appreciation during the year ended March 31, 2021, notrepeated in March 31, 2022. Gain (loss) on investments in equity securities includes both realized and unrealized gains and losses on investments inequity securities held for operating purposes which are our investments in unaffiliated companies, which we hold on a long-term basis in order topromote existing and potential business relationships. Other decreased from the year ended March 31, 2021 to the year ended March 31, 2022, primarily
due to American Century Investments related gain/loss.
Net revenue increased from the year ended March 31, 2020 to the year ended March 31, 2021 despite recognizing significant losses in connection
with the U.S. Prime Brokerage Event in our Wholesale Division. This increase is primarily driven by Commissions earned by Retail Division.
Commissions increased from the year ended March 31, 2020 to the year ended March 31, 2021 primarily due to an increase in commissions received
from the distribution of investment trusts and brokerage commissions received from equity and equity related products. Fees from investment banking
increased from the year ended March 31, 2020 to the year ended March 31, 2021 primarily due to an increase in revenue from M&A advisory services
and our solution services associated with fund raising. Asset management and portfolio service fees decreased from the year ended March 31, 2020 to
the year ended March 31, 2021 mainly due to decreases in fee ratios. Net gain on trading decreased from the year ended March 31, 2020 to the year
ended March 31, 2021, primarily due to the U.S. Prime Brokerage Event. Net gain on trading also included total losses of ¥13.4 billion attributable tochanges in Nomura’s own creditworthiness with respect to derivative liabilities primarily due to a tightening of Nomura’s credit spreads which were
temporarily widened at the end of March 2020 due to the COVID-19 pandemic. Gain (loss) on investments in equity securities increased from the year
ended March 31, 2020 to the year ended March 31, 2021, primarily due to a result of market appreciation during the year ended March 31, 2021. Gain(loss) on investments in equity securities includes both realized and unrealized gains and losses on investments in equity securities held for operating
purposes which are our investments in unaffiliated companies, which we hold on a long-term basis in order to promote existing and potential business
relationships. Other increased from the year ended March 31, 2020 to the year ended March 31, 2021, primarily due to recognizing a non-recurring gainof ¥71.1 billion resulting from the rights conversion related to the Tokyo Nihonbashi district redevelopment project.
31

Net interest revenue is a function of the level and mix of total assets and liabilities, which includes trading assets and financing and lendingtransactions, and the level, term structure and volatility of interest rates. Net interest revenue is an integral component of trading activity. In assessing the
profitability of our overall business and of our Global Markets business in particular, we view Net interest revenue and Non-interest revenues inaggregate. For the year ended March 31, 2022, interest revenue, including a dividend from our investment in American Century Investments decreased
by 20%, and interest expense increased by 7% from the year ended March 31, 2021. As a result, Net interest revenue for the year ended March 31, 2022
decreased from the year ended March 31, 2021. For the year ended March 31, 2021, interest revenue, including a dividend from our investment in
American Century Investments decreased by 55%, and interest expense decreased by 68% from the year ended March 31, 2020. As a result, Net interest
revenue for the year ended March 31, 2021 increased from the year ended March 31, 2020.
Non-interest expenses for the year ended March 31, 2022 decreased from the year ended March 31, 2021, primarily due to the credit losses related
to the U.S. Prime Brokerage Event subsiding compared to previous fiscal year and the absence of an impairment loss of ¥47.7 billion on our equity
method investments in Nomura Real Estate Holdings.
Non-interest expenses for the year ended March 31, 2021 increased from the year ended March 31, 2020, primarily due to provisions for credit
losses of ¥41.6 billion recognized as a result of the U.S. Prime Brokerage Event and an impairment loss of ¥47.7 billion on our equity method
investments in Nomura Real Estate Holdings.
We are subject to a number of different taxes in Japan and have adopted the consolidated tax filing system permitted under Japanese tax law. The
consolidated tax filing system only imposes a national tax. Nomura’s domestic effective statutory tax rate was approximately 31% for the fiscal years
ended March 31, 2020, 2021 and 2022, respectively. Our foreign subsidiaries are subject to the income taxes of the countries in which they operate,
which are generally lower than those in Japan. The Company’s effective statutory tax rate in any one year is therefore dependent on our geographic mixof profits and losses and also on the specific tax treatment applicable in each location.
Income tax expense for the year ended March 31, 2022, represented an effective tax rate of 35.3%. The significant factors causing the difference
between the effective tax rate of 35.3% and the effective statutory tax rate of 31% was the changes in deferred tax valuation allowances which increased
the effective tax rate by 18.0%, partially offset by the effect of changes in foreign tax laws which decreased the effective tax rate by 14.4%.
Income tax expense for the year ended March 31, 2021, represented an effective tax rate of 30.5%. The significant factors causing the difference
between the effective tax rate of 30.5% and the effective statutory tax rate of 31% was the effect of the tax benefit recognized on the outside basis
differences for investment in subsidiaries and affiliates which decreased the effective tax rate by 8.7%, partially offset by changes in deferred tax
valuation allowances which increased the effective tax rate by 8.7%.
Income tax expense for the year ended March 31, 2020, represented an effective tax rate of 11.6%. The significant factors causing the difference
between the effective tax rate of 11.6% and the effective statutory tax rate of 31% was the effect of non-taxable income which decreased the effective
tax rate by 23.5%, partially offset by non-deductible expenses which increased the effective tax rate by 2.9%.
32

Results by Business Segment
On April 1, 2021, the Investment Management Division was newly established and replaced the Asset Management Division and the MerchantBanking Division. Accordingly, our operating management and management reporting are prepared based on the Retail, the Investment Management
and the Wholesale segments. We disclose business segment information in accordance with this structure from the first quarter commencing on April 1,
2021.
Net gain (loss) related to economic hedging transactions, a part of realized gain (loss) on investments in equity securities held for operating
purposes, our share of equity in the earnings of affiliates, corporate items and other financial adjustments are included as “Other” operating results
outside of business segments in our segment information. A part of unrealized gain (loss) on certain investments in equity securities held for operating
purposes is classified as a reconciling item outside of our segment information. The following segment information should be read in conjunction withNote 21 “Segment and geographic information” in our consolidated financial statements included in this annual report. The reconciliation of oursegment results of operations and consolidated financial statements is provided in Note 21 “Segment and geographic information” in our consolidated
financial statements included in this annual report.
RetailOperating Results of Retail

Non-interest revenue
Net interest revenue
Net revenue
Non-interest expenses
Income before income taxes

2020

2021

¥ 329,983
6,376
336,359
286,926¥ 49,433¥ 366,271
2,538
368,809
276,480¥ 92,329

Millions of yen
Year ended March 31% Changefrom previous
year

11.0%
(60.2)
9.6
(3.6)
86.8%

2022

% Changefrom previous
year¥ 324,642
3,343
327,985
268,745¥ 59,240(11.4)%
31.7(11.1)(2.8)(35.8)%Net revenue decreased from the year ended March 31, 2021 to the year ended March 31, 2022 primarily due to a decrease in commissions earned
from brokerage commissions and the distribution of investment trusts.
Net revenue increased from the year ended March 31, 2020 to the year ended March 31, 2021 primarily due to an increase in brokeragecommissions.
Non-interest expenses decreased from the year ended March 31, 2021 to the year ended March 31, 2022 primarily due to a decrease in bonus
expense driven by a decrease in revenue.
Non-interest expenses decreased from the year ended March 31, 2020 to the year ended March 31, 2021, primarily due to a decrease in occupancy
expenses.
33

The following table shows the breakdown of Retail non-interest revenues for the years ended March 31, 2021 and 2022.
Millions of yen
Year ended March 31
2021

Commissions
Brokerage commissions
Commissions for distribution of investment trusts
Other commissions
Net gain on trading
Fees from investment banking
Asset management fees
OthersNon-interest revenues¥¥% Changefrom previous
year

2022

187,678
92,58968,352
26,73758,357
20,354
88,996
10,886366,271¥¥

138,525
67,41943,53727,56943,981
19,003
109,300
13,833324,642(26.2)%(27.2)(36.3)
3.1(24.6)
(6.6)
22.8
27.1
(11.4)%

Commissions decreased from the year ended March 31, 2021 to the year ended March 31, 2022, primarily due to decrease in brokeragecommissions received from equity and equity-related products and in commissions for distribution of investment trusts. Net gain on trading
decreased from the year ended March 31, 2021 to the year ended March 31, 2022, primarily due to a decrease in income related to debt securities.
Retail Client Assets
The following table presents amounts and details regarding the composition of Retail client assets as of March 31, 2021 and 2022. Retail client
assets consist of clients’ assets held in our custody and assets relating to variable annuity insurance products.
Trillions of yen
Year ended March 31, 2021
Balance at
beginning of year

Equities
Debt securities
Stock investment trusts
Bond investment trusts
Overseas mutual funds
Others
Total

¥

¥

62.7
18.4
7.6
7.3
1.0
7.0
104.0

Gross inflows

¥

24.4
12.3
3.1
1.4
0.2
0.9
42.3

¥

Marketappreciation /(depreciation)

Gross outflows¥¥(24.9)
(9.9)
(3.0)
(0.6)
(0.1)
(0.7)
(39.2)

¥

¥

20.1
(2.7)
2.5
(0.1)
(0.0)
(0.3)
19.5

Balance at
end of year

¥

¥

82.3
18.1
10.2
8.0
1.1
6.9
126.6

Trillions of yen
Year ended March 31, 2022
Balance at
beginning of year

Equities
Debt securities
Stock investment trusts
Bond investment trusts
Overseas mutual funds
Others
Total

¥

¥

82.3
18.1
10.2
8.0
1.1
6.9
126.6

Gross inflows

¥

19.5
15.5
2.4
0.3
0.2
1.1
39.0

¥

Marketappreciation /(depreciation)

Gross outflows¥¥(19.8)(13.3)
(2.1)
(0.6)
0.0
(0.5)
(36.3)

¥

¥

(4.5)
(2.6)
0.3
(0.2)
0.0
(0.2)
(7.2)

Balance at
end of year

¥

¥

77.5
17.7
10.8
7.5
1.3
7.3
122.1

Retail client assets decreased from March 31, 2021 to March 31, 2022. The balances of our clients’ equity and equity-related products increased
from March 31, 2021 to ¥77.5 trillion as of March 31, 2022, mainly due to market depreciation during the year. The balances of our clients’investment trusts increased by ¥0.3 trillion from ¥19.3 trillion as of March 31, 2021 to ¥19.6 trillion as of March 31, 2022.
Retail client assets increased from March 31, 2020 to March 31, 2021. The balances of our clients’ equity and equity-related products increased
from March 31, 2020 to ¥82.3 trillion as of March 31, 2021, mainly due to market appreciation during the year. The balances of our clients’investment trusts increased by ¥3.4 trillion from ¥15.9 trillion as of March 31, 2020 to ¥19.3 trillion as of March 31, 2021.
34

Investment Management
Operating Results of Investment Management2020

Non-interest revenue
Net interest revenue
Net revenue
Non-interest expenses
Income before income taxes¥¥

101,130
6,807
107,937
74,36433,573

2021¥¥

153,523
9,627
163,150
72,14291,008Millions of yen
Year ended March 31% Changefrom previous
year

51.8% ¥
41.4
51.2
(3.0)
171.1% ¥2022

129,848
18,145
147,993
76,47871,515% Changefrom previous
year(15.4)%
88.5
(9.3)
6.0
(21.4)%Net revenue decreased from the year ended March 31, 2021 to the year ended March 31, 2022, primarily due to decreasing in unrealized gains
recognized in respect of our investment in American Century Investments.
Net revenue increased from the year ended March 31, 2020 to the year ended March 31, 2021, primarily due to unrealized gains recognized in
respect of our investment in American Century Investments.
Non-interest expenses increased from the year ended March 31, 2021 to the year ended March 31, 2022, primarily due to an increases in personnel
expenses driven by an increase in business revenue.
Non-interest expenses decreased from the year ended March 31, 2020 to the year ended March 31, 2021, primarily due to decreases in commission
expenses related to fund management.
The breakdown of net revenue for Investment Management is as follows.

2020

Business revenue(1)Investment gain/ loss(2)Net revenue

¥
¥

2021

121,495 ¥(13,558)
107,937 ¥

111,946
51,204
163,150

Millions of yen
Year ended March 31% Changefrom previous
year(7.9)% ¥—51.2% ¥

2022

119,920
28,073
147,993% Changefrom previous
year

7.1%
(45.2)(9.3)%

Note: Prior period amounts have been reclassified to conform to the current year presentation.
(1)

Consists of division revenue, other than investment gain/loss, including revenue generated by our asset management business (excluding gains andlosses related to our investment in American Century Investments), revenues generated by Nomura Babcock & Brown Co., Ltd.’s aircraft leasingrelated businesses and management fee revenues generated from our private equity and other investment businesses(2)Consists of division revenue attributable to investments (including fair value fluctuations, funding cost and dividends), including gains and losses
related to our investment in American Century Investments, our investments held in our private equity and other investment businesses and ourinvestment in Mebuki Financial Group, Inc.
35

The following table presents assets under management of each principal Nomura entity within the Investment Management Division as ofMarch 31, 2021 and 2022.
Billions of yen
Year ended March 31, 2021

Nomura Asset Management Co., Ltd.
Nomura Corporate Research and Asset Management Inc. etc
Combined total
Shared across group companies
Total

Balance at
beginning of year

Gross inflows

Gross outflows

Marketappreciation /(depreciation)

¥

¥

¥

¥

50,6482,543
53,191(3,860)49,331¥¥

28,675906
29,581(1,169)28,412¥(27,705)(927)(28,632)
1,431(27,201)¥

Balance at
end of year

14,540778
15,318(1,194)
14,124¥ 66,158
3,300
69,458(4,792)¥ 64,666

Balance at
end of year

Billions of yen
Year ended March 31, 2022

Nomura Asset Management Co., Ltd.
Nomura Corporate Research and Asset Management Inc. etc
Combined total
Shared across group companies
Total

Balance at
beginning of year

Gross inflows

Gross outflows

Marketappreciation /(depreciation)

¥

¥

¥

¥

66,1583,300
69,458(4,792)64,666¥¥

26,883944
27,827(1,462)
26,365¥(25,549)(690)(26,239)
1,163(25,076)

¥

2,100
313
2,413
(455)
1,958

¥ 69,592
3,867
73,459(5,546)¥ 67,913

Asset under management increased primary due to a continued inflow into equity funds such as ETFs during the year ended March 31, 2022.
The following table presents NAM’s share, in terms of net asset value, of the Japanese publicly offered investment trusts market as of March 31,
2020, 2021 and 2022.
2020

Total of publicly offered investment trusts
Stock investment trusts
Bond investment trusts

28%
26%
44%

March 31
2021

28%
26%
44%

2022

27%
25%
44%

(Source) Nomura’s own calculation based on data published by the Investment Trusts Association, Japan.
Investment trust assets included in assets under management by NAM were ¥47.9 trillion as of March 31, 2022, a ¥1.3 trillion, 3% increase fromMarch 31, 2021. This increase is due to positive net inflows of ¥1.0 trillion and market appreciation of ¥0.3 trillion. The balances of certain investment
trusts, such as TOPIX Exchange Traded Fund increased.
Investment trust assets included in assets under management by NAM were ¥46.6 trillion as of March 31, 2021, a ¥12.6 trillion, 37% increase
from March 31, 2020. This increase is due to positive net inflows of ¥2.8 trillion and market appreciation of ¥9.8 trillion. The balances of certain
investment trusts, such as TOPIX Exchange Traded Fund and Nikkei 225 Exchange Traded Fund increased.
36

Wholesale
Operating Results of Wholesale
The operating results of our Wholesale Division comprise the combined results of our Global Markets and Investment Banking businesses. Our
Global Markets business comprises our Fixed Income and Equities businesses.

Non-interest revenue
Net interest revenue
Net revenue
Non-interest expenses
Income (loss) before income taxes

2020

2021

¥506,203
142,416
648,619556,399¥ 92,220¥524,019
167,337
691,356
627,051¥ 64,305

Millions of yen
Year ended March 31% Changefrom previous
year

3.5%
17.5
6.6
12.7
(30.3)%

2022¥617,227
85,828703,055
628,563¥ 74,492% Changefrom previous
year

17.8%
(48.7)
1.7
0.2
15.8%

Net revenue increased from the year ended March 31, 2021 to the year ended March 31, 2022. Fixed Income revenues in Global Markets
decreased due to a slowdown from last year’s strong performance in macro products. Equities revenues in Global Markets increased primarily due tolosses related to the U.S. Prime Brokerage Event recognized during the previous fiscal year. Investment Banking revenues increased primarily due toincreases in advisory business deals during the year.
Net revenue increased from the year ended March 31, 2020 to the year ended March 31, 2021 despite the significant losses recognized in respectof the U.S. Prime Brokerage Event recognized during the year ended March 31, 2021. Fixed Income revenues in Global Markets increased due to astrong performance in rates, credit and securitization products. Equities revenues in Global Markets decreased primarily due to trading losses in respectof the U.S. Prime Brokerage Event. Investment Banking revenues increased primarily due to increases in M&A advisory and equity financing deals
during the year.
Non-interest expenses slightly increased from the year ended March 31, 2021 to the year ended March 31, 2022, primarily due to increases inyen-denominated expenses at overseas driven by the weaker yen, partially offset with credit losses related to the U.S. Prime Brokerage Event subsiding
compared to previous fiscal year.
Non-interest expenses increased from the year ended March 31, 2020 to the year ended March 31, 2021, primarily due to additional provisions for
credit losses as a result of the U.S. Prime Brokerage Event.
The following table presents a breakdown of net revenue for Wholesale for the year ended March 31, 2020, 2021 and 2022.

Wholesale net revenue:
Global Markets net revenue
Investment Banking net revenue
Net revenue

2020

2021

¥562,927
85,692¥648,619¥575,533
115,823¥691,356

Millions of yen
Year ended March 31% Changefrom previous
year

2.2%
35.2
6.6%

2022

¥556,417
146,638¥703,055% Changefrom previous
year(3.3)%
26.6
1.7%

Global Markets
We have a proven track record in sales and trading of debt securities, equity securities, and foreign exchange, as well as derivative products basedon these financial instruments, mainly to domestic and overseas institutional investors. In response to the increasingly diverse and complex needs of ourclients, we continue to enhance our trading and product origination capabilities to offer superior products not only to domestic and overseas institutional
investors, but also to our Retail and Investment Management Divisions. This cross-divisional approach also extends to Investment Banking, where close
collaboration leads to high value-adding solutions for our clients. These ties enable us to identify the types of product of interest for investors anddevelop and deliver products that meet their needs. We continue to develop extensive ties with institutional investors in Japan and international markets,
as well as wealthy investors, public-sector agencies, and regional financial institutions in Japan, and government agencies, financial institutions, andcorporations around the world.
37

Net revenue decreased from the year ended March 31, 2021 to the year ended March 31, 2022. In our Fixed Income businesses, Net revenue
decreased from ¥441,893 million for the year ended March 31, 2021 to ¥326,918 million for the year ended March 31, 2022 primarily due to a slow
from last year’s strong performance in macro products. In our Equities business, Net revenue increased from ¥133,640 million for the year ended
March 31, 2021 to ¥229,499 million for the year ended March 31, 2022, primarily due to losses related to the U.S. Prime Brokerage Event subsiding
compared to the previous fiscal year.
Net revenue increased from the year ended March 31, 2020 to the year ended March 31, 2021. In our Fixed Income businesses, Net revenue
increased from ¥337,480 million for the year ended March 31, 2020 to ¥441,893 million for the year ended March 31, 2021 primarily due to strong
performance mainly in rates, credit and securitization products. In our Equities business, Net revenue decreased from ¥225,447 million for the year
ended March 31, 2020 to ¥133,640 million for the year ended March 31, 2021, primarily due to recognizing a trading loss related to the U.S. Prime
Brokerage event.
Investment Banking
We provide a broad range of investment banking services, such as underwriting and advisory activities. We underwrite offerings of debt, equity
and other financial instruments in major financial markets, such as Asia, Europe and the U.S. We have been enhancing our M&A and financial advisory
expertise to secure more high-profile deals both across and within regions. We develop and forge solid relationships with clients on a long-term basis byproviding extensive resources in a seamless fashion to facilitate bespoke solutions.
Net revenue increased from the year ended March 31, 2021 to the year ended March 31, 2022, primarily due to increases in advisory businessduring the year.
Net revenue increased from the year ended March 31, 2020 to the year ended March 31, 2021, primarily due to increases in M&A advisory andequity financing deals during the year.
38

Other Operating Results
Other operating results include net gain (loss) related to economic hedging transactions, a part of realized gain(loss) on investments in equity
securities held for operating purposes, equity in earnings of affiliates, corporate items, and other financial adjustments. See Note 21 “Segment andgeographic information” in our consolidated financial statements included within this annual report.
Income (loss) before income taxes in Other operating results were ¥94,362 million for the year ended March 31, 2020, ¥(28,516) million for theyear ended March 31, 2021 and ¥15,753 million for the year ended March 31, 2022, primarily due to recognizing income of approximately ¥79.0 billion
from the sale of a part of its shares held in Nomura Research Institute, Ltd. and loss of approximately ¥62.0 billion related to legacy transactions in the
U.S. from before the global financial crisis (2007 – 2008) that was recognized including legal expenses as well as certain transactions intended tomitigate future losses.
Other operating results for the year ended March 31, 2022 include the positive impact of our own creditworthiness on derivative liabilities which
resulted in gains of ¥6,731 million and losses from changes in counterparty credit spreads of ¥1,249 million.
Other operating results for the year ended March 31, 2021 include the negative impact of our own creditworthiness on derivative liabilities which
resulted in losses of ¥12,052 million and gains from changes in counterparty credit spreads of ¥11,988 million.
Other operating results for the year ended March 31, 2020 include the negative impact of our own creditworthiness on derivative liabilities which
resulted in gains of ¥16,333 million and losses from changes in counterparty credit spreads of ¥12,056 million.
Summary of Regional Contribution
For a summary of our net revenue, income (loss) before income taxes and long-lived assets by geographic region, see Note 21 “Segment andgeographic information” in our consolidated financial statements included in this annual report.
Cash flows
Please refer to Item 2 “3. Operating, Financial and Cash Flow Analyses by Management”, “(5) Liquidity and Capital Resources.”39

(2) Trading Activities
Assets and liabilities for trading purposes
For disclosures relating to the assets and liabilities for trading purposes, please refer to Item 5 “1. Consolidated Financial Statements and Other”,
Note 2 “Fair value measurements” as well as Note 3 “Derivative instruments and hedging activities.”
Risk management of trading activity
Nomura adopts Value at Risk (“VaR”) for measurement of market risk arising from trading activity.
1)

Assumption on VaR•

Confidence level: 95%•

Holding period: One day•

Consideration of price movement among the products

Nomura has decided to change the confidence level used to calculate its disclosed one-day VaR from 99% to 95%. See “—VaR Methodology
Assumption.” One-day VaR data using the new confidence level of 95% for the fiscal year ended March 31, 2022 is presented below.
2)

Records of VaR
Billions of yen
As ofMarch 31,2022

EquityInterest rate
Foreign exchange
Subtotal
Less: Diversification Benefit
VaR

¥

¥

1.4
2.3
0.9
4.6
(1.9)
2.7

Billions of yen
For the fiscal
year ended
March 31,2022

Maximum daily VaR(1)Average daily VaR(1)Minimum daily VaR(1)

¥

40

23.2
4.5
2.7

(Reference Information)
1)

Assumption on VaR•

Confidence level: 99%•

Holding period: One day•

Consideration of price movement among the products

Nomura has decided to change the confidence level used to calculate its disclosed one-day VaR from 99% to 95%. See “—VaR Methodology
Assumption.” One-day VaR data calculated using the previous confidence level of 99% for the fiscal year ended March 31, 2022, together withcomparative data for the previous fiscal year, is presented below.
2)

Records of VaR
Billions of yen
As ofMarch 31,
March 31,
2021
2022

EquityInterest rate
Foreign exchange
Subtotal
Less: Diversification Benefit
VaR

¥

¥

93.4
8.6
4.2
106.2
(12.8)
93.4

¥

¥

1.7
3.5
1.3
6.5
(1.7)
4.8

Billions of yen
For the twelve months ended
March 31,
March 31,
2021
2022

Maximum daily VaR(1)Average daily VaR(1)Minimum daily VaR(1)

¥

41

93.4
13.6
7.1

¥

89.7
8.2
4.0

(3) Critical accounting policies and estimates
Critical accounting policies are the accounting policies which have the most significant impact on the preparation of our consolidated financial
statements included within this annual report and which require the most difficult, subjective and complex judgments by our management to develop
estimates used in the application of these policies. Such estimates determined by management include estimates regarding the fair value of financial
instruments and the outcome of litigations that affect the reported amounts of assets and liabilities related footnote as the disclosures in our consolidated
financial statements. Estimates, by their nature, are based on underlying assumptions which require management judgment and depend on the extent ofavailable information. Actual results in future reporting periods may differ from current estimates, which could have a material impact on ourconsolidated financial statements.
The following table summarizes the critical accounting policies within our consolidated financial statements which have had the most significant
impact on our financial condition and financial performance during the year ended March 31, 2022. For each such critical accounting policy, thefollowing table also identifies the critical accounting estimates inherent within application of those policies, the nature of the estimates, the underlying
assumptions made by our management during the year to derive those estimates and the financial impact had we used different estimates or assumptions
during the year. See Note 1 “Summary of Accounting Policies” in our consolidated financial statements included in this annual report for more
information on the critical accounting policies we apply for all of these areas and the relevant additional footnote disclosures referred to in the table formore information around how these critical accounting policies and critical accounting estimates have been applied.
42

Critical
accounting
policyFair value offinancial
instruments
Note 2 “Fair value
measurements”

Critical accounting
estimates

Underlying subjective key assumptions by management

Estimating fairvalue for financial
instruments

A significant portion of our financial instruments is carried atfair value. The fair values of these financial instruments may
not only measured at quoted prices but also impacted by otherfactors including selection of valuation techniques/ models andother assumptions that require judgment.
Selection of appropriate valuation techniques•

For financial instruments measured at fair value where
quoted prices are available in active markets, Nomura
generally uses quoted prices as level 1 inputs fordetermining the fair value of these financial instruments.

•

For financial instruments where such quoted prices are notavailable, fair value of the financial instruments aremeasured by level 2 or level 3 input(s). Significant
judgment is involved in selection of appropriate valuation
techniques and validation of assumptions applied in models
because the fair value measured could be varied by theselection of those models and assumptions. When selecting
valuation techniques, various factors such as the particular
circumstances where these financial instruments are traded,availability of reliable inputs, maximizing the use of
relevant observable inputs and minimizing the use ofunobservable inputs are considered.

Significance of level 3 inputs•

Fair value measurement is more judgmental in respect oflevel 3 inputs, which are valued based on significant
non-market based unobservable inputs.

43

Effect of changes in estimatesand assumptions during year
ended March 31, 2022
(including impact of the
COVID-19 pandemic)

See Note 2 “Fair value
measurements” in ourconsolidated financial
statements included inthis annual report forvaluation methodologies
including active/ inactive
principal market, as wellas our policy in fair value
hierarchy.
Level 3 fair value
hierarchy (assets net ofderivative liabilities)
during the year increased
from ¥566 billion as ofMarch 2021 to¥792 billion as of March
2022. Level 3 financial
assets as a proportion of
total financial assets
carried at fair value on arecurring basis was 6 %as of March 31, 2022 (5%as of March 31, 2021.)
See Note 2, “Fair Valuemeasurement” for further
quantitative andqualitative information
regarding level 3 inputs,
including the sensitivityof fair value of theunderlying financial
instruments to changes inlevel 3 inputs.

Critical
accounting
policyLitigation
provisions
Note 20“Commitments,
contingencies andguarantees”

Critical accounting
estimates

Underlying subjective key assumptions by management

Determination ofwhether a loss isprobable andmeasurement ofprovisions andreasonably possibleloss

In the normal course of business, Nomura may be involved ininvestigations, lawsuits and other legal proceedings and, as aresult, may suffer losses from any fines, penalties or settlements
where Nomura chooses to make to resolve the matters and these
could be significant to Nomura’s results of operations.
Determination if a loss is probable•

Recognition of litigation provisions are only required if aloss is probable and can be reasonably estimated.

•Significant judgment required in deciding whether loss
from litigation, investigations, claims or other actions isprobable or just reasonably possible.

•

Such judgment usually involves consideration of external
legal counsel opinion, our own historical experiences incourt and similar matters, the progress of regulatory
investigation or litigation proceedings and management or
our counterparty’s appetite to settle the matter.

•

If a loss is only considered to be reasonably possible, noprovision is required.

Measurement of a probable / reasonably possible loss•

Once a loss has been determined as being probable ofoccurring, a provision is recognized when a loss is probableand the amount of such loss or range of loss can bereasonably estimated.

•

Where a loss is not probable but still reasonably possible
and an estimate of the range of reasonably possible losses
can be made based on current information available as ofthe date of our consolidated financial statements, thereasonably possible maximum loss in excess of amounts
recognized as a provision is disclosed.

•

All of the above determination is often inherently difficult,especially for legal claims or regulatory investigations thatare indeterminate or still at an early stage.

•

For certain exceptional matters, given the inherent
complexities where we believe a loss is probable orreasonably possible, we may be unable to reasonably
estimate the amount of loss and therefore are unable torecognize a provision or disclose the reasonably possible
maximum loss in excess of amounts recognized as aprovision for the matter. In these situations, we disclose this
fact.
44

Effect of changes in estimatesand assumptions during year
ended March 31, 2022
(including impact of the
COVID-19 pandemic)

See Note 20“Commitments,
contingencies andguarantees” in ourconsolidated financial
statements included inthis annual report for
details of the various
legal matters Nomura iscurrently involved with,including those where
provisions have beenrecognized or where loss
is considered reasonably
possible.
If we concluded as ofJune 24, 2022 that forcases where an estimateof a range of reasonably
possible losses can bemade, such loss was
actually now probable,
we would recognize
additional legal
provisions throughearnings ofapproximately¥61 billion. However, thisestimate does not include
the impact of probablelosses where we cannot
reasonably estimate suchloss. See Note.20“Commitments,
contingencies andguarantees”.

Assets and Liabilities Associated with Investment and Financial Services Business
Exposure to Certain Financial Instruments and Counterparties
Market conditions continue to impact numerous products to which we have certain exposures. We also have exposures to Special Purpose Entities(“SPEs”) and others in the normal course of business.
Leveraged Finance
We provide loans to clients in connection with leveraged buy-outs and leveraged buy-ins. As this type of financing is usually initially provided
through a commitment, we have both funded and unfunded exposures on these transactions.
The following table sets forth our exposure to leveraged finance with unfunded commitments, presenting funded and unfunded portions bygeographic location of the target company as of March 31, 2022.

EuropeAmericas
Asia and Oceania
Total

FundedMillions of yen
March 31, 2022
UnfundedTotal¥ 6,361
17,37010,448¥34,179¥ 69,040
106,915
27,289¥203,244¥ 75,401
124,285
37,737¥237,423

Special Purpose Entities (“SPEs”)
Our involvement with these entities includes structuring, underwriting, distributing and selling debt instruments and beneficial interests issued bythese entities, subject to prevailing market conditions. In connection with our securitization and equity derivative activities, we also act as a transferor of
financial assets to these entities, as well as, underwriter, distributor and seller of asset-repackaged financial instruments issued by these entities. We
retain, purchase and sell variable interests in SPEs in connection with our market-making, investing and structuring activities. Our other types of
involvement with SPEs include guarantee agreements and derivative contracts.
For further discussion on Nomura’s involvement with variable interest entities, see Note 6 “Securitizations and Variable Interest Entities” in ourconsolidated financial statements included in this annual report.
Accounting Developments
See Note 1 “Basis of accounting and summary of accounting policies: New accounting pronouncements adopted during the current year” in ourconsolidated financial statements included in this annual report.
45

(4) Deferred Tax Assets
Details of deferred tax assets and liabilities
The following table presents details of deferred tax assets and liabilities reported within Other assets—Other and Other liabilities, respectively, inthe consolidated balance sheets as of March 31, 2022.
Millions of yen
March 31, 2022

Deferred tax assets
Depreciation, amortization and valuation of fixed assets
Investments in subsidiaries and affiliates
Valuation of financial instruments
Accrued pension and severance costs
Other accrued expenses and provisions
Operating losses
Lease liabilities
Other
Gross deferred tax assets
Less—Valuation allowances
Total deferred tax assets
Deferred tax liabilities
Investments in subsidiaries and affiliates
Valuation of financial instruments
Undistributed earnings of foreign subsidiaries
Valuation of fixed assets
Right-of-use assets
Other
Total deferred tax liabilities
Net deferred tax assets (liabilities)¥¥

30,441
21,390102,021
20,492
79,061
370,481
49,06015,425688,371(466,145)
222,226
91,04085,301
2,745
23,96248,5197,044
258,611(36,385)

Calculation method of deferred tax assets
In accordance with U.S. GAAP, we recognize deferred tax assets to the extent we believe that it is more likely than not that a benefit will be
realized. A valuation allowance is provided for tax benefits available to us, which are not deemed more likely than not to be realized.
46

(5) Liquidity and Capital Resources
Funding and Liquidity Management
Overview
We define liquidity risk as the risk of loss arising from difficulty in securing the necessary funding or from a significantly higher cost of funding
than normal levels due to deterioration of the Nomura Group’s creditworthiness or deterioration in market conditions. This risk could arise from
Nomura-specific or market-wide events such as inability to access the secured or unsecured debt markets, a deterioration in our credit ratings, a failure
to manage unplanned changes in funding requirements, a failure to liquidate assets quickly and with minimal loss in value, or changes in regulatory
capital restrictions which may prevent the free flow of funds between different group entities. Our global liquidity risk management policy is based on
liquidity risk appetite formulated by the Executive Management Board (“EMB”). Nomura’s liquidity risk management, under market-wide stress and in
addition, under Nomura-specific stress, seeks to ensure enough continuous liquidity to meet all funding requirements and unsecured debt obligations
across one year and 30-day periods, respectively, without raising funds through unsecured funding or through the liquidation of assets. We are required
to meet regulatory notice on the liquidity coverage ratio issued by the FSA.
We have in place a number of liquidity risk management frameworks that enable us to achieve our primary liquidity objective. These frameworks
include (1) Centralized Control of Residual Cash and Maintenance of Liquidity Portfolio; (2) Utilization of Unencumbered Assets as Part of Our
Liquidity Portfolio; (3) Appropriate Funding and Diversification of Funding Sources and Maturities Commensurate with the Composition of Assets;(4) Management of Credit Lines to Nomura Group Entities; (5) Implementation of Liquidity Stress Tests; and (6) Contingency Funding Plan.
Our EMB has the authority to make decisions concerning group liquidity management. The Chief Financial Officer (“CFO”) has the operational
authority and responsibility over our liquidity management based on decisions made by the EMB.
1. Centralized Control of Residual Cash and Maintenance of Liquidity Portfolio.
We centrally control residual cash held at Nomura Group entities for effective liquidity utilization purposes. As for the usage of funds, the CFO
decides the maximum amount of available funds, provided without posting any collateral, for allocation within Nomura and the EMB allocates the funds
to each business division. Global Treasury monitors usage by businesses and reports to the EMB.
In order to enable us to transfer funds smoothly between group entities, we limit the issuance of securities by regulated broker-dealers or banking
entities within the Nomura Group and seek to raise unsecured funding primarily through the Company or through unregulated subsidiaries. The primary
benefits of this strategy include cost minimization, wider investor name recognition and greater flexibility in providing funding to various subsidiaries
across the Nomura Group.
To meet any potential liquidity requirement, we maintain a liquidity portfolio, managed by Global Treasury apart from other assets, in the form of
cash and highly liquid, unencumbered securities that may be sold or pledged to provide liquidity. As of March 31, 2022, our liquidity portfolio was¥7,074.2 billion which sufficiently met liquidity requirements under the stress scenarios.
The following table presents a breakdown of our liquidity portfolio by type of financial assets as of March 31, 2021 and 2022 and averages
maintained for the years ended March 31, 2021 and 2022. Yearly averages are calculated using month-end amounts.
Average foryear ended
March 31, 2021

Cash, cash equivalents and time deposits(1)Government debt securities
Others(2)Total liquidity portfolio
(1)
(2)

¥

¥

Billions of yen
Average forMarch 31,year ended
2021
March 31, 2022

2,775.9 ¥2,765.0 ¥3,082.8 2,641.2
254.0
252.1
6,112.7 ¥5,658.3 ¥March 31,2022

3,151.6 ¥2,997.5
3,629.8 3,674.2
298.3
402.5
7,079.7 ¥7,074.2

Cash, cash equivalents, and time deposits include nostro balances and deposits with both central banks and market counterparties that are readily
available to support the liquidity position of Nomura.
Others include other liquid financial assets such as money market funds and U.S. agency securities.
47

The following table presents a breakdown of our liquidity portfolio by currency as of March 31, 2021 and 2022 and averages maintained for theyears ended March 31, 2021 and 2022. Yearly averages are calculated using month-end amounts.
Average foryear ended
March 31, 2021

Japanese Yen
U.S. Dollar
Euro
British Pound
Others(1)Total liquidity portfolio
(1)

¥

¥

Billions of yen
Average forMarch 31,year ended
2021
March 31, 2022

2,298.1 ¥ 966.5 ¥2,441.2 3,367.1
795.1
793.5
405.4
333.8
172.9
197.5
6,112.7 ¥5,658.3 ¥March 31,2022

1,913.7 ¥1,409.8
3,567.3 3,924.1
792.3
868.5
578.3
597.5
228.1
274.3
7,079.7 ¥7,074.2

Includes other currencies such as the Australian dollar, the Canadian dollar and the Swiss franc.

We assess our liquidity portfolio requirements globally as well as by each major operating entity in the Nomura Group. We primarily maintain our
liquidity portfolio at Nomura Holdings, Inc. (“NHI”) and Nomura Securities Co. Ltd. (“NSC”), our other major broker-dealer subsidiaries, our banksubsidiaries, and other group entities. In determining the amounts and entities which hold this liquidity portfolio, we consider legal, regulatory and tax
restrictions which may impact our ability to freely transfer liquidity across different entities in the Nomura Group. For more information regarding
regulatory restrictions, see Note 18 “Regulatory requirements” in our consolidated financial statements included within this annual report.
The following table presents a breakdown of our liquidity portfolio by entity as of March 31, 2021 and 2022.
Billions of yen
March 31, 2021 March 31, 2022

NHI and NSC(1)Major broker-dealer subsidiaries
Bank subsidiaries(2)Other affiliates
Total liquidity portfolio
(1)

(2)

¥

¥

981.8 ¥
2,632.6752.6
1,291.3
5,658.3 ¥1,395.4
3,118.5
1,008.5
1,551.8
7,074.2

NSC, a broker-dealer located in Japan, holds an account with the Bank of Japan (“BOJ”) and has direct access to the BOJ Lombard facility
through which same day funding is available for our securities pool. Any liquidity surplus at NHI is lent to NSC via short-term intercompany
loans, which can be unwound immediately when needed.
Includes Nomura Bank International plc (“NBI”), Nomura Singapore Limited and Nomura Bank Luxembourg S.A.
2. Utilization of Unencumbered Assets as Part of Our Liquidity Portfolio.

In addition to our liquidity portfolio, we had ¥2,665.7 billion of other unencumbered assets comprising mainly of unpledged trading assets that canbe used as an additional source of secured funding. Global Treasury monitors other unencumbered assets and can, under a liquidity stress event when thecontingency funding plan has been invoked, monetize and utilize the cash generated as a result. The aggregate of our liquidity portfolio and otherunencumbered assets as of March 31, 2022 was ¥9,739.9 billion, which represented 332.2% of our total unsecured debt maturing within one year.
Billions of yen
March 31, 2021 March 31, 2022

Net liquidity value of other unencumbered assets
Liquidity portfolio
Total

¥
¥

2,771.6 ¥5,658.3
8,429.9 ¥2,665.7
7,074.2
9,739.9

3. Appropriate Funding and Diversification of Funding Sources and Maturities Commensurate with the Composition of Assets
We seek to maintain a surplus of long-term debt and equity above the cash capital requirements of our assets. We also seek to achieve
diversification of our funding by market, instrument type, investors, currency, and staggered maturities in order to reduce unsecured refinancing risk.
48

We diversify funding by issuing various types of debt instruments—these include both structured loans and structured notes with returns linked tointerest rates, currencies, equities, commodities, or related indices. We issue structured loans and structured notes in order to increase the diversity of ourdebt instruments. We typically hedge the returns we are obliged to pay with derivatives and/or the underlying assets to obtain funding equivalent to our
unsecured long-term debt. The proportion of our non-Japanese Yen denominated long-term debt increased to 51.4% of total long-term debt outstanding
as of March 31, 2022 from 47.2% as of March 31, 2021.
3.1 Short-Term Unsecured Debt
Our short-term unsecured debt consists of short-term bank borrowings (including long-term bank borrowings maturing within one year), otherloans, commercial paper, deposit at banking entities, certificates of deposit and debt securities maturing within one year. Deposits at banking entities andcertificates of deposit comprise customer deposits and certificates of deposit of our banking subsidiaries. Short-term unsecured debt includes the current
portion of long-term unsecured debt.
The following table presents an analysis of our short-term unsecured debt by type of financial liability as of March 31, 2021 and 2022.
Billions of yen
March 31, 2021 March 31, 2022

Short-term bank borrowings
Other loans
Commercial paper
Deposits at banking entities
Certificates of deposit
Debt securities maturing within one year
Total short-term unsecured debt¥¥

265.8 ¥
138.7
460.0
1,149.9
83.6
831.5
2,929.5 ¥

148.0
228.1
131.9
1,520.7
127.8
775.6
2,932.1

3.2 Long-Term Unsecured Debt
We meet our long-term capital requirements and also achieve both cost-effective funding and an appropriate maturity profile by routinely funding
through long-term debt and diversifying across various maturities and currencies.
Our long-term unsecured debt includes senior and subordinated debt issued through U.S. registered shelf offerings and our U.S. registeredmedium-term note programs, our Euro medium-term note programs, registered shelf offerings in Japan and various other debt programs.
As a globally competitive financial services group in Japan, we have access to multiple global markets and major funding centers. The Company,
NSC, Nomura Europe Finance N.V., NBI, Nomura International Funding Pte. Ltd. and Nomura Global Finance Co., LTD. are the main group entities
that borrow externally, issue debt instruments and engage in other funding activities. By raising funds to match the currencies and liquidities of ourassets or by using foreign exchange swaps as necessary, we pursue optimization of our funding structures.
We use a wide range of products and currencies to ensure that our funding is efficient and well diversified across markets and investor types. Our
unsecured senior debt is mostly issued without financial covenants, such as covenants related to adverse changes in our credit ratings, cash flows, resultsof operations or financial ratios, which could trigger an increase in our cost of financing or accelerate repayment of the debt.
49

The following table presents an analysis of our long-term unsecured debt by type of financial liability as of March 31, 2021 and 2022.
Billions of yen
March 31, 2021 March 31, 2022

Long-term deposits at banking entities
Long-term bank borrowings
Other loans
Debt securities(1)Total long-term unsecured debt
(1)

¥

¥

109.0 ¥
2,635.2
74.2
3,877.9
6,696.3 ¥

112.3
2,820.5
219.5
4,745.8
7,898.1

Excludes long-term debt securities issued by consolidated special purpose entities and similar entities that meet the definition of variable interest
entities under ASC 810 “Consolidation” and secured financing transactions recognized within Long-term borrowings as a result of transfers offinancial assets that are accounted for as financings rather than sales in accordance with ASC 860 “Transfer and Servicing.”
3.3 Maturity Profile

We also seek to maintain an average maturity for our plain vanilla debt securities and borrowings greater than or equal to three years. The average
maturity for our plain vanilla debt securities and borrowings with maturities longer than one year was 4.4 years as of March 31, 2022. A significant
amount of our structured loans and structured notes are linked to interest rates, currencies, equities, commodities, or related indices. These maturities areevaluated based on internal models and monitored by Global Treasury. Where there is a possibility that these may be called prior to their scheduled
maturity date, maturities are based on our internal stress option adjusted model. The model values the embedded optionality under stress market
conditions in order to determine when the debt securities or borrowing is likely to be called. The graph below shows the distribution of maturities of ouroutstanding long-term debt securities and borrowings by the model.
On this basis, the average maturity of our structured loans and structured notes with maturities longer than one year was 10.1 years as ofMarch 31, 2022. The average maturity of our entire long-term debt with maturities longer than one year including plain vanilla debt securities andborrowings, was 7.2 years as of March 31, 2022.

3.4 Secured Funding
We typically fund our trading activities through secured borrowings, repurchase agreements and Japanese “Gensaki Repo” transactions. We
believe such funding activities in the secured markets are more cost-efficient and less credit-rating sensitive than financing in the unsecured market. Our
secured funding capabilities depend on the quality of the underlying collateral and market conditions. While we have shorter term secured financing forhighly liquid assets, we seek longer terms for less liquid assets. We also seek to lower the refinancing risks of secured funding by transacting with adiverse group of global counterparties and delivering various types of securities collateral. In addition, we reserve an appropriate level of liquidity
portfolio for the refinancing risks of secured funding maturing in the short term for less liquid assets. For more detail of secured borrowings andrepurchase agreements, see Note 5 “Collateralized transactions” in our consolidated financial statements.
50

4. Management of Credit Lines to Nomura Group Entities
We maintain and expand credit lines to Nomura Group entities from other financial institutions to secure stable funding. We ensure that thematurity dates of borrowing agreements are distributed evenly throughout the year in order to prevent excessive maturities in any given period.
5. Implementation of Liquidity Stress Tests
We maintain our liquidity portfolio and monitor the sufficiency of our liquidity based on an internal model which simulates changes in cash
outflow under specified stress scenarios to comply with our above mentioned liquidity management policy.
We assess the liquidity requirements of the Nomura Group under various stress scenarios with differing levels of severity over multiple time
horizons. We evaluate these requirements under Nomura-specific and broad market-wide events, including potential credit rating downgrades at theCompany and subsidiary levels. We call this risk analysis our Maximum Cumulative Outflow (“MCO”) framework.
The MCO framework is designed to incorporate the primary liquidity risks for Nomura and models the relevant future cash flows in the following
two primary scenarios:•

Stressed scenario—To maintain adequate liquidity during a severe market-wide liquidity event without raising funds through unsecured
financing or through the liquidation of assets for a year; and•Acute stress scenario—To maintain adequate liquidity during a severe market-wide liquidity event coupled with credit concerns regarding
Nomura’s liquidity position, without raising funds through unsecured funding or through the liquidation of assets for 30 days.

We assume that Nomura will not be able to liquidate assets or adjust its business model during the time horizons used in each of these scenarios.
The MCO framework therefore defines the amount of liquidity required to be held in order to meet our expected liquidity needs in a stress event to alevel we believe appropriate based on our liquidity risk appetite.
As of March 31, 2022, our liquidity portfolio exceeded net cash outflows under the stress scenarios described above.
We constantly evaluate and modify our liquidity risk assumptions based on regulatory and market changes. The model we use in order to simulate
the impact of stress scenarios includes the following assumptions:•

No liquidation of assets;•

No ability to issue additional unsecured funding;•

Upcoming maturities of unsecured debt (maturities less than one year);•

Potential buybacks of our outstanding debt;•

Loss of secured funding lines particularly for less liquid assets;•

Fluctuation of funding needs under normal business circumstances;•

Cash deposits and free collateral roll-off in a stress event;•

Widening of haircuts on outstanding repo funding;•

Additional collateralization requirements of clearing banks and depositories;•

Drawdown on loan commitments;•

Loss of liquidity from market losses;•

Assuming a two-notch downgrade of our credit ratings, the aggregate fair value of assets that we would be required to post as additional
collateral in connection with our derivative contracts; and•Legal and regulatory requirements that can restrict the flow of funds between entities in the Nomura Group.
51

6. Contingency Funding Plan
We have developed a detailed contingency funding plan to integrate liquidity risk control into our comprehensive risk management strategy and toenhance the quantitative aspects of our liquidity risk control procedures. As a part of our Contingency Funding Plan (“CFP”), we have developed an
approach for analyzing and quantifying the impact of any liquidity crisis. This allows us to estimate the likely impact of both Nomura-specific andmarket-wide events; and specifies the immediate action to be taken to mitigate any risk. The CFP lists details of key internal and external parties to becontacted and the processes by which information is to be disseminated. This has been developed at a legal entity level in order to capture specific cash
requirements at the local level—it assumes that our parent company does not have access to cash that may be trapped at a subsidiary level due toregulatory, legal or tax constraints. We periodically test the effectiveness of our funding plans for different Nomura-specific and market-wide events. We
also have access to central banks including, but not exclusively, the BOJ, which provide financing against various types of securities. These operations
are accessed in the normal course of business and are an important tool in mitigating contingent risk from market disruptions.
Liquidity Regulatory Framework
In 2008, the Basel Committee published “Principles for Sound Liquidity Risk Management and Supervision”. To complement these principles, theCommittee has further strengthened its liquidity framework by developing two minimum standards for funding liquidity. These standards have beendeveloped to achieve two separate but complementary objectives.
The first objective is to promote short-term resilience of a financial institution’s liquidity risk profile by ensuring that it has sufficient high-quality
liquid assets to survive a significant stress scenario lasting for 30 days. The Committee developed the Liquidity Coverage Ratio (“LCR”) to achieve thisobjective.
The second objective is to promote resilience over a longer time horizon by creating additional incentives for financial institutions to fund theiractivities with more stable sources of funding on an ongoing basis. The Net Stable Funding Ratio (“NSFR”) has a time horizon of one year and has beendeveloped to provide a sustainable maturity structure of assets and liabilities.
These two standards are comprised mainly of specific parameters which are internationally “harmonized” with prescribed values. Certain
parameters, however, contain elements of national discretion to reflect jurisdiction-specific conditions.
In Japan, the regulatory notice on the LCR, based on the international agreement issued by the Basel Committee with necessary national revisions,
was published by Financial Services Agency (on October 31, 2014). The notices have been implemented since the end of March 2015 with phased-inminimum standards. Average of Nomura’s LCRs for the three months ended March 31, 2022 was 241.7%, and Nomura was compliant withrequirements of the above notices. As for the NSFR, the revision of the liquidity regulatory notice was published by Financial Services Agency (onMarch 31, 2021) and it has been implemented from the end of September 2021. Nomura’s NSFR as of March 31, 2022 was compliant with theregulatory requirements.
52

Cash Flows
Nomura’s cash flows are primarily generated from operating activities undertaken in connection with our client flows and trading and fromfinancing activities which are closely related to such activities. As a financial institution, growth in operations tends to result in cash outflows fromoperating activities as well as investing activities. For the year ended March 31, 2021, we recorded net cash inflows from operating and investing
activities and net cash outflow from financing activities. For the year ended March 31, 2022, we recorded net cash outflows from operating activities
and investing activities and net cash inflow from financing activities as discussed in the comparative analysis below.
The following table presents the summary information on our consolidated cash flows for the years ended March 31, 2021 and 2022. As discussed
in Note 1 “Summary of accounting policies”, amounts for the years ended March 31, 2021 and 2022 have been restated to correct certain errors
identified during the fourth quarter ended March 31, 2024.
Billions of yen
Year Ended March 31
2021 (Restated)
2022 (Restated)

Net cash provided by (used in) operating activities
Net income
Trading assets and private equity and debt investments
Trading liabilities
Securities purchased under agreements to resell, net of securities sold under agreements to repurchase
Securities borrowed, net of securities loaned
Other net operating cash flow reconciling items
Net cash provided by (used in) investing activities
Net cash inflows/ (outflows) from time deposits
Net cash inflows/ (outflows) from loans
Net cash inflows/ (outflows) from non-trading debt securities
Other net investing cash inflows/ (outflows)
Net cash provided by (used in) financing activities
Net cash inflows/ (outflows) from long-term borrowings
Net cash inflows/ (outflows) from short-term borrowings
Net cash inflows/ (outflows) from other secured borrowings
Net cash inflows from deposits received at banks
Other net financing cash outflows
Effect of exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents
Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of the year
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of the year

¥

¥

667.6
160.4
1,441.5
777.7(1,453.9)(1,242.5)
984.4
257.9
43.7
267.2
38.4
(91.4)(668.7)(31.8)
64.1(335.4)36.2(401.8)60.9
317.7
3,192.3
3,510.0¥¥(862.8)146.5
1,229.6(284.7)(2,220.5)
595.1(328.8)(593.2)(28.2)(634.5)(51.1)
120.6
1,112.7
1,238.4(420.3)30.8
372.6(108.8)149.7(193.6)3,510.0
3,316.4

See the consolidated statements of cash flows in our consolidated financial statements included within this annual report for more detailed
information.
For the year ended March 31, 2022, our cash, cash equivalents, restricted cash and restricted cash equivalents decreased by ¥193.6 billion to¥3,316.4 billion. Net cash of ¥1,112.7 billion was provided by financing activities due to net cash inflows of ¥1,238.4 billion from Net cash inflows
long-term borrowings. Net cash of ¥593.2 billion was used in investing activities due to net cash outflow of ¥634.5 billion from Net cash outflows fromloans. As part of trading activities, while there were net cash inflows of ¥944.8 billion mainly due to a decrease in Trading assets and private equity anddebt investments, they were offset by net cash outflows of ¥1,625.4 billion from repo transactions and securities borrowed and loaned transactions suchas Securities purchased under agreements to resell, net of securities sold under agreements to repurchase, and Securities borrowed, net of securities
loaned. As a result, net cash of ¥862.8 billion was used in operating activities.
For the year ended March 31, 2021, our cash, cash equivalents, restricted cash and restricted cash equivalents increased by ¥317.7 billion to¥3,510.0 billion. Net cash of ¥668.7 billion was used in financing activities due to net cash outflows of ¥335.4 billion from Net cash outflows othersecured borrowings. Net cash of ¥257.9 billion was provided by investing activities due to net cash inflow of ¥267.2 billion from Net cash inflows fromloans. As part of trading activities, while there were net cash inflows of ¥2,219.3 billion mainly due to a decrease in Trading assets and Private equity
and debt investments, they were offset by net cash outflows of ¥2,696.4 billion from repo transactions and securities borrowed and loaned transactions
such as Securities purchased under agreements to resell, Securities sold under agreements to repurchase, and Securities borrowed, net of Securities
loaned. As a result, net cash of ¥667.6 billion was provided by operating activities.
Balance Sheet and Financial Leverage
Total assets as of March 31, 2022, were ¥43,412.2 billion, an increase of ¥895.7 billion compared with ¥42,516.5 billion as of March 31, 2021,
reflecting primarily an increase in Securities purchased under agreements to resell. Total liabilities as of March 31, 2022, were ¥40,439.4 billion, an
increase of ¥679.3 billion compared with ¥39,760.0 billion as of March 31, 2021, reflecting primarily an increase in Long-term borrowings. NHI
shareholders’ equity as of March 31, 2022 was ¥2,914.6 billion, an increase of ¥219.7 billion compared with ¥2,694.9 billion as of March 31, 2021,
primarily due to an increase in Accumulated other comprehensive income.
53

We seek to maintain sufficient capital at all times to withstand losses due to extreme market movements. The EMB is responsible for
implementing and enforcing capital policies. This includes the determination of our balance sheet size and required capital levels. We continuously
review our equity capital base to ensure that it can support the economic risk inherent in our business. There are also regulatory requirements forminimum capital of entities that operate in regulated securities or banking businesses.
As leverage ratios are commonly used by other financial institutions similar to us, we voluntarily provide a leverage ratio and adjusted leverage
ratio primarily for benchmarking purposes so that users of our annual report can compare our leverage against other financial institutions. Adjusted
leverage ratio is a non-GAAP financial measure that Nomura considers to be a useful supplemental measure of leverage.
The following table presents NHI shareholders’ equity, total assets, adjusted assets and leverage ratios as of March 31, 2021 and 2022.
Billions of yen, except
ratiosMarch 312021

NHI shareholders’ equity
Total assets
Adjusted assets(1)Leverage ratio(2)Adjusted leverage ratio(3)
(1)
(2)
(3)

2022

¥ 2,694.9 ¥ 2,914.6
42,516.5 43,412.2
26,477.0 26,535.8
15.8 x14.9 x
9.8 x
9.1 x

Represents total assets less Securities purchased under agreements to resell and Securities borrowed. Adjusted assets is a non-GAAP financial
measure and is calculated as follows:
Equals total assets divided by NHI shareholders’ equity.
Equals adjusted assets divided by NHI shareholders’ equity.
Billions of yen
March 312021

Total assets
Less:
Securities purchased under agreements to resell
Securities borrowed
Adjusted assets

2022¥42,516.5 ¥43,412.2
10,775.1 11,879.3
5,264.4
4,997.1¥26,477.0 ¥26,535.8

Total assets increased by 2.1% reflecting primarily an increase in Securities purchased under agreements to resell. Total NHI shareholders’ equity
increased by 8.2% reflecting primarily an increase in Accumulated other comprehensive income. As a result, our leverage ratios were 15.8 times as ofMarch 31, 2021 and 14.9 times as of March 31, 2022.
Adjusted assets increased primarily due to an increase in Loans receivable. As a result, our adjusted leverage ratios were 9.8 times as of March 31,
2021 and 9.1 times as of March 31, 2022.
54

Consolidated Regulatory Capital Requirements
The FSA established the “Guideline for Financial Conglomerates Supervision” (“Financial Conglomerates Guideline”) in June 2005 and set out
the rules on consolidated regulatory capital. We started monitoring our consolidated capital adequacy ratio in accordance with the Financial
Conglomerates Guideline from April 2005.
The Company has been assigned by the FSA as a Final Designated Parent Company who must calculate a consolidated capital adequacy ratio
according to the Capital Adequacy Notice on Final Designated Parent Company in April 2011. Since then, we have been calculating our consolidated
capital adequacy ratio according to the Capital Adequacy Notice on Final Designated Parent Company. The Capital Adequacy Notice on Final
Designated Parent Company has been revised to be in line with Basel 2.5 and Basel III since then. We have calculated a Basel III-based consolidated
capital adequacy ratio from the end of March 2013. Basel 2.5 includes significant change in calculation method of market risk and Basel III includes
redefinition of capital items for the purpose of requiring higher quality of capital and expansion of the scope of credit risk-weighted assets calculation.
In accordance with Article 2 of the Capital Adequacy Notice on Final Designated Parent Company, our consolidated capital adequacy ratio iscurrently calculated based on the amounts of common equity Tier 1 capital, Tier 1 capital (sum of common equity Tier 1 capital and additional Tier 1
capital), total capital (sum of Tier 1 capital and Tier 2 capital), credit risk-weighted assets, market risk and operational risk. As of March 31, 2022, ourcommon equity Tier 1 capital ratio is 17.22%, Tier 1 capital ratio is 19.60% and consolidated capital adequacy ratio is 19.60% and we are in compliancewith the requirement for each ratio set out in the Capital Adequacy Notice on Final Designated Parent Company, etc. (required level including applicableminimum consolidated capital buffers as of March 31, 2022 is 7.51% for the common equity Tier 1 capital ratio, 9.01% for the Tier 1 capital ratio and11.01% for the consolidated capital adequacy ratio).
In accordance with Article 2 of the “Notice of the Establishment of Standards that Indicate Soundness pertaining to Loss-absorbing andRecapitalisation Capacity, Established as Criteria by which the Highest Designated Parent Company is to Judge the Soundness in the Management of theHighest Designated Parent Company and its Subsidiary Corporations, etc., under Paragraph 1, Article 57 -17 of the Financial Instruments and Exchange
Act” (the ”TLAC Notification”), we have started calculating our external TLAC ratio on a risk-weighted assets basis from March 2021. As of March 31,
2022, our external TLAC as a percentage of risk-weighted assets is 30.72% and we are in compliance with the requirement set out in the TLAC
Notification.
55

The following table presents the Company’s consolidated capital adequacy ratios and External TLAC as a percentage of risk-weighted assets as ofMarch 31, 2021 and March 31, 2022.
Billions of yen, except ratios
March 312021
2022

Common equity Tier 1 capital
Tier 1 capital
Total capital
Risk-Weighted Assets
Credit risk-weighted assets
Market risk equivalent assets
Operational risk equivalent assets
Total risk-weighted assets
Consolidated Capital Adequacy Ratios
Common equity Tier 1 capital ratio
Tier 1 capital ratio
Consolidated capital adequacy ratio
External TLAC as a percentage of risk-weighted assets¥ 2,522.1
2,840.5
2,845.2¥ 2,726.4
3,103.0
3,103.4

8,550.9
4,951.6
2,448.5¥15,951.0

8,301.2
4,899.0
2,629.7¥15,829.9

15.81%
17.80%
17.83%
23.06%

17.22%
19.60%
19.60%
30.72%

Since the end of March 2011, we have been calculating credit risk-weighted assets and operational risk equivalent assets by using the foundation
Internal Ratings-Based Approach and the Standardized Approach, respectively, with the approval of the FSA. Furthermore, market risk equivalent assets
are calculated using the Internal Models Approach.
We provide consolidated capital adequacy ratios not only to demonstrate that we are in compliance with the requirements set out in the Capital
Adequacy Notice on Final Designated Parent Company but also for benchmarking purposes so that users of this annual report can compare our capital
position against those of other financial groups to which Basel III is applied. Our management receives and reviews these capital ratios on a regularbasis.
Consolidated Leverage Ratio Requirements
In March 2019, the FSA set out requirements for the calculation and disclosure and minimum requirement of 3% of a consolidated leverage ratio,
and the publication of “Notice of the Establishment of Standards for Determining Whether the Adequacy of Leverage, the Supplementary Measure to
the Adequacy of Equity Capital of a Final Designated Parent Company and its Subsidiary Corporations, etc. is Appropriate Compared to the Assets Heldby the Final Designated Parent Company and its Subsidiary Corporations, etc., under Paragraph 1, Article 57-17 of the Financial Instruments andExchange Act” (2019 FSA Regulatory Notice No. 13; “Notice on Consolidated Leverage Ratio”), through amendments to revising “Specification of
items which a final designated parent company should disclose on documents to show the status of its sound management” (2010 FSA Regulatory
Notice No. 132; “Notice on Pillar 3 Disclosure”). We started calculating and disclosing a consolidated leverage ratio from March 31, 2015 in accordancewith these Notices. We have also started calculating a consolidated leverage ratio from March 31, 2019 in accordance with the Notice on Pillar 3
Disclosure, Notice on Consolidated Leverage Ratio and other related Notices. In coordination with the monetary policy of the Bank of Japan in responseto the impact of the COVID-19 pandemic, the FSA published amendments to the Notice on Consolidated Leverage Ratio on June 2020 and March 2021.
Under these amendments, deposits with the Bank of Japan have been excluded from the total exposure measure used to calculate the leverage ratio
during the period from June 30, 2020 to March 31, 2022. In March 2022, the FSA announced this measure will be extended to March 31, 2024. As of
March 31, 2022, our consolidated leverage ratio is 5.98%.
In accordance with Article 2 of the TLAC Notification we have started calculating our external TLAC ratio on a total exposure basis from March
2021. As of March 31, 2022, our external TLAC as a percentage of leverage ratio exposure measure is 10.30% and we are in compliance with therequirement set out in the TLAC Notification.
Regulatory changes which affect us
The Basel Committee has issued a series of announcements regarding a Basel III program designed to strengthen the regulatory capital framework
in light of weaknesses revealed by the financial crises. The following is a summary of the proposals which are most relevant to us.
In March 2022, the FSA announced one year delay of the implementation date of the finalised Basel III standards for internationally active banks,
to March 31, 2024. Also the FSA announced the exclusion of deposits with the Bank of Japan from the total exposure used to calculate the leverage ratio
until March 31, 2024.
56

On December 16, 2010, in an effort to promote a more resilient banking sector, the Basel Committee issued Basel III, that is, “Internationalframework for liquidity risk measurement, standards and monitoring” and “A global regulatory framework for more resilient banks and banking
systems”. They include raising the quality, consistency and transparency of the capital base; strengthening the risk coverage of the capital framework
such as the implementation of a credit value adjustment (“CVA”) charge for OTC derivative trades; introducing a leverage ratio requirement as asupplemental measure to the risk-based framework; introducing a series of measures to address concerns over the “procyclicality” of the current
framework; and introducing a liquidity standard including a 30-day liquidity coverage ratio as well as the net stable funding ratio to measure stability offinancing structure. These standards were implemented from 2013, which includes transitional treatment, (i.e., they are phased in gradually from 2013).
In addition, the Basel Committee has issued interim rules for the capitalization of bank exposures to central counterparties (“CCPs”) on July 25, 2012,
which came into effect in 2013 as part of Basel III. Moreover, in addition to Basel III leverage ratio framework under which we started the calculationand disclosure of consolidated leverage ratio as above, a series of final standards on the regulatory frameworks such as capital requirements for banks’equity investments in funds, the standardized approach for measuring counterparty credit risk exposures, capital requirements for bank exposures to
CCPs, supervisory framework for measuring and controlling large exposures, and revisions to the securitization framework, and revised framework formarket risk capital requirements have been published by the Basel Committee.
At the G-20 summit in November 2011, the Financial Stability Board (“FSB”) and the Basel Committee announced the list of global systemicallyimportant banks (“G-SIBs”) and the additional requirements to the G-SIBs including the recovery and resolution plan. The group of G-SIBs have been
updated annually and published by the FSB each November. Since November 2011, we have not been designated as a G-SIBs. On the other hand, the
FSB and the Basel Committee were asked to work on extending the framework for G-SIBs to domestic systemically important financial institutions(“D-SIBs”) and the Basel Committee developed and published a set of principles on the assessment methodology and the higher loss absorbency
requirement for D-SIBs. In December 2015, the FSA identified us as a D-SIB and required additional capital charge of 0.5% after March 2016, with
3-year transitional arrangement.
In November 2015, the FSB issued the final TLAC standard for G-SIBs. The TLAC standard has been designed so that failing G-SIBs will havesufficient loss-absorbing and recapitalization capacity available in resolution for authorities to implement an orderly resolution. In response to the FSB’s
publication of the TLAC standard, in April 2016, the FSA published its policy to develop the TLAC framework in Japan applicable to Japanese G-SIBs
and, in April 2018, revised such policy to apply the TLAC requirements in Japan not only to Japanese G-SIBs but also to Japanese D-SIBs that are
deemed (i) of particular need for a cross-border resolution arrangement and (ii) of particular systemic significance to Japanese financial system if they
fail. In the revised policy, the Japanese G-SIBs and Nomura (“TLAC Covered SIBs”) would be subject to the TLAC requirements in Japan. On March
2019, the FSA published the notices and revised the guidelines of TLAC regulations. Although Nomura is not identified as a G-SIB as of the date of thisannual report, the TLAC Covered SIBs, including Nomura, will be required to meet the TLAC requirement alongside the minimum regulatory
requirements set out in the Basel III framework. Specifically, Nomura will be required to meet a minimum TLAC requirement of holding TLAC in an
amount at least 16% of our consolidated risk-weighted assets as from March 31, 2021 and at least 18% as from March 31, 2024 as well as at least 6% of
the applicable Basel III leverage ratio denominator from March 31, 2021 and at least 6.75% from March 31, 2024.
Furthermore, according to the FSA’s revised policy published in April 2018, which is subject to change based on future international discussions,the preferred resolution strategy for the TLAC Covered SIBs is Single Point of Entry (“SPE”) resolution, in which resolution powers are applied to the
top of a group by a single national resolution authority (i.e., the FSA), although the actual measures to be taken will be determined on a case-by-casebasis considering the actual condition of the relevant the TLAC Covered SIBs in crisis.
To implement this SPE resolution strategy effectively, the FSA requires holding companies of the TLAC Covered SIBs (“Domestic Resolution
Entities”) to (i) meet the minimum external TLAC requirements and (ii) cause their material subsidiaries that are designated as systemically importantby the FSA, including but not limited to certain material sub-groups as provided in the FSB’s TLAC standard, to maintain a certain level of capital anddebt recognized by the FSA as having loss-absorbing and recapitalization capacity, or Internal TLAC.
In addition, the TLAC Covered SIBs’ Domestic Resolution Entities will be allowed to count the amount equivalent to 2.5% of their consolidated
risk-weighted assets from the implementation date of the TLAC requirements in Japan (March 31, 2021 for Nomura) and 3.5% of their consolidated
risk-weighted assets from 3 years after the implementation date (March 31, 2024 for Nomura) as our external TLAC, considering the Japanese Deposit
Insurance Fund Reserves.
It is likely that the FSA’s regulation and notice will be revised further to be in line with a series of rules and standards proposed by the BaselCommittee, FSB or International Organization of Securities Commissions.
57

Credit Ratings
The cost and availability of unsecured funding are generally dependent on credit ratings. Our long-term and short-term debt is rated by several
recognized credit rating agencies. We believe that our credit ratings include the credit ratings agencies’ assessment of the general operating environment,
our positions in the markets in which we operate, reputation, earnings structure, trend and volatility of our earnings, risk management framework,
liquidity and capital management. An adverse change in any of these factors could result in a downgrade of our credit ratings, and that could, in turn,increase our borrowing costs and limit our access to the capital markets or require us to post additional collateral and permit counterparties to terminatetransactions pursuant to certain contractual obligations. In addition, our credit ratings can have a significant impact on certain of our trading revenues,
particularly in those businesses where longer term counterparty performance is critical, such as OTC derivative transactions.
On September 2, 2021, Fitch Ratings removed the negative watch on the bbb+ viability ratings of the Company and NSC.
As of May 20, 2022, the credit ratings of the Company and NSC were as follows.
Nomura Holdings, Inc.

Short-term Debt

S&P Global Ratings
Moody’s Investors Service
Fitch Ratings
Rating and Investment Information, Inc.
Japan Credit Rating Agency, Ltd.

A-2
—
F1
a-1
—

Nomura Securities Co., Ltd.

Short-term Debt

S&P Global Ratings
Moody’s Investors Service
Fitch Ratings
Rating and Investment Information, Inc.
Japan Credit Rating Agency, Ltd.

A-2
P-2
F1
a-1
—
58

Long-term Debt

BBB+ (Stable)
Baa1 (Negative)
A- (Stable)
A (Stable)AA- (Stable)
Long-term Debt

A- (Stable)
A3 (Negative)
A- (Stable)
A+ (Stable)AA- (Stable)

(6) Off-Balance Sheet Arrangements
Off-balance sheet entities
In the normal course of business, we engage in a variety of off-balance sheet arrangements with off-balance sheet entities which may have an
impact on Nomura’s future financial position and performance.
Off-balance sheet arrangements with off-balance sheet entities include where Nomura has:•

an obligation under a guarantee contract;•a retained or contingent interest in assets transferred to an off-balance sheet entity or similar arrangement that serves to provide credit,
liquidity or market risk support to such entity;•

any obligation, including a contingent obligation, under a contract that would be accounted for as a derivative instrument; or•

any obligation, including a contingent obligation, arising out of a variable interest in an off-balance sheet entity that is held by, and material
to, us, where such entity provides financing, liquidity, market risk or credit risk support to, or engages in leasing, hedging or research anddevelopment services with, us.

Off-balance sheet entities may take the form of a corporation, partnership, fund, trust or other legal vehicle which is designed to fulfill a limited,
specific purpose by its sponsor. We both create or sponsor these entities and also enter into arrangements with entities created or sponsored by others.
Our involvement with these entities includes structuring, underwriting, distributing and selling debt instruments and beneficial interests issued bythese entities, subject to prevailing market conditions. In connection with our securitization and equity derivative activities, we also act as a transferor of
financial assets to these entities, as well as, underwriter, distributor and seller of asset-repackaged financial instruments issued by these entities. We
retain, purchase and sell variable interests in SPEs in connection with our market-making, investing and structuring activities. Our other types ofoff-balance sheet arrangements include guarantee agreements and derivative contracts. Significant involvement is assessed based on all of ourarrangements with these entities, even if the probability of loss, as assessed at the balance sheet date, is remote.
For further information about transactions with VIEs, see Note 6 “Securitizations and Variable Interest Entities” in our consolidated financial
statements included in this annual report.
59

(7) Tabular Disclosure of Contractual Obligations
In the ordinary course of our business, we enter into a variety of contractual obligations and contingent commitments, which may require future
payments. These arrangements include:
Standby letters of credit and other guarantees:•

In connection with our banking and financing activities, we enter into various guarantee arrangements with counterparties in the form ofstandby letters of credit and other guarantees, which generally have fixed expiration dates.

Long-term borrowings and contractual interest payments:•

In connection with our operating activities, we issue Japanese Yen and non-Japanese Yen denominated long-term borrowings which incur
variable and fixed interest payments in accordance with our funding policy.

Operating lease commitments:•

We lease office space, residential facilities for employees, motor vehicles, equipment and technology assets in the ordinary course ofbusiness both in Japan and overseas as lessee. These arrangements predominantly consist of operating leases.

•

Separately we sublease certain real estate and equipment through operating lease arrangements.

Finance lease commitments:•

We lease certain equipments and facilities in Japan and overseas which are classified as finance lease agreements.

Purchase obligations:•

We have purchase obligations for goods and services which include payments for construction, advertising, and computer andtelecommunications maintenance agreements.

Commitments to extend credit:•

In connection with our banking and financing activities, we enter into contractual commitments to extend credit, which generally have fixed
expiration dates.

•

In connection with our investment banking activities, we enter into agreements with clients under which we commit to underwrite securities
that may be issued by clients.

•

As a member of certain central clearing counterparties, Nomura is committed to provide liquidity facilities through entering into reverse
repo transactions backed by government and government agency debt securities with those counterparties in a situation where a default of
another clearing member occurs.

Commitments to invest in partnerships:•

We have commitments to invest in interests in various partnerships and other entities and commitments to provide financing for investments
related to those partnerships.

Note 8 “Leases” in our consolidated financial statements contains further detail on our operating leases and finance leases. Note 11 “Borrowings”
in our consolidated financial statements contains further detail on our short-term and long-term borrowing obligations and Note 20 “Commitments,
contingencies and guarantees” in our consolidated financial statements included in this annual report contains further detail on our other commitments,
contingencies and guarantees.
60

The contractual amounts of commitments to extend credit represent the maximum amounts at risk should the contracts be fully drawn upon,should the counterparties default, and assuming the value of any existing collateral becomes worthless. The total contractual amount of thesecommitments may not represent future cash requirements since the commitments may expire without being drawn upon. The credit risk associated withthese commitments varies depending on our clients’ creditworthiness and the value of collateral held. We evaluate each client’s creditworthiness on acase-by-case basis. The amount of collateral obtained, if deemed necessary by us upon extension of credit, is based on management’s credit evaluationof the counterparty.
The following table presents information regarding amounts and timing of our future contractual obligations and contingent commitments as ofMarch 31, 2022.

Standby letters of credit and other guarantees
Long-term borrowings(1)Contractual interest payments(2)Operating lease commitments(3)Purchase obligations(4)Commitments to extend credit(5)Commitments to invest
Total
(1)

(2)
(3)
(4)

(5)

Total
contractual
amountLess than
1 year

¥ 1,698,193
8,988,356
1,032,515
209,040
98,2142,012,851
32,286¥14,071,455¥1,684,360
456,663
134,019
44,49314,012
1,354,834
149¥3,688,530

Millions of yen
Years to maturity
1 to 33 to 5
years
years

¥
7,705
2,085,430
220,91357,884
18,652
269,8284,102¥2,664,514

¥

4,519
2,273,072
152,920
42,761
65,397
163,515
6,175¥2,708,359

More than
5 years¥

1,609
4,173,191
524,663
63,902
153
224,674
21,860¥5,010,052

The amounts disclosed within long-term borrowings exclude financial liabilities recognized within long-term borrowings as a result of transfers offinancial assets that are accounted for as financings rather than sales in accordance with ASC 860. These are not borrowings issued for our own
funding purposes and therefore do not represent actual contractual obligations by us to deliver cash.
The amounts represent estimated future interest payments related to long-time borrowings based on the period through to their maturity andapplicable interest rates as of March 31, 2022.
The amounts of operating lease commitments are undiscounted future minimum lease payments. The amounts of finance lease contracts wereimmaterial.
The minimum contractual obligations under enforceable and legally binding contracts that specify all significant terms. Amounts exclude
obligations that are already reflected on our consolidated balance sheets as liabilities or payables. Includes the commitment to purchase parts of
the redeveloped real estate in Tokyo Nihonbashi district from the redevelopment association.
Contingent liquidity facilities to central clearing counterparties are included.

Excluded from the above table are obligations that are generally short-term in nature, including short-term borrowings, deposits received at banks
and other payables, collateralized agreements and financing transactions (such as reverse repurchase and repurchase agreements), and trading liabilities.
In addition to amounts presented above, we have commitments under reverse repurchase and repurchase agreements including amounts inconnection with collateralized agreements and collateralized financing. These commitments amount to ¥1,565 billion for reverse repurchase agreementsand ¥2,673 billion for repurchase agreements as of March 31, 2022.
4. Significant Contracts.
Not applicable.
61

Item 4. Company Information
1. Share Capital Information(1) Total Number of Shares
A. Number of Authorized Share Capital
Authorized Share Capital(shares)Type

Common StockClass 1 Preferred StockClass 2 Preferred StockClass 3 Preferred StockClass 4 Preferred Stock
Total

6,000,000,000
200,000,000
200,000,000
200,000,000
200,000,000
6,000,000,000(Note)The “Authorized Share Capital” is stated by class and the total is the number of authorized share capital designated in the Articles ofIncorporation.
B. Issued Shares
Number ofIssued Shares as ofMarch 31, 2022

Type

Common Stock

3,233,562,601

Total

3,233,562,601

(1)
(2)
(3)
(4)

Number ofIssued Shares as ofJune 24, 2022

Trading Markets

3,233,562,601 Tokyo Stock Exchange(2)(3)
Nagoya Stock Exchange(2)(4)Singapore Exchange
New York Stock Exchange
3,233,562,601—

Description

1 unit is 100 shares—

Shares that may have increased from exercise of stock options between June 1, 2022 and June 24, 2022 are not included in the number of issued
shares as of June 24, 2022.
Listed on the First Section of each stock exchange as of March 31, 2022.
Listed on the Prime Market as of June 24, 2022.
Listed on the Premier Market as of June 24, 2022.
62

(2) Stock Options
A. Stock Acquisition Right
Number ofCommon Stockunder SARs
in the Preceding
Month to Filingof this Report(May 31, 2022)

Number of
SARs

Number ofCommon Stockunder SARs
(March 31, 2022)

SARs No.48

343

34,3006,500

SARs No.50

364

36,400364,000

SARs No.58

1,248

124,800

36,500

SARs No.64

1,339

133,900

39,700

SARs No.65

7,993

799,300

38,100

SARs No.68

25,6582,565,800

29,800

SARs No.69

1,382

138,200

671,800

SARs No.70

8,834

883,400

808,900

SARs No.71

11,624

1,162,400

2,670,700

SARs No.74

23,6542,365,400

24,300

SARs No.75

7,297

729,700

612,200

SARs No.76

9,084

908,400

1,005,700

SARs No.77

12,8001,280,000

2,565,800

SARs No.78

3,986

398,600

662,500

SARs No.79

8,099

809,900

1,086,100

SARs No.80

1,362

136,200

1,322,800

SARs No.81

1,362

136,200

203,200

SARs No.82

2,021

202,100

2,367,400

SARs No.84

24,7532,475,300

849,000

SARs No.85

23,103

2,310,300

993,200

Name of Stock Acquisition Rights(“SARs”)

B. Rights plan
None
C. Other plan
None
63

Period for
the Exerciseof SARs

From April 20, 2017
to April 19, 2022
From October 20, 2016
to April 19, 2022
From April 20, 2017
to April 19, 2022
From April 20, 2017
to April 19, 2022
From April 20, 2018
to April 19, 2023
From November 18, 2017
to November 17, 2022
From April 20, 2017
to April 19, 2022
From April 20, 2018
to April 19, 2023
From April 20, 2019
to April 19, 2024
From November 11, 2018
to November 10, 2023
From April 20, 2018
to April 19, 2023
From April 20, 2019
to April 19, 2024
From April 20, 2020
to April 19, 2025
From April 20, 2021
to April 19, 2026
From April 20, 2022
to April 19, 2027
From April 20, 2023
to April 19, 2028
From April 20, 2024
to April 19, 2029
From October 30, 2017
to October 29, 2022
From November 17, 2019
to November 16, 2024
From November 20, 2020
to November 19, 2025

Exercise
Price perShare under
SARs
(yen)

1
1
1
1
1
801
1
1
1
593
1
1
1
1
1
1
1
1
684
573

(3) Exercises, etc., of moving strike convertible bonds, etc.
None(4) Changes in Issued Shares, Common Stock, etc.

Increase/(Decrease)of Issued Shares

Date

December 18, 2017(1)December 17, 2018(1)December 1, 2020(1)(1)(179,000,000)(150,000,000)(260,000,000)

Total
Issued Shares

Increase/(Decrease)of Common Stock(millions of yen)———

3,643,562,601
3,493,562,601
3,233,562,601

Common Stock(millions of yen)

Increase/(Decrease)of Additional
paid-in capital(millions of yen)

Additional
paid-in capital(millions of yen)594,493594,493594,493———559,676
559,676
559,676

The decrease is due to the cancellation of treasury stock.

(5) Shareholders
As of March 31, 2022
Unit Shareholders (100 shares per 1 unit)
Foreign Shareholders

Number of Shareholders
Number of Units Held
Percentage of Units Held (%)(1)(2)

Governments
andMunicipal
Governments

Financial
Institutions

Securities
Companies

Other
Corporations

Other than
individuals

—
—
—

150
7,637,371
23.63

71
1,311,345
4.06

3,125
1,402,305
4.34

861
10,313,520
31.91

Individuals

Individuals
andOthers

Total

SharesRepresentingLess than
One Unit(Shares)

556
11,9820.04

338,864
11,643,445
36.02

343,627
32,319,968
100.00—1,565,801—

Out of 215,394,467 treasury stocks, 2,153,944 units are included in Individuals and Others while 67 shares are in Shares Representing Less than
One Unit (Shares).
Other Corporations includes 20 units held by Japan Securities Depository Center, Inc.
64

(6) Major Shareholders

Name

Address

The Master Trust Bank of Japan, Ltd. (Trust Account)
Custody Bank of Japan, Ltd. (Trust Account)Northern Trust Co. (AVFC)
Re Silchester International Investors International Value
Equity Trust
State Street Bank West Client-Treaty 505234
Northern Trust Co. (AVFC)
Re U.S. Tax Exempted Pension Funds
JP Morgan Chase Bank 385781
The Bank of New York Mellon as Depositary Bank for DR
Holders
Nomura Group Employee Stock Ownership Association
Government of Norway
State Street Bank And Trust Company 505001
Total
(1)
(2)
(3)

2-11-3, Hamamatsu-cho, Minato-Ku, Tokyo, Japan
1-8-12, Harumi, Chuo-Ku, Tokyo, Japan

488,832
140,171

16.19
4.64

50 Bank Street Canary Wharf London E14 5NT, UK
1776 Heritage Drive, North Quincy, MA 02171 U.S.A.

60,96552,9502.01
1.75

50 Bank Street Canary Wharf London E14 5NT, UK
25 Bank Street Canary Wharf London E14 5JP, UK
240 Greenwich Street, 8TH FL West, New York, NY 10286,
U.S.A.
1-13-1, Nihonbashi, Chuo-Ku, Tokyo, Japan
Bankplassen 2, 0107 Oslo 1 Oslo 0107, NO
P.O.Box 351 Boston Massachusetts 02101, U.S.A.

46,43239,066

1.53
1.29

36,83333,62032,33130,928962,128

1.22
1.11
1.07
1.02
31.83

The Company has 215,394 thousand shares of treasury stock as of March 31, 2022 which is not included in the Major Shareholders list above.
For Shares Held in the above, amounts less than thousand shares are discarded.
According to a statement on Schedule 13G (Amendment No.7) filed by BlackRock, Inc. with the SEC on February 3, 2022, BlackRock, Inc.
owned 206,811,679 shares, representing 6.40% of the issued shares of the Company’s common stock. However, the Company has not confirmed
the status of these shareholdings as of March 31, 2022.

Name

Address

BlackRock, Inc.
(4)

As of March 31, 2022
Shares Held Percentage of(thousand Issued Sharesshares)(%)

55 East 52nd Street New York, NY 10055

As of December 31, 2021
Shares Held Percentage of(thousand Issued Shares(%)
shares)

206,811

6.40

According to a statement on Schedule 13G (Amendment No.2) filed by Sumitomo Mitsui Trust Holdings, Inc. with the SEC on February 4, 2022,
Sumitomo Mitsui Trust Holdings, Inc. owned 176,175,500 shares, representing 5.40% of the issued shares of the Company’s common stock.
However, the Company has not confirmed the status of these shareholdings as of March 31, 2022.

Name

Sumitomo Mitsui Trust Holdings, Inc

Address

1-4-1, Marunouchi, Chiyoda-Ku, Tokyo, Japan65

As of December 31, 2021
Shares Held Percentage of(thousand Issued Sharesshares)(%)

176,175

5.40

(7) Voting Rights
A. Outstanding Shares
Number of Shares

Stock without voting right
Stock with limited voting right (Treasury stocks, etc.)
Stock with limited voting right (Others)
Stock with full voting right (Treasury stocks, etc.)(Treasury stocks)
Common stock(Crossholding stocks)
Common stock
Common stock
Common stock

Stock with full voting right (Others)
Shares less than 1 unit
Total Shares Issued

As of March 31, 2022
Number of Votes

—
—
—

—
—
—

215,394,400——

1,567,200
3,015,035,200
1,565,801—
30,150,352—

3,233,562,601——

30,150,352

Voting Rights of Total Shareholders(1)

Description

—
—
—

—
—
Shares less than 1 unit
(100 shares)——

Stock with full voting right (Others) includes 2,000 shares held by Japan Securities Depository Center, Inc. Shares less than 1 unit includes 67
treasury stocks.
B. Treasury Stocks

Name

Address(Treasury stocks)
Nomura Holdings, Inc.

1-13-1, Nihonbashi, Chuo-Ku,
Tokyo, Japan

Total

—

(1)

Directly
heldshares215,394,400
215,394,400

As of March 31, 2022
Indirectly
heldshares
Total——

Percentage ofIssued Shares(%)

215,394,400
215,394,400

In addition to the above, 1,567,200 shares are directly held by a subsidiary of the Company for the purpose of securities related business.
66

6.66
6.66

(8) Restricted Stock Units

Series of RSU

Grant date

Number of
RSU(March 31, 2022)

RSU No.4
RSU No.5
RSU No.6
RSU No.7
RSU No.10
RSU No.11
RSU No.12
RSU No.13
RSU No.14
RSU No.16
RSU No.17
RSU No.18
RSU No.19
RSU No.20
RSU No.21
RSU No.22
RSU No.23
RSU No.24
RSU No.25
RSU No.26
RSU No.27
RSU No.28
RSU No.29
RSU No.30
RSU No.31
RSU No.32
RSU No.33
RSU No.34
RSU No.35

2018.5.14
2018.5.14
2018.5.14
2018.5.14
2019.5.16
2019.5.16
2019.5.16
2019.5.16
2019.5.16
2020.5.27
2020.5.27
2020.5.27
2020.5.27
2020.5.27
2020.5.27
2021.5.17
2021.5.17
2021.5.17
2021.5.17
2021.5.17
2021.5.17
2021.5.17
2022.5.19
2022.5.19
2022.5.19
2022.5.19
2022.5.19
2022.5.19
2022.5.19

1,154,800
1,150,000
109,000
108,800
9,364,675
737,900
734,700
48,00047,40022,552,565
22,673,675
1,689,600
1,685,800
179,800
179,400
18,771,675
18,692,100
18,742,900
1,627,000
1,622,600
123,600
123,400
—
—
—
—
—
—
—

Number of RSU
in the Preceding Monthto Filing of this Report(May 31, 2022)—
1,149,000
109,000
108,800—
642,100
639,100
48,00047,400—22,141,675
1,513,000
1,509,400
179,800
179,400—
18,250,700
18,302,700
1,455,000
1,450,800
123,600
123,400
31,404,700
31,329,200
31,425,300
3,664,400
1,652,800
172,800
172,600

Period of payment

2022.4.20~2022.5.19
2023.4.20~2023.5.19
2024.4.20~2024.5.19
2025.4.20~2025.5.19
2022.4.20~2022.5.19
2023.4.20~2023.5.19
2024.4.20~2024.5.19
2025.4.20~2025.5.19
2026.4.20~2026.5.19
2022.4.20~2022.5.19
2023.4.20~2023.5.19
2024.4.20~2024.5.19
2025.4.20~2025.5.19
2026.4.20~2026.5.19
2027.4.20~2027.5.19
2022.4.20~2022.5.19
2023.4.20~2023.5.19
2024.4.20~2024.5.19
2025.4.20~2025.5.19
2026.4.20~2026.5.19
2027.4.20~2027.5.19
2028.4.20~2028.5.19
2023.4.20~2023.5.19
2024.4.20~2024.5.19
2025.4.20~2025.5.19
2026.4.20~2026.5.19
2027.4.20~2027.5.19
2028.4.20~2028.5.19
2029.4.20~2029.5.19

Please see “4. Status of Corporate Governance and Other” for detail of the plan.
2. Stock Repurchase
Type of Stock

Repurchase of the common stock in accordance with provisions of Articles 155-3 and 155-7 of the Companies Act.

(1) Stock Repurchase resolved by Shareholders’ MeetingNone67

(2) Stock Repurchase resolved by Board of Directors
Number of Shares

Resolution at the Board of Directors (October 29, 2021)(Purchase period from November 16, 2021 to March 31, 2022)
Stock repurchased prior to April 1, 2021
Stock repurchased from April 1, 2021 to March 31, 2022
Total shares and amounts resolved
Percentage not repurchased at year end (%)
Repurchases made in the period
Percentage not repurchased at the date of submission of this annual report (%)

80,000,000—
80,000,000————
Number of Shares

Resolution at the Board of Directors (April 26, 2022)(Purchase period from May 17, 2022 to March 31, 2023)
Stock repurchased prior to April 1, 2021
Stock repurchased from April 1, 2021 to March 31, 2022
Total shares and amounts resolved
Percentage not repurchased at year end (%)
Repurchases made in the period
Percentage not repurchased at the date of submission of this annual report (%)

50,000,000——
50,000,000
100.0
19,551,600
60.9

Total Amount(Yen)

50,000,000,000—
39,639,408,040
10,360,591,960.0
20.7
—
20.7
Total Amount(Yen)

30,000,000,000——
30,000,000,000
100.0
9,565,730,970
68.1(3) Stock Repurchase not based on above (1) or (2)Number of Shares

Stock repurchased during the year ended March 31, 2022(1)Stock repurchased during the period(2)(1)(2)

20,237
2,152

Total Amount(Yen)

11,035,077
1,088,392

Acceptance of requests for purchasing less-than-a-full-unit-shares.
Repurchases from June 1, 2022 to the reporting date of this annual report are not included.

(4) Disposal and retention of repurchased stockYear ended March 31, 2022
Total amount of
Number of
disposal
shares(yen)

Treasury shares disposed subject to procedures for issuance of new shares
Treasury shares canceled
Treasury shares transferred upon merger, share exchange, share delivery or
demerger
Others(1)Treasury stocks(1)(2)

Stock repurchased during the period(2)Total amount of
Number of
disposal
shares
(yen)

—
—

—
—

—
—

—
—

—
34,682,937
215,394,467—
18,541,085,123——
32,958,431
201,989,788—
16,691,391,220—

Others are for purchasing less-than-a-full-unit-shares and disposal for exercise of stock acquisition rights and allotment of RSU.
Repurchases or disposals and allotments from June 1, 2022 to the reporting date of this annual report are not included.

3. Dividend Policy
We seek to enhance shareholder value and to capture growing business opportunities by maintaining sufficient levels of capital. We will continue
to review our levels of capital as appropriate, taking into consideration the economic risks inherent to operating our businesses, the regulatory
requirements, and maintaining our ratings necessary to operate businesses globally.
We believe that raising corporate value over the long term and paying dividends is essential to rewarding shareholders.
We will strive to pay dividends using a consolidated pay-out ratio of 30 percent of each semi-annual consolidated earnings as a key indicator.
Dividend payments for period will be determined taking into account a comprehensive range of factors such as the tightening of Basel regulations andother changes to the regulatory environment as well as the company’s consolidated financial performance.
The payment frequency is semi-annual in principle (record dates: September 30 and March 31).
Additionally, we will aim for a total payout ratio, which includes dividends and share buybacks, of at least 50 percent.
68With respect to retained earnings, in order to implement measures to adapt to regulatory changes and to increase shareholder value, we seek toefficiently invest in business areas where high profitability and growth may reasonably be expected, including the development and expansion of
infrastructure.
(Dividends for the year ended March 31, 2022)
In line with its dividend policy for the year ended March 31, 2022, the Company paid a dividend of ¥8 per share to shareholders of record as of
September 30, 2021. Based on the same dividend policy, we paid a dividend of ¥14 yen per share to shareholders of record as of March 31, 2022. As aresult, the annual dividend totaled ¥22 per share.
The details of dividends from retained earnings in the year ended March 31, 2022 are as follows.
Decision date

Record date

Total dividend value(millions of yen)

Dividend per share(yen)

Board of Directors October 29, 2021

September 30, 2021

24,761

8.00

Board of Directors April 26, 2022

March 31, 2022

42,25414.00

69

4. Status of Corporate Governance and Other(1) Status of Corporate Governance
Underlying Concept of Corporate Governance
The Company recognizes that enhancement of corporate governance is one of the top priorities for the Company to achieve its management
visions “to enhance 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, the Company is committed to strengthening and to improving its governance framework which ensures effectiveness ofmanagement oversight and transparency in the Company’s management and at the same time pursues sustainable growth and expedited decision-making
process within the Nomura Group.
The Company, recognizing the perspectives of various stakeholders beginning with shareholders and clients, established the “Nomura Holdings
Corporate Governance Guidelines” for the purpose of setting forth an effective corporate governance framework as a structure for transparent/fair andtimely/decisive decision-making, and contributing to the realization of that.
The “Nomura Holdings Corporate Governance Guidelines” can be accessed from the Company’s website.
(https://www.nomuraholdings.com/company/cg/data/cg_guideline.pdf)
In addition, the Company has established the “Nomura Group Code of Conduct” (“the Code of Conduct”) as a code of conduct to be observed byeach director, officer and employee of the Nomura Group. This is a guideline for Nomura Group directors, officers and employees to translate theNomura Group Corporate Philosophy into actions. All of our business activities are carried out based on the Code of Conduct, and through thoroughcompliance with the Code of Conduct, we endeavor to fulfill the various responsibilities in relation to, not only shareholders, but to various
stakeholders.
The “Nomura Group Code of Conduct” can be accessed from the Company’s website.
(https://www.nomuraholdings.com/company/basic/coc.pdf)
Summary of the corporate governance structure and reasons for adopting such structure
The Company is a Company with Three Board Committees. The Company has determined that the Company with Three Board Committees
structure is the most suitable form of corporate governance at this point in time for the reasons below.
A Company with Three Board Committees establishes Nomination, Audit and Compensation Committees, which are each to be comprised of amajority of Outside Directors, and in addition to striving to enhance management oversight and improve transparency by separating management
oversight and business execution functions, it is a structure that makes it possible to strive to expedite the decision-making process by broadly
delegating authority for the execution of business functions from the Board of Directors to the Executive Officers. Further, the Company believes that a
Company with Three Board Committees is the most compatible with the corporate governance standards which form a part of the NYSE (which theCompany is listed on) Listed Company Manual.
The outline of the Company’s Corporate Governance Structure is as follows:<The Board of Directors and Committees>
At the Company, which is a Company with Three Board Committees where management oversight and business execution functions are
institutionally separated, in addition to the Board of Directors and the Nomination/Audit/Compensation committees, which are the three statutory
committees, both the “Board Risk Committee”, which is a committee that has the purpose of deepening the oversight of risk management by the Boardof Directors and the “Outside Directors Meeting” for having Outside Directors periodically engage in discussions regarding matters concerning theCompany’s business and corporate governance, have been established.
The main role of the Company’s Board of Directors is management oversight and the purpose of the Board of Directors of the Company is to
strive for the Company’s sustainable growth and maximization of corporate value over the mid to long-term. The Board of Directors, in addition toensuring the fairness and transparency of the management, determines the “Fundamental Management Policy,” and appointments of Executive Officers
that manage the Company such as the Group CEO and important business execution decisions are made based on such policy.
The Board of Directors of the Company, to enable active discussion from diversified perspectives, consists of members with diversity, such as ingender, internationality, and professional background, and with expertise in areas such as corporate management, international business, the financial
industry, accounting/finance, legal systems/regulation, internal controls including risk management, and blockchain technology. Further, for theappropriate exercise of the Board of Directors’ management oversight functions, there is a general rule that the majority of the Board of Directors must
be Outside Directors.
70Eight out of the current twelve Directors of the Company’s Board of Directors are Outside Directors, and out of the eight Outside Directors, there
is a diverse composition of four non-Japanese Directors and three female Directors. In particular, as a result of the expansion of the U.S. business,
Directors with an extensive understanding of the U.S. financial industry, macro economy, and regulatory environment have been appointed. Further, inconsideration of factors including the geographical distribution of Directors, in addition to the appointment of a Director well-versed in finance from
Asia, in view of the importance of the managerial knowledge of Japanese companies that are engaged in global business development, a Director who isa domestic executive has been appointed.
The Board of Directors is chaired by a Director who is not concurrently serving as an Executive Officer, allowing the Board of Directors toconcentrate on overseeing the business conducted by the Executive Officers. Further, with respect to each of the Nomination/Audit/Compensation/Board
Risk committee, by having Outside Directors serve as the chair, independence from the management has been made even clearer.
71

The composition of the Board of Directors is as follows:
Chairman of the Board of Directors
Director, Representative Executive Officer, President and Group CEO
Director, Representative Executive Officer and Deputy President
Director
Outside Director
Outside Director
Outside Director
Outside Director
Outside Director
Outside Director
Outside Director
Outside Director

Koji Nagai
Kentaro Okuda
Tomoyuki Teraguchi
Shoji Ogawa
Kazuhiko Ishimura
Takahisa Takahara
Noriaki ShimazakiMari Sono
Laura Simone Unger
Victor Chu
J. Christopher Giancarlo
Patricia Mosser

The roles and composition of each Committee are as follows:(1) Nomination Committee
This Committee is a statutory organ which determines the details of any proposals concerning the election and dismissal of Directors to besubmitted to general meetings of shareholders. The three members of the Committee are elected by the Board of Directors. At the Nomination
Committee, concerning the Group CEO Succession Plan, work is being done for the further development of governance by carrying out activities suchas discussions concerning topics such as qualifications and potential candidates that should be sought on the basis of the management environment fromnow on.
The composition of the Nomination Committee is as follows:
Member of the Nomination Committee (Chairman)
Member of the Nomination Committee
Member of the Nomination Committee

Outside Director Kazuhiko Ishimura
Outside Director Takahisa Takahara
Chairman of the Board of Directors (Non-Executive) Koji Nagai(2) Audit Committee
This Committee is a statutory organ which (i) audits the execution by the Directors and Executive Officers of their duties and prepares audit
reports and (ii) determines the details of proposals concerning the election, dismissal, and non-reappointment of the independent auditors to besubmitted to general meetings of shareholders. The four members of the Committee are elected by the Board of Directors. All members satisfy
requirements for independence as defined in the U.S. Sarbanes-Oxley Act of 2002, and Noriaki Shimazaki is a Financial Expert under this Act and has
considerable degree of knowledge in the areas of finance and accounting.
The composition of the Audit Committee is as follows:
Member of the Audit Committee (Chairman)
Member of the Audit Committee
Member of the Audit Committee
Member of the Audit Committee (Full-time)

Outside Director Noriaki Shimazaki
Outside Director Mari Sono
Outside Director Victor Chu
Director (Non-Executive) Shoji Ogawa(3) Compensation Committee
This Committee is a statutory organ which determines the Company’s policy with respect to the determination of the details of each Director andExecutive Officer’s compensation. The Committee also determines the details of each Director and Executive Officer’s actual compensation. The threemembers of the Committee are elected by the Board of Directors.
72

The composition of the Compensation Committee is as follows:
Member of the Compensation Committee (Chairman)
Member of the Compensation Committee
Member of the Compensation Committee

Outside Director Kazuhiko Ishimura
Outside Director Takahisa Takahara
Chairman of the Board of Directors (Non-Executive) Koji Nagai(4) Board Risk Committee
This Committee is a non-statutory organ of which purpose is to assist the Board of Directors in supervising Nomura Group’s risk management andto contribute to sophistication of the risk management. The six members of the Committee are elected by the Board of Directors.
The composition of the Board Risk Committee is as follows:
Member of the Board Risk Committee (Chairperson)
Member of the Board Risk Committee
Member of the Board Risk Committee
Member of the Board Risk Committee
Member of the Board Risk Committee
Member of the Board Risk Committee

Outside Director Laura Simone Unger
Outside Director Noriaki Shimazaki
Outside Director Victor Chu
Outside Director J. Christopher Giancarlo
Outside Director Patricia Mosser
Director (Non-Executive) Shoji Ogawa<Business Execution Framework>
As the Company is a Company with Three Board Committees, the Board of Directors has, to the extent permitted by laws and regulations,delegated to the Executive Officers decision making authority for business execution functions to ensure that the Executive Officers can execute theCompany’s business with speed and efficiency. Among the matters delegated to the Executive Officers by resolutions adopted by the Board of Directors,
the most important matters of business must be decided upon deliberation by specific management bodies within the Company including the Executive
Management Board, Group Risk Management Committee, Nomura Group Conduct Committee, Sustainability Committee, and Internal Controls
Committee. These management bodies are required to report to the Board of Directors on the status of their deliberations at least once every threemonths.
The roles and composition of each management body are as follows:(1) Executive Management Board
This Board is chaired by the Representative Executive Officer, President, and Group CEO Kentaro Okuda, and also consists of other Executive
Officers and other persons designated by the Representative Executive Officer, President, and the Group CEO. The Executive Management Board
deliberates and determines management strategies, business plans, budgets, allocation of management resources, and other important matters related tothe management of the Nomura Group.
(2) Group Risk Management Committee
This Committee is chaired by the Representative Executive Officer, President, and Group CEO Kentaro Okuda and also consists of one
representative executive officer other than the Group CEO appointed by the Chairman, the Chief Compliance Officer (CCO), Chief Risk Officer (CRO),
Chief Financial Officer (CFO), Division Heads (responsible for execution of business in each division) and other persons designated by the Chairman.
The Executive Management Board has delegated authority to the Group Risk Committee to deliberate and determine important matters concerning
enterprise risk management of the Nomura Group.
73

(3) Nomura Group Conduct Committee
This Committee is chaired by the Representative Executive Officer and Deputy President Tomoyuki Teraguchi, and also consists of the Chief
Strategy Officer (CSO), Chief Compliance Officer (CCO) and Senior Managing Directors of each division. The Nomura Group Conduct Committee
discusses the embeddedness of the Nomura Group Code of Conduct and management of compliance and conduct risk within the Nomura Group.
(4) Sustainability Committee
This Committee is chaired by the Representative Executive Officer, President, and Group CEO Kentaro Okuda, and also consists of other persons
designated by the Representative Executive Officer, President, and Group CEO that are the same as the persons who make up the Executive
Management Board. The Sustainability Committee deliberates and determines matters such as the strategy in relation to promoting sustainability in the
Nomura Group.
(5) Internal Controls Committee
This Committee is chaired by the Representative Executive Officer, President, and Group CEO Kentaro Okuda, and also consists of other persons
designated by the Representative Executive Officer, President, and Group CEO, Audit Committee member Noriaki Shimazaki selected by the Audit
Committee, and Director Shoji Ogawa selected by the Board of Directors. The Internal Controls Committee deliberates on important matters concerning
areas such as internal controls, audit activities and risk management in relation to the Nomura Group’s business.
In order to further bolster the Company’s business execution framework for financial operations that are becoming increasingly sophisticated andspecialized, the Company utilizes a system whereby the Executive Officers delegate a part of their authority for business execution decisions to Senior
Managing Directors, who focus on individual business and operations.
∎ Corporate Governance System

74

Status of the Internal Controls System and Status of the Internal Controls System of the Subsidiaries
The Company is committed to strengthening and improving its internal controls system in order to promote proper corporate behavior throughout
the Nomura Group, from the viewpoints of ensuring management transparency and efficiency, complying with laws and regulations, controlling risks,
ensuring the reliability of business and financial reports and fostering the timely and appropriate disclosure of information.
The internal controls system in the Company has been implemented based on a resolution adopted by the Board of Directors under the title“Structures for Ensuring Appropriate Operations at Nomura Holdings, Inc.,” which also includes matters regarding maintenance of internal control
system as a group. Further, based on the content of the resolution of the Company, each Nomura Group company maintains internal control system thatreflects the actual conditions of each company.
∎ Structure of Nomura Holdings’ internal controls system

Regulations regarding the Number of Directors
The Company’s Articles of Incorporation provide for not more than 20 Directors.
Requirements for a Resolution to Appoint Directors
For the purpose of carrying out the smooth operation of the General Meeting of Shareholders, the Company’s Articles of Incorporation providethat a resolution for the appointment of Directors shall be adopted at a general meeting of shareholders with a vote in favor by a simple majority of thevoting rights held by the shareholders present at a meeting attended by shareholders entitled to exercise voting rights holding in aggregate 1/3 or more of
the total voting rights. The Company’s Articles of Incorporation also provide that no cumulative voting shall be used for the appointment of Directors.
Requirements for a “Special” Resolution at the General Meeting of Shareholders
The Company’s Articles of Incorporation provide that any resolution under Article 309, Paragraph 2 of the Companies Act must be adopted with avote in favor by 2/3 of the voting rights held by the shareholders at a meeting attended by shareholders entitled to exercise voting rights holding inaggregate 1/3 or more of the total voting rights.
75

Decision-Making Body for Dividends, etc.
In order for the Company to return profit to the shareholders and execute capital policy by responding flexibly to changes in the businessenvironment, the Company’s Articles of Incorporation provide that dividend distributions, etc., under Article 459, Paragraph 1 of the Companies Act
must be approved by a resolution adopted by the Board of Directors, instead of a resolution adopted by the general meeting of shareholders, unlessotherwise prescribed by law.
Release for Directors and Executive Officers
In order for the Directors and Executive Officers to perform their expected roles in the execution of their duties, the Company’s Articles ofIncorporation provide that Directors (including former Directors) and Executive Officers (including former Executive Officers) can be released from
Companies Act Article 423, Paragraph 1 liability by a resolution adopted by the Board of Directors pursuant to Article 426, Paragraph 1 of theCompanies Act, up to the amount specified in applicable laws and regulations.
Limitation of Liability Agreement
The Company has entered into agreements to limit Companies Act Article 423, Paragraph 1 liability for damages (limitation of liability
agreements) with Director Shoji Ogawa and all of the Outside Directors. Liability under each such agreement is limited to either ¥20 million or theamount prescribed by laws and regulations, whichever is greater.
Directors and Officers Liability Insurance Contracts
The Company has entered into directors and officers liability insurance contracts set forth in Article 430-3, Paragraph 1 of the Companies Act withinsurance companies, which have persons such as directors, executive officers, senior managing directors, auditors, and senior employees of theCompany and its subsidiaries as insured persons. Under such insurance contracts, there will be an indemnification of losses, such as compensation fordamages and litigation costs, incurred by an insured person due to a claim for loss or damage caused by an act (including an omission) carried out on thebasis of the position, such as director or officer, held by the insured at the Company, and all insurance premiums of insureds have been entirely borne by
the Company. However, there are certain exclusions applicable to such insurance contracts such as losses caused by a deliberately fraudulent or
dishonest act of individuals such as directors/officers.
Preferred Stock
In order to secure as many financing options as possible and make it possible to promptly respond in the future to changes in the environment,
including changes in the economic and business environments, the Company’s Articles of Incorporation essentially provides that the Company can issue
preferred stock with no voting rights, in addition to common stock. The unit for preferred stock is 100 shares, which is the same as the unit for common
stock. The shareholders of preferred stock may not exercise voting rights with regard to any proposals at a general meeting of shareholders, as long as
such shareholders of the preferred stock receive preferred dividends that are paid in priority to the shareholders of the common stock. Further, currently
as of the date of this submission, the only stock that has actually been issued is common stock.
76

Establishment of Risk Management Framework
Business activities of Nomura Group are exposed to various risks such as market risk, credit risk, operational risk and other risks caused byexternal factors. Nomura Group has established a risk management framework to control, monitor and report those risks in a comprehensive manner inorder to maintain financial soundness and to sustain and enhance its enterprise value.
Global Risk Management Framework
Nomura defines risks as (i) the potential erosion of Nomura’s capital base due to unexpected losses arising from risks to which its business
operations are exposed, such as market risk, credit risk, operational risk and model risk, (ii) liquidity risk, the potential lack of access to funds or higher
cost of funding than normal levels due to a deterioration in Nomura’s creditworthiness or deterioration in market conditions, and (iii) strategic risk, thepotential failure of revenues to cover costs due to a deterioration in the earnings environment or a deterioration in the efficiency or effectiveness of its
business operations.
A fundamental principle established by Nomura is that all employees shall regard themselves as principals of risk management and appropriately
manage these risks. Nomura seeks to promote a culture of proactive risk management throughout all levels of the organization and to limit risks to theconfines of its risk appetite. The risk management framework that Nomura uses to manage these risks consists of its risk appetite, risk management
governance and oversight, the management of financial resources, the management of all risk classes, and processes to measure and control risks.
Furthermore, in response to the U.S. Prime Brokerage Event, we are in the process of reviewing our risk management framework for considering
improvements thereto. Each of these key components is explained in further detail in this Item.
As a part of the efforts to enhance the risk management governance, the Board Risk Committee (the “BRC”) was formally established on
October 29, 2021 to discuss important risks independently of the execution side within the high-level governance structure. The BRC assists the Boardof Directors (the “BoD”) in supervising such matters as (i) providing consent to Risk Appetite Statement, (ii) providing consent to the main design of therisk management framework, (iii) results of analysis and verification or future forecasts of risk environment, and (iv) supervision over execution state of
the overall risk management and medium- to long-term risk strategies for contributing to the sophistication of the Group’s risk management. Besides,
the Group Integrated Risk Management Committee (the “GIRMC”) was formally changed its name to the Group Risk Management Committee (the“GRMC”), further ensuring global representatives and efficiency in the operations, with an intention to increase the senior management’s involvement inrisk management, stimulate dialog and analysis further, and effectively coordinate with the BRC of supervisory side.
Nomura engages in the risk management through the Three Lines of Defense framework.
•

First Line of Defense: All executives and employees of the front office for Financial Risk and all executives and employees for
Non-Financial Risk are primarily responsible for risk management and assume the consequences associated with business execution and toprovide evidence and justify that the risk arising from their business activities is in line with risk appetite.

•

Second Line of Defense: The department responsible for risk management supports and monitors management activities on the First Line of
Defense and reports to boards and the senior management. In addition, the Second Line independently evaluates risk management
governance established by the First Line.

•

Third Line of Defense: The Internal Audit function examines and evaluates the risk management from an independent standpoint, provides
advice for improvement, and reports the examination and evaluation are reported to the Audit Committee.
77

Risk Appetite
Nomura has determined the types and levels of risk that it will assume in pursuit of its strategic objectives and business plan and has articulated
this in its Risk Appetite Statement. This document is jointly submitted by the Chief Risk Officer (the “CRO”), the Chief Financial Officer (the “CFO”)
and the Chief Compliance Officer (the “CCO”) to the Executive Management Board (the “EMB”) for approval. It will then be further reviewed at the
BRC through the authority to consent to the relevant proposal raised by the executive side. The Risk Appetite Statement provides an aggregated view ofrisk and includes capital adequacy, liquidity, financial risk and non-financial risk. It is subject to regular monitoring and breach escalation as appropriateby the owner of the relevant risk appetite statement.
Nomura’s Risk Appetite Statement is required to be reviewed at least annually by the EMB but it is reviewed on an ad hoc basis if necessary, andmust specifically be reviewed following any significant changes in Nomura’s strategy. Risk appetite underpins all additional aspects of Nomura’s risk
management framework.
Risk Management Governance and OversightCommittee GovernanceNomura has established a committee structure to facilitate effective business operations and management of Nomura’s risks. The formal
governance structure for risk management within Nomura is as follows:

Board of Directors
The BoD determines the policy for the execution of the business of Nomura and other matters prescribed in laws and regulations, supervises theexecution of Directors’ and Executive Officers’ duties and has the authority to adopt, alter or abolish the regulations of the EMB.
Board Risk Committee
The BRC provides specialized oversight to deepen the oversight functions of the BoD. To ensure a high degree of independence, the BRC ischaired by an outside director. The BRC contributes to more sophisticated Group risk management mainly in the areas outlined below:•

Amendment and abolition of the Risk Appetite Statement•

Change in risk management framework78

•

Results of analysis and verification or future forecasts of risk environment•

Execution state of the overall risk management and medium- to long-term risk strategies

Executive Management Board
The EMB deliberates on and determines management strategy, the allocation of management resources and important management matters of
Nomura, and seeks to increase shareholder value by promoting effective use of management resources and unified decision-making with regard to the
execution of business. The EMB delegates responsibility for deliberation of matters concerning risk management to the GRMC. Key responsibilities of
the EMB include the following:•

Resource Allocation—At the beginning of each financial year, the EMB determines the allocation of management resources and financial
resources such as risk-weighted asset and unsecured funding to business units and establishes usage limits for these resources;•

Business Plan—At the beginning of each financial year, the EMB approves the business plan and budget of Nomura. Introduction ofsignificant new businesses, changes to business plans, the budget and the allocation of management resources during the year are also
approved by the EMB; and•Reporting—The EMB reports the status of its deliberations to the BoD.

Group Risk Management Committee
Upon delegation from the EMB, the GRMC deliberates on or determines important matters concerning integrated risk management of Nomura toassure the sound and effective management of its businesses. The GRMC establishes a framework of integrated risk management consistent with
Nomura’s risk appetite. The GRMC supervises Nomura’s risk management by establishing and operating its risk management framework. The GRMC
reports the status of key risk management issues and any other matters deemed necessary by the committee chairman to the BoD and the EMB. In
addition, the GRMC, upon delegation from the EMB, has established the Risk Management Policy, describing Nomura’s overall risk management
framework including the fundamental risk management principles followed by Nomura.
Nomura Group Conduct Committee
Upon delegation from the EMB, the Nomura Group Conduct Committee deliberates on the matters necessary for compliance and conduct risk
management to assure the sound and effective management of its businesses.
Global Portfolio Committee (the “GPC”)
Upon delegation from the GRMC, the GPC deliberates on or determines matters in relation to the management of Financial Risks of theWholesale Division, in addition to global portfolio concentration risk.
Asset Liability Committee (the “ALCO”)
Upon delegation from the EMB and the GRMC, the ALCO deliberates on, based on Nomura’s risk appetite determined by the EMB, balance sheet
management, financial resource allocation, liquidity management and related matters. The ALCO reports to the GRMC the status of discussions at its
meetings and any other matters as deemed necessary by the committee chairman.
Global Transaction Committee (the “GTC”)
Upon delegation from the GPC, the GTC deliberates on or determines individual transactions in line with Nomura’s risk appetite determined by
the EMB and thereby seeks to assure the sound and effective management of Nomura’s businesses.
Transaction Profile Review Committee (the “TPC”)
Upon delegation from the GRMC, the TPC deliberates on and makes decisions on matters relating to transactions and/or clients/counterparties that
require consideration of the Nomura Group’s reputational risk in view of the Nomura Group’s Code of Conduct and Risk Appetite Statement, thereby
ensuring the sound and effective management of the businesses.
Other Committees
Model Risk Management Committees such as the Global Risk Analytics Committee and the Model Risk Analytics Committee deliberate on or
determine matters concerning the development, management and strategy of models upon delegation from the CRO. The primary responsibility of thesecommittees is to govern and provide oversight of model management, including the approval of new models and significant model changes. Bothcommittees report significant matters and material decisions taken to the CRO on a regular basis. The Global Collateral Steering Committee deliberates
on or determines Nomura’s collateral risk management, including concentrations, liquidity, collateral re-use, limits and stress tests, provides direction on
Nomura’s collateral strategy and ensures compliance with regulatory collateral requirements upon delegation from the CRO.
79

Chief Risk Officer
The CRO is responsible for setting the overall strategy and direction of the Risk Management Division. The CRO is responsible for supervising
the Risk Management Division and maintaining the effectiveness of the risk management framework independently from the business units within
Nomura. The CRO regularly reports on the status of Nomura’s risk management to the GRMC, and reports to and seeks the approval of the GRMC on
measures required for risk management.
Chief Financial Officer
The CFO is responsible for overall financial strategy of Nomura, and has operational authority and responsibility over Nomura’s liquidity
management based on decisions made by the EMB.
Chief Compliance Officer
The CCO is responsible for supervising the Legal, Compliance and Controls Division (the “LCC Division”) and maintaining the effectiveness ofthe non-financial risk management framework (operational risk and reputational risk).
Risk Management Division, Finance Division and LCC Division
The Risk Management Division, the Finance Division and the LCC Division comprise various departments or units established independently
from Nomura’s business units. These three divisions are responsible for establishing and operating risk management processes, establishing andenforcing risk management policies and regulations, verifying the effectiveness of risk management methods, gathering reports from Nomura Group
entities, reporting to Executive Officers/Senior Managing Directors and the GRMC and others, as well as reporting to regulatory bodies and handlingregulatory applications concerning risk management methods and other items as necessary. Important risk management issues are closely communicatedbetween these three divisions and the CRO, CFO and CCO. The CRO, CFO and CCO regularly attend the EMB and the GRMC meetings to reportspecific risk issues.
Risk Policy Framework
Policies and procedures are essential tools of governance and define principles, rules and standards, and the specific processes that must be
adhered to in order to effectively manage risk at Nomura. Risk management operations are designed to function in accordance with these policies andprocedures.
Monitoring, Reporting and Data Integrity
Development, consolidation, monitoring and reporting of risk management information (“MI”) are fundamental to the appropriate management of
risk. The aim of all risk MI is to provide a basis for sound decision-making, action and escalation as required. The Risk Management Division, theFinance Division and the LCC Division are responsible for producing regular risk MI, which reflects the position of Nomura relative to stated risk
appetite. Risk MI includes information from across the risk classes defined in the risk management framework and reflect the use of the various risk
tools used to identify and assess those risks. These three divisions are responsible for implementing appropriate controls over data integrity for risk MI.
Risk Management Enhancement Program
U.S. Prime Brokerage Event
In March 2021, following the default of one of our prime brokerage clients in the United States on its obligations to post additional margin in
respect of its positions with us, we issued a closeout notice to the client following which we began to wind down the positions held by us and liquidate
hedges held against those positions. Due to fluctuations in the market values of the hedges against the positions and our expectation that we will not beable to recover those losses from the client, we recognized significant losses during the fourth quarter and fiscal year ended March 31, 2021, andrecognized additional losses in the fiscal year ended March 31, 2022.
Our transactions with the client comprised (i) total return swaps (the “TRS transactions”), which are transactions that allow the client to obtain
synthetic (i.e., derivative) long or short exposure to underlying individual equities or indices, as well as (ii) providing financing against a portfolio ofsecurities in the client’s cash prime brokerage account. To manage credit risk in relation to prime brokerage clients, we require that prime brokerageclients deposit collateral (referred to as “margin”) in respect of their positions with us in accordance with the margin ratios applied to them. Thesemargin ratios are determined based on the results of an internal risk assessment of the specific client and the composition of the client’s positions andmay require that they post additional margin based on the effect of market movements on these ratios. TRS transactions are hedged from a market risk
perspective by holding long or short positions in individual equities or indices and through derivative transactions, depending on the positions taken by
the relevant client. For long equity positions taken by the client, we hold cash equity long positions in the underlying equities as well as derivativetransactions. For short equity positions taken by the client, we hold cash equity short positions and derivative transactions. Lending transactions against
cash prime brokerage portfolios are generally overcollateralized, and therefore not separately hedged, and we may enter into separate hedges if the valueof the collateral falls.
80Particularly between January and March 2021, transaction amounts and volumes with the client increased significantly as a result of changes inmarket prices as well as new positions entered into by the client. However, in March 2021, the market value of certain securities in which the client helda large synthetic position experienced a sharp decline, after which we requested that the client deposit additional margin with us pursuant to ourcontractual agreements with the client. The client defaulted on its obligation to post additional margin, and we issued a closeout notice to the client. It
became clear that the client had similar large positions with other financial institutions, and that the client had also defaulted on margin calls with thesefinancial institutions. Although we endeavored to take a disciplined approach to unwind the positions and liquidate the hedges for the TRS transactions,taking into account both market impact and our own trading losses, due to the significant volume of positions being closed by both us and the otheraffected financial institutions and the effect on market prices, we recognized ¥204.2 billion of losses in earnings reported within Net gain (loss) on
trading in the quarter and fiscal year ended March 31, 2021. We also recognized additional provisions for current expected credit losses of ¥41.6 billion
in earnings reported within other expenses during the same period against loans extended to the client collateralized by a cash portfolio of securities,
reflecting the reduced likelihood of recovery on these lending transactions. All of the positions with the client were closed out and hedges liquidated by
May 17, 2021, as a result of which we recognized losses of approximately ¥65.4 billion during the quarter ended June 30, 2021, of which ¥56.1 billion
booked in Equities revenues as trading loss and ¥9.3 billion booked as loan loss provision in expenses.
Immediately following the incident, we conducted an internal investigation of the underlying facts, and our Audit Committee hired an external law
firm to conduct a comprehensive review. In addition, we reviewed our risk management framework, centered on the prime brokerage business, andconducted a comprehensive review by third-party risk management experts on our risk management framework for the Wholesale division and our Risk
Management function. Based on those, we have determined various measures to enhance risk management and its governance structure to drive it
forward. We took measures to strengthen the functions of our risk management committees, including expanding the scope of our Wholesale division’srisk monitoring beyond our financing businesses to include other businesses in the Wholesale division. . In addition, we established the BRC, effective
October 29, 2021, which is chaired by an independent director and constituted of non-executive directors, to discuss important risk matters from astandpoint independent of execution. At the same time, the existing committee to discuss risk management on execution side is partially reformed, fromthe GIRMC to the GRMC, in order to effectively coordinate with the BRC of supervisory side. For detail of the BRC and the GRMC, see ‘Risk
Management Governance and Oversight’.
Moreover, to build out our platform to provide value-added products and services to our clients as a global financial services company, we haveappointed Mr. Christopher Willcox, who has extensive experience with the U.S. financial services business, as the CEO & President of our U.S.
subsidiaries Nomura Securities International, Inc. (our registered broker-dealer subsidiary in the U.S.) and Nomura Global Financial Products Inc. (ourregistered swap dealer subsidiary in the U.S.), as well as Co-CEO of Nomura Holding America, Inc. (the intermediate holding company for our U.S.
subsidiaries), effective May 3, 2021.
Programme Governance Structure
Given our strong commitment to timely remediation of weaknesses across the firm, we have already taken several important steps to launch
remediation actions and align resources to ensure successful implementation. Importantly, we have set up a robust governance process in 2021,
including the Steering Committee for Enhancement of Risk Management (the “Steering Committee”) which is chaired by Group CEO, and Deputy
President as vice chair. The Steering Committee deliberates on matters such as formulating and overseeing the execution of enhancement measures,
securing necessary resources, and developing a global cooperation structure to ensure enhancements are achieved. Further, a Chief Transformation
Officer (the “CTO”) and members of the Steering Committee will lead efforts to advance group-wide initiatives, and foster collaboration andconsistency across regions. To ensure supervision of the enhancement plan at the highest level, the Steering Committee updates the EMB on a regularbasis as well as reports progress of the plan directly to the BoD.
81

Under the leadership of the Steering Committee, detailed measures to enhance risk management have already been discussed and implementation
has begun. These measures have been categorized into four areas: business strategy, oversight, risk management, and risk culture. We have assigned an
executive officer or executive-level person to each area and have prioritized the resources necessary for implementation.
Business Strategy
By clarifying our Global Markets business strategy and conducting regular reviews of the business portfolio using various methods, we continue
our efforts to maintain consistency between the risk profile, and other areas such as the firm’s strategic direction, risk appetite and allocation of
resources. In particular, we are committing the required resources and investments to ensure a risk management framework for safe and sound executionof the business thorough review of our businesses and strategic planning processes. For example, we have reviewed and significantly revised thestrategy of the Prime Brokerage business to better align with its core capabilities, risk appetite and financial resources position.
Oversight
In order to build a more robust, global cross-border governance framework, we are reviewing the cross-border booking model and controls at local
entities from front office to back office. To strengthen critical first-line risk management functions and enhance oversight of complex business activities
carried out globally, we made critical hires including for newly created positions as part of efforts to strengthen business oversight, for example a Global
Head of Wholesale Front Office & Risk Control and a Global Head of Wholesale Client Account Management.
Risk Management
To strengthen the risk control function in the first line and risk management function in the second line, we are in a process of significantly
increasing the headcount in each line. We also plan to increase the number of employees in Internal Audit, which is the third line.
By the end of October 2021, we have already advanced expertise of our Risk Management function. To increase managers in the risk management
function, strengthen our global cooperation and controls, and further enhance risk management, we assigned a new executive officer in charge of risk
management at the Tokyo headquarters and implementing other initiatives. To supervise risk management enhancement initiatives and business
management, and strengthen our implementation capabilities, we also newly established the Group Risk Management Head Office. The Group Risk
Management Head Office monitors risk management operations globally, support the work of the CRO and bolster collaboration with relevant
departments.
We are also working to improve processes related to risk appetite, by adding quantitative indicators to our Risk Appetite Statement, and byreviewing our limit framework as well as Management Information suite.
Risk Culture
We established a firm-wide programme to strengthen risk management and foster a shared sense of responsibility toward managing risks. To
appropriately evaluate and embed the targeted actions, we have revised the Nomura Group Code of Conduct in March 2022, and will continue further
efforts such as expanding conduct-related workshops and annual training programs to all regions, and systematically reviewing and changing policies
and practices for providing incentives. To measure the progress of these initiatives, we plan to establish a framework to assess the effectiveness of the
program, including risk culture surveys and other metrics.
Management of Financial Resources
Nomura has established a framework for management of financial resources in order to adequately manage utilization of these resources. The
EMB allocates financial resources to business units at the beginning of each financial year. These allocations are used to set revenue forecasts for eachbusiness unit. Key components are set out below:
Risk-weighted assets
A key component used in the calculation of our consolidated capital adequacy ratios is risk-weighted assets. The EMB determines the risk appetite
for our consolidated Tier 1 capital ratio on an annual basis and sets the limits for the usage of risk-weighted assets by each division and by additional
lower levels of the division. In addition the EMB determines the risk appetite for the level of exposures under the leverage ratio framework which is a
non-risk based measure to supplement risk-weighted assets. See Item 2. “Operating and Financial Review—Consolidated Regulatory Capital
Requirements” of our annual report for the fiscal year ended March 31, 2022, and “Consolidated Regulatory Capital Requirements” and “Consolidated
Leverage Ratio Requirements” in this annual report for further information on our consolidated capital adequacy ratios and risk-weighted assets.
82

Available Funds
The CFO decides the maximum amount of available funds, provided without posting of any collateral, for allocation within Nomura and the EMB
approves the allocation of the funds to each business division. Global Treasury monitors the usage by businesses and reports to the EMB.
Classification and Definition of Risk
Nomura classifies and defines risks as follows and has established departments or units to manage each risk type.
Risk Category

Definition

Financial Risk
Market risk

Risk of loss arising from fluctuations in values of financial assets or debts (including off-balance sheet items) due
to fluctuations in market risk factors (interest rates, foreign exchange rates, prices of securities and others).

Credit risk

Risk of loss arising from an obligor’s default, insolvency or administrative proceeding which results in the
obligor’s failure to meet its contractual obligations in accordance with agreed terms. It is also the risk of loss
arising through a credit valuation adjustment (the “CVA”) associated with deterioration in the creditworthiness ofa counterparty.

Model risk

Risk of financial loss, incorrect decision making, or damage to the firm’s credibility arising from model errors orincorrect or inappropriate model application.

Liquidity risk

Risk of loss arising from difficulty in securing the necessary funding or from a significantly higher cost of funding
than normal levels due to deterioration of the Nomura Group’s creditworthiness or deterioration in market
conditions.

Non-financial Risk
Operational risk

Risk of financial loss or non-financial impact arising from inadequate or failed internal processes, people andsystems, or from external events. Operational risk includes in its definition Compliance, Legal, IT and Cyber
Security, Fraud, Third Party and other non-financial risks.

Reputational risk

Possible damage to Nomura’s reputation and associated risk to earnings, capital or liquidity arising from any
association, action or inaction which could be perceived by stakeholders to be inappropriate, unethical orinconsistent with Nomura Group’s values and corporate philosophy.

Other Risks
ESG: Environmental, Social andGovernance (*)

ESG is a collective term for Environmental (E), Social (S) and Governance (G) factors. “Environmental” includes
issues related to impacts on the natural environment, including climate change. “Social” includes interactions withstakeholders and communities, for example the approach to human rights, workplace related issues andengagement on social issues. Governance includes issues related to corporate governance, corporate behaviour
and the approach to transparent reporting.

Strategic risk

Risk to current or anticipated earning, capital, liquidity, enterprise value, or the Nomura Group’s reputation arisingfrom adverse business decisions, poor implementation of business decisions, or lack of responsiveness to change
in the industry or external environment.

Market Risk Management
Market risk is the risk of loss arising from fluctuations in values of financial assets and liabilities (including off-balance sheet items) due tofluctuations in market risk factors (interest rates, foreign exchange rates, prices of securities and others).
Market Risk Management Process
Effective management of market risk requires the ability to analyze a complex and evolving portfolio in a constantly changing global market
environment, identify problematic trends and ensure that appropriate action is taken in a timely manner.
Nomura uses a variety of statistical risk measurement tools to assess and monitor market risk on an ongoing basis, including, but not limited to,
Value at Risk (“VaR”), Stressed VaR (“SVaR”) and Incremental Risk Charge. In addition, Nomura uses sensitivity analysis and stress testing to measure
and analyze its market risk. Sensitivities are measures used to show the potential changes to a portfolio due to standard moves in market risk factors.
They are specific to each asset class and cannot usually be aggregated across risk factors. Stress testing enables the analysis of portfolio risks or tailrisks, including non-linear behaviors and can be aggregated across risk factors at any level of the group hierarchy, from group level to business division,
units or desk levels. Market risk is monitored against a set of approved limits, with daily reports and other management information provided to thebusiness units and senior management.
83Value at Risk
VaR is a measure of the potential loss due to adverse movements of market factors, such as equity prices, interest rates, credit, foreign exchange
rates, and commodities with associated volatilities and correlations.
VaR Methodology Assumptions
Nomura uses a single VaR model which has been implemented globally in order to determine the total trading VaR. A historical simulation is
implemented, where historical market moves over a two-year window are applied to current exposure in order to construct a profit and loss distribution.
Potential losses can be estimated at required confidence levels or probabilities. For internal risk management purposes, VaR is calculated across Nomura
using a 1-day time horizon; this data is presented below. A scenario weighting scheme is employed to ensure that the VaR model responds to changing
market volatility. For regulatory reporting purposes, Nomura uses a 10-day time horizon, calculated using actual 10-day historical market moves andemploy an equal weight scheme to ensure VaR is not overly sensitive to changing market volatility. To complement VaR under Basel 2.5 regulations,
Nomura also computes SVaR, which samples from a one-year window during a period of financial stress. The SVaR window is regularly calibrated andobservations are equally weighted.
Nomura’s VaR model uses exact time series for each individual risk factor. However, if good quality data is not available, a ‘proxy logic’ maps the
exposure to an appropriate time series. The level of proxying taking place is carefully monitored through internal risk management processes and there
is a continual effort to source new time series to use in the VaR calculation.
Nomura has decided to change the confidence level used to calculate its disclosed one-day VaR from 99% to 95% effective from the end of the
fiscal year ended March 31, 2022, as Nomura believes based on its historical experience that the 95th percentile measure better reflects the day-to-day
profit and loss volatility expected for the firm. In addition to data for the fiscal year ended March 31, 2022 calculated using the 95% confidence interval,
pursuant to the requirements of Form 20-F, Nomura is also providing data for the fiscal years ended March 31, 2021 and 2022 calculated using thepreviously-used 99% confidence interval.
VaR Backtesting
The performance of Nomura’s VaR model is closely monitored to help ensure that it remains fit for purpose. The main approach for validating
VaR is to compare actual 1-day trading losses with the corresponding VaR estimate. Nomura’s VaR model is backtested at different hierarchy levels.
Backtesting results are reviewed on a monthly basis by Nomura’s Risk Management Division. No one-day trading losses exceeded the 99% VaRestimate (the currently required regulatory backtesting level) at the Nomura Group level for the 250 business days ended March 31, 2022.
Limitations and Advantages of VaRVaR aggregates risks from different asset classes in a transparent and intuitive way. However, there are limitations. VaR is a backward-looking
measure: it implicitly assumes that distributions and correlations of recent factor moves are adequate to represent moves in the near future. VaR isappropriate for liquid markets and is not appropriate for risk factors that exhibit sudden jumps. Therefore it may understate the impact of severe events.
Given these limitations, Nomura uses VaR only as one component of a diverse market risk management process.
Stress Testing
Nomura conducts market risk stress testing since VaR and sensitivity analysis have limited ability to capture all portfolio risks or tail risks. Stresstesting for market risk is conducted regularly, using various scenarios based upon features of trading strategies. Nomura conducts stress testing not onlyat the desk level, but also at the Nomura Group level with a set of common global scenarios in order to reflect the impact of market fluctuations on theentire Nomura Group.
Non-Trading Risk
A major market risk in Nomura’s non-trading portfolio relates to equity investments held for operating purposes and on a long-term basis. Equity
investments held for operating purposes are minority stakes in the equity securities of unaffiliated Japanese financial institutions and corporations heldin order to promote existing and potential business relationships. This non-trading portfolio is exposed mainly to volatility in the Japanese stock market.
One method that can estimate the market risk in this portfolio is to analyze market sensitivity based on changes in the TOPIX, which is a leading index
of prices of stocks on the First Section of the Tokyo Stock Exchange.
84

Nomura uses regression analysis covering the previous 90 days which tracks and compares fluctuations in the TOPIX and the fair value of
Nomura’s equity investments held for operating purposes, which allows to determine a correlation factor. Based on this analysis for each 10% change in
the TOPIX, the fair value of Nomura’s operating equity investments held for operating purposes can be expected to change by 9,800 million at the endof March 2021 and 10,912 million at the end of March 2022. The TOPIX closed at 1,954.00 points at the end of March 2021 and at 1,946.40 points at
the end of March 2022. This simulation analyzes data for the entire portfolio of equity investments held for operating purposes at Nomura and therefore
actual results may differ from Nomura’s expectations because of price fluctuations of individual equities.
Credit Risk Management
Credit risk is the risk of loss arising from an obligor’s default, insolvency or administrative proceeding which results in the obligor’s failure tomeet its contractual obligations in accordance with agreed terms. This includes both on and off-balance sheet exposures. It is also the risk of loss arisingthrough CVA associated with deterioration in the creditworthiness of a counterparty. Nomura manages credit risk on a global basis and on an individual
Nomura legal entity basis.
Credit Risk Management Framework
The measurement, monitoring and management of credit risk at Nomura are governed by a set of global policies and procedures. Credit Risk
Management (“CRM”), a global function within the Risk Management Division, is responsible for the implementation and maintenance of these policies
and procedures. These policies are authorized by the GRMC and/or Global Risk Strategic Committee, prescribe the basic principles of credit risk
management and set delegated authority limits, which enables CRM personnel to set credit limits.
Credit risk is managed by CRM together with various global and regional risk committees. This helps to ensure transparency of material credit
risks and compliance with established credit limits, the approval of material extensions of credit and the escalation of risk concentrations to appropriatesenior management.
Credit Risk Management Process
CRM operates as a credit risk control function within the Risk Management Division, reporting to the CRO. The process for managing credit risk
at Nomura includes:•

Evaluation of likelihood that a counterparty defaults on its payments and obligations;•

Assignment of internal ratings to all active counterparties;•

Approval of extensions of credit and establishment of credit limits;•

Measurement, monitoring and management of Nomura’s current and potential future credit exposures;•

Setting credit terms in legal documentation; and•Use of appropriate credit risk mitigants including netting, collateral and hedging.

The scope of credit risk management includes counterparty trading and various debt or equity instruments including loans, private equity
investments, fund investments, investment securities and any other as deemed necessary from a credit risk management perspective.
The evaluation of counterparties’ creditworthiness involves a thorough due diligence and analysis of the business environments in which they
operate, their competitive positions, management and financial strength and flexibility. Credit analysts also take into account the corporate structure andany explicit or implicit credit support. CRM evaluates credit risk not only by counterparty, but also by counterparty group.
Following the credit analysis, CRM estimates the probability of default of a given counterparty or obligor through an alphanumeric ratings scale
similar to that used by rating agencies and a corresponding numeric scale. Credit analysts are responsible for assigning and maintaining the internalratings, ensuring that each rating is reviewed and approved at least annually.
Nomura’s internal rating system employs a range of ratings models to achieve global consistency and accuracy. These models are developed andmaintained by the Risk Methodology Group. Internal ratings represent a critical component of Nomura’s approach to managing counterparty credit risk.
They are frequently used as key factors in:•Establishing the amount of counterparty credit risk that Nomura is willing to take to an individual counterparty or counterparty group(setting of credit limits);
85

•

Determining the level of delegated authority for setting credit limits (including tenor);•

The frequency of credit reviews (renewal of credit limits);•

Reporting counterparty credit risk to senior management within Nomura; and•Reporting counterparty credit risk to stakeholders outside of Nomura.

The Credit Risk Control Unit is a function within the Risk Model Validation Group (“RMVG”) which is independent of CRM. It seeks to ensurethat Nomura’s internal rating system is properly reviewed and validated, and that breaks or issues are reported to senior management for timely
resolution. The unit is responsible for ensuring that the system remains accurate and predictive of risk and provides periodic reporting on the system tosenior management.
For regulatory capital calculation purposes, Nomura has been applying the Foundation Internal Rating Based Approach in calculating credit riskweighted assets since the end of March 2011. The Standardized Approach is applied to certain business units or asset types, which are considered
immaterial to the calculation of credit risk-weighted assets.
Internal ratings are mapped to the probabilities of default (“PD”) which in turn are used for calculating credit risk-weighted assets. PDs are
estimated annually by the Risk Methodology Group and validated by the Credit Risk Control Unit through testing of conservativeness and backtestingof PDs used in calculations.
86Credit Limits and Risk Measures
Internal ratings form an integral part in the assignment of credit limits to counterparties. Nomura’s credit limit framework is designed to ensurethat Nomura takes appropriate credit risk in a manner that is consistent with its overall risk appetite. Global Credit policies define the delegated authority
matrices that establish the maximum aggregated limit amounts and tenors that may be set for any single counterparty group based on their internalrating.
Nomura’s main type of counterparty credit risk exposures arise from derivatives transactions or securities financing transactions. Credit exposuresagainst counterparties are managed by means of setting credit limits based upon credit analysis of individual counterparty. Credit risk is managed daily
through the monitoring of credit exposure against approved credit limits and the ongoing monitoring of the creditworthiness of Nomura’s counterparties.
Changes in circumstances that alter Nomura’s risk appetite for any particular counterparty, sector, industry or country are reflected in changes to theinternal rating and credit limit as appropriate.
Nomura’s global credit risk management systems record credit limits and capture credit exposures to Nomura’s counterparties allowing CRM tomeasure, monitor and manage utilization of credit limits, ensure appropriate reporting and escalation of limit breaches.
For derivatives and securities financing transactions, Nomura measures credit risk primarily by way of a Monte Carlo-based simulation model that
determines a Potential Exposure profile at a specified confidence level. The exposure calculation model used for counterparty credit risk management
has also been used for the Internal Model Method based exposure calculation for regulatory capital reporting purposes since the end of December 2012.
Loans and lending commitments are measured and monitored on both a funded and unfunded basis.
Wrong Way Risk
Wrong Way Risk (“WWR”) occurs when exposure to a counterparty is highly correlated with the deterioration of creditworthiness of thatcounterparty. Nomura has established global policies that govern the management of WWR exposures. Stress testing is used to support the assessment of
WWR embedded within existing portfolios and adjustments are made to credit exposures and regulatory capital, as appropriate.
Stress Testing
Stress Testing is an integral part of Nomura’s management of credit risk. Regular stress tests are used to support the assessment of credit risks bycounterparties, sectors and regions. The stress tests include potential concentrations that are highlighted as a result of applying shocks to risk factors,
probabilities of default or rating migrations.
Risk Mitigation
Nomura utilizes financial instruments, agreements and practices to assist in the management of credit risk. Nomura enters into legal agreements,
such as the International Swap and Derivatives Association, Inc. agreements or equivalent (referred to as “Master Netting Agreements”), with many of
its counterparties. Master Netting Agreements allow netting of receivables and payables and reduce losses potentially incurred as a result of acounterparty default. Further reduction in credit risk is achieved through entering into collateral agreements that allow Nomura to obtain collateral fromcounterparties either upfront or contingent on exposure levels, changes in credit rating or other factors.
87Credit Risk to Counterparties in Derivatives Transaction
The credit exposures arising from Nomura’s trading-related derivatives as of March 31, 2022 are summarized in the table below, showing thepositive fair value of derivative assets by counterparty credit rating and by remaining contractual maturity. The credit ratings are internally determinedby Nomura’s CRM.
Billions of yen
Less than
1 yearCredit Rating

AAA
AA
A
BBB
BB and lower
Other(2)Sub-total
Listed
Total

¥

¥
¥

50 ¥
571
843
285
166
33
1,948 ¥
352
2,300 ¥

1 to 3years

Years to Maturity
3 to 5
years

25 ¥
325
846
239
79
51
1,565 ¥
46
1,611 ¥

5 ¥
252
324
121
62
90
854 ¥
1
855 ¥

5 to 7years

More than
7 years

4 ¥
74
194
67
20
50
409 ¥
0
409 ¥

39 ¥
578
868
518
46
363
2,412 ¥
02,412 ¥

CrossMaturity
Netting(1)(107) ¥
(1,454)(2,658)
(838)
(170)
(648)
(5,875) ¥(158)(6,033) ¥Total
Fair Value
(a)

16 ¥
346
417
392
203
(61)
1,313 ¥
241
1,554 ¥

Collateralobtained(b)

Replacementcost(3)(a)-(b)

2 ¥
75
239
91
295
46
748 ¥
234
982 ¥

14
271
178
301
0
0
764
7
771

(1)

Represents netting of derivative liabilities against derivatives assets entered into with the same counterparty across different maturity bands.
Derivative assets and derivative liabilities with the same counterparty in the same maturity band are net within the relevant maturity band. Cashcollateral netting against net derivative assets in accordance with ASC 210-20 “Balance Sheet—Offsetting” and ASC 815 “Derivatives andHedging” is also included.

(2)“Other” comprises unrated counterparties and certain portfolio level valuation adjustments not allocated to specific counterparties.

(3)

Zero balances represent instances where total collateral received is in excess of the total fair value; therefore, Nomura’s credit exposure is zero.

Country Risk
At Nomura, country risk is defined as the risk of loss arising from country-specific events (such as political, economic, legal and other events) that
affect counterparties and/or issuers within that country, causing those counterparties and/or issuers to be unable to meet financial obligations. Nomura’s
country risk framework acts as a complement to other risk management areas and encompasses a number of tools including, but not limited to, country
limits, which restrict credit exposure concentration to any given country. Other tools to manage country risk include country ratings as well as country
risk policies and procedures that describe responsibilities and delegation for decision-making.
Nomura’s credit portfolio remains well-diversified by country and concentrated towards highly-rated countries. The breakdown of top 10 country
exposures is as follows:
Billions of Yen(As of March 31, 2022)

Top 10 Country Exposures(1)United States
Japan
United Kingdom
Germany
Singapore
India
China
FranceSouth Korea
Switxerland
(1)

3,384
2,971
1,130
589
231
186
171
170
164
136

The table represents the Top 10 country exposures as of March 31, 2022 based on country of risk, combining counterparty and inventory
exposures88

- Counterparty exposures include cash and cash equivalents held at banks; the outstanding default fund and initial margin balances posted by
Nomura to central clearing counterparties as legally required under its direct and affiliate clearing memberships; the aggregate marked-to-market
exposure by counterparty of derivative transactions and securities financing transactions (net of collateral where the collateral is held under alegally enforceable margin agreement); and the fair value of total commitment amount less any applicable reserves- Inventory exposures are the market value of debt and equity securities, and equity and credit derivatives, using the net of long versus shortpositions.
Russia and Ukraine war
Since the war in Ukraine began in February 2022, Nomura has been actively monitoring the impact of the conflict on the Ukraine and Russian
economies, as well as on other financial markets. As of March 31, 2022, the total direct exposure of Nomura to Ukraine and Russia was not significant.
Operational Risk Management
Operational risk is the risk of financial loss or non-financial impact arising from inadequate or failed internal processes, people and systems, orfrom external events. Operational risk includes in its definition Compliance, Legal, IT and Cyber Security, Fraud, Third Party and other non-financial
risks. Operational risk does not include strategic risk and reputational risk, however, some operational risks can lead to reputational issues and as suchoperational and reputational risks may be closely linked.
Operational Risk Management Framework
An Operational Risk Management Framework has been established in order to allow Nomura to identify, assess, manage, monitor and report on
operational risk. The GRMC, with delegated authority from the EMB has formal oversight over the management of operational risk.
This framework is set out below:
Infrastructure of the framework•

Policy framework: Sets standards for managing operational risk and details how to monitor adherence to these standards.

•

Training and awareness: Action taken by ORM to improve business understanding of operational risk.

Products and Services•

Event Reporting: This process is used to identify and report any event which resulted in or had the potential to result in a loss or gain orother impact associated with inadequate or failed internal processes, people and systems, or from external events.

•

Risk and Control Self-Assessment (the “RCSA”): This process is used to identify the inherent risks the business faces, the key controls
associated with those risks and relevant actions to mitigate the residual risks. Global ORM are responsible for developing the RCSA
process and supporting the business in its implementation.

•

Key Risk Indicators (the “KRI”): KRIs are metrics used to monitor the business’ exposure to operational risk and trigger appropriate
responses as thresholds are breached.

•

Scenario Analysis: The process used to assess and quantify potential high impact, low likelihood operational risk events. During theprocess actions may be identified to enhance the control environment which are then tracked via the Operational Risk Management
Framework.

Outputs•

Analysis and reporting: A key aspect of ORM’s role is to analyze, report, and challenge operational risk information provided by business
units, and work with business units to develop action plans to mitigate risks.

•

Operational risk capital calculation: Calculate operational risk capital as required under applicable Basel standards and local regulatory
requirements.
89Regulatory Capital Calculation for Operational Risk
Nomura uses the Standardized Approach for calculating regulatory capital for operational risk. This involves using a three-year average of grossincome allocated to business lines, which is multiplied by a fixed percentage (the “Beta Factor”) determined by the FSA, to establish the amount of
required operational risk capital.
Nomura uses consolidated net revenue as gross income, however for certain consolidated subsidiaries, gross operating profit is used as grossincome. Gross income allocation is performed by mapping the net revenue of each business segment as defined in Nomura’s management accounting
data to each business line defined in the Standardized Approach as follows:Business Line

Retail Banking
Commercial Banking
Payment and Settlement
Retail Brokerage
Trading and Sales
Corporate FinanceAgency Services
Asset Management

Description

Retail deposit and loan-related services
Deposit and loan-related services except for Retail Banking business
Payment and settlement services for clients’ transactions
Securities-related services mainly for individuals
Market-related business
M&A, underwriting, secondary and private offerings, and other funding services for clients
Agency services for clients such as custody
Fund management services for clients

Beta Factor

12%
15%
18%
12%
18%
18%
15%
12%

Nomura calculates the required amount of operational risk capital for each business line by multiplying the allocated annual gross income amountby the appropriate Beta Factor defined above. The operational risk capital for any gross income amount not allocated to a specific business line isdetermined by multiplying such unallocated gross income amount by a fixed percentage of 18%.
The total operational risk capital for Nomura is calculated by aggregating the total amount of operational risk capital required for each businessline and unallocated amount and by determining a three-year average. Where the aggregated amount for a given year is negative, then the total
operational risk capital amount for that year will be calculated as zero.
In any given year, negative amounts in any business line are offset against positive amounts in other business lines. However, negative unallocatedamounts are not offset against positive amounts in other business lines and are calculated as zero.
Operational risk capital is calculated at the end of September and March each year.
Model Risk Management
Model Risk is the risk of financial loss, incorrect decision making, or damage to the firm’s credibility arising from Model errors or incorrect orinappropriate Model application.
To effectively manage the Firm’s Model Risk, Nomura has established a Model Risk Management Framework to govern the development,
ownership, validation, approval, usage, ongoing monitoring, and periodic review of the Firm’s Models. The framework is supported by a set of policies
and procedures that articulate process requirements for the various elements of the model lifecycle, including monitoring of model risk with respect to
the Firm’s appetite.
New models and material changes to approved models must be independently validated prior to official use. Thresholds to assess the materialityof model changes are defined in Model Risk Management’s procedures. During independent validation, validation teams analyze a number of factors toassess a model’s suitability, identify model limitations, and quantify the associated model risk, which is ultimately mitigated through the imposition of
approval conditions, such as usage conditions, model reserves and capital adjustments. Approved models are subject to Model Risk Management’s
periodic review process and ongoing performance monitoring to assess their continued suitability. Appropriately delegated Model Risk Management
Committees provide oversight, challenge, governance, and ultimate approval of validated Models.
90

Risk Measures and Controls
Limit Frameworks
The establishment of robust limit monitoring and management is central to appropriate monitoring and management of risk. The limit
management frameworks incorporate escalation policies to facilitate approval of limits at appropriate levels of seniority. The Risk Management
Division, the Finance Division and the LCC Division are responsible for day-to-day operation of these limit frameworks including approval, monitoring,and reporting as required. Business units are responsible for complying with the agreed limits. Limits apply across a range of quantitative measures ofrisk and across market and credit risks.
New Business Risk Management
The new business approval process represents the starting point for new business in Nomura and exists to support management decision-making
and ensure that risks associated with new products and transactions are identified and managed appropriately. The new business approval process
consists of two components:(1)

Transaction committees are in place to provide formal governance over the review and decision-making process for individualtransactions.

(2)

The new product approval process allows business unit sponsors to submit applications for new products and obtain approval fromrelevant departments prior to execution of the new products. The process is designed to capture and assess risks across various risk classes
as a result of the new product or business.

The new business approval process continues to seek assuring the sound and effective management to better meet the various changes observed in
the market environment.
Stress Testing
Stress testing performed at the Nomura Group seeks to provide comprehensive coverage of risks across different hierarchical levels, and covers
different time horizons, severities, plausibilities and stress testing methodologies. The results of stress tests are used in capital planning processes,
capital adequacy assessments, liquidity adequacy assessments, recovery and resolution planning, assessments of whether risk appetite is appropriate, andin routine risk management.
Stress tests are run on a regular basis or on an ad hoc basis as needed, for example, in response to material changes in the external environment
and/or in the Nomura Group risk profile. The results of stress tests with supporting detailed analysis are reported to senior management and otherstakeholders as appropriate for the stress test being performed.
Stress testing is categorized either as sensitivity analysis or scenario analysis and may be performed on a Nomura Group-wide basis or at moregranular levels.
•

Sensitivity analysis is used to quantify the impact of a market move in one or two associated risk factors (for example, equity prices,
equity volatilities) in order primarily to capture those risks which may not be readily identified by other risk models;•

Scenario analysis is used to quantify the impact of a specified event across multiple asset classes and risk classes. This is a primary
approach used in performing stress testing at the different hierarchical levels of the Nomura Group;

Scenario analysis includes following examples.
•

Nomura Group establishes several stress scenarios to validate risk appetite for capital and liquidity soundness, taking into account thebusiness environment, business’s risk profile, economic environment and forecasts.

•

Group-wide stress to assess the capital adequacy of the Nomura Group under severe but plausible market scenarios is conducted on aquarterly basis at a minimum; and•Reverse stress testing, a process of considering the vulnerabilities of the firm and hence how it may react to situations where it becomesdifficult to continue its business, and reviewing the results of that analysis, is conducted on an annual basis at a minimum.

Stress testing is an integral part of the Nomura Group’s overall governance and is used as a tool for forward-looking risk management, decisionmaking and enhancing communication amongst Corporate Functions, Business Divisions, and senior management.
91

(3) Status of audit
1.

Status of Audits by the Audit Committee

Organization, personnel, and procedures of audits by the Audit Committee
As of March 31, 2022, the Audit Committee is composed of two outside directors and one full-time director who does not concurrently serve as an
executive officer and does not execute business operations. All members of the Audit Committee must be independent pursuant to the Sarbanes-Oxley
Act of the United States, as well as related Securities and Exchange Commission rules and New York Stock Exchange rules, and in principle one ormore members of the Audit Committee must be financial experts.
Noriaki Shimazaki, chairperson of the Audit Committee (and outside director), has a wealth of experience in corporate management and is a
Financial Expert pursuant to the US Sarbanes-Oxley Act, and Audit Committee member (and outside director) Mari Sono has many years of experience
as a Certified Public Accountant. They both have a considerable degree of knowledge regarding finance and accounting. Hisato Miyashita, who served
as the full-time Audit Committee member through June 21, 2021, had a wealth of experience and knowledge in the field of compliance, having worked
for many years in the legal and compliance affairs of securities companies including the Company, serving as Nomura Group’s Chief Compliance
Officer. Also, Shoji Ogawa, who was appointed as the full-time Audit Committee member on June 21, 2021, was in charge of Group Internal Audit, andin this and other ways has amassed extensive experience and knowledge in the fields of Nomura Group’s governance, internal control and internal
audits. Also, Victor Chu, who has a wealth of experience in corporate management and the financial industry and a high level of expertise regarding
laws, regulations, and corporate governance, was appointed as an Audit Committee member on June 20, 2022, and from that time the Audit Committee
is composed of three outside directors and one full-time director who does not concurrently serve as an executive officer and does not execute business
operations.
In order to increase the effectiveness of audits by the Audit Committee, a full-time director who does not concurrently serve as an executive
officer may be appointed as necessary as a full-time Audit Committee member or an “Audit Mission Director.” Furthermore, the Company has
established the “Office of Non-Executive Directors and Audit Committee” as a department dedicated to supporting the duties of the Audit Committee
and directors. To ensure the independence of the Office of Non-Executive Directors and Audit Committee from business execution, its employees areevaluated by either the Audit Committee or an Audit Committee member designated by the Audit Committee. Furthermore, the consent of either the
Audit Committee or an Audit Committee member designated by the Audit Committee is required for the hiring, transfer, or discipline of such
employees.
The Audit Committee establishes audit policies and the division of duties among its members, etc., and in accordance with those policies andduties, monitors and verifies the establishment and operation of the Nomura Group’s internal control system and carries out audits concerning thelegality, validity, and efficiency of the execution of duties by directors and executive officers. The chairperson of the Audit Committee also serves as thechairperson of the Audit and Supervisory Committee of Nomura Securities, the Company’s main subsidiary. The Audit Committee engages in audit
activities in cooperation with the Audit and Supervisory Committee, including two outside Audit and Supervisory Committee members, and three Audit
Mission Directors of Nomura Securities. The Audit Committee conducts audits in an effective and efficient manner also in cooperation with the internal
control divisions and with the audit committee members, audit and supervisory committee members, and corporate auditors of domestic and foreignsubsidiaries other than Nomura Securities, as well as with the Internal Audit Division and the accounting auditor. The Audit Committee conducts selfevaluations each year to clarify issues, thereby enhancing audit activities.
The Audit Committee also monitors and verifies the performance of the accounting auditor’s duties and conducts annual evaluations to confirm
matters including the status of the accounting auditor’s compliance with laws, regulations, and other rules, the quality control structure including its
independence and inspection structure, and the effectiveness of audits based on the “Assessment Criteria for the Accounting Auditor” established by the
Audit Committee. The full-time Audit Committee member also interviews the person responsible for quality control of the accounting auditor. As aresult, because the accounting auditor is maintaining the structures and audit quality required for the audits of the Group, and because facts falling underthe “Policy on Dismissal or Non-reappointment of the Independent Auditor” established by the Audit Committee were not found, the Audit Committee
decided to reappoint the accounting auditor for the fiscal year ending March 2023.
Activities of the Audit Committee
From a Group-wide, global, and risk-based perspective, the Audit Committee implemented audits with the following as key audit items: 1)
establishing a sound corporate culture, 2) enhancement of the Group governance framework and effectiveness, 3) initiatives to achieve medium-to-longterm management strategies, and 4) establishing a robust internal control system and enhancing business management. Especially regarding the eventthat occurred in March 2021 in which a significant loss arose from transactions with a U.S. client, the Audit Committee implemented an investigation
employing an external law firm, and based on the findings of the investigation, reported its opinions and proposals to the Board of Directors regarding
the necessity of further reinforcing the risk management structure. In addition, it confirmed that the Company implemented comprehensive verifications
on the risk management framework and that the entire Group is working together to enhance risk management while incorporating the opinions ofoutside experts.
92Key Audit Items

1) Establishing a sound corporate culture

Main Focal Points of Audits(1) Spreading of high professional ethics, compliance, and awareness of the Nomura Group
Code of Conduct on a Group-wide basis(2) Establishment of risk culture(3) Strengthening of management by the first line of defense and achievement of customeroriented business operations

2) Enhancement of the Group governance frameworkand effectiveness(1) Appropriate construction and administration of a governance framework for the entire
Group and in each region(2) Appropriate management of contractors(3) Decision-making and post-investment monitoring in strategic investments(4) Response to requests for enhanced disclosure, and appropriate disclosure of non-financial
information

3) Initiatives to achieve medium-to-long term
management strategies(1) Implementation of measures in line with the management policy of expanding the scopeof business from public to private services(2) Verification of the risk-return of each business and the synergy effect among businesses,
and swift response to issues(3) Response to corporate transformation and digital transformation(4) Reinforcement and promotion of sustainability initiatives through main business(5) Employment, training and career development, and appropriate assessment to secure
personnel with a view toward the next generation

4) Establishing a robust internal control system andenhancing business management(1) Establishment and reinforcement of a company-wide conduct risk management structure(2) Establishment of the Nomura Group’s risk management structure and risk governance,and evolution of its risk management framework(3) Compliance with financial regulations such as those relating to capital, liability andliquidity management(4) Isolation from organized crime groups, prevention of money laundering, and preventionof misconduct(5) Upgrading of the level of defense against cyber attacks

During the fiscal year under review, the spread of COVID-19 made the implementation of face-to-face meetings and interviews and of domestic
and overseas on-site audit visits difficult as in the previous fiscal year, but by utilizing written questions and answers and making use of telephone
conferences and online meetings, there were no problems with the efficacy of the audits, and the activities were conducted in accordance with the audit
plan.
The Audit Committee met 24 times during the fiscal year under review including joint meetings with the Audit and Supervisory Committee of
Nomura Securities, and two of the meetings held by the Audit Committee alone were global meetings attended by the chairpersons of the audit
committees of holding subsidiaries overseeing overseas regions. Each of the Audit Committee members attended all meetings.
93

Held by the
Audit
Committee
alone

Held jointlywith theAudit andSupervisory
Committee of
NomuraSecurities

No. ofMeetings

Main contents

Solo or Joint•

Deliberations concerning audit activities, etc.

•

Reports from executive officers and senior managing directors, etc.

•

Discussions with the chairpersons of each regional audit committee•

Audit activity reports from the full-time Audit Committee member, etc.

•

Deliberations regarding matters for resolution, including approval of the audit basic plan, as
well as of the implementation plan pertaining to internal audits and the related budget,
dismissal or reappointment of the accounting auditor, agreement regarding compensation of
the accounting auditor, reporting of the status of the execution of duties to the Board of
Directors, and the preparation of the audit report•

Reports from executive officers, senior managing directors, etc.

•

Report from the accounting auditor

Average Time

10 Approx. 1 hour and 15
minutes• Audit activities report from the full time Audit Committee member, etc.
Total

14 Approx. 3 hours and
30 minutes

24 Approx. 2 hours and
30 minutes

The Audit Committee held a total of 50 interviews with representative executive officers, other executive officers, senior managing directors, key
employees in internal control-related departments, and the accounting auditor. The Audit Committee also received reports on audit activities from thefull-time Audit Committee member and Nomura Securities’ three Audit Mission Directors. In addition, the Audit Committee members attended
important meetings, held interviews with executive officers, senior managing directors, and the accounting auditor, and examined the execution of duties
by directors and executive officers, as well as the development and operation of the internal control system.
The Audit Committee offers comments and proposals in the form of Observations of the Audit Committee regarding matters deemed to be
especially important in regular reports on execution of duties submitted to the Board of Directors, and exchanges views with directors who are notmembers of the Audit Committee. The Audit Committee also works at mutual communication with the management team, and monitors and verifies
their response to the Observations of the Audit Committee.
Additionally, the Audit Committee works closely with the accounting auditor and the Internal Audit Division to share information and exchange
views on auditing issues and other matters. The accounting auditor is provided with opportunities to hear the views of executive officers, senior
managing directors, and others so that they can deepen their understanding of the status of the Company’s business and the problem awareness of Audit
Committee members, and attends the main interviews at the Audit Committee. The chairperson of the Audit Committee and the full-time member of the
Audit Committee also hold monthly tri-party meetings with the accounting auditor and the senior managing director in charge of Group Internal Audit,
where opinions are also exchanged with the members of overseas member firms affiliated with the accounting auditor. Similar to the previous fiscal
year, in the year-end audit of the fiscal year under review, with the understanding that the impact of remote work and other measures implemented in
response to the COVID-19 pandemic affects the audit work and requires even closer coordination among the parties involved than in the past, the fulltime Audit Committee member held weekly meetings with the accounting auditor and the senior managing director in charge of Group Internal Audit,
received reports from the accounting auditor on key audit matters and the progress of the audit and from the senior managing director in charge of GroupInternal Audit on the status of the assessment of internal control, and held discussions.
The main reports that the Audit Committee requested during the fiscal year under review were as follows.
Audit Activities

Reports from executive officers, senior
managing directors, etc.

Main Contents•

Status of execution of duties by the Group CEO, head of China Committee, head of Retail, head ofWholesale, head of Investment Management, head of Future Innovation Company, chief of staff and
CCO, CFO, CRO, CSO, etc.

•

Reports concerning certifications from the Group CEO and CFO attached to annual reports (Form20-F), confirmation documents for annual securities reports, and internal controls reports•

Quarterly financial results overview from the CFO•

Internal Audit reports (including internal audit implementation plans and budget requests)

Reports from the accounting auditor•

Financial audit plan and quarterly review plans (Japan standards and US standards)•

Quarterly review results•

Results of financial audits required by the Companies Act•

CAM/KAM (critical/key audit matters)•

Status and results of the integrated audit concerning internal controls pertaining to consolidated
financial statements and financial reporting•

Results of the Japanese Institute of Certified Public Accountants quality control review, the Certified
Public Accountants and Auditing Oversight Board inspection, etc.

•

Status of progress toward audits utilizing advanced digital technologies
94In addition, the status of attendance at or observance of important meetings and of cooperation with the accounting auditor by each member of the
Audit Committee during the fiscal year under review was as follows.
Main Contents

Audit Activities

Attendance at or observance of important
meetings•••

Cooperation with the accounting auditor•(1)

Board of Directors meetings
Board Risk Committee meetings
Internal Controls Committee
meetings
Monthly meetings with theaccounting auditor and the senior
managing director in charge ofGroup Internal Audit (regulartri-party audit meetings)

Audit Committee
Chairperson (outside)

Audit Committee
Member (outside)

Audit Committee
Member (full-time)(1)

12/12 times
4/4 times
5/5 times

12/12 times——

12/12 times
4/4 times
5/5 times

12/12 times—

12/12 times

Hisato Miyashita or Shoji Ogawa

The full-time Audit Committee member and Nomura Securities’ three Audit Mission Directors share duties with other Audit Committee members.
They audit the status of business execution and related matters through such means as attending or observing important meetings including meetings ofthe Executive Management Board, the Group Risk Management Committee, and the Steering Committee for Enhancement of Risk Management inaddition to the above, and interviewing executive officers, senior managing directors, key personnel of departments related to internal control, andothers, as well as staff at the retail branch offices, headquarters departments, and overseas offices. They report their findings to the Audit Committee.
Furthermore, the full-time Audit Committee member, Nomura Securities’ three Audit Mission Directors, and members of the Office of
Non-Executive Directors and Audit Committee strive to enhance the audit activities of the Nomura Group by means including serving in such positions
as directors or corporate auditors of major subsidiaries and monitoring the status of business execution and related matters at such companies.
During the fiscal year under review, the full-time Audit Committee member, Nomura Securities’ Audit Mission Directors, and members of the
Office of Non-Executive Directors and Audit Committee serving as the corporate auditors of domestic subsidiaries conducted a total of 270 interviews,
etc. with executive officers, senior managing directors, and key domestic and overseas staff under their authority, as well as others including theaccounting auditor. They also interviewed staff at a total of 46 retail branch offices and headquarters departments, as well as four overseas offices.
2.

Status of internal audit

Organization, personnel and procedures for internal audits
In order to ensure effective and adequate internal controls, in addition to the establishment of the Group Internal Audit Department which is
independent from the business execution functions, specialized internal audit departments have been similarly established at major affiliatedsubsidiaries, and internal audits are being conducted within the Nomura Group with approximately 200 staffs. In order to utilize audit resources
effectively and efficiently, the Nomura Group’s Internal Audit Division endeavors to develop and implement the internal audit plans by carrying out risk
assessments of each business and operation that is subject to an internal audit and determine the allocation of audit resources depending on the type
and/or degree of inherent risks. The implementation status of the internal audit is reported to the Audit Committee95

Cooperation in conducting internal audits, audits by the Audit Committee and accounting audits, and their relationship with the Internal Controls
Division
The Audit Committee is coordinating with the Internal Audit Division by receiving reports from the Senior Managing Director in charge ofinternal audits or Audit Committee members, regarding matters such as the maintenance, operational status and implementation status of the internal
audit structure, and concerning any matters worthy of special mention, such matters are included in the periodic reports from the Audit Committee to theBoard of Directors. Through such reports, the Outside Directors recognize challenges, etc., based on the internal audits and provide advice, etc., asnecessary, to executives.
In addition, the Audit Committee members may make recommendations to Executive Officers concerning, in relation to internal audits, changes tothe implementation plan, implementation of additional audits or the formulation of improvement measures.
Further, the Audit Committee, as internal audits should promote the organization’s value improvement and integrity through the improvement ofbusiness operations, to be able to make determinations concerning the appropriateness of an audit’s scope and the sufficiency of audit personnel, may
request the Head of the Internal Audit Division to provide suitable reports. The implementation plans and formulation of the budget in relation tointernal audit shall be subject to the approval of the Audit Committee or an Audit Committee Member selected by the Audit Committee. The
appointment and dismissal of the head of the internal audit division shall require the consent of the Audit Committee or a member of the Audit
Committee.
Concerning the accounting auditor, the Audit Committee has the authority to approve the accounting auditor’s annual audit plan, hear reports andexplanations regarding the accounting audit from the accounting auditor at least once each quarter, exchange information from time to time with theaccounting auditor, audit the method and result of the accounting auditor’s audits in view of the appropriateness thereof and examine the relevant
financial statements, etc. In addition, audit fees to be paid to the accounting auditor are approved by the Audit Committee upon an explanation from the
CFO. Furthermore, regarding services rendered by the accounting auditor and its affiliates’ to the Company and its subsidiaries and the fees to be paid,
the Company has a procedure for deliberation and prior approval by the Audit Committee upon the request of the CFO, pursuant to the U.S. SarbanesOxley Act of 2002 and the relevant rules of the U.S. Securities and Exchange Commission.
In addition, the Audit Committee Members receive reports directly from the accounting auditors as necessary, and the Head of Audit Committee
and the full-time Audit Committee Members hold regular meetings with the accounting auditors and the executive officers in charge of internal audits toshare and exchange opinions on matters such as the recognition of auditing issues, thereby enhancing the auditing activities of Nomura Group.
3.

Status of accounting audita.

Name of auditing firm
Ernst & Young ShinNihon LLCb.

Duration of the auditor’s assignment
Since 1973 (Including periods between 1978 and 2002 in joint audit with other auditing firms )c.

The certified accountants who executed the audit work
Names of the accountants

Names to which the accountants belong to

Designated and Operating Partner Hiroki Matsumura
Designated and Operating Partner Hisashi Yuhara
Designated and Operating Partner Kenjiro Tsumura
Designated and Operating Partner Toshiro Kuwata

Ernst & Young ShinNihon LLC
Ernst & Young ShinNihon LLC
Ernst & Young ShinNihon LLC
Ernst & Young ShinNihon LLC

Note: Years of the accountants’ assignment is omitted due to less than seven years.
d.

Composition of the assistants assigned to the audit work
Certified public accountants:
Others:29 persons
126 persons
96Note: Others include those who passed the Certified Public Accountant Examination and system auditors.
e.

Accounting Auditor Selection Policy and Reasons

The Audit Committee confirmed and verified the status of execution of the accounting auditor’s duties by speaking directly with theaccounting auditor concerning such execution and hearing opinions from the Finance Division and the Internal Audit Division within the
Company. Having identified no facts relevant to the Dismissal or Non-Reappointment Policy with Regard to Accounting Auditor, the Audit
Committee deemed it appropriate to reappoint the accounting auditor.
f.

g.

Dismissal or Non-Reappointment Policy with Regard to Accounting Auditor
1.

If any of the items stipulated under Article 340, Paragraph 1 of the Companies Act apply to the accounting auditor, the Audit
Committee shall consider dismissal of the accounting auditor, and if dismissal is determined to be reasonable, the Audit Committee
shall dismiss the accounting auditor by unanimous consent of all members of the Audit Committee. In such event, an Audit
Committee member appointed by the Audit Committee shall report the dismissal of the accounting auditor and reasons for dismissal
at a general meeting of shareholders to be convened immediately after the dismissal.

2.

In cases where the Audit Committee determines that the accounting auditor is unsuitable, or that provision of a more appropriate
audit structure is needed, a proposal on dismissal or non-reappointment of the accounting auditor shall be submitted to the annual
general meeting of shareholders.

Evaluation of Accounting Auditor by the Audit Committee
The Audit Committee evaluated the accounting auditor in accordance with evaluation criteria determined by the Audit Committee.

Having confirmed matters including the accounting auditor’s compliance with relevant laws and regulations, and independence, as well as
quality control systems deemed appropriate for the accounting auditor to establish and operate, and performance of audits on the Company, theAudit Committee recognizes that the accounting auditor has the specialized knowledge of financial product evaluation and US GAAP, etc., as wellas the global networks, required to audit the Company, and that appropriate audits were conducted during the fiscal year under review.
4.

Audit fees, etc.
a.

Details of fees to Ernst & Young ShinNihon LLC(in millions of yen)
Year ended March 31, 2021
Year ended March 31, 2022
Audit
Non-audit
Audit
Non-audit

Company
Consolidated subsidiaries
Total

¥
¥

963
391
1,354

¥
¥

50
53
103

¥
¥

966
394
1,360

¥
¥

66
64
130

Ernst & Young ShinNihon LLC provides certain non-audit services, such as, accounting advice and comfort letter, which are not included in
the scope of services prescribed in Article 2, Paragraph 1 of Certified Public Accountants Act, with the Company.
b.

Details of fees to Ernst & Young and its member firm companies other than Ernst & Young ShinNihon LLC (Except a.)(in millions of yen)
Year ended March 31, 2021
Year ended March 31, 2022
Audit
Non-audit
Audit
Non-audit

Company
Consolidated subsidiaries
Total

¥
¥

—
2,088
2,088

¥
¥

0
294
294

¥
¥

—
2,437
2,437

¥
¥

0
340
340

Ernst & Young ShinNihon LLC is a member firm of Ernst & Young. Ernst & Young and its member firm companies other than
Ernst &Young ShinNihon LLC also provide a various type of services, such as supporting tax filings and tax compliances with the Company andits consolidated subsidiaries.
c.

Other details of significant fees based on audit attestation

Not applicable97

d.

Approval of audit fees

Our Audit Committee is to agree on audit fee level for Ernst& Young ShinNihon LLC after our Chief Financial Officer (“CFO”) considers theappropriate fee level in order to practice a high quality audit based on the previous performance, audit scope, audit procedure, audit system, annual plans
and etc. With respect to non-audit services to be provided by Ernst& Young ShinNihon LLC, Ernst& Young and its member firm companies, our Audit
Committee receives the application from our CFO and makes the pre-approval decision on these services after reviewing the details and estimated fee
levels for each engagement, pursuant to its internal policies.
e.

Agreement by audit committee on audit fee

The Audit Committee has received necessary documents and reports from the Chief Financial Officer (“CFO”), relevant internal divisions, and the
Accounting Auditor, and has confirmed the structure of the Accounting Auditor’s audit team, audit plan, audit status, the status of the maintenance of thestructure for controlling quality of the audit firm, and the basis for the calculation of estimated remuneration, etc. Additionally, the Audit Committee
conducts pre-approval procedures in accordance with Article 202 of the Sarbanes-Oxley Act of 2002, etc. Based on the result of such confirmations andprocedures, the Audit Committee has verified the compensation, etc. of the Accounting Auditor and determined that it is at a reasonable level to maintainand improve audit quality, and has given the Companies Act Article 399 Paragraph 1 consent.
98

(4) Compensation of Statutory Officers
Our compensation program for our statutory officers is outlined as following.
1. Compensation Program of Statutory Officers
Items

Overview of our Compensation Program of Statutory Officers

Key performance indicator (KPI) regarding Performance-Linked
Compensation

Return on Equity (ROE)

Determination method for amounts of Performance-Linked
Compensation

Determined by considering qualitative evaluation etc. by the Compensation
Committee, based on the level of achievement in actual value against the target
value regarding KPI.

Determination method for compensation of each Statutory Officers

Determined by reflecting individual roles and responsibilities, respective
jurisdiction’s regulations and compensation level etc. in addition to otherqualitative elements.

Nominating Committee and Compensation Committee

Chairman: Kazuhiko Ishimura (outside director)
Member: Takahisa Takahara (outside director)
Member: Koji Nagai (chairman of board of directors, non-executive director)

2. Compensation Policy and Compensation Scheme(1) Compensation policy
We have developed Nomura Group compensation policy for all the employees and statutory officers (“Basic Policy”) and Compensation Policy
for Directors and Executive Officers of Nomura Holdings, Inc. (“NHI”) (“Policy for Statutory Officers”) to enable us to achieve sustainable growth,realize a long-term increase in shareholder value, deliver client excellence, compete in a global market and enhance our reputation. The Compensation
Committee has been setting those policies with discussion for its appropriateness on every fiscal year.
Separately, we have established compensation policy for Nomura Group officers and employees, including senior managing directors of NHI and
directors of subsidiaries of NHI but excluding Directors and Executive officers of NHI. This policy is referred to as the “Employee Policy”.
< Overview of Nomura’s Compensation Policy Structure >99

<a> ”Basic Policy” is as follows:
Nomura Group has established compensation policy for Nomura Group officers and employees, including directors and executive officers of NHI.
This policy is referred to as the “Basic Policy” and is as follows.
Compensation Governance
As a company with three Board Committees structure, pursuant to Japanese corporate law, NHI has established an independent statutory
Compensation Committee. Majority the Committee members are outside directors. The Committee has established both the Basic Policy and aCompensation Policy for Directors and Executive Officers of NHI, on the basis of which it considers and determines the details of individualcompensation for Directors and Executive Officers of NHI.
With respect to the relevant policies and total compensation funding for Nomura Group officers and employees other than the Company’s
directors and executive officers, certain decisions regarding employment and remuneration matters are delegated to the “Human Resources Committee”(“HRC”) by Executive Management Board of NHI. The HRC is chaired by the Group CEO and at a minimum is composed of the Chief Finance Officer
and Chief Risk Management Officer. The HRC considers and determine the above mentioned matters by cooperating with the remuneration committees
in each region.
Compensation Policies and Practices
Nomura Group recognizes that its employees are key in contributing to society in line with its mission of “We help to enrich society through ourexpertise in capital markets”.
Compensation for Nomura Group employees is designed to support achieving sustainable corporate growth, increasing enterprise value over the
medium and long-term and maintaining sound and effective risk management, while at the same time positively contributing to the interest of all
Nomura shareholders. In addition, in order to ensure that Numara Group attracts, retains, motivates and develops talent, the level and structure of
remuneration takes into account the roles and responsibilities of individuals as well as the market pay levels in Japan and overseas, doing so in line withany relevant laws and regulatory expectations.
1) Sustainable corporate growth and increasing enterprise value over the medium and long-term
Compensation for Nomura Group employees aims to realize Nomura Group corporate philosophy, to promote healthy corporate culture andbehaviour in line with Nomura Group “Code of Conduct” and to facilitate a greater alignment with the environmental, social and governance (“ESG”)
considerations.
Based on the pay-for-performance principle, compensation supports Nomura Group business strategy, objectives and the aim of sustainablegrowth and increasing enterprise value over the medium and long-term, while at the same time it ensures the maintenance of sound and marketcompetitive remuneration practices.
2) Sound and effective risk management
Nomura Group maintains a sound and effective risk management with an appropriate risk appetite. The Company adjusts the performancemeasurement standards and indicators when determining compensation by considering both financial and non-financial risks in each business. The
qualitative factors such as conduct, compliance, professional ethics and corporate philosophy are considered in determining the final amount of
remuneration, which may include a reduction resulting from a disciplinary action.
3) Alignment of interests with shareholders
For Nomura Group employees who receive a certain amount of remuneration, a portion of the remuneration is stock-related remuneration linked
to shares of NHI with an appropriate deferral period applicable, in order to ensure an alignment with the shareholders’ interests.
In addition, when granting stock-related compensation, in the event of a material revision of Nomura Group financial statements or a material
violation of Nomura Group rules and policies, employees’ compensation may be subject to suspension, reduction, forfeiture of rights, or for some
employees even re-payment (so-called “clawback”).
Approval and Revision of the Basic Policy
The approval, amendment or repeal of the Basic Policy can be made by the Compensation Committee of NHI.
100

<b> ”Policy for Statutory Officers” is as follows:
Compensation of Directors and Executive Officers is composed of base salary, cash bonus and long-term incentive plans.
1) Base Salary•

Base salary is determined based on factors such as professional background, career history, responsibilities and compensation standards ofrelated business fields.

•

With respect to Executive Officers, a portion of base salary may be paid in equity-linked awards with appropriate vesting periods to ensurethat medium to long-term interests of Executive Officers are closely aligned with those of shareholders.

2) Annual Bonus•

Annual bonuses of Directors and Executive Officers are determined by taking into account both quantitative and qualitative factors.
Quantitative factors include performance of the Group and the division. Qualitative factors include achievement of individual goals andsubjective assessment of individual contribution.

•

In principle, certain portion of annual bonus payment should be deferred.

•With respect to the Group CEO, given the overall responsibility of business execution of the Nomura Group, the basic amount of theannual bonus is calculated based on the level of achievement in actual value(s) against the target value(s) of key performance indicator(s).
In addition, qualitative evaluation should be reflected when determining final annual bonus amount.

•With respect to Directors and other Executive Officers, amount of annual bonus is determined with the annual bonus of Group CEO as
standard baseline, taking into consideration the roles and responsibilities, local remuneration regulations and compensation levels in eachjurisdiction etc., in addition to the qualitative evaluation of the individual.

•

Audit Committee members and Outside Directors are not bonus-eligible in order to maintain and ensure their independence from businessexecution.

•

Mid-term Incentive Plan
In principle, certain portion of annual bonus should be deferred and paid in an equity-linked awards with appropriate vesting periods inlieu of cash to ensure that medium-term interests of Directors and Executive Officers are closely aligned with those of shareholders.

•

Clawback
In specific circumstances, unvested bonus may be required to be forfeited. Any voluntary resignation, material modification of Nomura’s
financial statements, material breach of Nomura’s internal policies and regulations, amongst others, may render such forfeiture.
Additionally, in certain jurisdictions, clawback provisions may apply to already paid and/or vested bonus.

3) Long-term Incentive Plan•

Long-term incentive plans may be awarded to Directors and Executive Officers, depending on their individual responsibilities,
performance etc.

•

Payments under long-term incentive plans are made when a certain degree of achievements are accomplished. Payments are made inequity-linked awards with appropriate vesting periods to ensure that long-term interests of Directors and Executive Officers are closelyaligned with those of shareholders.

<c> ”Employee Policy” is as follows:
Based on the “Basic Policy”, Nomura Group has established compensation policy for Nomura Group officers and employees, including senior
managing directors of NHI and directors of subsidiaries of NHI but excluding directors and executive officers of NHI. This policy is referred to as the“Employee Policy” and is as follows.
Matters not provided for in the Employee Policy shall be governed by the provisions of the Basic Policy.
Compensation GovernanceSupervised by NHI Human Resources Committee (“HRC”), the regional committees governing employee compensation are composed ofrepresentatives of Finance, Risk Management, Compliance, Human Resources, and other departments as appropriate. These committees implement
Nomura Group global compensation governance rules.
The proposed compensation of Control Function staff (Risk Management, Compliance, Internal Audit) shall not be determined by the front officebusiness and the performance evaluation of such staff shall not be determined solely by the financial performance of the business for which such staff
are responsible.
101Compensation Policies and Practices
Nomura Group recognizes that its employees are key in contributing to society in line with its mission of “We help to enrich society through ourexpertise in capital markets”.
Compensation for Nomura Group employees is designed to support achieving sustainable corporate growth, increasing enterprise value over the
medium and long-term and maintaining sound and effective risk management, while at the same time positively contributing to the interest of all NHI
shareholders. In addition, in order to ensure that Nomura Group attracts, retains, motivates and develops talent, the level and structure of remuneration
takes into account the roles and responsibilities of individuals as well as the market pay levels in Japan and overseas, doing so in line with any relevantlaws and regulatory expectations.
1) Sustainable corporate growth and increasing enterprise value over the medium and long-term
Compensation for Nomura Group employees aims to realize Nomura Group corporate philosophy which underpins its Mission of Contributing toSociety and its Vision of being a Trusted Partner, being based on the Values of Entrepreneurial Leadership, Teamwork and Integrity, to promotehealthy, diverse corporate culture and the right behaviour in line with Nomura Group “Code of Conduct” and to facilitate a greater alignment withthe environmental, social and governance (“ESG”) considerations.
Based on the pay-for-performance principle, compensation supports Nomura Group business strategy, objectives and the aim of sustainablegrowth and increasing enterprise value over the medium and long-term, while at the same time it ensures the maintenance of sound and marketcompetitive remuneration practices.
Compensation at Nomura reflects and aligns with the performance of Nomura Group as a whole, its divisions, as well as individual employees,
taking into account both the business strategy and market considerations.
2) Sound and effective risk management
Nomura Group maintains a sound and effective risk management with an appropriate risk appetite. It adjusts the performance measurement
standards and indicators when determining compensation by considering both financial and non-financial risks in each business, taking a holistic
approach. The qualitative factors such as conduct, compliance, professional ethics and corporate philosophy are considered in determining thefinal amount of remuneration, which may include a reduction resulting from a disciplinary action. Risk Management, Compliance and Financedivisions provide key inputs into the overall risk and performance assessment to ensure appropriate consideration of these factors.
The compensation package offered to Nomura Group employees comprises two key elements:•

Fixed compensation—reflects the role, responsibilities and experience of the employee; and•Variable compensation—intends to incentivise performance, promote the right behaviours, drive employee growth and development. For
higher paid employees, a portion of the variable compensation may be deferred, balancing short-term with medium and long-term interestsof Nomura Group.

Nomura Group seeks to balance the components of compensation between fixed and variable according to the employee’ role and seniority. In
principle, the percentage of deferral increases as an employee’s compensation increases. Guaranteed compensation is allowed only in limited
circumstances such as new hire or, where allowed, strategic business needs. Multi-year guarantees are typically prohibited.
3) Alignment of interests with shareholders
Deferred variable compensation is intended to align the interests of employees and NHI shareholders, and to encourage a long-term, sustainableapproach to the management of the Company by senior management and more highly paid employees. For Nomura Group employees who receivea certain amount of remuneration, a portion of the remuneration is stock-related remuneration linked to shares of NHI with an appropriate deferral
period applicable, in order to ensure an alignment with the shareholders’ interests.
In addition, when granting stock-related compensation, in the event of a material revision of Nomura Group financial statements or a material
violation of Nomura Group rules and policies, employees’ compensation may be subject to suspension, reduction, forfeiture of rights, or for some
employees located in specific jurisdictions/regions even re-payment (so-called “clawback”).
Approval and Revision of the Employee Policy
The approval, amendment or repeal of the Employee Policy can be made by the HRC.
102

(2) Scheme and details of Compensation for Directors and Executive Officers
1) Scheme of Compensation and Directors and Executive Officers and calculation method.

The result of TC for the President and the Group CEO regarding the fiscal year ended as of March 31, 2022 is as follows.
(Millions of yen, except percentages)
Base Salary (Fixed Compensation)
Equity-linked
Base cash salarycompensation

102.0
28.9%

17.4
4.9%

Subtotal

119.4
33.9%

Cash
Bonus

Annual Bonus (Variable Compensation)
DeferredCompensation
Subtotal

116.5
33.1%

116.5
33.1%

233.0
66.1%

Total
Compensation
(TC)

352.4
100.0%The percentage of Base Salary (Fixed Compensation) and Annual Bonus (Variable Compensation) in TC is approximately 35% : 65%. Also, Base
Salary (Fixed Compensation) includes equity-linked compensation, which is delivered by Nomura’ shares after the relevant fiscal year, same as deferredcompensation. To be in line with overall responsibility of business execution of the Nomura Group, approximately 40% (equity-linked compensation,
which is a part of Base Salary (Fixed Compensation), and deferred compensation) of TC are paid as equity-linked compensation, which leads to thealignment of interest with shareholders and appropriate medium-term incentives.
1032) Calculation method of the Annual Bonus<Outline of calculation method>
In calculating the Annual Bonus for the Directors and the Executive Officers, a different calculation method is applied depending on the position.
<Specific calculation method by position>•

With respect to the President and the Group CEO, given the overall responsibility of business execution of the Nomura Group, the basic
amount of the Annual Bonus is calculated based on the level of achievement in actual value against the target value regarding ROE. In
addition, Total Compensation (hereafter “TC”) , including the Base Salary and the Annual Bonus, is determined by considering, as needed,
qualitative evaluation etc. by the Compensation Committee.

•

With respect to the Directors and Executive Officers other than the Group CEO, their Annual Bonus and TC are determined based on theones of the Group CEO, reflecting individual roles and responsibilities, respective jurisdiction’s regulations and compensation level etc. inaddition to other qualitative elements.

•

With respect to the Director of the audit committee member and Outside Directors are out of scope of the Annual Bonus in order to keep
independency from business execution.

<Actual value regarding the performance indicator used for the calculation of the Annual Bonus >Performance Indicator

Target value

Actual value for the Fiscal Year

ROE

8.0%

5.1%

3) Matters relating to Non-Monetary Compensation(1)

Deferred Compensation (equity-linked compensation)

The Company sets half of the amount of the Annual Bonus of the Directors and Executive Officers. In principle, equity-linked compensation(Restricted Stock Unit (“RSU”), Notional Stock Unit (“NSU”) ) that falls under the Non-Monetary Compensation is used for payment of the amount.
(2)

Outline of current Deferred Compensation Awards.

The outline of current Deferred Compensation Awards is as follows.
Type of award

Key features

RSU awards

•
•
•
•

Settled in Nomura’s common stock.
Graded vesting period is set as three years in principle.
It is introduced as the Deferred Compensation since the fiscal year ended March 31, 2018.
In principle, it has been granted in May every year.

NSU awards

•
•
•
•

Linked to the price of Nomura’s common stock and cash-settled.
Same as RSU awards, graded vesting period is set as three years in principle.
Following the introduction of RSU as a principle vehicle in 2018 NSU awards are less commonly used in Nomura.
Same as RSU awards, in principle, it has been granted in May every year.

As stated above, RSU awards have been introduced as a principle vehicle from the fiscal year ended as of March 31, 2018 and replaced with stockacquisition rights and other awards.
(3)

Effect of payment of deferred compensation as equity-related compensation

By providing deferred compensation as equity-linked compensation, the economic value of the compensation is linked to the stock price of
Nomura, and a certain vesting period is set.
•

Alignment of interests with shareholders.

•Medium-term incentives (*) and retention by providing an opportunity for the economic value of Deferred Compensation at the time of
grant to be increased by a rise in shares during a period of time from grant to vesting.
* In line with the introduction of RSU, among the equity-linked compensation, as the principal vehicle for Deferred Compensation, in
principle, Nomura’s common stock will be paid instead of cash over the three year deferral period from the fiscal year following the fiscal
year in which the deferred compensation was granted. Since the number of shares to be paid is determined based on the Nomura’s shareprice at the time of grant, the increase in Nomura’s share price will increase the economic value of Deferred Compensation at the time ofvest. Since the increase in share prices reflects the increase in corporate value, alignment of interest with that of shareholders, in addition
to medium-term incentive effects for the Directors and Executive Officers, will be achieved.
104

•Promotion of cross-divisional collaboration and cooperation by providing a common goal of increasing corporate value over the medium
to long term.

As a result of these benefits, deferred compensation awards are also recommended by regulators in the key jurisdictions in which we operate.
The deferral period over which our deferred compensation awards vest is generally three or more years. This is in line with the “Principles forSound Compensation Practices” issued by the Financial Stability Board which recommends, among other things, a deferral period of three or more
years.
(4)

Clawback prescribed in Deferred Compensation

Any voluntary resignation, material modification of the financial statements, material breach of Nomura’s internal policies and regulations etc. aresubject to forfeiture, reduction or clawback (Conclusion of individual contracts including “clawback clause”).
3. Compensation for Directors and Executive Officers
Pursuant to the fundamental approach and framework of compensation as described above, and as a company which adopts a committee-based
corporate governance system, a Compensation Committee of Nomura determines compensation of its Directors and Executive Officers in accordancewith our applicable compensation policies.
3-1. Aggregate compensation
1)

Aggregate Compensation for Directors and Officers

Officer Category

Directors(Outside Directors included in above)
Executive Officers
Total
(1)
(2)
(3)
(4)
(5)
(6)

Headcount(Note 1)

13
(10)
7
20

Base Salary etc.
(Note2, 3)Millions of yen
Performancelinked
Non-monetary
Compensation
Compensation(Note 4)(Note 5)

¥

¥

¥
¥

323
(166)
430
753

¥
¥

70
(— )
301
371

¥
¥
¥

63
(— )
258
321

Total

¥
¥
¥

456
(166)
989
1,445

The number of people includes 3 Directors and 1 Executive Officer who retired in June 2021. There were 10 Directors and 6 Executive Officers asof March 31, 2022. Compensation to Directors who were concurrently serving as Executive Officers is included in that of Executive Officers.
Base Salary of ¥753 million includes other compensation (commuter pass allowance) of ¥60 thousand.
In addition to base salary of Executive Officers, ¥16 million of corporate housing costs, such as housing allowance and related tax adjustments,
were provided.
Out of the Annual Bonus, amounts to be paid in cash after the Fiscal Year close are shown.
Deferred compensation (such as RSU and stock options) granted during and prior to the fiscal year ended March 31, 2022 is recognized as
expense in the financial statements for the fiscal year ended March 31, 2022.
Subsidiaries of the Company paid ¥56 million to Outside Directors as compensation, etc. for their directorship at those subsidiaries for the fiscal
year ended March 31, 2022.
105

2)

Individual compensation of Directors and Executive Officers receiving ¥100 million or more
Millions of yen

Name

Company

Category

Koji Nagai

NomuraKentaro Okuda(2)NomuraTomoyuki Teraguchi

NomuraToshiyasu Iiyama

NomuraTakumi Kitamura

NomuraSotaro Kato

NomuraToru Otsuka

NomuraChairman of
the Board of
Directors
Director,
Representative
Executive
Officer(Group CEO)
Director,
Representative
Executive
Officer
Executive
Officer
Executive
Officer
Executive
Officer
Executive
Officer(1)(2)

Fixed Remuneration(Basic Compensation)
EquityBase
Compensation
Salary(RSUs)
Total

Variable Compensation(1)DeferredCash
Compensation
Bonus(RSUs, etc.)
Total

Total

¥ 91.2¥0¥ 91.2¥ 69.9¥69.9¥139.8¥231.0¥102.0¥17.4¥119.4¥116.5¥116.5¥233.0¥352.4¥ 75.6¥

14.4¥ 90.0¥ 65.0¥65.0¥130.0¥220.0¥ 66.0¥13.2¥ 79.2¥ 45.4¥45.4¥ 90.8¥170.0¥ 60.0¥13.2¥ 73.2¥ 28.4¥28.4¥ 56.8¥130.0¥ 51.3¥

9.6¥ 60.9¥ 23.3¥23.3¥ 46.6¥107.5¥ 54.0¥9.6¥ 63.6¥ 22.7¥22.7¥ 45.4¥109.0

Variable Compensation indicates the amount determined as remuneration based on the performance during the fiscal year ended March 31, 2022.
In addition to basic compensation, ¥16 million of corporate housing costs, such as housing allowance and related tax adjustments, were provided.
106

The following table presents a summary of the meetings held by our Compensation Committee during the year ended March 31, 2022, a summaryof key matters discussed and also whether all members of the Committee attended the meeting.

Date

April 15, 2021

Summary of the discussion and the resolution

Attendance recordsof the member

Discussion: Annual bonus for the year ended Mar 31, 2021

All members attendedApril 27, 2021

Resolution: Annual bonus for the year ended Mar 31, 2021

All members attended

May 14, 2021

Resolution: Transformation of the determination process of the Directors and Executive Officers
compensation (bonus).
All members attended
Discussion: Updating disclosure material to meet a revised Japan Corporate Law requirement.
Discussion: Revision of the Compensation Policy for Directors and Executive Officers of NHI.

June 20, 2021

Resolution: Reduction in base salary for certain Executive Officers

July 1, 2021

Resolution: The appointment of the Director with the right to convoke the board of directors
meetings and the Director who reports the executions of the committee’s duties to the board of
the directors meetings.
Resolution: The compensation policies
All members attended
Resolution: Individual base salary of the Directors and Executive Officers
Discussion: Transformation of the determination process of the Directors and Executive Officers
compensation (bonus).

August 30, 2021

Resolution: Granting RSUs to the Directors and Executive Officers.

All members attended

September 24, 2021

Resolution: Individual base salary of the Directors.
Discussion: Revision of the Compensation Policy of Nomura Group
Resolution: Revision of the Compensation Policy for Directors and Executive Officers of NHI.
Discussion: Establishment of the Nomura Group Compensation Policy for Employees

All members attended

December 6, 2021

Resolution: Revision of the Compensation Policy of Nomura GroupAll members attended

March 24, 2022

Resolution: Individual base salary of the Directors and Executive Officers.

All members attended

All members attended

Through discussion and resolution of the above topics, our Compensation Committee confirmed that compensation for our Directors andExecutive Officers in respect of the year ended March 31, 2022 are appropriate and consistent with our relevant compensation policies. Outlines of theabove meetings have been reported to our Board of Directors.
107

(5) Status of Equity Investment
1. Standards and concepts for classification of equity investment
The pure investment purpose is to obtain profits mainly from capital gain or dividends income.
2. Equity investment not for pure investment purpose
a. Method of verifying holding policies and the reasonableness of holding, and the content of assessment by the Board of Directors regarding theappropriateness of holding individual shares
The basic policy for strategic shareholdings and the methods to verify the reasonableness of the holding are as follows.
*

Regarding strategic shareholdings held by the Nomura Group, the Company and its core subsidiaries shall consider the risks and costs
involved in holding such shares and perspectives of business strategy, such as opportunities to increase the revenues of the Company’sbusinesses through the expansion of transactions or business alliances with the company whose shares are held, and shall hold such shares
only if such shareholdings will contribute to maintaining/enhancing the corporate value of the Nomura Group.

*

The Board of Directors shall establish the Investment Securities Committee for the purpose of conducting continuous considerations withrespect to the purpose of the holding of strategic shareholdings within the Nomura Group.

*

After consideration of the holding status of strategic shareholdings along the lines of the policy by the Investment Securities Committee,
concerning stocks whose sale has been determined to be reasonable, the Company shall proceed with the sale of such stocks while taking
into consideration the impact on the market and other circumstances.

*

The Board of Directors shall assess the content of what was considered at the Investment Securities Committee.

Nomura, in principle, plans to proceed with the sale of its strategic stockholdings taking into account the market impact and other circumstancesthat need to be considered. Nomura is examining the rationality of its holdings for which it will continue to hold, based on an internal verification
process
Specifically, Nomura regularly conducts quantitative analyses of all of its strategic holdings. Nomura verifies whether the return on required
capital (Revenues from transactions with issuer companies and dividends received) exceeds the standard level, and if the standard is met, Nomura
allows to continue holding and conduct continuous monitoring. If the standard is not met, Nomura will perform qualitative analysis. In thequalitative analysis, Nomura considers whether to continue holding or to sell, taking into account the expected future earnings including medium
to long term earnings, the purpose and period of holding, the relationship with the issuer and the regional economy, and other significant factors.

In principle, Nomura holds the Investment Securities Committee once a year. The Committee examines the quantitative and qualitative elements
mentioned above, confirms the significance of holdings, and discusses policies for additional actions. At the Board of Directors meeting held on July 30,
2021, the Board of Directors examined the appropriateness of holdings based on the contents discussed in the Investment Securities Committee, andconfirmed the progress of the reduction and sale of shares as a result of the deliberations by the Committee.
108

b. Number of the different securities and amount on balance sheet
Securities
Number of the different
securities

Non-listed securities
Listed securities

Millions of yen
Amount onbalance sheet

145
77

16,190101,345(Securities whose number of shares increased during the fiscal year ended March 31, 2022)
Securities
Number of the different
securities

Millions of yen
Acquisition cost for theincrease in number of shares

Non-listed securities

2300

Listed securities

1

378(Securities whose number of shares decreased during the fiscal year ended March 31, 2022)

Non-listed securities
Listed securities

Securities
Number of the different
securities

Millions of yen
Proceeds from sale of shares

6
10

56
1,620
109

Reason for the increase in number of shares

Investment to digitalization
including trading business
Increased due to stock listingc. Information on number of shares, amount on balance sheet, etc. by security

Name of security

TOYOTA MOTOR CORPORATION
DENTSU GROUP INC.
Asahi Group Holdings, Ltd.
Japan Exchange Group, Inc.
The Chiba Bank, Ltd.
HIROSE ELECTRIC CO., LTD.
NIPPON EXPRESS HOLDINGS, INC.
C.Uyemura & Co., Ltd.
THE SHIZUOKA BANK, LTD.
Otsuka Holdings Co., Ltd.
The Gunma Bank, Ltd.
Hirogin Holdings, Inc.
HOKKO CHEMICAL INDUSTRY CO., LTD.
Heiwa Corporation
Nippon Television Holdings, Inc.
Nishi-Nippon Financial Holdings, Inc.
Seven & i Holdings Co., Ltd.
AEON Financial Service Co., Ltd.
Juroku Financial Group, Inc.
The Iyo Bank, Ltd.
Kyushu Financial Group, Inc.
The Musashino Bank, Ltd.
Dai-ichi Life Holdings, Inc.
Suruga Bank Ltd.
The Awa Bank, Ltd.
North Pacific Bank, Ltd.
The Aomori Bank, Ltd.
Mebuki Financial Group, Inc.
Tokyo Kiraboshi Financial Group, Inc.
KIBUN FOODS INC.
Hokuhoku Financial Group, Inc.
The Hachijuni Bank, Ltd.
ALPHA SYSTEMS INC.
TOMONY Holdings, Inc.
The Bank of Nagoya, Ltd.
Japan Transcity Corporation
NIPPON SHOKUBAI CO., LTD.
Fukuoka Financial Group, Inc.
Ishii Iron Works Co., Ltd.
The Bank of Iwate, Ltd.
The Yamanashi Chuo Bank, Ltd.
The Aichi Bank, Ltd.
Daishi Hokuetsu Financial Group, Inc.
The Miyazaki Bank, Ltd.
The Ogaki Kyoritsu Bank, Ltd.
Senshu Ikeda Holdings, Inc.
The Chugoku Bank, Limited
THE TOTTORI BANK, LTD.
HEIWA REAL ESTATE CO., LTD.
The Fukui Bank, Ltd.
SHINNIHON CORPORATIONThe Toho Bank, Ltd.
The Shimizu Bank, Ltd.
The Ehime Bank, Ltd.
The Yamagata Bank, Ltd.
THE OITA BANK, LTD.

Year ended March 31, 2022
in thousand
Millions ofsharesyen
Amount on
Number ofbalancesharessheet

17,765
2,400
2,650
4,429
5,693
110
206
229
1,500
300
3,168
1,500
836
400
548
922
109
474
262
934
1,395
313
200
1,136
200
1,670
204
1,519
218
333
413
693
59
723
78
368
40
88
70
100
187
38
54
62
62
626
119
85
20
50
94
312
38
61
58
25

39,483
12,048
11,822
10,125
4,128
1,969
1,735
1,306
1,295
1,270
1,121
972
782
729
698
698
635
577
568
560
560
551
500
465
434
401
390
389
383
378
369
282
250
237
224
222
213
208
206
185
178
172
136
129
117
108
104
101
79
71
69
64
59
57
50
49

Year ended March 31, 2021
in thousand
Millions ofsharesyen
Amount on
Number ofbalanceshares
sheet

3,553
2,400
2,650
4,429
5,693
110
206
114
1,500
300
3,168
1,500
836
400
548
922
109
474
262
934
1,395
313
200
1,136
200
1,670
204
1,519
218
N/A
413
693
59
723
78
368
40
88
70
100
187
38
54
62
62
626
119
85
20
50
94
312
38
61
58
25

30,6138,520
12,362
11,493
4,128
1,876
1,697
901
1,305
1,406
1,258
1,016
980
723
797
733
487
704
578
620
663
572
380
485
498
534
515
396
306
N/A
425
279
214
234
244
206
254
184
210
239
172
115
142
146
137
111
111
97
69
98
83
77
64
63
66
55

Purpose andquantitative effect ofholding

Holder of theCompany’s
shares

B (5)
B
B
B
A
B
B
B (5)
A
B
A
A
A
B
B
A
B
B
A
A
A
A
B
A
A
A
A
A
A
B (6)
A
A
B
A
A
B
B
A
B
A
A
A
A
A
A
A
A
A
B
A
A
A
A
A
A
A

Yes
Yes
No
No
Yes
Yes
No
No
No
No
Yes
No
Yes
No
Yes
No
No
No
Yes
Yes
No
Yes
No
Yes
Yes
Yes
No
No
No
No
No
No
No
No
Yes
No
No
No
Yes
No
Yes
No
No
Yes
Yes
No
No
No
Yes
No
No
Yes
Yes
No
Yes
Yes

Yamaguchi Financial Group, Inc.
HIRAKAWA HEWTECH CORP.
The Chukyo Bank, Ltd.
THE BANK OF SAGA LTD.
Takashimaya Company, Limited
Tokuyama Corporation
Misonoza Theatrical Corporation
AT-Group Co., Ltd.
T.HASEGAWA CO., LTD.

69
40
26
25
—
—
—
—
—

47
46
41
37
—
—
—
—
—

N/A
N/A
N/A
N/A
690
100
80
105
52

N/A
N/A
N/A
N/A
814
279
180
179
110

A
B
A
A
B
B
B
B
B

No
Yes
No
Yes
No
No
No
No
No

(Note)
1.
Shares held in trust are not considered as the shares held by issuer company.
2.
It is difficult to describe the effects of quantitative retention because of the diversified reasons. Please refer (5) 2a.
3.
N/A means that the amount of securities on the balance sheet is not more than 1% of Shareholders’ equity of the Company and not in top 60.
4.
Purpose and quantitative effect of holdingA:
To create business opportunities, maintain, strengthen, and expand business relationships and relationships with local economies, mainly in
Retail DivisionB:
To create business opportunities, and to maintain, strengthen, and expand business relationships, mainly in Wholesale Division5.
Due to stock split, the number of shares is increased.
6.
Due to stock listing, the number of shares is increased.
110

3. Equity investments for pure investment purpose
Year ended March 31, 2022
Securities
Millions of yen
Number of the different
Amount on
securities
balance sheet

Non-listed securities
Listed securities

14—

Year ended March 31, 2022
Millions of yen
Gains on sale

Dividends received

Non-listed securities
Listed securities

827
—

—
—

—
—

Year ended March 31, 2021
Securities
Millions of yen
Number of the different
Amount on
securities
balance sheet

—
—

—
—

Gains on valuation*(1)—(Note)(1) There is no market price of non-listed securities, therefore not included in the table.
4. Equity investments reclassified from held for the purpose of pure investment to held for the purpose of other than pure investment during the fiscal
year ended March 31, 2022
None
5. Equity investments reclassified from held for the purpose of other than pure investment to held for the purpose of pure investment during the fiscal
year ended March 31, 2022
None
111

Item 5. Financial Information
1. Preparation Method of Consolidated Financial Statements and Unconsolidated Financial Statements(1)

Pursuant to Article 95 of “Ordinance on Terminology, Forms and Preparation Methods of Consolidated Financial Statements”(Ministry of
Finance Ordinance No. 28, 1976), the consolidated financial statements were prepared in accordance with the accounting principles which
are required in order to issue American Depositary Shares (“ADS”), i.e., the accounting principles generally accepted in the United Statesof America (“U.S. GAAP”).

(2)

The consolidated financial statements were prepared by making necessary adjustments to the financial statements of each consolidated
company which were prepared in accordance with the accounting principles generally accepted in each country. Such adjustment has been
made to comply with above-mentioned principles in (1).

(3)

The unconsolidated financial statements of the Company were prepared based on the “Ordinance on Terminology, Forms and Preparation
Methods of Financial Statements”(Ministry of Finance Ordinance No. 59, 1963) (the “Ordinance”). Also, the financial statements of theCompany are prepared in accordance with Article 127 of the Ordinance.

2. Audit Certificate
Under Article No.193-2-1 of the Financial Instruments and Exchange Act, Ernst & Young ShinNihon LLC performed audits of theconsolidated and unconsolidated financial statements for the year ended March 31, 2022.
Under Article No.24-2-1 of the Financial Instruments and Exchange Act, the registrant filed the amended Annual Securities Report, which
Ernst & Young ShinNihon LLC performed audits of the restated consolidated financial statements.
3. Specific efforts to ensure the appropriateness of the consolidated financial statements
The Company makes specific efforts to ensure the appropriateness of its consolidated financial statements. Certain internal structures arein place for ensuring the Company’s correct understanding of the accounting standards and the ability to accurately deal with any changes
in the standards as well as for maintaining the completeness and appropriateness in disclosure in relation to any significant information
which is subject to disclosure requirements.
112

NOMURA HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS

NoteMillions of yen
March 31
2021
2022

ASSETSCash and cash deposits:
Cash and cash equivalents
Time deposits
Deposits with stock exchanges and other segregated cash
Total cash and cash deposits
Loans and receivables:
Loans receivable (includes ¥818,523 and ¥1,210,590 at fair value)
Receivables from customers (includes ¥163,388 and ¥86,839 at fair value)
Receivables from other than customers (includes ¥ nil and ¥10,362 at fair value)
Allowance for credit losses
Total loans and receivables
Collateralized agreements:
Securities purchased under agreements to resell (includes ¥366,506 and ¥297,653 at fair value)
Securities borrowed
Total collateralized agreements
Trading assets and private equity and debt investments:
Trading assets (includes assets pledged of ¥5,587,555 and ¥4,643,412; includes ¥10,122 and ¥14,328 at fairvalue )
Private equity and debt investments (includes ¥3,599 and ¥10,770 at fair value)
Total trading assets and private equity and debt investments
Other assets:
Office buildings, land, equipment and facilities (net of accumulated depreciation and amortization of¥395,429 and ¥426,081)
Non-trading debt securities (includes assets pledged of ¥ 9,427 and ¥ 17,823)
Investments in equity securities (includes assets pledged of ¥ nil and ¥ 606)
Investments in and advances to affiliated companies (includes assets pledged of ¥ nil and ¥ 5,038)
Other (includes ¥171,482 and ¥169,080 at fair value)
Total other assets
Total assets
The accompanying notes are an integral part of these consolidated financial statements.
113¥ 3,509,754
281,422373,559
4,164,735¥ 3,316,238
320,754426,519
4,063,511

2,943,472
459,090793,669(53,784)
4,142,447

3,579,727
417,661
1,069,660(66,346)
5,000,702*2

10,775,078
5,264,360
16,039,438

11,879,312
4,997,129
16,876,441

*2, 3
*2

15,674,354
63,825
15,738,179

15,230,817
65,193
15,296,010

464,449
426,758
126,649364,393
1,049,432
2,431,681¥42,516,480

419,047484,681
133,897364,281773,586
2,175,492¥43,412,156

*2, 7
*2, 4
*7

*2
*2
*7, 19*2, 10NOMURA HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS—(Continued)

Note

LIABILITIES AND EQUITY
Short-term borrowings (includes ¥634,714 and ¥710,629 at fair value)
Payables and deposits:
Payables to customers
Payables to other than customers
Deposits received at banks (includes ¥49,874 and ¥71,156 at fair value)
Total payables and deposits
Collateralized financing:
Securities sold under agreements to repurchase (includes ¥224,056 and ¥411,847 at fair value)
Securities loaned (includes ¥128,886 and ¥104,606 at fair value)
Other secured borrowings
Total collateralized financing
Trading liabilities
Other liabilities (includes ¥44,708 and ¥52,110 at fair value)
Long-term borrowings (includes ¥4,098,457 and ¥4,557,326 at fair value)
Total liabilities
Commitments and contingencies (Note 20)
Equity:Nomura Holdings, Inc. (“NHI”) shareholders’ equity:
Common stock
No par value shares;
Authorized—6,000,000,000 shares
Issued—3,233,562,601 shares
Outstanding—3,063,155,434 and 3,017,804,012 shares
Additional paid-in capital
Retained earnings
Accumulated other comprehensive income
Total NHI shareholders’ equity before treasury stock
Common stock held in treasury, at cost—170,407,167 and 215,758,589 shares
Total NHI shareholders’ equity
Noncontrolling interests
Total equity
Total liabilities and equity
The accompanying notes are an integral part of these consolidated financial statements.
114

Millions of yen
March 312021
2022

*2, 11 ¥ 1,368,098
*4
*2

*2
*2

*2, 3
*2, 10*2, 11¥ 1,050,141

1,454,755
1,773,699
1,342,464
4,570,918

1,522,961
1,636,725
1,760,679
4,920,365

13,360,429
1,380,629
392,515
15,133,573
9,473,261
1,239,167
7,975,012
39,760,029

12,574,556
1,567,351
396,291
14,538,198
9,652,118
1,020,225
9,258,306
40,439,353

*20
*17

594,493594,493
696,122
697,507
1,533,713
1,606,987*16(38,144)
127,973
2,786,184
3,026,960(91,246)(112,355)
2,694,938
2,914,605
61,51358,1982,756,451
2,972,803¥42,516,480 ¥43,412,156

The following table presents the classification of consolidated variable interest entities’ (“VIEs”) assets and liabilities included in the consolidatedbalance sheets above. The assets of a consolidated VIE may only be used to settle obligations of that VIE. Creditors do not typically have any recourse
to Nomura beyond the assets held in the VIEs. See Note 6 “Securitizations and Variable Interest Entities” for further information.
Billions of yen
March 31
2021
2022

Cash and cash deposits
Trading assets and private equity and debt investments
Other assets
Total assets¥

Trading liabilities
Other liabilities
Borrowings
Total liabilities

¥

¥

¥

The accompanying notes are an integral part of these consolidated financial statements.
115

13
984
77
1,074

¥

2
2
837
841

¥

¥

¥

62
1,024
125
1,211
0
6
892
898

NOMURA HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME
Millions of yen
Year ended March 31
2021
2022

Revenue:Commissions
Fees from investment banking
Asset management and portfolio service fees
Net gain on trading
Gain on private equity and debt investments
Interest and dividends
Gain 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 before income taxes
Income tax expense
Net income

*4 ¥
*4
*4
*2, 3

*4, 10376,897
108,681230,047
310,040
12,734356,466
14,053208,317
1,617,235
215,363
1,401,872

507,906
111,550
178,835
72,367
13,520*10
287,023
1,171,201
230,671*15
70,274¥ 160,397

Less: Net income attributable to noncontrolling interests¥

529,506
105,204
184,319
69,742
15,641
232,855
1,137,267
226,623
80,090¥ 146,533

7,281

Net income attributable to NHI shareholders¥

153,116

332,344
149,603269,985368,799
30,768284,2225,446
152,832
1,593,999
230,109
1,363,890

3,537¥

142,996

Yen

Per share of common stock:
Basic—Net income attributable to NHI shareholders per share*12

Diluted—
Net income attributable to NHI shareholders per share
The accompanying notes are an integral part of these consolidated financial statements.
116

¥

50.11

¥

46.68

¥

48.63

¥

45.23

NOMURA HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Millions of yen
Year ended March 31
2021
2022

Net income
Other comprehensive income (loss):
Change in cumulative translation adjustments:
Change in cumulative translation adjustments
Deferred income taxes
Total
Defined benefit pension plans:
Pension liability adjustment
Deferred income taxes
Total
Own credit adjustments:
Own credit adjustments
Deferred income taxes
Total
Total other comprehensive income (loss)
Comprehensive income
Less: Comprehensive income attributable to noncontrolling interests
Comprehensive income attributable to NHI shareholders¥¥

The accompanying notes are an integral part of these consolidated financial statements.
117

160,397¥

146,533

46,821(1,287)45,534122,468(946)
121,522

20,720(1,626)
19,094

(404)
78
(326)

(91,666)
15,943(75,723)(11,095)
149,3028,225
141,077 ¥

60,777(12,930)
47,847
169,043
315,576
6,463
309,113

NOMURA HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Millions of yen
Year ended March 31
2021
2022

Common stock
Balance at beginning of year
Balance at end of year¥

Additional paid-in capital
Balance at beginning of year
Stock-based compensation awards
Changes in an affiliated company’s interests in its subsidiary
Changes in an affiliated company’s interests
Balance at end of year
Retained earnings
Balance at beginning of year
Cumulative effect of change in accounting principle (1)Net income attributable to NHI shareholders
Cash dividends
Gain (loss) on sales of treasury stock
Cancellation of treasury stock
Balance at end of year
Accumulated other comprehensive income (loss)
Cumulative translation adjustments
Balance at beginning of year
Net change during the year
Balance at end of year
Defined benefit pension plans
Balance at beginning of year
Pension liability adjustment
Balance at end of year
Own credit adjustments
Balance at beginning of year
Own credit adjustments
Balance at end of year
Balance at end of year
(1)594,493594,493¥683,232
11,775
1,115—
696,122

696,122
1,421
—
(36)
697,507

1,645,451(18,200)
153,116(107,104)(346)(139,204)
1,533,713

1,533,713—
142,996(67,007)(2,715)—
1,606,987(26,274)
44,59018,316

18,316
118,596
136,912(62,571)
19,094(43,477)(43,477)(326)(43,803)62,740(75,723)(12,983)(38,144)(12,983)
47,84734,864
127,973

Represents the adjustments to initially apply Accounting Standards Update ASU 2016-13, “Measurement of Credit Losses on Financial
Instruments” for the year ended March 31, 2021.
118

594,493594,493

NOMURA HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY—(Continued)
Millions of yen
Year ended March 31
2021
2022

Common stock held in treasury
Balance at beginning of year
Repurchases of common stock
Sales of common stock
Common stock issued to employees
Cancellation of treasury stock
Balance at end of year

(243,604)(11)
0
13,165
139,204(91,246)(91,246)(39,650)
018,541—(112,355)

Total NHI shareholders’ equity
Balance at end of year

2,694,938

2,914,605

77,797(1,416)
7,281

61,513(1,421)
3,537

944
673
(23,766)
61,513

2,926
1,307(9,664)58,198¥ 2,756,451¥ 2,972,803

Noncontrolling interests
Balance at beginning of year
Cash dividends
Net income attributable to noncontrolling interests
Accumulated other comprehensive income (loss) attributable to noncontrolling interests
Cumulative translation adjustments
Purchase/sale (disposition) of subsidiary shares, etc., net
Other net change in noncontrolling interests
Balance at end of year
Total equity
Balance at end of year
The accompanying notes are an integral part of these consolidated financial statements.
119

NOMURA HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWSMillions of yen
Year ended March 31
2021 (Restated) 2022 (Restated)

Cash flows from operating activities:
Net income
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization
Provision for credit losses
Stock-based compensation
Gain on investments in equity securities(Gain) loss on investments in subsidiaries and affiliates
Equity in earnings of affiliates, net of dividends received
Gain on disposal of office buildings, land, equipment and facilities
Deferred income taxes
Changes in operating assets and liabilities:
Deposits with stock exchanges and other segregated cash
Trading assets and private equity and debt investments
Trading liabilities
Securities purchased under agreements to resell, net of securities sold under agreements to repurchase
Securities borrowed, net of securities loaned
Margin loans and receivables
PayablesBonus accrual
Accrued income taxes, net
Other, net
Net cash provided by (used in) operating activities
Cash flows from investing activities:
Payments for placements of time deposits
Proceeds from redemption or maturity of time deposits
Payments for purchases of office buildings, land, equipment and facilities
Proceeds from sales of office buildings, land, equipment and facilities
Payments for purchases of equity investments
Proceeds from sales of investments
Net cash outflows from loans receivable at banks
Payments for purchases or origination of other non-trading loans
Proceeds from sales or repayments of other non-trading loans
Net cash outflows from interbank money market loans
Payments for purchases of non-trading debt securities
Proceeds from sales or maturity of non-trading debt securities
Acquisitions, net of cash acquired
Payments for purchases of investments in affiliated companies
Proceeds from sales of investments in affiliated companies
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities:
Proceeds from issuances of long-term borrowings
Payments for repurchases or maturity of long-term borrowings
Proceeds from issuances of short-term borrowings
Payments for repurchases or maturity of short-term borrowings
Net cash inflows (outflows) from interbank money market borrowings
Net cash inflows (outflows) from other secured borrowings
Net cash inflows from deposits received at banks
Payments for withholding taxes on stock-based compensation
Proceeds from sales of common stock
Payments for repurchases of common stock
Payments for cash dividends
Contributions from noncontrolling interests
Distributions to noncontrolling interests
Net cash provided by (used in) financing activities¥

160,397¥

146,533

63,84638,30328,251(14,053)
45,086(15,716)(64,730)(21,113)59,524
8,749
27,941(5,446)(79,396)(20,235)(3,490)3,106

13,878
1,441,539
777,741(1,453,871)(1,242,489)
936,346(33,994)
15,84055,712(63,363)
667,610(18,408)
1,229,557(284,747)(2,220,493)
595,116
111,468(247,980)(1,865)(37,639)(125,127)(862,832)(239,980)
283,650(119,875)
49,642(20,115)
20,258(83,122)(3,362,619)
3,713,333(355)(124,614)
163,023(11,152)(12,098)
1,221
735
257,932(227,644)
199,475(111,331)
94,985(3,142)
41,089(110,811)(5,695,122)
5,172,221(808)(106,390)
55,325—(5,674)
109,111(4,466)(593,182)

2,063,263(2,095,069)
2,929,762(2,865,700)(311,471)(335,372)
36,223(3,856)215(11)(76,358)
24,794(35,145)(668,725)

3,894,613(2,656,233)
1,743,817(2,164,098)
12,92530,753
372,575(10,816)
11(39,650)(70,714)42,881(43,346)
1,112,718

Effect of exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents
Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of year
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of year

60,884
317,701
3,192,310¥ 3,510,011

149,693(193,603)
3,510,011¥ 3,316,408

Supplemental information:
Cash paid during the year for—
Interest
Income tax payments, net

¥
¥

¥
¥

120

222,024
35,675

225,679
114,623

The following table presents a reconciliation of cash and cash equivalents, and restricted cash and restricted cash equivalents reported in Deposits
with stock exchanges and other segregated cash within the consolidated balance sheets to the total of the same such amounts shown in the statements ofcash flows above. Restricted cash and restricted cash equivalents are amounts where access, withdrawal or usage by Nomura is substantively prohibitedby a third party entity outside of the Nomura group.
Millions of yen
Year ended March 31
2021
2022

Cash and cash equivalents reported in Cash and cash equivalents
Restricted cash and restricted cash equivalents reported in Deposits with stock exchanges and other segregated cash
Total cash, cash equivalent, restricted cash and restricted cash equivalents¥ 3,509,754
257¥ 3,510,011¥ 3,316,238
170¥ 3,316,408

Non-cash—
Total amount of right-of-use assets recognized for the years ended March 31, 2021 and 2022 were ¥41,279 million and ¥32,208 million,
respectively.
Restatement of above comparatives
See Note 1 “Summary of Accounting Policies” to these consolidated financial statements included in this annual report for further information on
the nature of this restatement.
The accompanying notes are an integral part of these consolidated financial statements.
121

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of accounting policies:
Restatement of historical annual consolidated financial statements
Nature of errors
During the quarter ended March 31, 2024, the Company identified classification and presentation errors within the consolidated statements of cash
flows as reported in historical annual financial statements. These classification errors related to the incorrect classification of cash flows arising fromcertain non-trading loans, other financial and non-financial transactions within operating rather than investing or financing activities. These presentation
errors related to the presentation of certain cash flows from non-trading debt securities, short-term borrowings and other financial and non-financialtransactions on a net rather than gross basis. None of these errors impact the consolidated balance sheets, consolidated statements of income orconsolidated statements of comprehensive income and therefore do not impact previously reported earnings per share amounts.
The Company has concluded that certain of these errors are material and therefore the Company has restated comparative amounts included in the
consolidated statements of cash flows during the years ended March 31, 2021, and March 31, 2022 to correct the identified classification andpresentation errors.
The following tables present the impact of correction of each of these errors on prior amounts as previously reported in specific line items in the
consolidated statement of cash flows and the restated amounts for the years ended March 31, 2021, and March 31, 2022.
122Year ended March 31, 2022
Millions of yen
As Previously Reported
Line item[Line item not previously reported]
Time deposits
Trading assets and private equity and debt
investments
Other secured borrowings
Loans and receivables, net of allowance for credit
lossesOther, net
Net cash provided by (used in) operating activities[Line item not previously reported][Line item not previously reported]

As Restated
Amount—(23,064)

8,749
23,064

1,254,261
2,120

1,229,557—(412,429)(102,119)(1,368,710)—

523,897(23,008)
505,878(227,644)

111,468(125,127)(862,832)(227,644)

199,475

(300)

300

2,502
—
—
(112,782)(2,502)(3,142)
41,0891,971—(5,695,122)—

5,172,221[Line item not previously reported][Line item not previously reported]
Decrease (increase) in non-trading debt securities, net

Decrease (increase) in investments in affiliatedcompanies, net

Other, net
Net cash provided by (used in) investing activities
Increase in long-term borrowings
Decrease in long-term borrowings
Increase (decrease) in short-term borrowings, net[Line item not previously reported][Line item not previously reported]—(51,065)(808)—

103,437—

29,253(45,301)
3,895,059(33,719)(547,881)(446)(2,670,106)(475,509)—

13,873475,509
1,743,817—(2,164,098)—

12,925—448,099

30,753(75,524)—(16,475)——
1,070,715(10,816)
16,47542,881(43,346)
42,003[Line item not previously reported][Line item not previously reported]
Increase (decrease) in deposits received at banks, net[Line item not previously reported]
Transactions with noncontrolling interests, net[Line item not previously reported][Line item not previously reported]
Net cash provided by (used in) financing activities

AmountProvision for credit losses[Line item removed]
Trading assets and private equity and debt
(24,704)
investments(2,120) [Line item removed]—
Payments for purchases of investments in equity
securities
Proceeds from sales of investments in equity
securities[Line item not previously reported][Line item not previously reported]
Decrease (increase) in loans receivable at banks, net[Line item not previously reported]

Line item

Adjustment

123

Margin loans and receivables
Other, net
Net cash provided by (used in) operating activities
Payments for placements of time deposits
Proceeds from redemption or maturity of time
deposits[Line item removed][Line item removed]
Payments for purchases of equity investments
Proceeds from sales of equity investments
Net cash outflows from loans receivable at banks
Payments for purchases or origination of other nontrading loans
Proceeds from sales or repayments of other nontrading loans
Net cash outflows from interbank money market
loans
Payments for purchases of non-trading debt securities
Proceeds from sales or maturity of non-trading debt
securities
Payments for purchases of investments in affiliatedcompanies
Proceeds from sales of investments in affiliatedcompanies
Other, net
Net cash provided by (used in) investing activities
Proceeds from issuances of long-term borrowings
Payments for repurchases or maturity of long-termborrowings[Line item removed]
Proceeds from issuances of short-term borrowings
Payments for repurchases or maturity of short-termborrowings
Net cash inflows (outflows) from interbank money
market borrowings
Net cash inflows (outflows) from other secured
borrowings
Net cash inflows from deposits received at banks
Payments for withholding taxes on stock-based
compensation[Line item removed]
Contributions from noncontrolling interests
Distributions to noncontrolling interests
Net cash provided by (used in) financing activities

8,749
—

199,475——(3,142)
41,089(110,811)(5,695,122)
5,172,221(808)(106,390)
55,325(5,674)
109,111(4,466)(593,182)
3,894,613(2,656,233)—
1,743,817(2,164,098)
12,92530,753
372,575(10,816)—42,881(43,346)
1,112,718

Year ended March 31, 2021
Millions of yen
As Previously Reported
Line item[Line item not previously reported]
Time deposits
Trading assets and private equity and debt
investments
Other secured borrowings
Loans and receivables, net of allowance for credit
lossesOther, net
Net cash provided by (used in) operating activities[Line item not previously reported][Line item not previously reported]
Proceeds from sales of investments in equity
securities[Line item not previously reported][Line item not previously reported]
Decrease (increase) in loans receivable at banks, net[Line item not previously reported]

As Restated
Amount—43,560Adjustment

1,468,357(326,450)

1,441,539—

1,145,429
20,089665,770—(209,083)(83,452)
1,840(239,980)

936,346(63,363)
667,610(239,980)—

283,6506,502——(83,412)——[Line item not previously reported][Line item removed]
Payments for purchases of equity investments
Proceeds from sales of equity investments
Net cash outflows from loans receivable at banks
Payments for purchases or origination of other non(3,362,619)
trading loans
Proceeds from sales or repayments of other non3,713,333
trading loans
Net cash outflows from interbank money market
(355)
loans
—
Payments for purchases of non-trading debt securities
Proceeds from sales or maturity of non-trading debt
securities—
Acquisitions, net of cash acquired
Divestures, net of cash disposed of—
38,409Business combinations or disposals, net(11,152)

Decrease (increase) in investments in affiliatedcompanies, net[Line item not previously reported](9,182)

9,182—(12,098)[Line item not previously reported]—(9,958)(139,026)
2,067,725

1,221
10,693396,958(4,462)(2,068,695)(325,237)—(26,374)
325,237
2,929,762—(2,865,700)—(311,471)—
126,177(335,372)(89,954)

—
6,257
—
—
(269,927)(3,856)(6,257)
24,794(35,145)(398,798)[Line item not previously reported][Line item not previously reported]
Increase (decrease) in deposits received at banks, net[Line item not previously reported]
Transactions with noncontrolling interests, net[Line item not previously reported][Line item not previously reported]
Net cash provided by (used in) financing activities

Margin loans and receivables
Other, net
Net cash provided by (used in) operating activities
Payments for placements of time deposits
Proceeds from redemption or maturity of time
deposits(6,502)(20,115)
20,258290

Decrease (increase) in non-trading debt securities, net

Increase (decrease) in short-term borrowings, net[Line item not previously reported][Line item not previously reported]

Amount38,303 Provision for credit losses(43,560) [Line item removed]
Trading assets and private equity and debt
(26,818)
investments
326,450 [Line item removed][Line item not previously reported]

Other, net
Net cash provided by (used in) investing activities
Increase in long-term borrowings
Decrease in long-term borrowings

Line item

124[Line item removed]
Payments for purchases of investments in affiliatedcompanies
Proceeds from sales of investments in affiliatedcompanies
Other, net
Net cash provided by (used in) investing activities
Proceeds from issuances of long-term borrowings
Payments for repurchases or maturity of long-termborrowings[Line item removed]
Proceeds from issuances of short-term borrowings
Payments for repurchases or maturity of short-termborrowings
Net cash inflows (outflows) from interbank money
market borrowings
Net cash inflows (outflows) from other secured
borrowings
Net cash inflows from deposits received at banks
Payments for withholding taxes on stock-based
compensation[Line item removed]
Contributions from noncontrolling interests
Distributions to noncontrolling interests
Net cash provided by (used in) financing activities

38,303—

283,650—(20,115)
20,258(83,122)(3,362,619)
3,713,333(355)(124,614)
163,023(11,152)——(12,098)
1,221
735
257,932
2,063,263(2,095,069)—
2,929,762(2,865,700)(311,471)(335,372)
36,223(3,856)—
24,794(35,145)(668,725)

Description of business—
Nomura Holdings, Inc. (“Company”) and its broker-dealer, banking and other financial services subsidiaries provide investment, financing andrelated services to individual, institutional and government clients on a global basis. The Company and other entities in which it has a controlling
financial interest are collectively referred to as “Nomura” within these consolidated financial statements.
Nomura operates its business through various divisions based upon the nature of specific products and services, its main client base and its
management structure. On April 1, 2021, the Asset Management Division and the Merchant Banking Division were combined and the Investment
Management Division was established. Nomura reports operating results through three business segments: Retail, Investment Management, andWholesale.
In its Retail segment, Nomura provides investment consultation services mainly to individual clients in Japan. In its Investment Management
segment, Nomura mainly provides various investment management services such as establishing and managing investment trusts, discretionary
investment services for domestic and overseas investors, investment and management for investment corporation and for funds for institutional
investors, and management of Tokumei kumiai (silent partnerships). In its Wholesale segment, Nomura engages in the sales and trading of debt andequity securities, foreign exchange contracts and derivatives globally, and provides investment banking services such as the underwriting anddistribution of debt and equity securities as well as mergers and acquisitions and financial advisory.
Basis of presentation—
The accounting and financial reporting policies of Nomura conform to accounting principles generally accepted in the United States (“U.S.
GAAP”) as applicable to broker-dealers.
These consolidated financial statements include the financial statements of the Company and other entities in which it has a controlling financial
interest. Nomura initially determines whether it has a controlling financial interest in an entity by evaluating whether the entity is a variable interest
entity (“VIE”) under Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) 810 “Consolidation”. VIEs areentities in which equity investors do not have the characteristics of a controlling financial interest or which do not have sufficient equity at risk for theentities to finance their activities without additional subordinated financial support. Nomura consolidates VIEs where Nomura is the primary
beneficiary, which is where (1) Nomura has power to direct the activities of the VIE that is most significantly impact the VIE’s economic performance;and (2) through Nomura’s interest in the VIE, the right to receive benefits or the obligation to absorb losses that could potentially be significant to the
VIE, provided that Nomura is not acting as a fiduciary for other interest holders.
For entities other than VIEs, Nomura is generally determined to have a controlling financial interest in an entity when it owns a majority of thevoting interests.
Equity investments in entities in which Nomura has significant influence over operating and financial decisions (generally defined as a holding of
20 to 50 percent of the voting stock of a corporate entity, or at least 3 percent of a limited partnership) are accounted for under the equity method of
accounting (“equity method investments”) and reported within Other assets—Investments in and advances to affiliated companies or at fair value byelecting the fair value option permitted by ASC 825“Financial Instruments”(“ASC 825”) and reported within Trading assets, Private equity and debt
investments or Other assets—Other in consolidated balance sheets depending on the nature and purpose of the investments.
Equity investments in which Nomura has neither control nor significant influence are carried at fair value, with changes in fair value recognizedthrough the consolidated statements of income and reported within Trading assets, Private equity and debt investments or Other assets—Other inconsolidated balance sheets depending on the nature or purpose of the investments.
Certain consolidated entities are investment companies under ASC 946 “Financial Services—Investment Companies” (“ASC 946”). Nomura
carries all of their investments at fair value, with changes in fair value recognized through the consolidated statements of income.
125

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The Company’s principal subsidiaries include Nomura Securities Co., Ltd. (“NSC”), Nomura Securities International, Inc. (“NSI”), Nomura
International plc (“NIP”) and Nomura Financial Products & Services, Inc. (“NFPS”).
All material intercompany transactions and balances have been eliminated on consolidation.
Use of estimates—
Nomura uses accounting estimates to prepare these consolidated financial statements and they require difficult, subjective and complex judgments
by management. Such estimates determined by management to be material include estimates regarding the fair value of financial instruments andlitigation provisions. Estimates, by their nature, are based on underlying assumptions which require management judgment and depend on the extent ofavailable information. Actual results in future periods may differ from current estimates, which could have a material impact on these consolidated
financial statements.
Various references are made throughout the notes to these consolidated financial statements where critical accounting estimates based on
management judgment have been made, the nature of the estimates, the underlying assumptions made by management used to derive those estimatesand how these estimates affect the amounts reported in these consolidated financial statements.
Fair value of financial instruments—
A significant amount of Nomura’s financial assets and financial liabilities are carried at fair value, with changes in fair value recognized throughthe consolidated statements of income and/ or the consolidated statements of comprehensive income. Use of a fair value measurement is either
specifically required under U.S. GAAP or Nomura makes an election to use a fair value measurement for certain eligible items under the fair value
option.
Other financial assets and financial liabilities are carried at fair value on a nonrecurring basis, where the primary measurement basis is not fairvalue. Fair value is only used in specific circumstances after initial recognition, such as to measure impairment.
In both cases, fair value is generally determined in accordance with ASC 820 “Fair Value Measurements and Disclosures” (“ASC 820”) which
defines fair value as the amount that would be exchanged to sell a financial asset or transfer a financial liability in an orderly transaction between market
participants at the measurement date. It assumes that the transaction occurs in Nomura’s principal market, or in the absence of a principal market, themost advantageous market for the relevant financial asset or financial liability. See Note 2 “Fair value measurements” for further information regarding
how Nomura estimates fair value for specific types of financial instruments used in the ordinary course of business.
The fair values of financial assets and financial liabilities of consolidated VIEs which meet the definition of collateralized financing entities areboth measured using the more observable fair value of the financial assets and financial liabilities.
126

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Allowance for current expected credit losses—
Management recognizes allowance for current expected credit losses on financial assets not carried at fair value and certain off-balance sheet
financial instruments including unfunded loan commitments not carried at fair value in accordance with ASC 326, “Financial Instruments—Credit
Losses” (“ASC 326”) which Nomura initially adopted on April 1, 2020. Prior to such date, allowances for credit losses were recognized for incurred
losses rather than expected credit losses based on management’s estimate of probable losses incurred within these financial assets and off-balance sheet
financial instruments.
Current expected credit losses are calculated over the expected life of the financial instruments in scope of the requirements on an individual or aportfolio basis, considering all relevant, reasonable supportable information available about the collectability of cash flows, including information aboutpast events, current conditions and future forecasts. Accrued interest receivables are excluded from the amortized cost basis of financing receivables
when calculating current expected credit losses.
The methodology used by Nomura to determine allowances for current expected credit losses in accordance with the CECL impairment modelprimarily depends on the nature of the financial instrument and whether certain practical expedients permitted by ASC 326 are applied by Nomura.
Allowances for current expected credit losses against recognized financial instruments are reported in the consolidated balance sheets within
Allowances for current expected credit losses while allowances for current expected credit losses against off-balance sheet financial instruments arereported in the consolidated balance sheets within Other liabilities. All movements in the allowances are reported in the consolidated statements ofincome within Other expenses.
See Note 7 “Financing receivables” for further information including how allowance for current expected credit losses are calculated.
Transfers of financial assets—
Nomura accounts for the transfer of a financial asset as a sale when Nomura relinquishes control over the asset by meeting the following
conditions: (a) the asset has been isolated from the transferor (even in bankruptcy or other receivership), (b) the transferee has the right to pledge or
exchange the asset received, or if the transferee is an entity whose sole purpose is to engage in securitization or asset-backed financing activities, if, theholders of its beneficial interests have the right to pledge or exchange the beneficial interests held and (c) the transferor has not maintained effective
control over the transferred asset.
In connection with its securitization activities, Nomura utilizes special purpose entities (“SPEs”) to securitize commercial and residential
mortgage loans, government and corporate securities or other types of financial assets. Nomura’s involvement with SPEs includes structuring andunderwriting, distributing and selling debt instruments and beneficial interests issued by SPEs to investors. Nomura derecognizes financial assets
transferred in securitizations provided that Nomura has relinquished control over such assets and does not consolidate the SPE. Nomura may obtain or
retain an interest in the financial assets, including residual interests in the SPEs dependent upon prevailing market conditions. Any such interests areaccounted for at fair value and reported within Trading assets in the consolidated balance sheets with the change in fair value reported within Revenue—
Net gain on trading in the consolidated statements of income.
Foreign currency translation—
The financial statements of the Company’s subsidiaries and operations are measured using their functional currency which is the currency of the
primary economic environment in which the entity operates. All assets and liabilities of subsidiaries and operations which have a functional currency
other than Japanese Yen are translated into Japanese Yen at exchange rates in effect at the balance sheet date, and all revenue and expenses are translated
at the average exchange rates for the respective years and the resulting translation adjustments are accumulated and reported within Accumulated othercomprehensive income (loss) in NHI shareholders’ equity.
Foreign currency assets and liabilities are translated at exchange rates in effect at the balance sheet date and the resulting translation gains orlosses are credited or charged to the consolidated statements of income.
127

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Revenue from services provided to clients—
Nomura earns revenue through fees and commissions from providing financial services to clients across all three business divisions. These
services primarily include trade execution and clearing services, distribution of fund unit services, financial advisory services, underwriting anddistribution services and asset management services.
Revenues are recognized when or as the client obtains control of the service provided by Nomura which depends on when each of the key distinct
substantive promises made by Nomura within the contract with the client (“performance obligations”) are satisfied. Such performance obligations are
generally satisfied at a particularly point in time or, if certain criteria are met, over a period of time.
Revenues from providing distribution of fund units and clearing services are reported in the consolidated statements of income within Revenue—
Commissions, revenues from asset management services are reported in Revenue—Asset management and portfolio service fees and revenues fromfinancial advisory services, underwriting and distribution services are reported in Revenue—Fees from investment banking.
Costs to obtain or fulfill the underlying contract to provide services to a client are deferred as assets if certain criteria are met. These deferredcosts, which are reported in the consolidated balance sheets within Other assets are released to the consolidated statements of income when the related
revenue from providing the service is also recognized or earlier if there is evidence that the costs are not recoverable and therefore impaired.
Trading assets and trading liabilities—
Trading assets primarily comprise debt securities, equity securities and derivative assets which are recognized on the consolidated balance sheets
on a trade date basis and loans which are recognized on the consolidated balance sheets on a settlement date basis.
Financial assets are classified as being held for trading when any of the following criteria are met:•

The financial assets are originated or acquired with the intention to generate profit through sale of the financial assets in the short-term;•

The financial assets are part of a portfolio of identified financial instruments that are managed together for the purposes of short-term
profit or arbitrage profit-taking; or•

The financial assets are derivative assets.

Trading liabilities primarily comprise short sales of securities and derivative liabilities, which are recognized on the consolidated balance sheets
on a trade date basis. Trading assets and liabilities are carried at fair value and changes in fair value are generally reported within Revenue—Net gain on
trading in the consolidated statements of income.
Certain nonderivative trading liabilities are held to economically hedge the price risk of investments in equity securities held for operating
purposes. Changes in fair value of these trading liabilities are reported within Revenue—Gain (loss) on investments in equity securities in the
consolidated statements of income.
Collateralized agreements and collateralized financing—
Collateralized agreements consist of reverse repurchase agreements disclosed as Securities purchased under agreements to resell and securities
borrowing transactions disclosed as Securities borrowed. Collateralized financing consists of repurchase agreements disclosed as Securities sold underagreements to repurchase, securities lending transactions disclosed as Securities loaned and certain other secured borrowings.
128

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Reverse repurchase and repurchase agreements principally involve the buying or selling of securities under agreements with clients to resell or
repurchase these securities to or from those clients, respectively. These transactions are generally accounted for as collateralized agreements orcollateralized financing transactions and are recognized in the consolidated balance sheets at the amount for which the securities were originallyacquired or sold. Certain reverse repurchase and repurchase agreements are carried at fair value through election of the fair value option.
Nomura also enters into Gensaki Repo transactions which are the standard type of repurchase agreement used in Japanese financial markets.
Gensaki Repo transactions contain margin requirements, rights of security substitution, and certain restrictions on the client’s right to sell or repledge thetransferred securities. Gensaki Repo transactions are accounted for as collateralized agreements or collateralized financing transactions and arerecognized on the consolidated balance sheets at the amount that the securities were originally acquired or sold.
Securities borrowing and lending transactions are generally accounted for as collateralized agreements and collateralized financing transactions,
respectively. These transactions are generally cash collateralized and are recognized on the consolidated balance sheets at the amount of cash collateraladvanced or received. Allowances for current expected credit losses recognized against securities borrowing transactions are not significant due to an
ongoing monitoring of collateral and the short expected life of these transactions. Where Nomura acts as lenders in securities borrowing and lendingtransactions and receives securities that can be sold or pledged as collateral, Nomura recognizes the securities received at fair value within Other assets—Other and the obligation to return those securities as a liability within Other liabilities.
See Note 7 “Financing receivables” for further information including how allowances for current expected credit losses under ASC 326 aredetermined and the impact of the COVID-19 pandemic on the approach to calculation of current expected credit losses during the years ended March 31,
2021 and 2022.
Offsetting of collateralized agreements and collateralized financings
Reverse repurchase agreements and repurchase agreements (including Gensaki Repo transactions) accounted for as collateralized agreements andcollateralized financing transactions, respectively, entered into with the same counterparty and documented under a master netting agreement are offset
in the consolidated balance sheets where the specific criteria defined by ASC 210-20 “Balance Sheet—Offsetting” (“ASC 210-20”) are met. These
criteria include requirements around the maturity of the transactions, the underlying systems on which the collateral is settled, associated banking
arrangements and the legal enforceability of close-out and offsetting rights under the master netting agreement. Similarly, securities borrowing andlending transactions accounted for as collateralized agreements and collateralized financing transactions, respectively, entered into with the same
counterparty and documented under a master netting agreement are also offset in the consolidated balance sheets where the specific criteria defined by
ASC 210-20 are met.
Other secured borrowings consist primarily of secured borrowings from financial institutions and central banks in the inter-bank money market,
and are carried at contractual amounts due.
Trading balances of secured borrowings consist of liabilities related to transfers of financial assets that are accounted for as secured financing
transactions rather than sales under ASC 860 “Transfers and Servicing” (“ASC 860”) and are reported in the consolidated balance sheets within Longterm borrowings. The fair value option is generally elected for these transactions, which are carried at fair value on a recurring basis. See Note 6“Securitizations and Variable Interest Entities” and Note 11 “Borrowings” for further information regarding these transactions.
All Nomura-owned securities pledged to counterparties where the counterparty has the right to sell or repledge the securities, including collateraltransferred under Gensaki Repo transactions, are reported parenthetically within Trading assets as Securities pledged as collateral in the consolidatedbalance sheets.
See Note 5 “Collateralized transactions” for further information.
129

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Derivatives—
Nomura uses a variety of derivatives, including futures, forwards, swaps and options, for both trading and non-trading purposes. Freestanding
financial instruments which meet the accounting definition of derivatives are carried at fair value in the consolidated balance sheets and reported within
Trading assets or Trading liabilities depending on whether fair value at the balance sheet date is positive or negative, respectively. Certain derivatives
embedded in hybrid financial instruments such as structured notes and certificates of deposit are bifurcated from the host contract and are also carried atfair value in the consolidated balance sheets and reported within Short-term borrowings or Long-term borrowings depending on the maturity of theunderlying host contract. Changes in fair value are recognized either through the consolidated statements of income or the consolidated statements ofcomprehensive income depending on the purpose for which the derivatives are used.
Derivatives used for trading purposes
Derivatives used for trading purposes, including bifurcated embedded derivatives, are carried at fair value with changes in fair value reported in
the consolidated statements of income within Revenue—Net gain on trading.
Derivatives held for non-trading purposes
In addition to its trading activities, Nomura uses derivatives for other than trading purposes such as to manage risk exposures arising fromrecognized assets and liabilities, forecasted transactions and firm commitments. Derivatives held for non-trading purposes comprise derivatives formallydesignated as fair value or net investment hedges under ASC 815 “Derivatives and Hedging” (“ASC 815”) or economic expense hedges as follows:
Fair value hedges
Nomura designates certain derivative as fair value hedges of interest rate risk and foreign exchange risk arising from specific financial liabilities
and foreign currency denominated non-trading debt securities, respectively. These derivatives are effective in reducing the risk associated with theexposure being hedged and they are highly correlated with changes in the fair value of the underlying hedged items, both at inception and throughout thelife of the hedging relationship. Changes in fair value of the hedging derivatives are reported together with those of the hedged financial assets andliabilities through the consolidated statements of income within Interest expense and Revenue—Other, respectively.
Net investment hedges
Nomura designates certain derivatives as hedges of the net investment in foreign operations related to specific subsidiaries with non-Japanese Yenfunctional currencies. When determining the effectiveness of net investment hedges, the effective portion of the change in fair value of the hedging
derivative is determined by changes in spot exchange rates. Changes in fair value of the hedging derivatives attributable to changes in the difference
between the forward rate and spot rate is excluded from the measurement of hedge effectiveness and are reported in the consolidated statements ofincome within Revenue—Other. All other movements in fair value of highly effective net investment hedging derivatives are reported through NHI
shareholders’ equity within Accumulated other comprehensive income (loss).
Economic expense hedges
Nomura designates certain derivatives as economic expense hedges to manage equity price risk or foreign currency risk of certain expenses arisingfrom forecasted transactions or firm commitments. Changes in fair value of these derivatives are reported in the same line item in the consolidated
statements of income where expenses arising from the hedged transactions are reported.
Offsetting of derivatives
Derivative assets and liabilities with the same counterparty documented under a legally enforceable master netting agreement and the related cash
collateral receivables and payables are presented on a net basis in the consolidated balance sheets where the specific criteria defined by ASC 210-20 and
ASC 815 are met.
Settlement-to-market derivatives
Exchange traded and centrally cleared OTC derivatives typically involve daily variation margin payments and receipts which reflect changes in
the fair value of the related derivatives. Such variation margin amounts are accounted for as either a partial settlement of the derivative or as a separate
cash collateral receivable or payable depending on the legal form of the arrangement with the relevant central clearing counterparty.
130

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
See Note 3 “Derivatives and hedging activities” for further information.
Loans receivable—
Loans receivable are loans which management intends to hold for the foreseeable future. Loans receivable are either carried at fair value or atamortized cost. Interest earned on loans receivable is reported in the consolidated statements of income within Revenue—Interest and dividends.
Loans receivable carried at fair value
Certain loans which are risk managed on a fair value basis are carried at fair value through election of the fair value option. Nomura makes thiselection to mitigate volatility in the consolidated statements of income caused by the difference in measurement basis that would otherwise exist
between the loans and the derivatives used to risk manage those loans. Changes in the fair value of loans receivable carried at fair value are reported in
the consolidated statements of income within Revenue—Net gain on trading.
Loans receivable carried at amortized cost
Loans receivable which are not carried at fair value are carried at amortized cost. Amortized cost represents cost adjusted for deferred fees anddirect costs, unamortized premiums or discounts on purchased loans and after deducting applicable allowances for current expected credit losses under
ASC 326 which Nomura initially adopted from April 1, 2020.
Loan origination fees, net of direct origination costs, are amortized to Revenue—Interest and dividends as an adjustment to yield over the life of
the loan.
Modifications of loans receivable where the borrower is in financial difficulty and Nomura has granted a financial concession are typicallyaccounted for as troubled debt restructurings (“TDRs”). Consistent with guidance issued by U.S. banking regulators in March 2020 as a result of the
COVID-19 pandemic, certain modifications of loans receivable which met the above criteria were not accounted for TDRs nor the loan classified as
impaired provided the borrower was current with payments prior to the COVID-19 pandemic, the nature of the concession was short-term and only
permitted a payment delay, waiver of fees or extension of repayment terms. Such guidance has no longer been applied by Nomura since October 1,
2020.
See Note 7 “Financing receivables” for further information including how allowances for current expected credit losses under ASC 326 aredetermined.
131

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Other receivables—
Receivables from customers include amounts receivable on client securities transactions, amounts receivable from clients for failed to deliver
securities and receivables for commissions receivable. Receivables from other than customers include amounts receivable from brokers and dealers for
failed to deliver securities, margin deposits, cash collateral receivables for derivative transactions, and net receivables arising from unsettled securities
transactions. The net receivable arising from unsettled securities transactions reported within Receivables from other than customers was ¥nil millionand ¥nil as of March 31, 2021 and March 31, 2022, respectively.
These amounts are carried at contractual amounts due less any applicable allowance for current expected credit losses recognized under ASC 326
which Nomura initially adopted from April 1, 2020.
See Note 7 “Financing receivables” for further information including how allowances for current expected credit losses under ASC 326 aredetermined.
Loan commitments—
Unfunded loan commitments written by Nomura are accounted for as either off-balance sheet instruments, or are carried at fair value on arecurring basis either as trading instruments or through election of the fair value option.
These loan commitments are generally accounted for in a manner consistent with the accounting for the loan receivable upon funding. Where theloan receivable will be classified as a trading asset or will be elected for the fair value option, the loan commitment is also generally held at fair value,with changes in fair value reported in the consolidated statements of income within Revenue—Net gain on trading. Loan commitment fees integral to theloan commitment are recognized as part of the fair value of the commitment.
For loan commitments where the loan will be held for the foreseeable future and will not be elected for the fair value option, Nomura recognizes
allowances for current expected credit losses in accordance with ASC 326 which Nomura initially adopted from April 1, 2020. As of March 31, 2020,
the allowance for incurred credit losses reflected management’s best estimate of probable losses expected incurred for these loan commitments. Loan
commitment fees are generally deferred and recognized over the term of the loan when funded as an adjustment to yield. If drawdown of the loan
commitment is considered remote, loan commitment fees are recognized over the commitment period as service revenue.
See Note 7 “Financing receivables” for further information including how allowances for current expected credit losses under ASC 326 aredetermined.
132

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Payables and deposits—
Payables to customers include amounts payable on client securities transactions and are generally measured at contractual amounts due.
Payables to other than customers include payables to brokers and dealers for failed-to-receive securities, cash collateral payable for derivativetransactions, certain collateralized agreements and financing transactions and net payables arising from unsettled securities transactions. Amounts aremeasured at contractual amounts due. The net payable arising from unsettled securities transactions reported within Payables to other than customers
was ¥205,211 and ¥67,258 million as of March 31, 2021 and March 31, 2022, respectively.
Deposits received at banks represent amounts held on deposit within Nomura’s banking subsidiaries and are measured at contractual amounts due.
Office buildings, land, equipment and facilities—
Office buildings, land, equipment and facilities, owned and held for use by Nomura are stated at cost, net of accumulated depreciation andamortization, except for land, which is stated at cost. Significant renewals and additions are capitalized at cost. Maintenance, repairs and minor renewals
are expensed as incurred in the consolidated statements of income.
Leases and subleases entered into by Nomura as either lessor or lessee are classified as either operating or finance leases on inception date inaccordance with ASC 842 “Leases” which Nomura adopted from April 1, 2019. On lease commencement date, Nomura as lessee recognizes
right-of-use (“ROU”) assets and lease liabilities which are reported within Other assets—Office buildings, land, equipment and facilities and Otherliabilities, respectively in the consolidated balance sheets.
Lease liabilities are initially measured at present value of the future minimum lease payments over the expected lease term. The future minimum
lease payments are discounted using a relevant Nomura incremental borrowing rate as derived from information available at lease commencement date.
The expected lease term is generally determined based on the contractual maturity of the lease, and adjusted for periods covered by options to extend or
terminate the lease when Nomura is reasonably certain to exercise those options. ROU assets are initially measured at the amount of lease liabilities, andadjusted for any prepaid lease payments, initial direct costs incurred and any lease incentives received.
After lease commencement date, for operating leases Nomura as lessee recognizes lease expense over the lease term generally on a straight-line
basis within Occupancy and related depreciation or Information processing and communications in the consolidated statements of income. While forfinance leases, Nomura recognizes amortization charges of ROU assets over the lease term and interest expense on finance lease liabilities.
133

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Depreciation and amortization charges of owned assets are generally computed using the straight-line method and recognized over the estimateduseful lives of each asset. The estimated useful life of an asset takes into consideration technological change, normal deterioration and actual physicalusage by Nomura. Leasehold improvements are depreciated over the shorter of their useful life or the term of corresponding lease.
The estimated useful lives for significant asset classes are as follows:
Office buildings
Equipment and facilities
Software3 to 50 years
2 to 20 years
3 to 10 years

Long-lived assets, including ROU assets and software assets but excluding goodwill and indefinite-lived intangible assets, are reviewed for
impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the estimated future undiscounted
cash flows generated by the asset is less than the carrying amount of the asset, a loss is recognized to the extent that the carrying value exceeds its fairvalue.
See Note 8 “Leases” for further information.
Investments in equity securities—
Nomura holds minority stakes in the equity securities of unaffiliated Japanese financial institutions and corporations in order to promote existingand potential business relationships. These companies often have similar investments in Nomura. Such cross-holdings are a customary business practicein Japan and provide a way for companies to manage shareholder relationships.
These investments, which Nomura refers to as being held for operating purposes, are carried at fair value and reported within Other assets—
Investments in equity securities in the consolidated balance sheets, with changes in fair value reported within Revenue—Gain (loss) on investments inequity securities in the consolidated statements of income.
Other non-trading debt and equity securities—
Certain non-trading subsidiaries within Nomura hold debt securities and minority stakes in equity securities for non-trading purposes. Non-trading
securities held by non-trading subsidiaries are carried at fair value and reported within Other assets—Non-trading debt securities and Other assets—
Other in the consolidated balance sheets with changes in fair value reported within Revenue—Other in the consolidated statements of income. Realized
gains and losses on non-trading securities are reported within Revenue—Other in the consolidated statements of income.
134

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Short-term and long-term borrowings—
Short-term borrowings are defined as borrowings which are due on demand, which have a contractual maturity of one year or less at issuance date,or which have a longer contractual maturity but which contain features outside of Nomura’s control that allows the investor to demand redemption
within one year from original issuance date. Short-term and long-term borrowings primarily consist of commercial paper, bank borrowings, and certain
structured notes issued by Nomura and SPEs consolidated by Nomura, and financial liabilities recognized in transfers of financial assets which areaccounted for as financings rather than sales under ASC 860 (“secured financing transactions”). Of these financial liabilities, certain structured notes andsecured financing transactions are accounted for at fair value on a recurring basis through election of the fair value option. Other short and long-termborrowings are carried at amortized cost.
Structured notes are debt securities which contain embedded features (often meeting the accounting definition of a derivative) that alter the returnto the investor from simply receiving a fixed or floating rate of interest to a return that depends upon some other variable(s) such as an equity or equity
index, commodity price, foreign exchange rate, credit rating of a third party or more complex interest rate calculation. Structured borrowings areborrowings that have similar characteristics as structured notes.
All structured notes and certain structured borrowings issued by Nomura are carried at fair value on a recurring basis through election of the fairvalue option. This blanket election for structured notes and certain structured borrowings are made primarily to mitigate the volatility in the consolidated
statements of income caused by differences in the measurement basis for structured notes and the derivatives used to risk manage those positions and to
generally simplify the accounting Nomura applies to these financial instruments.
Changes in the fair value of structured notes elected for the fair value option are reported within Revenue—Net gain on trading in the consolidated
statements of income, except for those attributable to Nomura’s own creditworthiness which are reported within Other comprehensive income in the
consolidated balance sheets.
See Note 11 “Borrowings” for further information.
Income taxes—
Deferred tax assets and liabilities are recognized to reflect the expected future tax consequences of operating loss carryforwards, tax credit
carryforwards and temporary differences between the carrying amounts for financial reporting purposes and the tax bases of assets and liabilities based
upon enacted tax laws and tax rates. Nomura recognizes deferred tax assets to the extent it believes that it is more likely than not that a benefit will be
realized. A valuation allowance is established against deferred tax assets for tax benefits available to Nomura that are not deemed more likely than not tobe realized.
Deferred tax assets and deferred tax liabilities that relate to the same tax-paying component within a particular tax jurisdiction are offset in the
consolidated balance sheets. Net deferred tax assets and net deferred tax liabilities are reported within Other assets—Other and Other liabilities in the
consolidated balance sheets.
Nomura recognizes and measures unrecognized tax benefits based on Nomura’s estimate of the likelihood, based on technical merits, that tax
positions will be sustained upon examination based on the facts and circumstances and information available at the end of each period. Nomura adjusts
the level of unrecognized tax benefits when there is more information available, or when an event occurs requiring a change. The reassessment of
unrecognized tax benefits could have a material impact on Nomura’s effective tax rate in the period in which it occurs.
Nomura reports income tax-related interest and penalties within Income tax expense in the consolidated statements of income.
See Note 15 “Income taxes” for further information.
135

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Stock-based and other compensation awards—
Stock-based awards issued by Nomura to senior management and other employees are classified as either equity or liability awards depending on
the terms of the award.
Stock-based awards such as Stock Acquisition Rights (“SARs”) and Restricted Stock Units (“RSUs”) which are expected to be settled by thedelivery of the Company’s common stock are classified as equity awards. For these awards, total compensation cost is generally fixed at the grant dateand measured using the grant-date fair value of the award, net of any amount the employee is obligated to pay and estimated forfeitures.
Stock-based awards such as Notional Stock Units (“NSUs”) and Collared Notional Stock Units (“CSUs”) which are expected to be settled in cash
are classified as liability awards. Liability awards are remeasured to fair value at each balance sheet date, net of estimated forfeitures with the final
measurement of cumulative compensation cost equal to the settlement amount.
For both equity and liability awards, fair value is determined either by using option pricing models, the market price of the Company’s common
stock or the price of the third party index, as appropriate. Compensation cost is recognized in the consolidated statements of income over the requisite
service period, which generally is equal to the contractual vesting period. Where an award has graded vesting, compensation expense is recognizedusing the accelerated recognition method.
Certain deferred compensation awards include “Full Career Retirement” (“FCR”) provisions which permit recipients of the awards to continue tovest in the awards upon voluntary termination or by claiming FCR during a pre-defined election window if certain criteria based on corporate title andlength of service within Nomura are met. The requisite service period for these awards ends on the earlier of the contractual vesting date and the datethat the recipients become eligible for or claim FCR.
See Note 14 “Deferred compensation awards” for further information.
Earnings per share—
The computation of basic earnings per share is based on the weighted average number of shares outstanding during the year. Diluted earnings per
share reflects the assumed conversion of all dilutive securities based on the most advantageous conversion rate or exercise price available to theinvestors, and assuming conversion of convertible debt under the if-converted method.
See Note 12 “Earnings per share” for further information.
Cash and cash equivalents—
Nomura defines cash and cash equivalents as cash on hand and demand deposits with banks.
136

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Goodwill and intangible assets—
Goodwill is recognized upon completion of a business combination as the difference between the purchase price and the fair value of the net assets
acquired. Subsequent to initial recognition, goodwill is not amortized but is tested for impairment at a reporting unit level during the fourth quarter of
each fiscal year, or more frequently during earlier interim periods if events or circumstances indicate there may be impairment. Nomura’s reporting units
are at the same level as or one level below its business segments.
Nomura tests goodwill of each separate reporting unit by initially qualitatively assessing whether events and circumstances indicate that it is more
likely than not (i.e., greater than 50% likelihood) that a reporting unit’s fair value is less than its carrying amount. If such assessment indicates fair value
is not less than the carrying value, the reporting unit is deemed not to be impaired and no further analysis is required. If it is more likely than not that fairvalue of the reporting unit is below its carrying value, a quantitative test is then performed. Following the adoption of ASU 2017-04 “Simplifying theTest for Goodwill Impairment” effective from April 1, 2020, a goodwill impairment loss is now recognized through earnings as the excess of thecarrying amount of a reporting unit, including goodwill, over its fair value but limited to the total amount of goodwill allocated to the reporting unit.
Prior to such date, an impairment loss was only recognized if the estimated implied fair value of the goodwill is below its carrying value. Intangible
assets not subject to amortization (“indefinite-lived intangible assets”) are tested for impairment on an individual asset basis during the fourth quarter of
each fiscal year, or more frequently during earlier interim periods if events or circumstances indicate there may be impairment. Similar to goodwill,
Nomura tests an indefinite-lived intangible asset by initially qualitatively assessing whether events or circumstances indicate that it is more likely than
not that the fair value of the intangible asset is less than its carrying amount. If such assessment indicates fair value is not less than the carrying value,
the intangible asset is deemed not to be impaired and no further analysis is required. If it is more likely than not that the fair value of the intangible asset
is below its carrying value, the current estimated fair value of the intangible asset is compared with its carrying value. An impairment loss is recognized
if the carrying value of the intangible asset exceeds its estimated fair value.
Intangible assets with finite lives (“finite-lived intangible assets”) are amortized over their estimated useful lives and tested for impairment either
individually or with other assets (“asset group”) when events and circumstances indicate that the carrying value of the intangible asset (or asset group)
may not be recoverable.
A finite-lived intangible asset is impaired when its carrying amount or the carrying amount of the asset group exceeds its fair value. An
impairment loss is recognized only if the carrying amount of the intangible asset (or asset group) is not recoverable and exceeds its fair value.
For both goodwill and intangible assets, to the extent an impairment loss is recognized, the loss establishes a new cost basis for the asset whichcannot be subsequently reversed.
See Note 10 “Other assets—Office buildings, land, equipment and facilities and Other / Other liabilities” for further information.
Nomura’s equity method investments are tested in their entirety for other-than-temporary impairment when there is an indication of impairment.
The underlying assets associated with the equity method investments, including goodwill, are not tested separately for impairment.
137

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Employee benefit plans—
Nomura provides certain eligible employees with various benefit plans, including pensions and other post-retirement benefits. These benefit plans
are classified as either defined benefit plans or defined contribution plans.
Plan assets and benefit obligations, as well as the net periodic benefit cost of a defined benefit pension or post-retirement benefit plan, arerecognized based on various actuarial assumptions such as discount rates, expected return on plan assets and future compensation levels at the balance
sheet date. Actuarial gains and losses in excess of 10% of the greater of the projected benefit obligation or the fair value of plan assets and unrecognizedprior service costs or credits are amortized to net periodic benefit cost on a straight-line basis over the average remaining service life of active
employees expected to receive benefits. The overfunded or underfunded status of a plan is reported within Other assets—Other or Other liabilities in the
consolidated balance sheets, and changes in funded status are reflected in net periodic benefit cost and Other comprehensive income (loss) on a
net-of-tax basis in the consolidated statements of comprehensive income.
The net periodic pension and other benefit cost of defined contribution plans is recognized within Compensation and benefits in the consolidated
statements of income when the employee renders service to Nomura, which generally coincides with when contributions to the plan are made.
See Note 13 “Employee benefit plans” for further information.
138

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
New accounting pronouncements adopted during the current year—
No new accounting pronouncements relevant to Nomura were adopted during the year ended March 31, 2022.
However, Nomura has elected to apply certain practical reliefs provided by the following new accounting pronouncements during the year ended
March 31, 2022:
Summary of new guidance

Pronouncement

ASU 2020-04“Reference rate reform”

•

•

•

Adoption date andmethod of adoption

The expedients andProvides temporary optional expedients and exceptions to theapplication of generally accepted accounting principles to certain exceptions
contract and hedge relationships affected by reference rate reform. provided by the
ASU are permitted
Contract modifications solely related to the replacement of
to be adopted any
reference rate are eligible for relief from modification accounting
time until
requirements and accounted for as a continuation of the existing
December 31,
contract.
2022.
Allows various optional expedients and elections to allow hedging
relationships affected by reference rate reform would continue
uninterrupted during the reference rate transition if certain criteria
are met.
139

Effect on these
consolidated statements

Nomura has elected toapply the relief to certain
contract modifications
beginning from the year
ended March 31, 2022.
These modifications have
not had a material impact
on these consolidated
financial statements.

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Future accounting developments—
The following table presents a summary of new authoritative accounting pronouncements relevant to Nomura which will be adopted on or after
April 1, 2022 and which may have a material impact on these consolidated financial statements:

Summary of new guidance

Pronouncement

ASU 2022-02“Financial instruments—
Credit losses (Topic 326):
Troubled debt
restructurings and vintage
disclosures”•

Eliminates specific recognition and measurement guidance fortroubled debt restructurings (“TDRs”).Single guidance to be
applied to all modifications when determining whether amodification results in a new receivable or a continuation of an
existing receivable;•

Requires to use a discounted cash flow (“DCF”) or reconcilable
method for measurement of current expected credit losses formodified receivables is removed; where a DCF method is used forthe measurement, an effective interest rate (EIR) derived from themodified contractual terms should be applied;•

Enhances disclosures by creditors for modifications of receivablesfrom debtors experiencing financial difficulty in the form ofprincipal forgiveness, an interest rate reduction, other-thaninsignificant payment delay or term extension;•

Augments the current requirements for public business entity
creditors to disclose current-period gross write-offs by year oforigination (i.e., the vintage year) for financing receivables and net
investments in leases.
140

Expected adoption
date and method of
adoption

Effect on these
consolidated statements

Nomura tentatively
plans to adopt theamendments from
April 1, 2023

No material financial
impact expected unless asignificant number of
TDRs occur in the future.
Certain disclosures aboutmodification ofreceivables and write-offs
will be updated or
removed.

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
2. Fair value measurements:
The fair value of financial instruments
A significant amount of Nomura’s financial instruments is measured at fair value. Financial assets measured at fair value on a recurring basis arereported in the consolidated balance sheets within Trading assets and private equity and debt investments, Loans and receivables, Collateralized
agreements and Other assets. Financial liabilities measured at fair value on a recurring basis are reported within Trading liabilities, Short-termborrowings, Payables and deposits, Collateralized financing, Long-term borrowings and Other liabilities.
Other financial assets and financial liabilities are measured at fair value on a nonrecurring basis, where the primary measurement basis is not fairvalue but where fair value is used in specific circumstances after initial recognition, such as to measure impairment.
In all cases, fair value is determined in accordance with ASC 820 “Fair Value Measurements and Disclosures” (“ASC 820”) which defines fairvalue as the amount that would be exchanged to sell a financial asset or transfer a financial liability in an orderly transaction between market participantsat the measurement date. It assumes that the transaction occurs in the principal market for the relevant financial assets or financial liabilities, or in theabsence of a principal market, the most advantageous market.
Fair value is usually determined on an individual financial instrument basis consistent with the unit of account of the financial instrument.
However, certain financial instruments managed on a portfolio basis are valued as a portfolio, namely based on the price that would be received to sell a
net long position (i.e., a net financial asset) or transfer a net short position (i.e., a net financial liability) consistent with how market participants would
price the net risk exposure at the measurement date.
Financial assets measured at fair value also include investments in certain funds where, as a practical expedient, fair value is determined on thebasis of net asset value per share (“NAV per share”) if the NAV per share is calculated in accordance with certain industry standard principles.
Increases and decreases in the fair value of assets and liabilities will significantly impact Nomura’s position, performance, liquidity and capital
resources. As explained below, valuation techniques applied contain inherent uncertainties and Nomura is unable to predict the accurate impact of future
developments in the market. The valuation of financial instruments is more difficult during periods of market stress as a result of greater volatility andreduced price transparency, such as during the COVID-19 pandemic in 2020 and 2021 and during the invasion of Ukraine by the Russian Federation in
2022, and may therefore require the greater use of judgement in the determination of fair value. Where appropriate, Nomura uses economic hedging
strategies to mitigate its risk, although these hedges are also subject to unpredictable movements in the market.
Valuation methodology for financial instruments carried at fair value on a recurring basis
The fair value of financial instruments is based on quoted market prices including market indices, broker or dealer quotations or an estimation by
management of the expected exit price under current market conditions. Various financial instruments, including cash instruments and over-the-counter(“OTC”) contracts, have bid and offer prices that are observable in the market. These are measured at the point within the bid-offer range which best
represents Nomura’s estimate of fair value. Where quoted market prices or broker or dealer quotations are not available, prices for similar instruments orvaluation pricing models are considered in the determination of fair value.
Where quoted prices are available in active markets, no valuation adjustments are taken to modify the fair value of assets or liabilities marked
using such prices. Other instruments may be measured using valuation techniques, such as valuation pricing models incorporating observable valuation
inputs, unobservable parameters or a combination of both. Valuation pricing models use valuation inputs which would be considered by market
participants in valuing similar financial instruments.
Valuation pricing models and their underlying assumptions impact the amount and timing of unrealized and realized gains and losses recognized,
and the use of different valuation pricing models or underlying assumptions could produce different financial results. Valuation uncertainty results froma variety of factors, including the valuation technique or model selected, the quantitative assumptions used within the valuation model, the inputs into
the model, as well as other factors. Valuation adjustments are used to reflect the assessment of this uncertainty. Common valuation adjustments include
model reserves, credit adjustments, close-out adjustments, and other appropriate instrument-specific adjustments, such as those to reflect transfer or sale
restrictions.
141

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The level of adjustments is largely judgmental and is based on an assessment of the factors that management believe other market participants
would use in determining the fair value of similar financial instruments. The type of adjustments taken, the methodology for the calculation of theseadjustments, and the valuation inputs for these calculations are reassessed periodically to reflect current market practice and the availability of new
information.
For example, the fair value of certain financial instruments includes adjustments for credit risk; both with regards to counterparty credit risk on
positions held and Nomura’s own creditworthiness on positions issued. Credit risk on financial assets is significantly mitigated by credit enhancements
such as collateral and netting arrangements. Any net credit exposure is measured using available and applicable valuation inputs for the relevant
counterparty. The same approach is used to measure the credit exposure on Nomura’s financial liabilities as is used to measure counterparty credit risk
on Nomura’s financial assets.
Such valuation pricing models are calibrated to the market on a regular basis and inputs used are adjusted for current market conditions and risks.
The Valuation Model Validation Group within Nomura’s Risk Management Department reviews pricing models and assesses model appropriateness andconsistency independently of the front office. The model reviews consider a number of factors about a model’s suitability for valuation and sensitivity ofa particular product. Valuation models are calibrated to the market on a periodic basis by comparison to observable market pricing, comparison withalternative models and analysis of risk profiles.
As explained above, any changes in fixed income, equity, foreign exchange and commodity markets can impact Nomura’s estimates of fair value
in the future, potentially affecting trading gains and losses. Where financial contracts have longer maturity dates, Nomura’s estimates of fair value may
involve greater subjectivity due to the lack of transparent market data.
Fair value hierarchy
All financial instruments measured at fair value, including those measured at fair value using the fair value option, have been categorized into athree-level hierarchy (“fair value hierarchy”) based on the transparency of valuation inputs used by Nomura to estimate fair value. A financial instrument
is classified in the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement of the financial instrument. The
three levels of the fair value hierarchy are defined as follows, with Level 1 representing the most transparent inputs and Level 3 representing the leasttransparent inputs:
Level 1:
Observable valuation inputs that reflect quoted prices (unadjusted) for identical financial instruments traded in active markets at the measurement
date.
Level 2:
Valuation inputs other than quoted prices included within Level 1 that are either directly or indirectly observable for the financial instrument.
Level 3:
Unobservable valuation inputs which reflect Nomura assumptions and specific data.
The availability of valuation inputs observable in the market varies by product and can be affected by a variety of factors. Significant factors
include, but are not restricted to the prevalence of similar products in the market, especially for customized products, how established the product is in
the market, for example, whether it is a new product or is relatively mature, and the reliability of information provided in the market which would
depend, for example, on the frequency and volume of current data. A period of significant change in the market may reduce the availability ofobservable data. Under such circumstances, financial instruments may be reclassified into a lower level in the fair value hierarchy.
Significant judgments used in determining the classification of financial instruments include the nature of the market in which the product would
be traded, the underlying risks, the type and liquidity of market data inputs and the nature of observed transactions for similar instruments.
142

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Where valuation models include the use of valuation inputs which are less observable or unobservable in the market, significant management
judgment is used in establishing fair value. The valuations for Level 3 financial instruments, therefore, involve a greater degree of judgment than thosevaluations for Level 1 or Level 2 financial instruments and has become more prevalent during the COVID-19 pandemic.
Certain criteria used to determine whether a market is active or inactive include the number of transactions, the frequency that pricing is updated
by other market participants, the variability of price quotes among market participants, and the amount of publicly available information.
143

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following tables present the amounts of Nomura’s financial instruments measured at fair value on a recurring basis as of March 31, 2021 and2022 within the fair value hierarchy.

Assets:Trading assets and private equity and debt investments(2)Equities(3)Private equity and debt investments(5)Japanese government securities
Japanese agency and municipal securities
Foreign government, agency and municipal securities
Bank and corporate debt securities and loans for trading purposes
Commercial mortgage-backed securities (“CMBS”)
Residential mortgage-backed securities (“RMBS”)
Issued/Guaranteed by government sponsored entity
Other
Real estate-backed securities
Collateralized debt obligations (“CDOs”) and other(6)Investment trust funds and otherTotal trading assets and private equity and debt investments
Derivative assets(7)Equity contracts
Interest rate contracts
Credit contracts
Foreign exchange contracts
Commodity contracts
Netting
Total derivative assets
Subtotal
Loans and receivables(8)Collateralized agreements(9)Other assets
Non-trading debt securities
Other(2)(3)(4)
Total
Liabilities:
Trading liabilities
Equities
Japanese government securities
Japanese agency and municipal securities
Foreign government, agency and municipal securities
Bank and corporate debt securities
Residential mortgage-backed securities (“RMBS”)
Collateralized debt obligations (“CDOs”) and other(6)Investment trust funds and otherTotal trading liabilities
Derivative liabilities(7)Equity contracts
Interest rate contracts
Credit contracts
Foreign exchange contracts
Commodity contracts
Netting
Total derivative liabilities

Level 1

Level 2

Billions of yen
March 31, 2021
Counterparty
andCash Collateral
Netting(1)Level 3

¥2,338
—
1,637
—
2,838
—
—
—
—
—
—
—
573
7,386

¥

¥

9
29
4
0
1
—
43
¥7,429
—
—

1,318
9,577
427
4,479
0
—
15,801¥22,543
878
349

75
26
24
37
—
—
162
¥ 528
104
18

123
353
¥7,905304
173¥24,247

—
185
¥ 835

¥

¥2,341
1,039
—
2,912
—
—
—
243
6,535

¥

¥

¥

1
21
3
—
0
—
25

968
—
—
76
1,987
1,259
0
2,387
2,325
62
0
36
29
6,742

20
—
1
1,172
230
0
0
13
1,436
2,112
8,948
458
4,380
0
—
15,898

16
58
—
2
12
135
8
6
—
6
106
23
0
366

0
—
—
1
5
—
1
0
7
116
69
62
22
—
—
269

¥

¥

—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(14,786)(14,786)(14,786)————(14,786)

—
—
—
—
—
—
—
—
—
—
—
—
—
—
(14,697)(14,697)

Balance as ofMarch 31, 2021

¥

¥

¥

¥

3,322
58
1,637
78
4,837
1,394
8
2,393
2,325
68
106
59
602
14,494
1,402
9,632
455
4,516
1
(14,786)
1,220
15,714
982
367
427
711
18,201

2,361
1,039
1
4,085
235
0
1
256
7,978
2,229
9,038
523
4,402
0
(14,697)1,495

Subtotal
Short-term borrowings(10)Payables and deposits(10)(11)
Collateralized financing(9)Long-term borrowings(10)(12)(13)
Other liabilities(14)Total¥6,560
¥ —
—
—
5
231
¥6,796
144¥17,334
¥ 532
49
352
3,546
179
¥21,992

¥ 276
¥ 103
1
1
547
35
¥ 963

¥
¥

¥

(14,697)—————(14,697)

¥
¥

¥

9,473
635
50
353
4,098
445
15,054

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Assets:Trading assets and private equity and debt investments(2)Equities(3)Private equity and debt investments(5)Japanese government securities
Japanese agency and municipal securities
Foreign government, agency and municipal securities
Bank and corporate debt securities and loans for trading purposes
Commercial mortgage-backed securities (“CMBS”)
Residential mortgage-backed securities (“RMBS”)
Issued/Guaranteed by government sponsored entity
Other
Real estate-backed securities
Collateralized debt obligations (“CDOs”) and other(6)Investment trust funds and otherTotal trading assets and private equity and debt investments
Derivative assets(7)Equity contracts
Interest rate contracts
Credit contracts
Foreign exchange contracts
Commodity contracts
Netting
Total derivative assets
Subtotal
Loans and receivables(8)Collateralized agreements(9)Other assets
Non-trading debt securities
Other(2)(3)(4)
Total
Liabilities:
Trading liabilities
Equities
Japanese government securities
Japanese agency and municipal securities
Foreign government, agency and municipal securities
Bank and corporate debt securities
Residential mortgage-backed securities (“RMBS”)
Collateralized debt obligations (“CDOs”) and other(6)Investment trust funds and otherTotal trading liabilities
Derivative liabilities(7)Equity contracts
Interest rate contracts
Credit contracts
Foreign exchange contracts
Commodity contracts
Netting
Total derivative liabilities
Subtotal
Short-term borrowings(10)Payables and deposits(10)(11)

Billions of yen
March 31, 2022
Counterparty
andCash Collateral
Level 3
Netting(1)Balance as ofMarch 31, 2022¥

Level 1

Level 2

¥2,100
22
1,730
—
3,220
—
—
—
—
—
—
—
293
7,365

¥ 1,041
—
—
184
2,010
1,134
0
1,450
1,376
74
58
34
23
5,934

¥

3
120
12
—
1
—
136
¥7,501——874
11,755
398
4,777
0
—
17,804¥23,738
1,103
282

97
63
33
29
—
—
222
¥ 620
205
16

117
146
¥7,764367
136¥25,626—197¥ 1,038¥¥1,796
1,098
—
3,451
—
—
—
76
6,421

¥

¥

¥

2
60
14
0
0
—
76
¥6,497¥ ——1,368
10,826
434
4,795
1
—
17,424¥18,985
¥ 653
63

8
—
0
1,328
222
0
3
0
1,561

14
32
—
2
10
220
7
8
—
8
79
26
0
398

0
—
—
0
3
—
0
0
3

87
74
66
19
—
—
246
¥ 249
¥ 58
8

¥

¥

¥
¥

—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(16,608)(16,608)(16,608)————(16,608)

—
—
—
—
—
—
—
—
—
—
—
—
—
—
(16,079)(16,079)(16,079)
—
—

¥

¥

¥

¥
¥

3,155
54
1,730
186
5,240
1,354
7
1,458
1,376
82
137
60
316
13,697974
11,938443
4,806
1(16,608)
1,554
15,251
1,308
298
484
479
17,820

1,804
1,098
0
4,779
225
0
3
76
7,985
1,457
10,960514
4,814
1(16,079)
1,667
9,652
711
71

Collateralized financing(9)Long-term borrowings(10)(12)(13)
Other liabilities(14)
Total

—
23
32
¥6,552
145

516
4,055
155
¥24,427

—
479
32
¥ 826

¥

—
—
—
(16,079)

¥

516
4,557
219
15,726

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(1)
(2)

(3)
(4)
(5)

(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
(14)

Represents the amount offset under counterparty netting of derivative assets and liabilities as well as cash collateral netting against net derivatives.
Certain investments that are measured at fair value using net asset value per share as a practical expedient have not been classified in the fair value
hierarchy. As of March 31, 2021 and March 31, 2022, the fair values of these investments which are included in Trading assets and private equity
and debt investments were ¥24 billion and ¥45 billion, respectively. As of March 31, 2021 and March 31, 2022, the fair values of theseinvestments which are included in Other assets—Others were ¥4 billion and ¥3 billion, respectively.
Includes equity investments that would have been accounted for under the equity method had Nomura not chosen to elect the fair value option.
Includes equity investments which comprise listed and unlisted equity securities held for operating purposes in the amounts of ¥93,230 millionand ¥33,419 million, respectively, as of March 31, 2021 and ¥101,503 million and ¥32,394 million, respectively, as of March 31, 2022.
Private equity and debt investments include private non-traded financial instruments including minority private equity and venture capital equity
investments and other junior debt investments such as mezzanine debt held for non-trading purposes, and post-IPO investments. Also include
minority equity investments that would have been accounted for under the equity method had Nomura not chosen to elect the fair value option tothese investments as permitted under ASC 825.
Includes collateralized loan obligations (“CLOs”) and asset-backed securities (“ABS”) such as those secured on credit card loans, auto loans andstudent loans.
Derivatives which contain multiple types of risk are classified based on the primary risk type of the instrument.
Includes loans and receivables for which the fair value option has been elected.
Includes collateralized agreements or collateralized financing for which the fair value option has been elected.
Includes deposits received at banks and structured notes for which the fair value option has been elected.
Includes embedded derivatives bifurcated from deposits received at banks. If unrealized gains are greater than unrealized losses, deposits are
reduced by the excess amount.
Includes embedded derivatives bifurcated from issued structured notes. If unrealized gains are greater than unrealized losses, borrowings are
reduced by the excess amount.
Includes liabilities recognized from secured financing transactions that are accounted for as financings rather than sales. Nomura elected the fairvalue option for these liabilities.
Includes loan commitments for which the fair value option has been elected.
146

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Valuation techniques by major class of financial instrument
The valuation techniques used by Nomura to estimate fair value for major classes of financial instruments, together with the significant inputs
which determine classification in the fair value hierarchy, are as follows.
Equities and equity securities reported within Other assets—Equities and equity securities reported within Other assets include direct holdings ofboth listed and unlisted equity securities, and fund investments. The fair value of listed equity securities is determined using quoted prices for identicalsecurities from active markets where available. These valuations should be in line with market practice and therefore can be based on bid prices or
mid-market prices. Nomura determines whether the market is active depending on the sufficiency and frequency of trading activity. Where thesesecurities are classified in Level 1 of the fair value hierarchy, no valuation adjustments are made to fair value. Listed equity securities traded in inactive
markets are also generally valued using the exchange price and are classified in Level 2. Whilst rare in practice, Nomura may apply a discount or
liquidity adjustment to the exchange price of a listed equity security traded in an inactive market if the exchange price is not considered to be an
appropriate representation of fair value. These adjustments are determined by individual security and are not determined or influenced by the size ofholding. The amount of such adjustments made to listed equity securities traded in inactive markets was ¥nil as of March 31, 2021 and 2022,
respectively. The fair value of unlisted equity securities is determined using the same valuation technique as private equity and debt investments
described below and are usually classified in Level 3 because significant valuation inputs such as liquidity discounts and credit spreads areunobservable.
Private equity and debt investments—The determination of fair value of unlisted private equity and debt investments requires significant
management judgment because the investments, by their nature, have little or no price transparency. Private equity and debt investments are initially
carried at cost as an approximation of fair value. Adjustments to carrying value are made if there is third-party evidence of a change in value.
Adjustments are also made, in the absence of third-party transactions, if it is determined that the expected exit price of the investment is different fromcarrying value. In reaching that determination, Nomura primarily uses either a discounted cash flow (“DCF”) or market multiple valuation technique. A
DCF valuation technique incorporates estimated future cash flows to be generated from the underlying investee, as adjusted for an appropriate growthrate discounted at a weighted average cost of capital (“WACC”). Market multiple valuation techniques include comparables such as Enterprise
Value/earnings before interest, taxes, depreciation and amortization (“EV/EBITDA”) ratios, Price/Earnings (“PE”) ratios, Price/Book ratios,
Price/Embedded Value ratios and other multiples based on relationships between numbers reported in the financial statements of the investee and theprice of comparable companies. A liquidity discount may also be applied to either a DCF or market multiple valuation to reflect the specificcharacteristics of the investee. The liquidity discount includes considerations for various uncertainties in the model and inputs to valuation. Where
possible these valuations are compared with the operating cash flows and financial performance of the investee or properties relative to budgets or
projections, price/earnings data for similar quoted companies, trends within sectors and/or regions and any specific rights or terms associated with theinvestment, such as conversion features and liquidation preferences. Private equity and debt investments are generally classified in Level 3 since thevaluation inputs such as those mentioned above are usually unobservable.
147

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Government, agency and municipal securities—The fair value of Japanese and other G7 government securities is primarily determined using
quoted market prices, executable broker or dealer quotations, or alternative pricing sources. These securities are traded in active markets and therefore
are classified within Level 1 of the fair value hierarchy. Non-G7 government securities, agency securities and municipal securities are valued using
similar pricing sources but are generally classified in Level 2 as they are traded in inactive markets. Certain non-G7 securities may be classified in
Level 1 because they are traded in active markets. Certain securities may be classified in Level 3 because they are traded infrequently and there is not
sufficient information from comparable securities to classify them in Level 2. These are valued using DCF valuation techniques which include
significant unobservable valuation inputs such as credit spreads of the issuer.
Bank and corporate debt securities—The fair value of bank and corporate debt securities is primarily determined using DCF valuation techniques
but also using broker or dealer quotations and recent market transactions of identical or similar debt securities, if available. Consideration is given to thenature of the broker and dealer quotations, namely whether these are indicative or executable, the number of available quotations and how these
quotations compare to any available recent market activity or alternative pricing sources. The significant valuation inputs used for DCF valuations areyield curves, asset swap spreads, recovery rates and credit spreads of the issuer. Bank and corporate debt securities are generally classified in Level 2 ofthe fair value hierarchy because these valuation inputs are usually observable or market-corroborated. Certain bank and corporate debt securities will beclassified in Level 3 because they are traded infrequently and there is insufficient information from comparable securities to classify them in Level 2, or
credit spreads or recovery rates of the issuer used in DCF valuations are unobservable.
Commercial mortgage-backed securities (“CMBS”) and Residential mortgage-backed securities (“RMBS”)—The fair value of CMBS and RMBS
are primarily determined using DCF valuation techniques but also using broker or dealer quotations and recent market transactions of identical orsimilar securities, if available. Consideration is given to the nature of the broker and dealer quotations, namely whether these are indicative or
executable, the number of available quotations and how these quotations compare to any available recent market activity or alternative pricing sources.
The significant valuation inputs include yields, prepayment rates, default probabilities and loss severities. CMBS and RMBS securities are generallyclassified in Level 2 because these valuation inputs are observable or market-corroborated. Certain CMBS and RMBS positions will be classified in
Level 3 because they are traded infrequently and there is insufficient information from comparable securities to classify them in Level 2, or one or moreof the significant valuation inputs used in DCF valuations are unobservable.
Real estate-backed securities—The fair value of real estate-backed securities is determined using broker or dealer quotations, recent market
transactions or by reference to a comparable market index. Consideration is given to the nature of the broker and dealer quotations, namely whether
these are indicative or executable, the number of available quotations and how these quotations compare to any available recent market activity oralternative pricing sources. Where all significant inputs are observable, the securities will be classified in Level 2. For certain securities, no direct
pricing sources or comparable securities or indices may be available. These securities are valued using DCF or valuation techniques and are classified in
Level 3 as the valuation includes significant unobservable valuation inputs such as yields or loss severities.
Collateralized debt obligations (“CDOs”) and other—The fair value of CDOs is primarily determined using DCF valuation techniques but alsousing broker or dealer quotations and recent market transactions of identical or similar securities, if available. Consideration is given to the nature of thebroker and dealer quotations, namely whether these are indicative or executable, the number of available quotations and how these quotations compare
to any available recent market activity or alternative pricing sources. The significant valuation inputs used include market spread data for each credit
rating, yields, prepayment rates, default probabilities and loss severities. CDOs are generally classified in Level 2 of the fair value hierarchy because
these valuation inputs are observable or market-corroborated. CDOs will be classified in Level 3 where one or more of the significant valuation inputs
used in the DCF valuations are unobservable.
148

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Investment trust funds and other—The fair value of investment trust funds is primarily determined using NAV per share. Publicly traded funds
which are valued using a daily NAV per share are classified in Level 1 of the fair value hierarchy. For funds that are not publicly traded but Nomura has
the ability to redeem its investment with the investee at NAV per share on the balance sheet date or within the near term, the investments are classified in
Level 2. Investments where Nomura does not have the ability to redeem in the near term or does not know when it can redeem are classified in Level 3.
The fair value of certain other investments reported within Investment trust funds and other is determined using DCF valuation techniques. These
investments are classified in Level 3 as the valuation includes significant unobservable valuation inputs such as credit spreads of issuer and correlation.
Derivatives—Equity contracts—Nomura enters into both exchange-traded and OTC equity derivative transactions such as index and equity
options, equity basket options and index and equity swaps. Where these derivatives are traded in active markets and the exchange price is representativeof fair value, the fair value of exchange-traded equity derivatives is determined using an unadjusted exchange price and classified in Level 1 of the fairvalue hierarchy. The fair value of exchange-traded equity derivatives which are traded in inactive markets or where the exchange price is not
representative of fair value is determined using a model price and are classified in Level 2. The fair value of OTC equity derivatives is determinedthrough option models such as Black-Scholes and Monte Carlo simulation. The significant valuation inputs used include equity prices, dividend yields,
volatilities and correlations. Valuation adjustments are also made to model valuations in order to reflect counterparty credit risk on derivative assets andNomura‘s own creditworthiness on derivative liabilities. OTC equity derivatives are generally classified in Level 2 because all significant valuation
inputs and adjustments are observable or market-corroborated. Certain less liquid vanilla or more complex equity derivatives are classified in Level 3
where dividend yield, volatility or correlation valuation inputs are significant and unobservable.
Derivatives—Interest rate contracts—Nomura enters into both exchange-traded and OTC interest rate derivative transactions such as interest rate
swaps, currency swaps, interest rate options, forward rate agreements, swaptions, caps and floors. Where these derivatives are traded in active markets
and the exchange price is representative of fair value, the fair value of exchange-traded interest rate derivatives is determined using an unadjusted
exchange price and classified in Level 1 of the fair value hierarchy. The fair value of exchange-traded interest rate derivatives which are traded ininactive markets or where the exchange price is not representative of fair value is determined using a model price and are classified in Level 2. The fairvalue of OTC interest rate derivatives is determined through DCF valuation techniques as well as option models such as Black-Scholes and Monte Carlosimulation. The significant valuation inputs used include interest rates, forward foreign exchange (“FX”) rates, volatilities and correlations. Valuation
adjustments are also made to model valuations in order to reflect counterparty credit risk on derivative assets and Nomura‘s own creditworthiness onderivative liabilities. OTC interest rate derivatives are generally classified in Level 2 because all significant valuation inputs and adjustments areobservable or market-corroborated. Certain less liquid vanilla or more complex OTC interest rate derivatives are classified in Level 3 where interest
rate, volatility or correlation valuation inputs are significant and unobservable.
Derivatives—Credit contracts—Nomura enters into OTC credit derivative transactions such as credit default swaps and credit options on single
names, indices or baskets of assets. The fair value of OTC credit derivatives is determined through DCF valuation techniques as well as option models
such as Black-Scholes and Monte Carlo simulation. The significant valuation inputs used include interest rates, credit spreads, recovery rates, default
probabilities, volatilities and correlations. Valuation adjustments are also made to model valuations in order to reflect counterparty credit risk onderivative assets and Nomura’s own creditworthiness on derivative liabilities. OTC credit derivatives are generally classified in Level 2 of the fair value
hierarchy because all significant valuation inputs and adjustments are observable or market-corroborated. Certain less liquid vanilla or more complex
OTC credit derivatives are classified in Level 3 where credit spread, recovery rate, volatility or correlation valuation inputs are significant andunobservable.
149

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Derivatives—Foreign exchange contracts—Nomura enters into both exchange-traded and OTC foreign exchange derivative transactions such as
foreign exchange forwards and currency options. The fair value of exchange-traded foreign exchange derivatives which are traded in inactive markets or
where the exchange price is not representative of fair value is determined using a model price and are classified in Level 2. The fair value of OTC
foreign exchange derivatives is determined through DCF valuation techniques as well as option models such as Black-Scholes and Monte Carlosimulation. The significant valuation inputs used include interest rates, forward FX rates, spot FX rates and volatilities. Valuation adjustments are also
made to model valuations in order to reflect counterparty credit risk on derivative assets and Nomura’s own creditworthiness on derivative liabilities.
OTC foreign exchange derivatives are generally classified in Level 2 because all significant valuation inputs and adjustments are observable or marketcorroborated. Certain foreign exchange derivatives are classified in Level 3 where interest rates, volatility or correlation valuation inputs are significant
and unobservable.
Nomura includes valuation adjustments in its estimation of fair value of certain OTC derivatives relating to funding costs associated with thesetransactions to be consistent with how market participants in the principal market for these derivatives would determine fair value.
Loans and receivables—The fair value of loans and receivables carried at fair value either as trading assets or through election of the fair value
option is primarily determined using DCF valuation techniques as quoted prices are typically not available. The significant valuation inputs used aresimilar to those used in the valuation of corporate debt securities described above. Loans and receivables are generally classified in Level 2 of the fairvalue hierarchy because all significant valuation inputs are observable. Certain loans and receivables, however, are classified in Level 3 because they aretraded infrequently and there is not sufficient information from comparable securities to classify them in Level 2 or credit spreads of the issuer orrecovery rates used in DCF valuations are significant and unobservable.
Collateralized agreements and Collateralized financing—The primary types of collateralized agreement and financing transactions carried at fairvalue are reverse repurchase and repurchase agreements elected for the fair value option. The fair value of these financial instruments is primarily
determined using DCF valuation techniques. The significant valuation inputs used include interest rates and collateral funding spreads such as generalcollateral or special rates. Reverse repurchase and repurchase agreements are generally classified in Level 2 of the fair value hierarchy because thesevaluation inputs are usually observable.
Non-trading debt securities—These are debt securities held by certain non-trading subsidiaries in the group and are valued and classified in thefair value hierarchy using the same valuation techniques used for other debt securities classified as Government, agency and municipal securities andBank and corporate debt securities described above.
Short-term and long-term borrowings (“Structured notes”)—Structured notes are debt securities issued by Nomura or by consolidated variableinterest entities (“VIEs”) which contain embedded features that alter the return to the investor from simply receiving a fixed or floating rate of interest toa return that depends upon some other variables, such as an equity or equity index, commodity price, foreign exchange rate, credit rating of a third party
or a more complex interest rate (i.e., an embedded derivative).
150

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The fair value of structured notes is determined using a quoted price in an active market for the identical liability if available, and where notavailable, using a mixture of valuation techniques that use the quoted price of the identical liability when traded as an asset, quoted prices for similar
liabilities, similar liabilities when traded as assets, or an internal model which combines DCF valuation techniques and option pricing models,depending on the nature of the embedded features within the structured note. Where an internal model is used, Nomura estimates the fair value of boththe underlying debt instrument and the embedded derivative components. The significant valuation inputs used to estimate the fair value of the debt
instrument component include yield curves, prepayment rates, default probabilities and loss severities. The significant valuation inputs used to estimate
the fair value of the embedded derivative component are the same as those used for the relevant type of freestanding OTC derivative discussed above. A
valuation adjustment is also made to the entire structured note in order to reflect Nomura’s own creditworthiness. This adjustment is determined basedon recent observable secondary market transactions and executable broker quotes involving Nomura debt instruments and is therefore typically treatedas a Level 2 valuation input. Structured notes are generally classified in Level 2 of the fair value hierarchy as all significant valuation inputs andadjustments are observable. Where any unobservable valuation inputs are significant, such as yields, prepayment rates, default probabilities, loss
severities, volatilities and correlations used to estimate the fair value of the embedded derivative component, structured notes are classified in Level 3.
Long-term borrowings (“Secured financing transactions”)—Secured financing transactions are liabilities recognized when a transfer of afinancial asset does not meet the criteria for sales accounting under ASC 860 “Transfer and Servicing” (“ASC 860”) and therefore the transaction is
accounted for as a secured borrowing. These liabilities are valued using the same valuation techniques that are applied to the transferred financial assets
which remain on the consolidated balance sheets and are therefore classified in the same level in the fair value hierarchy as the transferred financial
assets. These liabilities do not provide general recourse to Nomura and therefore, no adjustment is made to reflect Nomura’s own creditworthiness.
151

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Level 3 financial instruments
The valuation of Level 3 financial assets and liabilities is dependent on certain significant valuation inputs which are unobservable. Common
characteristics of an inactive market include a low number of transactions of the financial instrument, stale or non-current price quotes, price quotes thatvary substantially either over time or among market makers, non-executable broker quotes or little publicly released information.
If corroborative evidence is not available to value Level 3 financial instruments, fair value may be measured using other equivalent products in themarket. The level of correlation between the specific Level 3 financial instrument and the available benchmark instrument is considered as anunobservable valuation input. Other techniques for determining an appropriate value for unobservable valuation input may consider information such asconsensus pricing data among certain market participants, historical trends, extrapolation from observable market data and other information Nomura
would expect market participants to use in valuing similar instruments.
Use of reasonably possible alternative valuation input assumptions to value Level 3 financial instruments will significantly influence fair value
determination. Ultimately, the uncertainties described above about input assumptions imply that the fair value of Level 3 financial instruments is a
judgmental estimate. The specific valuation for each instrument is based on management’s judgment of prevailing market conditions, in accordance with
Nomura’s established valuation policies and procedures.
152

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Quantitative and qualitative information regarding significant unobservable valuation inputs
The following tables present quantitative and qualitative information about the significant unobservable valuation inputs used by Nomura tomeasure the fair value of financial instruments classified in Level 3 as of March 31, 2021 and 2022. These financial instruments will also typically
include observable valuation inputs (i.e., Level 1 or Level 2 valuation inputs) which are not included in the table and are also often hedged using
financial instruments which are classified in Level 1 or Level 2 of the fair value hierarchy. Changes in each of these significant unobservable valuation
inputs used by Nomura will impact upon the fair value measurement of the financial instrument. The following tables also illustrate qualitatively how anincrease in those significant unobservable valuation inputs might result in a higher or lower fair value measurement at the reporting date and theinterrelationship between significant unobservable valuation inputs where more than one is used to determine fair value measurement of the financial
instruments.
March 31, 2021

Financial Instrument

Significant
unobservablevaluation input

Range ofvaluation
inputs(1)Weighted
Average(2)(3)

Impact ofincreases insignificant
unobservablevaluation
inputs(4)(5)

Liquidity discounts
WACC
Growth rates
Credit spreads
Liquidity discounts

75.0%
6.3 – 11.5%
0.0 – 1.0%
7.6 – 8.8%
5.0 – 30.0%

75.0%
8.4%
0.5%
8.1%
12.8%

Lower fair value
Lower fair value
Higher fair value
Lower fair value
Lower fair value

Not applicable
No predictableinterrelationshipMarket EV/EBITDA ratios
multiples
PE Ratios
Liquidity discounts
DCF
Credit spreads
Recovery rates

1.9 – 10.8 x
11.1 x
5.0 – 20.0%
0.0 – 1.5%
9.2 – 9.3%

6.5 x
11.1 x
12.2%
0.4%
9.2%

Higher fair value
Higher fair value
Lower fair value
Lower fair value
Higher fair value

No predictableinterrelationshipFairvalue inbillions of Valuation
techniqueyen

Assets:Trading assets and private equity and debt investments
Equities¥16
Private equity and debt investments
58

DCF
DCF

Interrelationships
between valuation
inputs(6)No predictableinterrelationshipForeign government, agency andmunicipal securities

12

Bank and corporate debt securities andloans for trading purposes

135

DCF

Credit spreads
Recovery rates

0.0 – 23.1%
0.0 – 100.0%

7.4%
73.3%

Lower fair value
Higher fair value

No predictableinterrelationshipCommercial mortgage backed securities(“CMBS”)

8

DCF

YieldsLoss severities

Residential mortgage backed securities(“RMBS”)

6

DCF

5.0%
50.3%
1.4%
7.2%
5.8%

Lower fair value
Lower fair value
Lower fair value
Lower fair value
Lower fair value

No predictableinterrelationship
No predictableinterrelationshipReal estate-backed securities
Collateralized debt obligations(“CDOs”) and other

106
23

DCF
DCF

Yields
Prepayment rates
Loss severities
Loss severities
Yields
Prepayment rates
Default probabilities
Loss severities

4.2 – 10.6%
27.5 – 69.5%
0.0 – 14.3%
6.4 – 15.0%
0.8 – 100.0%
0.0 – 18.6%
5.4 – 35.0%
20.0%
2.0%
77.0 – 100.0%

2.4%
11.0%
20.0%
2.0%
88.1%

Lower fair value
Lower fair value
Lower fair value
Lower fair value
Lower fair value

Not applicable
Change in default
probabilities typicallyaccompanied bydirectionally similarchange in loss severities
and opposite change inprepayment rates

153

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
March 31, 2021

Financial Instrument

Derivatives, net:
Equity contracts

Fairvalue inbillions of Valuation
techniqueyen

Significant
unobservablevaluation input

Range ofvaluation
inputs(1)Weighted
Average(2)(3)

Impact ofincreases insignificant
unobservablevaluation
inputs(4)(5)Interrelationships
between valuation
inputs(6)¥(41)

OptionmodelsDividend yield
Volatilities
Correlations

0.0 – 9.8%
4.0 – 102.0%(0.80) – 0.98———

Higher fair value
Higher fair value
Higher fair value

No predictableinterrelationship

Interest rate contracts

(43)

DCF/
OptionmodelsInterest rates
Volatilities
Volatilities
Correlations

0.1 – 2.3%
9.6 – 13.1%
24.9 – 94.0 bp(1.00) – 0.98

—
—
—
—

No predictableinterrelationship

Credit contracts

(38)

DCF/
OptionmodelsCredit spreads
Recovery rates
Volatilities
Correlations

0.0 – 20.8%
0.0 – 100.4%
41.9 – 65.0%
0.29 – 0.72

—
—
—
—

Higher fair value
Higher fair value
Higher fair value
Higher fair value
Higher fair value
Higher fair value
Higher fair value
Higher fair value

Foreign exchange contracts

15

OptionmodelsInterest rates
Volatilities
Volatilities
Correlations

0.1 – 2.1%
2.6 – 31.5%
16.2 – 25.5 bp(0.25) – 0.80

—
—
—
—

Higher fair value
Higher fair value
Higher fair value
Higher fair value

No predictableinterrelationship

Loans and receivables

104

DCF

Credit spreads
Recovery rates

0.0 – 25.6%
26.4 – 100.0%

6.6%
95.8%

Lower fair value
Higher fair value

No predictableinterrelationship

Collateralized agreements
Other assets
Other(7)18

DCF

Repo rate

2.8 – 5.8%

4.0%

Lower fair value

Not applicable

185

DCF

WACC
Growth rates
Liquidity discounts

9.2%
2.0%
10.0%

9.2%
2.0%
10.0%

No predictableinterrelationshipMarket EV/EBITDA ratios
multiples
PE Ratios
Price/Book ratios
Liquidity discounts

5.0 – 6.2 x
8.2 – 32.0 x
0.3 – 1.6 x
10.0 – 40.0%

5.4 x
13.8 x
0.9 x
30.6%

Lower fair value
Higher fair value
Lower fair value
Higher fair value
Higher fair value
Higher fair value
Lower fair value

No predictableinterrelationship

Generally changes in
multiples result in acorresponding similar
directional change in afair value measurement,
assuming earnings
levels remain constant.

Liabilities:
Trading Liabilities
Bank and corporate debt securities
Short-term borrowings

5
103

DCF
DCF/
OptionmodelsRecovery rates
Volatilities
Correlations

3.4 – 3.5%
13.8 – 82.3%(0.69) – 0.96

3.4%
—
—

Higher fair value
Higher fair value
Higher fair value

Not applicable
No predictableinterrelationship

Long-term borrowings

547

DCF/
OptionmodelsVolatilities
Volatilities
Correlations

9.5 – 82.3%
29.6 –77.0 bp(1.00) – 0.98———

Higher fair value
Higher fair value
Higher fair value

No predictableinterrelationship154

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
March 31, 2022

Financial Instrument

Significant
unobservablevaluation input

Range ofvaluation
inputs(1)Weighted
Average(2)(3)

Impact ofincreases insignificant
unobservablevaluation
inputs(4)(5)

Liquidity discounts
WACC
Growth rates
Liquidity discounts

75.0%
7.1 – 13.0%
0.0 – 2.0%
5.0 – 30.0%

75.0%
10.2%
0.7%
18.5%

Lower fair value
Lower fair value
Higher fair value
Lower fair value

Not applicable
No predictableinterrelationshipMarket EV/EBITDA ratios
multiples
PE Ratios
Liquidity discounts

2.0 – 11.2 x
10.7 – 12.6 x
5.0 – 20.0%

6.9 x
11.6 x11.9%

Higher fair value
Higher fair value
Lower fair value

No predictableinterrelationshipFairvalue inbillions of Valuation
techniqueyen

Assets:Trading assets and private equity and debt investments
Equities¥14
Private equity and debt investments
32

DCF
DCF

Interrelationships
between valuation
inputs(6)Foreign government, agency andmunicipal securities

10

DCF

Credit spreads
Recovery rates

0.0 – 1.3%
6.0%

0.7%
6.0%

Lower fair value
Higher fair value

No predictableinterrelationshipBank and corporate debt securities andloans for trading purposes

220

DCF

Credit spreads
Recovery rates

0.1 – 114.7%
0.0 – 100.0%

7.2%
84.4%

Lower fair value
Higher fair value

No predictableinterrelationshipCommercial mortgage backed securities(“CMBS”)

7

DCF

YieldsLoss severities

4.3 – 11.1%
28.3 – 73.0%

4.6%
40.8%

Lower fair value
Lower fair value

No predictableinterrelationshipResidential mortgage backed securities(“RMBS”)

8

DCF

Yields
Prepayment rates
Loss severities

0.0 – 22.2%
6.9 – 15.0%
0.0 – 99.9%

8.4%
9.5%
6.9%

Lower fair value
Lower fair value
Lower fair value

No predictableinterrelationshipReal estate-backed securities
Collateralized debt obligations(“CDOs”) and other

79
26

DCF
DCF

Loss severities
Yields
Prepayment rates
Default probabilities
Loss severities

0.0 – 21.2%
5.5 – 27.5%
18.0 – 20.0%
2.0%
0.0 – 100.0%

2.9%
13.1%
19.5%
2.0%
44.0%

Lower fair value
Lower fair value
Lower fair value
Lower fair value
Lower fair value

Not applicable
Change in default
probabilities typicallyaccompanied bydirectionally similarchange in loss severities
and opposite change inprepayment rates

155

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
March 31, 2022

Financial Instrument

Derivatives, net:
Equity contracts

Interest rate contracts

Fairvalue inbillions of Valuation
techniqueyen

Significant
unobservablevaluation input

Range ofvaluation
inputs(1)Weighted
Average(2)(3)

Impact ofincreases insignificant
unobservablevaluation
inputs(4)(5)Interrelationships
between valuation
inputs(6)¥10OptionmodelsDividend yield
Volatilities
Correlations

0.0 – 12.6%
0.0 – 109.7%(0.80) – 0.97———

Higher fair value
Higher fair value
Higher fair value

No predictableinterrelationship

(11)

DCF/
OptionmodelsInterest rates
Volatilities

0.3 – 3.3%
9.2 – 13.9%——

Higher fair value
Higher fair value

No predictableinterrelationship

Volatilities
Correlations

34.8 – 128.3 bp(1.00) – 0.98——

Higher fair value
Higher fair value

Credit contracts

(33)

DCF/
OptionmodelsCredit spreads
Recovery rates
Volatilities
Correlations

0.0 – 428.7%
0.0 – 90.0%
50.0 – 67.6%
0.00 – 0.90

—
—
—
—

Higher fair value
Higher fair value
Higher fair value
Higher fair value

No predictableinterrelationshipForeign exchange contracts

10

Optionmodels

0.3 – 2.9%
2.4 – 39.3%
13.9 – 24.0 bp(0.25) – 0.84

—
—
—
—

Higher fair value
Higher fair value
Higher fair value
Higher fair value

No predictableinterrelationship

Loans and receivables

205

DCF

Collateralized agreements
Other assets
Other(7)16

DCFInterest rates
Volatilities
Volatilities
Correlations
Credit spreads
Recovery rates
Repo rate

0.0 – 21.5%
44.0 – 100.0%
2.8 – 6.0%

6.0%
98.2%
3.6%

Lower fair value
Higher fair value
Lower fair value

No predictableinterrelationship
Not applicable

197

DCF

WACC
Growth rates
Liquidity discounts

10.1%
2.0%
10.0%

10.1%
2.0%
10.0%

Lower fair value
Higher fair value
Lower fair value

No predictableinterrelationshipMarket EV/EBITDA ratios
multiples
PE Ratios
Price/Book ratios
Liquidity discounts

3.6 – 5.9 x
6.7 – 30.8 x
0.3 – 1.7 x
25.0 – 40.0%

4.4 x
13.1 x
0.9 x
30.6%Higher fair value
Higher fair value
Higher fair value
Lower fair value

Generally changes in
multiples result in acorresponding similar
directional change in afair value measurement,
assuming earnings levels
remain constant.

DCF
DCF/
Optionmodels
DCF/
OptionmodelsRecovery rates
Volatilities
Correlations

3.9 – 97.0%
5.0 – 97.0%(0.80) – 0.93

84.1%
—
—

Higher fair value
Higher fair value
Higher fair value

Not applicable
No predictableinterrelationship

Volatilities
Volatilities
Correlations

9.2 – 11.3%
41.2 – 69.6 bp
0.34 – 0.98———

Higher fair value
Higher fair value
Higher fair value

No predictableinterrelationship

DCF
DCF/
OptionmodelsLoss severities
Volatilities

0.0%
5.0 – 97.0%

0.0%—

Lower fair value
Higher fair value

Not applicable
No predictableinterrelationship

Volatilities
Correlations

41.2 – 69.6 bp(1.00) – 0.98——

Higher fair value
Higher fair value

DCF

Recovery rates

90.0%

90.0%

Higher fair value

Liabilities:
Trading Liabilities
Bank and corporate debt securities
Short-term borrowings

3
58

Payable and deposits

8Long-term borrowings

479

Other liabilities

(1)

32

Not applicable

Range information is provided in percentages, coefficients and multiples and represents the highest and lowest level significant unobservablevaluation input used to value that type of financial instrument. A wide dispersion in the range does not necessarily reflect increased uncertainty or
subjectivity in the valuation input and is typically just a consequence of the different characteristics of the financial instruments themselves.
156

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(2)
(3)
(4)

(5)

(6)
(7)

Weighted average information for non-derivatives is calculated by weighting each valuation input by the fair value of the financial instrument.
Nomura has not provided weighted average information for derivatives as unlike cash products the risk on such products is distinct from thebalance sheet value and is subject to netting.
The above table only considers the impact of an increase in each significant unobservable valuation input on the fair value measurement of thefinancial instrument. However, a decrease in the significant unobservable valuation input would have the opposite effect on the fair value
measurement of the financial instrument. For example, if an increase in a significant unobservable valuation input would result in a lower fairvalue measurement, a decrease in the significant unobservable valuation input would result in a higher fair value measurement.
The impact of an increase in the significant unobservable valuation input on the fair value measurement for a derivative assumes Nomura is longrisk to the input e.g., long volatility. Where Nomura is short such risk, the impact of an increase would have a converse effect on the fair value
measurement of the derivative.
Consideration of the interrelationships between significant unobservable valuation inputs is only relevant where more than one unobservablevaluation input is used to determine the fair value measurement of the financial instrument.
Valuation techniques and unobservable valuation inputs in respect of equity securities reported within Other assets in the consolidated balance
sheets.

Qualitative discussion of the ranges of significant unobservable valuation inputs
The following comments present qualitative discussion about the significant unobservable valuation inputs used by Nomura for financial
instruments classified in Level 3.
Derivatives—Equity contracts—The significant unobservable valuation inputs are dividend yield, volatilities and correlations. The range ofdividend yields varies as some companies do not pay any dividends, for example due to a lack of profits or as a policy during a growth period, and hence
have a zero dividend yield while others may pay high dividends, for example to return money to investors. The range of volatilities is wide as thevolatilities of shorter-dated equity derivatives or those based on single equity securities can be higher than those of longer-dated instruments or those
based on indices. Correlations represent the relationships between one input and another (“pairs”) and can either be positive or negative amounts. The
range of correlations moves from positive to negative because the movement of some pairs is very closely related and in the same direction causing
highly positive correlations while others generally move in opposite directions causing highly negative correlations with pairs that have differing
relationships throughout the range.
Derivatives—Interest rate contracts—The significant unobservable valuation inputs are interest rates, volatilities and correlations. The range ofinterest rates is due to interest rates in different countries/currencies being at different levels. The range of volatilities is wide as volatilities of shorterdated interest rate derivatives are typically higher than those of longer-dated instruments. The range of correlations moves from positive to negative
because the movement of some pairs is very closely related and in the same direction causing highly positive correlations while others generally move in
opposite directions causing highly negative correlations with pairs that have differing relationships through the range. All significant unobservablevaluation inputs are spread across the ranges.
Derivatives—Credit contracts—The significant unobservable valuation inputs are credit spreads, recovery rates, volatilities and correlations. The
range of credit spreads reflects the different risk of default present within the portfolio. At the low end of the range, underlying reference names have avery limited risk of default whereas at the high end of the range, underlying reference names have a much greater risk of default. The range of recovery
rates varies primarily due to the seniority of the underlying exposure with senior exposures having a higher recovery than subordinated exposures. The
range of volatilities is wide as the volatilities of shorter-dated credit contracts are typically higher than those of longer-dated instruments. The correlation
range is positive since credit spread moves are generally in the same direction. Highly positive correlations are those for which the movement is very
closely related and in the same direction, with correlation falling as the relationship becomes less strong.
Derivatives—Foreign exchange contracts—The significant unobservable valuation inputs are interest rates, volatilities and correlations. The range
of interest rates is due to interest rates in different countries/currencies being at different levels with some countries having extremely low levels andothers being at levels that while still relatively low are less so. The range of volatilities is mainly due to the lower end of the range arising fromcurrencies that trade in narrow ranges (e.g. versus the U.S. Dollar) while the higher end comes from currencies with a greater range of movement suchas emerging market currencies. The range of correlations moves from positive to negative because the movement of some pairs is very closely related
and in the same direction causing highly positive correlations while others generally move in opposite directions causing highly negative correlations
with pairs that have differing relationships through the range.
157

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Short-term borrowings and Long-term borrowings—The significant unobservable valuation inputs are yields, prepayment rates, default
probabilities, loss severities, volatilities and correlations. The range of volatilities is wide as the volatilities of shorter-dated instruments are typicallyhigher than those in longer-dated instruments. The range of correlations moves from positive to negative because the movement of some pairs is very
closely related and in the same direction causing highly positive correlations while others generally move in opposite directions causing highly negative
correlations with pairs that have differing relationships through the range.
158

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Movements in Level 3 financial instruments
The following tables present gains and losses as well as increases and decreases of financial instruments measured at fair value on a recurring
basis which Nomura classified in Level 3 for the years ended March 31, 2021 and 2022. Financial instruments classified in Level 3 are often hedged
with instruments within Level 1 or Level 2 of the fair value hierarchy. The gains or losses presented below do not reflect the offsetting gains or losses forthese hedging instruments. Level 3 financial instruments are also measured using both observable and unobservable valuation inputs. Fair value changes
presented below, therefore, reflect realized and unrealized gains and losses resulting from movements in both observable and unobservable valuation
inputs.
For the years ended March 31, 2021 and 2022, gains and losses related to Level 3 assets and liabilities did not have a material impact on Nomura’s
liquidity and capital resources management.
Billions of yen
Year ended March 31, 2021
Balance
Total gains
as of(losses)
April 1,
recognized2020
in net revenue(1)Assets:Trading assets and private equity anddebt investments
Equities¥
Private equity and debt
investments
Japanese agency and municipal
securities
Foreign government, agency andmunicipal securities
Bank and corporate debt
securities and loans for
trading purposes
Commercial mortgage-backed
securities (“CMBS”)
Residential mortgage-backed
securities (“RMBS”)
Real estate-backed securities
Collateralized debt obligations(“CDOs”) and other
Investment trust funds and otherTotal trading assets and private equity
and debt investments
Derivatives, net(3)Equity contracts
Interest rate contracts
Credit contracts
Foreign exchange contracts
Total derivatives, net
Subtotal¥
Loans and receivables¥
Collateralized agreements
Other assets
Other
Total
¥
Liabilities:
Trading liabilities
Equities¥
Foreign government, agency andmunicipal securities
Bank and corporate debt
securities
Collateralized debt obligations(“CDOs”) and other
Investment trust funds and otherTotal trading liabilities¥
Short-term borrowings
Payables and deposits
Collateralized financing
Long-term borrowings
Other liabilities
Total¥

Total gains(losses)
recognized in
BalanceotherForeignTransfers Transfers
as ofcomprehensive Purchases
Sales /
exchange
into
out ofMarch 31,(2)
(2)(4)(5)(5)
income/ issues
redemptions
Settlements movements Level 3
Level 3
2021

14 ¥

5 ¥

—

¥

23 ¥

(29) ¥

—

31

11

—

2

0

—

8

1

—

228

1

—

66

¥

1 ¥

2 ¥

19

(4)

—

1

0

0

—

—

0

0

2

21

(16)

—

0

5

(7)

12

(165)

—

9

31

(35)

135

—

0 ¥
—

16
58

1

1

—

6

0

—

0

0

8

62
94

0
(5)

—
—

12
170

(46)
(155)

—
—

1
2

—
—

(23)
0

6
106

32
0

0
0

—
—

102
16

(104)
(16)

—
—

0
0

0
0

(7)
—

23
0

472

14

—

435

(535)

—

14

38

(72)

366

19
(54)
(1)
7
(29)
443 ¥
96 ¥
15

(43)
16
(19)
20
(26)
(12) ¥
2 ¥
(1)

—
—
—
—
—
—
—
—

—
—
—
—
—
435 ¥
42 ¥
—

—
—
—
—
—
(535) ¥
(69) ¥
(1)

(26)
(6)
(14)
(15)
(61)
(61) ¥
— ¥
—

0
1
(1)
1
1
15 ¥
7 ¥
0

20
(3)
(4)
(2)
11
49 ¥
41 ¥
5

(11)
3
1
4
(3)
(75) ¥(15) ¥
—

(41)
(43)
(38)
15
(107)
259
104
18

168
722 ¥

47
36 ¥

4
481 ¥

(39)
(644) ¥—
(61) ¥

5
27 ¥

—
95 ¥

0
(90) ¥

185
566

0 ¥

0 ¥

—

1 ¥

(1) ¥

—

0 ¥

0 ¥

0

0

0

—

0

0

—

1

—

1

0

—

4

(1)

—

0

1
0
2 ¥
29
1
—
409
0
441 ¥

1
0
1 ¥
(5)
0
(1)
(35)
(2)
(42) ¥

11
0
16 ¥
220
0
—
343
33
612 ¥

(10)
0
(12) ¥
(137)
0
—
(284)
0
(433) ¥

—
—
—
—
—
—
—
—
—

0
0
1 ¥
0
—
0
0
0
1 ¥

¥
¥

0
0 ¥

¥

—
—
— ¥
0
0
—
(1)
—
(1) ¥

159

¥

¥

¥

0

0 ¥

—

1

2

(1)

5

—
—
2 ¥
13
1
—
111
1
128 ¥

—
—
(1) ¥
(27)
(1)
—
(68)
(1)
(98) ¥

1
0
7
103
1
1
547
35
694

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Billions of yen
Year ended March 31, 2022
Total gains
Balance(losses)
as ofrecognized
April 1,in net revenue(1)2021
Assets:Trading assets and private equity anddebt investments
Equities¥
Private equity and debt
investments
Japanese agency and municipal
securities
Foreign government, agency andmunicipal securities
Bank and corporate debt
securities and loans for trading
purposesCommercial mortgage-backed
securities (“CMBS”)
Residential mortgage-backed
securities (“RMBS”)
Real estate-backed securities
Collateralized debt obligations(“CDOs”) and other
Investment trust funds and otherTotal trading assets and private equity
and debt investments
Derivatives, net(3)Equity contracts
Interest rate contracts
Credit contracts
Foreign exchange contracts
Total derivatives, net
Subtotal¥
Loans and receivables¥
Collateralized agreements
Other assets
Other
Total
¥
Liabilities:
Trading liabilities
Equities¥
Foreign government, agency andmunicipal securities
Bank and corporate debt
securities
Collateralized debt obligations(“CDOs”) and other
Investment trust funds and otherTotal trading liabilities¥
Short-term borrowings
Payables and deposits
Collateralized financing
Long-term borrowings
Other liabilities
Total
¥
(1)
(2)
(3)
(4)
(5)

Total gains(losses)
recognized in
Balanceother
as ofForeignTransfers Transfers
comprehensive Purchases
March 31,
Sales /
exchange
into
out of(2)(2)(4)(5)(5)
income/ issues2022
redemptions
Settlements movements Level 3
Level 3

16 ¥

3 ¥

—

58

2

2

¥

2 ¥

(9) ¥

—

(2) ¥

14

—

14

(30)

—

—

(13)

32

0

—

0

0

—

—

—

2

12

1

—

13

(16)

—

0

2

(2)

10

135

(3)

—

207

(194)

—

16

89

(30)

220

8

0

—

0

(1)

—

0

—

0

7

6
106

0
4

—
—

5
370

(4)
(395)

—
—

1
10

0
—

—
(16)

8
79

23
0

(4)
0

—
—

96
16

(89)
(16)

—
—

1
0

—
0

(1)
—

26
0

366

3

—

723

(754)

—

30

94

(64)

398

(41)
(43)
(38)
15
(107)
259 ¥
104 ¥
18

43
(7)
6
(1)
41
44 ¥
18 ¥
(1)

—
—
—
—
—
—
—
—

—
—
—
—
—
723 ¥
95 ¥
2

—
—
—
—
—
(754) ¥
(89) ¥
(5)

3
13
2
(4)
14
14 ¥
— ¥
—

(1)
0
(2)
1
(2)
28 ¥
16 ¥
2

(31)
14
(2)
0
(19)
75 ¥
73 ¥
—

37
12
1
(1)
49
(15) ¥(12) ¥
—

10
(11)
(33)
10
(24)
374
205
16

185
566 ¥

(2)
59 ¥

2
822 ¥

(1)
(849) ¥

—
14 ¥

14
60 ¥

0
148 ¥

(1)
(28) ¥

197
792

0 ¥

0 ¥

0 ¥

0 ¥

—

0 ¥

—

0 ¥

0

¥
¥

0
0 ¥

—

¥

¥

1 ¥
1
—

¥

3 ¥

¥

1

0

—

0

(1)

—

0

—

—

0

5

0

—

5

(6)

—

(1)

8

(8)

3

1
0
7 ¥
103
1
1
547
35
694 ¥

0
0
0 ¥
(8)
0
—
(6)
(26)
(40) ¥

2
0
7 ¥
152
2
—
487
1
649 ¥

(3)
0
(10) ¥
(136)
—
—
(409)
(36)
(591) ¥

—
—
—
—
—
—
—
—
—

0
0
(1) ¥
1
—
—
1
6
7 ¥

0
—
8 ¥
15
7
—
41
0
71 ¥

—
—
(8) ¥
(85)
(2)
(1)
(192)
0
(288) ¥

0
0
3
58
8
—
479
32
580

—
—
— ¥
0
0
—
2
—
2 ¥

¥

¥

Includes gains and losses reported primarily within Net gain on trading, Gain on private equity and debt investments, and also within Gain (loss) on investments in equity securities,
Revenue—Other and Non-interest expenses—Other, Interest and dividends and Interest expense in the consolidated statements of income.
Amounts reported in Purchases / issues include increases in trading liabilities while Sales / redemptions include decreases in trading liabilities.
Derivatives which contain multiple types of risk are classified based on the primary risk type of the instrument.
Amounts of gains and losses on these transfers which were recognized in the period when the Transfers into Level 3 occurred were not significant for the year ended March 31, 2021
and March 31, 2022.
Transfers into Level 3 indicate certain valuation inputs of a financial instrument become unobservable or significant. Transfers out of Level 3 indicate certain valuation inputs of afinancial instrument become observable or insignificant. See Quantitative and qualitative information regarding significant unobservable valuation inputs above for the valuation
inputs of each financial instruments.

160

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Unrealized gains and losses recognized for Level 3 financial instruments
The following table presents the amounts of unrealized gains (losses) for the years ended March 31, 2021 and 2022, relating to those financial
instruments which Nomura classified in Level 3 within the fair value hierarchy and that were still held by Nomura at the relevant consolidated balance
sheet date.
Billions of yen
March 31
2021
2022
Unrealized
gains / (losses)(1)

Assets:Trading assets and private equity and debt investments
Equities
Private equity and debt investments
Japanese agency and municipal securities
Foreign government, agency and municipal securities
Bank and corporate debt securities and loans for trading purposes
Commercial mortgage-backed securities (“CMBS”)
Residential mortgage-backed securities (“RMBS”)
Real estate-backed securities
Collateralized debt obligations (“CDOs”) and other
Investment trust funds and otherTotal trading assets and private equity and debt investments
Derivatives, net(2)Equity contracts
Interest rate contracts
Credit contracts
Foreign exchange contracts
Total derivatives, net
Subtotal
Loans and receivables
Collateralized agreements
Other assets
Other
Total
Liabilities:
Trading liabilities
Equities
Foreign government, agency and municipal securities
Bank and corporate debt securities
Collateralized debt obligations (“CDOs”) and otherTotal trading liabilities
Short-term borrowings(3)Payables and deposits(3)Collateralized financing(3)Long-term borrowings(3)Other liabilities
Total
(1)

(2)
(3)

¥

4
12
0
1
(1)
0
0
(3)
(3)
0
10

¥

2
1
0
0
(2)
0
0
1
(7)
0
(5)

(66)
16
(21)
19
(52)
¥ (42)
(3)
(1)

46
0
5
(13)
38
¥ 33
16
0

41
¥ (5)

(2)
¥ 47

¥

¥

0
0
0
0
¥ 0
4
0
0
(17)
5
¥ (8)

0
0
0
0
¥ 0
2
0
—
18
(7)
¥ 13

Includes gains and losses reported within Net gain on trading, Gain on private equity and debt investments, and also within Gain on investmentsin equity securities, Revenue—Other and Non-interest expenses—Other, Interest and dividends and Interest expense in the consolidated statements
of income.
Derivatives which contain multiple types of risk are classified based on the primary risk type of the instrument.
Includes changes in unrealized gains and losses in Other comprehensive income (loss) for recurring Level 3 fair value measurements held at theend of the reporting period. They were ¥0 billion and ¥5 billion for the years ended March 31, 2021 and 2022.
161

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Investments in investment funds that calculate NAV per share
In the normal course of business, Nomura invests in non-consolidated funds which meet the definition of investment companies or are similar innature and which do not have readily determinable fair values. For certain of these investments, Nomura uses NAV per share as the basis for valuation asa practical expedient. Some of these investments are redeemable at different amounts from NAV per share.
The following tables present information on these investments where NAV per share is calculated or disclosed as of March 31, 2021 and 2022.
Investments are presented by major category relevant to the nature of Nomura’s business and risks.

Hedge funds
Venture capital funds
Private equity funds
Real estate funds
Total

Hedge funds
Venture capital funds
Private equity funds
Real estate funds
Total
(1)
(2)
(3)

Fair value

Unfundedcommitments(1)

¥

¥

—

¥

2
21
1
24

¥

2
4
18
4
28

Fair value

Unfundedcommitments(1)

¥

¥

¥

12
10
22
4
48

¥

1
10
19
1
31

Billions of yen
March 31, 2021
Redemption frequency(if currently eligible)(2)Redemption notice(3)Monthly———

Same day-30 days———

Billions of yen
March 31, 2022
Redemption frequency(if currently eligible)(2)Redemption notice(3)Monthly———

Same day-30 days———

The contractual amount of any unfunded commitments Nomura is required to make to the entities in which the investment is held.
The range in frequency with which Nomura is permitted to redeem investments.
The range in notice period required to be provided before redemption is possible.
Hedge funds:

These investments include funds of funds that invest in multiple asset classes. The fair values of these investments are determined using NAV pershare. Although most of these funds can be redeemed within six months, certain funds cannot be redeemed within six months due to contractual,liquidity or gating issues. The redemption period is unknown for certain suspended or liquidating funds. Some of these investments contain restrictions
against transfers of the investments to third parties.
Venture capital funds:
These investments include primarily start-up funds. The fair values of these investments are determined using NAV per share. Most of these funds
cannot be redeemed within six months. The redemption period is unknown for certain suspended or liquidating funds. Some of these investments
contain restrictions against transfers of the investments to third parties.
Private equity funds:
These investments are made mainly in various sectors in Europe, U.S. and Japan. The fair values of these investments are determined using NAV
per share. Redemption is restricted for most of these investments. The redemption period is unknown for certain suspended or liquidating funds. Someof these investments contain restrictions against transfers of the investments to third parties.
Real estate funds:
These are investments in commercial and other types of real estate. The fair values of these investments are determined using NAV per share.
Redemption is restricted for most of these investments. The redemption period is unknown for certain suspended or liquidating funds. Some of theseinvestments contain restrictions against transfers of the investments to third parties.
162

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Fair value option for financial assets and financial liabilities
Nomura measures certain eligible financial assets and liabilities at fair value through the election of the fair value option permitted by ASC 815“Derivatives and Hedging” and ASC 825 “Financial Instruments.” When Nomura elects the fair value option for an eligible item, changes in that item’sfair value are recognized through earnings. Election of the fair value option is generally irrevocable unless an event occurs that gives rise to a new basisof accounting for that instrument.
The financial assets and financial liabilities primarily elected for the fair value option by Nomura, and the reasons for the election, are as follows:•

Equity method investments reported within Trading assets and private equity and debt investments and Other assets held for capital
appreciation or current income purposes which Nomura generally has an intention to exit rather than hold indefinitely. Nomura elects thefair value option to more appropriately represent the purpose of these investments in these consolidated financial statements.

•

Loans receivable and Receivables from customers reported within Loans and receivables which are risk managed on a fair value basis andloan commitments related to loans receivable for which the fair value option will be elected upon funding. Nomura elects the fair value
option to mitigate volatility through earnings caused by the difference in measurement basis that otherwise would arise between loans andthe derivatives used to risk manage those instruments.

•

Reverse repurchase and repurchase agreements reported within Collateralized agreements and Collateralized financing which are risk
managed on a fair value basis. Nomura elects the fair value option to mitigate volatility through earnings caused by the difference inmeasurement basis that otherwise would arise between the reverse repurchase and repurchase agreements and the derivatives used to risk
manage those instruments.

•

All structured notes issued on or after April 1, 2008 reported within Short-term borrowings or Long-term borrowings. Nomura elects thefair value option for those structured notes primarily to mitigate the volatility through earnings caused by differences in the measurement
basis for structured notes and the derivatives Nomura uses to risk manage those positions. Nomura also elects the fair value option forcertain notes issued by consolidated VIEs for the same purpose and for certain structured notes issued prior to April 1, 2008. Certain
subsidiaries elect the fair value option for structured loans and vanilla debt securities issued by those subsidiaries.

•

Certain structured deposit issuances reported within Deposits received at banks. Nomura elects the fair value option for those structured
deposits primarily to mitigate the volatility through earnings caused by differences in the measurement basis for structured deposits andthe derivatives Nomura uses to risk manage those positions.

•

Financial liabilities reported within Long-term borrowings recognized in transactions which are accounted for as secured financing
transactions under ASC 860. Nomura elects the fair value option for these financial liabilities to mitigate volatility through earnings that
otherwise would arise had this election not been made. Even though Nomura usually has little or no continuing economic exposure to thetransferred financial assets, they remain on the consolidated balance sheets and continue to be carried at fair value, with changes in fairvalue recognized through earnings.

•

Financial reinsurance contracts reported within Other assets. Nomura elects the fair value option to mitigate income volatility caused by
the difference in measurement basis that would otherwise exist. Changes in the fair value of the reinsurance contracts carried at fair value
are reported in the consolidated statements of income.

On April 1, 2020, Nomura also elected the fair value option for certain loans and loan commitments originated or purchased by the Wholesale
division as part of its adoption of ASC 326. This election was made to allow these positions to be more appropriately risk managed on a prospective
basis through the impact of the COVID-19 pandemic at such time. Risk management for this purpose has included hedging these positions and also
selling certain positions within the portfolio as and when active markets and buyers returned. These positions elected for the FVO were selectedprimarily based on the activity of the borrower, internal credit rating and from a credit and market risk perspective.
The impact of this election was to reduce the carrying value of recognized loans receivable as reported within Loans and receivables by¥9,774 million as of April 1, 2020 as the fair value of these positions was below carrying value at such date. Similarly, a liability of ¥5,888 million wasrecognized and reported within Other liabilities for loan commitments at such date as the fair value of these positions was negative. In both cases, fairvalue was below carrying value or negative primarily as a result of the volatile credit markets and impact of the COVID-19 pandemic on credit spreads
at such date.
163

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The total difference between carrying value and fair value of ¥15,662 million, net of tax, was recognized in opening Retained earnings as acumulative effect adjustment on April 1, 2020. Subsequent changes in fair value after April 1, 2020 have been recognized in earnings and reported
within Revenue—Net gain on trading.
In March 2021, Nomura also elected the fair value option for certain claims receivable arising from the U.S. Prime Brokerage Event. This election
was made as these receivables will be prospectively managed on a fair value basis. The receivables are reported within Loans and receivables with any
subsequent changes in fair value recognized in earnings and reported within Revenue—Net gain on trading. See Note.23 “U.S. Prime Brokerage Event”
for further information on this event.
Interest and dividends arising from financial instruments for which the fair value option has been elected are recognized within Interest anddividends, Interest expense or Revenue—Net gain on trading.
164

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents gains (losses) due to changes in fair value for financial instruments measured at fair value using the fair value option
for the years ended March 31, 2021 and 2022.
Billions of yen
Year ended March 31
2021
2022
Gains/(Losses)(1)

Assets:Trading assets and private equity and debt investments(2)Trading assets
Private equity and debt investments
Loans and receivables
Collateralized agreements(3)Other assets(2)
Total

¥

¥

Liabilities:
Short-term borrowings(4)Payables and deposits
Collateralized financing(3)Long-term borrowings(4)(5)
Other liabilities(6)
Total
(1)
(2)
(3)
(4)
(5)
(6)

¥

¥

2
0
7
5
51
65
(83)
3
9
(194)
3
(262)

¥

¥

1
6
39
(1)
(3)
42

¥

60
4
3
275
4
¥ 346

Includes gains and losses reported primarily within Revenue—Net gain on trading and Revenue—Other in the consolidated statements of income.
Includes equity investments that would have been accounted for under the equity method had Nomura not chosen to elect the fair value option.
Includes reverse repurchase and repurchase agreements.
Includes structured notes and other financial liabilities.
Includes secured financing transactions arising from transfers of financial assets which did not meet the criteria for sales accounting.
Includes unfunded written loan commitments.

As of March 31, 2021 and 2022, Nomura held an economic interest of 39.27% and 39.21% in American Century Companies, Inc., respectively.
The investment is measured at fair value on a recurring basis through election of the fair value option and is reported within Other assets—Other in the
consolidated balance sheets.
Changes in gains and losses attributable to instrument-specific credit risk of loans and receivables elected for the FVO during the year ended
March 31, 2022 were primarily due to a recovery of increasing in the estimated fair value of certain transactions with a U.S. client in connection with
the U.S. Prime Brokerage Event elected to be measured at fair value and not significant from others. See Note 23 “U.S. Prime Brokerage Event” forfurther information on this event.
Nomura calculates the impact of changes in its own creditworthiness on certain financial liabilities for which the fair value option is elected byrevaluation techniques using a rate which incorporates observable changes in its credit spread.
165

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents changes in the valuation adjustment for Nomura’s own creditworthiness recognized in other comprehensive income
during the years pertaining to certain financial liabilities for which the fair value option has been elected recognized in other comprehensive income
during the years and cumulatively, and amounts reclassified to earnings from accumulated other comprehensive income on early settlement of suchfinancial liabilities during the years ended March 31, 2021 and 2022
Billions of Yen
Year ended March 31
2021
2022

Changes recognized as a credit (debit) to other comprehensive income
Credit (debit) amounts reclassified to earnings
Cumulative credit (debit) balance recognized in accumulated other comprehensive income

¥

(88)
(10)
(11)

¥

60
1
49

As of March 31, 2021, the fair value of the aggregate unpaid principal balance (which is contractually principally protected) of Loans andreceivables for which the fair value option was elected was ¥219 billion less than the principal balance of such Loans and receivables. A significant
portion of the principal balance relates to receivables recognized for claims in connection with the U.S. prime brokerage event in March 2021. See
Note.23 “U.S. Prime Brokerage Event” for further information on this event. There were no Loans and receivables for which the fair value option waselected that were 90 days or more past due. The fair value of the aggregate unpaid principal balance (which is contractually principally protected) ofLong-term borrowings for which the fair value option was elected was ¥45 billion less than the principal balance of such Long-term borrowings.
As of March 31, 2022, the fair value of the aggregate unpaid principal balance (which is contractually principally protected) of Loans andreceivables for which the fair value option was elected was ¥267 billion less than the principal balance of such Loans and receivables. A significant
portion of the principal balance relates to receivables recognized for claims in connection with the U.S. prime brokerage event in March 2021. See
Note.23 “U.S. Prime Brokerage Event” for further information on this event. The unpaid principal balance of Loans and receivables for which the fairvalue option was elected that were 90 days or more past due was ¥278 billion. The fair value of the aggregate unpaid principal balance (which iscontractually principally protected) of Long-term borrowings for which the fair value option was elected was ¥212 billion less than the principal balanceof such Long-term borrowings.
Investment by Investment companies
Nomura carries all of investments by investment companies under ASC 946 “Financial Services—Investment Companies” (“ASC 946”) at fairvalue, with changes in fair value recognized through the consolidated statements of income.
166

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Concentrations of credit risk
Concentrations of credit risk may arise from trading, securities financing transactions and underwriting activities, and may be impacted bychanges in political or economic factors. Nomura has credit risk concentrations on debt securities issued by the Japanese Government, U.S.
Government, British Government (“U.K.”), Governments within the European Union (“EU”), their states and municipalities, and their agencies. These
concentrations generally arise from taking trading positions and are reported within Trading assets in the consolidated balance sheets. Government,
agency and municipal securities, including Securities pledged as collateral, represented 15% of total assets as of March 31, 2021 and 16% as ofMarch 31, 2022.
The following tables present geographic allocations of Nomura’s trading assets related to government, agency and municipal securities as ofMarch 31, 2021 and 2022. See Note 3 “Derivative instruments and hedging activities” for further information regarding the concentration of credit riskfor derivatives.

Japan

Government, agency and municipal securities

¥

Japan

Government, agency and municipal securities
(1)

¥

U.S.

1,715 ¥

U.S.

1,916 ¥

Billions of yen
March 31, 2021
EU & U.K.

1,888 ¥

Billions of yen
March 31, 2022
EU & U.K.

2,368 ¥

Other

2,329 ¥

Other

2,151 ¥

Total(1)

620 ¥

6,552

Total(1)

721 ¥

7,156

Other than above, there were ¥299 billion and ¥331 billion of government, agency and municipal securities reported within Other assets—Non-trading debt securities in the consolidated balance sheets as of March 31, 2021 and 2022, respectively. These securities are primarily
Japanese government, agency and municipal securities.

Estimated fair value of financial instruments not carried at fair value
Certain financial instruments are not carried at fair value on a recurring basis in the consolidated balance sheets since they are neither held for
trading purposes nor are elected for the fair value option. These are typically carried at contractual amounts due or amortized cost.
The carrying value of the majority of the financial instruments detailed below approximates their fair value since they are short-term in nature andcontain minimal credit risk. These financial instruments include financial assets reported within Cash and cash equivalents, Time deposits, Deposits withstock exchanges and other segregated cash, Receivables from customers, Receivables from other than customers, Securities purchased underagreements to resell and Securities borrowed and financial liabilities reported within Short-term borrowings, Payables to customers, Payables to otherthan customers, Deposits received at banks, Securities sold under agreements to repurchase, Securities loaned and Other secured borrowings in the
consolidated balance sheets.
The fair values of other financial instruments which are longer-term in nature or may contain more than minimal credit risk may be different totheir carrying value. Financial assets of this type primarily include certain loans which are reported within Loans receivable while financial liabilities
primarily include long-term borrowings which are reported within Long-term borrowings.
167

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following tables present carrying values, fair values and classification within the fair value hierarchy for certain classes of financial
instrument of which a portion of the ending balance was carried at fair value as of March 31, 2021 and 2022.
Billions of yen
March 31, 2021(1)Fair value by level
Carrying
value

Fair value

Level 1

Level 2

Level 3

Assets:Cash and cash equivalents
Time deposits
Deposits with stock exchanges and other segregated cash
Loans receivable(2)Securities purchased under agreements to resell
Securities borrowed
Total¥ 3,510 ¥ 3,510 ¥ 3,510 ¥ — ¥ —
281
281
—
281
—
374
374
—
374
—
2,937
2,937
—
2,120
817
10,775
10,775—
10,757
18
5,264
5,264
—
5,264
—
¥23,141 ¥ 23,141 ¥ 3,510 ¥18,796 ¥ 835

Liabilities:
Short-term borrowings
Deposits received at banks
Securities sold under agreements to repurchase
Securities loaned
Other secured borrowings
Long-term borrowings
Total¥ 1,368 ¥ 1,368 ¥
1,342
1,343
13,36013,360
1,381
1,381
393
393
7,975
7,978
¥25,819 ¥ 25,823 ¥— ¥ 1,265 ¥ 103
—
1,342
1
—
13,360
0
—
1,381
—
—
393
—
5
7,370
603
5 ¥25,111 ¥ 707

Billions of yen
March 31, 2022(1)Fair value by level
Carrying
value

Fair value

Level 1

Level 2

Level 3

Assets:Cash and cash equivalents
Time deposits
Deposits with stock exchanges and other segregated cash
Loans receivable(2)Securities purchased under agreements to resell
Securities borrowed
Total¥ 3,316 ¥ 3,316 ¥ 3,316 ¥ — ¥ —
321
321
—
321
—
427
427
—
427
—
3,515
3,515
—
2,461
1,054
11,87911,879—11,863
16
4,997
4,994
—
4,994
—
¥24,455 ¥ 24,452 ¥ 3,316 ¥20,066 ¥ 1,070

Liabilities:
Short-term borrowings
Deposits received at banks
Securities sold under agreements to repurchase
Securities loaned
Other secured borrowings
Long-term borrowings
Total¥ 1,050 ¥ 1,050 ¥
1,761
1,761
12,575
12,575
1,567
1,568
396
396
9,258
9,236
¥26,607 ¥ 26,586 ¥

(1)
(2)

Includes financial instruments which are carried at fair value on a recurring basis.
Carrying values are shown after deducting relevant allowances for credit losses.
168— ¥ 993 ¥ 57
—
1,752
9
—
12,575
0
—
1,568
—
—
396
—
23
8,688
525
23 ¥25,972 ¥ 591

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Assets and liabilities measured at fair value on a nonrecurring basis
In addition to financial instruments carried at fair value on a recurring basis, Nomura also measures other financial and non-financial assets andliabilities at fair value on a nonrecurring basis, where the primary measurement basis is not fair value. Fair value is only used in specific circumstances
after initial recognition such as to measure impairment.
As of March 31, 2021, the equity method investment in Nomura Real Estate Holdings, Inc., one of Nomura’s affiliated companies, is measured atfair value on a nonrecurring basis. The investment that is reported within Investments in and advances to affiliated companies in the consolidatedbalance sheets was impaired by ¥47,661 million. The fair value used to measure the other than temporary impairment was the quoted market price as ofMarch 31, 2021 which would be classified in Level 1 of the fair value hierarchy. See Note 19 “Affiliated companies and other equity-method investees”
for further information.
As of March 31, 2022, there were no significant amount of assets or liabilities which were measured at fair value on a nonrecurring basis.
169

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
3. Derivative instruments and hedging activities:
Nomura uses a variety of derivatives, including futures, forwards, options and swaps, for both trading and non-trading purposes.
Derivatives used for trading purposes
In the normal course of business, Nomura enters into transactions involving derivatives to meet client needs, for trading purposes, and to reduce
its own exposure to loss due to adverse fluctuations in interest rates, currency exchange rates and market prices of securities. These financial instruments
include contractual agreements such as commitments to swap interest payment streams, exchange currencies or purchase or sell securities and otherfinancial instruments on specific terms at specific future dates.
Nomura maintains active trading positions in a variety of derivatives. Most of Nomura’s trading activities are client oriented. Nomura utilizes avariety of derivatives as a means of bridging clients’ specific financial needs and investors’ demands in the securities markets. Nomura also actively
trades securities and various derivatives to facilitate its clients in adjusting their risk profiles change. In performing these activities, Nomura carries aninventory of capital markets instruments and maintains its access to market liquidity by quoting bid and offer prices to and trading with other market
makers. These activities are essential to provide clients with securities and other capital market products at competitive prices.
Futures and forward contracts are commitments to either purchase or sell securities, foreign exchange contracts or other capital market instruments
at a specific future date for a specified price and may be settled in cash or through delivery. Foreign exchange contracts include spot and forward
contracts and involve the exchange of two currencies at a rate agreed by the contracting parties. Risks arise from the possible inability of counterparties
to meet the terms of their contracts and from movements in market prices. Futures contracts are executed through exchanges which clear and guarantee
performance of counterparties. Accordingly, credit risk associated with futures contracts is considered minimal. In contrast, forward contracts are
generally negotiated between two counterparties and, therefore, are subject to counterparty risks.
Options are contracts that grant the purchaser, for a premium payment, the right to either purchase or sell a financial instrument at a specified pricewithin a specified period of time or on a specified date from or to the writer of the option. The writer of options receives premiums and bears the risk ofunfavorable changes in the market price of the financial instruments underlying the options.
Swaps are contractual agreements in which two counterparties agree to exchange certain cash flows, at specified future dates, based on an agreed
contract. Certain agreements may result in combined interest rate and foreign exchange exposures. Entering into swap agreements may involve the riskof credit losses in the event of counterparty default.
To the extent these derivatives are economically hedging financial instruments or securities positions of Nomura, the overall risk of loss may befully or partly mitigated by the hedged position.
Nomura seeks to minimize its exposure to market risk arising from its use of these derivatives through various control policies and procedures,
including position limits, monitoring procedures and hedging strategies whereby Nomura enters into offsetting or other positions in a variety of financial
instruments.
170

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Derivatives used for non-trading purposes
Nomura’s principal objectives in using derivatives for non-trading purposes are to manage interest rate risk, to modify interest rate risk profile ofcertain financial liabilities, to manage foreign exchange risk of certain foreign currency denominated debt securities, to manage net investment exposure
to fluctuations in foreign exchange rates arising from certain foreign operations and to mitigate equity price risk arising from certain stock-based
compensation awards given to employees. Credit risk associated with derivatives utilized for non-trading purposes is controlled and managed in thesame way as that associated with derivatives used for trading purposes.
Fair value hedges
Nomura designates certain derivatives as fair value hedges of interest rate risk arising from specific financial liabilities and foreign currency risk
arising from specific foreign currency denominated debt securities. These derivatives are effective in reducing the risk associated with the exposure
being hedged and are highly correlated with changes in the fair value and foreign currency rates of the underlying hedged items, both at inception andthroughout the life of the hedging relationship. Changes in fair value of the hedging derivatives are reported together with those of the hedged liabilities
and assets through the consolidated statements of income within Interest expense and Revenue—Other, respectively.
Net investment hedges
Nomura designates certain derivatives designated as hedges of its net investment in foreign operations relating to specific subsidiaries which have
non-Japanese Yen functional currencies. When determining the effectiveness of net investment hedges, the effective portion of the change in fair valueof the hedging derivative is determined by changes in spot exchange rates. Changes in fair value of the hedging derivatives attributable to changes in the
difference between the forward rate and spot rate are excluded from the measurement of hedge effectiveness and are reported in the consolidated
statements of income within Revenue-Other. All other movements in the fair value of highly effective net investment hedging derivatives are reported
through NHI shareholders’ equity within Accumulated other comprehensive income (loss).
Concentrations of credit risk for derivatives
The following tables present Nomura’s significant concentration of exposures to credit risk in OTC derivatives with financial institutions
including transactions cleared through central counterparties as of March 31, 2021 and 2022. The gross fair value of derivative assets represents the
maximum amount of loss due to credit risk that Nomura would incur if the counterparties of Nomura failed to perform in accordance with the terms of
the instruments and any collateral or other security Nomura held in relation to those instruments proved to be of no value.
Billions of yen
March 31, 2021
Impact ofmaster netting
agreements

Gross fair value ofderivative assets

Financial institutions¥

13,474¥(11,473)

Impact ofcollateral¥(1,500)Net exposure tocredit risk¥

501

Billions of yen
March 31, 2022
Impact ofmaster netting
agreements

Gross fair value ofderivative assets

Financial institutions¥
171

15,667¥(13,193)

Impact ofcollateral¥(1,669)Net exposure tocredit risk¥

805

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Derivative activities
The following tables quantify of Nomura’s derivative positions as of March 31, 2021 and 2022 through a disclosure of notional amounts, incomparison with the fair value of those derivatives. All amounts are disclosed on a gross basis, prior to counterparty offsetting of derivative assets andliabilities and cash collateral offsetting against net derivatives. Derivatives which contain multiple types of risk are classified in the table based on the
primary risk type of the instrument. Changes in the fair value of derivatives are recognized either through earnings or other comprehensive income
depending on the purpose for which the derivatives are used.

Total
notional(1)Derivatives used for trading and non-trading purposes(2):Equity contracts
Interest rate contracts
Credit contracts
Foreign exchange contracts
Commodity contracts
Total
Derivatives designated as formal fair value or net investment accounting hedges:
Interest rate contracts
Foreign exchange contracts
Total
Total derivatives

Billions of yen
March 31, 2021
Derivative
Derivative
assetsliabilities
Fair value
Fair value(1)¥40,396 ¥2,524,407
38,850351,662334¥2,955,649 ¥

1,402 ¥
9,617
455
4,511
1
15,986 ¥

2,229
9,023
523
4,402
0
16,177

¥

15 ¥
5
20 ¥
16,006 ¥14—
14
16,191

1,168 ¥
130¥
1,298 ¥
¥2,956,947 ¥Total
notional(1)Billions of yen
March 31, 2022
Derivative
Derivative
assetsliabilities
Fair value
Fair value(1)Derivatives used for trading and non-trading purposes(2):Equity contracts
Interest rate contracts
Credit contracts
Foreign exchange contracts
Commodity contracts
Total

34,526 ¥2,769,546
37,572
314,763300¥3,156,707 ¥Derivatives designated as formal fair value or net investment accounting hedges:
Interest rate contracts
Foreign exchange contracts
Total
Total derivatives
(1)
(2)

¥

974 ¥
11,938443
4,804
1
18,160 ¥1,457
10,865514
4,814
1
17,651

¥

—

88
—
88
17,7392,166 ¥
145¥
2,311 ¥
¥3,159,018 ¥¥2
2 ¥18,162 ¥Includes the amount of embedded derivatives bifurcated in accordance with ASC 815.
As of March 31, 2021 and 2022, the amounts reported include derivatives used for non-trading purposes other than those designated as fair value
or net investment accounting hedges. These amounts have not been separately presented since such amounts were not significant.
172

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Offsetting of derivatives
Counterparty credit risk associated with derivatives is controlled by Nomura through credit approvals, limits and monitoring procedures. To
reduce the risk of loss, Nomura requires collateral, principally cash collateral and government securities, for certain derivative transactions. In certain
cases, Nomura may agree for such collateral to be posted to a third-party custodian under a control agreement that enables Nomura to take control ofsuch collateral in the event of counterparty default. From an economic standpoint, Nomura evaluates default risk exposure net of related collateral.
Furthermore, OTC derivative transactions are typically documented under industry standard master netting agreements which mitigate Nomura’s credit
exposure to counterparties. A master netting agreement is a single agreement with a counterparty that permits multiple transactions governed by thatagreement to be terminated or accelerated and settled through a single payment in a single currency in the event of a default of the counterparty(“close-out and offsetting rights”).
For certain OTC centrally-cleared and exchange-traded derivatives, the clearing or membership agreements entered into by Nomura provide
similar rights to Nomura in the event of default of the relevant central clearing party or exchange. Nomura generally seeks to obtain an external legal
opinion in order to ascertain the enforceability of such close-out and offsetting rights within these agreements.
For certain counterparties and/ or in certain jurisdictions, Nomura may enter into derivative transactions which are not documented under a masternetting agreement. Even when derivatives are documented under such agreements, Nomura may not have obtained, or may not be able to obtainevidence to determine with sufficient certainty that close-out and offsetting rights within such agreements are legally enforceable. This may be the casewhere the relevant local laws explicitly prohibit the enforceability of such close-out and offsetting rights, or where the local laws are complex,
ambiguous or silent on the enforceability of such rights. This may include derivative transactions executed with certain foreign governments, agencies,
municipalities, central clearing counterparties, exchanges and pension funds.
Nomura considers the enforceability of a master netting agreement in determining how credit risk arising from transactions with a specificcounterparty is hedged, how counterparty credit exposures are calculated and applied to credit limits and the extent and nature of collateral requirementsfrom the counterparty.
Derivative assets and liabilities with the same counterparty and the related cash collateral receivables and payables documented under anenforceable master netting agreement are presented on a net basis on the consolidated balance sheets where the specific criteria defined by ASC 210-20
and ASC 815 are met.
The following table presents information about offsetting of derivatives and related cash collateral amounts on the consolidated balance sheets asof March 31, 2021 and 2022 by type of derivative contract, and additional amounts permitted to be offset legally by Nomura under enforceable masternetting agreements, central clearing counterparties or exchange rules in the event of counterparty default but not offset on the consolidated balance
sheets due to one or more of the criteria defined by ASC 210-20 and ASC 815 are not met. Derivative transactions which are not documented under amaster netting agreement or are documented under a master netting agreement for which Nomura does not have sufficient evidence of enforceability ofclose-out and offsetting rights are not offset in the following table.
173

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Equity contracts
OTC settled bilaterally
Exchange-traded
Interest rate contracts
OTC settled bilaterally
OTC centrally-cleared
Exchange-traded
Credit contracts
OTC settled bilaterally
OTC centrally-cleared
Exchange-traded
Foreign exchange contracts
OTC settled bilaterally
Commodity contracts
OTC settled bilaterally
Exchange-traded
Total gross derivative balances(2)Less: Amounts offset in the consolidated balance sheets(3)Total net amounts reported on the face of the consolidated balance sheets(4)Less: Additional amounts not offset in the consolidated balance sheets(5)Financial instruments and non-cash collateral
Net amount
174

Billions of yen
March 31, 2021
Derivative
Derivative
assetsliabilities(1)Billions of yen
March 31, 2022
Derivative
Derivative
assetsliabilities(1)

¥

¥

904
498

¥

1,439
790

709
265

¥

1,054
403

8,456
1,147
29

7,871
1,146
20

9,486
2,332
120

8,584
2,309
60

169
282
4

251
269
3

208
223
12

276
224
14

4,516

4,402

4,806

4,814

0
0
1
1
1
0
0
0
¥ 16,006 ¥ 16,191 ¥ 18,162 ¥ 17,739(14,786)(14,697) (16,608)(16,079)¥ 1,220 ¥ 1,494 ¥ 1,554 ¥ 1,660¥¥(240) ¥
980 ¥(310) ¥ (432) ¥1,184 ¥ 1,122 ¥

(134)
1,526

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(1)
(2)

(3)

(4)

(5)

Includes the amount of embedded derivatives bifurcated in accordance with ASC 815.
Includes all gross derivative asset and liability balances irrespective of whether they are transacted under a master netting agreement or whether
Nomura has obtained sufficient evidence of enforceability of the master netting agreement. As of March 31, 2021, the gross balance of derivative
assets and derivative liabilities which are not documented under master netting agreements or are documented under master netting agreements forwhich Nomura has not yet obtained sufficient evidence of enforceability was ¥392 billion and ¥589 billion, respectively. As of March 31, 2022,
the gross balance of such derivative assets and derivative liabilities was ¥458 billion and ¥671 billion, respectively.
Represents amounts offset through counterparty offsetting of derivative assets and liabilities as well as cash collateral offsetting against net
derivatives under master netting and similar agreements for which Nomura has obtained sufficient evidence of enforceability in accordance with
ASC 815. As of March 31, 2021, Nomura offset a total of ¥1,594 billion of cash collateral receivables against net derivative liabilities and¥1,683 billion of cash collateral payables against net derivative assets. As of March 31, 2022, Nomura offset a total of ¥1,431 billion of cash
collateral receivables against net derivative liabilities and ¥1,960 billion of cash collateral payables against net derivative assets.
Net derivative assets and net derivative liabilities are generally reported within Trading assets and private equity and debt investments—Trading
assets and Trading liabilities, respectively in the consolidated balance sheet. Bifurcated embedded derivatives are reported within Short-termborrowings or Long-term borrowings depending on the maturity of the underlying host contract.
Represents amounts which are not permitted to be offset on the consolidated balance sheets in accordance with ASC 210-20 and ASC 815 but
which provide Nomura with a legally enforceable right of offset in the event of counterparty default. Amounts relating to derivative and collateralagreements where Nomura has not yet obtained sufficient evidence of enforceability of such offsetting rights are excluded. As of March 31, 2021,
a total of ¥283 billion of cash collateral receivables and ¥572 billion of cash collateral payables, including amounts reported in the table, have notbeen offset against net derivatives. As of March 31, 2022, a total of ¥359 billion of cash collateral receivables and ¥652 billion of cash collateralpayables, including amounts reported in the table, have not been offset against net derivatives.
For information on offsetting of collateralized transactions, see Note 5 “ Collateralized transactions”.
175

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Derivatives used for trading purposes
Derivative financial instruments used for trading purposes, including bifurcated embedded derivatives, are carried at fair value with changes infair value recognized through the consolidated statements of income within Revenue—Net gain on trading.
The following table presents amounts included in the consolidated statements of income for the years ended March 31, 2021 and 2022 related toderivatives used for trading and non-trading purposes by types of underlying derivative contract. Derivatives which contain multiple types of risk areclassified in the table based on the primary risk type of instrument.
Billions of yen
Year ended March 31
2021
2022

Derivatives used for trading and non-trading purposes(1):Equity contracts
Interest rate contracts
Credit contracts
Foreign exchange contracts
Commodity contracts
Total
(1)

¥

¥

26
254
(90)
(11)
50
229

¥

(36)
198
(118)
27
87
¥ 158

Includes net gains (losses) on derivatives used for non-trading purposes which are not designated as fair value or net investment hedges. For theyear ended March 31, 2021, net losses for these non-trading derivatives were ¥3 billion. For the year ended March 31, 2022, these amounts were
not significant.
Fair value hedges

Nomura issues Japanese Yen and foreign currency denominated debt with both fixed and floating interest rates. Nomura generally enters into swap
agreements to convert fixed rate interest payments on its debt obligations to a floating rate and applies fair value hedge accounting to these instruments.
In conjunction with the abolition of LIBOR, Nomura terminated the hedging instruments that reference LIBOR and began new hedging transactions.
The cancelled hedging transactions are accounted for as termination of hedge accounting.
The following table presents the carrying value of the hedged items that are currently designated in a hedging relationship by line items in the
consolidated balance sheets where the hedged item is reported, the related cumulative amount of fair value hedging adjustment included in the carrying
amount of the hedged items and the cumulative amount of fair value hedging adjustment remaining for the liabilities which hedge accounting has been
discontinued as of March 31, 2021 and 2022.
Billions of yen

Balance sheet line item in which the hedged
item is included:Long-term borrowings
Total

Cumulative amount of fair value
hedging adjustment remaining
for the liabilities which hedge
accounting has been
discontinued

Cumulative gains of fair value
hedging adjustment included in
the carrying amount of thehedged assets/liabilities

Carrying amount of the hedged
assets/liabilities
March 31, 2021

March 31, 2022

March 31, 2021

March 31, 2022

March 31, 2021

March 31, 2022

¥
¥

¥
¥

¥
¥

¥
¥

¥
¥

¥
¥

1,164
1,164

2,075
2,075

2
2

90
90

0
0

Hedging derivatives designated as fair value hedges are carried at fair value attributable to the hedged risk, which is recognized in the
consolidated statements of income within Interest expense and Revenue-Other, respectively together with the change in fair value of the hedged items.
176

0
0

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents amounts included in the consolidated statements of income for the years ended March 31, 2021 and 2022 related toderivatives designated as fair value hedges by type of underlying derivative contract and the nature of the hedged item.
Billions of yen
Year ended March 31
2021
2022

Derivatives designated as fair value hedging instruments:
Interest rate contracts
Total

¥
¥

29
29

¥
¥

85
85

Billions of yen
Year ended March 31
2021
2022

Hedged items in fair value hedges:
Long-term borrowings
Total

¥
¥

(29)
(29)

¥
¥

(85)
(85)

Net investment hedges
Nomura designates certain foreign currency derivatives, as hedges of net investments in certain foreign operations with significant foreignexchange risks and applies hedge accounting to these instruments. Accordingly, foreign exchange gains and losses arising from the derivatives andnon-derivative financial instruments designated as hedges, except for the portion excluded from effectiveness assessment, are recognized through theconsolidated statements of comprehensive income within Other comprehensive income (loss)-Change in cumulative translation adjustments, net of tax.
This is offset by the foreign exchange adjustments arising from consolidation of the relevant foreign subsidiaries.
The following table presents gains (losses) from derivatives designated as net investment hedges included in the consolidated statements ofcomprehensive income for the years ended March 31, 2021 and 2022.
Billions of yen
Year ended March 31
2021
2022

Net investment hedging instruments:
Foreign exchange contracts
Total

¥
¥

(7)
(7)

¥
¥

7
7

The portion of gains (losses) representing the amount excluded from the assessment of hedge effectiveness are recognized within
Revenue—Net gain on trading and Revenue—Other in the consolidated statements of income. The amount of gains (losses) was not
significant during the years ended March 31, 2021 and 2022.
Derivatives containing credit risk related contingent features
Nomura enters into certain OTC derivatives and other agreements containing credit-risk-related contingent features. These features would require
Nomura to post additional collateral or settle the instrument upon occurrence of a credit event, the most common of which would be a downgrade in the
Company’s long-term credit rating.
The aggregate fair value of all derivatives with credit-risk-related contingent features that are in a liability position as of March 31, 2021, was¥727 billion with related collateral pledged of ¥583 billion. In the event of a one-notch downgrade to Nomura’s long-term credit rating in effect as ofMarch 31, 2021, the aggregate fair value of assets that would have been required to be posted as additional collateral or that would have been needed tosettle the instruments immediately was approximately ¥2 billion.
177

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The aggregate fair value of all derivatives with credit-risk-related contingent features that are in a liability position as of March 31, 2022 was¥638 billion with related collateral pledged of ¥421 billion. In the event of a one-notch downgrade to Nomura’s long-term credit rating in effect as ofMarch 31, 2022, the aggregate fair value of assets that would have been required to be posted as additional collateral or that would have been needed tosettle the instruments immediately was approximately ¥1 billion.
Credit derivatives
Credit derivatives are derivatives in which one or more of their underlying reference assets of the instrument are related to the credit risk of a
specified entity (or group of entities) or an index based on the credit risk of a group of entities that expose the seller of credit protection to potential loss
from credit events specified in the contract.
Written credit derivatives are instruments or embedded features where Nomura assumes third party credit risk, either as guarantor in a guaranteetype contract, or as the party that provides credit protection in an option-type contract, credit default swap, or any other credit derivative contract.
Nomura enters into credit derivatives as part of its normal trading activities as both purchaser and/ or seller of protection for credit risk mitigation,
proprietary trading positions and for client transactions.
The most common type of credit derivatives used by Nomura are single-name credit default swaps where settlement of the derivative is based on
the credit risk of a single third party. Nomura also writes credit derivatives linked to the performance of credit default indices and issues other credit risk
related portfolio products.
Nomura would have to perform under a credit derivative contract if a credit event as defined in the respective contract occurs. Typical credit
events include bankruptcy, failure to pay and restructuring of obligations of the underlying reference asset.
Credit derivatives written by Nomura are either cash or physically settled. In cash-settled instruments, once payment is made upon an event of a
default, the contract usually terminates with no further payments due. Nomura generally has no right to assume the reference assets of the counterparty
in exchange for payment, nor does Nomura usually have any direct recourse to the actual issuers of the reference assets to recover the amount paid. In
physically settled contracts, upon a default event, Nomura takes delivery of the reference asset in return for payment of the full notional amount of thecontract.
Nomura actively monitors and manages its credit derivative exposures. Where protection is sold, risks may be mitigated by purchasing credit
protection from other third parties either on identical underlying reference assets or on underlying reference assets with the same issuer which would be
expected to behave in a correlated fashion. The most common form of recourse provision to enable Nomura to recover from third parties any amounts
paid under a written credit derivative is therefore not through the derivative itself but rather through the purchase of separate credit derivative protection
with identical or correlated underlying reference assets.
The extent of these purchased credit protection contracts is quantified in the following tables under the column titled “Purchased Credit
Protection.” These amounts represent purchased credit protection with identical underlying reference assets to the written credit derivatives which act as
a hedge against Nomura’s exposures. To the extent Nomura is required to pay out under the written credit derivative, a similar amount would generally
become due to Nomura under the purchased credit protection.
178

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Written credit derivatives have a stated notional amount which represents the maximum payment Nomura may be required to make under the
written credit derivative. However, this is generally not a true representation of the amount Nomura will actually pay under these contracts as there areother factors that affect the likelihood and amount of any payment obligations under the contracts, including:
Probability of default: Nomura values credit derivatives by taking into account of the probability that the underlying reference asset will default
and that Nomura will be required to make payments under the contract. Based on historical experience and Nomura’s assessment of the market, Nomura
believes that the probability that all reference assets on which Nomura provides protection will default in a single period is remote. The notionalamounts are therefore, significantly higher than Nomura’s actual exposures to these contracts as a whole.
Recovery value on the underlying asset: In the case of the occurrence of an event of default, Nomura’s liability on a written credit derivative islimited to the difference between the notional amount and the recovery value of the underlying reference asset under default. While the recovery value
on a defaulted asset may be minimal in certain cases, this does reduce amounts paid on these contracts.
The following tables present information about Nomura’s written credit derivatives and purchased credit protection with identical underlying
reference assets as of March 31, 2021 and 2022.

Carrying value(Asset) /Liability(1)Single-name credit default swaps
Credit default swap indices
Other credit risk related portfolio products
Credit-risk related options and swaptions
Total

¥

¥

(80)
(246)
10
0
(316)
179

Total

¥ 7,035
10,235396
39¥17,705

Billions of yen
March 31, 2021
Maximum potential payout/NotionalYears to maturity
Less than
1 to 33 to 5More than
1 yearyears
years
5 years

Notional
Purchased
creditprotection¥ 1,318
1,271
73—¥ 2,662¥ 5,452
7,737
280
33
¥ 13,502¥2,2974,065
180—¥6,542¥2,642
3,989
131
39¥6,801

¥

778
910
12
—
¥ 1,700

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Carrying value(Asset) /Liability(1)Single-name credit default swaps
Credit default swap indices
Other credit risk related portfolio products
Credit-risk related options and swaptions
Total
(1)

¥

¥

19
(140)
19
0
(102)

Total

¥ 7,708
10,015419
115¥18,257

Billions of yen
March 31, 2022
Maximum potential payout/NotionalYears to maturity
Less than
1 to 33 to 5More than
1 yearyears
years
5 years

Notional
Purchased
creditprotection¥ 1,3392,045
56—¥ 3,440¥ 5,688
7,494
293
68
¥ 13,543¥2,9154,189
286—¥7,390¥2,4483,257
63
88¥5,856¥ 1,006524
14
27¥ 1,571

Carrying value amounts are shown on a gross basis prior to cash collateral or counterparty offsetting. Asset balances represent positive fair value
amounts caused by tightening of credit spreads of underlyings since inception of the credit derivatives.

The following tables present information about Nomura’s written credit derivatives by external credit rating of the underlying asset. Credit ratings
are based on S&P Global Ratings (“S&P”), or if not rated by S&P, based on Moody’s Investors Service. If credit ratings from either of these agencies
are not available, the credit ratings are based on Fitch Ratings Ltd. or Japan Credit Rating Agency, Ltd. For credit default indices, the credit rating isdetermined by taking the weighted average of the external credit ratings given for each of the underlying reference entities comprising the portfolio or
index.

AAA

Single-name credit default swaps
Credit default swap indices
Other credit risk-related portfolio products
Credit risk-related options and swaptions
Total

Total

¥198 ¥1,218 ¥1,887 ¥2,098 ¥ 753 ¥ 881 ¥ 7,035
114
128 1,880 6,294 1,415
404 10,235
—
—
4
237
58
97
396
—
—
—
32
7
—
39
¥312 ¥1,346 ¥3,771 ¥8,661 ¥2,233 ¥1,382 ¥17,705

AAA

Single-name credit default swaps
Credit default swap indices
Other credit risk-related portfolio products
Credit risk-related options and swaptions
Total
(1)

AA

Billions of yen
March 31, 2021
Maximum potential payout/Notional
A
BBB
BB
Other(1)AA

Billions of yen
March 31, 2022
Maximum potential payout/Notional
A
BBB
BB
Other(1)

Total¥192 ¥1,485 ¥2,164 ¥2,057 ¥ 869 ¥ 941 ¥ 7,708
105
215 3,369 5,012
988
326 10,015
—
—
28
226
47
118
419
—
—
61
27
27
—
115
¥297 ¥1,700 ¥5,622 ¥7,322 ¥1,931 ¥1,385 ¥18,257

Other includes credit derivatives where the credit rating of the underlying reference asset is below investment grade or where a credit rating isunavailable.
180

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Derivatives entered into in contemplation of sales of financial assets
Nomura enters into transactions which involve both the transfer of financial assets to a counterparty and a separate agreement enteredcontemporaneously with the same counterparty through which Nomura retains substantially all of the exposure to the economic return on the transferredfinancial assets throughout the term of the transaction. These transactions primarily include sales of securities with bilateral OTC total return swaps orother derivative agreements which are in-substance total return swaps.
These transactions are accounted for as sales of the securities with the derivative accounted for separately if the criteria for derecognition of the
securities under ASC 860 are met. Where the derecognition criteria are not met, the transfer and separate derivative are accounted for as a single
collateralized financing transaction which is reported within Long-term borrowings or Short-term borrowings in the consolidated balance sheets.
For the year ended March 31, 2021, certain transactions which involve sales of securities and total return swaps were accounted for as sales. As ofthe date of transfer, the carrying amount of the securities and the amount of gross cash proceeds from the sales were ¥69,405 million and¥69,535 million, respectively. As of March 31, 2021, the fair value of the securities derecognized by Nomura and the gross liability balances of thederivatives arising from the transactions were ¥67,773 million and ¥1,539 million respectively.
For the year ended March 31, 2022, certain transactions which involve sales of securities and total return swaps were accounted for as sales. As ofthe date of transfer, the carrying amount of the securities and the amount of gross cash proceeds from the sales were ¥69,405 million and¥69,535 million, respectively. As of March 31, 2022, the fair value of the securities derecognized by Nomura and the gross liability balances of thederivatives arising from the transactions were ¥63,994 million and ¥5,319 million, respectively.
181

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
4. Revenue from services provided to customers
Revenue by types of service
The following table presents revenue earned by Nomura from providing services to customers by relevant line item in the consolidated statements
of income for the years ended March 31, 2021 and 2022.
Millions of yen
Year ended March 31
2021
2022

Commissions
Fees from investment banking
Asset management and portfolio service fees
Other revenue
Total¥376,897
108,681230,047
44,235¥759,860¥332,344
149,603269,985
38,863¥790,795

Commissions represent revenue principally from trade execution, clearing services and distribution of fund units provided by the Wholesale andRetail divisions generated approximately equally across the divisions. The following table shows a breakdown of Commissions for the years ended
March 31, 2021 and 2022.
Millions of yen
Year ended March 31
2021
2022

Brokerage commissions
Fund unit distribution fees
Other commissions
Total¥262,286
68,79445,817¥376,897¥236,353
43,69552,296¥332,344

Fees from investment banking represent revenues from financial advisory, underwriting and distribution primarily from the Wholesale division,and to a lesser extent, the Retail division. The following table shows the breakdown of Fees from investment banking for the years ended March 31,
2021 and 2022.
Millions of yen
Year ended March 31
2021
2022

Equity underwriting and distribution fees
Debt underwriting and distribution fees
Financial advisory fees
Other fees
Total

¥ 30,647
23,12037,76017,154¥108,681¥ 33,113
29,81264,24022,438¥149,603

Asset management and portfolio service fees represent revenues from asset management services primarily from the Investment Management
division, and to a lesser extent, the Retail division. The following table shows the breakdown of Asset management and portfolio service fees for theyears ended March 31, 2021 and 2022.
Millions of yen
Year ended March 31
2021
2022

Asset management fees
Administration fees
Custodial fees
Total

¥150,218
63,215
16,614¥230,047
182¥171,056
79,572
19,357¥269,985

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents summary information regarding the key methodologies, assumptions and judgments used in recognizing revenue foreach of the primary types of service provided to customers, including the nature of underlying performance obligations within each type of service andwhether those performance obligations are satisfied at a point in time or over a period of time. For performance obligations recognized over time,
information is also provided to explain the nature of the input or output method used to recognize revenue over time.

Trade execution, clearing services anddistribution of fund units•••

Financial advisory services

Key revenue recognition policies, assumptions andjudgments

Overview of key services provided

Type of service provided to customers

•

•

•
•

Buying and selling of securities onbehalf of customers
Distribution of fund units
Clearing of securities and derivatives
on behalf of customers•

Provision of financial advice tocustomers in connection with a
specific forecasted transaction ortransactions such as mergers andacquisitions
Provision of financial advice not in
connection with a specific forecasted
transaction or transactions such as
general corporate intelligence andsimilar research
Issuance of fairness opinions
Structuring complex financial
instruments for customers

•

•
•

•

•

•

Underwriting and syndication services

•

•
•
•

Underwriting of debt, equity and otherfinancial instruments on behalf ofcustomers
Distributing securities on behalf ofissuers
Arranging loan financing for customers
Syndicating loan financing on behalf ofcustomer
183

•
•

•

Trade execution and clearing commissions recognized at apoint in time, namely trade date.
Distribution fees are recognized at a point in time when thefund units have been sold to third party investors.
Commissions recognized net of soft dollar credits provided
to customers where Nomura is acting as agent in providing
investment research and similar services to the customer.
Fees contingent on the success of an underlying transaction
are variable consideration recognized when the underlying
transaction has been completed since only at such point is
it probable that a significant reversal of revenue will notoccur.
Retainer and milestone fees are recognized either over theperiod to which they relate or are deferred until
consummation of the underlying transaction depending onwhether the underlying performance obligation is satisfied
at a point in time or over time.
Judgment is required to make this determination withfactors influencing this determination including, but notlimited to, whether the fee is in connection with an
engagement designed to achieve a specific transaction oroutcome for the customer (such as the purchase or sale ofa business), the nature and extent of benefit to be provided
to the customer prior to, and in addition to such specifictransaction or outcome and the fee structure for theengagement.
Retainer and milestone fees recognized over time arenormally recognized on a straight-line basis over the termof the contract based on time elapsed.
Underwriting and syndication fees are recognized at apoint in time when the underlying transaction is complete.
Commitment fees where draw down of the facility isdeemed remote recognized on a straight-line basis over thelife of the facility based on time elapsed.
Underwriting and syndication costs recognized either as a
reduction of revenue or on a gross basis depending onwhether Nomura is acting as principal or agent for suchamounts.

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Asset management services

Key revenue recognition policies, assumptions andjudgments

Overview of key services provided

Type of service provided to customers•••

Management of funds, investment trusts
and other investment vehicles
Provision of investment advisory
services
Provision of custodial andadministrative services to customers

•

•

•

Management fees earned by Nomura in connection withmanaging a fund, investment trust or other vehicle
generally are recognized on a straight-line basis based ontime elapsed.
Performance-based fees are variable consideration
recognized when the performance metric has been
determined since only at such point is it probable that asignificant reversal of revenue will not occur.
Custodial and administrative fees are recognized on astraight-line basis over time based on time elapsed.

Where revenue is recognized at a point in time, payments of fees are typically received at the same time as when the performance obligation issatisfied, or within several days or months after satisfying a performance obligation. In relation to revenue recognized over time, payments of fees are
typically settled monthly, quarterly or semi-annually.
The underlying contracts entered into by Nomura in connection with the services described above typically do not have significant financing
components. If such components exist in a contract, Nomura has made an accounting policy permitted by ASC 606 “Revenue from Contracts with
Customers” (“ASC 606”) not to adjust for the effects of a significant financing component where the financing is effectively for a period of one year or
less. Such contracts also typically do not contain any rights of return or similar features for the customer
184

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Customer contract balances
When Nomura or the customer performs in accordance with the terms of a customer contract, a contract asset, customer contract receivable orcontract liability is recognized in Nomura’s consolidated balance sheet.
A contract asset represents accrued revenue recognized by Nomura for completion or partially completion of a performance obligation, namely aright of Nomura to receive consideration for providing the service to the customer, which is conditional on factors or events other than the passage oftime. A customer contract receivable is an unconditional right of Nomura to receive consideration in exchange for services provided. Both contract
assets and customer contract receivables are reported in Receivables from Customers within Nomura’s consolidated balance sheet. A contract liability is
any liability recognized in connection with a customer contract, including obligations to refund or obligations to provide a service in the future for which
consideration has already been received or is due to be received. Contract liabilities are reported in Payables to Customers within Nomura’s
consolidated balance sheet.
The following table presents the balances of customer contract receivables and contract liabilities in scope of ASC 606. The amount of contract
assets as of March 31, 2021 and 2022 was not significant.
Millions of yen
March 31, 2021
March 31, 2022

Customer contract receivables
Contract liabilities(1)(1)¥

85,205
3,497¥

88,621
3,834

Contract liabilities primarily rise from investment advisory services and are recognized over the term of the contract based on time elapsed.

The balance of contract liabilities as of March 31, 2020 were recognized as revenue for the year ended March 31, 2021. Nomura recognized¥1,565 million of revenue from performance obligations satisfied in previous periods for the year ended March 31, 2021. The balance of contract
liabilities as of March 31, 2021 were recognized as revenue for the year ended March 31, 2022. Nomura recognized ¥8,108 million of revenue fromperformance obligations satisfied in previous periods for the year ended March 31, 2022.
Transaction price allocated to the remaining performance obligations
In the ordinary course of business, Nomura may enter into customer contracts where the performance obligations are wholly or partiallyunsatisfied as of fiscal year ends. The total transaction prices allocated to the remaining unsatisfied performance obligations within these customer
contracts were ¥1,187 million as of March 31, 2021 and ¥1,350 million as of March 31, 2022. As permitted by ASC 606, Nomura has elected not todisclose information about remaining performance obligations that have an individual estimated contract period of one year or less. In addition,
considerations arising from contracts with customers do not comprise any significant amount that is not included in transaction price.
Customer contract costs
As permitted by ASC 340 “Other Assets and Deferred Costs,” Nomura has elected to expense all costs to obtain customer contracts where suchamounts would be otherwise expensed within one year or less. As a result, the amount of deferred costs to obtain or fulfill customer contracts as ofMarch 31, 2021 and 2022 was not significant.
185

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
5. Collateralized transactions:
Nomura enters into collateralized transactions, including reverse repurchase agreements, repurchase agreements, securities borrowing
transactions, securities lending transactions, other secured borrowings and similar transactions mainly to meet clients’ financing needs, finance trading
inventory positions and obtain securities for settlement.
Reverse repurchase agreements, repurchase agreements, securities borrowing transactions and securities lending transactions are typically
documented under industry standard master netting agreements which mitigate Nomura’s credit exposure to counterparties. For certain centrally-cleared
reverse repurchase and repurchase agreements, the clearing or membership agreements entered into by Nomura provide similar rights to Nomura in theevent of default of the relevant central clearing counterparty. Nomura generally seeks to obtain an external legal opinion in order to ascertain theenforceability of such close-out and offsetting rights within these agreements.
Nomura may enter into reverse repurchase agreements, repurchase agreements, securities borrowing and securities lending transactions withcertain types of counterparty and in certain jurisdictions which are not documented under a master netting agreement. Even when these transactions are
documented under such master netting agreements, Nomura may not have obtained, or may not be able to obtain, evidence to determine with sufficientcertainty that the close-out and offsetting rights in the agreements are legally enforceable. This may be the case where relevant local laws explicitly
prohibit such close-out and offsetting rights, or where local laws are complex, ambiguous or silent on the enforceability of such rights. This may include
reverse repurchase agreements, repurchase agreements, securities borrowing and securities lending transactions executed with certain foreign
governments, agencies, municipalities, central clearing counterparties, agent banks and pension funds.
Nomura considers the enforceability of a master netting agreement in determining how credit risk arising from transactions with a specificcounterparty is hedged, how counterparty credit exposures are calculated and applied to credit limits and the extent and nature of collateral requirementsfrom the counterparty.
In all of these transactions, Nomura either receives or provides collateral, including Japanese and non-Japanese government, agency, mortgagebacked, bank and corporate debt securities and equities. In most cases, the party receiving the collateral is free to sell or repledge the securities received
through repurchase agreements, securities lending transactions or to cover short positions. In repurchase and reverse repurchase agreements, the value ofcollateral typically exceeds the amount of cash transferred, where collateral is generally in the form of securities. Securities borrowing transactions
generally require Nomura to provide the counterparty with collateral in the form of cash or other securities. For securities lending transactions, Nomura
generally receives collateral in the form of cash or other securities. Nomura monitors the market value of the securities either received from or provided
to the counterparty. Additional cash or securities are exchanged as necessary, to ensure that such transactions are adequately collateralized throughout
the life of the transactions.
186

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Offsetting of certain collateralized transactions
Reverse repurchase agreements and repurchase agreements, securities borrowing and lending transactions with the same counterparty documented
under a master netting agreement are offset in the consolidated balance sheets where specific criteria as defined by ASC 210-20 are met. These criteria
include requirements around maturity of transactions, underlying systems on which collateral is settled, associated banking arrangements and legal
enforceability of close-out and offsetting rights under relevant master netting agreements.
The following tables present information about offsetting of these transactions in the consolidated balance sheets as of March 31, 2021 and 2022,
together with the extent to which master netting agreements entered into with counterparties and central clearing parties permit additional offsetting in
the event of counterparty default. Transactions which are not documented under a master netting agreement or are documented under a master netting
agreement for which Nomura does not have sufficient evidence of enforceability are not offset in the following tables.
Billions of yen
March 31, 2021
AssetsTotal gross balance(1)Less: Amounts offset in the consolidated balance sheets(2)Total net amounts of reported on the face of the consolidated balance sheets(3)Less: Additional amounts not offset in the consolidated balance sheets(4)Financial instruments and non-cash collateral
Cash collateral
Net amount
187

Reverserepurchaseagreements

Securities
borrowingtransactions¥ 31,568(20,793)¥ 10,775¥(9,390)(1)¥ 1,384

Liabilities
Securities
Repurchaselendingagreements
transactions

¥

5,241
—
5,241

¥ 34,154(20,794)¥ 13,360¥(3,211)—
2,030(9,448)(1)¥ 3,911

¥
¥

1,781
—
1,781

¥

(1,488)—293

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Billions of yen
March 31, 2022
AssetsTotal gross balance(1)Less: Amounts offset in the consolidated balance sheets(2)Total net amounts of reported on the face of the consolidated balance sheets(3)Less: Additional amounts not offset in the consolidated balance sheets(4)Financial instruments and non-cash collateral
Cash collateral
Net amount
(1)

(2)

(3)

(4)

Reverserepurchaseagreements

Securities
borrowingtransactions¥ 31,365(19,486)¥ 11,879¥(9,370)(8)¥ 2,501

Liabilities
Securities
Repurchaselendingagreements
transactions

¥

4,994
—
4,994

¥ 32,061(19,486)¥ 12,575¥(3,372)—
1,622(9,114)(12)¥ 3,449

¥
¥

1,734
—
1,734

¥

(1,524)—210

Include all recognized balances irrespective of whether they are transacted under a master netting agreement or whether Nomura has obtained
sufficient evidence of enforceability of the master netting agreement. Amounts include transactions carried at fair value through election of the fairvalue option. As of March 31, 2021, the gross balance of reverse repurchase agreements and repurchase agreements which were not transacted
under master netting agreements or are documented under master netting agreements for which Nomura has not yet obtained sufficient evidence
of enforceability amounted to ¥480 billion and ¥2,653 billion, respectively. As of March 31, 2021, the gross balance of securities borrowing
transactions and securities lending transactions which were not transacted under master netting agreements or are documented under masternetting agreements for which Nomura has not yet obtained sufficient evidence of enforceability amounted to ¥1,947 billion and ¥213 billion,
respectively. As of March 31, 2022, the gross balance of reverse repurchase agreements and repurchase agreements which were not transacted
under master netting agreements or are documented under master netting agreements for which Nomura has not yet obtained sufficient evidence
of enforceability amounted to ¥793 billion and ¥2,453 billion, respectively. As of March 31, 2022, the gross balance of securities borrowing
transactions and securities lending transactions which were not transacted under master netting agreements or are documented under masternetting agreements for which Nomura has not yet obtained sufficient evidence of enforceability amounted to ¥1,511 billion and ¥158 billion,
respectively.
Represent amounts offset through counterparty netting under master netting or similar agreements for which Nomura has obtained sufficientevidence of enforceability in accordance with ASC 210-20. Amounts offset include transactions carried at fair value through election of the fairvalue option.
Reverse repurchase agreements and securities borrowing transactions are reported within Collateralized agreements—Securities purchased underagreements to resell and Collateralized agreements—Securities borrowed in the consolidated balance sheets, respectively. Repurchase agreements
and securities lending transactions are reported within Collateralized financing—Securities sold under agreements to repurchase andCollateralized financing—Securities loaned in the consolidated balance sheets, respectively. Amounts reported under securities lendingtransactions also include transactions where Nomura lends securities and receives securities that can be sold or pledged as collateral. Nomura
recognizes the securities received at fair value and a liability for the same amount, representing the obligation to return those securities. The
liability is reported within Other liabilities in the consolidated balance sheets.
Represent amounts which are not permitted to be offset on the face of the balance sheet in accordance with ASC 210-20 but which provide
Nomura with the right of offset in the event of counterparty default. Amounts relating to agreements where Nomura has not yet obtained sufficientevidence of enforceability of such offsetting rights are excluded.
For information on offsetting of derivatives, see Note 3 “ Derivative instruments and hedging activities”.
188

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Maturity analysis of repurchase agreements and securities lending transactions
The following table presents an analysis of the total carrying value of liabilities recognized in the consolidated balance sheets for repurchaseagreements and securities lending transactions by remaining contractual maturity of the agreement as of March 31, 2021 and 2022. Amounts reported
are shown prior to counterparty netting in accordance with ASC 210-20.

Repurchase agreements
Securities lending transactions
Total gross recognized liabilities(2)Repurchase agreements
Securities lending transactions
Total gross recognized liabilities(2)(1)(2)

Overnight
and open(1)Up to
30 days

Billions of yen
March 31, 2021
30 - 90
90 days days
1 year¥ 13,837
872¥ 14,709¥16,452351¥16,803¥1,991291¥2,282

Overnight
and open(1)Up to
30 days

Billions of yen
March 31, 2022
30 - 90
90 days days
1 year¥ 12,266
992¥ 13,258¥15,454242¥15,696¥2,220200¥2,420¥ 1,590266¥ 1,856¥ 1,611277¥ 1,888

Greater than
1 year

¥
¥

284
1
285

Greater than
1 year

¥
¥

510
23
533

Total

¥34,154
1,781¥35,935

Total¥32,061
1,734¥33,795

Open transactions do not have an explicit contractual maturity date and are terminable on demand by Nomura or the counterparty.
Repurchase agreements and securities lending transactions are reported within Collateralized financing—Securities sold under agreements torepurchase and Collateralized financing—Securities loaned in the consolidated balance sheets, respectively. Amounts reported for securities
lending transactions also include transactions where Nomura lends securities and receives securities that can be sold or pledged as collateral.
Nomura recognizes the securities received at fair value and a liability for the same amount, representing the obligation to return those securities.
The liability is reported within Other liabilities in the consolidated balance sheets. The total gross recognized liabilities reported for repurchaseagreements and securities lending transactions are consistent with the total gross balances reported in the offsetting disclosures above.
189

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Securities transferred in repurchase agreements and securities lending transactions
The following table presents an analysis of the total carrying value of liabilities recognized in the consolidated balance sheets for repurchaseagreements and securities lending transactions by class of securities transferred by Nomura to counterparties as of March 31, 2021 and 2022. Amounts
reported are shown prior to counterparty netting in accordance with ASC 210-20.

Repurchaseagreements

Equities and convertible securities
Japanese government, agency and municipal securities
Foreign government, agency and municipal securities
Bank and corporate debt securities
Commercial mortgage-backed securities (“CMBS”)
Residential mortgage-backed securities (“RMBS”)(1)Collateralized debt obligations (“CDOs”) and other
Investment trust funds and otherTotal gross recognized liabilities(2)

¥

724
1,168
27,531
1,926
6
2,532
223
44
¥ 34,154

Repurchaseagreements

Equities and convertible securities
Japanese government, agency and municipal securities
Foreign government, agency and municipal securities
Bank and corporate debt securities
Commercial mortgage-backed securities (“CMBS”)
Residential mortgage-backed securities (“RMBS”)(1)Collateralized debt obligations (“CDOs”) and other
Investment trust funds and otherTotal gross recognized liabilities(2)
(1)

(2)

¥

384
879
26,436
2,322
1
1,846
157
36
¥ 32,061

Billions of yen
March 31, 2021
Securities
lendingtransactions

¥

¥

1,600
0
8
117
—
—
—
56
1,781

Billions of yen
March 31, 2022
Securities
lendingtransactions

¥

¥

1,508
1
17
175
—
—
—
33
1,734

Total

¥ 2,324
1,168
27,539
2,043
6
2,532
223
100
¥35,935

Total¥ 1,892880
26,453
2,497
1
1,846
157
69
¥33,795

Includes ¥2,170 billion of U.S. government sponsored agency mortgage pass through securities and collateralized mortgage obligations as ofMarch 31, 2021. Includes ¥1,404 billion of U.S. government sponsored agency mortgage pass through securities and collateralized mortgage
obligations as of March 31, 2022.
Repurchase agreements and securities lending transactions are reported within Collateralized financing—Securities sold under agreements torepurchase and Collateralized financing—Securities loaned in the consolidated balance sheets, respectively. Amounts reported for securities
lending transactions also include transactions where Nomura lends securities and receives securities that can be sold or pledged as collateral.
Nomura recognizes the securities received at fair value and a liability for the same amount, representing the obligation to return those securities.
The liability is reported within Other liabilities in the consolidated balance sheets. The total gross recognized liabilities reported for repurchaseagreements and securities lending transactions are consistent with the total gross balances reported in the offsetting disclosures above.
190

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Collateral received by Nomura
The following table presents the fair value of securities received as collateral, securities borrowed with collateral and securities borrowed without
collateral, which Nomura is permitted to sell or repledge, and the portion that has been sold or repledged as of March 31, 2021 and 2022.
Billions of yen
March 31
2021
2022

The fair value of securities received as collateral, securities borrowed as collateral and securities borrowed without collateral
where Nomura is permitted by contract or custom to sell or repledge the securities
The portion of the above that has been sold (as reported within Trading liabilities in the consolidated balance sheets) orrepledged¥50,466¥48,234

38,34236,146

Collateral pledged by Nomura
Nomura pledges owned securities and other financial assets to collateralize repurchase transactions, other secured financings and derivativetransactions. Pledged securities that can be sold or repledged by the transferee, including Gensaki Repo transactions, are reported in parentheses as
Securities pledged as collateral within Trading assets, Non-trading debt securities, Investments in equity securities and Investments in and advances toaffiliated companies in the consolidated balance sheets.
The following table presents the carrying amounts of financial assets recognized in the consolidated balance sheets which have been pledged ascollateral, primarily to stock exchanges and clearing organizations, without allowing the secured party the right to sell or repledge them by type of asset
as of March 31, 2021 and 2022.
Millions of yen
March 312021
2022

Trading assets:
Equities and convertible securities
Government and government agency securities
Bank and corporate debt securities
Residential mortgage-backed securities (“RMBS”)
Collateralized debt obligations (“CDOs”) and other(1)Investment trust funds and other¥ 239,393
1,064,164
32,262
1,790,395
32,08143,805¥3,202,100

Non-trading debt securities(2)Investments in and advances to affiliated companies(3)
(1)
(2)
(3)

¥

Includes CLOs and ABS such as those secured on credit card loans, auto loans and student loans.
Non-trading debt securities are primarily Japanese municipal securities.
Investments in and advances to affiliated companies primarily comprise shares in NRI.
191

115,659
4,136¥ 368,235
1,178,011
27,899868,183
9,548
36,661¥2,488,537¥

163,445
12,832

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents the carrying amount of financial and non-financial assets recognized in the consolidated balance sheets, other thanthose disclosed above, which are subject to lien as of March 31, 2021 and 2022.
Millions of yen
March 31
2021
2022

Loans and receivables
Trading assets and private equity and debt investments
Office buildings, land, equipment and facilities
Non-trading debt securities
Investments in and advances to affiliated companies
Other¥ 114,051
1,344,361
5,076
1,047
—
5,823
¥1,470,358¥ 235,875
1,416,279
4,841
2,827
3
497
¥1,660,322

Assets in the above table were primarily pledged for secured borrowings, including other secured borrowings, collateralized borrowings ofconsolidated VIEs, trading balances of secured borrowings, and derivative transactions. See Note 11 “Borrowings” for further information regarding
trading balances of secured borrowings.
192

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
6. Securitizations and Variable Interest Entities:
Securitizations
Nomura utilizes special purpose entities (“SPEs”) to securitize commercial and residential mortgage loans, government agency and corporate
securities and other types of financial assets. Those SPEs are incorporated as stock companies, Tokumei kumiai (silent partnerships), Cayman special
purpose companies (“SPCs”) or trust accounts. Nomura’s involvements with these SPEs includes structuring SPEs, underwriting, distributing and sellingdebt instruments and beneficial interests issued by SPEs to investors. Nomura accounts for the transfer of financial assets in accordance with ASC 860.
This statement requires that Nomura accounts for the transfer of financial assets as a sale when Nomura relinquishes control over the assets. ASC 860
deems control to be relinquished when the following conditions are met: (a) the assets have been isolated from the transferor (even in bankruptcy orother receivership), (b) the transferee has the right to pledge or exchange the assets received, or if the transferee is an entity whose sole purpose is toengage in securitization or asset-backed financing activities, the holders of its beneficial interests have the right to pledge or exchange the beneficial
interests, and (c) the transferor has not maintained effective control over the transferred assets. Where Nomura retains an interest in the financial assets,
including residual interests in the SPEs, any such interests are measured at fair value and reported within Trading assets in Nomura’s consolidatedbalance sheets, with the change in fair value reported within Revenue-Net gain on trading. Fair value for retained interests in securitized financial assets
is determined by using observable prices; or in cases where observable prices are not available for certain retained interests, Nomura estimates fair value
generally based on the present value of expected future cash flows using its best estimates of the key assumptions, including forecasted credit losses,
prepayment rates, forward yield curves and discount rates commensurate with the risks involved. Nomura may also enter into derivative transactions inrelation to the assets transferred to an SPE.
As noted above, Nomura may have continuing involvement with SPEs to which Nomura transferred assets. For the years ended March 31, 2021
and 2022, Nomura received cash proceeds from SPEs in new securitizations of ¥297 billion and ¥464 billion, respectively, and the associated gain onsale was ¥19 billion and ¥9 billion, respectively. For the years ended March 31, 2021 and 2022, Nomura received debt securities issued by these SPEs
with an initial fair value of ¥2,799 billion and ¥1,890 billion, respectively, and cash inflows from third parties on the sale of those debt securities of¥2,564 billion and ¥1,759 billion, respectively. The cumulative balance of financial assets transferred to SPEs with which Nomura has continuing
involvement was ¥5,323 billion and ¥5,829 billion as of March 31, 2021 and 2022, respectively. Nomura’s retained interests were ¥160 billion and¥131 billion as of March 31, 2021 and 2022, respectively. For the years ended March 31, 2021 and 2022, Nomura received cash flows of ¥27 billion and¥39 billion, respectively, from the SPEs on the retained interests held in the SPEs.
Nomura does not provide any financial support to SPEs beyond its contractual obligations as of March 31, 2021 and 2022.
The following tables present the fair value of retained interests which Nomura has continuing involvement in SPEs and their classification in thefair value hierarchy, categorized by the type of transferred assets as of March 31, 2021 and 2022.
Billions of yen
March 31, 2021

Government, agency and municipal securities
Bank and corporate debt securities
CMBS and RMBS
Total

Level 1

Level 2

Level 3

Total

¥ —
—
—
¥ —

¥ 154
—
—
¥ 154

¥ —
—
6
¥ 6

¥154
—
6
¥160

Investment
grade

¥

Other

154
—
0
154

¥—
—
6
¥ 6

Investment
grade

Other

¥

Billions of yen
March 31, 2022

Government, agency and municipal securities
Bank and corporate debt securities
CMBS and RMBS
Total

Level 1

Level 2

Level 3

Total

¥ —
—
—
¥ —

¥ 124
—
—
¥ 124

¥ —
—
7
¥ 7

¥124
—
7
¥131

¥

¥

124
—
2
126

¥—
—
5
¥ 5

As of March 31, 2021 and 2022, predominantly all of the retained interests held by Nomura were valued using observable prices. The initial fairvalue of these retained interests are mostly level 2 in the fair value hierarchy.
193

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents the type and carrying value of financial assets included within Trading assets and Loans receivable which have beentransferred to SPEs but which do not meet the criteria for derecognition under ASC 860 as of March 31, 2021 and 2022. These transfers are accounted
for as secured financing transactions and generally reported within Long-term borrowings. The assets are pledged as collateral of the associatedliabilities and cannot be removed unilaterally by Nomura and the liabilities are non-recourse to Nomura.
Billions of yen
March 31
2021
2022

AssetsTrading assets
Loans for trading purposes
Loans receivable
Total

¥

Liabilities
Long-term borrowings

¥

106
—
106

¥
¥

19
203
222

¥

106

¥

222

Variable Interest Entities (“VIEs”)
In the normal course of business, Nomura acts as a transferor of financial assets to VIEs, and underwriter, distributor, and seller of repackaged
financial instruments issued by VIEs in connection with its securitization and equity derivative activities. Nomura retains, purchases and sells variableinterests in VIEs in connection with its market-making, investing and structuring activities.
If Nomura has power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, and through Nomura’sinterest in the VIE, Nomura has the right to receive benefits or the obligation to absorb losses that could be potentially significant to the VIE, Nomura is
the primary beneficiary of the VIE and must consolidate the entity, provided that Nomura does not act as a fiduciary for other interest holders. Nomura’s
consolidated VIEs include those that were created to market structured securities to investors by repackaging corporate convertible securities, mortgages
and mortgage-backed securities. Certain VIEs used in connection with Nomura’s aircraft leasing business as well as other purposes are consolidated.
Nomura also consolidates certain investment funds for which Nomura is the primary beneficiary.
The power to direct the most significant activities may take a number of different forms in different types of VIEs. For transactions such as
securitizations, investment funds, and CDOs, Nomura generally considers collateral management and servicing to represent the power to make the mostsignificant decisions, unless such roles are deemed to be a fiduciary relationship. Accordingly, Nomura does not consolidate such types of VIEs forwhich it does not act as collateral manager or servicer unless Nomura has the unilateral right to replace the collateral manager or servicer or to requireliquidation of the entity.
For many transactions, such as where VIEs are used for re-securitizations of residential mortgage-backed securities, there are no significant
economic decisions made on an ongoing basis and no single investor has the unilateral ability to liquidate the VIE. In those cases, Nomura focuses its
analysis on the party who has the sole discretion in the initial design of the VIE, and considers factors such as the nature of the underlying assets held by
the VIE, the extent of third party investors’ involvement in the design of the VIE, the size of initial third party investment and the amount and level ofany subordination of beneficial interests issued by the VIE which will be held by Nomura and any third party investors. Nomura has sponsorednumerous re-securitization transactions and in many cases has determined that it is not the primary beneficiary on the basis that power to direct the mostsignificant activities relating to these entities are shared with third party investors. Nomura has consolidated certain VIEs where it was determined thatthird party investors were not involved in the design of the VIEs, including where the size of third party investment was insignificant at inception of thetransaction.
194

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents the classification of consolidated VIEs’ assets and liabilities in these consolidated financial statements as ofMarch 31, 2021 and 2022. Most of these assets and liabilities are related to consolidated VIEs which securitize corporate convertible securities,
mortgages and mortgage-backed securities. The assets of a consolidated VIE may only be used to settle obligations of that VIE. Creditors do not
typically have any recourse to Nomura.
Billions of yen
March 312021
2022

Consolidated VIE assets
Cash and cash equivalents
Trading assets
Equities
Debt securities
CMBS and RMBS
Investment trust funds and other
Derivatives
Private equity and debt investments
Office buildings, land, equipment and facilities
Other
Total

¥

Consolidated VIE liabilities
Trading liabilities
Derivatives
Borrowings
Short-term borrowings
Long-term borrowings
Other
Total

13

¥

62

524
414
20
4
1
21
51
26
¥1,074

555
443
21
—
1
4
10
115
¥1,211

2

0

74
763
2
¥ 841

95
797
6
¥ 898

On a quarterly basis, Nomura reassesses its involvement with the VIEs and evaluates the impact of any changes in governing documents and/or
variable interests held by Nomura and other parties.
Nomura also holds variable interests in VIEs where Nomura is not the primary beneficiary. Nomura’s variable interests in such VIEs include
senior and subordinated debt, residual interests, and equity interests associated with commercial and residential mortgage-backed and other asset-backed
securitizations and structured financings, equity interests in VIEs which were formed primarily to acquire high yield leveraged loans and other lower
investment grade debt obligations, residual interests in operating leases for aircraft held by VIEs, and loans and investments in VIEs that acquire
operating businesses.
195

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following tables present the carrying amount of variable interests of unconsolidated VIEs and maximum exposure to loss associated withthese variable interests as of March 31, 2021 and 2022. Maximum exposure to loss does not reflect Nomura’s estimate of the actual losses that could
result from adverse changes, nor does it reflect the economic hedges Nomura enters into to reduce its exposure. The risks associated with VIEs in which
Nomura is involved are limited to the amount recorded in the consolidated balance sheets and the amount of any undrawn commitments and financial
guarantees issued.
Billions of yen
March 31, 2021
Carrying amount of variable interests
AssetsTrading assets and liabilities
Equities
Debt securities
CMBS and RMBS
Investment trust funds and other
Private equity and debt investments
Loans
Other
Commitments to extend credit and other guarantees
Total

¥

¥

30
60
2,362
195
3
556
19
—
3,225

Liabilities

¥

—
—
—
—
—
—
—
—
—

¥

Maximum exposure
to loss tounconsolidated VIEs

¥

¥

30
60
2,362
195
3
556
19
110
3,335

Billions of yen
March 31, 2022
Carrying amount of variable interests
AssetsTrading assets and liabilities
Equities
Debt securities
CMBS and RMBS
Investment trust funds and other
Private equity and debt investments
Loans
Other
Commitments to extend credit and other guarantees
Total

¥

¥

26
61
1,432
191
22
940
10
—
2,682

Liabilities

¥

¥

—
—
—
—
—
—
—
—
—

The above does not include certain repurchase agreement financings provided to third parties or Nomura sponsored VIEs.
196

Maximum exposure
to loss tounconsolidated VIEs

¥

¥

26
61
1,432
191
22
940
10
256
2,938

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
7. Financing receivables:
In the normal course of business, Nomura extends financing to clients primarily in the form of loan receivables, loan commitments andcollateralized agreements such as reverse repurchase agreements and securities borrowing transactions. These financing receivables are recognized asassets on Nomura’s consolidated balance sheets at fair value or on amortized cost basis and provide a contractual right to receive money either on
demand or on future fixed or determinable dates.
The carrying value of financing receivables measured on an amortized cost basis is adjusted for an allowance for current expected credit losses whereappropriate. As of April 1, 2020 Nomura adopted new guidance for determination of such allowances defined by ASC 326 “Financial Instruments—
Credit Losses” (“ASC 326”) which requires recognition of allowances based on current expected credit losses rather incurred credit losses as required byprevious authoritative guidance. See Note 1 “Basis of accounting – New accounting pronouncements recently adopted” in these consolidated financial
statements for guidance on the impact of the current expected credit loss (“CECL”) impairment model introduced by ASC 326 on Nomura on initialadoption.
Collateralized agreements
Collateralized agreements consist of reverse repurchase agreements reported as Securities purchased under agreements to resell and securities
borrowing transactions reported as Securities borrowed in the consolidated balance sheets, including those executed under Gensaki Repo agreements.
Reverse repurchase agreements and securities borrowing transactions principally involve the buying of government and government agency securities
from customers under agreements that also require Nomura to resell these securities to those customers, or borrowing these securities with cash andnon-cash collateral. Nomura monitors the value of the underlying securities on a daily basis to the related receivables, including accrued interest, andrequests or returns additional collateral when appropriate. Except for those where we apply the fair value option, reverse repurchase agreements are
generally recognized in the consolidated balance sheets at the amount for which the securities were originally acquired with applicable accrued interest.
Securities borrowing transactions are generally recognized in the consolidated balance sheets at the amount of cash collateral advanced. Allowances for
current expected credit losses against collateralized agreements are not significant either because of application of practical expedients permitted by
ASC 326 based on the collateralization requirements and ongoing monitoring of the collateral levels or the short expected life of the financial
instruments.
Loans receivable
The key types of loans receivable recognized by Nomura are loans at banks, short-term secured margin loans, inter-bank money market loans andcorporate loans.
Loans at banks include both retail and commercial secured loans and traditional unsecured loans mainly extended by Nomura Trust & Banking
Co., Ltd. Where retail and commercial loans are secured by real estate or securities, Nomura is exposed to the risk of a decline in the value of theunderlying collateral. Loans at banks also include unsecured commercial loans provided to investment banking clients for relationship purposes. For
unsecured commercial loans, Nomura is exposed to risk of default of the counterparty, although these counterparties usually have high or good credit
ratings. Where loans are secured by guarantees, Nomura is also exposed to the risk of default by the guarantor.
Short-term secured margin loans are margin loans provided to clients in connection with securities brokerage business in retail and wealthmanagement services. These loans provide funding for clients in order to purchase securities. Nomura requests initial margin in the form of acceptablesecurities or deposits against these loans and holds the purchased securities as collateral through the life of the loans. If the value of the securities
declines by more than specified amounts, Nomura can make additional frequent margin calls in order to maintain a specified ratio of loan-to-value(“LTV”) ratio. These clients are required and reasonably expected to continue to replenish the amount of collateral as required by Nomura. Allowances
for current expected losses against Short-term secured margin loans are therefore usually not significant.
Inter-bank money market loans are loans to financial institutions in the inter-bank money market, where overnight and intra-day financings aretraded through money market dealers. The risk to Nomura of making these loans is limited as only qualified financial institutions can participate in thesemarkets and these loans are usually overnight or short-term in nature. Allowances for current expected losses against inter-bank money market loans are
therefore usually not significant.
197

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Corporate loans are primarily commercial loans provided to corporate clients excluding those classified as Loans at banks. Corporate loans
include loans secured by real estate or securities, unsecured commercial loans provided to investment banking clients for relationship purposes. The risk
to Nomura of making these loans is similar to those risks arising from commercial loans reported in loans at banks.
The following tables present a summary of loans receivable reported within Loans receivable or Advances to affiliated companies in the
consolidated balance sheets as of March 31, 2021, and 2022 by portfolio segment.
Millions of yen
March 31, 2021
Carried atfair value(1)Carried atamortized cost

Loans receivable
Loans at banks
Short-term secured margin loans
Inter-bank money market loans
Corporate loans
Total loans receivable¥

Advances to affiliated companies
Total

¥

605,200
436,2211,289
1,082,239
2,124,949¥

1,000
2,125,949

Carried atamortized cost

Loans receivable
Loans at banks
Short-term secured margin loans
Inter-bank money market loans
Corporate loans
Total loans receivable¥

Advances to affiliated companies
Total
(1)

¥

¥

¥

—
—
—
818,523
818,523¥—
818,5231,000¥ 2,944,472

Millions of yen
March 31, 2022
Carried atfair value(1)¥717,992
442,600
2,196
1,206,349
2,369,137¥

1,000
2,370,137

Total

¥

605,200
436,2211,289
1,900,762¥ 2,943,472

Total

¥

¥

—
—
—
1,210,590
1,210,590

717,992
442,600
2,196
2,416,939¥ 3,579,727¥—
1,210,590

1,000¥ 3,580,727

Includes loans receivable and loan commitments carried at fair value through election of the fair value option.

There were no significant purchases nor sales of loans receivable during the year ended March 31, 2021. During the same period, there were no
significant reclassifications of loans receivable to or from trading assets.
There were no significant purchases nor sales of loans receivable during the year ended March 31, 2022. During the same period, there were no
significant reclassifications of loans receivable to or from trading assets.
Net unamortized deferred fees and costs related to loans receivable carried at amortized cost were immaterial as of March 31, 2021 and March 31,
2022.
198

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Allowance for current expected credit losses
Following adoption of ASC 326 on April 1, 2020, Management has established an allowance for current expected credit losses using the CECL
impairment model against the following types of financial instruments, including financing receivables, which are not measured at fair value on arecurring basis, to reflect the net amount Nomura expects to collect:•

Loans receivable and written unfunded loan commitments;•

Cash deposits;•

Collateralized agreements such as reverse repos and securities borrowing transactions;•Customer contract assets and receivables; and•Other receivables including margin receivables, security deposits, default fund contributions to central clearing counterparties and net
investments in finance leases.
199

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Current expected credit losses for an individual or portfolio of financial instrument are measured at each Nomura reporting date based on expectedcredit losses over the remaining expected life of the financial instruments that consider forecast of future economic conditions in addition to information
about past events and current conditions. Key macroeconomic inputs to our weighted average forecasts of three years include GDP and credit spreads.
The risk of loss is considered, even when that risk of loss is remote. While management has based its estimate of the allowance for current
expected credit losses on the best information available, future adjustments to the allowance may be necessary as a result of changes in the economic
environment or variances between actual results and original assumptions.
Nomura has elected to exclude accrued interest receivable from the amortized cost basis of financial instruments used to measure expected credit
losses. The amount of accrued interest receivable as of March 31, 2021 and March 31, 2022 was not significant.
The methodology used by Nomura to determine allowances for current expected credit losses in accordance with the CECL impairment modelprimarily depends on the nature of the financial instrument and whether certain practical expedients permitted by ASC 326 are applied by Nomura.
Financial instruments subject to the CECL impairment model are charged off when Nomura has deemed the loan or receivable as uncollectible,
namely management believes there is no reasonable expectation of collecting future contractual cash flows and all commercially reasonable means ofrecovering outstanding principle and interest balances have been exhausted.
The following table summarizes the methodology used for each significant type of financial instrument subject to the CECL impairment modeland the key assumptions used which have impacted the measurement of current expected credit losses during the year ended March 31, 2022.
Financial instrument
Loans, written loan commitments and certain deposits•

200

Methodology to determine current expected credit losses
Full loss rate model developed by Nomura’s Risk department•

Measures expected credit losses based on probability of default(PD), Loss Given Default (LGD) and Exposure at Default (EAD)
inputs.

•PD inputs incorporate forward-looking scenarios used by Nomura
for internal risk management and capital purposes.

•

Immediate reversion method used for periods beyond which
reasonable and supportable forecast is not available.

•

For financial instruments which have defaulted or are probable ofdefaulting, expected credit losses measured using discounted cash
flow analyses or, where the financial instrument is collateraldependent, based on any shortfall of fair value of the underlying
collateral.

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Collateralized agreements, short-term secured margin loans and cash
prime brokerage loans

Customer contract assets and receivables•

For reverse repos and short-term secured margin loans and cash
prime brokerage loans where frequent margining is required andthe counterparty has ability to replenish margin, as permitted by apractical expedient provided by ASC 326 expected credit losses
are limited to difference between carrying value of the reverse
repo or margin loan and fair value of underlying collateral.

•

Securities borrowing transactions typically have very short
expected lives and are collateralized and therefore expected credit
losses are generally determined qualitatively to be insignificant
based on historical experience and consistent monitoring ofcollateral.
Expected credit losses typically based on ageing analysis whereloss rates are applied to the carrying value based on historicalexperience, the current economic climate and specific information
about the ability of the client to pay.

•

Prior to adoption of ASC 326, allowances for credit losses recognized against financial instruments measured at amortized cost were based onamounts which reflected management’s best estimate of probable losses incurred. The allowance for doubtful accounts comprised two components,
namely a specific component for financial instruments which have been individually evaluated for impairment; and a general component for financial
instruments which, while not individually evaluated for impairment, have been collectively evaluated for impairment based on historical loss
experience. The specific component of the allowance reflects probable losses incurred within financial instruments which have been individually
evaluated for impairment. Impairment was measured by adjusting the carrying value of the financial instrument to either the present value of expected
future cash flows discounted at the financial instrument’s effective interest rate, an observable market price, or the fair value of the collateral if thefinancial instrument is collateral dependent.
The general component of the allowance was for financial instruments not individually evaluated for impairment and includes judgment aboutcollectability based on available information at the balance sheet date and the uncertainties inherent in those underlying assumptions. The allowance wasbased on historical loss experience adjusted for qualitative factors such as current economic conditions.
201

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents changes in the allowance for current expected credit losses for the year ended March 31, 2021 and 2022 asdetermined using the CECL impairment model defined by ASC 326. The allowance increased as of March 2022 when compared to March 2021
primarily as a result of additional credit losses arising in connection with the U.S. Prime Brokerage Event in March 2021. See Note 23. “U.S. Prime
Brokerage Event” for further information on this event.

Opening balance prior to CECL adoption(1)Impact of CECL adoption(2)Opening balance after CECL adoption
Provision for credit losses(4)Charge-offs
Other(5)Closing balance

Opening balance
Provision for losses(4)Charge-offs
Other(4)(5)
Closing balance
(1)
(2)
(3)
(4)

(5)

Millions of yen
Year ended March 31, 2021
Allowance for current expected credit losses against loans
Short-term
securedmarginCorporate
Loans
loans
loans
Subtotal
at banks

Allowance
againstreceivables
other thanloans (3)Totalallowance forcurrent
expected
credit losses

1,564
232
1,796
(196)
(318)
—
¥ 1,282

3,152
2
3,154
1,060
(1,600)1,903¥ 4,517¥

13,012
1,972
14,98439,075(2,281)
2,006
53,784

Millions of yen
Year ended March 31, 2022
Allowance for current expected credit losses against loans
Short-term
securedLoansmarginCorporate
at banks
loans
loans
Subtotal

Allowance
againstreceivables
other thanloans (3)Totalallowance forcurrent
expected
credit losses

1,282
1,161
—
(9)
¥ 2,434

4,517
113(1,231)(1,840)¥ 1,559

53,784
12,353(1,231)
1,440
66,346

¥

¥

352
—
352
—
(363)
11
—

—
—
—
—
—

¥

¥

7,944
1,738
9,682
38,211(0)
92
47,98547,985
11,079—3,289
62,3539,860
1,970
11,83038,015(681)
103¥ 49,267

49,267
12,240—3,280¥ 64,787¥

Closing balance recognized on March 31, 2020 as determined using legacy U.S. GAAP guidance in effect prior to the adoption of ASC 326.
The adjusted opening balance recognized on April 1, 2020 on adoption of the CECL impairment model under ASC 326.
Includes amounts recognized against collateralized agreements, customer contract assets and receivables and other receivables.
Following default by a U.S. client in connection with the U.S. Prime Brokerage Event in March 2021, a provision for losses of ¥41,561 million
was recognized. During year ending March 2022, an additional provision for losses of ¥9,289 million was recognized during the quarter ended
June 30, 2021, which was subsequently partially offset by a release in the allowance of ¥2,535 million during the quarter ended March 31, 2022.
See Note 23 “U.S. Prime Brokerage Event” for further information on this event.
Primarily includes the effect of foreign exchange movements and recoveries collected.

Troubled debt restructurings
In the ordinary course of business, Nomura may choose to restructure a loan classified as held for investment either because of financial
difficulties of the borrower, or simply as a result of market conditions or relationship reasons. A troubled debt restructuring (“TDR”) occurs when
Nomura (as lender) for economic or legal reasons related to the borrower’s financial difficulties grants a concession to the borrower that Nomura would
not otherwise consider.
Expected credit losses for a loan being restructured under a TDR which only involve modification of the loan’s terms (rather than receipt of assets
in full or partial settlement) is typically determined using a discounted cash flow analysis. Assets received in full or partial satisfaction of a loan in a
TDR are recognized at fair value.
Discussions continue with various borrowers to modify the existing contractual terms of certain loans. These modifications where the borrower isdeemed to be in financial difficulty and Nomura has, or expects to, grant a financial concession would typically be accounted for and reported as a TDR.
The amounts of TDRs which occurred during the years ended March 31, 2021 and 2022 were not significant.
202

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Nonaccrual and past due loans
Loans are placed on a nonaccrual status if interest is deemed uncollectible. Nomura policy is to define interest as being uncollectible if theborrower is determined to be in financial difficulty or an interest or principal payment on the loans is 90 days or more past due.
Where a loan is placed on a nonaccrual status, any accrued but unpaid interest receivable reversed and no further accrual of interest is permitted.
Interest income is subsequent recognized when a cash payment is received from the borrower using the cash basis method.
Loans are generally only returned to an accrual status if the loan is brought contractually current, i.e., all overdue principal and interest amounts
are paid. In limited circumstances, a loan which has not been brought contractually current will also be returned to an accrual status if all principal andinterest amounts contractually due are reasonably assured of repayment within a reasonable period of time or there has been a sustained period of
repayment performance by the borrower.
As of March 31, 2021, there were ¥204,404 million of loans which were placed on a nonaccrual status, primarily secured corporate loans.
Corporate loans on a non-accrual status include loans relating to a U.S. client in connection with the U.S. Prime Brokerage Event in March 2021. The
amount of loans which were 90 days past due was not significant.
As of March 31, 2022, there were ¥62,289 million of loans which were placed on a nonaccrual status, primarily secured corporate loans.
Corporate loans on a non-accrual status as of March 31, 2022 include loans relating to a U.S. client in connection with the U.S. Prime Brokerage Eventin March 2021. The amount of loans which were 90 days past due but were not on a nonaccrual status was not significant.
Credit quality indicators
Nomura is exposed to credit risks due to a decline in the value of loans or a default caused by deterioration of creditworthiness or bankruptcy ofthe borrower. Nomura’s risk management framework for such credit risks is based on a risk assessment through an internal rating process, in depth
pre-financing credit analysis of each individual loan and continuous post-financing monitoring of the borrower’s creditworthiness.
203

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following tables present an analysis of each class of loans not carried at fair value using Nomura’s internal ratings or equivalent credit quality
indicators applied by subsidiaries by years of origination as of March 31, 2021 and 2022.
Millions of yen
March 31, 2021
2021

Secured loans at banks:
AAA-BBB
BB-CCC
CC-D
Others(1)Total secured loans at banks
Unsecured loans at banks:
AAA-BBB
BB-CCC
CC-D
OthersTotal unsecured loans at banks
Short-term secured margin loans:
AAA-BBB
BB-CCC
CC-D
Others(1)Total short-term secured margin loans
Unsecured inter-bank money market loans:
AAA-BBB
BB-CCC
CC-D
OthersTotal unsecured inter-bank money market loans
Secured corporate loans:
AAA-BBB
BB-CCCCC-D(2)Others(1)Total secured corporate loans
Unsecured corporate loans:
AAA-BBB
BB-CCC
CC-D
OthersTotal unsecured corporate loans
Advances to affiliated companies
AAA-BBB
BB-CCC
CC-D
OthersTotal advances to affiliated companies
Total
(1)
(2)

2020

2019

2018

2016 orearlier

2017

Revolving

Total¥ 54,179 ¥115,003 ¥ 17,106 ¥ 12,450 ¥ 4,240 ¥ 17,634 ¥
75,680 115,131
3,864
2,324
—
5,484
—
—
—
—
—
—
—
61,185————¥129,859 ¥291,319 ¥ 20,970 ¥ 14,774 ¥ 4,240 ¥ 23,118 ¥

—
—
—
—
—

¥ 220,612
202,483—
61,185¥ 484,280

¥

—
—
—
—
—

¥ 120,685
235——¥ 120,920

9,101 ¥ 22,955 ¥ 27,863 ¥ 17,563 ¥ 8,484 ¥ 34,719 ¥
—
—
235
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
¥ 9,101 ¥ 22,955 ¥ 28,098 ¥ 17,563 ¥ 8,484 ¥ 34,719 ¥

¥

— ¥
—
—
170,514¥170,514 ¥

— ¥
—
—
141
141 ¥

—
—
—
—
—

¥

¥

—
—
—
—
—

—
—
—
—
—

¥

1,289 ¥———
¥ 1,289 ¥

¥

¥

¥

¥

—
—
—
—
—

¥

—
—
—
—
—

¥

¥

¥

—
—
—
—
—

¥

—
—
—
—
—

¥

¥

¥

—
—
—
—
—

¥

— ¥
—
—
—
—
—
265,566
436,221¥265,566 ¥ 436,221

—
—
—
—
—

¥

¥

—
—
—
—
—

¥

¥

1,289
—
—
—
1,289

¥ 33,965 ¥261,182 ¥ 45,880 ¥ 9,817 ¥ 6,406 ¥ 27,672 ¥97 ¥ 385,019
20,093 102,941
34,43529,869 13,067
17,573 173,178
391,156
197,859——————
197,859
—
39
40
11
30
4,697
428
5,245
¥251,917 ¥364,162 ¥ 80,355 ¥ 39,697 ¥19,503 ¥ 49,942 ¥173,703 ¥ 979,279
¥

¥

— ¥
84
—
1
85 ¥

— ¥
—
—
191
191 ¥

— ¥
— ¥
450
—
—
—
8
97,212458 ¥ 97,212 ¥

—
—
—
—
—

¥

— ¥
—
—
5,014
¥ 5,014 ¥

—
—
—
—
—

¥

—
534
—
102,426¥ 102,960¥

1,000 ¥— ¥— ¥— ¥ — ¥
— ¥
— ¥
1,000
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
¥ 1,000 ¥— ¥— ¥— ¥ — ¥
— ¥
— ¥
1,000
¥563,765 ¥678,768 ¥129,881 ¥169,246 ¥32,227 ¥112,793 ¥439,269 ¥2,125,949

Relate to collateralized exposures where a specified ratio of LTV is maintained.
Includes loans of ¥197,859 million to a U.S. client in connection with the U.S. Prime Brokerage Event. See Note.23 “U.S. Prime Brokerage
Event” for further information on this event.
204

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Millions of yen
March 31, 2022
2022

Secured loans at banks:
AAA-BBB
BB-CCC
CC-D
Others(1)Total secured loans at banks
Unsecured loans at banks:
AAA-BBB
BB-CCC
CC-D
OthersTotal unsecured loans at banks
Short-term secured margin loans:
AAA-BBB
BB-CCC
CC-D
Others(1)Total short-term secured margin loans
Unsecured inter-bank money market loans:
AAA-BBB
BB-CCC
CC-D
OthersTotal unsecured inter-bank money market loans
Secured corporate loans:
AAA-BBB
BB-CCCCC-D(2)Others(1)Total secured corporate loans
Unsecured corporate loans:
AAA-BBB
BB-CCC
CC-D
OthersTotal unsecured corporate loans
Advances to affiliated companies
AAA-BBB
BB-CCC
CC-D
OthersTotal advances to affiliated companies
Total
(1)
(2)

2021

2020

2019

2017 orearlier

2018¥106,554 ¥126,834 ¥ 8,325 ¥ 17,308 ¥
80,167 169,655
1,693
638
—
—
—
—
—
82,304——¥186,721 ¥378,793 ¥ 10,018 ¥ 17,946 ¥RevolvingTotal

9,213 ¥ 12,729 ¥
587
6,779
—
—
—
—
9,800 ¥ 19,508 ¥

—
—
—
—
—

¥ 280,963
259,519—
82,304¥ 622,786

6,000 ¥ 18,175 ¥ 12,703 ¥ 20,565 ¥ 9,982 ¥ 25,841 ¥
—
—
—
—
—
—
1,940
—
—
—
—
—
—
—
—
¥ 6,000 ¥ 18,175 ¥ 12,703 ¥ 22,505 ¥ 9,982 ¥ 25,841 ¥

—
—
—
—
—

¥

¥

¥

— ¥
— ¥
—
—
—
—
169,195
23,238¥169,195 ¥ 23,238 ¥

—
—
—
—
—

¥

¥

—
—
—
—
—

¥

2,196 ¥———
¥ 2,196 ¥

—
—
—
—
—

¥

¥

¥

¥

—
—
—
—
—

¥

—
—
—
—
—

¥

¥

¥

—
—
—
—
—

¥

—
—
—
—
—

¥

¥

¥

—
—
—
—
—

¥

—
—
—
—
—

¥

¥

93,266—
1,940—
95,206

— ¥
—
—
—
—
—
250,167
442,600¥250,167 ¥ 442,600

¥

—
—
—
—
—

¥

¥

2,196
—
—
—
2,196

¥

— ¥ 52,545 ¥ 86,910 ¥ 20,710 ¥ 3,258 ¥ 52,496 ¥ 9,916 ¥ 225,835
86,300 307,636
14,718 131,266 115,494
30,08592,039777,538—
57,524—————57,524
455
20
25
26
10
101
96
733
¥ 86,755 ¥417,725 ¥101,653 ¥152,002 ¥118,762 ¥ 82,682 ¥102,051 ¥1,061,630

¥

— ¥
— ¥
11,621
20,516———438¥ 11,621 ¥ 20,954 ¥

— ¥
— ¥
— ¥
—
1,989
—
—
—
—
191
—
109,959
191 ¥ 1,989 ¥109,959 ¥

—
—
—

¥

5
5 ¥

—
—
—
—
—

¥

—
34,126—
110,593¥ 144,719¥— ¥ 1,000 ¥
— ¥
— ¥
— ¥
— ¥
— ¥
1,000
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
¥
— ¥ 1,000 ¥
— ¥
— ¥
— ¥
— ¥
— ¥
1,000
¥462,488 ¥859,885 ¥124,565 ¥194,442 ¥248,503 ¥128,036 ¥352,218 ¥2,370,137

Relate to collateralized exposures where a specified ratio of LTV is maintained.
Includes loans of ¥57,524 million to a U.S. client in connection with the U.S. Prime Brokerage Event. See Note.23 “U.S. Prime Brokerage Event”
for further information on this event.
205

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents a definition of each of the internal ratings used in the Nomura Group.
Rating Range

Definition

AAA

Highest credit quality. An obligor or facility has extremely strong capacity to meet its financial commitments. ‘AAA range’ is the highest
credit rating assigned by Nomura. Extremely low probability of default.

AA

Very high credit quality category. An obligor or facility has very strong capacity to meet its financial commitments. Very low probabilityof default but above that of ‘AAA range.’

A

High credit quality category. An obligor or facility has strong capacity to meet its financial commitments but is somewhat more
susceptible to the adverse effects of changes in circumstances and economic conditions than those in higher-rated categories. Low
probability of default but higher than that of ‘AA range.’

BBB

Good credit quality category. An obligor or facility has adequate capacity to meet its financial commitments. However, adverse economic
conditions or changing circumstances are more likely to lead to a weakened capacity to meet its financial commitments. Medium
probability of default but higher than that of ‘A range.’

BB

Speculative credit quality category. An obligor or facility is less vulnerable in the near term than other lower-ratings. However, it faces
major ongoing uncertainties and exposure to adverse business, financial, or economic conditions which could lead to the inadequate
capacity to meet its financial commitments. Medium to high probability of default but higher than that of ‘BBB range.’

B

Highly speculative credit quality category. An obligor or facility is more vulnerable than those rated ‘BB range’, but the obligor currently
has the capacity to meet its financial commitments. Adverse business, financial, or economic conditions will likely impair the issuer’s orobligor’s capacity or willingness to meet its financial commitments. High probability of default—more than that of ‘BB range.’

CCC

Substantial credit risk. An obligor or facility is currently vulnerable, and is dependent upon favorable business, financial, and economic
conditions to meet its financial commitments. Strong probability of default – more than that of ‘B range.’CC

Default category. An obligor or facility is currently highly vulnerable to nonpayment.

C

Default category. An obligor or facility is currently extremely vulnerable to nonpayment.

D

Failure of an obligor to make payments in full and on time of any financial obligations, markedly disadvantageous modification to acontractual term compared with the existing obligation, bankruptcy filings, administration, receivership, liquidation or other winding-up or
cessation of business of an obligor or other similar situations.

Nomura reviews internal ratings at least once a year by using available credit information of obligors including financial statements and otherinformation. Internal ratings are also reviewed more frequently for high-risk obligors or problematic exposures and any significant credit event of
obligors will trigger an immediate credit review process.
206

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
8. Leases:
Nomura as lessor
Nomura leases office buildings and aircrafts in Japan and overseas either as head lessor or through subleases. These leases and subleases areprimarily classified as operating leases. The related assets are stated at cost, net of accumulated depreciation, except for land, which is stated at cost in
the consolidated balance sheets and reported within Other assets-Office buildings, land, equipment and facilities.
The following table presents the types of assets which Nomura leases under operating leases:
Millions of yen
March 31
Cost

Real estate(1)Aircraft
Total
(1)

¥
¥

354
39,73640,0902021
Accumulated
depreciation

Net carrying
amount

¥

¥

¥

(288)
(1,382)(1,670)¥66
38,35438,420

Cost

¥
¥

354
10,373
10,7272022
Accumulated
depreciation

Net carrying
amount

¥

¥

(292)
(688)
(980)

¥

¥

62
9,685
9,747

Cost, accumulated depreciation and net carrying amounts include amounts relating to real estate utilized by Nomura.

Nomura recognized lease income of ¥1,878 million and ¥3,653 million for the years ended March 31, 2021 and 2022, respectively. These areincluded in the consolidated statements of income within Revenue—Other.
The following table presents an analysis of future undiscounted lease payments receivable in connection with noncancellable operating leases
entered into by Nomura as lessor over the remaining lease term as of March 31, 2022. Amounts in connection with finance leases were not significant.
Millions of yen
March 31, 2022
Minimum lease payments
to be received

Years of receipt
Less than 1 year
1 to 2 years
2 to 3 years
3 to 4 years
4 to 5 years
More than 5 years
Total

¥

¥

1,013
986
986
986
986
4,883
9,840

Nomura as lessee
Nomura enters into leases of office space, residential facilities for employees, motor vehicles, equipment and technology assets in the ordinary
course of business in both Japan and overseas as lessee. These arrangements predominantly consist of operating leases. Separately Nomura subleases
certain real estate and equipment through operating lease arrangements. The total carrying values of right-of-use (“ROU”) assets recognized inconnection with operating leases as of March 31, 2021 and 2022 were ¥185,085 million and ¥175,422 million, respectively. The total carrying values of
ROU asset recognized in connection with finance leases as of March 31, 2021 and 2022 were not significant. These lease assets are reported within
Other assets-Office buildings, land, equipment and facilities in the consolidated balance sheets.
207

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents income and expense amounts recognized through the consolidated statements of income for leases where Nomura isacting as lessee for the year ended March 31, 2021 and 2022. Amounts recognized in the consolidated statements of income in respect of finance leasecost, short-term lease cost, variable lease cost and net gains (losses) on qualifying sale and leaseback transactions were not significant during the years
ended March 31, 2021 and 2022.
Millions of yen
Year ended March 31
2021
2022

Lease expense:
Operating lease costs
Other income and expenses:
Gross sublease income(1)(1)¥49,168¥47,643¥ 4,638¥ 3,464

Gross sublease income represents income from subleases separate from lease payments made by Nomura on the head lease as lessee.

Lease cash flow information
Lease payments made in cash in connection with operating leases are classified as operating activity in the consolidated statements of cash flows.
The initial recognition of ROU assets and lease liabilities on lease commencement date represents noncash transactions.
The following table presents cash payments made by Nomura as lessee which meet the definition of lease payments and therefore have been
included in the measurement of operating lease liabilities recorded under operating cash flows and the total amount of ROU assets and lease liabilities
recognized during the years ended March 31, 2021 and 2022.
Millions of yen
Year ended March 31
2021
2022

Operating cash flows for operating leases
ROU assets recognized in connection with new operating leases¥47,584¥41,279
208¥46,565¥32,208

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Maturity analysis of lease liabilities
The following table presents an analysis of future undiscounted lease payments under operating leases entered into by Nomura as lessee over theremaining lease term as of March 31, 2022 and also represents a reconciliation between total of such lease payments and the discounted carrying valueof operating lease liabilities recognized in the consolidated balance sheets as of March 31, 2022. Finance lease liabilities were not significant as ofMarch 31, 2022. These lease liabilities are reported within Other liabilities in the consolidated balance sheets.
Millions of yen
March 31, 2022
Operating leases

Years of payment
Less than 1 year
1 to 2 years
2 to 3 years
3 to 4 years
4 to 5 years
More than 5 years
Total undiscounted lease payments
Less: Impact of discounting
Lease liabilities as reported in the consolidated balance sheets¥¥¥

44,49332,03425,85023,507
19,25463,902
209,040(10,909)
198,131

The following table presents the weighted-average discount rate used to measure lease liabilities and the weighted-average remaining lease termof operating leases as of March 31, 2021 and 2022.
Year ended March 31
2021
2022
Operating leases
Operating leases

Weighted-average discount rate used to measure lease liabilities
Weighted-average remaining lease term

1.4%
7.6 years
209

1.4%
7.2 years

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
9. Business combinations:On April 1, 2020, Nomura acquired 100% of Greentech Capital, LLC (“Greentech”), a leading M&A advisory boutique in sustainable technology
and infrastructure in the United States. The acquisition of Greentech comprises an initial cash payment and additional contingent payments based on
future performance of the company. The transaction has been accounted for as a business combination under ASC 805 “Business combinations” andconsideration for the purchase as used to determine goodwill was ¥12,389 million which includes the estimated fair value of contingent payments
accounted for as contingent consideration on acquisition date. Changes in the fair value of contingent consideration are recognized in the consolidated
statements of income until the contingency is resolved. Contingent payments linked to future employment of employees of Greentech are recognized in
the consolidated statements of income as compensation expense over the relevant service period and when payment of those amounts becomes probable.
The operating results and cash flows of Greentech was reflected to Nomura’s consolidated financial statements from April 1, 2020. The assets acquired
and liabilities assumed as of the acquisition date were not material to Nomura’s consolidated balance sheet.
210

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
10. Other assets—Office buildings, land, equipment and facilities and Other / Other liabilities:
Office buildings, land, equipment and facilities
The following table presents a breakdown of owned and leased office buildings, land, equipment and facilities as of March 31, 2021 and 2022.
Millions of yen
March 31
2021
2022

Land
Office buildings
Equipment and facilities
SoftwareConstruction in progress
Operating lease ROU assets
Total

¥

¥

39,23376,72559,614
103,385407
185,085
464,449¥¥

39,11860,02531,895
104,6097,978
175,422419,047

Depreciation and amortization charges of depreciable assets are reported within Non-interest expenses—Information processing andcommunications in the amount of ¥49,343 million, and ¥46,111 million, and in Non-interest expenses—Occupancy and related depreciation in theamount of ¥14,503 million, and ¥13,412 million for the years ended March 31, 2021 and 2022, respectively.
As of March 31, 2021, Nomura has classified buildings with a carrying value of ¥12,311 million as being held for sale and reported within Other
assets—Office buildings, land, equipment and facilities in the consolidated balance sheet. Held-for-sale assets are carried at the lower of the carrying
amount and fair value less cost to sell. During the year ended March 31, 2021, no gain or loss associated with the sale of held-for-sale assets wasrecognized through earnings. The sale was subsequently completed during the quarter ended June 30, 2021 with no material gain or loss recognizedthrough earnings.
Other assets—Other / Other liabilities
The following table presents components of Other assets—Other and Other liabilities in the consolidated balance sheets as of March 31, 2021 and
2022.
Millions of yen
March 31
2021
2022

Other assets—Other:
Securities received as collateral
Goodwill and other intangible assets
Deferred tax assets net
Investments in equity securities for other than operating purposes(1)Prepaid expenses
Other
Total

¥

Other liabilities:
Obligation to return securities received as collateral
Accrued income taxes
Other accrued expenses and provisions(2)Other(3)
Total
(1)

(2)

(3)

399,975
29,04030,433
270,246
18,741300,997¥ 1,049,432

¥

¥

¥

399,975
60,275424,961
353,956¥ 1,239,167¥

166,352
30,007
15,562
249,448
17,165
295,052
773,586

166,352
34,158457,511362,204¥ 1,020,225

Includes marketable and non-marketable equity securities held for other than trading or operating purposes. These investments comprise of listed
equity securities and unlisted equity securities of ¥30,912 million and ¥239,334 million respectively, as of March 31, 2021, and ¥13,572 millionand ¥235,877 million respectively, as of March 31, 2022. In principle, these securities are carried at fair value, with changes in fair value
recognized and reported within Revenue—Other in the consolidated statements of income. It also includes equity securities without a readily
determinable fair value of ¥65,365 million as of March 31, 2021 and 2022 respectively.
Includes a liability of ¥62,889 million and ¥76,866 million as of March 31, 2021 and 2022 respectively, in respect of outstanding and unsettledinvestigations, lawsuits and other legal proceedings where loss is considered probable and the amount of such loss can be reasonably estimated.
See Note 20 “Commitments, contingencies and guarantees” for further information.
Operating lease liabilities are presented through Other liabilities—Other. See Note 8 “Leases” for further information.
211

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Goodwill is recognized upon completion of a business combination as the difference between the purchase price and the fair value of the net assets
acquired. Subsequent to initial recognition, goodwill is not amortized but is tested for impairment during the fourth quarter of each fiscal year, or more
often if events or circumstances, such as adverse changes in the business climate, indicate there may be impairment.
Impairment testing of goodwill is inherently subjective and often requires management judgment to determine when to perform an impairment
test, whether qualitatively the fair value of a reporting unit exceeds its carrying value and also to estimate the fair value of a reporting unit when aquantitative impairment test is required.
An annual goodwill impairment test was performed in the quarter ended March 31, 2021 and 2022. Whilst determination of fair value of thereporting unit was more subjective because of the impact of the COVID-19 pandemic, the estimated fair value of the reporting unit is expected to exceed
carrying value and therefore no impairment loss was recognized.
The following table presents changes in goodwill, which are reported in the consolidated balance sheets within Other assets—Other for the years
ended March 31, 2021 and 2022.
Millions of yen
Year ended March 31, 2021
Changes during year

Beginning of year

End of year

Gross

Wholesale
Other
Total

Gross

carrying
amountAccumulated
Impairment

Net carrying
amountAcquisition(2)Impairment¥ 92,814472¥ 93,286¥ (92,814)—¥ (92,814)

¥

¥

¥

—
472
472

¥

¥

12,078189
12,267¥———

Other(1)

¥

402
4
406

¥

Beginning of year

(1)
(2)

Accumulated
Impairment

Net carrying
amount¥105,294
665¥105,959¥ (92,814)—¥ (92,814)¥

Millions of yen
Year ended March 31, 2022
Changes during year¥

12,480665
13,145End of year
Gross

Gross

Wholesale
Other
Total

carrying
amountcarrying
amountAccumulated
Impairment

Net carrying
amountAcquisition

Impairment¥105,294
665¥105,959¥ (92,814)—¥ (92,814)

¥

¥

¥

¥

12,480665
13,145

—
—
—

¥

¥

—
—
—

Other(1)

¥

1,260
2
1,262

¥

carrying
amountAccumulated
Impairment

Net carrying
amount¥106,554
667¥107,221¥ (92,814)—¥ (92,814)¥¥

13,740667
14,407

Includes currency translation adjustments.
For the year ended March 31, 2021, Nomura recognized goodwill as a result of acquiring 100% of the ownership interests in Greentech Capital,
LLC which has been allocated in its entirety to the Wholesale division for segmental reporting and reporting unit purposes. See Note 9 “Business
Combination” for further information.

During the fiscal year ended March 31, 2021 and 2022, management considered but determined the COVID-19 pandemic did not indicate thatcertain finite-lived intangible assets were impaired. As a result, a formal impairment test over the relevant asset groups which include these intangible
assets was not required.
The following table presents finite-lived intangible assets by type as of March 31, 2021 and 2022.
Millions of yen
March 31, 2021
Gross
carrying
amountClient relationships
Other
Total

¥
¥

64,357
1,842
66,199

Accumulated
amortization¥¥(57,680)(1,234)(58,914)

March 31, 2022
Gross
carrying
amountNet carrying
amount

¥
¥

6,677
608
7,285

¥
¥

67,4922,000
69,492

Accumulated
amortization¥¥(61,715)(1,522)(63,237)

Net carrying
amount¥¥Amortization expenses for the years ended March 31, 2021 and 2022 were ¥2,296 million and ¥1,717 million, respectively. Estimatedamortization expenses for the next five years are shown below.
212

5,777
478
6,255

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Millions of yen
Estimated
amortization expense

Year ending March 31

2023
2024
2025
2026
2027

¥

324
200
197
113
73

The amounts of indefinite-lived intangibles, which primarily includes trademarks, were ¥8,609 million and ¥9,345 million as of March 31, 2021
and 2022, respectively.
An annual impairment test was performed in the quarter ended March 31, 2021 and 2022 against these intangibles. Whilst determination of fairvalue of these intangibles was more subjective because of the impact of the COVID-19 pandemic, the estimated fair value of each intangible exceeded
carrying value and therefore no impairment loss was recognized.
Nomura recognizes an obligation related to restoration of the existing rental buildings at the time of leaving, as Asset Retirement Obligations(“ARO”) on real estate leasehold contracts.
The following table presents changes in ARO, which are reported in the consolidated balance sheets within Other liabilities—Other for the years
ended March 31, 2021 and 2022.
Millions of yen
March 31
2021
2022

Balance at beginning of year
Liabilities incurred during the current period
Liabilities settled during the current period
Revision in estimated cash flows(1)Balance at end of period(1)¥ 6,625 ¥14,485
1,846
319
(97)
(564)
6,111
—
¥14,485 ¥14,240

During the fiscal year ended March 31, 2021, as a result of the rights conversion of the Tokyo Nihonbashi district redevelopment project, theestimate of future cash flows for the ARO associated with our properties has been changed.
213

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
11. Borrowings:
The following table presents short-term and long-term borrowings of Nomura as of March 31, 2021 and 2022.
Millions of yen
March 31
2021
2022

Short-term borrowings(1):Commercial paper
Bank borrowings
Other
Total
Long-term borrowings:
Long-term borrowings from banks and other financial institutions(2)Bonds and notes issued(3):Fixed-rate obligations:Japanese yen denominated
Non-Japanese yen denominatedFloating-rate obligations:Japanese yen denominated
Non-Japanese yen denominatedIndex / Equity-linked obligations:Japanese yen denominated
Non-Japanese yen denominatedSubtotal
Trading balances of secured borrowings
Total
(1)
(2)
(3)

¥ 460,014
294,052
614,032¥1,368,098¥ 131,915
205,857
712,369¥1,050,141¥2,878,676¥3,196,144

583,148
1,917,166

765,4122,486,305

876,844
327,595

917,362
329,876

906,332
361,916
4,973,001
7,851,677
123,335¥7,975,012

942,585
350,672
5,792,212
8,988,356
269,950¥9,258,306

Includes secured borrowings of ¥55,569 million as of March 31, 2021 and ¥92,580 million as of March 31, 2022.
Includes secured borrowings of ¥118,106 million as of March 31, 2021 and ¥79,843 million as of March 31, 2022.
Includes secured borrowings of ¥788,618 million as of March 31, 2021 and ¥761,620 million as of March 31, 2022.
Trading balances of secured borrowings

These are liabilities recognized when a transfer of a financial asset does not meet the criteria for sales accounting under ASC 860 and therefore thetransaction is accounted for as a secured borrowing. These borrowings are part of Nomura’s trading activities intended to generate profits from the
distribution of financial products secured by those financial assets.
Long-term borrowings consisted of the following:
Millions of yen
March 312021
2022

Debt issued by the Company
Debt issued by subsidiaries—guaranteed by the Company
Debt issued by subsidiaries—not guaranteed by the Company(1)
Total
(1)

¥3,003,810
2,398,932
2,572,270¥7,975,012¥3,679,955
2,124,904
3,453,447¥9,258,306

Includes trading balances of secured borrowings.

As of March 31, 2021, fixed-rate long-term borrowings mature between 2021 and 2067 at interest rates ranging from 0.00% to 24.40%. Excluding
perpetual subordinated debts, floating-rate obligations, which are generally based on LIBOR, mature between 2021 and 2051 at interest rates ranging
from 0.00% to 8.01%. Index / Equity-linked obligations mature between 2021 and 2051 at interest rates ranging from 0.00% to 43.80%
As of March 31, 2022, fixed-rate long-term borrowings mature between 2022 and 2067 at interest rates ranging from 0.00% to 30.09%. Excluding
perpetual subordinated debts, floating-rate obligations, which are generally based on TIBOR and LIBOR, mature between 2022 and 2051 at interest
rates ranging from 0.00% to 7.74%. Index / Equity-linked obligations mature between 2022 and 2052 at interest rates ranging from 0.00% to 42.30%.
214

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Certain borrowing agreements contain provisions whereby the borrowings are redeemable at the option of the borrower at specified dates prior tomaturity and include various equity-linked or other index-linked instruments.
Nomura enters into swap agreements to manage its exposure to interest rates and foreign exchange rates. Principally, debt securities and notes
issued are effectively converted to Tokyo OverNight Average rate and Secured Overnight Financing Rate-based floating rate obligations through suchswap agreements. The carrying value of the long-term borrowings includes adjustments to reflect fair value hedges.
Following table presents the effective weighted-average interest rates of borrowings, including the effect of fair value hedges as of March 31,
2021 and 2022.
March 31
2021
2022

Short-term borrowings
Long-term borrowings
Fixed-rate obligations
Floating-rate obligations
Index / Equity-linked obligations

0.58%
0.82%
0.96%
0.88%
0.30%

1.26%
1.09%
1.25%
1.04%
0.79%

Maturities of long-term borrowings
The following table presents the aggregate annual maturities of long-term borrowings, including adjustments related to fair value hedges andliabilities measured at fair value, as of March 31, 2022:
Year ending March 31

Millions of yen

2023
2024
2025
2026
2027
2028 and thereafter
Subtotal
Trading balances of secured borrowings
Total

¥

456,663904,738
1,180,692
1,402,216
870,856
4,173,191
8,988,356
269,950¥ 9,258,306

Borrowing facilities
As of March 31, 2021 and 2022, Nomura had unutilized borrowing facilities of ¥nil and ¥nil, respectively.
Subordinated borrowings
As of March 31, 2021 and 2022, subordinated borrowings were ¥354,500 million and ¥414,500 million, respectively.
215

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
12. Earnings per share:
Basic and diluted earnings per share (“EPS”) are presented on the face of the consolidated statements of income. Basic EPS is calculated by
dividing net income attributable to NHI shareholders by the weighted average number of the Company’s common shares outstanding during the year.
The calculation of diluted EPS is similar to basic EPS, except that the weighted average number of the Company’s common shares is adjusted to reflect
all dilutive instruments where the Company’s common shares are potentially deliverable during the year. In addition, net income attributable to NHI
shareholders is adjusted for any change in income or loss that would result from the assumed conversion of dilutive instruments issued by subsidiaries
and affiliates.
The following table presents a reconciliation of the amounts and the numbers used in the calculation of net income attributable to NHI
shareholders per share (basic and diluted) for the years ended March 31, 2021 and 2022.
Millions of yen
except per share data presented in yen
Year ended March 31
2021
2022

Basic—Net income attributable to NHI shareholders
Weighted average number of shares outstanding
Net income attributable to NHI shareholders per share
Diluted—
Net income attributable to NHI shareholders
Weighted average number of shares outstanding
Net income attributable to NHI shareholders per share¥

153,116¥

3,055,525,640
50.11

¥

153,064

3,147,338,609
¥
48.63

¥

142,996

3,063,524,091
¥
46.68
¥

142,861

3,158,708,013¥
45.23

Net income attributable to NHI shareholders was adjusted to reflect the decline in Nomura’s equity share of earnings of subsidiaries and affiliates
for the years ended March 31, 2021 and 2022 arising from options to purchase common shares issued by subsidiaries and affiliates.
The weighted average number of shares used in the calculation of diluted EPS reflects the increase in potential issuance of the Company’scommon shares arising from stock-based compensation plans by the Company and affiliates, which would have minimal impact on EPS for the years
ended March 31, 2021 and 2022.
Antidilutive stock options and other stock-based compensation plans to purchase 12,398,500 and 9,716,800 of the Company’s common shareswere not included in the computation of diluted EPS for the years ended March 31, 2021 and 2022, respectively.
Subsequent Events
On May 19, 2022, the Company adopted a resolution to grant Restricted Stock Units (“RSUs”). See Note 14 “Deferred compensation awards” forfurther information.
On April 26, 2022, the Company adopted a resolution to set up a share buyback program. See Note 17 “Shareholders’ equity” for further
information.
216

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
13. Employee benefit plans:
Nomura provides various pension plans and other post-retirement benefits which cover certain eligible employees worldwide. In addition, Nomura
provides health care benefits to certain active and retired employees through its Nomura Securities Health Insurance Society (“NSHIS”).
Defined benefit pension plans—
The Company and certain subsidiaries in Japan (“Japanese entities”) have contributory funded benefit pension plans for eligible employees. The
benefits are paid as annuity payments subsequent to retirement or as lump-sum payments at the time of retirement based on a combination of years ofservice, age at retirement and employee’s choice. The benefits under the plans are calculated based upon position, years of service and reason for
retirement. In addition to the plans described above, certain Japanese entities also have unfunded lump-sum payment plans. Under these plans,
employees with at least two years of service are generally entitled to lump-sum payments upon termination of employment. The benefits under the plans
are calculated based upon position, years of service and the reason for retirement. Nomura’s funding policy is to contribute annually the amountnecessary to satisfy local funding standards. In December 2008, certain contributory funded benefit pension plans and unfunded lump-sum payment
plans were amended and “Cash balance pension plans” were introduced. Participants receive an annual benefit in their cash balance pension planaccounts, which is computed based on compensation of the participants, adjusted for the changes in market interest rate.
In April 2020, certain Japanese entities amended their pension plans. Certain defined benefit pension plans and unfunded lump-sum payment plans
were either closed for additional funding or abolished. Defined contribution pension plans and cash balance pension plans have replaced them for futurecontributions.
Certain overseas subsidiaries have various local defined benefit plans covering certain employees. Nomura recognized an asset for surplus pension
benefits for these plans amounting to ¥8,912 million and ¥7,911 million as of March 31, 2021 and 2022, respectively.
Net periodic benefit cost
The following table presents the components of net periodic benefit cost for defined benefit plans of Japanese entities for the years ended
March 31, 2021 and 2022. Nomura’s measurement date is March 31 for defined benefit plans of Japanese entities.
Millions of yen
Year ended March 31
2021
2022

Service cost
Interest cost
Expected return on plan assets
Amortization of net actuarial losses
Amortization of prior service cost
Net periodic benefit cost

¥ 6,721 ¥ 6,452
1,786
2,042
(5,826)(6,055)
5,519
3,955(1,521)(1,599)¥ 6,679 ¥ 4,795

Prior service cost is amortized on a straight-line basis over the average remaining service period of active participants. Gains and losses in excess
of 10% of the greater of the projected benefit obligation or the fair value of plan assets are amortized over the average remaining service period of active
participants, which is 14 years.
217

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Benefit obligations and funded status
The following table presents a reconciliation of changes in projected benefit obligation (“PBO”) and the fair value of plan assets, as well as asummary of the funded status of Japanese entities’ plans as of, and for the years ended March 31, 2021 and 2022.
Millions of yen
As of or for the year ended March 31
2021
2022

Change in projected benefit obligation:
Projected benefit obligation at beginning of year
Service cost
Interest cost
Actuarial gain
Benefits paid
Acquisition, divestitures and other
Projected benefit obligation at end of year
Change in plan assets:
Fair value of plan assets at beginning of year
Actual return on plan assets
Employer contributions
Benefits paid
Fair value of plan assets at end of year
Funded status at end of year
Amounts recognized in the consolidated balance sheets

¥

¥
¥

¥
¥

303,523
6,721
1,786(3,593)(12,656)29
295,810¥295,810
6,452
2,042
1,433
(12,683)(15)
293,039¥

225,744
19,126825(10,948)234,747(61,063)(61,063)¥234,747
5,464
815(9,565)
231,461(61,578)(61,578)¥¥

The accumulated benefit obligation (“ABO”) was ¥295,810 million and ¥293,039 million as of March 31, 2021 and 2022, respectively.
In April 2020, defined contribution pension plans and cash balance pension plans were adopted for future contributions following the amendmentsof pension benefit plans. Certain contributory defined benefit pension plans were closed for additional funding and will be managed within theaccumulated funds. Unfunded lump-sum payment plans were abolished and transferred to cash balance plans with the calculated amount of lump-sum
retirement payment as of the amendment date.
The following table presents the PBO, ABO and fair value of plan assets for Japanese entities’ plans with ABO and PBO in excess of plan assets
as of March 31, 2021 and 2022.
Millions of yen
March 31

Plans with ABO in excess of plan assets:
PBO
ABO
Fair value of plan assets
Plans with PBO in excess of plan assets:
PBO
ABO
Fair value of plan assets
218

2021

2022

¥ 61,063
61,063—¥ 62,457
62,457—¥ 61,063
61,063—¥ 62,457
62,457—

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents pre-tax amounts of Japanese entities’ plans deferred in Accumulated other comprehensive income (loss) that have notyet been recognized as components of net periodic benefit cost during the year ended March 31, 2022.
Millions of yen
For the year ended
March 31, 2022

Net actuarial loss
Net prior service cost
Total

¥
¥

82,734(8,114)74,620Pre-tax amounts of Japanese entities’ plans in accumulated other comprehensive income which are expected to be recognized as components of
net periodic benefit cost over the next fiscal year are as follows.
Millions of yen
For the year ending
March 31, 2023

Net actuarial loss
Net prior service cost
Total

¥

3,818
(1,665)
2,153¥

Assumptions
The following table presents the weighted-average assumptions used to determine projected benefit obligations of Japanese entities’ plans as ofMarch 31, 2021 and 2022.
March 31

Discount rate
Rate of increase in compensation levels
Interest crediting rate

2021

2022

0.7%
0.3%
2.9%

0.8%
0.3%
2.9%

The following table presents the weighted-average assumptions used to determine the net periodic benefit cost of Japanese entities’ plans as ofMarch 31, 2021 and 2022.
Year ended March 31
2021
2022

Discount rate
Rate of increase in compensation levels
Expected long-term rate of return on plan assets
Interest crediting rate

0.6%
0.3%
2.6%
3.0%

0.7%
0.3%
2.6%
2.9%

Nomura generally determines the discount rates for its defined benefit plans by referencing indices for long-term, high-quality debt securities andensuring that the discount rate does not exceed the yield reported for those indices after adjustment for the duration of the plans’ liabilities.
Nomura uses the expected long-term rate of return on plan assets to compute the expected return on assets. Nomura’s approach in determining thelong-term rate of return on plan assets is primarily based on historical financial market relationships that have existed over time with the presumptionthat this trend will generally remain constant in the future.
219

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Plan assets
Plan assets are managed with an objective to generate sufficient long-term value in order to enable future pension payouts. While targeting a longterm rate of return on plan assets, Nomura aims to minimize short-term volatility by managing the portfolio through diversifying risk. Based on thisportfolio policy, the plan assets are invested diversely.
The plan assets of domestic plans target to invest 15%in equities (including private equity investments), 44% in debt securities, 25% in life
insurance company general accounts, and 16% in other investments. Investment allocations are generally reviewed and revised at the time of the actual
revaluation that takes place every five years or when there is a significant change in the portfolio assumptions.
For details of the levels of inputs used to measure the fair value of plan assets, see Note 2 “Fair value measurements.”
The following tables present information about the fair value of plan assets of Japanese entities’ plans as of March 31, 2021 and 2022 within thefair value hierarchy.
Millions of yen
March 31, 2021
Level 1

Pension plan assets:
Private equity and pooled investments(1)Japanese government securities
Investment trust funds and other(2)(3)Life insurance company general accounts
Other assets
Total

¥

—
21,047———¥21,047

Level 2

Level 3614—
24,581
72,10635,857¥133,158¥33,384—
36,335——¥69,719¥

Balance as ofMarch 31, 2021¥¥

33,99821,04760,916
72,10635,857
223,924

Millions of yen
March 31, 2022
Level 1

Pension plan assets:
Private equity and pooled investments(1)Japanese government securities
Investment trust funds and other(2)(3)Life insurance company general accounts
Other assets
Total
(1)
(2)
(3)

¥

—
20,469———¥20,469

Level 2

Level 3740—
19,84273,31433,575¥127,471¥29,081—
27,575——¥56,656¥

Balance as ofMarch 31, 2022¥¥

29,821
20,46947,41773,31433,575204,596

Includes corporate type equity investments.
Includes primarily debt investment funds. Hedge funds and real estate funds are also included.
Certain assets that are measured at fair value using net asset value per share as a practical expedient have not been classified in the fair value
hierarchy. As of March 31, 2021 and 2022, the fair values of these assets were ¥10,823 million and ¥26,865 million, respectively.
220

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The fair value of plan assets of non-Japanese entities’ plans as of March 31, 2021 was ¥1,543 million, ¥2,192 million and ¥39,572 million whichwere classified in Level 1, Level 2 and Level 3 of the fair value hierarchy, respectively. The fair value of plan assets of non-Japanese entities’ plans as ofMarch 31, 2022 was ¥1,543 million, ¥2,181 million and ¥36,129 million which were classified in Level 1, Level 2 and Level 3 of the fair value
hierarchy, respectively.
See Note 2 “Fair value measurements” for further information regarding how Nomura estimates fair value for specific types of financial
instruments.
The following tables present information about plan assets of Japanese entities’ plans for which Nomura has utilized significant Level 3 valuation
inputs to estimate fair value.
Millions of yen
Year ended March 31, 2021
Purchases /sales and
Unrealized
Balanceotherand realized
as ofsettlement
gains / (loss)
April 1, 2020

Private equity and pooled investments
Investment trust funds and other
Total

¥

¥ (1,306)(8,206)¥ (9,512)¥ 33,384
36,335¥ 69,719

Millions of yen
Year ended March 31, 2022
Purchases /sales and
Balance
Unrealizedotherand realized
as ofsettlement
April 1, 2021
gains / (loss)

Balance
as ofMarch 31,2022¥

Private equity and pooled investments
Investment trust funds and other
Total

¥
¥

23,46541,61665,081

33,38436,33569,719¥ 11,225
2,925¥ 14,150

Balance
as ofMarch 31,
2021

¥
¥

1,374
(532)
842

¥ (5,677)(8,228)¥ (13,905)¥ 29,081
27,575¥ 56,656

The fair value of Level 3 plan assets of non-Japanese entities’ plans, mainly consisting of annuities, was ¥39,572 million and ¥36,129 million as ofMarch 31, 2021 and 2022, respectively. The amount of unrealized profit (loss) of Level 3 assets was ¥(2,039) million and ¥(4,060) million as ofMarch 31, 2021 and 2022, respectively. The amounts of gains and losses, purchases and sales other than above, transfers between Level 1 or Level 2 andLevel 3 relating to these assets during the years ended March 31, 2021 and 2022 were not significant.
Cash Flows
Following the amendments of pension benefit plans in Japanese entities, certain contributory funded benefit pension plans were closed for
additional funding and will be managed within the accumulated funds.
The following table presents the expected benefit payments of Japanese entities’ plans during the next five fiscal years and in aggregate for thefive fiscal years thereafter.
Year ending March 31

Millions of yen

2023
2024
2025
2026
2027
2028-2032¥

221

14,517
14,39415,15914,52813,99362,226

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Defined contribution pension plans—
In addition to defined benefit pension plans, the Company, NSC and other Japanese and non-Japanese subsidiaries have defined contribution
pension plans.
Nomura contributed ¥6,478 million and ¥6,709 million to defined contribution pension plans for Japanese entities’ plans for the years ended
March 31, 2021 and 2022, respectively.
The contributions to overseas defined contribution pension plans were ¥8,035 million and ¥9,215 million for the years ended March 31, 2021 and
2022, respectively.
Health care benefits—
The Company and certain subsidiaries provide certain health care benefits to both active and retired employees through NSHIS. The Company
and certain subsidiaries also sponsor certain health care benefits to retired employees (“Special Plan”) and who participate in the Special Plan on a
pay-all basis, i.e., by requiring a retiree contribution based on the estimated per capita cost of coverage. The Special Plan is a multi-employer postretirement plan because it is jointly administered by NSHIS and the Japanese government, and the funded status of it is not computed separately.
Therefore, although the Company and certain subsidiaries contribute some portion of the cost of retiree health care benefits not covered through retiree
contributions, the Company and certain subsidiaries do not reserve for future costs. The health care benefit costs, which are equivalent to the required
contribution, amounted to ¥9,463 million and ¥10,035 million for the years ended March 31, 2021 and 2022, respectively.
222

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
14. Deferred compensation awards:
Nomura issues deferred compensation awards to senior management and employees, which are linked to the price of the Company’s common
stock, in order to retain and motivate key staff.
These stock-based compensation awards comprise Restricted Stock Unit (“RSU”) awards, Plan A and Plan B Stock Acquisition Right (“SAR”)
awards, Notional Stock Unit (“NSU”) awards, and Collared Notional Stock Unit (“CSU”) awards. SAR Plan A awards are awards of stock options while
RSU awards, SAR Plan B awards, NSU awards and CSU awards are analogous to awards of restricted common stock.
Certain deferred compensation awards include “Full Career Retirement” (“FCR”) provisions which permit recipients of the awards to continue tovest in the awards upon voluntary termination of employment if certain criteria based on corporate title and length of service within Nomura are met.
The requisite service period for these awards ends on the earlier of the contractual vesting date and the date that the recipients become eligible for or
claim FCR.
Unless indicated below, deferred compensation awards are generally reduced, forfeited or clawed back in the event of termination of employment,material restatements of financial statements, material conduct issues, material damage to Nomura’s business or reputation, material downturns in theperformance of the Nomura group and/or a material failure of risk management.
RSU awards
The Company introduced RSU awards in the fiscal year ended March 31, 2018, and granted the first RSU awards in May 2018. For each RSU
award, one common stock of the Company is delivered. The awards generally have a graded vesting period over three years with an extending vesting
period of up to seven years for certain senior management and employees in order to meet local regulatory requirements based on the role they perform
within Nomura.
The grant date fair value per award is determined using the price of the Company’s common stock.
The following table presents activity relating to RSU awards for the year ended March 31, 2022.
Outstanding(number of Nomura
shares)Outstanding as of March 31, 2021
GrantedForfeited
Delivered
Outstanding as of March 31, 2022

Weighted-average
grant date fairvalue per share

115,287,730 ¥
64,439,400(9,223,711)(48,384,029)
122,119,390 ¥Weighted-averageremaining life
until expiry(years)

427
507
468
427
466

1.0

1.0

The weighted-average grant date fair value per award for the year ended March 31, 2021 and 2022 was ¥418 and ¥507, respectively.
The total intrinsic value of RSU awards vested during the year ended March 31, 2022 was ¥28,076 million. The total of 29,972,792 shares wasdelivered during the year ended March 31, 2022 and its intrinsic value was ¥ 28,704 million. The aggregate intrinsic value of RSU awards outstanding
as of March 31, 2022 was ¥62,916 million.
As of March 31, 2022, total unrecognized compensation cost relating to RSU awards was ¥8,700 million which is expected to be recognized overa weighted average period of 1.8 years.
223

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
SAR Plan B awards
The Company issues SAR Plan B awards linked to the price of the Company’s common stock pursuant to several stock unit plans. These awards
vest and are exercisable into the Company’s common stock, have an exercise price of ¥1 per share and graded vesting generally over three years withcertain longer vesting or holding periods where required under local regulations.
The grant date fair value of SAR Plan B awards is determined using the price of the Company’s common stock.
The following table presents activity relating to SAR Plan B awards for the year ended March 31, 2022. No new SAR Plan B awards have been
granted since April 1, 2018.
Outstanding(number of Nomura
shares)

Weighted-average
grant date fairvalue per share

Weighted-averageremaining life
until expiry(years)Outstanding as of March 31, 2021
GrantedExercised
Forfeited
ExpiredOutstanding as of March 31, 2022

12,967,100 ¥—(3,697,000)—(1,356,300)
7,913,800 ¥

509
—
535
—
397
516

2.7

Exercisable as of March 31, 2022

6,831,500

526

1.8

¥

2.3

The total intrinsic value of SAR Plan B awards exercised during the years ended March 31, 2021 and 2022 was ¥4,878 million and ¥2,547 million,
respectively.
The aggregate intrinsic value of SAR Plan B awards outstanding and exercisable as of March 31, 2022 was ¥4,069 million and ¥3,513 million,
respectively.
As of March 31, 2022, total unrecognized compensation cost relating to SAR Plan B awards was ¥1 million which is expected to be recognizedover a weighted average period of 1.7 years. The total fair value of SAR Plan B awards which vested during the years ended March 31, 2021 and 2022
was ¥1,784 million and ¥467 million, respectively.
Total compensation expense recognized within Non-interest expenses—Compensation and benefits in the consolidated statements of income
relating to RSU and SAR awards for the years ended March 31, 2021 and 2022 was ¥28,251 million and ¥27,941 million, respectively.
Cash received from the exercise of SAR awards during the year ended March 31, 2022 was ¥11 million and the tax benefit realized from exerciseof these awards was ¥206 million.
Total related tax benefits recognized in the consolidated statements of income relating to RSU and SAR awards for the years ended March 31,
2021 and 2022 were ¥nil million and ¥nil million, respectively. The dilutive effect of outstanding deferred compensation plans is included in theweighted average number of shares outstanding used in diluted EPS computations. See Note 12 “Earnings per share” for further information.
224

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
NSU and CSU awards
NSU and CSU awards are cash-settled awards linked to the price of the Company’s common stock. NSU awards replicate the key features of SAR
Plan B awards described above but are settled in cash rather than exercisable into the Company’s common stock. CSU awards are similar to NSU
awards but exposure to movements in the price of the Company’s common stock is subject to a cap and floor. Both types of award have graded vesting
periods generally over three years with certain longer vesting periods where required by local regulations.
The fair value of NSU and CSU awards are determined using the price of the Company’s common stock.
The following table presents activity related to NSU and CSU awards for the year ended March 31, 2022. No new CSU awards have been granted
since April 1, 2018.
NSUs
Outstanding(number of units)

Outstanding as of March 31, 2021
Granted
VestedForfeited
Outstanding as of March 31, 2022
(1)
(2)
(3)

19,951,962
11,528,713(12,555,940)(926,410)
17,998,325

Stock
price

¥539
575(1)
577(2)¥445(3)

CSUs
Outstanding(number of units)

1,867,400—(929,732)(512)
937,156

Stock
price

¥636
—
601(2)¥606(3)Weighted-average price of the Company’s common stock used to determine number of awards granted.
Weighted-average price of the Company’s common stock used to determine the final cash settlement amount of the awards.
The price of the Company’s common stock used to remeasure the fair value of the remaining outstanding unvested awards as of March 31, 2022.

Total compensation expense recognized within Non-interest expenses—Compensation and benefits in the consolidated statements of income
relating to NSU and CSU awards for the years ended March 31, 2021 and 2022 was ¥8,043 million and ¥4,566 million, respectively.
Total unrecognized compensation cost relating to NSU awards, based on the fair value of these awards as of March 31, 2022, was ¥280 million,
which is expected to be recognized through the consolidated statements of income over a remaining weighted-average period of 1.1 years. The total fairvalue of NSU awards which vested during the years ended March 31, 2021 and 2022 was ¥8,426 million and ¥7,247 million, respectively.
Total unrecognized compensation cost relating to CSU awards, based on the fair value of these awards as of March 31, 2022, was ¥nil million.
The total fair value of CSU awards which vested during the years ended March 31, 2021 and 2022 was ¥576 million and ¥559 million, respectively.
Total tax benefits recognized in the consolidated statements of income for compensation expense relating to NSU, and CSU awards for the years
ended March 31, 2021 and 2022 were ¥205 million and ¥125 million, respectively.
Subsequent events
On May 19, 2022, the Company passed a resolution to grant RSU awards to certain senior management and employees. Total of 100,057,000 RSU
awards have been granted which generally have a graded vesting period from one to three years with an extending vesting period of up to seven years
for certain senior management and employees in order to meet local regulatory requirements based on the role they perform within Nomura.
On May 25, 2022, Nomura also granted NSU awards to senior management and employees in countries where RSU awards are less favorably
treated from tax or other perspectives. These NSU awards have a total grant date fair value of ¥6 billion and vesting periods of up to seven years.
225

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
15. Income taxes:
The following table presents components of Income tax expense reported in the consolidated statements of income for the years ended March 31,
2021 and 2022.
Millions of yen
Year ended March 31
2021
2022

Current:
Domestic
Foreign
Subtotal
Deferred:
Domestic
Foreign
Subtotal
Total¥ 73,534
17,85391,387¥69,661
7,323
76,984(19,567)
1,561(1,546)
1,545(21,113)3,106¥ 70,274 ¥80,090

The income tax benefit recognized from operating losses for the years ended March 31, 2021 and 2022 was ¥97 million and ¥6,007 million,
respectively, which is included within deferred income tax expense above.
The Company and its wholly-owned domestic subsidiaries have adopted the consolidated tax filing system permitted under Japanese tax law. The
consolidated tax filing system only imposes a national tax.
The effective statutory tax rate applicable to Nomura in Japan was approximately 31% as of March 31, 2021 and 2022, respectively.
On March 27, 2020, the “Act to partially revise the Income Tax Act and Others” (Act No.8 of 2020) was enacted, effective for fiscal years
beginning on or after April 1, 2022. As a result of the Act, the existing Consolidated Taxation system in Japan will be replaced with the Group Tax
Sharing system. The Company does not expect any significant impact on its net deferred tax liabilities on adoption of the Act.
Foreign subsidiaries are subject to income taxes of the countries in which they operate. The relationship between income tax expense and pretax
accounting income (loss) is affected by a number of items, including various tax credits, certain revenues not subject to income taxes, certain expenses
not deductible for income tax purposes, changes in deferred tax valuation allowance and different enacted tax rates applicable to foreign subsidiaries.
The following table presents a reconciliation of the effective income tax rate reflected in the consolidated statements of income to Nomura’s
effective statutory tax rate for the years ended March 31, 2021 and 2022. The effective tax rate presented in the following table represents total income
tax expense for the year as a percentage of Income (loss) before income taxes.
Year ended March 31
2021
2022

Nomura’s effective statutory tax rate
Impact of:
Changes in deferred tax valuation allowances(2)Additional taxable income
Non-deductible expenses
Non-taxable income
Dividends from foreign subsidiaries
Tax effect of undistributed earnings of foreign subsidiaries
Different tax rate applicable to income (loss) of foreign subsidiaries
Effect of changes in foreign tax laws(2)Tax benefit recognized on the outside basis differences for investment in subsidiaries and affiliates(1)Other
Effective tax rate
226

31.0%

31.0%

8.7
0.7
7.1
(4.5)
0.0
0.0
(4.0)
1.1
(8.7)
(0.9)
30.5%

18.0
1.0
5.1
(2.9)
0.0
0.1
0.0
(14.4)
0.0
(2.6)
35.3%

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(1)

(2)

Tax benefit recognized on the outside basis differences for investment in subsidiaries and affiliates during the year ended March 31, 2021 ofapproximately ¥21 billion (which decreased Nomura’s effective tax rate by 9.1%) arises from the recognition of deferred tax assets from thedecision and commitment of Nomura management to liquidate a certain wholly-owned subsidiary within Nomura in the foreseeable future. The
valuation allowances of ¥3 billion have been recognized against these deferred tax assets, the impact of which are reported in Changes in deferred
tax valuation allowances for the same period.
Finance Act 2021, enacted on June 10, 2021, increases the headline U.K. corporation tax rate from 19% to 25% on April 1, 2023. Deferred tax
assets and liabilities as of the balance sheet date are calculated by reference to the most appropriate enacted rates as of March 31, 2022. As a resultof the change in closing deferred tax rate, Nomura recognized a movement in Effect of changes in foreign tax laws of ¥36 billion (which decreased
Nomura’s effective tax rate by 16.0%), which was offset by a movement in Changes in deferred tax valuation allowances of ¥36 billion (which
increased Nomura’s effective tax rate by 16.0%) during the year ended March 31, 2022.
227

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents the significant components of deferred tax assets and liabilities as of March 31, 2021 and 2022, before offsetting ofamounts which relate to the same tax-paying component within a particular tax jurisdiction.
Millions of yen
March 31
2021
2022

Deferred tax assets
Depreciation, amortization and valuation of fixed assets
Investments in subsidiaries and affiliates
Valuation of financial instruments
Accrued pension and severance costs
Other accrued expenses and provisions
Operating losses
Lease liabilities
Other
Gross deferred tax assets
Less—Valuation allowances
Total deferred tax assets
Deferred tax liabilities
Investments in subsidiaries and affiliates
Valuation of financial instruments
Undistributed earnings of foreign subsidiaries
Valuation of fixed assets
Right-of-use assets
Other
Total deferred tax liabilities
Net deferred tax assets (liabilities)¥ 22,770
20,22073,905
19,94760,280353,326
52,251
15,011
617,710(428,014)
189,696¥ 30,441
21,390102,021
20,492
79,061
370,481
49,06015,425688,371(466,145)
222,226

85,63640,8072,486
23,521
51,671
5,546
209,667¥ (19,971)

91,04085,301
2,745
23,96248,5197,044
258,611¥ (36,385)

After offsetting deferred tax assets and liabilities which relate to the same tax-paying component within a particular tax jurisdiction, net deferred
tax assets reported within Other assets—Other in the consolidated balance sheets were ¥30,433 million and ¥15,562 million as of March 31, 2021 and
2022, respectively and net deferred tax liabilities reported within Other liabilities in the consolidated balance sheets were ¥50,404 million and¥51,947 million as of March 31, 2021 and 2022, respectively.
As of March 31, 2022, no deferred tax liabilities have been recognized for undistributed earnings of foreign subsidiaries totaling ¥19,027 million
which are not expected to be remitted in the foreseeable future. It is not practicable to determine the amount of income taxes payable in the event all
such foreign earnings are repatriated.
228

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents changes in total valuation allowances established against deferred tax assets for the years ended March 31, 2021 and
2022.
Millions of yen
Year ended March 31
2021
2022

Balance at beginning of year
Net change during the year
Balance at end of year
(1)

(2)

¥ 388,411¥ 428,014
39,603(1)38,131(2)¥ 428,014¥ 466,145

Primarily includes an increase of ¥48,883 million of valuation allowances of certain foreign subsidiaries mainly due to an increase in valuation
allowances related to operating loss carryforwards, a reduction of ¥5,871 million of valuation allowances mainly due to an increase in valuation offinancial instruments, and a reduction of ¥3,409 million of valuation allowances related to Japanese subsidiaries and the Company mainly due toan increase of valuation of financial instruments and a decrease of accrued pension and severance costs. In total, ¥39,603 million of allowances
increased for the year ended March 31, 2021.
Primarily includes an increase of ¥51,706 million of valuation allowances of certain foreign subsidiaries mainly due to an increase in operating
loss carryforwards, and a reduction of ¥13,575 million of valuation allowances related to Japanese subsidiaries and the Company mainly due to adecrease of operating loss carryforwards. In total, ¥38,131 million of allowances increased for the year ended March 31, 2022.

As of March 31, 2022, total operating loss carryforwards were ¥2,039,600 million, which included ¥545,946 million relating to the Company anddomestic subsidiaries, ¥624,763 million relating to foreign subsidiaries in U.K., ¥568,273 million relating to foreign subsidiaries in U.S.,¥272,066 million relating to foreign subsidiaries in Hong Kong, and ¥28,552 million relating to foreign subsidiaries in other tax jurisdictions. Of thistotal amount, ¥1,101,276 million can be carried forward indefinitely, ¥838,753 million expires by March 31, 2031 and ¥99,571 million expires in later
fiscal years. These numbers are presented before offset with any uncertain tax position discussed later.
In determining the amount of valuation allowances to be established as of March 31, 2022, Nomura considered all available positive and negative
evidence around the likelihood that sufficient future taxable income will be generated to realize the deferred tax assets in the relevant tax jurisdiction of
the Company, its domestic subsidiaries and foreign subsidiaries. In Japan and other tax jurisdictions where domestic and foreign subsidiaries haveexperienced cumulative operating losses in recent years, these losses provided the most verifiable negative evidence available and outweigh positive
evidence.
229

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
While Nomura has considered certain future tax planning strategies as a potential source of future taxable income, no such strategies have beenrelied upon as positive evidence resulting in a reduction of valuation allowances in any major tax jurisdiction in which Nomura operates as of March 31,
2021 and 2022. In addition, valuation allowances have not been reduced in any of these periods as a result of changing the weighting applied to positiveor negative evidence in any of the major tax jurisdictions in which Nomura operates.
The determination of whether deferred tax assets will be realized, and therefore whether a valuation allowance is required, is inherently
subjective and often requires management judgment around the future profitability of Nomura entities, an interpretation of tax rules by courts andregulatory authorities and tax examinations by taxing authorities, and the appropriate weighting of positive and negative evidence around the likelihoodthat sufficient future taxable income will be generated to realize deferred tax assets in the relevant tax jurisdiction. Although estimating future taxable
income was increasingly subjective due to uncertainty in future profitability of Nomura as a result of the COVID-19 pandemic, it did not result in asignificant impact on the determination of realization of deferred tax assets.
Nomura’s unrecognized tax benefits were ¥4,367 million and ¥35,774 million as of March 31, 2021 and 2022 respectively. Out of the balance asof March 31, 2022, ¥6,273 million, if recognized, would favorably impact the effective tax rate in the future periods. The remaining balance would notfavorably impact the effective tax rate as it is expected to increase operating loss carryforwards and corresponding valuation allowance. The movementof the gross amounts in unrecognized tax benefits during the year ended March 31, 2022 was an increase of ¥31,406 million of which ¥29,501 million ispresented as a reduction to the deferred tax asset for a utilization of net operating loss carryforward. There were no significant movements of the grossamounts in unrecognized tax benefits for the years ended March 31, 2021. There were also no significant movements of the amount of interest andpenalties recognized due to unrecognized tax benefits during the years ended March 31, 2021 and 2022. Nomura is under regular examination by theJapanese National Tax Agency and other taxing authorities in the major jurisdictions in which Nomura operates. Nomura regularly assesses thelikelihood of additional assessments in each tax jurisdiction and the impact on the consolidated financial statements. It is reasonably possible that there
may be an increase or decrease in unrecognized tax benefits within 12 months of March 31, 2022 depending on the outcome of the examinations.
Quantification of an estimated range cannot be made at this time due to the uncertainty of the potential outcomes. However, Nomura does not expectthat any change in the gross balance of unrecognized tax benefits would have a material effect on its financial condition.
Nomura operates in multiple tax jurisdictions, and faces audits from various taxing authorities regarding many issues including, but not limited to,transfer pricing, the deductibility of certain expenses, foreign tax credits and other matters.
The table below presents information regarding the earliest year in which Nomura remains subject to examination in the major jurisdictions inwhich Nomura operates as of March 31, 2022. Under Hong Kong Special Administrative Region tax law, the statute of limitation does not apply if anentity incurs taxable losses and is therefore not included in the table.
Jurisdiction

Year

Japan
United Kingdom
United States

2017(1)
2016
2019

(1)

The earliest year in which Nomura remains subject to examination for transfer pricing issues is 2016.
230

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
16. Other comprehensive income (loss):
The following tables present changes in Accumulated other comprehensive income (loss) for the years ended March 31, 2021 and 2022.
Millions of yen
For the year ended March 31, 2021
Balance at
beginningof year

Cumulative translation adjustments
Pension liability adjustment(1)Own credit adjustments(2)
Total

¥

¥

Other
comprehensive
income (loss)
beforereclassifications(26,274) ¥(62,571)
62,740(26,105) ¥Reclassifications out ofaccumulated othercomprehensive
income (loss)

47,673 ¥16,140(65,741)(1,928) ¥Net change
during the year

(3,083) ¥2,954(9,982)(10,111) ¥44,590 ¥19,094(75,723)(12,039) ¥Balance at
end of year

18,316(43,477)(12,983)(38,144)

Millions of yen
For the year ended March 31, 2022
Balance at
beginningof year

Cumulative translation adjustments
Pension liability adjustment(1)Own credit adjustments(2)
Total
(1)
(2)

¥

¥

Other
comprehensive
income (loss)
beforereclassifications

18,316 ¥(43,477)(12,983)(38,144) ¥Reclassifications out ofaccumulated othercomprehensive
income (loss)

118,574 ¥(2,156)
46,816
163,234 ¥See Note 13 “Employee benefit plans” for further information.
See Note 2 “Fair value measurements” for further information.
231

22 ¥
1,830
1,031
2,883 ¥Net change
during the year

118,596 ¥(326)
47,847
166,117 ¥Balance at
end of year

136,912(43,803)
34,864
127,973

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following tables present significant reclassifications out of Accumulated other comprehensive income (loss) for the years ended March 31,
2021 and 2022.

2021
Reclassifications out ofaccumulated othercomprehensive income(loss)

Millions of yen
For the year ended March 31
2022
Reclassifications out ofaccumulated othercomprehensive income(loss)¥¥

Affected line items in consolidated
statements of income

Cumulative translation adjustments:
3,083
—
3,083
—
¥

3,083

2021
Reclassifications out ofaccumulated othercomprehensive income(loss)

(21)
(1)
(22)
—

¥

(22)

Millions of yen
For the year ended March 31
2022
Reclassifications out ofaccumulated othercomprehensive income(loss)

Revenue—Other / Non-interest
expenses—Other
Income tax expense
Net income (loss)
Net income attributable tononcontrolling interests
Net income (loss) attributable
to NHI shareholders

Affected line items inconsolidated statements ofincomePension liability adjustment:¥(4,167)
1,213(2,954)¥—¥(2,954)(2,585)755(1,830)—¥(1,830)2021
Reclassifications out ofaccumulated othercomprehensive income(loss)

Millions of yen
For the year ended March 31
2022
Reclassifications out ofaccumulated othercomprehensive income(loss)¥¥

Non-interest expenses—
Compensation andbenefits /Revenue—Other
Income tax expense
Net income (loss)
Net income attributable
to noncontrollinginterests
Net income (loss)
attributable to NHI
shareholders

Affected line items inconsolidated statements ofincomeOwn credit adjustments:
12,134(2,152)
9,982

—

¥

9,982
232

(1,161)130(1,031)—¥(1,031)

Revenue—Net gain on
trading
Income tax expense
Net income (loss)
Net income attributable
to noncontrollinginterests
Net income (loss)
attributable to NHI
shareholders

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
17. Shareholders’ equity:
The following table presents changes in shares of the Company’s common stock outstanding for the years ended March 31, 2021 and 2022.
Number of SharesYear ended March 31
2021
2022

Common stock outstanding at beginning of year
Decrease of common stock by cancellation of treasury stock
Common stock held in treasury:
Repurchases of common stock
Sales of common stock
Common stock issued to employees
Cancellation of treasury stock
Other net change in treasury stock
Common stock outstanding at end of year

3,038,587,493(260,000,000)

3,063,155,434—(20,129)353
24,587,717
260,000,000—
3,063,155,434(80,020,237)
345
34,682,592—(14,122)3,017,804,012

The amount available for dividends and acquisition of treasury stock is subject to restrictions imposed by the Companies Act. Additional paid-in
capital and retained earnings include amounts which the Companies Act prohibits for the use of dividends and acquisition of treasury stock. As of
March 31, 2021 and 2022, the amounts available for distributions were ¥1,232,753 million and ¥1,315,738 million, respectively. These amounts are
based on the amounts recorded in the Company’s unconsolidated financial statements maintained in accordance with accounting principles and practices
prevailing in Japan. U.S. GAAP adjustments incorporated in these consolidated financial statements but not recorded in the Company’s unconsolidated
financial statements have no effect on the determination of the amounts available for distributions under the Companies Act.
Dividends on the Company’s common stock per share for the years ended March 31, 2021 and 2022 were ¥35.0 and ¥22.0, respectively.
During the year ended March 31, 2021, due to the cancellation of treasury stock on December 1, 2020, total number of issued shares and treasury
stock decreased by 260,000,000 shares, respectively.
On October 29, 2021, the board of directors approved a repurchase program of Nomura Holdings common stock in accordance with Article 459-1of the Companies Act of Japan as follows: (a) total number of shares authorized for repurchase is up to 80,000,000 shares, (b) total value of sharesauthorized for repurchase is up to ¥50,000 million and (c) the share buyback will run from November 16, 2021 to March 31, 2022. Under thisrepurchase program, the Company repurchased 80,000,000 shares of common stock at a cost of ¥39,639 million.
In addition to the above, the change in common stock held in treasury includes the change in common stock issued to employees under stockbased compensation plans, common stock held by affiliated companies, common stock sold to enable shareholders to hold round lots of the 100 shareminimum tradable quantity (adding-to-holdings requests) or common stock acquired to create round lots or eliminate odd lots.
Subsequent Events
On April 26, 2022, the board of directors approved a resolution to set up a share buyback program, pursuant to the Company’s articles ofincorporation set out in accordance with Article 459-1 of the Companies Act as follows: (a) total number of shares authorized for repurchase is up to
50,000,000 shares, (b) total value of shares authorized for repurchase is up to ¥30 billion and (c) the share buyback program will run from May 17,
2022, to March 31, 2023 (excluding the ten business days following the announcement of quarterly operating results).
233

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
18. Regulatory requirements:
In April 2011, the Company has been assigned as Final Designated Parent Company who must calculate a consolidated capital adequacy ratio andsince then, our consolidated capital adequacy ratio has been calculated based on Capital Adequacy Notice on Final Designated Parent Company. The
Capital Adequacy Notice on Final Designated Parent Company has been revised in line with Basel 2.5 and Basel III and Nomura has calculated a Basel
III-based consolidated capital adequacy ratio since March 2013.
In accordance with Article 2 of the Capital Adequacy Notice on Final Designated Parent Company, Nomura’s consolidated capital adequacy ratio
is calculated based on the amounts of common equity Tier 1 capital, Tier 1 capital, total capital, credit risk-weighted assets, market risk and operationalrisk. As of March 31, 2021 and 2022, the Company was in compliance with common equity Tier 1 capital ratio, Tier 1 capital ratio and consolidated
capital adequacy ratio requirements set out in the Capital Adequacy Notice on Final Designated Parent Company, etc. The required level (including
applicable minimum consolidated capital buffer) as of March 31, 2022 was 7.51% for the common equity Tier 1 capital ratio, 9.01% for the Tier 1
capital ratio and 11.01% for the consolidated capital adequacy ratio.
Under the Financial Instruments and Exchange Act (“FIEA”), NSC and NFPS are subject to the capital adequacy rules of the FSA. These rules
requires the maintenance of a capital adequacy ratio, which is defined as the ratio of adjusted capital to a quantified total of business risk, of not lessthan 120%. Adjusted capital is defined as net worth (which includes shareholders’ equity, net unrealized gains and losses on securities held, reserves andsubordinated debt) less illiquid assets. Business risks are divided into three categories: (1) market risks, (2) counterparty risks, and (3) basic risks. Under
these rules, there are no restrictions on the operations of the companies provided that the resulting net capital adequacy ratio exceeds 120%. As of
March 31, 2021 and 2022, the capital adequacy ratio of NSC exceeded 120%. Also, as of March 31, 2021 and 2022, the capital adequacy ratio of NFPS
also exceeded 120%.
In connection with providing brokerage, clearing, asset management and wealth management services to clients, Nomura maintains segregatedaccounts to hold financial assets such as cash and securities on behalf of its clients. These accounts are typically governed by stringent statutory or
regulatory rules in the relevant jurisdiction where the accounts are maintained in order to protect the clients from loss.
As of March 31, 2021 and 2022, the total amount of segregated client cash recognized as an asset in Deposits with stock exchanges and other
segregated cash in the consolidated balance sheets was ¥92,477 million and ¥113,052 million, respectively. As of March 31, 2021 and 2022, the total
amount of segregated securities recognized as assets in Trading assets and Collateralized agreements in the consolidated balance sheets was¥1,080,260 million and ¥1,103,395 million, respectively.
In the U.S., Nomura Securities International, Inc. (“NSI”) is registered as a broker-dealer under the Securities Exchange Act of 1934 and is a
futures commission merchant with the Commodity Futures Trading Commission (“CFTC”). NSI is also regulated by self-regulatory organizations, suchas the Financial Industry Regulatory Authority (“FINRA”) and the Chicago Mercantile Exchange Group. NSI is subject to the SEC’s Uniform Net
Capital Rule (“Rule 15c3-1”) and other related rules, which require net capital, as defined under the alternative method, of not less than the greater of$1,000,000 or 2% of aggregate debit items arising from client transactions. NSI is also subject to CFTC Regulation 1.17 which requires the maintenanceof net capital of 8% of the total risk margin requirement, as defined, for all positions carried in client accounts and nonclient accounts or $1,000,000,
whichever is greater. NSI is required to maintain net capital in accordance with the SEC, CFTC, or other various exchange requirements, whichever isgreater. Another U.S. subsidiary, Nomura Global Financial Products Inc. (“NGFP”) is registered as an OTC Derivatives Dealer under the Securities
Exchange Act of 1934. NGFP registered with CFTC as a Swap Dealer on October 6, 2021 and registered with the Securities and Exchange Commission(“SEC”) as a Security Based Swap Dealer on November 1, 2021. NGFP calculates capital under SEC rule 18a-1 and CFTC rule 23.101 and requires thegreater of $20,000,000, 2% of the SEC risk margin amount or 2% of the CFTC risk margin amount. Another U.S. subsidiary, Instinet, LLC (“ILLC”) isa broker-dealer registered with the SEC and is a member of FINRA. Further, ILLC is an introducing broker registered with the CFTC and a member of
the National Futures Association and various other exchanges. ILLC is subject to Rule 15c3-1 which requires the maintenance of minimum net capital,
as defined under the alternative method, equal to the greater of $1,000,000, 2% of aggregate debit items arising from client transactions, or the CFTC
minimum requirement. Under CFTC rules, ILLC is subject to the greater of the following when determining its minimum net capital requirement:$45,000 minimum net capital required as a CFTC introducing broker; the amount of adjusted net capital required by a futures association of which it is amember; and the amount of net capital required by Rule 15c3-1(a). As of March 31, 2021 and 2022, NSI, NGFP and ILLC were in compliance with
relevant regulatory capital related requirements.
234

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
In Europe, Nomura Europe Holdings plc (“NEHS”) is subject to consolidated regulatory supervision by the Prudential Regulation Authority(“U.K. PRA”) as a U.K. Parent Financial Holding Company. The regulatory consolidation is produced in accordance with the requirements establishedunder the Financial Services and Markets Act 2000, U.K. Capital Requirements Regulations and the PRA Rulebook. Nomura International plc (“NIP”),
the most significant of NEHS’ subsidiaries, acts as a securities brokerage and dealing business. NIP is also regulated by the U.K. PRA and has minimum
capital adequacy requirements imposed on it on a standalone basis. As a non-U.S. swap dealer and securities based swap dealer NIP is also subject to theregulations of the CFTC and SEC under the Dodd Frank Act. In addition, Nomura Bank International plc (“NBI”), another subsidiary of NEHS, is also
regulated by the U.K. PRA on a standalone basis. NEHS also has a number of European domiciled subsidiaries including Nomura Financial Products
Europe GmbH (“NFPE”), a Nomura subsidiary domiciled in Germany which is regulated by the German regulator (“BaFin”) and is subject to the EU
Capital Requirements Regulation and local German regulations and Banque Nomura France (“BNF”), a Nomura subsidiary domiciled in France whichis regulated by the French regulator (“ACPR”) and is also subject to the EU Capital Requirements Regulation and local French regulations. As of
March 31, 2021 and 2022, NEHS, NIP, NBI, NFPE and BNF were in compliance with relevant regulatory capital related requirements.
In Asia, Nomura International (Hong Kong) Limited (“NIHK”) and Nomura Singapore Ltd (“NSL”) are regulated by their local respective
regulatory authorities. NIHK is licensed by the Securities and Futures Commission in Hong Kong to carry out regulated activities including dealing andclearing in securities and futures contracts, advising on securities, futures contracts and corporate finance and wealth management. Activities of NIHK,
including its branch in Taiwan, are subject to the Securities and Futures (Financial Resources) Rules which require it, at all times, to maintain liquid
capital at a level not less than its required liquid capital. Liquid capital is the amount by which liquid assets exceed ranking liabilities. Required liquid
capital is calculated in accordance with provisions laid down in the Securities and Futures (Financial Resources) Rules. NSL is a licensed merchant bankregulated by the Monetary Authority of Singapore (“MAS”). NSL carries out its regulated activities including, among others, securities brokerage anddealing business. NSL is regulated and has minimum capital adequacy requirements imposed on it on a standalone basis by the MAS in Singapore.
NIHK and NSL have been compliant with relevant regulatory capital related requirements.
19. Affiliated companies and other equity-method investees:
Nomura’s significant affiliated companies and other equity-method investees include Nomura Research Institute, Ltd. (“NRI”) and Nomura Real
Estate Holdings, Inc. (“NREH”).
NRI
NRI develops and manages computer systems and provides research services and management consulting services. One of the major clients of
NRI is Nomura.
Nomura has sold 14,105,000 ordinary shares it held at ¥50,002 million to NRI in response to its own share repurchase through off-floor trading(ToSTNeT-3) on June 22, 2021. As a result of the transaction, a gain of ¥36,249 million was recognized in earnings within Revenue—Other during theyear ended March 31, 2022.
Further, Nomura has sold 15,000,000 ordinary shares it held at ¥57,870 million to third parties, through block trades on March 23, 2022. As aresult of the transaction, a gain of ¥42,798 million was recognized in earnings within Revenue—Other during the year ended March 31, 2022. NRI
remains an equity method affiliate of NHI.
As of March 31, 2021, Nomura’s ownership of NRI was 28.6% and the remaining balance of equity method goodwill included in the carrying
value of the investment was ¥60,572 million.
As of March 31, 2022, Nomura’s ownership of NRI was 24.5% and the remaining balance of equity method goodwill included in the carrying
value of the investment was ¥57,633 million.
NREH
NREH is the holding company of the Nomura Real Estate Group which is primarily involved in the residential property development, leasing,investment management as well as other real estate-related activities.
235

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Nomura recognized an impairment loss of ¥47,661 million against its investment in NREH during the year ended March 31, 2021. Based on the
period and extent to which the NREH share price, and therefore fair value of the investment in NREH was below carrying value, Nomura determined
the impairment was other-than-temporary and therefore an impairment loss was recognized. The loss was classified within Non-interest expenses—
Other in the consolidated statements of income.
As of March 31, 2021, Nomura’s ownership of NREH was 36.1% and the difference between the carrying amount of the equity method
investment and the underlying equity in net assets was ¥37,140 million as a result of an excess of the underlying equity in net assets over fair value ofthe investment.
As of March 31, 2022, Nomura’s ownership of NREH was 36.6% and the difference between the carrying amount of the equity method
investment and the underlying equity in net assets was ¥36,910 million as a result of an excess of the underlying equity in net assets over fair value ofthe investment.
236

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Summary financial information—
The following tables present summarized financial information for significant affiliated companies of Nomura (including those elected for the fairvalue option) as of March 31, 2021 and 2022, and for the years ended March 31, 2021 and 2022.
Millions of yen
March 312021
2022

Total assets
Total liabilities¥2,769,294
1,788,704¥3,009,394
1,984,043

Millions of yen
Year ended March 31
2021
2022

Net revenues
Non-interest expenses
Net income attributable to the companies¥ 909,616
737,200
124,163¥1,041,000
786,391
179,706

The following tables present a summary of balances and transactions with affiliated companies and other equity-method investees as of March 31,
2021 and 2022, and during the years ended March 31, 2021 and 2022.
Millions of yen
March 31
2021
2022

Investments in affiliated companies
Advances to affiliated companies
Other receivables from affiliated companies(1)Other payables to affiliated companies(1)(1)¥ 363,393
1,000
21,817
26,344¥ 363,281
1,000
24,75430,617

ROU assets and operating lease liabilities are included by ¥20,793 million and ¥23,899 million as of March 31, 2021 and 2022 respectively.
Millions of yen
Year ended March 31
2021
2022

Revenues
Non-interest expenses
Purchase of software, securities and tangible assets

¥

2,240
50,753
14,407¥2,660
50,004
12,760The following table presents the aggregate carrying amount and fair value of investments in affiliated companies and other equity-method
investees for which a quoted market price is available as of March 31, 2021 and 2022.
Millions of yen
March 31
2021
2022

Carrying amount
Fair value¥ 340,909
768,389¥ 341,935
772,243

The following table presents equity in earnings of equity-method investees, including those above and dividends from equity-method investees forthe years ended March 31, 2021 and 2022.
Millions of yen
Year ended March 31
2021
2022

Equity in earnings of equity-method investees(1)Dividends from equity-method investees(1)¥

Equity in earnings of equity-method investees is reported within Revenue-Other in the consolidated statements of income.
237

26,812
11,096¥32,083
11,848NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
20. Commitments, contingencies and guarantees:
Commitments—
Credit and investment commitments
In connection with its banking and financing activities, Nomura provides commitments to extend credit which generally have fixed expiration
dates. In connection with its investment banking activities, Nomura enters into agreements with clients under which Nomura commits to underwrite
securities that may be issued by the clients. As a member of certain central clearing counterparties, Nomura is committed to provide liquidity facilities
through entering into reverse repo transactions backed by government and government agency debt securities with those counterparties in a situation
where a default of another clearing member occurs. The outstanding commitments under these agreements are included below as commitments to extend
credit.
Nomura has commitments to invest in various partnerships and other entities and also has commitments to provide financing for investments
related to these partnerships. The outstanding commitments under these agreements are included below as commitments to invest.
The following table presents a summary of the key types of outstanding commitments provided by Nomura as of March 31, 2021 and 2022.
Millions of yen
March 31, 2021
March 31, 2022

Commitments to extend credit
Liquidity facilities to central clearing counterparties
Other commitments to extend credit
Total¥ 1,400,076
901,867¥ 2,301,943¥ 1,135,695
877,156¥ 2,012,851

Commitments to invest¥¥

136,367

32,286

Maturity profile of these commitments as of March 31, 2022:
Millions of yen
Years to maturity
Less than
1 to 33 to 5
1 year
years
years

Total
contractual
amountMore than
5 years

Commitments to extend credit
Liquidity facilities to central clearing counterparties
Other commitments to extend credit
Total¥1,135,695
877,156¥2,012,851¥1,135,695
219,139¥1,354,834¥—
269,828¥269,828¥—
163,515¥163,515¥—
224,674¥224,674

Commitments to invest

¥

¥

¥

¥

¥ 21,860

32,286

149

4,102

6,175

The contractual amounts of these commitments to extend credit represent the maximum amounts at risk assuming the contracts are fully drawn
upon, should all the counterparties default, and the value of all collateral or credit mitigations becomes worthless. The total contractual amount of thesecommitments may not represent actual future cash outflows since the commitments may expire without being drawn upon. The credit risk associatedwith these commitments varies depending on the clients’ creditworthiness and the value and quality of collateral held. Nomura evaluates each client’s
creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by Nomura upon extension of credit, is based on credit
evaluation of the counterparty.
Other commitments
Purchase obligations for goods or services that include payments for construction-related, advertising, and computer and telecommunications
maintenance agreements amounted to ¥121,604 million as of March 31, 2021 and ¥98,214 million as of March 31, 2022.
238

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
As of March 31, 2022, these purchase obligations had the following maturities:

Purchase obligations

Total

Less than
1 year1 to 2
years¥98,214¥14,012¥15,254

Millions of yen
Years of payment
2 to 33 to 4
years
years¥3,398¥1,7744 to 5
years¥63,623

More than
5 years¥

153

Above table includes the commitment to purchase parts of the redeveloped real estate in Tokyo Nihonbashi district from the redevelopment
association.
Nomura has commitments under resale and repurchase agreements including amounts in connection with collateralized agreements andcollateralized financing. These commitments amounted to ¥1,725 billion for resale agreements and ¥1,533 billion for repurchase agreements as ofMarch 31, 2021 and ¥1,565 billion for resale agreements and ¥2,673 billion for repurchase agreements as of March 31, 2022.
Nomura has commitments to purchase notes held by our clients. These commitments amounted to ¥15 billion as of March 31, 2022.
In Japan, there is a market in which participants lend and borrow debt and equity securities without collateral to and from financial institutions.
Under these arrangements, Nomura had obligations to return debt and equity securities borrowed without collateral of ¥824 billion and ¥1,219 billion asof March 31, 2021 and 2022, respectively.
As a member of various securities clearing houses and exchanges, Nomura may be required to assume a certain share of the financial obligationsof another member who may default on its obligations to the clearing house or the exchange. These guarantees are generally required under themembership agreements. To mitigate these risks, exchanges and clearing houses often require members to post collateral. The potential for Nomura to
make payments under such guarantees is deemed remote.
239

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Contingencies—
Investigations, lawsuits and other legal proceedings
In the normal course of business as a global financial services entity, Nomura is involved in investigations, lawsuits and other legal proceedings
and, as a result, may suffer loss from any fines, penalties or damages awarded against Nomura, any settlements Nomura chooses to make to resolve a
matter, and legal and other advisory costs incurred to support and formulate a defense.
The ability to predict the outcome of these actions and proceedings is inherently difficult, particularly where claimants are seeking substantial orindeterminate damages, where investigations and legal proceedings are at an early stage, where the matters present novel legal theories or involve alarge number of parties, or which take place in foreign jurisdictions with complex or unclear laws.
The Company regularly evaluates each legal proceeding and claim on a case-by-case basis in consultation with external legal counsel to assess
whether an estimate of possible loss or range of loss can be made, if recognition of a liability is not appropriate. In accordance with ASC 450“Contingencies” (“ASC 450”), the Company recognizes a liability for this risk of loss arising on each individual matter when a loss is probable and theamount of such loss or range of loss can be reasonably estimated. The amount recognized as a liability is reviewed at least quarterly and is revised whenfurther information becomes available. If these criteria are not met for an individual matter, such as if an estimated loss is only reasonably possible
rather than probable, no liability is recognized. However, where a material loss is reasonably possible, the Company will disclose details of the legal
proceeding or claim below. Under ASC 450 an event is defined as reasonably possible if the chance of the loss to the Company is more than remote but
less than probable. As of March 31, 2021 and 2022, a total liability of ¥62,889 million and ¥76,866 million has been recognized, respectively, andreported within the consolidated balance sheets within Other liabilities in respect of outstanding and unsettled investigations, lawsuits and other legal
proceedings (excluding claims with no legal proceedings as of March 31, 2021 and 2022) where loss is considered probable and the amount of such loss
can be reasonably estimated. Total expenses recognized through earnings during the year ended March 31, 2021 and 2022 in connection with thesematters were ¥41,131 million and ¥63,338 million, respectively, which has been reported within the consolidated statements of income within
Non-interest expenses—Other.
The most significant actions and proceedings against Nomura are summarized below. The Company believes that, based on current information
available as of the date of these consolidated financial statements, the ultimate resolution of these actions and proceedings will not be material to theCompany’s financial condition. However, an adverse outcome in certain of these matters could have a material adverse effect on the consolidated
statements of income or cash flows in a particular quarter or annual period.
For certain of the significant actions and proceedings, the Company is currently able to estimate the amount of reasonably possible loss, or rangeof reasonably possible losses, in excess of amounts recognized as a liability (if any) against such cases. These estimates are based on current information
available as of the date of these consolidated financial statements and include, but are not limited to, the specific amount of damages or claims against
Nomura in each case. As of June 24, 2022, for those cases where an estimate of the range of reasonably possible losses can be made, the Company
estimates that the total aggregate reasonably possible maximum loss in excess of amounts recognized as a liability (if any) against these cases isapproximately ¥61 billion.
For certain other significant actions and proceedings, the Company is unable to provide an estimate of the reasonably possible loss or range ofreasonably possible losses because, among other reasons, (i) the proceedings are at such an early stage there is not enough information available toassess whether the stated grounds for the claim are viable; (ii) damages have not been identified by the claimant; (iii) damages are unsupported and/or
exaggerated; (iv) there is uncertainty as to the outcome of pending appeals or motions; (v) there are significant legal issues to be resolved that may bedispositive, such as the applicability of statutes of limitations; (vi) there are novel or unsettled legal theories underlying the claims and/or (vii) a
judgment has been made against Nomura but detailed reasons for the basis for the judgment and how the amount of the judgment has been determined
have not yet been received.
Nomura will continue to cooperate with regulatory investigations and to vigorously defend its position in the ongoing actions and proceedings set
out below, as appropriate.
240

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
In January 2008, Nomura International plc (“NIP”) was served with a tax notice issued by the tax authorities in Pescara, Italy alleging breaches by
NIP of the U.K.-Italy Double Taxation Treaty of 1998 (“Tax Notice”). The alleged breaches relate to payments to NIP of tax credits on dividends on
Italian shares. The Tax Notice not only denies certain payments to which NIP claims to be entitled but also seeks reimbursement of approximately EUR
33.8 million, plus interest, already refunded. NIP has exhausted all avenues of appeal following a judgment of the Italian Supreme Court dismissing
NIP’s appeal in July 2021.
Similar claims have been made by the tax authorities against IBJ Nomura Financial Products (UK) PLC (“IBJN”) a group company which has
been in members’ voluntary liquidation since 2000. An Italian Supreme Court judgment in June 2019 confirmed that tax credit refunds of approximately
EUR 38 million, plus interest, were payable by IBJN to the Italian tax authorities.
In October 2010 and June 2012, two actions were brought against NIP, seeking recovery of payments allegedly made to NIP by Fairfield Sentry
Ltd. and Fairfield Sigma Ltd. (collectively, “Fairfield Funds”), which are now in liquidation and were feeder funds to Bernard L. Madoff Investment
Securities LLC (in liquidation pursuant to the Securities Investor Protection Act in the U.S. since December 2008) (“BLMIS”). The first suit was
brought by the liquidators of the Fairfield Funds. It was filed on October 5, 2010 in the Supreme Court of the State of New York, but was subsequently
removed to the United States Bankruptcy Court for the Southern District of New York. The second suit was brought by the Trustee for the liquidation of
BLMIS (“Madoff Trustee”). NIP was added as a defendant in June 2012 when the Madoff Trustee filed an amended complaint in the United States
Bankruptcy Court for the Southern District of New York. Both actions seek to recover approximately $35 million plus interest.
Certain of the Company’s subsidiaries in the U.S. securitized residential mortgage loans in the form of residential mortgage-backed securities(“RMBS”). These subsidiaries did not generally originate mortgage loans, but purchased mortgage loans from third-party loan originators(“originators”). In connection with such purchases, these subsidiaries received loan level representations from the originators. In connection with thesecuritizations, the relevant subsidiaries provided loan level representations and warranties of the type generally described below, which mirror the
representations the subsidiaries received from the originators.
The loan level representations made in connection with the securitization of mortgage loans were generally detailed representations applicable toeach loan and addressed characteristics of the borrowers and properties. The representations included, but were not limited to, information concerning
the borrower’s credit status, the loan-to-value ratio, the owner occupancy status of the property, the lien position, the fact that the loan was originated inaccordance with the originator’s guidelines, and the fact that the loan was originated in compliance with applicable laws. Certain of the RMBS issued by
the subsidiaries were structured with credit protection provided to specified classes of certificates by monoline insurers.
With respect to certain of the RMBS issued from 2005 to 2007, the relevant subsidiaries received claims demanding the repurchase of certain
loans from trustees of various securitization trusts, made at the instance of one or more investors, or from certificate insurers. The total original principal
amount of loans for which repurchase claims were received by the relevant subsidiaries within six years of each securitization is $3,203 million. The
relevant subsidiaries summarily rejected any demand for repurchase received after the expiration of the statute of limitations applicable to breach of
representation claims. For those claims received within six years, the relevant subsidiaries reviewed each claim received, and rejected those claims
believed to be without merit or agreed to repurchase certain loans for those claims that the relevant subsidiaries determined to have merit. In several
instances, following the rejection of repurchase demands, investors instituted actions through the trustee alleging breach of contract from 2011 to 2014.
The breach of contract claims that were brought within the six-year statute of limitations for breach of contract actions have survived motions to dismissand discovery was completed and Notes of Issue were filed. Following a decision from the New York Court of Appeals in a similar proceeding,however, the court has agreed to reopen discovery in four actions and has not set a date for completion. Three actions have completed discovery and arein the pretrial motion phase in the Supreme Court of the State of New York. The Company has been engaged in efforts to resolve the actions outside of
Court, which has resulted in the recording of additional expenses and provisions during the fiscal year.
A monoline insurer, Ambac Assurance Corp (“Ambac”), brought an action in April 2013 against Nomura Credit & Capital, Inc. (“NCCI”) and
Nomura Holding America Inc. (“NHA”) alleging breach of contract with respect to representations concerning specific loan characteristics and fraud in
the inducement of the insurance contract based on misrepresentations concerning the loans for two trusts insured by Ambac. The court dismissed all
claims against NHA, and the claims against NCCI are continuing in the Supreme Court of the State of New York and discovery has now been
completed.
In November 2011, NIP was served with a claim filed by the Madoff Trustee in the United States Bankruptcy Court for the Southern District of
New York. This is a clawback action similar to claims filed by the Madoff Trustee against numerous other institutions. The Madoff Trustee alleges that
NIP received redemptions from the BLMIS feeder fund, Harley International (Cayman) Limited in the six years prior to December 11, 2008 (the dateproceedings were commenced against BLMIS) and that these are avoidable and recoverable under the U.S. Bankruptcy Code and New York law. The
amount that the Madoff Trustee is currently seeking to recover from NIP is approximately $24.4 million plus interest.
In March 2013, Banca Monte dei Paschi di Siena SpA (“MPS”) issued a claim in the Italian Courts against (1) two former directors of MPS and(2) NIP. MPS alleged that the former directors improperly caused MPS to enter into certain structured financial transactions with NIP in 2009(“Transactions”) and that NIP acted fraudulently and was jointly liable for the unlawful conduct of MPS’s former directors. MPS claimed damages of
not less than EUR 1.1 billion.
241

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
In March 2013, NIP commenced a claim against MPS in the English Courts. The claim was for declaratory relief confirming that the Transactions
remained valid and contractually binding. MPS filed and served its defence and counterclaim to these proceedings in March 2014. MPS alleged in its
counterclaim that NIP was liable to make restitution of a net amount of approximately EUR 1.5 billion, and sought declarations regarding the illegality
and invalidity of the Transactions.
On September 23, 2015, NIP entered into a settlement agreement with MPS to terminate the Transactions. NIP believes that the Transactions wereconducted legally and appropriately, and does not accept the allegations made against it or admit any wrongdoing. Taking into account the views of
relevant European financial authorities and the advice provided by external experts, NIP considered it to be in its best interests to reach a settlement inrelation to this matter. As part of the agreement, the Transactions were unwound at a discount of EUR 440 million in favour of MPS and the civil
proceedings between MPS and NIP in Italy and England, respectively, will no longer be pursued. Pursuant to the settlement agreement MPS and NIP
applied to the Italian Courts to discontinue the proceedings brought by MPS against NIP. These proceedings have since been discontinued.
In April 2013, an investigation was commenced by the Public Prosecutor’s office in Siena, Italy, into various allegations against MPS and certainof its former directors, including in relation to the Transactions. The investigation was subsequently transferred to the Public Prosecutor of Milan. On
April 3, 2015, the Public Prosecutor’s office in Milan issued a notice concluding its preliminary investigation. The Public Prosecutor was seeking toindict MPS, three individuals from MPS’s former management, NIP and two former NIP employees for, among others, the offences of false accounting
and market manipulation in relation to MPS’s previous accounts. The preliminary hearing at which the Milan criminal court considered whether or not
to grant the indictment concluded on October 1, 2016, the Judge ordering the trial of all individuals and banks involved except for MPS (which enteredinto a plea bargaining agreement with the Public Prosecutor). The trial commenced in December 2016. As part of these proceedings, a number of civil
claimants have been permitted to bring damages claims against a number of entities and individuals, including NIP.
On November 8, 2019, the court delivered its oral verdict, finding two former employees of NIP guilty of false accounting, market manipulationand obstructing the supervisory activities of CONSOB and that NIP had breached Italian corporate liability legislation. In so doing it imposed a fine of
EUR 3.45 million on NIP as well as ordering confiscation of EUR 88 million. On May 12, 2020, the court issued the detailed reasoning for the verdict(including the rationale for the penalties imposed). NIP appealed the decision to the Milan Court of Appeal. On May 6, 2022, the Milan Court of Appeal
delivered its oral verdict, overturning the first instance judgment and acquitting the two former employees of NIP of all charges. The court also
overturned the first instance judgment in respect of NIP and quashed the EUR 3.45 million fine and EUR 88 million confiscation order imposed on NIP.
The detailed reasoning for the verdict is expected to be filed within 90 days, following which the decision may be appealed to the Italian Supreme Court.
In addition, NIP is involved in a number of separate civil or administrative matters relating to the Transactions including those described further
below.
In July 2013, a claim was issued against former directors of MPS, and NIP, by the shareholder group Fondazione Monte dei Paschi di Siena(“FMPS”). The grounds of the FMPS claim were similar to those on which the MPS claim was founded and the level of damages sought by FMPS was
not less than EUR 315.2 million. In September 2020, NIP, without admitting any wrongdoing, entered into a settlement agreement with FMPS pursuant
to which FMPS waived its claim against NIP. The proceedings have since been discontinued.
In January 2018, a claim before the Italian Courts brought by two claimants, Alken Fund Sicav (on behalf of two Luxembourg investment funds
Alken Fund European Opportunities and Alken Fund Absolute Return Europe) and Alken Luxembourg S.A (the funds’ management company)(collectively referred to as “Alken”) was served on NIP. The claim was made against NIP, MPS, four MPS former directors and a member of MPS’s
internal audit board, and sought monetary damages of approximately EUR 434 million plus interest on the basis of allegations similar to those made in
the MPS and FMPS claims, as well as non-monetary damages in an amount left to be quantified by the Judge. In July 2021, the court rejected all of
Alken’s claims. In February 2022, Alken appealed the decision to the Milan Court of Appeal.
In May 2019, a claim before the Italian Courts brought by York Global Finance Offshore BDH (Luxembourg) Sàrl and a number of seemingly
related funds was served on NIP. The claim is made against NIP, MPS, two MPS former directors and a member of MPS’s internal audit board, andseeks monetary damages of approximately EUR 186.7 million plus interest on grounds similar to those in the MPS and FMPS claims, as well as
non-monetary damages in an amount left to be quantified by the Judge.
242

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Additionally, NIP was served by the Commissione Nazionale per le Società e la Borsa (“CONSOB”, the Italian financial regulatory authority)with a notice commencing administrative sanction proceedings for market manipulation in connection with the Transactions. In relation to theTransactions, the notice named MPS, three individuals from MPS’s former management and two former NIP employees as defendants, whereas NIP wasnamed only in its capacity as vicariously liable to pay any fines imposed on the former NIP employees. On May 22, 2018 CONSOB issued its decisionin which it levied EUR 100,000 fines in relation to each of the two former NIP employees. In addition, CONSOB decided that the two employees did
not meet the necessary Italian law integrity requirements to perform certain senior corporate functions, for a period of three months and six months
respectively. NIP was vicariously liable to pay the fines imposed on its former employees. NIP paid the fines and appealed the decision to the Milan
Court of Appeal. In December 2020, the Court of Appeal annulled the CONSOB decision against NIP. CONSOB has appealed the Court of Appeal’s
decision to the Italian Supreme Court.
In June 2016 and August 2016, Nomura International (Hong Kong) Limited (“NIHK”) and Nomura Special Investments Singapore Pte Limited(“NSIS”) were respectively served with a complaint filed in the Taipei District Court against NIHK, NSIS and certain individuals by Cathay United
Bank, Co., Ltd., Taiwan Cooperative Bank Ltd., Chang Hwa Commercial Bank Ltd., Taiwan Business Bank Ltd., KGI Bank and Hwatai Bank Ltd.
(collectively, “Syndicate Banks”). The Syndicate Banks’ complaint relates to a $60 million syndicated term loan to a subsidiary of Ultrasonic AG that
was arranged by NIHK, and made by the Syndicate Banks together with NSIS. The Syndicate Banks’ allegations in the complaint include allegations
that NIHK failed to comply with its fiduciary duties to the lenders as the arranger of the loan and the Syndicate Banks seek to recover approximately$48 million in damages plus interest. The Syndicate Banks’ claims are dismissed by the Taipei District Court on June 2, 2022.
In March 2017, certain subsidiaries of American International Group, Inc. (“AIG”) commenced proceedings in the District Court of Harris
County, Texas against certain entities and individuals, including Nomura Securities International, Inc. (“NSI”), in connection with a 2012 offering of$750 million of certain project finance notes, of which $92 million allegedly were purchased by AIG. AIG had alleged violations of the Texas Securities
Act based on material misrepresentations and omissions in connection with the marketing, offering, issuance and sale of the notes and seeks rescissionof the purchases or compensatory damages. The action was resolved in a confidential settlement in March 2022.
On May 20, 2021, NIP and the Company were named as addressees in a decision issued by the European Commission in which NIP, the Company
and various other third party banks have been found to have infringed EU competition law in connection with their activity in the primary and secondary
markets for European Government Bonds (“EGB”). The European Commission found that the infringement consisted of anticompetitive agreements
and/or concerted practices in the EGB sector in breach of EU competition law and fined NIP and the Company approximately EUR 129.6 million. In
August 2021, NIP and the Company appealed the decision. The fine has been provisionally paid, as is required, pending the outcome of NIP and theCompany’s appeal.
NIP and NSI are defendants in a class action filed in the United States District Court for the Southern District of New York alleging violations of
U.S. antitrust law in relation to the alleged manipulation of the primary and secondary markets for EGB.
Additionally, NIP and NSI are defendants in a separate class action filed in the Toronto Registry Office of the Federal Court of Canada alleging
violations of Canadian competition law relating to the alleged manipulation of the secondary trading market for supranational, sub-sovereign and agency
bonds.
Nomura is responding to requests for information from the U.S. Commodity Futures Trading Commission (“CFTC”) in relation to swap trading
related to bond issuances, as well as the use of non-Nomura approved messaging platforms for business communications. On February 1, 2021, the
CFTC filed a civil enforcement action against a Nomura employee and charged him with violating the anti-fraud, price manipulation and false
statements provisions of the Commodity Exchange Act in relation to a 2015 interest rate swap transaction.
NSI is also cooperating with the Securities and Exchange Commission (“SEC”) in connection with an investigation of compliance with records
preservation requirements relating to the use of non-Nomura approved messaging platforms for business communications. The SEC has stated that it isconducting similar investigations of record preservation practices at other financial institutions.
In September 2017 and November 2017, NIHK and NSIS were respectively served with a complaint filed in the Taipei District Court against
NIHK, NSIS, China Firstextile (Holdings) Limited (“FT”) and certain individuals by First Commercial Bank, Ltd., Land Bank of Taiwan Co., Ltd.,
Chang Hwa Commercial Bank Ltd., Taishin International Bank, E.Sun Commercial Bank, Ltd., CTBC Bank Co., Ltd., Hwatai Bank, Ltd. and Bank of
Taiwan (collectively, “FT Syndicate Banks”). The FT Syndicate Banks’ complaint relates to a $100 million syndicated term loan facility to borrower FTthat was arranged by NIHK, and made by the FT Syndicate Banks together with NSIS. The FT Syndicate Banks’ allegations in the complaint include
tort claims under Taiwan law against the defendants. The FT Syndicate Banks seek to recover approximately $68 million in damages plus interest.
243

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
In August 2017, the Cologne public prosecutor in Germany notified NIP that it is investigating possible tax fraud by individuals who worked for
the Nomura Group in relation to the historic planning and execution of trading strategies around dividend record dates in certain German equities(known as “cum/ex” trading) and in relation to filings of tax reclaims in 2007 to 2012. During the fiscal year ended March 31, 2020, Nomura Group
became aware that certain of those individuals would be the subject of investigative proceedings in Germany. NIP and another entity in the Nomura
Group are cooperating with the investigation, including by disclosing to the public prosecutor certain documents and trading data. If the investigation
involving Nomura Group entities and former individuals proceeds to trial, the individuals could face criminal sanctions and Nomura Group entities
could face administrative sanctions such as administrative fines or profit confiscation orders.
In June 2020, NIP issued a claim against an Italian counterparty in the English Courts. The claim sought declarations that the terms of a derivativetransaction entered into in 2005 are binding. The counterparty filed and served its defense and counterclaim to these proceedings in January 2021 whichsought, amongst other things, restitution of sums paid under the transaction. Separately, in June 2020, the counterparty filed an interim injunction
application against NIP in the Tribunal of Palermo relating to payments due by it in relation to the same transaction. This application was dismissed at
first instance but the counterparty appealed that decision. In October 2021, NIP, without admitting any wrongdoing, entered into a settlement agreementwith the counterparty pursuant to which the proceedings in both jurisdictions were discontinued. At the same time, the derivative transaction was
terminated.
Stichting Vestia, a Dutch housing association and former counterparty, has asserted a claim against NIP relating to derivative transactions enteredinto between Vestia and NIP between 2009 and 2011. On February 1, 2022, Vestia commenced proceedings against NIP in the English Courts. The
proceedings allege that the transactions are void because Vestia lacked the capacity and/or the authority to enter into them. Vestia is seeking restitutionof a net amount of approximately EUR 154.2 million plus interest in respect of those transactions.
In the context of a secured financing and the enforcement of the related pledge agreements following events of default attributable to thecounterparty, on February 8, 2022, two former pledgors served a formal notice stating their intention to commence legal proceedings against Nomura
European Investment Limited as lender and NIP as security agent. The pledgors allege that there have been certain valuation errors in relation to
enforcement of the related pledge agreements. To date, no legal proceedings have been issued in respect of the claim.
244

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Guarantees—
In the normal course of business, Nomura enters into various guarantee arrangements with counterparties in the form of standby letters of credit
and other guarantees, which generally have a fixed expiration date.
In addition, Nomura enters into certain derivative contracts that meet the accounting definition of a guarantee, namely derivative contracts that
contingently require a guarantor to make payment to a guaranteed party based on changes in an underlying that relate to an asset, liability or equity
security held by a guaranteed party. Since Nomura does not track whether its clients enter into these derivative contracts for speculative or hedging
purposes, Nomura includes relevant information about these derivative contracts that could meet the accounting definition of guarantees in thedisclosure below.
For information about the maximum potential amount of future payments that Nomura could be required to make under these derivative contracts,
the notional amount of contracts has been disclosed, except for certain derivative contracts, such as written interest rate caps and written currency
options, the maximum potential payout amount cannot be estimated, as increases in interest or foreign exchange rates in the future could be theoreticallyunlimited.
The notional amounts do not represent anticipated losses from these derivatives contracts. As Nomura measures all derivative contracts at fairvalue, carrying value is considered the best indication of probability of payment and performance risks for these derivative contracts. Nomura may also
reduce net exposures to certain of these contracts by entering into offsetting transactions or by entering into contracts that hedge the market risks related
to these derivative contracts.
The following table presents information on Nomura’s derivative contracts that could meet the accounting definition of a guarantee and standby
letters of credit and other guarantees.
Millions of yen
March 312021

Derivative contracts(1)(2)Standby letters of credit and other guarantees(3)
(1)
(2)
(3)

2022

Carryingvalue

Maximum
potential
payout /Notional
total

Carryingvalue

Maximum
potential
payout /Notional
total¥5,207,911—¥322,635,226
206,072¥6,151,646—¥393,709,887
1,698,193

Credit derivatives are disclosed in Note 3 “Derivative instruments and hedging activities” and are excluded from above.
Derivative contracts primarily consist of equity, interest rate and foreign exchange contracts.
Primarily related to a certain sponsored repo program where Nomura guarantees to a third party clearing house in relation to its clients’ payment
obligations. Our credit exposures under this guarantee is minimized by obtaining collateral from clients at amount approximately the maximum
potential payout under the guarantee.

The following table presents maturity information on Nomura’s derivative contracts that could meet the accounting definition of a guarantee andstandby letters of credit and other guarantees as of March 31, 2022.

Derivative contracts
Standby letters of credit and other guarantees

Carrying
value

Total

¥6,151,646—¥393,709,887
1,698,193
245

Millions of yen
Maximum potential payout/NotionalYears to Maturity
Less than
1 to 33 to 5
1 yearyears
years¥82,738,268
1,684,360¥112,981,416
7,705¥65,305,775
4,519

More than
5 years¥132,684,428
1,609

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
21. Segment and geographic information:
Operating segments—
In April 2021, the Investment Management Division was newly established by replacing the Asset Management Division and the MerchantBanking Division. Accordingly, Nomura’s operating management and management reporting are prepared based on the Retail, the Investment
Management, and the Wholesale segments. Nomura structures its business segments based upon the nature of its main products and services, its clientbase and its management structure.
The accounting policies for segment information generally follow U.S. GAAP, except for a part of the impact of unrealized gains/losses on certain
investments in equity securities held for operating purposes, which under U.S. GAAP are included in Income (loss) before income taxes, but excluded
from segment information.
Revenues and expenses directly associated with each business segment are included in the operating results of each respective segment. Revenues
and expenses that are not directly attributable to a particular segment are allocated to each respective business segment or included in “Other,” based
upon Nomura’s allocation methodologies as used by management to assess each segment’s performance.
Business segments’ results are shown in the following tables. Net interest revenue is disclosed because management monitors interest revenue netof interest expense for its operating decisions. Business segments’ information on total assets is not disclosed because management does not consider
such information for its operating decisions and therefore, it is not reported to management.
Certain comparative amounts have been reclassified to conform to the current year’s presentation, in accordance with the realignment in April
2021.
Millions of yen
RetailInvestment
Management

Wholesale(1)Year ended March 31, 2021
Non-interest revenue
Net interest revenue
Net revenue
Non-interest expenses
Income (loss) before income taxes¥366,271
2,538
368,809
276,480¥ 92,329¥ 153,523
9,627
163,150
72,142¥ 91,008¥ 524,019
167,337
691,356
627,051¥ 64,305¥

Year ended March 31, 2022
Non-interest revenue
Net interest revenue
Net revenue
Non-interest expenses
Income (loss) before income taxes¥324,642
3,343
327,985
268,745¥ 59,240¥ 129,848
18,145
147,993
76,478¥ 71,515¥ 617,227
85,828703,055
628,563¥ 74,492

¥

(1)

Other
(Incl. elimination)

¥

¥

Total

205,411(38,399)
167,012
195,528(28,516)¥1,249,224
141,103
1,390,327
1,171,201¥ 219,126

232,437(53,203)179,234
163,481
15,753¥1,304,154
54,113
1,358,267
1,137,267¥ 221,000

Non-interest revenue and Non-interest expense for the year ended March 31, 2021 and March 31, 2022 include losses arising from the U.S. Prime
Brokerage Event. See Note 23 “U.S. Prime Brokerage Event”

Transactions between operating segments are recorded within segment results based on commercial terms and conditions and are eliminated in“Other.”246

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents the major components of Income (loss) before income taxes in “Other” for the years ended March 31, 2021 and
2022.
Millions of yen
Year ended March 31
2021
2022

Net gain (loss) related to economic hedging transactions
Realized gain on investments in equity securities held for operating purposes
Equity in earnings of affiliates(1)Corporate items(2)Other(3)(4)(5)
Total

(1)

(2)

(3)

(4)
(5)

¥

(11,450) ¥ (9,937)
1,731
1,355
(16,410)
36,7904,956(91,073)(7,343)78,618¥(28,516) ¥ 15,753

Includes an impairment loss of ¥47,661 million recognized in respect of Nomura’s investment in Nomura Real Estate holdings, Inc. during theyear ended March 31, 2021. Based on the period and extent to which the share price of the investee (and therefore its estimated fair value) was
below the carrying value of the investment, Nomura determined the impairment was other-than-temporary and an impairment loss was recognizedthrough earnings. The loss was reported within Non-interest expenses—Other in the consolidated statements of income.
Income before income taxes for the year ended March 31, 2022 includes a loss of approximately ¥62.0 billion related to legacy transactions in the
U.S. from before the global financial crisis (2007 – 2008) that was recognized including legal expenses as well as certain transactions intended tomitigate future losses.
Loss before income taxes for the year ended March 31, 2021 includes a gain of ¥ 71,075 million which represents the difference between the fairvalue of the assets acquired and the carrying value of the assets transferred by Nomura as a result of the rights conversion of the Tokyo
Nihonbashi district redevelopment project.
Income before income taxes for the year ended March 31, 2022 includes a gain of approximately ¥79.0 billion from the partial sale of Nomura’s
investment in the ordinary shares of Nomura Research Institute, Ltd.
Includes the impact of Nomura’s own creditworthiness.

The table below presents reconciliations of the combined business segments’ results included in the preceding table to Nomura’s reported Net
revenue, Non-interest expenses and Income (loss) before income taxes in the consolidated statements of income for the years ended March 31, 2021 and
2022.
Millions of yen
Year ended March 31
2021
2022

Net revenue
Unrealized gain (loss) on investments in equity securities held for operating purposes
Consolidated net revenue¥

Non-interest expenses
Unrealized gain (loss) on investments in equity securities held for operating purposes
Consolidated non-interest expenses¥

Income (loss) before income taxes
Unrealized gain (loss) on investments in equity securities held for operating purposes
Consolidated income (loss) before income taxes

¥

¥

¥

¥

1,390,327
11,5451,401,872¥¥

1,171,201—
1,171,201¥

219,126
11,545
230,671¥¥¥

1,358,267
5,623
1,363,890
1,137,267—
1,137,267
221,000
5,623
226,623

Geographic information—
Nomura’s identifiable assets, revenues and expenses are generally allocated based on the country of domicile of the legal entity providing theservice. However, because of the integration of the global capital markets and the corresponding global nature of Nomura’s activities and services, it is
not always possible to make a precise separation by location. As a result, various assumptions, which are consistent among years, have been made inpresenting the following geographic data.
The tables below present a geographic allocation of Net revenue and Income (loss) before income taxes from operations by geographic areas forthe years ended March 31, 2021 and 2022 and Long-lived assets associated with Nomura’s operations as of March 31, 2021 and 2022. Net revenue in
Americas and Europe in the table substantially represents Nomura’s operations in the U.S. and the U.K., respectively. Net revenue and Long-lived assets
have been allocated based on transactions with external customers while Income (loss) before income taxes has been allocated based on the inclusion ofintersegment transactions.
247

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Millions of yen
Year ended March 312021(2)2022(2)

Net revenue(1):Americas
EuropeAsia and Oceania
Subtotal
Japan
Consolidated¥¥

Income (loss) before income taxes:
Americas
EuropeAsia and Oceania
Subtotal
Japan
Consolidated(1)(2)

226,741
142,941
66,985436,667
965,205
1,401,872

¥

¥

¥

¥

289,571
131,39385,081
506,045857,845
1,363,890(76,963) ¥14,28349,205(13,475)
244,146
230,671 ¥(40,950)(21,774)
28,586(34,138)
260,761
226,623

There is no revenue derived from transactions with a single major external customer.
Includes losses arising from the U.S. Prime Brokerage Event. See Note 23 “U.S. Prime Brokerage Event.”
March 312021

Long-lived assets:
Americas
EuropeAsia and Oceania
Subtotal
Japan
Consolidated

¥

¥
248

98,611
65,165
26,690190,466
303,355
493,821

2022

¥

¥

103,045
53,64323,600180,288269,135
449,423

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
22. Related party transactions
Nomura makes loans to certain of its directors and other related parties. Outstanding loans to its directors and other related parties were notconsidered significant.
23. U.S. Prime Brokerage Event
An event occurred in certain Nomura’s subsidiaries, including a U.S. subsidiary, Nomura Global Financial Products Inc., resulting in total lossesof ¥245,749 million being recognized in the consolidated statements during the year ended March 31, 2021. The losses were caused by the default of aU.S. client on margin calls against synthetic and cash prime brokerage transactions. The losses arose primarily through the liquidation of the hedges held
against these transactions and also through recognition of allowances for current expected credit losses against certain of the transactions with the client.
Of the losses, ¥(204,188) million was reported within Revenue—Net gain on trading and ¥41,561 million reported within Non-interest expenses—Otherin the consolidated statements of income.
On May 17, 2021, Nomura completed the unwinding of all its positions related to the event and recognized additional losses of ¥65,362 million
during the quarter ended June 30, 2021. Of these losses, ¥(56,073) was reported within Revenue—Net gain on trading and ¥9,289 million reported
within Non-interest expenses—Other in the consolidated statements of income.
A total of ¥14,696 million of this loss has been recovered during the quarter ended December 31, 2021 and March 31, 2022 through an increase in
the estimated fair value of certain transactions with the client elected to be measured at fair value and through a reduction in allowances for current
expected credit losses against other transactions with the client. A gain of ¥12,161 million was recognized and reported within Revenue—Net gain on
trading and a reduction in expenses of ¥(2,535) million recognized through release of allowances for current expected credit losses reported within
Non-interest expenses—Other in the consolidated statements of income.
249

2. Unconsolidated Financial Statements(1) Unconsolidated Financial Statements
1. Balance Sheets

Notes(ASSETS)
Current Assets
Cash and time deposits
Money held in trust
Short-term loans receivable
Accounts receivable
OthersTotal Current Assets
Fixed Assets
Tangible fixed assets
Buildings
Furniture and fixtures
Land
Construction in progress
Intangible assets
Software
Other
Investments and others
Investment securities
Investments in subsidiaries and affiliates (at cost)
Other securities of subsidiaries and affiliates
Long-term loans receivable from subsidiaries and affiliates
Long-term guarantee deposits
Deferred tax assets
OthersAllowance for doubtful accounts
Total Fixed Assets
TOTAL ASSETS

*1
*1

250

Millions of yen
March 312021
2022

¥ 166,525
39
3,913,319
67,33963,293
4,210,514¥ 145,605
40
3,624,538
43,235
185,772
3,999,190

21,015
9,165
11,577210
64
71,06771,066
0
3,588,750
120,0542,446,405
38,233904,355
23,61035,05321,063(23)
3,680,832

27,4098,469
10,877210
7,853
69,44669,446
0
4,889,116
133,0312,531,582
50,9982,085,030
22,61758,2897,591(23)4,985,971¥7,891,346¥8,985,161

Notes(LIABILITIES)Current Liabilities
Short-term borrowings
Bond due within one year
Collaterals received
Accrued income taxes
Accrued bonuses
OthersTotal Current Liabilities
Long-term liabilities
Bonds payable
Long-term borrowings
OthersTotal Long-term liabilities
TOTAL LIABILITIES(NET ASSETS)
Shareholder’s equity
Common stock
Capital reserves
Additional paid-in capital
Total capital reserves
Earned surplus
Earned surplus reserve
Other Earned surplus
Earned surplus carried forward
Total earned surplus
Treasury stock
Total shareholder’s equity
Valuation and translation adjustments
Net unrealized gain on investments
Deferred gains or loss on hedges
Total valuation and translation adjustments
Subscription rights to shares
TOTAL NET ASSETSTOTAL LIABILITIES AND NET ASSETS

Millions of yen
March 312021
2022

¥2,109,493
6,700
91,057
26,69645,41887,3312,366,695¥ 2,057,902
30,00071,534
17,28655,172
107,295
2,339,188

1,200,148
1,793,245
20,5493,013,942
5,380,637

2,113,394
1,896,312
90,074
4,099,780
6,438,968

594,493594,493559,676
559,676

559,676
559,676

81,85881,8581,323,802
1,405,660(91,049)2,468,780

1,427,897
1,509,755(112,159)
2,551,766

42,09859,899(9,002)(70,833)
33,096(10,934)
8,834
5,361
2,510,710
2,546,193¥7,891,346 ¥ 8,985,161
251

2. Statements of Income
Millions of yen
Year ended March 31
2021
2022

Notes

Operating revenue
Property and equipment fee revenue
Rent revenue
Royalty on trademark
Dividend from subsidiaries and affiliates
Interest from affiliates
OthersTotal operating revenue
Operating expenses
Compensation and benefits
Rental and maintenance
Data processing and office supplies
Depreciation and amortization
Taxes
OthersInterest expenses
Total operating expenses
Operating income
Non-operating revenue
Non-operating expenses
Ordinary income
Special profits
Gain on sales of subsidiaries and affiliates
Gain on sales of investment securities
Gain on sales of fixed assets
Compensation income
Gain on reversal of subscription rights to shares
Total special profits
Special losses
Loss on sales of investment securities
Loss on devaluation of investment securities
Loss on sales and retirement of fixed assets
Loss on devaluation of stocks of subsidiaries and affiliates
Loss on sales of stocks of subsidiaries and affiliates
Total special losses
Income (loss) before income taxes
Income taxes—current
Income taxes—deferred
Total income taxes
Net income (loss)¥*2

99,91530,80540,303102,999
49,4995,104
328,625¥

41,59642,912
61,572
31,743
2,522
4,637
53,070238,052
90,572
5,462
7,043
88,992

48,29338,85066,67331,0794,240
7,245
51,408
247,788
107,698
16,903
10,024
114,577

—
4,563
—
5,863
918
11,343

105,443
3,400
14
—
873
109,729

26
196
568
*3
113,261
119
114,170(13,835)
6,960(19,286)(12,327)¥ (1,508) ¥252

102,287
28,26638,478
127,518
52,744
6,195
355,487

5
1,985
597
10,785—
13,373210,933
39,638(5,174)
34,464
176,470

3. Statements of Changes in Net Assets(Year ended March 31, 2021)
Millions of yen
Shareholders’equity
Capital reserve

Additional
paid-in
capitalCommonstock

Balance at April 1, 2020
Change in the term
Cash dividends
Net Income (loss)
Repurchases of treasury stock
Sale of treasury stock
Cancellation of treasury stock
Other-net
Total change in the year
Balance at March 31, 2021

¥ 594,493—¥ 594,493¥¥

559,676—
559,676

Shareholders’ equity
Treasurystock

Balance at April 1, 2020
Change in the term
Cash dividends
Net Income (loss)
Repurchases of treasury stock
Sale of treasury stock
Cancellation of treasury stock
Other-net
Total change in the year
Balance at March 31, 2021

Total
Shareholders’equity¥(243,407) ¥ 2,533,587(11)
13,165
139,204

Total
capitalreserve

Earnedsurplusreserve¥ 559,676 ¥ 81,858——¥ 559,676 ¥ 81,858

Earned surplus
Other Earned
surplus
EarnedsurpluscarriedforwardTotal
Earnedsurplus¥ 1,540,967¥1,622,825(76,358)(1,508)(76,358)(1,508)(95)(139,204)(95)(139,204)(217,165)(217,165)¥ 1,323,802 ¥1,405,660

Millions of yen
Valuation and translation adjustments
Total
Net
Deferred
unrealized
gains or
Valuation andgain onloss ontranslation
investments
hedgesadjustments

Subscription
rights toshares¥ 33,920 ¥ 16,386¥¥

50,306(76,358)(1,508)(11)
13,070—8,178 (25,388)
152,358(64,807)8,178 (25,388)¥ (91,049) ¥ 2,468,780 ¥ 42,098 ¥ (9,002) ¥253(17,210)(17,210)
33,096 ¥14,668Total
net assets¥2,598,561(76,358)(1,508)(11)
13,070—(5,834)(23,044)(5,834)(87,851)
8,834 ¥2,510,710

(Year ended March 31, 2022)
Millions of yen
Shareholders’equity
Capital reserve

Additional
paid-in
capitalCommonstock

Balance at April 1, 2021
Change in the term
Cash dividends
Net Income
Repurchases of treasury stock
Sale of treasury stock
Other-net
Total change in the year
Balance at March 31, 2022

¥ 594,493—¥ 594,493¥¥

559,676—
559,676

Shareholders’ equity
Treasurystock

Balance at April 1, 2021
Change in the term
Cash dividends
Net Income
Repurchases of treasury stock
Sale of treasury stock
Other-net
Total change in the year
Balance at March 31, 2022

Total
Shareholders’equity¥ (91,049) ¥ 2,468,780(39,650)
18,541

Earned surplus
Other Earned
surplus
EarnedsurpluscarriedforwardTotal
Earnedsurplus¥ 1,323,802¥1,405,660(70,714)
176,470(70,714)
176,470(1,661)(1,661)

104,095¥ 1,427,897

104,095¥1,509,755

Millions of yen
Valuation and translation adjustments
Total
DeferredNet
Valuation andgains orunrealized
translation
loss ongain onadjustments
hedgesinvestments

Subscription
rights toshares¥ 42,098 ¥ (9,002) ¥

¥

Total
capitalreserve

Earnedsurplusreserve¥ 559,676 ¥ 81,858——¥ 559,676 ¥ 81,858

33,096(70,714)
176,470(39,650)
16,880(21,109)
82,986¥(112,159) ¥ 2,551,766
254

17,801 (61,831)
17,801 (61,831)¥ 59,899 ¥(70,833) ¥(44,030)(44,030)(10,934) ¥

8,834

Total
net assets¥2,510,710(70,714)
176,470(39,650)
16,880(3,473)(47,503)(3,473)35,4835,361 ¥2,546,193

[Notes to the Financial Statements](Significant Accounting Policies)
1. Basis and methods of valuation for financial instruments(1) Other securities
a. Securities other than shares without market value
Recorded at market value
The difference between the cost using the moving average method or amortized cost and market value less deferred taxes is recorded
as Net unrealized gain on investments in Net assets on the balance sheet.
b. Shares without market value
Recorded at cost using the moving average method or amortized cost
With respect to investments in investment enterprise partnerships and similar ones which are regarded as equivalent to securities inaccordance with Paragraph 2, Article 2 of the Financial Instruments and Exchange Act, the pro rata shares of such partnerships arerecorded at net asset values based on the available current financial statements on the reporting date set forth in the partnershipagreements.
(2) Stocks of subsidiaries and affiliates
Recorded at cost using the moving average method
2. Basis and method of valuation for derivative transaction
Accounted for at fair value based on the mark-to-market method
3. Basis and method of valuation for money held in trust
Accounted for at fair value based on the mark-to-market method
4. Depreciation and amortization(1) Depreciation of tangible fixed assets
Tangible fixed assets are depreciated primarily on the declining balance method, except for buildings (excluding equipment of thebuildings) acquired on or after April 1, 1998 and equipment of the buildings and structures acquired on or after April 1, 2016 which are
depreciated on the straight-line method.
(2) Amortization of intangible assets, investments and others
Intangible assets, investments and others are amortized over their estimated useful lives primarily on the straight-line method. The useful
lives of software are based on those determined internally.
5. Deferred Assets
Bond issuance costs
Bond issuance costs are expensed upon incurred.
6. Translation of assets and liabilities denominated in foreign currencies
Financial assets and liabilities denominated in foreign currencies are translated into Japanese yen using exchange rates as of the balance
sheet date. Gains and losses resulting from translation are reflected in the statement of income.
7. Provisions(1) Allowance for doubtful accounts
To provide for bad loans, the Company recorded an allowance for doubtful accounts based on an estimate of the uncollectible amounts
calculated using historical loss ratios or a reasonable estimate based on the financial condition of individual borrowers.
(2) Accrued bonuses
To prepare for bonus payments to employees, the estimated amount was recorded in accordance with the prescribed calculation method.
255

8. Recognition criteria for revenue and expenses
The primary types of service provided to customers are as follows;
For royalty fees for the use of the “Nomura” trademark, performance obligations are satisfied over service providing period of time. The
performance obligations are normally judged to be satisfied over the term of the contracts and are recognized as “Royalty on trademarks”
based on revenue of the service recipient.
For revenue from providing outsourcing services, performance obligations are satisfied over service providing period of time. The
performance obligations are normally judged to be satisfied over the term of the contracts and are recognized as “Other operating revenue” ona straight-line basis.
9. Hedging activities(1) Hedge accounting
Mark-to-market profits and losses on hedging instruments are deferred as assets or liabilities until the profits or losses on the underlying
hedged items are realized for interest rate risk hedge and foreign currency risk hedge. Fair value hedge is applied and all the profits and losses
are recognized for share price risk hedge.
(2) Hedging instrument and hedged item
The Company utilizes interest rate swap contracts to hedge the interest rate risk on bonds and borrowings that the Company issued. The
Company utilizes currency forward contracts and long term foreign currency liabilities including long term bonds issued to hedge foreign
currency risk on investments in subsidiaries. Additionally, the Company utilizes total return swap contracts to hedge share price risk on a partof investment securities.
(3) Hedging policy
As a general rule, the interest rate risk on bonds and borrowings is fully hedged until maturity. Foreign currency investment in
subsidiaries is hedged by currency forward contracts and long term foreign currency liabilities including long term bonds issued. A part ofinvestment securities is hedged by total return swap contracts.
(4) Valuating the validity of hedging instruments
Regarding to the hedge of the interest risk and foreign currency risk, the Company regularly verifies the result of risk offsetting by eachhedging instrument and hedged item, and verifies the validity of the hedge. For the hedge of share price risk, the Company verifies the hedge
effectiveness by comparing the change in fair value of each investment security and total return swap contract.
10. Consumption taxes and local consumption taxes are accounted for based on the tax exclusion method.
11. The Company applies the consolidated tax return system.
With regard the company to the items for which the individual tax return filing method was reviewed in accordance with the transition to theGroup Tax Sharing System established under the “Act to partially revise the Income Tax Act and Others” (Act No. 8 of 2020) and the transition to theGroup Tax Sharing System, in accordance with the treatment in Paragraph 3 of the “Practical Solution on the Treatment of Tax Effect Accounting for
the Transition from the Consolidated Taxation System to the Group Tax Sharing System” (Practical Solution No. 39 March 31, 2020), the provisions
in Paragraph 44 of the “Implementation Guidance on Tax Effect Accounting” (ASBJ Guidance No. 28 February 16, 2018) are not applied and theamounts of deferred tax assets and deferred tax liabilities are in accordance with the provisions of the tax law before amendment.
(Significant Accounting Estimates)
1. Realization of deferred tax assets(1) The following information present deferred tax assets for the year ended March 31, 2021 and March 31, 2022.
March 31, 2021

35,053 million yen

March 31, 2022

58,289 million yen
256

(2) Content information which were identified as considerable accounting estimates were as follows;
The Company recognized deferred tax assets to extent it believes that it is more likely than not that a benefit will be realized against
future taxable income in a future deductible amount and unused tax loss carried forward. Future taxable income is computed based on taxable
income more likely to be realized in the future, which timing and amount is reasonably estimated. Deferred tax assets are reviewed at the
fiscal year end and in case deferred tax assets is determined to have no possible benefit of tax relief in the future, the Company may reducethe deferred tax assets recognized in balance sheets. See “Tax Effect Accounting” in financial statement included in this annual report for
further information regarding the deferred tax assets that the Company currently recognize.
(Change in Accounting Policies)(Adoption of Accounting Standard for Fair Value Measurement)
The Company adopted “Accounting Standard for Fair Value Measurement” (Accounting Standards Board of Japan Statement No.30 issued on
July 4, 2019) from the beginning of the current fiscal year. In addition, the company applied the accounting policies prospectively in accordance withthe transitional accounting treatment prescribed in Paragraph 19 of “Accounting Standard for Fair Value Measurement”. There was no impact on thefinancial statement.
257

(Balance Sheets)*1. Securities deposited(March 31, 2021)
The Company loaned investment securities (mainly investments in subsidiaries and affiliates) with a book value of ¥8,523 million based on
securities lending agreements contracts which provide borrowers with the rights to resell or repledge the securities.
(March 31, 2022)
The Company loaned investment securities (mainly investments in subsidiaries and affiliates) with a book value of ¥7,190 million based on
securities lending agreements contracts which provide borrowers with the rights to resell or repledge the securities.
2. Financial guarantee(1)(March 31, 2021)
Millions of yen

Nomura Europe Finance N.V.
Nomura International Funding Pte. Ltd.
Nomura Global Financial Products Inc.
Nomura International plc
Nomura International plc
Nomura Global Finance Co.,Ltd.
Nomura Bank International plc
Nomura America Finance, LLC
Nomura International plc
Other

Borrowings/Medium term notes/
Repurchase transactions
Borrowings/Medium term notes/
Repurchase transactions
Derivative transactions
Borrowings/Medium term notes/
Repurchase transactions
Derivative transactions
Borrowings/Medium term notes/
Repurchase transactions
Borrowings/Medium term notes/
Repurchase transactions
Borrowings/Medium term notes/
Repurchase transactions
Stock lending transactions

1,547,544(2)1,069,852
474,143(2)320,723
319,226(2)259,409244,223
102,557
79,04561,498(2)(March 31, 2022)
Millions of yen

Nomura Europe Finance N.V.
Nomura International Funding Pte. Ltd.
Nomura Global Finance Co.,Ltd.
Nomura International plc
Nomura Global Financial Products Inc.
Nomura Bank International plc
Nomura International plc
Nomura Securities (Bermuda) Ltd.
Nomura America Finance, LLC
Nomura Singapore Limited
Nomura Corporate Funding Americans, LLC

Borrowings/Medium term notes/
Repurchase transactions
Borrowings/Medium term notes/
Repurchase transactions
Borrowings/Medium term notes/
Repurchase transactions
Borrowings/Medium term notes/
Repurchase transactions
Derivative transactions
Borrowings/Medium term notes/
Repurchase transactions
Derivative transactions
Derivative transactions
Borrowings/Medium term notes/
Repurchase transactions
Derivative transactions
Borrowings/Medium term notes/
Repurchase transactions

Other

(1)
(2)
(3)

1,422,257(2)1,158,363(2)770,523
603,587
380,424(2)272,022
256,325(2)190,123
115,772
94,06092,081
109,258(2)In accordance with Japan Institute of Certified Public Accountants Audit and Assurance Practice Committee Practical Guideline No. 61, items
recognized as effectively bearing the obligation of guarantee of liabilities are included in notes items equivalent to guaranteed obligations.
Includes joint guarantee with Nomura Securities Co., Ltd.
Includes joint guarantee with Nomura International (Hong Kong) Limited.
258

3. Balance with Subsidiaries and Affiliates
Major balances with subsidiaries and affiliates are as follows:
Millions of yen
March 31
2021
2022

Short-term receivables
Short-term payables
Long-term receivables
Long-term payables¥ 4,015,203
2,233,566
926,580
8,868¥ 3,817,281
2,171,156
2,106,239
274,478

4. Commitments
The Company has provided commitments to extend subordinated credits to its subsidiaries.
Millions of yen
March 312021
2022

Total commitment available
Less amount utilized
Balance available¥ 1,020,000
597,930¥ 422,070¥ 1,020,000
734,883¥ 285,117(Statements of Income)1. Transactions with subsidiaries and affiliates
Millions of yen
Year ended March 31
2021
2022

Operating revenue
Operating expenses
Non-operating transactions¥

327,256
91,8501,992¥

354,438
81,826111,606*2. Extraordinary income(Year ended March 31, 2022)
Gain on sales of subsidiaries and affiliates was from the sale of a part of ordinary shares of Nomura Research Institute, Ltd. which is an affiliateof the Company.
*3. Extraordinary loss
(Year ended March 31, 2021)
Loss on devaluation of stocks of subsidiaries and affiliates was mainly from the loss on valuation due to a decrease in the net asset value of
Nomura Holding America Inc., a subsidiary holding company for the Americas.
259

(Securities)
Stocks of subsidiaries and affiliates with market value(March 31, 2021)

Book
Value

Subsidiaries
Affiliates¥

Millions of yen
March 31, 2021
MarketValue
Difference

31 ¥62,745413 ¥
537,139381
474,394

Stocks of subsidiaries and affiliates which are considered extremely difficult to observe market value
Millions of yen
March 31, 2021
Book Value

Subsidiaries
Affiliates
Total¥ 2,359,752
23,877¥ 2,383,628

The above securities have no quoted market value. Accordingly, they are considered extremely difficult to observe market value.
(March 31, 2022)
Millions of yen
March 31, 2022
Book Value

Subsidiaries
Affiliates¥

Market Value

31 ¥60,316

Difference529 ¥500,821498
440,505

Stocks of subsidiaries and affiliates without market value which are not included in above.
Millions of yen
March 31, 2022
Book Value

Subsidiaries
Affiliates
Total¥ 2,453,034
18,201¥ 2,471,235
260

(Tax Effect Accounting)
1. Breakdown of deferred tax assets and liabilities
Millions of yen
March 31
2021
2022

Deferred tax assets
Loss on devaluation of securities
Deferred loss on hedges
Loss carry-forward on local tax
Loss on devaluation of fixed assets
Derivatives
OthersSubtotal of deferred tax assets
Valuation allowance for tax loss carryforwards
Valuation allowance for deferred temporary differences
Valuation allowance
Total of deferred tax assets
Deferred tax liabilities
Net unrealized gain on investments
Deferred gain on hedges
OthersTotal of deferred tax liabilities
Net deferred tax assets¥¥

154,291
8,158
23,944
2,441
595
2,908
192,336(21,995)(113,475)(135,469)
56,867(16,734)(4,315)(765)(21,814)35,053¥¥

157,564
35,08318,050
2,441
5,043
3,569
221,750(15,929)(117,230)(133,159)
88,591(25,446)(4,468)(387)(30,302)58,2892. Major differences between the statutory effective tax rate and the corporate tax rate after tax effect accounting application
Percentage tax rate
March 31
2021
2022

Statutory effective tax rate
Permanent differences excluded from revenues
Permanent differences excluded from expenses
Valuation allowance
Accumulated earning tax of overseas subsidiaries
Income taxes—prior year adjustments
Foreign Tax Credit
Applicable tax rate differences
OthersCorporate tax rate after tax effect accounting

— %
—
—
—
—
—
—
—
—
—

(Note)Tax rates for the year ended March 31, 2021 was not stated due to net loss before taxes.
261

31.0%
(18.6)
4.7
(1.1)
0.9
(0.1)
(0.3)
0.4
(0.7)
16.3

(Significant Subsequent Events)
Grant of Restricted Stock Units
On May 19, 2022, the Company passed a resolution to grant Restricted Stock Units (“RSUs”) to directors, executive officers and/or employees of
the Company and/or its subsidiaries, etc. The number of RSUs is 100,057,000 units (100,057,000 shares equivalent). RSUs are to deliver shares ofcommon stock of the Company to grantees from one year to the maximum of seven years after the RSUs are granted.
Treasury Stock Buyback
On April 26, 2022, the Board of Directors of the Company approved a resolution to set up a share buyback program, pursuant to the company’s
articles of incorporation set out in accordance with Article 459-1 of the Companies Act of Japan.
(1) Reason to buyback treasury stocks
To use the acquired treasury stock to raise capital efficiency and ensure a flexible capital management policy, and to deliver as stock-based
compensation.
(2) Contents of Buyback
1) Type of stock to be purchased
Common Stock2) Total number of stocks to be purchased
Upper limit of 50,000,000 shares (1.5% of outstanding shares)
3) Total amount of stocks
Maximum of 30,000 million yen
4) Term
May 17, 2022 to March 31, 2023
(Excluding the ten business days following the announcement of quarterly operating results)5) Type of stock to be purchased
Purchase on the stock exchange via a trust bank
(The details of the trust agreement including the timing to start the buyback will be decided separately by a Representative Executive Officer or
the CFO.)262

[Translation]
Independent Auditor’s Report
June 25, 2024
The Board of Directors
Nomura Holdings, Inc.
Ernst & Young ShinNihon LLC
Tokyo office, Japan
Hiroki Matsumura
Designated Engagement Partner
Certified Public Accountant
Hisashi Yuhara
Designated Engagement Partner
Certified Public Accountant
Kenjiro Tsumura
Designated Engagement Partner
Certified Public Accountant
Toshiro Kuwata
Designated Engagement Partner
Certified Public Accountant
OpinionPursuant to the audit requirement of the rule specified in the Article 193-2, Section 1 of the Financial Instruments and Exchange Act, we haveaudited the restated consolidated financial statements, which comprise the consolidated balance sheet, the consolidated statements of income,comprehensive income, changes in equity, and cash flows, notes to the consolidated financial statements and the consolidated supplementary schedulesof Nomura Holdings, Inc. (the “Company”) applicable to the fiscal year from April 1, 2021 to March 31, 2022, included in the “Financial Information”
section.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company
and its consolidated subsidiaries (the “Group”) as of March 31, 2022 and the consolidated results of their operations and cash flows for the fiscal year
then ended, in accordance with accounting principles generally accepted in the United States of America pursuant to Article 95 of “Regulations
Concerning the Terminology, Forms and Preparation Methods of Consolidated Financial Statements”.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities under those standards are further
described in the “Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements” section of our report. We are independent of theGroup in accordance with the ethical requirements that are relevant to our audit of the financial statements in Japan, and we have fulfilled our otherethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.
263

Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial
statements of the current period. These matters were addressed in the context of the audit of the consolidated financial statements as a whole, and informing the auditor’s opinion thereon, and we do not provide a separate opinion on these matters.
Fair value of less liquid financial instruments
Description of Key Audit Matters

Auditor’s Response

The Group holds financial instruments for trading, customer facilitationand investment purposes. As disclosed in Note 2 Fair value
measurements to the consolidated financial statements as of March 31,
2022, the Group had ¥ 1,038 billion and ¥ 826 billion of financial
instruments assets and liabilities, respectively, categorized within Level 3of the fair value hierarchy. In determining the fair value of these financial
instruments, the Group used valuation models and unobservable inputs
which reflect its assumptions and specific data. These inputs are
significant to the fair value of the financial instruments and are supported
by little or no market activity as of March 31, 2022. The valuation
techniques applied by management to determine the fair value of such
instruments are described in Note 2 to the consolidated financial
statements.

We obtained an understanding, evaluated the design and tested theoperating effectiveness of controls relating to the valuation models andsignificant unobservable inputs used in fair value measurement. This
included the testing of model validation controls by various
departments within the Group.

Auditing the fair value of the Company’s Level 3 financial instruments
was complex and highly judgmental due to the subjectivity of thejudgments used and estimations made by management in determining thefair value for these financial instruments. In particular, to value certain
financial instruments, management used a variety of valuation techniques
which involved certain underlying valuation assumptions and significant
unobservable inputs, including WACC, growth rates, liquidity discount,
volatilities, correlations, credit spreads, interest rates, recovery rates, loss
severities, prepayment rates, default probabilities, yields and repo rates.
Therefore, we have determined the fair value of less liquid financial
instruments to be a key audit matter.
264

To evaluate the valuation techniques used by the Group, among
others, we performed the following procedures for samples selectedconsidering quantitative materiality, subjectivity, complexity anduncertainty.
We independently developed fair value estimates for which we
involved our valuation specialists to assist with the application ofthese procedures and compared them to the Group’s results.
We agreed significant unobservable inputs and underlying data used in
the Group’s valuation models to information available from third party
sources and market data, where available.
We evaluated subsequent transactions and considered whether they
corroborate or contradict the Group’s year-end valuations.

Contingencies for investigations, lawsuits and other legal proceedings
Description of Key Audit Matter

Auditor’s Response

As disclosed in Note 20 Commitments, contingencies and guarantees tothe consolidated financial statements as of March 31, 2022, the Group is
involved in investigations, lawsuits and other legal proceedings.

We obtained an understanding, evaluated the design and tested theoperating effectiveness of controls relating to management’s
assessment for timely identification of contingencies that may arise outof lawsuits and regulatory investigations including the Group’s
assessment of whether they are probable or reasonably possible and theassociated measurement of the best estimate.

In accordance with the Financial Accounting Standards Board
Accounting Standards Codification 450 Contingencies, the Group
recognizes a liability for those contingencies for which it is probable thata liability had been incurred at the date of the consolidated financial
statements and the amount is reasonably estimable.
If the amount of a reasonably possible loss or range of reasonably
possible loss in excess of amounts recognized as a liability (if any)against each individual matter is reasonably estimable, the Group
discloses an estimate of the reasonably possible maximum loss within thenotes to the consolidated financial statements. If it is reasonably possiblethat a loss may have been incurred and the amount of such loss cannot bereasonably estimated, the Group discloses a statement that such an
estimate cannot be made.
As of March 31, 2022, the Group has recorded litigation provision of¥ 76,866 million in respect of outstanding and unsettled investigations,lawsuits and other legal proceedings. Also, the Group recorded
corresponding legal expenses of ¥63,338 million in the consolidated
statements of income. In addition, the Group discloses that the total
aggregate reasonably possible maximum loss in excess of amounts
recognized as a liability (if any) against these cases is approximately¥ 61 billion.
With respect to accounting and disclosure of contingencies, management
judgment is needed to determine whether a loss is probable or reasonably
possible and whether such loss is reasonably estimable. This includes
management’s assessment of the amounts at which the Group is willingto settle for any loss contingency

In order to test the management’s assessment of the probability of
incurrence of a loss and measurement of the loss contingency and thedisclosure of the reasonably possible maximum loss in excess ofamounts recognized as a liability, we performed, among others, thefollowing procedures.
•

We read the minutes of the meetings of the Board of Directors,
Executive Management Board, and relevant legal correspondence
to assess developments in significant matters.

•

We evaluated management’s assessment of the probability of
incurrence of a loss and estimate of such loss.

•

We evaluated the method of measuring the contingency and tested
the accuracy and completeness of the underlying data. Also, we
inspected evidence of approval of the amount that the Group iswilling to settle.

•

We made inquiries of the Group’s internal and external legal
counsel and obtained their views on the loss contingency. We also
received internal and external legal counsel confirmation letters.

•

We evaluated subsequent events and considered whether they
corroborate or contradict the Group’s year-end assessments.

Auditing management’s determination of whether a loss contingency isprobable and reasonably estimable, reasonably possible or remote, andthe related disclosures, is highly subjective, complex and requires
significant judgment. Therefore, we have determined the contingencies
for investigations, lawsuits and other legal proceedings to be a key audit
matter.
Emphasis of a matter
As mentioned in Note 1 to the consolidated financial statements, the Company has restated its consolidated financial statements. However, thismatter does not affect our audit opinion.
We issued our audit report on the original consolidated financial statements on June 24, 2022. Due to the restatement, we issue this audit report on
the restated consolidated financial statements.
Other Information
The other information included in the amendment to the Annual Securities Report comprises information other than the consolidated financial
statements, the financial statements, and our auditor’s reports thereon. Management is responsible for preparation and disclosure of the otherinformation. The Audit Committee is responsible for overseeing the Group’s reporting process of the other information.
Our opinion on the restated consolidated financial statements does not cover the other information and we do not express any form of assurance
conclusion thereon.
265

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise
appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to reportthat fact.
We have nothing to report in this regard.
Responsibilities of Management and the Audit Committee for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting
principles generally accepted in the United States of America, and for such internal control as management determines is necessary to enable thepreparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern anddisclosing, as required by accounting principles generally accepted in the United States of America, matters related to going concern.
The Audit Committee is responsible for overseeing the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Misstatements can arise from fraud or error andare considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on thebasis of these consolidated financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise professional judgment and maintainprofessional skepticism throughout the audit. We also:•

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design andperform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our
opinion.

•Consider internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances for our risk
assessments, while the purpose of the audit of the consolidated financial statements is not expressing an opinion on the effectiveness of theGroup’s internal control.

•

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made bymanagement.

•

Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained,
whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as agoing concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related
disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group tocease to continue as a going concern.

•

Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the
consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation inaccordance with accounting principles generally accepted in the United States of America.

We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the audit and significant audit
findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the Audit Committee with a statement that we have complied with the ethical requirements regarding independence that are
relevant to our audit of the consolidated financial statements in Japan, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Audit Committee, we determine those matters that were of most significance in the audit of theconsolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unlesslaw or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
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Conflicts of Interest
We have no interest in the Group which should be disclosed in accordance with the Certified Public Accountants Act.
(Note)
This is an English translation of the Japanese language Independent Auditor’s Report issued by Ernst & Young ShinNihon LLC in connection withthe audit of the consolidated financial statements of the Group, prepared in Japanese, for the year ended March 31, 2022. Ernst & Young ShinNihon
LLC have not audited the English language version of the consolidated financial statements for the above-mentioned year, which are included in thisreport of foreign private issuer on Form 6-K/A.
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EXHIBIT 2Management’s Report on Internal Control over Financial Reporting
1 [Framework of Internal Control over Financial Reporting]Kentaro Okuda, Group Chief Executive Officer, and Takumi Kitamura, Chief Financial Officer, are responsible for establishing and maintaining
adequate internal control over financial reporting for the Company.
The establishment and maintenance of an adequate internal control over financial reporting are based on the criteria set forth in Internal Control—
Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the“COSO framework”).
There is a possibility that the internal control over financial reporting may not fully prevent or detect misstatements.
2 [Scope, Reference Date, and Method of Evaluation]
The Company evaluated the effectiveness of its internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the
Securities Exchange Act of 1934) using the criteria set forth in the COSO framework. The reference date of evaluation was as of March 31, 2022.
The Company’s internal control over financial reporting covers the Company and other entities in which it has a controlling financial interest.
3 [Report of Result of Evaluation]
Based on the evaluation, a material weakness was identified which are described below. As a result of the material weakness, management
concluded that our internal control over financial reporting is not effective as of March 31, 2022.
On June 24, 2022, we filed the Original Report. At that time, our management, with the participation of our Group Chief Executive Officer andChief Financial Officer, and the Disclosure Committee, had evaluated the effectiveness of our internal control over financial reporting and concluded
that our internal control over financial reporting was effective as of March 31, 2022. Subsequent to that evaluation, certain classification andpresentation errors were identified within the Company’s consolidated statement of cash flows. The classification errors related to the incorrectclassification of cash flows arising from certain non-trading loans, other financial and non-financial transactions within operating rather than investingor financing activities. The presentation errors related to the presentation of certain cash flows from non-trading debt securities, short-term borrowings
and other financial and non-financial transactions on a net rather than gross basis. As a result, our management concluded that our disclosure controls
and procedures were not effective, that a material weakness existed in our internal control over financial reporting and that our internal control overfinancial reporting was not effective as of March 31, 2022. Specifically, this conclusion was based on the fact that these errors were not detected throughour existing controls and there was a lack of effectively designed controls to evaluate the appropriate classification and presentation of certain cash
flows in accordance with authoritative requirements of Accounting Standards Codification (“ASC”) 230 “Statement of Cash Flows” (“ASC 230”).
The errors described above primarily reflect certain classification and presentation approaches and interpretations which the Company has
concluded were not in accordance with U.S. GAAP and should have been amended. While there was no impact to net revenue, income before taxes, net
income, basic or diluted net income per share or any amounts included in the consolidated balance sheets, the Company has concluded that as a result of
these errors, a material weakness existed in our internal control over financial reporting as of March 31, 2022, as our existing internal controls failed todetect a material misstatement in the consolidated statements of cash flows in such classification and presentation matters.
Remediation plan
The Company is in the process of implementing remediation actions to address this material weakness and specifically to mitigate the risk ofsimilar errors occurring in the future within the consolidated statement of cash flows. In particular:•

The Company has performed a detailed review of the consolidated statements of cash flow in the Original Filing and other Restated
Financial Statements in order to identify other related issues or improvements in both presentation and classification of cash flows matters;•

The Company has released a comprehensive internal policy documentation and has provided training to relevant personnel specificallyfocusing on classification and presentation within the consolidated statement of cash flows; and•The Company is in the process of implementing a new annual control whereby senior finance and accounting policy personnel perform an
in-depth comprehensive review of the consolidated statement of cash flows, including a review of underlying calculations andmethodologies used as the basis of reported amounts, to evaluate compliance with applicable accounting requirements under ASC 230 andother authoritative guidance.

4 [Comments]
The key differences between the standards generally accepted in the United States which the Company adopts for the evaluation of internal control
over financial reporting (“U.S. standards”) and the standards generally accepted in Japan (“Japanese standards”) are as follows:— Under the U.S. standards, the financial reporting which is subject to the internal control requirements only includes the consolidated financial
statements. Under the Japanese standards, the financial reporting which is subject to the internal control requirements includes financial statements,

including consolidated financial statements, and other disclosures that have material effects on the reliability of the financial statements.
— Under the U.S. standards, the scope of internal control over financial reporting includes the parent company and its consolidated entities. Under
the Japanese standards, the scope of internal control over financial reporting includes the parent company, its consolidated entities, and the affiliatedcompanies that are accounted for by using the equity method.
5 [Special Comments]
There is no special comment to be stated.
1Confirmation Letter
1 [Appropriateness of Annual Securities Report]
Kentaro Okuda, Group Chief Executive Officer, and Takumi Kitamura, Chief Financial Officer, have confirmed that Amendment Annual
Securities Report of Nomura Holdings, Inc. for the year ended March 31, 2022 is fairly presented pursuant to the Financial Instruments and ExchangeAct.
2 [Special Comments]
There is no special comment to be stated.
2