SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 20-F‘
È‘‘

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF
1934
OR
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2009
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period fromtoOR
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report
Commission file number: 1-15270

Nomura Horudingusu Kabushiki Kaisha(Exact name of registrant as specified in its charter)

Nomura Holdings, Inc.
(Translation of registrant’s name into English)

9-1, Nihonbashi 1-chome
Chuo-ku, Tokyo 103-8645
Japan

Japan
(Jurisdiction of incorporation or organization)(Address of principal executive offices)

Takumi Kitamura, 81-3-5255-1000, 81-3-3274-4496(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:
Title of Each Class

Name of Each Exchange On Which Registered

Common Stock*

New York Stock Exchange* Not for trading, but only in connection with the registration of the American Depositary Shares, each representing one share of Common
Stock.
Securities registered or to be registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None
(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of theperiod covered by the annual report.
As of March 31, 2009, 2,604,779,843 shares of Common Stock were outstanding, including 42,233,578 shares represented by
42,233,578 American Depositary Shares.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. È Yes ‘ No
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934. ‘ Yes È No
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to filesuch reports), and (2) has been subject to such filing requirements for the past 90 days. Yes È No ‘
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during
the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ‘ No ‘
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See
definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer È
Accelerated filer ‘
Non-accelerated filer ‘
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP È
International Financial Reporting Standards as issued
Other ‘by the International Accounting Standards Board ‘
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item theregistrant has elected to follow. ‘ Item 17 ‘ Item 18
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). ‘ Yes È No

TABLE OF CONTENTS
PagePART I
Item 1.

Identity of Directors, Senior Management and Advisors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2Item 2.

Offer Statistics and Expected Timetable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2Item 3.

Key Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2Item 4.

Information on the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16

Item 4A.

Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27

Item 5.

Operating and Financial Review and Prospects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27

Item 6.

Directors and Senior Management and Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

65

Item 7.

Major Shareholders and Related Party Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

81

Item 8.

Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

82

Item 9.

The Offer and Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

83

Item 10.

Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

84

Item 11.

Quantitative and Qualitative Disclosures about Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . .

100

Item 12.

Description of Securities Other Than Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

107

PART II
Item 13.

Defaults, Dividend Arrearages and Delinquencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

108

Item 14.

Material Modifications to the Rights of Security Holders and Use of Proceeds . . . . . . . . . . . . .

108

Item 15.

Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

108

Item 16A. Audit Committee Financial Expert . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

108

Item 16B.

Code of Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

108

Item 16C.

Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

109

Item 16D. Exemptions from the Listing Standards for Audit Committees . . . . . . . . . . . . . . . . . . . . . . . . . .

110

Item 16E.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers . . . . . . . . . . . . . . . . . . .

110

Item 16F.

Change in Registrant’s Certifying Accountant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

111

Item 16G. Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

111

PART III
Item 17.

Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

113

Item 18.

Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

113

Item 19.

Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

114

Index to the Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-1

1

As used in this annual report, references to “Nomura” are to The Nomura Securities Co., Ltd. when thereferences relate to the period prior to, and including, September 30, 2001 and to Nomura Holdings, Inc. when
the references relate to the period after, and including, October 1, 2001. See “History and Development of theCompany” under Item 4.A of this annual report. Also, as used in this annual report, references to “we”, “our”
and “us” are to Nomura and, except as the context otherwise requires, its subsidiaries.
As used in this annual report, “yen” or “¥“ means the lawful currency of Japan, and “dollar” or “$”means the lawful currency of the United States of America.
As used in this annual report, “ADS” means an American Depositary Share, currently representing one
share of Nomura’s common stock, and “ADR” means an American Depositary Receipt evidencing one or more
ADSs. See “Rights of Holders of ADSs” under Item 10.B of this annual report.
Amounts shown in this annual report have been rounded to the nearest indicated digit unless otherwise
specified. In tables and graphs with rounded figures, sums may not add up due to rounding.

PART I
Item 1. Identity of Directors, Senior Management and Advisors
Not applicable.
Item 2. Offer Statistics and Expected Timetable
Not applicable.
Item 3. Key Information
A. Selected Financial Data.
The following table shows selected financial information as of and for the years ended March 31, 2005,
2006, 2007, 2008 and 2009 and the information is derived from our consolidated financial statements. These
financial statements were prepared in accordance with accounting principles generally accepted in the UnitedStates. Certain reclassifications of previously reported amounts have been made to conform to the current period
presentation.

2

The selected consolidated financial information set forth below should be read in conjunction with Item 5,“Operating and Financial Review and Prospects,” in this annual report and our consolidated financial statements
and notes thereto included in this annual report.
Year Ended March 31
2007
2008
(in millions, except per share data)2009(6)

2005

2006

Income statement data:
Revenue . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . .

¥ 1,126,237
327,047¥ 1,792,840
647,190¥ 2,049,101
958,000¥ 1,593,722
806,465

Net revenue . . . . . . . . . . . . . . . . . . .
Non-interest expenses . . . . . . . . . . .

799,190594,355

1,145,650
700,050

1,091,101
769,343787,257
851,845

312,627
1,091,673

3,153
11,010

Income (loss) from continuing
operations before income taxes . .
Income tax expense . . . . . . . . . . . . .

204,835
110,103445,600
188,972

321,758
145,930(64,588)3,259(779,046)(70,854)(7,857)(714)

94,732

256,628

175,828(67,847)(708,192)(7,143)—47,700————

Income (loss) from continuing
operations . . . . . . . . . . . . . . . . . . .
Gain on discontinued
operations(1) . . . . . . . . . . . . . . . . .
Net income (loss) . . . . . . . . . . . . . . .

¥94,732

Balance sheet data (period end):
Total assets(2) . . . . . . . . . . . . . . . . . .
Shareholders’ equity . . . . . . . . . . . . .
Common stock . . . . . . . . . . . . . . . . .

¥34,488,853
1,868,429
182,800

Per share data:
Income (loss) from continuing
operations—basic . . . . . . . . . . . . . ¥48.80
Net income (loss)—basic . . . . . . . . .
48.80
Income (loss) from continuing
operations—diluted . . . . . . . . . . .
48.77
Net income (loss)—diluted . . . . . . .
48.77
Shareholders’ equity(3) . . . . . . . . . . .
962.48Cash dividends(3) . . . . . . . . . . . . . . .
20.00
Weighted average number of shares
outstanding (in thousands)(4) . . . .
1,941,401
Return on equity(5): . . . . . . . . . . . .

5.2%

¥

304,328¥

175,828¥

35,577,511
2,185,919
182,800¥25,236,054
1,988,124
182,800

¥

¥

¥

92.25
92.25

¥

664,511351,884¥24,837,848
1,539,396
321,765(35.55) ¥(35.55)(3.69)(3.69)
5.96
0.26(35.57)(35.57)
1,042.60
34.00(366.16)(366.16)590.9925.50

1,913,759

1,906,012

1,908,399

1,941,907(3.3)%$250,508
15,5263,245(3.68)(3.68)

92.00
92.00
1,146.23
44.00

8.3%

6,702
3,549

(364.69)(364.69)

133.89158.781,083.19
48.00

15.5%

$

(67,847) ¥ (708,192) $ (7,143)

34,694,679
2,063,327
182,800

134.10159.02

2009(40.2)%

Notes:(1) In accordance with Statement of Financial Accounting Standard No. 144, “Accounting for the Impairment or Disposal ofLong-Lived Assets”, income from discontinued operations is separately reported.
(2) On April 1, 2008, we adopted Financial Accounting Standard Board’s Staff Position No. FIN 39-1, “Amendment of
FASB Interpretation No. 39” (“FSP FIN 39-1”). See Note 1 “Summary of Accounting Policies” in our consolidated
financial statements included in this annual report. FSP FIN 39-1 was retrospectively applied to our consolidated balance
sheet as of March 31, 2008. In the above table, the total assets amounts as of March 31, 2006, 2007 and 2008 reflect such
retrospective application, while the total assets amount as of March 31, 2005 does not reflect such retrospective
application.
(3) Calculated using the number of shares outstanding at year end.
(4) The number shown is used to calculate basic earnings per common share.
(5) Calculated as net income (loss) divided by average Shareholders’ equity.
(6) Calculated using the yen-dollar exchange rate of $1.00 = ¥99.15, the noon buying rate in New York City for cabletransfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York on March 31,
2009.

3

Foreign Exchange
Fluctuations in exchange rates between the Japanese yen and U.S. dollar will affect the U.S. dollar
equivalent of the yen price of our shares and ADSs and the U.S. dollar amounts received on conversion of cash
dividends. We have translated certain Japanese yen amounts presented in this annual report into U.S. dollars
solely for your convenience. The rate we used for the translations was ¥99.15 equal to $1.00, which was the noonbuying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by theFederal Reserve Bank of New York on March 31, 2009. These translations do not imply that the yen amounts
actually represent, or have been or could be converted into, equivalent amounts in U.S. dollars.
Year ended March 31,

High

Low

Average*Year end

2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

114.30120.93121.81124.09110.48102.26104.41110.0796.88
87.80

107.28113.67116.55113.61100.85107.22117.48117.5699.85
99.15

Calendar year 2009

High

Low

January . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
February . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
April . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
May . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
June (through June 26) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

94.20
98.55
99.34
100.71
99.24
98.56

87.80
89.09
93.85
96.49
94.45
95.19

* Average rate represents the average of rates available on the last business day of each month during the period.
The noon buying rate for Japanese yen on June 26, 2009 was $1.00 = ¥95.19
B. Capitalization and Indebtedness.
Not applicable.
C. Reasons for the Offer and Use of Proceeds.
Not applicable.
D. Risk Factors.
Risk Factors
You should carefully consider the risks described below before making an investment decision. If any of therisks described below actually occurs, our business, financial condition, results of operations or cashflow could
be adversely affected. In that event, the trading prices of our shares could decline, and you may lose all or part ofyour 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.
Recent financial and credit crises and recessionary economies around the world have had and may
continue to have adverse effects on our businesses, financial condition and results of operations
During 2008, particularly the second half of the year, and thereafter, the business environment has been
extremely adverse.
Starting in mid-2007 in the United States and Europe, and particularly during the second half of 2008, thefinancial services industry and the securities markets generally were materially and adversely affected by4

significant declines in the values of nearly all asset classes and by a serious lack of liquidity. This was initiallytriggered by declines in the values of subprime mortgages in the U.S. market, but spread to all mortgage and realestate asset classes, to leveraged bank loans and to nearly all asset classes, including equities.
Market conditions have also led to the failure or merger of a number of prominent financial institutions,
including monoline insurers, primarily in the United States. Financial institution failures or problems haveresulted in further losses as a consequence of defaults on securities issued by them and defaults under bilateralderivatives and other contracts entered into with such entities as counterparties. The geographic reach of suchconsequences has extended globally.
In addition, as of March 31, 2009, the United States, large parts of Europe and Japan are all now in arecession in their economies as a whole. Business activity across a wide range of industries and regions is greatly
reduced and many companies are in serious difficulty due to the lack of demand for their products or services
primarily due to significantly reduced consumer spending as well as the lack of liquidity in the credit markets.
Unemployment rates in these jurisdictions have increased significantly.
In response to the current harsh business environment, we are seeking to implement several strategic
initiatives, including expanding customer base, focusing on client-driven flow businesses to expand market share,continuing to review and reduce asset size through selective disposition of assets not suited to our business focus,
and implementing cost reduction through selective downsizing with concentration on core businesses in the
short-term, as well as reengineering of our business processes in the longer-term. As to the latter, we hope to see
our service-related firms in India effectively assist our operations to bring about cost reduction and productivity
increases group-wide. There can be no assurance, however, that we will be able to carry out any of these strategic
initiatives or that, even if they are carried out, they will have the intended effect or will be effective in addressing
the difficulties we have or we may have under the then current business environment.
Overall, during 2008 and thereafter, the business environment has been extremely adverse for many of ourbusinesses, and we expect that these conditions will not improve for some time in the future.
We may have difficulty integrating the recently acquired former Lehman Brothers’ operations into ourbusiness or achieving the synergy effect or other benefits from the integrated businesses, which may have amaterial adverse effect on our business, results of operations and financial condition
In October 2008, we acquired Lehman’s operations by way of transfer of the majority of employments in
the Asia-Pacific region, as well as the majority of employments in its equities and investment banking businesses
in Europe and the Middle East, certain of its fixed income personnel in Europe and its specialized service
companies in India, to expand and enhance our wholesale operations. The transactions did not include any
trading assets or trading liabilities of Lehman.
We believe that the successful integration of these former Lehman operations into our businesses, andaccomplishing the synergy and other benefits from the integrated businesses, will be fundamental to our strategy
and our financial success over the coming years. The integration is a complex, time-consuming and costly
process. Successful integration of the former Lehman operations and achieving the synergy effects and otherbenefits from the integrated businesses in a timely manner will involve a number of challenges, risks anduncertainties, including:•loss of key former Lehman employees, which risk may be heightened after the payment of retention
guarantee bonuses that we have agreed to pay to a number of such employees contingent upon theircontinued services with us for approximately up to eighteen months from the respective dates of
employment;•

failure, delays or other difficulties in integrating the former Lehman employees with our original
employees to form and operate efficiently as a single team, including challenges in reconciling culturaldifferences and attitudes of our respective employees;
5•

temporary or extended disruption of, or deterioration in quality of, our services caused during the
integration process;•failure to implement effectively our operating standards, controls, policies and procedures; and•loss or impairment of relationships with strategic or other business partners.

If we do not successfully integrate the former Lehman operations into our business or achieve the synergy
effects and other benefits from the integrated businesses in a timely manner, and as a result, fail to quickly offset
the temporary high-cost structure after the Lehman acquisition, our business, results of operations and financial
condition may materially suffer.
To the extent that we may be unable to achieve, or experience a delay in achieving, higher earnings to offset
those expenses, our results of operations and financial condition may materially suffer in future periods.
We may have to recognize impairment charges with regard to the amount of goodwill and intangible assets
recorded on our consolidated balance sheets
We have purchased all or a part of the equity interests in, or certain operations from, certain othercompanies in order to pursue our business expansion, and expect to continue to do so when and as we deem
appropriate. We account for each of those and similar purchases and acquisitions in conformity with U.S. GAAP,
as a business combination, and allocate their acquisition costs to the assets acquired and liabilities assumed, andrecord the remaining amount as goodwill.
We may have to record impairment charges with regard to the amount of goodwill and intangible assets.
Any impairment charges for goodwill or intangible assets we recognize, if recorded, may adversely affect our
results of operations and financial condition.
Market fluctuations could harm our businesses
Our businesses are materially affected by conditions in the financial markets and economic conditions inJapan and elsewhere around the world. Market downturns can occur not only as a result of purely economic
factors, but also as a result of war, act of terrorism, natural disasters or other similar events. A sustained market
downturn can adversely affect our business and can result in substantial losses. Even in the absence of a
prolonged market downturn, we may incur substantial losses due to market volatility.
Our brokerage and asset management revenues may decline
A market downturn could result in a decline in the revenues concerning our intermediary business becauseof a decline in the volume and value of securities that we broker for our customers. Also, with regard to our asset
management business, in most cases, we charge fees for managing our clients’ portfolios that are based on thevalue of their portfolios. A market downturn that reduces the value of our clients’ portfolios, increases theamount of withdrawals or reduces the amount of new investments in these portfolios would reduce the revenue
we receive from our asset management businesses.
Our investment banking revenues may decline
Unfavorable financial or economic conditions would likely reduce the number and size of transactions forwhich we provide securities underwriting, financial advisory and other investment banking services. Ourinvestment banking revenues, which include fees from these services, are directly related to the number and sizeof the transactions in which we participate and would therefore decrease if there is a sustained market downturn.
We may incur significant losses from our trading and investment activities
We maintain large trading and investment positions in the fixed income, equity and other markets, both forour own account and for the purpose of facilitating our customers’ trades. Our positions consist of various types
6

of assets, including financial derivatives transactions in interest rate, credit, equity, currency, commodity, realestate and other markets, loans and real estate. Fluctuations in the markets where the foregoing assets are traded
can adversely affect the value of these assets. To the extent that we own assets, or have long positions, a market
downturn could result in losses if the value of these long positions decreases. Furthermore, to the extent that wehave sold assets we do not own, or have short positions, an upturn in the prices of the assets could expose us topotentially unlimited losses. This could result in losses due to the decline in value of the assets we own, although
we have worked to mitigate these position risks with a variety of hedging techniques. We can incur losses if themarkets move in a way we have not anticipated, as a result of specific events such as the Russian economic crisis
in 1998, the terrorist attacks in the U.S. on September 11, 2001, the current global financial and credit crisis
originating from U.S. subprime issues since 2007, and the global financial and credit crisis since 2008. Also, we
may face losses if the level of volatility of the markets where the foregoing assets are traded differs from our
expectation, which may occur particularly in the emerging markets.
Our businesses have been and may continue to be affected by changes in the levels of market volatility.
Certain of our trading businesses depend on market volatility to provide trading and arbitrage opportunities, anddecreases in volatility may reduce these opportunities and adversely affect the results of these businesses. On theother hand, increased volatility, while it can increase trading volumes and spreads, also increases risk asmeasured by value at risk (“VaR”) and may expose us to increased risks in connection with our market-making
and proprietary businesses or cause us to reduce the size of these businesses in order to avoid increasing our
VaR.
Furthermore, we commit capital to take relatively large positions for underwriting or warehousing assets tofacilitate certain capital market transactions. Also, we structure and possess pilot funds for developing financial
investment products and invest seed money to setup and preserve 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 this can increase our costs and reduce our profitability
and if we are the party receiving collateral this can also reduce our profitability by reducing the level of businessdone with our clients and counterparties.
Holding large and concentrated positions of securities and other assets may expose us to large losses
Holding a large amount and concentrating in specific assets can enhance our risks and expose us to large
losses in our businesses such as market-making, block trading, underwriting, asset securitization and acquiring
newly-issued convertible bonds through third-party allotment. We have committed substantial amounts of capitalto these businesses. This often requires us to take large positions in the securities of a particular issuer or issuersin a particular industry, country or region. We may incur substantial losses due to market fluctuations on assetbacked securities such as commercial mortgage-backed securities.
Extended market decline can reduce liquidity and lead to material losses
Extended market decline can reduce the level of market activity and the liquidity of the assets traded in themarket. If we cannot properly close out our associated positions, particularly with respect to over-the-counter
derivatives, we may incur substantial losses due to the difficulty of monitoring prices in a less liquid market.
Our hedging strategies may not prevent losses
We use a variety of instruments and strategies to hedge our exposure to various types of risk. 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 another asset
which has, historically, moved in a direction that would offset a change in value of the former asset. However,historical trading patterns and correlations may not continue, as seen in the case of the global financial and credit
crisis in Autumn of 2008, 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.
7

Our risk management policies and procedures may not be fully effective in managing market risk
Our policies and procedures to identify, monitor and manage risks may not be fully effective. Some of our
methods of managing risk are based upon observed historical market behavior. This historical market behavior
may not continue in future periods. As a result, we may suffer large losses by being unable to predict future risk
exposures that could be significantly greater than the historical measures indicate. Other risk management
methods that we use also rely on our evaluation of 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 orproperly evaluated, in which case 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 the
new market environment. In such event, we may become unable to evaluate or otherwise manage our risks
adequately.
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 associated with new products through financial
engineering/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 the rise of our own credit risk.
Furthermore, if there is a market downturn, our customers and counterparties could incur substantial lossesof their own, thereby weakening their financial condition and, as a result, increasing our credit risk exposure tothem.
Our liquidity risk and credit risk are described below.
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 businesses. In addition to maintaining a readily
available cash position, we seek to enhance our liquidity through repurchase and securities lending transactions,access to long-term debt, issuance of long-term bonds, diversification of our short-term funding sources such ascommercial 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:
We may be unable to access the debt capital markets
We depend on continuous access to the short-term credit markets and the debt capital markets to finance our
day-to-day operations. An inability to raise money in the long-term or short-term debt markets, or to engage inrepurchase agreements and securities lending, 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 theirassessment 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, or•

regulatory authorities take significant action against us.

In addition to the above, our ability to borrow in the debt markets could also be impaired by factors that are
not specific to us, such as increases in banks’ nonperforming loans which reduce their lending capacity, a severe
disruption of the financial and credit markets which, among others, can lead to widening credit spreads andthereby increase our borrowing costs, or negative views about the general prospects for the investment banking,brokerage or financial services industries generally.
8

We may be unable to access the short-term debt markets
We depend primarily on the issuance of commercial paper and short-term bank loans as a principal sourceof unsecured short-term funding of our operations. Our liquidity depends largely on our ability to refinance theseborrowings on a continuous basis. Investors who hold our outstanding commercial paper and other short-term
debt instruments have no obligation to provide refinancing when the outstanding instruments mature. We may beunable to obtain short-term financing from banks to make up any shortfall. For example, the term commercial
paper market in the United States was effectively closed after the failure of Lehman Brothers in September 2008.
In Japan, we also experienced tightening of the commercial paper market toward the year-end of calendar year
2008.
We may be unable to sell assets
If we are unable to borrow in the debt capital markets or if our cash balances decline significantly, we willneed to liquidate our 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 beunable to sell some of our assets, which may adversely affect the liquidity of such assets, or we may have to sell
assets at depressed prices, which could adversely affect our results of operations and financial condition. Ourability to sell our assets may be impaired by other market participants seeking to sell similar assets into themarket at the same time. For example, after the Russian economic crisis in 1998, the liquidity of some of ourassets, including Russian bonds and other assets, such as commercial mortgage-backed securities, wassignificantly reduced by simultaneous attempts by us and other market participants to sell similar assets.
Lowering of our credit ratings could increase our borrowing costs
Our borrowing costs and our access to the debt capital markets depend significantly on our credit ratings.
Rating agencies may reduce or withdraw their ratings or place us on “credit watch” with negative implications.
This could increase our borrowing costs and limit our access to the capital markets. This, in turn, could reduce
our earnings and adversely affect our liquidity.
Event risk may cause losses in our trading and investment assets as well as market and liquidity risk
Event risk refers to potential losses in value we may suffer through unpredictable events that cause large
unexpected market price movements. These include not only the events such as the Russian economic crisis in
1998, the terrorist attacks in the U.S. on September 11, 2001, U.S. subprime issues since 2007, and the global
financial and credit crisis in Autumn of 2008, in each case resulting in losses to our business, but also moregenerally the following types of events that could cause losses on our trading and investment assets:•

sudden and significant changes in credit ratings with regard to our trading and investment assets by
rating agencies that have significant presence and influence on the market,•

sudden changes in trading, tax, accounting, laws and other related rules which may make our trading
strategy obsolete or less competitive, or•the failure of corporate actions, bankruptcy, deliberate acts of fraud, and criminal prosecution withrespect to the issuers of our trading and investment assets.

Losses caused by financial or other problems of third parties may expose us to credit risk
Our counterparties are from time to time indebted to us as a result of transactions or contracts, includingloans, commitments to lend, other contingent liabilities, and derivatives transactions such as swaps and options.
We may incur material losses when our counterparties default on their obligations to us due to bankruptcy,
deterioration in their creditworthiness, lack of liquidity, operational failure, an economic or political event, orother reasons. This risk may arise from:•decline of prices of securities issued by third parties, or9•executing securities, futures, currency or derivative trades that fail to settle at the required time due todefault by the counterparty, such as monoline insurers (financial guarantors) which are counterparties incredit default swap contracts, or systems failure by clearing agents, exchanges, clearing houses or otherfinancial intermediaries.

Problems related to third party credit risk may include the following:
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 credit standing of, or adefault by, one institution could lead to significant liquidity problems or losses in, or defaults by, otherinstitutions. 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 finance operations may be damaged if major financial institutions, Japanese or otherwise,
fail or experience severe liquidity or solvency problems.
There can be no assurance as to the accuracy of the information about, or the sufficiency of the collateral weuse in managing, our credit risk
We regularly review our credit exposure to specific customers or counterparties and to specific countries
and regions that we believe may present credit concerns. Default risk, however, may arise from events orcircumstances that are difficult to detect, such as fraud. We may also fail to receive full information with respect
to the risks of a counterparty. In addition, in cases where we have extended credit against collateral, we may fall
into a deficiency in value in the collateral. For example, if sudden declines in market values reduce the value of
our collateral, we may become undersecured.
Our customers 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 that country or region to obtain
credit or foreign exchange, and therefore to perform their obligations owed to us.
The financial services industry is intensely competitive and rapidly consolidating
Our businesses are intensely competitive, and we expect them to remain so. We compete on the basis of anumber of factors, including transaction execution, our products and services, innovation, reputation and price. In
recent years, we have experienced intense price competition, particularly in brokerage, underwriting and otherbusinesses. There has also been increased competition in terms of delivery of value-added services to customers,such as corporate advisory services.
Competition with commercial banks, commercial bank- owned securities subsidiaries and non-Japanese firms
in the Japanese market is increasing
Since the late 1990s, the financial services sector in Japan has been undergoing deregulation. Banks andother types of financial institutions can compete with us to a greater degree than they could before deregulationin the areas of financing and investment trusts. Among others, securities subsidiaries of commercial banks andnon-Japanese firms have been affecting our market shares in the underwriting business, corporate advisory
services in connection with M&A, and retail business.
10Increased domestic and global consolidation in the financial services industry means increased competition
for usIn recent years, there has been substantial consolidation and convergence among companies in the financial
services industry. In particular, a number of large commercial banks, insurance companies and other broad-based
financial services firms have established or acquired broker-dealers or have merged with other financial
institutions in Japan and overseas. Particularly in Japan, the number of business alliances of securities companies
with commercial banks have been increasing and non-Japanese commercial banks are setting up major securities
subsidiaries by acquiring their company’s stocks. Consolidations of those financial institutions with a view to
becoming a conglomerate are also reported as possible. Through such business alliances and consolidations,these other securities companies and commercial banks have, or would have, the ability to offer a wide range of
products, including loans, deposit-taking, insurance, brokerage, asset management and investment banking
services within their group. This diversity of services offered is enhancing, or would enhance, their competitive
position compared with us. They also have the ability to supplement their investment banking and brokeragebusinesses with commercial banking, insurance and other financial services revenues in an effort to gain market
share. Our policy to remain independent from commercial banks may result in the loss of market share as theselarge, consolidated firms expand their business.
Our ability to expand internationally will depend on our ability to compete successfully with financial
institutions in international markets
We believe that significant opportunities and challenges will arise for us outside of Japan. In order to takeadvantage of these opportunities, we will have to compete successfully with financial institutions based inimportant non-Japanese markets, including the United States, Europe and Asia. Some of these financial
institutions are larger, better capitalized and have a stronger local presence and a longer operating history in thesemarkets. As a means to bolster our international operations, we acquired the Lehman’s operations by way oftransfer of part of employments in Europe and the Middle East and majority of employments in Asia, and byacquisition of specialized service companies in India in 2008. There can be no assurance, however, that we may
successfully integrate the acquired former Lehman operations into our business or achieve the synergy effects orother benefits from the integrated businesses as contemplated.
Operational risk may disrupt our businesses, result in regulatory action against us or limit our growth
We face, for example, the following types of operational risk which could result in financial losses,
disruption in our business, litigation from relevant parties, intervention in our business by the regulatory
authorities, or damage to our reputation:•

Failure to settle securities transactions,•

Failure by officers or employees to perform proper administrative activities prescribed in regularprocedures, such as orders to the securities exchanges,•

Suspension or malfunction of systems, many of which are developed and maintained by our affiliate,
Nomura Research Institute, Ltd.,•The destruction of our facilities or systems due to large-scale disasters or acts of terrorism, which arebeyond anticipation and could not be covered by our contingency plan, or,•

The disruption in part or all of our business due to pandemic diseases or illnesses, such as avian
influenza.

Our business is subject to substantial legal and regulatory risk, to regulatory changes and reputation risk
Substantial legal liability or a significant regulatory action against us could have a material financial effector cause reputation harm to us, which in turn could seriously damage our business prospects. Also, materialchanges in regulations applicable to us or to our market could adversely affect our business.
11

Our exposure to legal liability is significant
We face significant legal risks in our businesses. These risks include liability under securities or other laws,
such as the Financial Instruments and Exchange Act of Japan, for materially false or misleading statements madein connection with securities underwriting and offering transactions, potential liability for advice we provide incorporate transactions, disputes over the terms and conditions of complex trading arrangements or the validity ofcontracts for transactions with us and legal claims concerning our merchant banking business. During a
prolonged market downturn, we would expect claims against us to increase. We may also face significant
litigation. The cost of defending such litigation may be substantial and our involvement in litigation may damage
our reputation. In addition, even legal transactions might be subject to social criticism according to the particulars
or situations of such transactions. These risks may be difficult to assess or quantify and their existence andmagnitude may remain unknown for substantial periods of time.
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 regulation by governmental
and self-regulatory organizations in Japan and in virtually all other jurisdictions in which we operate. These
regulations are designed to ensure the integrity of the financial markets and to protect customers and other third
parties who deal with us. These regulations are not necessarily designed to protect our shareholders and often limit
our activities, through net capital, customer protection and market conduct requirements. We face the risk that
regulatory authorities may intervene in our businesses through extended investigation and surveillance activity,
adoption of costly or restrictive new regulations or judicial or administrative proceedings that may result in
substantial penalties. We could be fined, prohibited from engaging in some of our business activities, ordered to
improve our internal governance procedures, or be subject to the temporary or long-term suspension or revocationof our legal authorization to conduct business. Our reputation could also suffer from the adverse publicity that any
administrative or judicial sanction against us may create. As a result of such sanction, we may lose business
opportunities for a period of time, even after the sanction is lifted, if and to the extent that our customers, especiallypublic institutions, decide not to engage us for their financial transactions.
Material changes in regulations applicable to us or to our market could adversely affect our business
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. For example, in accordance with theamendments to the Securities and Exchange Law of Japan (which has been renamed as the Financial Instruments
and Exchange Act (“FIEA”)), effective from December 1, 2004, banks and certain other financial institutions
became able to act as agents of securities companies in the securities brokerage business. In addition, in
accordance with the recent amendments to the FIEA effective from June 1, 2009, firewalls between commercial
banks and securities were partially deregulated. Therefore, we may face increased competition as our competitors
will be able to cooperate more closely with their affiliated commercial banks.
Misconduct or fraud by an employee, director or officer, or any third party, could occur and our
reputation in the market and our relationships with clients could be harmed
We face the risk that misconduct by an employee, director or officer, or any third party, could occur which
may adversely affect our business. Misconduct by an employee, director or officer can include, for example,
entering into transactions in excess of authorized limits, acceptance of risks that exceed our limits, orconcealment of unauthorized or unsuccessful activities. The misconduct could also involve, for example, theimproper use or disclosure of our or our clients’ confidential information such as insider trading, which could
result in regulatory sanctions, legal liability and serious reputational or financial damage to us. We may notalways be able to detect or deter misconduct by an employee, director or officer and the precautions we take todetect and prevent misconduct may not be effective in all cases. If any administrative or judicial sanction isissued against us as a result of such misconduct, we may lose business opportunities for a period of time, evenafter the sanction is lifted, if and to the extent that our customers, especially public institutions, decide not toengage us for their financial transactions.
12Third parties may also engage in fraudulent activities, including devising a fraudulent scheme by which toinduce our investment, loans, guarantee or any other form of our 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 wedeal in our day-to-day business operation, such fraud or any other misconduct may be difficult to prevent or
detect. Further, we may not be able to recover the financial losses caused by such activities and our reputation
may also be damaged by such activities.
Unauthorized disclosure of personal information held by us may adversely affect our businessWe keep and manage personal information obtained from customers in relation to 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 or disclosed. We may have to provide compensation for economic
loss and emotional distress arising out of a failure to protect such information in accordance with the Act on theProtection of Personal Information and rules, regulations and guidelines relating thereto.
Although we exercise care in protecting the confidentiality of personal information and take steps to ensure
security of such information, if any material unauthorized disclosure of personal information does occur, ourbusiness could be adversely affected in a number of ways. For example, we could be subject to complaints andlawsuits for damages from customers if they are adversely affected as a result of the release of their personal
information. 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, or in connection withpublic relations campaigns designed to prevent or mitigate damage to our corporate or brand image or reputation.
Any tarnishment of our reputation caused by such unauthorized disclosure could lead to a decline in new
customers and/or a loss of existing customers, as well as to increased costs and expenses in dealing with any suchproblems.
We are a holding company and depend on payments from our subsidiaries
We depend on dividends, distributions and other payments from our subsidiaries to fund dividend payments
and to fund all payments on our obligations, including debt obligations. Regulatory and other legal restrictions
may limit our ability to transfer funds freely, either to or from our subsidiaries. In particular, many of our
subsidiaries, including our broker-dealer subsidiaries, are subject to laws and regulations that authorize
regulatory bodies to block or reduce the flow of funds to the parent holding company, or that prohibit suchtransfers altogether in certain circumstances. These laws and regulations may hinder our ability to access funds
that we may need to make payments on our obligations.
We may not be able to realize gains we expect, and may even suffer losses, on our private equity investments
We run our private equity business in Japan and outside of Japan. In Japan, fully owned subsidiaries,
Nomura Principal Finance Co., Ltd. and Nomura Financial Partners Co., Ltd. make investments mainly in the
manufacturing, restaurant industry, tourism industry and financial service sectors. In Europe and Asia, we makeprivate equity investments through fully owned subsidiaries and other consolidated entities which have third
party pooling of funds. Due to the deteriorating business performance of these investments and any deteriorationin the market conditions of these sectors, our inability to dispose of our private equity investments at a level, at
the time or in a way we may wish, could have a material impact on our future financial statements.
Also, we restructured our European private equity business in 2002. Following the restructuring, theinvestments that were formerly possessed by the “old” Principal Finance Group (PFG) are now managed by
Terra Firma Capital Partners Ltd. (TFCPL), an independent private equity firm, which was founded by a numberof ex-Nomura employees (collectively referred to as the “Terra Firma Investments”). Nomura is a passive
investor in respect of the Terra Firma investments. The performance of the Terra Firma Investments could have amaterial impact on our future financial statements.
13

We may not be able to dispose of our operating investments at the time or with the speed we would like
We hold substantial operating investments, which refer to investments in equity securities of companies notaffiliated with us which we hold on a long-term basis in order to promote existing and potential business
relationships. A substantial portion of these investments consists of equity securities of public companies inJapan. Under U.S. GAAP, depending on market conditions, we may record significant unrealized gains or losses
on our operating investments, which would have a substantial impact on our consolidated statements ofoperations. Depending on the conditions of the Japanese equity markets, we may not be able to dispose of theseequity securities when we would like to do so or as quickly as we may wish.
Equity investments in affiliates and other investees accounted for under the equity method in ourconsolidated financial statements may decline significantly over a period of time and result in us incurring
an impairment loss
We have affiliates and investees, accounted for under the equity method in our consolidated financial
statements, whose shares are publicly traded. Under U.S. GAAP, if there is a decline in the fair value, i.e., themarket price, of the shares we hold in such affiliates over a period of time, and we determine, based on the guidanceof Accounting Principles Board Opinion No. 18, “The Equity Method of Accounting for Investments in Common
Stock”, that the decline is other-than-temporary, then we record an impairment loss for the applicable fiscal period.
We may face an outflow of customers’ assets due to losses of cash reserve funds or bonds we offered
We offer many types of products to meet various needs of our customers with different risk profiles. Cashreserve funds, such as money management funds and money reserve funds, and Long-term Bond Investment
Trusts (“Nomura Bond Fund”) are categorized as low-risk products. Such cash reserve funds may fall below parvalue as a result of losses caused by the rise of interest rates or the withdrawals or defaults on bonds contained in
the portfolio. In addition, bonds that we offer may default or experience delays in their obligation to pay interest
and/or principal. Such losses in the products we offer may result in the loss of customer confidence and lead toan outflow of customer assets from our custody.
Because of daily price range limitations under Japanese stock exchange rules, you may not be able to sell
your shares of Nomura’s common stock at a particular price on any particular trading day, or not at all
Stock prices on Japanese stock exchanges are determined on a real-time basis by the equilibrium between
bids and offers. These exchanges are order-driven markets without specialists or market makers to guide priceformation. For the purpose of protecting investors from excessive volatility, these exchanges set daily upwardand downward price fluctuation limits for each stock, based on the previous day’s closing price. Althoughtransactions may continue at the upward or downward limit price if the limit price is reached on a particular
trading day, no transactions may take place outside these limits. Consequently, an investor wishing to sell at a
price above or below the relevant daily limit may not be able to sell his or her shares at such price on a particular
trading day, or not at all.
Under Japan’s unit share system, holders of our shares constituting less than one unit are subject totransfer, voting and other restrictions
Pursuant to the Companies Act of Japan (the “Companies Act”) relating to joint stock corporations andcertain related legislation, our Articles of Incorporation provide that 100 shares of our stock constitute one “unit.”
The Companies Act imposes significant restrictions and limitations on holdings of shares that constitute less thana whole unit. Holders of shares constituting less than one unit do not have the right to vote or any other right
relating to voting. Under the unit share system, any holders of shares constituting less than a unit has the right torequire us to purchase their shares. Also, any holders of shares constituting less than a unit may require us to sellthem such number of shares as may be necessary to raise such holder’s share ownership to a whole unit.
14

As a holder of ADSs, you will have fewer rights than a shareholder has and you will have to act throughthe depositary to exercise these rights
The rights of the shareholders under Japanese law to take actions including voting their shares, receiving
dividends and distributions, bringing derivative actions, examining the company’s accounting books and records
and exercising appraisal rights are available only to holders of record. Because the depositary, through its
custodian agent, is the record holder of the shares underlying the ADSs, only the depositary can exercise thoserights in connection with the deposited shares. The depositary will make efforts to vote the shares underlying
your ADSs as instructed by you and will pay you the dividends and distributions collected from us. However, inyour capacity as an ADS holder, you will not be able to bring a derivative action, examine our accounting books
and records or exercise appraisal rights except through the depositary.
Rights of shareholders under Japanese law may be more limited than under the laws of jurisdictions
within the United States
Our Articles of Incorporation, our Regulations of the Board of Directors and the Companies Act govern our
corporate affairs. Legal principles relating to such matters as the validity of corporate procedures, Directors’ andExecutive Officers’ fiduciary duties and shareholders’ rights may be different from those that would apply if wewere a non-Japanese company. Shareholders’ rights under Japanese law may not be as extensive as shareholders’rights under the laws of jurisdictions within the United States. You may have more difficulty in asserting yourrights as a shareholder than you would as a shareholder of a corporation organized in a jurisdiction within the
United States.
Our shareholders of record on a record date may not receive the dividend they anticipate
The customary dividend payout practice of publicly listed companies in Japan may significantly differ fromthat widely followed or otherwise deemed necessary or fair in foreign markets. Our dividend payout practice isno exception. We do not make any dividend forecast, and we ultimately determine the actual dividend payment
amount to our shareholders of record on a record date, including whether we will make any dividend payment tosuch shareholders at all, after the expiry of such record date. For the foregoing reasons, our shareholders ofrecord on a record date may not receive the dividend they anticipate.
It may not be possible for investors to effect service of process within the United States upon us or our
Directors or Executive Officers, or to enforce against us or those persons judgments obtained in UnitedStates courts predicated upon the civil liability provisions of the federal securities laws of the United States
We are a limited liability, joint-stock corporation incorporated under the laws of Japan. Most of our
Directors and Executive Officers reside in Japan. Many of our assets and the assets of these persons are locatedin Japan and elsewhere outside the United States. It may not be possible, therefore, for U.S. investors to effectservice of process within the United States upon us or these persons or to enforce against us or these persons
judgments obtained in the United States courts predicated upon the civil liability provisions of the federal
securities laws of the United States. We believe that there is doubt as to the enforceability in Japan, in originalactions or inactions for enforcement of judgment of U.S. courts, of liabilities predicated solely upon the federal
securities laws of the United States.
Special Note Regarding Forward-looking Statements
This annual report contains forward-looking statements that are based on our current expectations,assumptions, estimates and projections about our business, our industry and capital markets around the world. These
forward-looking statements are subject to various risks and uncertainties. Generally, these forward-looking
statements can be identified by the use of forward-looking terminology such as “may”, “will”, “expect”,“anticipate”, “estimate”, “plan” or similar words. These statements discuss future expectations, identify strategies,
contain projections of our results of operations or financial condition, or state other forward-looking information.
15

Known and unknown risks, uncertainties and other factors may cause our actual results, performance,
achievements or financial position to differ materially from any future results, performance, achievements orfinancial position expressed or implied by any forward-looking statement contained in this annual report. Suchrisks, uncertainties and other factors are set forth in this Item 3.D and elsewhere in this annual report.
Item 4. Information on the Company
A. History and Development of the Company.
Nomura was incorporated in Japan on December 25, 1925 under the Commercial Code of Japan when the
securities division of The Osaka Nomura Bank, Ltd. became a separate entity specializing in the trading anddistribution of debt securities in Japan. Nomura was the first Japanese securities company to develop its businessinternationally with the opening in 1927 of a representative office in New York, which actively tradednon-yen-denominated debt securities. In Japan, we broadened the scope of our business when we began tradingin equity securities in 1938 and when we structured the first investment trust in Japan in 1941.
Since the end of World War II, we have played a leading role in most major developments in the Japanese
securities market. These developments include the resumption of the investment trust business in the 1950s, theintroduction of public stock offerings by Japanese companies in the 1960s, the development of theover-the-counter bond market in the 1970s, the introduction of new types of investment trusts such as themedium-term Japanese government bond investment trust in the 1980s, and the growth of the corporate bond andinitial public offering markets in the 1990s.
Our expansion overseas accelerated in 1967, when Nomura acquired a controlling interest in Nomura
International (Hong Kong) Limited for the purpose of conducting broker-dealer activities in the Hong Kong
capital markets. Subsequently, we established a number of other overseas subsidiaries, including Nomura
Securities International, Inc. in the United States in 1969 as a broker dealer and Nomura International Limited,
now Nomura International plc, in the United Kingdom in 1981, which acts as an underwriter and a broker. We
also established various other overseas affiliates, branches and representative offices.
In recent years, we have sought to take advantage of new opportunities presented by the deregulation of theJapanese financial market and by the expansion of our investor base. To make the most of new opportunities, we
aim to provide high value-added products and services that meet our customers’ needs.
On October 1, 2001, we adopted a holding company structure. In connection with this reorganization,
Nomura changed its name from “The Nomura Securities Co., Ltd.” to “Nomura Holdings, Inc.” Nomura
continues to be listed on the Tokyo Stock Exchange and other stock exchanges on which it was previously listed.
A wholly-owned subsidiary of Nomura assumed Nomura’s securities businesses and was named “Nomura
Securities Co., Ltd.”In December 2001, we were listed on the New York Stock Exchange.
We also strengthened our mergers and acquisitions and other financial advisory businesses by acquiring amajority interest in Nomura Corporate Advisors Co., Ltd., formerly Nomura Wasserstein Perrella Co., Ltd., in
November 1999. Nomura Corporate Advisors became a wholly-owned subsidiary of Nomura in September 2000
and merged with Nomura Securities in April 2002.
In addition, we also enhanced our asset management business through the acquisition of a majority interestin Nomura Asset Management Co., Ltd. in March 2000. Nomura Asset Management became a wholly-owned
subsidiary of Nomura in December 2001.
On June 26, 2003, we adopted a committee-based corporate governance system under which we establisheda Nomination Committee, an Audit Committee and a Compensation Committee. See Item 6.C of this annual
report.
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In February 2007, we acquired Instinet Incorporated, a global agency broker and major provider ofelectronic trading services for institutional investors, to develop an electronic platform in global equities.
In a series of steps beginning in September 2008, we acquired certain operations, including personnel, of
former Lehman Brothers in Asia-Pacific and in Europe and the Middle East.
The address of Nomura’s registered office is 9-1, Nihonbashi 1-chome, Chuo-ku, Tokyo 103-8645, Japan,
telephone number: 81-3-5255-1000.
B. Business Overview.
Overview
We are one of the leading financial services groups in Japan and have worldwide operations. As of
March 31, 2009, we operated offices in over 30 countries and regions including Japan, the United States, theUnited Kingdom, Singapore and Hong Kong through our subsidiaries.
Our customers include individuals, corporations, financial institutions, governments and governmental
agencies.
Our business consists of the following five business segments:•

Retail—principally investment consultation services to retail customers;•

Global Markets—principally fixed income and equity trading and asset finance businesses;•

Investment Banking—principally M&A advisory and corporate financing businesses;•

Merchant Banking—principally private equity investments; and•Asset Management—principally development and management of investment trusts, and investment
advisory services.

For a discussion on revenues by category of activity and geographic market, see “Operating Results” under
Item 5.A of this annual report.
Our Business Strategy
Our Corporate Goals and Principles
We are committed to a management vision of firmly establishing ourselves as a globally competitive
financial services group. We have also set a management target of maintaining an average consolidated return on
equity (ROE) of 10-15% over the medium to long-term.
In pursuing this vision, we put our clients first and contribute to the creation of an affluent society based oninvestment by listening closely to the needs of our clients and delivering world class products and services andhigh value-added solutions via the financial and capital markets. We aim to go beyond the boundaries of the
traditional securities business to take the lead in expanding into new business areas, and thereby construct new
growth models, diversify our sources of earnings, and achieve a profit structure resilient to changes in the market
environment. In addition, we will promote compliance with applicable laws and regulations as well as ensure
proper corporate behavior.
Management Challenges and Strategies
The deterioration of economic conditions due to the turbulence in the U.S. and European financial markets
has increased the severity of the downturn since the third quarter of the fiscal year ended March 31, 2009,
significantly affecting the economies of both developed and emerging countries. The economic environment in
17

Japan continues to be extremely severe. The combination of the appreciating yen and decreased foreign demandhas forced Japanese companies (especially export-driven firms) to significantly adjust production, while direemployment conditions have slowed domestic demand rapidly. We expect the business environment willcontinue to be challenging in the mid-term.
In this environment, we plan to strategically allocate management resources to grow our client base,improve our market share, and increase profits. In addition, we will proceed with our plans to reduce costs by
reengineering our business and increasing operational efficiency. In this regard, we expect our service-related
firms in India to effectively contribute to cost reduction and improvement of productivity on a group-wide basis.
To achieve our strategic goals, we will implement the following segment-specific measures:•

In Retail, we will continue to enhance our product and service offerings, which are provided throughdirect contact, online or via call centers to accommodate customer needs that have become increasingly
sophisticated and diverse. Other measures include development of new revenue streams throughenhanced online businesses, continuous investment in our brand recognition designed to further ourmarket penetration, and creation of new markets via new customer segments. Through these efforts, we
aim to continue being a trusted partner to our clients by providing world-class quality products andservices that meet their individual needs.

•

Global Markets will continue to be the product supply hub for the Nomura group. In light of thechanging environment in the financial markets, we will focus on delivering high value-added products
and solutions to our clients by enhancing our product development expertise in key areas such asderivatives, making full use of Instinet’s global trading infrastructure, and retaining and leveraging thehuman capital and infrastructure acquired from the former Lehman Brothers. In Global Fixed Income,we will strengthen our global marketing structure and cater to increasing client needs by focusing on
flow business in foreign exchange rates, credit and commodities as a core, and structured business to
attract solution-oriented clients. We will continue to leverage our increased human capital pool in Asia
and Europe. In Global Equities, our goal is to become the top provider of liquidity in markets around theworld, by combining our distinct trading facilities: Nomura, Instinet and Chi-X (Chi-X’s global
operations are owned by Instinet). With our enhanced execution tools and research coverage, we aim tobecome a world-class provider of equity products.

•

In Investment Banking, we are expanding our M&A advisory and corporate financing advisorybusinesses by way of providing high value-added, bespoke solutions, such as financing and provision ofcurrency and derivative hedging instruments to address the individual needs of each client in eachgeographic region capitalizing on our execution and industry expertise. Through the integration offormer Lehman operations in Asia and Europe, we aim to enhance our presence as a global investmentbank centered through synchronizing our established Japanese client base with the global network thatprovides world-class services, while continuing to build our businesses in Japan. We are already seeingsome tangible positive effects of our acquisition of former Lehman operations in this regard, in terms of
new mandates from former Lehman’s customers.

•

In Merchant Banking, we remain focused on increasing the enterprise value of the companies in which weinvest, and achieving optimal or immediate returns on investments by continually weighing exit strategy
options. With the continued instability in the global investment environment, we are taking a morecautious approach in new investments and continually reevaluating our investment and exit strategies.

•

In Asset Management, we aim to further increase our competitive advantage in Japan and the rest of
Asia, aggressively expanding our investment management capabilities globally. In Japan, we intend toenhance our brand value by providing a diverse range of investment opportunities through various sales
channels and by providing comprehensive investment services to existing and new individual andinstitutional investors. Outside Japan, we aim to expand our client base and increase assets undermanagement by meeting demands of international investors who are looking for investment
opportunities in Japan and Asia.
18

In implementing the initiatives outlined above, we will enhance collaboration between business divisions
and bring together the collective strengths of our domestic and international operations to expand and strengthen
the financial and capital markets, while also increasing profitability across our group to realize our management
objectives and maximize shareholder value.
In addition, we are working to further enhance our management system which supports continued growth.
We pursue a capital policy best fit for medium to long-term growth of the Nomura group. Accordingly, we
will keep options for raising capital and funds necessary for our operations as wide as possible.
At the same time, we understand that it is necessary to further strengthen our global risk management
system. By adopting a proactive, rather than a reactive, risk management approach, top management has been
directly engaged in risk management related decision-making. We will continue to strengthen this type ofsystem.
As our business operations become increasingly diverse, and as our operations and personnel become
increasingly international, we recognize the growing importance of compliance. In addition to complying withlaws and regulations, we view compliance in a wider context, and will further enhance Nomura group’s overall
compliance system.
RetailIn Retail, we conduct business activities mainly for individuals and corporations in Japan through a networkof nationwide branches. The number of branches increased to 171 as of the end of March 2009 from 164 a year
ago. We offer investment consultation services and maintenance services to meet the medium to long-term needsof our customers. The aggregate market value of our retail client assets was ¥59.3 trillion as of the end of March
2009. We discuss retail client assets in “Operating Results” under Item 5.A of this annual report.
In order to execute our business strategy described above in “Our Business Strategy”, we employ various
methods to deliver our services to our clients. These include face-to-face meetings with our staff, either in ourbranch offices or by visiting our customers, and communications through Nomura Home Trade, an internet-based
trading service, or our call center.
We capitalize on the linkages among Retail, Global Markets, Investment Banking, Merchant Banking andAsset Management to offer to our customers various financial instruments such as stocks, bonds, investment
trusts and variable annuity insurance products, for the short, medium, and long term, with different risk levels.
We seek to provide information “that can only come from Nomura” to customers through various media such as
our investor reports and Nomura Home Trade.
Global Markets
Global Markets consists of three businesses: Global Fixed Income, Global Equities and Asset Finance.
•

Global Fixed Income handles mainly bonds, foreign currencies and commodities as well as related
derivatives.

•

Global Equities focuses on equities and equity-linked derivatives.

•

Asset Finance helps clients raise capital through real estate and asset securitization, financing and otherschemes.

We have full-service offerings in Global Fixed Income and Global Equities, with a proven track record of
selling and trading bonds, stocks, and foreign exchange, as well as derivatives based on these financial
instruments, mainly to institutional investors. In response to the increasingly diverse and complex needs of ourcustomers, Global Markets is enhancing its trading and product origination capabilities to be the product supply
hub for Nomura group, offering superior products not only to institutional investors but also to Retail and Asset
19

Management clients. In addition, we offer execution services based on cutting-edge technologies such asalgorithmic trading and transaction cost analysis (TCA), making full use of Instinet’s global trading
infrastructure. Our cross-divisional approach also extends to Investment Banking, where close collaboration
leads to high value-added solutions for our clients. We seek to maximize the synergies and cross-selling
opportunities across our recently expanded global operations.
In Asset Finance, we leverage our broad customer base to maximum advantage and offer high value-added
services including financial advisory, the structuring of privately placed funds and CMBS, equity and mezzanine
financing and other services through a one-stop approach. We are also branching out into real estate management
operations, as well as enhancing our expertise to supply financial products that meet investors’ real estate-related
needs.
We have forged extensive ties with institutional investors in Japan and international markets; wealthy andaffluent investors, public-sector agencies, and regional financial institutions in Japan; and government agencies,
financial institutions, and corporations around the world. These strong relationships enable us to understand specificclient requirements and then develop and deliver solutions that meet those needs across a broad product lineup.
Investment Banking
We offer a broad range of investment banking services to a diverse range of corporations, financial
institutions, sovereigns, investment funds and others. We aim to develop and fortify solid relationships with theseclients on a long term basis by providing them with our extensive resources for each bespoke solution. Ourinvestment banking segment has two components: Underwriting and Financial Advisory Services.
Underwriting. We underwrite offerings of a wide range of securities and other financial instruments, which
include various types of stocks, convertible and exchangeable securities, investment grade debt, sovereign andemerging market debt, high yield debt, structured securities and other securities in Asia, Europe and other major
financial markets. We also arrange private placements and engage in other capital raising activities. We are oneof the leading equity and fixed income securities underwriters in Japan.
Financial Advisory Services. We provide financial advisory services on business transactions including
mergers and acquisitions, divestitures, spin-offs, capital structuring, corporate defense activities and leveraged
buyouts. Our involvement in initial public offerings (“IPOs”), reorganizations and other corporate restructurings
related to industry consolidation enhance our opportunities to offer customers other advisory and investmentbanking services. We are one of the leading financial advisors in Asia.
Merchant Banking
We have an established private equity business in Japan, which we operate through wholly owned
subsidiaries, including Nomura Principal Finance Co., Ltd. (“NPF”) and Nomura Financial Partners Co., Ltd.
Our main focus has been targeting investment opportunities for capital appreciation that will offer attractive
returns to us and which will also help contribute to the structural reform of the Japanese economy.
In Europe, our private equity investments are mainly managed by Terra Firma, an independent asset
management group. Terra Firma was established following the reorganization in March 2002 of our United
Kingdom principal finance business, and is operated by former Nomura employees. We have also established andmade alternative investments in Europe through wholly owned subsidiaries and other consolidated entities someof which have third party pooling of funds. For a further description of our private equity business. See“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Private Equity
Business.”
We also invest in venture companies in Japan, Europe and the United States focusing mainly on
biotechnology, IT technology, health care, new energy and clean technology, some of which have been alreadytaken public through IPOs. In Asia, we set up Asia Merchant Banking in 2007 to seek investment opportunities
brought about by the expansion of the regional economy.
20

Asset Management
We conduct our asset management business, which consists of development and management of investment
trusts and investment advisory services, primarily through Nomura Asset Management Co., Ltd. (NAMCO).
NAMCO is the largest asset management company in Japan, in terms of assets under management in investment
trusts as of March 31, 2009. In Japan, our challenge is to shift individual financial assets from saving products
into investment products to create many business opportunities. In order to make these opportunities available,
NAMCO manages various investment trusts, ranging from low risk/low return products to high risk/high return
products, and develops new products to respond to various investor needs. Investment trusts are distributed toinvestors through Nomura Securities Co., Ltd. as well as through financial institutions such as securities
companies (including those outside our group), banks and Japan Post Bank. Investment trusts are also offered as
instruments in defined contribution pension plans. We also provide investment advisory services to public
pensions, private pensions, governments and their agencies, central banks and institutional investors.
Our Research Activities
In our Japan research, we continue to have a highly qualified team of equities and fixed income analysts,
and we maintain our high profile within the industry. Our research on Asia Pacific (excluding Japan) and Europe
was strengthened considerably by the addition of former Lehman Brothers professionals in the autumn of 2008,
thus creating a global research platform. Research on the Americas is carried out by our quantitative researchanalysts, in addition to which our new global chief economist heads up a global economy research team. At thestart of 2009, we initiated an array of weekly top-down global flagship reports by our global economy, strategy
and foreign exchange research teams.
Our Information Technology
We believe that information technology is one of the key success factors for our overall business and intend
to develop and maintain a solid technology platform to ensure that the firm is able to fulfill the various needs ofour clients.
Accordingly, we will continue to build a technology platform suitable for each business segment andprovide our customers with electronic access to our products and services through the platform. For example, for
our retail customers, we have introduced Nomura Home Trade, at www.nomura.co.jp/hometrade, which provides
on-line trading capabilities and current status reports on asset portfolios, investments and transactions andinvestment information, including our research reports through the internet or mobile phones.
On the wholesale side, we have taken on developers and engineers at our service entities in India, who offer
their technical expertise to support our global wholesale operations. We are further developing our technology
platform in India to facilitate operations to the wholesale business, which includes investment research, global
markets, corporate treasury, investment banking and others.
Competition
As a leading financial services industry player, we are active in a set of intensely competitive markets, andwe expect them to remain so. We compete globally with other securities firms, banks and integrated financial
institutions. We also face competition on regional, product and niche bases from local and specialist firms. A
number of factors determine our competitive position against other firms, including:•the quality, range and prices of our products and services,•

our ability to originate and develop innovative client solutions,•

our ability to maintain and develop client relationships,•

our ability to access and commit capital resources,•

our ability to retain and attract qualified employees, and•our general reputation.
21

Our competitive position is also affected by the overall condition of the global financial markets, which are
influenced by factors such as:•

monetary and fiscal policies of national governments and international economic organizations, and•economic developments both within and between Japan, the United States, Europe and other majorindustrialized and developing countries and regions.

In Japan, we compete with other Japanese and non-Japanese securities companies and other financial
institutions. Competition has become more intense due to deregulation in the Japanese financial industry since
the late 1990s and increased presence of global securities companies and other financial institutions. In
particular, major global firms have increased their presence in securities underwriting, corporate advisory
services (particularly M&A advisory) and secondary securities sales and trading.
There has also been substantial consolidation and convergence among financial institutions in recent years,
both within Japan and globally. This trend accelerated further over the course of the past year as several leading
market players consolidated, were found to merge, received governmental assistance, or received regulatory
approval to transition to bank holding companies in the credit crisis. The growing presence and scale of financialgroups which encompass commercial banking, securities brokerage, investment banking and other financial
services has led to increased competition. Through their broadened offerings, these firms are able to create goodclient relationships and leverage their existing client base in brokerage and investment banking business as well.
In addition to the breadth of their products and services, these firms have the ability to pursue greater market
shares in investment banking and securities products by reducing margins and relying on their commercial
banking, asset management, insurance and other financial services activities. This has resulted in pricing pressurein our investment banking and trading businesses and could result in pricing pressure in other areas of ourbusinesses. Moreover, the trend toward consolidation and convergence has significantly increased the capitalbase and geographic reach of some of our competitors, hastening the globalization of the securities and financial
services markets. To accommodate this trend, we will have to compete successfully with financial institutions
that are large and well-capitalized, and that may have a stronger local presence and longer operating history
outside Japan.
We have also competed, and expect to compete, with other financial institutions which commit capital tobusinesses or transactions for market share in investment banking activities. In particular, corporate clients may
seek such commitments (such as agreements to participate in their commercial paper backstop or other loan
facilities) in connection with investment banking mandates and other assignments.
RegulationJapan
The Financial Instruments and Exchange Act (the “FIEA”), which came into effect on September 30, 2007
to amend and replace the former Securities and Exchange Law, widely regulates financial products and services
in Japan under the defined terms “financial instruments” and “financial instruments trading business”. The FIEA
combines previously existing financial and securities related laws to comprehensively regulate financial
products. It expands the scope of securities subject to regulation, extending, among others, to a previously
unregulated category of products identified under the defined term “collective investment schemes”. The FIEA
also widely regulates “financial instruments trading business”, which includes not only the securities business but
also the investment advisory business, the investment trust management business and the financial futures tradingbusiness.
In addition, to enhance fairness and transparency in the financial markets and to protect investors, the FIEA
provides for, among other things, stiffer penalties for misrepresentations in disclosure documents and unfair
trading, stricter regulation of tender offer bids, stricter reporting obligations for large shareholders and improved
corporate information disclosure systems, including quarterly report systems, submission of confirmation
certificates concerning the descriptions in securities reports and internal controls over financial reporting.
22Regulation of the Securities Industry. The FIEA regulates most aspects of securities transactions and the
securities industry in Japan, including public offerings, private placements and secondary trading of securities,
on-going disclosure by securities issuers, tender offers for securities, organization and operation of securities
exchanges and self-regulatory associations, and registration of securities companies. The Prime Minister has theauthority to regulate the securities industry and securities companies, which authority is delegated to theCommissioner of the Financial Services Agency under the FIEA. The Securities and Exchange SurveillanceCommission, an external agency of the Financial Services Agency which is independent from the Agency’s otherbureaus, is vested with authority to conduct day-to-day monitoring of the securities markets and to investigate
irregular activities that hinder fair trading of securities, including inspection of securities companies.
Furthermore, the Commissioner of the Financial Services Agency delegates certain authority to the Director
General of Local Finance Bureau to inspect local securities companies and branches. A violation of applicablelaws and regulations may result in various administrative sanctions, including revocation of registration or
authorization, suspension of business or an order to discharge any director or executive officer who has failed tocomply with applicable laws and regulations. Securities companies are also subject to the rules and regulations of
the Japanese stock exchanges and the Japan Securities Dealers Association, a self-regulatory association of
securities companies.
To enhance investor protection, each Japanese securities company is required to segregate customer assets
and to hold membership in an Investor Protection Fund approved by the government under the FIEA. The
Investor Protection Fund is funded through assessments on its securities company members. In the event of
failure of a securities company that is a member of the fund, the Investor Protection Fund provides protection of
up to ¥10 million per customer. The Investor Protection Fund covers claims related to securities deposited bycustomers with the failed securities company and certain other customer claims.
Regulation of Other Financial Services. Securities companies are not permitted to conduct banking or otherfinancial services directly, except for those which are registered as money lenders and engaged in money lending
business under the Money Lending Business Act or which hold permission to act as bank agents and conduct
banking agency activities under the Banking Law. Securities companies are allowed, however, to hold majority
ownership in banks and other financial services institutions. Securities company subsidiaries conducting banking
and financial services are also regulated by relevant laws and regulations. The Nomura Trust & Banking Co.,
Ltd. is such a subsidiary and engages in banking and certain financial services.
Regulatory Amendments. A bill to amend the FIEA was passed by the Diet on June 6, 2008 to strengthen thecompetitiveness of Japan’s financial and capital markets.
A part of such amendment, which became effective on December 12, 2008, the system of administrative
monetary penalties was amended in order to create fair, transparent and reliable markets. Such amendment has
increased the administrative monetary penalties that may be imposed in the event of certain types of misconduct,such as insider trading, market manipulation and filing of false disclosure documents, and has expanded thescope of misconduct to which administrative monetary penalties may apply to include additional items, such as
illegal market stabilization and failure to file disclosure documents.
Another part of such amendment, which became effective on June 1, 2009, revamped the firewall
regulations among securities companies, banks and insurance companies and abolished the ban on concurrent
holding by certain employees, including executives, of posts in such companies. To manage conflicts of interest
between or among securities companies, banks and insurance companies, these financial institutions are required
to implement proper information management and to develop appropriate internal control frameworks to prevent
customer interests from being unfairly harmed due to trading by the financial institution itself or by otherfinancial institutions within its group.
Overseas
Our overseas offices and subsidiaries are also subject to various laws and governmental rules andregulations applicable in the countries where they carry on their operations, including those promulgated and23

enforced by the Securities and Exchange Commission, the New York Stock Exchange and the Financial Industry
Regulatory Authority (a non-governmental regulator for all securities companies which was established in July
2007 through the consolidation of the National Association of Securities Dealers, Inc. and the member
regulation, enforcement and arbitration functions of the New York Stock Exchange) in the United States, and by
the Financial Services Authority and the London Stock Exchange plc in the United Kingdom. Failure to comply
with such laws, rules or regulations could result in fines, suspension or expulsion, which could have a material
adverse effect upon us.
International Developments
In April 2008, the Financial Stability Forum, which consists of major national financial authorities, issued“Report of the Financial Stability Forum on Enhancing Market and Institutional Resilience”, which was
subsequently endorsed by the G7 and the G20 leaders, recommending, among other things, that supervisors ofcertain large global financial institutions around the world enhance their systematic cross-border supervisory
cooperation by establishing an international college consisting of such supervisors. In line with thatrecommendation, and as part of its regulatory reform effort designed to prevent the recurrence of a financial
crisis, Japan’s Financial Services Agency has jointly established with other major overseas regulatorsinternational supervisory colleges for Japan’s three largest banking institutions and us, and has been coordinatingwith the financial authorities of the United States, Europe and Asia in supervising those institutions and us.
Regulatory Capital Rules
Japan
The Financial Services Agency established the “Guideline for Financial Conglomerate Supervision”(hereinafter referred to as the “Financial Conglomerate Guideline”) in June 2005. Financial conglomerates,
defined as the holding companies of financial institutions and its group companies, must maintain the amount ofconsolidated capital not less than required capital. “The Comprehensive Guidelines for Supervision of Financial
Instruments Business Operators, etc.” (hereinafter referred to as the “Financial Instruments Business Operators
Guidelines”), established in July 2007, requires international financial instruments groups to report consolidated
capital adequacy ratio to the Financial Services Agency semi-annually and whenever the ratio falls below 120%.
We started monitoring the consolidated capital adequacy ratio of Nomura Holdings, Inc. according to theabove guideline and principle from April 2005 and have been in compliance with these requirements until weselected to change the calculation method as described below.
We selected to calculate the consolidated capital adequacy ratio according to the “Criteria for bank holding
companies to judge whether their capital adequacy status is appropriate in light of their own and theirsubsidiaries’ asset holdings, etc. under Article 52-25 of the Banking Act” (hereinafter referred to as the “Bank
Holding Companies Notice”), which is allowed under the provision in the Financial Instruments Business
Operators Guidelines instead of the Financial Conglomerate Guideline from the end of March, 2009, although we
continue to be monitored as a financial conglomerate governed by Financial Conglomerate Guideline. The Bank
Holding Companies Notice incorporates the rules set out in “International Convergence of Capital Measurement
and Capital Standards: A Revised Framework” published by the Basel Committee on Banking Supervision(Basel II).
As mentioned above, under the Financial Conglomerate Guideline, financial conglomerates must maintainthe amount of consolidated capital not smaller than required capital. As we have started the calculation according
to the Bank Holding Companies Notice, we convert each risk by multiplying the amount by 12.5; therefore we
examine whether we abide by this requirement by confirming that the capital/risk-weighted asset ratio is higher
than 8%. As of March 31, 2009, we were in compliance with this requirement, and believe that we will continue
to be in compliance with all applicable capital adequacy requirements in the foreseeable future.
24Under the FIEA Nomura Securities Co., Ltd. is required to maintain adjusted capital at specified levels ascompared with the quantified total of their business risks on a non-consolidated basis. Article 46-6 of the FIEA
requires Financial Instruments Firms I, to which securities companies are classified, to file month-end reports
regarding their capital adequacy ratio, i.e. the ratio of adjusted capital to a quantified total of business risks, to the
Financial Services Agency, or the Local Finance Bureau, and to disclose their capital adequacy ratio to the public
on a quarterly basis. A Financial Instruments Firm I must also file a report on a daily basis with the Financial
Services Agency or the Local Finance Bureau if its capital adequacy ratio falls below 140%. Article 53 of the
FIEA determines the actions which the Prime Minister, through the Financial Services Agency, may take if theratio falls further: if the ratio falls below 120%; the Prime Minister may order the Financial Instruments Firm I tochange its method of business or to deposit its property in trust, or order other measures for the public interestand investor protection if necessary. A Financial Instruments Firm I whose ratio falls below 100% may besubject to additional proceedings, including temporary suspension of its business and revocation of its
registration as a Financial Instruments Firm I if there is no prospect that the ratio will recover three months after
the suspension came into effect.
We closely monitor the capital adequacy ratio of Nomura Securities Co., Ltd. on a continuous basis. Since
the introduction of the capital adequacy requirement in Japan in 1989, we have at all times been in compliancewith these requirements. We believe that we will continue to be in compliance with all applicable capital
adequacy requirements in the foreseeable future.
Overseas
In the United States, Nomura Securities International, Inc. (NSI) is a registered broker-dealer and registered
futures commission merchant. As such, NSI is subject to the minimum net capital requirements of the UnitedStates Securities and Exchange Commission and the Commodity Futures Trading Commission. NSI is regulatedby the Financial Industry Regulatory Authority as its designated self-regulatory organization. These requirements
specify minimum levels of capital that U.S. broker-dealers are required to maintain and limit the amount ofleverage that such broker-dealers may use in their businesses.
In Europe, the Nomura Europe Holdings plc (NEHS) group is regulated under consolidated supervision by
the Financial Services Authority in the United Kingdom. Various banking and broker/dealer subsidiaries of thegroup are regulated on a stand alone basis by their appropriate local regulator.
In addition, certain of our other subsidiaries are subject to various securities and banking regulations, andcapital adequacy requirements promulgated by the regulatory and exchange authorities of the countries in whichsuch subsidiaries operate. We believe that each such subsidiary is, and will in the foreseeable future be, incompliance with such requirements in all material respects.

25

C. Organizational Structure.
The following table lists Nomura and its significant subsidiaries and their respective countries ofincorporation. Indentation indicates the principal parent of each subsidiary. Proportions of ownership interest
include indirect ownership.
Name

Country

Ownership
Interest(%)

Nomura Holdings, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nomura Securities Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nomura Asset Management Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Nomura Trust & Banking Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nomura Babcock & Brown Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nomura Capital Investment Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nomura Investor Relations Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nomura Principal Finance Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nomura Funds Research and Technologies Co., Ltd. . . . . . . . . . . . . . . . . . . . .
Nomura Pension Support & Service Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . .
Nomura Research & Advisory Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nomura Business Services Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nomura Facilities, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nomura Institute of Capital Markets Research . . . . . . . . . . . . . . . . . . . . . . . . .
JOINVEST Securities Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nomura Healthcare Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Private Equity Funds Research and Investments Co., Ltd. . . . . . . . . . . . . . . . .
Nomura Holding America Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nomura Securities International, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nomura Corporate Research and Asset Management Inc. . . . . . . . . . . . .
Nomura Derivative Products Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nomura America Mortgage Finance, LLC . . . . . . . . . . . . . . . . . . . . . . . .
Nomura Financial Holding America, LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nomura Global Financial Products Inc. . . . . . . . . . . . . . . . . . . . . . . . . . .
NHI Acquisition Holding Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Instinet Incorporated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nomura Europe Holdings plc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nomura International plc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nomura Bank International plc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Banque Nomura France . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nomura Bank (Luxembourg) S.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nomura Bank (Deutschland) GmbH . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nomura Bank (Switzerland) Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nomura Italia S.I.M. p.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nomura Investment Banking (Middle East) B.S.C. (Closed) . . . . . . . . . .
Nomura Funding Facility Corporation Limited . . . . . . . . . . . . . . . . . . . . . . . .
Nomura Global Funding plc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nomura Europe Finance N.V. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nomura Principal Investment plc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nomura Capital Markets plc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nomura Asia Holding N.V. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nomura International (Hong Kong) Limited . . . . . . . . . . . . . . . . . . . . . .
Nomura Singapore Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nomura Malaysia Sdn. Bhd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nomura Australia Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
P.T. Nomura Indonesia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nomura Financial Advisory and Securities (India) Private Limited . . . . . . . .
Nomura Asia Investment (India Powai) Pte. Ltd. . . . . . . . . . . . . . . . . . . . . . . .
Nomura Services India Private Limited . . . . . . . . . . . . . . . . . . . . . . . . . .

Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
United States
United States
United States
United States
United States
United States
United States
United States
United States
United Kingdom
United Kingdom
United Kingdom
FranceLuxemburg
Germany
Switzerland
Italy
BahrainIrelandUnited Kingdom
The Netherlands
United Kingdom
United Kingdom
The Netherlands
Hong Kong
Singapore
Malaysia
Australia
Indonesia
India
Singapore
India

—
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
65
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
94
100
100
100

26

D. Property, Plants and Equipment.
Our Properties
As of March 31, 2009, our principal head office is located in Tokyo, Japan and occupies 1,165,285 square
feet of office space. Our other major offices in Japan are our Osaka branch office, which occupies 130,072 square
feet, our Nagoya branch office, which occupies 82,918 square feet, and the head office of Nomura AssetManagement Co., Ltd. In Tokyo, which occupies 166,765 square feet. We lease certain other office space inJapan. Nomura Land and Building Co., Ltd., which is accounted for under the equity method of accounting in ourconsolidated financial statements, is the lessor of certain leased office space in Japan, including part of ourTokyo headquarters.
As of March 31, 2009, our major offices outside Japan are offices of Nomura International plc (“NIP”)
located in London, which occupies 886,913 square feet, the New York head office of Nomura Securities
International, Inc., which occupies 113,787 square feet, and offices of Nomura International (Hong Kong)
Limited located in Hong Kong, which occupies 221,844 square feet. We own the land and building for the
London head office of NIP. We lease most of our other overseas office space.
As of March 31, 2009, our major office of specialized service companies in India is Nomura Services India
Private Limited, which occupies 436,082 square feet.
As of March 31, 2009, the aggregate book value of the land and buildings we owned was ¥167 billion, andthe aggregate book value of equipment we owned, including communications and data processing facilities, was¥47 billion.
Item 4A. Unresolved Staff Comments
We are a large accelerated filer as defined in Rule 12b-2 under the Securities Exchange Act of 1934. There
are no written comments which have been provided by the staff of the Securities and Exchange Commission
regarding our periodic reports under that Act not less than 180 days before the end of the fiscal year ended
March 31, 2009 and which remain unresolved as of the date of the filing of this annual report with theCommission.
Item 5. Operating and Financial Review and Prospects
A. Operating Results.
You should read the following discussion of our operating and financial review and prospects together with
Item 3.A “Selected Financial Data” of this annual report and our consolidated financial statements included
elsewhere in this annual report.
This discussion and analysis contains forward-looking statements that involve risks, uncertainties andassumptions. Our actual results may differ materially from those anticipated in these forward-looking statements
as a result of factors, including, but not limited to, those under Item 3.D “Risk Factors” and elsewhere in thisannual report.
Business Environment
Japan
Corporate earnings started to weaken from around mid-2007 as the U.S. subprime loan (mortgages toindividuals with low credit standing) crisis sapped business confidence and high energy and materials prices
weighed down profits. The Japanese economy started to slow as a result, with the weakness centering on capital
expenditure. On top of this, the September 2008 collapse of a US investment bank resulted in a global credit
crunch that had a further marked impact on the world economy and exacerbated the slowdown in exports. As a27

consequence, Japan’s industrial production fell 12.7% year-on-year in the fiscal year ended March 2009, marking
the largest decline since the start of the current data series. The economic contraction had a dramatic impact on
employment, leading in turn to a worsening in the household income environment. This caused the deteriorationin domestic consumer spending to accelerate toward the end of 2008.
Corporate earnings had expanded for the six straight years spanning the fiscal year ended March 2003 to theyear ended March 2008. From the start of the year ended March 2009, however, a downward trend in profits
rapidly took hold. Concerns about recession in Japan and overseas combined with financial market turbulence topush down the U.S. dollar and share prices, which together with high energy and raw material prices weighed onJapanese corporate earnings. We estimate that recurring profits at the major companies (NOMURA 400
components) fell by approximately 60% year-on-year in the year ended March 2009. Processing sectors such as
automobiles and electrical machinery and precision equipment were major contributors to the earnings
deterioration.
The stock market had been trending downward since around mid-2007, and there were further andsubstantial declines during the year ended March 2009. The downward trend accelerated amid the turmoil in the
U.S. and other overseas stock markets and the consequent weakening of the U.S. dollar, and as the global credit
squeeze that started in September heightened concerns about recession. The Tokyo Stock Price Index, or TOPIX,
which is a broad index for the Japanese equity market, fell below the previous post-bubble low of March 2003.
The TOPIX had lost about 29% in the fiscal year ended March 2008, falling from 1,713.61 points at the end of
March 2007 to 1,212.96 points at the end of March 2008, furthermore in the year ended March 2009 it fell byapproximately 36% to finish the year at 773.66 points. This marked the largest decline in a single fiscal year
since the index was first devised, despite there having been a modest rebound toward the end of the fiscal year as
concerns about recession eased. The Nikkei Stock Average lost approximately 35%, falling from ¥12,525.54 at
the end of March 2008 to ¥8,109.53 at the end of March 2009.
Yields on newly issued 10-year Japanese government bonds fell below 1.3% at the end of March 2008, as
funds shifted to government bonds amid increasing global financial market turbulence. Share prices settled down
moving toward June, and bond yields briefly rebounded to more than 1.8% on concerns about inflation triggeredby rising crude oil prices. Approaching the end of the year, however, bond yields fell once again, dipping below
1.2% as the global credit crunch led to increased risk aversion and as share prices fell further. Shares started torally again at the end of the fiscal year, and bond yields were above 1.3% at the end of March 2009.
On the foreign exchange markets, the global financial market turbulence that began in the U.S. had a major
impact. At the end of March 2008, the yen was trading at the ¥99 level against the U.S. dollar and the ¥157 level
against the euro. The markets calmed down for a while moving toward August, and expectations for monetary
tightening in Europe saw the yen fall at one point to the ¥110 level against the U.S. dollar and the ¥169 level
against the euro. However, from September the yen strengthened against all the major currencies as the global
credit crunch once again came to the fore and as investors sought to avoid the risks associated with the U.S. andEuropean economies. In December the yen was trading at the ¥87 level against the U.S. dollar, its highest level
since 1995, and in January it reached the ¥112 level against the euro. As excessive concerns about the U.S. andEuropean economies receded, the yen then corrected to finish the fiscal year at the ¥98 level against the dollar
and the ¥130 level against the euro.
Overseas
Among the economies of the leading industrialized nations, the impact of the slowdown in economic growthin the United States from the second half of 2007 spread to the economies of Europe, raising the prospect ofsimultaneous economic contraction. International commodity prices trended upward until around mid-2008 as
investors sought vehicles for their funds, but fell sharply heading toward the end of the year owing to the global
credit crunch and concerns about recession. Various policies were implemented in a bid to head off a global
recession, including aggressive interest rate cuts in the U.S. and Europe that were aimed at avoiding further
28

financial market turmoil, the recapitalization of banks using public funds, and fiscal measures. In China, too, theauthorities adopted monetary easing policies and took aggressive fiscal action to boost domestic demand.
After slowing to 2.0% in 2007, US real GDP growth declined to 1.1% in 2008. The US economy moved
into recession in 2008, and there were three consecutive quarters of negative real GDP growth through the firstquarter of 2009. There was a substantial drop in housing investment as house prices fell and financial institutions
adopted risk-averse lending stances. In addition, the financial situation for households and companies
deteriorated sharply due to the global credit shortage from September, and domestic demand was depressed as aresult. Although there has been a slight upturn in sentiment on the expected benefits of monetary easing and thetax cuts and public works projects that were implemented in a bid to spur domestic demand, there have been noclear signs of an economic recovery.
The Federal Reserve Board, or FRB, implemented a string of rate cuts from the second half of 2007 in
response to the financial market turmoil. The FRB cut the federal funds rate target ten times between September
2007 and December 2008, eventually lowering it to 0–0.25% and effectively introducing a zero interest rate
policy. The FRB also commenced quantitative easing, by which it increases the supply of liquidity to financial
markets through the purchase of government agency and other bonds, and in this way it intends to continue
promoting financial market stability and supporting the economy. The downward trend of the U.S. stock market
became more pronounced with the spread of the global credit crunch and economic recession. The Dow Jones
Industrial Average stood at 12,262.89 at the end of March 2008, but by the end of March 2009 it had fallen to7,608.92. The yield on 10-year U.S. Treasuries was at the 3.4% level in March 2008, but falling share prices andaggressive monetary easing implemented by the FRB put downward pressure on yields, which vied with upward
pressure arising from concerns about the expanding fiscal deficit. The yield fell to the 2.6% level at the end of
March 2009, but recovered and held above the 3% mark thereafter.
European economies also moved into recession in 2008. Real GDP growth in the Eurozone fell to 0.7% in
2008, from 2.6% in 2007. On a quarterly basis, however, growth was negative for three straight quarters, startingin the April–June quarter. The European Central Bank (ECB) lifted its policy rate in July 2008, citing concerns
about accelerating inflation. Nevertheless, the increasing risk of global recession from September prompted the
ECB to cut its policy rate three times between October and the end of the year and to provide ample liquidity to
the financial markets. The decline in European stock markets gained momentum as global financial turmoil
spread, and the benchmark German stock index (DAX) lost roughly 37% during the year ended March 2009.
While Asian economies other than Japan performed well in 2008 compared with the leading industrialized
nations, the economic slowdown began to emerge more clearly in these regions also. Real GDP growth in China
fell to 9.0% in 2008, from 11.9% in 2007. This marked the first dip into single-figure growth in six years andprompted the Chinese government to assemble a large-scale stimulus package worth some 13% of nominal GDP.
Executive Summary
Impacted by the turmoil in U.S. and European financial markets triggered by the U.S. subprime loan
problem and the rapid spread of the ensuing economic downturn to the entire world including emerging
countries, the Japanese economy suffered a dramatic slowdown, particularly in exports, adversely impacted by
the appreciation of the yen and the rapid decline in overseas demand, especially in the second half of the fiscal
year. This rapid economic slowdown led to deterioration in the employment situation and thus a rapid drop-off inhousehold sector spending. The corporate sector also saw a large drop in revenues due to the rapid economic
slowdown in Japan and overseas, and recurring profits among major listed companies are expected to have fallen
significantly. After the Tokyo Stock Price Index (TOPIX) marked a high for the period under review in June2008 at 1,430 points, the market started to decline, and stayed soft even after the rapid decline in September. In
March 2009, the TOPIX corrected all the way down to the 700 point level, the lowest point since December
1983. As the global financial crisis continued, the amount of equity financing by listed companies in Japan fell toa 10-year low. Meanwhile, in the bond market, the yield on newly issued 10-year Japanese government bondsrose to the 1.8% range in June 2008, but then dropped to the 1.1% range by the end of 2008, as investors became29safety-oriented in response to the global financial market turmoil. The yield subsequently rose to the 1.3% range
in March 2009. Amid this environment, we posted significant losses due to a number of factors, including trading
losses due to one-off factors, write-downs related to Merchant Banking and illiquid assets such as real estate,
expenses related to the acquisition of Lehman Brothers (“Lehman”) operations, and impairment losses ofaffiliated companies. As a result, net revenue decreased 60% year-on-year to ¥312.6 billion, non-interest
expenses increased 28% year-on-year to ¥1,091.7 billion, loss before income taxes was ¥779.0 billion, and net
loss was ¥708.2 billion. Consequently, ROE for the full year was negative 40.2%.
In Retail, net revenue for the year ended March 31, 2009 was ¥291.9 billion, down 27% from the previous
year, and income before income taxes was ¥18.2 billion, down 85% from the previous year. The overall market
slump triggered by the turmoil in the global financial markets led to a decline in brokerage commissions andcommissions for distribution of investment trusts. Sales of structured bonds declined as a result of the rapid
strengthening of the yen, leading to lower sales credit. Retail client assets have declined to ¥59.3 trillion as ofMarch 31, 2009, due primarily to a decrease in the balance of equity securities as a result of the stock market
decline.
In Global Markets, net revenue for the year ended March 31, 2009 was negative ¥157.3 billion and loss
before income taxes was ¥574.6 billion. In Global Fixed Income, net revenue was negative ¥217.2 billion due to
trading losses in conjunction with the market drop-off as well as the one-off losses in association with the turmoil
in global financial markets. In Global Equities, the deterioration in the trading environment due to the market
turmoil resulted in a 52% year-on-year decline in net revenue to ¥98.9 billion. Following the acquisition ofcertain operations of former Lehman Brothers in October 2008, we restructured our organization and businesslines, and mostly completed system and other infrastructure integration projects by the end of the fiscal year. In
conjunction with such business base expansion, we are starting to see positive results, such as an increase inequities market share and currency trading. Meanwhile, expenses increased due primarily to the acquisition ofcertain operations of former Lehman Brothers.
In Investment Banking, net revenue for the year ended March 31, 2009 was ¥63.5 billion, down 24% fromthe previous year, and loss before income taxes was ¥57.4 billion. Net revenue decreased due to the decline intransaction volume in the equity finance reflecting instability across the global stock markets. Meanwhile,
expenses increased due primarily to the acquisition of certain operations of former Lehman Brothers.
In Merchant Banking, net revenue for the year ended March 31, 2009 was negative ¥69.9 billion due
primarily to unrealized losses of certain investee companies. As a result, loss before income taxes was ¥85.3
billion.
In Asset Management, net revenue for the year ended March 31, 2009 was ¥59.8 billion, down 33% fromthe previous year, and income before income taxes was ¥7.4 billion, down 78% from the previous year. Net
revenue decreased compared to the prior year, due primarily to the reduction in assets under management mainly
driven by plunge in the stock market and appreciation of the yen, as well as unrealized losses on pilot funds andseed money for new product development. Deteriorating market conditions due to the slump in stock prices andappreciation of the yen led to a decrease in the outstanding balance of assets under management to ¥20.2 trillion.

30

Results of Operations
Overview
The following table provides selected consolidated statements of operations information for the years
indicated.
Year Ended March 31
2008
2009
(in millions)2007

Non-interest revenues:
Commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fees from investment banking . . . . . . . . . . . . . . . . . . . . .
Asset management and portfolio service fees . . . . . . . . .
Net (loss) gain on trading . . . . . . . . . . . . . . . . . . . . . . . . .
(Loss) gain on private equity investments . . . . . . . . . . . .
Loss on investments in equity securities . . . . . . . . . . . . .
Private equity entities product sales . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 337,458 ¥404,659 ¥ 306,803 $ 3,094
99,27685,09654,953554
145,977
189,712140,166
1,414
290,008
61,720(128,339)(1,294)47,59076,505(54,791)(553)(20,103) (48,695)(25,500)(257)
100,126———
67,42528,18539,863402

Total Non-interest revenues . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net interest revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,067,757
23,344

797,182(9,925)333,155(20,528)

3,360
(207)

Net revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,091,101
769,343787,257
851,845

312,627
1,091,673

3,153
11,010

Income (loss) before income taxes . . . . . . . . . . . . . . . . . . . . . .
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

321,758
145,930(64,588)3,259(779,046)(70,854)(7,857)(714)

Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 175,828

Return on equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8.3%¥ (67,847) ¥ (708,192) $ (7,143)(3.3)%(40.2)%Net revenue decreased by 60% from ¥787,257 million for the year ended March 31, 2008 to ¥312,627
million for the year ended March 31, 2009. Commissions decreased by 24%, due primarily to a decline incommissions for distribution of investment trusts, reflecting the overall market slump triggered by the recent
turmoil in the global financial markets. Asset management and portfolio service fees also decreased by 26%, due
primarily to a decrease in assets under management driven by the plunge in the stock market and the appreciationof the yen. While net gain on trading was ¥61,720 million for the year ended March 31, 2008, we suffered a net
loss of ¥128,339 million on trading for the year ended March 31, 2009, due primarily to the recent turmoil in the
global financial markets. While we gained ¥76,505 million on private equity investments for the year ended
March 31, 2008, we lost ¥54,791 million on such investments for the year ended March 31, 2009 due primarily tounrealized losses of certain investee companies.
Net revenue decreased by 28% from ¥1,091,101 million for the year ended March 31, 2007 to¥787,257 million for the year ended March 31, 2008. Commissions increased by 20%, due to an increase in stock
brokerage commissions resulting from the consolidation of Instinet. Asset management and portfolio service fees
also increased by 30%, due primarily to firm sales of newly-launched funds and existing balanced funds. Net
gain on trading decreased by 79%, driven primarily by losses from Global Markets. Gain on private equity
investments increased by 61% from the previous financial year, due to realized and unrealized gains resulting
from the sale and valuation at fair value of investee companies. We recorded losses on our investments in equity
securities due to the stagnation of the stock market.
Net interest revenue was ¥23,344 million for the year ended March 31, 2007, negative ¥9,925 million for theyear ended March 31, 2008 and negative ¥20,528 million for the year ended March 31, 2009. Net interest
revenue is a function of the level and mix of total assets and liabilities, which includes trading assets andfinancing and lending transactions, and the level, term structure and volatility of interest rates. Net interest
31

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 in aggregate.
Net interest revenue for the year ended March 31, 2009 declined by ¥10,603 million from the year ended March
31, 2008. Short-term interest rates declined during the year in major currencies including U.S. dollar andJapanese yen by March 2009, but until the third quarter short-term interest rates in Japanese yen stayed atrelatively high level in comparison to the U.S. dollar, which decreased significantly. Together with thecontinuous decline in demand for structured notes from investors, this has pushed up our financial costs, failingto offset the decline in the gross interest revenue which is due to the general decline in the interest rate levelacross the globe. However, the rate at which the net interest revenue has deteriorated in the last three quarters has
been moderated, as the short-term interest rate markets turmoil has subsided. Net interest revenue for the year
ended March 31, 2008 turned negative, declining by ¥33,269 million from the year ended March 31, 2007.
Rising short-term interest rates and falling long-term interest rates on the yen affected net interest revenue of thecompany adversely, causing a general rise in the funding cost and decline in coupon received on bonds.
Reorganization of the U.S. business has reduced the volume of U.S. dollar repo transactions, so even though the
U.S. dollar yield curve had shifted downward while steepening during the year, the positive impact on net
interest revenue was limited.
In our consolidated statements of operations, we include under “Revenue” loss on investments in equity
securities. We recorded losses on such investments in the amount of ¥20,103 million for the year ended
March 31, 2007, ¥48,695 million for the year ended March 31, 2008 and ¥25,500 million for the year ended
March 31, 2009. This line item includes both realized and unrealized gains and losses on investments in equity
securities held for operating purposes. These investments refer to our investments in unaffiliated companies,
which we hold on a long-term basis in order to promote existing and potential business relationships. In ourconsolidated financial statements, these investments are recorded at market value, with unrealized gains andlosses on these investments recognized currently in income.
Non-interest expenses increased by 28% from ¥851,845 million for the year ended March 31, 2008 to¥1,091,673 million for the year ended March 31, 2009. The increase in non-interest expenses consisted mainly ofother expenses and compensation and benefits. Other expenses increased by 67% from ¥156,868 million for theyear ended March 31, 2008 to ¥261,339 million for the year ended March 31, 2009, mainly due to impairment
losses of affiliated companies. Compensation and benefits increased by 34% from ¥366,805 million for the year
ended March 31, 2008 to ¥491,555 million for the year ended March 31, 2009, due primarily to our hiring ofsome former Lehman Brothers’ employees.
Non-interest expenses increased by 11% from ¥769,343 million for the year ended March 31, 2007 to¥851,845 million for the year ended March 31, 2008. The increase in non-interest expenses was mainly due toother expenses and commissions and floor brokerage, offset by private equity entities cost of goods sold. Private
equity entities cost of goods sold was no longer recognized for the year ended March 31, 2008 as a result of
deconsolidation of private equity entities with the application of Statement of Position 07-1, “Clarification of the
Scope of the Audit and Accounting Guide—Investment Companies and Accounting by Parent Companies andEquity Method Investors for Investments in Investment Companies”. Other expenses increased by 48% from¥106,039 million for the year ended March 31, 2007 to ¥156,868 million for the year ended March 31, 2008,
mainly due to an impairment loss for an affiliated company which was included in other expenses. Commissions
and floor brokerage increased by 78% from ¥50,812 million for the year ended March 31, 2007 to¥90,192 million for the year ended March 31, 2008, due primarily to the consolidation of Instinet.
Income before income taxes was ¥321,758 million for the year ended March 31, 2007, and loss before
income taxes was ¥64,588 million for the year ended March 31, 2008 and ¥ 779,046 million for the year ended
March 31, 2009.
We are subject to a number of different taxes in Japan and have adopted the consolidation tax system
permitted under Japanese tax law. The consolidation tax system targets only national tax. Since April 1, 2004,
our domestic statutory tax rate is approximately 41%. Our foreign subsidiaries are subject to the income tax rates
32

of the countries in which they operate, which are generally lower than those in Japan. Our effective tax rate inany one year is therefore dependent on our geographic mix of profits and losses and also on the specific tax
treatment applicable in each location.
Income tax expense for the year ended March 31, 2009 was negative ¥70,854 million, representing aneffective tax rate of 9.1% which was significantly below the statutory tax rate of 41%. The most significant factor
causing the difference was an increase in the valuation allowance, mainly relating to non-recoverability of losses
in certain U.S. and U.K subsidiaries and also future realizable losses in Japan as a result of the review of the
future realizable value of the deferred tax assets. Although the increase in the valuation allowance generally has
the effect of increasing the effective tax rate, this had the effect of decreasing the rate by approximately 27.7%
due to loss from continuing operations. Other significant factors causing the difference was tax benefit
recognized on the devaluation of investments in foreign subsidiaries which increased the effective tax rate byapproximately 7.6% and also due to different tax rates applicable for foreign subsidiaries which decreased theeffective tax rate by 9.9% for the year ended March 31, 2009.
Income tax expense for the year ended March 31, 2008 was ¥3,259 million, representing an effective tax
rate of negative 5.0%. The effective tax rate was significantly below the statutory tax rate of 41%. The mostsignificant factor causing the difference was an increase in the valuation allowance, mainly relating to the
non-recoverability of losses in certain U.S. subsidiaries and future realizable losses in Japan as a result of thereview of the future realizable value of the deferred tax assets. Although the increase in the valuation allowance
generally has the effect of increasing the effective tax rate, it resulted in a decreasing effective tax rate for theyear ended March 31, 2008 by approximately 166.3% due to loss from continuing operations. Another significant
factor causing the difference was tax benefit recognized on the devaluation of investments in foreign subsidiaries.
This had the effect of increasing the effective tax rate for the year ended March 31, 2008 by approximately
121.6% due to the same reason described above.
Income tax expense for the year ended March 31, 2007 was ¥145,930 million, representing an effective tax
rate of 45.4%. The effective tax rate was above the statutory tax rate of 41%. The difference was mainly due tothe following two factors, which had opposite effects. First, the valuation allowance has been increased to reflect
several factors, mainly relating to the non-recoverability of losses in certain U.S. subsidiaries and certain Terra
Firma investments in Europe as a result of the review of the future realizable value of the deferred tax assets.
This had the effect of increasing the effective tax rate for the year ended March 31, 2007 by approximately
11.6%. Second, tax benefit has been recognized on the devaluation of investments in foreign subsidiaries, mainly
overseas. This had the effect of decreasing the effective tax rate for the year ended March 31, 2007 byapproximately 8.0%.
Net income was ¥175,828 million for the year ended March 31, 2007, and net loss was ¥67,847 million forthe year ended March 31, 2008 and ¥708,192 million for the year ended March 31, 2009. Our return on equity
was 8.3% for the year ended March 31, 2007, negative 3.3% for the year ended March 31, 2008, and negative
40.2% for the year ended March 31, 2009.

Results by Business Segment
As discussed in “Overview” under Item 4.B of this annual report, we operate five business divisions: Retail,Global Markets, Investment Banking, Merchant Banking and Asset Management. Gain (loss) on investments inequity securities, our share of equity in the earnings (losses) of affiliates, impairment losses on long-lived assets,
corporate items and other financial adjustments are included as “Other” operating results outside of businesssegments in our segment information. Unrealized gain (loss) on investments in equity securities held for
operating purposes is classified as reconciling items outside of our segment information. The effects ofconsolidation and deconsolidation of certain investments in our private equity business were also classified as33

reconciling items outside our segment information for the year ended March 31, 2007, while there is noreconciling item for the year ended March 31, 2008 and 2009 due to AICPA Statement of Position 07-1
“Clarification of the Scope of the Audit and Accounting Guide—Investment Companies and Accounting by
Parent Companies and Equity Method Investors for Investments in Investment Companies” (“SOP 07-1”), which
resulted in all investments made by investment companies within the scope of the guide being carried at fairvalue with changes in fair value recognized in our consolidated financial statements. You should read thefollowing segment information in conjunction with Item 4.B of this annual report and Note 21 to ourconsolidated financial statements included in this annual report. The reconciliation of our segment results ofoperations and consolidated financial statements is set forth in Note 21. Certain reclassifications of previously
reported amounts have been made to conform to the current year presentation.
RetailIn Retail, we receive commissions and fees from investment consultation services which we provide mainly
to individual customers in Japan. Additionally, we receive operational fees from asset management companies inconnection with the administration services of investment trust certificates that we distribute. We also receive
agent commissions from insurance companies for the insurance products we sell as an agent.
Operating Results of Retail2007

Year Ended March 31
2008
2009
(in millions)Non-interest revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net interest revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥434,701
5,417¥395,887
6,131¥287,750
4,107$2,90242

Net revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

440,118
279,253

402,018
279,702291,857
273,620

2,944
2,760

Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥160,865¥122,316¥ 18,237$ 184

Net revenue for the year ended March 31, 2009 was ¥291,857 million, decreasing 27% from¥402,018 million for the year ended March 31, 2008. The overall market slump triggered by the turmoil in the
global financial markets led to a decline in brokerage commissions and commissions for distribution of
investment trusts. Sales of structured bonds declined as a result of the rapid strengthening of the yen, leading tolower sales credit.
Net revenue for the year ended March 31, 2008 was ¥402,018 million, decreasing 9% from
¥440,118 million for the year ended March 31, 2007. The overall market slump triggered by the turmoil in the
global financial markets led to a drop-off in stock subscriptions and purchases as well as weaker sales ofinvestment trusts during the second half of the year, resulting in a decline in brokerage commissions andcommissions for distribution of investment trusts. Distribution of newly-launched investment trusts remainedrobust, especially for bond investment trusts. Sales of structured bonds declined as a result of the rapid
strengthening of the yen, leading to lower sales credit. However, sales of foreign currency bonds were strong inthe second half of the year.
Non-interest expenses for the year ended March 31, 2009 were ¥273,620 million, decreasing 2% from¥279,702 million for the year ended March 31, 2008, due primarily to a decrease in compensation and benefits.
Non-interest expenses for the year ended March 31, 2008 were ¥279,702 million, almost at the same level as¥279,253 million for the year ended March 31, 2007, due primarily to an increase in occupancy and related
depreciation due to the expansion of branches offset by a decrease in compensation and benefits.
Income before income taxes was ¥160,865 million for the year ended March 31, 2007, ¥122,316 million forthe year ended March 31, 2008, and ¥18,237 million for the year ended March 31, 2009.
34

The graph below shows the revenue composition by instrument in terms of Retail non-interest revenues forthe years ended March 31, 2007, 2008, and 2009.
100%

3%

3%

3%

16%

17%

33%

30%

24%

26%

22%

24%

24%

2007

2008

2009

12%
80%
31%
60%

40%

32%

20%

0%

Bonds

Equities

Investment trusts

Asset Management

Variable annuity insurance

As described above, revenue composition of investment trusts and asset management decreased from 49%
for the year ended March 31, 2008 to 47% for the year ended March 31, 2009, due primarily to a decline incommissions for distribution of investment trusts. Revenue composition of equities increased from 24% for theyear ended March 31, 2008 to 26% for the year ended March 31, 2009, due primarily to an overall decrease in
the revenue size of total Retail non-interest revenue although revenue from equities decreased reflecting theoverall market slump. Revenue composition of bonds and variable annuity insurance unchanged from theprevious year.

35Retail Client Assets
The following graph shows amounts and details regarding retail client assets at March 31, 2007, 2008, and2009. Retail client assets consist of customers’ assets held in our custody, and assets relating to the variable annuity
insurance products.
Retail Client Assets(trillion yen)
90.0

2.9
80.0

70.0

2.0
4.7
2.5

7.4

1.7
4.4

60.0

1.9

7.3

19.6

1.4
4.0

50.0

5.0
19.2

40.0

18.5

30.0

48.5
20.0

37.2
28.6

10.0

0.0
3/31/2007

3/31/2008

3/31/2009

Equities

Bonds

Stock investment trusts

Bond investment trusts

Overseas mutual funds

Other

Retail client assets decreased by ¥12.9 trillion from ¥72.2 trillion at March 31, 2008 to ¥59.3 trillion atMarch 31, 2009, due primarily to a decrease in the balance of equity securities as a result of the stock market
decline. The balance of our clients’ investment trusts decreased 22% from ¥13.4 trillion at March 31, 2008 to¥10.4 trillion at March 31, 2009, reflecting net cash inflows by clients of ¥0.1 trillion and market depreciation of¥3.1 trillion.
Retail client assets decreased by ¥13.0 trillion from ¥85.2 trillion at March 31, 2007 to ¥72.2 trillion atMarch 31, 2008, due primarily to a decrease in the balance of equity securities. The balance of our clients’investment trusts decreased 5% from ¥14.1 trillion at March 31, 2007 to ¥13.4 trillion at March 31, 2008,reflecting net cash inflows by clients of ¥1.5 trillion and market depreciation of ¥2.2 trillion.
Global Markets
We have a proven track record of sales and trading bonds, stocks, and foreign exchange, as well as derivatives
based on these financial instruments, mainly to institutional investors. In response to the increasingly diverse and36complex needs of our customers, we are building up our trading and product origination capabilities to offer
superior products not only to institutional investors but also to Retail and Asset Management. This cross-divisional
approach also extends to Investment Banking, where close collaboration leads to high value-added solutions for ourcustomers. In Asset Finance, we use our broad customer base at a maximum advantage and offer sophisticatedfinancial solutions for raising capital through real estate and other asset securitization schemes.
We have forged extensive ties with institutional investors in Japan and international markets; wealthy andaffluent investors, public-sector agencies, and regional financial institutions in Japan; and government agencies,
financial institutions, and corporations around the world. These ties enable us to pinpoint what types of products
investors are currently looking for and then develop and deliver a line of products that meet their needs.
Operating Results of Global Markets
2007

Non-interest revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net interest revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥285,088
4,940

Net revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

290,028
231,222

Income (loss) before income taxes . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 58,806

Year Ended March 31
2008
2009
(in millions)¥ 145,192 ¥(146,335) $(1,476)(49,595)(10,919)(110)
95,597321,794(157,254)
417,387(1,586)4,210¥(226,197) ¥(574,641) $(5,796)

Net revenue decreased from ¥95,597 million for the year ended March 31, 2008 to negative¥157,254 million for the year ended March 31, 2009. In Global Fixed Income, net revenue was negative ¥217.2
billion due to trading losses in conjunction with the market drop-off as well as the one-off losses in association
with the turmoil in global financial markets. In Global Equities, the deterioration in the trading environment due
to the market turmoil resulted in a 52% year-on-year decline in net revenue to ¥98.9 billion. We also wrote down
the value of real estate and other illiquid assets and reduced our exposure to illiquid assets. Following theacquisition of certain operations of former Lehman Brothers in October 2008, we restructured our organization
and business lines, and mostly completed system and other infrastructure integration projects by the end of the
fiscal year. In conjunction with such business base expansion, we are starting to see positive results, such as anincrease in equities market share and currency trading.
Net revenue decreased by 67% from ¥290,028 million for the year ended March 31, 2007 to ¥95,597 million
for the year ended March 31, 2008. In Global Fixed Income, the environment remained harsh as a global credit
crunch sparked by subprime problems hit and the yen appreciated sharply. Net revenue declined due to net writedowns mainly related to increased credit valuation adjustments against monoline insurers (financial guarantors),a realized loss booked on our exit from the U.S. RMBS-related business, and realized and unrealized losses in the
U.S. CMBS-related business. In Global Equities although trading revenue from MPOs and equity derivatives
declined, revenue increased as Instinet, which was acquired in February 2007, contributed to revenue, order flow
for non-Japanese equities expanded, and trading of listed equities contributed to revenue.
Non-interest expenses increased by 30% from ¥321,794 million for the year ended March 31, 2008 to¥417,387 million for the year ended March 31, 2009, due primarily to the acquisition of certain operations offormer Lehman Brothers.
Non-interest expenses increased by 39% from ¥231,222 million for the year ended March 31, 2007 to¥321,794 million for the year ended March 31, 2008, due primarily to increases in commissions and floor brokerage,
other expenses on transactions and compensation and benefits resulting from the consolidation of Instinet.
Income before income taxes was ¥58,806 million for the year ended March 31, 2007, loss before income
taxes was ¥226,197 million for the year ended March 31, 2008 and ¥574,641 million for the year ended
March 31, 2009.
37

The table below shows our market share of Japanese Government bond auctions and secondary bondtrading, in terms of the principal amounts of bonds purchased, for the years indicated. Secondary bond tradingrefers to the trading of bonds originally issued in Japan in the over-the-counter market and on exchanges inJapan, but excludes gensaki and inter-dealer transactions.
Year Ended March 31
2007
2008
2009

Nomura’s Share in Japanese Government bond auctions . . . . . . . . . . . . . . . . . . . . .
Nomura’s Share in secondary bond trading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11%
13%

11%
12%

11%
13%

The following table sets forth the closing level of the TOPIX and the Nikkei 225, which are both stock
market indices in Japan, as of the dates indicated, and the percentage changes from the closing level at the date
one year before:
Stock Market Index

2007

TOPIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nikkei 225 (“Nikkei Stock Average”) . . . . . . . . . . . . . . . . . . . . . . . . . . .

March 31
2008

2009

1,713.61
1,212.96
773.66(0.8)%(29.2)%(36.2)%
17,287.65
12,525.54
8,109.53
1.3%(27.5)%(35.3)%The TOPIX had lost about 29% in the fiscal year ended March 2008, falling from 1,713.61 points at the endof March 2007 to 1,212.96 points at the end of March 2008, furthermore in the year ended March 2009 it fell byapproximately 36% to finish the year at 773.66 points. This marked the largest decline in a single fiscal year
since the index was first devised, despite there having been a modest rebound toward the end of the fiscal year as
concerns about recession eased. The Nikkei Stock Average also lost approximately 35%, falling from ¥12,525.54
at the end of March 2008 to ¥8,109.53 at the end of March 2009. The following table shows our market share ofJapanese equity trading for the years indicated.
Nomura’s Share inYear Ended March 31
2007
2008
2009

Total equity trading market in Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Off-floor/off-exchange equity trading market in Japan . . . . . . . . . . . . . . . . . . . . . .

7%
21%

7%
21%

7%
17%

Investment Banking
We provide a broad range of investment banking services, such as underwriting and advisory activities to adiverse range of corporations, financial institutions, sovereigns, investment funds and others. We underwrite
offerings of debt, equity and other financial instruments in Asia, Europe and other major financial markets. We
have been enhancing our M&A and financial advisory expertise to secure more high profile cross-regional deals
as well as deals within each region. We pursue to develop and forge a solid relationship with these clients on along term basis by offering our extensive resources in a seamless fashion for their bespoke solutions.
Operating Results of Investment Banking
2007

Year Ended March 31
2008
2009
(in millions)Non-interest revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net interest revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥97,427
1,760¥81,305
1,804¥ 62,132
1,367

$ 627
13

Net revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

99,18754,783

83,10960,33663,499120,910640
1,219

Income (loss) before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥44,404¥22,773¥ (57,411) $ (579)38Net revenue decreased by 24% from ¥83,109 million for the year ended March 31, 2008 to ¥63,499 million
for the year ended March 31, 2009, due primarily to the decline in transaction volume in the equity financereflecting instability across the global stock markets.
Net revenue decreased by 16% from ¥99,187 million for the year ended March 31, 2007 to ¥83,109 million
for the year ended March 31, 2008, due primarily to a marked decline in overall transaction value in the equity
finance market, while the M&A-related business remained strong and we maintained our high market share.
Non-interest expenses increased by 100% from ¥60,336 million for the year ended March 31, 2008 to¥120,910 million for the year ended March 31, 2009, due primarily to the acquisition of certain operations offormer Lehman Brothers.
Non-interest expenses increased by 10% from ¥54,783 million for the year ended March 31, 2007 to¥60,336 million for the year ended March 31, 2008, due primarily to higher compensation and benefits.
Income before income taxes was ¥44,404 million for the year ended March 31, 2007, ¥22,773 million for theyear ended March 31, 2008 and loss before income taxes was ¥57,411 million for the year ended March 31, 2009.
The following table shows changes in our market share (value base) in the underwriting market for bondsand equity in Japan.
Year Ended March 31
2007
2008
2009

Nomura’s Share in Japanese IPOs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nomura’s Share in Japanese Public Offerings . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nomura’s Share in Japanese Straight Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nomura’s Share in Japanese Samurai Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21%
40%
14%
13%

44%
42%
16%
10%

57%
24%
16%
12%

Merchant Banking
In Japan, Nomura Principal Finance Co., Ltd. has been active in the field of buy-outs and corporate
revitalization, targeting investment opportunities that offer scope for capital appreciation and attractive returns to
us. Our Japanese private equity business has also been developed through investments in funds managed by the
Nomura Research & Advisory Co., Ltd. Our principal finance investments in Europe have been primarily
managed by Terra Firma, as explained in “Private Equity Business” below.
Operating Results of Merchant Banking
2007

Non-interest revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net interest revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Year Ended March 31
2008
2009
(in millions)¥ 77,325 ¥ 74,795 ¥(62,319) $(629)(12,356) (10,002)(7,556)(76)

Net revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

64,96912,15364,793
11,473

Income (loss) before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 52,816¥ 53,320(69,875)
15,398(705)
155¥(85,273) $(860)

Net revenue was negative ¥69,875 million for the year ended March 31, 2009, as compared to net revenue of¥64,793 million for the year ended March 31, 2008, due primarily to unrealized losses of certain investee companies.
In the year ended March 31, 2009, realized gains from investments in Japan were ¥42.0 billion and unrealized
losses from investments in Japan were ¥78.0 billion. Realized gains from the Terra Firma Investments were
¥6.7 billion and unrealized losses from the Terra Firma Investments were ¥15.7 billion. Realized gains resulted
39

from the exit of certain retail and service industry investments. Unrealized losses resulted from underperformanceof investments in the media, aircraft leasing, waste management and renewable energy sectors.
Net revenue was ¥64,793 million for the year ended March 31, 2008, almost at the same level as¥64,969 million for the year ended March 31, 2007 due to realized and unrealized gains on the sale of Deutsche
Annington and valuation at fair value of Annington in the UK, both Terra Firma Investments, as well as on thesale of our stake in Nomura Principal Finance investee companies, Sliontec and Wanbishi Archives.
In the year ended March 31, 2008, realized gains from investments in Japan from which we exited were
¥16.6 billion and unrealized losses from investments in Japan were ¥21.2 billion. Realized gains from the Terra
Firma Investments were ¥69.3 billion and unrealized gains from the Terra Firma Investments were ¥14.3 billion.
Investments in the residential real estate sector continued to perform well, leading to a significant uplift.
In the year ended March 31, 2007, realized gains from investments in Japan from which we exited were¥12.0 billion and unrealized gains from investments in Japan were ¥9.8 billion. Realized gains from the Terra
Firma Investments were ¥84.8 billion and unrealized losses from the Terra Firma Investments were ¥28.0 billion.
Investments in the residential real estate sector continued to perform well on the back of a buoyant market,
leading to a significant uplift. Gains from property related investments were partially offset by the continued
underperformance of retail and service industry investments, where falling market share and lower than expecteddemand for new products and services were the main causes of the net realizable value of these assets being
reduced. Further gains were made on utilities assets through refinancing and divestiture.
Non-interest expenses increased by 34% from ¥11,473 million for the year ended March 31, 2008 to¥15,398 million for the year ended March 31, 2009, due primarily to an increase in professional fees.
Non-interest expenses decreased by 6% from ¥12,153 million for the year ended March 31, 2007 to¥11,473 million for the year ended March 31, 2008, due primarily to a decrease in professional fees.
Income before income taxes was ¥52,816 million for the year ended March 31, 2007, ¥53,320 million for theyear ended March 31, 2008 and loss before income taxes was ¥85,273 million for the year ended March 31, 2009.
Asset Management
We earn portfolio management fees through the development and management of investment trusts, which
are distributed by Nomura Securities Co., Ltd., other brokers, banks, Japan Post Bank and Japan Post Network
Co., Ltd. We also provide investment advisory services for pension funds and other institutional clients. Net
revenues basically consist of asset management and portfolio services fees that are attributable to AssetManagement.
Operating Results of Asset Management

2007

Year Ended March 31
2008
2009
(in millions)Non-interest revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net interest revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥85,195
2,885¥84,710
4,031¥56,463
3,326

$569
34

Net revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

88,08048,702

88,74154,79059,78952,409603
529

Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥39,378¥33,951¥ 7,380$ 74

40

Note:The defined contribution pension plan business in the Asset Management segment was integrated into the Other Segment in
the second quarter of the year ended March 31, 2009. In the above table, certain reclassifications of previously reported
amounts have been made to conform to the current presentation.

Net revenue decreased by 33% from ¥88,741 million for the year ended March 31, 2008 to ¥59,789 million
for the year ended March 31, 2009, due primarily to the reduction in assets under management mainly driven byplunge in the stock market and appreciating yen, and unrealized losses from pilot funds and seed money for new
product development.
Net revenue increased by 1% from ¥88,080 million for the year ended March 31, 2007 to ¥88,741 million
for the year ended March 31, 2008, due primarily to an increase in asset management and portfolio service feespartially offset by unrealized losses from pilot funds and seed money for new product development.
Non-interest expenses decreased by 4% from ¥54,790 million for the year ended March 31, 2008 to¥52,409 million for the year ended March 31, 2009, due primarily to a decrease in compensation and benefits.
Non-interest expenses increased by 13% from ¥48,702 million for the year ended March 31, 2007 to¥54,790 million for the year ended March 31, 2008, due primarily to compensation and benefits associated withincreased headcount and information technology expenses increased due to new investment.
Income before income taxes was ¥39,378 million for the year ended March 31, 2007, ¥33,951 million forthe year ended March 31, 2008 and ¥7,380 million for the year ended March 31, 2009.
The following table sets forth assets under management of each principal Nomura entity included under
Asset Management as of the dates indicated.

2007

March 312008
(in billions)2009

Nomura Asset Management Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥26,489 ¥25,591 ¥19,993
Nomura Funds Research and Technologies Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . .
2,980
2,829
1,634
Nomura Corporate Research and Asset Management Inc. . . . . . . . . . . . . . . . . . . .
1,462
1,117
1,049
Private Equity Funds Research and Investments Co., Ltd. . . . . . . . . . . . . . . . . . . .
—
104
600
Nomura Funds Research and Technologies America, Inc. . . . . . . . . . . . . . . . . . . .
309
306
216
MAINTRUST KAG mbH. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
337
320
172
Combined total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥31,577¥30,268¥23,663

Total* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥27,036¥25,766¥20,231* Overlapping asset amounts among group companies are adjusted in Total.

Assets under management were ¥20.2 trillion as of March 31, 2009, a ¥6.8 trillion decrease from March 31,
2007, and a ¥5.5 trillion decrease from March 31, 2008. The greatest proportion of these assets was managed by
Nomura Asset Management with assets under management of ¥20.0 trillion as of March 31, 2009.
The net assets of stock investment trusts decreased at March 31, 2009 compared to the previous year due todeteriorating market conditions and the appreciation of the yen, triggered by U.S. subprime problems. The net
assets of bond investment trusts also declined. Assets from institutional clients also declined at March 31, 2009
compared to the previous year, reflecting additional mandates of new product from the domestic pension funds
offset by depreciation in assets due to deteriorating market conditions.
41

Investment trust assets included in assets under management by Nomura Asset Management were ¥13.0
trillion as of March 31, 2009, down ¥4.2 trillion, or 25%, from the previous year, reflecting net cash outflows by
clients of ¥0.3 trillion and market depreciation of ¥3.9 trillion. While the balance of many investment trusts
decreased under the harsh environment, the sales of Exchange Traded Funds and newly-launched investment
trusts in the fourth quarter remains robust. For the year ended March 31, 2008, the balance of investment trusts
managed by Nomura Asset Management was ¥17.2 trillion as of March 31, 2008, down ¥1.6 trillion, or 9%, fromthe previous year, reflecting net cash inflows by clients of ¥1.7 trillion and market depreciation of ¥3.3 trillion.
The following table shows Nomura Asset Management’s share, in terms of net asset value, in the Japanese
asset management market as of the dates indicated.
Nomura Asset Management’s share of the fund market in Japan2007

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

23%
18%
44%

As of March 31
2008
2009

22%
17%
44%

22%
16%
44%

Other Operating Results
Other operating results include gain (loss) on investments in equity securities, our share of equity in theearnings (losses) of affiliates, impairment losses on long-lived assets, corporate items and other financial
adjustments. Please refer to Note 21 to our consolidated financial statements included in this annual report.
Income before income taxes in other operating results was ¥21,020 million for the year ended March 31,
2007, loss before income taxes in other operating results was ¥20,582 million for the year ended March 31, 2008and ¥64,201 million for the year ended March 31, 2009.
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 to our consolidated financial statements included in this annual report.
Regulatory Capital Requirements
Many of our business activities are subject to statutory capital requirements, including those of Japan, theUnited States, the United Kingdom and certain other countries in which we operate.
Some of our subsidiaries are subject to various regulatory requirements that may limit cash dividends andadvances to the Japanese parent company and that may establish minimum capital requirements. Thesesubsidiaries are in compliance with all applicable regulatory capital adequacy requirements.
Translation Exposure
A significant portion of our business is conducted in currencies other than yen—most significantly, U.S.
dollars, British pounds and Euros. In foreign countries where we operate, our business is conducted in thecurrencies of those countries. We prepare financial statements of each of our consolidated entities in its
functional currency, which is the currency of the primary economic environment in which the entity operates.
Translation exposure is the risk arising from the effect of fluctuations in exchange rates on the net assets of ourforeign subsidiaries. Translation exposure is not recognized in our statements of operations unless and until we
dispose of, or liquidate, the relevant foreign subsidiary, which historically has not occurred, and which we do not
expect to occur, frequently.
42Critical Accounting Policies and Estimates
Use of estimates
In presenting the consolidated financial statements, management makes estimates regarding certain financial
instrument and investment valuations, the outcome of litigation, and tax examinations, the recovery of thecarrying value of goodwill, the allowance for loan losses, the realization of deferred tax assets and other mattersthat affect the reported amounts of assets and liabilities as well as the disclosure in the financial statements.
Estimates, by their nature, are based on judgment and available information. Therefore, actual results may differ
from estimates, which could have a material impact on the consolidated financial statements and, it is possiblethat such adjustments could occur in the near term.
Fair value for financial instruments
We adopted Statement of Financial Accounting Standards (“SFAS”) No. 157 “Fair Value Measurements”(“SFAS 157”) for financial assets and financial liabilities on April 1, 2008. In addition to defining fair value,
SFAS 157 provides guidance on fair value measurements establishes a hierarchy of inputs used in valuations andenhances the disclosure requirements for fair value instruments. It also nullifies the guidance provided by EITF
Issue No. 02-3, “Issues Involved in Accounting for Derivative Contracts Held for Trading Purposes andContracts Involved in Energy Trading and Risk Management Activities” (“EITF No. 02-3”), which prohibits therecognition of day one gains or losses on financial instruments valued using significant unobservable inputs.
Please see Note 1, “Summary of accounting policies: Accounting changes and new accounting pronouncements”
in our consolidated financial statements in this annual report for additional information regarding our adoption
SFAS 157.
We also adopted SFAS No. 159 “The Fair Value Option for Financial Assets and Financial Liabilities”(“SFAS 159”) on April 1, 2008 which permits us to apply fair value to additional financial instruments which
would otherwise be accounted for under an alternative method, such as amortized cost or the equity method of
accounting. We elect fair value under SFAS 159 for certain loans and receivables, equity method investments,
structured notes and secured financing transactions. Please see Note 1, “Summary of accounting policies:
Accounting changes and new accounting pronouncements” in our consolidated financial statements in this annual
report for additional information regarding our adoption SFAS 159.
The majority of our financial assets and financial liabilities are carried at fair value, with changes in fairvalue recognized through the consolidated statement of operations on a recurring basis. Financial assets which
are carried at fair value on a recurring basis are reported in our consolidated balance sheets within Trading assets
and private equity investments, Loans and receivables and Other assets. Financial liabilities which are carried atfair value on a recurring basis are reported within Trading liabilities, Short-term borrowings, payables anddeposits, Long-term borrowings, and Other liabilities.
In all cases, fair value is determined in accordance with SFAS No.157, which defines fair value as theamount 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 our principal
market, or in the absence of the principal market, the most advantageous market for the relevant financial asset or
financial liability. Further information on the determination of fair value is provided in Note 1, “Summary ofaccounting policies” and in Note 3, “Fair value of Financial instruments” to our consolidated financial
statements.
Fair value hierarchy
In accordance with SFAS 157, all financial instruments measured at fair value have been categorized into athree-level hierarchy based on the transparency of inputs used to establish fair value.
Level 1:
Quoted prices (unadjusted) in active markets for identical assets or liabilities that we has the ability toaccess at the measurement date are classified as Level 1.
43

Level 2:
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly or indirectly, are classified as Level 2. If the asset or liability has a specified (contractual or redemption)
term, a Level 2 input must be observable for substantially the full term (contractual life) of the asset or liability.
Level 3:Financial assets and financial liabilities whose values are based on unobservable inputs in markets areclassified as Level 3. Unobservable inputs are based on the reporting entity’s own assumptions that other market
participants would consider (including assumptions about risk) under the best information available in thecircumstances. It is classified as Level 3, if such unobservable inputs in markets have more than insignificant
impact on fair value measurement of an instrument.
Financial instruments are classified in the entirety based on the lowest level of input that is significant to thefair value measurement of the instruments. In case that a derivative is valued using a combination of Level 1, 2
and 3 inputs, it would be classified as Level 3, where the Level 3 inputs are significant in its measurement.
As explained above, the valuation of Level 3 financial assets and liabilities are dependent on certain inputs
which cannot be observed or corroborated in the market. This can be the case if, for example, the specificfinancial instrument is traded in an inactive market. Common characteristics of an inactive market include a low
number of transactions of the financial instrument; stale or non-current price quotations; price quotations thatvary substantially either over time or among market makers; or little publicly released information. Common
unobservable inputs include volatility skew and correlation risk for derivative instruments; refinancing periods
and recovery rates for credit-related products and loans; and macroeconomic factors affecting the value ofcollateral in asset-backed securitizations.
If corroborative evidence is not available to value Level 3 financial instruments, fair value may beestablished using other equivalent products in the market. The level of correlation between the specific Level 3
financial instrument and the available benchmark instrument is considered an unobservable parameter. Other
techniques for determining an appropriate value for unobservable parameters may take into account informationsuch as consensus pricing data, historical trends, extrapolation from available market data and other information
we would expect market participants to use in valuing similar instruments.

44

The following table presents information about our financial assets and financial liabilities measured at fairvalue on a recurring basis as of March 31, 2009 within the fair value hierarchy.

Level 1

Level 2

Assets:Trading assets and private equity investments
Equities (including private equity)(2) . . . . .
Debt securities and loans . . . . . . . . . . . . .
Investment trust funds and other . . . . . . . .
Derivatives . . . . . . . . . . . . . . . . . . . . . . . .

¥ 271
6,007
19
638

¥

Loans and receivables(3) . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Billions of yen
March 31, 2009
Counterparty
andCash Collateral
Level 3
Netting(1)

592
1,401
35
15,581

¥ 606
793
6
1,691

0
285

8
54

4
50

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥7,220¥17,671¥3,150¥(15,967)¥12,074

Liabilities:
Trading liabilities
Equities . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt securities . . . . . . . . . . . . . . . . . . . . . .
Investment trust funds and other . . . . . . . .
Derivatives . . . . . . . . . . . . . . . . . . . . . . . .

¥ 413
2,355
1
722

¥

¥

¥

¥

Short-term borrowings(4)(5) . . . . . . . . . . . . . . . . .
Payables and deposits(6) . . . . . . . . . . . . . . . . . . .
Long-term borrowings(4)(5)(7) . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . .

9
—
39
—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥3,539

45

117
250
—
15,192

1
0

¥

—
—
—
(15,967)

Balance as ofMarch 31, 2009

¥ 1,469
8,201
60
1,943

—
—

—
1,424

—
—
—
(15,724)

28
0
485
1

8
(1)
(81)
—

—
—
—
—

¥16,073¥1,351¥(15,724)

12
389

531
2,605
1
1,614
45
(1)
443
1

¥ 5,239

Level 1

Translation into billions of U.S. dollars
March 31, 2009
Counterparty
andCash Collateral
Balance as ofLevel 2
Level 3
Netting(1)March 31, 2009

Assets:Trading assets and private equity investments
Equities (including private equity)(2) . . . . . . . . . . . .
Debt securities and loans . . . . . . . . . . . . . . . . . . . .
Investment trust funds and other . . . . . . . . . . . . . . .
Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans and receivables(3) . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 2.74
60.58
0.19
6.44
0.00
2.87

$

5.97
14.13
0.35
157.150.08
0.54$ 6.11
8.00
0.06
17.05
0.04
0.51

$

—
—
—
(161.04)——$ 14.82
82.71
0.60
19.60
0.12
3.92

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$72.82$178.22$31.77$ (161.04)$121.77

Liabilities:
Trading liabilities
Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment trust funds and other . . . . . . . . . . . . . . .
Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term borrowings(4)(5) . . . . . . . . . . . . . . . . . . . . . . .
Payables and deposits(6) . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term borrowing(4)(5)(7) . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 4.17
23.75
0.01
7.28
0.09
—
0.39
—

$

1.18
2.52
—
153.23
0.28
0.00
4.89
0.01

$ 0.01
0.00
—
14.36
0.08
(0.01)(0.82)—$$

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$35.69$162.11$13.62$ (158.59)———(158.59)
—
—
—
—

5.36
26.27
0.01
16.28
0.45
(0.01)
4.46
0.01$ 52.83(1) Counterparty netting of derivative assets and liabilities in accordance with FASB Interpretation (“FIN”)
No. 39, “Offsetting of Amounts Related to Certain Contracts” (“FIN 39”) and cash collateral netting against
net derivatives in accordance with FSP FIN 39-1.
(2) Includes equity investments that would have been accounted for under the equity method if Nomura had notchosen to apply the fair value option under SFAS 159.
(3) Includes loans for which Nomura elected the fair value option under SFAS 159.
(4) Includes structured notes for which Nomura elected the fair value option under either SFAS No. 155“Accounting for Certain Hybrid Financial Instruments—an amendmend of FASB Statements No. 133 and140” (“SFAS 155”) or SFAS 159.
(5) Includes embedded derivatives bifurcated in accordance with SFAS No. 133, “Accounting for Derivative
Instruments and Hedging Activities” (“SFAS133”) from the structured notes issued. If unrealized gain isgreater than unrealized loss, borrowings are reduced by the excess amount.
(6) Includes embedded derivatives bifurcated in accordance with SFAS 133 from the deposits received at banks.
If unrealized gain is greater than unrealized loss, deposits are reduced by the excess amount.
(7) Includes secured financing transactions that are accounted for as financings rather than sales in accordancewith Statement of Financial Accounting Standards No. 140 “Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities” (“SFAS 140”). We elected the fair value option under
SFAS 159 for these liabilities.
Level 3 Assets and Liabilities
The Level 3 financial instruments include following instruments.
Equities comprised private equity investments in the amount of ¥322 billion ($3.25 billion). Investments tounlisted companies were classified in level 3. Equities also comprised the inventory through Hedge Fund in theamount of ¥130 billion ($1.31 billion). We have developed the business such as issuing structured notes linked tothe inventory.
46

Debt securities and loans comprised bank and corporate bond in the amount of ¥299 billion ($3.02 billion),
corporate loan in the amount of ¥213 billion ($2.15 billion), mortgage backed securities and mortgage loans in
the amount of ¥246 billion ($2.48 billion). It also comprised certain notes which were illiquid and valued bypricing models. Derivative contracts are aggregated without netting of derivative assets and derivative liabilities
by counterparty.
The following is a table of Level 3 financial instruments as a proportion of total financial instruments
carried at fair value:
Translationinto
billions ofBillions of yen
U.S. dollars
March 31, 2009

Level 3 Financial Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deduct: Level 3 Derivative, Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net Level 3 Financial Assets (After netting derivative assets and liabilities) . .

¥ 3,150(1,424)¥ 1,726$ 31.77(14.36)$ 17.41

Total Financial Assets measured at Fair Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deduct: Derivative, Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net Total Financial Assets measured at Fair Value (After netting derivative
assets and liabilities) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 28,041(17,338)$ 282.81(174.87)¥ 10,703$ 107.94

The proportion of the net Level 3 financial assets in the net total financial
assets carried at fair value after netting of derivative assets and liabilities . .

16%

16%

Private equity business
As of April 1, 2007 we adopted SOP 07-1, as a result, all private equity investments made by investmentcompany subsidiaries pursuant to the provisions of SOP 07-1 are now accounted for at fair value, with changes infair value recognized through earnings. Prior to adoption of SOP 07-1, private equity investments were accounted
for at fair value, by the equity method of accounting or as consolidated subsidiaries depending on the attributesof each investment.
The valuation of unlisted private equity investments at fair value requires significant management judgment
because these investments, by their nature, have little or no price transparency. Private equity investments are
initially carried at cost as an approximation of fair value. Adjustments to carrying value are made if there is thirdparty evidence of a change in value. Adjustments are also made, in the absence of third-party transactions, if it isdetermined that the expected realizable value of the investment has been different from the carrying value. In
reaching that determination, we primarily use either our own internal valuation models based on projected future
cash flows to be generated from the underlying investment, discounted at a weighted average cost of capital orcomparable market multiple valuations. Where possible these valuations are compared with the operating cash
flows and financial performance of the companies 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 the investment, such as conversion features and liquidation preferences.
Any changes to valuations are then stress tested to assess the impact of particular risk factors in order toestablish the final estimated valuation. For more information on our private equity activities, see “Private Equity
Business” below.
Derivative contracts
We use a variety of derivative financial instruments, including futures, forwards, swaps and options, for trading
purposes and for non-trading purposes. All derivatives are carried at fair value, with changes in fair value
recognized through earnings.
47

Fair value amounts recognized for derivative instruments with which party are concerned to a master netting
agreement are offset in the consolidated balance sheet in accordance with FIN 39. In addition, fair value amounts
recognized for the right to reclaim cash collateral (a receivable) and the obligation to return cash collateral (apayable) are also offset against net derivative liabilities and net derivative assets, respectively in accordance withFSP FIN 39-1.
Derivative contracts consist of listed derivatives and OTC derivatives. The fair value of listed derivatives
are generally determined from quoted market prices. OTC derivatives are valued using valuation models. Listed
derivative and OTC derivative assets and liabilities are shown below:
Translation into
Billions of yen
billions of U.S. dollars
March 31, 2009
AssetsLiabilities
AssetsLiabilities

Listed derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
OTC derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 633
1,310

¥ 716
898

$ 7
13

$ 7
9

¥1,943¥1,614$20$16

Billions of yen
March 31, 2008(1)AssetsLiabilities

Listed derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
OTC derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

52
1,121

¥

53
737

¥1,173¥ 790(1) As FSP FIN 39-1 was retrospectively applied, the above table as of March 31, 2008 reflect such
retrospective application.
The fair value of OTC derivative assets and liabilities at March 31, 2008 and 2009 by remaining contractual
maturity are shown below:

Less than
1 year

OTC derivative assets . . . . . . . . . . . . . . . .
OTC derivative liabilities . . . . . . . . . . . . .

OTC derivative assets . . . . . . . . . . . . . . . . .
OTC derivative liabilities . . . . . . . . . . . . . .

Billions of yen
March 31, 2009
Years to Maturity
1 to 3 3 to 5 5 to 7 More thanyears years years
7 years

¥829
728

¥746
643

Less than
1 yearBillions of yen
March 31, 2008
Years to Maturity
1 to 3 3 to 5 5 to 7 More thanyears years years
7 years

¥548
636

¥846
767

¥499
447

¥379 ¥518 ¥406
414 484 362¥1,3701,249¥1,058934

Cross-maturity
netting(1)Totalfair value¥(2,980)(2,936)¥1,310898

Cross-maturity
netting(1)Totalfair value¥(1,788)(2,093)¥1,121737

Note: (1) This column shows the amount, which represents the netting of payable balances with receivablebalances for the same counterparty across maturity band categories. Receivable and payable balanceswith the same counterparty in the same maturity category, however, are netted within the maturity
category. Cash collateral netting against net derivatives in accordance with FSP FIN 39-1 are included.
(2) As FSP FIN 39-1 was retrospectively applied, the above table as of March 31, 2008 reflect such
retrospective application.
48

The fair value of derivative contracts include adjustments for credit risk, both with regards to counterparty
credit risk on positions held and our own credit risk on positions issued.
We realize gain or losses relating to changes in credit risk on our derivative contracts together with the
movements of our trading positions, which include derivatives, that are expected to mitigate the above mentioned
impacts due to changes in credit risk. We have various such derivative contracts with credit risk including theexposure to monoline insurers (financial guarantors). See “Exposure to monoline insurers (financial
guarantors)” on the next page for further information.
We calculated the impact of its own creditworthiness on derivative liabilities, which resulted in revenue of¥50 billion ($0.50 billion) for the year ended March 31, 2009.
Assets and Liabilities Associated with Investment and Financial Services Business
Exposure to Certain Financial Instruments and Counterparties
Challenging market conditions continue to impact numerous products including securitization and leveraged
finance products to which we have certain exposure. We also have exposures to monoline insurers in the normal
course of business.
Securitization Products
Our exposure to securitization products mainly consists of Commercial mortgage-backed securities(“CMBS”), Residential mortgage-backed securities (“RMBS”), and commercial real estate-backed securities. We
hold these securitization products in connection with securitization, financing, trading and other activities. The
following table provides a summary of our exposure to securitization products by geographic location of theunderlying collateral as of March 31, 2009.
Japan

Asia

March 31, 2009
EuropeAmerica(in millions)

Total

Commercial mortgage-backed securities(2) . . . . . . . . . . . . . .
Residential mortgage-backed securities . . . . . . . . . . . . . . . . .
Commercial real estate-backed securities . . . . . . . . . . . . . . .
Other securitization products . . . . . . . . . . . . . . . . . . . . . . . . .

¥

8,069
35,49737,70838,773

¥ —
—
—
2,715

¥ —
—
—
7,701

¥ 2,71735,786—
5,148¥ 10,786
71,28337,70854,337

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥120,047¥2,715¥7,701¥43,651¥174,114

Notes:(1) The balances shown exclude those for which we transferred financial assets to securitization vehicles wheresuch transfers were accounted for as secured financings rather than sales under SFAS140, and in which wehave no continuing economic exposure.
(2) We have ¥38,486 million exposure, as whole loans and commitment, to U.S. CMBS-related business as ofMarch 31, 2009.
The following table sets forth our exposure to CMBS by geographical region and external credit rating of
the underlying collateral as of March 31, 2009.
March 31, 2009BB
Not rated(in millions)

AAA

A

BBB

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Americas . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥4,304
1,509

¥ 97
56

¥887
35

¥—
374

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥5,813

¥153

¥922

¥374

49

GNMA/GSEs(1)Total¥2,781—¥—743¥ 8,069
2,717¥2,781¥743¥10,786

Notes:(1) “GNMA” refers to the Government National Mortgage Association. “GSEs” refers to government
sponsored enterprises.
(2) Rating based on the lowest rating given by Standard & Poor’s, Moody’s Investors Service, Fitch Ratings
Ltd., Japan Credit Rating Agency, Ltd. or Rating and Investment Information, Inc. as of March 31, 2009.
Exposure to monoline insurers (financial guarantors)
The following table sets forth our notional amounts, gross exposure, counter party risk reserves and otheradjustments, net exposure, and CDS protection to monoline insurers (financial guarantors) by credit rating instructured credit trading business of Global Markets in Europe. The table does not include the fully reserved orhedged exposures.
March 31, 2009
Counterparty
Risk Reserves
and other
Adjustments
Net Exposure(in millions)Monoline Insurers by Credit Rating(1)Notional(2)GrossExposure(3)CDS
Protection(4)AAA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
AA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-investment grade . . . . . . . . . . . . . . . . . . . . .

$1,276$ 256$6,947$ 248$ 123$4,868$ 94$ 13$4,433

$154
$110
$435

$ —
$ 11
$142

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$8,479$5,239$4,540$699$153

Notes:(1) Rating based on Standard & Poor’s or Moody’s Investors Service as of March 31, 2009 depending on whichrating is lower.
(2) The gross notional value of the credit derivative contract. There is no exposure related to U.S. RMBS as
reference assets.
(3) Gross exposure represents the estimated fair value prior to adjustments.
(4) Notional less estimated fair value of CDS protection acquired against the monoline insurers.
In addition to the above derivatives exposure, Nomura also had $420 million of debt securities at March 31,
2009 guaranteed by monoline insurers, the majority of which are utility bonds. The estimated fair value of thewrap included in the carrying value of these debt securities is not significant.
Leveraged Finance
We provide loans to clients in connection with leveraged buy-outs and leveraged buy-ins. As this type offinancing is usually initially provided through a commitment, We have both funded and unfunded exposures onthese transactions.
The following table sets forth our’s exposure to leveraged finance by geographic location of the target
company as of March 31, 2009.
March 31, 2009

FundedMillions of yen
Unfunded

Total

Translation into
millions of
U.S. dollars
Total

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 7,967
74,859¥1,895
5,601¥ 9,862
80,460$100
811

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥82,826¥7,496¥90,322$911

50

Accounting Developments
See Note 1, “Summary of accounting policies: Accounting changes and new accounting pronouncements”,
in our consolidated financial statements included in this annual report.
Private Equity Business
Our private equity investments, which are made primarily through our Merchant Banking Division, continue
to expand in both Japan and Europe.
As of April 1, 2007 we adopted SOP 07-1. Certain entities which we consolidate under either a votinginterest or variable interest model (“investment company subsidiaries”) are investment companies pursuant to theprovisions of SOP 07-1. Investment company accounting applied by each of these investment company
subsidiaries is retained in these consolidated financial statements.
These entities make private equity investments solely for capital appreciation, current income or both rather
than to generate strategic operating benefits to the parent entity or our group. In accordance with our investment
policies, non-investment companies within the group may not make investments in entities engaged in non-corebusinesses if such investments would result in consolidation or application of the equity method. Suchinvestments may generally only be made by investment companies within the group. Non-core businesses aredefined as those engaged in activities other than our five business segments.
We also adopted SFAS 159 on April 1, 2008 as well as SOP 07-1. As a result, all private equity investments
are now accounted for at fair value, with changes in fair value recognized through earnings. Prior to the adoptionof SOP 07-1, private equity investments were accounted for at fair value, by the equity method of accounting or
as consolidated subsidiaries depending on the attributes of each investment.
Private equity business in Japan
We have an established private equity business in Japan, which is operated primarily through a whollyowned subsidiary, Nomura Principal Finance Co., Ltd (“NPF”).
Since its inception in 2001, NPF has made 21 investments and exited from 15 of these investments(including partial sales) and the fair value of its investment portfolio is ¥98,998 million ($998 million) as at
March 31, 2009.
NPF is a consolidated investment company pursuant to the provisions of SOP 07-1 and therefore carries allof its investments at fair value, with changes in fair value recognized through earnings from the adoption date of
SOP 07-1 on April 1, 2007, rather than applying the equity method of accounting or consolidation, which was theaccounting applied to certain investments prior to that date.
We also make private equity investments through another wholly-owned subsidiary Nomura Financial
Partners Co., Ltd. (“NFP”). NFP is not an investment company pursuant to SOP 07-1, as it invests in entities
engaged in our core-business.
On April 11, 2008, NFP and our joint investors entered into a share purchase agreement among Ashikaga
Holdings Co., Ltd. (“Ashikaga Holdings”), a newly established entity for this transaction, The Ashikaga Bank
Ltd. (“Ashikaga Bank”) and Deposit Insurance Corporation of Japan (“DICJ”). Ashikaga Holdings acquired
Ashikaga Bank’s shares from DICJ for ¥120 billion ($1.21 billion) and to subscribe for Ashikaga Bank’s newshares for ¥160 billion ($1.61 billion) on July 1, 2008. We elected the fair value option to account for ourinvestment in Ashikaga Holdings common stock, in which our ownership share is 45.5%. For more informationof the fair value option under SFAS 159, see “—Fair value for financial instruments”.
51

Private equity business in Europe
In Europe, our private equity investments primarily comprise legacy investments made by our former
Principal Finance Group (“PFG”) now managed by Terra Firma (collectively referred to as the “Terra Firma
Investments”), investments in other funds managed by Terra Firma (“Other Terra Firma Funds”) and throughother investment company subsidiaries (“Other Investments”).
Terra Firma Investments
Following a review to determine the optimum structure to run our European private equity business, on
March 27, 2002, we restructured our PFG and, as a result, contributed our investments in certain of ourremaining investee companies to Terra Firma Capital Partners I (“TFCP I”), a limited partnership which isengaged in the private equity business, in exchange for a limited partnership interest. Terra Firma Investments(GP) Limited (“Terra Firma”), the general partner of TFCP I, which is independent of us, assumed the
management and control of these investments, together with one other PFG investment, Annington Holdings plc,
which due to contractual restrictions was not transferred to the partnership.
With effect from March 27, 2002, we ceased consolidating the Terra Firma Investments and accounted for
our investment managed by Terra Firma at fair value in accordance with the AICPA Audit and Accounting
Guide, “Investment Companies” until March 31, 2007, following which we adopted SOP 07-1.
The Terra Firma Investments are held by entities which are consolidated investment companies pursuant to
the provisions of SOP 07-1 and therefore we continue to account for these investments at fair value, with changes
in fair value recognized through earnings.
The estimated fair value of the Terra Firma Investments was ¥130,938 million and ¥89,762 million($905 million) at March 31, 2008 and 2009, respectively.
Other Terra Firma Funds
In addition to the Terra Firma Investments, we are a 10% investor in a ¥252 billion ($2.54 billion) private
equity fund (“TFCP II”) and a 2% investor in a ¥671 billion ($6.77 billion) private equity fund (“TFCP III”), also
raised and managed by Terra Firma Capital Partners Limited.
Our total commitment for TFCP II was originally ¥25,182 million ($254 million) and reduced to¥6,038 million ($61 million) as a result of adjustments for recyclable distributions. As of March 31, 2009,¥4,392 million ($44 million) had been drawn down for investments.
For TFCP III, our total commitment is ¥12,984 million ($131 million) and ¥7,037 million ($71 million) had
been drawn down for investments as at March 31, 2009.
The investments in TFCP II and TFCP III are carried at fair value, with changes in fair value recognizedthrough earnings.
Other Investments
We also makes private equity investments in Europe through wholly owned subsidiaries and otherconsolidated entities which have third party pooling of funds. These entities are consolidated investmentcompanies pursuant to the provision of SOP 07-1 and therefore all investments are carried at fair value, withchanges in fair value recognized through earnings.

52

B. Liquidity and Capital Resources.
Liquidity
Overviews
Liquidity is of critical importance to us and other firms in the financial services sector. We define liquidity
risk as the potential inability to meet financial obligations as they become due. This risk could arise from an
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. Liquidity risk could be due both to Nomura-specific and market wide events. Our primary liquidity
objective is to ensure continuous liquidity across market cycles and periods of stress, and to ensure that all
funding requirements and unsecured debt obligations that fall due within one year can be met without additional
unsecured funding or forced liquidation of trading assets.
We have in place a number of liquidity policies to achieve our primary liquidity objective. These include(1) ensuring sufficient long term debt to meet our cash capital needs; (2) maintenance of liquidity portfolios
comprising cash and highly liquid unencumbered securities that can be converted into cash to meet our
immediate liquidity requirements; (3) diversification of funding sources by currency, products, investor base andmaturity in order to minimize reliance on any one source; (4) contingency funding plans and committed,
unsecured credit facilities.
The Executive Management Board has the authority to make decisions concerning the group liquidity
management. The Chief Financial Officer (CFO) has the operational authority and responsibility over Nomura
Group’s liquidity management based on the decision made by the Executive Management Board. Global
Treasury is responsible for monitoring and managing our liquidity in accordance with policies determined by the
Executive Management Board or other decision making bodies.
1. Ensure appropriate funding mix. We seek to maintain a surplus of long term debt and equity above the
cash capital requirements of our assets. This allows us to be able to fund our operations for at least one year in a
stress event, without needing to raise additional unsecured funding or forcing the liquidation of trading assets.
The amount of liquidity required is based on an internal model which incorporates the following requirements.
(i)

Our ability to finance assets using secured funding, including repurchase agreements and securities
lending transactions. The cash capital requirements are calculated using conservative estimates of theassets secured borrowing power in stressed scenarios.

(ii) Goodwill and identifiable intangible assets, property, equipment and other illiquid assets.
(iii) Collateral requirements on derivative contracts arising as a result of a two-notch downgrade in ourcredit rating. In addition, other unencumbered assets held at exchanges for chaining requirements arealso funded with long-term liquidity.
(iv) Commitments to lend to external counterparties based on the probability of drawdown.
(v) Capital or other forms of financing in our regulated subsidiaries that is in excess of their long-term cash
capital requirements.
Our internal model is calculated at the subsidiary level in order to take into account legal, regulatory and tax
restrictions that may impact the transfer of liquidity between entities.
We routinely issue long term debt in various maturities and currencies to maintain a long term funding
surplus, and to also achieve both cost effective funding and a maturity profile where the average duration of ourdebt is sufficient to meet our long-term cash capital requirements. We therefore seek to maintain an average
maturity for vanilla instruments greater than three years. The average maturity (for debt securities and53

borrowings with maturities longer than one year) was 3.98 years as of March 31, 2009. Approximately 80% of
our medium-term notes are structured and linked to interest or equity, indices, currencies or commodities.
Conditions for such calls by indexes are individually set. These maturities are evaluated based on our internal
model and monitored by Global Treasury. Maturities for plain vanilla debt securities and borrowings are basedon contractual maturities. Where there is a possibility that notes may be called prior to their scheduled maturity
date, maturities are based on our internal stress option adjusted model. This model values the embedded
optionality under stress market conditions in order to determine when the note is likely to be called.
On this basis, the average maturity of structured notes (notes with maturities longer than one year) was
13.53 years as of March 31, 2009. The average maturity of our entire long term debt portfolio including plain
vanilla debt securities and borrowings was 7.52 years as of March 31, 2009. The graph below shows the
distribution of maturities of our outstanding long-term debt securities and borrowings.

Long-term debt maturities profile

JPY in Billion

as of March 31, 2009

2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
Over 5Y

FY2013Q4

FY2013Q3

FY2013Q2

FY2013Q1

FY2012Q4

FY2012Q3

FY2012Q2

FY2012Q1

FY2011Q4

FY2011Q3

FY2011Q2

FY2011Q1

FY2010Q4

FY2010Q3

FY2010Q2

FY2010Q1

FY2009Q4

FY2009Q3

FY2009Q2

FY2009Q1

0(1) Redemption schedule is individually estimated by considering of the probability of redemption. Due tostructure bias, we use the probability adjusted by a certain stress.
2. Diversify unsecured funding sources. We seek to reduce refinancing risk through diversification of ourfunding sources. We diversify funding by product, investor and market in order to reduce our reliance on any one
funding source. We benefit by distributing a significant portion of our debt through our retail and institutionalsales force to a diversified global investor base. We believe that maintaining relationships with our investors is
critical to our liquidity strategy.
We also seek to diversify funding by currency. The proportion of our non-yen denominated long-term debt
is 12.5% of total term debt outstanding as of March 31, 2009.

54

We diversify funding by issuing various types of debt instruments—these include both structured loans andnotes. Structured notes are debt obligations with returns linked to other debt or equity securities, indices,
currencies or commodities.
March 312008
2009
(in billions, except percentages)

Short-Term Unsecured Debt Total(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥2,246.4 26.1% ¥1,932.4
Short-Term Bank Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
698.7
796.7
Other Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
86.0
137.4
Commercial Paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
445.9
318.7
Deposit at Banking Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
327.7
354.6
Certificates of Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16.7
61.0
Bonds and Notes maturing within one year . . . . . . . . . . . . . . . . . . . . . .
671.4
264.0
Long-Term Unsecured Debt Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,374.5 50.8% 4,646.4
Long-Term Deposit at Banking Entities . . . . . . . . . . . . . . . . . . . . . . . . .
18.4
24.7
Long-Term Bank Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,259.3
1,706.4
Other Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
145.0
124.0
2,951.8
2,791.3
Bonds and Notes(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shareholders’ Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,988.1 23.1% 1,539.4

23.8%

57.2%

19.0%

(1) Short-term unsecured debt includes the current portion of long-term unsecured debt.
(2) Excluding “Long term bonds and notes issued by consolidated VIEs” that meet the definition of Variable
Interest Entities (VIE) under FASB Interpretation No. 46-R and “Financial liabilities recognized within longterm borrowings as a result of transfers of financial assets that are accounted for as financings rather
than sales in accordance with SFAS 140”.
3. Unsecured Funding Management. We manage the overall level of unsecured funding and createdinternal limits on the additional amount of unsecured funding available across the Firm. The availability of
unsecured funding is set by the Executive Management Board and monitored closely by Global Treasury.
Issuance of securities by regulated broker-dealers or banking entities may restrict the availability of liquidity
across the Nomura group. We actively seek to concentrate issuance of all long-term unsecured, non-deposit
funding instruments at either the parent company or unregulated issuing entities. The primary benefits of thisstrategy include cost minimization, wider investor name recognition and greater flexibility in providing funding
to various subsidiaries across the Nomura group.
4. Maintain Liquidity Portfolios. To ensure a readily available source of liquidity, we have structured our
liquidity portfolio under the assumption that in certain instances, legal and regulatory requirements can restrict
the flow of funds between entities in our consolidated group, and funds or securities might not freely moveacross the Nomura group.
We maintain a liquidity portfolio at Nomura Holdings, Inc. and group companies in the form of cash andhighly liquid, unencumbered securities that may be sold or pledged to provide liquidity.
The size and structure of our liquidity portfolio takes into account immediate cash requirements arising from(i)

Upcoming maturities of unsecured debt (maturities less than 1 year)(ii) Potential buybacks of our outstanding debt(iii) Loss of secured funding lines particularly for less liquid assets, over and above our cash capital
estimates
55

(iv) Normal business volatility(v) Cash and collateral outflows in the event of a stress event.
As of March 31, 2009, our liquidity portfolio was ¥2,400.5 billion. Our liquidity portfolio is composed offollowing highly liquid products.
March 312008
2009
(in billions)

Liquidity Portfolios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥2,385.9 ¥2,400.5
Cash, Cash Equivalent and Time Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,265.3
1,150.7
Overnight Call Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
139.4
45.9
Government Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
981.2
1,203.9
In addition to the liquidity portfolio, we have ¥907.9 billion of other unencumbered assets comprising
mainly unpledged trading inventory that can be used as an additional source of secured funding. The aggregate
value of our liquidity portfolios and other unencumbered assets as of March 31, 2009 was ¥3,308.4 billion—thisrepresented 171% of our total unsecured debt maturing within one year.
March 312008
2009
(in billions)

Net Liquidity Value of Other Unencumbered Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liquidity Portfolios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,329.2
2,385.9¥ 907.9
2,400.5

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥3,715.1¥3,308.4

5. Maintain Committed Bank Facilities. In addition to our Liquidity Portfolio, we maintain undrawn
committed facilities with a group of globally recognized banks in order to provide contingent financing sources.
Total committed facilities were ¥256.2 billion as of March 31, 2009. We have structured the facilities to ensurethat the maturity dates of these facilities are distributed evenly throughout the year in order to prevent excessive
maturities of facilities in any given period. While the ability to borrow under these facilities is subject tocustomary lending conditions and covenants, we do not believe that any of the covenant requirements will impair
our ability to draw them. We may occasionally test the effectiveness of our drawdown procedures.
6. Maintain and test Contingency Funding Plan (CFP). We have developed a detailed contingency
funding plan. As a part of the CFP, we have developed an approach for analyzing and specifying the extent of
any liquidity crisis. This allows us to estimate the likely impact of both a Nomura-specific and market-widecrises; and specifies the immediate action to be taken to mitigate any risk. The CFP lists details of key internaland external parties to be contacted and the processes by which information is to be disseminated. This has beendeveloped at the legal entity level in order to capture specific cash requirements at the local level—it assumes
that the parent company does not have access to cash that may be trapped at the subsidiary level due toregulatory, legal or tax constraints. We periodically test the effectiveness of our funding plans for different
Nomura specific events and market-wide. We also have access to operations at central banks such as Bank ofJapan and European Central Bank, which provide financing against various types of securities. These operations
are accessed in the normal course of business and are an important in tool in mitigating contingent risk frommarket disruptions.
Cash Flow
Cash and cash equivalents as of March 31, 2009, increased by ¥106.3 billion compared to March 31, 2008. For
the year ended March 31, 2009, net cash used in operating activities amounted to ¥712.6 billion due primarily to an56

increase of trading related assets (net of trading related assets and liabilities). Net cash used in investing activities
amounted to ¥98.9 billion. Net cash provided by financing activities amounted to ¥999.8 billion due primarily toproceeds received from issuances of stock and long-term borrowings.
Balance Sheet and Financial Leverage
Total assets as of March 31, 2009, were ¥24,837.8 billion, a decrease of ¥398.2 billion compared to¥25,236.1 billion as of March 31, 2008, reflecting a decrease in collateralized agreements. Total liabilities as ofMarch 31, 2009, were ¥23,298.5 billion, an increase of ¥50.5 billion compared to ¥23,247.9 billion as ofMarch 31, 2008. Total shareholders’ equity at March 31, 2009, was ¥1,539.4 billion, a decrease of ¥448.7 billion
compared to ¥1,988.1 billion as of March 31, 2008, due to a decrease in retained earnings offset by the proceedsfrom a stock issuance.
We seek to maintain sufficient capital at all times to withstand losses due to extreme market movements.
The Executive Management Board 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 capitalbase to ensure that it can support the economic risk inherent in our business. There are also regulatory
requirements for minimum capital of entities that operate in regulated securities or banking businesses. See
Note 18, “Regulatory requirements” in our consolidated financial statements.
Our capital was ¥1,539.4 billion as of March 31, 2009, a decrease of ¥448.7 billion compared with ¥1,988.1
billion as of March 31, 2008. Our leverage ratio as of March 31, 2009 has increased to 16.1 times from 12.7
times as of March 31, 2008, largely due to the decrease of our shareholders’ equity.
The following table sets forth our shareholders’ equity, total assets, adjusted assets and leverage ratios:
March 312008(1)2009(in billions, except ratios)

Shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjusted assets(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leverage ratio(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjusted leverage ratio(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 1,988.1
25,236.1
14,844.7
12.7x
7.5x

¥ 1,539.4
24,837.8
16,425.2
16.1x
10.7x

(1) As FSP FIN 39-1 was retrospectively applied, the above table as of March 31, 2008 reflect such
retrospective application.
(2) Adjusted assets represent total assets less securities purchased under agreements to resell and securities
borrowed transactions.
(3) Leverage ratio equals total assets divided by shareholders’ equity.
(4) Adjusted leverage ratio equals adjusted assets divided by shareholders’ equity.
Capital Management
Capital Management Policy
We seek to enhance shareholder value by capturing business opportunities as they develop. To achieve thisgoal, we maintain sufficient capital to support our business. We review our sufficiency of capital as appropriate,taking into consideration economic risks inherent in our businesses, regulatory requirements, and maintenance ofa sufficient debt rating for a global financial institution.
Capital-raising Activities
Our capital-raising activities during the fiscal year ended March 31, 2009 included the following:•

In June and July 2008, Nomura Securities raised ¥480.0 billion through a subordinated loan fromseveral financial institutions.
57

•In December 2008, we raised ¥410.0 billion through issuance of subordinated bonds to the public andsubordinated convertible bonds to certain Japanese financial institutions. The subordinated bonds, theaggregate principal amount of which is ¥300.0 billion, are due December 26, 2016 and their coupon rate is
3.60% per annum. The subordinated bonds were issued to enhance our financial position without causing
dilution. The subordinated convertible bonds, the aggregate principal amount of which is ¥110.0 billion,
are due March 31, 2014 and their coupon rate is also 3.60% per annum. The subordinated convertible
bonds were issued for the financial stability offered by the subordinated nature of the bonds, the possibility
to change our capital structure by conversion of debt to equity when market conditions recover, and theflexibility and speed with which capital can be enhanced due to a 120% call option attached.

•In March 2009, we raised ¥277.9 billion through issuance of shares of our common stock in a global
offering. The proceeds from the offering were used for working capital and other general corporate
purposes.

Dividends
In regard to cash dividends, we had set target dividend amounts based on the dividend-on-equity ratio(DOE) of 3% as the minimum level of cash dividend. When we achieved a sufficient level of profit, we madeadditional cash dividends achieving a pay-out ratio exceeding 30%. For the fiscal year ended March 31, 2009,
based on the target dividend amount of 34 yen per share, we paid 8.5 yen of dividend for the first, second, andthird quarter. However, we decided to forgo payment of the fourth quarter dividend, as we finished the year at a
net loss. Accordingly, the total annual dividend for the fiscal year ended March 31, 2009 was 25.5 yen per share.
For the fiscal year ending March 31, 2010, we changed our dividend policy from the DOE focused one tothe pay-out ratio of 30% as a key indicator so that we can achieve stable dividend payouts. The payment
frequency will also be changed from quarterly (record dates: June 30, September 30, December 31 andMarch 31) to semi-annual (record dates: September 30 and March 31) in principle.
As for retained earnings, we intend to invest in business areas where high profitability and growth may
reasonably be expected, including development and expansion of infrastructure, to maximize value for shareholders.
Stock Repurchases
We repurchase shares when we recognize the need to set out flexible financial strategies that allow the
Board to respond quickly to changes in the business environment.
When we decide to set up a share buyback program, we will announce the decision soon after it is made andpurchase the shares following internal guidelines.
Preferred Stock
Effective June 25, 2009, we have amended our Articles of Incorporation in order to enable issuance ofseveral classes of preferred stock. A robust capital base is essential to ensuring the expansion and enhancementof our business platform. Although our capital and financial structure currently does not require any immediate
issuance of preferred stock, we have made this amendment to expand our fundraising options and speedily
respond to future changes in the economic and business environment. We do not have concrete plans to issue
preferred stocks as of June 30, 2009.
The amendment did not result in any change to the authorized number of shares of Nomura.
Consolidated Regulatory Requirements
The Financial Services Agency established the “Guideline for Financial Conglomerate Supervision”(hereinafter referred to as the “Financial Conglomerate Guideline”) in June 2005 and set out the rule on
consolidated regulatory capital. We started monitoring the consolidated capital adequacy ratio of Nomura
Holdings, Inc. according to the Financial Conglomerate Guideline from April 2005.
58

Beginning from the end of March, 2009, we selected to calculate the consolidated capital adequacy ratio
according to the “Criteria for bank holding companies to judge whether their capital adequacy status isappropriate in light of their own and their subsidiaries’ asset holdings, etc. under Article 52-25 of the Banking
Act” (hereinafter referred to as the “Bank Holding Companies Notice”) which is allowed under the provision in“the Comprehensive Guidelines for Supervision of Financial Instruments Business Operators, etc.” (hereinafterreferred to as the “Financial Instruments Business Operators Guidelines”) instead of the Financial Conglomerate
Guideline although we continue to be monitored as a financial conglomerate governed by Financial
Conglomerate Guideline. The Bank Holding Companies Notice incorporates the rules set out in “International
Convergence of Capital Measurement and Capital Standards: A Revised Framework” published by the BaselCommittee on Banking Supervision (Basel II).
Under the Financial Conglomerate Guideline, financial conglomerates, defined as the holding companies offinancial institutions and its group companies, must maintain the amount of consolidated capital not less thanrequired capital. As we have started the calculation according to the Bank Holding Companies Notice, weconvert each risk by multiplying the amount by 12.5; therefore we examine whether we abide by this requirementby confirming that the capital/risk-weighted asset ratio is higher than 8%.
As of March 31, 2009, we were in compliance with this requirement, with a ratio of total capital to riskweighted assets of 18.9%.
The following table presents the Company’s consolidated capital adequacy ratio as of March 31, 2009:
March 31, 2009
(in billions, except ratios)

Qualifying Capital
Tier 1 capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tier 2 capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tier 3 capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deductions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total qualifying capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk-Weighted Assets
Credit risk-weighted assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Market risk equivalent assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operational risk equivalent assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total risk-weighted assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Capital Adequacy Ratios
Consolidated capital adequacy ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tier 1 capital ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,405.1
612.7
297.5
58.4
2,257.0
5,422.1
5,207.0
1,306.8
11,935.9
18.9%
11.7%

Total qualifying capital is comprised of Tier 1, Tier 2 and Tier 3 capital. Our Tier 1 capital mainly consistsof shareholders’ equity and minority interest less goodwill, certain intangible fixed assets, and net deferred tax
assets in excess of 20% of Tier 1 before deferred tax asset adjustment.
Tier 2 and Tier 3 capital consists of subordinated debt, classified to Tier 2 and Tier 3 by original maturity
and other conditions set out by the Bank Holding Companies Notice.
Market risk is calculated using the Company’s Value-at-Risk model as permitted under the Financial
Instruments Business Operators Guidelines. Credit risk assets are calculated using Standardized Approach whichapplies fixed percentage to the fair value of the assets. Operational risk is calculated under the Basic Indicator
Approach, where the average net revenues over the previous three years are multiplied by a fixed percentage.
Credit Ratings
The cost and availability of unsecured funding generally are dependent on credit ratings. Our long-term andshort-term debt were rated by Standard & Poor’s, Moody’s Investors Service, Rating and Investment
Information, Inc., Japan Credit Rating Agency, Ltd.
59

As of May 27, 2009, the credit ratings of Nomura Holdings, Inc. and Nomura Securities provided by suchcredit rating agencies were as follows:
Nomura Holdings, Inc.

Standard & Poor’s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Moody’s Investors Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rating and Investment Information, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japan Credit Rating Agency, Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Nomura Securities Co., Ltd.

Standard & Poor’s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Moody’s Investors Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rating and Investment Information, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japan Credit Rating Agency, Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Short-term Debt

Senior Debt

A-2
—
a-1
—

BBB+
Baa2
A+
AA-

Short-Term Debt

Senior Debt

A-2
P-2
a-1
—

ABaa1
A+
AA-

Rating and Investment Information, Inc. and Japan Credit Rating Agency, Ltd. are credit rating agencies
nationally recognized in Japan. We rely on, or utilize, credit ratings on our long-term and short-term debt provided
by these Japanese credit rating agencies, as well as Standard & Poor’s and Moody’s Investors Service, for purposesof unsecured funding and other financing activities and also for purposes of our trading and other business activities.
Within the rating classification system of Rating and Investment Information, Inc., “a-1” is the highest of fivecategories for short-term debt and indicates “a strong degree of certainty regarding the debt repayment”; and “A” isthe third highest of nine categories for long-term debt and indicates “a high degree of certainty regarding the debt
repayment with excellence in specific component factors,” with a plus (+) or minus (-) sign added to a rating in thatcategory to indicate its relative standing within that category. Within the rating classification system of Japan Credit
Rating Agency, Ltd., “AA” is the second highest of ten categories for long-term debt and indicates “a very highlevel of capacity to honor the financial commitment on the obligation,” with a plus (+) or minus (-) sign added to arating in that category to indicate its relative standing within that category.
On May 27, 2009, Moody’s Investors Service downgraded the ratings for senior debt from “A3” to “Baa2”and from “A2” to “Baa1” for Nomura Holdings and Nomura Securities, respectively. The short-term debt rating
for Nomura Securities was also downgraded from “P-1” to “P-2.” The Outlook for both Nomura Holdings andNomura Securities was changed from “Negative” to “Stable.” These downgrades were attributed to Moody’s
expectation that Nomura’s challenges to stabilizing earnings will continue, given a persistently difficult operating
environment. The downgrade also reflects the agency’s lingering uncertainty regarding Nomura’s ability to
expand its wholesale platform within a reasonable timeframe by integrating the former Lehman operations.
On January 27, 2009, Standard & Poor’s downgraded the ratings for senior debt from “A-” to “BBB+” andfrom “A” to “A-” for Nomura Holdings and Nomura Securities, respectively. The short-term debt rating for Nomura
Securities was also downgraded from “A-1” to “A-2.” The outlook for both Nomura Holdings and Nomura
Securities was changed from “Negative” to “Stable.” These downgrades were attributed to Nomura’s record
quarterly loss for the three months ended December 31, 2008. According to Standard & Poor’s, the loss was mainly
due to negative trading results, mark down of positions and additional costs and expenses related to the Lehman
acquisition. The outlook was changed to “Stable,” reflecting a solid capital base, strong domestic franchise andperceived “balance” between risk/profitability and capital/liquidity to merit the rating for the mid-term.
On January 27, 2009, Rating and Investment Information, Inc. downgraded the ratings for senior debt from“AA-” to “A+” and short-term debt from “a-1+” to “a-1” for both Nomura Holdings and Nomura Securities. The
Outlook for both Nomura Holdings and Nomura Securities was changed from “Negative” to “Stable.” These
downgrades were attributed to the market slump since September weighing heavily on our group. Losses wereincurred in Global Markets, and the overall decline in market activities prompted a slowdown in retail sales
which led to larger-than-expected losses for the third quarter, according to the agency.

60

On October 28, 2008, Japan Credit Rating Agency, Ltd. downgraded the ratings for senior debt from “AA”
to “AA-” for both Nomura Holdings and Nomura Securities. The downgrade was attributed to the deteriorationof the operating environment, both domestic and global, for investment banks, the erosion of capital from the¥149.5 billion loss in six months ended September 30, 2008 and the downward pressure on profitability. On
January 27, 2009, Japan Credit Rating Agency, Ltd. revised the ratings outlook of the Nomura group from
“Stable” to “Negative”. The “Negative” outlook is an indication that Japan Credit Rating Agency, Ltd. may
lower the Nomura group ratings over the medium term.
C. Research and Development, Patents and Licenses, etc.
Not applicable.
D. Trend Information.
The information required by this item is set forth in Item 5.A of this annual report.
E. Off-Balance Sheet Arrangements.
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 financial performance.
Off-balance sheet arrangements with off-balance sheet entities include the following where Nomura has:•

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

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

any obligation, including 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 and development services with, us.

Off-balance sheet entities may take the form of a corporation, partnership, fund, trust or other legal vehicle
which are 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. Such entities generally meet thedefinition of a Variable Interest Entity (“VIE”) under FASB Interpretation No. 46 (revised December 2003),“Consolidation of Variable Interest Entities” (“FIN 46-R”) or meet the definition of a Qualifying Special
Purpose Entity (“QSPE”) under SFAS 140.
A VIE, as defined by FIN46-R, is an entity with insufficient equity at risk to support its operations without
additional subordinated financial support or whose equity investors lack the features of a controlling interest in
the entity. In other words, equity investors in these entities lack either the ability to make significant decisions
through their voting rights, an obligation to absorb the expected losses of the entity or a right to receive theexpected residual returns of the entity. A QSPE is generally a passive vehicle whose activities are restricted andpredetermined at inception in accordance with criteria under SFAS 140. Such vehicles are generally used tosecuritize financial assets such as loans and debt instruments.
Our only significant off-balance sheet arrangements with entities which meet the definition of off-balance
sheet entities are through program vehicles which we use primarily for the securitization of commercial andresidential mortgages, government and corporate bonds and other financial assets. Significant involvement isassessed based on all of our arrangements with these entities, even if the probability of loss as assessed at thebalance sheet date is remote.
61

Our involvement with these entities includes structuring, underwriting, distributing and selling debt
instruments and beneficial interests issued by these entities, subject to prevailing market conditions. In the normal
course of business, we also act as transferor of financial assets to, and underwriter, distributor and seller of assetrepackaged financial instruments issued by these entities, in connection with our securitization and equity derivative
activities. We retain, purchase and sell variable interests in Special Purpose Entities (“SPEs”) in connection with ourmarket-making, investing and structuring activities. Our other types of off-balance sheet arrangements include
guarantee agreements and derivative contracts. For further information about transactions with VIEs, see Note 8,“Securitization and Variable Interest Entities (VIEs)” in our consolidated financial statements.
The following table sets forth our exposures from consolidated VIEs, exposure to unconsolidated significant
VIEs and exposure to unconsolidated sponsored VIEs (of which we are a sponsor that holds a variable interest ina VIE) as at March 31, 2009, arising from our significant involvement with these entities. We consider maximum
exposures to loss to be limited to the amounts presented below, which are reflected in our consolidated balance
sheet or the footnote discussing guarantees. Exposures do not reflect our estimate of the actual losses that could
result from adverse changes, nor does it reflect the economic hedges we enter into to reduce its exposure.
Billions of yen
March 31, 2009
Exposures tounconsolidated
Exposuressignificant
from
VIEs andconsolidated
sponsored
VIEs
VIEs(2)

Total

Trading Assets:
Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥362
52

¥ 84
24

¥446
76

Mortgage and mortgage-backed securities . . . . . . . . . . . . . . . . . . . . . . . .
Investment trust fund and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivatives(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Office buildings, land, equipment and facilities . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

123
8
12
51
82

89
4
55
—
48

212
12
67
51
130

(1) The amounts represent current balance sheet carrying value of derivatives. Notional amounts up to VIEs’
gross assets are ¥38 billion for exposure of consolidated VIEs and ¥116 billion for exposure tounconsolidated SPEs.
(2) We held ¥23 billion of commitment to extend credit, standby letters of credit and other guarantees tounconsolidated significant VIEs and sponsored VIEs as of March 31, 2009.
We may be required to consolidate off-balance sheet entities which are currently not consolidated under theprovisions of FIN 46-R, should it become the primary beneficiary of those vehicles. The primary beneficiary of anentity is determined through an assessment of which entity absorbs the majority of the expected losses or is entitledto the majority of the expected benefits of that entity, or both. Such an assessment takes into account our variableinterests in the entity as well the seniority of its interests in relation to those of other variable interest holders.
We are required to reconsider its position and whether or not it absorbs the majority of the risks and rewardsof a VIE and may, therefore, be required to consolidate the vehicle if:•

The obligation to absorb expected losses or the right to receive expected residual returns is reallocatedbetween the existing primary beneficiary and other parties due to a change in the entity’s governing
documents or contractual arrangements;•

The existing primary beneficiary sells or disposes of all or part of its variable interests to unrelatedparties;•

The variable interest entity issues new variable interests to parties other than the primary beneficiaryand its related parties; or62•

We acquire additional variable interests in the variable interest entity.

Taking into consideration the triggers above, we reassess whether it is primary beneficiary of off-balance
sheet entities at least quarterly.
F. Tabular Disclosure of Contractual Obligations.
As part 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 the normal course of our banking / financing activities, we enter into various guarantee arrangementswith counterparties in the form of standby letters of credit and other guarantees, which generally have afixed expiration date.

Long-term borrowings:•

In connection with our operating activities, we issue Japanese yen and non-Japanese yen denominatedlong-term borrowings with variable and fixed interest in accordance with our funding policy.

Operating lease commitments:•

We lease our office space and certain employees’ residential facilities in Japan primarily undercancellable lease agreements which are customarily renewed upon expiration;•

We lease certain equipment and facilities under non-cancellable operating lease agreements.

Capital lease commitments:•

We lease certain equipment and facilities under capital lease agreements.

Commitments to extend credit:•

In connection with our banking / 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 customers underwhich we commit to underwrite notes that may be issued by the customers.

Commitments to invest in partnership:•

In connection with our merchant banking activities, we have commitments to invest in interests invarious partnerships and other entities and commitments to provide financing for investments related tothese partnerships.

Note 12, “Borrowings” contains further detail on our short-term and long-term borrowing obligation andNote 20, “Commitments, contingencies and guarantees” in our consolidated financial statements contains further
detail on our commitments, contingencies and guarantees.
The contractual amounts of commitments to extend credit represent the amounts at risk should the contracts
be fully drawn upon, should the counterparties default, and assuming the value of any existing collateral become
worthless. The total contractual amount of these commitments may not represent future cash requirements since
the commitments may expire without being drawn upon. The credit risk associated with these commitments
varies depending on the customers’ creditworthiness and the value of collateral held. We evaluate eachcustomer’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 managements’ credit evaluation of the counterparty.
63

The following table shows our contractual obligations and contingent commitments as well as theirmaturities as of March 31, 2009:
Total
contractual
amountLess than
1 yearYears to Maturity
1 to 33 to 5years
years(in millions)Standby letters of credit and other guarantees . . ¥9,270
Long-term borrowings(1) . . . . . . . . . . . . . . . . . . . 5,040,000
Operating lease commitments . . . . . . . . . . . . . . .
80,901
Capital lease commitments(2) . . . . . . . . . . . . . . .
1,150
Purchase obligations(3) . . . . . . . . . . . . . . . . . . . . .
30,552
Commitments to extend credit . . . . . . . . . . . . . .
99,915
Commitments to invest in partnerships . . . . . . . .
69,320Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥5,331,108¥ 8,965
489,472
17,602500
30,144
61,524
26,889¥635,096

¥
98
— ¥
207
1,100,675 1,006,738 2,443,115
26,825
14,744
21,730
596
54
—
408
—
—
35,198400
2,793
11,29015,27015,871¥1,175,090 ¥1,037,206 ¥2,483,716

Total
contractual
amountLess than
1 yearYears to Maturity
1 to 33 to 5years
years(in millions)$$Standby letters of credit and other guarantees . . $Long-term borrowings(1) . . . . . . . . . . . . . . . . . . .
Operating lease commitments . . . . . . . . . . . . . . .
Capital lease commitments(2) . . . . . . . . . . . . . . .
Purchase obligations(3) . . . . . . . . . . . . . . . . . . . . .
Commitments to extend credit . . . . . . . . . . . . . .
Commitments to invest in partnerships . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $93
50,833
816
12
308
1,008
699
53,769

$

90
4,937
178
5
304
621
271
6,406

$

1 $
11,101
271
6
4
355
114
11,852 $More than
5 years

More than
5 years— $10,153
149
1
—
4
154
10,461 $2
24,642
218
—
—
28
160
25,050(1) The amounts disclosed within long-term borrowings exclude financial liabilities recognized within longterm borrowings as a result of transfers of financial assets that are accounted for as financings rather thansales in accordance with SFAS 140. These are not borrowings issued for our own funding purposes andtherefore do not represent actual contractual obligations by us to deliver cash.
(2) The total contractual amount of capital lease commitments is calculated as the present value of minimum
lease payments.
(3) Purchase obligations for goods and services that include payments for construction-related, advertising, andcomputer and telecommunications maintenance agreements. The amounts reflect the minimum contractual
obligations under enforceable and legally binding contracts that specify all significant terms. The amounts
exclude obligations that are already reflected on our consolidated balance sheet as liabilities or payables.
Excluded from the above table are obligations that are generally short-term in nature, including short-termborrowings, deposits received at banks and other payables, collateralized agreements and financing transactions(such as resale and repurchase agreements), and trading liabilities.
In addition to amounts presented above, we have commitments to enter into resale and repurchaseagreements including amounts in connection with collateralized agreements, collateralized financing and Gensaki
transactions. These commitments amount to ¥1,890 billion ($19.06 billion) for resale agreements and ¥3,011
billion ($30.37 billion) for repurchase agreements at March 31, 2009.

64

Item 6. Directors, Senior Management and Employees
A. Directors and Senior Management.
Directors
The following table provides information about Nomura’s Directors as of June 30, 2009. With respect to theinformation under “Brief Personal History” below, some of the Directors changed their titles upon our adoptionof the holding company structure on October 1, 2001 and the Committee System on June 26, 2003, as described
in Item 6.C of this annual report.
Name(Date of Birth)

Responsibilities and Status
in Other Companies

Brief Personal History

Junichi Ujiie(Oct. 12, 1945)

Chairman of the Board of Directors
Chairman of the Nomination Committee
Chairman of the Compensation Committee
Director and President & Chief Executive
Officer of Nomura Institute of
Capital Markets Research

Nov. 1975 Joined Nomura
Jun. 1990 Director
Jun. 1992 Director and Head of Americas
Division
Jun. 1995 Managing Director and Head ofAmericas DivisionJun. 1996 Managing Director in charge of
Risk Analysis Division
May. 1997 President & CEO
Apr. 2003 Chairman of the Board of
Directors
Jun. 2003 Chairman of the Board of
Directors and Senior Managing
Director
Apr. 2006 Chairman of the Board of
Directors

Kenichi Watanabe(Oct. 28, 1952)

Director and President & CEO
Director and President & CEO of
Nomura Securities Co., Ltd.

Apr. 1975
Jun. 1998
Jun. 2000
Oct. 2001

Apr. 2002
Jun. 2003

Apr. 2004
Mar. 2006
Apr. 2006
Apr. 2008

Jun. 2008

65

Joined Nomura
Director
Managing Director
Director
Managing Director of Nomura
Securities Co., Ltd.
Executive Managing Director of
Nomura Securities Co., Ltd.
Senior Managing Director
Director and Executive Vice
President of Nomura Securities
Co., Ltd.
Executive Vice President of
Nomura Securities Co., Ltd.
Retired from Senior Managing
Director
Deputy President of Nomura
Securities Co., Ltd.
President & CEO
Director and President & CEO
of Nomura Securities Co., Ltd.
Director and President & CEOName(Date of Birth)

Takumi Shibata(Jan. 8, 1953)

Responsibilities and Status
in Other Companies

Director and Deputy President & COO
Director and Deputy President & COO of
Nomura Securities Co., Ltd.
Director of Fortress Investment LLC

Brief Personal History

Apr. 1976
Jun. 1998
Jun. 2000
Sep. 2001
Oct. 2001
Apr. 2003
Jun. 2003

Apr. 2004

Mar. 2005

Apr. 2005

Mar. 2006
Mar. 2008

Apr. 2008

Jun. 2008

Masanori Itatani(Oct. 13, 1953)

Director
Director of Nomura Securities Co., Ltd.

66

Joined Nomura
Director
Managing Director
Retired from Managing Director
Managing Director of Nomura
Securities Co., Ltd.
Executive Managing Director of
Nomura Securities Co., Ltd.
Senior Managing Director
Executive Vice President of
Nomura Securities Co., Ltd.
Director and Executive Vice
President of Nomura Securities
Co., Ltd.
Retired from Director andExecutive Vice President of
Nomura Securities Co., Ltd.
Director and President & CEO
of Nomura Asset Management
Co., Ltd.
Retired from Senior Managing
Director
Retired from Director andPresident & CEO of Nomura
Asset Management Co., Ltd.
Deputy President & COO
Director and Deputy Presidentof Nomura Securities Co., Ltd.
Director and Deputy President& COO
Director and Deputy President& COO of Nomura Securities
Co., Ltd.

Apr. 1976 Joined Nomura
Jun. 1998 Director in charge of Corporate
Communications and IR
Jun. 2000 Director in charge of Planning
Division and Corporate
Communications
Oct. 2001 Director in charge of General
Affairs Department
Jun. 2003 Senior Managing Director in
charge of Global Corporate
Communications, General
Affairs Department andSecretariat
Apr. 2004 Senior Managing Director in
charge of Internal Audit
Apr. 2006 Executive Managing Director in
charge of Internal Audit
Jun. 2007 Director

Name(Date of Birth)

Responsibilities and Status
in Other Companies

Brief Personal History

Yoshifumi Kawabata Director(Nov. 3, 1952)

Apr. 1975 Joined Nomura
Jun. 1998 Director
Jun. 2000 President of Nomura Babcock &Brown Co., Ltd
Sep. 2001 Retired from Director
Oct. 2001 Director of Nomura Securities
Co., Ltd.
Apr. 2002 Managing Director of Nomura
Securities Co., Ltd.
Jun. 2003 Senior Managing Director
Director and President of Nomura
Babcock & Brown Co., Ltd.
Executive Managing Director of
Nomura Securities Co., Ltd.
Mar. 2005 Retired from Senior Managing
Director
Retired from Executive Managing
Director of Nomura Securities
Co., Ltd.
Mar. 2008 Retired from Director andPresident of Nomura Babcock &Brown Co., Ltd.
Apr. 2008 Advisor
Jun. 2008 Director

Masaharu Shibata(Feb. 21, 1937)

Director
Member of the Nomination Committee
Member of the Compensation Committee
Director of Nomura Securities Co., Ltd.
Chairman of NGK Insulators, Ltd.
Chairman of NGK Technica, Ltd.
Statutory Auditor of Chubu-Nippon
Broadcasting Co., Ltd.

Apr. 1959 Joined NGK Insulators, Ltd.
Jun. 1994 President & CEO of
NGK Insulators, Ltd.
Oct. 2001 Director
Jun. 2002 Chairman of NGK Insulators, Ltd.
Jun. 2007 Statutory Auditor of ChubuNippon Broadcasting Co., Ltd.

Hideaki Kubori(Aug. 29, 1944)

Director
Member of the Nomination Committee
Member of the Compensation Committee
Director of Nomura Securities Co., Ltd.
Chairman of Hibiya Park Law Offices
Statutory Auditor of SOURCENEXTCORPORATIONSupervisory Committee of
The Norinchukin Bank

Apr. 1971 Registered as attorney at law andjoined Mori Sogo Law Offices
Mar. 1998 Left Mori Sogo Law Offices
Apr. 1998 Chairman, Hibiya Park Law
Offices
Apr. 2001 Vice President, Japan Federationof Bar Associations and President,
Daini Tokyo Bar Association
Oct. 2001 Director
Mar. 2002 Retired from Vice President,
Japan Federation of Bar
Associations and President, Daini
Tokyo Bar Association
Feb. 2003 Statutory Auditor,
SOURCENEXT CORPORATION
Jun. 2008 Supervisory Committee, The
Norinchukin Bank

67

Name
(Date of Birth)

Responsibilities and Status
in Other Companies

Brief Personal History

Haruo Tsuji(Dec. 6, 1932)

Director
Chairman of the Audit Committee
Director of Nomura Securities Co., Ltd.
Corporate Advisor of Sharp Corporation
Director of Kobayashi
Pharmaceutical Co., Ltd.

Mar. 1955 Joined Hayakawa ElectricIndustry Co., Ltd. (currently,
Sharp Corporation)
Jun. 1986 President, Sharp Corporation
Jun. 1998 Corporate Advisor, Sharp
Corporation
Jun. 2001 Statutory Auditor
Jun. 2003 Director
Jun. 2008 Director of Kobayashi
Pharmaceutical Co., Ltd.

Fumihide Nomura(Apr. 13, 1934)

Director
Member of the Audit Committee
President of Nomura Shokusan Co., Ltd.

Apr. 1957
Dec. 1976
Dec. 1979
Dec. 1982
Jun. 2003

Masahiro Sakane(Jan. 7, 1941)

Director
Chairman of Komatsu Ltd.
Director of Tokyo Electron Limited

Apr. 1963 Joined Komatsu Ltd.
Jun. 2001 President of Komatsu Ltd.
Jun. 2003 President & CEO of Komatsu
Ltd.
Jun. 2007 Chairman of Komatsu Ltd.
Jun. 2008 Director of Tokyo Electron
LimitedJun. 2008 Director

Tsuguoki Fujinuma(Nov. 21, 1944)

Apr. 1969 Joined Horie Morita Accounting
Director
Firm
Advisor of The Japanese Institute ofJun. 1970 Joined Arthur & Young
Certified Public Accountants
Accounting Firm
Director of Tokyo Stock Exchange Group,
Nov. 1974 Registered as a certified public
Inc.
accountant
Governor of Tokyo Stock Exchange
May. 1991 Managing Partner of Asahi
Regulation
Shinwa Accounting Firm
Specially-appointed Professor of Chuo
Graduate School of Strategic Management Jun. 1993 Managing Partner of Ota Showa& Co. (Ernst & Young
Statutory Auditor of Sumitomo Corporation
ShinNihon (currently, Ernst &Statutory Auditor of Takeda
Young ShinNihon LLC))
Pharmaceutical Company Limited
May. 2000 President of the International
Director of Sumitomo Life Insurance
Federation of Accountants
Company
Nov. 2002 Retired from President of theInternational Federation of
Accountants
Jul. 2004 Chairman and President of theJapanese Institute of Certified
Public Accountants
Jun. 2007 Retired from Ernst & Young
ShinNihon
Jul. 2007 Retired from Chairman andPresident of the JapaneseInstitute of Certified Public
Accountants
Advisor of the Japanese Instituteof Certified Public Accountants
68

Joined Nomura
Director
Managing Director
Statutory Auditor
DirectorName(Date of Birth)

Responsibilities and Status
in Other Companies

Brief Personal History

Aug. 2007 Director of Tokyo Stock
Exchange Group, Inc.
Oct. 2007 Governor of Tokyo Stock
Exchange Regulation
Apr. 2008 Specially-appointed Professor of
Chuo Graduate School ofStrategic Management
Jun. 2008 Statutory Auditor of Sumitomo
Corporation
Jun. 2008 Statutory Auditor of Takeda
Pharmaceutical Company
LimitedJun. 2008 Director
Jul. 2008 Director of Sumitomo Life
Insurance Company
Hajime Sawabe(Jan. 9, 1942)

Chairman of TDK Corporation
Apr. 1964
Director of Asahi Glass Company, Limited
Director of TEIJIN LIMITED
Jun. 1998
Jun. 2006
Mar. 2008
Jun. 2008

Joined TDK Electronics Co.,
Ltd. (currently, TDK
Corporation)
President of TDK Corporation
Chairman of TDK Corporation
Director of Asahi Glass
Company, Limited
Director of TEIJIN LIMITED

Among the above listed Directors, Masaharu Shibata, Hideaki Kubori, Haruo Tsuji, Masahiro Sakane,
Tsuguoki Fujinuma and Hajime Sawabe satisfy the requirements for an “outside director” under the Companies
Act. The Companies Act defines an outside director of a company as a non-executive director (i) who has neverassumed the position of executive director, executive officer, manager or employee of the company or its
subsidiaries and (ii) who does not currently assume the position of executive director, executive officer, manager
or employee of the company or its subsidiaries.

69

Executive Officers
The following table provides information about Nomura’s Executive Officers as of June 30, 2009. With
respect to the information under “Brief Personal History” below, some of the Executive Officers changed theirtitles or positions upon our adoption of the holding company structure on October 1, 2001 and the Committee
System on June 26, 2003, as described in Item 6.C of this annual report.
Name(Date of Birth)

Responsibilities and Status
in Other Companies

Brief Personal History

Kenichi Watanabe(Oct. 28, 1952)

Director
President & Chief Executive Officer
Representative Executive Officer

See “Directors” under this Item 6.A.

Takumi Shibata(Jan. 8, 1953)

Director
See “Directors” under this Item 6.A.
Deputy President & Chief Operating Officer
Representative Executive Officer

Hitoshi Tada
(Jun. 29, 1955)

Executive Managing Director
Retail CEO
Deputy President of
Nomura Securities Co., Ltd.

Apr. 1978 Joined Nomura
Apr. 1999 General Manager of Sales
Dept.
Jun. 1999 Director
Oct. 2001 Director of Nomura Securities
Co., Ltd.
Mar. 2003 Retired from Director
Apr. 2003 Managing Director of Nomura
Securities Co., Ltd.
Jun. 2003 Senior Managing Director
Executive Managing Directorof Nomura Securities Co., Ltd.
Mar. 2006 Retired from Senior Managing
Director
Apr. 2006 Executive Vice President of
Nomura Securities Co., Ltd.
Apr. 2008 Domestic Retail CEO(currently, Retail CEO)Oct. 2008 Executive Managing Director
Representative Executive
Officer and Executive Vice
President of Nomura Securities
Co., Ltd.
Apr. 2009 Representative Executive
Officer and Deputy Presidentof Nomura Securities Co., Ltd.

Hiromi Yamaji(Mar. 8, 1955)

Executive Managing Director
Investment Banking CEO
Executive Vice President of Nomura
Securities Co., Ltd.

Apr. 1977
Jun. 1997
Jun. 1998
Jun. 2000
Sep. 2001
Oct. 2001

70

Joined Nomura
Manager of Personnel Dept.
Director
Managing Director
Retired from Managing
Director
Managing Director of Nomura
Securities Co., Ltd.

Name
(Date of Birth)

Responsibilities and Status
in Other Companies

Brief Personal History

Jun. 2003

Apr. 2005
Mar. 2006
Apr. 2007
Apr. 2008

Oct. 2008

Senior Managing Director
Retired from Managing
Director of Nomura Securities
Co., Ltd.
Executive Managing Directorof Nomura Securities Co., Ltd.
Retired from Senior Managing
Director
Executive Vice President of
Nomura Securities Co., Ltd.
Global Investment Banking
CEO (currently, Investment
Banking CEO)
Executive Managing Director
Representative Executive
Officer and Executive Vice
President of Nomura Securities
Co., Ltd.

Akira Maruyama(Mar. 21, 1957)

Executive Managing Director
Global Markets CEO
Executive Vice President of Nomura
Securities Co., Ltd.

Apr. 1979 Joined Nomura
Jul. 2001 General Manager ofController’s Dept. and Finance
Dept.
Apr. 2003 Director of Nomura Securities
Co., Ltd.
Jun. 2003 Senior Managing Director
Mar. 2006 Retired from Senior Managing
Director
Nov. 2007 Global Markets CEO
Executive Vice President of
Nomura Securities Co., Ltd.
Oct. 2008 Executive Managing Director
Representative Executive
Officer and Executive Vice
President of Nomura Securities
Co., Ltd.

Shoichi Nagamatsu(Jul. 6, 1958)

Executive Managing Director
Merchant Banking CEO
Director and President of Nomura Principal
Finance Co., Ltd.
Senior Managing Director of
Nomura Securities Co., Ltd.

Apr. 1982 Joined Nomura
Apr. 2004 Senior Managing Director of
Nomura Securities Co., Ltd.
Nov. 2007 Global Merchant Banking CEO(currently, Merchant Banking
CEO)
Director and President of
Nomura Principal Finance Co.,
Ltd.
Oct. 2008 Executive Managing Director

71

Name
(Date of Birth)

Responsibilities and Status
in Other Companies

Brief Personal History

Atsushi Yoshikawa(Apr. 7, 1954)

Executive Managing Director
Asset Management CEO
Director and President & CEO of Nomura
Asset Management Co., Ltd.

Apr. 1978 Joined Nomura
Jun. 1997 Co-President of Nomura
Securities International Inc.
Jun. 2000 Director
Sep. 2001 Retired from Director
Oct. 2001 Director of Nomura Securities
Co., Ltd.
Jun. 2003 Senior Managing Director of
Nomura Securities Co., Ltd.
Mar. 2004 Retired from Senior Managing
Director of Nomura Securities
Co., Ltd.
Apr. 2004 Senior Managing Director
Executive Managing Directorof Nomura Asset Management
Co., Ltd.
Apr. 2005 Executive Vice President of
Nomura Asset Management
Co., Ltd.
Mar. 2006 Retired from Senior Managing
Director
Apr. 2008 Asset Management CEO
Director and President & CEO
of Nomura Asset Management
Co., Ltd.
Oct. 2008 Executive Managing Director

Hiroshi Tanaka(May. 13, 1956)

Executive Managing Director
Group Compliance Head
Chief Information Officer
Head of Global Operations
Senior Corporate Managing Director of
Nomura Securities Co., Ltd.

Apr. 1980 Joined Nomura
Apr. 1999 Manager of Equity Dept.
Apr. 2002 Director of Nomura Securities
Co., Ltd.
Jun. 2003 Senior Managing Director
Mar. 2006 Retired from Senior Managing
Director
Apr. 2006 Director and Representative
Executive Officer of Nomura
Securities Co., Ltd.
Apr. 2007 Director and Representative
Executive Officer andExecutive Managing Directorof Nomura Securities Co., Ltd.
Apr. 2008 Group Compliance Head
Sep. 2008 Retired from Director of
Nomura Securities Co., Ltd.
Oct. 2008 Executive Managing Director
Chief Information Officer
Head of Global Operations
Representative Executive
Officer and Senior Corporate
Managing Director of Nomura
Securities Co., Ltd.

72

Name
(Date of Birth)

Responsibilities and Status
in Other Companies

Brief Personal History

Masafumi Nakada(Jul. 30, 1958)

Executive Managing Director
Chief Financial Officer
Executive Managing Director of Nomura
Securities Co., Ltd.

Apr. 1981 Joined Nomura
Apr. 2003 General Manager ofCompliance Department of
Nomura Securities Co., Ltd.
Apr. 2005 Senior Managing Director,
Chief Financial Officer andHead of Global Risk
Management, Treasury,
Controller and IR Senior
Managing Director of Nomura
Securities Co., Ltd.
Apr. 2006 Chief Financial Officer
Mar. 2008 Retired from Senior Managing
Director of Nomura Securities
Co., Ltd.
Oct. 2008 Executive Managing Director
Executive Managing Directorof Nomura Securities Co., Ltd.

Noriaki Nagai(Dec. 1, 1957)

Apr. 1981
Executive Managing Director
Jun. 2000
Head of Corporate Office
Executive Managing Director of Nomura
Securities Co., Ltd.
Director of Nomura Asset Management Co., Apr. 2006
Ltd.

Joined Nomura
General Manager of Legal
Department of Nomura
Securities Co. Ltd.
Senior Managing Director andHead of Corporate OfficeSenior Managing Director of
Nomura Securities Co., Ltd.
Apr. 2008 Director of Nomura AssetManagement Co., Ltd.
Oct. 2008 Executive Managing Director
Executive Managing Directorof Nomura Securities Co., Ltd.

B. Compensation.
Compensation Policy
Our Compensation Committee establishes the policy with respect to the determination of the individualcompensation of each Director and Executive Officer and makes such determination under the compensation
policy. The policy is based on our vision to establish ourselves firmly as a globally competitive Japanesefinancial institution with the goal of increasing our shareholders’ value. The policy is intended to:•link the compensation of our Directors and Executive Officers to the achievement of our strategic
business objectives and award them in a manner that further motivates them toward achievement of theirrespective goals and thereby maximize their performance; and•introduce equity-based compensation to enhance our long term incentives for our Directors andExecutive Officers.

Compensation of our Directors and Executive Officers consists of base salary, cash bonus and equity-based
compensation.

73

Base Salary
The base salary of each Director and Executive Officer for each fiscal year is calculated by aggregating thefollowing amounts, each of which is considered and determined by our Compensation Committee:•

the amount reflecting his or her career;•

the amount reflecting his or her post and responsibilities; and•the amount reflecting our consolidated return on equity for the previous fiscal year.

Under our compensation policy, the amount reflecting our consolidated return on equity for the previous
fiscal year is determined as follows:
Consolidated
ROE (X)

X(less than) 0%

Amount . . . . . . . . . . . . .

00% (less-or-equal)X(less than) 5%

5% (less-or-equal)X(less-or-equal) 10%

10% (less than)X(less-or-equal) 15%

15% (less than)X

1/3 of Standard
Amount2/3 of Standard
AmountStandard
Amount4/3 of Standard
AmountCash BonusIn determining cash bonus of our Directors and Executive Officers, the Compensation Committee considers
both quantitative and qualitative factors. Quantitative factors include:•

our consolidated net income;•our consolidated return on equity; and•our segment/business line results.

Qualitative factors include:•

the degree of achievement of our strategic business objectives;•the degree of achievement of the pre-established goals of each Director and Executive Officer; and•the Compensation Committee’s subjective assessments of individual contribution of each Director andExecutive Officer.

Under our compensation policy, the aggregated cash bonus amount paid to our Directors and Executive
Officers will not exceed 1% of our consolidated net income.
Equity-based Compensation,
Equity-based compensation is determined individually in a comprehensive manner by not only the
consolidated net income or consolidated return on equity but also the balance of base salary and cash bonus, aswell as costs and effects in awarding such bonus.

74

Aggregate Compensation(for the year ended March 31, 2009)
Number of Directors
Amount ofor
Aggregate
Executive Officers
Compensation

Director or Executive Officer

Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Of them, outside Directors) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Executive Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11
(6)
20

¥ 424 million¥ (139 million)¥ 829 million

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

31¥1,253 million(Notes)
1. Two of the Directors are concurrently serving as Executive Officers. Those Directors who are also
Executive Officers are paid as Executive Officers but not as Directors.
2. ¥1,253 million includes compensation of stock options (equity-based compensation) which was ¥459
million.
3. ¥1,253 million includes non-cash compensation of ¥1 million.
Stock Acquisition Rights
We have issued the following two types of stock acquisition rights, which can be granted not only to
Directors and Executive Officers but also to Senior Managing Directors (“Shikko Yakuin”) and employees:
Stock Option A Plan
Under this plan, which is intended to improve the performance of and to grant equity-linked incentive to
executives and employees (senior staff) of Nomura and its subsidiaries, the exercise price is determined based on
the market price of Nomura’s stock price at the time of the allotment of the stock acquisition rights. They are
qualified as stock acquisition rights under Japanese taxation laws. After the determination of a solicitation plan togrant this type of stock options, there is a non-exercise period of two years in order to pursue capital gains. We
expect that this creates a common incentive to executives and employees working in different divisions andgeographic regions and to improve performance across Nomura and its subsidiaries.
Stock Option B Plan
This plan is intended to provide incentives that have the same economic effect as restricted stocks, which
are commonly used by companies in the United States and in Europe. The exercise price will be ¥1 per share anda non-exercise period of two or more years from the determination of a solicitation plan to grant this type ofstock options has been set. Grantees who leave Nomura and its subsidiaries before the start of the exercise period
will, in principle, forfeit their rights to the stock acquisition rights. These stock options will be granted in lieu ofa portion of cash compensation, making for a quasi-deferred payment to link compensation to Nomura’s stock
price. We believe that this creates an effective means to retain talented personnel over the medium- to long-term.
If Nomura’s stock price rises, grantees’ compensation will also increase, thereby making it possible to align theirinterests with those of our shareholders.

75Stock Acquisition Rights

Name of Stock Acquisition Rights

Allotment Date

Number of
Shares under
Stock
Acquisition
RightsStock Acquisition Rights No.1

August 5, 2002

1,166,000

Stock Acquisition Rights No.2

July 22, 2003

1,230,000

Stock Acquisition Rights No.3

June 4, 2004

200,000

Stock Acquisition Rights No.4

August 16, 2004

1,250,000

Stock Acquisition Rights No.5

April 25, 2005

53,000Stock Acquisition Rights No.6

June 3, 2005

310,000

Stock Acquisition Rights No.8

July 25, 2005

1,522,300

Stock Acquisition Rights No.9

April 24, 2006

554,500

Stock Acquisition Rights No.10

June 12, 2006

624,200

Stock Acquisition Rights No.11

July 14, 2006

1,804,000

Stock Acquisition Rights No.12

October 10, 2006

12,400Stock Acquisition Rights No.13

April 25, 2007

3,909,000

Stock Acquisition Rights No.14

June 21, 2007

1,203,900

Stock Acquisition Rights No.15

August 1, 2007

113,000

Stock Acquisition Rights No.16

August 1, 2007

1,888,000

Stock Acquisition Rights No.17

August 1, 2007

2,550,500

Stock Acquisition Rights No.18

October 19, 2007

160,400

Stock Acquisition Rights No.19

April 23, 2008

6,337,600

Stock Acquisition Rights No.20

June 23, 2008

152,300

Stock Acquisition Rights No.21

June 23, 2008

777,700

Stock Acquisition Rights No.22

August 5, 2008

110,000

Stock Acquisition Rights No.23

August 5, 2008

1,978,000

Stock Acquisition Rights No.24

August 5, 2008

6,000

Stock Acquisition Rights No.25

August 5, 2008

3,000

Stock Acquisition Rights No.26

November 11, 2008

15,600Stock Acquisition Rights No.27

November 11, 2008

677,000

76

Exercise Period of
Stock Acquisition Rights

From July 1, 2004
to June 30, 2009
From July 1, 2005
to June 30, 2010
From June 5, 2006
to June 4, 2011
From July 1, 2006
to June 30, 2011
From April 26, 2007
to April 25, 2012
From June 4, 2007
to June 3, 2012
From July 1, 2007
to June 30, 2012
From April 25, 2008
to April 24, 2013
From June 13, 2008
to June 12, 2013
From July 7, 2008
to July 6, 2013
From October 11, 2008
to October 10, 2013
From April 26, 2009
to April 25, 2014
From June 22, 2009
to June 21, 2014
From August 2, 2009
to August 1, 2014
From August 2, 2009
to August 1, 2014
From August 2, 2009
to August 1, 2014
From October 20, 2009
to October 19, 2014
From April 24, 2010
to April 23, 2015
From June 24, 2010
to June 23, 2015
From June 24, 2010
to June 23, 2015
From August 6, 2010
to August 5, 2015
From August 6, 2010
to August 5, 2015
From August 6, 2010
to August 5, 2015
From August 6, 2010
to August 5, 2015
From November 11, 2010
to November 10, 2015
From November 11, 2010
to November 10, 2015(as of March 31, 2009)
Exercise
Price perPaid-in
Share under Amount for
Stock
Stock
Acquisition Acquisition
RightsRights

1,600

0

1,444

0

1

0

1,434

0

1

0

1

0

1,258

0

1

0

1

0

1,964

0

1

0

1

0

1

0

2,125

0

2,125

0

1

0

1

0

1

0

1

0

1

0

1,460

0

1,460

0

1

0

1

0

1

0

1

0

(Notes)1:
2:

Stock acquisition rights (including those granted to Directors and Executive Officers of Nomura which are stated in thetable on next page) are issued in conjunction with stock option plan.
The number of shares issuable under stock acquisition rights is subject to adjustments under certain circumstances
including stock split.

Stock Acquisition Rights Held by Directors and Executive Officers of Nomura(as of March 31, 2009)
Numbers of Holders

Name of Stock Acquisition Rights

Stock Acquisition Rights No.1 . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock Acquisition Rights No.2 . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock Acquisition Rights No.3 . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock Acquisition Rights No.4 . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock Acquisition Rights No.6 . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock Acquisition Rights No.8 . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock Acquisition Rights No.10 . . . . . . . . . . . . . . . . . . . . . . . . .
Stock Acquisition Rights No.11 . . . . . . . . . . . . . . . . . . . . . . . . .
Stock Acquisition Rights No.14 . . . . . . . . . . . . . . . . . . . . . . . . .
Stock Acquisition Rights No.15 . . . . . . . . . . . . . . . . . . . . . . . . .
Stock Acquisition Rights No.16 . . . . . . . . . . . . . . . . . . . . . . . . .
Stock Acquisition Rights No.20 . . . . . . . . . . . . . . . . . . . . . . . . .
Stock Acquisition Rights No.21 . . . . . . . . . . . . . . . . . . . . . . . . .
Stock Acquisition Rights No.22 . . . . . . . . . . . . . . . . . . . . . . . . .
Stock Acquisition Rights No.23 . . . . . . . . . . . . . . . . . . . . . . . . .
Stock Acquisition Rights No.24 . . . . . . . . . . . . . . . . . . . . . . . . .

Number of
Shares under
Stock
Acquisition
RightsDirectors andExecutive Officers(excluding
Outside Directors)

156,000
200,000
71,000151,000
87,000134,000
141,400
98,000200,300
36,00065,00091,10059,40063,00050,000
6,000

11
14
6
14
7
15
11
15
15
6
9
9
6
9
6
—

Outside Directors

3
3
1
3
1
3
1
3
3
3
—
3
—
5
—
2

Resolved at the annual meeting of shareholders held on June 25, 2009, the authority to determine asolicitation plan to grant “Stock Option A” and “Stock Option B”, each of which stock options represents 100
shares, to Directors, Executive Officers, and employees of our subsidiaries in and outside Japan was delegated to
our Board of Directors or Executive Officer(s) designated by our Board of Directors. These stock options are
exercisable during a period which is to be decided by our Board of Directors or an Executive Officer designatedby our Board of Directors. That period must begin no earlier than two years after the allotment date, and end nolater than seven years after the allotment date. The exercise price of Stock Option A will be determined byreference to the market price of our common stock while that of Stock Option B will be ¥1 per share. Subject toadjustments, a total of 17,500,000 shares will be issuable upon full exercise of all the stock options granted inthis round, 2,500,000 shares of which will be issuable for Stock Option A and 15,000,000 shares of which will be
issuable for Stock Option B.
Pension, Retirement Or Similar Benefits
See Note 14 “Employee benefit plans”.
C. Board Practices.
Information Concerning Our Directors
Under the Companies Act, joint stock companies in Japan have the option of choosing committee-based
corporate governance system (“Committee System”) that consists of Board of Directors and committees or a
traditional corporate governance system that consists of board of directors and board of statutory auditors. A
company which chooses the Committee System must establish three committees: a nomination committee, an77

audit committee and a compensation committee. The members of each committee are chosen from thecompany’s directors. A majority of each committee must be outside directors who are not executive officers of
the company. The company must then appoint executive officers and representative executive officers by aresolution of the board of directors. Under the Committee System, the executive officers manage the businessaffairs of a company. While the board of directors is entitled to establish the basic management policy for thecompany and has decision-making authority over certain prescribed matters, all other decisions related tobusiness affairs may be made by executive officers.
We adopted the Committee System by amending our Articles of Incorporation by way of a special
resolution adopted at our annual meeting of shareholders held on June 26, 2003. Our Board of Directors
established three committees, a Nomination Committee, an Audit Committee and a Compensation Committee, as
described below. Through the adoption of the Committee System, we aim to strengthen management oversight,
increase transparency in our management and have more flexible group operations. Our Board of Directors has
the authority to determine our basic management policy and supervise the execution by the Directors andExecutive Officers of their duties. Our Board of Directors has, by resolution, delegated to our Executive Officers
most of its authority to make decisions with regard to our company’s business.
Our Articles of Incorporation provide for the number of Directors to be no more than 20. Directors areelected at a meeting of shareholders. The term of office of Directors is one year, although they may serve any
number of consecutive terms. From among its members, our Board of Directors elects the Chairman of meetings.
Our Board of Directors met 10 times during the year ended March 31, 2009. As a group, our Directors attended
over 90% of the total number of meetings of our Board of Directors.
Compensation Committee
Our Compensation Committee is authorized to determine the policy with respect to the determination of theparticulars of the compensation for each Director and Executive Officer, and the particulars of the compensationfor each Director and Executive Officer. This committee’s current members are Junichi Ujiie, Masaharu Shibata,
Hideaki Kubori and Masahiro Sakane. Junichi Ujiie is the Chairman of this committee. Our Compensation
Committee met 6 times during the year ended March 31, 2009. As a group, the member Directors attended over
90% of the total number of meetings of our Compensation Committee during the year.
Nomination Committee
Our Nomination Committee is authorized to determine the particulars of proposals concerning the election
and dismissal of Directors to be submitted to a general meeting of shareholders by our Board of Directors. This
committee’s current members are Junichi Ujiie, Masaharu Shibata, Hideaki Kubori and Masahiro Sakane. Junichi
Ujiie is the Chairman of this committee. Our Nomination Committee met twice during the year ended March 31,
2009. Each member Directors attended every meeting of our Nomination Committee during the year.
Audit Committee
We have an Audit Committee that, according to our Articles of Incorporation, is authorized to (i) audit theexecution by the Directors and the Executive Officers of their duties and formulation of audit reports and(ii) determine the particulars of proposals concerning the election and dismissal of the independent auditors andthe non-retention of such independent auditors to be submitted to a general meeting of shareholders by our Boardof Directors. With respect to financial reporting, our Audit Committee has the statutory duty to examine ourfinancial statements and business reports to be prepared by Executive Officers designated by our Board of
Directors and is authorized to report its opinion to the annual meeting of shareholders. In addition, pursuant to
our Regulations of the Audit Committee or resolutions of the Board of Directors concerning matters to benecessary for the performance of functions of the Audit Committee, our Audit Committee has the authority to(i) pre-approve audit or non-audit services provided by the independent auditors for SEC reporting purposes and78their fees, (ii) fees for independent auditors, (iii) establish the procedures for (a) the receipt, retention, andtreatment of complaints received by us regarding accounting, internal controls, or auditing matters and (b) the
confidential, anonymous submission by our employees regarding questionable accounting or auditing matters,(iv) approve the annual audit plan of the independent auditors.
This committee is currently composed of Haruo Tsuji, Tsuguoki Fujinuma and Hajime Sawabe. Haruo Tsuji
is the Chairman of this committee. Our Audit Committee met 24 times during the year ended March 31, 2009. As
a group, the member Directors attended over 90% of the total number of meetings of our Audit Committee
during the year.
Limitation of Liabilities of Some Directors
We have entered into agreements with six of our Directors, Masaharu Shibata, Hideaki Kubori, Haruo Tsuji,
Masahiro Sakane, Tsuguoki Fujinuma and Hajime Sawabe, that limit their liabilities to us for damages sufferedby us due to their acts taken in good faith and without gross negligence, up to the higher of (a) ¥20 million or(b) the amount prescribed by laws and ordinances.
Information Concerning Our Executive Officers
Our Articles of Incorporation provide for the number of the Executive Officers to be not more than 45.
Executive Officers are elected at a meeting of our Board of Directors. The term of office of Executive Officers is
one year, although they may serve any number of consecutive terms.
Our Executive Officers have the authority to determine the matters delegated by the resolutions of our
Board of Directors and to execute our business activities. Certain important matters so delegated (including
issuance of new shares) are determined by the Executive Management Board. At present, the members of thisboard are ten Executive Officers, including two Representative Executive Officers.
Rights of ADR Holders
The rights of ADR holders, including their rights to corporate governance practices, are governed by the
Deposit Agreement which is an exhibit to this annual report. See also “Rights of Holders of ADSs” under
Item 10.B of our Registration Statement on Form 20-F (File No. 1-15270), which we filed with the Securities andExchange Commission on December 13, 2001. The information contained in that part of the Registration
Statement is incorporated in Item 10.B of this annual report by reference.
D. Employees
The following table shows the number of our employees as of the dates indicated:2007

As of March 31,
2008
2009

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,841 13,938 15,320
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,791
1,955
4,294
Americas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,322
1,063
1,079
Asia Pacific (excluding Japan) and Oceania . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
900
1,070
4,933
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16,85418,02625,626

In Japan, as of March 31, 2009, we had 15,320 employees, of which 9,695 were engaged in Retail, 963 were
engaged in Global Markets, 945 were engaged in Investment Banking, 58 were engaged in Merchant Banking
and 979 were engaged in Asset Management.
The increase of total employees was due to the acquisition of certain operations of former Lehman Brothers.
79

As of March 31, 2009, 8,710 of Nomura Securities’ employees in Japan were members of Nomura
employees’ union, with which we have a labor contract. Pursuant to this contract, salaries and bonuses arenegotiated with the labor union based on our overall performance during the relevant fiscal period and ourfinancial position.
We emphasize and reward individual skills and performance.
For information on stock options granted to some of our employees, see Item 6.B of this annual report.
Under our retirement allowance system, eligible employees are entitled to a lump-sum allowance and aretirement annuity upon their retirement.
In Japan, we have not experienced any strikes or other labor disputes and consider our employee relations to
be excellent.
Overseas
As of March 31, 2009, we had 10,306 employees overseas, including 4,294 in Europe, 1,079 in theAmericas, 4,933 in Asia Pacific (excluding Japan) and Oceania which includes former Lehman operations inIndia.
Most of our overseas professional employees receive salaries as well as incentive compensation in the formof bonuses and profit sharing. Compensation for some of our employees consists largely of incentive
compensation. Our employees overseas are not unionized.
We have not experienced any strikes or other labor disputes overseas and consider our overseas employee
relations to be excellent.
E. Share Ownership.
The following table shows the number of shares owned by our Directors and Executive Officers as ofJune 30, 2009. As of that date, none of them owned 1% or more of our issued and outstanding shares. None of
the shares referred to below have different voting rights.
Directors
Number of
Shareholdings

Name

Junichi Ujiie . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kenichi Watanabe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Takumi Shibata . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Masanori Itatani . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Yoshifumi Kawabata . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Masaharu Shibata . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Hideaki Kubori . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Haruo Tsuji . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fumihide Nomura . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Masahiro Sakane . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tsuguoki Fujinuma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Hajime Sawabe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

198,902
14,84842,551
69,744
15,46624,0006,000
14,000198,626
3,400
2,907
0

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

590,444

80

Executive Officers
Name

Number of
Shareholdings

Kenichi Watanabe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Takumi Shibata . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Hitoshi Tada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Hiromi Yamaji . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Akira Maruyama . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shoichi Nagamatsu . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Atsushi Yoshikawa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Hiroshi Tanaka . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Masafumi Nakada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noriaki Nagai . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

See above
See above
54,75841,044
5,466
6,653
27,32232,2843,203
10,800Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

238,929

For information regarding stock options granted to our Directors and Executive Officers, see “Equity-Based
Compensation” under Item 6.B of this annual report.
Item 7. Major Shareholders and Related Party Transactions
A. Major Shareholders.
The following table shows our major shareholders who are beneficial owners holding more than 5% of ouroutstanding common stock as of March 31, 2009.
Number of Shares Owned andPercentage of Voting Right(in thousand shares)(%)

Names of Shareholders

Japan Trustee Services Bank, Ltd. (Trust Account) . . . . . . . . . . . . . . . . . . . . . . . . . .
The Master Trust Bank of Japan, Ltd. (Trust Account) . . . . . . . . . . . . . . . . . . . . . . . .
Japan Trustee Services Bank, Ltd. (Trust Account 4G) . . . . . . . . . . . . . . . . . . . . . . . .

164,008
153,837
143,151

6.31
5.91
5.50

To our knowledge, we are not directly or indirectly owned or controlled by another corporation, by any
government or by any other natural or legal person severally or jointly. We know of no arrangements theoperation of which may at a later time result in a change of control of Nomura. Also as of March 31, 2009, there
were 159 record shareholders of Nomura with addresses in the United States, and those U.S. holders held
346,783,711 shares of Nomura’s common stock, representing 13.0% of Nomura’s then outstanding common
stock. As of March 31, 2009, there were 42,233,578 ADSs outstanding, representing 42,233,578 shares of
Nomura’s common stock or 1.6% of Nomura’s then outstanding common stock. Our major shareholders above
do not have different voting rights.
B. Related Party Transactions.
Nomura Land and Building Co., Ltd.
Nomura Land and Building Co., Ltd. (“NLB”) currently owns some of our leased office space in Japan. We
held 38.6% of NLB’s outstanding share capital at March 31, 2009.
Other major shareholders of NLB were Nomura Research Institute, Ltd. (“NRI”), holding 19.2%, and
JAFCO Co., Ltd., holding 19.2%.
For the year ended March 31, 2009, we paid ¥5,432 million in rent to NLB. As of March 31, 2009, we had¥9,175 million in lease deposits with NLB.
81

Nomura Research Institute, Ltd.
NRI develops and manages computer systems and provides investigation/research services and management
consulting services. We are one of the major customers of NRI.
We held 38.5% of NRI’s outstanding share capital at March 31, 2009.
For the year ended March 31, 2009, we purchased ¥44,602 million worth of software and computerequipment, and paid NRI ¥42,848 million for other services. Additionally, we sold ¥38,419 million worth ofsoftware and computer equipment to NRI.
Directors
Our Director Mr. Fumihide Nomura serves as President of Nomura Shokusan Co., Ltd. (“Shokusan”)
incorporated in Japan, which is principally engaged in real-estate leasing. Shokusan leases a commercial property
to our subsidiary, Nomura Facilities, Inc. During the year ended March 31, 2009, Nomura Facilities, Inc. had
paid ¥420 million for the rent to Shokusan during the year ended March 31, 2009. This transaction was in theordinary course of business and on substantially the same terms as those prevailing at the time for comparable
transactions with unrelated third parties. We hold approximately 0.9% of Shokusan’s outstanding stocks.
C. Interests of Experts and Counsel.
Not applicable.
Item 8. Financial Information
A. Consolidated Statements and Other Financial Information.
Financial Statements
The information required by this item is set forth in our consolidated financial statements included
elsewhere in this annual report.
Legal Proceedings
We are involved in a number of actions and proceedings in Japan and overseas, which are either ordinary
routine actions and proceedings incidental to our business or not material to us. Based upon the information
currently available to us and our domestic and overseas legal counsel, we believe that the ultimate resolution ofsuch actions and proceedings will not, in the aggregate, have a material adverse effect on our financial condition
or results of our operations.
On April 22, 2008, a former employee of the M&A Advisory Department of Nomura Securities wasarrested on suspicion of insider trading and on June 2, 2008 he was indicted. On April 25, 2008, the Board of
Directors of Nomura Securities established an independent committee to investigate the information management
system at Nomura Securities. On June 6, 2008, the committee concluded that there was no evidence Nomura
Securities had breached insider trading regulations and relevant self-regulatory rules including those of the Japan
Securities Dealers Association. The committee made recommendations to Nomura Securities regarding risk
mitigation measures for possible similar incidents in the future. In response to the recommendations, Nomura
Securities announced it was adopting preventative measures including controlling the flow of information,
improving procedures for the hiring and training of staff, and reinforcing internal rules on stock trading. On
July 3, 2008, the Financial Services Agency of Japan issued to Nomura Securities an administrative order
requiring our business improvement. In accordance with the administrative order, Nomura Securities submitted,
on July 4, 2008, a report on its measures for improving business operation to the Financial Services Agency ofJapan, which was accepted on the same date.
82

Dividend Policy
For our dividend policy, see “Capital Management—Dividends” under Item 5.B of this annual report.
B. Significant Changes.
Except as disclosed in this annual report, there have been no significant changes since March 31, 2009.
Item 9. The Offer and Listing
A. Offer and Listing Details.
Price History
The following table sets forth, for the periods indicated, the reported high and low sale prices of ourcommon stock on the Tokyo Stock Exchange and the reported high and low share prices of our ADS on New
York Stock Exchange.
Tokyo Stock Exchange
Price Per Share ofCommon Stock
High
Low

Year ended March 31,

Annual highs and lows2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Quarterly highs and lows
2008
First Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2009
First Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Monthly highs and lows2009
January . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
February . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
April . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
May . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
June (through June 29) . . . . . . . . . . . . . . . . . . . . . . . . . .

New York Stock Exchange
Price Per Share of ADS
High
Low

1,966
2,630
2,870
2,580
1,918

1,278
1,295
1,843
1,395
403

18.60
22.43
24.30
21.05
17.89

12.05
11.65
15.63
13.08
3.96

2,580
2,440
2,175
1,832

2,250
1,726
1,728
1,395

21.05
19.74
18.96
17.05

19.12
15.22
15.75
13.08

1,918
1,695
1,430
776

1,475
1,176
586
403

17.89
16.55
14.35
8.50

14.29
10.94
6.18
3.96

776
592
574
649
734
934

591
406
403
498
589
712

8.50
6.54
5.90
6.52
7.62
9.50

6.35
3.96
4.00
5.03
6.08
7.55

B. Plan of Distribution.
Not applicable.
C. Markets.
The principal trading market for our Common Stock is the Tokyo Stock Exchange, Inc. Our Common Stock
has been listed on the Tokyo Stock Exchange, Inc., the Osaka Securities Exchange Co., Ltd. and the Nagoya
Stock Exchange, Inc. since 1961.
83

In December 2001, we listed our Common Stock on New York Stock Exchange in the form of ADSs
evidenced by ADRs. Each ADS represents one share of Common Stock. Our Common stock has been listed on
the Singapore Stock Exchange since 1994.
D. Selling Shareholders.
Not applicable.
E. Dilution.
Not applicable.
F. Expenses of the Issue.
Not applicable.
Item 10. Additional Information
A. Share Capital.
Not applicable.
B. Memorandum and Articles of Association.
Objects and Purposes in Nomura’s Articles of Incorporation
Article 2 of our Articles of Incorporation, which is an exhibit to this annual report, states our objects andpurposes.
Provisions Regarding Our Directors
There is no provision in our Articles of Incorporation as to a Director’s power to vote on a proposal or
arrangement in which the Director is materially interested, but, under the Companies Act and our Regulations of
the Board of Directors, a Director must abstain from voting on such matters at meetings of the Board of
Directors.
The Companies Act provides that, under the Committee System, the compensation committee determines
the compensation for directors and executive officers. The compensation committee must first establish a policy
with respect to the determination of the individual compensation of each director and executive officer and thenfor each individual case determine the amount of compensation, the calculation method as to variable
compensation and/or define components of non-monetary compensation for each director and executive officer
in accordance with the established policy.
Pursuant to the Companies Act, under the Committee System, the board of directors may delegate to
executive officers powers regarding the incurrence by a company of a significant loan from a third party. Our
Executive Officers are delegated such powers by our Board of Directors.
There is no mandatory retirement age for our Directors under the Companies Act or our Articles ofIncorporation.
There is no requirement concerning the number of shares an individual must hold in order to qualify him or
her as a Director of Nomura under the Companies Act or our Articles of Incorporation.
Pursuant to the Companies Act and our Articles of Incorporation, we may, by resolution of our Board of
Directors, release the liabilities of any Directors or Executive Officers to us for damages suffered by us due to84their acts taken in good faith and without gross negligence, to the extent permitted by the Companies Act and ourArticles of Incorporation. In addition, we may execute with outside Directors agreements that limit their
liabilities to us for damages suffered by us due to their acts in good faith and without gross negligence, to theextent permitted by the Companies Act and our Articles of Incorporation. See “Limitation of Liabilities of Some
Directors” under Item 6.C above.
Holding of Our Shares by Foreign Investors
Other than the Japanese unit share system that is described in “Common Stock—Japanese Unit Share
System” below, there are no limitations on the rights of non-residents or foreign shareholders to hold or exercise
voting rights on our shares imposed by the laws or our Articles of Incorporation or our other constituent
documents.
Common Stock
Set forth below is general information relating to our common stock, including brief summaries of therelevant provisions of our Articles of Incorporation and Share Handling Regulations, as currently in effect, and of
the Companies Act and related legislation.
GeneralUnder our Articles of Incorporation, the authorized share capital is 6,000,000,000 shares, of which
2,661,092,760 shares were issued as of March 31, 2009. All issued shares are fully-paid and non-assessable, andare in registered form.
On January 5, 2009, a new central clearing system for shares of Japanese listed companies was establishedpursuant to the Law Concerning Book-Entry Transfer of Corporate Bonds, Stocks, etc. (including regulations
promulgated thereunder; the “Book-Entry Law”), and the shares of all Japanese companies listed on any
Japanese stock exchange, including our shares, became subject to this new system. On the same day, all existing
share certificates for such shares became null and void. At present, Japan Securities Depository Center, Inc.
(“JASDEC”) is the only institution that is designated by the relevant authorities as a clearing house which ispermitted to engage in the clearing operations of shares of Japanese listed companies under the Book-Entry Law.
Under the new clearing system, in order for any person to hold, sell or otherwise dispose of shares of Japaneselisted companies, it must have an account at an account managing institution unless such person has an accountat JASDEC. “Account managing institutions” are financial instruments traders (i.e., securities companies), banks,
trust companies and certain other financial institutions which meet the requirements prescribed by the BookEntry Law, and only those financial institutions that meet further stringent requirements of the Book-Entry Law
can open accounts directly at JASDEC. For purposes of the description under “Description of the Shares”, we
assume that the relevant person has no account at JASDEC.
Under the Book-Entry Law, any transfer of shares is effected through book-entry, and title to the shares
passes to the transferee at the time when the transferred number of the shares is recorded at the transferee’s
account at an account managing institution. The holder of an account at an account managing institution ispresumed to be the legal owner of the shares held in such account.
Under the Companies Act and the Book-Entry Law, in order to assert shareholders’ rights against us, ashareholder must have its name and address registered in our register of shareholders, except in limited
circumstances. Under the new clearing system, such registration is made upon our receipt of necessary
information from JASDEC. See “—Share Registrar” and “—Record Date” below.
Non-resident shareholders are required to appoint a standing proxy in Japan or provide a mailing address inJapan. Each such shareholder must give notice of such standing proxy or mailing address to the relevant accountmanaging institution. Such notice will be forwarded to us through JASDEC. Japanese securities companies andcommercial banks customarily act as standing proxies and provide related services for standard fees. Notices
from us to non-resident shareholders are delivered to such standing proxies or mailing addresses.
85

The registered beneficial holder of deposited shares underlying the ADSs is the depositary for the ADSs.
Accordingly, holders of ADSs will not be able to directly assert shareholders’ rights.
Dividends
Under the Companies Act, distributions of cash or other assets by joint stock corporations to theirshareholders, so called “dividends”, are referred to as “distribution of Surplus” (“Surplus” is defined in“Restriction on Distributions of Surplus” below). We may make distributions of Surplus to the shareholders any
number of times per fiscal year, subject to certain limitations described in “Restriction on Distributions ofSurplus”. Under the Companies Act, distributions of Surplus are required in principle to be authorized by aresolution of a meeting of shareholders. However, our Articles of Incorporation, in accordance with theCompanies Act, provide that our Board of Directors has the authority to make decisions regarding distributionsof Surplus except for limited exceptions as provided by the Companies Act, since we have satisfied the following
requirements:(a) the normal term of office of our Directors terminates on prior to the date of conclusion of the annual
meeting of shareholders relating to the last fiscal year ending within the period of one year from theelection of the Directors; and(b) our non-consolidated annual financial statements and certain documents for the last fiscal year present
fairly our assets and profit or loss, as required by the ordinances of the Ministry of Justice.
Under our Articles of Incorporation, dividends, if any, may be distributed to shareholders (or pledgees)
appearing in the register of shareholders as of June 30, September 30, December 31 or March 31 of each year
pursuant to a resolution of our Board of Directors. In addition, under the Companies Act and our Articles ofIncorporation, we may make further distributions of Surplus by resolution of our Board of Directors. However,
we may decide not to pay dividends to shareholders of our stocks as of any record date regardless of the amountof Surplus we have.
Under our Articles of Incorporation, we are not obliged to pay any dividends that are left unclaimed for aperiod of three years after the date on which they first became payable.
Distributions of Surplus may be distributed in cash or in kind in proportion to the number of shares held by
each shareholder. A resolution of our Board of Directors authorizing a distribution of Surplus must specify thekind and aggregate book value of the assets to be distributed, the manner of allocation of such assets toshareholders, and the effective date of the distribution. If a distribution of Surplus is to be made in kind, we may,pursuant to a resolution of our Board of Directors, grant a right to our shareholders to require us to make such
distribution in cash instead of in kind. If no such right is granted to shareholders, the relevant distribution of
Surplus must be approved by a special resolution of meeting of shareholders.
For information as to Japanese taxes on dividends, see “Japanese Taxation” under Item 10.E of this annual
report.
Restriction on Distributions of Surplus
When we make a distribution of Surplus, we must, until the aggregate amount of our additional paid-in
capital and legal reserve reaches one-quarter of our stated capital, set aside in our additional paid-in capital and/or legal reserve an amount equal to one-tenth of the amount of Surplus so distributed.
The amount of Surplus at any given time must be calculated in accordance with the following formula:
A + B + C + D - (E + F + G)
In the above formula:“A” =the total amount of ‘other capital surplus’ and ‘other retained earnings’ each such amount beingthat appearing on our non-consolidated balance sheet as of the end of the last fiscal year;86

“B” =(if we have disposed of our treasury stock after the end of the last fiscal year) the amount of theconsideration for such treasury stock received by us less the book value thereof;“C” =(if we have reduced our stated capital after the end of the last fiscal year) the amount of such
reduction less the portion thereof that has been transferred to additional paid-in capital or legal
reserve (if any);“D” =(if we have reduced our additional paid-in capital or legal reserve after the end of the last fiscal
year) the amount of such reduction less the portion thereof that has been transferred to statedcapital (if any);“E” =(if we have cancelled our treasury stock after the end of the last fiscal year) the book value of suchtreasury stock;“F” =(if we have distributed Surplus to our shareholders after the end of the last fiscal year) the total
book value of Surplus so distributed;“G” =certain other amounts set forth in ordinances of the Ministry of Justice, including (if we have
reduced Surplus and increased our stated capital, additional paid-in capital or legal reserve after
the end of the last fiscal year) the amount of such reduction and (if we have distributed Surplus toour shareholders after the end of the last fiscal year) the amount set aside in our additional paid-in
capital or legal reserve (if any) as required by the ordinances of the Ministry of Justice.

The aggregate book value of Surplus distributed by us may not exceed a prescribed distributable amount(the “Distributable Amount”), as calculated on the effective date of such distribution. The Distributable Amountat any given time shall be equal to the amount of Surplus less the aggregate of the followings:(a) the book value of our treasury stock;(b) the amount of consideration for our treasury stock disposed of by us after the end of the last fiscal year;and(c) certain other amounts set forth in the ordinances of the Ministry of Justice, including (if the sum of
one-half of good will and the deferred assets exceeds the total of stated capital, additional paid-in
capital and legal reserve, each such amount being that appearing on our non-consolidate balance sheet
as of the end of the last fiscal year) all or certain part of such exceeding amount as calculated inaccordance with the ordinances of the Ministry of Justice.
If we have become at our option a company with respect to which consolidated balance sheets should also
be taken into consideration in the calculation of the Distributable Amount (renketsu haito kisei tekiyo kaisha), it
will be required to further deduct from the amount of Surplus the excess amount, if any, of (x) the total amountof shareholders’ equity appearing on our non-consolidated balance sheet as of the end of the last fiscal year andcertain other amounts set forth in the ordinances of the Ministry of Justice over (y) the total amount ofshareholders’ equity and certain other amounts set forth in the ordinances of the Ministry of Justice appearing on
our consolidated balance sheet as of the end of the last fiscal year.
If we have prepared interim financial statements as described below, and if such interim financial statements
have been approved by the Board of Directors (if so required by the Companies Act) by a meeting ofshareholders, the Distributable Amount must be adjusted to take into account the amount of profit or loss, and theamount of consideration for our treasury stock disposed of by us, during the period in respect of which suchinterim financial statements have been prepared. We may prepare non-consolidated interim financial statements
consisting of a balance sheet as of any date subsequent to the end of the last fiscal year and an income statement
for the period from the first day of the current fiscal year to the date of such balance sheet. Interim financial
statements so prepared by us must be approved by the Board of Directors and audited by our Audit Committee
and independent auditors, as required by the ordinances of the Ministry of Justice.

87

Stock Splits
We may at any time split the issued shares into a greater number of shares by resolution of our Board of
Directors, and in accordance with the Companies Act, our Board of Directors has by resolution delegated to our
Executive Management Board, which consists of Executive Officers, powers to make such stock splits.
In accordance with the Companies Act, our Board of Directors has by resolution delegated to our Executive
Management Board powers to increase the authorized shares up to the number reflecting the rate of stock splits
and amend our Articles of Incorporation to this effect without the approval of a meeting of shareholders. For
example, if each share became three shares by way of a stock split, we may increase the authorized shares fromthe current 6,000,000,000 shares to 18,000,000,000 shares.
Japanese Unit Share System
Our Articles of Incorporation provide that 100 shares constitute one “unit”. The Companies Act permits us,
by resolution of our Board of Directors, to reduce the number of shares which constitutes one unit or abolish theunit share system, and amend our Articles of Incorporation to this effect without the approval of a meeting ofshareholders.
Transferability of Shares Representing Less Than One Unit. Under the new clearing system, sharesconstituting less than one unit are transferable. Under the rules of the Japanese stock exchanges, however, sharesconstituting less than one unit do not comprise a trading unit, except in limited circumstances, and accordingly
may not be sold on the Japanese stock exchanges.
Right of a Holder of Shares Representing Less Than One Unit to Require Us to Purchase Its Shares.
A holder of shares representing less than one unit may at any time request us to purchase its shares. These shares
will be purchased at (a) the closing price of the shares reported by the Tokyo Stock Exchange, Inc. (hereinafterreferred to as the “Tokyo Stock Exchange”) on the day when the request to purchase is made or (b) if no saletakes place on the Tokyo Stock Exchange on that day, then the price at which sale of shares is effected on suchstock exchange immediately thereafter, except in limited circumstances as provided by our Share Handling
Regulations. In such case, we will request payment of handling fee pursuant to our Share Handling Regulations.
Right of a Holder of Shares Representing Less than One Unit to Purchase from Us Its Shares up to a Whole
Unit. Our Articles of Incorporation provide that a holder of shares representing less than one unit may request us
to sell any fractional shares we may have to such holder so that the holder can raise its fractional ownership up toa whole unit. These shares will be sold at (a) the closing price of the shares reported by the Tokyo Stock
Exchange on the day when the request to sell becomes effective or (b) if no sale has taken place on the Tokyo
Stock Exchange on that day, then the price at which sale of shares is effected on such stock exchange
immediately thereafter, except in limited circumstances as provided by our Share Handling Regulations. In suchcase, we will request payment of handling fee pursuant to our Share Handling Regulations.
Voting Rights of a Holder of Shares Representing Less Than One Unit. A holder of shares representing lessthan one unit cannot exercise any voting rights pertaining to those shares. In calculating the quorum for various
voting purposes, the aggregate number of shares representing less than one unit will be excluded from thenumber of outstanding shares. A holder of shares representing one or more whole units will have one vote foreach whole unit represented.
A holder of shares representing less than one unit does not have any rights related to voting, such as theright to participate in a demand for the resignation of a Director, the right to participate in a demand for the
convocation of a meeting of shareholders and the right to join with other shareholders to propose an agenda item
to be addressed at a meeting of shareholders. In addition, a holder of shares constituting less than one unit does
not have the right to institute a representative action by shareholders.
88In accordance with the Companies Act, our Articles of Incorporation provide that a holder of sharesconstituting less than one unit does not have any other rights of a shareholder in respect of those shares, otherthan those provided by our Articles of Incorporation including the following rights:•

to receive dividends,•

to receive cash or other assets in case of consolidation or split of shares, exchange or transfer of shares,
corporate split or merger,•

to be allotted rights to subscribe for free for new shares and stock acquisition rights when such rights are
granted to shareholders, and•to participate in any distribution of surplus assets upon liquidation.

Annual Meeting of Shareholders
We normally hold our annual meeting of shareholders in June every year. In addition, we may hold anextraordinary meeting of shareholders whenever necessary by giving at least two weeks’ advance notice. Under
the Companies Act, notice of any meeting of shareholders must be given to each shareholder having voting rights
or, in the case of a non-resident shareholder, to his resident proxy or mailing address in Japan in accordance with
our Share Handling Regulations, at least two weeks prior to the date of the meeting.
Voting Rights
A shareholder is generally entitled to one vote per one unit of shares as described in this paragraph andunder “Japanese Unit Share System” above. In general, under the Companies Act, a resolution can be adopted ata meeting of shareholders by the holders of a majority of the total number of voting rights represented at themeeting. The Companies Act and our Articles of Incorporation require a quorum for the election of Directors of
not less than one-third of the total number of voting rights. Our shareholders are not entitled to cumulative votingin the election of Directors. A corporate shareholder having one-quarter or more of the total voting rights ofwhich are directly or indirectly held by us does not have voting rights. Shareholders may exercise their voting
rights through proxies, provided that those proxies are also shareholders who have voting rights.
The Companies Act provides that certain important matters shall be approved by a “special resolution” ofmeeting of shareholders. Our Articles of Incorporation provide that the quorum for a special resolution is
one-third of the total number of voting rights and the approval of at least two-thirds of the voting rights presented
at the meeting is required for adopting a special resolution. Such important matters include:•

a reduction of stated capital,•

amendment to the Articles of Incorporation (except amendments which the Board of Directors (or under
the Committee System, Executive Officers) are authorized to make under the Companies Act),•

establishment of a 100% parent-subsidiary relationship by way of share exchange or share transfer
requiring shareholders’ approval,•a dissolution, merger or consolidation requiring shareholders’ approval,•a corporate split requiring shareholders’ approval,•

the transfer of the whole or an important part of our business,•

the taking over of the whole of the business of any other corporation requiring shareholders’ approval,•

any issuance of new shares or transfer of existing shares as treasury stock to persons other than theshareholders at a “specially favorable” price,•

any issuance of stock acquisition rights (including those incorporated in bonds with stock acquisitionrights) to persons other than the shareholders under “specially favorable” conditions,89

•purchase of shares by us from a specific shareholder other than our subsidiary,•consolidation of shares, and•release of part of directors’, independent auditor’s or executive officers’ liabilities to their corporation.

The voting rights of holders of ADSs are exercised by the depositary based on instructions from those
holders.
Subscription Rights
Holders of shares have no preemptive rights under our Articles of Incorporation when we issue new shares.
Under the Companies Act, our Executive Management Board which consists of executive officers and has beendelegated by our Board of Directors with the authority to issue new shares, may, however, determine thatshareholders be given subscription rights in connection with a particular issue of new shares. In this case, suchrights must be given on uniform terms to all shareholders as of a specified record date by at least two weeks’prior notice to shareholders of the record date.
Stock Acquisition Rights
We may issue stock acquisition rights (shinkabu yoyakuken). Holders of stock acquisition rights are entitledto acquire shares from us, upon payment of the applicable exercise price, and subject to other terms andconditions thereof. The issuance of stock acquisition rights and bonds with stock acquisition rights may be
authorized by our Executive Management Board, which consists of executive officers and has been delegated by
our Board of Directors with the authority to issue stock acquisition rights, unless it is made under “speciallyfavorable” conditions in which case special resolution of meeting of shareholders is required. In issuing stockacquisition rights, notice must be given at least two weeks prior to the date for allotment in the form of individual
notice or public notice. Under the Companies Act we will not be required to make such notice if we makerelevant securities filing or reporting under the Financial Instruments and Exchange Act at least two weeks prior
to the date for allotment, subject to the requirements provided by the ordinance of the Ministry of Justice.
A special resolution of our annual meeting of shareholders held on June 25, 2009 authorizes us to issue up
to 175,000 stock acquisition rights, each of which represents a right to subscribe for 100 shares of common stock,for 17,500,000 shares of common stock, to our subsidiaries’ directors, executive officers and employees. See“Equity-Based Compensation” under Item 6.B above.
Liquidation Rights
In the event of liquidation, the assets remaining after payment of all debt securities and borrowings,
liquidation expenses and taxes will be distributed among the shareholders in proportion to the number of shares
they own.
Liability to Further Calls or Assessments
All of our currently outstanding shares, including shares represented by the ADSs, are fully paid andnonassessable.
Share Registrar
Mitsubishi UFJ Trust and Banking Corporation is the share registrar for our shares. Mitsubishi UFJ Trust’s
office is located at 4-5, Marunouchi 1-chome, Chiyoda-ku, Tokyo, 100-8212 Japan. Mitsubishi UFJ Trust
maintains our register of shareholders and registers the name and addresses of our shareholders and otherinformation in our register of shareholders upon notice thereof from JASDEC, as described in “Record Date”
below.
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Record Date
The close of business of June 30, September 30, December 31 and March 31 are the record dates for our
distributions of Surplus (dividends), if any. A holder of shares constituting one or more whole units, who isregistered as a holder on our register of shareholders at the close of business as of March 31, is also entitled toexercise shareholders’ voting rights at the annual meeting of shareholders with respect to the year ended on
March 31. In addition, we may set a record date for determining the shareholders entitled to other rights and forother purposes by giving at least two weeks’ public notice.
Under the Book-Entry Law, we are required to give notice of each record date to JASDEC at least two
weeks prior to such record date. JASDEC is required to promptly give us notice of the names and addresses ofour shareholders, the numbers of shares held by them and other relevant information as of such record date.
The shares are generally traded ex-dividend or ex-rights in the Japanese stock exchanges on the third
business day before a record date (or if the record date is not a business day, the fourth business day prior
thereto), for the purpose of dividends or rights offerings.
Acquisition by Us of Shares
We may acquire our shares (i) by soliciting all our shareholders to offer to sell our shares held by them(pursuant to a resolution of the Board of Directors), (ii) from a specific shareholder other than any our
subsidiaries (pursuant to a special resolution of a meeting of shareholders), (iii) from any of our subsidiaries(pursuant to a resolution of the Board of Directors), or (iv) by way of purchase on any Japanese stock exchange
on which our shares are listed or by way of tender offer (in either case pursuant to a resolution of the Board of
Directors). In the case of (ii) above, any other shareholder may make a request to the Board of Directors that suchother shareholder be included as a seller in the proposed purchase, provided that no such right will be available if
the purchase price or any other consideration to be received by the relevant specific shareholder will not exceed
the last trading price of the shares on the relevant stock exchange on the day immediately preceding the date on
which the resolution mentioned in (ii) was adopted (or, if there is no trading in the shares on the stock exchange
or if the stock exchange is not open on such day, the price at which the shares are first traded on such stock
exchange thereafter). This acquisition is subject to the condition that the aggregate amount of the purchase pricemust not exceed the Distributable Amount as described in “Dividends” above.
We may hold our shares acquired in compliance with the provisions of the Companies Act, and may
generally dispose of or cancel such shares by resolutions of the Board of Directors.
In addition, we may acquire our shares by means of repurchase of any number of shares constituting lessthan one unit upon the request of the holder of those shares, as described under “Japanese Unit Share System”
above.
Preferred Stock
The following is a summary of information concerning the shares of our preferred stock. The outlines of ourpreferred stocks are set forth in our Articles of Incorporation, and the details will be specified prior to the time ofissuance in a resolution of our Board of Directors or determination by Executive Officer(s) under authority
delegated by a resolution of our Board of Directors.
GeneralThe amendment to our Articles of Incorporation resolved at the 105th Annual Meeting of Shareholders on
June 25, 2009 set forth the provisions regarding preferred stock. Although our Articles of Incorporation havethese provisions that enable us to issue preferred stock, there is no outstanding share of any class of preferredstock as of June 30, 2009.
91Under our Articles of Incorporation, we are authorized to issue 200,000,000 shares of Class 1 preferredstock, 200,000,000 shares of Class 2 preferred stock, 200,000,000 shares of Class 3 preferred stock and
200,000,000 shares of Class 4 preferred stock.
Preferred Dividends
In priority to the payment of dividends on shares of common stock, preferred dividends will be paid to theshareholders of preferred stock on record as of March 31 every year. In addition, interim preferred dividends may
be paid to shareholders of our preferred stocks on record as of June 30, September 30 or December 31 of any
year. Preferred interim dividends will be paid in priority to the payment of dividends to the shareholders ofcommon stock. The details including the amount of preferred dividends or preferred interim dividends is to be set
by a resolution of our Board of Directors or a determination by Executive Officer(s) under authorities delegatedby a resolution of the Board of Directors prior to the time of issuance.
No payment of dividends on our preferred shares or any other shares may be made unless we have sufficient
Distributable Amount. Payment of preferred dividends or preferred interim dividends is to be resolved by our
Board of Directors.
Dividends on our preferred shares are non-cumulative. In case the amount of preferred dividends actually
paid is less than the amount payable in respect of any fiscal year, preferred shareholders do not have any right toclaim the amount in deficiency as cumulative preferred dividends in any subsequent fiscal year. Also, we will
have no obligation to pay the deficiency or to pay any interest regardless in any subsequent fiscal year.
Shareholders of our preferred stock are not entitled to any further dividends or other participation in or
distribution of Surplus.
Voting Rights
No shareholder of our preferred stocks has a right to vote at a meeting of shareholders, except as otherwise
specifically provided under the Companies Act, any other applicable law or our Articles of Incorporation. Subject
to conditions stated therein, our Articles of Incorporation set forth the following periods during which theshareholders of our preferred stock will be entitled to vote at meetings of shareholders:•

If the board of directors has not passed any resolution to confer preferred dividends upon the preferredshareholders prior to distribution of the notice of convocation for an annual meeting of shareholders in agiven financial year, and if no proposal to confer preferred dividends on those preferred shareholders
was made at the aforementioned annual meeting, then the preferred shareholders will be entitled to voteat such annual meeting of shareholders and continue to be able to do so until the board of directors
passes a resolution to confer preferred dividends on such preferred shareholders or until a proposal to an
equivalent effect is passed at a shareholders’ meeting; and•If the board of directors has not passed any resolution to confer preferred dividends upon the preferredshareholders prior to distribution of the notice of convocation for an annual meeting of shareholders in agiven financial year, and if a proposal to confer preferred dividends on those preferred shareholders wasmade but nevertheless rejected at the aforementioned annual meeting, then the preferred shareholders
will be entitled to vote at shareholders’ meeting(s) during the period beginning after the conclusion of
the aforementioned annual meeting in which the proposal to confer the preferred dividends was rejecteduntil the board of directors passes a resolution to confer preferred dividends on those preferredshareholders or until a proposal to an equivalent effect is passed at a shareholders’ meeting.

Liquidation Rights
In the event of our voluntary or involuntary liquidation, shareholders of our preferred stock will be entitled, inpreference over shareholders of common stock, to receive a certain amount of our residual assets. The amount to be
paid upon such liquidation is to be set by a resolution of our Board of Directors or a determination by Executive
Officer(s) under authorities delegated by a resolution of the Board of Directors prior to the time of issuance.
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Except as provided in the immediately preceding paragraph, shareholders of our preferred stock are notentitled to any other participation or distribution of our residual assets upon our liquidation.
Right to Demand Acquisition of Preferred Stock (Conversion)
Shareholders of class 3 preferred stock and shareholders of class 4 preferred stock are to be entitled todemand us to acquire his/her shares of preferred stock during a period to demand acquisition. Shares of common
stock are to be delivered in exchange for the acquired shares of preferred stock. The details including the period
to demand acquisition and the acquisition price based on which the number of the shares of common stock to bedelivered are to be set by a resolution of our Board of Directors or a determination by Executive Officer(s) underauthorities delegated by a resolution of the Board of Directors prior to the time of issuance.
Redemption of Preferred Stock
We may redeem any part or all of the shares of class 1 preferred stock, class 2 preferred stock and/or class 4
preferred stock. The details including the events to trigger a redemption and the amount of cash to be paid in
exchange for the shares of preferred stock are to be set by a resolution of our Board of Directors or adetermination by Executive Officer(s) under authorities delegated by a resolution of the Board of Directors prior
to the time of issuance.
We will redeem all the shares of class 3 preferred stock and class 4 preferred stock outstanding on the day
following the last day of the period during which shareholders of such preferred stock are entitled to demand us
for acquisition, if such shares of preferred stock have not been converted into shares of common stock when the
period to demand acquisition has elapsed. Shares of common stock are to be delivered in exchange for the sharesof preferred stock. The details of such redemption are to be set by a resolution of our Board of Directors or adetermination by Executive Officer(s) under authorities delegated by a resolution of the Board of Directors prior
to the time of issuance.
Order of Priority
All classes of the preferred stock are to be in the same order of priority in respect of the payment ofpreferred dividends and preferred interim dividends and the distribution of residual assets. All classes ofpreferred stock are in priority to our common stock in respect of the payment of dividends and interim dividends
and the distribution of residual assets.
Report of Substantial Shareholdings
The Financial Instruments and Exchange Act requires any person who has become, beneficially and solely
or jointly, a holder of more than 5% of the total issued shares of a company listed on any Japanese stock
exchange to file with the relevant Local Finance Bureau, within five business days, a report concerning thoseshareholdings. With certain exceptions, a similar report must also be filed to reflect any change of 1% or more in
the above shareholding or any change in material matters set out in any previous filed reports. Copies of any
reports must also be furnished to the company. For this purpose, shares issuable to a person upon exercise ofstock acquisition rights are taken into account in determining both the number of shares held by that holder andthe company’s total issued share capital.
Daily Price Fluctuation Limits under Japanese Stock Exchange Rules
Stock prices on Japanese stock exchanges are determined on a real-time basis by the equilibrium between
bids and offers. These exchanges are order-driven markets without specialists or market makers to guide priceformation. To prevent excessive volatility, these exchange set daily upward and downward price fluctuation
limits for each stock, based on the previous day’s closing price. Although transactions may continue at the
upward or downward limit price if the limit price is reached on a particular trading day, no transactions may takeplace outside these limits. Consequently, an investor wishing to sell at a price above or below the relevant daily
limit may not be able to sell the shares at such price on a particular trading day, or at all.
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On June 29, 2009, the closing price of our shares on the Tokyo Stock Exchange was ¥796 per share. The
following table shows the daily price limit for a stock on the Tokyo Stock Exchange with a closing price ofbetween ¥500 and ¥999 per share, as well as the daily price limit if our per share price were to rise to between¥1,000 and ¥1,999, or fall to between ¥200 and ¥499. Other daily price limits would apply if our per share price
moved to other ranges.
Selected Daily Price Limits
Previous Day’s Closing Price or Special Quote

Equal to or greater thanEqual to or greater thanEqual to or greater than

¥ 200
500
1,000

Less thanLess thanLess thanMaximum Daily Price Movement

¥ 500
1,000
1,500

¥ 80
100
200

For a history of the trading price of our shares on the Tokyo Stock Exchange, see Item 9.A of this annual
report.
Rights of Holders of ADSs
For a description of rights of holders of ADSs, see “Rights of Holders of ADSs” under Item 10.B of our
Registration Statement on Form 20-F (File No. 1-15270), which we filed with the Securities and Exchange
Commission on December 13, 2001. The information contained in that part of the Registration Statement isincorporated in this Item 10.B by reference.
C. Material Contracts.
For the two years immediately preceding the date of this annual report, we have not been a party to any
material agreement other than in the ordinary course of business, except as disclosed in Item 6.C of this annual
report.
D. Exchange Controls.
Acquisition of Shares
The Foreign Exchange and Foreign Trade Law of Japan governs certain aspects relating to the acquisitionand holding of securities by “non-residents of Japan” and “foreign investors”, as defined below.
In general, acquisition of shares of stock of a Japanese company listed on any Japanese stock exchange by anon-resident of Japan from a resident of Japan is not subject to any prior notification requirement, but subject to apost reporting requirement by the resident.
If a foreign investor acquires shares of a Japanese company listed on a Japanese stock exchange and as aresult of this acquisition directly or indirectly holds, aggregated with its existing holdings and those of otherparties who have a special relationship with that foreign investor, 10% or more of the issued shares of thecompany, the foreign investor is, in general, required to report the acquisition to the Minister of Finance and anyother competent ministers via the Bank of Japan within 15 days from and including the date of acquisition. In
exceptional cases, a prior notification is required in respect of the acquisition.
“Non-residents of Japan” are generally defined as individuals who are not resident in Japan and corporations
whose principal offices are located outside Japan. Branches and other offices of Japanese corporations locatedoutside Japan are considered as non-residents of Japan, and branches and other offices located within Japan of
non-resident corporations are considered as residents of Japan. “Foreign investors” are generally defined to be (i)individuals not resident in Japan, (ii) corporations which are organized under the laws of foreign countries orwhose principal offices are located outside Japan, and (iii) corporations of which (a) 50% or more of the sharesare held directly or indirectly by (i) and/or (ii) above, (b) a majority of officers consists of non-residents of Japanor (c) a majority of officers having the power of representation consists of non-residents of Japan.
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Dividends and Proceeds of Sale
Under the Foreign Exchange and Foreign Trade Law, dividends paid on, and the proceeds of sales in Japanof, shares held by non-residents of Japan may in general be converted into any foreign currency and repatriatedabroad. Under the terms of the deposit agreement pursuant to which our ADSs will be issued, the depositary is
required, to the extent that in its judgment it can convert yen on a reasonable basis into dollars and transfer the
resulting dollars to the United States, to convert all cash dividends that it receives in respect of deposited shares
into dollars and to distribute the amount received (after deduction of applicable withholding taxes) to the holders
of ADSs.
E. Taxation.
United States Federal Income Taxation
This section describes the material United States federal income tax consequences of owning shares or
ADSs. It applies to you only if you are a U.S. holder (as defined below), you acquire your shares or ADSs in anoffering and you hold your shares or ADSs as capital assets for tax purposes. This section does not apply to you
if you are a member of a special class of holders subject to special rules, including:•a dealer in securities,•a trader in securities that elects to use a mark-to-market method of accounting for your securities
holdings,•

a tax-exempt organization,•a life insurance company,•a person liable for alternative minimum tax,•

a person that actually or constructively owns 10% or more of our voting stock,•a person that holds shares or ADSs as part of a straddle or a hedging, conversion, integrated orconstructive sale transaction, or•a person below whose functional currency is not the U.S. dollar.

This section is based on the Internal Revenue Code of 1986, as amended, its legislative history, existing andproposed regulations, published rulings and court decisions, all as currently in effect, as well as on the Income
Tax Convention Between the United States of America and Japan (the “Treaty”). These laws are subject tochange, possibly on a retroactive basis. In addition, this section is based in part upon the representations of The
Bank of New York and the assumption that each obligation in the deposit agreement and any related agreement
will be performed in accordance with its terms.
You are a U.S. holder if you are a beneficial owner of shares or ADSs and you are:•a citizen or resident of the United States,•

a domestic corporation,•an estate whose income is subject to United States federal income tax regardless of its source, or•a trust if a United States court can exercise primary supervision over the trust’s administration and one
or more United States persons are authorized to control all substantial decisions of the trust.

You should consult your own tax advisor regarding the United States federal, state and local and the Japaneseand other tax consequences of owning and disposing of shares and ADSs in your particular circumstances.
This discussion addresses only United States federal income taxation.
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In general, and taking into account the earlier assumptions, for United States federal income tax purposes, if
you hold ADRs evidencing ADSs, you will be treated as the owner of the shares represented by those ADSs.
Exchanges of shares for ADRs, and ADRs for shares, generally will not be subject to United States federal
income tax.
Taxation of Dividends
Under the United States federal income tax laws, and subject to the passive foreign investment company, or
PFIC, rules discussed below, the gross amount of any dividend we pay out of our current or accumulated
earnings and profits (as determined for United States federal income tax purposes) is subject to United Statesfederal income taxation. If you are a noncorporate U.S. holder, dividends paid to you in taxable years beginningbefore January 1, 2011 that constitute qualified dividend income will be taxable to you at a maximum tax rate of
15% provided that you hold the shares or ADSs for more than 60 days during the 121-day period beginning 60
days before the ex-dividend date and meet certain other requirements. Dividends we pay with respect to theshares or ADSs generally will be qualified dividend income. You must include any Japanese tax withheld fromthe dividend payment in this gross amount even though you do not in fact receive it.
The dividend is taxable when you, in the case of shares, or the Depositary, in the case of ADSs, receive thedividend, actually or constructively. The dividend will not be eligible for the dividends-received deduction
generally allowed to United States corporations in respect of dividends received from other United States
corporations. The amount of the dividend distribution that you must include in your income as a U.S. holder willbe the U.S. dollar value of the Japanese yen payments made, determined at the spot Japanese yen/U.S. dollar rateon the date the dividend distribution is includible in your income, regardless of whether the payment is in fact
converted into U.S. dollars. Generally, any gain or loss resulting from currency exchange fluctuations during theperiod from the date you include the dividend payment in income to the date you convert the payment into U.S.
dollars will be treated as ordinary income or loss and will not be eligible for the special tax rate applicable toqualified dividend income. The gain or loss generally will be income or loss from sources within the UnitedStates for foreign tax credit limitation purposes. Distributions in excess of current and accumulated earnings andprofits, as determined for United States federal income tax purposes, will be treated as a non-taxable return ofcapital to the extent of your basis in the shares or ADSs and thereafter as capital gain.
Subject to certain limitations, the Japanese tax withheld in accordance with the Treaty and paid over toJapan will be creditable against your United States federal income tax liability. Special rules apply indetermining the foreign tax credit limitation with respect to dividends that are subject to the maximum 15% rate.
To the extent a refund of the tax withheld is available under Japanese law or the Treaty, the amount of tax
withheld that is refundable will not be eligible for credit against your United States federal income tax liability.
Dividends will be income from sources outside the United States, and, depending on your circumstances,
will generally be “passive income” or “general income” for purposes of computing the foreign tax credit
allowable to you.
As discussed in “Japanese taxation” below, if we purchase our shares, selling shareholders will be deemed
to have received a dividend payment for Japanese tax purposes, in general. If we purchase the shares pursuant toa tender offer, selling shareholders might be subject to the deemed dividend taxation regime and part ofconsideration for the tender offer would be treated as dividends subject to withholding tax for Japanese tax
purposes (please see the exceptional treatment discussed in “Japanese taxation” below). Such dividend is not
generally a taxable event for United States federal income tax purposes (though a selling U.S. shareholder would
be subject to U.S. federal income tax on capital gains realized on a sale of shares to us, as described below) andtherefore would not give rise to foreign source income, and you would not be able to use the foreign tax credit
arising from any Japanese withholding tax imposed on such distribution unless you can apply the credit (subject
to limitations) against U.S. tax due or other foreign source income in the appropriate category for foreign tax
credit purposes.
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Taxation of Capital Gains
Subject to the PFIC rules discussed below, if you are a U.S. holder and you sell or otherwise dispose of yourshares or ADSs, you will recognize capital gain or loss for United States federal income tax purposes equal to thedifference between the U.S. dollar value of the amount that you realize and your tax basis, determined in U.S.
dollars, in your shares or ADSs. Capital gain of a noncorporate U.S. holder that is recognized in taxable years
beginning before January 1, 2011 is generally taxed at a maximum rate of 15% where the property is held formore than one year. The gain or loss will generally be income or loss from sources within the United States forforeign tax credit limitation purposes.
PFIC Rules
We do not expect our shares and ADSs to be treated as stock of a PFIC for United States federal income tax
purposes for 2008, but this conclusion is a factual determination that is made annually and thus may be subject tochange. Moreover, the application of the PFIC rules to a corporation, such as Nomura, that is primarily engaged
in an active business as a securities dealer is not entirely clear.
In general, if you are a U.S. holder, we will be a PFIC with respect to you if for any taxable year in which
you held our ADSs or shares:•

at least 75% of our gross income for the taxable year is passive income or,•at least 50% of the value, determined on the basis of a quarterly average, of our assets is attributable toassets that produce or are held for the production of passive income.

Passive income generally includes dividends, interest, royalties, rents (other than certain rents and royalties
derived in the active conduct of a trade or business), annuities and gains from assets that produce passive income.
If a foreign corporation owns at least 25% by value of the stock of another corporation, the foreign corporation istreated for purposes of the PFIC tests as owning its proportionate share of the assets of the other corporation, andas receiving directly its proportionate share of the other corporation’s income.
If we are treated as a PFIC, and you are a U.S. holder that did not make a mark-to-market election, as
described below, you will be subject to special rules with respect to:•

any gain you realize on the sale or other disposition of your shares or ADSs, and•any excess distribution that we make to you (generally, any distributions to you during a single taxable
year that are greater than 125% of the average annual distributions received by you in respect of theshares or ADSs during the three preceding taxable years or, if shorter, your holding period for the sharesor ADSs).

Under these rules:•

the gain or excess distribution will be allocated ratably over your holding period for the shares or ADSs,•

the amount allocated to the taxable year in which you realized the gain or excess distribution and any
taxable year prior to the first year in which we were a PFIC will be taxed as ordinary income,•the amount allocated to each other year, with certain exceptions, will be taxed at the highest tax rate ineffect for that year, and•the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax
attributable to each such year.

Special rules apply for calculating the amount of the foreign tax credit with respect to excess distributions
by a PFIC.
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If you own shares or ADSs in a PFIC that are regularly traded on a qualified exchange, they will be treatedas marketable stock, and you may elect to mark your shares or ADSs to market. If you make this election, youwill not be subject to the PFIC rules described above. Instead, in general, you will include as ordinary income
each year the excess, if any, of the fair market value of your shares or ADSs at the end of the taxable year overyour adjusted basis in your shares or ADSs. These amounts of ordinary income will not be eligible for thefavorable tax rates applicable to qualified dividend income or long-term capital gains. You will also be allowed
to take an ordinary loss in respect of the excess, if any, of the adjusted basis of your shares or ADSs over theirfair market value at the end of the taxable year (but only to the extent of the net amount of previously included
income as a result of the mark-to-market election). Your basis in the shares or ADSs will be adjusted to reflect
any such income or loss amounts. We urge you to speak to your tax advisor regarding the availability andadvisability of this election.
In addition, notwithstanding any election you make with regard to the shares or ADSs, dividends that you
receive from us will not constitute qualified dividend income to you if we are a PFIC either in the taxable year ofthe distribution or the preceding taxable year. Moreover, your shares or ADSs will be treated as stock in a PFIC
if we were a PFIC at any time during your holding period in your shares or ADSs, even if we are not currently aPFIC. For purposes of this rule, if you make a mark-to-market election with respect to your shares or ADSs, youwill be treated as having a new holding period in your shares or ADSs beginning on the first day of the firsttaxable year beginning after the last taxable year for which the mark-to-market election applies. Dividends thatyou receive that do not constitute qualified dividend income are not eligible for taxation at the 15% maximum
rate applicable to qualified dividend income. Instead, you must include the gross amount of any such dividend
paid by us out of our accumulated earnings and profits (as determined for United States federal income tax
purposes) in your gross income, and it will be subject to tax at rates applicable to ordinary income.
If you own shares or ADSs during any year that we are a PFIC, you must file Internal Revenue Service
Form 8621.
Japanese Taxation
The following is a summary of the principal Japanese tax consequences to owners of our shares who are
non-resident individuals or non-Japanese corporations without a permanent establishment in Japan to which therelevant income is attributable. As tax laws are frequently revised, the tax treatments described in this summary
are also subject to changes in the applicable Japanese laws and/or double taxation conventions occurring in the
future, if any. This summary is not exhaustive of all possible tax considerations which may apply to specificinvestors under particular circumstances. Potential investors should satisfy themselves as to•the overall tax consequences of the acquisition, ownership and disposition of shares or ADSs, including
specifically the tax consequences under Japanese law,•

the laws of the jurisdiction of which they are resident, and•any tax treaty between Japan and their country of residence, by consulting with their own tax advisers.

Generally, a non-resident shareholder is subject to Japanese withholding tax on dividends on the shares paidby us. A stock split is not subject to Japanese income or corporation tax, as it is characterized merely as anincrease of number of shares (as opposed to an increase of value of shares) from Japanese tax perspectives. Dueto the 2001 Japanese tax legislation effective from April 1, 2001, a conversion of retained earnings or legal
reserve (but other than additional paid-in capital, in general) into stated capital on a non-consolidated basis is notcharacterized as a deemed dividend for Japanese tax purposes, and therefore such a conversion does not trigger
Japanese withholding taxation (Article 2 (16) of the Japanese Corporation Tax Law and Article 8 (1) (xiv) of theJapanese Corporation Tax Law Enforcement Order).
Under the 2001 tax legislation, the deemed dividend taxation system has been drastically changed. Under
the new rule, if we purchase our listed shares by way of a tender offer, the selling shareholders (both individuals
and corporations) are in general required to recognize (i) a deemed dividend corresponding to a distribution of98

retained earnings proportionally computed by a statutory formula on a pro rata basis allocating the purchase priceinto share capital portion (including additional paid-in capital) and retained earnings portion on a nonconsolidated basis under Article 24(1)(v) of the Japanese Corporation Tax Law, and (ii) capital gain or loss
computed as a difference between the basis of the shares subject to the tender offer at the shareholder’s level andthe amount of the consideration for the tender offer (deducting the amount corresponding to the deemed dividend
computed as (i) above) under Article 61-2(1) (i) of the same law. On the other hand, no deemed dividend isrequired to be recognized if we purchase our shares at/through the stock market due to the difficulty ofidentifying each shareholder who sold our shares (Article 24(1)(iv) of the Japanese Corporation Tax Law and
Article 23(3) of the Japanese Corporation Tax Law Enforcement Order). In addition, in the case of individual
shareholders, no deemed dividend is required to be recognized until March 31, 2010 (a one-year extension isprovided for under the 2009 Japanese tax legislation) due to the operation of a temporary measure (Article 9-6 ofthe Japanese Special Tax Measures Law) and therefore they are only required to recognize capital gain or loss ofthe shares subject to the tender offer. In the meantime, when shares are acquired by us (whether by way of atender offer or otherwise) for the purpose of cancellation with retained earnings, the shareholders (bothindividuals and corporations) whose shares were not canceled were previously deemed to have received a
dividend corresponding to the increase of share value by the share cancellation, under the old tax law before the2001 tax legislation. However, under the 2001 tax legislation, no deemed dividend taxation occurs for theremaining shareholders (both individuals and corporations) whose shares are not canceled.
Unless otherwise provided for in applicable tax treaties, conventions or agreements reducing the maximum
rate of withholding tax, under Japanese taxation law, the withholding rate applicable to dividends on the listed
shares such as those paid by us to non-resident shareholders is currently 7% which is applicable during the period
from January 1, 2004 through December 31, 2011 (2009 tax legislation extended this period). 15% withholding
rate will apply thereafter. Notwithstanding the 7% or 15% withholding rate periods above, 20%-withholding-rate
applies to dividends paid to any individual shareholder who holds 5% or more of the outstanding shares (Pleaserefer to Article 182(2) of the Japanese Income Tax Law and Article 9-3(1) and (2) of the Japanese Special Tax
Measures Law for these withholding rates). Japan has income tax treaties, conventions or agreements whereby
the above-mentioned withholding tax rate is reduced, generally to 15% for portfolio investors, with, among
others, Australia, Belgium, Canada, Denmark, Finland, Germany, Ireland, Italy, Luxembourg, The Netherlands,
New Zealand, Norway, Singapore, Spain, Sweden and Switzerland. Under the new tax treaty between UnitedStates and Japan of which withholding tax treatments is applicable effective from July 1, 2004, the withholding
tax rate on dividends is 10% for portfolio investors, if they do not have a permanent establishment in Japan andthe shares with respect to which such dividends are paid are not related in-fact to such permanent establishment,
and if they are qualified U.S. residents eligible to enjoy treaty benefits. It shall be noted that, under the new tax
treaty between the U.S. and Japan, withholding tax on dividends declared after July 1, 2004 is exempt fromJapanese taxation by way of withholding or otherwise for pension funds which are qualified U.S. residents
eligible to enjoy treaty benefits unless such dividends are derived from the carrying on of a business, directly or
indirectly, by such pension funds. The similar withholding tax treatment applies under the new Tax Treaty
between the United Kingdom and Japan for dividends declared on or after January 1, 2007 due to the renewal of
the Tax Treaty. The Tax Treaty between France and Japan is also renewed effective from January 1, 2008 underwhich the reduction of the standard treaty withholding rate for portfolio investors on dividends (15% to 10%) ispromulgated. In addition, the tax treaty between Australia and Japan has been renewed and came into effect as ofJanuary 1, 2009 under which the standard treaty withholding rate for portfolio investors on dividends will also be
reduced from 15% to 10%. Non-resident shareholders who are entitled to a reduced treaty rate of Japanese
withholding tax on payment of dividends on the shares by us are required to submit an Application Form for
Income Tax Convention regarding Relief from Japanese Income Tax on Dividends in advance through us to therelevant tax authority before payment of dividends. A standing proxy for non-resident shareholders may provide
such application service. See “Rights of Our Shareholders” under Item 10.B of this annual report. Non-resident
shareholders who do not submit an application in advance will be entitled to claim the refund of withholding
taxes withheld in excess of the rate of an applicable tax treaty from the relevant Japanese tax authority. For
Japanese tax purpose, the treaty rate normally applies superseding the tax rate under the domestic law. However,
due to the so-called “preservation doctrine” under Article 3-2 of the Special Measures Law for the Income Tax99

Law, Corporation Tax Law and Local Taxes Law with respect to the Implementation of Tax Treaties, if the tax
rate under the domestic tax law is lower than that promulgated under the applicable income tax treaty, then thedomestic tax rate is still applicable. If the domestic tax rate still applies, no treaty application is required to be
filed, consequently.
Gains derived from the sale of shares outside Japan, or from the sale of shares within Japan by a nonresident shareholder as a portfolio investor, are, in general, not subject to Japanese income or corporation taxes.
Japanese inheritance and gift taxes at progressive rates may be payable by an individual who has acquired
shares as a legatee, heir or donee, even if the individual is not a Japanese resident.
F. Dividends and Paying Agents.
Not applicable.
G. Statement by Experts.
Not applicable.
H. Documents on Display.
We are subject to the informational requirements of the Securities Exchange Act of 1934 and, in accordance
therewith, we will file annual reports on Form 20-F within six months of our fiscal year-end and other reports
and information on Form 6-K with the Securities and Exchange Commission. These reports and otherinformation can be inspected at the public reference room at the Securities and Exchange Commission at
100 F Street, NE., Washington, D.C. 20549. You can also obtain copies of such material by mail from the public
reference room of the Securities and Exchange Commission at prescribed fees. You may obtain information on
the operation of the Securities and Exchange Commission public reference room by calling the Securities andExchange Commission in the United States at 1-800-SEC-0330. You can also access to the documents filed via
the Electronic Data Gathering, Analysis, and Retrieval system on the SEC’s website (http://www.sec.gov).
I. Subsidiary Information.
Not applicable.
Item 11. Quantitative and Qualitative Disclosures about Market Risk
Risk Management
Our group business activities are inherently subject to various risks. Managing those risks is an integral partof management’s responsibilities to secure fiscal health as well as to contribute to the maintenance and expansionof corporate value. Our risk management framework and governance structure is intended to provide
comprehensive controls, monitoring and reporting.
We establish “Structure for Ensuring Appropriate Business” which is a principle, at the Board of Directors.
Within this is established the “Structure for Regulations and others regarding Management of Risk Loss”. In
accordance with these structures, we are constantly seeking to upgrade the risk management expertise and we aretrying to strengthen and promote the risk management.
Global Risk Management Structure
Governance
We have independent financial management resources and risk management units (Controller’s Department,Group Finance Department, Group Treasury Department and Group Risk Management Department)
headquartered in Tokyo which are responsible for appropriate financial resource allocation and risk management.
100Within these units, the Group Risk Management Department assists the Chief Risk Officer (CRO) with
implementing the risk management framework and supervising risks. Supervision includes establishing anenterprise-wide risk management framework, ensuring its adoption by the entire group, monitoring theappropriateness of risk management, and measuring and analyzing the risks of the entire group. In particular,Group Risk Management Department establishes and enhances all of our risk management policies and rules,
gathers necessary information for risk management and implement risk management policies for our global
operations. Group Risk Management Department reports ongoing risk status and the results of their analysis tosenior management. These processes are audited regularly by Internal Audit.
We have established a Group Integrated Risk Management Committee (GIRMC) under the Board of
Directors and Executive Management Board (EMB). The GIRMC considers significant risk matters including
Basel II regulated risk items, matters related to Nomura Group’s debt structure & capital policy, andimplementation and updating of important policies and procedures related to risk management. Further, we haveestablished the Global Risk Management Committee under the GIRMC for the management of important
positions, market risk, credit risk, risk concentration and strategic risk within the Nomura Group.

Risk Governance

Board
BoardofofDirectors
Directors
Report

EMB
EMB
GIRMC
GIRMC

Internal
Controls
Committee
SeniorManaging
Directorin charge ofInternal Audit

CFO

CRO

GRMC

FinancialandFinancial Resources
Resourcessoand Risk
Risk Management
Managementt

Controllers

Finance

RiskManagement

Treasury

Audit
u
Check

ReportFront Divisions
Internal Audit

AA

BB

CC

DD

EE

Definition and Types of Risk Managed“Risk” is defined as the possibility of capital impairment due to losses in the business, and the possibility
that business operations do not generate an assumed output or cannot reach an expected level or cannot meet aplanned goal due to the deterioration of efficiency and/or effectiveness. We classify risks as “Portfolio risk”(Risk of losses arising from fluctuations and declines in the value of portfolios.) and “Non-portfolio risk”.
Portfolio risk consists of Market Risk, Credit Risk and Private Equity Risk and Non-portfolio risk consists ofOperational Risk and Business Risk. Further, “Portfolio risk” is classified into trading risk and non-trading risk.
In addition to managing each risk, we calculate economic capital for each risk.

101

Risk Control
Dynamic management of risk is performed within each regional front office business. These units are bestplaced to respond rapidly and flexibly to changing market conditions and the needs of business in each region.
Risk taken and managed in this way is consistent with limits and guidelines which provide a framework foreconomic capital allocation. This framework consists of higher level economic capital guidelines, links to lower
level limits on value-at risk (“VaR”) and other measures appropriate to individual business lines. We set
economic capital guidelines for core business units within a business division. We also set limits designed torestrict trading activities to prescribed mandates. The financial management resources and risk management units
set and monitor the limits such as risk control limit (various types), credit line, country limit, regulatory capital
limit and unsecured funding limit. The Risk Management unit reports ongoing risk status to senior management.

Risk Control
Board of Directors
Report

Allocation of Economic Capital
EMB
GIRMC

GRMC

CFO & CRO
Financial management resources and risk management units

Division
Risk Control Limit
Credit Line

Economic Capital

Limit Setting

Business Unit

Country Limit
Guideline

Regulatory Capital Limit
Unsecured Financing Limit

Monitoring

Strategy
Risk Control Limit

Market Risk
Market risk refers to the potential loss in the value of an asset resulting from changes in market prices, rates,
indices, volatilities, correlations or other market factors. We are exposed to this type of risk primarily inconnection with our trading activities. Effective monitoring and management of this risk requires an ability toanalyze a complex and constantly changing capital market environment worldwide and to highlight any
problematic trends quickly. We measure and manage market risk using VaR on a daily basis. The Risk
Management unit reports ongoing market risk status and the results of its analysis to senior management.
VaR
The statistical technique known as Value-at-Risk, or VaR, is one of the tools we use to assess market risk
exposure of our trading portfolio. VaR is the potential loss in the value of our trading positions due to adverse
movements in markets over a defined time horizon with a specified confidence level. We estimate VaR using a
99% confidence level and a one-day time horizon for our trading portfolio. Market risks that are incorporated inthe VaR model include equity prices, interest rates, foreign exchange rates, and associated volatilities andcorrelations. The historical data to calculate volatilities and correlations are weighted to give greater importanceto more recent observations.
102

VaR Methodology, Assumptions and Limitations. We make a number of assumptions and approximations inconnection with the modeling of the risk characteristics of our trading positions. Different assumptions,approximations or a combination of them could result in a materially different VaR. We believe that theassumptions and approximations we use are reasonable.
Trading Portfolio Risk
The following table shows our VaR as of each of the dates indicated for substantially all of our trading
positions:
As ofMar. 31, Apr. 30, May 31, Jun. 29, Jul. 31, Aug. 31, Sep. 28, Oct. 31, Nov. 30, Dec. 31, Jan. 31, Feb. 29, Mar. 31,
2008
2008
2008
2008
2008
2008
2008
2008
2008
2008
2009
2009
2009
(in 100 millions of Yen)

Equity . . . . . . . . . . . . . . . . . . . . . ¥ 41.6 ¥ 41.0 ¥ 44.5 ¥ 32.6 ¥ 38.3 ¥ 32.4 ¥ 26.8 ¥ 29.7 ¥ 23.8 ¥ 24.6 ¥ 21.6 ¥ 36.4 ¥ 37.9
Interest Rate . . . . . . . . . . . . . . . .
47.0
80.2
54.8
37.4 34.3
31.5
33.8
49.2
40.9
42.2
39.7
72.4
67.0
Foreign Exchange . . . . . . . . . . . .
80.0
65.4
70.6
47.6 38.4
43.0
63.0 124.3 127.7 118.0 102.0
92.1
86.6
Sub-total . . . . . . . . . . . . . . . . . . .
Less:Diversification Benefit . . . .

168.7

186.6

169.8

117.5 111.1

106.9

123.7

203.2

192.3

184.8

163.4

200.9

191.5

(67.6)(92.7) (88.2) (54.6) (49.1) (45.4) (50.8) (72.0) (61.2) (61.7) (54.0) (77.4)(74.8)

Value at Risk . . . . . . . . . . . ¥101.0 ¥ 94.0 ¥ 81.6 ¥ 63.0 ¥ 62.0 ¥ 61.6 ¥ 72.9 ¥131.1 ¥131.1 ¥123.1 ¥109.4 ¥123.5 ¥116.6

Value at Risk
(maximum)(average)(minimum)¥139.3 : November 25, 2008
96.1 : Average for the period from April 1, 2008 to March 31, 200958.7 : August 22, 2008
As ofMar. 30, Apr. 30, May 31, Jun. 29, Jul. 31, Aug. 31, Sep. 28, Oct. 31, Nov. 30, Dec. 31, Jan. 31, Feb. 29, Mar. 31,
2007
2007
2007
2007
2007
2007
2007
2007
2007
2007
2008
2008
2008
(in 100 millions of Yen)

Equity . . . . . . . . . . . . . . . . . . . . . ¥ 46.5 ¥ 44.1 ¥ 39.5 ¥ 47.4 ¥ 41.8 ¥ 33.5 ¥ 32.8 ¥ 45.0 ¥ 30.5 ¥ 38.4 ¥ 36.7 ¥ 48.5 ¥ 41.6
Interest Rate . . . . . . . . . . . . . . . .
37.4
32.1
33.5
35.0 26.3
28.6
32.4
29.8
34.5
24.1
31.1
31.5
47.0
Foreign Exchange . . . . . . . . . . . .
14.3
18.3
20.2
24.1 19.7
21.1
25.8
41.4
40.7
42.0
41.3
42.4
80.0
Sub-total . . . . . . . . . . . . . . . . . . .
Less:Diversification Benefit . . . .

98.2

94.5

93.2

(35.9)(37.1) (36.7)

106.4

87.7

83.2

91.1

116.2

105.7

104.4

109.0

122.3

168.7

(42.2) (36.1) (32.0) (35.3) (51.0) (46.3) (50.5) (47.7) (48.5)(67.6)

Value at Risk . . . . . . . . . . . ¥ 62.3 ¥ 57.4 ¥ 56.5 ¥ 64.2 ¥ 51.7 ¥ 51.2 ¥ 55.8 ¥ 65.2 ¥ 59.5 ¥ 53.9 ¥ 61.3 ¥ 73.8 ¥101.0

Value at Risk
(maximum)(average)(minimum)¥101.4 : March 27, 2008
62.0 : Average for the period from April 2, 2007 to March 31, 2008
45.6 : August 14, 2007

VaR relating to equity risk decreased from ¥4.16 billion at the end of March 2008 to ¥3.79 billion at the endof March 2009 mainly due to a reduction of equity related positions. VaR relating to interest rate risk increased
from ¥4.70 billion at the end of March 2008 to ¥6.70 billion at the end of March 2009 mainly due to a rise ofinterest rate related volatility. VaR relating to foreign exchange risk increased from ¥8.00 billion at the end of
March 2008 to ¥8.66 billion at the end of March 2009 mainly due to a rise in FX volatility.
In the preceding year, VaR relating to equity risk decreased from ¥4.65 billion at the end of March 2007 to¥4.16 billion at the end of March 2008. VaR relating to interest rate risk increased from ¥3.74 billion at the endof March 2007 to ¥4.70 billion at the end of March 2008 mainly due to a rise of interest rate related volatility.
VaR relating to foreign exchange risk significantly increased from ¥1.43 billion at the end of March 2007 to ¥8.0
billion at the end of March 2008 mainly due to a rise in FX volatility.

103

Back-Testing
We compare VaR values with the actual profit and losses in trading portfolio and verify model’s accuracy
used in risk measurement. We count the number of actual times that VaR is exceeded and verify whether thenumber of times is within a predetermined range. If the number of exceptions is greater than the number
predicted by the confidence level used for VaR then we examine any necessary adjustments to the VaRparameters and VaR methodology.
Other Measures
In some business lines or portfolios we may use additional measures to control or limit risk taking activity.
Measures include sensitivities to small moves in key market parameters, credit portfolio risk measures or thefinancial impact of large market movements on certain portfolios. Metrics and limits of this type are typicallyspecific to asset types, businesses or strategies and are used to compliment VaR and economic capital measures.
Stress Testing
We also carry out stress testing and scenario analysis. We assess the impact of the occurrence of shock
events such as the U.S. sub-prime loan problem on our profit and loss. We verify losses which are over VaR andwhich are equivalent to the “distribution base”, and verify if the amount of economic capital by division isappropriate. Scenario analysis or limits may also be used at more granular business levels to assess the impact ofcertain scenarios or limit risk taking within the businesses. Nomura continues to invest in the development oftools to analyze the impact of market stresses on the value of our portfolios.
Model Review
We use pricing models when some of the financial instruments cannot be valued based upon quoted market
prices. Such models are used for management of risk positions, such as reporting against limits, as well as forvaluation. The global risk management unit reviews the models and assesses model appropriateness andconsistency independently of the front office. The model reviews consider a number of factors about the model’s
suitability for valuation and risk management of a particular product.
Non-trading Risk
A major market risk in our non-trading portfolio relates to equity investments held for operating purposes
which we hold on a long-term basis. Our non-trading portfolio is exposed mainly to volatility in the Japanesestock market. One method that can estimate the market risk in the portfolio is to analyze market sensitivity basedon changes in the Tokyo Stock Price Index, or TOPIX, which is a leading index of prices of stocks on the First
Section of the Tokyo Stock Exchange.
We use regression analysis covering the previous 90 days which tracks and compares fluctuations in the
TOPIX and the market value of our operating equity investments held for operating purposes. Our simulation
indicates that, for each 10% change in the TOPIX, the market value of our operating equity investments held for
operating purposes can be expected to change by ¥18,528 million as of March 31, 2008 and ¥11,983 million as ofMarch 31, 2009. On March 31, 2008, the TOPIX closed at 1,212.96 points and on March 31, 2009, the TOPIX
closed at 773.66 points. This simulation analyzes data for our entire portfolio of equity investments held for
operating purposes. Therefore, it is very important to note that the actual results differ from our expectations
because of price fluctuations of individual equities.
Credit Risk
The framework for the management of our credit risk and investment risk is outlined in the Credit Risk
Management Policy approved by the then GEMC (currently EMB).
104

Credit Risk is defined as the risk of losses arising from decrease or disappearance of asset values, on and offbalance sheet, due to deterioration in creditworthiness or default of credit granted entity. Credit Risk includes
Issuer Risk and Counterparty Risk.
Investment Risk is defined as the risk of losses arising from decrease or disappearance of position values ofinvestment securities, private equity investment and fund investments. Credit Risk in this Policy includes
Investment Risk except as otherwise defined.
Scope of Credit Risk Management
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 deemednecessary from a credit risk management perspective.
Integrated Management
We evaluate credit risk not only by obligor, but also by obligor group where it is appropriate that their credit
risk should be evaluated collectively.
Credit Risk Reporting
The global risk management unit is responsible for monitoring, evaluating and analyzing credit risk and forreporting the status of credit risk to CRO, Senior Managing Directors in charge of risk management and the
GIRMC with appropriate frequency.
Credit Risk Measurement
Credit Risk is quantitatively-measured by a globally unified methodology. Credit Risk is properly measured
to reflect the effect of collateral or a guarantee.
Credit Risk to counterparties to derivatives transaction
We measure our credit risk to counterparties to derivatives transactions as the sum of actual current
exposure evaluated daily at its fair value, plus potential exposure until maturity of such transactions. All
derivative credit lines are controlled through the risk management units.
We enter into International Swaps and Derivatives Association, Inc. (“ISDA”) master agreements orequivalent agreements (called master netting agreements) with many of our derivative counterparties. Masternetting agreements provide protection to reduce our risks of counterparty default and, in some cases, offset ourconsolidated balance sheet exposure with the same counterparty. This provides a more meaningful presentationof our balance sheet credit exposure.
In addition, to reduce default risk, we require collateral, principally cash or highly liquid bonds, including
U.S. and Japanese government securities when necessary.
The credit exposures in our trading-related derivatives as of March 31, 2009 are summarized in the tablebelow, showing as the fair value by counterparty credit rating and by tenor. The credit ratings are internallydetermined by our credit unit.

105

Counterparty Credit Ratings for Replacement Cost (Net of Collateral) of Trading Derivatives Assets

Credit Rating

AAA . . . . . . .
AA . . . . . . . . .
A ..........
BBB . . . . . . . .
BB . . . . . . . . .
Other(2) . . . . .

Years to Maturity
Less than 1 to 3 3 to 5 5 to 7 More than Cross-Maturity
Total
Collateral Replacement Replacement
1 Year Years Years Years 7 Years
Netting(1)Fair Value Obtained
Cost
Cost

¥

(a)
(b)
(in billions of Yen and millions of U.S. dollars)(a)-(b)

87
233
356
27
10
116

¥ 82 ¥ 24 ¥ 58
268 392 166
372 403 256
18
15
15
2
6
1
4
6
3

¥

89
428
664
140
6
43

¥ (58)(1,086)(1,698)
(66)
(8)
(64)

¥ 282
401
353
149
17
108

¥

2
33
146
39
5
87

¥ 280
368
207
110
12
21

$ 2,824
3,712
2,088
1,109
121
212

Sub-total . . . .
Listed . . . . . . .

829
425

746
133

499
1

1,370
—

(2,980)
—

1,310
633

312
—

998
633

10,066
6,384

Total . . . . . . .

¥1,254¥879 ¥920 ¥500

¥1,370¥(2,980)¥1,943¥312¥1,631$16,450

846
74

Notes:(1) This item represents netting of payable balances with receivable balances for the same counterparty across maturity band
categories. Receivable and payable balances with the same counterparty in the same maturity category, however, are net
within the maturity category. Cash collateral netting against net derivatives in accordance with FSP FIN 39-1 areincluded.
(2) “Other” does not necessarily indicate that the counterparties’ credit is below investment grade.

Operational Risk
The framework for the management of our operational risk is outlined in the Operational Risk Management
Policy approved by the GIRMC.
We define operational risk as the risk of loss resulting from inadequate or failed internal processes, people
and systems or from external events. This definition includes legal risk, but excludes strategic and reputationalrisk. The loss event types which fall under this definition are as follows: (1) Internal Fraud (2) External Fraud(3) Employment Practices and Workplace Safety (4) Clients, Products & Business Practices (5) Damage toPhysical Assets (6) Business Disruption and System Failures (7) Execution, Delivery & Process Management
GovernanceOperational risk is managed on a day-to-day basis by the business areas through the maintenance ofappropriate control environments. In addition, Nomura has a corporate Operational Risk function, as part of theGroup Risk Management Department, that is developing a global Basel II compliant framework. We promote
this framework under the control of GIRMC.
Framework
The Nomura group is in the process of implementing a formal Operational Risk Management framework
globally that meets the expected standards for a sophisticated global financial institution. The framework is
designed to provide shareholder and investor confidence and transparency in our management of operational risk.
We are gradually aiming for a Basel II approach to operational risk management.
The operational risk management framework consists of four elements: Identification, Assessment, Control
and Monitoring of the risk. We identify the risk by capturing and analyzing internal and external loss data. We
assess and control risk appropriately through the analysis of losses and through the implementation of self
assessments. We monitor and report operational risk to our senior management. We continually inform and train
Nomura group employees in awareness of operational risk and the potential impact to the organization.
106

As a result of meeting the Basel II requirements, we will be able to respond to and mitigate operational risk,
improve our processes and systems, and so contribute to our corporate value.
Nomura group will continue to develop policies and procedures, effective tools and systems in order toimplement this framework globally.
Item 12. Description of Securities Other Than Equity Securities
Not applicable.

107PART II
Item 13. Defaults, Dividend Arrearages and Delinquencies
None.
Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
None.
Item 15. Controls and Procedures
Evaluation of Disclosure Controls and Procedures.
Our Disclosure Committee is charged with the maintenance and evaluation of our disclosure controls andprocedures. As of March 31, 2009, an evaluation was carried out under the supervision and with the participationof our management, including our Chief Executive Officer and Chief Financial Officer, and the Disclosure
Committee, of the effectiveness of the disclosure controls and procedures (as defined in Rules 13a-15(e) and15d-15(e) under the Securities Exchange Act of 1934). Based on that evaluation, these officers concluded that, asof March 31, 2009, the disclosure controls and procedures were effective.
Management’s Report on Internal Control Over Financial Reporting.
Management is responsible for establishing and maintaining adequate internal control over financial
reporting for Nomura. Management, with the participation of our Chief Executive Officer and Chief Financial
Officer, evaluated the effectiveness of our 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 Internal Control –Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission(COSO). Based on this evaluation, management concluded that our internal control over financial reporting was
effective as of March 31, 2009. Our independent registered public accounting firm, Ernst & Young ShinNihon
LLC, has issued an attestation report on the effectiveness of our internal control over financial reporting, whichappears on page F-3 of this annual report.
Evaluation of Changes in Internal Control Over Financial Reporting.
Management also carried out an evaluation, with the participation of our Chief Executive Officer and Chief
Financial Officer, of changes in our internal control over financial reporting during the year ended March 31,
2009. Based upon that evaluation, there was no change in our internal control over financial reporting during theyear ended March 31, 2009 that has materially affected, or is reasonably likely to affect, our internal control overfinancial reporting.
Item 16A. Audit Committee Financial Expert
Our Board of Directors has determined that Tsuguoki Fujinuma, a member of the Audit Committee, is an“audit committee financial expert” as such term is defined by Item 16A of Form 20-F. Mr. Fujinuma meets theindependence requirements applicable to him under Section 303A.06 of the NYSE Listed Company Manual. Fora description of his business experience, please see Item 6.A of this annual report.
Item 16B. Code of Ethics
On March 5, 2004, we adopted the “Code of Ethics of Nomura Group” that includes the “Code of Ethics for
Financial Professionals”, which applies to our financial professionals including our principal Executive Officer,
principal financial officer, principal accounting officer and persons performing similar functions.
108

Item 16C. Principal Accountant Fees and Services
Ernst & Young ShinNihon LLC has been our principal accountants for SEC reporting purposes for the last
seven fiscal years. The table set forth below contains the aggregate fees billed for each of the last two fiscal years
by our principal accountants in each of the following categories: (i) Audit Fees, which are fees for professional
services for the audit of our annual financial statements or services that are normally provided by the accountant
in connection with statutory and regulatory filings or engagements for those fiscal years, (ii) Audit-Related Fees,
which are fees for assurance and related services that are reasonably related to the performance of the audit orreview of our financial statements and are not reported as Audit Fees, (iii) Tax Fees, which are fees for
professional services rendered for tax compliance, tax advice and tax planning, and (iv) All Other Fees, which
are fees for products and services other than Audit Fees, Audit-Related Fees and Tax-Fees, such as advisory
work for risk management and regulatory matters.
Year ended March 31
2008
2009
2009
(in millions)Audit Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Audit-Related Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All Other Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥2,961118
200
164¥2,716
81
146
56

$27
1
1
1

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥3,443¥2,999$30

Audit-Related Fees included fees for services relating to consultations on accounting issues relating to ourbusiness such as securitization. Tax Fees included fees for services relating to tax planning and compliance. All
Other Fees included fees for services relating to advice with respect to regulations and disclosures under the
Financial Instruments and Exchange Act in connection with our underwriting business.
In accordance with the regulations of the Securities and Exchange Commission issued pursuant to Sections
202 and 208 of the Sarbanes-Oxley Act of 2002, our Audit Committee has adopted a pre-approval policy
regarding the engagements of our principal accountants. Under the pre-approval policy, there are two types ofpre-approval procedures, “General Pre-Approval” and “Specific Pre-Approval.”
Under the pre-approval procedure for “General Pre-Approval,” our Chief Financial Officer in conjunction
with our principal accountants must make a proposal to our Audit Committee for the types of services andestimated fee levels of each category of services to be generally pre-approved. Such proposal must be made noless frequently than annually. The Audit Committee will discuss the proposal and if necessary consult withoutside professionals as to whether the proposed services would impair the independence of our principal
accountants. If such proposal is accepted, our Audit Committee will inform our CFO and principal accountants ofthe services that have generally been pre-approved and included in a “General Pre-Approved List.” Our Audit
Committee is informed of each such service that is provided.
Under the pre-approval procedure for “Specific Pre-Approval,” if any proposed services are not on the
General Pre-Approved List, our CFO must submit an application to our Audit Committee for such services. After
reviewing the details and estimated fee levels for each engagement and if necessary consulting with outside
professionals as to whether the proposed services would impair the independence of our principal accountants,
our Audit Committee may make a specific pre-approval decision on these services. Also, if any approved
services in the General Pre-Approved List exceed the fee levels prescribed on the List, our CFO must submit anapplication to our Audit Committee for new fee levels for such services. Our Audit Committee may make a
pre-approval decision after reviewing the details of the services and the estimated fee levels for eachengagement.

109

None of the services described in the first paragraph under this Item 16C were waived from the pre-approvalrequirement pursuant to Rule 2-01(c)(7)(i)(C) of Regulation S-X.
Item 16D. Exemptions from the Listing Standards for Audit Committees
We do not avail ourselves of any exemption from the independence requirements of Rule 10A-3 under the
Securities Exchange Act of 1934.
Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
In the year ended March 31, 2009, we acquired 74,263 shares of our common stock by means of repurchaseof shares constituting less than one unit upon the request of the holders of those shares. For an explanation of theright of our shareholders to demand such repurchases by us, see “Common Stock” under Item 10.B of this annual
report. As of March 31, 2009, we had 2,604,779,843 outstanding shares excluding 56,312,917 shares as treasury
stock. During the year ended March 31, 2009, no affiliated purchaser of Nomura purchased shares of ourcommon stock.
We had not established share buyback programs nor purchased our common stock utilizing the programs
during the year ended March 31, 2009.
The following table sets forth certain information with respect to our purchases of shares of our common
stock during the year ended March 31, 2009.

Month

Total
Number of
SharesPurchased

Average Price
Paid perShare(in JPY)

Total
Number of
SharesPurchased
as Part of
Publicly
Announced
ProgramApril 1 to 30, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
May 1 to 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
June 1 to 30, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
July 1 to 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
August 1 to 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
September 1 to 30, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
October 1 to 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
November 1 to 30, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 1 to 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
January 1 to 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
February 1 to 28, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March 1 to 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,733
3,871
8,300
9,167
6,728
10,2985,880
3,631
12,428
1,921
2,584
5,722

1,603
1,763
1,776
1,559
1,531
1,421
1,259
849
673
721
496
457

—
—
—
—
—
—
—
—
—
—
—
—

—
—
—
—
—
—
—
—
—
—
—
—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

74,263

1,224

—

—

Maximum
Number of
Shares thatMay Yet Be
Purchased
Under
the Program

Nomura recognizes the need to set out flexible financial strategies that allow the Board to respond quickly
to any changes in the business environment and is looking into implementing further share buybacks. Details will
be announced when finalized.
As of May 31, 2009, Nomura Holdings had 2,615,674,540 outstanding shares excluding 54,582,022 sharesas treasury stock.

110

Item 16F. Change in Registrant’s Certifying Accountant.
Not applicable.
Item 16G. Corporate Governance.
Companies listed on the NYSE must comply with certain standards regarding corporate governance under
Section 303A of the NYSE Listed Company Manual. However, listed companies that are foreign private issuers,
such as Nomura, are permitted to follow home country practice in lieu of certain provisions of Section 303A.
The following table shows the significant differences between the corporate governance practices followedby U.S. listed companies under Section 303A of the NYSE Listed Company Manual and those followed by
Nomura. The information set forth below is current as of the date of this annual report.
Corporate Governance Practices Followed
by NYSE-listed U.S. Companies

Corporate Governance Practices Followed by Nomura

A NYSE-listed U.S. company must have a majority of
Directors meeting the independence requirements under
Section 303A of the NYSE Listed Company Manual.

In accordance with the Companies Act, Nomura has
the Committee System corporate form, under which
it has an Audit Committee, a Nomination Committee
and a Compensation Committee under its Board of
Directors. Under the Companies Act, Nomura is not
required to have outside directors comprising amajority of its Directors, but is required to have oneach committee at least three Directors, a majority ofwhom must be outside directors. Nomura has twelve
Directors, six of whom are outside directors. An
outside director of a corporation is defined under theCompanies Act as a non-executive director (i) who
has never assumed the position of executive director,
executive officer, manager or employee of thecompany or its subsidiaries and (ii) who does not
currently assume the position of executive director,
executive officer, manager or employee of thecompany or its subsidiaries.

The non-management directors of a NYSE-listed U.S.
company must meet at regularly scheduled executive
sessions without management.

Under the Companies Act, Nomura is not required tohold such executive sessions for its outside directors.

A NYSE-listed U.S. company must have an audit
committee with responsibilities described under Section
303A of the NYSE Listed Company Manual, including
those imposed by Rule 10A-3 under the U.S. Securities
Exchange Act of 1934. The audit committee must becomposed entirely of independent directors and have atleast three members.

Nomura has an Audit Committee consisting of three
Directors, two of whom are outside directors under
the Companies Act and all of whom are independent
directors under Rule 10A-3 under the U.S. Securities
Exchange Act of 1934. The Audit Committee is incharge of monitoring the performance of the
Directors and Executive Officers of Nomura and to
propose the appointment or dismissal of its
independent auditors and accounting firm. The Audit
Committee satisfies the requirements of Rule 10A-3
under the U.S. Securities Exchange Act of 1934.

111

Corporate Governance Practices Followed
by NYSE-listed U.S. Companies

Corporate Governance Practices Followed by Nomura

A NYSE-listed U.S. company must have a nominating/corporate governance committee with responsibilities
described under Section 303A of the NYSE Listed
Company
Manual.
Thenominating/corporate
governance committee must be composed entirely of
independent directors.

Nomura has a Nomination Committee consisting of
three Directors, two of whom are outside directors.
The Nomination Committee is in charge of proposing
to the meeting of shareholders the election or
dismissal of Directors.

A NYSE-listed U.S. company must have acompensation committee with responsibilities describedunder Section 303A of the NYSE Listed Company
Manual. The compensation committee must becomposed entirely of independent directors.

Nomura has a Compensation Committee consistingof three Directors, two of whom are outside directors.
The Compensation Committee is in charge ofdetermining the compensation of each Director andExecutive Officer of Nomura.

A NYSE-listed U.S. company must generally obtainshareholder approval with respect to any equity
compensation plan.

The Compensation Committee establishes the policy
with respect to the determination of the individualcompensation of each of our Directors and Executive
Officers (including stock options in the form of stockacquisition rights as equity compensation) and makes
determinations in accordance with that compensation
policy. Under the Companies Act, stock option isdeemed to be compensation for the services
performed by our Directors and Executive Officers.
In respect of the equity compensation for directors,
executive officers, statutory auditors and employeesof Nomura’s subsidiaries under our stock option planin the form of stock acquisition rights, such plan must
be approved by a special resolution adopted at a
meeting of shareholders. A special resolution
requires as a quorum one-third of the total number ofvoting rights and the approval of at least two-thirdsof the voting rights represented at the meeting.

112

PART III
Item 17. Financial Statements
In lieu of responding to this item, we have responded to Item 18 of this annual report.
Item 18. Financial Statements
The information required by this item is set forth in our consolidated financial statements included in thisannual report.
Pursuant to Regulation S-X, Rule 3-09, this annual report contains the consolidated financial statements of
Nomura Land and Building Co., Ltd., one of our 50%-or-less-owned companies accounted for by the equity
method in our consolidated financial statements. The consolidated financial statements of Nomura Land andBuilding contained herein, which are as of March 31, 2008 and 2009 and for each of the three years ended
March 31, 2009, have been prepared in accordance with generally accepted accounting principles in Japan.
Nomura’s and its subsidiaries’ equity in the income from continuing operations before income taxes,
extraordinary items and cumulative effect of a change in accounting principle of Nomura Land and Building
exceeded 20%, but did not exceed 30%, of such income of Nomura and its subsidiaries for the year ended
March 31, 2007, while such percentage for each of the years ended March 31, 2008 and 2009 did not exceed
20%. Nomura’s and its subsidiaries’ investments in and advances to Nomura Land and Building did not exceed
20% of the total assets of Nomura and its subsidiaries as of any of March 31, 2007, 2008 or 2009. Accordingly,
pursuant to Regulation S-X, Rule 3-09 as well as Item 17 of Form 20-F, of the consolidated financial statementsof Nomura Land and Building contained herein, only those as of and for the year ended March 31, 2007 havebeen audited in accordance with generally accepted auditing standards in the United States. In Japan, Nomura
Land and Building has publicly disclosed the consolidated financial statements contained herein which have been
audited by its outside auditor for purposes of the Financial Instruments and Exchange Act in accordance withgenerally accepted auditing standards in Japan.

113

Item 19. Exhibits
Exhibit
NumberDescription

1.1

Articles of Incorporation of the registrant (English translation)

1.2

Share Handling Regulations of the registrant (English translation)

1.3

Regulations of the Board of Directors of the registrant (English translation)

1.4

Regulations of the Nomination Committee (English translation)

1.5

Regulations of the Audit Committee (English translation)

1.6

Regulations of the Compensation Committee (English translation) (incorporated by reference to theAnnual Report on Form 20-F (File No. 1-15270) filed on June 29, 2006)

2.1

Form of Deposit Agreement among the registrant, The Bank of New York as Depositary and allowners and holders from time to time of American Depositary Receipts, including the form ofAmerican Depositary Receipt (incorporated by reference to the Registration Statement on Form F-6(File No. 333-14178) filed on December 10, 2001)

4.1

Liabilities Limitation Agreement (English translation) (incorporated by reference to the Annual Reporton Form 20-F (File No. 1-15270) filed on June 29, 2006)*1

4.2

Liabilities Limitation Agreement (English translation) (incorporated by reference to the Annual Reporton Form 20-F (File No. 1-15270) filed on June 30, 2008)*2

4.3

Liabilities Limitation Agreement (English translation)*3

8.1

Subsidiaries of the registrant—See “Item 4.C. Information on the Company—Organizational
Structure.”

11.1

Code of Ethics (English translation)

12.1

Certification of the principal executive officer required by 17 C.F.R. 240. 13a-14(a)12.2

Certification of the principal financial officer required by 17 C.F.R. 240. 13a-14(a)13.1

Certification of the chief executive officer required by 18 U.S.C. Section 1350

13.2

Certification of the chief financial officer required by 18 U.S.C. Section 1350

15.1

Consent of Ernst & Young ShinNihon LLC with respect to its report on the audit of the financial
statements included in this annual report

15.2

Consent of Ernst & Young ShinNihon LLC with respect to its report on the audit of the financial
statements included in this annual report

*1
*2
*3

Nomura and each of Masaharu Shibata, Hideaki Kubori and Haruo Tsuji entered into a Liabilities
Limitation Agreement, dated June 28, 2006, in the form of this exhibit.
Nomura and each of Masahiro Sakane and Tsuguoki Fujinuma entered into a Liabilities Limitation
Agreement, dated June 26, 2008, in the form of this exhibit.
Nomura and Hajime Sawabe entered into a Liabilities Limitation Agreement, dated June 25, 2009, in theform of this exhibit.

We have not included as exhibits certain instruments with respect to our long-term debt. The amount of debt
authorized under each such debt instrument does not exceed 10% or our total assets. We will furnish a copy of
any such instrument to the SEC upon request.

114

NOMURA HOLDINGS, INC.
INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS
Page

Consolidated Financial Statements:
Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-2

Consolidated Balance Sheets as of March 31, 2008 and 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-4

Consolidated Statements of Operations for the Years Ended March 31, 2007, 2008 and 2009 . . . . . . .

F-6

Consolidated Statements of Changes in Shareholders’ Equity for the Years Ended March 31, 2007,2008 and 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-7

Consolidated Statements of Comprehensive Income for the Years Ended March 31, 2007, 2008 and2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-8

Consolidated Statements of Cash Flows for the Years Ended March 31, 2007, 2008 and 2009 . . . . . .

F-9Notes to the Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-11

Nomura Land and Building Co., Ltd.
Consolidated Financial Statements:
Report of Independent Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-92

Consolidated Balance Sheets as of March 31, 2008 and 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-93

Consolidated Statements of Income for the Years Ended March 31, 2007, 2008 and 2009 . . . . . . . . . .

F-95

Consolidated Statements of Changes in Shareholders’ Equity for the Years Ended March 31, 2007,2008 and 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-96

Consolidated Statements of Cash Flows for the Years Ended March 31, 2007, 2008 and 2009 . . . . . .

F-98

Notes to the Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-99

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Shareholders of
Nomura Holdings, Inc.
We have audited the accompanying consolidated balance sheets of Nomura Holdings, Inc. (the “Company”)
as of March 31, 2008 and 2009, and the related consolidated statements of operations, changes in shareholders’equity, comprehensive income, and cash flows for each of the three years in the period ended March 31, 2009.
These financial statements are the responsibility of the Company’s management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, theconsolidated financial position of Nomura Holdings, Inc. at March 31, 2008 and 2009, and the consolidated
results of its operations and its cash flows for each of the three years in the period ended March 31, 2009, in
conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board(United States), Nomura Holdings, Inc.’s internal control over financial reporting as of March 31, 2009, based on
criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission and our report dated June 29, 2009 expressed an unqualified opinion
thereon.
/s/ Ernst & Young ShinNihon LLC
Tokyo, Japan
June 29, 2009

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Shareholders of
Nomura Holdings, Inc.
We have audited Nomura Holdings, Inc.’s internal control over financial reporting as of March 31, 2009,
based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (the COSO criteria). Nomura Holdings, Inc.’s management is
responsible for maintaining effective internal control over financial reporting, and for its assessment of theeffectiveness of internal control over financial reporting included in the accompanying Management’s Report on
Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the company’s internal
control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether effective internal control over financial reporting was maintained in all material respects. Our
audit included obtaining an understanding of internal control over financial reporting, assessing the risk that amaterial weakness exists, testing and evaluating the design and operating effectiveness of internal control basedon the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We
believe that our audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financial statements in accordancewith generally accepted accounting principles, and that receipts and expenditures of the company are being madeonly in accordance with authorizations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of thecompany’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with thepolicies or procedures may deteriorate.
In our opinion, Nomura Holdings, Inc. maintained, in all material respects, effective internal control overfinancial reporting as of March 31, 2009, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board(United States), the consolidated balance sheets of Nomura Holdings, Inc. as of March 31, 2008 and 2009, andthe related consolidated statements of operations, changes in shareholders’ equity, comprehensive income, andcash flows for each of the three years in the period ended March 31, 2009 and our report dated June 29, 2009
expressed an unqualified opinion thereon.
/s/ Ernst & Young ShinNihon LLC
Tokyo, Japan
June 29, 2009

F-3

NOMURA HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETSMillions of yen
March 31
2008
2009

ASSETSCash and cash deposits:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Time deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deposits with stock exchanges and other segregated cash . . . . . . .
Loans and receivables:
Loans receivable (including ¥12,431 million($125 million) measured at fair value by applying fair value
option in 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Receivables from customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Receivables from other than customers . . . . . . . . . . . . . . . . . . . . .
Allowance for doubtful accounts . . . . . . . . . . . . . . . . . . . . . . . . . .
Collateralized agreements:
Securities purchased under agreements to resell . . . . . . . . . . . . . . .
Securities borrowed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading assets and private equity investments:
Trading assets (including securities pledged as collateral of¥3,140,923 million in 2008 and ¥2,851,759 million($28,762 million) in 2009; including ¥21,189 million($214 million) measured at fair value by applying fair value
option in 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Private equity investments (including ¥62,108 million($626 million) measured at fair value by applying fair value
option in 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets:
Office buildings, land, equipment and facilities (net ofaccumulated depreciation and amortization of ¥260,910 million
in 2008 and ¥225,475 million ($2,274 million) in 2009) . . . . . .
Non-trading debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments in equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments in and advances to affiliated companies (including
securities pledged as collateral of ¥3,361 million in 2008 and
NIL in 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥507,236
758,130
168,701¥

613,566
537,084
272,059

2009

$

6,188
5,417
2,744

1,434,067

1,422,709

14,349784,262
43,623361,114(1,399)519,179
23,6191,103,974(3,765)

5,236
238
11,135(38)

1,187,600

1,643,007

16,5713,233,200
7,158,167

2,657,151
5,755,467

26,79958,048

10,391,367

8,412,618

84,847

9,947,443

11,348,747

114,461

330,745

323,865

3,266

10,278,188

11,672,612

117,727

389,151
246,108
139,330

357,256
244,027
118,902

3,603
2,461
1,199

361,334
808,909

243,474
723,243

2,456
7,295

1,944,832

1,686,902

17,014¥25,236,054¥24,837,848$250,508

The accompanying notes are an integral part of these consolidated financial statements.
F-4

Translation
intomillions of
U.S. dollars

NOMURA HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS—(Continued)

Millions of yen
March 31
2008
2009

LIABILITIES AND SHAREHOLDERS’ EQUITY
Short-term borrowings (including ¥3,245 million and ¥36,304 million($366 million) measured at fair value by applying fair value option
in 2008 and 2009, respectively) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payables and deposits:
Payables to customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payables to other than customers . . . . . . . . . . . . . . . . . . . . . . . . . .
Deposits received at banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Translation
intomillions of
U.S. dollars
2009¥ 1,426,266¥ 1,183,374$ 11,935

264,679
322,927
362,775

403,797
398,187
440,334

4,073
4,016
4,441

950,381

1,242,318

12,5304,298,872
3,753,730
2,488,129

5,000,787
2,243,152
2,914,015

50,437
22,62429,38910,540,731

10,157,954

102,450

Trading liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term borrowings (including ¥110,081 million and¥913,790 million ($9,216 million) measured at fair value by
applying fair value option in 2008 and 2009, respectively) . . . . . . . .

4,469,942
636,184

4,752,054
479,724

47,9284,839

5,224,426

5,483,028

55,300Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

23,247,930

23,298,452

234,982

Commitments and contingencies (Note 20)
Shareholders’ equity:
Common stock
No par value share;
Authorized—6,000,000,000 shares in 2008 and 2009
Issued—1,965,919,860 shares in 2008 and 2,661,092,760 sharesin 2009
Outstanding—1,906,885,059 shares in 2008 and 2,604,779,843
shares in 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . .

182,800
177,227
1,779,783(71,111)

321,765
374,413
1,038,557(118,437)

3,245
3,776
10,475(1,194)

2,068,699

1,616,298

16,302

Collateralized financing:
Securities sold under agreements to repurchase . . . . . . . . . . . . . . .
Securities loaned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other secured borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Common stock held in treasury, at cost—59,034,801 shares in 2008
and 56,312,917 shares in 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(80,575)(76,902)(776)

Total shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,988,124

1,539,396

15,526

Total liabilities and shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . .

¥25,236,054¥24,837,848$250,508

The accompanying notes are an integral part of these consolidated financial statements.
F-5

NOMURA HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS

2007

Millions of yen
Year ended March 31
2008
2009

Revenue:Commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 337,458 ¥Fees from investment banking . . . . . . . . . . . . . . . . . . .
99,276
Asset management and portfolio service fees . . . . . . . .
145,977
Net gain (loss) on trading . . . . . . . . . . . . . . . . . . . . . . .
290,008
Gain (loss) on private equity investments . . . . . . . . . . .
47,590Interest and dividends . . . . . . . . . . . . . . . . . . . . . . . . . .
981,344
Loss on investments in equity securities . . . . . . . . . . . .
(20,103)
Private equity entities product sales . . . . . . . . . . . . . . .
100,126
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
67,425

404,659 ¥ 306,803
85,09654,953
189,712140,166
61,720(128,339)
76,505(54,791)
796,540
331,356(48,695)(25,500)——
28,18539,863

Translation
intomillions of
U.S. dollars
2009$ 3,094554
1,414(1,294)
(553)
3,342
(257)
—
402

Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,049,101
958,000

1,593,722
806,465

664,511351,884

6,702
3,549

Net revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,091,101

787,257

312,627

3,153

Non-interest expenses
Compensation and benefits . . . . . . . . . . . . . . . . . . . . . .
Commissions and floor brokerage . . . . . . . . . . . . . . . . .
Information processing and communications . . . . . . . .
Occupancy and related depreciation . . . . . . . . . . . . . . .
Business development expenses . . . . . . . . . . . . . . . . . .
Private equity entities cost of goods sold . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

345,936
50,812
109,987
61,27938,10657,184106,039

366,805
90,192135,004
64,841
38,135—
156,868

491,555
73,681
154,980
78,48031,638—261,339

4,958
743
1,563
792
319
—
2,635

769,343

851,845

1,091,673

11,010

Income (loss) before income taxes . . . . . . . . . . . . . . . . . . . .

321,758(64,588)(779,046)(7,857)

Income tax expense (benefit) . . . . . . . . . . . . . . . . . . . . . . . .

145,930

3,259(70,854)(714)

Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 175,828¥ (67,847) ¥ (708,192)$ (7,143)

Yen

Translation
into
U.S. dollars

Per share of common stock:
Basic—Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

92.25

¥

(35.55) ¥ (364.69)$ (3.68)

Diluted—
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

92.00

¥

(35.57) ¥ (366.16)$ (3.69)

The accompanying notes are an integral part of these consolidated financial statements.
F-6

NOMURA HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

2007

Millions of yen
Year ended March 31
2008
2009

Translation
intomillions of
U.S. dollars
2009

Common stock
Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issuance of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 182,800—¥ 182,800—¥ 182,800
138,965$ 1,844
1,401

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

182,800

182,800

321,765

3,245

Additional paid-in capital
Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Loss) gain on sales of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issuance of common stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issuance of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Beneficial conversion feature relating to subordinated convertible bond . . . . . .

159,527
(556)
6,525
—
—

165,496(1,458)13,189——177,227
2,755
9,954
143,482
40,995

1,787
28
100
1,447
414

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

165,496

177,227

374,4133,776

Retained earnings
Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to initially apply FIN 48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to initially apply EITF 06-2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to initially apply SOP 07-1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to initially apply SFAS 157 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to initially apply SFAS 159 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on sales of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,819,037
175,828(83,887)
—
—
—
—
—
—

1,910,978(67,847)(64,883)
1,266(1,119)
2,049
—
—
(661)

1,779,783(708,192)(48,675)———
10,383
5,258—

17,950(7,143)
(490)
—
—
—
105
53
—

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,910,9781,779,783

1,038,557

10,475

Accumulated other comprehensive (loss) income:Cumulative translation adjustments
Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net change during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1,129)38,01836,889(65,305)(28,416)(45,053)

(287)
(454)

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

36,889(28,416)(73,469)(741)

Defined benefit pension plans:
Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension liability adjustment(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to initially apply SFAS 158(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(14,096)(387)(15,793)(30,276)(12,419)—(42,695)(2,273)
—

(431)
(22)
—

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(30,276)(42,695)(44,968)(453)

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,613(71,111)(118,437)(1,194)

Common stock held in treasury
Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchases of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sales of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock issued to employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other net change in treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(82,812)
(204)
25
2,910
113

(79,968)(3,525)
85
2,862
(29)

(80,575)
(91)
73
3,759
(68)

(813)
(1)
1
38
(1)

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(79,968)(80,575)(76,902)(776)

Total shareholders’ equity
Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥2,185,919¥1,988,124¥1,539,396$15,526(1) The amount for the year ended March 31, 2007 is the minimum pension liability adjustment.
(2) For the initial year of application, the adjustments are not reflected in the consolidated statements of comprehensive income.

The accompanying notes are an integral part of these consolidated financial statements.
F-7

NOMURA HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

2007

Millions of yen
Year ended March 31
2008
2009

Translation
intomillions of
U.S. dollars
2009

Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥175,828 ¥ (67,847) ¥(708,192) $(7,143)
Other comprehensive income (loss)(1):
Change in cumulative translation adjustments, net of tax . . .
38,018(65,305) (45,053)(454)
Defined benefit pension plans:
Pension liability adjustment(2) . . . . . . . . . . . . . . . . . . . . .
(608) (21,853)(5,861)(58)
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . .
221
9,434
3,588
36
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(387)(12,419)(2,273)(22)

Total other comprehensive income (loss) . . . . . . . . . . . . . . . .

37,631(77,724)(47,326)(476)

Comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥213,459 ¥(145,571) ¥(755,518) $(7,619)(1) Adjustments due to the initial adoption of SFAS 158 are not reflected in the consolidated statement ofcomprehensive income.
(2) The amount for the year ended March 31, 2007 is the minimum pension liability adjustment.

The accompanying notes are an integral part of these consolidated financial statements.
F-8

NOMURA HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

2007
Cash flows from operating activities:
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to reconcile net income (loss) to net cash used in operating
activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on investments in equity securities . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in (earnings) losses of affiliates, net of dividends received . . . . .
Loss on disposal of office buildings, land, equipment and facilities . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in operating assets and liabilities:
Time deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deposits with stock exchanges and other segregated cash . . . . . . . . . . .
Trading assets and private equity investments . . . . . . . . . . . . . . . . . . . .
Trading liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Securities purchased under agreements to resell, net of securities soldunder agreements to repurchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Securities borrowed, net of securities loaned . . . . . . . . . . . . . . . . . . . . .
Other secured borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans and receivables, net of allowance for doubtful accounts . . . . . . .
Payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued income taxes, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥175,828

Millions of yen
Year ended March 31
2008
2009
¥

(67,847) ¥ (708,192)

Translation into
millions of
U.S. dollars
2009$ (7,143)

50,432
6,525
20,103(50,274)
5,182
(256)

63,463
13,18848,695(381)
7,820(139,861)

75,78016,47625,50012,842
6,107(83,631)

764
166
257
130
62
(843)

24,395(30,186)
1,052,451(1,928,208)(314,240)(82,817)
2,139,627
299,61172,670(153,059)(3,153,499)
1,323,314

733(1,544)(31,805)
13,3471,243,337(177,234)(1,612,879)
37,071(167,993)(184,036)(91,414)(2,562,836)(1,036,076)
1,097,679(58,541)(1,639)25,549(79,300)

1,490,423(278,318)
425,886(1,336,288)
994,150(72,209)629,419

15,032(2,807)
4,295(13,477)
10,027(728)
6,347

Net cash used in operating activities . . . . . . . . . . . . . . . . . . . . . . .

(1,627,156)(647,906)(712,629)(7,187)

Cash flows from investing activities:
Payments for purchases of office buildings, land, equipment andfacilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of office buildings, land, equipment and facilities . . .
Payments for purchases of investments in equity securities . . . . . . . . . . . .
Proceeds from sales of investments in equity securities . . . . . . . . . . . . . . .
(Increase) decrease in loans receivable at banks, net . . . . . . . . . . . . . . . . .
(Increase) decrease in non-trading debt securities, net . . . . . . . . . . . . . . . .
Business dispositions or acquisitions, net . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase in investments in affiliated companies, net . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(101,784)
634(9,284)
25,109(73,611)(37,861)(172,019)(164,700)(297)(126,285)
15,621(615)
7,887
14,042
2,665
1,428(15,673)(1,089)(95,978)
38,799(6,236)
2,065
28,096(19,415)(39,421)(5,965)
(850)

(968)
391
(63)
21
283
(196)
(398)
(60)
(8)

Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . .

(533,813)(102,019)(98,905)(998)

Cash flows from financing activities:
Increase in long-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Decrease in long-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase (decrease) in short-term borrowings, net . . . . . . . . . . . . . . . . . . .
Increase (decrease) in deposits received at banks, net . . . . . . . . . . . . . . . .
Proceeds from issuances of common stock . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of common stock held in treasury . . . . . . . . . . . . . . .
Payments for repurchases of common stock held in treasury . . . . . . . . . . .
Payments for cash dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from issuances of stock by a subsidiary . . . . . . . . . . . . . . . . . . . .

2,736,688(1,451,500)
377,788
17,947
—
2,379
(204)
(114,395)—

2,425,393(1,722,644)
386,048(57,756)—
828(3,525)(86,866)
1,401

2,091,553(1,262,300)(175,988)
126,520
282,447
65(91)(64,924)
2,478

21,095(12,732)(1,775)
1,276
2,849
1
(1)
(655)
25

Net cash provided by financing activities . . . . . . . . . . . . . . . . . . . .

1,568,703

942,879

999,760

10,083

Effect of initial adoption of SOP 07-1 on cash and cash equivalents . . . . . . .
Effect of exchange rate changes on cash and cash equivalents . . . . . . . . . . . .

—10,333(38,427)(57,319)—(81,896)—(826)

Net (decrease) increase in cash and cash equivalents . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents at beginning of the year . . . . . . . . . . . . . . . . . . . .

(581,933)
991,961

97,208410,028

106,330
507,236

1,072
5,116

¥

613,566$ 6,188

Cash and cash equivalents at end of the year . . . . . . . . . . . . . . . . . . . . . . . . .

¥Supplemental disclosure:
Cash paid during the year for—
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 1,056,820¥

987,228¥

416,124$ 4,197¥¥

117,570¥

84,986$

Income tax payments, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-9410,028

330,222¥507,236857

NOMURA HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS—(Continued)
Non cash activities—
Business acquisitions:
Assets acquired, excluding cash and cash equivalents, and debt assumed were ¥344,299 million and ¥151,106 million, respectively, forthe year ended March 31, 2007. There were no business acquisitions during the year ended March 31, 2008. Assets acquired, excluding
cash and cash equivalents, and debt assumed were ¥56,168 million and ¥28,849 million, respectively, for the year ended March 31, 2009.
Business dispositions:
Assets sold, excluding cash and cash equivalents, and debt assumed by the purchaser were ¥7,958 million and ¥8,211 million for the year
ended March 31, 2007, respectively. There were no business dispositions during the year ended March 31, 2008 and 2009.
Reclassification of convertible bonds:
In March 2009, Nomura reclassified the intrinsic value associated with the beneficial conversion feature relating to the SubordinatedUnsecured Convertible Bonds No. 1 issued on December 16, 2008 from Long-term borrowings to Additional paid-in capital. As of
March 31, 2009, the balance in Additional paid-in capital associated with the beneficial conversion feature was ¥40,995 million, after theeffect of deferred taxes. See Note 12, “Borrowings” for further discussion on this bond issuance.
Reclassifications—
In conjunction with the retroactive application of FSP FIN 39-1, derivative assets and liabilities were offset by cash collateral payables
and receivables where applicable, and accordingly, certain reclassifications were made for the year ended March 31, 2007 and 2008. See
Note 1, “Summary of accounting policiies”.

The accompanying notes are an integral part of these consolidated financial statements.
F-10

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of accounting policies:
Description of business—
Nomura Holdings, Inc. (the “Company”) and its broker-dealer, banking and other financial services
subsidiaries provide investment, financing and related services to individual, institutional and government
customers on a global basis. The Company and other entities in which it has a controlling financial interest arecollectively referred to as “Nomura.”
Nomura structures its business segments based upon the nature of specific products and services, its main
customer base and its management structure. Nomura reports operating results in five business segments: Retail,Global Markets, Investment Banking, Merchant Banking and Asset Management.
In the Retail business, Nomura provides investment consultation services mainly to individual customers inJapan. In the Global Markets business, Nomura is engaged in the sales and trading of equity securities and bonds
and currencies on a global basis to institutions domestically and abroad. In the Investment Banking business,
Nomura provides investment banking services such as the underwriting of bonds and equities as well as mergers
and acquisition and financial advice. In the Merchant Banking business, Nomura invests in private equity
businesses and seeks to maximize returns on the investments by increasing the corporate value of investee
companies. In the Asset Management business, Nomura develops and manages investment trusts, and provides
investment advisory services.
Basis of presentation—
The consolidated financial statements include the accounts of the Company and other entities in which it has
a controlling financial interest. The Company determines whether it has a controlling financial interest in an
entity by evaluating whether the entity is a variable interest entity (“VIE”) or not in accordance with Financial
Accounting Standards Board (“FASB”) Interpretation No. 46, “Consolidation of Variable Interest Entities”, asrevised (“FIN 46-R”). VIEs are entities in which equity investors do not have the characteristics of a controlling
financial interest or which do not have sufficient equity at risk for the entity to finance its activities without
additional subordinated financial support. The Company consolidates VIEs where Nomura is the primary
beneficiary, generally defined as the enterprise that will absorb a majority of the expected losses or receive amajority of the expected residual returns of the entity, or both. For entities other than VIEs, Nomura is generally
determined to have a controlling financial interest in an entity when it owns a majority of the voting interest.
Therefore, the Company consolidates these entities in which it has a majority voting interest. Additionally, theCompany does not consolidate certain special purpose entities utilized for securitization transactions if they meetthe qualifying special purpose entities (“QSPE”) criteria in accordance with Statement of Financial AccountingStandards (“SFAS”) No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishmentsof Liabilities” (“SFAS 140”).
Equity investments in entities in which Nomura has significant influence over operating and financial
decisions (generally defined as 20 to 50 percent of the voting stock of a corporate entity, or at least 3% of alimited partnership) are accounted for either in accordance with Accounting Principles Board Opinion (“APB”)
No. 18, “The Equity Method of Accounting for Investments in Common Stock” and reported in Other assets—
Investments in and advances to affiliated companies or at fair value in accordance with SFAS No. 159, “The Fair
Value Option for Financial Assets and Financial Liabilities—including an amendment of FASB Statement
No. 115” (“SFAS 159”) and reported in Trading assets or Private equity investments. Equity investments inwhich Nomura has neither control nor significant influence are carried at fair value, with changes in fair value
recognized currently through the consolidated statement of operations.
F-11

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Certain entities in which the Company has a financial interest are investment companies pursuant to theprovisions of AICPA Statement of Position 07-1, “Clarification of the Scope of the Audit and Accounting
Guide—Investment Companies and Accounting by Parent Companies and Equity Method Investors for
Investments in Investment Companies” (“SOP 07-1”). SOP 07-1 addresses whether the accounting principles of
the Audit and Accounting Guide for Investment Companies should be applied to an entity by clarifying thedefinition of an investment company, and whether those accounting principles should be retained by a parent
company in consolidation or by an investor in the application of the equity method of accounting. These entities,
including subsidiaries such as Nomura Principal Finance Co., Ltd. (“NPF”), carry all of their investments at fairvalue, with changes in fair value recognized through the consolidated statement of operations, rather than apply
the equity method of accounting or consolidation.
The Company’s principal subsidiaries include Nomura Securities Co., Ltd., Nomura Securities International,
Inc. and Nomura International plc.
The accounting and financial reporting policies of the Company conform to accounting principles generally
accepted in the United States (“U.S. GAAP”) as applicable to broker-dealers. All material intercompany
transactions and balances have been eliminated on consolidation. Certain reclassifications of previously reported
amounts have been made to conform to the current year presentation.
Use of estimates—
In presenting the consolidated financial statements, management makes estimates regarding certain financial
instrument and investment valuations, the outcome of litigation and tax examinations, the recovery of thecarrying value of goodwill, the allowance for doubtful accounts, the realization of deferred tax assets and othermatters that affect the reported amounts of assets and liabilities as well as the disclosure in the financial
statements. Estimates, by their nature, are based on judgment and available information. Therefore, actual results
may differ from estimates, which could have a material impact on these consolidated financial statements and, it
is possible that such adjustments could occur in the near term.
Fair value of financial instruments—
Nomura adopted SFAS No. 157 “Fair Value Measurements” (“SFAS 157”) for financial assets andfinancial liabilities on April 1, 2008. In addition to defining fair value, SFAS 157 provides guidance on fair value
measurements, establishes a hierarchy of inputs used in valuations and enhances the disclosure requirements forfair value instruments. It also nullifies the guidance provided by EITF Issue No. 02-3, “Issues Involved in
Accounting for Derivative Contracts Held for Trading Purposes and Contracts Involved in Energy Trading and
Risk Management Activities” (“EITF 02-3”), which prohibits the recognition of day one gains or losses on
financial instruments valued using significant unobservable inputs.
Nomura also adopted SFAS 159 on April 1, 2008 which permits us to apply fair value to additional financial
instruments which would otherwise be accounted for under an alternative method, such as amortized cost or theequity method of accounting. Nomura elects fair value under SFAS 159 for certain loans, equity method
investments, structured notes and secured financing transactions. Please see Accounting changes and new
accounting pronouncements below for additional information regarding Nomura’s adoption of SFAS 159.
The majority of Nomura’s financial assets and financial liabilities are carried at fair value, with changes in fairvalue recognized through the consolidated statement of operations on a recurring basis. Financial assets which arecarried at fair value on a recurring basis are reported in the consolidated balance sheet within Trading assets andprivate equity investments, Loans and receivables and Other assets. Financial liabilities which are carried at fairvalue on a recurring basis are reported within Trading liabilities, Short-term borrowings, Payable and deposits,
Long-term borrowings, and Other liabilities.
F-12

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
In all cases, fair value is determined in accordance with SFAS 157, which defines fair value as the amountthat 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 the principal market, the most advantageous market for the relevant financial asset or
financial liability. See Note 3 “Fair Value of financial instruments” below for further discussion.
Private equity business—
Nomura adopted SOP 07-1 as of April 1, 2007 as well as SFAS 159 as of April 1, 2008, and as a result, allprivate equity investments are now accounted for at fair value, with changes in fair value recognized through theconsolidated statement of operations. Prior to adoption of SOP 07-1, private equity investments were accounted
for at fair value, by the equity method of accounting or as consolidated subsidiaries depending on the attributesof each investment.
The valuation of unlisted private equity investments at fair value requires significant management judgment
because the investments, by their nature, have little or no price transparency. Private equity 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 isdetermined that the expected realizable value of the investment is different from the carrying value. In reaching that
determination, Nomura primarily uses either its own internal valuation models based on projected future cash flows
to be generated from the underlying investment, discounted at a weighted average cost of capital or comparable
market multiple valuations. Where possible these valuations are compared with the operating cash flows andfinancial performance of the companies or properties relative to budgets or projections, price/earnings data forsimilar quoted companies, trends within sectors and/or regions and any specific rights or terms associated with theinvestment, such as conversion features and liquidation preferences. See Note 5, “Private Equity Business” below
for further discussion.
Transfers of financial assets—
Nomura accounts for the transfer of financial assets in accordance with SFAS 140. This statement requires that
Nomura account for the transfer of a financial asset as a sale when Nomura relinquishes control over the asset. SFAS
140 deems control to be relinquished when the following conditions are met: (a) the assets have been isolated from thetransferor (even in bankruptcy or other receivership), (b) the transferee has the right to pledge or exchange the assets
received, or if the transferee is a QSPE, the holders of its beneficial interests have the right to pledge or exchange thebeneficial interests and (c) the transferor has not maintained effective control over the transferred assets.
In connection with its securitization activities, Nomura utilizes special purpose entities (“SPEs”) to securitizecommercial and residential mortgage loans, government and corporate bonds and other types of financial assets.
Nomura’s involvement with SPEs includes structuring SPEs and underwriting, distributing and selling debt
instruments and beneficial interests issued by SPEs to investors. Nomura derecognizes financial assets transferred insecuritizations provided that Nomura has relinquished control over such assets under SFAS 140 and does notconsolidate the SPE. Nomura may obtain an interest in the financial assets, including residual interests in the SPEs
subject to prevailing market conditions. Following a transfer recognized as a sale, any such interests are accounted
for at fair value and included in Trading assets within the consolidated balance sheet with the change in fair value
included in Revenue—Net gain (loss) on trading.
Foreign currency translation—
The financial statements of the Company’s subsidiaries are measured using their functional currency whichis the currency of the primary economic environment in which the entity operates. All assets and liabilities of
F-13

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
subsidiaries which have a functional currency other than Japanese yen are translated into Japanese yen at
exchange rates in effect at the balance sheet date; all revenue and expenses are translated at the average exchange
rates for the respective years and the resulting translation adjustments are accumulated and reported as
Accumulated other comprehensive loss in shareholders’ equity.
Foreign currency assets and liabilities are translated at exchange rates in effect at the balance sheet date andthe resulting translation gains or losses are credited or charged to income.
Fee revenue—
Revenue—Commissions include amounts charged for executing brokerage transactions accrued on a tradedate basis and are included in current period earnings. Revenue—Fees from investment banking include securities
underwriting fees and other corporate financing services fees. Underwriting fees are recorded when services forunderwriting are completed. All other fees are recognized when related services are performed. Revenue—Assetmanagement and portfolio service fees are accrued over the period that the related services are provided or when
specified performance requirements are met.
Trading assets and trading liabilities—
Trading assets and Trading liabilities primarily comprise debt and equity securities, derivatives, loans andprivate equity investments.
Trading assets also include the equity securities, which would otherwise be accounted for under the equity
method investments, elected for the fair value option.
Trading assets and trading liabilities, including contractual commitments arising pursuant to derivativetransactions, are recognized on the consolidated balance sheet on a trade date basis and carried at fair value withchanges in fair value recognized currently within Revenue—Net gain (loss) on trading in the consolidated
statement of operations.
Collateralized agreements and collateralized financing—
Collateralized agreements consist of resale agreements and securities borrowed. Collateralized financing
consists of repurchase agreements, securities loaned and other secured borrowings.
Resale and repurchase agreements (“Repo transactions”) principally involve the buying or selling ofgovernment and government agency securities under agreements with customers to resell or repurchase thesesecurities to or from those customers. Nomura takes possession of securities purchased under agreements toresell and makes delivery of securities sold under agreements to repurchase. Nomura monitors the value of theunderlying securities on a daily basis relative to the related receivables and payables, including accrued interest,
and requests or returns additional collateral when deemed appropriate. Repo transactions are generally accounted
for as collateralized agreements or collateralized financing transactions and are recorded on the consolidatedbalance sheet at the amount at which the securities will be repurchased or resold, as appropriate.
Repo transactions are presented in the consolidated balance sheet net-by-counterparty, where netpresentation is consistent with FASB Interpretation No. 41, “Offsetting of Amounts Related to Certain
Repurchase and Reverse Repurchase Agreements” (“FIN 41”).
Securities borrowed and securities loaned are accounted for as financing transactions. Securities borrowed
and securities loaned are generally cash collateralized and are recorded on the consolidated balance sheet at the
F-14

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
amount of cash collateral advanced or received. Securities borrowed transactions generally require Nomura toprovide the counterparty with collateral in the form of cash or other securities. For securities loaned transactions,
Nomura generally receives collateral in the form of cash or other securities. Nomura monitors the market valueof the securities borrowed or loaned and requires additional cash or securities, as necessary, to ensure that suchtransactions are adequately collateralized.
Repo transactions under a Japanese market standard (“Gensaki Repo transactions”) were adopted in theJapanese financial markets in 2001. Gensaki Repo transactions contain margin requirements, rights of security
substitution, or restrictions on the customer’s right to sell or repledge the transferred securities. Accordingly,
Gensaki Repo transactions are accounted for as collateralized agreements or financing transactions and arerecorded on the consolidated balance sheet at the amount that the securities will be repurchased or resold.
Other secured borrowings consist primarily of secured borrowings from financial institutions and central
banks in the inter-bank money market, and are recorded at contractual amounts.
Secured loans to financial institutions in the inter-bank money market are included in the consolidatedbalance sheet in Loans receivable.
Trading balances of secured borrowings consist of the liabilities related to transfers of financial assets thatare accounted for as secured financing transactions rather than sales under SFAS 140 and are included in the
consolidated balance sheet in Short-term borrowings and Long-term borrowings. These are generally carried atfair value in accordance with SFAS 159. See Note 8, “Securitization and Variable Interest Entities (VIEs)” andNote 12 “Borrowings” for further information regarding these transactions.
On the consolidated balance sheet, all Nomura-owned securities pledged to counterparties where thecounterparty has the right to sell or repledge the securities, including Gensaki Repo transactions, are shownparenthetically in Trading assets and private equity investments and Other assets—Investments in and advances
to affiliated companies as Securities pledged as collateral in accordance with SFAS 140.
Derivatives—
Nomura uses a variety of derivative financial instruments, including futures, forwards, swaps and options,for trading purposes and for non-trading purposes, namely in the management of its interest rate, market priceand currency exposures. All derivatives are carried at fair value, with changes in fair value recognized throughthe consolidated statement of operations.
Trading
Derivative financial instruments used for trading purposes are carried at fair value with changes in fair value
recognized currently within Revenue—Net gain (loss) on trading. Over-the-counter (“OTC”) derivative financial
instruments are presented in the consolidated balance sheet on a net-by-counterparty basis where net presentationis consistent with FASB Interpretation No. 39, “Offsetting of Amounts Related to Certain Contracts” (“FIN 39”).
In addition, fair value amounts recognized for the right to reclaim cash collateral (a receivable) and the obligation
to return cash collateral (a payable) are also offset against net derivative liabilities and net derivative assets,
respectively, in accordance with FASB Staff Position No. FIN 39-1, “Amendment of FASB Interpretation No. 39”(“FSP FIN 39-1”).
Non-trading
In addition to its trading activities, Nomura, as an end user, uses derivative financial instruments to manageinterest rate risk or to modify the interest rate characteristics of certain non-trading assets and liabilities.
F-15

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
These derivative financial instruments are linked to specific assets or specific liabilities and are designatedas hedges as they are effective in reducing the risk associated with the exposure being hedged, and they arehighly correlated with changes in the market or fair value of the underlying hedged item, both at inception andthroughout the life of the hedge contract. Nomura applies fair value hedge accounting to these hedging
transactions, and the relating unrealized profit and losses are recognized together with those of the hedged assets
and liabilities as interest revenue or expenses.
Certain derivatives embedded in hybrid financial instruments are bifurcated from the host contract, such as
bonds and certificates of deposit and are carried at fair value and presented on a combined basis with the hostcontract, with changes in fair value of these embedded derivatives recognized within Revenue—Net gain (loss)
on trading. Derivatives used to economically hedge these instruments are also carried at fair value, with changes
in fair value recognized within Revenue—Net gain (loss) on trading.
Loans receivable—
Loans receivable are loans which management intends to hold for the foreseeable future. Interest including
accrued interest is generally recognized within Revenue—Interest and dividends. These consist primarily of“loans at banks”, “financing activity loans”, “margin transaction loans” and “inter-bank money market loans”.
They are generally carried at cost adjusted for deferred fees or costs on originated loans, any unamortizedpremiums or discounts on purchased loans less any applicable allowances for loan losses. Loan origination fees,
net of direct origination costs, are deferred and amortized to Revenue—Interest and dividends as an adjustment toyield over the life of the loan.
Loans at banks are loans receivable in connection with banking activities undertaken by banking
subsidiaries such as The Nomura Trust & Banking Co., Ltd, Nomura Singapore Limited and Nomura BankInternational plc.
Financing activity loans are loans receivable in connection with financing activities undertaken by nonbanking subsidiaries.
Margin transaction loans are loans receivable from customers in connection with stock brokerage activities.
These loans are usually collateralized by customers’ securities and customers’ deposits.
Inter-bank money market loans are loans receivable from financial institutions in the inter-bank money
market, where overnight and intra-day financings are traded through money market dealers.
Management establishes an allowance for loan losses against these loans which is disclosed within the
Allowance for doubtful accounts and which reflects management’s best estimate of probable losses incurred. The
allowance for loan losses comprises a specific component for loans which have been specifically identified as
impaired and a general component for loans which, while not specifically identified as impaired, are collectively
assessed for impairment based on historical loss experience.
The specific component of the allowance for loan losses reflects probable losses incurred within loans whichhave been specifically identified as impaired. A loan is defined as being impaired when, based on current
information and events, it is probable that all amounts due according to the contractual terms of the loan
agreement will not be collected. Factors considered by management in determining impairment include anassessment of the ability of borrowers to pay by considering various factors such as the nature of the loan, priorloan loss experience, current economic conditions, the current financial situation of the borrower and the fair
F-16

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
value of any underlying collateral. Loans that experience insignificant payment delays and payment shortfalls are
not classified as impaired. The allowance is measured on a loan by loan basis by adjusting the carrying value ofthe impaired loan to either the present value of expected future cash flows discounted as the loan’s effective
interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateraldependent.
The general component of the allowance for loan losses for loans not specifically identified as impaired
includes judgment about collectability based on available information at the balance sheet date, and theuncertainties inherent in those underlying assumptions. The allowance is measured taking into consideration
historical loss experience adjusted for qualitative factors such as current economic conditions.
While management has based its estimate of the allowance for loan losses on the best information available,
future adjustments to the allowance for loan losses may be necessary as a result of changes in the economic
environment or variances between actual results and the original assumptions.
Certain loans which are risk managed on a fair value basis are elected to be carried at fair value inaccordance with SFAS 159. Nomura elects the fair value option to mitigate volatility in the consolidated
statement of operations caused by the difference in measurement basis that would otherwise exist between loans
and the derivatives used to risk manage those instruments.
Changes in the fair value of loans receivable elected for the fair value option are reported within Revenue –Net gain (loss) on trading in the consolidated statements of operations.
Other receivables—
Receivables from customers include amounts receivable on customer securities transactions.
Receivables from other than customers include amounts receivable for securities not delivered to apurchaser by the settlement date (“fails to deliver”), margin deposits, commissions, and net receivables arisingfrom unsettled securities transactions.
The allowance for receivables is included in Allowance for doubtful accounts and reflects management’s
best estimate of probable losses incurred within receivables which have been specifically identified as impaired.
Payables and deposits—
Payables to customers include amounts payable on customer securities transactions and are generally
measured at contractual amounts due.
Payables to other than customers include payables to brokers and dealers for securities not received from aseller by the settlement date (“fails to receive”) and net payables arising from unsettled securities transactions.
Amounts are measured at contractual amounts due.
Deposits received at banks represent amounts held on deposit within our banking subsidiaries and aremeasured at contractual amounts due.
Office buildings, land, equipment and facilities—
Office buildings, land, equipment and facilities, which consist mainly of office buildings, land and software,
are stated at cost, net of accumulated depreciation and amortization, 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 statement of operations.
F-17

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Depreciation is generally computed by the straight-line method and at rates based on estimated useful livesof each asset according to general class, type of construction and use. Amortization is generally computed by thestraight-line method over the estimated useful lives. The estimated useful lives are generally as follows:
Office buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equipment and installations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15 to 50 years
2 to 15 years
Up to 5 years

Depreciation and amortization is included in Non-interest expenses—Information processing andcommunications in the amount of ¥39,265 million, ¥47,350 million, and ¥56,429 million ($569 million), and in
Non-interest expenses—Occupancy and related depreciation in the amount of ¥11,167 million, ¥16,113 millionand ¥19,351 million ($195 million) for the years ended March 31, 2007, 2008 and 2009, respectively.
Long-lived assets—
In accordance with SFAS No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets”,
long-lived assets excluding goodwill and other intangible assets not being amortized are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If theestimated future undiscounted cash flow is less than the carrying amount of the assets, a loss is recognized to theextent that carrying value exceeded its fair value.
Nomura recorded non-cash impairment charges of ¥214 million, ¥93 million and ¥2,656 million($27 million) substantially related to write-downs of software, office buildings, land, equipment, facilities, andother assets for the years ended March 31, 2007, 2008 and 2009, respectively. These losses are included in the
consolidated statement of operations under Non-interest expenses—Other. The revised carrying values of theseassets were based on the estimated fair value of the assets.
Investments in equity securities and non-trading debt securities—
Nomura holds minority stakes in the equity securities of unaffiliated Japanese financial institutions andcorporations in order to promote existing and potential business relationships. These companies will also often
have similar investments in Nomura. Such cross-holdings are a customary business practice in Japan and provide
a way for companies to manage their shareholder relationships.
These investments, which Nomura refers to as being held for operating purposes, are carried at fair value
within Other assets—Investments in equity securities in the consolidated balance sheet, with changes in fair value
recognized within Revenue—Loss (gain) on investments in equity securities in the consolidated statement ofoperations. These investments comprise listed and unlisted equity securities in the amounts of ¥112,946 millionand ¥26,384 million, respectively, at March 31, 2008, and ¥81,053 million ($817 million) and ¥37,849 million($382 million), respectively, at March 31, 2009.
Other assets-Other includes marketable and non-marketable equity securities held for other than trading or
operating purposes. These investments are comprised of listed equity securities and unlisted equity securities in
the amounts of ¥8,287 million and ¥11,911 million, respectively, at March 31, 2008 and ¥2,844 million ($28
million) and ¥3,134 million ($32 million), respectively, at March 31, 2009. These securities are carried at fairvalue, with changes in fair value recognized within Revenue—Other in the consolidated statement of operations.
Non-trading debt securities consist of debt securities mainly held by non-trading subsidiaries. Non-trading
debt securities are carried at fair value, with changes in fair value recognized within Revenue—Other in the
consolidated statement of operations.
F-18

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Short-term and long-term borrowings—
Short-term and long-term borrowings primarily consists of commercial paper, bank borrowings, structured
notes issued by Nomura and SPEs consolidated by Nomura, and financial liabilities recognized in transactions
which are accounted for as financings under SFAS 140 (“secured financing transactions”). Of these financial
liabilities, certain structured notes and secured financing transactions are accounted for at fair value on arecurring basis.
Structured notes—
Structured notes are debt securities which contain embedded features (often meeting the accounting
definition of a derivative) that alter the return to the investor from that of a creditor 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 product, foreign exchange rate, credit rating of a third party or more complex interest rate.
All structured notes issued by Nomura on or after April 1, 2008 are carried at fair value in accordance with
SFAS 159. This blanket election for structured notes is made primarily to mitigate the volatility in the
consolidated statement of operations caused by differences in the measurement basis for structured notes and thederivatives used to risk manage those positions and to generally simplify the accounting we applied to thesefinancial instruments.
Certain structured notes issued outstanding at March 31, 2008 were already measured at fair value under
SFAS No. 155 “Accounting for Certain Hybrid Financial Instruments—an amendmend of FASB Statements No.
133 and 140” (“SFAS 155”) but others which were either not eligible or not elected continue to be accounted inaccordance with SFAS No. 133 “Accounting for Derivative Instruments and Hedging Activities” (“SFAS 133”)
and related pronouncements.
To estimate the fair value of structured notes, the expected cash flows are estimated and discounted using anappropriate market rate for the relevant maturity. Cash flows are adjusted to reflect the fair value of theembedded derivative features. In addition, the valuation is adjusted to reflect Nomura’s own creditworthiness.
Changes in the fair value of structured notes elected for the fair value option are reported within Revenue—
Net gain (loss) on trading in the consolidated statement of operations.
Secured financing transactions—
Secured financing transactions arising from the application of SFAS 140 (“failed sale liabilities”) are valued
using the same methodology as we apply to the transferred financial instruments. In any given transaction, to thedegree that Nomura has no economic interest in the transferred financial instruments, we have elected to the fairvalue option for the corresponding failed sale liability to mitigate any earnings impact. Failed sale liabilities do
not provide general recourse to Nomura. Consequently, we generally do not make an adjustment for Nomura’s
own credit for these instruments.
Changes in the fair value of failed sale liabilities elected for the fair value option are reported within
Revenue—Net gain (loss) on trading in our consolidated statements of operations.
Income taxes—
In accordance with SFAS No. 109, “Accounting for Income Taxes,” deferred tax assets and liabilities arerecorded for the expected future tax consequences of tax loss carryforwards and temporary differences between
the carrying amounts and the tax bases of assets and liabilities based upon enacted tax laws and rates. Nomura
F-19

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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 provided for tax benefits available to Nomura that are not deemed more likely than not
to be realized.
Nomura recognizes and measures unrecognized tax benefits in accordance with FASB Interpretation No. 48,“Accounting for Uncertainty in Income Taxes—an Interpretation of FASB Statement No. 109” (“FIN 48”).
Nomura estimates the likelihood, based on their 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.
Compensated Absences—
In June 2006, the FASB ratified the Emerging Issues Task Force consensus on EITF Issue No. 06-2,“Accounting for Sabbatical Leave and Other Similar Benefits Pursuant to FASB Statement No. 43” (“EITF 06-2”).
EITF 06-2 requires a reporting entity to accrue the costs of compensated absences under a sabbatical or similar
benefit arrangement over the requisite service period. Prior to the adoption of EITF 06-2, Nomura recorded aliability for sabbatical leave upon employee vesting in the benefit, which occurred only at the end of the service
period. Under EITF 06-2, Nomura accrued an estimated liability for sabbatical leave over the requisite service
period as employee services are rendered. On April 1, 2007, Nomura adopted EITF 06-2 and recognized adecrease to opening retained earnings of ¥1,119 million after-tax.
Stock-based compensation—
Stock-based compensation cost is determined either by using option pricing models intended to estimate thefair value of the awards at the grant date or by calculating the fair value of the award at the grant date based on
the market price at the grant date and the exercise price, and it is recognized over the requisite service period,
which generally is equal to the vesting period in accordance with SFAS No. 123 (Revised 2004), “Share-Based
Payment.”
Earnings per share—
In accordance with SFAS No. 128, “Earnings per Share” (“SFAS 128”) the computation of basic earnings
per share is based on the average number of shares outstanding during the year. Diluted earnings per sharereflects the assumed conversion of all dilutive securities based on the most advantageous conversion rate or
exercise price available to the investor, and assuming conversion of convertible debt under the if-converted
method.
Cash and cash equivalents—
Nomura defines cash and cash equivalents as cash on hand and demand deposits with banks.
Goodwill and intangible assets—
In accordance with SFAS No. 142 “Goodwill and Other Intangible Assets” (“SFAS 142”), goodwill andintangible assets not subject to amortization are reviewed annually, or more frequently in certain circumstances
for impairment. Goodwill is the cost of acquired companies in excess of the fair value of identifiable net assets at
F-20

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
acquisition date. Nomura periodically assesses the recoverability of goodwill by comparing the fair value of thereporting units to which goodwill relates to the carrying amount of the reporting units including goodwill. If suchassessment indicates that the fair value is less than the related carrying amount, a goodwill impairment
determination is made. Identifiable intangible assets with finite lives are amortized over their expected useful
lives. Identifiable intangible assets with indefinite lives are not amortized. Instead, these assets are evaluated atleast annually for impairment.
Restructuring costs—
Costs associated with an exit activity not involving an entity newly acquired in a business combination arerecognized at fair value in the period in which the liability is incurred in accordance with SFAS No. 146“Accounting for Costs Associated with Exit or Disposal Activities” (“SFAS 146”). Such costs include one-timetermination benefits provided to employees, costs to terminate certain contracts and costs to relocate employees.
In accordance with SFAS No. 112 “Employers’ Accounting for Postemployment benefits—an amendment of
FASB Statements No. 5 and 43” (“SFAS 112”), termination benefits provided to employees as part of ongoing
benefit arrangements are recognized as liabilities during the period in which it is probable Nomura has incurred aloss, and the amount of the loss can be reasonably estimated.
Costs of a plan to either exit an activity of an acquired company or involuntarily terminate or relocate
employees of an acquired company are recognized as liabilities assumed in a business combination in accordancewith EITF Issue No. 95-3 “Recognition of Liabilities in Connection with a Purchase Business Combination”.
Accounting changes and new accounting pronouncements—
The following new accounting pronouncements relevant to Nomura have been adopted during the year
ended March 31, 2009:
Fair value measurements
In September 2006, the FASB issued SFAS 157 which defines fair value, establishes a framework formeasuring fair value and expands disclosures about fair value measurements. SFAS 157 clarifies that fair value isthe amount that would be exchanged to sell an asset or transfer a liability, in an orderly transaction between
market participants. In addition, SFAS 157:•

requires that a fair value measurement technique include an adjustment for risks inherent in a particularvaluation technique (such as a pricing model);•establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs tothe valuation of a financial asset or financial liability;•

nullifies the guidance in EITF 02-3 which required deferral of profit at inception of a derivativetransaction in the absence of observable data supporting the valuation technique;•eliminates large position (“block”) discounts for financial instruments quoted in active markets; and•requires a reporting entity to consider its own credit rating when valuing liabilities carried at fair value.

The requirements of SFAS 157 are generally applied prospectively to financial instruments apart fromderivatives which have been accounted for in accordance with EITF 02-3, hybrid financial instruments that wasmeasured at fair value at initial recognition using the transaction price under SFAS 155 and certain investments
which have block discounts applied to them. The impact of adopting SFAS 157 for these financial instruments
was recorded as a cumulative-effect adjustment to opening retained earnings.
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NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
In February 2008, the FASB issued Staff Position No. 157-2, “Effective Date of FASB Statement No. 157”(“FSP SFAS 157-2”) which delays the effective date of SFAS 157 for all nonfinancial assets and nonfinancial
liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring
basis (at least annually), to fiscal years beginning after November 15, 2008, and interim periods within thosefiscal years for items within the scope of the FSP.
The remainder of SFAS 157 relating to financial assets and financial liabilities is effective for fiscal years
beginning after November 15, 2007. As permitted by FSP SFAS 157-2, Nomura adopted SFAS 157 on April 1,2008 for financial assets and financial liabilities only and has not applied the provisions of SFAS 157 to thefollowing categories of assets and liabilities not held at fair value on a recurring basis:•

Nonfinancial assets and nonfinancial liabilities acquired in a business combination but not measured atfair value on a recurring basis;•

Goodwill and other intangible assets; and•Long-lived non-financial assets.

Nomura recognized a credit to opening retained earnings of ¥10,383 million after-tax as of April 1, 2008
from the partial adoption of SFAS 157. The key components of the transition adjustment were an increase of
approximately ¥3,373 million after-tax for reversal of block discounts against financial instruments quoted in
active markets and an increase of ¥6,933 million after-tax for the nullification of EITF 02-3.
The fair value hierarchy
SFAS 157 establishes a fair value hierarchy which prioritizes the inputs used in fair value valuation
techniques, based on their observability in the market. The use of observable inputs is maximized while the useof unobservable inputs is minimized as SFAS 157 requires that the most observable inputs be used whenavailable. The three levels of the fair value hierarchy are defined as follows, with Level 1 representing thehighest priority inputs and Level 3 representing the lowest priority inputs:
Level 1:
Unadjusted quoted prices in active markets for identical assets or liabilities accessible by Nomura at themeasurement date.
Fair value financial instruments which are valued using Level 1 inputs include:•

G7 government and US agency debt securities•

Listed stocks at Tokyo Stock Exchange 1st section•

Equity securities traded on a liquid exchange

Level 2:
Quoted prices in inactive markets or containing other significant inputs which are observable, either directly
or indirectly. Valuation techniques using observable inputs reflect assumptions used by market participants inpricing financial instruments and are based on data obtained from market sources which are independent from
Nomura at the measurement date.
Fair value financial instruments which are valued using Level 2 inputs include:•

Debt securities (including government and corporate issuances) valued using observable inputs•

Structured notes valued using observable inputs
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NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)•

Equity securities traded on an illiquid exchange•

Derivatives valued using observable parameters

Level 3:
Unobservable inputs which are significant to the fair value measurement of the financial instrument in its
entirety. Valuation techniques using unobservable inputs reflect management’s assumptions about the estimatesused by other market participants in valuing similar financial instruments and are developed based on the best
available information at the measurement date.
Fair value financial instruments which are valued using Level 3 inputs include:•

Investments in non-investment grade Mortgage-Backed Securities (“MBS”) including investments in
sub-prime or non-performing MBS•

Structured notes valued using significant unobservable inputs•

Loans valued using significant unobservable parameters•

Private equity investments•

Derivatives valued using significant unobservable parameters

The availability of inputs observable in the market varies by product and can be affected by a variety offactors. Significant factors include, but are not restricted to: the prevalence of similar products in the market,
especially if the product is significantly customized; 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 result in the decline of available observable 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 or the underlying risks, the type and liquidity of market data
inputs and the nature of observed transactions on similar instruments.
Where valuation models include the use of parameters which are less observable or unobservable in themarket, significant management judgement is used in establishing fair value. The valuations for Level 3 financial
instruments, therefore, involve a greater degree of judgement than those in the two preceding Levels.
Management judgment is required to determine whether a market is active or inactive in determining the fairvalue hierarchy. Key criteria used to determine whether a market is active or inactive include the number oftransactions, the frequency pricing is updated by other market participants, the variability of prices quotations
amongst other market participants, and the amount of publicly available information.
Valuation inputs available for certain instruments may fall into different levels of the fair value hierarchy. Insuch circumstances, for disclosure purposes, the instrument is categorized in accordance with the lowest level ofthe input which is significant to the fair value measurement of the instrument in its entirety.
Fair value of a financial asset when the market for that asset is not active
In October, 2008, the FASB issued Staff Position No. SFAS 157-3, “Determining the Fair Value of a
Financial Asset When the Market for That Asset Is Not Active” (“FSP SFAS 157-3”) which provides guidance
and provides an example to illustrate key considerations in determining the fair value of a financial asset when
F-23

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
the market for that financial asset is not active. Any changes in valuation methodology as a result of the FSPSFAS 157-3 are accounted for prospectively as a change in accounting estimate. The FSP SFAS 157-3 iseffective upon issuance, including prior periods for which financial statements had not been issued.
Nomura adopted FSP SFAS 157-3 on July 1, 2008. The guidance on fair value measurement did not have amaterial impact on these consolidated financial statements as it was consistent with Nomura’s existing valuation
methodology at that date.
Fair value option for financial assets and financial liabilities
In February 2007, the FASB issued SFAS 159 which allows an entity to choose, at specified election dates,
to measure eligible financial assets and liabilities at fair value that are not otherwise required to be measured atfair value. If an entity elects the fair value option for an eligible item, changes in that item’s fair value insubsequent reporting periods is recognized in current earnings. SFAS 159 permits the fair value option election
on an instrument-by-instrument basis at initial recognition of an asset or liability or upon an event that gives rise
to a new basis of accounting for that instrument. It also establishes presentation and disclosure requirements
designed to allow a comparison between entities that elect different measurement attributes for similar assets andliabilities.
An entity may elect the fair value option for eligible items that exist at the date of adoption and report thedifference between the carrying value and fair value as a cumulative-effect adjustment to the opening balance ofretained earnings.
SFAS 159 is effective for fiscal years beginning after November 15, 2007, and Nomura adopted SFAS 159
on April 1, 2008. The financial assets and financial liabilities elected for the fair value option, and the reasons forthe election are as follows:•

Loans which are risk managed on a fair value basis. Nomura elects the fair value option to mitigate
volatility in the statement of operations caused by the difference in measurement basis that would
otherwise exist between loans and the derivatives used to risk manage those instruments;•

Equity method investments which are held for capital appreciation or current income purposes, which
Nomura generally has an intention to exit as opposed to hold indefinitely. Nomura elects the fair value
option to simplify the accounting for these investments, and to more faithfully represent the purpose of
these investments in these consolidated financial statements;•

Financial liabilities recognized in transactions which are accounted for as secured financing transactions
under SFAS 140. Nomura elects the fair value option for these financial liabilities to mitigate volatility
in the consolidated statement of operations which otherwise would arise had this election not beenmade. Even though Nomura has little or no continuing economic exposure to the transferred financial
assets, they remain on the consolidated balance sheet and continue to be carried at fair value, withchanges in fair value recognized through the consolidated statement of operations; and•All structured notes issued on or after the date of adoption. Because SFAS 159 incorporates similaraccounting and disclosure requirements to SFAS 155, Nomura now applies SFAS 159 to all suchfinancial instruments which have been issued on or after April 1, 2008. Nomura elects the fair value
option for those structured notes primarily to mitigate the volatility in the consolidated statement ofoperations caused by differences in the measurement basis for structured notes and the derivatives
Nomura uses to risk manage those positions and to generally simplify the accounting it applied to thesefinancial instruments. Nomura also elects the fair value option for certain notes issued by consolidated
variable interest entities to the same purposes.
F-24

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Interest and dividends arising from financial instruments to which the fair value option has been adopted areaccounted as net gain on trading if they are a part of profit or loss from the change in market value, otherwise
they are accounted as interest revenue or expense.
The adjustment to retained earnings as of adoption date was a credit of ¥5,258 million after-tax (¥7,693
million pre-tax), primarily arising from long-term financial liabilities accounted for as financings under SFAS 140.
Accounting for defined benefit pension and other postretirement plans
In September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension
and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106 and 132-R” (“SFAS 158”).
SFAS 158 requires an entity to recognize in its balance sheet the funded status of its defined benefit
postretirement plans, measured as the difference between the fair value of the plan assets and the benefit
obligation. SFAS 158 is effective as of the end of the fiscal year ending after December 15, 2006. In accordancewith SFAS 158, Nomura adopted this provision of SFAS 158 as of the end of the year ended March 31, 2007.
Consequently, Nomura recorded a reduction of ¥15,793 million to Accumulated other comprehensive income(loss) (after-tax) as of that date.
SFAS 158 also requires an entity to measure plan assets and benefit obligations as of the date of its financial
statements, rather than on another date within three months of that date. This provision of SFAS 158 is effective
as of the end of the fiscal year ending after December 15, 2008 and therefore Nomura adopted the measurement
provision on March 31, 2009. As Nomura’s measurement date already coincides with the date of the financial
statements, this provision did not have a material impact on these consolidated financial statements.
See Note 14 “Employee benefit plans” within these consolidated financial statements for additional
information regarding the adoption of SFAS 158.
Enhanced disclosures about derivatives and hedging
In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging
Activities—an amendments of FASB Statement No. 133” (“SFAS 161”). SFAS 161 amends and expands thequantitative and qualitative disclosure requirements of SFAS 133 and other related literature and intends toprovide an enhanced understanding of:•

How and why a reporting entity uses derivative instruments;•

How derivative instruments and related hedged items are accounted for under SFAS 133 and its related
interpretations; and•How derivative instruments affect a reporting entity’s financial position, financial performance and cash
flows.

SFAS 161 is effective for financial statements issued for fiscal years and interim periods beginning afterNovember 15, 2008 with early application permitted.
Nomura adopted SFAS 161 on January 1, 2009 and therefore has included the required disclosures in these
consolidated financial statements for the three months ended March 31, 2009. Because this is a disclosurestatement and does not impact the accounting treatment for derivative instruments and related hedged items, it
did not have a material impact on these consolidated financial statements.
F-25

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
See Note 4, “Derivative instruments and hedging activities” within these consolidated financial statements
where the new disclosures have been made.
Enhanced disclosures about credit derivatives and guarantees
In September 2008, the FASB issued Staff Position No. SFAS 133-1 and FIN 45-4, “Disclosures about Credit
Derivatives and Certain Guarantees: An Amendment of FASB Statement 133 and FASB Interpretation No. 45; andClarification of the Effective Date of FASB Statement No. 161” (“FSP SFAS 133-1 and FIN 45-4”) which requires aseller of credit derivatives to disclose information about its credit derivatives and hybrid instruments that haveembedded credit derivatives to enable users of financial statements to assess their potential effect on the seller’s
financial position, financial performance, and cash flows. In addition, the FSP amends FASB Interpretation No. 45,“Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees ofIndebtedness of Others” (“FIN 45”) to exclude credit derivative instruments accounted for at fair value under SFAS
133. The FSP is effective for reporting periods (annual or interim) ending after November 15, 2008, with early
adoption permitted.
Nomura adopted FSP SFAS 133-1 and FIN 45-4 on December 31, 2008 and therefore has included therequired disclosures in these consolidated financial statements for the year ended March 31, 2009. Because this isa disclosure statement and does not impact the accounting treatment for credit derivatives or financial guarantees,
it did not have a material impact on these consolidated financial statements.
See Note 4, “Derivative instruments and hedging activities” within these consolidated financial statements
where the new disclosures have been made.
Offsetting of amounts related to certain contracts
In April 2007, the FASB issued FSP FIN 39-1 which addresses whether a reporting entity that is party to amaster netting arrangement can offset fair value amounts recognized for the right to reclaim cash collateral (areceivable) or the obligation to return cash collateral (a payable) against fair value amounts recognized forderivative instruments that have been offset under the same master netting arrangement in accordance with FIN
39. FSP FIN 39-1 is effective for fiscal years beginning after November 15, 2007.
Nomura adopted FSP FIN 39-1 on April 1, 2008 and recognized ¥684 billion and ¥680 billion of netting of
cash collateral receivables against net derivative liabilities and ¥378 billion and ¥923 billion of netting of cash
collateral payables against net derivative assets as of March 31, 2008 and 2009, respectively.
See Note 4 “Derivative instruments and hedging activities” within these consolidated financial statements
for further information on the netting applied to derivatives.
Enhanced disclosures about transfers of financial assets and interests in Variable Interest Entities
In December 2008, the FASB issued Staff Position No. SFAS 140-4 and FIN 46-R-8, “Disclosures by
Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities”(“FSP SFAS 140-4 and FIN 46-R-8”) which requires enhanced disclosures about transfers of financial assets andinterests in variable interest entities. The FSP is effective for reporting periods (annual or interim) ending after
December 15, 2008.
Nomura adopted FSP SFAS 140-4 and FIN-46-R-8 on December 31, 2008 and therefore has included therequired disclosures in these consolidated financial statements for the year ended March 31, 2009. Because this isa disclosure statement and does not affect consolidation or derecognition accounting, it did not have a material
impact on these consolidated financial statements.
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NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
See Note 8, “Securitization and Variable Interest Entities (VIEs)” where the new disclosures have been
made.
Future accounting developments—
The following new accounting pronouncements relevant to Nomura will be adopted in future periods:
Accounting for business combinations
In December 2007, the FASB issued SFAS No. 141-R, “Business Combinations” (“SFAS 141-R”).
SFAS 141-R expands the definition of transactions and events that qualify as business combinations; requiresthat the full value of acquired assets and liabilities, including contingent consideration, be recorded at the fairvalue determined on the acquisition date and changes thereafter in valuation to be reflected in earnings rather
than goodwill; changes the recognition timing for valuation; and requires acquisition costs to be expensed as
incurred. SFAS 141-R applies prospectively for business combinations for which the acquisition date is on orafter the beginning of the first annual reporting period beginning on or after December 15, 2008. Early adoption
and retroactive application is not permitted.
Nomura intends to adopt SFAS 141-R for business combinations for which the acquisition date is on or after
April 1, 2009. Adoption of SFAS 141-R will not have a material effect on these consolidated financial
statements, but may have a material effect on the accounting for future business combinations.
Accounting for noncontrolling interests
In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interest in Consolidated Financial
Statements” (“SFAS 160”). SFAS 160 re-characterizes minority interests in consolidated subsidiaries as
non-controlling interests and requires the classification of non-controlling interests as a component of equity(rather than as a liability or as mezzanine equity). Under SFAS 160, a change in control will be measured at fairvalue. SFAS 160 also provides guidance on the accounting for transactions between an entity and noncontrollinginterests. SFAS 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on orafter December 15, 2008 with early adoption not permitted.
Nomura intends to adopt SFAS 160 on April 1, 2009. It is applied prospectively as of the beginning of the fiscal
year in which it is initially applied, except for the presentation and disclosure requirements which are applied
retrospectively for all periods presented. Nomura is evaluating the impact of adoption on these consolidated financial
statements.
Repurchase financing agreements
In February 2008, the FASB issued Staff Position No. SFAS 140-3, “Accounting for Transfers of Financial
Assets and Repurchase Financing Transactions” (“FSP SFAS 140-3”) which provides implementation guidanceon whether a transfer of a financial asset and repurchase agreement involving the same transferred financial asset
entered into contemporaneously or in contemplation of each other must be evaluated as a single linked
transaction or two separate transactions. The FSP requires the recognition of the transfer and the repurchaseagreement as one linked transaction unless specific criteria are met. The FSP is effective on a prospective basis
for financial years beginning after November 15, 2008 (and interims within those years).
Nomura intends to adopt FSP SFAS 140-3 on April 1, 2009 and does not expect it to have a material impact
on these consolidated financial statements.
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NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Equity method accounting considerations
In November 2008, the FASB ratified the consensus in EITF Issue No. 08-6 “Equity Method Investment
Accounting Considerations” (“EITF 08-6”) which clarifies the accounting for certain transactions andimpairment considerations involving equity method investments. The EITF is effective prospectively for fiscal
years beginning on or after December 15, 2008, and interim periods within those fiscal years.
Nomura intends to adopt EITF 08-6 on April 1, 2009 and does not expect it to have a material impact onthese consolidated financial statements.
Revisions to calculation of earnings per share
In June 2008, the FASB issued Staff Position No. EITF 03-6-1, “Determining Whether Instruments Grantedin Share-Based Payment Transactions Are Participating Securities” (“FSP EITF 03-6-1”) which clarifies thatunvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents(whether paid or unpaid) are participating securities and therefore are included in the computation of earnings per
share using the two-class method described by SFAS 128. All distributed and undistributed earnings are allocatedto common shares and participating securities based on their respective rights to receive dividends. The FSP iseffective for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. All
prior period earnings per share data presented are retrospectively adjusted.
Nomura intends to adopt FSP EITF 03-6-1 on April 1, 2009 and does not expect it to have a material impact
on prospective or historical basic and diluted earnings per share amounts reported within these consolidated
financial statements.
Instruments indexed to an entity’s own stock.
In June 2008, the FASB ratified the consensus in EITF Issue No. 07-5, “Determining Whether an
Instrument (or Embedded Feature) Is Indexed to an Entity’s Own Stock” (“EITF 07-5”) which provides guidancefor determining whether an equity-linked financial instrument (or embedded feature) is indexed to an entity’s
own stock. To meet the definition of “indexed to own stock,” an instrument’s contingent exercise provisions
must not be based on (a) an observable market, other than the market for the issuer’s stock (if applicable), or(b) an observable index, other than an index calculated or measured solely by reference to the issuer’s own
operations, and the variables that could affect the settlement amount must be inputs to the fair value of a“fixed-for-fixed” forward or option on equity shares. The EITF is effective for fiscal years beginning after
December 15, 2008, and interim periods within those fiscal years.
Nomura intends to adopt EITF 07-5 on April 1, 2009 and Nomura is evaluating the impact of adoption onthese consolidated financial statements.
Enhanced disclosures about pension plan assets
In December 2008, the FASB issued Staff Position No. SFAS 132(R)-1 “Employers’ Disclosures about
Postretirement Benefit Plan Assets” (“FSP SFAS 132-R-1”) which increases the information to be disclosed
about plan assets on an annual basis and aligns these disclosures with those made under SFAS 157. In particular,a reporting entity will be required to separate plan assets into the three fair value hierarchy levels and provide arollforward of the changes in fair value of plan assets classified as Level 3. The FSP is effective prospectively forfiscal years ending after December 15, 2009.
Nomura intends to adopt FSP SFAS 132-R-1 in these consolidated financial statements for the year ending
March 31, 2010. As the FSP is a disclosure statement and does not impact upon the accounting for plan assets or
benefit obligations, it will not have a material impact on these consolidated financial statements.
F-28

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Measurement of fair value in inactive markets
In April 2009, the FASB issued Staff Position No. SFAS 157-4, “Determining Fair Value When the Volume
and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That
Are Not Orderly” (“FSP SFAS 157-4”) which provides guidance for determination of fair value when thevolume and level of activity for an asset or liability have significantly declined and also mandates increased
disclosures around financial assets and financial liabilities measured at fair value under SFAS 157. The FSP iseffective for interim and annual reporting periods ending after June 15, 2009, and is applied prospectively. Early
adoption is permitted for periods ending after March 15, 2009.
Nomura intends to adopt FSP SFAS 157-4 on April 1, 2009. The guidance on fair value measurement is notexpected to have a material impact on these consolidated financial statements as it is consistent with Nomura’s
existing valuation methodology.
Interim disclosures about fair value of financial instruments
In April 2009, the FASB issued Staff Position No. SFAS 107-1 and APB 28- 1, “Interim Disclosures about
Fair Value of Financial Instruments” (“FSP SFAS 107-1 and APB 28-1”) which requires quarterly disclosure ofqualitative and quantitative information about the fair value of all financial instruments including methods andsignificant assumptions used to estimate fair value during the period. These disclosures were previously only
required annually. The FSP is effective for interim reporting periods ending after June 15, 2009, unless early
adopted together with FSP FAS 157-4, which Nomura did not do.
Nomura intends to adopt FSP SFAS 107-1 and APB 28-1 in its quarterly interim consolidated financial
statements ending June 30, 2009. As the FSP does not affect determination of fair value and only extends fairvalue disclosures to interim financial statements, it will not have a material impact on these consolidated
financial statements.
Subsequent events
In May 2009, the FASB issued SFAS No. 165, “Subsequent Events” (“SFAS 165”) which provides
accounting and disclosure requirements of events that occur after the balance sheet date but before financial
statements are issued or are available to be issued. In particular, SFAS 165 defines:•

The period after the balance sheet date during which events or transactions that may occur for potential
recognition or disclosure in the financial statements are evaluated;•

The circumstances under which a reporting entity should recognize events or transactions occurring
after the balance sheet date in its financial statements; and•Disclosures about events or transactions that occurred after the balance sheet date.

SFAS 165 applies prospectively to interim or annual financial periods ending after June 15, 2009. Nomura
intends to adopt SFAS 165 on April 1, 2009 and is currently evaluating the impact of adoption on these
consolidated financial statements.
Codification of US GAAPIn June 2009, the FASB voted to approve a new FASB statement replacing SFAS No. 162, “The Hierarchyof Generally Accepted Accounting Principles” ( “SFAS 162”). This action will replace existing guidance
defining the relative level of authority of various types of U.S. GAAP pronouncements and is part of a project to
codify GAAP within a single authoritative volume, the FASB Accounting Standards Codification
F-29

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(“Codification”). The FASB’s primary objective in developing the Codification is to simplify access to all
authoritative U.S. GAAP by providing all authoritative literature related to a particular topic in one place. The
Codification is intended to accurately represent existing standards and not to create new guidance. The FASB
also voted to approve the Codification as the single source of authoritative U.S. GAAP. Once the statement
replacing SFAS 162 and the Codification are adopted, all other accounting literature not included in the
Codification will be considered non-authoritative, except for certain SEC pronouncements.
At this time, the Codification has not been finalized, although the FASB has stated that it will be effective
for interim and annual periods ending after September 15, 2009. Based upon the FASB’s statements about theobjective of the Codification and the effective date, Nomura intends to adopt the Codification on July 1, 2009,and does not expect a material impact on these consolidated financial statements.
Transfers of financial assets
In June 2009, the FASB issued SFAS No. 166, “Accounting for Transfers of Financial Assets—anamendment of FASB Statement No. 140” (“SFAS 166”) which changes the requirements for derecognizing
financial assets, eliminates the concept of a QSPE, and requires additional disclosures about transfers of financial
assets and a transferor’s continuing involvement with transfers of financial assets accounted for as sales.
The requirements for derecognizing financial assets include new restrictions regarding when a portion of afinancial asset may be recognized as a sale, as well as a clarification to the requirements needed to ensureisolation of the transferred assets has occurred from a legal perspective. The elimination of QSPEs will subject
such entities to the revised consolidation guidance provided by SFAS 167, as described below, provided Nomura
still has variable interests in those entities at the adoption date.
SFAS 166 is effective in the first annual reporting period that begins after November 15, 2009. Applicationof the revised guidance in SFAS 166 for transfers of financial assets is prospective after adoption.
Nomura intends to adopt SFAS 166 on April 1, 2010 and is currently evaluating SFAS 166 to determine
what impact it will have on these consolidated financial statements.
Consolidation of variable interest entities
In June 2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation No. 46(R)”(“SFAS 167”) which revises the existing accounting guidance determining when a VIE should be consolidated.
SFAS 167 requires a company to perform a qualitative analysis when determining whether it must
consolidate a VIE. If a company has an interest that provides the company with control over the most significant
activities of the VIE and the right to receive benefits or the obligation to absorb losses, the company must
consolidate the entity. Under the new qualitative approach, a quantitative analysis of exposure to expected
benefit and loss is no longer, by itself, determinative. SFAS 167 also requires consolidation or deconsolidation of
VIEs to be evaluated on an ongoing basis, which differs from existing guidance that requires evaluation at
inception of the entity and only upon occurrence of certain events triggering reconsideration.
SFAS 167 is effective in the first annual reporting period that begins after November 15, 2009, for interim
periods within that first annual reporting period, and for interim and annual reporting periods thereafter. Earlier
application is prohibited.
SFAS 167 contains special transition provisions governing whether the assets, liabilities, and noncontrollinginterests resulting from consolidation of entities at the date of adoption should occur at their carrying amounts (asif such entities had been consolidated under SFAS 167 prior to the adoption date), fair value, or at unpaid
principal balances. In certain cases, differences between the net amount added to the balance sheet upon
F-30

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
consolidation and the amount previously recognized on an unconsolidated basis will be recognized as acumulative adjustment to retained earnings. SFAS 167 may also be optionally applied retroactively in previously
issued financial statements, with a cumulative-effect adjustment to retained earnings.
Nomura intends to adopt SFAS 167 on April 1, 2010 and is currently evaluating SFAS 167 to determine
what impact it will have on these consolidated financial statements.
2. U.S. dollar amounts:
The U.S. dollar amounts are included solely for the convenience of the reader and have been translated at
the rate of ¥99.15 = U.S.$1, the noon buying rate in New York City for cable transfers in foreign currencies ascertified for customs purposes by the Federal Reserve Bank of New York on March 31, 2009. This translation
should not be construed to imply that the yen amounts actually represent, or have been or could be converted
into, equivalent amounts in U.S. dollars.
3. Fair value of financial instruments:
The majority of Nomura’s financial instruments are carried at fair value or at amounts that approximate fairvalue. Financial assets which are carried at fair value on a recurring basis are included in the consolidatedbalance sheet within Trading assets and private equity investments, Loans and receivables and Other assets.
Financial liabilities which are carried at fair value on a recurring basis are included within Trading liabilities,
Short-term borrowings, Payables and deposits, Long-term borrowings, and Other liabilities.
Other financial assets and financial liabilities are carried at fair value on a nonrecurring basis, where theprimary measurement basis is not fair value. Fair value is only used in specific circumstances such as to measure
impairment of the asset or liability.
In all cases, fair value is determined in accordance with SFAS 157 which defines fair value as the amountthat 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 the principal market, the most advantageous market for the relevant financial asset or
financial liability.
Increases and decreases in the fair value of assets and liabilities will significantly impact Nomura’s position,
performance, liquidity and capital resources. As explained later, valuation techniques applied contain inherent
uncertainties and Nomura is unable to predict the impact of future developments in the market. 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, including exchange traded securities and derivatives is based onquoted market prices, including market indices, broker or dealer quotations or an estimation by management of
the amounts expected to be realized upon settlement under current market conditions. A variety of instruments,
including cash and OTC contracts, have bid and ask prices that are observable in the market. These are measured
at the point within the bid-ask 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 or valuation pricing models
are considered in the determination of fair value.
F-31

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Where quoted prices are available in active markets, no valuation adjustments are taken to modify the fairvalue of assets or liabilities marked using such prices. Other instruments may be measured using valuation
techniques, such as valuation pricing models, incorporating observable parameters, unobservable parameters or a
combination of both. Valuation pricing models use parameters which would be considered by market participantsin valuing similar financial instruments.
Valuation pricing models and their underlying assumptions impact the amount and timing of unrealized
gains and losses recognized, and the use of different valuation pricing models or underlying assumptions could
produce different financial results. Valuation uncertainty results from a variety of factors, including: thevaluation 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 thisuncertainty. Common valuation adjustments include model reserves, credit adjustments, close out adjustments,and other appropriate instrument-specific adjustments, such as those instruments under trade restrictions.
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 these adjustments, and the inputs for thesecalculations 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 withregards 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 inputs for the relevant
counterparty. The same approach is used to measure the credit exposure on Nomura’s liabilities as is used formeasuring counterparty credit risk on Nomura’s assets.
Such models are calibrated to the market on a regular basis and inputs used are adjusted for current market
conditions and risks. The global risk management unit reviews pricing models and assesses model appropriatenessand consistency independently of the front office. The model reviews consider a number of factors about themodel’s suitability for valuation and sensitivity of a particular product. Valuation models are calibrated to themarket on a periodic basis by comparison to observable market pricing, comparison with alternative models, andanalysis of risk profiles.
As explained above, any changes in fixed income, equity, foreign exchange and commodity markets canimpact Nomura’s estimates of fair value in the future, potentially affecting trading gains and losses. As financial
contracts have longer maturity dates, Nomura’s estimates of fair value may involve greater subjectivity due to thelack of transparent market data available upon which include base assumptions underlying valuation pricing
models. No material changes were made to valuation approach during the period.

F-32

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 by changes in political or economic factors. Nomura’s significant single
concentrations of credit risk were with the Japanese Government, U.S. Government, Governments within EU andtheir agencies. These concentrations generally arise from taking trading securities positions. Government andgovernment agency bonds, including Securities pledged as collateral, represented 26% of total assets as ofMarch 31, 2009. Please see Note 4, “Derivative instruments and hedging activities” about the concentration of
credit risk for derivatives.

Government and their agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

JapanBillions of yen
March 31, 2009
U.S.
E.U
Other

Total

¥4,005¥396¥6,388¥1,803¥184

Translation into billions of U.S. dollars
March 31, 2009
Japan
U.S.
E.U
Other
Total

Government and their agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

40

$

4

$

18

$

2

$

64

Fair value hierarchy—
The following table presents information about Nomura’s financial assets and financial liabilities measured
at fair value on a recurring basis as of March 31, 2009 within the fair value hierarchy, including those accounted
for at fair value using the fair value option, based on the transparency of inputs to the valuation techniques usedby Nomura to determine such fair values. Financial assets and financial liabilities are classified in their entirety
based on the lowest level of input that is significant to the fair value measurement of the financial instrument.
Billions of yen
March 31, 2009
Counterparty
andCash Collateral
Level 3
Netting(1)Balance as ofMarch 31, 2009

Level 1

Level 2

Assets:Trading assets and private equity investments
Equities (including private equity)(2) . . . . . . . . . . . .
Debt securities and loans . . . . . . . . . . . . . . . . . . . .
Investment trust funds and other . . . . . . . . . . . . . . .
Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans and receivables(3) . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 271
6,007
19
638
0
285

¥

592
1,401
35
15,581
8
54

¥ 606
793
6
1,691
4
50

¥

—
—
—
(15,967)——¥ 1,469
8,201
60
1,943
12
389

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥7,220¥17,671¥3,150¥(15,967)¥12,074

Liabilities:
Trading liabilities
Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment trust funds and other . . . . . . . . . . . . . . .
Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term borrowings(4)(5) . . . . . . . . . . . . . . . . . . . . . . .
Payables and deposits(6) . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term borrowings(4)(5)(7) . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 413
2,355
1
722
9
—
39
—

¥

117
250
—
15,192
28
0
485
1

¥

¥

¥

—
1,424
8
(1)
(81)
—

—
—
—
(15,724)————

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥3,539¥16,073¥1,351¥(15,724)¥ 5,239

F-33

1
0

531
2,605
1
1,614
45
(1)
443
1

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

Level 1

Translation into billions of U.S. dollars
March 31, 2009
Counterparty
andCash Collateral
Balance as ofLevel 2
Level 3
Netting(1)March 31, 2009

Assets:Trading assets and private equity investments
Equities (including private equity)(2) . . . . .
Debt securities and loans . . . . . . . . . . . . .
Investment trust funds and other . . . . . . . .
Derivatives . . . . . . . . . . . . . . . . . . . . . . . . .
Loans and receivables(3) . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 2.74 $ 5.97 $ 6.11
60.58
14.13
8.00
0.19
0.35
0.06
6.44
157.15
17.05
0.00
0.08
0.04
2.87
0.54
0.51

$

—
—
—
(161.04)——$ 14.82
82.71
0.60
19.60
0.12
3.92

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$72.82$(161.04)$121.77

Liabilities:
Trading liabilities
Equities . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt securities . . . . . . . . . . . . . . . . . . . . . .
Investment trust funds and other . . . . . . . .
Derivatives . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term borrowings(4)(5) . . . . . . . . . . . . . . . . .
Payables and deposits(6) . . . . . . . . . . . . . . . . . . .
Long-term borrowings(4)(5)(7) . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . .

$ 4.17 $ 1.18 $ 0.01
23.75
2.52
0.00
0.01
—
—
7.28
153.23
14.36
0.09
0.28
0.08
—
0.00
(0.01)
0.39
4.89(0.82)
—
0.01
—

$

—
—
—
(158.59)
—
—
—
—

$

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$35.69$(158.59)$ 52.83$178.22$162.11$31.77$13.62

5.36
26.27
0.01
16.28
0.45
(0.01)
4.46
0.01(1) Counterparty netting of derivative assets and liabilities in accordance with FIN 39 and cash collateral
netting against net derivatives in accordance with FSP FIN 39-1.
(2) Includes equity investments that would have been accounted for under the equity method if Nomura had notchosen to apply the fair value option under SFAS 159.
(3) Includes loans for which Nomura elected the fair value option under SFAS 159.
(4) Includes structured notes for which Nomura elected the fair value option under either SFAS 155 or
SFAS 159.
(5) Includes embedded derivatives bifurcated in accordance with SFAS 133 from structured notes not elected
for the fair value option. If unrealized gain is greater than unrealized loss, borrowings are reduced by theexcess amount.
(6) Includes embedded derivatives bifurcated in accordance with SFAS 133 from certain deposit liabilities. If
unrealized gain is greater than unrealized loss, the deposit liability is reduced by the excess amount.
(7) Includes secured financing transactions that are accounted for as financings rather than sales in accordancewith SFAS 140. Nomura elected the fair value option under SFAS 159 for these liabilities.
Level 3 financial assets and financial liabilities
Level 3 financial assets and financial liabilities consist of instruments whose valuations are significantly
dependent on parameters which are unobservable in the market. Financial instruments are categorized inaccordance with their lowest level significant input. As a result, a derivative valued using a combination of Level
1, Level 2 and Level 3 parameters would be classified in Level 3 in its entirety, if it’s value is significantly
affected by at least one significant unobservable parameter.
F-34

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
These financial instruments are often hedged with instruments within Level 1 or Level 2 of the fair value
hierarchy and the gains or losses below do not reflect the offsetting gains or losses for these hedging instruments.
Level 3 instruments are also measured using both observable and unobservable inputs. Fair value changes
presented below, therefore, reflect realized and unrealized gains and losses resulting from movements in bothobservable and unobservable parameters.
The following table presents information about financial assets and liabilities measured at fair value on arecurring basis for which Nomura has utilized Level 3 inputs to determine fair value. This table is prepared by
the accumulation of quarterly information.
Billions of yen
Year ended March 31, 2009
Unrealized and realized gains/losses
BalanceGain (loss) Gain (loss) Interest and
Total
PurchasesNet
as of Net gain on operating on private dividends / unrealized (issuances) /sales transfers Balance as ofApril 1, (loss) on investments
equityInterest
and realized(redemption), in /(out of) March 31,
2008 trading and others(1) investments expense gains /(losses) and settlement(2) Level 3(3)2009Assets:Trading assets and private
equity investments
Equities (including
private equity) . . ¥ 802
Debt securities andloans . . . . . . . . .
783
Investment trust
funds andother . . . . . . . . . .
21
Derivatives, net . . .
121
Loans and receivables . . . .
4
Other assets . . . . . . . . . . . .
59
Total . . . . . . . . . . . . . . . . . . . . ¥1,790
Liabilities:
Trading liabilities
Equities . . . . . . . . . . . . . ¥Debt securities . . . . . . . .
Short-term borrowings . . . .
Payables and deposits . . . .
Long-term borrowings . . . .
Total . . . . . . . . . . . . . . . . . . . . ¥¥(113)¥—¥ (53)¥ (0)¥(166)¥ (31)

(163)

—

—

2

(161)

(1)
43
(1)
(0)
¥(235)

—
—
—
2
¥ 2

—
—
—
0
¥ (53)

—
—
—
(0)
¥ 2

1 ¥ 1
—
(0)
15
5
—
(0)
(59)
245
(43) ¥ 251

¥—
—
—
—
—
¥—

¥—
—
—
—
—
¥—

¥—
—
—
—
—
¥—

F-35

1

¥ 606

26

145

793

(1)
43
(1)
2
¥(284)

(15)
(85)
2
(11)
¥(114)

1
188
(1)
(0)
¥334

6
267
4
50
¥1,726

¥

¥

¥

¥

1
(0)
5
(0)
245
¥ 251

1
0
14
(1)
165
¥ 179

¥

0
(0)
(16)
(0)
58
¥ 42

1
0
8
(1)
(81)
¥ (73)NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Translation into billions of U.S. dollars
Year ended March 31, 2009
Unrealized and realized gains/losses
BalanceGain (loss) Gain (loss) Interest and
Total
PurchasesNet
as of Net gain on operating on private dividends / unrealized (issuances) /sales transfers Balance as ofApril 1, (loss) on investments
equityInterest
and realized(redemption), in /(out of) March 31,
2008 trading and others(1) investments expense gains /(losses) and settlements(2) Level 3(3)2009Assets:Trading assets and private
equity investments
Equities (including
privateequity) . . . . . . . . $ 8.08 $(1.14)
Debt securities andloans . . . . . . . . .
7.90 (1.64)
Investment trust
funds andother . . . . . . . . .
0.21 (0.01)
Derivatives, net . . .
1.22
0.43
Loans and receivables . . . .
0.04 (0.01)
Other assets . . . . . . . . . . . .
0.60 (0.00)
Total . . . . . . . . . . . . . . . . . . . $18.05 $(2.37)
Liabilities:
Trading liabilities
Equities . . . . . . . . . . . . . $ 0.01 $ 0.01
Debt securities . . . . . . . .
—(0.00)
Short-term borrowings . . .
0.15
0.05
Payables and deposits . . . .
—(0.00)
Long-term borrowings . . . (0.60) 2.47
Total . . . . . . . . . . . . . . . . . . . $ (0.44) $ 2.53$—$(0.53)$(0.00)$(1.67)$(0.31)$ 0.01$ 6.11——0.02(1.62)

0.26

1.46

8.00

—
—
—
0.02
$0.02

—
—
—
0.00
$(0.53)———(0.00)$ 0.02(0.01)
0.43(0.01)
0.02$(2.86)(0.15)(0.86)
0.02(0.11)$(1.15)0.01
1.90(0.01)(0.00)$ 3.37

0.06
2.69
0.04
0.51
$17.41

$—
—
—
—
—
$—

$ —
—
—
—
—
$ —

$ —
—
—
—
—
$ —

$ 0.01(0.00)
0.05(0.00)
2.47$ 2.53$ 0.010.00
0.14(0.01)
1.67$ 1.81$ 0.00(0.00)(0.16)(0.00)
0.58$ 0.42$ 0.010.00
0.08(0.01)(0.82)$ (0.74)(1) Includes in Revenue—Other and Non-interest expenses—Other in our consolidated statements of operations.
(2) Includes the effect of foreign exchange movements.
(3) If a financial instrument moves from Level 3 to another Level or migrates from another Level to Level 3, the amount reported in “Nettransfers in / (out of) Level 3” is the fair value at the beginning of quarter during which the movement occurs.

F-36

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents the amounts of unrealized gains or (losses) for the year ended March 31, 2009
relating to those financial instruments which Nomura classified as Level 3 within the fair value hierarchy andthat were still held by Nomura at the balance sheet date:

Net gain(loss) on
trading

Assets:Trading assets and private equity investments
Equities (including private equity) . . . . .
Debt securities and loans . . . . . . . . . . . .
Investment trust funds and other . . . . . . .
Derivatives, net . . . . . . . . . . . . . . . . . . . .
Loans and receivables . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities:
Trading liabilities
Equities . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt securities . . . . . . . . . . . . . . . . . . . .
Short-term borrowings . . . . . . . . . . . . . . . . . .
Payables and deposits . . . . . . . . . . . . . . . . . . .
Long-term borrowings . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Billions of yen
Year ended March 31, 2009
Gain (loss) on
Interest andoperating
Gain (loss) on
dividends /investments
private equity
Interest
and others(1)investments
expenseTotal
unrealized
gains /(losses)

¥

4
(135)
(1)
64
(5)
(1)
¥ (74)

¥—
—
—
—
—
4
¥ 4

¥ (85)————0¥ (85)

¥ (0)
—
—
—
—
—
¥ (0)

¥ (81)
(135)
(1)
64
(5)
3
¥(155)

¥

¥—
—
—
—
—
¥—

¥—
—
—
—
—
¥—

¥—
—
—
—
—
¥—

¥

0
0
2
0
140
¥ 142

Net gain(loss) on
trading

Translation into billions of U.S. dollars
Year ended March 31, 2009
Gain (loss) on
Interest andoperating
Gain (loss) on
dividends /investments
private equity
Interest(1)
and others
investments
expense

0
0
2
0
140
¥ 142

Total
unrealized
gains /(losses)

Assets:Trading assets and private equity investments
Equities (including private equity) . . . . .
Debt securities and loans . . . . . . . . . . . .
Investment trust funds and other . . . . . . .
Derivatives, net . . . . . . . . . . . . . . . . . . . .
Loans and receivables . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 0.04(1.36)(0.01)
0.65(0.05)(0.01)$(0.74)

$—
—
—
—
—
0.04
$0.04

$(0.86)
—
—
—
—
0.00
$(0.86)$(0.00)—————$(0.00)$(0.82)(1.36)(0.01)
0.65(0.05)
0.03$(1.56)

Liabilities:
Trading liabilities
Equities . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt securities . . . . . . . . . . . . . . . . . . . .
Short-term borrowings . . . . . . . . . . . . . . . . . .
Payables and deposits . . . . . . . . . . . . . . . . . . .
Long-term borrowings . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 0.00
0.00
0.02
0.00
1.41
$ 1.43

$—
—
—
—
—
$—

$ —
—
—
—
—
$ —

$ —
—
—
—
—
$ —

$ 0.00
0.00
0.02
0.00
1.41
$ 1.43(1) Includes in Revenue—Other and Non-interest expenses—Other in our consolidated statements of operations.
F-37

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Market conditions, in particular, a lack of liquidity, has reduced the observability of certain parameterswhich are significant to Nomura’s financial instrument valuations. These parameters include certain foreign
currency exchange volatilities, certain credit spreads and also certain price of distressed bonds which were notobservable at the end of the period.
As explained above, the valuation of Level 3 financial assets and liabilities are dependent on certain
parameters which cannot be observed or corroborated in the market. This can be the case if, for example, thespecific financial instrument is traded in an inactive market. Common characteristics of an inactive market
include a low number of transactions of the financial instrument; stale or non-current price quotations; pricequotations that vary substantially either over time or among market makers; or little publicly released
information. Unobservable parameters include volatility skew and correlation risk for derivative instruments;
refinancing periods and recovery rates for credit-related products and loans; and macroeconomic factors affecting
the value of collateral for asset-backed securitizations.
If corroborative evidence is not available to value Level 3 financial instruments, fair value may beestablished using other equivalent products in the market. The level of correlation between the specific Level 3
financial instrument and the available benchmark instrument is considered an unobservable parameter. Other
techniques for determining an appropriate value for unobservable parameters may take into account informationsuch as consensus pricing data among certain market participants, historical trends, extrapolation fromobservable market data and other information we would expect market participants to use in valuing similar
instruments.
A range of fair values may be available for Level 3 financial instruments as a result of the uncertainties
described above. The specific valuation for the instrument is based on management’s judgement of prevailingmarket conditions, in accordance with Nomura’s established valuation policies and procedures. Using reasonably
possible alternative assumptions to value Level 3 financial instruments will significantly influence fair values.
For the year ended March 31, 2009, losses of ¥284 billion ($2.86 billion) related to Level 3 assets had amaterial impact on Nomura’s results, however this impact has been mitigated by gains of ¥251 billion ($2.53
billion) related to Level 3 liabilities and has been further mitigated through Nomura’s management of its liquidity
and capital resources. With regards to liquidity, please see Item 5.B, “Liquidity and Capital Resources” of thisannual report.
If economic conditions do not change significantly, management does not anticipate a material difference
between the fair value of Level 3 financial instruments and their settlement amounts in the future. Given that thevaluation of these instruments fluctuate in response to a variety of factors, including, but not limited to generalmarket sentiment, credit, interest rate, foreign exchange and correlation risk, current values may continue todecrease if conditions deteriorate further. Conversely, should conditions improve, an increase in the value of theLevel 3 portfolio would be expected.

F-38

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The fair value option—
The following table presents gains (losses) due to changes in fair value for financial assets and financial
liabilities measured at fair value using the fair value option under SFAS 155 and SFAS 159 at March 31 2009.
Translation into
Billions of yen billions of U.S. dollars
Year ended March 31, 2009
Net gains and (losses) on trading

Assets:Trading assets and private equity investments
Trading assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Private equity investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans and receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities:
Short-term borrowings(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term borrowings(1)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ (2)
(0)
(0)
¥ (2)

$(0.02)(0.00)(0.00)$(0.02)¥$ 0.07
2.61$ 2.687259¥266(1) Includes structured notes and other financial liabilities.
(2) Includes secured financing transactions arising from transfers of financial assets which did not meet thecriteria for derecognition under SFAS 140.
Nomura elected to apply the fair value option for its common stocks investment in Ashikaga Holdings Co.,
Ltd. (“Ashikaga Holdings”) Nomura’s ownership share is 45.5%, and this investment is included in Private equity
investments. Ashikaga Holdings recognized a total revenue of ¥83 billion ($0.83 billion), total expense of ¥110
billion ($1.11 billion) and a net loss of ¥7 billion ($0.07 billion) for the year ended March 31, 2009. As of March 31,
2009, its total assets and total liabilities were ¥4,921 billion ($49.63 billion) and ¥4,726 billion ($47.66 billion),
respectively, determined in accordance with accounting principles generally accepted in Japan.
Nomura calculates the impact of changes in its own creditworthiness on certain financial liabilities forwhich the fair value option is elected, by discounting future cash flows at a rate which incorporates observablechanges in its credit spread. Gains from changes in the fair value of the financial liabilities for which the fairvalue option was elected, attributable to the change in its creditworthiness, were ¥73 billion ($0.74 billion) for
the year ended March 31, 2009, mainly because of the widening of Nomura’s credit spread. There was no
significant impact on financial assets for which the fair value option was elected, attributable to instrumentspecific credit risk.
As of March 31, 2009, the fair value of the aggregated unpaid principal balance (which is contractuallyprincipally protected) of loans and receivables for which the fair value option was elected was ¥1 billion($0.01 billion) more than the principal balance of such loans and receivables. The fair value of the aggregatedunpaid principal balance (which is contractually principally protected) of long-term borrowings for which the fairvalue option was elected was ¥14 billion ($0.14 billion) less than the principal balance of such long-termborrowings. There were no loans and receivables for which the fair value option was elected that were 90 days ormore past due.
F-39

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Financial instruments carried at fair value on a nonrecurring basis—
In addition to the financial instruments carried at fair value on a recurring basis, which are described above,
Nomura also carries other financial instruments at fair value on a nonrecurring basis, for which the primaryvaluation basis is not fair value. Fair value is only used in specific circumstances such as to measure impairmentof the asset or liability.
For the year ended March 31, 2009, Nomura recognized impairment losses of ¥100 billion ($1.01 billion)
within Non-interest expenses—Other in the consolidated statement of operations against certain listed equity
method investees as the impairment was determined to be due to an other-than-temporary decline in value. The
amount of investments in the investees, which are included within Other assets—Investments in and advances toaffiliated companies in the consolidated balance sheet, were written down to their fair value of ¥37 billion ($0.37
billion). Fair value was determined in accordance with SFAS 157 using the unadjusted quoted market prices for theInvestees. Consequently, these nonrecurring fair value measurements have been determined using inputs which
would be classified as Level 1 in the fair value hierarchy.
Trading activities—
Nomura’s trading activities consist primarily of securities brokerage, trading, and underwriting; derivatives
dealing and brokerage; and securities financing transactions. Trading assets and trading liabilities consist of cash
instruments (such as securities) and derivative instruments used for trading purposes or for hedging other trading
assets or liabilities.
Trading assets and Trading liabilities
Trading assets, including Securities pledged as collateral, and Trading liabilities consist of the following
major types of financial instruments:
Translation
intobillions of
U.S. dollars

Billions of yen

Equities and convertible bonds . . . . . . . . . . . . . . . .
Government and government agency bonds . . . . .
Bank and corporate debt securities . . . . . . . . . . . . .
Commercial paper and certificates of deposit . . . .
Mortgage and mortgage-backed securities . . . . . . .
Beneficiary interests and other . . . . . . . . . . . . . . . .
Derivative contracts(1)(2) . . . . . . . . . . . . . . . . . . . . .

2008
Trading
Trading
assetsliabilities

March 312009
Trading
Trading
assetsliabilities

2009
Trading
Trading
assetsliabilities¥1,296
4,751
1,651
321
478
277
1,173

¥ 871
2,663
146
—
—
0
790

¥ 1,145
6,388
1,314
165
331
63
1,943

¥ 532
2,464
115
—
26
1
1,614

$ 11.55
64.42
13.25
1.66
3.34
0.64
19.60

$ 5.36
24.86
1.16
—
0.26
0.01
16.28

¥9,947¥4,470¥11,349¥4,752$114.46$47.93(1) Amounts disclosed for derivative contracts are reported on a net-by-counterparty basis and on a net-by-cash
collateral basis where net presentation is consistent with FIN 39 and FSP FIN 39-1 as of March 31, 2008.
(2) Amounts reported as of March 31, 2008 reflect retroactive application of FSP FIN 39-1.

F-40

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Net gain (loss) on trading
While trading activities are primarily generated by client order flow, Nomura also takes proprietary
positions in interest rate, debt, equity instruments etc. Revenues from trading include realized and unrealized
gains and losses arising from trading as principal. Revenues also include realized and unrealized gains and losses
on debt and equity securities and derivatives utilized in arbitrage strategies for Nomura’s own account. The
following table of net trading gains and losses by business unit has been prepared in order to present Nomura’s
net trading gains and losses in a format which reflects the manner in which Nomura manages its businesses.

2007

Merchant Banking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity trading-including units trading primarily in stocks,
convertible bonds, stock subscription warrants, and related
derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fixed income trading-including units trading primarily ingovernment bonds, corporate debt securities, related
derivatives, and foreign exchange in connection with
Nomura’s securities business . . . . . . . . . . . . . . . . . . . . . . . . . .

Millions of yen
Year ended March 31
2008
2009

Translation
intomillions of
U.S. dollars
2009¥ (2,459) ¥ (4,969) ¥(2,660)$(27)

137,595

136,955(38,660)(389)

154,872(70,266)(87,019)(878)¥290,008¥ 61,720¥(128,339)$(1,294)

Estimated Fair Value
Financial assets which are carried at contractual amounts that approximate fair value include Cash and cash
equivalents, Time deposits, Deposits with stock exchange and other segregated cash, Receivable from customers,
Receivable from other than customers, Securities purchased under agreements to resell, Securities borrowed,
and Loans receivable. Financial liabilities which are carried at contractual amounts that approximate fair value
include Short-term borrowings, Payables to customers, Payables to other than customers, Deposits received atbanks, Securities sold under agreements to repurchase, Securities loaned and Other secured borrowings. These
financial instruments mature principally within one year and bear interest at rates that approximate market.
Loans receivable
Loans receivable are carried at cost adjusted for deferred fees or costs on originated loans, any unamortizedpremiums or discounts on purchased loans less applicable allowances for loan losses unless they are electedunder the fair value option and held at fair value. The fair value of loans receivable is estimated based on loan
characteristics. Where quoted market prices are available, such market prices were utilized to estimate fair value.

F-41

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents carrying values and fair values or approximate fair values of loans receivable.
Carrying values are shown after deducting allowances for doubtful accounts.

Billions of yen
March 31
2008
2009
Carrying
Fair
Carrying
Fair
value
value
value
value

Loans receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥784

¥784

¥516

¥507

Translation
intobillions of
U.S. dollars
2009
Carrying
Fair
value
value

$5.21

$5.11

Long-term borrowings
For long-term borrowings, certain financial instruments, including structured notes, are carried at fair value
under SFAS 155 and 159. Except for those instruments, long-term borrowings are carried at historical amounts
unless such borrowings are designated as the hedged item in a fair value hedge. The fair value of long-termborrowings is estimated using quoted market prices where available or by discounting future cash flows.
The following table presents carrying values and fair values or approximate fair values of long-termborrowings.

Long-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . .

Translation
intobillions of
U.S. dollars

Billions of yen
March 31
2008
2009
Carrying
Fair
Carrying
Fair
value
value
value
value

2009
Carrying
Fair
value
value

¥5,224$55.30¥5,243¥5,483¥5,196$52.41

4. Derivative instruments and hedging activities
Derivatives used for trading purposes
In the normal course of business, Nomura enters into transactions involving derivative financial instruments
to meet customer needs, for its trading activities, and to reduce its own exposure to loss due to adverse
fluctuations in interest rates, currency exchange rates and market prices of securities, etc. These financial
instruments include contractual agreements such as commitments to swap interest payment streams, exchange
currencies or purchase or sell securities and other financial instruments on specific terms at specific future dates.
Nomura also enters into various derivative financial instrument transactions including futures, forwards,
swap and option contracts involving securities, foreign currency, interest rate and other money market
instruments as part of its normal trading activities and for market risk management of certain non-trading assets
and liabilities.
Nomura maintains active trading positions in a variety of derivative financial instruments. Most of
Nomura’s trading activities are customer oriented. Nomura utilizes a variety of derivative financial instruments
F-42

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
as a means of bridging customers’ specific financial needs and investors’ demands in the securities markets.
Nomura also actively trades securities and various derivatives in order to assist its customers in adjusting theirrisk profiles as markets change. In performing these activities, Nomura carries an inventory of capital markets
instruments and maintains its access to market liquidity by quoting bid and offer prices to and trading with othermarket makers. These activities are essential to provide customers with securities and other capital markets
products at competitive prices.
Forward and futures contracts are commitments to either purchase or sell securities, foreign currency ormoney market instruments at a specific future date for a specified price and may be settled in cash or throughdelivery. Foreign exchange contracts include spot and forward contracts and involve the exchange of twocurrencies at a rate agreed to 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 conducted
through regulated exchanges which clear and guarantee performance of counterparties. Accordingly, credit risk
associated with futures contracts is considered minimal. In contrast, forward contracts are generally negotiatedbetween two counterparties and, therefore, are subject to the performance of the related counterparties.
Options are contracts that grant the purchaser, for a premium payment, the right to either purchase or sell afinancial instrument at a specified price within a specified period of time or on a specified date from or to thewriter of the option. The writer of options receives premiums and bears the risk of unfavorable changes in themarket 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 andforeign currency exposures. Entering into swap agreements may involve the risk of credit loss in the event of thecounterparties’ default.
To the extent these derivative financial instruments are economically hedging offsetting financial
instruments or securities positions of Nomura, the overall risk of loss may be fully or partly mitigated by thehedged position.
Nomura seeks to minimize its exposure to market risk arising from its use of these derivative financial
instruments through various control policies and procedures, including position limits, monitoring proceduresand hedging strategies whereby Nomura enters into offsetting or other positions in a variety of financial
instruments. Credit risk associated with these financial instruments is controlled by Nomura through credit
approvals, limits and monitoring procedures. To reduce default risk, Nomura requires collateral, principally cash
collateral and government securities, for certain derivative transactions. From an economic standpoint, Nomura
evaluates default risk exposure net of related collateral. Furthermore, Nomura generally enters into International
Swaps and Derivatives Association, Inc. master agreements or their equivalents (“master netting agreements”)
with each of its counterparties. Master netting agreements provide protection in bankruptcy in certain
circumstances and mitigate the credit risk exposure from these transactions. In some cases, they enable
unrealized gains and losses arising from Nomura’s dealings in over-the-counter derivatives to be presented on a
net-by-counterparty basis and on a net-by-cash collateral basis in accordance with FIN 39 and FSP FIN 39-1.

F-43

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table discloses the fair value of derivative financial instruments used for trading purposes by
Nomura.

Billions of yen
March 3120082009

Derivative Trading Assets:
Foreign exchange forwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
FRA(1), other OTC forwards, and futures contracts . . . . . . . . . . . . . . . . . . . . .
Swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Securities options—purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Options other than securities options—purchased . . . . . . . . . . . . . . . . . . . . . .
Sub total(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The amount netted with cash collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivative Trading Liabilities:
Foreign exchange forwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
FRA, other OTC forwards, and futures contracts . . . . . . . . . . . . . . . . . . . . . . .
Swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Securities options—written . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Options other than securities options—written . . . . . . . . . . . . . . . . . . . . . . . . .
Sub total(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The amount netted with cash collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Translation
intobillions of
U.S. dollars
2009¥

91 ¥ 134
67
17
1,040
1,606
155
734
198
375
¥1,551 ¥2,866
(378)
(923)
¥1,173 ¥1,943$ 1.35
0.17
16.21
7.40
3.78
$28.91(9.31)$19.60¥ 121 ¥ 240
39
36
748
657
328
850
238
511
¥1,474 ¥2,294
(684)
(680)
¥ 790 ¥1,614$ 2.42
0.36
6.63
8.58
5.15
$23.14(6.86)$16.28(1) Forward Rate Agreements.
(2) Total amounts are reported on a net-by-counterparty basis.
(3) Total amounts are reported on a net-by-cash collateral basis and net-by-counterparty basis where netpresentation is consistent with FIN 39 and FSP FIN 39-1. Amounts reported as of March 31, 2008 reflectretroactive application of FSP FIN 39-1.
Derivatives used for non-trading purposes
Nomura’s principal objective in using derivatives for purposes other than trading is market risk management
for certain non-trading assets and liabilities such as non-trading debt securities, loans receivable from customers
and other assets as well as bonds and notes issued. The operations of Nomura are subject to the risk of interest
rate and currency rate fluctuations to the extent that there is a difference between the amounts of Nomura’sinterest-bearing and/or foreign currency assets and liabilities which mature or reprice in specified periods. To
manage its exposures to market movements, Nomura uses derivative financial instruments.
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 floating rate. The maturity structure of the swaps corresponds with the maturity of the debt
obligations being hedged. Nomura also uses interest rate swaps to modify the interest rate characteristics of
certain assets including loans receivable from customers. Credit risk associated with derivatives utilized for
non-trading purposes is controlled and managed in the same way as credit risk associated with derivatives
utilized for trading purposes.
F-44

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Concentrations of credit risk about derivatives
The following table presents Nomura’s significant concentration exposures for financial institutions about
OTC derivatives. The gross fair value of derivative assets presents the maximum amount of loss due to credit riskthat 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 novalue.

Gross Fair Value ofderivative assets

Financial institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥13,511

Billions of yen
March 31, 2009
Impact of
Master Netting Impact ofArrangements Collateral¥(11,962)

Net Exposure to
Credit Risk¥(887)¥662

Translation into billions of U.S. dollars
March 31, 2009
Impact ofGross Fair Value of Master Netting Impact of Net Exposure ofderivative assets
Arrangements Collateral
Credit Risk

Financial institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$136$(120)$(9)$7

Derivative activities
The following table quantifies the volume of Nomura’s derivative activity, through a disclosure of notionalamounts, in comparison with the fair value of those derivatives. All amounts are disclosed on a gross basis, prior
to counterparty netting of derivative assets and liabilities and cash collateral netting against net derivatives.
Billions of yen
March 31, 2009
Derivative Assets
Derivative Liabilities
Notional
Fair Value Notional(1) Fair Value(1)Derivative contracts used for trading purpose(2):Equity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,286
186,151
49,587
28,799
70
904

¥

878
11,195
5,512
270
23
32

¥ 8,963
192,11749,40915,193
68
794

¥ 860
10,421
5,137
405
23
30

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥273,797¥17,910¥266,544¥16,876

Derivatives designated as hedging instruments(3):Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

646

¥

18

¥

94

¥

1

Total hedging derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

646

¥

18

¥

94

¥

1

F-45

¥

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Translation into billions of U.S. dollars
March 31, 2009
Derivative Assets
Derivative Liabilities
Notional
Fair Value
Notional(1)Fair Value(1)Derivative contracts used for trading purpose(2):Equity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivatives designated as hedging instruments(3):Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total hedging derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

83.57
1,877.46
500.12290.460.71
9.12$2,761.44$

8.86
112.92
55.59
2.72
0.23
0.32
$180.64$90.40
1,937.63
498.33153.230.69
8.01$2,688.29

$

$
$

$
$

$
$

$
$

6.52
6.52

0.18
0.18

0.95
0.95

8.67
105.11
51.82
4.08
0.23
0.30
$170.210.01
0.01(1) Includes the amount of embedded derivatives bifurcated in accordance with SFAS 133.
(2) Derivative assets are reported in Trading assets. Derivative liabilities are reported in Trading liabilities, andembedded derivatives are reported in Short-term borrowings and Long-term borrowings.
(3) Derivatives designated as hedging instruments are reported in Other assets-Other and Other liabilitiesOther.
The following table discloses amounts included in the consolidated statement of operations related toderivatives:
Translation
into billions ofBillions of yen
U.S. dollars
Three month ended March 31, 2009(1)Net gains and (loss) on trading

Derivative contracts used for trading purpose(2):Equity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total trading derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15
86
41
(175)
0
(3)
¥ (36)$ 0.150.87
0.41(1.76)
0.00(0.03)$(0.36)

Derivatives designated as hedging instruments:
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total hedging derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥¥$ 0.02$ 0.02¥2
2(1) The table only includes net gain and (loss) for the three months ended March 31, 2009, which is the firstinterim period after Nomura adopted SFAS 161.
(2) Includes net gain and (loss) on embedded derivatives.

F-46

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Derivatives containing credit-risk-related contingent features
Nomura enters into certain OTC derivatives and other agreements containing credit-risk-related contingent
features. These features are clauses that would require Nomura to post additional collateral or settle theinstrument upon occurrence of a credit event, the most common of which would be a downgrade in the Group’s
long-term credit rating.
The aggregate fair value of all derivative instruments with credit-risk-related contingent features that are ina liability position on March 31, 2009, was ¥1,578 billion ($15.92 billion) with related collateral pledged at thatdate of ¥629 billion ($6.34 billion). In the event of a one-notch downgrade to Nomura’s long-term credit rating,the aggregate fair value of assets that would have been required to be posted as additional collateral or that would
have been needed to settle the instruments immediately was ¥13 billion ($0.13 billion).
Credit derivatives:
Credit derivatives are derivative instruments in which one or more of their underlyings are related to thecredit risk of a specified entity (or group of entities) or an index based on the credit risk of a group of entities andthat expose the seller to potential loss from credit risk related 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 guarantee-type contract, or as the party that provides credit protection in a optiontype 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 seller for
credit risk mitigation, proprietary trading positions and for client transactions.
The most significant type of credit derivative used by Nomura are those linked to the performance of acredit default index. Nomura also writes single-name credit default swaps where settlement of the derivative isbased on the credit risk of a single third party 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 therespective contract occurs. Typical credit events include bankruptcy, dissolution or insolvency of the underlying
referenced entity, failure to pay and restructuring of obligations of the referenced security.
The following table presents information about Nomura’s written credit derivatives and purchased credit
protection with identical underlyings at March 31, 2009.

Single-name credit default swaps . . .
Credit default indices . . . . . . . . . . . . .
Other credit-risk related portfolio
products . . . . . . . . . . . . . . . . . . . . .
Credit-risk related options andswaptions . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . .

Billions of yen
Maximum Potential Payout/NotionalYears to Maturity
Less than
1 to 33 to 5More than
1 yearyears
years
5 years

Purchased
CreditProtection

Notional

Carrying
value(1)Total¥1,014
2,962¥ 9,71132,963¥ 938
628¥ 2,282
8,808¥ 5,337
17,795¥1,154
5,732¥ 9,067
32,919

1,044

5,178

45

921

2,561

1,651

4,915

2
¥5,0228¥47,860—¥1,611

8¥12,019—¥25,693—¥8,537

8¥46,909

F-47

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

Single-name credit default swaps . . .
Credit default indices . . . . . . . . . . . . .
Other credit-risk related portfolio
products . . . . . . . . . . . . . . . . . . . . .
Credit-risk related options andswaptions . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . .

Translation into billions of U.S. dollars
Maximum Potential Payout/NotionalYears to Maturity
Less than
1 to 33 to 5More than
1 yearyears
years
5 years

Carrying
value(1)

Total$10.2329.88$ 97.94332.45$ 9.46
6.33

10.53

52.22

0.46

0.02
$50.660.08$482.69—$16.25$ 23.01 $ 53.83
88.83 179.48

Notional
Purchased
CreditProtection$11.6457.81$ 91.45
332.01

25.82

16.65

49.57

0.08
—
$121.21 $259.13—$86.100.08$473.119.29(1) Carrying value amounts are shown on a gross basis prior to cash collateral or counterparty netting.
The following table presents information about Nomura’s written credit derivatives by external credit ratingof underlying asset at March 31, 2009. Ratings are based on Standard & Poor’s (“S&P”), or if not rated by S&P,
based on Moody’s Investors Service. If neither of them are available, the ratings are based on Fitch Ratings Ltd.
or Japan Credit Rating Agency, Ltd. as of March 31, 2009. For credit default indices, the rating is determined bytaking the weighted average of the external credit ratings given for each of the underlying reference entities
comprising the portfolio or index.
Billions of yen
Maximum Potential Payout/Notional
A
BBB
BB
Other(1)AAA

AA

Single-name credit default swaps . . . . . .
Credit default indices . . . . . . . . . . . . . . .
Other credit-risk related portfolio
products . . . . . . . . . . . . . . . . . . . . . . . .
Credit-risk related options andswaptions . . . . . . . . . . . . . . . . . . . . . .

¥227
471

¥ 591
557

—

—

—

—

—

—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥698¥1,148¥ 2,619 ¥ 3,537
16,069 11,979

Total¥1,540735¥1,197
3,152¥ 9,71132,963

—

—

5,178

5,178

—

—

8

8

¥18,688 ¥15,516¥2,275¥9,535¥47,860

Translation into billions of U.S. dollars
Maximum Potential Payout/Notional
A
BBB
BB
Other(1)AAA

AA

Single-name credit default swaps . . . . .
Credit default indices . . . . . . . . . . . . . . .
Other credit-risk related portfolio
products . . . . . . . . . . . . . . . . . . . . . . .
Credit-risk related options andswaptions . . . . . . . . . . . . . . . . . . . . . .

$2.29
4.75

$ 5.96
5.62

—

—

—

—

—

—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$7.04$11.58$ 26.41 $ 35.67
162.07 120.81

Total$15.537.41$12.0831.79$ 97.94332.45

—

—

52.22

52.22

—

—

0.08

0.08

$188.48 $156.48$22.94$96.17$482.69(1) “Other” includes credit derivatives with credit rating of underlying asset that is below investment grade or
where rating is unavailable.

F-48

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
5. Private equity business:
Nomura’s private equity investments, which are made primarily through its Merchant Banking Division,
continue to expand in both Japan and Europe.
As of April 1, 2007 Nomura adopted SOP 07-1. Certain entities which Nomura consolidates under either avoting interest or variable interest model (“investment company subsidiaries”) are investment companies
pursuant to the provisions of SOP 07-1. Investment company accounting applied by each of these investmentcompany subsidiaries is retained in these consolidated financial statements.
These entities make private equity investments solely for capital appreciation, current income or both rather
than to generate strategic operating benefits to the parent entity or the Nomura group. In accordance with
Nomura investment policies, non-investment companies within the group may not make investments in entities
engaged in non-core businesses if such investments would result in consolidation or application of the equity
method. Such investments may generally only be made by investment companies within the group. Non-corebusinesses are defined as those engaged in activities other than Nomura’s five business segments.
Nomura also adopted SFAS 159 on April 1, 2008 as well as SOP 07-1. As a result, all private equity
investments are now accounted for at fair value, with changes in fair value recognized through the consolidated
statement of operations. Prior to adoption of SOP 07-1, private equity investments were accounted for at fairvalue, by the equity method of accounting or as consolidated subsidiaries depending on the attributes of each
investment.
Private equity business in Japan
Nomura has an established private equity business in Japan, which is operated primarily through a whollyowned subsidiary, Nomura Principal Finance Co., Ltd (“NPF”).
Since its inception in 2001, NPF has made 21 investments and exited from 15 of these investments(including partial sales) and the fair value of its investment portfolio is ¥98,998 million ($998 million) as at
March 31, 2009.
NPF is a consolidated investment company pursuant to the provisions of SOP 07-1 and therefore carries allof its investments at fair value, with changes in fair value recognized through the consolidated statement ofoperations from the adoption date of SOP 07-1 on April 1, 2007, rather than applying the equity method of
accounting or consolidation, which was the accounting applied to certain investments prior to that date.
Nomura also makes private equity investments through another wholly-owned subsidiary Nomura Financial
Partners Co., Ltd. (“NFP”). NFP is not an investment company pursuant to SOP 07-1 as it invests in entities
engaged in our core business.
On April 11, 2008, NFP and its joint investors entered into a share purchase agreement with Ashikaga
Holdings Co., Ltd. (“Ashikaga Holdings”), a newly established entity for this transaction, The Ashikaga Bank
Ltd. (“Ashikaga Bank”) and the Deposit Insurance Corporation of Japan (“DICJ”). Ashikaga Holdings acquired
Ashikaga Bank’s shares from DICJ for ¥120 billion ($1.21 billion) and subscribed for Ashikaga Bank’s newshares for ¥160 billion ($1.61 billion) on July 1, 2008. Nomura elected the fair value option to account for its
investment in Ashikaga Holdings common stock, in which its ownership share is 45.5%. For more information of
the fair value option under SFAS 159, see Note 1, “Summary of accounting policies”.
F-49

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Private equity business in Europe
In Europe, Nomura’s private equity investments primarily comprise legacy investments made by its former
Principal Finance Group (“PFG”) now managed by Terra Firma (collectively referred to as the “Terra Firma
Investments”), investments in other funds managed by Terra Firma (“Other Terra Firma Funds”) and throughother investment company subsidiaries (“Other Investments”).
Terra Firma Investments
Following a review to determine the optimum structure to run Nomura’s European private equity business,on March 27, 2002, Nomura restructured its PFG and, as a result, contributed its investments in certain of its
remaining investee companies to Terra Firma Capital Partners I (“TFCP I”), a limited partnership which isengaged in the private equity business, in exchange for a limited partnership interest. Terra Firma Investments(GP) Limited (“Terra Firma”), the general partner of TFCP I, which is independent of Nomura, assumed the
management and control of these investments, together with one other PFG investment, Annington Holdings plc,
which due to contractual restrictions was not transferred to the partnership.
With effect from March 27, 2002, Nomura ceased consolidating the Terra Firma Investments and accounted
for the investments managed by Terra Firma at fair value in accordance with the AICPA Audit and Accounting
Guide, “Investment Companies” until March 31, 2007, following which Nomura adopted SOP 07-1.
The Terra Firma Investments are held by entities which are consolidated investment companies pursuant to
the provisions of SOP 07-1 and therefore Nomura continues to account for these investments at fair value, withchanges in fair value recognized through the consolidated statement of operations.
The estimated fair value of the Terra Firma Investments was ¥130,938 million and ¥89,762 million ($905
million) at March 31, 2008 and 2009, respectively.
Other Terra Firma Funds
In addition to the Terra Firma Investments, Nomura is a 10% investor in a ¥252 billion ($2.54 billion)
private equity fund (“TFCP II”) and a 2% investor in a ¥671 billion ($6.77 billion) private equity fund (“TFCP
III”), also raised and managed by Terra Firma Capital Partners Limited.
Nomura’s total commitment for TFCP II was originally ¥25,182 million ($254 million) and reduced to¥6,038 million ($61 million) as a result of adjustments for recyclable distributions. As of March 31, 2009,¥4,392 million ($44 million) had been drawn down for investments.
For TFCP III, Nomura’s total commitment is ¥12,984 million ($131 million) and ¥7,037 million ($71
million) had been drawn down for investments as at March 31, 2009.
The investments in TFCP II and TFCP III are carried at fair value, with changes in fair value recognizedthrough the consolidated statement of operations.
Other Investments
Nomura also makes private equity investments in Europe through wholly owned subsidiaries and otherconsolidated entities which have third party pooling of funds. These entities are consolidated investmentcompanies pursuant to the provisions of SOP 07-1 and therefore all investments are carried at fair value, withchanges in fair value recognized through the consolidated statement of operations.
F-50

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
6. Investment company accounting
Certain entities, including NPF and TFCPI are investment companies pursuant to the provisions of
SOP 07-1 and therefore carry all of their investments at fair value, with changes in fair value recognized throughthe consolidated statement of operations from the adoption date of April 1, 2007.
The following table summarizes the aggregate carrying value (fair value) and the cost of investments heldby all investment company subsidiaries consolidated within the Nomura group which are investment companies
pursuant to SOP 07-1 and for which investment company accounting has been retained in these consolidated
financial statements.

Millions of yen
March 312008
2009

Closing cost(1)..................................................
Gross unrealized appreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross unrealized depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥210,193 ¥260,920
148,354
90,760(52,193) (97,987)

Closing fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥306,354¥253,693

Translation
intomillions of
U.S. dollars
2009$2,632915(988)$2,559(1) Cost is defined as the historical cost of each investment (i.e. purchase price) as adjusted for subsequent
additional investment.
The following table summarizes the performance of the investments held by investment company
subsidiaries during the period:

Millions of yen
March 312008
2009

Translation
intomillions of
U.S. dollars
2009

Opening fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase / (sales) of investees during the period(1) . . . . . . . . . . . . . . . . .
Realized gains / (losses) during the period(2) . . . . . . . . . . . . . . . . . . . . .
Change in unrealized gains / (losses) during the period . . . . . . . . . . . . .

¥ 487,059 ¥ 306,354(250,067)
36,41476,08249,493(6,720) (138,568)$ 3,090
368
499(1,398)

Closing fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 306,354$ 2,559¥ 253,693(1) Acquisition cost of new investees and additional investments or sales proceeds of investees disposed ofduring the period.
(2) Realized gains and losses are calculated as the difference between sales proceeds and the adjusted historicalcost of the investment.
7. Collateralized transactions:
Nomura enters into collateralized transactions, including resale and repurchase agreements, securities
borrowed and loaned transactions, and other secured borrowings mainly to meet customers’ needs, finance
F-51

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
trading inventory positions and obtain securities for settlements. Under these transactions, Nomura either
receives or provides collateral, including Japanese Government and agencies, mortgage backed, bank andcorporate debt securities, non-Japanese government securities and equities. In many cases, Nomura is permitted
to use the securities received to secure repurchase agreements, enter into securities lending transactions or tocover short positions with counterparties.
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 are as follows:

Billions of yen
March 31
2008
2009

The fair value of securities received as collateral, securities borrowed withcollateral and securities borrowed without collateral where Nomura ispermitted to sell or repledge the securities . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The portion of the above that has been sold (included in Trading liabilities on
the consolidated balance sheet) or repledged . . . . . . . . . . . . . . . . . . . . . . . . . .

Translation
intobillions of
U.S. dollars
2009¥13,106¥10,742

$108

9,028

8,631

87

Nomura pledges firm-owned securities to collateralize repurchase agreements and other secured financings.
Pledged securities that can be sold or repledged by the secured party, including Gensaki Repo transactions, aredisclosed parenthetically as Securities pledged as collateral in Trading assets and private equity investments andOther assets—Investments in and advances to affiliated companies on the consolidated balance sheets at
March 31, 2008 and 2009, respectively. Assets owned, which have been pledged as collateral, primarily to stock
exchanges and clearing organizations, without allowing the secured party the right to sell or repledge them, aresummarized in the table below:

Millions of yen
March 312008
2009

Translation
intomillions of
U.S. dollars
2009

Trading assets:
Equities and convertible bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 197,669
Government and government agency bonds . . . . . . . . . . . . . . . . . . . . .
263,955
Bank and corporate debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
718,380
Beneficial interests and others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
531¥ 78,432
495,043
312,729
52

$ 791
4,993
3,154
1

¥1,180,535¥886,256$8,939¥¥¥108,700¥ 35,682$1,096$ 360

Non-trading debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments in and advance to affiliated companies . . . . . . . . . . . . . . . . . . .

F-52

94,56049,761NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Assets subject to lien, except for those disclosed above, are as follows:

Millions of yen
March 312008
2009

Loans and receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 22,352 ¥7,408
Trading assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,084,313
3,145,982
Office buildings, land, equipment and facilities . . . . . . . . . . . . . . . . . . . . .
43,895
51,153
Non-trading debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
85,86655,244
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,982—¥2,238,408¥3,259,787

Translation
intomillions of
U.S. dollars
2009

$

75
31,730516
557—$32,878

Assets in the above table were primarily pledged for secured borrowings, including other secured
borrowings and trading balances of secured borrowings, and derivative transactions. See Note 12, “Borrowings”,
for further information regarding trading balances of secured borrowings.
8. Securitization and Variable Interest Entities (VIEs):
Securitization
Nomura utilizes special purpose entities, or SPEs to securitize commercial and residential mortgage loans,government and corporate bonds and other types of financial assets. Those SPEs are incorporated as stockcompanies, Tokumei kumiai (silent partnerships), Cayman SPCs or trust accounts. Nomura’s involvement with
SPEs includes structuring SPEs, underwriting, distributing and selling debt instruments and beneficial interests
issued by SPEs to investors. Nomura accounts for the transfer of financial assets in accordance with SFAS 140.
This statement requires that Nomura accounts for the transfer of financial assets as a sale when Nomura
relinquishes control over the assets. SFAS 140 deems control to be relinquished when the following conditions
are met: (a) the assets have been isolated from the transferor (even in bankruptcy or other receivership), (b) thetransferee has the right to pledge or exchange the assets received, or if the transferee is a QSPE, 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. Nomura may obtain an interest in the financial assets,
including retained interests in the SPEs. Any such interests are accounted for at fair value and included in
Trading assets within Nomura’s consolidated balance sheet, with the change in fair value included in
Revenues-net gain (loss) on trading. Fair value for retained interests in securitized financial assets is determinedusing observable prices or in cases where observable prices are not available for certain retained interests,
Nomura estimates fair value 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 discountrates commensurate with risks involved. Nomura may also enter into derivative transactions in relation to theassets transferred to an SPE.
As noted above, Nomura may have continuing involvement in the SPEs to which Nomura transferred assets.
During the year ended March 31, 2009, Nomura securitized ¥137 billion ($1.39 billion) and recognizedassociated gain on sale of ¥203 million ($2.05 million). As of March 31, 2009, the cumulative balance offinancial assets transferred to SPEs in which Nomura has continuing involvement was ¥1,122 billion ($11.31
billion), the size of total assets held by such SPEs was ¥1,198 billion ($12.08 billion), and Nomura’s retainedinterest was ¥7 billion ($0.07 billion). Nomura had outstanding collateral service agreements or written credit
F-53

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
default swap agreements in the amount of ¥29 billion ($0.30 billion). Nomura does not provide financial support
beyond its contractual obligations. For the year ended March 31, 2009, Nomura received ¥139 billion ($1.40
billion) of proceeds from the SPEs.
The following table presents the type and carrying value of financial assets included within Trading assets
which have been transferred to SPEs but which do not meet the criteria for derecognition under SFAS 140. The
transfers are accounted for as secured financing transactions within Long-term borrowings.
Translation
intobillions ofBillions of yen U.S. dollars
March 31, 2009

AssetsTrading assets
Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mortgage and mortgage-backed securities . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥136
246
84

$1.37
2.48
0.85

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥466

$4.70

Liabilities
Long-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥443

$4.47

During the year ended March 31, 2008, Nomura securitized ¥691 billion of financial assets and received ¥12billion from securitization trusts and paid ¥3 billion to securitization trusts. Nomura held ¥17 billion of retainedinterests in transferred assets as of March 31, 2008.
Variable Interest Entities
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 securitizationand equity derivative activities. Nomura retains, purchases and sells variable interests in VIEs in connection withits market-making, investing and structuring activities. Nomura consolidates VIEs for which Nomura is theprimary beneficiary, including those that were created to market structured bonds to investors by repackaging
corporate convertible bonds, and mortgages and mortgage-backed securities. Nomura also consolidates certain
investment funds, which are VIEs, and for which Nomura is the primary beneficiary.

F-54

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents the classification of the consolidated VIEs’ assets and liabilities. Creditors do
not have any recourse to Nomura beyond the assets held in the VIEs.
Translation
intobillions ofBillions of yen U.S. dollars
March 31, 2009

Consolidated VIEs’ assets
Cash and cash equivalent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trading assets
Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mortgage and mortgage-backed securities . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment trust funds and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Office buildings, land, equipment and facilities . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 50

$0.51

362
52
123
8
12
51
32

3.65
0.53
1.24
0.08
0.13
0.52
0.30

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥690

$6.96

Consolidated VIEs’ liabilities
Trading liabilities
Mortgage-backed securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 26
2
251
28

$0.26
0.02
2.54
0.28

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥307

$3.10

Nomura also holds significant variable interests in VIEs where Nomura is not the primary beneficiary or
holds variable interests in VIEs that Nomura sponsored. Nomura’s variable interests in such VIEs include seniorand 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 whichwere formed to acquire primarily high yield leveraged loans and other lower investment grade debt obligations;guarantees and residual interests regarding leveraged and operating leases for aircraft held by VIEs; and loans
and investments in VIEs that acquire operating businesses.

F-55

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following tables present the carrying amount of assets and liabilities of unconsolidated VIEs for which
Nomura holds significant variable interests, or interests in VIEs that Nomura sponsored, and maximum exposure
to loss associated with these variable interests. 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 theamount recorded in the consolidated balance sheet, the amount of commitments and financial guarantees, and thenotional of the derivative instruments up to VIEs’ gross assets. Nomura believes the notional amount ofderivative instruments generally exceeds the amount of actual risk.
Billions of yen
March 31, 2009
exposure
Carrying amount of variable interests Maximum
to loss toAssetsLiabilities
unconsolidated VIEs

Type of variable interest held:
Trading assets
Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mortgage and mortgage-backed securities . . . . . .
Investment trust fund and other . . . . . . . . . . . . . .
Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commitments to extend credit and other guarantees . .

¥ 84
24
89
4
55
48
0
—

¥—
—
—
—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥304

¥

0
—
—
—

¥ 84
24
89
4
116
48
0
23

0

¥388

Translation into billions of U.S dollars
March 31, 2009
exposure
Carrying amount of variable interests Maximum
to loss toAssetsLiabilities
unconsolidated VIEs

Type of variable interest held:
Trading assets
Equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mortgage and mortgage-backed securities . . . . .
Investment trust fund and other . . . . . . . . . . . . . .
Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commitments to extend credit and otherguarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$0.85
0.24
0.89
0.04
0.56
0.49
0.00

$—
—
—
—
0.00
—
—

$0.85
0.24
0.89
0.04
1.18
0.49
0.00

—

—

0.23

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$3.07

$0.00

$3.92

FSP SFAS 140-4 and FIN 46-R-8 is effective for the annual or interim reporting periods ending after
December 15, 2008. The two tables below that relate to the prior fiscal year end were prepared in accordancewith the disclosure requirements prior to the adoption of FSP SFAS 140-4 and FIN 46-R-8.

F-56

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table presents the classification of VIEs’ assets that collateralized the VIEs’ obligations at
March 31, 2008. The investors do not have any recourse to Nomura beyond the assets held in the VIEs.
Billions of yen
March 31, 2008

Consolidated VIE assets providing collateral for VIE obligations
Trading assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Office buildings, land, equipment and facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥240
47
3

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥290

The following table presents the aggregate total assets of VIEs for which Nomura holds significant variableinterests and the maximum exposure to loss associated with these significant variable interests at March 31,
2008. Maximum exposure to loss does not reflect Nomura’s estimate of the actual losses that could result fromadverse changes, nor does it reflect the economic hedges Nomura enters into to reduce its exposure.
Billions of yen
March 31, 2008

VIEs’ assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Maximum exposure to loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥457
261

9. Receivables and payables
Loans receivable consist primarily of loans receivable in connection with banking activities (“loans atbanks”), loans receivable in connection with financing activities such as asset-based loans at non-bank entities(“financing activity loans”), margin transaction loans related to broker dealers (“margin transaction loans”), andloans receivable from financial institutions in the inter-bank money market used for short-term financing (“interbank money market loans”).
For each of these types of loans, the following table presents the total recorded investment or fair value forthose loans elected for the fair value option:

Millions of yen
March 312008
2009

Translation
intomillions of
U.S. dollars
2009

Loans at banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥252,553
Financing activity loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
200,947
Margin transaction loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
181,313Inter-bank money market loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
149,449¥214,390
191,489
67,44245,858$2,162
1,931
680
463

Loans receivable total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥519,179$5,236

F-57¥784,262

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Nomura establishes an Allowance for doubtful accounts for amounts estimated to be uncollectible against
loans receivable, receivables from customers and receivables from other than customers. Changes in the
Allowance for doubtful accounts are presented below:

Millions of yen
Year ended March 31
2007
2008
2009

Translation
intomillions of
U.S. dollars
2009

Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 2,878 ¥2,027 ¥1,399
220
149 3,089(1,407)
(252)
(318)
336
(525)
(405)

$14
31
(3)
(4)

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 2,027$38¥1,399¥3,765

Net receivables/payables arising from unsettled securities transactions are included in Payables to otherthan customers amounting to ¥19,489 million at March 31, 2008 and Receivables from other than customers
amounting to ¥480,182 million ($4,843 million) at March 31, 2009
10. Business combinations:LehmanIn October 2008, Nomura acquired the majority of Lehman’s Asia Pacific operations, its equities andinvestment banking operations in Europe and the Middle East, and hired certain of its fixed income personnel in
Europe. The acquisition agreements generally provided for the transfer of certain employees, the purchase ofcertain assets and the assumption of certain liabilities for those operations. Financial assets and financial
liabilities were generally not acquired. The acquisitions will strengthen Nomura’s wholesale and investmentbanking businesses and expand its global capabilities.
Nomura also acquired Lehman’s specialized services companies in India by purchasing the shares ofLehman Brothers Services India Private Ltd, Lehman Brothers Financial Services (India) Private Ltd andLehman Brothers Structured Finance Services Private Ltd. The operations of these three companies functioned asa shared-services platform for Lehman’s businesses in Europe and Asia Pacific by supporting IT operations,financial control, and global risk management.
Nomura has accounted for these acquisitions as a business combination. Accordingly, the operating resultsof the acquired businesses have been included in Nomura’s consolidated statement of operations from October
2008. The acquisition costs were allocated to the estimated fair value of the assets acquired and liabilities
assumed as of the acquisition date. The allocation of the purchase price will be completed within one year of theacquisition date, once Nomura has completed its analysis of the fair value of the assets acquired and liabilities
assumed.

F-58

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table provides a summary of the estimated fair value of the assets acquired, including
goodwill, and the liabilities assumed based on the preliminary values as of October 2008:

Millions of yen

Translation
intomillions of
U.S. dollars

Assets:Cash and cash deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans and receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Office buildings, land, equipment and facilities . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 2,675
1,303
26,066
26,420
2,434

$ 27
13
263
266
25

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥58,898$594

Liabilities:
Payables and deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥10,759
18,294$109
184

Total liabilities(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29,053293

Net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29,845301

Acquisition costs(3).....................................................

42,863432

Preliminary estimate of goodwill(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥13,018$131(1) Intangible assets primarily comprise the estimated fair value of customer relationships and favorable leaseagreements, which will be amortized based on a weighted-average amortization period of 10 years with noresidual value.
(2) Total liabilities include approximately ¥17 billion ($0.17 billion) of liabilities incurred in connection withthe termination and relocation of Lehman employees. As of March 31, 2009, Nomura is still executing its
restructuring plans for the acquired businesses and therefore additional liabilities will be recognized during
the period through to September 30, 2009. Recognition of these liabilities will also result in an increase in
the amount of reported goodwill.
(3) Acquisition costs are primarily comprise the fair value of consideration given and direct acquisition costs
incurred.
(4) The preliminary estimate of goodwill of approximately ¥13 billion ($0.13 billion) represents the value
expected from the synergies created from strengthening Nomura’s wholesale and investment banking
businesses and expanding its global operations by integrating Lehman’s customer base. Of this amount, ¥8billion ($0.08 billion) has been recorded in Nomura’s Global Markets segment and the remaining ¥5 billion($0.05 billion) in its Investment Banking segment. ¥6 billion ($0.06 billion) of goodwill is deductible forJapan tax purposes.
In addition to restructuring of the acquired businesses, management also initiated a restructuring of
Nomura’s existing activities at the end of 2008. Total restructuring costs of ¥7 billion ($0.07 billion) have beenrecognized in the consolidated statement of operations during the year. These costs primarily consist of one-timeand ongoing staff termination costs which are reported within Non-interest expenses—Compensation andbenefits.

F-59

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following unaudited condensed combined pro forma financial information presents the results ofoperations as if the acquisitions had been completed as of April 1, 2007.
Translation
intomillions of
U.S. dollars,Millions of yen,
except per share
except per share amounts
amounts
Year ended March 31
2008
2009
2009

Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Basic EPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted EPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥2,297,185 ¥ 679,920
114,883(794,081)
60.20(408.92)
60.01(410.55)$ 6,857(8,009)(4.12)(4.14)The unaudited condensed combined pro forma financial information is presented for illustrative purposes
only and does not indicate the actual consolidated financial results that would have been reported had theacquisitions actually taken place as of April 1, 2007. It also is not indicative of the results of operations in future
periods.
11. Other assets-Other/ Other liabilities:
The following table sets forth Other assets-Other and Other liabilities in the consolidated balance sheets by
type.

Millions of yen
March 31
2008
2009

Other assets-Other:
Securities received as collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill and other intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments in equity securities for other than operating purposes . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Translation
intomillions of
U.S. dollars
2009¥242,601
103,022
273,041
20,198170,047¥ 32,079
130,972
334,1235,978
220,091

$ 324
1,321
3,370
60
2,220

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥808,909¥723,243$7,295

Other liabilities:
Obligation to return securities received as collateral . . . . . . . . . . . . . . . . . . . .
Accrued income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥242,601
35,669279,169
12,97865,767¥ 32,079
10,593360,867
12,15064,035

$ 324
107
3,640
123
645

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥636,184¥479,724$4,839

F-60

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Changes in goodwill, which are included in the consolidated balance sheets in Other assets-Other, are as
follows.
Translation
intomillions ofMillions of yen
U.S. dollars
Year ended March 31
2008
2009
2009

Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase by business combinations and acquisitions . . . . . . . . . . . . . . . . . . . .
Impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 91,279¥62,990$635—
14,288(2)144—(1,362)(14)(28,289)(1) (5,457)(3)(54)

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 62,990¥70,459$711(1) ¥17,143 million was no longer recognized following adoption of SOP 07-1 and deconsolidation of certain
entities held by investment companies. ¥11,146 relates to translation adjustments.
(2) ¥13,018 million ($131 million) is related to Lehman and ¥1,270 million ($13 million) is related to Chi-X
Global Technology which is a subsidiary of Instinet.
(3) ¥5,393 million ($54 million) is related to translation adjustments.
The gross carrying amounts of other intangible assets subject to amortization were ¥35,323 million and¥59,677 million ($602 million) at March 31, 2008 and 2009, respectively. These amounts primarily comprisecustomer relationships related to the acquisitions of Instinet Incorporated and Lehman Brothers, which will beamortized based on a weighted-average amortization period of 15 years and 10 years, respectively. The grosscarrying amounts of other intangible assets not subject to amortization were ¥8,563 million and ¥8,394 million($85 million) at March 31, 2008 and 2009, respectively. Accumulated amortization of other intangible assets
amounted to ¥3,854 million and ¥7,558 million ($76 million) at March 31, 2008 and 2009, respectively.

F-61

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
12. Borrowings:
Short-term and long-term borrowings of Nomura at March 31, 2008 and 2009 are shown below:

Millions of yen
March 312008
2009

Translation
intomillions of
U.S. dollars
2009

Short-term borrowings(1):Commercial paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bank borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 445,933
658,438
321,895¥ 318,675
796,742
67,957$ 3,214
8,036
685

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,426,266¥1,183,374$11,935

Long-term borrowings:
Long-term borrowings from banks and other financial
institutions(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥1,449,553 ¥1,993,324
Bonds and notes issued(3):Fixed-rate obligations:Japanese yen denominated . . . . . . . . . . . . . . . . . . . . . . . . .
610,920923,086
Non-Japanese yen denominated . . . . . . . . . . . . . . . . . . . . .
418
10,716
Floating-rate obligations:Japanese yen denominated . . . . . . . . . . . . . . . . . . . . . . . . .
120,198
131,971
Non-Japanese yen denominated . . . . . . . . . . . . . . . . . . . . .
475,997
264,925
Index / Equity-linked obligations:Japanese yen denominated . . . . . . . . . . . . . . . . . . . . . . . . .
1,820,643
1,436,840
Non-Japanese yen denominated . . . . . . . . . . . . . . . . . . . . .
367,487
279,138$20,104

9,310
108
1,331
2,672
14,492
2,815

3,395,663

3,046,676

30,728

Sub-Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,845,216

5,040,000

50,832

Trading balances of secured borrowings . . . . . . . . . . . . . . . . . . . . . . .

379,210443,028

4,468

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥5,224,426¥5,483,028$55,300(1) Include secured borrowings of ¥17,380 million ($175 million) at March 31, 2009.
(2) Include secured borrowings of ¥24,722 million at March 31, 2008 and ¥29,898 million ($302 million) at
March 31, 2009.
(3) Include secured borrowings of ¥252,202 million at March 31, 2008 and ¥171,225 million ($1,727 million) at
March 31, 2009.
Trading balances of secured borrowings
These balances of secured borrowings consist of the liabilities related to transfers of financial assets that are
accounted for as financings secured by the financial assets without recourse to Nomura rather than sales under
SFAS 140. These borrowings are not borrowed for the purpose of Nomura’s funding but are related to Nomura’s
trading activities to gain profits from the distribution of financial products secured by the financial assets.

F-62

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Long-term borrowings consisted of the following:

Millions of yen
March 312008
2009

Translation
intomillions of
U.S. dollars
2009

Debt issued by the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt issued by subsidiaries—guaranteed by the Company . . . . . . . . . . . .
Debt issued by subsidiaries—not guaranteed by the Company(1) . . . . . . . .

¥1,502,345
2,365,315
1,356,766¥1,974,286
1,706,250
1,802,492$19,912
17,20918,179Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥5,224,426¥5,483,028$55,300(1) Includes trading balances of secured borrowings.
At March 31, 2008, fixed-rate obligations of long-term borrowings are due between 2008 and 2023 atinterest rates ranging from 0.71% to 6.40%. Floating-rate obligations, which are generally based on LIBOR, aredue between 2008 and 2015 at interest rates ranging from 0.92% to 5.32%. Index / Equity-linked obligations aredue between 2008 and 2038 at interest rates ranging from 0.00% to 40.00%.
At March 31, 2009, fixed-rate obligations of long-term borrowings are due between 2009 and 2023 atinterest rates ranging from 0.10% to 7.00%. Floating-rate obligations, which are generally based on LIBOR, aredue between 2009 and 2018 at interest rates ranging from 0.57% to 3.91%. Index / Equity-linked obligations aredue between 2009 and 2043 at interest rates ranging from 0.00% to 32.70%.
Certain borrowing agreements of subsidiaries contain provisions whereby the borrowings are redeemable atthe option of the borrower at specified dates prior to maturity and include various equity-linked or otherindex-linked instruments.
Nomura enters into swap agreements to manage its exposure to interest. Principally, bonds and notes issued
are effectively converted to LIBOR-based floating rate obligations through such swap agreements. The carrying
value of the long-term borrowings includes adjustments to reflect fair value hedges.
The effective weighted-average interest rates of borrowings, some of which include the effect of hedges,
were as follows:
March 312008
2009

Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fixed-rate obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Floating-rate obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Index / Equity-linked obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-63

1.37%
2.76%
0.88%
2.08%
3.64%

0.98%
1.56%
0.81%
1.54%
1.89%

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Maturities tables of long-term borrowings
The aggregate annual maturities of long-term borrowings, including adjustments related to fair value hedges
and liabilities measured at fair value, as of March 31, 2008 consist of the following:
Year ending March 31

Millions of yen

2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 476,131
533,596
262,752
564,551624,553
2,383,633

Sub-Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,845,216

Trading balances of secured borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

379,210¥5,224,426

The aggregate annual maturities of long-term borrowings, including adjustments related to fair value hedges
and liabilities measured at fair value, as of March 31, 2009 consist of the following:

Year ending March 31

Millions of yen

Translation
intomillions of
U.S. dollars

2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 489,472
389,742710,933
566,685
440,053
2,443,115$ 4,937
3,931
7,170
5,715
4,438
24,641

Sub-Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,040,000

50,832

Trading balances of secured borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

443,028

4,468¥5,483,028$55,300

Borrowing facilities
At March 31, 2008 and 2009, Nomura had unutilized borrowing facilities of credit amounting to¥370,209 million and ¥256,230 million ($2,584 million), respectively.
Subordinated borrowings
At March 31, 2008 and 2009, subordinated borrowings were ¥126,539 million and ¥949,098 million($9,572 million), respectively.
Convertible Bonds
On December 16, 2008, Nomura issued the Subordinated Unsecured Convertible Bonds No.1 (the“Convertible Bonds”) totaling ¥110 billion at par. The initial conversion price was ¥745 per share subject to certain
conversion price adjustment provisions. One of the adjustment provisions allowed for a reduction in the conversion
price was the case if new shares were issued within ninety days of the issuance of the Convertible Bonds at
F-64

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
consideration per share lower than the initial conversion price. This provision was considered a contingent
beneficial conversion feature, to be recorded if and when the contingency was triggered. This contingency was
triggered by a new share issuance announced on March 4, 2009 offering a total of 750,000,000 new shares to beissued through two distribution methods, a public offering as well as a third-party allotment. Accordingly, in
March 2009, the conversion price was reduced to ¥438.2. As a result, in March 2009, Nomura reclassified the
intrinsic value associated with this beneficial conversion feature from Long-term borrowing to Additional paid-in
capital. The discount resulting from the reclassification of the beneficial conversion feature is amortized using
the interest method until the maturity date of the Convertible Bonds of March 31, 2014. As of March 31, 2009,
the balance in Additional paid-in capital associated with the beneficial conversion feature was ¥40,995 million,
after considering the effect of deferred taxes. This provision expired during this fiscal year. The number of shares
into which the convertible bonds are convertible was 251,026,928 as of March 31, 2009. Subject to certain
governmental approval, Nomura may redeem all, for cash at their par amount, if the average closing price of ourshares exceeds 120% of the conversion price for a defined period of time. In this case, partial redemption is not
permissible.
13. Earnings per share:
SFAS 128, basic and diluted earnings per share (“EPS”) are presented on the face of the consolidated
statements of operations. Basic EPS is calculated by dividing net income applicable to common stock by theweighted average number of common shares outstanding during the year. The calculation of diluted EPS issimilar to basic EPS, except that weighted average number of common shares is adjusted to reflect all dilutive
instruments where potential common shares are deliverable during the year. In addition, net income is also
adjusted for any change in income or loss that would result from the assumed conversion of dilutive instruments
issued by affiliates.
A reconciliation of the amounts and the numbers used in the calculation of basic and diluted EPS is as follows:

Yen amounts in millions
except per share data presented in yen
Year ended March 31
2007
2008
2009

Basic—Net income (loss) applicable to common stock . . . ¥Weighted average number of shares
outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

175,828 ¥
1,906,011,723(67,847) ¥1,908,399,176(708,192)

Translation into
millions of
U.S. dollars except
per share data
presented in
U.S. dollars
2009$(7,143)

1,941,906,637

Basic EPS:
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . ¥92.25 ¥

(35.55) ¥(364.69)$ (3.68)

Diluted—
Net income (loss) applicable to common stock onwhich diluted net income per share is
calculated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥175,819 ¥(67,849) ¥(708,207)$(7,143)

Weighted average number of shares outstandingused in diluted EPS computations . . . . . . . . . . .

1,911,093,936

Diluted EPS:
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . ¥1,907,307,701

92.00 ¥

F-65

1,934,159,290(35.57) ¥(366.16)$ (3.69)

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
In determining diluted EPS, net income applicable to common stock has been adjusted to reflect the decline
in Nomura’s equity share of earnings of affiliates for the years ended March 31, 2007, 2008 and 2009 arisingfrom options to purchase common shares issued by affiliates.
The weighted average number of shares used in the calculation of diluted EPS reflects the increase inpotential common shares arising from stock option plans (A-plan) and stock units plans (B-plan) issued by theCompany that would individually reduce EPS in each of the years ended March 31, 2007 and thereafter. Also theweighted average number of shares used in the calculation of diluted EPS reflect potential decrease in number ofcommon shares arising from stock option plans (A-plan) and stock units plans (B-plan) issued by the Company
that would individually increase loss per share in the years ended March 31, 2008 and 2009.
Antidilutive stock options to purchase 1,816,000, and 14,058,600 common shares at March 31, 2007, and2008, respectively, were not included in the computation of diluted EPS. Also antidilutive stock options andconvertible bonds to purchase or convert to 266,942,428 common shares at March 31, 2009, were not included in
the computation of diluted EPS.
14. Employee benefit plans:
Nomura provides various severance benefits and pension plans which cover certain 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 (the “Japanese entities”) have contributory funded benefit
pension plans for their employees who meet eligibility requirements. The benefits are paid as annuity payments
subsequent to retirement or as lump-sum payments at the time of retirement based on the combination of years ofservice, age at the retirement and employee’s choice. The benefits under the plans are calculated based upon
position, years of service and reason of retirement. In addition to the plans described above, certain Japaneseentities also have unfunded lump-sum payment plans. Under these plans, employees with at least two years ofservice are generally entitled to lump-sum payments upon termination of employment. The benefits under theplans are calculated based upon position, years of service and the reason for retirement. Nomura’s funding policy
is to contribute annually the amount necessary to satisfy local funding standards. In December 2008, certain
contributory funded benefit pension plans and unfunded lump-sum payment plans were amended and “cashbalance pension plans” were introduced. Participants receive an annual benefit in their cash balance pension planaccount, which is computed based on compensation of the participants, adjusted for changes in Japanese
government bond rates. This plan amendment attributed a reduction in the benefit obligations of the subsidiaries.
Substantially all overseas subsidiaries have various local defined benefit plans covering certain employees.
Nomura recognized an asset for pension benefits for these plans amounting to ¥3,357 million and ¥7,628 million($77 million) at March 31, 2008, and 2009, respectively.
Net Periodic Benefit Cost
The net periodic benefit cost of the defined benefit plans include the following components. Nomura’s
measurement date is March 31 for its defined benefit plans for Japanese entities.

F-66

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Japanese entities’ plans—Millions of yen
Year ended March 31
2008
2009

2007

Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of net actuarial losses . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net periodic benefit cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Translation
intomillions of
U.S. dollars
2009¥ 8,857 ¥ 9,395 ¥ 9,706
4,729
4,928
5,058
(3,909) (4,118) (3,543)
1,401
1,452
3,260
84
86
(202)

$ 98
51
(36)
33
(2)

¥11,162¥144¥11,743¥14,279

The 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 benefit obligation or the fair value ofplan assets are amortized over the average remaining service period of active participants.
Benefit Obligations and Funded Status
The following table presents a reconciliation of the changes in benefit obligation and fair value of plan
assets and a summary of the funded status:
Japanese entities’ plans—
Translation
intomillions ofMillions of yen
U.S. dollars
As of or for the year ended March 31
2008
2009
2009

Change in projected benefit obligation:
Projected benefit obligation at beginning of year . . . . . . . . . . . . . . . . . .
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 234,988 ¥ 244,338
9,395
9,706
4,928
5,058
2,369
1,596
(7,374)(12,533)—(18,332)
32
48$ 2,464
98
51
16
(126)
(185)
1

¥ 244,338¥ 229,881$ 2,319¥ 158,623 ¥ 141,685(20,033)(26,740)
8,775
7,303
(5,680)(5,876)—112$ 1,429
(270)
74
(59)
1

Fair value of plan assets at end of year . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 141,685¥ 116,484$ 1,175

Funded status at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(102,653)(113,397)(1,144)

Amounts recognized in the consolidated balance sheets . . . . . . . . . . . . . . . .

¥(102,653) ¥(113,397)$(1,144)

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-67

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
As a result of the plan amendment for a part of the defined benefit plans, the projected benefit obligation
decreased by ¥18,332 million at December 31, 2008 and resulted in an unrecognized prior service cost, which
will be recognized in future service periods.
The accumulated benefit obligation for Japanese entities’ plans was ¥219,326 million and ¥226,615 million($2,286 million) as of March 31, 2008 and 2009, respectively.
The projected benefit obligation (“PBO”), accumulated benefit obligation (“ABO”), and fair value of plan
assets for pension plans with ABO and PBO in excess of plan assets as of March 31, 2008 and 2009 are set forthin the tables below.
Japanese entities’ plans—Millions of yen
March 312008
2009

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Translation
intomillions of
U.S. dollars
2009¥244,338
219,326
141,685¥229,881
226,615
116,484$2,3192,286
1,175¥244,338
219,326
141,685¥229,881
226,615
116,484$2,3192,286
1,175

Amounts in accumulated other comprehensive income, pre-tax, that have not yet been recognized ascomponents of net periodic benefit cost consist of:Japanese entities’ plans—
Translation
intomillions ofMillions of yen U.S. dollars
For the year ended March 31
2009
2009

Net actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 98,769(16,964)

$ 996
(171)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 81,805

$ 825

F-68

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Amounts in accumulated other comprehensive income, pre-tax, expected to be recognized as components of
net periodic benefit cost over the next fiscal year are as follows:
Japanese entities’ plans—
Translation
intomillions ofMillions of yen U.S. dollars
For the year ending March 31
2010
2010

Net actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 4,757(1,062)$ 48(11)Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 3,695$ 37

Assumptions
The following table presents the weighted-average assumptions used to determine benefit obligations at year end:
Japanese entities’ plans—
March 312008 2009

Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rate of increase in compensation levels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.1% 2.0%
3.7% 2.5%

The following table presents the weighted-average assumptions used to determine Japanese entities’ plansnet periodic benefit costs for the year:
Year ended March 31
2007
2008
2009

Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rate of increase in compensation levels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected long-term rate of return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.1% 2.1% 2.0%
3.6% 3.7% 2.5%
2.6% 2.6% 2.6%

Generally, Nomura determines the discount rates for its defined benefit plans by referencing indices forlong-term, high-quality bonds and ensuring that the discount rate does not exceed the yield reported for thoseindices 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 the long-term rate of return on plan assets is primarily based on historicalfinancial market relationships that have existed over time with the presumption that this trend will generally
remain constant in the future.

F-69

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Plan Assets
The following table presents the composition of plan assets by asset category:Japanese entities’ plans—
March 312008
2009

Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

43.6% 36.6%
49.2% 58.0%
7.2% 5.4%

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

100.0% 100.0%

Nomura’s investment policies are to protect plan assets while generating sufficiently stable real returns to
help cover current and future benefit payment needs. Risk is controlled through diversification of asset types indomestic and overseas equity securities, debt securities and other. For Japanese entities’ plans, the target ofstrategic allocation is principally 46.5% equity securities, 45.5% debt securities and 8.0% other. The asset mix
and when and how to rebalance the portfolio are reviewed periodically.
Cash Flows
Nomura expects to contribute approximately ¥14,386 million ($145 million) to Japanese entities’ plans in
the year ending March 31, 2010 based upon Nomura’s funding policy to contribute annually the amountnecessary to satisfy local funding standards.
Expected benefit payments for the next five fiscal years and in aggregate for the five fiscal years thereafter
are as follows:
Japanese entities’ plans—Year ending March 31

2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015-2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Millions of yen

Translation
intomillions of
U.S. dollars¥ 8,280
8,475
8,713
8,530
8,775
51,353

$ 84
85
88
86
89
518

Defined contribution pension plans—
In addition to the defined benefit pension plans, the Company, Nomura Securities Co., Ltd., and otherJapanese and non-Japanese entities have defined contribution pension plans.
Nomura contributed ¥858 million, ¥905 million and ¥1,415 million ($14 million) to the defined contribution
pension plans for Japanese entities’ plans for the years ended March 31, 2007, 2008, and 2009, respectively.
During the year ended March 31, 2009 certain subsidiaries in Japan increased an amount being contributed todefined contribution plans.
F-70

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The contributions to the overseas defined contribution pension plans were ¥3,946 million, ¥3,836 millionand ¥4,711 million ($48 million) for the years ended March 31, 2007, 2008 and 2009, respectively.
Health care benefits—
The Company and certain subsidiaries provide certain health care benefits to both active and retired
employees through NSHIS and these benefits are currently funded and provided through NSHIS. The Company
and certain subsidiaries also sponsor certain health care benefits to retired employees (“Special Plan”) and theseretirees are permitted to continue participation 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 national government, and the funded statusof it is not computed separately. Therefore, although the Company and certain subsidiaries contribute some
portion of cost of retiree health care benefits not covered through retiree contributions, the Company and certain
subsidiaries do not provide any provision for the future cost. The health care benefit costs, which are equivalent
to the required contribution, amounted to ¥5,356 million, ¥6,179 million and ¥6,200 million ($63 million) for theyears ended March 31, 2007, 2008 and 2009, respectively.
15. Stock-based compensation plans:
The Company has stock-based compensation plans to maintain high levels of performance, to recruit
talented staff and to link a portion of compensation to the Company’s stock price, namely of “A-plan” and“B-plan”. The A-plan generally consists of stock option plans, and the B-plan consists of stock units plans.
Stock option plans (A-plan)—
The Company has issued stock acquisition rights of common stock pursuant to several effective stock option
plans for employees (directors, executive officers and certain employees). These stock options vest and become
exercisable two years after the grant date, and expire approximately seven years after the grant date, subject toaccelerated expiration on termination of employment. The exercise price generally is not less than the fair valueof the Company’s common stock on the grant date.
The fair value of the stock options as of the grant date is estimated using a Black-Scholes option-pricing
model with the following assumptions. Expected volatilities are based on historical volatility of the Company’scommon stock. The expected dividend yield is based on the current dividend rate at the time of grant. The
expected lives of options granted are determined based on historical experience. The risk-free interest rate—estimate is based on yen swap rate with a maturity equal to the expected lives of options. The weighted-average
grant date fair value of options granted during the years ended March 31, 2007, 2008 and 2009 were ¥485, ¥496
and ¥281 ($3) per share, respectively. The weighted-average assumptions used for the years are as follows:Year ended March 31
2007
2008
2009

Expected volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.48% 33.85% 32.73%
Expected dividends yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.58% 1.54% 2.28%
Expected lives (in years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
6
6
Risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.68% 1.65% 1.43%

F-71

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Activity related to these stock option plans (A-plan) is as follows:

Outstanding at March 31, 2006 . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outstanding at March 31, 2007 . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outstanding at March 31, 2008 . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outstanding at March 31, 2009 . . . . . . . . . . . . . . . . . . . . . .

Outstanding(number of shares)

Weighted-average
exercise price

7,167,000
1,832,000(1,425,000)—(47,000)—
7,527,000
2,016,000(504,200)—(38,000)—
9,000,800
2,088,000(21,500)—(6,000)—11,061,300

1,620
2,210
1,696
—
1,714
—
1,746
2,382
1,590
—
1,987
—
1,891
1,460
1,336
—
2,045
—
1,645

Weighted-averageremaining life
(years)

4.7

4.4

4.1

3.7

The total intrinsic value of options exercised during the years ended March 31, 2007, 2008 and 2009 were
¥1,087 million, ¥308 million and ¥5 million ($0.1 million), respectively. The aggregate intrinsic value of options
outstanding at March 31, 2009 was ¥nil.
The following table details the distribution of the options at March 31, 2009:

Exercise prices

Stock options outstanding
Stock options
Weighted-average Weighted-average
outstanding
exerciseremaining life
(number of shares)
price(years)Stock options exercisable
Stock options
Weighted-average
exercisable
exercise(number of shares)
price¥2,125 . . . . . . . . . . . .
¥1,964 . . . . . . . . . . . .
¥1,600 . . . . . . . . . . . .
¥1,460 . . . . . . . . . . . .
¥1,444 . . . . . . . . . . . .
¥1,434 . . . . . . . . . . . .
¥1,258 . . . . . . . . . . . .

2,001,000
1,804,000
1,166,000
2,088,000
1,230,000
1,250,000
1,522,300¥2,125
1,964
1,600
1,460
1,444
1,434
1,258

5.3
4.3
0.2
6.4
1.2
2.2
3.3

—
1,804,000
1,166,000—
1,230,000
1,250,000
1,522,300

¥ —
1,964
1,600
—
1,444
1,434
1,258

Total . . . . . . . . . . . . .

11,061,300¥1,645

3.7

6,972,300¥1,562At March 31, 2007, 2008 and 2009, options exercisable were 3,999,000, 5,189,800 and 6,972,300,
respectively.

F-72

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Stock unit plans (B-plan)—
The Company has issued stock acquisition rights of common stock pursuant to several effective stock unit
plans for employees (directors, executive officers and certain employees). These stock units vest and become
exercisable two years after the grant date, and expire approximately seven years after the grant date. The exercise
price is a nominal ¥1 per share.
Activity related to these stock unit plans (B-plan) is as follows:
Outstanding(number of shares)

Weighted-average
grant date fair value
per share

Outstanding at March 31, 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,812,000
4,065,600(780,000)—(629,100)
—

1,453
2,415
1,619
—
2,074
—

Outstanding at March 31, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,468,500
8,769,800(1,670,600)—(903,200)
—

1,978
2,314
1,398
—
2,356
—

Outstanding at March 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12,664,500
8,223,900(2,779,700)—(561,600)
—

2,260
1,560
2,248
—
1,958
—

Outstanding at March 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17,547,100

1,944

As of March 31, 2009, there was ¥6,660 million ($67 million) of total unrecognized compensation cost
related to stock unit plans. Such cost is expected to be recognized over a weighted-average period of 1.1 years.
The total fair value of shares vested during the years ended March 31, 2007, 2008 and 2009 were ¥2,897 million,¥5,421 million and ¥5,778 million ($58 million), respectively.
Total stock-based compensation expense included in net income (loss) for the years ended March 31, 2007,2008 and 2009 were ¥6,525 million, ¥13,188 million and ¥16,476 million ($166 million), respectively. Total
related tax benefits recognized in earnings for stock-based compensation expense for the years ended March 31,
2007, 2008 and 2009 were ¥335 million, ¥990 million and ¥1,045 million ($11 million), respectively. The
dilutive effect of outstanding stock-based compensation plans is included in weighted average number of shares
outstanding used in diluted EPS computations. Cash received from exercise of the stock-based compensationplans during the year ended March 31, 2009 was ¥35 million ($0.4 million) and the tax benefit realized fromexercise of the stock options was ¥nil.

F-73

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Subsequent events
On April 30, 2009, the Company has issued stock acquisition rights of common stock pursuant to stock unit
plans (B-plan) for foreign subsidiaries directors and certain employees. The total number of stock acquisitionrights to be issued is 102,930 for the acquisition of 10,293,000 shares. The exercise price is a nominal ¥1 pershare. The stock acquisition rights vest and become exercisable two years after the grant date, and expire sevenyears after the grant date.
On June 16, 2009, the Company has issued stock acquisition rights of common stock pursuant to stock units
plans (B-plan) for directors and certain employees in the Company and subsidiaries. The total number of stockacquisition rights to be issued is 16,300 for the acquisition of 1,630,000 shares. The exercise price is a nominal¥1 per share. The stock acquisition rights vest and are exercisable two years after the grant date, and expire sevenyears after the grant date.
16. Income taxes:
The components of income tax expense reflected in the consolidated statements of operations are as follows:

2007

Current:
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Millions of yen
Year ended March 31
2008
2009

¥150,876 ¥ 133,196(4,690)9,924Translation
intomillions of
U.S. dollars
2009¥ 7,635
5,142

$ 77
52

Sub Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

146,186

143,120

12,777

129

Deferred:
Domestic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(14,874)
14,618(114,132)(25,729)(84,072)
441

(847)
4

Sub Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(256)(139,861)(83,631)(843)¥¥(70,854)$(714)

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥145,930

3,259

The income tax benefit recognized from net operating losses for the year ended March 31, 2009 totaled¥69,205 million ($698 million).
The Company and its wholly-owned domestic subsidiaries have adopted the consolidation tax system
permitted under Japanese tax law. The consolidation tax system targets only national tax. Since April 1, 2004,
our domestic effective statutory tax rate is approximately 41%.
Foreign subsidiaries are subject to income taxes of the countries in which they operate. The relationshipbetween income tax expense and pretax accounting income is affected by a number of items, including various
tax credits, certain expenses not allowable for income tax purposes and different tax rates applicable to foreignsubsidiaries.

F-74

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
A reconciliation of the effective income tax rate reflected in the consolidated statements of operations to thenormal effective statutory tax rate is as follows:Year ended March 31
2007
2008
2009

Normal effective statutory tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impact of:
Change in deferred tax valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-deductible expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-taxable revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax effect of undistributed earnings of foreign subsidiaries . . . . . . . . . . . . . . . . . . . . .
Different tax rate applicable to income (loss) of foreign subsidiaries . . . . . . . . . . . . .
Tax benefit recognized on the devaluation of investment in foreign subsidiaries . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

41.0%

Effective tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

45.4%

41.0% 41.0%

11.6 (166.3) (27.7)
2.1(28.2) (3.9)
(3.8)
13.8
2.9
0.2
15.9
(0.7)
0.6
(2.9) (9.9)(8.0) 121.6
7.6
1.7
0.1 (0.2)(5.0)% 9.1%

The net deferred tax assets of ¥273,041 million and ¥334,123 million ($3,370 million) included in Other
assets—Other in the consolidated balance sheets at March 31, 2008 and 2009, respectively, represent tax effectsof the total of the temporary differences and tax loss carryforwards in components of those tax jurisdictions withnet deductible amounts in future years. The net deferred tax liabilities of ¥20,763 million and ¥34,552 million($348 million) included in Other liabilities in the consolidated balance sheets at March 31, 2008 and 2009,
respectively, represent the total of the temporary differences in components of those tax jurisdictions with net
taxable amounts in future years.

F-75

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Details of deferred tax assets and liabilities are as follows:

Millions of yen
March 312008
2009

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥Translation
intomillions of
U.S. dollars
2009

5,218
218,602
181,078
58,414
74,164
158,360
2,809¥ 18,576
241,506
232,595
59,06470,899343,581
4,303

$

187
2,436
2,346
596
715
3,465
43

Gross deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less—Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

698,645(326,634)

970,524(493,906)

9,788(4,981)

Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

372,011476,618

4,807

Deferred tax liabilities
Investments in subsidiaries and affiliates . . . . . . . . . . . . . . . . . . . . . . . .
Valuation of financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Undistributed earnings of foreign subsidiaries . . . . . . . . . . . . . . . . . . . .
Valuation of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassification of convertible bonds . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

53,364
48,8501,257
14,418—1,844

56,39859,065
5,114
22,982
28,340(1)
5,148

569
595
52
232
286
52

Total deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

119,733

177,047

1,786

Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 252,278¥ 299,571$ 3,021(1) See Note 12, “Borrowings”, for further discussion on the convertible bonds.
The valuation allowance mainly relates to deferred tax assets of consolidated subsidiaries with operating
loss carryforwards for tax purposes. Based on the cumulative and continuing losses of these subsidiaries,
management of the Company believes that it is more likely than not that the related deferred tax assets will not berealized. Changes in the valuation allowance for deferred tax assets are shown below:

2007

Millions of yen
Year ended March 31
2008
2009

Translation
intomillions of
U.S. dollars
2009

Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net change during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥231,726 ¥280,207 ¥326,634$3,29448,481(1) 46,427(2) 167,272(3) 1,687

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥280,207¥326,634¥493,906$4,981(1) Includes ¥40,956 million related to foreign subsidiaries which is mainly due to the non-recoverability oflosses in certain U.S subsidiaries and the allowance for deferred tax assets previously recorded on certain
European subsidiaries. These allowances for deferred tax assets are determined based on a review of future
realizable value.
F-76

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)(2) Includes ¥9,491 million related to foreign subsidiaries which is mainly due to the increase of
non-recoverability of losses in certain U.S subsidiaries and the decrease of allowance for deferred tax assets
previously recorded on certain European subsidiaries, and ¥36,550 million related to the Company, which isdue to the allowance for the non-recoverability of future realizable losses on local taxes. These allowances
for deferred tax assets are determined based on a review of future realizable value.
(3) Includes ¥121,273 million ($1,223 million) related to foreign subsidiaries which is mainly due to theincrease of non-recoverability of losses in certain U.S subsidiaries and in certain European subsidiaries,¥25,817 million ($260 million) related to subsidiaries in Japan and ¥20,182 million ($204 million) related to
the Company, which is due to the allowance for the non-recoverability of future realizable losses on local
taxes. These allowances for deferred tax assets are determined based on a review of future realizable value.
At March 31, 2009, no deferred income taxes have been provided on undistributed earnings of foreignsubsidiaries not expected to be remitted in the foreseeable future totaling ¥3,760 million ($38 million). It is notpracticable to determine the amount of income taxes payable in the event all such foreign earnings are repatriated.
At March 31, 2009, Nomura has net operating loss carryforwards, for income tax purposes, of¥1,092,857 million ($11,022 million) resulting from certain U.S. and European subsidiaries and from theCompany. These losses, except for ¥464,833 million ($4,688 million), which can be carried forward indefinitely,
expire as follows: 2009 through 2016—¥279,075 million ($2,815 million), 2017 and thereafter—¥348,949
million ($3,519 million). Nomura believes that it is more likely than not that these loss carryforwards, lessvaluation allowance, will be realized.
The total amount of unrecognised tax benefits as of the date of adoption of FIN 48 and that as of March 31,
2009 were ¥nil. Also there were no movements of the gross amounts in unrealized tax benefits and the amounts
of interest and penalties recognised due to the unrealized tax benefits during the year ended March 2009. Nomura
recognises the accrual of interest related to unrecognised tax benefits and penalties related to unrecognised tax
benefits, if there are any, in Income tax expense in the consolidated statement of operations.
Nomura is under continuous examination by the Japanese National Tax Agency and other tax authorities inmajor operating jurisdictions such as the United Kingdom and United States. Nomura regularly assesses thelikelihood of additional assessments in each tax jurisdiction and the impact on the consolidated financial
statements. A liability for unrecognized tax benefits would be established if necessary, which Nomura believes tobe adequate with regards to the potential for additional exposure. It is reasonably possible that there may be asignificant increase in unrecognised tax benefits within 12 months of March 31, 2009. Quantification of an
estimated range cannot be made at this time due to the uncertainty of the potential outcomes. However, Nomura
does not expect that any change in the gross balance of unrecognised tax benefits would have a material effect on
its financial condition.
Nomura operates in multiple taxing jurisdictions, and faces audits from various tax authorities regarding
many issues including but not limited to transfer pricing, deductibility of certain expenses, creditability of foreigntaxes, and other matters. The table below summarizes the major jurisdictions in which Nomura operates and theearliest year in which we remain subject to examination. Under Hong Kong tax law, the time bar does not apply
if the entity records a tax loss, thus not stated in below table.
Jurisdiction

Year

Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
UK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
US . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2004(1)2007
1999(1) For transfer pricing, the earliest year in which we remain subject to examinations is 2003.
F-77

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
17. Shareholders’ equity:
Changes in shares of common stock outstanding are shown below:

2007

SharesYear ended March 31,
2008

2009

Number of shares outstanding at beginning of year . . . . . . . . . .

1,904,864,196

1,907,049,871

1,906,885,059

New issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

——695,172,900

Common stock held in treasury:
Repurchases of common stock . . . . . . . . . . . . . . . . . . . . . .
Sales of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock issued to employees . . . . . . . . . . . . . . . . .
Other net change in treasury stock . . . . . . . . . . . . . . . . . . .

(89,517)
9,412
2,172,000
93,780(2,344,149)
12,7762,174,800(8,239)(74,263)
32,1622,801,200(37,215)

Number of shares outstanding at end of year . . . . . . . . . . . . . . .

1,907,049,871

1,906,885,059

2,604,779,843

The amount available for dividends and acquisition of treasury stock is subject to the restrictions under theCompanies Act of Japan (On May 1, 2006, the Companies Act of Japan became effective, which reformed andreplaced the Commercial Code of Japan.). Additional paid-in capital and retained earnings include amounts
which the Companies Act of Japan prohibits for the use of dividends and acquisition of treasury stock. The
amount available for dividends and acquisition of treasury stock was ¥537,260 million ($5,419 million) at
March 31, 2009. This amount is based on the amount recorded in the Company’s unconsolidated books ofaccount maintained in accordance with accounting principles and practices prevailing in Japan. U.S. GAAP
adjustments incorporated in the accompanying consolidated financial statements but not recorded in the
Company’s unconsolidated books of account have no effect on the determination of the amount available fordividends and acquisition of treasury stock under the Companies Act of Japan.
Retained earnings include Nomura’s equity in undistributed earnings of investees accounted for by theequity method in the amount of ¥66,916 million ($675 million) at March 31, 2009.
Dividends on common stock per share were ¥44 for the year ended March 31, 2007, ¥34 for the year ended
March 31, 2008 and ¥25.5 ($0.26) for the year ended March 31, 2009.
On January 31, 2008, the board of directors approved a repurchase program of Nomura Holdings common
stock in accordance with Article 459-1 of the Companies Act of Japan as follows: (a) total number of sharesauthorized for repurchase is up to 25 million shares, (b) total value of shares authorized for repurchase is up to¥40 billion and (c) the share buyback will run from February 8, 2008, to March 14, 2008. Under this repurchaseprogram, the Company repurchased 1.7 million shares of common stock at a cost of ¥2,520 million.
The change in common stock held in treasury includes the change in shares issued to employees understock-based compensation plans, shares sold to enable shareholders to hold round lots of the 100 share minimum
tradable quantity (adding-to-holdings requests) or shares acquired to create round lots or eliminate odd lots.
Common stock held in treasury also includes, 1,185 thousand shares, or ¥2,348 million ($24 million), held byaffiliated companies at March 31, 2009.
Nomura issued 661,572,900 shares and 33,600,000 shares through a global offering and third-party
allotment, respectively in March, 2009.
F-78

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
18. Regulatory requirements:
The Financial Services Agency requires financial conglomerates to maintain net capital not less than therequired capital on a consolidated basis under the “Guideline for Financial Conglomerate Supervision”(hereinafter referred to as the “Financial Conglomerate Guideline”), which was established in June 2005. As of
March 31, 2008, the Company was in compliance with the minimum capital requirement. The Company has
selected to calculate its consolidated capital adequacy ratio according to the “Criteria for bank holding companies
to judge whether their capital adequacy status is appropriate in light of their own and their subsidiaries’ asset
holdings, etc. under Article 52-25 of the Banking Act” (hereinafter referred to as the “Bank Holding Companies
Notice”), which is allowed under the provision in the “Comprehensive Guidelines for Supervision of Financial
Instruments Business Operators, etc.” instead of the Financial Conglomerate Guideline from the end of March,
2009. As we have started the calculation according to the Bank Holding Companies Notice, we convert each risk
by multiplying the amount by 12.5; therefore we examine whether we abide by this requirement by confirmingthat the capital/risk-weighted asset ratio is higher than 8%. As of March 31, 2009, the Company was incompliance with the minimum capital requirement.
Under the Financial Instruments and Exchange Act, Nomura Securities Co, Ltd, (“NSC”) is subject to thecapital adequacy rules of the Financial Services Agency. This rule 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 less than 120%.
Adjusted capital is defined as net worth (which includes shareholders’ equity, net unrealized gains and losses on
securities held, reserves and subordinated debts) less illiquid assets. The business risks are divided into three
categories; (1) market risks, (2) counterparty risks, and (3) basic risks. Under this rule, there are no restrictions on
the operations of the companies provided that the resulting net capital adequacy ratio exceeds 120%. At
March 31, 2008 and 2009, the capital adequacy ratio of NSC exceeded 120%.
“Financial Instruments Firms” in Japan are required to segregate cash deposited by customers on securities
transactions under the Financial Instruments and Exchange Act. At March 31, 2008 and 2009, Nomura Securities
Co., Ltd. segregated bonds with a market value of ¥123,801 million and ¥200,350 million ($2,021 million) andequities with a market value of ¥112,797 million and ¥3,116 million ($31 million), respectively, which were
either included in Trading assets on the accompanying consolidated balance sheets or borrowed under lending
and borrowing securities contracts, as a substitute for cash.
In the U.S., Nomura Securities International, Inc. (“NSI”) is registered as a broker-dealer under the
Securities Exchange Act of 1934 and as a futures commissions merchant with the Commodity Futures Trading
Commission (“CFTC”). NSI is also regulated by the Financial Industry Authority (“FINRA”) as its designatedself regulatory organization. NSI is subject to the Securities and Exchange Commission’s Uniform Net Capital
Rule (“Rule 15c3-1”), which requires net capital, as defined under the alternative method, of not less than thegreater of $1,000,000 or 2% of aggregate debit items arising from customer transactions. The subsidiary is also
subject to CFTC Regulation 1.17 which requires the maintenance of net capital of 8% of the total risk margin
requirement, as defined, for all positions carried in customer accounts plus 4% of the total risk margin
requirement, as defined, for all positions carried in noncustomer accounts or $500,000, whichever is greater. The
subsidiary is required to maintain net capital in accordance with the SEC, CFTC, or various other exchange
requirements, whichever is greater. At March 31, 2008 and 2009, the subsidiary was in compliance with allapplicable regulatory capital adequacy requirements.
In Europe, the Nomura Europe Holdings plc (NEHS) group is regulated on a consolidated basis by the
Financial Services Authority in the United Kingdom. Certain banking and broker/dealer subsidiaries of the
NEHS group, including Nomura International plc, are also regulated on a stand alone basis by the Financial
Services Authority or other appropriate local regulators. All of these regulators impose minimum capital
F-79

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
adequacy requirements and limits on exposures to other entities within the Nomura Group. At March 31, 2008
and 2009 the NEHS group and its subsidiaries were in compliance with all relevant regulatory capital related
requirements.
In Hong Kong, Nomura International (Hong Kong) Limited (“NIHK”) is licensed by the Securities andFutures Commission, Hong Kong to carry out regulated activities including dealing in securities and futurescontracts, advising on securities and futures contracts, and advising on corporate finance. Its two branches,
namely Taiwan branch and Korea branch, are also regulated by their local regulators under their respective
jurisdictions. Activities of NIHK, including its two branches, are subject to the Securities and Futures (Financial
Resources) Rules (FRR rules) which requires NIHK, at all times, to maintain its liquid capital at a level not lessthan its required liquid capital. Liquid capital means the amount by which its liquid assets exceed its ranking
liabilities. Required liquid capital is calculated in accordance with the provisions laid down in the FRR rules. At
March 31, 2008 and 2009, NIHK was in compliance with all relevant regulatory capital related requirements.
19. Affiliated companies and other equity-method investees:
Nomura’s significant affiliated companies and other equity-method investees include JAFCO Co., Ltd.,
Nomura Research Institute, Ltd., Nomura Land and Building Co., Ltd. and Fortress Investment Group LLC.
JAFCO Co., Ltd. (“JAFCO”)—
JAFCO, which is a listed company in Japan, manages various venture capital funds and provides private
equity-related investment services to portfolio companies. Nomura held 21.1% of the outstanding share capital at
March 31, 2001 and has applied the equity method of accounting for the investment in JAFCO in the
consolidated financial statements. During the year ended March 31, 2002, Nomura acquired an additional 0.6%
equity interest in JAFCO. During the year ended March 31, 2003, Nomura acquired an additional 3.6% equity
interest in JAFCO from Nomura Land and Building Co., Ltd.
Nomura recognized impairment losses of ¥17,551 million and ¥13,618 million ($137 million) against its
investment in JAFCO for the years ended March 31, 2008 and 2009, respectively. The share price of JAFCO has
declined significantly during 2008 and 2009 as the Japanese stock market slowed down and this decline wasdetermined to be other-than-temporary in nature. The loss was classified within Non-interest expenses—Other inthe consolidated statement of operations.
At March 31, 2009, Nomura’s ownership of JAFCO was 27.5% and there was no balance of equity method
goodwill arising from JAFCO.
Nomura Research Institute, Ltd. (“NRI”)—
NRI develops and manages computer systems and provides investigation/research services and management
consulting services. One of the major customers of NRI is Nomura. Nomura has held 25.2% of the outstanding
share capital since March 31, 2000 and applies the equity method of accounting for the investment in NRI in the
consolidated financial statements.
NRI was listed on the First Section of the Tokyo Stock Exchange on December 17, 2001 and completed an
initial public offering and issued 2 million shares of common stock to third parties. As a result of this issuance,
Nomura’s equity interest in NRI declined from 25.2% to 24.1%.
Subsequently, during the year ended March 31, 2003 and 2005, Nomura acquired an additional 1.0% and17.2% equity interest in NRI from Nomura Land and Building Co., Ltd, respectively.
F-80

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
In October 2005, Nomura applied for a share repurchase offered by NRI and NRI re-acquired 4 million ofits shares from Nomura in November 2005.
For the year ended March 31, 2009, Nomura sold ¥38,419 million worth of software and computerequipment to NRI.
At March 31, 2009, Nomura’s ownership of NRI was 38.5% and the balance of equity method goodwill
arising from NRI was ¥56,934 million ($574 million).
Nomura Land and Building Co., Ltd. (“NLB”)—
Prior to August 1, 2004, NLB owned a substantial portion of Nomura’s leased office space in Japan andfrom August 1, 2004, NLB has owned certain of Nomura’s leased office space in Japan. The lease transactions
with Nomura are disclosed in Note 20 “Commitments, contingencies and guarantees”, Nomura has held 24.9% of
NLB’s outstanding share capital since March 31, 2000 and applies the equity method of accounting for theinvestment in NLB in the consolidated financial statements. During the year ended March 31, 2003, Nomura
acquired an additional 4.4% equity interest in NLB from a financial institution.
Effective August 1, 2004, Nomura acquired NLB’s facility management business, which included theownership, lease, maintenance and administration of certain real estate properties previously leased to Nomura.
In March 2005, Nomura acquired an additional 8.4% equity interest in NLB from a third party.
In October 2006, Nomura Real Estate Holdings, Inc. (“NREH”) which is a subsidiary of NLB, completed an
initial public offering and issued 36 million shares of common stock to third parties at an underwriting price of
3,332 yen per share and listed the shares on the First Section of the Tokyo Stock Exchange. Since the price ofcapital paid in per share exceeded NLB’s carrying amount per share of NREH stock, NLB recognized a gainfrom the offering based on its ownership of NREH shares and from the offering for sale of the 11 million NREH
shares held by NLB. Nomura recognized its share of this gain in the consolidated statement of operations for theyear ended March 31, 2007.
At March 31, 2009, Nomura’s ownership of NLB was 38.6% and the balance of equity method goodwill
arising from NLB was ¥1,485 million ($15 million).
Fortress Investment Group LLC (“Fortress”)—
Fortress is a global alternative asset manager. Fortress raises, invests and manages private equity funds,
hedge funds and publicly traded alternative investment vehicles.
In January 2007, Nomura acquired Class A shares of Fortress for approximately $888 million, representing
15% of voting interests. On February 8, 2007, Fortress announced its initial public offering of 34,286,000
Class A shares priced at $18.50 per share. Fortress also granted the underwriters an option to purchase up to an
additional 5,142,900 Class A shares. In accordance with EITF Issue No. 03-16, “Accounting for Investments in
Limited Liability Companies,” the investment in Fortress is treated as an investment in a limited partnership andis accounted for by the equity method as prescribed by EITF Topic No.D-46, “Accounting for Limited
Partnership Investments.”
Fortress’s shares began trading on February 9, 2007, on the New York Stock Exchange. Since the price ofcapital paid in per share exceeded Nomura’s carrying amount per share of Fortress stock, Nomura recognized again from changes in equity of Fortress, in the consolidated statement of operations during the year ended
March 31, 2007.
For the year ended March 31, 2009, Nomura recognized an impairment loss of ¥81,248 million ($819
million) against its investment in Fortress. The share price of Fortress has declined significantly during 2008 as
F-81

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
the U.S. stock market slowed down and this decline was determined to be other-than-temporary in nature. The
loss was classified within Non-interest expenses—Other in the consolidated statement of operations.
At March 31, 2009, Nomura owned a 13.5% of voting interest in Fortress and there was no balance ofequity method goodwill arising from Fortress.
Summary Financial Information—
A summary of financial information for JAFCO, NRI and NLB is as follows:

Millions of yen
March 312008
2009

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥1,549,634
1,007,620

2007

Net Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥605,075
383,439
147,186¥2,012,853
1,507,486

Millions of yen
Year ended March 31
2008
2009

¥493,058
430,766
30,340¥530,181
498,104
2,598

Translation
intomillions of
U.S. dollars
2009$20,301
15,204
Translation
intomillions of
U.S. dollars
2009$5,347
5,024
26

A summary of financial information for Fortress is as follows:

Millions of yen
March 312008(1)
2009(1)

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥199,356
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180,308

2007(1)Net Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥780,016
65,26051,804¥154,981
146,871

Millions of yen
Year ended March 31
2008(1)
2009(1)¥ 63,835 ¥ 38,702
185,405
150,079(6,844) (32,458)

Translation
intomillions of
U.S. dollars
2009$1,563$1,481
Translation
intomillions of
U.S. dollars
2009

$ 390
1,514
(327)

(1) Financial information for Fortress is as of its fiscal years ended December 31, 2006, 2007 and 2008,
respectively. Nomura records its share of Fortress’s earnings on the equity basis on a three month lag.
F-82

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
A summary of balances and transactions with affiliated companies and other equity-method investees,
except for the lease transactions with NLB, which are disclosed in Note 20, “Commitments, contingencies andguarantees”, is presented below:

Millions of yen
March 31
2008
2009

Investments in affiliated companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Advances to affiliated companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2007

Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase of software and tangible assets . . . . . . . . . . . . . . . . . . . . . . .

¥ 7,403
38,07868,563¥361,334—¥240,055
3,419

Millions of yen
Year ended March 31
2008
2009

¥ 1,738
40,52652,890¥865
43,75044,602

Translation
intomillions of
U.S. dollars
2009$2,421
34
Translation
intomillions of
U.S. dollars
2009

$

9
441
450

In addition to the above, the sale of tangible assets for the year ended March 31, 2008 was ¥11,541 million
and the sale of software and tangible assets for the year ended March 31, 2009 was ¥38,420 million ($387
million).
The aggregate carrying amount and market value of investments in affiliated companies and other equitymethod investees for which a quoted market price is available are as follows.

Millions of yen
March 31
2008
2009

Carrying amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥278,676
Market value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 309,355¥173,831
156,194

Translation
intomillions of
U.S. dollars
2009$1,7531,575

Equity in earnings of equity-method investees, including those mentioned above, amounted to ¥53,367 million,¥10,416 million and loss of ¥5,534 million ($56 million) for the years ended March 31, 2007, 2008 and 2009,
respectively. Equity in earnings of equity-method investees are included in Revenue—Other in the consolidated
statements of operations. Dividends from equity-method investees for the years ended March 31, 2007, 2008 and2009 were ¥3,044 million, ¥10,036 million and ¥7,308 million ($74 million), respectively.
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
F-83

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
into agreements with customers under which Nomura commits to underwrite notes that may be issued by thecustomers. The outstanding commitments under these agreements are included below in commitments to extend
credit.
Nomura has commitments to invest in interests in various partnerships and other entities, primarily inconnection with its merchant banking activities, and also has commitments to provide financing for investments
related to these partnerships. The outstanding commitments under these agreements are included in commitments
to invest in partnerships.
These commitments outstanding were as follows:

Millions of yen
March 312008
2009

Commitments to extend credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commitments to invest in partnerships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥181,341
124,154

Translation
intomillions of
U.S. dollars¥99,915
69,3202009$1,008699

At March 31, 2009, these commitments had the following expirations:
Millions of yen
Years to Maturity

Commitments to extend credit . . . . . . . . . . . . . . . . . . . . . .
Commitments to invest in partnerships . . . . . . . . . . . . . . .

Totalcontractual
amountLess than
1 year1 to 3years¥99,915
69,320¥61,524
26,889¥35,198
11,2903 to 5years

More than
5 years400
15,270¥ 2,793
15,871¥

Translation into millions of U.S. dollars
Years to Maturity
Total
contractual
amountCommitments to extend credit . . . . . . . . . . . . . . . . . . . . . .
Commitments to invest in partnerships . . . . . . . . . . . . . . .

$ 1,008
699

Less than
1 year$621
271

1 to 3
years

$

355 $
114

3 to 5
years

4
154

More than
5 years$

28
160

The contractual amounts of these commitments to extend credit represent the amounts at risk should thecontracts be fully drawn upon, should the counterparties default, and assuming the value of any existing
collateral becomes worthless. The total contractual amount of these commitments may not represent future cash
requirements since the commitments may expire without being drawn upon. The credit risk associated with thesecommitments varies depending on the customers’ creditworthiness and the value of collateral held. Nomura
evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemednecessary by Nomura upon extension of credit, is based on management’s credit evaluation of the counterparty.
Other commitments
Purchase obligations for goods or services that include payments for construction-related, advertising, andcomputer and telecommunications maintenance agreements amounted to ¥10,760 million as of March 31, 2008and ¥30,552 million ($308 million) as of March 31, 2009.
Nomura has commitments to enter into resale and repurchase agreements including amounts in connection
with collateralized agreements, collateralized financing and Gensaki transactions. These commitments amounted
F-84

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
to ¥2,338 billion for resale agreements and ¥5,579 billion for repurchase agreements at March 31, 2008 and¥1,890 billion ($19.06 billion) for resale agreements and ¥3,011 billion ($30.37 billion) for repurchaseagreements at March 31, 2009.
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 undertakes obligations to returndebt and equity securities borrowed without collateral of ¥462 billion and ¥96 billion ($0.97 billion) at March 31,
2008 and 2009, respectively.
As a member of securities clearing houses and exchanges, Nomura may be required to pay a certain share of
the financial obligations of another member who may default on its obligations to the clearing house or theexchange. These guarantees are generally required under the membership agreements. To mitigate these risks,exchanges and clearing houses often require members to post collateral. The potential for Nomura to makepayments under such guarantees is deemed remote.
Leases
Nomura leases its office space and certain employees’ residential facilities in Japan primarily undercancelable lease agreements which are customarily renewed upon expiration. Nomura also leases certain
equipment and facilities under noncancelable lease agreements. Rental expenses, net of sublease rental income,for the years ended March 31 2007, 2008 and 2009 were ¥33,731 million, ¥37,823 million and ¥46,467 million($469 million), respectively. A portion of such rentals is paid to NLB, an affiliated company. Also, see Note 19“Affiliated companies and other equity-method investees”.
Lease deposits and rent paid to NLB were as follows:

Millions of yen
March 31
2007
2008
2009

Lease deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rent paid during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥7,7683,549¥9,246
4,912¥9,1755,432Translation
intomillions of
U.S. dollars
2009

$93
55

Presented below is a schedule of future minimum lease payments under capital leases as of March 31, 2009:

Present value of minimum lease payments(1) . . . . . .

Total

Less than
1 year¥1,150

¥500

Total

Present value of minimum lease payments(1) . . . . . .

$12(1) As interest is not material, it is not shown separately.
F-85

Millions of yen
Years of payment
1 to 2 2 to 3 3 to 4 4 to 5
Years Years Years Years

¥372

¥224

¥53

¥1

Translation into millions of U.S. dollars
Years of payment
Less than 1 to 2 2 to 3 3 to 4 4 to 5
1 yearYears Years Years Years

$5

$4

$2

$1

$0

More than
5 years¥—

More than
5 years$—

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Office buildings, land, equipment and facilities in the consolidated balance sheet include capital leases in
the amount of ¥1,350 million and ¥977 million ($10 million) at March 31, 2008 and 2009 respectively.
Presented below is a schedule of future minimum rental payments under non-cancelable operating leases
with remaining terms exceeding one year as of March 31, 2009:
Translation
intomillions ofMillions of yen U.S. dollars
Year ending March 31, 2009

Total minimum lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Sublease rental income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 80,901(17,495)

$ 816
(177)

Net lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 63,406$ 639

Minimum lease payments . . . . . . . . . . . .

Total

Less than
1 year¥80,901¥17,602

Total

Minimum lease payments . . . . . . . . . . . .

$816

Millions of yen
Years of payment
1 to 2
2 to 33 to 4
Years
Years
Years

4 to 5Years

More than
5 years¥6,166¥21,730

Translation into millions of U.S. dollars
Years of payment
Less than
1 to 2
2 to 33 to 44 to 5
1 year
Years
Years
Years
Years

More than
5 years$178¥16,250$164¥10,575$107¥8,578

$87

$62

$218

Certain leases contain renewal options or escalation clauses providing for increased rental payments based
upon maintenance, utilities, and tax increases.
Contingencies—
Lawsuits and other legal proceedings
In the normal course of business, Nomura is involved in lawsuits and other legal proceedings and, as a resultof such activities, is subject to ongoing legal risk. The management of Nomura believes that the ultimate
resolution of such litigation will not be material to these consolidated financial statements.
Guarantees—
FIN 45 specifies the disclosures to be made in regards to obligations under certain issued guarantees andrequires a liability to be recognized for the fair value of a guarantee obligation.
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 FIN 45 definition of guarantees.
FIN 45 defines guarantees to include 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
F-86

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
guaranteed party. Since Nomura does not track whether its clients enter into these derivative contracts for
speculative or hedging purposes, Nomura has disclosed below information about derivative contracts that could
meet the FIN 45 definition of guarantees. For the year ended March 31, 2008, the population of derivative
contracts disclosed included credit derivatives, Nomura adopted FSP FAS 133-1 and FIN 45-4 during the year
ended March 31, 2009 and as a result no longer includes credit derivatives in these disclosures.
For information about the maximum potential amount of future payments that Nomura could be required tomake under certain derivatives, the notional amount of contracts has been disclosed. However, the maximum
potential payout for certain derivative contracts, such as written interest rate caps and written currency options,cannot be estimated, as increases in interest or foreign exchange rates in the future could be theoreticallyunlimited.
Nomura records all derivative contracts at fair value on its consolidated balance sheet. Nomura believes that
notional amounts generally overstate its risk exposure. Because the derivative contracts are accounted for at fairvalue, carrying value is considered the best indication of payment/performance risk for individual contracts.
The following table shows information about Nomura’s derivative contracts that could meet the definitionof a guarantee under FIN 45 and certain other guarantees:
Translation
intomillions of
U.S. dollars

Millions of yen
March 312008

Derivative contracts . . . . . . . . . . .
Standby letters of credit andother guarantees(2) . . . . . . . . . .

Carrying
value(1)2009
Maximum
Potential
Payout/Notional
Total(1)

Carrying
value(1)Maximum
Potential
Payout/Notional
Total(1)¥70,659,948¥2,091,560¥43,848,870$21,095$442,248

6,438

1

9,270

0

93

Carryingvalue

Maximum
Potential
Payout/Notional
Total¥3,325,218
756(1) Credit derivatives are disclosed in Note 4, “Derivative instruments and hedging activities” and are excluded
from “Derivative Contracts” above.
(2) Collateral held in connection with standby letters of credit and other guarantees as of March 31, 2008 is ¥nil and as of March 31, 2009 is ¥6,571 million ($66 million).
The following table shows expiration information about Nomura’s derivative contracts that could meet thedefinition of a guarantee under FIN 45 and certain other guarantees as of March 31, 2009:

Carrying
value

Derivative contracts . . . . . . ¥2,091,560
Standby letters of credit
and other guarantees . . .
1Millions of yen
Maximum Potential Payout/NotionalYears to Maturity
Less than
1 to 33 to 5
1 year
years
years

Total

More than
5 years¥43,848,870¥25,582,543¥5,650,533¥2,590,171¥10,025,623

9,270

8,965

98

—

207

F-87

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

Carrying
value

Derivative contracts . . . . . . . . . . . . . . . . . . . . .
Standby letters of credit and otherguarantees . . . . . . . . . . . . . . . . . . . . . . . . . .

Translation into millions of U.S. dollars
Maximum Potential Payout/NotionalYears to Maturity
Less than
1 to 33 to 5Total
1 yearyears
years

More than
5 years$21,095$442,248$258,018$56,990$26,124$101,116

0

93

90

1

—

2

21. Segment and geographic information:
Operating segments—
Nomura operates five distinct segments: Retail, Global Markets, Investment Banking, Merchant Banking
and Asset Management. Nomura structures its business segments based upon the nature of specific products andservices, its main customer base and its management structure.
The accounting policies for segment information materially follow U.S. GAAP, except as described below:•

The impact of unrealized gains/losses on long-term investments in equity securities held for operating
purposes, which under U.S. GAAP is included in Net income (loss), is excluded from segment
information.

•

The investments in private equity business are treated as private equity positions for management
reporting purposes, as management views these entities as investments held for ultimate sale and therealization of capital gains. Any changes in management’s estimate of fair value of these investments
are included in the non-interest revenue line under Merchant Banking. On the other hand, theseinvestments were accounted for at fair value, under the equity method of accounting or as consolidated
subsidiaries, depending on the attributes of each investment under U.S. GAAP for the year ended
March 31, 2007. The impact of consolidating and deconsolidating these investments is not included in
the segment information but is described in the reconciliation table below. With the application of SOP
07-1, all investments made by investment companies within the scope of the guide are carried at fairvalue for the year ended March 31, 2008 and 2009, with changes in fair value recognized in the
non-interest revenue line under Merchant Banking treated the same way as management reporting.

Revenues and expenses directly associated with each business segment are included in determining theiroperating results. Revenues and expenses that are not directly attributable to a particular segment are allocated toeach business segment or included in “Other” based upon Nomura’s allocation methodologies as used bymanagement to assess each segment’s performance.

F-88

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Business segments’ results are shown in the following table. Net interest revenue is disclosed because
management views interest revenue net of interest expense for its operating decisions. Business segments’
information on total assets is not disclosed because management does not utilize such information for its
operating decisions and therefore, it is not reported to management. Certain prior period amounts have been
reclassified to conform to the current presentation, including the reclassification of the defined contribution
pension plan business that was previously included in Asset Management to Other business in the second quarterof the fiscal year ending March 31, 2009.
Millions of yen

RetailOther
Investment Merchant
Asset
(Inc.
Banking
Banking Management elimination)

GlobalMarkets

Year ended March 31, 2007
Non-interest revenue . . . . . . . . . ¥434,701 ¥ 285,088 ¥ 97,427 ¥ 77,325 ¥85,195
Net interest revenue . . . . . . . . . .
5,417
4,940
1,760 (12,356)
2,885
Net revenue . . . . . . . . . . . . . . . . 440,118
Non-interest expenses . . . . . . . . 279,253

290,028
231,222

99,18754,78364,96912,15388,08048,702

Total¥ 54,344 ¥1,034,080
21,02023,66675,36454,344

1,057,746
680,457

Income (loss) before income
taxes . . . . . . . . . . . . . . . . . . . . ¥160,865 ¥ 58,806 ¥ 44,404 ¥ 52,816 ¥39,378¥ 21,020 ¥ 377,289

Year ended March 31, 2008
Non-interest revenue . . . . . . . . . ¥395,887 ¥ 145,192 ¥ 81,305 ¥ 74,795 ¥84,710
Net interest revenue . . . . . . . . . .
6,131(49,595)
1,804 (10,002)
4,031¥ 65,462 ¥ 847,351
37,706(9,925)

Net revenue . . . . . . . . . . . . . . . . 402,018
Non-interest expenses . . . . . . . . 279,702

103,168
123,750

95,597321,794

83,10960,33664,793
11,47388,74154,790837,426
851,845

Income (loss) before income
taxes . . . . . . . . . . . . . . . . . . . . ¥122,316 ¥(226,197) ¥ 22,773 ¥ 53,320 ¥33,951¥ (20,582) ¥ (14,419)

Year ended March 31, 2009
Non-interest revenue . . . . . . . . . ¥287,750 ¥(146,335) ¥ 62,132 ¥(62,319) ¥56,463
Net interest revenue . . . . . . . . . .
4,107(10,919)
1,367(7,556)
3,326¥158,601 ¥ 356,292(10,853)(20,528)

Net revenue . . . . . . . . . . . . . . . . 291,857
Non-interest expenses . . . . . . . . 273,620

147,748
211,949(157,254) 63,499
417,387 120,910(69,875)
15,39859,78952,409

Income (loss) before income
taxes . . . . . . . . . . . . . . . . . . . . ¥ 18,237 ¥(574,641) ¥ (57,411) ¥(85,273) ¥ 7,380

335,764
1,091,673¥ (64,201) ¥ (755,909)

Translation into millions of U.S. dollars

Year ended March 31, 2009
Non-interest revenue . . . . . . . . .
Net interest revenue . . . . . . . . . .

$2,90242$(1,476)
(110)

$ 627
13

$(629)
(76)

$569
34

$1,600(110)$ 3,593(207)

Net revenue . . . . . . . . . . . . . . . .
Non-interest expenses . . . . . . . .

2,944
2,760

(1,586)
4,210

640
1,219

(705)
155

603
529

1,490
2,137

3,386
11,010

Income (loss) before income
taxes . . . . . . . . . . . . . . . . . . . .

$ 184$(5,796)$ (579)$(860)$ 74$ (647)$ (7,624)

Transactions between operating segments are recorded within segment results on commercial terms andconditions and are eliminated in the “Other” column.
F-89

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.”

2007

Net gain (loss) on trading related to economic hedging
transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Realized gain (loss) on investments in equity securities held for
operating purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in earnings (loss) of affiliates . . . . . . . . . . . . . . . . . . . . . . .
Corporate items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Millions of yen
Year ended March 31
2008
2009

¥(38,383) ¥ (9,740) ¥ 64,152

Translation
intomillions of
U.S. dollars
2009

$ 647

18,1291,474(2,363)(24)
53,169
4,743
(718)
(7)
(11,111) (13,424) (70,533)(1) (711)(784)(3,635) (54,739)(2) (552)¥ 21,020 ¥(20,582) ¥(64,201)$(647)(1) The increase of corporate items are mainly due to the increase of Compensation and benefits and Occupancy
and related depreciation from the business combination with Lehman which occurred during October 2008.
(2) Includes impairment losses of affiliated companies equities and other equity-method investees of ¥98 billion($0.99 billion) which are not part of the 5 business segments and also gains from changes in the fair value ofthe financial liabilities due to SFAS 159.
The table below presents reconciliation of the combined business segments’ results included in thepreceding table to Nomura’s reported net revenue, non-interest expenses and income (loss) before income taxes
in the consolidated statements of operations.

2007

Net revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unrealized loss on investments in equity securities held for
operating purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of consolidation/deconsolidation of private equity
investee companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated net revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Millions of yen
Year ended March 31
2008
2009

Translation
intomillions of
U.S. dollars
2009¥1,057,746¥837,426¥ 335,764$ 3,386(38,232)(50,169)(23,137)(233)

71,587¥1,091,101—¥787,257—¥ 312,627—$ 3,153

Non-interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 680,457 ¥851,845
Unrealized loss on investments in equity securities held for
operating purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
——Effect of consolidation/deconsolidation of private equity
investee companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
88,886—
Consolidated non-interest expenses . . . . . . . . . . . . . . . . . . . . ¥ 769,343 ¥851,845¥1,091,673$11,010———¥1,091,673—$11,010

Income (loss) before income taxes . . . . . . . . . . . . . . . . . . . . . ¥ 377,289 ¥ (14,419) ¥ (755,909)
Unrealized loss on investments in equity securities held for
operating purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(38,232) (50,169)(23,137)
Effect of consolidation/deconsolidation of private equity
investee companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(17,299)——
Consolidated income (loss) before income taxes . . . . . . . . . . ¥ 321,758 ¥ (64,588) ¥ (779,046)$ (7,624)

F-90

(233)
—
$ (7,857)

NOMURA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Geographic Information—
In general, Nomura’s identifiable assets, revenues and expenses are allocated based on the country of
domicile of the legal entity providing the service. However, because of the integration of the global capital
markets and the corresponding globalization 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, havebeen made in presenting the following geographic data.
The table below presents a geographic allocation of net revenue and income (loss) before income taxes fromoperations by geographic areas, and long-lived assets associated with Nomura’s operations. Net revenue in“Americas” and “Europe” substantially represents Nomura’s operations in the United States and the United
Kingdom, respectively. Net revenue and long-lived assets have been allocated on a revenues-and-expenses-fromexternal-customers-basis. Income (loss) before income taxes have been allocated on an including-intersegmentrevenues-and-expenses-basis.

2007

Millions of yen
Year ended March 31
2008
2009

Translation
intomillions of
U.S. dollars
2009

Net revenue(1):Americas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia and Oceania . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sub-total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥99,476
83,322
24,906
207,704
883,397¥1,091,101¥ 66,071 ¥ 17,748
5,952(170,718)
38,302
18,781
110,325(134,189)
676,932
446,816¥ 787,257 ¥ 312,627

Income (loss) before income taxes(1):Americas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ (38,876) ¥(149,205) ¥(165,202)
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,857(92,745) (412,021)
Asia and Oceania . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,922
6,140
(81,429)
Sub-total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(32,097) (235,810) (658,652)
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
353,855
171,222(120,394)
Consolidated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 321,758 ¥ (64,588) ¥(779,046)

2007

Long-lived assets:
Americas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia and Oceania . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sub-total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 134,200
66,586
7,962
208,748394,838¥ 603,586

March 312008
2009

¥ 99,993
54,424
7,454
161,871
336,867¥ 498,738¥ 100,241
62,69030,804
193,735
312,893¥ 506,628$

179(1,722)190(1,353)
4,506$ 3,153$(1,666)(4,156)(821)(6,643)(1,214)$(7,857)2009$ 1,011
632
311
1,954
3,156
$ 5,110(1) All prior year amounts have been reclassified to conform to the current year presentation.
There is no revenue greater than 10% of total revenue derived from transactions with a single externalcustomer for the years ended March 31, 2007, 2008 and 2009.
F-91

REPORT OF INDEPENDENT AUDITORSThe Board of Directors and Shareholders of
Nomura Land and Building Co., Ltd.
We have audited the accompanying consolidated statements of income, changes in shareholders’ equity, andcash flows of Nomura Land and Building Co., Ltd. (the “Company”) for the year ended March 31, 2007. These
financial statements are the responsibility of the Company’s management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States.
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. We were not engaged to perform an audit of theCompany’s internal control over financial reporting. Our audit included consideration of internal control overfinancial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not forthe purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing the accounting principles used andsignificant estimates made by management, and evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, theconsolidated results of operations and cash flows of Nomura Land and Building Co., Ltd. for the year ended
March 31, 2007, in conformity with accounting principles generally accepted in Japan.
The accompanying consolidated balance sheets of Nomura Land and Building Co., Ltd. as of March 31,
2008 and 2009, and related consolidated statements of income, retained earnings and cash flows for the two years
ended March 31, 2009, were not audited by us in accordance with auditing standards generally accepted in the
United States and, accordingly, we do not express an opinion on them in accordance with auditing standards
generally accepted in the United States.
/s/ Ernst & Young ShinNihon LLC(formerly Ernst & Young ShinNihon)
Tokyo, Japan
July 12, 2007

F-92

NOMURA LAND AND BUILDING CO., LTD.
CONSOLIDATED BALANCE SHEETSMillions of yen
March 312008
2009
(unaudited)(unaudited)

ASSETS
Current assets:
Cash and deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes and accounts receivable-trade . . . . . . . . . . . . . . . . . . . . . .
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allowance for doubtful accounts . . . . . . . . . . . . . . . . . . . . . . . . .
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 37,715 ¥ 41,638
9,188
31,485—39,019454,737
480,869
92,873109,076
10,74021,67735,385
19,678(75)(159)

Translation
intomillions of
U.S. dollars
2009(unaudited)

$

420
318
394
4,850
1,100
219
198
(2)

640,565

743,287

7,497

86,199114,229
1,955

191,612384,673
4,369

1,933
3,880
44

4,250

5,363

54

Total tangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible fixed assets (net of accumulated amortization) . . . . . . . . . .
Investments and other assets:
Investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term guarantee money deposited . . . . . . . . . . . . . . . . . . . .
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allowance for doubtful accounts . . . . . . . . . . . . . . . . . . . . . . . . .

206,634
4,372

586,019
9,552

5,910
96

54,92827,683
12,3362,907(117)

41,625
26,845
14,336
4,497
(17)

420
271
145
45
(0)

Total investments and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .

97,73787,287880

Total non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

308,745682,859

6,887

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥949,310¥1,426,147$14,384

Non-current assets:
Tangible fixed assets
Buildings and structures (net of accumulated depreciation of¥70,369 million in 2008 and ¥74,822 million ($755 million)
in 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others (net of accumulated depreciation of ¥6,696 million in2008 and ¥6,935 million ($70 million) in 2009) . . . . . . . . . . .

The accompanying notes are an integral part of these consolidated financial statements.
F-93

NOMURA LAND AND BUILDING CO., LTD.
CONSOLIDATED BALANCE SHEETS—(Continued)

Millions of yen
March 312008
2009
(unaudited)(unaudited)

LIABILITIESCurrent liabilities:
Accounts payable-trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bond due within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deposits received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued bonuses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued bonuses to directors and statutory auditors . . . . . . . . . .
Allowance for losses on withdrawal from business . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current liabilities:
Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Guarantee money received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities on land revaluation . . . . . . . . . . . . . . . . .
Accrued pension and severance costs . . . . . . . . . . . . . . . . . . . . . .
Accrued retirement benefits for directors and statutory
auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allowance for losses from subleasing business . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
NET ASSETS
Net assets:
Shareholders’ equity
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock held in treasury . . . . . . . . . . . . . . . . . . . . . .
Total shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation and translation adjustments
Unrealized gain (loss) on other securities . . . . . . . . . . . . . .
Deferred hedge gain (loss) . . . . . . . . . . . . . . . . . . . . . . . . . .
Variance of land revaluation . . . . . . . . . . . . . . . . . . . . . . . .
Cumulative translation adjustments . . . . . . . . . . . . . . . . . . .
Total valuation and translation adjustments. . . . . . . . . . . . . . . . .
Stock acquisition rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities and net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 63,553
84,284—
15,173
165
57,091
4,134
590
279
51,370276,643¥

69,639203,446300
15,084710
31,880
4,491
238
214
49,899375,906

2009(unaudited)

$

702
2,052
3
152
7
322
45
2
2
503
3,791

20,300318,282
35,815
8,499
3,904
12,21520,000564,576
52,39087,616
4,996
14,347

202
5,694
528
884
50
145

249
2,890
7,466
409,623¥686,267

224
1,811
5,583
751,547¥1,127,453

2
18
56
7,580
$11,371

1,015
166,367(453)
166,929

1,015
169,383(456)
169,942

10
1,708
(5)
1,714

11,524(1,666)
(0)
165
(218)
3,881
(787)
(2,257)
10,517123217
368
85,378128,258
263,043
298,693¥949,310 ¥1,426,147

(17)
2
39
(23)
1
4
1,294
3,013
$14,384

The accompanying notes are an integral part of these consolidated financial statements.
F-94

Translation
intomillions of
U.S. dollars

NOMURA LAND AND BUILDING CO., LTD.
CONSOLIDATED STATEMENTS OF INCOME

2007

Millions of yen
Year ended March 31
2008
2009
(unaudited) (unaudited)

Translation
intomillions of
U.S. dollars
2009(unaudited)

Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥375,380
261,227¥419,963
283,830¥456,200
350,512$4,601
3,535

Gross profit on sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

114,153

136,132

105,687

1,066

Selling, general and administrative expenses . . . . . . . . . . . . . . . . . . . . . .

57,636

63,81369,815704

Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

56,51772,31835,872362

Other revenues:
Non-operating revenues
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividend income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain allocated from Tokumei kumiai (silent partnership) . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

413
833
543
—
759

189
480
515
—
508

178
387
—
167
323

2
4
—

Gain on sales of investment securities . . . . . . . . . . . . . . . . . . . . . . .
Gain on sales of investments in subsidiaries . . . . . . . . . . . . . . . . . .
Gain from liquidations in affiliates . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain from changes in equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reversal of allowance for loss from sublease business . . . . . . . . . .
Prior year adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,550
94
25,623—
66,485
1,290
—

1,693
1,750
—
474
138
356
1,233

1,056
2
—
608
30
544
—

11
0
—
6
0
5
—

96,044

5,646

2,242

23

Other expenses:
Non-operating expenses
Interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss allocated from Tokumei kumiai (silent partnership) . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,946
—
887
1,129

7,531
—
2,598
1,740

9,788
574
1,074
1,347

99
6
11
14

Loss on sales of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on disposal of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment loss on fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on devaluation of inventories . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on sales of investment securities . . . . . . . . . . . . . . . . . . . . . . .
Loss on devaluation of investment securities . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,963
4
119
—
869
345
9
—

11,869
—
73
—
—
—
—
—

12,784
—
44
323
—
—
2,317
49

129
—
0
3
—
—
23
0

10,311

11,942

15,519157

Income before income taxes and minority interests . . . . . . . . . . . . . . . . .

142,250

66,022

22,595

228

Income tax expense-current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense-deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

36,206(42)

25,447
1,604

20,615(11,207)

208
(113)

36,16427,052

9,407

95

Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,999

12,645

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥101,085¥ 26,324

5,563
¥

7,625

The accompanying notes are an integral part of these consolidated financial statements.
F-95

2
3

56
$

77

NOMURA LAND AND BUILDING CO., LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

Millions of yen
Year ended March 31
2008
2009
(unaudited)(unaudited)

2007

Shareholders’ equity
Common stock
Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . .

¥ 1,015

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,015

Retained earnings
Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . .
Appropriation of surplus . . . . . . . . . . . . . . . . . . . . . .
Payments of bonuses to directors and statutory
auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Decrease due to increase in consolidated
subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reversal of variance of land revaluation . . . . . . . . . .

¥

1,015

¥

2009
(unaudited)

$

10

1,015

10

40,072
141,139
166,367(81)(1) (1,096)(2)
(507)

1,678
(5)

(10)(1)
101,085

1,015

1,015

Translation
intomillions of
U.S. dollars—
26,324

—
7,625

—
77

(1)
73

—
—

—
(4,101)—(41)

Total amount of change during the year . . . . . . . . . . . . .

101,067

25,2283,015

30

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . .

141,139

166,367

169,383

1,708

(471)
3

(467)
—
14

(453)
(2)
—

(5)
(0)
—

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(467)

(453)

(456)

(5)

Total shareholders’ equity
Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . .
Change during the year (net) . . . . . . . . . . . . . . . . . . . . . . .

40,615101,071

141,686
25,242

166,929
3,012

1,684
30

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

141,686

166,929

169,942

1,714

Valuation and translation adjustments
Unrealized gain on other securities
Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . .
Change during the year (net) . . . . . . . . . . . . . . . . . . . . . . .

31,831
2,590

34,421(22,897)

11,524(13,190)

116
(133)

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . .

34,421

11,524(1,666)(17)

Deferred hedge gain (loss)
Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . .
Change during the year (net) . . . . . . . . . . . . . . . . . . . . . . .

—
(11)

(11)
11

(0)
165

(0)
2

(11) ¥(0)

Common stock held in treasury
Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . .
Acquisition of treasury stock . . . . . . . . . . . . . . . . . . .
Disposal of treasury stock . . . . . . . . . . . . . . . . . . . . .

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

¥

165

The accompanying notes are an integral part of these consolidated financial statements.
F-96

$

2

NOMURA LAND AND BUILDING CO., LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY—(Continued)

2007

Variance of land revaluation
Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . .
Change during the year (net) . . . . . . . . . . . . . . . . . . . . . . . .

¥Millions of yen
Year ended March 31
2008
2009
(unaudited) (unaudited)

Translation
intomillions of
U.S. dollars
2009(unaudited)(131) ¥
(74)(205) ¥
(13)

(218)
4,100

$

(2)
41

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(205)

(218)

3,881

39

Cumulative translation adjustments
Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . .
Change during the year (net) . . . . . . . . . . . . . . . . . . . . . . . .

(516)
33

(483)
(303)

(787)
(1,470)(8)(15)

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(483)

(787)

(2,257)(23)

Total valuation and translation adjustments
Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . .
Change during the year (net) . . . . . . . . . . . . . . . . . . . . . . . . . .

31,1832,537

33,720(23,202)

10,517(10,394)

106
(105)

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

33,72010,517123

1

Stock acquisition rights
Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . .
Change during the year (net) . . . . . . . . . . . . . . . . . . . . . . . . . .

—
—

—
217

217
150

2
2

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—

217

368

4

Minority interests
Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . .
Change during the year (net) . . . . . . . . . . . . . . . . . . . . . . . . . .

4,948
72,237

77,1858,192

85,37842,880861
432

Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

77,18585,378128,258

1,294

Total net assets
Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . .
Change during the year (net) . . . . . . . . . . . . . . . . . . . . . . . . . .

76,747
175,846

252,593
10,449263,043
35,6502,653360Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥252,593¥263,043¥298,693$3,013(1) These appropriations of retained earnings were approved at the general meeting of shareholders held in June
2006.
(2) This appropriation of retained earning was approved at the general meeting of shareholders held in June
2007.

The accompanying notes are an integral part of these consolidated financial statements.
F-97

NOMURA LAND AND BUILDING CO., LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS

2007
Cash flows from operating activities:
Income before income taxes and minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase (Decrease) in allowance for doubtful accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase in accrued pension and severance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Decrease in allowance for losses on withdrawal from business . . . . . . . . . . . . . . . . . . . . . .
(Decrease) Increase in allowance for losses from subleasing business . . . . . . . . . . . . . . . . .
Interest and dividend income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on sales of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on sales of investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on sales of investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on sales of investments in subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain from changes in equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on devaluation of investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment loss on fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments for revenues in prior year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Increase) Decrease in notes and accounts receivable-trade . . . . . . . . . . . . . . . . . . . . . . . . .
Increase in inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase in equity investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Decrease) increase in accounts payable-trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Decrease in deposits received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments of directors’ and statutory auditors’ bonuses . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest and dividends received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash used in operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash flows from investing activities:
Payments for purchase of securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from redemption of securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments for purchase of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments for purchase of investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of investments in subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payment for purchase of investments in subsidiaries with change in scope of
consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments for loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from collection of loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repayment for guarantee money received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from guarantee money received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payment for guarantee money deposited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Collection of guarantee money deposited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash flows from financing activities:(Decrease) increase in short-term borrowings, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments under finance lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from long-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repayment for long-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from the issuance of bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments for the repayment of bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from issuance of stocks to minority shareholders . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments for cash dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments for cash dividends to minority shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments for liquidation dividends to minority shareholders . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of exchange rate changes on cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net (decrease) increase in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents at beginning of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Decrease) Increase in cash and cash equivalents due to change in scope of consolidation . . . . .
Cash and cash equivalents at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Millions of yen
Year ended March 31
2008
2009
(unaudited) (unaudited)2009(unaudited)¥142,250
5,453
(543)
10
1,563
(117)
(2,067)(1,247)
6,946
4
(94)
345
(25,623)(66,485)
9——(2,032)(87,203)(36,374)(1,401)(7,552)(10)
8,713(65,458)
2,293(6,788)(15,939)(85,892)¥ 66,022
5,937
(515)
47
1,447
(348)
(922)
(669)
7,531
—
(1,750)
—
—
(138)
—
—
(1,233)
492(35,377)(14,927)
24,265(3,236)—(1,714)44,909847(7,323)(41,590)(3,156)¥ 22,595
8,248
574
(22)
1,373
(65)
(1,078)
(566)
9,788
—
(2)
—
—
(30)
2,317
323
—
(21,302)(36,665)(16,203)
4,702(38,801)—(9,683)(74,497)
696(8,972)(21,804)(104,577)(12,968)—(27,735)
151(9,196)476
36,656—
13,000(19,260)
11(1,008)
2,017
—

—
—
(57,494)20(6,485)
2
—

—
—
(580)
0
(65)
0
—

—
(234)
285
(3,294)
10,800(524)
1,795(2,675)(6,465)(996)(1,977)
5,223(3,776)
3,866(1,177)
1,821
257(1,999)(81,588)(20)
1,890(3,448)3,944(1,005)
1,988(4,309)(146,504)

(823)
(0)
19
(35)
40
(10)
20
(43)
(1,478)(40,700)—
78,268(75,421)—(5,600)
119,476
(81)
(28)
—
(0)
75,913
221(16,223)
50,886(4)¥ 34,657

3,850—
57,315(71,338)
20,182(25)
1,191(1,096)(1,844)
—
(0)
8,233
72
3,149
34,657(8)¥ 37,798

108,200(23)
296,503(106,142)
—
—
0
(507)
(4,242)(594)(0)
293,192(526)
41,58337,7981,275¥ 80,656

1,091
(0)
2,990
(1,071)
—
—
0
(5)
(43)
(6)
(0)
2,957
(5)
419
381
13
$ 813

The accompanying notes are an integral part of these consolidated financial statements.
F-98

Translation
intomillions of
U.S. dollars

$

228
83
6
(0)
14
(1)
(11)
(6)
99
—
(0)
—
—
(0)
23
3
—
(215)
(370)
(163)
47
(391)
—
(98)
(751)
7
(90)
(220)
(1,055)

NOMURA LAND AND BUILDING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended March 31, 2007
and the years ended March 31, 2008 (unaudited) and March 31, 2009 (unaudited)
1. Summary of accounting policies:
Basis of preparation—
The accompanying consolidated financial statements of Nomura Land and Buildings Co., Ltd. (the“Company”) and its consolidated subsidiaries are prepared on the basis of accounting principles generally
accepted in Japan (“Japanese GAAP”), which are different in certain respects as to the application and disclosure
requirements of accounting principles generally accepted in the United States of America. The consolidated
financial statements are compiled from consolidated financial statements prepared by the Company as requiredby the Financial Instruments and Exchange Act of Japan (formerly the Securities and Exchange Law of Japan)
and filed with the Tokyo Stock Exchange for public disclosure purposes.
In addition, the notes to the consolidated financial statements include information which may not be
required under Japanese GAAP but is presented herein as additional information.
As permitted by the Financial Instruments and Exchange Act, amounts of less than one million yen havebeen rounded off. As a result, the totals shown in the accompanying consolidated financial statements (both inyen and U.S. dollars) do not necessarily agree with the sums of the individual amounts.
Unaudited financial information—
The unaudited consolidated financial statements as of and for the years ended March 31, 2008 andMarch 31, 2009 have been prepared in accordance with Japanese GAAP. These financial statements wereprepared on the same basis as the consolidated financial statements as of March 31, 2007 and for the year thenended, and in the opinion of management, reflect all adjustments and accruals considered necessary to fairly
present the Company’s consolidated financial position, results of operations, and cash flows.
Principles of consolidation—
The accompanying consolidated financial statements include the accounts of the Company and thesubsidiaries that it controls directly or indirectly. Companies over which the Company exercises significant
influence in terms of their operating and financial policies have been included in the consolidated financial
statements on an equity basis. All significant intercompany balances and transactions have been eliminated inconsolidation. The Company and other entities in which it has a controlling financial interest are collectively
referred to as “NLB”.
Use of estimates—
The preparation of financial statements in conformity with generally accepted accounting principles requires
management to make certain estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. The actual results could differ from those estimates.
Standards for the translation of major foreign currency assets or liabilities into Japanese yen—
Monetary claims and obligations denominated in foreign currencies are translated into Japanese yen at the
spot exchange rate as of the consolidated balance sheet date and the translation differences are accounted for as
profits/losses. Assets and liabilities of overseas subsidiaries are translated into Japanese yen at the spot exchange
F-99

NOMURA LAND AND BUILDING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the year ended March 31, 2007
and the years ended March 31, 2008 (unaudited) and March 31, 2009 (unaudited)
rate as of the balance sheet date of the subsidiaries, profits and losses of overseas subsidiaries are translated into
Japanese yen at the average exchange rate for the period, and translation differences are reported as Cumulativetransaction adjustments in Net assets section in the consolidated balance sheets.
Scope of cash and cash equivalents in the consolidated statements of cash flow—
Cash and cash equivalents within the consolidated statements of cash flow include cash at hand, demand
deposits and short-term investments that are easily converted into cash, with little risk of fluctuation in value andreach maturity within 3 months from acquisition.
Securities—
Securities held to maturity are evaluated using the amortized cost method (straight-line method).
Other securities with market value are stated at fair value at the balance sheet date (net unrealized gain/loss
are included in the Net assets section), and sales cost is calculated by the moving average method. Other
securities without market value are stated at cost using the moving average method or evaluated using theamortized cost method.
Derivatives—
NLB enters into derivative transactions in order to hedge risks associated with future fluctuations in interest
rates and foreign exchange and will not engage in transactions of speculative nature. Derivatives are stated at fairvalue.
The mark to market gains or losses on hedging instruments have been deferred until realization of thehedged item. Certain exceptional treatments are permitted under Japanese GAAP. When an interest rate swap
contract is used to hedge future fluctuation of interest rates, the net amount paid or received under the interest
rate swap contract is added to or deducted from interest income/expense. Also, when foreign currency swaps areused as a hedge and meets certain criteria, the swaps denominated in a foreign currency may be recorded using
the contracted forward rate.
Hedging instruments are interest rate swaps, foreign currency swaps, and forward foreign exchange
contracts. Hedged items are borrowings and securities.
In accordance with NLB’s internal rules, the hedging instruments are utilized to reduce the risks related toforeign exchange market and interest rate market fluctuations.
The cash flow fluctuations of the hedged items or the cumulative fair value change of the hedged items arecompared with the cash flow fluctuations of the hedging instruments or the cumulative fair value change of thehedging instruments, respectively, and the effectiveness of the hedging activities are tested.
For interest rate swaps, which meet the criteria for the above mentioned exceptional accounting, the test isomitted.
Inventories—
Inventories are primarily stated at cost based on the identified cost method (the amounts presented in the
consolidated balance sheets are calculated by the book value markdown method based on the decline inprofitability).
F-100

NOMURA LAND AND BUILDING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the year ended March 31, 2007
and the years ended March 31, 2008 (unaudited) and March 31, 2009 (unaudited)
Tangible fixed assets—
Tangible fixed assets are depreciated primarily using the straight-line method.
The estimated useful lives are generally as followed:
Buildings and structures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2 to 65 years

Intangible fixed assets—
Intangible fixed assets are depreciated using the straight-line method.
For internal-use software, amortization is based on the estimated useful life of 5 years.
Goodwill is usually amortized over 5 to 20 years using the straight-line method, however, one timeamortization is performed on goodwill when its amount is not material.
Leased assets—
Leased assets are depreciated using the straight-line method assuming that the useful life equals to the leaseterm and the residual value equals to zero.
Finance leases other than those that are deemed to transfer the ownership of leased property to lessees,
which commenced in fiscal years beginning prior to April 1, 2008, are accounted for in a similar way tooperating leases.
Allowance for doubtful accounts—
In order to prepare for possible losses from receivables, loans, etc., an allowance is provided based on
historical loan loss experience for claims to general debtors. For certain doubtful accounts, allowance is provided
for the estimated uncollectible amount, based on the collectability of individual claims.
Accrued bonuses—
In order to provide for the payment of employees’ bonuses, allowance is made based on the estimatedpayment amount.
Accrued bonuses to directors and statutory auditors—
In order to provide for the payment of directors’ and statutory auditors’ bonuses at the consolidated
subsidiaries, an allowance is made based on the estimated payment amount.
Accrued pension and severance costs—
In order to provide for the payment of employees’ pension and severance, an allowance is made based on
the amount of the projected benefit obligation and fair value of the pension plan assets at the end of the year.
F-101

NOMURA LAND AND BUILDING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the year ended March 31, 2007
and the years ended March 31, 2008 (unaudited) and March 31, 2009 (unaudited)Moreover actuarial differences are to be charged to expenses from the following fiscal year on a
proportional basis over period of 10 years which is within the average remaining service years of the employee
when incurred.
Allowance for losses on withdrawal from business—
The estimated amount of loss on the withdrawal from business is recorded.
Allowance for losses from subleasing business—
In order to provide for subleasing losses on sublease properties with a likelihood of losses in the future,
allowance is made for the projected loss amount for the following fiscal years.
Consumption taxes, etc—
Amounts are recorded without consumption and local consumption taxes. However, non-deductible
consumption taxes primarily relating to fixed assets are recorded in Investments and other assets—other in the
consolidated balance sheets and amortized over 5 years, those relating to land as inventory are included inacquisition costs, and all others are charged to expenses during the year they are incurred.
Revenue recognition—
Revenue from sales of housing and other properties, one of the major revenues, is recognized when
delivered and accepted by customers.
Changes in accounting policies and presentation—
Under Japanese GAAP, prior year presentations are not generally reclassified to conform to the current year
presentation in case of a change in accounting policies and/or presentation.
NLB has adopted “Accounting Standard for Presentation of Net Assets in the Balance Sheet” (ASBJ
Statement No. 5, December 9, 2005) and “Guidance on Accounting Standard for Presentation of Net Assets in
the Balance Sheet” (ASBJ Guidance No. 8, December 9, 2005) from the year ended March 31, 2007. As a result,
NLB reflects this new presentation, formerly in the Shareholders’ Equity section, in the Net Assets section of theconsolidated balance sheet. The amount corresponding to the total of shareholders’ equity as of March 31, 2007
was ¥175,419 million.
NLB adopted “Accounting Standard for Directors’ Bonuses (ASBJ Statement No. 4, November 29, 2005)
from the year ended March 31, 2007. As a result, Operating income and Income before income taxes andminority interests for the year ended March 31, 2007 decreased by ¥40 million compared to the previous method.
NLB early adopted “Accounting Standard for Measurement of Inventories” (ASBJ Statement No. 9, July 5,2006) for the year ended March 31, 2007, which mandates the application of the lower of costs or market
method. As a result, Income before income taxes and minority interests for the year ended March 31, 2007
decreased by ¥869 million. Effects on segment information are indicated in the corresponding sections.
F-102

NOMURA LAND AND BUILDING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the year ended March 31, 2007
and the years ended March 31, 2008 (unaudited) and March 31, 2009 (unaudited)
For the year ended March 31, 2008, due to the amendment of the Japanese Corporate Tax Law, NLB haschanged its method of depreciation of tangible fixed assets purchased on or after April 1, 2007 to the method
prescribed in the amended corporate tax law. The impacts of this change were not significant on the consolidated
financial statements for the year ended March 31, 2008. Additionally, the tangible fixed assets purchased on or
before March 31, 2007 are amortized by the method adopted before the amendment and when the balance after
depreciation runs up to 5% of the acquisition cost, the differences between 5% of the acquisition cost and thememorandum amount are amortized based on the straight-line method from the next fiscal year and they arerecorded in the depreciation and amortization of the consolidated statement of income. The impacts were notsignificant on the consolidated financial statements for the year ended March 31, 2008.
Following the enforcement of the ASBJ Statement No. 13, “Accounting Standard for Lease Transactions”
issued by the Business Accounting Council, the First Committee on June 17, 1993 revised on March 30, 2007
and the ASBJ Guidance No. 16, “Guidance on Accounting Standard for Lease Transactions” and revised by the
Accounting Standards Board of Japan (ASBJ) on March 30, 2007 (the “New Accounting Standard for Lease”),
NLB changed their accounting treatments for finance lease transactions that do not transfer ownership of theleased property to the lessee, but deem to transfer it to the lessee (a “Non-ownership-transfer Finance Lease”) i.e.
a “Non-ownership-transfer Finance Lease” transaction is accounted for in a similar manner with ordinary saleand purchase transactions. Finance leases other than those that are deemed to transfer the ownership of leased
property to lessees, which commenced in fiscal years beginning prior to April 1, 2008, are continuously
accounted for in a similar way to operating leases. The impacts were not significant on the consolidated financial
statements for the year ended March 31, 2009.
NLB has adopted “Accounting Standard for Related Party Disclosures” (“Statement No.11” issued by the
Accounting Standards Board of Japan on October 17, 2006) and guidance on Accounting Standard for Related Party
Disclosures (Guidance No.13 issued by the Accounting Standards Board of Japan on October 17, 2006) from theyear ended March 31, 2009. As a result, transactions of the Company’s consolidated subsidiaries with (a) significant
directors of subsidiaries and their close relatives, (b) companies owned by the Company’s directors and their close
relatives and (c) subsidiaries of (b), were newly disclosed for the year ended March 31, 2009.
Changes in methods of presentation—
Gain allocated from Tokumei kumiai (silent partnerships), ¥167 million for the year ended March 31, 2009,
which had been included in Other revenues—Non-operating revenues—Other until the year ended March 31,
2008, was separated out in the consolidated statements of income, since it exceeded above 10/100 of the total
amount of non-operating revenue.
Gain allocated from Tokumei kumiai (silent partnerships) was ¥110 million as of March 31, 2008.
Evaluation of assets and liabilities of the consolidated subsidiaries—
Assets and liabilities of the consolidated subsidiaries are stated at fair value as of the acquisition date,including the portion of minority shareholders.
2. U.S. dollar amounts:
The U.S. dollar amounts are included solely for the convenience of the reader and have been translated at
the rate of ¥99.15 = U.S.$1, the noon buying rate in New York City for cable transfers in foreign currencies as
F-103

NOMURA LAND AND BUILDING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the year ended March 31, 2007
and the years ended March 31, 2008 (unaudited) and March 31, 2009 (unaudited)certified for customs purposes by the Federal Reserve Bank of New York on March 31, 2009. This translation
should not be construed to imply that the yen amounts actually represent, or have been or could be converted
into, equivalent amounts in U.S. dollars.
3. Notes to the consolidated balance sheets:
Investments in non-consolidated subsidiaries and affiliated companies—
Investments in non-consolidated subsidiaries and affiliated companies are as follows:

Millions of yen
March 31
2008
2009

Investment securities (stock) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments and other assets—Other (equity) . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥21,9141,159¥18,186919

Translation
intomillions of
U.S. dollars
2009

$183
9

Assets pledged as collateral and borrowings secured by collateral—
Assets pledged as collateral and borrowings secured by collateral are as follows:
Assets pledged as collateral and borrowings secured by collateralMillions of yen
March 31
2008
2009

Assets pledged as collateral
Buildings and structures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tangible fixed assets—others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Borrowings secured by collateral
Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Guarantee money received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-104

Translation
intomillions of
U.S. dollars
2009

¥

—
—
—
¥ —

¥ 9,304
7,454
67¥16,826

$ 94
75
1
$170

¥

¥

$

—
—
—
¥ —

731
2,281
96
¥ 3,109

7
23
1
$ 31

NOMURA LAND AND BUILDING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the year ended March 31, 2007
and the years ended March 31, 2008 (unaudited) and March 31, 2009 (unaudited)
Assets pledged as collateral for limited recourse loans and borrowings secured by collateralMillions of yen
March 31
2008
2009

Assets pledged as collateral
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buildings and structures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tangible fixed assets—others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 5,868—
15,2001,036¥22,105

Borrowings secured by collateral
Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,175
1,602
15,17435,500¥17,349(*1) ¥37,102(*2)¥ 2,355
4,899
46,926
1,827¥56,009

Translation
intomillions of
U.S. dollars
2009

$ 24
49
473
18
$565
16
358
$374

(Note)
1. As of March 31, 2008, the obligations are related to Midousuji Mirai Development, LLC, UN Residential
Development, Ltd., Yamabukicho Development, Ltd, Kitahorie Development, LLC, and Shinjuku
Development Special Purpose Company. The repayments of debt were non-recourse and limited to assets
held by the these companies including the collateralized assets.
2. As of March 31, 2009, the obligations are related to Midousuji Mirai Development, LLC, Shinjuku Mirai
Development, LLC, and Shinjuku Development Special Purpose Company. The repayments of debt were
non-recourse and limited to assets held by the these companies including the collateralized assets.
As of March 31, 2008 and 2009, Shinjuku Development Special Purpose Company pursuant to Article 128of the Law Concerning Asset Liquidation (Law No. 105, 1998) has pledged its assets as general collateral for its¥300 million ($3 million) Specified Bond and the repayments of debt were limited to these assets.
As of March 31, 2008 and 2009, ¥2 million ($0 million) of cash and deposits have been pledged foraccounts payable.
As of March 31, 2008 and 2009, ¥2 million ($0 million) of investment securities have been pledged for debt
of investees as collateral.

F-105

NOMURA LAND AND BUILDING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the year ended March 31, 2007
and the years ended March 31, 2008 (unaudited) and March 31, 2009 (unaudited)
Contingent liabilities—
NLB provides guarantees for borrowings from financial institutions to the following customers, etc.

Millions of yen
March 312008
2009

Translation
intomillions of
U.S. dollars
2009

BorrowerMortgage loan customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Coproprietors of EBS Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Minamiazabu Development Co., Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥49,925
1,133
298¥48,214
1,077
970

$486
11
10

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥51,356¥50,262$507

Revaluation of land used for business—
Nomura Real Estate Development Co., Ltd., which is a domestic consolidated subsidiary, revalued its land
used for business pursuant to the Law Concerning Revaluation of Land (Law No. 34, effective March 31, 1998).
The related income taxes to the revaluation difference have been accounted for as Non-current liabilities—
Deferred tax liabilities on land revaluation in the consolidated balance sheets and the difference net of taxes has
been accounted for as Variance of land revaluation in Net assets section as of March 31, 2008 and 2009.
The revaluation was performed with reasonable adjustments made on the tax base for property taxes asprescribed in Article 2, item 3 of the Ordinance Implementing the Law Concerning Revaluation of Land
(Government Ordinance No. 119, effective March 31, 1998).
Revaluation was performed effective March 31, 2002.
Differences between the fair value of the land revalued at March 31, 2002 and the book value of the land
subsequent to the revaluation were ¥4,074 million and ¥3,804 million ($38 million) as of March 31, 2008 and2009, respectively.
Others—As a result of the revision of the purpose to hold assets, as of March 31, 2009, ¥16,645 million($168 million) of inventories and others have been reclassified to tangible assets.
Kaihin Makuhari Development, LLC, which is a domestic consolidated subsidiary of the Company,
entrusted a block of rental condominiums developed for sale to a trust bank and assigned its beneficiary rights to
Smile Retail eight, LLC, SPC, on March 17, 2008.
However, as Nomura Real Estate Development Co., Ltd., which is a domestic consolidated subsidiary of theCompany, has substantively retained equity holdings in Tokumei kumiai (silent partnerships), in amounts
exceeding 5% of the transferred value to Smile Retail eight, LLC and consequently the risks and economic
benefit of the assets were not considered to have been assigned in its entity to other parties through the SPC.
Therefore, the transaction has been accounted for as a financing transaction in accordance with the “Practical
Principles Concerning Accounting Treatment of Assignor in Liquidation of Real Property Using Special Purpose
Companies” (July 31, 2000) for the year ended March 31, 2009.
F-106

NOMURA LAND AND BUILDING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the year ended March 31, 2007
and the years ended March 31, 2008 (unaudited) and March 31, 2009 (unaudited)
As a result, the related assets have not been treated as sales but included in the consolidated balance sheets,
while liabilities of ¥8,201 million ($83 million) were recorded in Current liabilities—Other in the consolidatedbalance sheets.
The book values of these assets (Inventories) as of March 31, 2008 and March 31, 2009 were ¥5,166 millionand ¥5,148 million ($52 million).
4. Notes to the consolidated statements of income:
Cost of sales
Inventories as of March 31, 2009 have been recorded at net realized value after a write down to reflect lower
profit margins. The write down of ¥26,994 million ($272 million) has been included in Cost of sales in the
consolidated statement of income for the year ended March 31, 2009.
Selling, general and administrative expenses—
The major components and amounts of selling, general and administrative expenses are as follows:

2007

Employee salaries and allowances . . . . . . . . . . . . . . . . . . . . . . . . . . .
Advertisement expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provisions for reserve for bonuses . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retirement benefits expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provisions for reserve for directors’ and statutory auditors’
bonuses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provisions for allowance for doubtful accounts . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Millions of yen
Year ended March 31
2008
2009

Translation
intomillions of
U.S. dollars
2009¥18,262
11,944
3,198
1,899¥19,200
13,981
3,422
2,008¥21,945
15,151
3,714
2,285

$221
153
37
23

570
17
21,743¥57,636590
14
24,595¥63,813219
81
26,417¥69,815

2
1
266
$704

Other revenues—
Gain from changes in equity for the year ended March 31, 2007 is primarily from the issuance of shares atmarket price in connection with the initial public offering of Nomura Real Estate Holdings, Inc., a consolidated
subsidiary.
Prior year adjustments—
Prior year adjustments for the year ended March 31, 2008 were incurred as a result of adjustments of thegain from changes in equity in the prior year and others.
Other expenses—
Loss on sales of fixed assets was incurred as a result of sales of buildings and land for the year ended
March 31, 2007 and March 31, 2009.
Loss on disposal of fixed assets for the year ended March 31, 2007, 2008 and 2009 was dismantling expenseof buildings.
F-107

NOMURA LAND AND BUILDING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the year ended March 31, 2007
and the years ended March 31, 2008 (unaudited) and March 31, 2009 (unaudited)
For the year ended March 31, 2009, NLB recorded impairment losses on fixed assets on the following asset
groups:Location

Honjo-shi, Saitama-ken

Main use

Type

Golf club facility

Land and buildings, etc.

NLB has been grouping its assets into the possible smallest units that could generate cash flow independent
from the cash flow of other assets and asset groups.
The components of Impairment loss on fixed assets for the year ended March 31, 2009 were as follows:

Millions of yen
2009

Translation
intomillions of
U.S. dollars
2009

Buildings and structures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 80
54
189

$1
1
2

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥323

$3

The collectible amount of each asset group was measured mainly based on its net sale value. The appraisal
values determined by real-estate appraisers were mainly used for the net sale value.
5. Notes to consolidated statements of changes in shareholders’ equity:
Authorized number of shares are 6,000 thousand. Classes and total number of shares issued and classes andnumber of shares of treasury stock for the year ended March 31, 2007 are as follows:
Number of shares at
March 31, 2006

Shares issued
Common stock . . . . . . . . . .
Treasury stock
Common stock(*) . . . . . . . .

Thousand shares
Increase in number
Decrease in numberof shares for the year of shares for the year

2,030

—

43

—

Number of shares at
March 31, 2007

—

2,030
0

43

(Note) The decrease in the number of shares of common stock in treasury is due to the decrease in the number
of NLB’s shares held by an equity-method affiliate resulting from the decrease in NLB’s equity interestin the equity-method affiliate.
Payment for cash dividends is as follows:
General Meeting of Shareholders held on June 29, 2006
Class of Stock

Total amount ofcash dividends

Cash dividends
per share

Record date

Effective dateCommon Stock . . . . . . . . . . . . . . . . . . . . . . . . .

¥81 million¥40

March 31, 2006

June 29, 2006

F-108

NOMURA LAND AND BUILDING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the year ended March 31, 2007
and the years ended March 31, 2008 (unaudited) and March 31, 2009 (unaudited)
Authorized number of shares are 6,000 thousand. Classes and total number of shares issued and classes andnumber of shares of treasury stock for the year ended March 31, 2008 are as follows:

Number of shares at
March 31, 2007

Shares issued
Common stock . . . . . . . . .
Treasury stock
Common stock(*) . . . . . . .

Thousand shares
Increase in number
Decrease in numberof shares for the year of shares for the year

Number of shares at
March 31, 2008

2,030

—

—

2,030

43

—

0

43

(Note) The decrease in the number of shares of common stock in treasury is due to the decrease in the number
of NLB’s shares held by an equity-method affiliate resulting from the decrease in NLB’s equity interestin the equity-method affiliate.
Payment for cash dividends is as follows:
General Meeting of Shareholders held on June 29, 2007
Class of Stock

Total amount ofcash dividends

Cash dividends
per share

Record date

Effective dateCommon Stock . . . . . . . . . . . . . . . . . . . . . . . .

¥1,096 million¥540

March 31, 2007

June 29, 2007

The total number of authorized shares are 6,000 thousand. Classes and total number of shares issued as wellas treasury stock for the year ended March 31, 2009 are as follows:

Number of shares at
March 31, 2008

Shares issued
Common stock . . . . . . . . .
Treasury stock
Common stock(*) . . . . . . .

Thousand shares
Increase in number
Decrease in numberof shares for the year of shares for the year

Number of shares at
March 31, 2009

2,030

—

—

2,030

43

—

1

42

(Note) The decrease in the number of shares of common stock in treasury is due to the decrease in the number
of NLB’s shares held by an equity-method affiliate resulting from the decrease in NLB’s equity interestin the equity-method affiliate.
Stock acquisition right and stock acquisition right for treasury stock is as follows:
Thousand shares
Million Yen
Type of share
under the stock
Increase in
Decrease inacquisition
Number of shares number of shares number of shares Number of shares
Balance atrights
at March 31, 2008
for the year
for the year
at March 31, 2009 March 31, 2009

Stock acquisitionrights as stock
option . . . . . . .
Total . . . . . . . . . .

—
—

—
—

—
—
F-109

—
—

—
—

368
368

NOMURA LAND AND BUILDING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the year ended March 31, 2007
and the years ended March 31, 2008 (unaudited) and March 31, 2009 (unaudited)
Payment for cash dividends is as follows:
General Meeting of Shareholders held on June 30, 2008
Class of Stock

Total amount ofcash dividends

Cash dividends
per share

Record date

Effective dateCommon Stock . . . . . . . . . . . . . . . . . . . . . . . . .

¥507 million¥250

March 31, 2008

June 30, 2008

Dividends for which record date falls in the year ended March 31, 2008 and the effective date falls in thenext year is as follows:
General Meeting of Shareholders held on June 29, 2009.
Class of Stock

Total amount ofcash dividends

Source of dividends

Cash dividends
per share

Record date

Effective dateCommon Stock . . . . . . . .

¥406 million

Retained Earnings¥200

March 31, 2009

June 30, 2009

6. Notes to the consolidated statements of cash flows:
The year end balance of cash and cash equivalents and the relationships with the accounts and amounts
shown in the consolidated balance sheets are as follows:

2007

Cash and deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Time deposits whose deposit terms are more than 3 months . . . . . . .
Certificate of deposit whose deposit terms are within 3 months . . . . .
Bonds, debentures and investment trusts whose maturities arewithin 3 months of acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-110

Millions of yen
Year ended March 31
2008
2009

¥34,545 ¥37,715 ¥41,638
(2)
(2)
(2)
—
—
34,000Translation
intomillions of
U.S. dollars
2009

$420
(0)
343

114

84

5,019

51

¥34,657¥37,798¥80,656$813

NOMURA LAND AND BUILDING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the year ended March 31, 2007
and the years ended March 31, 2008 (unaudited) and March 31, 2009 (unaudited)
Details of assets and liabilities of companies that have become consolidated subsidiaries due to theacquisitions for the current fiscal year:
The linkage between the details of assets and liabilities of companies at the commencement date of
consolidation due to the acquisition of NREG Toshiba Real Estate Co., Ltd., and its subsidiary NREG Toshiba
Real Estate Facilities Co., Ltd., and the payment for purchase of investments in subsidiaries is as follows:

Millions of yen
2009

Translation
intomillions of
U.S. dollars
2009

Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 12,957
283,181
4,711(25,693)(150,893)(41,843)$

Acquisition cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

82,420831

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1,284)(13)

Payment for purchase of investments in subsidiaries with change in scope of
consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 81,135

$

131
2,856
48
(259)
(1,522)(422)

818

7. Lease transactions:
Finance lease transactions that do not transfer ownership of the leased property to the lessee—
As Lessee
Summary of pro-forma information of acquisition cost, accumulated depreciation, accumulated amount of
impairment loss and year end balance in each fiscal year assuming as if finance lease accounting had been
applied are as follows:
For the year ended March 31, 2007

Acquisition cost

Buildings and structures . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥Millions of yen
Accumulated
Accumulated
depreciation
impairment loss

29
2,593

¥

20
1,334

¥—

¥2,623¥1,354¥

F-111

Year end balance

7

¥

9
1,252

7

¥1,261NOMURA LAND AND BUILDING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the year ended March 31, 2007
and the years ended March 31, 2008 (unaudited) and March 31, 2009 (unaudited)
For the year ended March 31, 2008

Acquisition cost

Buildings and structures . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Millions of yen
Accumulated
Accumulated
depreciation
impairment loss

¥

15
2,332

¥

10
1,157

¥—

¥2,348¥1,168¥Year end balance

2

¥

4
1,171

2

¥1,176(Note) The acquisition cost was calculated inclusive of interest payable in each fiscal year, since the proportionof the aggregate amounts of future lease payments to the year-end balance of tangible fixed assets was
small.
The year-end balance of future lease payments, etc. are as follows:

Millions of yen
March 31
2007
2008
2009

Due within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due in more than one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 417
851
¥1,268¥ 441
739¥1,180¥——¥—Translation
intomillions of
U.S. dollars
2009

$—
—
$—

(Note)
1
Impairment losses on lease assets for the years ended March 31, 2007 and 2008 are ¥7 million and¥2 million, respectively.
2
The year-end balance of future lease payments was calculated inclusive of interest payable in each fiscal
year, since the proportion of the year-end balance of future lease payments to the year-end balance oftangible fixed assets was small.
Lease payment, reversal of account relating to impairment losses on lease assets, depreciation and amountof impairment losses are as follows:

2007

Lease payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reversal of account relating to impairment losses on lease assets . . .
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥559
4
559
—

Millions of yen
Year ended March 31
2008
2009

¥474
4
474
—

¥—
—
—
—

Translation
intomillions of
U.S. dollars
2009

$—
—
—
—

Depreciation was calculated based on the straight-line method over the lease terms as the useful life
assuming no residual value.
F-112

NOMURA LAND AND BUILDING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the year ended March 31, 2007
and the years ended March 31, 2008 (unaudited) and March 31, 2009 (unaudited)
For the year ended March 31, 2009, the footnote for Finance lease transactions that not transfer ownershipof the leased property to the lessee has been omitted since its materiality is not significant.
Operating lease transactions—
As Lessee
Future lease payments are as follows:

2007

Millions of yen
Year ended March 31
2008
2009

Translation
intomillions of
U.S. dollars
2009

Due within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due in more than one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 7,90346,289¥ 7,938
41,225¥ 8,159
44,962$ 82
453

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥54,193¥49,163¥53,121$536

As Lessor
Future lease payments are as follows:

2007

Millions of yen
Year ended March 31
2008
2009

Translation
intomillions of
U.S. dollars
2009

Due within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due in more than one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 5,91030,881¥ 5,170
19,859¥ 7,252
39,631$ 73
400

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥36,791¥25,030¥46,884

$473

F-113

NOMURA LAND AND BUILDING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the year ended March 31, 2007
and the years ended March 31, 2008 (unaudited) and March 31, 2009 (unaudited)
8. Securities:
Bonds and debentures held to maturity with fair value are as follows:
Translation into
millions of U.S. dollars

Millions of yen
March 31
2008

2009

Amounton theFair
consolidated
Value Difference balance sheet

Amounton theFair
consolidated Fair
Value Difference balance sheet Value Difference

¥ 35

¥ 35

¥0

¥295

¥296

¥1

$3

$3

$0

270
¥305

269
¥305

(0)
¥(0)

20
¥315

20
¥316

(0)
¥0

0
$3

0
$3

(0)
$0

Amounton theconsolidatedbalance sheet

Bonds and debentures whose fairvalue exceeds the amountrecorded on the consolidatedbalance sheet
Governmental, municipal
bonds, etc . . . . . . . . . . . .
Bonds and debentures whose fairvalue do not exceed theamount recorded on the
consolidated balance sheet
Governmental, municipal
bonds, etc . . . . . . . . . . . .
Total . . . . . . . . . . . . . .

2009

Amounts and fair value of other securities carried at fair value are as follows:
Translation into
millions of U.S. dollars

Millions of yen
March 31
2008

2009

2009

AmountAmountAmounton theon theon theAcquisition consolidated
Acquisition consolidated
Acquisition consolidated
cost
balance sheet Difference
costbalance sheet Difference
costbalance sheet Difference

Amounts recorded on the
consolidated balance
sheet exceeding theiracquisition costs
Equities . . . . . . . . . . . ¥ 3,763 ¥10,162 ¥ 6,399 ¥ 2,551 ¥ 4,235 ¥ 1,683 $ 26
Others . . . . . . . . . . . . 19,858 22,943
3,085
296
297
1
3
Sub-total . . . . . . . . . . 23,621 33,106
9,484 2,847
4,532
1,685
29
Amounts recorded on the
consolidated balance
sheet not exceeding
their acquisition costs
Equities . . . . . . . . . . .
814
766
(47)
951
884
(66)
10
Others . . . . . . . . . . . . 22,155 20,273 (1,882) 39,978 33,519 (6,459) 403
Sub-total . . . . . . . . . . 22,969 21,039 (1,930) 40,930 34,403 (6,526) 413
Total . . . . . . . . . ¥46,591 ¥54,146 ¥ 7,554 ¥43,777 ¥38,936 ¥(4,841) $ 442
F-114

$

43
3
46

9
338
347
$ 393

$

17
0
17

(1)
(65)
(66)
$ (49)NOMURA LAND AND BUILDING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the year ended March 31, 2007
and the years ended March 31, 2008 (unaudited) and March 31, 2009 (unaudited)
Other securities sold in each fiscal year are as follows:

Amount sold2007
Total gainon salesTotal loss
on sales¥ 9,123¥246¥—

Millions of yen
Year ended March 31
2008
AmountTotal gain
Total loss
soldon saleson salesAmountsold2009
Total gainon salesTotal loss
on sales¥54,201¥2,323¥2¥153¥2,036¥0

Amount soldTranslation into millions of U.S. dollars
Year ended March 31
2009
Total gain on sales

Total loss on sales

$23

$0

$2

Major components of securities carried at cost value are as follows:

Millions of yen
March 31
2008
2009

Other securities
Cash Reserve Fund (“CRF”) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Certificate of deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unlisted stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity investments
Preferred investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment in Tokumei kumiai (silent partnership) . . . . . . . . . . . . . . . . . . .
Investment in limited partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥Translation
intomillions of
U.S. dollars
2009

—
—
1,128

¥ 5,000
34,000
1,119

$ 50
343
11

4,713
64,8101,088

7,521
81,208
1,045

76
819
11

The future redemption amounts of other securities with maturity dates and bonds held to maturity are as
follows:
Translation into
millions of U.S. dollars

Millions of yen
2008
Within 1 to 5 5 to 10 More than Within
1 year years years 10 years
1 year

Bonds and debentures
Governmental,
municipal
bonds, etc. . . . ¥—Certificate ofdeposit . . . . . . . . . . —Total . . . . . ¥—¥295 ¥ 10

¥—

¥

—

—

—

34,000¥295 ¥ 10¥—

March 312009
2009
1 to 5 5 to 10 More than Within 1 to 5 5 to 10 More thanyears years 10 years 1 year years years 10 years

37 ¥268 ¥ 10

¥—

$

—

—

343

¥34,037 ¥268 ¥ 10

¥—

$343

F-115

—

0

$

3 $

—
$

3 $

0

$—

—

—

0

$—

NOMURA LAND AND BUILDING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the year ended March 31, 2007
and the years ended March 31, 2008 (unaudited) and March 31, 2009 (unaudited)
9. Derivative transactions:
Descriptions of transactions—
The derivative transactions consist of interest rate swaps, foreign currency swaps and forward foreignexchange contracts.
NLB enters into interest rate swaps in order to hedge future rises in financing costs by fixing the interest
payments on floating-rate debt. Foreign currency swaps and forward foreign exchange contracts are used tohedge risks associated with foreign exchange fluctuations on foreign-denominated securities.
Hedge accounting is applied to by utilizing derivative transactions.
Gains or losses on derivatives have been deferred until the realization of gains or losses on the hedged item.
Certain exceptional treatments are permitted under Japanese GAAP. When an interest rate swap contract is used
to hedge future fluctuation of interest rates, the net amount paid or received under the interest rate swap contract
is added to or deducted from interest income/expense. Also, when a forward foreign exchange contract is used asa hedge and meets certain criteria, the future transaction denominated in a foreign currency may be recorded
using the contracted forward rate.
Hedging instruments are interest rate swaps, foreign currency swaps, and forward foreign exchange
contracts.
Hedged items are borrowings and securities.
NLB uses the above hedging instruments in accordance with the internal rules to reduce the risks related toforeign exchange market and interest rate market fluctuations.
The cash flow fluctuations of the hedged items or the cumulative fair value change of the hedged items arecompared with the cash flow fluctuations of the hedging instruments or the cumulative fair value change of thehedging instruments respectively and the effectiveness of the hedging activities are tested.
For interest rate swaps which meet the criteria for the above mentioned exceptional treatment, the test may
be omitted.
Interest rate swaps entail risks associated with fluctuations in market rates, while risks associated withfluctuations in foreign exchange rates are inherent in foreign currency swaps and forward foreign exchange
contracts.
As the counterparties to these derivatives are limited to financial institutions with high credibility, NLB
considers there are little credit risks.
Execution and control of derivative transactions are performed in accordance with procedures prescribed ininternal rules and with the approval of the officer with an appropriate authority.
Contract amounts pertaining to the market value of transactions are merely indications of the nominal
contract amounts of the derivative transaction or the nominal principal amount for calculation purposes only andthe amounts in themselves are not indicative of the magnitude of risk associated with the derivative transactions.
F-116

NOMURA LAND AND BUILDING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the year ended March 31, 2007
and the years ended March 31, 2008 (unaudited) and March 31, 2009 (unaudited)
Market value of transactions, etc.—
Millions of yen
March 312007
Contract/Notional
principal
Maturity over Market
Total
one yearvalue

Interest rate caps
Bought . . . . .

Unrealized
gain/loss

2008
Contract/Notional
principal
Maturity over Market
Total
one yearvalue

Unrealized
gain/loss

3,284

3,284

0

(3)

4,887

1,370

0

(5)

¥3,284¥3,284¥0¥(3)¥4,887¥1,370¥0¥(5)(Note)
1. Calculation of market value is based on the price reported by the financial institutions that are thecounterparties to the transactions.
2. Derivative transactions to which hedge accounting is applied are excluded.
For the year ended March 31, 2009, as interest rate swaps, foreign currency swaps and forward foreignexchange contracts are limited to derivative transactions to which hedge accounting is applied, the footnote has
been omitted.
10. Retirement benefits
Summary of the retirement benefits plans—
The Company does not have a retirement benefits plan. One of the consolidated subsidiaries has adopted the
lump-sum payment plan and the qualified retirement pension plan as defined-benefit type programs andestablished a retirement benefit trust, while four other companies at March 31, 2007, five at March 31, 2008 andseven at March 31, 2009 have adopted the lump-sum payment plan only and one has adopted the qualified
retirement pension plan only. Moreover one of the consolidated subsidiaries has adopted the defined-benefit typelump-sum payment plan in addition to establishing a defined contribution pension plan. Furthermore, employees
may receive premium severance payment upon their retirement etc.
One consolidated subsidiary has made a transition to the defined contribution pension plan for a portion ofits lump-sum payment plan in October 2005.

F-117

NOMURA LAND AND BUILDING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the year ended March 31, 2007
and the years ended March 31, 2008 (unaudited) and March 31, 2009 (unaudited)
Benefit obligation and funded status are as follows:

Millions of yen
March 312008
2009

Translation
intomillions of
U.S. dollars
2009

A Projected benefit obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B Plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥(22,197) ¥(24,050)
7,274
5,992

$(243)
60

C Funded status (A+B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
D Unrecognized net actuarial losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(14,922)2,707(18,058)
3,711

(182)
37

E

¥(12,215) ¥(14,347)$(145)

Accrued pension and severance costs (C+D) . . . . . . . . . . . . . . . . . . . . . . .

(Note) Certain consolidated subsidiaries have adopted the short-cut method in calculating the retirement benefit
obligations.
Retirement benefit expenses includes the following components:
Translation
intomillions ofMillions of yen
U.S. dollars
Year ended March 31
2007
2008
2009
2009

Retirement benefit expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C Expected return on plan asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
D Expensed amount of net actuarial losses . . . . . . . . . . . . . . . . . . . . . .
E Premium severance pay, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥2,005 ¥2,101 ¥2,436
1,274
1,310
1,452
392
412
427
(192)
(175)
(145)
378
390
533
53
44
26
99
119
141

$25
15
4
(1)
5
0
1

(Note)
1. The retirement benefit expenses of the consolidated subsidiaries that have adopted the short-cut method
have been recorded under “A Service cost”.
2. “F Others” refer to the contributions to the defined contribution pension plan.

F-118

NOMURA LAND AND BUILDING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the year ended March 31, 2007
and the years ended March 31, 2008 (unaudited) and March 31, 2009 (unaudited)
Basis for calculations of retirement benefit obligations, etc. is as follows:
March 312008

A Allocation of expected retirement benefits . . . . . . . . . . . . . .
B Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C Expected rate of return on plan asset . . . . . . . . . . . . . . . . . . .
D Amortization period of net actuarial losses . . . . . . . . . . . . . .

2009

Equal amounts are
Equal amounts areallocated to each term allocated to each term
2.0%
2.0%
2.0%
2.0%
Primarily 10 years (Actuarial differences are
expensed beginning in the consolidated fiscal
year following the occurrence within a certain
number of years based on the employees’
average residual service period at the time ofoccurrence)

11. Stock options
NLB adopted stock option plan in Nomura Real Estate Holdings, Inc. (“NREH”), NLB’s consolidated
subsidiary, for the year ended March 31, 2008. NLB recognized the stock options expense of ¥217 million($2 million) in Selling, general and administrative expenses in the consolidated statement of income for the year
ended March 31, 2008.
Stock option descriptions, amounts and status of change are as follows.
Descriptions of stock options
NREH stock acquisitionrights #1 for FY 2007

NREH stock acquisitionrights #2 for FY 2007

NREH stock acquisitionrights #3 for FY 2007

Grantees

5 directors

43 directors of subsidiaries

5 directors,
45 directors ofsubsidiaries and 116
employees of subsidiaries

Number of stock option
rights by type of stock(*)

Common stock
14,800 shares

Common stock
52,300 shares

Common stock
180,400 shares

Grant dateNovember 30, 2007

November 30, 2007

November 30, 2007

Conditions to vest

None

None

None

Requisite service period

None

None

None

Exercise period

From November 30,
2008 to November 29,
2013

From November 30, 2008
to November 29, 2013

From November 30,
2009 to November 29,
2014(*) Converted in number of shares

F-119

NOMURA LAND AND BUILDING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the year ended March 31, 2007
and the years ended March 31, 2008 (unaudited) and March 31, 2009 (unaudited)
Amounts and status of change of stock options
For the stock options existed for the year ended March 31, 2008, the number of stock options are converted
into the number of shares as follows.
a)Number of stock options

Before vesting (shares)
At March 31, 2007 . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . . . . . . . . .
Non vested balance . . . . . . . . . . . . . . . .
After vesting (shares)
At March 31, 2007 . . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . .
Non exercised balance . . . . . . . . . . . . .
b)

NREH stock acquisitionrights #1 for FY 2007

NREH stock acquisitionrights #2 for FY 2007

NREH stock acquisitionrights #3 for FY 2007—
14,800—14,800——52,300—52,300——180,400—
1,200
179,200—
14,800——14,800—52,300——52,300

—
1,200
—
—
1,200

NREH stock acquisitionrights #1 for FY 2007

NREH stock acquisitionrights #2 for FY 2007

NREH stock acquisitionrights #3 for FY 2007

Price per share information

Exercise price (yen) . . . . . . . . . . . . . . . . . . .
Average exercise price (yen) . . . . . . . . . . . .
The fair value at grant date (yen) . . . . . . . . .
The fair value at grant date (translation into
U.S. dollars) . . . . . . . . . . . . . . . . . . . . . . .

¥1—¥2,903

1—¥2,903¥3,380
—
¥ 714

$

$

$

29

¥

29

7

Fair value estimation of stock option
The fair value of the stock options granted for the year ended March 31, 2008 is estimated using a BlackScholes option-pricing model with following basic assumption and estimation method.

Share price volatility(*1) . . . . . . . . . . . . . . . .
Expected lives (in years)(*2) . . . . . . . . . . . . .
Expected dividends(*3) . . . . . . . . . . . . . . . . . .
Risk-free interest rate(*4) . . . . . . . . . . . . . . . .

NREH stock acquisitionrights #1 for FY 2007

NREH stock acquisitionrights #2 for FY 2007

NREH stock acquisitionrights #3 for FY 2007

34.8%
3.5
30 yen per share
0.893%

34.8%
3.5
30 yen per share
0.893%

34.8%
4.5
30 yen per share
0.982%(Note)
1. Volatility is calculated based on the actual share price from October 3, 2006 to November 30, 2007.

F-120

NOMURA LAND AND BUILDING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the year ended March 31, 2007
and the years ended March 31, 2008 (unaudited) and March 31, 2009 (unaudited)
2.
3.
4.

Expected lives are estimated under assumption that the stock option will be exercised at the middle ofexercise period as there is difficulty in reasonable estimation due to non-sufficient historical data.
Expected dividends are based on the expected dividends for the year ended March 31, 2008.
Risk-free interest rate is the Japanese government bond yield with a maturity consistent with expected livesof options.
Estimation method of number of vested stock options

Basically, NLB adopted the method to reflect actual numbers of forfeited stock options as it is difficult toestimate numbers of future forfeited options reasonably.
NLB adopted stock option plan in Nomura Real Estate Holdings, Inc. (“NREH”) and Megalos, NLB’s
consolidated subsidiary, for the year ended March 31, 2009. NLB recognized the stock options expense of¥284 million ($2 million) in Selling, general and administrative expenses in the consolidated statement ofincome for the year ended March 31, 2009.
Stock option descriptions, amounts and status of change are as follows.
Descriptions of stock options
NREH stock acquisitionrights #1 for FY 2007

NREH stock acquisitionrights #2 for FY 2007

NREH stock acquisitionrights #3 for FY 2007

Grantees

5 directors

43 directors ofsubsidiaries

5 directors,
45 directors ofsubsidiaries and 116
employees of subsidiaries

Number of stock option
rights by type of stock(*)

Common stock
14,800 shares

Common stock
52,300 shares

Common stock
180,400 shares

Grant dateNovember 30, 2007

November 30, 2007

November 30, 2007

Conditions to vest

None

None

None

Requisite service period

None

None

None

Exercise period

From November 30, 2008 From November 30, 2008 From November 30, 2009
to November 29, 2013
to November 29, 2013
to November 29, 2014(*) Converted in number of shares

F-121

NOMURA LAND AND BUILDING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the year ended March 31, 2007
and the years ended March 31, 2008 (unaudited) and March 31, 2009 (unaudited)
NREH stock acquisitionrights #1 for FY 2008

NREH stock acquisitionrights #2 for FY 2008

NREH stock acquisitionrights #3 for FY 2008

Grantees

5 directors

51 directors and senior
managing directors ofsubsidiaries

5 directors,
52 directors senior
managing directors ofsubsidiaries and 122
employees of subsidiaries

Number of stock option
rights by type of stock(*)

Common stock
14,800 shares

Common stock
61,300 shares

Common stock
191,200 shares

Grant dateAugust 11, 2008

August 11, 2008

August 11, 2008

Conditions to vest

None

None

None

Requisite service period

None

None

None

Exercise period

From August 11, 2009 toAugust 10, 2014

From August 11, 2009 toAugust 10, 2014

From August 11, 2010 toAugust 10, 2015(*) Converted in number of shares
Megalos stock acquisitionrights #1 for FY 2008

Megalos stock acquisitionrights #2 for FY 2008

Grantees

3 directors

3 directors and 14 employees

Number of stock option rights by type ofstock(*)

Common stock
16,400 shares

Common stock
32,000 shares

Grant date

December 1, 2008

December 1, 2008

Conditions to vest

None

None

Requisite service period

None

None

Exercise period

From December 1, 2009 From December 1, 2010 to November 30,
to November 30, 20142015(*) Converted in number of shares

F-122

NOMURA LAND AND BUILDING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the year ended March 31, 2007
and the years ended March 31, 2008 (unaudited) and March 31, 2009 (unaudited)
Amounts and status of change of stock options
For the stock options existed for the year ended March 31, 2009, the number of stock options are converted
into the number of shares as follows.
a)Number of stock options

Before vesting (shares)
At March 31, 2008 . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . . . . . . . . .
Non vested balance . . . . . . . . . . . . . . . .
After vesting (shares)
At March 31, 2008 . . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . .
Non exercised balance . . . . . . . . . . . . .

Before vesting (shares)
At March 31, 2008 . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . . . . . . . . .
Non vested balance . . . . . . . . . . . . . . . .
After vesting (shares)
At March 31, 2008 . . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . .
Non exercised balance . . . . . . . . . . . . .

NREH stock acquisitionrights #1 for FY 2007

NREH stock acquisitionrights #2 for FY 2007

NREH stock acquisitionrights #3 for FY 2007

—
—
—
—
—

—
—
—
—
—

179,200——
2,500
176,700

14,800—14,800——52,300—31,300—21,000

1,200
2,500
—
—
3,700

NREH stock acquisitionrights #1 for FY 2008

NREH stock acquisitionrights #2 for FY 2008

NREH stock acquisitionrights #3 for FY 2008—
14,800—14,800——61,300—61,300——191,200——
191,200—
14,800——14,800—61,300——61,300—————

Before vesting (shares)
At March 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non vested balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
After vesting (shares)
At March 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non exercised balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-123

Megalos stock acquisitionrights #1 for FY 2008

Megalos stock acquisitionrights #2 for FY 2008—
16,400—16,400——32,000——32,000—16,400——16,400—————NOMURA LAND AND BUILDING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the year ended March 31, 2007
and the years ended March 31, 2008 (unaudited) and March 31, 2009 (unaudited)b)

Price per share information

Exercise price (yen) . . . . . . . . . . . . . . . . . . .
Average exercise price (yen) . . . . . . . . . . . .
The fair value at grant date (yen) . . . . . . . . .
The fair value at grant date (translation into
U.S. dollars) . . . . . . . . . . . . . . . . . . . . . . .

Exercise price (yen) . . . . . . . . . . . . . . . . . . .
Average exercise price (yen) . . . . . . . . . . . .
The fair value at grant date (yen) . . . . . . . . .
The fair value at grant date (translation into
U.S. dollars) . . . . . . . . . . . . . . . . . . . . . . .

NREH stock acquisitionrights #1 for FY 2007

NREH stock acquisitionrights #2 for FY 2007

NREH stock acquisitionrights #3 for FY 2007¥
1
¥1,269¥2,903¥
1¥1,370¥2,903¥3,380
¥ —
¥ 714

$

$

$

29

29

7

NREH stock acquisitionrights #1 for FY 2008

NREH stock acquisitionrights #2 for FY 2008

NREH stock acquisitionrights #3 for FY 2008¥1
¥ —¥2,131¥1¥ —¥2,131¥2,255
¥ —
¥ 770

$

$

$

21

21

8

Megalos stock acquisitionrights #1 for FY 2008

Megalos stock acquisitionrights #2 for FY 2008

¥ 1
¥—
¥606
$ 6

¥740
¥—
¥184
$ 2

Exercise price (yen) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Average exercise price (yen) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The fair value at grant date (yen) . . . . . . . . . . . . . . . . . . . . . . . . .
The fair value at grant date (translation into U.S. dollars) . . . . . .
Fair value estimation of stock option

The fair value of the stock options granted for the year ended March 31, 2009 is estimated using a BlackScholes option-pricing model with following basic assumption and estimation method.

Share price volatility(*1) . . . . . . . . . . . . . . . .
Expected lives (in years)(*2) . . . . . . . . . . . . .
Expected dividends(*3) . . . . . . . . . . . . . . . . . .
Risk-free interest rate(*4) . . . . . . . . . . . . . . . .

NREH stock acquisitionrights #1 for FY 2008

NREH stock acquisitionrights #2 for FY 2008

NREH stock acquisitionrights #3 for FY 2008

46.3%
3.5
40 yen per share
0.841%

46.3%
3.5
40 yen per share
0.841%

46.3%
4.5
40 yen per share
0.936%(Note)
1. Volatility is calculated based on the actual share price from October 3, 2006 to August 8, 2008.
2. Expected lives are estimated under assumption that the stock option will be exercised at the middle ofexercise period as there is difficulty in reasonable estimation due to non-sufficient historical data.
3. Expected dividends are based on the expected dividends for the year ended March 31, 2009.
4. Risk-free interest rate is the Japanese government bond yield with a maturity consistent with expected livesof options.

Share price volatility(*1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected lives (in years)(*2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected dividends(*3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk-free interest rate(*4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-124

Megalos stock acquisitionrights #1 for FY 2008

Megalos stock acquisitionrights #2 for FY 2008

45.3%
3.5
30 yen per share
0.734%

45.3%
4.5
30 yen per share
0.836%NOMURA LAND AND BUILDING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the year ended March 31, 2007
and the years ended March 31, 2008 (unaudited) and March 31, 2009 (unaudited)(Note)
1. Volatility is calculated based on the actual share price from November 9, 2007 to December 1, 2008.
2. Expected lives are estimated under assumption that the stock option will be exercised at the middle ofexercise period as there is difficulty in reasonable estimation due to non-sufficient historical data.
3. Expected dividends are based on the expected dividends for the year ended March 31, 2008.
4. Risk-free interest rate is the Japanese government bond yield with a maturity consistent with expected livesof options.
Estimation method of number of vested stock options
Basically, NLB adopted the method to reflect actual numbers of forfeited stock options as it is difficult toestimate numbers of future forfeited options reasonably.
12. Income taxes:
Details of deferred tax assets and liabilities are as follows:

Millions of yen
March 312008
2009

Translation
intomillions of
U.S. dollars
2009

Deferred tax assets
Unrealized transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on devaluation of inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued pension and severance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation Differences arising from business combination . . . . . . . . . . . .
Net unrealized losses on other securities . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued bonuses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-deductible depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on impairment of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on devaluation of investment securities . . . . . . . . . . . . . . . . . . . . . .
Accrued enterprise tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss from subleasing business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 16,265
4,635
4,956
—
—
1,696
—
1,227
—
1,186
2,434
5,678

¥ 17,280
15,159
5,842
2,979
2,708
1,779
1,415
1,321
1,279
1,253
962
5,766

$ 174
153
59
30
27
18
14
13
13
13
10
58

Gross deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less—Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

38,080(8,658)57,748(12,906)

582
(130)

Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29,422

44,842

452

Deferred tax liabilities
Valuation Differences arising from business combination . . . . . . . . . . . .
Reserve for advanced depreciation of fixed assets . . . . . . . . . . . . . . . . . .
Gains on establishment of retirement benefit trust . . . . . . . . . . . . . . . . . .
Net unrealized gains on other securities . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—(10,990)(436)(3,085)(498)(69,956)(25,343)(320)—(1,536)

(706)
(256)
(3)
—
(15)

Total deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(15,010)(97,155)(980)

Net deferred tax assets (liabilities) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 14,411¥(52,312)$(528)F-125

NOMURA LAND AND BUILDING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the year ended March 31, 2007
and the years ended March 31, 2008 (unaudited) and March 31, 2009 (unaudited)
A reconciliation of the effective income tax rate reflected in the consolidated statements of income to thenormal effective statutory tax rate is as follows:
2007

March 312008(*) 2009(*)

Normal effective statutory tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.0% — %Impact of:
Change in valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.6 —Equity in earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(0.2) —
Gain from changes in equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (19.2) —Non-deductible entertainment expense, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.2 —Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.0 —Effective tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

— %
—
—
—
—
—

25.4% — % — %(Note) For the year ended March 31, 2008 and March 31, 2009, the reconciliation has been omitted since thedifference between the effective income tax rate reflected in the consolidated statements of income andthe normal effective statutory tax rate fell to below 5/100 of the effective income tax rate.

F-126

NOMURA LAND AND BUILDING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the year ended March 31, 2007
and the years ended March 31, 2008 (unaudited) and March 31, 2009 (unaudited)
13. Segment information:
Operating segments—
For the year ended March 31, 2007
Millions of yen
Assetmanagement Brokerage /andconsignment
Housing Buildings development
sales
Other
I. Sales and Operating income/loss
Sales(1) Sales to outside customers . . . . . ¥205,365 ¥ 49,901(2) Intersegment sales/transfers . . . .
585
4,433
Total . . . . . . . . . . . . . . . . . . . . . . .

205,950

54,334

Operating expenses . . . . . . . . . . . . .

182,323

Total¥ 65,600
772¥34,485
2,002¥20,028 ¥375,380
342
8,136

66,372

36,487

20,371

383,517

Elimination
andcorporate Consolidation¥—(8,136)¥375,380—(8,136)375,380

43,80847,631

28,09918,231

320,093(1,229)318,863

Operating income . . . . . . . . . . . . . . . ¥ 23,627 ¥ 10,526¥ 18,741¥ 8,388¥ 2,139 ¥ 63,424¥ (6,906)¥ 56,517

II. Assets, depreciation andamortization and capital expenditure
Assets . . . . . . . . . . . . . . . . . . . . . . . . ¥257,183 ¥219,053
Depreciation and amortization . . . . .
212
3,565
Capital expenditure . . . . . . . . . . . . . .
336
12,467¥284,549
116
24,549¥72,530
97
218¥28,449 ¥861,767
1,248
5,240
1,733
39,304¥ 61,086
213(10,018)¥922,853
5,453
29,285For the year ended March 31, 2008
Millions of yen
Assetmanagement Brokerage /andconsignment
Housing Buildings development
sales
Other
I. Sales and Operating income/loss
Sales(1) Sales to outside customers . . . . . ¥238,289 ¥ 54,969(2) Intersegment sales/transfers . . . .
513
5,006
Total . . . . . . . . . . . . . . . . . . . . . . .

238,80259,975

Operating expenses . . . . . . . . . . . . .

212,735

Total

Elimination
andcorporate Consolidation¥ 78,274
2,745¥27,1623,019¥21,267 ¥419,963
928
12,213¥—(12,213)¥419,963—

81,02030,182

22,195432,176(12,213)419,963

48,262

46,11023,791

19,879350,778(3,134)

347,644

Operating income . . . . . . . . . . . . . . . ¥ 26,066 ¥ 11,713¥ 34,909¥ 6,391¥ 2,316 ¥ 81,397¥ (9,078)¥ 72,318

II. Assets, depreciation andamortization and capital expenditure
Assets . . . . . . . . . . . . . . . . . . . . . . . . ¥259,781 ¥218,131
Depreciation and amortization . . . . .
217
3,939
Capital expenditure . . . . . . . . . . . . . .
304
28,566¥332,023
51
2,778¥72,735
121
238¥30,252 ¥912,924
1,402
5,733
1,910
33,798¥ 36,385
203(14,977)¥949,310
5,937
18,821

F-127

NOMURA LAND AND BUILDING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the year ended March 31, 2007
and the years ended March 31, 2008 (unaudited) and March 31, 2009 (unaudited)
For the year ended March 31, 2009
Millions of yen
Assetmanagement Brokerage /andconsignment
Housing Buildings development
sales
Other
I. Sales and Operating income/loss
Sales(1) Sales to outside customers . . . . ¥231,285 ¥ 87,331(2) Intersegment sales/transfers . . .
343
5,802

Total

Elimination
andcorporate Consolidation¥ 77,471
1,039¥36,728
3,035¥23,383 ¥ 456,200
1,239
11,460¥—(11,460)¥ 456,200—

Total . . . . . . . . . . . . . . . . . . . . .

231,628

93,13378,51039,764

24,623

467,660(11,460)

456,200

Operating expenses . . . . . . . . . . . .

219,842

75,363

68,26938,20923,106

424,792(4,465)420,327

Operating income . . . . . . . . . . . . . ¥ 11,786 ¥ 17,769¥ 10,241¥ 1,554¥ 1,516 ¥42,868¥ (6,995)¥

II. Assets, depreciation andamortization and capital
expenditure
Assets . . . . . . . . . . . . . . . . . . . . . . ¥318,845 ¥554,585
Depreciation and amortization . . .
234
6,001
Impairment loss on fixed assets . . .
——Capital expenditure . . . . . . . . . . . .
500
48,306¥372,855
71
—
6,988

¥57,922148—
304¥30,313 ¥1,334,522
1,562
8,018
323
323
2,043
58,143¥ 91,625
230—
378¥1,426,147
8,248
323
58,522$$35,872

Translation into millions of U.S. dollars
I. Net Sales and Operating income/loss Net Sales(1) Net Sales to outside
customers . . . . . . . . . . . . . . . . . . $(2) Intersegment net
sales/transfers . . . . . . . . . . . . .

2,333 $

881

$

781

3

59

10

$

370

$

236 $

4,601

—

4,601

31

12

116

(116)

—

Total . . . . . . . . . . . . . . . . . . . . .

2,336

939

792

401

248

4,717

(116)

4,601

Operating expenses . . . . . . . . . . . .

2,217

760

689

385

233

4,284

(45)

4,239

Operating income . . . . . . . . . . . . .

119

179

103

16

15

432

(71)

362

II. Assets, depreciation andamortization and capital
expenditure
Assets . . . . . . . . . . . . . . . . . . . . . . $Depreciation and amortization . . .
Impairment loss on fixed assets . . .
Capital expenditure . . . . . . . . . . . .

3,216 $
2
—
5

5,593
61
—
487

306 $
16
3
21

13,460
81
3
586

$

3,761
1
—
70

$

(Note)
1. Businesses segments have been classified according to their business contents

F-128

584
1
—
3

$

$

924
2
—
4

$

14,38483
3590

NOMURA LAND AND BUILDING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the year ended March 31, 2007
and the years ended March 31, 2008 (unaudited) and March 31, 2009 (unaudited)
2.

Major products and services of each business segments are as follows:Business segment

3.

4.

5.

6.

Major products

Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Sales of condominiums, houses and land, and comprehensive management ofcondominiums

Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rental and comprehensive management of office buildings and provision ofheating system to specific areas

Asset management and development . . . . . . . . . . .

Development and sales of real estate for rent and lease, management of real estate
investment funds and investment in real estate investment fundBrokerage/consignment sales . . . . . . . . . . . . . . . . .

Brokerage, consulting of real estate, agency activities of condominiums sales andhouses and insurance agency business

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Operating fitness clubs, golf clubs and hotels and construction of special order
homes

Operating expenses that are not allocable and included in the elimination and corporate are primarily general and administrative expenses
and they were ¥6,172 million, ¥6,538 million and ¥6,707 million ($68 million) for the years ended March 31, 2007, 2008 and 2009,
respectively.
The company-wide assets that are included under the elimination and corporate in assets amounted to ¥103,895 million and¥76,231 million and ¥124,990 million ($1,261 million) for the years ended March 31, 2007, 2008 and 2009, respectively. They wereprimarily surplus funds (cash, time deposits), long-term investment funds (investment securities), deferred tax assets and assets related togeneral affairs and administration.
As stated in 1. Summary of accounting policies, “Accounting Standards for Measurement of Inventories” (ASBJ Statement No. 9; July 5,2006) was adopted from the year ended March 31, 2007. The change for the year ended March 31, 2007 has resulted in a decrease in
assets under “Other businesses” segments by ¥869 million as compared with the conventional method.
Though “Development of real estate for rent and lease” business and others in the brokerage division for corporate and institutional
clients in NRED were included in “Brokerage/consignment sales” segment until the year ended March 31, 2007, the segment for a part ofthem has been changed to “Asset management and development” segment in the year ended March 31, 2008. This is intended to, withthe widen development of real estate for rent and lease based on the information for the brokerage, appropriately represent the realities ofthe business in response to mainly the establishment and of the new sections to take charge of and progress it.

The following tabular assumes the operating segment for the year ended March 31, 2007 was provided by
the method for the year ended March 31, 2008 and 2009 as mentioned above.
Millions of yen
Assetmanagement Brokerage /andconsignment
Housing Buildings development
sales
Other
I. Sales and Operating income/loss
Sales(1) Sales to outside customers . . . ¥205,365 ¥ 49,901(2) Intersegment sales/transfers . .
585
4,433

Total

¥ 69,103772¥30,981
2,002¥20,028 ¥375,380
342
8,136

Elimination
andcorporate Consolidation¥—(8,136)¥375,380—
375,380

Total . . . . . . . . . . . . . . . . . . . . .

205,950

54,33469,87632,984

20,371

383,517(8,136)

Operating expenses . . . . . . . . . . .

182,323

43,80849,70626,023

18,231

320,093(1,229)318,863

Operating income . . . . . . . . . . . . . ¥ 23,627 ¥ 10,526¥ 20,169¥ 6,961¥ 2,139 ¥ 63,424¥ (6,906)¥ 56,517

II. Assets, depreciation andamortization and capital
expenditure
Assets . . . . . . . . . . . . . . . . . . . . . . ¥257,183 ¥219,053
Depreciation and amortization . . .
212
3,565
Capital expenditure . . . . . . . . . . . .
336
12,467¥306,980
116
24,549¥50,099
97
218¥28,449 ¥861,767
1,248
5,240
1,733
39,304¥ 61,086
213(10,018)¥922,853
5,453
29,285F-129

NOMURA LAND AND BUILDING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the year ended March 31, 2007
and the years ended March 31, 2008 (unaudited) and March 31, 2009 (unaudited)
Geographic information—
Geographic information has been omitted as the proportion of domestic sales to the total sales and domestic
assets to total assets were greater than 90%, respectively.
Overseas sales—
Overseas sales have been omitted as the proportion of overseas sales to consolidated sales were less than 10%.
14. Related party transactions:
Fellow subsidiaries, etc.
The balances and transactions with Nomura Securities Co., Ltd., a subsidiary of Nomura Holdings, Inc., asof March 31, 2007 and for the year ended March 31, 2007 were as follows:
Details of transaction (millions of yen)
Proceeds from sales of subsidiary’s share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥36,652
Gain on sales of subsidiary’s share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥25,623
Purchase of securities(* 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥12,968
Balance at end of year (millions of yen)
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥12,990
The transactions with Nomura Securities Co., Ltd., a subsidiary of Nomura Holdings, Inc., for the year
ended March 31, 2008 were as follows:
Details of transaction (millions of yen)
Redemption of securities(* 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥13,000(Note)
1. The sales price is determined on the basis of market price.
2. The redemption amount is the face amount.
(1) Transactions of the NLB with related individual, including shareholders and directors, for the year ended
March 31, 2009 were none.
(2) Transactions of the NLB’s consolidated subsidiaries with related individual, including shareholders anddirectors, for the year ended March 31, 2009 were as follows:
1 Fellow subsidiaries, etc.
The balances and transactions with Nomura Securities Co., Ltd., a subsidiary of Nomura Holdings, Inc., asof March 31, 2009 and for the year ended March 31, 2009 were as follows:
Details of transaction (millions of yen)
Purchase of CRF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of CRF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of year (millions of yen)
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-130¥19,000 ($192 million)¥14,000 ($141 million)¥ 5,000 ($50 million)

NOMURA LAND AND BUILDING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the year ended March 31, 2007
and the years ended March 31, 2008 (unaudited) and March 31, 2009 (unaudited)
The transactions with The Nomura Trust and Banking Co., Ltd., a subsidiary of Nomura Holdings, Inc., forthe year ended March 31, 2009 were as follows:
Details of transaction (millions of yen)
Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥17,000 ($171 million)
Repayment of borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥17,000 ($171 million)
2 Shareholders and directors, etc.
The transactions with Mr. Hirohisa Suzuki, president and director, for the year ended March 31, 2009 wereas follows:
Details of transaction (millions of yen)
Housing construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥107($1 million)(3) The summary financial information of NLB’s significant affiliate
For the year ended March 31, 2009, significant affiliate is Asahi Fire and Marine Insurance Co., Ltd., and itssummary financial information were as follows:
Asahi Fire and Marine
Insurance Co., Ltd.,for FY 2008
(in millions of yen)

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥382,946
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥366,803
Total net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 16,143
Ordinary income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 85,464
Loss before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥912
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 1,322($3,862 million)($3,699 million)($ 163 million)($ 862 million)($
9 million)($ 13 million)

15. Per share data:

2007

Net assets per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥88,279.40
Net income per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
50,879.32
Diluted net income per share(*1) . . . . . . . . . . . . . . . . . . . . . .
—YenYear ended March 31
2008
2009

¥89,301.66
13,248.32
13,214.06¥85,543.70
3,835.21
3,833.09

Translation
into
U.S. dollars
2009$862.77
38.68
38.66

(Note)
1. The diluted earnings per shares for the year ended March 31, 2007 is not presented because the factors of
dilution to average number of shares outstanding do not exist.

F-131

NOMURA LAND AND BUILDING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the year ended March 31, 2007
and the years ended March 31, 2008 (unaudited) and March 31, 2009 (unaudited)
The basis for computation of net income per share and diluted net income per share is shown below.

2007

Net income per share
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥101,085
Net income on common stock . . . . . . . . . . . . . 101,085
Average number of shares outstanding(thousand shares) . . . . . . . . . . . . . . . . . . . . .
1,986
Diluted income per share
Adjustments for net income . . . . . . . . . . . . . . .
—(Change in equity by exercise of stockacquisition rights in consolidated
subsidiaries included above) . . . . . . . . .
—Shares not included in the computation of diluted
income per share because of an antidilutive—
effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Translation
intomillions of
U.S. dollars

Millions of yen
Year ended March 31
2008
2009

2009

¥26,324
26,324¥7,625
7,625

$77
77

1,987

1,988

20

(68)

(4)

(0)

(68)

(4)

(0)

NREH stockacquisitionrights #3 for
FY 2007(Shareacquisitionrights, 1,804)

NREH stockacquisition rights#2 for FY 2007
(Share acquisitionrights, 523),#3 for FY 2007
(Share acquisitionrights, 1,804),#1 for FY 2008
(Share acquisitionrights, 148),#2 for FY 2008
(Share acquisitionrights, 613) and#3 for FY 2008
(Share acquisitionrights, 1,912).
Megalos stockacquisition rights#2 for FY 2008
(Share acquisitionrights, 320)

16. Subsequent events:
For the year ended March 31, 2008, not applicable.
For the year ended March 31, 2009, the details of events are shown below.
Issuance of New Shares by Consolidated subsidiary
NREH, NLB’s consolidated subsidiary, announced that it resolved at the meeting of its Board of Directors
held at June 1, 2009 matters relating to the issuance of new shares and it was fully subscribed at June 16, 2009.
F-132

NOMURA LAND AND BUILDING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the year ended March 31, 2007
and the years ended March 31, 2008 (unaudited) and March 31, 2009 (unaudited)
Issuance of New Shares by way of Public Offering
1.

Way of offering : General Offering

2.

Class and Number of Shares to be issued : Common Stock 36,000,000 shares

3.

Issued price : 1,601.36 yen per share

4.

Total amount of issued price : 57,648 million yen

5.

Paid-in-capital : 800.68 yen per share

6.

Total amount of Paid-in-capital : 28,824 million yen

7.

Payment date : June 16, 20098.

Use of proceeds : Repayment of short-term borrowings, purchase of land for building residences andpayment for construction expenses

NREH also announced that it resolved at the meeting of its Board of Directors held at June 1, 2009 mattersrelating to the issuance of new shares by way of third-party (Nomura Securities Co.,) allotment. Nomura
Securities Co., was lead managing underwriter of general offering and this placement was relating to secondaryoffering by way of over-allotment (Offering of borrowed common 5,400,000 shares from NREH’s shareholders).
1.

Class and Number of Shares to be issued : Common Stock 5,400,000 shares

2.

Issued price : 1,601.36 yen per share

3.

Total amount of issued price : 8,647 million yen (Limit)

4.

Total amount of Paid-in-capital : 4,323 million yen (Limit)

5.

Allotee : Nomura Securities Co.,

6.

Subscription date : July 13, 2009

7.

Payment date : July 14, 20098.

Use of proceeds : Repayment of short-term borrowings, purchase of land for building residences andpayment for construction expenses

9.

Other : Nomura Securities Co., may conduct syndicate cover transactions. The common shares of NREH
purchased through such syndicate cover transactions may be used, in part or in whole, to return the
Borrowed 5,400,000 Shares. Accordingly, the shares will not be newly issued partly or fully by way ofthird-party allotment due to forfeiture, since Nomura Securities Co., will not accept the allotment of thecapital increase, in part or in whole, by way of third-party allotment and subscribe for shared to be issued
therefor.

F-133

NOMURA LAND AND BUILDING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the year ended March 31, 2007
and the years ended March 31, 2008 (unaudited) and March 31, 2009 (unaudited)
17. Supplementary information:
Bonds and debentures information is as follows:

Name of company(Note)

Issue

Balance atBalance at
March 31, 2009
March 31,2008
(million (million
Issue date (million yen) yen) dollars)

Coupon(%)

Collateral

Redemption
date

Nomura Real
Estate Holdings

First
October 31,
Unsecured bond2007

¥10,000¥10,000$101

1.7

Unsecured

October 31,
2014

Nomura Real
Estate Holdings

SecondOctober 31,
Unsecured bond2007

10,00010,000101

2.1

Unsecured

October 31,
2017

Shinjuku
Development
Special Purpose
CompanyFirst Secured
October 3,
Tokutei Shasai
2007(Specified Bond)

300

300
(300)

3
(3)

3.0

Total

¥20,300¥20,300
(300)

$205
(3)

Pledged December 31,
2009

Maturity ladder of bonds and debentures due within five years after the consolidated closing date are as follows.

Within 1 year

1-2 years

Millions of yen
2-3 years

3-4 years

4-5 years

¥ 300

¥—

¥—

¥—

¥—

Within 1 year

1-2 years

Translation into millions of U.S. dollars
2-3 years

3-4 years

4-5 years

$3

$—

$—

$—

$—

Borrowing schedule is as follows:
Balance at
March 31,2008
(million yen)Classification

Balance at
March 31, 2009
(million(millionyen)dollars)

Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term borrowings due within one year . . . . . . . . . . . . . . . . . . . . . . . . .
Lease obligations due within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term borrowings (excluding those due within one year) . . . . . . . . . . .
Lease obligations (excluding those due within one year) . . . . . . . . . . . . . . .
Other interest-bearing debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 34,500
49,784—
318,282——¥142,700
60,746
75
564,576
265—$1,439
613
1
5,694
3
—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥402,566¥768,364$7,750

Averageinterestrate(%)

Due date

1.1
1.5
—
1.4
—
—

—
—
—
2010-20192010-2014—(Note)
1. The weighted average interest rate on the outstanding balance of the loan at the end of the fiscal year has been indicated for the Averageinterest rate.
2. The Average interest rate for lease obligations has been omitted since the amount thereof is carried at the amount including calculated
interest that is a part of total lease payment at some NLB’s consolidated subsidiaries in the consolidated balance sheet.

F-134

NOMURA LAND AND BUILDING CO., LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
For the year ended March 31, 2007
and the years ended March 31, 2008 (unaudited) and March 31, 2009 (unaudited)3.

Maturity ladder of long-term borrowings (excluding those due within one year) due within five years after the consolidated closing dateare as follows.

Long-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1-2 years

Millions of yen
2-3 years 3-4 years

4-5 years¥99,86176¥94,24376¥113,876
36¥100,409
76

Translation into millions of U.S. dollars
1-2 years 2-3 years 3-4 years 4-5 years
Long-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-135$ 1,007
1

$

951
1

$

1,013
1

$

1,149
1

SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has
duly caused and authorized the undersigned to sign this annual report on its behalf.
NOMURA HOLDINGS, INC.
By:

Date: June 30, 2009/s/ KENICHI WATANABE
Name: Kenichi Watanabe
Title: President and Chief Executive Officer

INDEX OF EXHIBITS
Exhibit
NumberDescription

1.1

Articles of Incorporation of the registrant (English translation)

1.2

Share Handling Regulations of the registrant (English translation)

1.3

Regulations of the Board of Directors of the registrant (English translation)

1.4

Regulations of the Nomination Committee (English translation)

1.5

Regulations of the Audit Committee (English translation)

1.6

Regulations of the Compensation Committee (English translation) (incorporated by reference to theAnnual Report on Form 20-F (File No. 1-15270) filed on June 29, 2006)

2.1

Form of Deposit Agreement among the registrant, The Bank of New York as Depositary and allowners and holders from time to time of American Depositary Receipts, including the form ofAmerican Depositary Receipt (incorporated by reference to the Registration Statement on Form F-6(File No. 333-14178) filed on December 10, 2001)

4.1

Liabilities Limitation Agreement (English translation) (incorporated by reference to the Annual Reporton Form 20-F (File No. 1-15270) filed on June 29, 2006)*1

4.2

Liabilities Limitation Agreement (English translation) (incorporated by reference to the Annual Reporton Form 20-F (File No. 1-15270) filed on June 30, 2008)*2

4.3

Liabilities Limitation Agreement (English translation)*3

8.1

Subsidiaries of the registrant—See “Item 4.C. Information on the Company—Organizational
Structure.”

11.1

Code of Ethics (English translation)

12.1

Certification of the principal executive officer required by 17 C.F.R. 240. 13a-14(a)12.2

Certification of the principal financial officer required by 17 C.F.R. 240. 13a-14(a)13.1

Certification of the chief executive officer required by 18 U.S.C. Section 1350

13.2

Certification of the chief financial officer required by 18 U.S.C. Section 1350

15.1

Consent of Ernst & Young ShinNihon LLC with respect to its report on the audit of the financial
statements included in this annual report

15.2

Consent of Ernst & Young ShinNihon LLC with respect to its report on the audit of the financial
statements included in this annual report

*1
*2
*3

Nomura and each of Masaharu Shibata, Hideaki Kubori and Haruo Tsuji entered into a Liabilities
Limitation Agreement, dated June 28, 2006, in the form of this exhibit.
Nomura and each of Masahiro Sakane and Tsuguoki Fujinuma entered into a Liabilities Limitation
Agreement, dated June 26, 2008, in the form of this exhibit.
Nomura and Hajime Sawabe entered into a Liabilities Limitation Agreement, dated June 25, 2009, in theform of this exhibit.

We have not included as exhibits certain instruments with respect to our long-term debt. The amount of debt
authorized under each such debt instrument does not exceed 10% or our total assets. We will furnish a copy of
any such instrument to the SEC upon request.

Exhibit 1.1(Translation)
ARTICLES OF INCORPORATIONOFNOMURA HOLDINGS, INC.
(Nomura Horudingusu Kabushiki Kaisha)
CHAPTER I
GENERAL PROVISIONS
Article 1. (Trade Name)
The name of the Company shall be Nomura Horudingusu Kabushiki Kaisha and shall be expressed in
English as Nomura Holdings, Inc.
Article 2. (Purpose)
1. The purpose of the Company shall be, by means of holding shares, to control and manage the businessactivities of domestic companies which engage in the following businesses and the business activities of foreigncompanies which engage in the businesses equivalent to the following businesses:(1) Financial instruments business prescribed in the Financial Instruments and Exchange Law;
(2) Banking business prescribed in the Banking Law and trust business prescribed in the Trust Business
Law; and(3) Any other financial services and any business incidental or related to such financial services.
2. The Company may conduct any other business incidental to businesses described in paragraph 1 of this
Article.
Article 3. (Location of Head Office)
The Company shall have its head office in Chuo-ku, Tokyo.
Article 4. (Method of Giving Public Notices)
The method of public notices of the Company shall be electronic public notice; provided, however, that such
notices shall be given by publication in Nihon Keizai Shimbun in cases the method of electronic public notice is
not available due to any accidents or compelling reasons.
Article 5. (Governing Bodies)
The Company shall, as a company with committees, set up, in addition to the shareholders meetings anddirectors, the following organs;(1) board of directors(2) Nomination Committee, Audit Committee, and Compensation Committee(3) accounting auditors

CHAPTER IISHARES
Article 6. (Authorized Number of Shares)
The authorized number of shares of the Company shall be 6,000,000,000, and each total number of classesof shares which the Company is authorized to issue shall be as set forth below;
Common stock:

6,000,000,000 sharesClass 1 preferred stock:200,000,000 sharesClass 2 preferred stock:200,000,000 sharesClass 3 preferred stock:200,000,000 sharesClass 4 preferred stock:200,000,000 shares

Article 7. (Number of Shares Constituting One Unit)
The number of shares constituting one (1) unit of shares of the Company shall be one hundred (100) withrespect to common shares and each class of preferred shares, respectively.
Article 8. (Rights Pertaining to Less-than-a-full-unit Shares)
Any shareholder of the Company shall not exercise any right pertaining to shares which do not constitute afull unit of shares (“Less-than-a-full-unit Shares”) he/she has except the following rights;.
(1) rights granted by the items listed in Article 189, Paragraph 2 of the Companies Act.
(2) a right to make a request pursuant to Article 166, Paragraph 1 of the Companies Act.
(3) a right for allotment of shares for subscription or stock acquisition rights for subscription in proportion
to the number of shares owned by a shareholder.
(4) a right to make a request pursuant to the following article.
Article 9. (Request for Purchasing Less-than-a-full-unit shares)
Any shareholder of the Company with Less-than-a-full-unit Shares may request the Company to sell sharesto that shareholder which will become the number of full unit of shares together with the number ofLess-than-a-full-unit Shares owned by the shareholder.
Article 10. (Share Registrar)
1. The Company shall have a share registrar.
2. The share registrar and its place for handling business shall be appointed and designated by a resolutionof the board of directors, and public notice thereof shall be given.
Article 11. (Share Handling Regulations)
The handling business relating to shares of the Company shall, except as provided in these “Articles ofIncorporation”, be governed by the “Share Handling Regulations” to be established by the board of directors or
executive officers under authorities delegated by resolutions of the board of directors.

CHAPTER III
PREFERRED SHARESArticle 12. (Preferred Dividends)
1. The Company shall, fixing March 31 as the record date pursuant to Article 44, Paragraph 1 herein,
distribute cash dividends from surplus on preferred shares (“Preferred Dividends”) in such respective amount asprescribed below to holders of preferred shares (“Preferred Shareholders”) or registered pledgees of shares inrespect of preferred shares (“Registered Pledgees of Preferred Shares”), in priority to holders of common shares(“Common Shareholders”) and registered pledgees of shares in respect of common shares (“Registered Pledgeesof Common Shares”); provided, however, that in the event that Preferred Interim Dividends defined in Article 13
herein have been paid during the fiscal year to which that date belongs, the total amount so paid shall be deductedaccordingly.
Class 1 preferred stock and Class 2 preferred stock: Amount per share calculated by multiplying the amountequivalent to subscription money per share by the annual dividend rate specified in a resolution of the board of
directors or a determination by executive officer(s) under authorities delegated by a resolution of the board of
directors prior to the issuance of each class of preferred stock, which rate shall not exceed fifteen (15) percent
Class 3 preferred stock and Class 4 preferred stock: Amount per share calculated by multiplying the amountequivalent to subscription money per share by the annual dividend rate specified in a resolution of the board of
directors or a determination by executive officer(s) under authorities delegated by a resolution of the board of
directors prior to the issuance of each class of preferred stock, which rate shall not exceed ten (10) percent
2. If the aggregate amount paid to a Preferred Shareholder or Registered Pledgee of Preferred Shares as cash
dividends from surplus in any particular fiscal year is less than the relevant Preferred Dividends, the unpaid
amount shall not be accumulated in subsequent fiscal years.
3. The Company shall not distribute any dividends from surplus to any Preferred Shareholder or Registered
Pledgee of Preferred Shares in excess of the relevant Preferred Dividends; provided, however, that this shall not
apply to distributions from surplus in the process of a corporate split (kyushu-bunkatsu) pursuant to Article 758,
Item 8(b) or Article 760, Item 7(b) of the Companies Act, or the distribution from surplus in the process of acorporate split (shinsetsu-bunkatsu) pursuant to Article 763, Item 12(b) or Article 765, Paragraph 1, Item 8(b) ofthat Act.
Article 13. (Preferred Interim Dividends)
In the event that the Company distributes cash dividends from surplus on preferred shares, fixing any of thedates specified in Article 44, Paragraph 1 herein except March 31 as a record date, the Company shall pay cash toPreferred Shareholders or Registered Pledgees of Preferred Shares in priority to Common Shareholders andRegistered Pledgees of Common Shares, in the amount specified in a resolution of the board of directors or adetermination by executive officer(s) under authorities delegated by a resolution of the board of directors prior to
the issuance of each class of preferred shares (“Preferred Interim Dividends”), which amount shall not exceed
half of the amount of Preferred Dividends per share; provided, however, that the total amount of PreferredInterim Dividends shall not exceed the total amount of Preferred Dividends.
Article 14. (Distribution of Residual Assets)
1. In the event that the Company distributes its residual assets, the Company shall pay cash to the Preferred
Shareholders or Registered Pledgees of Preferred Shares in priority to the Common Shareholders and Registered
Pledgees of Common Shares in such respective amount as prescribed below:
Class 1 preferred stock, Class 2 preferred stock, Class 3 preferred stock and Class 4 preferred stock;
Amount per share specified in a resolution of the board of directors or a determination by executive
officer(s) under authorities delegated by a resolution of the board of directors prior to the issuance of eachclass of preferred stock, given the amount equivalent to subscription money per share2. The Company shall not make distribution of residual assets other than as provided for in the preceding
paragraph to the Preferred Shareholders or Registered Pledgees of Preferred Shares.
Article 15. (Voting Rights)
Any Preferred Shareholder may not exercise voting rights on any matters at meetings of shareholders;provided, however, that the Preferred Shareholders may exercise voting rights on any matters at meetings ofshareholders, in the event that no resolution of the board of directors concerning Preferred Shareholders’receiving Preferred Dividends had been made before the notice of convocation for an annual meeting ofshareholders was given in respect of each fiscal year, during the period through a resolution of the board of
directors or meeting of shareholders for a proposal concerning Preferred Shareholders’ receiving Preferred
Dividends will be made, from the time of the annual meeting of shareholders if no proposal concerning Preferred
Shareholders’ receiving Preferred Dividends is submitted to that annual meeting of shareholders, or from thetime when the annual meeting of shareholders is concluded if a proposal concerning Preferred Shareholders’receiving Preferred Dividends was dismissed in that annual meeting of shareholders.
Article 16. (Right to Demand Acquisition)
1. Any Class 3 Preferred Shareholder and Class 4 Preferred Shareholder may demand the Company toacquire his/her preferred shares during the period that such Preferred Shareholder is entitled to demand theacquisition as specified in a resolution of the board of directors or a determination by executive officer(s) underauthorities delegated by a resolution of the board of directors prior to the issuance of each class of preferred stock(the “Period to Demand Acquisition”). In the event that such demand is made, the Company shall deliver its
common shares to that Preferred Shareholder in exchange for the Company’s acquisition of the preferred shares
held by that Preferred Shareholder. The number of common shares to be delivered shall equal (A) the number ofpreferred shares demanded to be acquired by that Preferred Shareholder multiplied by the amount equivalent to
subscription money per share divided by (B) the Acquisition Price provided for in Paragraph 2 in this Article. If
the number of common shares to be delivered in exchange for the Company’s acquisition of such preferredshares includes a fraction less than one (1) share, that fraction shall be handled pursuant to Article 167, Paragraph
3 of the Companies Act.
2. The “Acquisition Price” means the amount initially calculated, given the market price of the Company’scommon shares, in accordance with the method specified in a resolution of the board of directors or adetermination by executive officer(s) under authorities delegated by a resolution of the board of directors prior to
the issuance of each class of preferred stock. That resolution of the board of directors or a determination by
executive officer(s) may specify methods to alter or adjust the Acquisition Price. If the Acquisition Price shall be
altered in accordance with such resolution or determination, a lower limit to the price to be altered shall be setout. In the event that the Acquisition Price becomes less than such lower limit, that Acquisition Price shall be
altered to such lower limit.
Article 17. (Blanket Redemption)
On the day following the last day of the Period to Demand Acquisition, the Company shall redeem all Class
3 preferred shares and Class 4 preferred shares which have not been acquired by the Company on and before thelast day of the Period to Demand Acquisition. In this case, the Company shall deliver its common shares to each
Preferred Shareholder in exchange for the Company’s redemption of such preferred shares. The number ofcommon shares to be delivered shall equal (A) the number of preferred shares held by each Preferred Shareholder
multiplied by the amount equivalent to subscription money per share divided by (B) the market price of theCompany’s common shares. The details of such redemption shall be specified in a resolution of the board of
directors or a determination by executive officer(s) under authorities delegated by a resolution of the board of
directors prior to the issuance of each class of preferred stock. That resolution or determination may specify themethod to calculate an upper limit to the number of common shares to be delivered. In the event that the numberof common shares to be delivered in exchange for the Company’s redemption of such preferred shares includes afraction less than one (1) share, that fraction shall be handled pursuant to Article 234 of the Companies Act.

Article 18. (Provision for Redemption)
1. With respect to Class 1 preferred stock, Class 2 preferred stock or Class 4 preferred stock, if any event
specified in a resolution of the board of directors or a determination by executive officer(s) under authorities
delegated by a resolution of the board of directors prior to the issuance of each class of preferred stock occurs
and the day separately specified in a resolution of the board of directors or a determination by executive
officer(s) under authorities delegated by a resolution of the board of directors arrives, the Company may redeem
in whole or in part those preferred shares. In this case, the Company shall, per preferred share of that class, payeach Preferred Shareholder the amount of cash specified, given the amount equivalent to the subscription money,
in a resolution of the board of directors or a determination by executive officer(s) under authorities delegated bya resolution of the board of directors prior to the issuance of the class of preferred stock.
2. In case the Company redeems a part of preferred shares pursuant to the preceding paragraph, such
redemption shall be made by means of a lot or pro rata allocation.
Article 19. (Consolidation or Split of Shares, etc.)
1. The Company shall not consolidate or split any preferred shares, except as otherwise provided in laws orordinances.
2. The Company shall not allot to the Preferred Shareholders shares without contribution or stockacquisition rights without contribution.
3. The Company shall not grant the Preferred Shareholders rights for allotment of shares for subscription orrights for allotment of stock acquisition rights for subscription.
Article 20. (Order of Priority)
All classes of preferred stocks shall have the same order of priority in respect of the payment of Preferred
Dividends and Preferred Interim Dividends and the distribution of residual assets.
CHAPTER IV
MEETINGS OF SHAREHOLDERS
Article 21. (Convocation)
1. An annual meeting of shareholders shall be convened within three (3) months from April 1 each year andan extraordinary meeting of shareholders shall be convened whenever necessary.
2. A meeting of shareholders shall, except as otherwise provided by laws or ordinances, be convened by the
director predetermined by the board of directors.
Article 22. (Record Date of an Annual Meeting of Shareholders)
The record date for voting rights at an annual meeting of shareholders shall be March 31 of each year.
Article 23. (Voting by Proxy)
A shareholder may exercise his voting right through a proxy who is a shareholder of the Company having avoting right.
Article 24. (Chairman of Meetings)
President & Chief Executive Officer shall act as chairman of a meeting of shareholders; provided, however,that when President & Chief Executive Officer is unable so to act, one of the other representative executive
officers shall take his place in accordance with the order of priority predetermined by a resolution of the board of
directors.

Article 25. (Disclosure of Reference Materials for a Meeting of Shareholders on the Internet)
The Company may deem that it has provided shareholders with information which should be stated or
shown in reference materials for a meeting of shareholders, business reports, financial statements andconsolidated financial statements when it has made a disclosure on the internet in compliance with requirements
stipulated by laws and ordinances.
Article 26. (Resolutions)
1. Resolutions of a meeting of shareholders shall, except as otherwise provided by laws or ordinances, be
adopted by a majority of the votes of the shareholders who are present thereat and entitled to exercise their voting
rights.
2. Any resolution under Article 309, Paragraph 2 of the Companies Act shall be adopted at such meeting at
which shareholders holding not less than one-third (1/3) of the voting rights owned by all shareholders of theCompany who are entitled to exercise their voting rights shall be present, by a majority of not less than
two-thirds (2/3) of the voting rights of the shareholders so present.
Article 27. (Meetings of Class Shareholders)
1. Resolutions of a meeting of class shareholders shall, except as otherwise provided by laws or ordinances,be adopted by a majority of the votes of the shareholders who are present thereat and entitled to exercise theirvoting rights.
2. Any resolution under Article 324, Paragraph 2 of the Companies Act shall be adopted at such meeting at
which shareholders holding not less than one-third (1/3) of the voting rights owned by all shareholders of theCompany who are entitled to exercise their voting rights shall be present, by a majority of not less than
two-thirds (2/3) of the voting rights of the shareholders so present.
3. The provisions of Article 21, Paragraph 2 and Articles 23 through 25 herein shall apply mutatis mutandis
to the meetings of class shareholders.

CHAPTER V
DIRECTORS AND THE BOARD OF DIRECTORS
Article 28. (Number of Directors and Election)
1. The Company shall have not more than twenty (20) directors, who shall be elected at a meeting ofshareholders.
2. The resolution for the election referred to in the preceding paragraph shall require the presence ofshareholders holding not less than one-third (1/3) of the voting rights out of the total number of the voting rights
owned by all the shareholders of the Company who are entitled to exercise their voting rights.
3. No cumulative voting shall be used for the election of directors.
4. One (1) Chairman of the Board of Directors shall be elected from among the directors.
Article 29. (Term of Office)The term of office of directors shall expire at the time of conclusion of the annual meeting of shareholders
with respect to the last fiscal year ending within one (1) year after their election. However, the term of office ofany director elected to fill a vacancy shall expire when the term of office of his predecessor would have expired.

Article 30. (Convocation)
1. A meeting of the board of directors shall, except as otherwise provided by laws or ordinances, beconvened by the director designated by the board of directors.
2. A notice of convocation referred to in the preceding paragraph shall be given to each director at least two(2) days prior to the date set for the meeting.
Article 31. (Chairman of Meetings)
The director designated by the board of directors shall act as chairman of a meeting of the board of
directors.
Article 32. (Resolutions)
1. Resolutions of the board of directors shall be adopted by an affirmative vote of a majority of the directors
present which directors present shall constitute a majority of all directors then in office.
2. The Company shall deem that a resolution of the board of directors has been adopted in case therequirements stipulated by Article 370 of the Companies Act have been fulfilled.
Article 33. (Limitation of Liabilities of Directors)
1. The Company may release directors (including former directors) from liabilities for damages due tonegligence of their duties to the extent permitted by laws or ordinances by resolutions of the board of directors
pursuant to the provision of Article 426, Paragraph 1 of the Companies Act.
2. The Company may execute with outside directors (meaning “outside directors” defined in Article 2,
Item 15 of the Companies Act) an agreement that will limit their liabilities for damages due to negligence of theirduties pursuant to the provision of Article 427, Paragraph 1 of the Companies Act. However, the maximum
amount of damages under the agreement shall be the higher of either the amount previously determined whichshall not be less than 20 million yen or the amount set forth by laws or ordinances.

CHAPTER VINOMINATION COMMITTEE, AUDIT COMMITTEE AND COMPENSATION COMMITTEE
Article 34. (Maintenance of Committees)
1. Members who constitute the Nomination Committee, the Audit Committee and the Compensation
Committee shall be appointed from the directors by a resolution of the board of directors.
2. The chairman of each committee shall be elected by a resolution of the board of directors.
Article 35. (Authorities of Committees, etc.)
1. The Nomination Committee shall have authorities to determine the particulars of a proposal concerning
the election and dismissal of directors to be submitted to a meeting of shareholders.
2. The Audit Committee shall have authorities to perform the following duties;(1) Audit of performance of duties by directors and executive officers and preparing audit reports(2) Determination of the particulars of proposals concerning the election and dismissal of the accounting
auditors and proposals concerning non-reelection of the accounting auditors to be submitted to ameeting of shareholders

3. The Compensation Committee shall have authorities to determine the policy with respect to thedetermination of the particulars of the compensation and other remuneration for each director and executive
officer, and the particulars of the compensation and other remuneration for each director and executive officer. In
case when an executive officer simultaneously serves as employee of the Company, the foregoing shall apply tothe compensation and other remuneration for that employee.
Article 36. (Matters concerning Committees)
Matters concerning each committee shall, in addition as provided by laws or ordinances or by these Articles
of Incorporation, be determined by the board of directors.

CHAPTER VII
EXECUTIVE OFFICERS
Article 37. (Executive Officers and Authorities of Execution of Business)
1. The Company shall have not more than forty-five (45) executive officers, who shall be elected by theboard of directors.
2. The executive officers shall perform the following duties;(1) Determination of the execution of the operations of the Company that were delegated by a resolution of
the board of directors(2) Execution of the operations of the Company
Article 38. (Term of Office)The term of office of executive officers shall expire at the time of conclusion of the first meeting of board of
directors convened after the annual meeting of shareholders concerning the last fiscal year ending within one(1) year after their assumption of office.
Article 39. (Representative Executive Officers and Executive Officers with Special Titles)
1. The Company shall, by a resolution of the board of directors, select representative executive officers fromthe executive officers.
2. The Company may, by a resolution of the board of directors, appoint one (1) President & Chief Executive
Officer, one (1) or more Deputy Presidents, Executive Vice Presidents and Senior Corporate Managing Director.
Article 40. (Limitation of Liabilities of Executive Officers)
The Company may release executive officers (including former executive officers) from liabilities fordamages of due to negligence of their duties to the extent permitted by laws or ordinances by resolutions of theboard of directors pursuant to the provision of Article 426, Paragraph 1 of the Companies Act.
Article 41. (Matters concerning Executive Officers)
Matters concerning executive officers shall, in addition as provided by laws or ordinances or by these“Articles of Incorporation”, be determined by the board of directors.

CHAPTER VIIIACCOUNTS
Article 42. (Fiscal Year)The fiscal year of the Company shall commence on April 1 of each year and end on March 31 of thefollowing year.
Article 43. (Distribution of Surplus and Acquisition of Own Shares)
The Company shall, by a resolution of the board of directors without obtaining a resolution of a meeting ofshareholders, determine the particulars contained in the items of Article 459, Paragraph 1, including distributionof surplus, except as otherwise stipulated by laws or ordinances.
Article 44. (Record Date for Distribution of Surplus)
1. The record dates for dividends of the Company shall be June 30, September 30, December 31 andMarch 31 of each year.
2. The Company may, in addition to the dates in the preceding paragraph,, fix other dividend record dates
and distribute surplus.
3. In case dividends are paid in cash, the Company shall be relieved from the obligation of paying dividends
if such dividends remain unreceived for three (3) years after the date of the commencement of payment thereof.

SUPPLEMENTARY PROVISION(Transitional Measures for Relief of Liabilities of Directors and Executive Officers)
The Company may, by a resolution of the board of directors, release directors and executive officers(including former directors and former executive officers) from liabilities to the extent permitted by laws orordinances for the acts prescribed in Article 21-17, Paragraph 1 of the Law for Special Exceptions to theCommercial Code (“Special Law”) before its abolishment by the Act on Arrangement of Relevant Acts
Incidental to Enforcement of the Companies Act (Act No. 87 of 2005).
(Register of Lost Share Certificates)
The preparation and keeping of the register of lost share certificates of the Company and other business
relating to the register of lost share certificates of the Company shall be delegated to the share registrar and shallnot be handled by the Company. This supplementary provision is to be valid until January 5, 2010 and deleted on
January 6, 2010.

HISTORY
1. The date on which these ARTICLES OF INCORPORATION were first drawn up:
November 27, 1925
2. Dates of amendments
October 20, 1948

November 22, 1972

September 30, 2007

November 30, 1948

November 22, 1973

June 25, 2009

January 15, 1949

November 20, 1975

May 26, 1949

December 17, 1976

November 26, 1949

December 14, 1978

January 27, 1950

December 18, 1981

March 29, 1950

December 17, 1982

November 28, 1950

December 22, 1983

November 27, 1951

December 20, 1984

November 29, 1952

December 20, 1985

May 26, 1953

December 19, 1986

November 24, 1953

December 18, 1987

May 7, 1954

December 16, 1988

November 26, 1954

June 28, 1990

November 25, 1955

June 27, 1991

April 27, 1956

June 29, 1993

November 20, 1956

June 29, 1994

November 25, 1957

June 27, 1996

November 25, 1958

June 27, 1997

June 1, 1959

June 29, 1999

November 26, 1959

June 29, 2000

November 25, 1960

October 1, 2001

November 24, 1961

June 26, 2002

November 24, 1962

June 26, 2003

November 25, 1963

June 25, 2004

November 24, 1966

January 4, 2005

November 25, 1967

June 28, 2005

November 21, 1968

June 28, 2006

Exhibit 1.2(Translation)
SHARE HANDLING REGULATIONSOFNOMURA HOLDINGS, INC.
(Nomura Horudingusu Kabushiki Kaisha)
CHAPTER I
GENERAL PROVISIONS
Article 1. (Purpose)
The handling business relating to the shares of the Company and the procedures for exercise ofshareholders’ right shall be governed by the provision set forth by Japan Securities Depository Center, Inc.
(hereinafter referred to as “JASDEC”) and the account management institutions including securities company,
etc. (hereinafter referred to as “Securities Company, etc.”), with which shareholders have their transfer accounts,
and by the provision of Article 12 (Share Handling Regulations) of the Articles of Incorporation.
Article 2. (Share Registrar)
The share registrar of the Company and its handling place of business shall be as follows:(1) Share registrar
Mitsubishi UFJ Trust and Banking Corporation
4-5, Marunouchi 1-chome, Chiyoda-ku, Tokyo(2) Its handling place of business
Securities Agency Department,
Mitsubishi UFJ Trust and Banking Corporation
4-5, Marunouchi 1-chome, Chiyoda-ku, Tokyo

CHAPTER IIRECORDS TO THE REGISTER OF SHAREHOLDERS
Article 3. (Records to the Register of Shareholders)
1. Any change of records in the register of shareholders shall be made by notices such as the notice ofgeneral shareholders from JASDEC (other than the notice (hereinafter referred to as the “Individual Shareholders
Notice”) as stipulated in Article 154, Paragraph 3 of the Law Concerning Book-Entry Transfer of Corporate
Bonds, Stocks, etc. (hereinafter referred to as the “Transfer Law”)).
2. Other than the case as set forth above, in issuance of new shares or in other cases as required by therelevant laws or ordinances, changes in the register of shareholders shall be made without notices from JASDEC.
3. Records in the register of shareholders shall be made with the characters and symbols designated by
JASDEC.
Article 4. (Notification relating to the Register of Shareholders)
A shareholder shall register its name and address through Securities Company, etc. and JASDEC in
accordance with the procedures provided by JASDEC. The same shall apply to any change thereof.

Article 5. (Representatives of Corporate Shareholders)
If a shareholder is a corporation, one (1) representative of such corporation shall be notified throughSecurities Company, etc. or JASDEC in accordance with the procedures as provided by JASDEC. The same shallapply to any change thereof.
Article 6. (Representatives of Joint Owned Shares)
Shareholders who jointly own shares shall appoint one (1) representative, and submit a notification thereofthrough Securities Company, etc. and JASDEC in accordance with the procedures as provided by JASDEC. The
same shall apply to any change thereof.
Article 7. (Legal Representative)
A legal representative such as a person having parental authority or a guardian of a shareholder shall notify
its name and address through Securities Company, etc. and JASDEC in accordance with the procedures asprovided by JASDEC. The same shall apply to any change or removal thereof.
Article 8. (Notification of Address by Foreign Resident Shareholders, etc.)
A shareholder residing in a foreign country or its legal representative shall appoint its standing proxy inJapan, or designate a mailing address in Japan to receive notices. The name and address of the standing proxy or
the mailing address to receive notices shall be notified through Securities Company, etc. and JASDEC in
accordance with the procedures as provided by JASDEC. The same shall apply to any change or removal thereof.
Article 9. (Confirmation of Notification Made by way of JASDEC)
A notification by shareholders, which is submitted through Securities Company, etc. and JASDEC, shall bedeemed as a notification from the shareholder.
Article 10. (Registered Pledgees for Shares)
The provisions of this Chapter shall apply mutatis mutandis to the registered pledgees for shares.

CHAPTER III
IDENTIFICATION OF SHAREHOLDERS
Article 11. (Identification of Shareholders)
1. If a shareholder (including a shareholder to whom the Individual Shareholders Notice is given) claims orexercises other shareholder rights (hereinafter collectively referred to as the “Claims, etc.”), such shareholder
shall attach or provide an evidence to support that the shareholder is the very person who made such Claims, etc.
(hereinafter referred to as the “Evidencing Materials, etc.”), unless otherwise verified by the Company that the
Claims, etc. were made by the said shareholder.
2. The Claims, etc. made by any shareholder to the Company through the Securities Company, etc. and
JASDEC shall be deemed as the Claims, etc. made by such shareholder, and submission of the Evidencing
Materials, etc is not required.
3. The Claims, etc. by a proxy shall be made pursuant to the provisions of the preceding two paragraphswith a letter of proxy attached thereto, bearing a signature or the name and seal of the shareholder. In such a
letter of proxy, the name and address of a delegate shall be indicated.
4. Provisions of the preceding paragraphs 1 and 2 shall apply mutatis mutandis to the proxy.

CHAPTER IV
PROCEDURES FOR EXERCISING SHAREHOLDER’S RIGHTS, ETC.
Article 12. (Minority Shareholders’ Right, etc.)
When a shareholder exercises his/her minority shareholders’ rights etc., defined in Article 147, Paragraph 4of the Transfer Law, except as otherwise set forth herein, directly towards the Company, that shareholder shallmake his request for such exercise by submitting a document bearing the signature or the name and seal alongwith making a request for an Individual Shareholder’s Notice.
Article 13. (Description of Shareholder Proposals in Reference Materials for General Meeting of Shareholders)
In the event a shareholder submits a proposal in the general meeting of shareholders, the length of the
proposal shall be as follows, as determined by the Company in accordance with Article 93, Paragraph 1 of theRegulations for Enforcement of the Companies Act.
(1) Reasons for proposal
Four hundred (400) characters in length for each proposal(2) Matters to be included in reference materials for general meeting of shareholders concerning the
proposal for election of officers
Four hundred (400) characters in length for each candidate
Article 14. (Methods of Filing Requests)
When any shareholder exercises rights by an electronic method pursuant to laws or ordinances, suchshareholder shall do so on the website of the Company(http://www.nomuraholdings.com/jp/investor/shareholders/sstep.html).

CHAPTER V
PURCHASE OF LESS-THAN-A-FULL-UNIT SHARESArticle 15. (Method of Requesting Purchase of Less-than-a-Full-Unit)
In case that purchase of less-than-a-full-unit shares is requested, such request shall be made throughSecurities Company, etc. and JASDEC in accordance with the procedures as provided by JASDEC.
Article 16. (Determination of Purchase Price)
1. The purchase price per share for a purchase request in accordance with the preceding Article 15 shall be
the closing price per share at the Tokyo Stock Exchange, Inc. (“TSE”) on the day on which the purchase request
is received at the Share Registrar’s handling place of business; provided, however, that if no sales of the sharetake place on the said day, or the said day fall on a holiday of the said stock exchange, the purchase price pershare shall be the price per share settled at the first sale thereafter.
2. The purchase price shall be the amount obtained by multiplying the purchase price per share referred to in
the preceding paragraph by the number of shares requested for purchase.
Article 17. (Payment of Purchase Price)
1. The Company shall pay the amount of the purchase price (hereinafter referred to as the “Purchase Price”)
calculated pursuant to the preceding Article 16 after deduction of the handling fees set forth in Article 26, unlessotherwise set forth thereby, the purchase price on the fourth business day from the following day on which thepurchase price per share is determined in accordance with the procedure as provided by JASDAC; provided,
however, that if the purchase price contains the right to dividend from surplus or stock split, etc., the Company
shall pay the Purchase Price no later than the record date thereof.
2. A person requesting share purchase may request payment of the Purchase Price to be transferred to thebank deposit account designated by such person or in cash through Japan Post Bank Co., Ltd.
Article 18. (Transfer of Purchased Shares)
The less-than-a-full-unit shares requested for purchase shall be transferred to the transfer account of theCompany on the date of payment or completion of the procedures for payment of the Purchase Price inaccordance with the preceding Article 17.

CHAPTER VI
ADDITIONAL PURCHASE OF LESS-THAN-A-FULL-UNIT SHARESArticle 19. (Method of Requesting for Additional Purchase of Less-than-a-full-unit Shares)
In case that a shareholder who holds less-than-a-full-unit shares requests the Company to sell him / hershares in such number that will constitute one (1) unit when added to such less-than-a-unit shares (hereinafterreferred to as the “Request for Additional Purchase”), such request shall be made through Securities Company,
etc. and JASDEC in accordance with the procedures as provided by JASDEC.
Article 20. (Request for Additional Purchase in Excess of Available Treasury Shares)
If the aggregated number of shares requested in the Request for Additional Purchase on a same day exceeds
the number of treasury shares available for transfer by the Company, none of the Request for Additional
Purchase on the said day shall come into effect.
Article 21. (Effective Date of Request for Additional Purchase)A Request for Additional Purchase shall come into effect on the day when the said Request for Additional
Purchase is received at the Share Registrar’s handling place of business.
Article 22. (Determination of Purchase Price)
1. The additional purchase price per share of less-than-a-full-unit share shall be the closing price on the TSEon the effective date of the Request for Additional Purchase; provided, however, that if no sales of the share takeplace on the said day, or the said day fall on a holiday of the said stock exchange, the purchase price per share
shall be the price per share settled at the first sale thereafter.
2. The additional purchase price shall be the amount obtained by multiplying the additional purchase priceper share referred to in the preceding paragraph by the number of shares requested for purchase.
Article 23. (Transfer of Additionally Purchased Shares)
Application for transfer of treasury shares to the shareholder’s transfer account in a number equal to thenumber of shares subject to a Request for Additional Purchase shall be made on the day on which it has been
confirmed that the sum calculated by adding the handling fees set forth in Article 26 to the additional purchaseprice has been remitted to the bank deposit account designated by the Company through Securities Company, etc.
in accordance with the procedures as provided by JASDEC.

Article 24. (Period of Suspension for Additional Purchase Request)
1. The Company shall suspend the acceptance of Request for Additional Purchase every year from theperiod starting from the tenth business day prior to and ending on the respective dates listed below:(1) March 31;(2) June 30;(3) September 30;(4) December 31; and(5) Any other dates as provided by JASDEC, such as the record date of shareholders, etc.
2. Notwithstanding the preceding paragraph, the Company may, when it deems necessary, set additional
periods for suspension of the acceptance of Request for Additional Purchase.

CHAPTER VII
SPECIAL TREATMENT OF SPECIAL ACCOUNT
Article 25. (Special Treatment of Special Account)
Identification of a shareholder who opened a special account and other treatments related to the special
account shall be in accordance with the procedures as provided by JASDEC as well as by the accountmanagement institution of the said special account.

CHAPTER VIIIHANDLING FEES
Article 26. (Handling Fees)
Handling fees with respect to a purchase of less-than-one-unit shares pursuant to Article 15 and a Request
for Additional Purchase of less-than-one-unit shares pursuant to Article 19 shall as follows:
An amount obtained in accordance with the following formula as equivalent to the brokerage commission
for 100 shares, prorated according to the number of shares so purchased or additionally purchased, for eachcase of purchase.
(Formula)
The handling fee shall be measured through the way where at first, the purchase price per share determined
under Article 16 or the additional purchase price per share determined under Article 22 shall be multipliedby 100 shares (the “assumed total amount”) and then calculated by using the following ratios to the assumed
total amount.
The first 1,000,000 yen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
More than 1,000,000 yen to 5,000,000 yen (inclusive) . . . . . . . . . . . . . . . . . . . . . . . .
More than 5,000,000 yen to 10,000,000 yen (inclusive) . . . . . . . . . . . . . . . . . . . . . . .
More than 10,000,000 yen to 30,000,000 yen (inclusive) . . . . . . . . . . . . . . . . . . . . . .
More than 30,000,000 yen to 50,000,000 yen (inclusive) . . . . . . . . . . . . . . . . . . . . . .
(If there is any fraction of 1 yen, it shall be disregarded.)

1.150%
0.900%
0.700%
0.575%
0.375%

Provided, however, that if the amount so obtained per 100 shares falls under 2,500 yen, it shall be 2,500 yen.

2. Notwithstanding the preceding paragraph, the Executive Officers designated by the resolution of theBoard of Directors are authorized to determine the period the Company does not charge handling fees for apurchase of less-than-a-full-unit shares or an additional purchase of shares up to a whole unit.
Supplementary Provision
Article 1. (Enforcement)
These Regulations shall come into force as from January 5, 2009.
Article 2. (Amendment to the number of Article 1 in relation to the Amendment to the Articles of Incorporation)
When an article number of the Article 12 (Share Handling Regulations) of the Article of Incorporation isamended in the general meeting of shareholders, “Article 12” as provided in Article 1 shall refer to the amended
article number.
Article 3. (Application for Cancellation of Registration of Lost Share Certificate)
When a person who registered a loss of share certificate wishes to cancel such registration, such person shallsubmit a designated application form.
Article 4. (Application for Cancellation by a Person Holding Share Certificates)
When a person who possesses a share certificate for which registration of a loss of share certificate has been
made wishes to apply for cancellation of such registration, such person shall submit a designated application
form accompanied by the share certificate and documents verifying such person’s identity.
Article 5. (Mutatis Mutandis Application of Various Notifications)
When a person who has registered a loss of share certificates wishes to change the entry or record in theregistry of loss of share certificates, the provisions of Articles 4 through 8 shall be applied mutatis mutandis, andshall notify the Share Registrar’s handling place of business as set forth in Article 2.
Article 6. (Interim Measures)
The provisions of Articles 3 through 6 of these Supplementary Provisions shall be deleted on January 6,
2010.
Dates of Amendments
January 15, 2002
June 26, 2003
January 4, 2005
June 28, 2006
November 26, 2008

June 17, 2002
June 25, 2004
October 1, 2005
June 27, 2007
May 15, 2009

April 1, 2003
October 1, 2004
May 1, 2006
September 25, 2008

Exhibit 1.3(Translation)
REGULATIONS OF THE BOARD OF DIRECTORSOFNOMURA HOLDINGS, INC.
(Nomura Horudingusu Kabushiki Kaisha)
Article 1. (Purpose)
1. Pursuant to the “Regulations of the Organization”, these Regulations of the Board of Directors shallprovide for necessary matters with respect to the operation of the Board of Directors.
2. All matters concerning the Board of Directors shall, except as otherwise provided for by laws orordinances or by the Articles of Incorporation, be governed by the provisions of these Regulations.
Article 2. (Constitution)
The Board of Directors shall consist of all Directors of the Company.
Article 3. (Holding of Meetings)
A meeting shall be held not less frequently than quarterly.
Article 4. (Place of Holding of Meetings)
Meetings of the Board of Directors shall be held at the head office of the Company; provided, however, that,
if necessary, the meetings may be held at any other place or by telephone or other means at two or more places.
Article 5. (Convocation of Meetings)
1. The Chairman of the Board of Directors shall convene a meeting of the Board of Directors unlessotherwise provided for by laws or ordinances. However, when the Chairman of the Board of Directors is unable
so to act, one of the other Directors shall take his place in accordance with the order of priority predetermined bya resolution of the Board of Directors.
2. Directors may, if necessary, request the convocation of or convene a meeting of the Board of Directors, inaccordance with laws or ordinances.
3. Any Director constituting the Nomination Committee, the Audit Committee or the Compensation
Committee and appointed by such committee may convene a meeting of the Board of Directors.
4. Executive Officers may, if necessary, request the convocation of or convene a meeting of the Board of
Directors, in accordance with laws or ordinances.
Article 6. (Convocation Notices)
1. Notice of a meeting of the Board of Directors shall be given to each Director at least two (2) days prior to
the date set for such meeting.
2. With the consent of all Directors, a meeting of the Board of Directors may be held without following theconvocation procedure provided for in the foregoing paragraph.

Article 7. (Agenda)
The agenda of a meeting of the Board of Directors shall be notified in advance to each Director; provided,
however, that in an unavoidable case, the foregoing shall not be applied.
Article 8. (Chairman of Meetings)
The Chairman of the Board of Directors shall act as chairman of meetings of the Board of Directors.
However, when the Chairman of the Board of Directors is unable so to act, one of the other Directors shall takehis place in accordance with the order of priority predetermined by a resolution of the Board of Directors.
Article 9. (Resolutions)
1. The resolution of a meeting of the Board of Directors shall be adopted by an affirmative vote of amajority of the Directors present which Directors present shall constitute a majority of all Directors then in office
who are entitled to participate in the voting.
2. No director who has a special interest in any matter requiring a resolution shall be entitled to participate
in the voting on such matter.
3. In case Directors make a proposition with regard to any of the matters set forth in the following Article
and all Directors entitled to participate in the voting on such proposition indicate their intention of consent
thereto in writing or in electronic records, a resolution for adopting the proposition by the Board of Directors
shall be deemed to have been carried.
Article 10. (Matters Requiring Resolutions)
The following matters shall be referred to meetings of the Board of Directors:(1) Matters concerning meetings of shareholders:a.

Convocation of meetings of shareholders; andb.

Determination of the agenda (excluding the agenda concerning the election and removal of
Directors and the accounting auditors and the non-retention of the accounting auditors) to besubmitted to meetings of shareholders.

(2) Matters concerning officers:a.

Appointment and removal of the Chairman of the Board of Directors;b.

Appointment and removal of the Directors to constitute each of the Nomination Committee, theAudit Committee and the Compensation Committee;c.

Appointment and removal of the Chairman of each of the Nomination Committee, the Audit
Committee and the Compensation Committee;d.

Election and removal of Executive Officers;e.

Appointment and removal of representative executive officers;f.

Appointment and removal of the titled Executive Officers;g.

Appointment, removal and delegate of the Chief Operating Officer (COO) and the Chief Financial
Officer (CFO);h.

Determination of matters concerning allocation of functions of Executive Officers, relationshipsof their directions, other relationships between or among the Executive Officers and the delegationof Executive Officers in employees’ positions;i.

Appointment of a person authorized to convene and chair meetings of shareholders;j.

Appointment of a person authorized to convene and chair meetings of the Board of Directors
when the Chairman of the Board of Directors is unable so to act;k.

Approval of a Director’s or Executive Officer’s engaging in a competitive transaction;l.

Approval of transactions with the Company by Directors or Executive Officers involving conflictsof interest; andm. Appointment of information recipients of the Compliance Hotline.
(3) Matters concerning Nomura Group:a.

Planning of the fundamental management policy of Nomura Group;b.

Appointment of Business Division CEOsc.

Appointment of Business Line Heads, Business Support Line Heads, Regional Managements,
Group Compliance Head and Internal Audit Head (provided if a person other than Executive
Officer is appointed, representative executive officer may appoint)(4) Adoption, alternation and abolition of important regulations:a.

Regulations of the Organization (excluding amendments concerning “Chapter V Organization and
Allocation of Duties”, “Chapter VI Employees and Lines of Authority” and the annex“Organization Chart”);b.

Regulations of the Board of Directors;c.

Regulations of the Nomination Committee;d.

Regulations of the Audit Committee;e.

Regulations of the Compensation Committee;f.

Regulations of the Executive Management Board;g.

Regulations of the Internal Controls Committee;h.

Regulations of the Requests for Decisions (excluding amendments concerning the drafter in theannex);i.

Share Handling Regulationsj.

Code of Ethics; andk.

Regulations of the Review Meeting by Outside Directors.

(5) Matters concerning shares and financing:a.

Determination of a share registrar;b.

Approval of financial statements, business reports and their annex specifications;c.

Determination of the surplus policy and its distribution; andd.

Approval of disclosure for financial statements, etc.

(6) Matters prescribed by laws or ordinances as frameworks to secure proper operations.
(7) Any other matters prescribed by laws or ordinances to be determined by the Board of Directors.
Article 11. (Matters to be Reported)
1. Each member appointed by the Nomination Committee, the Audit Committee or the Compensation
Committee shall report to the Board of Directors on the status of execution of the function in such committee
without delay.

2. Executive Officers shall report to the Board of Directors the status of execution of business of theCompany not less frequently than quarterly.
3. Directors or Executive Officers who engaged in a competitive transaction or who had a transaction with
the Company involving a conflict of interest must report, without delay, the important facts with respect thereto
at a meeting of the Board of Directors.
Article 12. (Attendance of Persons Other Than Directors)
1. The Board of Directors may ask persons other than Directors to attend a meeting of the Board of
Directors, to report on the relevant matters and to express their opinions thereat whenever necessary.
2. The Executive Officers, Senior Managing Directors or employees attending a meeting of the Board of
Directors pursuant to the foregoing paragraph shall explain to the Board of Directors matters demanded by the
Board of Directors.
Article 13. (Minutes of Meetings)
1. The substance of proceedings at a meeting of the Board of Directors, the results thereof and other mattersprescribed by laws or ordinances shall be recorded in minutes (including electronic records; the same applies
hereinafter) of the meeting, and the Directors present shall affix their signatures or their names and seals(including electronic signatures; the same applies hereinafter) thereto.
2. In case a resolution by the Board of Directors shall be deemed to have been carried pursuant to theprovision of Article 9, Paragraph 3, the particulars of the proposition and other matters prescribed by laws orordinances shall be recorded in minutes, and all the Directors shall affix their signatures or their names and seals
thereto.
3. The minutes of the meeting of the Board of Directors shall be kept at the head office of the Company forten (10) years from the day on which the meeting was held.
4. The minutes of meetings of the Board of Directors shall not be offered to perusal or permitted to be
reproduced, except to the shareholders or creditors who have complied with formalities prescribed by laws orordinances.
Article 14. (Notices to Absent Directors)
Resolutions made at a meeting of the Board of Directors shall be notified to Directors who were absent fromsuch meeting.
Article 15. (Omission of Reports to the Board of Directors)
1. Notwithstanding the provisions of these Regulations, if any matter prescribed by laws or ordinances orthese Regulations to be reported to the Board of Directors (excluding any report on the status of execution ofbusiness of the Company that shall be given by Executive Officers to the Board of Directors not less frequently
than quarterly) is notified to all the Directors, such matter shall not be required to be reported at a meeting of theBoard of Directors.
2. In the case of the foregoing paragraph, the substance of the matter not required to be reported at a meetingof the Board of Directors and other matters prescribed by laws or ordinances shall be recorded in minutes, and all
the Directors shall affix their signatures or their names and seals thereto.

Supplementary Provision
These Regulations shall come into force as from October 1, 2001.
Dates of Amendments
May 1, 2002
August 1, 2003
April 1, 2005
May 1, 2006
May 15, 2007
October 28, 2008

April 1, 2003
April 1, 2004
October 1, 2005
June 28, 2006
April 1, 2008
June 25, 2009

June 26, 2003
April 28, 2004
April 1, 2006
April 1, 2007
October 1, 2008

Exhibit 1.4(Translation)
REGULATIONS OF THE NOMINATION COMMITTEEOF
NOMURA HOLDINGS, INC.
(Nomura Horudingusu Kabushiki Kaisha)
Article 1. (Purpose)
1. Pursuant to the “Regulations of the Organization”, these Regulations shall provide for necessary matterswith respect to the operation of the Nomination Committee.
2. The purpose of the Nomination Committee is to establish the appropriate management structure of the
Nomura Group through its performance.
3. All matters concerning the Nomination Committee shall, except as otherwise provided for by laws orordinances or by the Articles of Incorporation, be governed by the provisions of these Regulations.
Article 2. (Constitution)
1. The Nomination Committee shall consist of Directors appointed by the resolution of the Board of
Directors (hereinafter, referred to as the “Member Directors”).
2. The Nomination Committee shall consist of three or more Member Directors; provided, however, that the
majority of the Member Directors shall be outside Directors.
3. The Board of Directors shall, by its resolution, appoint the Chairman of the Nomination Committee.
Article 3. (Holding of Meetings)
A meeting of the Nomination Committee shall be held not less frequently than annually.
Article 4. (Place of Holding of Meetings)
Meetings of the Nomination Committee shall be held at the head office of the Company; provided, however,
that, if necessary, the meetings may be held at any other place or by telephone or other means at two or moreplaces.
Article 5. (Convocation of Meetings)
Meetings of the Nomination Committee shall be convened by the Chairman of the Nomination Committee.
However, any other Member Directors may convene a meeting of the Nomination Committee.
Article 6. (Convocation Notices)
1. Any Member Director who is going to convene a meeting of the Nomination Committee shall give notice
thereof to each Member Director at least two (2) days prior to the date set for such meeting.
2. With the consent of all Member Directors, a meeting of the Nomination Committee may be held without
following the convocation procedure provided for in the foregoing paragraph.
Article 7. (Agenda)
The agenda of a meeting of the Nomination Committee shall be notified in advance to each Member
Director; provided, however, that in an unavoidable case, the foregoing shall not be applied.

Article 8. (Chairman of Meetings)
The Chairman of the Nomination Committee shall act as a chairman of meetings of the Nomination
Committee. If the Chairman of the Nomination Committee is unable to act, another Member Director shall be
designated as a chairman upon consultation among the other Member Directors.
Article 9. (Resolutions)
1. The resolution of a meeting of the Nomination Committee shall be adopted by an affirmative vote of amajority of the Member Directors present which Member Directors present shall constitute a majority of all
Member Directors who are then in office and entitled to participate in the voting.
2. No Member Director who has a special interest in any matter requiring a resolution shall be entitled toparticipate in the voting on such matter.
Article 10. (Matters Requiring Resolutions)
The Nomination Committee shall determine the particulars of a proposal concerning the election anddismissal of Directors to be submitted to a general meeting of shareholders.
Article 11. (Attendance of Persons Other Than Member Directors)
1. The Nomination Committee may ask persons other than Member Directors to attend a meeting of theNomination Committee, to report on the relevant matters and to express their opinions thereat whenevernecessary.
2. The Directors, Executive Officers, Senior Managing Directors or employees attending a meeting of theNomination Committee pursuant to the foregoing paragraph shall explain to the Nomination Committee mattersdemanded by the Nomination Committee.
Article 12. (Minutes of Meetings)
1. The substance of proceedings at a meeting of the Nomination Committee, the results thereof and othermatters prescribed by laws or ordinances shall be recorded in minutes (including electronic records; the same
applies hereinafter) of the meeting, and the Member Directors present shall affix their signatures or their names
and seals (including electronic signatures; the same applies hereinafter) thereto.
2. The minutes of the meetings of the Nomination Committee shall be kept at the head office of theCompany for ten (10) years from the day on which the meeting was held.
3. The minutes of the meetings of the Nomination Committee shall not be offered to perusal or permitted tobe reproduced, except to the shareholders or creditors who have complied with formalities prescribed by laws orordinances.
4. Any Director may peruse or reproduce the minutes of the meetings of the Nomination Committee.
Article 13. (Notices to Absent Member Directors)
Resolutions made at a meeting of the Nomination Committee shall be notified to Member Directors who
were absent from such meeting.
Article 14. (Report to the Board of Directors)
The Member Director appointed by the Nomination Committee shall report to the Board of Directors on thestatus of execution of the function in Nomination Committee without delay; provided, however, that if the matteris reported to all Directors by the Member Director so appointed, it shall not be required to be reported at themeeting of the Board of Directors.

Article 15. (Omission of Report to the Nomination Committee)
1. Notwithstanding the provisions of these Regulations, if any matter prescribed by laws or ordinances orthese Regulations to be reported to the Nomination Committee is reported by Directors or Executive Officers to
all Member Directors, such any matter shall not be required to be reported at the meeting of the Nomination
Committee.
2. In the case of the foregoing paragraph, the substance of the matter not required to be reported at a meetingof the Nomination Committee and other matters prescribed by laws or ordinances shall be recorded in minutes,
and all the Member Directors shall affix their signatures or their names and seals thereto.

Supplementary Provision
These Regulations shall come into force as from June 26, 2003.
Dates of Amendments
April 1, 2006
October 1, 2008

May 1, 2006

June 28, 2006

Exhibit 1.5(Translation)
REGULATIONS OF THE AUDIT COMMITTEEOF
NOMURA HOLDINGS, INC.
(Nomura Horudingusu Kabushiki Kaisha)
Article 1. (Purpose)
1. Pursuant to the “Regulations of the Organization”, these Regulations shall provide for necessary matterswith respect to the operation of the Audit Committee.
2. The purpose of the Audit Committee is to promote lawful, proper and efficient business operations of the
Nomura Group through performing its functions.
3. All matters concerning the Audit Committee shall, except as otherwise provided for by laws orordinances or by the Articles of Incorporation, be governed by the provisions of these Regulations.
Article 2. (Constitution)
1. The Audit Committee shall consist of Directors appointed by the resolution of the Board of Directors(hereinafter, referred to as the “Member Directors”).
2. The Audit Committee shall consist of three or more Member Directors; provided, however, that the
majority of the Member Directors shall be outside Directors.
3. The Member Directors shall not currently assume the position of Executive Officers, Senior Managing
Directors, employees or executive directors of the Company or its subsidiaries.
4. The Board of Directors shall, by its resolution, appoint the Chairman of the Audit Committee.
5. Directors specially appointed by the Board of Directors (hereinafter referred to as the “Audit Mission
Directors”) shall attend meetings of the Audit Committee; provided, however, that the Audit Mission Directors
may not attend the meeting in case the Audit Committee instructs the Audit Mission Directors not to attend themeeting.
6. In accordance with applicable provisions of the Sarbanes-Oxley Act of 2002 and its related SEC andNYSE rules, all Member Directors shall be independent and, in principle, at least one Member Director shall be afinancial expert.
Article 3. (Holding of Meetings)
A meeting of the Audit Committee shall be held not less frequently than quarterly.
Article 4. (Place of Holding of Meetings)
Meetings of the Audit Committee shall be held at the head office of the Company; provided, however, that,
if necessary, the meetings may be held at any other place or by telephone or other means at two or more places.
Article 5. (Convocation of Meetings)
Meetings of the Audit Committee shall be convened by the Chairman of the Audit Committee. However,any other Member Directors may convene a meeting of the Audit Committee.

Article 6. (Convocation Notices)
1. Any Member Director who is going to convene a meeting of the Audit Committee shall give notice
thereof to each Member Director at least two (2) days prior to the date set for such meeting.
2. With the consent of all Member Directors, a meeting of the Audit Committee may be held without
following the convocation procedure provided for in the foregoing paragraph.
Article 7. (Agenda)
The agenda of a meeting of the Audit Committee shall be notified in advance to each Member Director;
provided, however, that in an unavoidable case, the foregoing shall not be applied.
Article 8. (Chairman of Meetings)
The Chairman of the Audit Committee shall act as a chairman of meetings of the Audit Committee. If the
Chairman of the Audit Committee is unable to act, another Member Director shall be designated as a chairman
upon consultation among the other Member Directors.
Article 9. (Resolutions)
1. The resolution of a meeting of the Audit Committee shall be adopted by an affirmative vote of a majorityof the Member Directors present which Member Directors present shall constitute a majority of all Member
Directors who are then in office and entitled to participate in the voting.
2. No Member Director who has a special interest in any matter requiring a resolution shall be entitled toparticipate in the voting on such matter.
Article 10. (Matters Requiring Resolutions)
The following matters shall be referred to meetings of the Audit Committee:(1) Matters concerning the fundamental policy and performing plans of audits;(2) Matters concerning the assignment of duties among Member Directors;(3) Particulars of proposals concerning the election and dismissal of the independent auditor and thenon-retention of the independent auditor to be submitted to a general meeting of shareholders;(4) Particulars of proposals concerning the election and dismissal of the SEC independent auditor (which
audits the Company’s consolidated financial statements filed with the SEC) and the non-retention of the SEC
independent auditor to be submitted to the Board of Directors.
(5) Matters concerning pre-approval of fees to and services provided by the SEC independent auditor andmatters concerning ensuring of independence of the SEC independent auditor;(6) Matters concerning fees to the independent auditor;(7) Matters concerning whistle-blowing procedures concerning accounting or auditing matters;(8) Matters concerning the annual audit plan of the independent auditor (including principal auditing mattersand allocation of auditors); and(9) In addition to the foregoing items, matters concerning the execution by Member Directors of their duties.

Article 11. (Matters to be Reported)
1. Each Member Director shall report at a meeting of the Audit Committee the method, process and result of
the audit performed by the Member Director.
2. In the event that a Member Director receives any important report, opinion or document from any
director, the independent auditor or other person, the Member Director shall report to that effect at a meeting of
the Audit Committee.
3. In the event that any of Directors, Executive Officers or Senior Managing Directors find any fact thatshould cause the Company to incur a great loss, it shall be reported to a Member Director immediately.
Article 12. (Reporting Obligations and Powers Concerning Request for Stopping Unlawful Act)
1. In case Member Directors consider that an Executive Officer, Senior Managing Director or Director doesor threatens to do illegal activities or finds a fact in violation of laws or ordinances or the Articles ofIncorporation or a significantly unreasonable fact, they shall report the same at a meeting of the Board of
Directors without delay.
2. In case an Executive Officer, Senior Managing Director or Director does or threatens to do an act not
falling within the scope of the object of the Company or any other act in violation of laws, ordinances or the
Articles of Incorporation and there exist fears that serious damages may accrue to the Company due thereto,
Member Directors may request the Executive Officers, Senior Managing Directors or Directors to stop the act.
Article 13. (Powers Concerning Investigation)
1. The Member Directors appointed by the Audit Committee have powers prescribed in the following items:a.

Powers to request other Directors, Executive Officers, Senior Managing Directors and employees
to make report on the matters concerning the execution of their duties;b.

Powers to investigate the conditions of the business and property of the Company;c.

Powers to request for the Company or its subsidiaries to make report on the status of operation ofits business or investigate the conditions of the business and property of the Company or its
subsidiaries, whenever it is necessary to exercise powers of the Audit Committee; andd.

Any other powers concerning audits deemed to be necessary by the Audit Committee.

2. The Member Directors prescribed in the preceding paragraph shall observe the resolution of the Audit
Committee with respect to the matters concerning request and receipt of the report or investigation under theprovision of each item in the preceding paragraph.
Article 14. (Duties of Audit Mission Director)
1. Audit Mission Directors shall supplement the audit by the Audit Committee and, for the Board of
Directors’ effective oversight of the business execution by Directors and Executive Officers, perform thefollowing functions:a.

Attendance at meetings of the Group Management Board, the Risk Management Committee, theRisk Management Sub Committee, the Internal Controls Committee and other important
committees;b.

Hearing of report on the execution of the business from Executive Officers, Senior Managing
Directors and employees;c.

Inspection and investigation of minutes of the meetings prescribed in item (a) above, documents
circulated for obtaining approval and other documents relating to the execution of the business;andd.

Inspection of the Company or its subsidiaries.

2. The Audit Committee or Member Directors appointed by the Audit Committee may give Audit Mission
Directors necessary instructions when the Audit Mission Directors perform the functions prescribed in each itemin the preceding paragraph.
3. Audit Mission Directors shall make report to the Audit Committee on the state of performance of theirfunctions prescribed in each item in the paragraph 1; provided, however, that the Audit Mission Directors shallnot be precluded from reporting to the Board of Directors.
Article 15. (Attendance of Persons Other Than Member Directors)
1. The Audit Committee may ask persons other than Member Directors to attend a meeting of the Audit
Committee, to report on the relevant matters and to express their opinions thereat whenever necessary.
2. The Directors, Executive Officers, Senior Managing Directors, employees or independent auditors
attending pursuant to the preceding paragraph shall explain to the Audit Committee matters demanded by the
Audit Committee.
Article 16. (Receipt of Financial Statements, etc.)
The Audit Committee shall receive financial statements, business reports and their annex specifications
from an Executive Officers engaged in the business concerning such financial statements, business reports andtheir annex specifications (hereinafter referred to as the “Designated Executive Officer”) and audit reports fromthe independent auditor.
Article 17. (Preparation of Audit Report)
1. The Audit Committee shall prepare audit reports and, within the legal term, deliver an audit report
regarding financial statements to the Designated Executive Officer and independent auditor and deliver an audit
report regarding business reports and their annex specifications to the Designated Executive Officer.
2. The audit report to be prepared by the Audit Committee pursuant to the provision of the preceding
paragraph shall state the matters prescribed in the relevant laws and regulations and others.
3. In the case of the foregoing paragraph, any Member Director’s opinion may be stated in the audit report.
Article 18. (Report from the SEC Independent Auditor)
The Audit Committee shall receive report from the SEC independent auditor on the audit report of theCompany’s consolidated financial statements filed with the SEC (including resolution of disagreements between
Executive Officers and the SEC independent auditor regarding the relevant financial reporting).
Article 19. (Engagement of Outside Advisers)
The Audit Committee or the Member Director appointed by the Audit Committee may engage attorneys,
certified public accountants, consultants or other outside advisers at the Company’s expenses without
pre-approval by the Board of Directors, Executive Officers or Senior Managing Directors in case suchengagement is deemed to be necessary for audits.
Article 20. (Pre-approval of the Audit Services)
The Audit Committee shall pre-approve fees to and services provided by the SEC independent auditor inaccordance with the determination regarding matters prescribed in Article 10, Item (5).

Article 21. (Minutes of Meetings)
1. The substance of proceedings at a meeting of the Audit Committee, the results thereof and other mattersprescribed by laws or ordinances shall be recorded in minutes (including electronic records; the same applies
hereinafter) of the meeting, and the Member Directors present shall affix their signature or their names and seals(including electronic signatures; the same applies hereinafter) thereto.
2. The minutes of the meeting of the Audit Committee shall be kept at the head office of the Company forten (10) years from the day on which the meeting was held.
3. The minutes of meetings of the Audit Committee shall not be offered to perusal or permitted to be
reproduced, except to the shareholders or creditors who have complied with formalities prescribed by laws orordinances.
4. Any Director may peruse or reproduce the minutes of meetings of the Audit Committee.
Article 22. (Notices to Absent Member Directors)
Resolutions made at a meeting of the Audit Committee shall be notified to Member Directors who wereabsent from such meeting.
Article 23. (Report to the Board of Directors)
The Member Director appointed by the Audit Committee shall report to the Board of Directors on the statusof execution of the function in Audit Committee without delay; provided, however, that, if the matter is reported
to all Directors by the Member Director so appointed, it shall not be reported at a meeting of the Board of
Directors.
Article 24. (Omission of Report to the Audit Committee)
1. Notwithstanding the provisions of these Regulations, if any matter prescribed by laws or ordinances orthese Regulations to be reported to the Audit Committee is reported by Directors, Executive Officers, Senior
Managing Directors or independent auditors to all Member Directors, such any matter shall not be required to bereported at a meeting of the Audit Committee.
2. In the case of the foregoing paragraph, the substance of the matter not required to be reported at a meetingof the Audit Committee and other matters prescribed by laws or ordinances shall be recorded in minutes, and all
the Member Directors shall affix their signatures or their names and seals thereto.
Article 25. (Lawsuits)
The Audit Committee may designate a Member Director who shall represent the Company with respect tolawsuits between the Company and its Directors or Executive Officers or shareholder derivative actionsprescribed in the Corporation Law.

Supplementary Provision
These Regulations shall come into force as from June 26, 2003.
Date of Amendments
April 28, 2004
May 1, 2006
April 1, 2008

May 1, 2005
June 28, 2006
October 28, 2008

April 1, 2006
March 2, 2007
May 15, 2009

Exhibit 4.3
Liabilities Limitation Agreement
NOMURA HOLDINGS, INC. (the “Company”) and(the “Outside Director”) hereby agree to enter into
the agreement (the “Agreement”) provided for in Article 24, paragraph 2 of the Articles of Incorporation of theCompany, pursuant to the provisions of the said paragraph.
Article 1
If the Outside Director becomes liable for damages to the Company pursuant to the provisions of Article 423,
Paragraph 1 of the Corporation Law, for any reason attributable to its duty performed in good faith and withoutgross negligence as the outside director of the Company on or after the date of this Agreement, the liability of theOutside Director to the Company for such damages shall be limited to the higher of 20 million yen or the total of
the amounts listed below:(i)the amount worth of the highest amount of the amounts which the Outside Director has received or should
receive from the Company as remunerations, bonuses or other compensations for his duties for the businessyear to which the date of occurrence of such event causing such liability belongs or for each of the previous
years, multiplied by 2,(ii) the total amounts of the retirement allowance and any proprietary interest having the nature of such
retirement allowance received by the Outside Director from the Company, divided by the number of yearsof the Outside Director’s service as the outside director (if the years of service are not more than 2, by 2),and(iii) the amount determined according to the following categories set forth in item (a) and (b) below:(a) if the Outside Director exercises the stock acquisition rights (excluding those received by the Outside
Director from the Company as compensations for his duties) after assuming the position of the outside
director, the amount calculated by multiplying the current price of the stock acquisition rights per share[multiplying the current market price per share] at the time of exercise thereof less the total of theamount as provided for in Article 236, Paragraph 1, Item 2 of the Corporation Law and the paid-in
price as provided for in Article 238, Paragraph 1, Item 3 of the said Law, per share, which shall be
issued or transferred upon exercise of the stock acquisition rights (if the amount so calculated is 0 or
less, it shall be 0), multiplied by the number of shares of the Company delivered to the Outside
Director upon exercise thereof; or(b) if the Outside Director transfers the stock acquisition rights after assuming the position of the outside
director, the amount calculated by multiplying the transfer price of a stock acquisition right less thepaid-in price as provided for in Article 238, Paragraph 1, Item 3 of the Corporation Law, by the numberof stock acquisition rights.
Article 2
The Company may request the Outside Director to provide any information necessary to determine whether theOutside Director owes liabilities for damages set forth in Article 1 hereof and the upper amount of suchliabilities.
Article 3
1. If the Outside Director’s liability for damages is limited pursuant to Article 1 hereof, the Outside Director
may not, without approval at the general meeting of shareholders of the Company, receive the total amounts of
the retirement allowance and any proprietary interest having the nature of such retirement allowance, or exercise
or transfer stock acquisition rights.

2. When the Outside Director, the liability for damages of which is limited pursuant to Article 1 hereof, holds acertificate of stock acquisition rights representing stock acquisition rights, the Outside Director shall be required
to deposit such certificate to the Company without delay and may not demand the return of such certificate unless
it obtains approval for the transfer thereof at the general meeting of shareholders of the Company.
Article 4
When the Outside Director assumes the position of an executive director, operating officer or manager or any
other employee of the Company or any subsidiary of the Company, this Agreement shall become invalid in the
future.
Article 5
1. The liabilities limitation agreement entered into between the Company and the Outside Director on M/D/Y
shall become invalid upon execution of this Agreement.
2. Notwithstanding the foregoing paragraph, the liabilities limitation agreement entered into between the
Company and the Outside Director on M/D/Y shall still remain valid with regard to any liability for damages due
to any act of the Outside Director prior to the execution of this Agreement.
Article 6
Any matter not stipulated herein shall be settled upon consultation between the parties hereto.
IN WITNESS WHEREOF, this Agreement shall be executed by the parties hereto in duplicate, affixing theirrespective signatures and seals, and each party retains one copy thereof.
June 25, 2009
NOMURA HOLDINGS, INC.
/s/

KENICHI WATANABE

Kenichi Watanabe
President & CEO
9-1, Nihonbashi 1-chome, Chuo-ku, Tokyo
Name of Outside Director

Exhibit 11.1
Code of Ethics of Nomura Group
The Board of Directors of Nomura Holdings, Inc. (the “Company”) has adopted this Code of Ethics (the “Code”)
to guide all Directors, Executive Officers, Senior Managing Directors, Corporate Auditors and employees(“Nomura People”) of Nomura Group.
1. Social Responsibilities
Nomura Group aims to enrich society with due regard to the integrity of the securities business for the purpose ofpromoting efficient money flow in the financial markets.
2. Advancement of Customers’ Interests
Nomura People must act in the best interests of their customers.
3. Compliance with Laws
Nomura People must understand how confidence in Nomura Group could be undermined by any misconduct andhow hard it could be to restore it. Therefore, Nomura People must promote proper understanding and compliancewith the letter and spirit of all applicable laws, rules and regulations, including those concerning insider trading,money laundering and bribery.
4. Corporate Opportunity
Nomura People owe a duty to Nomura Group to advance its legitimate interests whenever the opportunity arises.
Nomura People are prohibited from taking for themselves personally opportunities that are discovered throughthe use of corporate property, information or position.
5. Conflicts of Interest
Nomura People should not take any actions that could have their private interests interfere in any way (or evenappear to interfere) with the interests of Nomura Group. Neither Nomura People nor their family members
should receive improper personal benefits as a result of their positions in Nomura Group, including loans, or
guarantees of obligations, from Nomura Group.
6. Confidentiality
Nomura People must maintain the confidentiality of information entrusted to them by Nomura Group or its
customers in the conduct of its business, except when disclosure is authorized or legally mandated.
7. Fair Dealing(a) Nomura People must respect fair business practices in jurisdictions where they operate and endeavor to deal
fairly with Nomura Group’s customers, suppliers, competitors and Nomura People. Nomura People should
not take unfair advantage of anyone through manipulation, concealment, abuse of confidential information,
misrepresentation of material facts, or any other unfair-dealing practice.
(b) Nomura Group must reject all contacts with criminal or unethical organizations involved in activities inviolation of applicable laws.
(c) Nomura People may give or accept from non-government employees gifts or entertainment in accordancewith specified guidelines of the relevant company of Nomura Group. In addition, Nomura People may notgive gifts to or entertain government officials without specified approval by the relevant company of
Nomura Group.

8. Protection and Proper Use of Corporate Assets
All Nomura Group assets should be used for legitimate purposes. Nomura People should protect Nomura
Group’s assets and ensure their efficient use.
9. Retention of Documents
Nomura People must prepare documents relating to the business or accounting of Nomura Group and retain such
documents for specified periods in accordance with applicable laws and internal rules of the Company or the
relevant company of Nomura Group. In connection with litigation or examinations by any regulatory body,
Nomura People shall not make false statements or intentionally conceal or destroy any relevant documents.
10. Environmental Issues
Nomura Group is committed to acting in an environmentally responsible manner and should therefore approach
environmental issues positively.
11. Corporate Citizenship Activities
Nomura Group as a good corporate citizen is committed to the pursuit of activities of social benefit.
12. Respect for Human Rights(a) Prohibition against Discrimination
Nomura Group shall respect human rights. Nomura Group shall prohibit discriminatory practices or harassment
because of nationality, race, ethnicity, sex, age, religion, creed, social status or disability.
(b) Equal Employment Opportunities and Comfortable Workplace
Nomura Group shall promote equal employment opportunities and maintain safe and comfortable workplaces for
Nomura People.
13. International Harmonization
Nomura People must respect the culture and customs of all the countries where they operate and strive to manage
their activities in such a way as to consider the societies and economies of such countries.
14. Media Policy
If Nomura People externally publish information relating to Nomura Group business in publications, lectures andinterviews, they must follow the guidelines promulgated by the relevant company of Nomura Group.
15. Personal Investments
If Nomura People buy or sell securities (including the stock of the Company) for their personal accounts, theymust comply with all applicable securities laws and follow specified procedures in accordance with theguidelines promulgated by the Company or the relevant company of Nomura Group.
16. Reporting of Illegal or Unethical Conduct(a) If Nomura People become aware of any conduct, including accounting, and auditing matters, that they
believe is illegal or unethical, they must promptly notify an appropriate contact specified in the guidelines
promulgated by each of Nomura Group.
(b) The contact above of Nomura People must take appropriate steps to investigate whether and how such
misconduct occurred and, when necessary, to correct it and prevent its recurrence.

17. Protection against Retaliation
Nomura People are prohibited from retaliating against any individual who reports in good faith illegal orunethical conduct.
18. Code of Ethics for Financial Professionals(a) All Financial Professionals must, in addition to the foregoing:(1) promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts ofinterest between personal and professional relationships;(2) make full, fair, accurate, timely, and understandable disclosure in reports and documents that theCompany and each of Nomura Group files with, or submits to, any applicable regulatory body and inother public communications;(3) comply with all applicable generally accepted accounting principles, government laws, rules andregulations;(4) promptly report violations of this section to an appropriate contact specified in the guidelines
promulgated by the Company or the relevant company of Nomura Group, in cases they believe thatsuch violations have occurred; and(5) be accountable for their adherence to this section.
(b) Financial Professionals are prohibited from directly or indirectly taking any action to fraudulently influence,
coerce, manipulate, or mislead any independent public or certified accountant in the performance of an auditof the financial statements of any of Nomura Group for the purpose of rendering such financial statements
materially misleading.
(c) “Financial Professional” means any professional employee of Nomura Group in the area of finance,
controllers, tax, treasury, risk management or investor relations and also includes the Chief Executive
Officer, the Chief Financial Officer and a chairman of the Disclosure Committee of the Company and all
Division CEOs, all Business Line Heads and Regional Managements of Nomura Group.
19. Amendments and Waivers
The Company shall disclose amendments to, and any waivers from, this Code of Ethics in accordance withapplicable laws. For this reason, Nomura People shall promptly inform their senior management in the event they
become aware of circumstances that may require an amendment or waiver under the Code so that the Company
may comply in a timely fashion.
Established: March 5, 2004
Amendment Date: October 1, 2008

Exhibit 12.1
Certification
I, Kenichi Watanabe, certify that:
1. I have reviewed this annual report on Form 20-F of Nomura Holdings, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements made, in light of the circumstances under whichsuch statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in thisreport, fairly present in all material respects the financial condition, results of operations and cash flows of
the company as of, and for, the periods presented in this report;
4. The company’s other certifying officer and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for thecompany and have:a) Designed such disclosure controls and procedures, or caused such disclosure controls andprocedures to be designed under our supervision, to ensure that material information relating to thecompany, including its consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;b) Designed such internal control over financial reporting, or caused such internal control overfinancial reporting to be designed under our supervision, to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles;c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented
in this report our conclusions about the effectiveness of the disclosure controls and procedures, as ofthe end of the period covered by this report based on such evaluation; andd) Disclosed in this report any change in the company’s internal control over financial reportingthat occurred during the period covered by the annual report that has materially affected, or isreasonably likely to materially affect, the company’s internal control over financial reporting; and5. The company’s other certifying officer and I have disclosed, based on our most recent evaluation ofinternal control over financial reporting, to the company’s auditors and the audit committee of thecompany’s board of directors (or persons performing the equivalent functions):a) All significant deficiencies and material weaknesses in the design or operation of internal
control over financial reporting which are reasonably likely to adversely affect the company’s ability torecord, process, summarize and report financial information; andb) Any fraud, whether or not material, that involves management or other employees who have asignificant role in the company’s internal control over financial reporting.
Date: June 30, 2009/s/ KENICHI WATANABE
Kenichi Watanabe
President and Chief Executive Officer

Exhibit 12.2
Certification
I, Masafumi Nakada, certify that:
1. I have reviewed this annual report on Form 20-F of Nomura Holdings, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements made, in light of the circumstances under whichsuch statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in thisreport, fairly present in all material respects the financial condition, results of operations and cash flows of
the company as of, and for, the periods presented in this report;
4. The company’s other certifying officer and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for thecompany and have:a) Designed such disclosure controls and procedures, or caused such disclosure controls andprocedures to be designed under our supervision, to ensure that material information relating to thecompany, including its consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;b) Designed such internal control over financial reporting, or caused such internal control overfinancial reporting to be designed under our supervision, to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles;c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented
in this report our conclusions about the effectiveness of the disclosure controls and procedures, as ofthe end of the period covered by this report based on such evaluation; andd) Disclosed in this report any change in the company’s internal control over financial reportingthat occurred during the period covered by the annual report that has materially affected, or isreasonably likely to materially affect, the company’s internal control over financial reporting; and5. The company’s other certifying officer and I have disclosed, based on our most recent evaluation ofinternal control over financial reporting, to the company’s auditors and the audit committee of thecompany’s board of directors (or persons performing the equivalent functions):a) All significant deficiencies and material weaknesses in the design or operation of internal
control over financial reporting which are reasonably likely to adversely affect the company’s ability torecord, process, summarize and report financial information; andb) Any fraud, whether or not material, that involves management or other employees who have asignificant role in the company’s internal control over financial reporting.
Date: June 30, 2009/s/ MASAFUMI NAKADA
Masafumi Nakada
Senior Managing Director and Chief Financial Officer

Exhibit 13.1
Certification
Pursuant to 18 U.S.C. §1350, the undersigned officer of Nomura Holdings, Inc. (the “Company”) hereby
certifies, to such officer’s knowledge, that the Company’s annual report on Form 20-F for the year ended
March 31, 2009 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of
the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in allmaterial respects, the financial condition and results of operations of the Company.
Date: June 30, 2009/s/ KENICHI WATANABE
Kenichi Watanabe
President and Chief Executive Officer

Exhibit 13.2
Certification
Pursuant to 18 U.S.C. §1350, the undersigned officer of Nomura Holdings, Inc. (the “Company”) hereby
certifies, to such officer’s knowledge, that the Company’s annual report on Form 20-F for the year ended
March 31, 2009 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of
the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in allmaterial respects, the financial condition and results of operations of the Company.
Date: June 30, 2009/s/ MASAFUMI NAKADA
Masafumi Nakada
Senior Managing Director and Chief Financial Officer

Exhibit 15.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in the Registration Statement Form S-8 (No. 333-116985)
pertaining to the Stock Acquisition Rights (No. 1), Form S-8 (No. 333-126203) pertaining to the Stock
Acquisition Rights (No. 2), Form S-8 (No. 333-134590) pertaining to the Stock Acquisition Rights (No. 3), Form
S-8 (No. 333-135430) pertaining to the Stock Acquisition Rights (No. 4), Form S-8 (No. 333-141988) pertaining
to the Stock Acquisition Rights (No. 5 and 6), Form S-8 (No. 333-144112) pertaining to the Stock Acquisition
Rights (No. 8), Form S-8 (No. 333-150267) pertaining to the Stock Acquisition Rights (No. 9, 10, 11 and 12) andForm S-8 (No. 333-158344) pertaining to the Stock Acquisition Rights (No. 13, 14, 15, 16, 17, and 18) of
Nomura Holdings, Inc. of our report dated June 30, 2009, with respect to the consolidated financial statements of
Nomura Holdings, Inc., and the effectiveness of internal control over financial reporting of Nomura Holdings,
Inc., included in its Annual Report (Form 20-F) for the year ended March 31, 2009.
/s/ Ernst & Young ShinNihon LLC
Tokyo, Japan
June 29, 2009

Exhibit 15.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in the Registration Statement Form S-8 (No. 333-116985)
pertaining to the Stock Acquisition Rights (No. 1), Form S-8 (No. 333-126203) pertaining to the Stock
Acquisition Rights (No. 2), Form S-8 (No. 333-134590) pertaining to the Stock Acquisition Rights (No. 3), Form
S-8 (No. 333-135430) pertaining to the Stock Acquisition Rights (No. 4), Form S-8 (No. 333-141988) pertaining
to the Stock Acquisition Rights (No. 5 and 6), Form S-8 (No. 333-144112) pertaining to the Stock Acquisition
Rights (No. 8), Form S-8 (No. 333-150267) pertaining to the Stock Acquisition Rights (No. 9, 10, 11 and 12) andForm S-8 (No. 333-158344) pertaining to the Stock Acquisition Rights (No. 13, 14, 15, 16, 17, and 18) of
Nomura Holdings, Inc. of our report dated July 12, 2007, with respect to the consolidated financial statements of
Nomura Land and Building Co., Ltd. included in its Annual Report (Form 20-F) for the year ended March 31,
2009.
/s/ Ernst & Young ShinNihon LLC
Tokyo, Japan
June 29, 2009