May 19, 2010

Dissolution of Venture Capital Joint Venture
Please note that this document is an unofficial translation of a press release announced onMay 19th, 2010, by Daiwa Securities Group Inc. and Daiwa SMBC Capital Co., Ltd., andwas prepared solely for reference purpose only. The original press release is in Japanese.
Daiwa Securities Group Inc. (“Daiwa”, and together with its subsidiaries and affiliates,
referred to collectively as “Daiwa Group”) announces that it has reached an agreement toterminate the joint venture contract dated May 13, 2005 regarding Daiwa SMBC Capital Co.,
Ltd. (“DSCAP”) with Sumitomo Mitsui Financial Group, Inc. (“SMFG” and, together with its
subsidiaries and affiliates, referred to collectively as “SMFG Group”) and Sumitomo Mitsui
Banking Corporation (“SMBC”).
1. Background
Since its formation and commencement of business as a new venture capital with a genuine
competitive edge in October 2005 upon merger of NIF Ventures Co., Ltd. (“NIF”) and SMBC
Capital Co., Ltd. (“SMBCC”), both Daiwa and SMFG Group have jointly managed DSCAP
lead by Daiwa Group. DSCAP became one of the best in the industry by taking advantage ofboth Daiwa Group and SMFG Group’s vast network and capabilities which enhanced
targeting and managerial support capabilities.
The market environment of the IPO business is still far off from its peak and the recovery inthe operating results of DSCAP is still underway. Daiwa and SMFG Group have held
discussions on the future, and agreed that it would be desirable to pursue the venture capitalbusiness separately for enhancement of both parties’ value.
Therefore, Daiwa, SMFG and SMBC have agreed today to terminate the joint venture under
the terms described in section 2 below on July 1st, 2010, while mutually confirming thecontinuation of the amicable trust relationship between them.
DSCAP will change its corporate name to Daiwa Corporate Investment Co., Ltd (“DCI”). DCI
will continue to proactively contribute to growth of promising companies with theprofessional expertise which has been developed through fund management activities withhigh transparency standards.

­1­2. Termination of the Joint Venture
The joint venture will be terminated by demerger and share transfer. Daiwa Group andSMFG Group will respectively assume the net assets, contracts and employees of DSCAP
at the ownership ratio of 60:40. The procedure of succeeding the rights and obligations upon
the dissolution of the joint venture are as follows.
1) Methods for succeeding the rights and obligations.
DSCAP will partially transfer its rights and obligations of the business (hereinafter referred
as “The Demerger”) to NS Capital Co., Ltd. (“NSCAP”, a wholly owned subsidiary of DSCAP
as of May 19, 2010). Following The Demerger, the shares of DSCAP (scheduled to change
corporate name to Daiwa Corporate Investment Co., Ltd (“DCI”)) will be transferred to anentity under Daiwa Group, and those of NSCAP will be transferred to SMFG Group and third
party investors (hereinafter referred as “The Share Transfer”).
The rights and obligations to be inherited to DCI and NSCAP will be conducted under thefollowing methods.
①Funds where DSCAP serves as General Partner
Any funds prior to the merger of NIF and SMBCC will be succeeded to DCI or NSCAP
subject to their origins and will be managed separately and solely by either DCI orNSCAP.
Any funds after the merger of NIF and SMBCC will be succeeded to DCI or NSCAP
subject to their current operations.

②Investments with direct ownership of DSCAP
Any investments held prior to the merger of NIF and SMBCC will basically be succeededto DCI or NSCAP subject to the ownership status on the merger date.
Any investments after the merger of NIF and SMBCC will not be split and will basicallybe succeeded to DCI or NSCAP as a whole, subject to the relationship with eachinvestee.

2) Capital structure after the termination
As stated in 1) above, Daiwa Group will wholly own DCI and will not possess any shares ofNSCAP. Daiwa Group and SMFG Group will no longer have any capital relationship related
to the venture capital business.

­2­

3. ScheduleMay 19, 2010 (Wed)

Board resolution
Signing of the JV termination contract

July 1, 2010 (Thurs)

Completion of The Demerger and The Share Transfer
Change company name to Daiwa Corporate Investment Co., Ltd

4. Impact on Earnings Forecast
The financial impact to Daiwa Group would be very limited.
5. Outline of the Joint Venture(as of March 31, 2010)（1）

Company Name

Daiwa SMBC Capital Co., Ltd.

（2）

Location Head Office

8­10, Kudan­Kita 1 chome, Chiyoda­ku, Tokyo

Title and Name ofPresident, Kazuo Ariake

（3）
（4）

Representative
Description of Principal

Venture Capital, Buy Out Investments

Business（5）

Amount of Capital

JPY 18,767 million（6）

Date of Incorporation

October 20, 1983

（7）

Fiscal Period

April 1 to March 31（8）

Net Assets

JPY 17,199 million (consolidated)（9）

Total Assets

JPY 58,444 million (consolidated)（10）

Shareholders

Daiwa Securities Group Inc.

60.00%

Sumitomo Mitsui Banking Corporation

40.00%

6. Outline of the Partner of the Joint Venture(as of March 31, 2010)（1） Company Name

Sumitomo Mitsui Financial Group, Inc.

（2） Location Head Office1­2, Yurakucho 1­chome, Chiyoda­Ku, Tokyo, Japan（3）

Title and Name ofPresident, Teisuke Kitayama

Representative
Description of Principal

Management of the affairs of subsidiaries within the group

Businessand relevant ancillary（5） Amount of Capital

JPY 2,337,895 million（6） Date of Incorporation

December 2, 2002

（7） Principle Shareholders

Japan Trustee Services Bank, Ltd.

（4）

­3­

6.62%

(Trust Account)(common shares)

The Master Trust Bank of Japan, Ltd.

(Note 1)

(Trust Account)

5.22%

Japan Trustee Services Bank, Ltd.

1.98%

(Trust Account 9)
Nippon Life Insurance Company

1.51%(Trust Account)
THE

CHASE MANHATTAN BANK,LONDON

SECS

LENDING

N.A.

1.34%

OMNIBUSACCOUNT
CapitalDaiwa Securities Group Inc. holds

Relationship

1,280,543 or 0.09% common shares of（8） Relationship with Daiwa

SMFG
SMFG does not hold any commonshares of Daiwa Securities Group Inc.
Personnel

Not applicable

Relationship(including overlapping directors)

Business

Not applicable

RelationshipApplicableNot applicable

Relationships
with Related
arties（9） Business Results for the Past Three Fiscal Years (consolidated, million yen)
Fiscal Year ended March 31

2008

Net Assets

5,224,076

4,611,764

7,000,805

Total Assets

111,955,918

119,637,224

123,159,513

4,245.46

2,790.27

3,931.75

Ordinary Income

4,623,545

3,552,843

3,166,465

Ordinary Profit

831,160

45,311

558,769

Net income (Note 2)

461,536(373,456)

271,559

Net income

592.98(497.39)248.4012090100 (scheduled)

Net Assets per Share (yen)

2009

2010

(Note 2)

per share (yen)(Note 2)
Dividend per Share (yen)Note 1: As of September 30, 2009
Note 2: SMFG implemented 100­for­1 stock split on January 4, 2009. The figures for
Consolidated Net Assets per Share, Net income (loss) per share, and Dividend per Shareare accordingly adjusted assuming that the stock split had been effective from April 1, 2007.

­4­

(as of March 31, 2010)（1） Company Name

Sumitomo Mitsui Banking Corporation（2） Location Head Office1­2, Yurakucho 1­chome, Chiyoda­ku, Tokyo, Japan

（3）
（4）

Title and Name ofPresident, Masayuki Oku

Representative
Description of PrincipalBankingBusiness（5） Amount of Capital

JPY 1,770,996 million（6） Date of Incorporation

June 6, 1996

（7） Principle shareholders

Sumitomo Mitsui Financial Group, Inc.

（8） Relationship with Daiwa

100.00%CapitalDaiwa Securities Group Inc. does not hold

Relationshipany common shares of SMBCSMBC holds 30,328,000 or 1.73% commonshares of Daiwa Securities Group Inc.

Personnel

Not applicable

Relationship(including overlapping directors)

Business

Not applicable

RelationshipApplicableNot applicable

Relationships
with RelatedParties（9） Business Results for the Past Three Fiscal Years (consolidated, million yen)
Fiscal Year ended March 312007

2008

2009

Net Assets

5,412,458

5,080,747

4,518,647

Total Assets

98,570,638

108,637,791

115,849,385

Net Assets per Share (yen)67,823.69

60,442.81

41,492.54

Ordinary Income

2,925,665

3,411,052

2,989,608

Ordinary Profit

716,697

734,958

59,285

Net income

401,795

351,820(317,306)

Net income per share (yen)7,072.09

6,132.91(5,740.34)

763

1,487

1,638

Dividend per Share (yen)­5­【Appendix (Capital Structure after Termination)】〈Present〉
SMBCDaiwa Securites Group Inc.

60%40%

DSCAP
Business to be transferred

100%(Note 1)NSCAP

〈After Termination〉
SMFG Group

Daiwa Group (Note3)

Third Party Investors

40%(Note 4)

100%60%NSCAP

DCI (Note 2)

Business to be transferred(Note 1)

Note 1.

DSCAP will partially transfer business to NSCAP on July1, 2010.

Note 2.

DSCAP will change company name to Daiwa Corporate Investment Co., Ltd on July1,
2010

Note 3.

Daiwa Investment Management, a wholly owned subsidiary of Daiwa Securities Group
Inc. and other Daiwa Group companies will own DCI shares.

Contacts:

Satoshi Nakamura, Hiroharu Misawa, Ryoji Fuchinoue, Misato Kinoshita, Yukiko Kishino(Tel +81­3­5555­1165), Daiwa Securities Group Inc.
Tadayuki Hatano, Kenichi Tabata (Tel + 81­3­6910­2600)
Corporate Planning, Daiwa SMBC Capital Co., Ltd­6­